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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
_______________________________________________________
FORM 10-Q
_______________________________________________________
(Mark One)
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| ☒ | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the quarterly period ended September 30, 2026
or
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| ☐ | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the transition period from to
Commission File Number: 001-40470
_______________________________________________________
GXO Logistics, Inc.
(Exact name of registrant as specified in its charter)
____________________________________________________________________________________________________________
| | | | | | | | |
| Delaware | | 86-2098312 |
| (State or other jurisdiction of incorporation or organization) | | (I.R.S. Employer Identification No.) |
| Two American Lane | | |
Greenwich, Connecticut | | 06831 |
| (Address of principal executive offices) | | (Zip Code) |
(203) 489-1287
Registrant’s telephone number, including area code
_______________________________________________________
Securities registered pursuant to Section 12(b) of the Act:
| | | | | | | | | | | | | | |
| Title of each class | | Trading Symbol(s) | | Name of each exchange on which registered |
| Common stock, par value $0.01 per share | | GXO | | New York Stock Exchange |
| 3.750% Notes due 2030 | | GXO/30 | | New York Stock Exchange |
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
| | | | | | | | | | | | | | | | | | | | |
| Large accelerated filer | | ☒ | | Accelerated filer | | ☐ |
| | | | | | |
| Non-accelerated filer | | ☐ | | Smaller reporting company | | ☐ |
| | | | | | |
| | | | Emerging growth company | | ☐ |
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒
As of November 2, 2026, there were 113,029,173 shares of the registrant’s common stock, par value $0.01 per share, outstanding.
| | | | | | | | |
GXO Logistics, Inc. |
| Form 10-Q |
For the Quarterly Period Ended September 30, 2026 |
Table of Contents |
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PART I—FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
GXO Logistics, Inc.
Condensed Consolidated Statements of Operations
(Unaudited)
| | | | | | | | | | | | | | | | | | | | | | | | | | |
| | Three Months Ended September 30, | | Nine Months Ended September 30, |
| (Dollars in millions, shares in thousands, except per share amounts) | | 2026 | | 2025 | | 2026 | | 2025 |
| Revenue | | $ | 3,590 | | | $ | 3,395 | | | $ | 10,329 | | | $ | 9,671 | |
| Direct operating expense | | 3,064 | | | 2,857 | | | 8,805 | | | 8,228 | |
| Selling, general and administrative expense | | 285 | | | 285 | | | 876 | | | 818 | |
| Depreciation and amortization expense | | 115 | | | 118 | | | 347 | | | 337 | |
| Transaction and integration costs | | 26 | | | 14 | | | 54 | | | 50 | |
| Restructuring costs and other | | 3 | | | 3 | | | 11 | | | 22 | |
| Regulatory matter | | — | | | — | | | — | | | 65 | |
| Net loss on divestiture of business | | 1 | | | — | | | 24 | | | — | |
| Operating income | | 96 | | | 118 | | | 212 | | | 151 | |
| Other income (expense), net | | 12 | | | 5 | | | 28 | | | (10) | |
| Interest expense, net | | (36) | | | (35) | | | (103) | | | (103) | |
| Income before income taxes | | 72 | | | 88 | | | 137 | | | 38 | |
| Income tax expense | | (7) | | | (28) | | | (40) | | | (45) | |
| Net income (loss) | | 65 | | | 60 | | | 97 | | | (7) | |
| Net income attributable to noncontrolling interests (“NCI”) | | (1) | | | (1) | | | (4) | | | (4) | |
| Net income (loss) attributable to GXO | | $ | 64 | | | $ | 59 | | | $ | 93 | | | $ | (11) | |
| | | | | | | | |
| Earnings (loss) per share | | | | | | | | |
| Basic | | $ | 0.56 | | | $ | 0.52 | | | $ | 0.81 | | | $ | (0.09) | |
| Diluted | | $ | 0.56 | | | $ | 0.51 | | | $ | 0.81 | | | $ | (0.09) | |
| | | | | | | | |
| Weighted-average shares outstanding used in computation of earnings (loss) per share | | | | | | | | |
| Basic | | 113,899 | | 114,473 | | 114,538 | | 116,075 |
| Diluted | | 114,636 | | 115,329 | | 115,395 | | 116,075 |
See accompanying Notes to Unaudited Condensed Consolidated Financial Statements.
GXO Logistics, Inc.
Condensed Consolidated Statements of Comprehensive Income
(Unaudited)
| | | | | | | | | | | | | | | | | | | | | | | | | | |
| | Three Months Ended September 30, | | Nine Months Ended September 30, |
| (In millions) | | 2026 | | 2025 | | 2026 | | 2025 |
| Net income (loss) | | $ | 65 | | | $ | 60 | | | $ | 97 | | | $ | (7) | |
| Other comprehensive income (loss), net of tax | | | | | | | | |
| Foreign currency translation adjustments | | 13 | | | (59) | | | (11) | | | 151 | |
| Cash flow hedges | | — | | | (1) | | | (1) | | | (2) | |
| Fair value hedges | | 1 | | | — | | | (1) | | | — | |
| Pension plans | | 2 | | | 3 | | | 7 | | | (9) | |
| Other comprehensive income (loss), net of tax | | 16 | | | (57) | | | (6) | | | 140 | |
| Comprehensive income, net of tax | | 81 | | | 3 | | | 91 | | | 133 | |
| Less: Comprehensive income (loss) attributable to NCI | | 1 | | | (2) | | | 4 | | | 5 | |
| Comprehensive income attributable to GXO | | $ | 80 | | | $ | 5 | | | $ | 87 | | | $ | 128 | |
See accompanying Notes to Unaudited Condensed Consolidated Financial Statements.
GXO Logistics, Inc.
Condensed Consolidated Balance Sheets
(Unaudited)
| | | | | | | | | | | | | | |
| | September 30, | | December 31, |
| (Dollars in millions, shares in thousands, except per share amounts) | | 2026 | | 2025 |
| ASSETS | | | | |
| Current assets | | | | |
| Cash and cash equivalents | | $ | 340 | | | $ | 854 | |
Accounts receivable, net of allowance of $14 and $15 | | 2,188 | | | 2,028 | |
| Other current assets | | 416 | | | 406 | |
| Total current assets | | 2,944 | | | 3,288 | |
| Long-term assets | | | | |
Property and equipment, net of accumulated depreciation of $2,270 and $2,126 | | 1,268 | | | 1,151 | |
| Operating lease right-of-use assets | | 2,786 | | | 2,563 | |
| Goodwill | | 3,722 | | | 3,781 | |
Intangible assets, net of accumulated amortization of $851 and $781 | | 812 | | | 909 | |
| Other long-term assets | | 613 | | | 570 | |
| Total long-term assets | | 9,201 | | | 8,974 | |
| Total assets | | $ | 12,145 | | | $ | 12,262 | |
| LIABILITIES AND EQUITY | | | | |
| Current liabilities | | | | |
| Accounts payable | | $ | 740 | | | $ | 758 | |
| Accrued expenses | | 1,555 | | | 1,492 | |
| Current debt | | 366 | | | 446 | |
| Current operating lease liabilities | | 777 | | | 745 | |
| Other current liabilities | | 415 | | | 434 | |
| Total current liabilities | | 3,853 | | | 3,875 | |
| Long-term liabilities | | | | |
| Long-term debt | | 2,452 | | | 2,619 | |
| Long-term operating lease liabilities | | 2,225 | | | 2,044 | |
| Other long-term liabilities | | 591 | | | 709 | |
| Total long-term liabilities | | 5,268 | | | 5,372 | |
Commitments and Contingencies (Note 13) | | | | |
| Stockholders’ Equity | | | | |
Common stock, $0.01 par value per share; 300,000 shares authorized, 120,490 and 119,868 shares issued and 113,026 and 114,512 shares outstanding, respectively | | 1 | | | 1 | |
Treasury stock, at cost; 7,464 and 5,356 shares, respectively | | (303) | | | (202) | |
Preferred stock, $0.01 par value per share; 10,000 shares authorized, none issued and outstanding | | — | | | — | |
| Additional Paid-In Capital (“APIC”) | | 2,691 | | | 2,667 | |
| Retained earnings | | 811 | | | 718 | |
| Accumulated Other Comprehensive Income (Loss) (“AOCIL”) | | (207) | | | (201) | |
| Total stockholders’ equity before NCI | | 2,993 | | | 2,983 | |
| NCI | | 31 | | | 32 | |
| Total equity | | 3,024 | | | 3,015 | |
| Total liabilities and equity | | $ | 12,145 | | | $ | 12,262 | |
See accompanying Notes to Unaudited Condensed Consolidated Financial Statements.
GXO Logistics, Inc.
Condensed Consolidated Statements of Cash Flows
(Unaudited)
| | | | | | | | | | | | | | |
| | Nine Months Ended September 30, |
| (In millions) | | 2026 | | 2025 |
| Cash flows from operating activities: | | | | |
| Net income (loss) | | $ | 97 | | | $ | (7) | |
| Adjustments to reconcile net income (loss) to net cash provided by operating activities | | | | |
| Depreciation and amortization expense | | 347 | | | 337 | |
| Stock-based compensation expense | | 35 | | | 34 | |
Deferred tax benefit | | (20) | | | (24) | |
| Other | | (11) | | | 11 | |
| Changes in operating assets and liabilities | | | | |
| Accounts receivable | | (215) | | | (76) | |
| Other assets | | (39) | | | 40 | |
| Accounts payable | | (4) | | | (91) | |
| Accrued expenses and other liabilities | | 73 | | | 40 | |
| Net cash provided by operating activities | | 263 | | | 264 | |
| Cash flows from investing activities: | | | | |
| Capital expenditures | | (204) | | | (269) | |
| Proceeds from the sale of property and equipment | | 7 | | | 101 | |
| Cash paid in connection with divestiture | | (38) | | | — | |
| Cross-currency swap agreements settlement | | — | | | (1) | |
| Net cash used in investing activities | | (235) | | | (169) | |
| Cash flows from financing activities: | | | | |
| Common stock repurchased and excise tax paid | | (102) | | | (200) | |
| Net borrowings under revolving credit facilities | | — | | | 38 | |
| Repayments of long-term and other debt | | (401) | | | (56) | |
| Repayments of finance lease obligations | | (46) | | | (38) | |
| Proceeds from exercise of stock options | | 7 | | | — | |
| Taxes paid related to net share settlement of equity awards | | (18) | | | (8) | |
| Obligations under factoring arrangements | | 20 | | | (2) | |
| Other | | 4 | | | — | |
| Net cash used in financing activities | | (536) | | | (266) | |
| Effect of exchange rates on cash and cash equivalents | | (6) | | | 30 | |
| Net decrease in cash, restricted cash and cash equivalents | | (514) | | | (141) | |
| Cash, restricted cash and cash equivalents, beginning of period | | 857 | | | 485 | |
| Cash, restricted cash and cash equivalents, end of period | | $ | 343 | | | $ | 344 | |
| | | | |
| Non-cash financing activities: | | | | |
| Excise tax liability related to stock repurchases | | $ | 1 | | | $ | 2 | |
| | | | |
| Reconciliation of cash, restricted cash and cash equivalents | | September 30, 2026 | | December 31, 2025 |
| Cash and cash equivalents | | $ | 340 | | | $ | 854 | |
| Restricted cash | | 3 | | | 3 | |
| Total cash, restricted cash and cash equivalents | | $ | 343 | | | $ | 857 | |
See accompanying Notes to Unaudited Condensed Consolidated Financial Statements.
