XPO(XPO) - 2025 Q2 - Quarterly Report

Part I—Financial Information Item 1. Financial Statements (Unaudited) This section presents XPO, Inc.'s unaudited condensed consolidated financial statements for Q2 and YTD 2025, including balance sheets, income, cash flows, and detailed notes Condensed Consolidated Balance Sheets Total assets increased to $8.13 billion as of June 30, 2025, from $7.71 billion at year-end 2024, with liabilities rising to $6.35 billion and equity to $1.78 billion Condensed Consolidated Balance Sheet Highlights (in millions) | Account | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Total current assets | $1,623 | $1,505 | | Total long-term assets | $6,510 | $6,206 | | Total assets | $8,133 | $7,712 | | Total current liabilities | $1,599 | $1,420 | | Total long-term liabilities | $4,753 | $4,690 | | Total equity | $1,781 | $1,601 | | Total liabilities and equity | $8,133 | $7,712 | Condensed Consolidated Statements of Income Q2 2025 revenue remained flat at $2.08 billion, but net income decreased to $106 million from $150 million year-over-year, with diluted EPS at $0.89 Income Statement Summary (in millions, except per share data) | Metric | Q2 2025 | Q2 2024 | YTD 2025 | YTD 2024 | | :--- | :--- | :--- | :--- | :--- | | Revenue | $2,080 | $2,079 | $4,034 | $4,097 | | Operating Income | $198 | $197 | $349 | $335 | | Net Income | $106 | $150 | $175 | $217 | | Diluted EPS | $0.89 | $1.25 | $1.47 | $1.81 | Condensed Consolidated Statements of Cash Flows Net cash from operating activities increased to $389 million for YTD 2025, while cash used in investing decreased to $382 million and financing increased to $74 million Cash Flow Summary - Six Months Ended June 30 (in millions) | Activity | 2025 | 2024 | | :--- | :--- | :--- | | Net cash provided by operating activities | $389 | $355 | | Net cash used in investing activities | $(382) | $(483) | | Net cash used in financing activities | $(74) | $(35) | | Net decrease in cash | $(65) | $(162) | Notes to Condensed Consolidated Financial Statements Notes detail accounting policies, strategic developments like the Yellow Corporation acquisition and European divestiture, segment operations, and recent financing and share repurchase activities - In December 2023, the company acquired 28 service centers from Yellow Corporation to expand its LTL network capacity in key markets[31] - The Board of Directors' authorization to divest the European business remains in effect, though there is no assurance a transaction will occur[32] - In February 2025, the company refinanced its term loan facility, resulting in a $5 million debt extinguishment loss, and entered into a new $600 million Revolving Credit Agreement[68][74] - A new share repurchase program of up to $750 million was authorized in March 2025, replacing the previous plan. In Q2 2025, $10 million of stock was repurchased[77][78] Management's Discussion and Analysis of Financial Condition and Results of Operations Management discusses Q2 2025 performance, noting flat consolidated revenue, segment-specific trends, ongoing technology investments, and strong liquidity of $824 million Consolidated Results of Operations Consolidated revenue for Q2 2025 was flat at $2.1 billion, while YTD revenue decreased 1.5% to $4.0 billion, with Q2 net income falling to $106 million due to a prior-year tax benefit Consolidated Financial Highlights (in millions) | Metric | Q2 2025 | Q2 2024 | Change % | YTD 2025 | YTD 2024 | Change % | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Revenue | $2,080 | $2,079 | 0.0% | $4,034 | $4,097 | (1.5)% | | Operating Income | $198 | $197 | 0.5% | $349 | $335 | 4.2% | | Net Income | $106 | $150 | (29.3)% | $175 | $217 | (19.4)% | - The year-over-year increase in the effective tax rate was primarily driven by a one-time tax benefit of $41 million in Q2 2024 from a legal entity reorganization in the European business[118] Segment Financial Results North American LTL Q2 revenue decreased 2.5% due to lower tonnage, while European Transportation revenue grew 4.1% but saw a 10.2% decline in Adjusted EBITDA North American LTL Key Metrics (YoY Change %) | Metric | Q2 2025 vs Q2 2024 | YTD 2025 vs YTD 2024 | | :--- | :--- | :--- | | Pounds per day | (6.7)% | (7.1)% | | Shipments per day | (5.1)% | (5.5)% | | Gross revenue per hundredweight (ex-fuel) | 6.1% | 6.5% | Segment Adjusted EBITDA (in millions) | Segment | Q2 2025 | Q2 2024 | YTD 2025 | YTD 2024 | | :--- | :--- | :--- | :--- | :--- | | North American LTL | $300 | $297 | $550 | $551 | | European Transportation | $44 | $49 | $76 | $87 | Liquidity and Capital Resources Total liquidity was $824 million as of June 30, 2025, with $389 million cash from operations YTD, and anticipated full-year capex between $600 million and $700 million - Total liquidity as of June 30, 2025, was approximately $824 million[137] Sources and Uses of Cash - Six Months Ended June 30 (in millions) | Category | 2025 | 2024 | | :--- | :--- | :--- | | Net cash provided by operating activities | $389 | $355 | | Net cash used in investing activities | $(382) | $(483) | | Net cash used in financing activities | $(74) | $(35) | - Anticipated full-year 2025 gross capital expenditures are projected to be between $600 million and $700 million[151] - Subsequent to the quarter end, in July 2025, the company used cash on hand to repay $50 million of outstanding principal on its Term Loan B-2 Facility[87][151] Quantitative and Qualitative Disclosures About Market Risk No material changes occurred in market risk disclosures concerning interest rates, foreign currency, and commodity prices since the 2024 Form 10-K - There have been no material changes to market risk disclosures concerning interest rates, foreign currency, and commodity prices since the 2024 Form 10-K[153] Controls and Procedures Management concluded that disclosure controls and procedures were effective as of June 30, 2025, with no material changes to internal control over financial reporting during the quarter - Management, including the CEO and CFO, concluded that disclosure controls and procedures were effective as of June 30, 2025[154] - No material changes to internal control over financial reporting occurred during the quarter ended June 30, 2025[155] Part II—Other Information Item 1. Legal Proceedings This section refers to Note 10 of the Financial Statements for detailed information on the company's legal proceedings and ongoing litigation - For information on legal proceedings, the report directs readers to Note 10—Commitments and Contingencies in the financial statements[156] Item 1A. Risk Factors No material changes to the risk factors previously disclosed in the 2024 Form 10-K have occurred - There are no material changes to the risk factors disclosed in the 2024 Form 10-K[157] Item 2. Unregistered Sales of Equity Securities and Use of Proceeds During Q2 2025, the company repurchased $10 million of common stock under a new $750 million share repurchase program, with $740 million remaining available Issuer Purchases of Equity Securities (Q2 2025) | Period | Total Shares Purchased | Average Price Paid | Total Value (in millions) | | :--- | :--- | :--- | :--- | | April 2025 | — | $— | $0 | | May 2025 | 12,369 | $121.26 | ~$1.5 | | June 2025 | 70,672 | $120.26 | ~$8.5 | | Total Q2 | 83,041 | $120.41 | $10 | - A new share repurchase program for up to $750 million was authorized on March 27, 2025. As of June 30, 2025, $740 million remains available for repurchase[160]