GXO Logistics NYSE: GXO reported a stronger first quarter of 2026 and raised its full-year profit outlook, as executives pointed to growth in new business wins, a record sales pipeline and early progress on operational and technology initiatives.
Chief Executive Officer Patrick Kelleher said the contract logistics provider generated first-quarter revenue of $3.3 billion, up 11% from the prior year, with organic revenue growth of 4%. Adjusted EBITDA rose 23% to $200 million, while adjusted diluted earnings per share increased 72% to $0.50.
“Organic revenue growth was 4% in the quarter, with every region contributing, demonstrating the resilience and global strength of our business model in a dynamic geopolitical environment,” Kelleher said.
GXO Raises 2026 Earnings Outlook
Chief Financial Officer Mark Suchinski, who joined the company recently and participated in his first earnings call as CFO, said GXO delivered adjusted EBITDA margin of 6.1% in the quarter, up 60 basis points year-over-year. The company reported net income of $5 million and adjusted net income attributable to GXO of $58 million, up 70.6% from the prior year.
Operating cash flow was $31 million in the quarter, while free cash flow was an outflow of $31 million, which Suchinski said was in line with typical seasonality. GXO ended the quarter with $794 million in cash and $1.6 billion in liquidity. Leverage remained steady at 2.5 times.
Following the first-quarter performance, GXO raised its full-year 2026 guidance for adjusted EBITDA and adjusted diluted EPS. The company now expects:
- Organic revenue growth of 4% to 5%, unchanged from prior guidance;
- Adjusted EBITDA of $935 million to $975 million;
- Adjusted diluted EPS of $2.90 to $3.20, up 22% at the midpoint;
- Free cash flow conversion of 30% to 40%, unchanged.
Suchinski said the company outperformed its first-quarter guidance, benefiting from strong performance in the core business as well as certain contract termination costs that had been expected in the first quarter but are now anticipated over the rest of the year.
Record Pipeline and Strategic Verticals Drive Visibility
Kelleher said GXO secured $227 million in new business wins during the quarter across several verticals, including aerospace and defense, technology, AI cloud infrastructure with hyperscalers, an expansion with the NHS in the U.K. and a new partnership with L’Oréal in Europe.
The company has $870 million of expected incremental new business revenue already secured for 2026, up 19% from the same point last year. Chief Strategy Officer Kristine Kubacki said GXO’s pipeline grew to $2.7 billion, a record for the company.
Approximately 40% of first-quarter wins and about one-quarter of the pipeline came from GXO’s strategic growth verticals: aerospace and defense, industrial, life sciences and technology, including data center infrastructure. Kelleher said the company’s sales pipeline increased 20% from the fourth quarter, with more than $500 million in strategic growth verticals.
In North America, Kelleher said the pipeline grew 35% sequentially, with higher win rates in the quarter. He highlighted GXO’s expanding aerospace and defense business, including the launch of a Defense Advisory Board in the U.S. and the establishment of the Torus Defence Supply Chain in the U.K.
Kubacki said GXO’s strategic growth verticals represent a combined total addressable market of more than $200 billion. She also said the company continues to see momentum in its core business, including omnichannel retail and consumer.
Amazon Announcement Prompts Questions on Competition
Several analysts asked management about Amazon’s recently announced expansion of supply chain services. Kelleher said he viewed the announcement as “a fantastic validation” of the opportunity in contract logistics, which he described as an approximately $500 billion market where roughly 70% remains insourced.
Kelleher argued that GXO’s offering differs from Amazon’s because GXO builds customized supply chain solutions for enterprise customers rather than selling access to a standardized network.
“Amazon is selling access to its supply chain, whereas GXO, we build custom solutions for our customers,” Kelleher said. “We’re not a one-size-fits-all provider. What we do is bespoke, operationally complex, and relationship-driven.”
He cited data protection, a vendor-agnostic technology stack, long-term contracts, vertical expertise and operational execution as differentiators. Kelleher said GXO does compete with Amazon in shared-use e-commerce through GXO Direct, which he said grew 5% in the first quarter and represents just under 6% of GXO’s total business.
Kelleher said GXO’s customer churn rate is below 5%, with customer departures typically tied to bankruptcy, supply chain restructuring or, in a small number of cases, competitive bids.
Volumes Flat, With Strength in B2B Offsetting Softer Retail
Management said GXO is not seeing a material impact from the conflict in the Middle East and has “virtually no direct exposure” to the region. Kelleher said first-quarter volumes were relatively flat overall, in line with the company’s expectations.
B2B volumes in aerospace and defense, industrial, technology and life sciences were slightly higher, while B2C volumes in retail and consumer packaged goods were slightly lower. Suchinski said GXO’s full-year guidance assumes roughly breakeven volume from existing customers, with organic growth driven primarily by contract wins signed in 2025 and early 2026.
Suchinski said second-quarter organic growth is expected to be similar to the first quarter, with acceleration anticipated in the second half of the year based on signed business and implementation timing.
Automation, AI and Wincanton Integration Remain Priorities
Executives emphasized the company’s three strategic priorities: sharpening commercial execution, strengthening operational discipline and leading in AI and next-generation automation.
Kelleher said GXO has begun implementing the “GXO Way,” a global framework intended to standardize and scale operational execution. Kubacki said new Chief Operating Officer Bart Beeks is overseeing that rollout.
The company also continues to expand GXO IQ, an AI-powered warehouse technology platform. Kubacki said GXO has moved from pilot to global rollout and is targeting more than 50 sites by year-end. Kelleher said GXO has eight AI modules deployed at a number of sites and is using AI both in customer operations and internal functions such as HR, IT and finance.
GXO is also deploying additional automation, including autonomous mobile robots in the Netherlands and its first Autoload solution in Europe. Kelleher said the company plans to launch more humanoid robotics pilots across the U.S. and Europe later this year.
On Wincanton, Suchinski said integration is progressing and GXO remains on track to deliver $60 million in run-rate cost synergies by the end of 2026. He said the company continues to look for additional opportunities as Wincanton is integrated into the broader GXO business.
Kelleher said GXO plans to hold an investor day after third-quarter earnings, where management will outline a three-year strategy, including more detail on organic growth, operational productivity, SG&A trajectory, investments and key performance metrics.
About GXO Logistics NYSE: GXO
GXO Logistics NYSE: GXO is a global contract logistics provider specializing in warehousing, distribution, and value-added supply chain services. Established in August 2021 as a spin-off from XPO Logistics, the company has built its reputation on integrating advanced technology and automation into traditional logistics operations. GXO’s core offerings include e-commerce fulfillment, inventory management, returns processing, and reverse logistics, supported by a network of fulfillment centers and distribution hubs designed to optimize order accuracy and delivery speed.
The company serves customers across a diverse array of industries, including retail, technology, consumer goods, automotive, industrial, and healthcare.
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