Acquisition and Growth - QXO completed the acquisition of Beacon Roofing Supply, valuing the transaction at $10.6 billion, with a purchase price of $124.35 per share[153]. - Net sales for the three months ended September 30, 2025, reached $2.73 billion, a significant increase from $13.1 million in the same period of 2024, primarily due to the Beacon Acquisition[157]. - For the nine months ended September 30, 2025, net sales totaled $4.65 billion, up from $42.1 million in the prior year, driven by the inclusion of Beacon's sales[158]. - The company aims to achieve $50 billion in annual revenues within the next decade through strategic acquisitions and organic growth in the building products distribution industry[154]. - QXO has transitioned to the largest publicly-traded distributor of roofing and complementary building products in North America following the Beacon Acquisition[154]. Financial Performance - The company reported a net loss of $139.4 million for the three months ended September 30, 2025, compared to a net income of $17.2 million in the same period of 2024[156]. - Adjusted Gross Profit for Q3 2025 was $687.2 million, up from $5.5 million in Q3 2024, with an Adjusted Gross Margin of 25.2% compared to 42.0% in Q3 2024[178]. - Adjusted Net Income for the nine months ended September 30, 2025, was $310.6 million, with Adjusted Diluted EPS of $0.32, compared to a net loss of $189.2 million for the same period[179]. - Adjusted EBITDA for Q3 2025 was $301.9 million, resulting in an Adjusted EBITDA Margin of 11.1%, while the net loss for the same quarter was $139.4 million[181]. Expenses and Costs - Cost of products sold for the three months ended September 30, 2025, increased to $2.09 billion from $7.6 million in 2024, reflecting higher sales and inventory fair value adjustments[159]. - SG&A expenses for the three months ended September 30, 2025, rose to $452.5 million, up from $39.0 million in 2024, due to ongoing operational costs post-acquisition and transformation efforts[161]. - Interest expense for the three months ended September 30, 2025, was $(37.7) million, compared to $57.0 million in 2024, primarily due to additional debt from the Beacon Acquisition[167]. Tax and Liquidity - The effective tax rate for the nine months ended September 30, 2025, was 14.1%, down from 25.9% in the same period of 2024, influenced by pre-tax losses and acquisition-related costs[170]. - The company continually evaluates its liquidity requirements, with primary sources being cash on the balance sheet, cash generated by operations, and borrowings under the ABL Facility[183]. - The company has a quarterly dividend policy for its Convertible Preferred Stock, which is considered in evaluating overall liquidity needs[185]. Cash Flow and Financing Activities - Net cash provided by operating activities was $74.8 million for the nine months ended September 30, 2025, an increase of $43.9 million compared to $30.9 million for the same period in 2024[218]. - Net cash used in investing activities was $10.6 billion for the nine months ended September 30, 2025, a significant increase from $0.1 million for the same period in 2024, primarily due to the Beacon Acquisition[219]. - Net cash provided by financing activities was $7.77 billion for the nine months ended September 30, 2025, an increase of $2.77 billion compared to $5.0 billion for the same period in 2024[220]. Debt and Capital Structure - The Company raised $823.8 million in net proceeds from a private placement of common stock to partially fund the Beacon Acquisition, completed on April 29, 2025[188]. - The Company raised $487.9 million in net proceeds from a public offering of 37.7 million shares at $13.25 per share in April 2025[197]. - In May 2025, the Company raised $892.5 million in net proceeds from a public offering of 48.5 million shares at $16.50 per share[198]. - The Company raised $1.96 billion in net proceeds from a public offering of 89.9 million shares at $22.25 per share in June 2025[199]. - The Company issued $2.25 billion in aggregate principal amount of 6.75% Senior Secured Notes due 2032 to partially fund the Beacon Acquisition[200]. - The Term Loan Facility has an aggregate principal amount of $2.25 billion and matures on April 30, 2032[204]. - As of September 30, 2025, the outstanding balance on the Term Loan Facility was $824.0 million, net of unamortized costs[210]. - The ABL Facility provides for an aggregate borrowing availability of $2.0 billion, with a borrowing capacity of $1.93 billion as of September 30, 2025[211]. - The Company recognized a loss on debt extinguishment of $45.7 million due to a voluntary principal prepayment of $1.40 billion under the Term Loan Facility[209]. - The Company capitalized debt issuance costs of $22.2 million related to the Senior Secured Notes, amortized over the term of the financing arrangement[203]. - The Company capitalized debt issuance costs of $18.8 million related to the ABL Facility, with $17.2 million of unamortized costs remaining as of September 30, 2025[216]. Market and Operational Insights - The demand for exterior building materials is expected to peak in the quarters ending June 30, September 30, and December 31, with lower sales anticipated in the March quarter due to seasonal weather impacts[182]. - The Company is in compliance with the covenants of the ABL Credit Agreement as of September 30, 2025[214]. - The Company has minimal foreign currency exposure, primarily operating within the U.S.[221]. - A 10% increase or decrease in interest rates would not have a material effect on the Company's interest income or expense[222].
QXO, Inc(QXO) - 2025 Q3 - Quarterly Report