GXO Logistics Q3 Earnings Call Highlights

Key Points

• GXO posted its fastest organic revenue growth in more than three years: Q3 revenue rose 5.7% to $3.6 billion, organic revenue grew 6.4%, and adjusted diluted EPS increased 13% to $0.89.
• New contract wins strengthened future revenue visibility. GXO signed $375 million in business during the quarter, and its sales pipeline reached a record $3.1 billion; the company expects more than $850 million in incremental revenue from new wins entering 2027.
• Startup costs weighed on margins, but GXO maintained its 2026 outlook. The company expects sequential margin improvement in Q4 and reiterated guidance for 4%–5% organic revenue growth and adjusted diluted EPS of $2.95–$3.15.

GXO Logistics NYSE: GXO reported its fastest organic revenue growth in more than three years in the third quarter of 2026, as new contract wins and demand from technology and data center customers helped drive sales higher.

Revenue rose 5.7% year over year to $3.6 billion, while organic revenue increased 6.4%. Adjusted diluted earnings per share climbed 13% to $0.89, and adjusted earnings before interest, taxes, depreciation and amortization, or EBITDA, were $251 million, in line with the prior year.

CEO Patrick Kelleher said the company is beginning to see results from its commercial strategy, including an emphasis on North America and industries such as technology and aerospace and defense. GXO reiterated its full-year guidance and said its sales pipeline reached a record $3.1 billion at quarter-end.

New business wins build revenue visibility

GXO signed $375 million in new business during the quarter, up 34% from a year earlier. Through the first nine months of 2026, signed wins exceeded $1 billion, nearly matching the total for all of 2025, Kelleher said.

The CEO said GXO expects to enter 2027 with more than $850 million in incremental revenue from new business wins, compared with $774 million entering 2026. Chief Strategy Officer Kristine Kubacki said the company had secured $630 million of expected incremental 2027 revenue by the end of the third quarter.

Asked about the lower year-ahead revenue figure at this point compared with a year earlier, Kelleher said the prior-year comparison included a very large NHS contract. Kubacki said GXO expects more than $300 million in fourth-quarter wins, with a large portion contributing to 2027 revenue.

North America’s sales pipeline rose more than 80% year over year to about $1.3 billion, while the pipeline across the U.K. and Europe reached approximately $1.7 billion, Kubacki said. Roughly 40% of year-to-date wins came from strategic growth verticals, including data centers, aerospace and defense, life sciences and industrials.

CFO Mark Suchinski said revenue from technology and consumer electronics rose 19% in the third quarter, driven by data center growth. GXO also reported wins in its core retail and e-commerce markets.

Startup costs weigh on margins

GXO’s adjusted EBITDA margin was 7% in the third quarter. Suchinski said the year-over-year margin reflected costs associated with starting new contracts, as well as investments in the commercial organization, labor management systems and the company’s GXO IQ warehouse artificial intelligence platform.

Kelleher said faster-than-expected contract wins and implementations stretched GXO’s internal resources, prompting it to hire outside help for some startups. He described those third-quarter expenses as specific to the period and said the company has been adding internal operational resources to support growth.

“The new contracts that we’re winning are margin accretive to us,” Kelleher said, adding that pricing discipline would be important to improving margins over time.

Suchinski expects another sequential margin improvement in the fourth quarter, supported by procurement savings, continuous improvement initiatives and a more favorable balance between contract wins and exits. He also said GXO has completed the divestment of Wincanton’s dedicated U.K. grocery business, substantially completed the Wincanton integration and is delivering $60 million in run-rate cost synergies.

Guidance maintained as peak season approaches

GXO reaffirmed its 2026 outlook for organic revenue growth of 4% to 5%, adjusted EBITDA of $945 million to $965 million, adjusted diluted earnings per share of $2.95 to $3.15 and free cash flow conversion of 30% to 40%.

Suchinski said the company expects fourth-quarter organic growth slightly above 5%, assuming flat volumes. If volume trends hold, growth could be similar to the third quarter, which benefited from a 1% volume increase, he said.

Kelleher characterized the company’s peak-season posture as “cautiously optimistic.” He said GXO was not currently seeing an impact from West Coast port congestion and that customers it serves had largely positioned peak-season inventory in August and September.

The company generated $156 million in operating cash flow and $85 million in free cash flow during the quarter. It ended the period with $340 million in cash, $2.8 billion in debt and net leverage of 2.7 times. GXO repurchased $84 million of shares during the quarter, leaving $200 million under its existing authorization.

Technology rollout and competition

GXO IQ is live across all three of the company’s regions, and GXO remains on track to deploy it at roughly 50 sites in 2026, Kelleher said. A unified labor management system has also been rolled out in the U.S., U.K., Netherlands, Poland and Spain.

Kelleher said GXO expects the labor system to improve labor costs by 5% to 15% at individual operations over a multiyear rollout. He estimated AI could provide a further mid-single-digit percentage improvement in productivity, with savings shared between GXO and its customers.

On competition, Kelleher said GXO has not lost contract logistics business to Amazon and does not see it in competitive bids in that market. He said GXO is winning more than 30% of the opportunities it pursues, although it often competes against multiple providers.

GXO plans to discuss its long-term strategy, technology roadmap and financial framework at an investor day on Nov. 16 at the New York Stock Exchange.

About GXO Logistics (NYSE:GXO)

GXO Logistics, Inc NYSE: GXO is a contract logistics company that manages supply chain operations for businesses worldwide. Its services include warehousing, distribution, order fulfillment, transportation management, reverse logistics, and other value-added supply chain solutions.

The company supports customers across sectors such as retail, consumer goods, technology, healthcare, and industrial manufacturing. GXO uses warehouse automation, robotics, data analytics, and other technology to help customers improve inventory management, delivery speed, and operational efficiency.

GXO was formed through the spin-off of XPO's logistics segment and began operating as an independent public company in 2021.

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