Stock Performance and Ownership - The common stock price has been highly volatile, ranging from $41.74 to $205.40 since June 13, 2024, significantly higher than the initial sale price of $9.14 per share[36]. - Approximately 31.4% of the voting power of the capital stock is controlled by the Chairman and CEO, Brad Jacobs, allowing him significant influence over company decisions[49]. - JPE, controlled by Mr. Jacobs, holds 900,000 shares of Convertible Preferred Stock and 197,109,065 Warrants, potentially convertible into 394,218,132 shares of common stock, representing about 49.2% of the voting power on a fully-diluted basis[50]. - The company does not intend to pay dividends in the foreseeable future, relying on market price appreciation for investor returns[44]. - The company has registered 789,549,465 shares of common stock for potential future sales, which could impact the market price[39]. - Future equity capital raises may lead to substantial dilution for existing shareholders, particularly if shares are issued at a significant discount[45]. - The concentration of ownership and voting power may delay or prevent beneficial changes in control or business combinations[52]. Financial Performance - Total revenue for the year ended December 31, 2024, was $56.873 million, an increase from $54.517 million in 2023, representing a growth of approximately 4.4%[149]. - The net income for the year ended December 31, 2024, was $27.969 million, compared to a net loss of $1.070 million in 2023, indicating a significant turnaround in financial performance[149]. - Operating expenses surged to $93.932 million in 2024 from $22.925 million in 2023, reflecting increased selling, general, and administrative expenses[149]. - The company reported a loss from operations of $71 million for the year ended December 31, 2024, compared to a loss of $1.311 million in 2023[149]. - The total liabilities increased from $13.024 million in 2023 to $45.363 million in 2024, indicating a significant rise in financial obligations[145]. - Cash provided by operating activities increased to $84,883,000 in 2024, compared to $584,000 in 2023[157]. - The company reported a net loss of $23.0 million for the year ended December 31, 2024, compared to a loss of $1.1 million in 2023[210]. - Basic and diluted loss per share for 2024 was $(0.11), a significant improvement from $(1.63) in 2023[210]. Industry and Market Conditions - The building products distribution industry is highly fragmented and competitive, with low barriers to entry for local competitors, affecting net sales and operating results[64]. - The industry is subject to cyclical market pressures, and prolonged periods of weak demand could reduce net sales and margins, potentially leading to losses[66]. - The company may face increased costs and reduced supply of building materials due to global trade tensions and tariffs, impacting competitiveness[67]. - The trend toward consolidation in the software industry may impede the company's ability to compete effectively, potentially increasing acquisition costs[75]. Leadership and Governance - The company is highly dependent on the leadership of Brad Jacobs as Chairman and CEO, and his loss could materially adversely affect the business and financial condition[57]. - Anti-takeover provisions in the company's Charter and bylaws could impair potential acquisition attempts, affecting stockholder opportunities[53]. Acquisitions and Growth Strategy - The company plans to target tens of billions of dollars in annual revenue in the next decade through acquisitions and organic growth in the $800 billion building products distribution industry[161]. - The company faces risks related to acquisitions, including the failure to consummate acquisitions expeditiously, which could adversely impact business prospects and stock price[60]. - The company may not be able to successfully integrate acquired businesses, which could lead to unexpected liabilities and adversely affect financial condition and results of operations[62]. - The Company announced a cash tender offer to acquire Beacon Roofing Supply, Inc. at a purchase price of $124.25 per share, with financing commitments secured[247][248]. Cash and Capital Management - The company's cash balance totaled $5.1 billion as of December 31, 2024, with a hypothetical 1% change in interest rates impacting net interest income by $51 million[132]. - Total cash, cash equivalents, and restricted cash at the end of 2024 was $5,072,004,000, up from $6,143,000 in 2023[165]. - The company issued $4,051,103,000 in common stock and pre-funded warrants, net of issuance costs, during the financing activities[157]. - The company raised approximately $3.5 billion from a private placement of 340,932,212 shares at $9.14 per share, closing on July 19, 2024[206]. - An additional private placement generated approximately $620 million from the sale of 67,833,699 shares at $9.14 per share, closing on July 25, 2024[207]. Tax and Regulatory Matters - The effective income tax rate for 2024 was 45.0%, significantly higher than 22.0% in 2023[236]. - The Company has U.S. federal net operating loss carryforwards of $3.4 million as of December 31, 2024, down from $5.8 million in 2023[239]. - The Company’s total current tax provision for 2024 was $24.0 million, compared to $41,000 in 2023[236]. - The Company has not incurred any expense related to interest or penalties for income tax matters during the years ended December 31, 2024 and 2023[191]. Share-Based Compensation - Share-based compensation for the year was $34,513,000, compared to $41,000 in 2023[157]. - The Company granted 13,470 RSUs with a grant date fair value of $11.57, resulting in total unrecognized compensation expense of $143.1 million expected to be recognized over 4.93 years[230]. - The Company granted 8,420 pRSUs with a grant date fair value of $20.24, leading to total unrecognized compensation expense of $148.5 million expected to be recognized over 3.52 years[233]. - The Company's total share-based compensation expense for 2024 was $34.5 million, compared to $41,000 in 2023[235]. Changes in Company Structure - The company underwent a name change from SilverSun Technologies, Inc. to QXO, Inc. on June 6, 2024, following a $1.0 billion cash investment[159]. - The company transferred its common stock listing from Nasdaq to the New York Stock Exchange on January 17, 2025[159]. - An 8:1 reverse stock split was executed on June 6, 2024, reducing the outstanding shares from 5,315,581 to 664,284[205].
QXO, Inc(QXO) - 2024 Q4 - Annual Report