GXO Logistics, Inc.
Condensed Consolidated Statements of Changes in Equity
(Unaudited)
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
(Shares in thousands,
dollars in millions) | | Shares | | Common Stock | | Treasury Stock | | APIC | | Retained
Earnings | | AOCIL | | Equity Before
NCI | | NCI | | Total
Equity |
| Balance as of June 30, 2026 | | 114,770 | | | $ | 1 | | | $ | (218) | | | $ | 2,680 | | | $ | 747 | | | $ | (223) | | | $ | 2,987 | | | $ | 35 | | | $ | 3,022 | |
| Net income | | — | | | — | | | — | | | — | | | 64 | | | — | | | 64 | | | 1 | | | 65 | |
| Other comprehensive income | | — | | | — | | | — | | | — | | | — | | | 16 | | | 16 | | | — | | | 16 | |
| Stock-based compensation | | — | | | — | | | — | | | 12 | | | — | | | — | | | 12 | | | — | | | 12 | |
| Common stock issued under employee stock plans and exercises of stock options | | 53 | | | — | | | — | | | — | | | — | | | — | | | — | | | — | | | — | |
| Tax withholding on vesting of stock-based compensation awards | | (21) | | | — | | | — | | | (1) | | | — | | | — | | | (1) | | | — | | | (1) | |
| Common stock repurchased | | (1,776) | | | — | | | (85) | | | — | | | — | | | — | | | (85) | | | — | | | (85) | |
| Dividends to NCI | | — | | | — | | | — | | | — | | | — | | | — | | | — | | | (5) | | | (5) | |
| Balance as of September 30, 2026 | | 113,026 | | | $ | 1 | | | $ | (303) | | | $ | 2,691 | | | $ | 811 | | | $ | (207) | | | $ | 2,993 | | | $ | 31 | | | $ | 3,024 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
(Shares in thousands,
dollars in millions) | | Shares | | Common Stock | | Treasury Stock | | APIC | | Retained
Earnings | | AOCIL | | Equity Before
NCI | | NCI | | Total
Equity |
| Balance as of December 31, 2025 | | 114,512 | | | $ | 1 | | | $ | (202) | | | $ | 2,667 | | | $ | 718 | | | $ | (201) | | | $ | 2,983 | | | $ | 32 | | | $ | 3,015 | |
| Net income | | — | | | — | | | — | | | — | | | 93 | | | — | | | 93 | | | 4 | | | 97 | |
| Other comprehensive loss | | — | | | — | | | — | | | — | | | — | | | (6) | | | (6) | | | — | | | (6) | |
| Stock-based compensation | | — | | | — | | | — | | | 35 | | | — | | | — | | | 35 | | | — | | | 35 | |
| Common stock issued under employee stock plans and exercises of stock options | | 943 | | | — | | | — | | | 7 | | | — | | | — | | | 7 | | | — | | | 7 | |
| Tax withholding on vesting of stock-based compensation awards | | (321) | | | — | | | — | | | (18) | | | — | | | — | | | (18) | | | — | | | (18) | |
| Common stock repurchased | | (2,108) | | | — | | | (101) | | | — | | | — | | | — | | | (101) | | | — | | | (101) | |
| Dividends to NCI | | — | | | — | | | — | | | — | | | — | | | — | | | — | | | (5) | | | (5) | |
| Balance as of September 30, 2026 | | 113,026 | | | $ | 1 | | | $ | (303) | | | $ | 2,691 | | | $ | 811 | | | $ | (207) | | | $ | 2,993 | | | $ | 31 | | | $ | 3,024 | |
See accompanying Notes to Unaudited Condensed Consolidated Financial Statements.
GXO Logistics, Inc.
Condensed Consolidated Statements of Changes in Equity
(Unaudited)
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
(Shares in thousands,
dollars in millions) | | Shares | | Common Stock | | Treasury Stock | | APIC | | Retained
Earnings | | AOCIL | | Equity Before
NCI | | NCI | | Total
Equity |
| Balance as of June 30, 2025 | | 114,452 | | | $ | 1 | | | $ | (202) | | | $ | 2,645 | | | $ | 616 | | | $ | (120) | | | $ | 2,940 | | | $ | 35 | | | $ | 2,975 | |
| Net income | | — | | | — | | | — | | | — | | | 59 | | | — | | | 59 | | | 1 | | | 60 | |
| Other comprehensive loss | | — | | | — | | | — | | | — | | | — | | | (54) | | | (54) | | | (3) | | | (57) | |
| Stock-based compensation | | — | | | — | | | — | | | 11 | | | — | | | — | | | 11 | | | — | | | 11 | |
| Common stock issued under employee stock plans and exercises of stock options | | 52 | | | — | | | — | | | — | | | — | | | — | | | — | | | — | | | — | |
| Tax withholding on vesting of stock-based compensation awards | | (18) | | | — | | | — | | | (1) | | | — | | | — | | | (1) | | | — | | | (1) | |
| | | | | | | | | | | | | | | | | | |
| Dividends to NCI | | — | | | — | | | — | | | — | | | — | | | — | | | — | | | — | | | — | |
| Balance as of September 30, 2025 | | 114,486 | | | $ | 1 | | | $ | (202) | | | $ | 2,655 | | | $ | 675 | | | $ | (174) | | | $ | 2,955 | | | $ | 33 | | | $ | 2,988 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
(Shares in thousands,
dollars in millions) | | Shares | | Common Stock | | Treasury Stock | | APIC | | Retained
Earnings | | AOCIL | | Equity Before
NCI | | NCI | | Total
Equity |
| Balance as of December 31, 2024 | | 119,496 | | | $ | 1 | | | $ | — | | | $ | 2,629 | | | $ | 686 | | | $ | (313) | | | $ | 3,003 | | | $ | 32 | | | $ | 3,035 | |
| Net income (loss) | | — | | | — | | | — | | | — | | | (11) | | | — | | | (11) | | | 4 | | | (7) | |
| Other comprehensive income | | — | | | — | | | — | | | — | | | — | | | 139 | | | 139 | | | 1 | | | 140 | |
| Stock-based compensation | | — | | | — | | | — | | | 34 | | | — | | | — | | | 34 | | | — | | | 34 | |
| Common stock issued under employee stock plans and exercises of stock options | | 547 | | | — | | | — | | | — | | | — | | | — | | | — | | | — | | | — | |
| Tax withholding on vesting of stock-based compensation awards | | (201) | | | — | | | — | | | (8) | | | — | | | — | | | (8) | | | — | | | (8) | |
| Common stock repurchased | | (5,356) | | | — | | | (202) | | | — | | | — | | | — | | | (202) | | | — | | | (202) | |
| Dividends to NCI | | — | | | — | | | — | | | — | | | — | | | — | | | — | | | (4) | | | (4) | |
| Balance as of September 30, 2025 | | 114,486 | | | $ | 1 | | | $ | (202) | | | $ | 2,655 | | | $ | 675 | | | $ | (174) | | | $ | 2,955 | | | $ | 33 | | | $ | 2,988 | |
See accompanying Notes to Unaudited Condensed Consolidated Financial Statements.
GXO Logistics, Inc.
Notes to Unaudited Condensed Consolidated Financial Statements
Note 1. Basis of Presentation
The accompanying unaudited Condensed Consolidated Financial Statements of GXO Logistics, Inc. (“GXO” or the “Company”) have been prepared in accordance with generally accepted accounting principles in the United States of America (“GAAP”) for interim financial information and pursuant to the rules of the United States Securities and Exchange Commission (the “SEC”). Accordingly, they do not include all of the information and notes required by GAAP for complete financial statements. In the opinion of management, all normal recurring accruals and adjustments considered necessary for a fair presentation of financial position, results of operations and cash flows at the dates and for the periods presented herein have been included. The Consolidated Balance Sheet as of December 31, 2025, was derived from audited annual financial statements as of that date. Operating results for interim periods are not necessarily indicative of full-year results. The accompanying Condensed Consolidated Financial Statements and Notes thereto should be read in conjunction with the Annual Report on Form 10-K for the year ended December 31, 2025.
The Company presents its operations as one reportable segment.
Basis of Consolidation
The Company’s Condensed Consolidated Financial Statements include the accounts of GXO and its majority-owned subsidiaries and variable interest entities of which the Company is the primary beneficiary. The Company has eliminated intercompany balances and transactions.
Use of Estimates
The preparation of the Company’s interim Condensed Consolidated Financial Statements requires management to make estimates and assumptions about future events. Management believes its use of estimates in these interim Condensed Consolidated Financial Statements to be reasonable.
Accounting Pronouncements Issued But Not Yet Adopted
In November 2024, the FASB issued ASU 2024-03, Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses. This standard requires all public companies to disclose more detailed information about certain costs and expenses in the notes to the financial statements in interim and annual reporting periods. This update will be effective for annual periods beginning after December 15, 2026, and interim periods beginning after December 15, 2027. Early adoption is permitted. The Company is currently evaluating the impact of adopting this standard on its disclosures.
In September 2025, the FASB issued ASU 2025-06, Intangibles- Goodwill and Other- Internal-Use Software (Subtopic 350-40): Targeted Improvements to the Accounting for Internal-Use Software. The amendments in this update remove all references to prescriptive and sequential software development stages (referred to as “project stages”) throughout Subtopic 350-40. Therefore, an entity is required to start capitalizing software costs when certain capitalization criteria are met. The ASU also supersedes guidance on website development costs. The amendments are effective for all entities for annual reporting periods beginning after December 15, 2027, and interim reporting periods within those annual reporting periods. Early adoption is permitted as of the beginning of an annual reporting period. The Company is currently evaluating the impact of this standard on its results of operations, financial position or cash flows, and the impact of adopting this standard on its disclosures.
