GXO Logistics 2025 Q2 Earnings Misses Targets as Net Income Declines 28.2%

GXO Logistics delivered mixed results in Q2, missing expectations with a 28.2% year-over-year drop in net income. The company raised full-year adjusted EBITDA guidance due to better-than-expected performance in the first half but faces ongoing challenges related to integration costs and deleveraging.

Revenue
GXO Logistics reported total revenue of $3.30 billion in 2025 Q2, a 15.9% increase from $2.85 billion in 2024 Q2. The company’s performance was driven by robust growth in key sectors, including omnichannel retail, which contributed $1.63 billion. Technology and consumer electronics added $402 million, while industrial and manufacturing and food and beverage segments generated $403 million and $359 million, respectively. The consumer packaged goods and other sectors also contributed $290 million and $219 million, showcasing a well-rounded performance across GXO’s diverse client base.

Earnings/Net Income
The company’s EPS fell 28.1% year-over-year to $0.23 from $0.32 in 2024 Q2. Net income declined to $28 million in 2025 Q2, a 28.2% drop from $39 million in the same period last year. The earnings dip reflects ongoing challenges, such as transaction and integration costs, despite strong revenue growth.

Price Action
GXO’s stock price showed mixed performance in the short term. While it edged up 0.99% during the latest trading day, it dropped 5.04% over the most recent full trading week and 4.05% month-to-date.

Post-Earnings Price Action Review
The strategy of buying GXO shares after a revenue-raising quarter on the earnings report date and holding for 30 days yielded a 17.44% return over the past three years. However, this underperformed the benchmark by 31.15%, with a maximum drawdown of 0.00% and a Sharpe ratio of 0.14, indicating moderate returns and significant volatility.

CEO Commentary
GXO’s CEO highlighted strong Q2 2025 performance, emphasizing business optimization and capital deployment. While acknowledging challenges from transaction and integration costs, leadership remains focused on strategic investments, market positioning, and organic revenue growth. The CEO underscored GXO’s commitment to deleveraging and strengthening liquidity, reinforcing confidence in the company’s long-term financial strategy.

Guidance
For full-year 2025, GXO targets continued organic revenue growth and improved adjusted EBITDA, with a focus on free cash flow conversion. The company expects to maintain a strong balance sheet and reduce its net leverage ratio. No reconciliation to GAAP measures is provided for these targets, but GXO anticipates third-quarter adjusted EBITDA to reflect ongoing operational improvements.

Additional News
Recent developments include the successful acquisition of Wincanton, which is expected to unlock growth opportunities in the UK and across European aerospace and industrial sectors. GXO has initiated integration efforts, with teams already collaborating on strategic tenders. The company also announced a raise in full-year adjusted EBITDA guidance for 2025, following earlier increases in June. Additionally, seasoned supply chain leader Patrick Kelleher is set to assume the role of CEO, succeeding Malcolm Wilson, who has stepped down. Meanwhile, CFO Baris Oran is transitioning out of his role to pursue new opportunities, with a smooth leadership handover expected.