QXO, Inc. 2026 Q1 Filing Summary
Business Context and Reporting Period
This Form 10-Q covers the quarterly period ended March 31, 2026. QXO, Inc. has fundamentally transformed from a technology solutions provider into the largest publicly-traded distributor of roofing, waterproofing, and complementary building products in North America following the acquisition of Beacon Roofing Supply, Inc. (the "Beacon Acquisition") which closed on April 29, 2025. The company operates as a single segment and serves customers across the U.S. and Canada.
Key Financial Metrics
| Metric | Q1 2026 | Q1 2025 |
|---|---|---|
| Net Sales | $1,730.2 million | $13.5 million |
| Gross Profit | $409.3 million (23.7% margin) | $5.4 million (40.0% margin) |
| Net Loss | $(227.1) million | $8.8 million income |
| Adjusted EBITDA | $1.2 million (0.1% margin) | $(9.0) million |
| Cash and Equivalents | $3,046.3 million | $5,072.0 million (beginning of period) |
| Long-Term Debt (Net) | $3,058.6 million | $3,057.3 million |
| Operating Cash Flow | $70.6 million | $36.5 million |
Material Changes vs. Prior Period
- Revenue Surge: Net sales increased to $1.73 billion from $13.5 million, driven entirely by the inclusion of Beacon's operations. Legacy software revenue was $14.6 million.
- Operating Loss: The company reported a net loss of $227.1 million compared to a net income of $8.8 million in the prior year. This is primarily due to significant amortization ($116.9 million) and depreciation ($47.3 million) from the Beacon acquisition, alongside increased SG&A expenses ($497.0 million) to support the expanded business.
- Interest Expense: Net interest expense was $31.1 million, a reversal from $56.6 million in interest income in Q1 2025, reflecting debt incurred to fund the Beacon Acquisition.
- Restructuring: The company recorded $17.2 million in pre-tax restructuring charges, including $6.5 million for severance and $9.8 million for lease abandonment costs.
Guidance, Outlook, and Risks
Strategic Outlook: Management targets $50 billion in annual revenues within the next decade through accretive acquisitions and organic growth. The company recently completed the acquisition of Kodiak Building Partners for $2.25 billion (April 1, 2026) and has entered into an agreement to acquire TopBuild Corp. for approximately $17.0 billion (expected to close Q3 2026).
Liquidity: As of March 31, 2026, the company held $3.05 billion in cash and cash equivalents. It maintains a $2.0 billion Asset-Based Lending (ABL) facility with $1.98 billion in available borrowing capacity. The company expects existing liquidity to support operations for the next 12 months.
Risks and Contingencies:
- Acquisition Risks: The proposed TopBuild Acquisition is subject to regulatory and stockholder approvals; failure to close could result in a $600 million termination fee and loss of anticipated synergies.
- Integration: Risks related to integrating Beacon, Kodiak, and potentially TopBuild, including culture clashes, system failures, and retention of key talent.
- Market Conditions: The building products industry is cyclical and sensitive to weather, interest rates, and housing market conditions.
- Dilution: Significant potential dilution exists from outstanding warrants, convertible preferred stock, and the stock consideration in the TopBuild deal.
Investor Verification Checklist
- Verify the status and closing timeline of the TopBuild Corp. acquisition ($17.0 billion) and associated regulatory approvals.
- Review the purchase price allocation for the Kodiak acquisition, which was not finalized in this filing.
- Monitor working capital trends, specifically inventory levels ($1.67 billion) and vendor rebates receivable ($478.8 million), given the seasonal nature of the business.
- Assess the impact of preferred stock dividends ($30.4 million paid in Q1) on future cash flow and liquidity.
- Track the realization of cost synergies and integration progress from the Beacon and Kodiak acquisitions to offset high amortization and restructuring costs.