GXO Logs Record $13.2B Revenue, but Organic Growth Remains a Puzzle

Date of Call: Feb 11, 2026

Financials Results

• Revenue: Record $13.2B for full year, up 12.5% YOY (of which 3.9% organic). Q4 revenue $3.5B, up 7.9% YOY (3.5% organic).
• EPS: Adjusted diluted EPS $2.51 for full year. Q4 adjusted diluted EPS $0.87, up from $0.37 GAAP.

Guidance:

• Organic revenue growth of 4% to 5%.
• Adjusted EBITDA of $930M to $970M, an increase of 8% at midpoint.
• Adjusted diluted EPS of $2.85 to $3.15, an increase of 20% at midpoint.
• Adjusted EBITDA to free cash flow conversion of 30% to 40%.

Business Commentary:

Record Revenue and EBITDA:

• GXO Logistics reported record revenue of $13.2 billion for the full year 2025, with organic growth contributing 3.9%.
• The company also achieved record adjusted EBITDA of $881 million, marking an 8% increase.
• The growth was driven by strong performance across all regions, new business wins totaling $1.1 billion, and a resilient contractual business model.

Organic Growth and Strategic Verticals:

• GXO's new business wins in 2025 provided visibility for accelerating growth in 2026, with $774 million of incremental new business revenue already secured.
• The company is focusing on strategic verticals such as life sciences, aerospace and defense, and industrial technology, particularly data centers.
• Growth in these verticals was driven by significant contract wins and expanding partnerships, such as with Boeing and BAE Systems.

Leadership Changes and Operational Efficiency:

• GXO introduced new leadership in commercial, operations, and regional roles to enhance operational execution and drive margin expansion.
• The appointment of Chief Operating Officer Bart Beeks aims to scale consistent operating standards and improve productivity through better labor planning and technology integration.
• These changes are designed to sharpen growth priorities and go-to-market disciplines to accelerate organic growth.

AI and Automation Strategy:

• GXO is rolling out its AI-powered warehouse operating system, GXO IQ, which is expected to improve labor planning, forecasting, and workflow management.
• The company is also advancing its leadership in automation and robotics, particularly with the deployment of humanoid robots.
• These initiatives are positioned to amplify GXO's competitive differentiation and drive productivity benefits.

Sentiment Analysis:

Overall Tone: Positive

• GXO delivered a 'strong finish to 2025' and 'record quarterly and full year performance.' Management states: 'We have a solid foundation to build on, and I'm very excited for the future.' Guidance shows accelerating organic growth and margin expansion with a 20% EPS growth midpoint.

Q&A:

• Question from Stephanie Benjamin Moore (Jefferies LLC): As you think about your market-leading position and industry vertical strategy, can you speak to your just overall philosophy on making sure GXO's value is appropriately recognized by your customers. And ultimately, what that can mean for pricing, churn and really organic growth in the future?
  Response: Vertical focus is critical for organic growth and client-aligned solutions will deliver value, leading to pricing power. Strategic verticals like aerospace, defense, industrial technology, and life sciences offer significant value to commercialize.

• Question from Stephanie Benjamin Moore (Jefferies LLC): Can you walk through how we should think about the cadence through 2026 for growth and EBITDA?
  Response: EBITDA phasing reflects timing of project start-ups and exits; quarterly swings are immaterial. High visibility from new business wins already secured will support growth throughout the year.

• Question from Ryan Deveikis (Wells Fargo Securities): The second half run rate looks to be a little bit more elevated. How should we think about that as we exit 2026 into 2027 from a fairly strong base?
  Response: New business wins from the current pipeline are expected to accelerate in Q4 2026 and into 2027, benefiting from a typical 6-9 month sales cycle and integration benefits from Wincanton.

• Question from Ryan Deveikis (Wells Fargo Securities): On the fourth quarter, organic growth came in a little bit light versus our expectations. Can you maybe walk us through what happened in the quarter? And why doesn't solid productivity carry fully through to Q1 and Q2 EBITDA?
  Response: Q4 growth was strong with net new business wins; organic shortfall driven by milder volume trends in Continental Europe and U.K. Productivity gains are being invested in to accelerate organic growth, with margin expansion contemplated in guidance.

• Question from Madison Pasterchick (Morgan Stanley): What is the timing for Investor Day?
  Response: Investor Day is definitely in 2026, with a date to be announced shortly.

• Question from Madison Pasterchick (Morgan Stanley): What macro assumptions are baked into the low and high end of the guidance range?
  Response: Guidance assumes flat volumes in existing operations, consistent with the macroeconomic backdrop. Organic growth is the lever, with new business wins providing uplift, and inflation pass-through and retention rates similar to 2025.

• Question from Scott Schneeberger (Oppenheimer): What items could put you at the high end or low end of the guidance range?
  Response: High end driven by speed of implementing new business wins from the pipeline; low end sensitivity on implementation and profitability realization. EBITDA range also depends on productivity and cost improvement initiatives.

• Question from Scott Schneeberger (Oppenheimer): What is the strategy with balancing investments currently, and what type of investments are you making?
  Response: Investments focus on improving growth in strategic verticals (digital marketing, Defense Advisory Board) and structurally increasing cost efficiency via labor management systems, GXO IQ AI, and ERP simplification.

• Question from Richa Talwar (Deutsche Bank): Is there upside risk to the margin outlook for 2026 if productivity enhancements go right? And can you provide an update on data centers and automation plans?
  Response: Detailed margin opportunity will be shared at Investor Day; current guidance contemplates existing initiatives. Data center TAM is $28B, pipeline has more than doubled in last 6 months, with 5 contracts signed in Q4 across multiple regions.

