XPO, Inc. 10-Q Summary: Quarter Ended June 30, 2026
Business Context and Reporting Period
XPO, Inc. is a leading provider of freight transportation services operating in North America and Europe. The company is organized into two reportable segments: North American Less-Than-Truckload (LTL) and European Transportation. This report covers the quarterly period ended June 30, 2026, and the six months ended June 30, 2026. As of July 24, 2026, there were 117,086,465 shares of common stock outstanding.
Key Financial Metrics
| Metric | Q2 2026 | Q2 2025 | YTD 2026 | YTD 2025 |
|---|---|---|---|---|
| Revenue | $2,355 million | $2,080 million | $4,451 million | $4,034 million |
| Operating Income | $271 million | $198 million | $445 million | $349 million |
| Net Income | $162 million | $106 million | $263 million | $175 million |
| Diluted EPS | $1.36 | $0.89 | $2.22 | $1.47 |
| Adjusted EBITDA | $434 million | $340 million | $753 million | $618 million |
| Operating Cash Flow (YTD) | $491 million | $389 million | N/A | N/A |
| Cash and Equivalents | $298 million | N/A | N/A | N/A |
| Total Debt (Carrying Value) | $3,206 million | N/A | N/A | N/A |
| Total Liquidity | $898 million | N/A | N/A | N/A |
Note: Liquidity includes $298 million in cash and cash equivalents plus approximately $600 million available under the Revolving Credit Facility.
Material Changes vs. Prior Period
- Revenue Growth: Consolidated revenue increased 13.2% in Q2 2026 and 10.3% YTD compared to 2025. Growth was driven by higher volumes, improved yield, and fuel surcharges, with foreign currency movements contributing approximately 1.0 percentage point in Q2.
- Profitability: Operating income margin improved to 11.5% in Q2 2026 from 9.5% in Q2 2025. Net income increased 52.8% in Q2 and 50.3% YTD.
- Segment Performance:
- North American LTL: Revenue rose 15.2% in Q2. Adjusted EBITDA increased 30.0% to $390 million, driven by higher yield and shipments per day.
- European Transportation: Revenue rose 10.2% in Q2. Adjusted EBITDA increased 9.1% to $48 million, aided by improved pricing and foreign currency movements.
- Cost Structure: Restructuring costs increased significantly to $22 million in Q2 2026 (vs. $8 million in Q2 2025), primarily related to European operations. Fuel and operating expenses increased 24.0% in Q2 due to higher fuel prices.
- Debt Refinancing: In May 2026, the company entered into a new $500 million Term Loan A and a $385 million Term Loan B facility, using proceeds to repay $885 million of existing debt. This resulted in a $5 million debt extinguishment loss.
Guidance, Outlook, and Risks
- Capital Expenditures: Management anticipates full-year 2026 gross capital expenditures to be between $500 million and $600 million.
- Divestiture: The Board's authorization to divest the European Transportation business remains in effect, though no assurance is given regarding the timing or terms of a transaction.
- Technology: Continued investment in proprietary AI and intelligent automation to optimize linehaul, pricing, and labor analytics.
- Legal Contingencies: A final judgment was entered in May 2026 regarding the legacy Con-way insurance contribution litigation. The judgment aligned with the $35 million charge accrued in Q3 2025. The matter is currently subject to appeal by Allianz and other defendants.
- Share Repurchases: The company repurchased $100 million of common stock YTD 2026. Approximately $525 million remains available under the current authorization.
Key Facts for Investor Verification
- Verify the impact of the ongoing appeal in the Con-way insurance litigation on future financial statements.
- Monitor the status and potential terms of the proposed divestiture of the European Transportation segment.
- Assess the sustainability of yield improvements in the North American LTL segment amidst potential freight volume fluctuations.
- Review the utilization of the $600 million Revolving Credit Facility and the $228 million trade receivables securitization program.
- Track the execution of restructuring initiatives in the European segment and their impact on future operating costs.