Core Viewpoint - XPO reported a revenue of $1.95 billion for Q1 2025, reflecting a 3.2% year-over-year decline, with an EPS of $0.73 compared to $0.81 a year ago, indicating mixed performance against analyst expectations [1] Financial Performance - Revenue of $1.95 billion was below the Zacks Consensus Estimate of $1.97 billion, resulting in a surprise of -0.76% [1] - The company achieved an EPS surprise of +12.31%, with the consensus EPS estimate being $0.65 [1] Key Metrics - Adjusted operating ratio stood at 85.9%, matching the average estimate from four analysts [4] - Average weight per shipment was 1,352 lbs, slightly below the three-analyst average estimate of 1,353.53 lbs [4] - Shipments per day totaled 48,400, compared to the average estimate of 48,464 [4] - Gross revenue per hundredweight (excluding fuel surcharges) was $24.73, close to the estimated $24.74 [4] - Gross revenue per hundredweight (including fuel surcharges) was $29.06, slightly below the average estimate of $29.18 [4] - Revenue from the European Transportation Segment was $782 million, below the $793.21 million estimate, representing a -1.9% year-over-year change [4] - Revenue from the North American Less-Than-Truckload Segment was $1.17 billion, compared to the estimated $1.18 billion, reflecting a -4% change year-over-year [4] - Adjusted EBITDA for the North American Less-Than-Truckload Segment was $250 million, slightly above the average estimate of $249.73 million [4] - Adjusted EBITDA for the Corporate segment was -$4 million, better than the average estimate of -$4.33 million [4] - Adjusted EBITDA for the European Transportation Segment was $32 million, exceeding the average estimate of $27.11 million [4] Stock Performance - XPO shares have returned -10.8% over the past month, contrasting with the Zacks S&P 500 composite's -0.2% change [3] - The stock currently holds a Zacks Rank 4 (Sell), suggesting potential underperformance relative to the broader market in the near term [3]

Core Viewpoint - XPO reported mixed Q1 2025 earnings, exceeding EPS expectations but falling short on revenue, highlighting profitability leverage alongside revenue challenges [1][2]. Financial Performance - Adjusted EPS for Q1 2025 was $0.73, surpassing the estimated $0.66, but down 9.9% from $0.81 in Q1 2024 [3]. - Revenue for Q1 2025 was $1.95 billion, slightly below the anticipated $1.98 billion and down 3.2% from $2.02 billion in Q1 2024 [3]. - Operating income increased to $151 million, a 9.4% rise from $138 million in Q1 2024 [3]. - Net income rose to $69 million, reflecting a 3% increase from $67 million in Q1 2024 [3]. - Adjusted EBITDA decreased to $278 million, down 3.5% from $288 million in Q1 2024 [3]. Business Segments - The North American Less-Than-Truckload (LTL) segment generated $1.17 billion in revenue, accounting for 60% of overall revenue, despite a 4% decline from the previous year [4][6]. - The LTL segment maintained strong profitability with $250 million in adjusted EBITDA [6]. - The European transportation segment generated $782 million in revenue, facing strategic uncertainties regarding potential divestiture [8]. Operational Efficiency - The adjusted operating ratio in the LTL segment improved to 85.9%, indicating enhanced cost control [7]. - The company reduced third-party outsourced linehaul miles by 940 basis points year over year and cut purchased transportation expenses by 53% [7]. Strategic Focus - XPO is leveraging proprietary technology to enhance operational efficiency, with tools like XPO Smart utilizing predictive analytics [5]. - Capital expenditures are forecasted to be between $600 million and $700 million for the full year 2025, focusing on accelerating yield growth [9]. - The company is committed to maintaining efficiency and service reliability amid strategic challenges, particularly concerning the potential European divestiture [9].

