QXO, Inc. (QXO) - Form 10-Q Summary
Business Context and Reporting Period
This Quarterly Report covers the period ended June 30, 2026. QXO, Inc. is the largest publicly-traded distributor of roofing, waterproofing, and complementary building products in North America. The company is executing an aggressive acquisition strategy to become a tech-enabled leader in the $800 billion building products industry. During the reporting period, QXO completed the acquisition of Kodiak Building Partners, Inc. (April 1, 2026) and, immediately following the period end on July 1, 2026, completed the acquisition of TopBuild Corp.
Key Financial Metrics (Six Months Ended June 30, 2026)
| Metric | Amount (in millions) |
|---|---|
| Net Sales | $4,976 |
| Gross Profit | $1,212 |
| Gross Margin | 24.4% |
| Operating Loss | $(294) |
| Net Loss | $(282) |
| Adjusted EBITDA | $273 |
| Adjusted EBITDA Margin | 5.5% |
| Cash and Cash Equivalents | $2,774 |
| Total Liquidity | $4.70 billion (including $1.93B ABL availability) |
| Long-Term Debt (Net) | $6,029 |
Material Changes vs. Prior Period
- Revenue Growth: Net sales increased 159% to $4.98 billion (from $1.92 billion in the prior year) driven primarily by the inclusion of Beacon Roofing Supply (acquired April 2025) and Kodiak Building Partners (acquired April 2026).
- Profitability: While GAAP Net Loss increased to $282 million (from $50 million), this is largely due to non-cash amortization ($257 million) and stock-based compensation ($68 million) associated with acquisitions. Adjusted Net Income was $73 million compared to $145 million in the prior year.
- Debt Structure: Long-term debt increased significantly to $6.03 billion (from $3.06 billion) to fund the Kodiak and TopBuild acquisitions. This includes new Senior Notes issued in June 2026 ($3.0 billion total) and an incremental term loan.
- Working Capital: Accounts receivable and inventories increased substantially ($1.78B and $2.07B respectively) reflecting the scale of the combined entity.
Guidance, Outlook, and Risks
Outlook: Management targets $50 billion in annual revenues within the next decade through accretive acquisitions and organic growth. The company expects seasonality to impact results, with peak demand in quarters ending June, September, and December.
Recent Developments: The TopBuild Acquisition ($15 billion purchase price) closed on July 1, 2026. Initial accounting for this transaction is incomplete and will be disclosed in the Q3 2026 filing.
Key Risks:
- Integration Risk: Challenges in integrating Beacon, Kodiak, and TopBuild operations, systems, and cultures.
- Supply Chain: Volatility in raw material costs (e.g., asphalt, steel) and potential supply shortages.
- Debt Obligations: Significant interest expense and mandatory prepayments associated with the increased debt load.
- Regulatory & Legal: Exposure to construction defect claims, warranty liabilities, and changing building codes.
Investor Verification Checklist
- TopBuild Accounting: Verify the provisional purchase price allocation and goodwill impact for the TopBuild acquisition in the upcoming Q3 2026 filing.
- Debt Covenants: Confirm compliance with fixed charge coverage ratios and other covenants under the ABL and Term Loan facilities given the increased leverage.
- Integration Costs: Monitor "Transformation costs" and "Transaction costs" to ensure they align with projected synergies and do not erode Adjusted EBITDA.
- Preferred Stock Dividends: Track cash outflows for dividends on Convertible, Mandatory Convertible, and Series C Preferred Stock, which are significant cash obligations.
- Seasonality: Assess Q3 and Q4 performance to confirm the expected seasonal recovery in roofing and construction demand.