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

GXO Logistics reported second-quarter results that fell short of expectations, with net income declining to $28 million compared to $39 million in the prior year. The company raised its full-year adjusted EBITDA guidance, citing strong revenue growth and strategic momentum, including the Wincanton acquisition and new business wins.

Revenue
GXO Logistics reported total revenue of $3.30 billion for fiscal 2025 Q2, reflecting a 15.9% increase compared to $2.85 billion in the same period last year. The growth was driven by robust performance across various industry segments. Omnichannel retail led the way with $1.63 billion in revenue, followed by technology and consumer electronics at $402 million, and industrial and manufacturing at $403 million. Food and beverage generated $359 million, while consumer packaged goods contributed $290 million. Additional revenue came from other sectors, totaling $219 million.

Earnings/Net Income
GXO Logistics's EPS declined 28.1% to $0.23 in 2025 Q2 from $0.32 in 2024 Q2. Meanwhile, the company's net income declined to $28 million in 2025 Q2, down 28.2% from $39 million reported in 2024 Q2, indicating a significant underperformance in profitability.

Price Action
The stock price of GXO Logistics has climbed 7.49% during the latest trading day, has edged up 1.43% during the most recent full trading week, and has edged up 1.18% month-to-date.

Post-Earnings Price Action Review
The strategy of buying GXO when it beats revenue and selling in 30 days resulted in a -41.40% return, significantly underperforming the benchmark return of 39.38%. The strategy had a maximum drawdown of 0.00%, a Sharpe ratio of -0.31, and a volatility of 42.22%.

CEO Commentary
Malcolm Wilson, CEO, highlighted GXO’s strong Q2 performance with $3.3 billion in record revenue and $212 million in adjusted EBITDA, driven by $307 million in new business wins, including clients like AkzoNobel and Boeing. He emphasized strategic momentum from the Wincanton acquisition, which unlocked growth in industrial and aerospace markets and is expected to deliver $60 million in cost synergies by 2026. Wilson also introduced GXO IQ, a Google Cloud-powered AI platform for supply chain operations, underscoring innovation as a growth lever. He expressed optimism about the business’s trajectory, noting a $2.4 billion sales pipeline, robust customer satisfaction, and long-term partnerships, including a 20-year expansion with a top U.S. retailer. Despite a cautious tone on full-year guidance, he remained confident in sustained momentum into 2026.

Guidance
The company raised full-year 2025 adjusted EBITDA guidance to $865 million to $885 million, up $25 million from prior estimates, alongside organic revenue growth of 3.5% to 6.5% and adjusted diluted EPS of $2.43 to $2.63. The company expects 25% to 35% adjusted EBITDA to free cash flow conversion and plans to leverage Wincanton synergies, which will ramp through 2026. CapEx is targeted at 2.5% to 3% of revenue, with a focus on high-return investments.

Additional News
GXO Logistics announced the successful completion of the Wincanton acquisition, which was granted final regulatory approval. This acquisition is expected to unlock growth opportunities in the UK and across aerospace and industrial markets in Europe. The integration is set to begin in the coming weeks, with teams already collaborating on strategic tenders. In a leadership change, the company announced that Patrick Kelleher, a seasoned supply chain leader, will take over as CEO later this month. This transition marks a new chapter for GXO under Kelleher's leadership. Additionally, CFO Baris Oran plans to step down to pursue new opportunities, with a successor to be named soon.