Note 2. Revenue Recognition
Revenue disaggregated by geographical area was as follows:
| | | | | | | | | | | | | | | | | | | | | | | | | | |
| | Three Months Ended September 30, | | Nine Months Ended September 30, |
| (In millions) | | 2026 | | 2025 | | 2026 | | 2025 |
| United Kingdom | | $ | 1,751 | | | $ | 1,628 | | | $ | 5,030 | | | $ | 4,609 | |
| United States | | 846 | | | 801 | | | 2,379 | | | 2,320 | |
| Netherlands | | 263 | | | 275 | | | 789 | | | 760 | |
| France | | 216 | | | 210 | | | 637 | | | 612 | |
| Spain | | 184 | | | 170 | | | 527 | | | 479 | |
| Italy | | 111 | | | 103 | | | 332 | | | 303 | |
| Other | | 219 | | | 208 | | | 635 | | | 588 | |
| Total | | $ | 3,590 | | | $ | 3,395 | | | $ | 10,329 | | | $ | 9,671 | |
The Company’s revenue can also be disaggregated by various verticals, reflecting the customers’ principal industry. Revenue disaggregated by industry was as follows:
| | | | | | | | | | | | | | | | | | | | | | | | | | |
| | Three Months Ended September 30, | | Nine Months Ended September 30, |
| (In millions) | | 2026 | | 2025 | | 2026 | | 2025 |
| Omnichannel retail | | $ | 1,689 | | | $ | 1,645 | | | $ | 4,887 | | | $ | 4,693 | |
| Technology and consumer electronics | | 498 | | | 420 | | | 1,370 | | | 1,215 | |
| Industrial and manufacturing | | 405 | | | 386 | | | 1,207 | | | 1,151 | |
| Food and beverage | | 351 | | | 371 | | | 1,009 | | | 1,044 | |
| Consumer packaged goods | | 333 | | | 324 | | | 998 | | | 898 | |
| Other | | 314 | | | 249 | | | 858 | | | 670 | |
| Total | | $ | 3,590 | | | $ | 3,395 | | | $ | 10,329 | | | $ | 9,671 | |
Contract Assets and Liabilities
The contract asset and contract liability balances from contracts with customers were as follows:
| | | | | | | | | | | | | | |
| | September 30, | | December 31, |
| (In millions) | | 2026 | | 2025 |
| Contract assets and contract costs included in: | | | | |
| Other current assets | | $ | 36 | | | $ | 36 | |
| Other long-term assets | | 251 | | | 235 | |
| Total contract assets | | $ | 287 | | | $ | 271 | |
| Contract liabilities included in: | | | | |
| Other current liabilities | | $ | 244 | | | $ | 279 | |
| Other long-term liabilities | | 99 | | | 101 | |
| Total contract liabilities | | $ | 343 | | | $ | 380 | |
Contract liabilities represent the Company’s obligation to transfer services to a customer for which the Company has received consideration, or the amount due from a customer before the related services have been transferred.
Revenue recognized included in contract liabilities at the beginning of the period was $15 million and $46 million for the three months ended September 30, 2026 and 2025, respectively, and $244 million and $267 million for the nine months ended September 30, 2026 and 2025, respectively.
Note 3. Segment Information
The Company is organized geographically into three operating segments: (i) Americas and Asia-Pacific, (ii) United Kingdom and Ireland, and (iii) Continental Europe. The Company’s reporting unit results are regularly provided to the Chief Operating Decision Maker (“CODM”). The CODM is our Chief Executive Officer, who assesses the Company’s performance and allocates resources.
The CODM evaluates the Company’s performance and allocates resources primarily based on earnings before interest, taxes, depreciation and amortization, adjusted for transaction and integration costs, restructuring costs and other, regulatory matters, net loss on divestiture of business and unrealized gain/loss on foreign currency contracts (“Adjusted EBITDA”). The CODM uses Adjusted EBITDA to communicate performance targets to the segment managers, to allocate resources to the segments, and to monitor segment performance. Additionally, the CODM considers the performance of this measure against planned and forecasted amounts to make investing and resource allocation decisions. The actual results are used in assessing the performance of the Company and in establishing management’s compensation.
For disclosure purposes, we aggregate these three operating segments into one reportable segment due to the similar nature of their operations and economic characteristics.
The Company’s segment results were as follows:
| | | | | | | | | | | | | | | | | | | | | | | | | | |
| | Three Months Ended September 30, | | Nine Months Ended September 30, |
| (In millions) | | 2026 | | 2025 | | 2026 | | 2025 |
| Revenue | | $ | 3,590 | | | $ | 3,395 | | | $ | 10,329 | | | $ | 9,671 | |
| Direct operating expense | | 3,064 | | | 2,857 | | | 8,805 | | | 8,228 | |
Selling, general and administrative expense(1) | | 270 | | | 266 | | | 831 | | | 769 | |
Other (income) expense, net(2)(3) | | (10) | | | 2 | | | (22) | | | (1) | |
| Segment Adjusted EBITDA | | $ | 266 | | | $ | 270 | | | $ | 715 | | | $ | 675 | |
| Less: | | | | | | | | |
Corporate expenses(4) | | 15 | | | 19 | | | 45 | | | 49 | |
| Depreciation expense | | 88 | | | 87 | | | 263 | | | 247 | |
| Amortization of intangible assets acquired | | 27 | | | 31 | | | 84 | | | 90 | |
| Transaction and integration costs | | 26 | | | 14 | | | 54 | | | 50 | |
| Restructuring costs and other | | 3 | | | 3 | | | 11 | | | 22 | |
| Regulatory matter | | — | | | — | | | — | | | 65 | |
| Net loss on divestiture of business | | 1 | | | — | | | 24 | | | — | |
Unrealized (gain) loss on foreign currency contracts(3) | | (2) | | | (7) | | | (6) | | | 11 | |
| Interest expense, net | | 36 | | | 35 | | | 103 | | | 103 | |
| Income before income taxes | | 72 | | | 88 | | | 137 | | | 38 | |
| Income tax expense | | (7) | | | (28) | | | (40) | | | (45) | |
| Net income (loss) | | $ | 65 | | | $ | 60 | | | $ | 97 | | | $ | (7) | |
(1) Excludes unallocated corporate expenses.
(2) Other (income) expense, net, excluding unrealized (gain) loss on foreign currency contracts.
(3) Included in Other income/expense, net in the Condensed Consolidated Statements of Operations.
(4) Corporate expenses include unallocated costs related to corporate functions such as salaries and benefits, rent, and professional fees, which are recorded in Selling, general and administrative expenses in the Condensed Consolidated Statements of Operations.
Note 4. Leases
The Company has entered into noncancelable operating and finance leases primarily for real estate and warehouse equipment. The Company determines whether an arrangement is a lease at inception and, if so, whether that lease meets the classification criteria for a finance or an operating lease at the commencement date.
Total lease cost recorded in the Condensed Consolidated Statements of Operations was as follows:
| | | | | | | | | | | | | | | | | | | | | | | | | | |
| | Three Months Ended September 30, | | Nine Months Ended September 30, |
| (In millions) | | 2026 | | 2025 | | 2026 | | 2025 |
Operating lease cost(1) | | $ | 273 | | | $ | 232 | | | $ | 711 | | | $ | 670 | |
| Finance lease cost: | | | | | | | | |
Amortization of the right-of-use assets(2) | | 31 | | | 12 | | | 57 | | | 27 | |
Interest on the lease liabilities(3) | | 7 | | | 5 | | | 19 | | | 13 | |
| Total finance lease cost | | 38 | | | 17 | | | 76 | | | 40 | |
Variable lease cost(1) | | 60 | | | 48 | | 192 | | | 164 | |
Short-term lease cost(1) | | 28 | | | 61 | | | 129 | | | 149 | |
Total lease cost(4) | | $ | 399 | | | $ | 358 | | | $ | 1,108 | | | $ | 1,023 | |
(1) Operating, variable, and short-term lease costs are primarily included in Direct operating expense in the Condensed Consolidated Statements of Operations.
(2) Amortization of right-of-use assets is included in Depreciation and amortization expense in the Condensed Consolidated Statements of Operations.
(3) Interest on the lease liabilities is included in Interest expense, net in the Condensed Consolidated Statements of Operations.
(4) Total lease cost excludes sublease income for all periods presented, as it was not material.
For the nine months ended September 30, 2026, the Company recorded a net benefit of $30 million, from a real estate transaction that resulted in an early termination of a lease.
The following amounts were recorded in the Condensed Consolidated Balance Sheets related to leases:
| | | | | | | | | | | | | | |
| | September 30, | | December 31, |
| (In millions) | | 2026 | | 2025 |
| Operating lease right-of-use assets | | $ | 2,786 | | | $ | 2,563 | |
| | | | |
| Current operating lease liabilities | | $ | 777 | | | $ | 745 | |
| Long-term operating lease liabilities | | 2,225 | | | 2,044 | |
| Operating lease liabilities | | $ | 3,002 | | | $ | 2,789 | |
| | | | |
| Finance lease right-of-use assets included in Property and equipment, net | | $ | 498 | | | $ | 306 | |
| | | | |
| Finance lease liabilities included in Current debt | | $ | 82 | | | $ | 45 | |
| Finance lease liabilities included in Long-term debt | | 405 | | | 281 | |
| Finance lease liabilities | | $ | 487 | | | $ | 326 | |
Supplemental cash flow information related to leases was as follows:
| | | | | | | | | | | | | | |
| | Nine Months Ended September 30, |
| (In millions) | | 2026 | | 2025 |
| Right-of-use assets obtained in exchange for lease liabilities: | | | | |
| Operating leases | | $ | 875 | | | $ | 682 | |
| Finance leases | | 207 | | | 83 | |
Note 5. Goodwill
The following table presents the changes in Goodwill for the nine months ended September 30, 2026:
| | | | | | | | |
| (In millions) | | |
Balance as of December 31, 2025 | | $ | 3,781 | |
| Impact of foreign exchange translation | | (59) | |
Balance as of September 30, 2026 | | $ | 3,722 | |
Note 6. Intangible Assets
The following table summarizes identifiable intangible assets subject to amortization:
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | September 30, 2026 | | December 31, 2025 |
| (In millions) | | Gross
Carrying
Amount | | Accumulated
Amortization | | Net
Value | | Gross
Carrying
Amount | | Accumulated
Amortization | | Net
Value |
| Customer relationships | | $ | 1,582 | | | $ | (810) | | | $ | 772 | | | $ | 1,609 | | | $ | (747) | | | $ | 862 | |
| Trade names and trademarks | | 64 | | | (34) | | | 30 | | | 64 | | | (29) | | | 35 | |
| Developed technology | | 17 | | | (7) | | | 10 | | | 17 | | | (5) | | | 12 | |
| Total | | $ | 1,663 | | | $ | (851) | | | $ | 812 | | | $ | 1,690 | | | $ | (781) | | | $ | 909 | |
Intangible asset amortization expense was $27 million and $31 million for the three months ended September 30, 2026 and 2025, respectively, and $84 million and $90 million for the nine months ended September 30, 2026 and 2025, respectively.