Core Insights - XPO reported quarterly earnings of $0.73 per share, exceeding the Zacks Consensus Estimate of $0.65 per share, but down from $0.81 per share a year ago, indicating an earnings surprise of 12.31% [1] - The company generated revenues of $1.95 billion for the quarter, missing the Zacks Consensus Estimate by 0.76% and down from $2.02 billion year-over-year [2] - XPO has surpassed consensus EPS estimates in all four of the last quarters, while it has topped revenue estimates three times during the same period [2] Earnings Outlook - The sustainability of XPO's stock price movement will largely depend on management's commentary during the earnings call and future earnings expectations [3][4] - Current consensus EPS estimate for the upcoming quarter is $1 on revenues of $2.05 billion, and for the current fiscal year, it is $3.81 on revenues of $8.13 billion [7] Industry Context - The Transportation - Truck industry, to which XPO belongs, is currently ranked in the bottom 1% of over 250 Zacks industries, which may negatively impact stock performance [8] - Empirical research indicates a strong correlation between near-term stock movements and trends in earnings estimate revisions, suggesting that the outlook for the industry can significantly affect stock performance [5][8] Stock Performance - XPO shares have declined approximately 25.7% since the beginning of the year, contrasting with the S&P 500's decline of 5.5% [3] - The estimate revisions trend for XPO is currently unfavorable, resulting in a Zacks Rank 4 (Sell), indicating expected underperformance in the near future [6]

Financial Data and Key Metrics Changes - Companywide revenue for Q1 2025 was $2 billion, down 3% year over year but up 2% sequentially from Q4 2024 [17] - Adjusted EBITDA was $278 million, down 3% year over year [20] - Adjusted diluted EPS was $0.73, exceeding expectations [5] - Net income grew by 3% to $69 million, representing diluted EPS of $0.58 [21] Business Line Data and Key Metrics Changes - LTL segment revenue was down 4% year over year and up 1% sequentially, with adjusted EBITDA for LTL at $250 million, down 2% [17][20] - Yield excluding fuel grew by 6.9% year over year, marking an acceleration from the prior quarter [10] - The damage claims ratio was 0.3%, a record low for the company [7][69] Market Data and Key Metrics Changes - Total shipments per day in the LTL segment were down 5.8% year over year, with tonnage per day down 7.5% [24] - In Europe, revenue increased by 2% year over year on a constant currency basis, with adjusted EBITDA growing by 19% sequentially [27] Company Strategy and Development Direction - The company is focused on maintaining high returns through investments in network capacity and technology, including proprietary AI applications [15][14] - The goal is to achieve 30% of revenue from local accounts, currently at low to mid-twenty percent [75] - The company aims for margin improvement despite a challenging freight market, with expectations of 150 basis points of improvement for the full year [36][46] Management's Comments on Operating Environment and Future Outlook - Management noted a fluid environment with challenges in predicting macroeconomic conditions, but remains optimistic about margin improvement [35] - The company expects to manage costs effectively and maintain productivity even if tonnage declines [41] - There is cautious sentiment among customers regarding demand in the back half of the year, but the company is positioned to capture market share when conditions improve [80] Other Important Information - The company has authorized a share repurchase of up to $750 million, indicating a commitment to returning capital to shareholders [23] - The net debt leverage ratio improved to 2.5 times trailing twelve months adjusted EBITDA [22] Q&A Session Summary Question: Update on full year guidance and second quarter expectations - Management expects to deliver 150 basis points of margin improvement despite negative tonnage, driven by strong yield performance and effective cost management [35][36] Question: Clarification on volume dynamics and potential share loss - Management estimates a 15% to 16% decline in overall industry volumes since pre-COVID, attributing it to softer industrial demand rather than significant share loss [48][49] Question: Pricing environment and competitive threats - The company continues to see a constructive pricing environment, with renewals up mid to high single digits [90] - Management does not view threats from UPS or Amazon as material, citing differences in service offerings and market focus [92][95]