• Question from Patrick Creuset (Goldman Sachs): What time line for meaningful commercial traction and organic growth lift off in the U.S. business? When will margin progress converge with European peers?
  Response: North America is already seeing traction; growth will follow sales cycle. Structural margin opportunity exists, with Wincanton integration delivering $60M run rate synergies by end of 2026, enabling margin expansion.

• Question from Uday Khanapurkar (TD Cowen): On the organic growth guide, is the implied churn based on typical rates or concluded conversations? Are U.S. volume signals better implying a softer U.K./Europe offset?
  Response: Guidance assumes steady retention similar to 2025 and flat volumes prudently. Q4 trends were stronger in North America vs. Continental Europe/U.K., but full-year 2026 is taken as flat for prudence.

• Question from Jeffrey Kauffman (Vertical Research Partners): On the macro side, where are you seeing incremental positive and negative changes geographically or by vertical?
  Response: Contract logistics outsourcing is increasing as customers seek to outsource complex supply chain challenges, especially in a challenging macro. Industry growth is not pinned to broad economy, with value proposition strengthening.

• Question from David Zazula (Barclays): How is the NHS rollout progressing and any outlook on the NHS side?
  Response: NHS business is on plan, providing great service. It serves as an anchor to grow relationships in life sciences and has significantly boosted the pipeline, with momentum expected to continue.

• Question from Kevin Gainey (Thompson, Davis): How are you thinking about North American expansion for organic growth vs. acquisition? Is it the most outsized opportunity?
  Response: North America is a priority for organic growth, with underrepresentation offering upside. M&A strategy focuses on accelerating growth in North America and strategic verticals, but no deals imminent; capital allocation focused on organic growth and deleveraging.

Contradiction Point 1

EBITDA Margin Expansion Guidance

Guidance for margin expansion appears inconsistent between quarters.

Could you summarize the quarter's performance, including peak season dynamics and volume trends by vertical and geography, and explain why strong cost productivity didn't fully translate to Q1 and Q2 EBITDA? - Ryan Deveikis (Wells Fargo Securities, LLC)

2025Q4: For 2026, EBITDA margin is expected to expand by around 20 basis points. - [Baris Oran](CFO)

What is the status and timeline for your ERP simplification and AI initiatives, and what impact will they have on operating leverage and EBITDA margin? - Ryan Deveikis (Wells Fargo Securities)

2025Q3: We expect EBITDA margin expansion to be ~60 basis points in 2026. - [Baris Oran](CFO)

Contradiction Point 2

Volume Outlook and Organic Growth Drivers

The primary driver for organic growth shifts from volume growth to gross growth from new business.

Can you explain the macro assumptions underlying the low, high, and midpoint of your guidance range, and whether the midpoint is based on current trends? - Madison Pasterchick (Morgan Stanley)

2025Q4: The guidance is based on a conservative view of current customer volumes, with the lever for growth being organic revenue. - [Patrick Kelleher](CEO)

What is the update on the progress and timing of your ERP simplification and AI initiatives, and how will they impact operating leverage and EBITDA margin? - Ryan Deveikis (Wells Fargo Securities)

2025Q3: Our 2026 guidance assumes organic revenue growth of ~6% with volumes expected to be flat. - [Patrick Kelleher](CEO)

Contradiction Point 3

Churn Rate and Retention Assumptions

Assumptions about customer retention rates change between guidance periods.

Can you confirm the mid-single-digit churn rate implied by 2026 locked-in wins is based on typical churn for this cycle or if customer conversations have concluded? Could market support lead to outperformance this year? - Uday Khanapurkar (TD Cowen)

2025Q4: For 2026, retention rates are assumed to be steady similar to 2025... - [Baris Oran](CFO)

Can you provide an update on the current status and timeline of your ERP simplification and AI initiatives and their impact on operating leverage and EBITDA margin? - Ryan Deveikis (Wells Fargo Securities)

2025Q3: Our guidance assumes retention rates will remain stable and reflects a conservative view... - [Baris Oran](CFO)

Contradiction Point 4

Wincanton Integration Timeline and Synergy Realization

Conflicting timelines for achieving Wincanton cost synergies.

How should we view the trajectory from 2026 to 2027 given the elevated second-half run rate and strong base? - Ryan Deveikis (Wells Fargo Securities, LLC)

2025Q4: The benefits of the Wincanton integration will become more visible in the second half of 2026. $60 million in run-rate synergies by year-end. - [Baris Oran](CFO), [Patrick Kelleher](CEO)

Could organic revenue growth reach upper single digits by 2026? What's your outlook on share buybacks going forward? - Christian F. Wetherbee (Wells Fargo Securities, LLC)

2025Q2: Wincanton adds $60M in cost synergies ($40M in 2025, majority by end of 2026). Significant wins... expected in late 2026/early 2027. - [Malcolm Wilson](CEO), [Baris Oran](CFO)

Contradiction Point 5

Organic Growth Guidance and Drivers

Shift from growth driven by new business wins to being constrained by volume assumptions.

Does the organic growth guide imply a mid-single-digit churn rate based on 2026 locked-in wins, and is this estimate derived from typical churn at this cycle stage or concluded customer conversations? Could broader market support lead to outperformance this year? - Uday Khanapurkar (TD Cowen)

2025Q4: For 2026, retention rates are assumed to be steady similar to 2025... Volumes are assumed flat for prudence. The 6% gross growth from secured wins will uplift the organic growth figure. - [Baris Oran](CFO)

What geographic and end market changes contributed to the growth acceleration from Q1 to Q2, and can you comment on peak season? - Stephanie Lynn Benjamin Moore (Jefferies LLC)

2025Q2: Organic growth guidance midpoint is maintained at 5% for the full year as a prudent approach. Growth is driven by strong new business start-ups and expected improvement in customer retention. - [Malcolm Wilson](CEO)