Note 7. Debt and Financing Arrangements
The following table summarizes the carrying value of the Company’s debt:
| | | | | | | | | | | | | | | | | | | | |
| | | | September 30, | | December 31, |
| (In millions, except percentages) | | Rate | | 2026 | | 2025 |
| Unsecured notes due 2026 | | 1.65 | % | | $ | — | | | $ | 400 | |
Unsecured notes due 2029(1) | | 6.25 | % | | 595 | | | 594 | |
Unsecured notes due 2031(2) | | 2.65 | % | | 398 | | | 398 | |
Unsecured notes due 2034(3) | | 6.50 | % | | 492 | | | 491 | |
Euro unsecured notes due 2030 (€500 principal)(4) | | 3.75 | % | | 561 | | | 580 | |
Five-year term loan due 2027(5) | | 5.38 | % | | 275 | | | 275 | |
| Finance leases and other debt | | Various | | 497 | | | 327 | |
| Total Debt | | | | $ | 2,818 | | | $ | 3,065 | |
Less: Current debt(6) | | | | 366 | | | 446 | |
| Total Long-term debt | | | | $ | 2,452 | | | $ | 2,619 | |
(1) Net of unamortized discount and debt issuance costs of $5 million and $6 million as of September 30, 2026 and December 31, 2025, respectively.
(2) Net of unamortized discount and debt issuance costs of $2 million as of September 30, 2026 and December 31, 2025.
(3) Net of unamortized discount and debt issuance costs of $8 million and $9 million as of September 30, 2026 and December 31, 2025, respectively.
(4) Net of unamortized discount and debt issuance costs of $6 million and $7 million as of September 30, 2026 and December 31, 2025, respectively.
(5) Variable-rate debt.
(6) As of September 30, 2026, current debt consisted of $275 million five-year term loan maturing in May 2027, $82 million of finance lease liabilities and $9 million of other debt. As of December 31, 2025, current debt consisted of $400 million in unsecured notes maturing in July 2026, $45 million of finance lease liabilities and $1 million of other debt.
Repayments of Debt
Upon maturity in July 2026, the Company repaid $400 million of 1.65% unsecured notes using cash on hand.
Revolving Credit Facilities
The Company has a five-year unsecured, multi-currency revolving credit facility expiring in 2029 (the “Revolving Credit Agreement”). The aggregate commitment of all lenders under the Revolving Credit Agreement is equal to $800 million, of which $100 million is available for the issuance of letters of credit. As of September 30, 2026 and December 31, 2025, no amounts were outstanding, and letters of credit were $7 million and $6 million, respectively, under the Revolving Credit Agreement. Borrowings under revolving credit facilities maturing in three months or less are presented net in the Condensed Consolidated Statement of Cash Flows.
Covenants and Compliance
The covenants governing the Company’s debt securities limit our ability to incur indebtedness and grant liens, among other restrictions. The Company’s revolving credit facility generally requires us to maintain a consolidated leverage ratio of no greater than 3.50 to 1.00, which may increase to 4.25 to 1.00 following the consummation of a material acquisition. The consolidated leverage ratio may not exceed 3.50 to 1.00 for more than five consecutive fiscal quarters. As of September 30, 2026, the Company was in compliance with the covenants contained in its debt and financing arrangements.
Factoring Programs
The Company sells certain of its trade receivables on a non-recourse basis to third-party financial institutions under various factoring agreements. Information related to the trade receivables sold under the factoring agreements was as follows:
| | | | | | | | | | | | | | | | | | | | | | | | | | |
| | Three Months Ended September 30, | | Nine Months Ended September 30, |
| (In millions) | | 2026 | | 2025 | | 2026 | | 2025 |
| Receivables sold in period | | $ | 623 | | | $ | 678 | | | $ | 1,885 | | | $ | 2,072 | |
| Cash consideration | | 620 | | | 674 | | | 1,875 | | | 2,059 | |
| | | | | | | | |
Note 8. Fair Value Measurements and Financial Instruments
Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between independent and knowledgeable parties who are willing and able to transact for an asset or liability at the measurement date. The levels of inputs used to measure fair value are:
•Level 1—Quoted prices for identical instruments in active markets;
•Level 2—Quoted prices for similar instruments in active markets; quoted prices for identical or similar instruments in markets that are not active; and model-derived valuations in which all significant inputs are observable in active markets; and
•Level 3—Valuations based on inputs that are unobservable, generally utilizing pricing models or other valuation techniques that reflect management’s judgment and estimates.
Assets and Liabilities
The Company bases its fair value estimates on market assumptions and available information. The carrying values of cash and cash equivalents, accounts receivable, accounts payable, accrued expenses and current maturities of long-term debt approximated their fair values as of September 30, 2026 and December 31, 2025, due to their short-term nature.
Debt
The fair value of debt was as follows:
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | September 30, 2026 | | December 31, 2025 |
| (In millions) | | Level | | Fair
Value | | Carrying
Value | | Fair
Value | | Carrying
Value |
| Unsecured notes due 2026 | | 2 | | $ | — | | | $ | — | | | $ | 394 | | | $ | 400 | |
| Unsecured notes due 2029 | | 2 | | 607 | | | 595 | | | 631 | | | 594 | |
| Unsecured notes due 2031 | | 2 | | 345 | | | 398 | | | 358 | | | 398 | |
| Unsecured notes due 2034 | | 2 | | 500 | | | 492 | | | 540 | | | 491 | |
| Euro unsecured notes due 2030 | | 2 | | 550 | | | 561 | | | 586 | | | 580 | |
Five-year term loan due 2027 | | 2 | | 274 | | | 275 | | | 272 | | | 275 | |
Financial Instruments
The Company directly manages its exposure to risks arising from business operations and economic factors, including fluctuations in interest rates and foreign currencies. The Company uses derivative instruments to manage the volatility related to these exposures.
The notional amount and fair value of derivative instruments were as follows:
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | September 30, 2026 | | December 31, 2025 | | Balance Sheet Location |
| (In millions) | | Notional Amount | | Fair
Value | | Notional Amount | | Fair
Value | |
Derivatives designated as net investment hedges: | | | | | | | | | | |
| Cross-currency swaps | | $ | 765 | | | $ | 48 | | | $ | 422 | | | $ | 33 | | | Other current liabilities |
| Cross-currency swaps | | 1,057 | | | 63 | | | 1,400 | | | 143 | | | Other long-term liabilities |
| Derivatives designated as fair value hedges: | | | | | | | | | | |
| Cross-currency swaps | | $ | 236 | | | $ | 8 | | | $ | — | | | $ | — | | | Other long-term assets |
| Cross-currency swaps | | — | | | — | | | 236 | | | 1 | | | Other long-term liabilities |
| Derivatives not designated as hedges: | | | | | | | | | | |
| Foreign currency option contracts | | $ | 294 | | | $ | 6 | | | $ | 308 | | | $ | 3 | | | Other current assets |
| Foreign currency option contracts | | 43 | | | 1 | | | — | | | — | | | Other long-term assets |
| Foreign currency option contracts | | 301 | | | 1 | | | 316 | | | 4 | | | Other current liabilities |
| Foreign currency option contracts | | 45 | | | 1 | | | — | | | — | | | Other long-term liabilities |
| Foreign currency forward contracts | | 131 | | | 1 | | | 231 | | | 1 | | | Other current liabilities |
As of September 30, 2026 and December 31, 2025, the derivatives were classified as Level 2 within the fair value hierarchy. The derivatives are valued using inputs other than quoted prices such as foreign exchange rates and yield curves.
The effect of hedges on AOCIL and in the Condensed Consolidated Statements of Operations was as follows:
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | Three Months Ended September 30, 2026 | | Nine Months Ended September 30, 2026 |
| (In millions) | | Amount of Gain (Loss) Recognized in Other Comprehensive Income on Derivative | | Gain (Loss) Reclassified from AOCIL into Net Income | | Gain (Loss) Recognized in Net Income on Derivative (Excluded from effectiveness testing) | | Amount of Gain (Loss) Recognized in Other Comprehensive Income on Derivative | | Gain (Loss) Reclassified from AOCIL into Net Income | | Gain (Loss) Recognized in Net Income on Derivative (Excluded from effectiveness testing) |
| Net investment hedges | | | | | | | | | | | | |
Cross-currency swaps(1) | | $ | 20 | | | $ | 2 | | | $ | — | | | $ | 65 | | | $ | 2 | | | $ | 2 | |
| Cash flow hedges | | | | | | | | | | | | |
Interest rate swaps(1) | | — | | | — | | | — | | | — | | | 1 | | | — | |
| Fair value hedges | | | | | | | | | | | | |
Cross-currency swaps(1) | | 2 | | | 1 | | | — | | | 1 | | | 2 | | | — | |
(1) Amounts reclassified to Net income are reported in Interest expense, net in the Condensed Consolidated Statements of Operations.
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | Three Months Ended September 30, 2025 | | Nine Months Ended September 30, 2025 |
| (In millions) | | Amount of Gain (Loss) Recognized in Other Comprehensive Income on Derivative | | Gain (Loss) Reclassified from AOCIL into Net Income | | Gain (Loss) Recognized in Net Income on Derivative (Excluded from effectiveness testing) | | Amount of Gain (Loss) Recognized in Other Comprehensive Income on Derivative | | Gain (Loss) Reclassified from AOCIL into Net Income | | Gain (Loss) Recognized in Net Income on Derivative (Excluded from effectiveness testing) |
| Net investment hedges | | | | | | | | | | | | |
Cross-currency swaps(1) | | $ | 18 | | | $ | — | | | $ | 1 | | | $ | (253) | | | $ | (3) | | | $ | 3 | |
| Cash flow hedges | | | | | | | | | | | | |
Interest rate swaps(1) | | — | | | — | | | — | | | (2) | | | — | | | — | |
| | | | | | | | | | | | |
| | | | | | | | | | | | |
(1) Amounts reclassified to Net income are reported in Interest expense, net in the Condensed Consolidated Statements of Operations.
Derivatives Not Designated as Hedges
Gains and losses for derivatives not designated as hedges were $2 million and $3 million gains for the three months ended September 30, 2026 and 2025, respectively, and $7 million gain and $11 million loss for the nine months ended September 30, 2026 and 2025, respectively. The Company recorded gains and losses for derivatives not designated as hedges as Other income (expense), net in the Condensed Consolidated Statements of Operations.
Note 9. Divestiture
In 2024, the Company completed the acquisition of Wincanton plc (now Wincanton Limited) (the “Wincanton Acquisition”). The Wincanton Acquisition was subject to review by the U.K. Competition and Markets Authority (the “CMA”). In 2025, the CMA approved the Wincanton Acquisition, subject to the divestment of certain grocery contracts in the U.K. (the “Wincanton Divestment”).
In the fourth quarter of 2025, the Company met the held-for-sale criteria for the anticipated Wincanton Divestment and recorded a $37 million write-down loss, including $4 million of goodwill, $21 million of customer relationships, and a $12 million fair value adjustment. For the three and nine months ended September 30, 2026, the Company recorded additional impairment of $1 million and $24 million, respectively, due to a further reduction in estimated fair value. In September 2026, the Company completed the Wincanton Divestment and paid $38 million in cash in connection with the transaction.
As of December 31, 2025, Assets and liabilities held for sale were not material and are included in Other current assets and Other current liabilities, respectively, in the Condensed Consolidated Balance Sheets.