Financial Data and Key Metrics Changes - Companywide revenue for Q1 2025 was $2 billion, down 3% year over year but up 2% sequentially from Q4 2024 [16] - Adjusted EBITDA was $278 million, down 3% year over year [20] - Adjusted diluted EPS was $0.73, exceeding expectations [4] - Net income grew by 3% to $69 million, representing diluted EPS of $0.58 [21] - Cash flow from operating activities was $142 million, with net CapEx of $191 million [21] Business Line Data and Key Metrics Changes - LTL segment revenue was down 4% year over year and up 1% sequentially, with adjusted EBITDA of $250 million, down 2% [16][20] - Yield excluding fuel grew by 6.9% year over year, reflecting strong commercial strategy [9] - Purchase transportation costs decreased by 53% year over year, equating to a reduction of $41 million in the quarter [17][20] - Adjusted operating ratio improved by 30 basis points to 85.9% [27] Market Data and Key Metrics Changes - Total shipments per day in the LTL segment were down 5.8% year over year, with tonnage per day down 7.5% [24] - In Europe, revenue increased by 2% year over year on a constant currency basis, with adjusted EBITDA growing by 19% sequentially [28] Company Strategy and Development Direction - The company is focused on maintaining high service quality and expanding its local channel, aiming for local accounts to represent 30% of total revenue [75] - Investments in proprietary AI technology are being made to enhance profitability through line haul optimization and labor planning [12][13] - The company is committed to cost efficiency and margin expansion, with a focus on insourcing line haul to improve operational flexibility [11][20] Management's Comments on Operating Environment and Future Outlook - Management expects to deliver 150 basis points of margin improvement for the full year, despite a negative tonnage outlook [35][46] - The company is optimistic about future demand recovery, citing a lack of meaningful capacity additions in the industry [55] - Management noted that the pricing environment remains constructive, with strong yield growth expected to continue [60] Other Important Information - The company ended the quarter with $212 million in cash and $811 million in total liquidity [22] - A share repurchase authorization of up to $750 million was announced, with plans to begin opportunistic repurchases [23][88] Q&A Session Summary Question: Update on full year guidance and second quarter expectations - Management expects to deliver 150 basis points of margin improvement despite a negative tonnage outlook, with strong yield performance and effective cost management [35][36][40] Question: Volume dynamics and potential share loss - Industry volumes have declined by approximately 15% to 16% since the peak in 2021, driven by softer demand, particularly in the industrial sector [48][49] Question: Pricing environment and competitive threats - The pricing environment remains constructive, with mid to high single-digit increases in contractual renewals [91] - Management does not see significant threats from competitors like UPS and Amazon, as their business models differ significantly from LTL [93][96]

Q1 2025 Financial Highlights - XPO's operating income reached $151 million, a 9% year-over-year increase[8] - The LTL adjusted operating ratio improved sequentially by 30 bps to 85.9%[8, 9] - LTL purchased transportation expense decreased significantly by 53% year-over-year[8] - Outsourcing of LTL linehaul miles to third-party carriers was reduced by 940 bps year-over-year[8, 42] - LTL yield, excluding fuel, increased by 6.9% year-over-year[8, 38] - LTL revenue per shipment, excluding fuel, rose by 5.2% year-over-year[8] North American LTL Performance - North American LTL revenue totaled $1.17 billion[9] - North American LTL adjusted EBITDA amounted to $250 million[9] Strategic Targets and Industry Position - The company targets a revenue CAGR of 6% to 8% and an adjusted EBITDA CAGR of 11% to 13% for LTL growth from 2021 to 2027[12, 43] - The company aims for an adjusted operating ratio improvement of at least 600 bps for LTL from 2021 to 2027[12] - The North American LTL industry represents a $53 billion market, with the top 10 players holding over 75% market share[17] 2025 Planning Assumptions - The company anticipates total gross capex between $600 million and $700 million for the full year 2025[49]

XPO Reports First Quarter 2025 Results GREENWICH, Conn. – April 30, 2025 – XPO (NYSE: XPO) today announced its financial results for the first quarter 2025. The company reported diluted earnings per share of $0.58, compared with $0.56 for the same period in 2024, and adjusted diluted earnings per share of $0.73, compared with $0.81 for the same period in 2024. First Quarter 2025 Summary Results | | | | | | Three Months Ended March 31, | | | | | | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | | ...

