GXO Logistics, Inc.

What they do

GXO runs high-value-added warehousing and distribution, order fulfillment, e-commerce, and reverse logistics for large corporations that have outsourced their supply chain operations. As of December 31, 2025, it operated 1,043 facilities totaling roughly 221 million square feet with approximately 154,000 team members. Contracts are typically long-term, a mix of fixed-price and cost-plus, and the model is described as asset-light with warehouse leases aligned to contract length.

Revenue drivers

• Contract logistics services — The company generates revenue by charging customers for warehousing, fulfillment, distribution and returns handling, split between closed-book fixed-price and open-book cost-plus contracts; total 2025 revenue was $13.18 billion.
• Fixed-price / closed-book contracts — GXO agrees to a pre-determined price and keeps the difference if actual costs come in below the negotiated estimate, so margin performance depends on its own cost control.
• Cost-plus / open-book contracts — GXO is reimbursed allowable costs plus a specified margin, limiting margin upside but reducing volume-related risk on those accounts.
• E-commerce and omnichannel fulfillment — MD&A identifies e-commerce and related channels including omnichannel retail and direct-to-consumer as the fastest-growing demand area, and the August 2026 release cites strategic growth verticals: aerospace defense, technology, industrial and life sciences.

Recent performance

Second quarter 2026 revenue was $3.44 billion, up 4.3% year over year, with organic growth of 3.4%, and all three regions grew organically. Net income was $27 million versus $28 million a year earlier, and diluted EPS was $0.22 versus $0.23. Adjusted EBITDA rose to $219 million from $212 million, and adjusted diluted EPS rose to $0.59 from $0.57. Operating cash flow was $76 million versus $3 million in the prior-year quarter, and free cash flow was $12 million versus $43 million of use. For full-year 2025, revenue was $13.18 billion but net income fell to $36 million and diluted EPS to $0.28.

Strategy

Management names three priorities: sharpening commercial strategy, strengthening execution through the GXO Way playbook, and leading in AI and next-generation automation through GXO IQ, which moved from platform launch to scaled deployment in the quarter. The company targets core verticals with durable demand and cross-sells new projects into existing customers to capture more of their logistics spend. Technology is described as a core competitive advantage, built on a cloud-based warehouse management platform spanning labor and inventory productivity, intelligent warehouse automation and predictive analytics. In North America, first-half 2026 wins increased 85% over the prior-year period, and GXO plans a 2026 Investor Day on November 16, 2026.

Risks

• Intense competition — GXO competes with multinational firms, regional players and emerging technology companies, and customers can in-source logistics or use multiple providers, with price and service quality the main decision factors.
• Fixed-price labor cost exposure — Many long-term contracts are fixed-price, which limits GXO's ability to pass through higher hourly labor costs driven by low unemployment, directly pressuring margins.
• Wincanton divestment and integration — The U.K. CMA approved the 2024 Wincanton acquisition in June 2025 subject to divestment of certain U.K. grocery contracts, and GXO expects to complete that divestment in 2026.
• Declining earnings despite revenue growth — Revenue grew from $11.71 billion in 2024 to $13.18 billion in 2025, but net income fell from $138 million to $36 million and diluted EPS from $1.12 to $0.28, with operating cash flow declining to $434 million.

Outlook

For full-year 2026, management guides to organic revenue growth of 4% to 5%, adjusted EBITDA of $945 million to $965 million, adjusted diluted EPS of $2.95 to $3.15, and free cash flow conversion of 30% to 40%, reflecting current FX rates. The company says it has approximately $1 billion of incremental 2026 revenue secured, up 29% year over year, plus $353 million of incremental 2027 revenue already secured. The commercial pipeline expanded from $2.3 billion at quarter-end to about $2.7 billion in July 2026.