Note 10. Employee Benefit Plans
Defined Benefit Plans
The Company offers pension plans in certain jurisdictions, with the most significant plans in the U.K. In the U.K., the Company sponsors two defined benefit pension schemes (the “U.K. Retirement Plans”). The U.K. Retirement Plans do not allow for new plan participants or additional benefit accruals. The funded status of the U.K. Retirement Plans was recorded in Other long-term assets in the Condensed Consolidated Balance Sheets. The Company considers its other defined benefit pension plans not material to its Consolidated Financial Statements.
Components of the net periodic benefit income recognized under the U.K. Retirement Plans were $7 million and $5 million for the three months ended September 30, 2026 and 2025, respectively, and $21 million and $14 million
for the nine months ended September 30, 2026 and 2025, respectively. The Company recorded periodic pension income as Other income (expense), net in the Condensed Consolidated Statements of Operations.
Defined Contribution Plans
Also, the Company has defined contribution retirement plans for its United States employees and employees of certain foreign subsidiaries. In these plans, employees are allowed to contribute a portion of their salaries and bonuses to the plans, and the Company matches a portion of the employee contributions.
Defined contribution plan costs were $30 million and $28 million for the three months ended September 30, 2026 and 2025, respectively, and $94 million and $82 million for the nine months ended September 30, 2026 and 2025, respectively. The Company primarily recorded defined contribution plan costs as direct operating expense in the Condensed Consolidated Statements of Operations.
Note 11. Income Taxes
Income tax expense for the three months ended September 30, 2026 decreased $21 million, or 75.0%, compared with the three months ended September 30, 2025. The Company’s effective tax rate was 10.2% for the three months ended September 30, 2026, compared with 31.2% for the three months ended September 30, 2025, primarily reflecting tax benefits related to the Wincanton Divestment and higher deferred tax benefits.
Income tax expense for the nine months ended September 30, 2026 decreased $5 million, or 11.1%, compared with the nine months ended September 30, 2025. The Company’s effective tax rate was 29.2% for the nine months ended September 30, 2026, compared with 118.1% for the nine months ended September 30, 2025, primarily reflecting the non-recurrence of non-deductible litigation costs incurred in 2025 and higher deferred tax benefits.
Note 12. Stockholders’ Equity
Stock Repurchase Plan
In 2025, the Company’s board of directors authorized and announced a repurchase plan for up to $500 million of its common stock (the “Repurchase Plan”). The Repurchase Plan permits shares of common stock to be repurchased from time to time in management’s discretion, through a variety of methods, including a 10b5-1 trading plan, open market purchases, privately negotiated transactions, or otherwise. The timing and number of shares of common stock repurchased will depend on a variety of factors, including price, general business and market conditions, alternative investment opportunities and funding considerations. The Repurchase Plan does not obligate the Company to repurchase any specific number of shares of common stock and may be suspended or discontinued at any time.
The repurchase of shares of the Company’s common stock is recorded as treasury stock within equity. It is accounted for under the cost method, inclusive of share repurchase costs and excise tax on share repurchases in excess of issuances. For the three months ended September 30, 2026, the Company repurchased approximately 1.8 million shares of its common stock for an aggregate purchase price of $85 million, including $84 million of share repurchases and $1 million of excise tax, and did not repurchase any shares for the three months ended September 30, 2025. For the nine months ended September 30, 2026 and 2025, the Company repurchased approximately 2.1 million and 5.4 million shares of its common stock for an aggregate purchase price of $101 million and $202 million, including $100 million and $200 million of share repurchases and $1 million and $2 million of excise tax, respectively. As of September 30, 2026, $200 million remained authorized under the Repurchase Plan.
Accumulated Other Comprehensive Income (Loss)
The following tables summarize the changes in AOCIL by component:
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | Foreign Currency Adjustment | | | | | | | | | | |
| (In millions) | | Foreign
Currency
Translation
Adjustments | | Net Investment Hedges | | Cash
Flow
Hedges | | Fair Value
Hedges | | Defined
Benefit
Plans | | Less: AOCIL
attributable to
NCI | | AOCIL
attributable
to GXO |
| As of June 30, 2026 | | $ | 89 | | | $ | (130) | | | $ | — | | | $ | (3) | | | $ | (181) | | | $ | 2 | | | $ | (223) | |
| Other comprehensive income before reclassifications | | (1) | | | 20 | | | — | | | 2 | | | 1 | | | — | | | 22 | |
| Amounts reclassified to net income | | — | | | (2) | | | — | | | (1) | | | 2 | | | — | | | (1) | |
| Tax amounts | | — | | | (4) | | | — | | | — | | | (1) | | | — | | | (5) | |
| Other comprehensive income, net of tax | | (1) | | | 14 | | | — | | | 1 | | | 2 | | | — | | | 16 | |
| As of September 30, 2026 | | $ | 88 | | | $ | (116) | | | $ | — | | | $ | (2) | | | $ | (179) | | | $ | 2 | | | $ | (207) | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | Foreign Currency Adjustment | | | | | | | | | | |
| (In millions) | | Foreign
Currency
Translation
Adjustments | | Net Investment Hedges | | Cash
Flow
Hedges | | Fair Value
Hedges | | Defined
Benefit
Plans | | Less: AOCIL
attributable to
NCI | | AOCIL
attributable
to GXO |
| As of December 31, 2025 | | $ | 147 | | | $ | (164) | | | $ | 1 | | | $ | (1) | | | $ | (186) | | | $ | 2 | | | $ | (201) | |
| Other comprehensive income (loss) before reclassifications | | (59) | | | 65 | | | — | | | 1 | | | 4 | | | — | | | 11 | |
| Amounts reclassified to net income | | — | | | (4) | | | (1) | | | (2) | | | 5 | | | — | | | (2) | |
| Tax amounts | | — | | | (13) | | | — | | | — | | | (2) | | | — | | | (15) | |
| Other comprehensive income (loss), net of tax | | (59) | | | 48 | | | (1) | | | (1) | | | 7 | | | — | | | (6) | |
| As of September 30, 2026 | | $ | 88 | | | $ | (116) | | | $ | — | | | $ | (2) | | | $ | (179) | | | $ | 2 | | | $ | (207) | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | Foreign Currency Adjustment | | | | | | | | |
| (In millions) | | Foreign
Currency
Translation
Adjustments | | Net Investment Hedges | | Cash
Flow
Hedges | | Defined
Benefit
Plans | | Less: AOCIL
attributable to
NCI | | AOCIL
attributable
to GXO |
| As of June 30, 2025 | | $ | 223 | | | $ | (177) | | | $ | 3 | | | $ | (167) | | | $ | (2) | | | $ | (120) | |
| Other comprehensive income (loss) before reclassifications | | (72) | | | 18 | | | — | | | 3 | | | 3 | | | (48) | |
| Amounts reclassified to net income | | — | | | (1) | | | — | | | 1 | | | — | | | — | |
| Tax amounts | | (1) | | | (3) | | | (1) | | | (1) | | | — | | | (6) | |
| Other comprehensive income (loss), net of tax | | (73) | | | 14 | | | (1) | | | 3 | | | 3 | | | (54) | |
| As of September 30, 2025 | | $ | 150 | | | $ | (163) | | | $ | 2 | | | $ | (164) | | | $ | 1 | | | $ | (174) | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | Foreign Currency Adjustment | | | | | | | | |
| (In millions) | | Foreign
Currency
Translation
Adjustments | | Net Investment Hedges | | Cash
Flow
Hedges | | Defined
Benefit
Plans | | Less: AOCIL
attributable to
NCI | | AOCIL
attributable
to GXO |
| As of December 31, 2024 | | $ | (195) | | | $ | 31 | | | $ | 4 | | | $ | (155) | | | $ | 2 | | | $ | (313) | |
| Other comprehensive income (loss) before reclassifications | | 347 | | | (252) | | | (2) | | | (15) | | | (1) | | | 77 | |
| Amounts reclassified to net loss | | — | | | — | | | — | | | 4 | | | — | | | 4 | |
| Tax amounts | | (2) | | | 58 | | | — | | | 2 | | | — | | | 58 | |
| Other comprehensive income (loss), net of tax | | 345 | | | (194) | | | (2) | | | (9) | | | (1) | | | 139 | |
| As of September 30, 2025 | | $ | 150 | | | $ | (163) | | | $ | 2 | | | $ | (164) | | | $ | 1 | | | $ | (174) | |
Note 13. Commitments and Contingencies
The Company is involved, and will continue to be involved, in numerous legal proceedings arising from the conduct of its business. These proceedings may include personal injury claims arising from the transportation and handling of goods, contractual disputes and employment-related claims, including alleged violations of wage and hour laws.
The Company establishes accruals for specific legal proceedings when it is considered probable that a loss has been incurred and the amount of the loss can be reasonably estimated.
Management of the Company believes that it has adequately accrued for the potential impact of loss contingencies that are probable and reasonably estimable. Management of the Company does not believe that the ultimate resolution of any matters to which the Company is presently a party will have a material adverse effect on its results of operations, financial condition or cash flows. However, the results of these matters cannot be predicted with certainty, and an unfavorable resolution of one or more of these matters could have a material adverse effect on the Company’s financial condition, results of operations or cash flows. Legal costs related to these matters are expensed as they are incurred.
The Company carries liability and excess umbrella insurance policies that are deemed sufficient to cover potential legal claims arising in the normal course of conducting its operations. In the event the Company is required to satisfy a legal claim outside the scope of the coverage provided by insurance, its financial condition, results of operations or cash flows could be negatively impacted.
Note 14. Earnings (Loss) per Share
The computations of basic and diluted earnings per share were as follows:
| | | | | | | | | | | | | | | | | | | | | | | | | | |
| | Three Months Ended September 30, | | Nine Months Ended September 30, |
| (Dollars in millions, shares in thousands, except per share amounts) | | 2026 | | 2025 | | 2026 | | 2025 |
Net income (loss) attributable to common shares | | $ | 64 | | | $ | 59 | | | $ | 93 | | | $ | (11) | |
| Basic weighted-average common shares | | 113,899 | | | 114,473 | | | 114,538 | | | 116,075 | |
Effect of dilutive securities: | | | | | | | | |
Restricted stock units | | 369 | | | 584 | | | 477 | | | — | |
Performance stock units | | 368 | | | 269 | | | 380 | | | — | |
Stock options | | — | | | 3 | | | — | | | — | |
Total dilutive potential common shares | | 737 | | | 856 | | | 857 | | | — | |
Diluted weighted-average common shares | | 114,636 | | | 115,329 | | | 115,395 | | | 116,075 | |
| | | | | | | | |
Basic earnings (loss) per share | | $ | 0.56 | | | $ | 0.52 | | | $ | 0.81 | | | $ | (0.09) | |
Diluted earnings (loss) per share | | $ | 0.56 | | | $ | 0.51 | | | $ | 0.81 | | | $ | (0.09) | |
Potentially dilutive shares outstanding of 718 thousand and 813 thousand for the three months ended September 30, 2026 and 2025, respectively, and 721 thousand and 3.4 million for the nine months ended September 30, 2026 and 2025, respectively, were excluded from the computation of diluted earnings per share because their effects would have been anti-dilutive.
ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Cautionary Statement Regarding Forward-Looking Statements
This Quarterly Report on Form 10-Q and other written reports and oral statements we make from time to time contain forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended (the “Securities Act”), and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). All statements other than statements of historical fact are, or may be deemed to be, forward-looking statements. In some cases, forward-looking statements can be identified by the use of forward-looking terms such as “anticipate,” “estimate,” “believe,” “continue,” “could,” “intend,” “may,” “plan,” “potential,” “predict,” “should,” “will,” “expect,” “objective,” “projection,” “forecast,” “goal,” “guidance,” “outlook,” “effort,” “target,” “trajectory” or the negative of these terms or other comparable terms. However, the absence of these words does not mean that the statements are not forward-looking. These forward-looking statements are based on certain assumptions and analyses made by the Company in light of its experience and its perception of historical trends, current conditions and expected future developments, as well as other factors it believes are appropriate in the circumstances. These forward-looking statements are subject to known and unknown risks, uncertainties and assumptions that may cause actual results, levels of activity, performance or achievements to be materially different from any future results, levels of activity, performance or achievements expressed or implied by such forward-looking statements. Factors that might cause or contribute to a material difference include those discussed below and the risks discussed in the Company’s other filings with the Securities and Exchange Commission (the “SEC”). All forward-looking statements set forth in this Quarterly Report on Form 10-Q are qualified by these cautionary statements, and there can be no assurance that the results or developments anticipated by the Company will be realized or, even if substantially realized, that they will have the expected consequence to or effects on the Company or its business or operations.
The following Management’s Discussion and Analysis of Financial Condition and Results of Operations should be read in conjunction with the audited consolidated financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2025, as filed with the SEC on February 25, 2026 (the “2025 Form 10-K”), and the unaudited condensed consolidated financial statements and related notes thereto included elsewhere in this Quarterly Report on Form 10-Q.
Business Overview
GXO Logistics, Inc., together with its subsidiaries (“GXO,” the “Company,” “our,” or “we”), is the largest pure-play contract logistics provider in the world and a foremost innovator in the industry. We provide our customers with high-value-added warehousing and distribution, order fulfillment, e-commerce, reverse logistics, and other supply chain services differentiated by our ability to deliver technology-enabled, customized solutions at scale. Our customers rely on us to move their goods efficiently through their supply chains—from the moment goods arrive at our warehouses through fulfillment and distribution, and the management of returned products. Our customer base includes many blue-chip leaders across sectors with high growth and/or durable demand, with significant growth potential as customers outsource logistics services.
Our business model is asset-light and historically resilient in cycles, with high returns, free cash flow, and visibility into revenue and earnings. Most of our customer contracts are long-term, and our warehouse lease arrangements generally align with their terms. The Company has both fixed-price contracts (closed-book or hybrid) and cost-plus contracts (open-book). Most of our customer contracts contain both fixed and variable components. The fixed component typically covers warehouse, technology, and equipment costs, while the variable component is based on expected volumes and associated labor costs. Under fixed-price contracts, the Company agrees to perform the specified work for a predetermined price. To the extent the Company’s actual costs vary from the estimates upon which the price was negotiated, the Company will generate more or less profit. Cost-plus contracts pay allowable costs incurred during contract performance, plus a specified margin.
Results of Operations
| | | | | | | | | | | | | | | | | | | | | | | | | | |
| | Three Months Ended September 30, | | Nine Months Ended September 30, |
| (In millions) | | 2026 | | 2025 | | 2026 | | 2025 |
| Revenue | | $ | 3,590 | | | $ | 3,395 | | | $ | 10,329 | | | $ | 9,671 | |
| Direct operating expense | | 3,064 | | | 2,857 | | | 8,805 | | | 8,228 | |
| Selling, general and administrative expense | | 285 | | | 285 | | | 876 | | | 818 | |
| Depreciation and amortization expense | | 115 | | | 118 | | | 347 | | | 337 | |
| Transaction and integration costs | | 26 | | | 14 | | | 54 | | | 50 | |
| Restructuring costs and other | | 3 | | | 3 | | | 11 | | | 22 | |
| Regulatory matter | | — | | | — | | | — | | | 65 | |
| Net loss on divestiture of business | | 1 | | | — | | | 24 | | | — | |
| Operating income | | 96 | | | 118 | | | 212 | | | 151 | |
| Other income (expense), net | | 12 | | | 5 | | | 28 | | | (10) | |
| Interest expense, net | | (36) | | | (35) | | | (103) | | | (103) | |
| Income before income taxes | | 72 | | | 88 | | | 137 | | | 38 | |
| Income tax expense | | (7) | | | (28) | | | (40) | | | (45) | |
| Net income (loss) | | $ | 65 | | | $ | 60 | | | $ | 97 | | | $ | (7) | |
Revenue
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| (In millions, except percentages) | | Three Months Ended September 30, | | Change | | Nine Months Ended September 30, | | Change |
| 2026 | | 2025 | | $ | | % | | 2026 | | 2025 | | $ | | % |
| Revenue | | $ | 3,590 | | | $ | 3,395 | | | $ | 195 | | | 5.7 | % | | $ | 10,329 | | | $ | 9,671 | | | $ | 658 | | | 6.8 | % |
| Geographic Revenues | | | | | | | | | | | | | | | | |
| United Kingdom | | $ | 1,751 | | | $ | 1,628 | | | $ | 123 | | | 7.6 | % | | $ | 5,030 | | | $ | 4,609 | | | $ | 421 | | | 9.1 | % |
| United States | | 846 | | | 801 | | | 45 | | | 5.6 | % | | 2,379 | | | 2,320 | | | 59 | | | 2.5 | % |
| Netherlands | | 263 | | | 275 | | | (12) | | | (4.4) | % | | 789 | | | 760 | | | 29 | | | 3.8 | % |
| France | | 216 | | | 210 | | | 6 | | | 2.9 | % | | 637 | | | 612 | | | 25 | | | 4.1 | % |
| Spain | | 184 | | | 170 | | | 14 | | | 8.2 | % | | 527 | | | 479 | | | 48 | | | 10.0 | % |
| Italy | | 111 | | | 103 | | | 8 | | | 7.8 | % | | 332 | | | 303 | | | 29 | | | 9.6 | % |
| Other | | 219 | | | 208 | | | 11 | | | 5.3 | % | | 635 | | | 588 | | | 47 | | | 8.0 | % |
| Total | | $ | 3,590 | | | $ | 3,395 | | | $ | 195 | | | 5.7 | % | | $ | 10,329 | | | $ | 9,671 | | | $ | 658 | | | 6.8 | % |
| | | | | | | | | | | | | | | | |
| Revenue by Vertical | | | | | | | | | | | | | | | | |
| Omnichannel retail | | $ | 1,689 | | | $ | 1,645 | | | $ | 44 | | | 2.7 | % | | $ | 4,887 | | | $ | 4,693 | | | $ | 194 | | | 4.1 | % |
| Technology and consumer electronics | | 498 | | | 420 | | | 78 | | | 18.6 | % | | 1,370 | | | 1,215 | | | 155 | | | 12.8 | % |
| Industrial and manufacturing | | 405 | | | 386 | | | 19 | | | 4.9 | % | | 1,207 | | | 1,151 | | | 56 | | | 4.9 | % |
| Food and beverage | | 351 | | | 371 | | | (20) | | | (5.4) | % | | 1,009 | | | 1,044 | | | (35) | | | (3.4) | % |
| Consumer packaged goods | | 333 | | | 324 | | | 9 | | | 2.8 | % | | 998 | | | 898 | | | 100 | | | 11.1 | % |
| Other | | 314 | | | 249 | | | 65 | | | 26.1 | % | | 858 | | | 670 | | | 188 | | | 28.1 | % |
| Total | | $ | 3,590 | | | $ | 3,395 | | | $ | 195 | | | 5.7 | % | | $ | 10,329 | | | $ | 9,671 | | | $ | 658 | | | 6.8 | % |
Revenue for the three months ended September 30, 2026 increased $195 million, or 5.7%, compared with the three months ended September 30, 2025. Revenue for the nine months ended September 30, 2026 increased $658 million, or 6.8%, compared with the nine months ended September 30, 2025. For the three and nine months ended September 30, 2026, changes in foreign currency exchange rates had an unfavorable impact of $22 million and a favorable impact of $205 million, respectively, on revenue.
Growth in both periods was broad-based across our regions and reflected new business wins and increased activity with existing customers, including continued growth in technology and data centers, aerospace and defense, industrials and life sciences customers.
Direct operating expense
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| (In millions, except percentages) | | Three Months Ended September 30, | | Change | | Nine Months Ended September 30, | | Change |
| 2026 | | 2025 | | $ | | % | | 2026 | | 2025 | | $ | | % |
| Direct operating expense | | $ | 3,064 | | | $ | 2,857 | | | $ | 207 | | | 7.2 | % | | $ | 8,805 | | | $ | 8,228 | | | $ | 577 | | | 7.0 | % |
Direct operating expense comprises both fixed and variable costs and include operating expenses related to our warehouse operations, including personnel costs, rent expenses, utility costs, equipment maintenance and repair costs, transportation costs, costs of materials and supplies, and information technology expenses.
Direct operating expense for the three months ended September 30, 2026 increased $207 million, or 7.2%, compared with the three months ended September 30, 2025. Direct operating expense for the nine months ended September 30, 2026 increased $577 million, or 7.0%, compared with the nine months ended September 30, 2025. Direct operating expense, as a percentage of revenue, was 85.3% for the three months ended September 30, 2026, compared with 84.2% for the three months ended September 30, 2025, and 85.2% for the nine months ended September 30, 2026, compared with 85.1% for the nine months ended September 30, 2025.
The increases primarily reflected higher labor and other operating costs associated with revenue growth and new customer start-ups, including costs incurred as new operations ramped toward expected productivity levels, as well as changes in customer and business mix. These increases were partially offset by productivity and cost-management initiatives across our operations and, for the nine-month period of 2026, a $30 million benefit from a real estate transaction.
Selling, General and Administrative (SG&A) Expense
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| (In millions, except percentages) | | Three Months Ended September 30, | | Change | | Nine Months Ended September 30, | | Change |
| 2026 | | 2025 | | $ | | % | | 2026 | | 2025 | | $ | | % |
| SG&A expense | | $ | 285 | | | $ | 285 | | | $ | — | | | — | % | | $ | 876 | | | $ | 818 | | | $ | 58 | | | 7.1 | % |
SG&A expense primarily consists of salary and benefit costs for executive and certain administrative functions, professional fees, bad-debt expense and legal costs.
SG&A expense remained relatively consistent for the three months ended September 30, 2026, compared with the three months ended September 30, 2025. SG&A expense for the nine months ended September 30, 2026 increased $58 million, or 7.1%, compared with the nine months ended September 30, 2025. SG&A expense, as a percentage of revenue, was 7.9% for the three months ended September 30, 2026, compared with 8.4% for the three months ended September 30, 2025, and 8.5% for both the nine months ended September 30, 2026 and 2025.