Core Insights - XPO reported first quarter 2025 financial results with diluted earnings per share of $0.58, up from $0.56 in Q1 2024, while adjusted diluted earnings per share decreased to $0.73 from $0.81 year-over-year [1][7][8] - Total revenue for Q1 2025 was $1.95 billion, a decline of 3.2% compared to $2.02 billion in Q1 2024, primarily due to lower fuel surcharge revenue in the North American LTL segment [6][10] - The company achieved adjusted EBITDA of $278 million, down from $288 million in the same quarter last year, reflecting a 3.5% decrease [8][49] Financial Performance - North American Less-Than-Truckload (LTL) segment revenue was $1.17 billion, a 4.0% decrease from $1.22 billion in Q1 2024, with operating income of $158 million, down from $165 million [10][11] - European Transportation segment revenue decreased by 1.9% to $782 million, with operating income improving to $1 million from a loss of $4 million [11][42] - Corporate segment reported an operating loss of $9 million, significantly improved from a loss of $23 million in the previous year [11][46] Operational Efficiency - The adjusted operating ratio for North American LTL improved to 85.9%, reflecting a cumulative improvement of 370 basis points over two years [5][10] - The company reported a year-over-year reduction in purchased transportation expenses by 53%, contributing to enhanced cost efficiency [5][10] - XPO's first quarter yield growth, excluding fuel, accelerated to 6.9%, with revenue per shipment improving for the ninth consecutive quarter [5][10] Cash Flow and Capital Expenditures - XPO generated $142 million in cash flow from operating activities in Q1 2025, ending the quarter with $212 million in cash and cash equivalents after $191 million in net capital expenditures [9][28]

Group 1: SEI Investments - SEI Investments announced an increase in its share buyback authorization to $556 million, up from a previous $500 million, representing approximately 6.1% of its market cap of about $9 billion [1][2] - In 2024, SEI spent a record $500 million on buybacks, and utilizing the full $556 million in 2025 would set a new record for the company [2] Group 2: Broadcom - Broadcom announced a new share repurchase program allowing for up to $10 billion in buybacks, which is about 1.2% of its total market capitalization [4][5] - The buyback authorization is set to end on December 31, 2025, indicating a rapid utilization plan within eight months, contrasting with typical long-term buyback programs [5][6] - Broadcom has increased its buyback spending significantly post-2021, averaging around $6.7 billion per year over the last three fiscal years [7] - The company also announced an 11% increase in its dividend in December 2024, with a current dividend yield of approximately 1.3% [8] Group 3: XPO - XPO announced a share repurchase authorization worth $750 million, which replaces its previous program and equates to about 6.8% of its market cap of around $11 billion [10][12] - Historically, XPO has been slow in utilizing its buyback capacity, averaging only $69 million per year from 2020 to 2024, despite having spent significantly more in previous years [11][12] - The new buyback authorization suggests that XPO may be preparing for a more aggressive repurchase strategy in 2025 [12] Group 4: Overall Market Implications - Together, SEI Investments, Broadcom, and XPO have raised their buyback capacity by over $12 billion, reflecting a strong commitment to returning capital to shareholders [12]

Core Points - XPO will hold its first quarter conference call and webcast on April 30, 2025, at 8:30 a.m. Eastern Time, with results released earlier that morning [1] - The company is a leader in asset-based less-than-truckload (LTL) freight transportation in North America, moving 18 billion pounds of freight annually [3] - XPO serves approximately 55,000 customers and operates 614 locations with a workforce of 38,000 employees in North America and Europe [3] Access Information - Toll-free call from US/Canada: 1-877-269-7756; international callers: +1-201-689-7817 [2] - Live webcast available at www.xpo.com/investors [2] - Replay of the conference call available until May 30, 2025, with specific passcode for access [2] Company Overview - XPO, Inc. is headquartered in Greenwich, Connecticut, and utilizes proprietary technology to enhance its customer-focused operations [3] - The company is active on various social media platforms including LinkedIn, Facebook, X, Instagram, and YouTube [3] Contact Information - Investor contact: Brian Scasserra, +1-617-607-6429, brian.scasserra@xpo.com [4] - Media contact: Cole Horton, +1-203-609-6004, cole.horton@xpo.com [4]