XPO Logistics posts record-breaking Q2 earnings results

Greenwich, Conn.-based freight transportation and global logistics services provider XPO Logistics posted its best-ever revenue number, in its second quarter earnings results, which were issued late yesterday.

Quarterly revenue—at $5.04 billion—was up 30.6% annually, and adjusted EBITDA came in at $507 million, both setting new quarterly records, setting a new adjusted EBITDA number for the fourth straight quarter. Operating income—at $246 million—well outpaced a $141 million operating loss a year ago.

An XPO spokesman cited various factors for the record-breaking quarter, including: technology being a major driver, ongoing e-commerce strength, and some big new business wins. What’s more, he noted how the pending spin-off of its global contract logistics arm, GXO, which it said will be the “largest pure-play contract logistics company in the world,” is set for next week.

“We’re operating at a higher level than we ever have in company history,” said the XPO spokesman.

Quarterly XPO performance metrics:

• transportation revenue hit a new record—at $3.2 billion—rose 23% annually, and the North American LTL (less-than-truckload) group posted its best adjusted operating ratio (excluding gains from sales of real estate) for any quarter, at 81.1, with the group on track for more than $1 billion in EBITDA by the end of 2022, driven by technology. North American truck brokerage revenue doubled annually, coming in at $598 million, with net revenue up 47%, to $87 million, with annual loads up 38%; and
• logistics revenue set a new quarterly revenue record—at $1.9 billion—rising 25.5%, with operating income coming in at $71 million, ahead of a $43 million operating loss a year ago. The XPO spokesman said that the record revenue was paced by what he called the “Big 3” tailwinds of e-commerce, warehouse automation, and the trend towards outsourcing, as well as continued strength in new business for GXO and the landing of major new contracts, representing more than $300 million of expected revenue in 2022 and 2023, and year-to-date new business wins accounting for a lifetime value of $2.5 billion, which rises to $5 billion, when factoring in renewals

“We continued to execute extremely well in the second quarter, reporting near-record net income and the highest revenue and adjusted EBITDA of any quarter in our company’s history,” said XPO Logistics Chairman and CEO Brad Jacobs in a statement. “We’ve given our transportation and logistics segments a strong springboard for the planned spin-off next week, when they’ll move forward independently as XPO and GXO.”