The three-month comparison primarily reflected synergies associated with the Wincanton acquisition, offset by investments in information technology and transformation initiatives. For the nine-month period, the increase in SG&A expense was primarily driven by higher salaries and benefits and investments in information technology and
transformation initiatives, partially offset by synergies associated with the Wincanton acquisition. As a percentage of revenue, these increases were offset by operating leverage from revenue growth.
Depreciation and Amortization (D&A) Expense
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| (In millions, except percentages) | | Three Months Ended September 30, | | Change | | Nine Months Ended September 30, | | Change |
| 2026 | | 2025 | | $ | | % | | 2026 | | 2025 | | $ | | % |
| D&A expense | | $ | 115 | | | $ | 118 | | | $ | (3) | | | (2.5) | % | | $ | 347 | | | $ | 337 | | | $ | 10 | | | 3.0 | % |
D&A expense for the three months ended September 30, 2026 decreased $3 million, or 2.5%, compared with the three months ended September 30, 2025. D&A expense for the nine months ended September 30, 2026 increased $10 million, or 3.0%, compared with the nine months ended September 30, 2025, primarily due to capital investments supporting business growth.
Transaction and integration costs
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| (In millions, except percentages) | | Three Months Ended September 30, | | Change | | Nine Months Ended September 30, | | Change |
| 2026 | | 2025 | | $ | | % | | 2026 | | 2025 | | $ | | % |
| Transaction and integration costs | | $ | 26 | | | $ | 14 | | | $ | 12 | | | 85.7 | % | | $ | 54 | | | $ | 50 | | | $ | 4 | | | 8.0 | % |
Transaction and integration costs increased $12 million, or 85.7%, for the three months ended September 30, 2026, and increased $4 million, or 8.0%, for the nine months ended September 30, 2026, compared with the corresponding periods in 2025. The increases reflected costs associated with the 2026 integration of Wincanton and the divestiture of certain grocery contracts in the U.K. (the “Wincanton Divestment”), compared with costs associated with the Wincanton acquisition in 2025.
Restructuring costs and other
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| (In millions, except percentages) | | Three Months Ended September 30, | | Change | | Nine Months Ended September 30, | | Change |
| 2026 | | 2025 | | $ | | % | | 2026 | | 2025 | | $ | | % |
| Restructuring costs and other | | $ | 3 | | | $ | 3 | | | $ | — | | | — | % | | $ | 11 | | | $ | 22 | | | $ | (11) | | | (50.0) | % |
Restructuring costs and other were $3 million for both the three months ended September 30, 2026 and 2025. For the nine months ended September 30, 2026 and 2025, restructuring costs and other were $11 million and $22 million, respectively. Restructuring costs and other primarily consisted of severance and other costs associated with initiatives to optimize corporate expenses.
Regulatory matter
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| (In millions, except percentages) | | Three Months Ended September 30, | | Change | | Nine Months Ended September 30, | | Change |
| 2026 | | 2025 | | $ | | % | | 2026 | | 2025 | | $ | | % |
| Regulatory matter | | $ | — | | | $ | — | | | $ | — | | | — | % | | $ | — | | | $ | 65 | | | $ | (65) | | | (100.0) | % |
Regulatory matter expense for the nine months ended September 30, 2025 was $65 million and related to the deductibility of value-added tax payments made to certain third-party service providers. The matter was settled in 2025.
Net loss on divestiture of business
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| (In millions, except percentages) | | Three Months Ended September 30, | | Change | | Nine Months Ended September 30, | | Change |
| 2026 | | 2025 | | $ | | % | | 2026 | | 2025 | | $ | | % |
| Net loss on divestiture of business | | $ | 1 | | | $ | — | | | $ | 1 | | | — | % | | $ | 24 | | | $ | — | | | $ | 24 | | | — | % |
Net loss on divestiture of business was $1 million and $24 million for the three and nine months ended September 30, 2026, respectively. These losses relate to impairments resulting from reductions in the estimated fair value of the business associated with the Wincanton Divestment. For additional information, see Note 9. “Divestiture,” to the Unaudited Condensed Consolidated Financial Statements.
Other income (expense), net
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| (In millions, except percentages) | | Three Months Ended September 30, | | Change | | Nine Months Ended September 30, | | Change |
| 2026 | | 2025 | | $ | | % | | 2026 | | 2025 | | $ | | % |
| Other income (expense), net | | $ | 12 | | | $ | 5 | | | $ | 7 | | | 140.0 | % | | $ | 28 | | | $ | (10) | | | $ | 38 | | | (380.0) | % |
Other income, net for the three months ended September 30, 2026 was $12 million, compared with $5 million for the three months ended September 30, 2025. Other income, net for the nine months ended September 30, 2026 was $28 million, compared with other expense, net of $10 million for the nine months ended September 30, 2025, primarily reflecting higher foreign currency gains and higher pension income in the nine months ended September 30, 2026.
Interest expense, net
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| (In millions, except percentages) | | Three Months Ended September 30, | | Change | | Nine Months Ended September 30, | | Change |
| 2026 | | 2025 | | $ | | % | | 2026 | | 2025 | | $ | | % |
| Interest expense, net | | $ | 36 | | | $ | 35 | | | $ | 1 | | | 2.9 | % | | $ | 103 | | | $ | 103 | | | $ | — | | | — | % |
Interest expense, net was $36 million for the three months ended September 30, 2026, compared with $35 million for the three months ended September 30, 2025. Interest expense, net was $103 million for both the nine months ended September 30, 2026 and 2025.
Income tax expense
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| (In millions, except percentages) | | Three Months Ended September 30, | | Change | | Nine Months Ended September 30, | | Change |
| 2026 | | 2025 | | $ | | % | | 2026 | | 2025 | | $ | | % |
| Income tax expense | | $ | 7 | | | $ | 28 | | | $ | (21) | | | (75.0) | % | | $ | 40 | | | $ | 45 | | | $ | (5) | | | (11.1) | % |
| Income tax rate | | 10.2 | % | | 31.2 | % | | | | | | 29.2 | % | | 118.1 | % | | | | |
Income tax expense for the three months ended September 30, 2026 decreased $21 million, or 75.0%, compared with the three months ended September 30, 2025. Our effective tax rate was 10.2% for the three months ended September 30, 2026, compared with 31.2% for the three months ended September 30, 2025, primarily reflecting tax benefits related to the Wincanton Divestment and higher deferred tax benefits.
Income tax expense for the nine months ended September 30, 2026 decreased $5 million, or 11.1%, compared with the nine months ended September 30, 2025. Our effective tax rate was 29.2% for the nine months ended September 30, 2026, compared with 118.1% for the nine months ended September 30, 2025, primarily reflecting the non-recurrence of non-deductible litigation costs incurred in 2025 and higher deferred tax benefits.
Liquidity and Capital Resources
Our primary sources of liquidity are cash generated from operations, cash and cash equivalents on hand, borrowing capacity under our revolving credit facility and our factoring programs. Our principal uses of cash include funding operations and working capital, capital expenditures, repayment of borrowings, strategic business development transactions and repurchases of our common stock. The timing and magnitude of new contract start-ups may positively or negatively affect our cash flows and working capital requirements.
As of September 30, 2026, we had $340 million of cash and cash equivalents and $793 million of borrowing capacity, net of letters of credit, under our revolving credit facility, providing approximately $1.1 billion of available liquidity. We also had $3 million of restricted cash. Total consolidated indebtedness was $2.8 billion as of September 30, 2026.
In 2025, our board of directors authorized the repurchase of up to $500 million of our common stock (the “Repurchase Plan”). For the nine months ended September 30, 2026, we repurchased approximately 2.1 million shares for an aggregate purchase price of $101 million, including $100 million of share repurchases and $1 million of excise tax. As of September 30, 2026, $200 million remained authorized under the Repurchase Plan. The timing and amount of any future repurchases will be determined by management based on market conditions, liquidity needs and other relevant considerations. The Repurchase Plan does not obligate us to repurchase any specific number of shares and may be suspended or discontinued at any time.
Our material cash requirements include operating and working capital requirements, debt principal and interest payments, lease obligations, capital expenditures and other contractual commitments. The timing and amount of capital expenditures and working capital requirements may vary based on the timing and magnitude of new customer start-ups and investments in automation and technology solutions. We expect capital expenditures in 2026 to be approximately $269 million to $305 million.
For additional information regarding our cash requirements from lease obligations, indebtedness and other contractual obligations, see Note 4. “Leases,” Note 7. “Debt and Financing Arrangements,” and Note 13. “Commitments and Contingencies,” to the Unaudited Condensed Consolidated Financial Statements.
We believe that cash and cash equivalents on hand, cash generated from operations, borrowing capacity under our revolving credit facility, our factoring programs and access to capital markets will be sufficient to meet our short-term liquidity requirements, including repayment of the current portion of our debt, for at least the next 12 months. We also expect these sources to be sufficient to meet our long-term liquidity requirements, although our long-term liquidity needs will depend on, among other factors, the timing and magnitude of new contract start-ups, capital expenditures, debt maturities, strategic transactions and share repurchases.
Debt Covenants
The covenants governing our debt securities limit our ability to incur indebtedness and grant liens, among other restrictions. Our revolving credit facility generally requires us to maintain a consolidated leverage ratio of no greater than 3.50 to 1.00, which may increase to 4.25 to 1.00 following the consummation of a material acquisition. The consolidated leverage ratio may not exceed 3.50 to 1.00 for more than five consecutive fiscal quarters. As of September 30, 2026, we were in compliance with the covenants contained in our debt and financing arrangements.
Cash Flow Activity
The following table summarizes our consolidated cash flows for the periods presented:
| | | | | | | | | | | | | | | | | | | | | | | | | | |
| | Nine Months Ended September 30, | | Increase
(Decrease) |
(In millions, except percentages) | | 2026 | | 2025 | | $ | | % |
| Net cash provided by operating activities | | $ | 263 | | | $ | 264 | | | $ | (1) | | | — | % |
| Net cash used in investing activities | | (235) | | | (169) | | | (66) | | | 39 | % |
| Net cash used in financing activities | | (536) | | | (266) | | | (270) | | | 102 | % |
| Effect of exchange rates on cash and cash equivalents | | (6) | | | 30 | | | (36) | | | (120) | % |
| Net decrease in cash, restricted cash and cash equivalents | | $ | (514) | | | $ | (141) | | | $ | (373) | | | 265 | % |
Operating Activities
Net cash provided by operating activities was $263 million for the nine months ended September 30, 2026, compared with $264 million for the nine months ended September 30, 2025. The change primarily reflected higher net income of $104 million and favorable changes in accounts payable of $87 million and accrued expenses and other liabilities of $33 million, primarily due to timing. These benefits were offset by unfavorable changes in accounts receivable of $139 million, primarily due to the timing of collections, and other assets of $79 million.
Net cash provided by our factoring programs was $21 million and $51 million for the nine months ended September 30, 2026 and 2025, respectively.
