$XPO earnings report

XPO reported broad third-quarter growth. Revenue increased 12.4% to $2,373 million, GAAP operating income increased 75.6% to $288 million and net income increased 120.7% to $181 million. Diluted EPS was $1.53, compared with $0.68. The prior-year quarter included a $35 million charge related to environmental and product liability claims involving a former subsidiary of Con-way, which contributed to the scale of the GAAP operating-income and net-income comparisons.

Non-GAAP earnings growth was also strong. Adjusted EBITDA increased 26.6% to $433 million and adjusted EBITDA margin was 18.2%, compared with 16.2%. Adjusted net income was $200 million and adjusted diluted EPS was $1.70, compared with $128 million and $1.07, respectively. For the first nine months, revenue increased 11.0% to $6,823 million, adjusted EBITDA increased 23.5% to $1,186 million and adjusted EBITDA margin was 17.4%, compared with 15.6%.

North American LTL was the principal growth contributor. Segment revenue increased 17.4% to $1,473 million, including an 8.5% increase in revenue excluding fuel surcharge revenue and a 66.5% increase in fuel surcharge revenue. Yield excluding fuel increased 3.6%, shipments per day increased 5.8% and tonnage per day increased 5.0%. Adjusted operating income increased 35.0% to $293 million, while the adjusted operating ratio improved to 80.1% from 82.7%. Adjusted EBITDA increased 26.3% to $389 million, with yield growth, volume, cost efficiencies and fuel surcharge revenue partly offset by higher fuel costs and wage inflation.

European Transportation revenue increased 5.0% to $900 million and operating income was $12 million, compared with a loss of $2 million. Adjusted EBITDA increased 26.3% to $48 million and adjusted EBITDA margin was 5.3%, compared with 4.5%. The segment cited higher revenue and cost efficiencies, partially offset by higher fuel costs. Corporate operating loss narrowed to $8 million from $42 million, while corporate adjusted EBITDA remained a loss of $4 million.

Cash generation and capital allocation were active in the quarter. XPO generated $415 million of cash flow from operating activities, completed $123 million of net capital expenditures, repurchased $150 million of common stock and repaid $100 million of term loans. Cash and cash equivalents were $260 million at quarter-end, while long-term debt was $2,995 million. The release did not provide forward financial guidance, so the next reported evidence on demand, LTL margin progression, fuel and wage costs, European profitability, cash conversion and additional capital returns will be central.

XPO reported a strong second quarter, with total revenue of $2,355 million, up 13.2% from $2,080 million. Operating income increased 36.9% to $271 million, net income increased 52.8% to $162 million and diluted EPS increased 52.8% to $1.36. Adjusted diluted EPS increased 61.9% to $1.70, while adjusted EBITDA increased 27.6% to $434 million.

North American Less-Than-Truckload was the principal source of growth. Segment revenue increased 15.2% to $1,428 million, while operating income increased 43.2% to $285 million and adjusted operating income increased 36.0% to $287 million. The adjusted operating ratio was a record 79.9%, a year-over-year improvement of 300 basis points. Yield excluding fuel increased 4.4%, shipments per day increased 2.8% and tonnage per day increased 1.0% year-over-year.

North American LTL adjusted EBITDA increased 30.0% to $390 million. The company attributed this increase to yield growth, higher tonnage per day, productivity improvements and higher fuel surcharge revenue, partly offset by higher fuel costs and wage inflation. Management also highlighted implementation of new AI capabilities across the network and a damage claims ratio below 0.2%.

European Transportation revenue increased 10.2% to $927 million, but the segment reported an operating loss of $6 million compared with operating income of $11 million in the same period in 2025, due primarily to restructuring. Adjusted EBITDA nevertheless increased 9.1% to $48 million. Corporate operating loss improved to $9 million from $11 million, and corporate adjusted EBITDA loss was unchanged at $4 million.

Cash generation and capital allocation were meaningful features of the quarter. XPO generated $308 million of cash flow from operating activities and ended the quarter with $298 million of cash and cash equivalents after $101 million of net capital expenditures, $70 million of common stock repurchases and $70 million of term loan repayments. The reported result also included gains from sales of real estate of $7 million ($9 million pre-tax), or $0.06 per diluted share. The release provided no forward financial guidance.