Investing Activities
Net cash used in investing activities was $235 million for the nine months ended September 30, 2026, compared with $169 million for the nine months ended September 30, 2025. The increase of $66 million primarily reflected lower proceeds from sales of property and equipment of $94 million and higher cash paid in connection with the Wincanton Divestment of $38 million in the current year, partially offset by lower capital expenditures of $65 million.
Financing Activities
Net cash used in financing activities was $536 million for the nine months ended September 30, 2026, compared with $266 million for the nine months ended September 30, 2025. The increase of $270 million primarily reflected an increase in the repayment of long-term and other debt of $345 million, partially offset by lower cash paid for common stock repurchases and related excise tax of $98 million.
Guaranteed Securities: Summarized Financial Information
The following information is provided to comply with Rule 13-01 of Regulation S-X under the Exchange Act for the €500 million 3.750% notes due 2030 issued by GXO Logistics Capital B.V. (“GXO Capital”), a subsidiary of the Company incorporated under the laws of the Netherlands. GXO Capital was incorporated in October 2025.
The €500 million 3.750% notes due 2030 are fully and unconditionally guaranteed on an unsecured and unsubordinated basis by GXO Logistics, Inc. (“GXO”). The €500 million 3.750% notes due 2030 are not guaranteed by any of GXO’s or GXO Capital’s subsidiaries (all GXO subsidiaries other than GXO Capital are referred to herein as "non-guarantor subsidiaries"). Holders of the €500 million 3.750% notes due 2030 will have a direct claim only against GXO Capital, as issuer, and GXO, as guarantor.
The following tables set forth the summarized financial information for the nine months ended September 30, 2026, and as of September 30, 2026 and December 31, 2025, of GXO and GXO Capital, on a standalone basis, which does not include the consolidated impact of the assets, liabilities, and financial results of their subsidiaries except as noted in the tables below, nor does it include any impact of intercompany eliminations as there were no intercompany transactions between GXO and GXO Capital. This summarized financial information is not intended to present the financial position or results of operations of GXO or GXO Capital in accordance with U.S. generally accepted accounting principles.
| | |
| GXO |
| Summarized Results of Operations |
| Standalone and Unconsolidated (Unaudited) |
| | | | | | | | |
| | Nine Months Ended |
| (In millions) | | September 30, 2026 |
| Revenue | | $ | — | |
| Costs and expenses | | 11 | |
| Operating loss | | $ | (11) | |
| Dividend income and other income from non-guarantor subsidiaries | | 57 | |
| Other income, net | | 4 | |
| Interest income, net from non-guarantor subsidiaries | | 35 | |
| Interest expense, net | | (54) | |
| Income tax expense | | (7) | |
| | |
| | |
| Net income attributable to GXO standalone | | $ | 24 | |
| | |
| GXO |
| Summarized Assets and Liabilities |
| Standalone and Unconsolidated (Unaudited) |
| | | | | | | | | | | | | | |
| | September 30, | | December 31, |
| (In millions) | | 2026 | | 2025 |
| Current assets | | $ | 72 | | | $ | 519 | |
| Investments in non-guarantor subsidiaries | | 2,373 | | | 2,361 | |
| Notes receivable from non-guarantor subsidiaries | | 715 | | | 860 | |
| Other noncurrent assets | | 62 | | | 81 | |
| Total assets | | $ | 3,222 | | | $ | 3,821 | |
| Accounts payable to non-guarantor subsidiaries | | $ | 473 | | | $ | 384 | |
| Current debt | | 275 | | | 400 | |
| Other current liabilities | | 124 | | | 93 | |
| Long-term debt | | 1,485 | | | 1,758 | |
| Notes payable to non-guarantor subsidiaries | | 4 | | | 210 | |
| Other noncurrent liabilities | | 87 | | | 167 | |
| Total liabilities | | $ | 2,448 | | | $ | 3,012 | |
| | |
| GXO Capital |
| Summarized Results of Operations |
| Standalone and Unconsolidated (Unaudited) |
| | | | | | | | |
| | Nine Months Ended |
| (In millions) | | September 30, 2026 |
| Revenue | | $ | — | |
| Costs and expenses | | — | |
| Operating income | | $ | — | |
| Interest expense, net | | (17) | |
| Income tax benefit | | 4 | |
| | |
| | |
| Net loss attributable to GXO Capital standalone | | $ | (13) | |
| | |
| GXO Capital |
| Summarized Assets and Liabilities |
| Standalone and Unconsolidated (Unaudited) |
| | | | | | | | | | | | | | |
| | September 30, | | December 31, |
| (In millions) | | 2026 | | 2025 |
| Current assets | | $ | 4 | | | $ | 3 | |
| Investments in non-guarantor subsidiaries | | 2,408 | | | 2,350 | |
| Other noncurrent assets | | 1 | | | 1 | |
| Total assets | | $ | 2,413 | | | $ | 2,354 | |
| Current liabilities | | $ | 18 | | | $ | 6 | |
| Long-term debt | | 561 | | | 580 | |
| Total liabilities | | $ | 579 | | | $ | 586 | |
Off-Balance Sheet Arrangements
We do not engage in any off-balance sheet financial arrangements that have or are reasonably likely to have a material current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources.
Contractual Obligations
Changes in our contractual obligations since December 31, 2025, primarily reflect changes in debt and lease obligations, as further described in Note 4. “Leases,” and Note 7. “Debt and Financing Arrangements.”
Critical Accounting Policies and Estimates
There have been no material changes to the critical accounting policies and estimates as previously disclosed in “Critical Accounting Policies” in Part II, Item 7 of our 2025 Form 10-K.
Accounting Pronouncements
Information related to new accounting standards is included in Note 1. “Basis of Presentation” in Part I, Item 1 of this Quarterly Report on Form 10-Q.
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
We are exposed to market risk that may impact our Condensed Consolidated Financial Statements primarily due to
variable-rate debt and fluctuations in certain foreign currencies. To reduce our exposure to market risk associated
with interest and foreign currency exchange rate risks, we enter into various derivative instruments. There have been
no material changes to our exposure to market risk for the nine months ended September 30, 2026, from those previously disclosed in “Quantitative and Qualitative Disclosures About Market Risk” contained in Part II, Item 7A of our Form 10-K for the year ended December 31, 2025.
ITEM 4. CONTROLS AND PROCEDURES
Evaluation of Disclosure Controls and Procedures
Under the supervision and with the participation of our management, including our Chief Executive Officer (“CEO”) and Chief Financial Officer (“CFO”), we conducted an evaluation of the effectiveness of the design and operation of our disclosure controls and procedures, as such term is defined in Rule 13a-15(e) and Rule 15d-15(e) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), as of September 30, 2026. Based on that evaluation, our CEO and CFO concluded that our disclosure controls and procedures as of September 30, 2026, were effective as of such time such that the information required to be included in our Securities and Exchange Commission (“SEC”) reports is: (i) recorded, processed, summarized and reported within the time periods specified in SEC rules and forms relating to the Company, including our consolidated subsidiaries and (ii) accumulated and communicated to our management, including our CEO and CFO, as appropriate to allow timely decisions regarding required disclosure.
Changes in Internal Control Over Financial Reporting
There were no changes in our internal control over financial reporting, as defined in Rules 13a-15(f) and 15d-15(f) of the Exchange Act, during our most recently completed fiscal quarter that materially affected or are reasonably likely to materially affect our internal control over financial reporting.
PART II—OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
See Note 13. “Commitments and Contingencies,” in Part I, Item 1 of this Quarterly Report on Form 10-Q for a description of our legal proceedings.
ITEM 1A. RISK FACTORS
There are no material changes to the risk factors as previously disclosed in “Risk Factors” contained in Part I, Item 1A of our Form 10-K for the year ended December 31, 2025.
ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
Issuer Purchases of Equity Securities
On February 18, 2025, the Company’s board of directors authorized and announced the repurchase of up to $500 million of its common stock (the “Repurchase Plan”). The Repurchase Plan permits shares of common stock to be repurchased from time to time in management’s discretion, through a variety of methods, including a 10b5-1 trading plan, open market purchases, privately negotiated transactions or otherwise. The Repurchase Plan does not obligate the Company to repurchase any specific number of shares of common stock and may be suspended or discontinued at any time.
The following table presents our repurchase activity on a cash basis during the third quarter of 2026:
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| Period | | Total Number of Shares Purchased(1) | | Average Price Paid per Share(2) | | Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs | | Approximate Dollar Value of Shares that May Yet be Purchased Under the Plans or Programs(2)(3) |
| July 1 - July 31 | | 104,114 | | | $ | 48.86 | | | 104,114 | | | $ | 278,772,147 | |
| August 1 - August 31 | | 1,640,239 | | | $ | 47.14 | | | 1,640,239 | | | $ | 201,445,802 | |
| September 1 - September 30 | | 31,007 | | | $ | 46.63 | | | 31,007 | | | $ | 200,000,020 | |
| Total | | 1,775,360 | | | $ | 47.24 | | | 1,775,360 | | | |
(1) All transactions are reported on a trade date basis.
(2) The average price paid per share and the approximate dollar value of shares that may yet be purchased under the Repurchase Plan exclude the costs associated with the repurchases and 1% excise tax imposed by the United States government-enacted Inflation Reduction Act of 2022 on share repurchases in excess of issuances. We reflect the costs associated with the repurchase and the 1% excise tax within equity as part of the repurchase cost of the common stock. For additional information regarding the Repurchase Plan, see Note 12. “Stockholders’ Equity” in Part I, Item 1 of this Quarterly Report on Form 10-Q.
(3) Approximate dollar value of shares that may yet be purchased under the Repurchase Plan at the end of the period.
ITEM 6. EXHIBITS
| | | | | | | | |
Exhibit
Number | | Description |
| 10.1+ | | |
| 22.1 | | |
| 31.1* | | |
| 31.2* | | |
| 32.1** | | |
| 32.2** | | |
| 101.INS* | | Inline XBRL Instance Document. |
| 101.SCH* | | Inline XBRL Taxonomy Extension Schema. |
| 101.CAL* | | Inline XBRL Taxonomy Extension Calculation Linkbase. |
| 101.DEF* | | Inline XBRL Taxonomy Extension Definition Linkbase. |
| 101.LAB* | | Inline XBRL Taxonomy Extension Label Linkbase. |
| 101.PRE* | | Inline XBRL Taxonomy Extension Presentation Linkbase. |
| 104* | | Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101). |
| * | | Filed herewith. |
| ** | | Furnished herewith. |
| + | | This exhibit is a management contract or compensatory plan or arrangement. |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
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| | GXO Logistics, Inc. |
| | |
Date: November 4, 2026 | By: | /s/ Patrick Kelleher |
| | Patrick Kelleher |
| | (Chief Executive Officer) |
| | (Principal Executive Officer) |
| | |
Date: November 4, 2026 | By: | /s/ Mark Suchinski |
| | Mark Suchinski |
| | (Chief Financial Officer) |
| | (Principal Financial Officer) |
