FreightWaves reported that GXO Logistics executives said the company's transformation strategy is beginning to pay off after it posted its strongest commercial quarter in three years, with confidence that growth will accelerate into 2027. During the second-quarter earnings call Wednesday before the market opened, CEO Patrick Kelleher said the company has moved beyond leadership changes and strategic planning into execution, with commercial momentum, artificial intelligence deployments and operational improvements beginning to translate into financial results.
What happened
According to FreightWaves, GXO released its second-quarter earnings after the market closed Tuesday. The Greenwich, Connecticut-based company (NYSE: GXO) reported revenue of $3.4 billion, up 4.3% year over year but below the $3.45 billion Wall Street had forecast. Adjusted EBITDA rose to $219 million, and adjusted diluted earnings per share came in at 59 cents, topping the 58-cent consensus. The company generated $76 million in operating cash flow and $12 million in free cash flow during the quarter.
| Metric | Q2 result | Forecast / consensus |
|---|---|---|
| Revenue | $3.4 billion | $3.45 billion |
| Adjusted EBITDA | $219 million | — |
| Adjusted diluted EPS | 59 cents | 58 cents |
| Operating cash flow | $76 million | — |
| Free cash flow | $12 million | — |
North America leads growth
FreightWaves reported that executives see North America as GXO's largest long-term growth opportunity, with the region becoming GXO's fastest-growing market in Q2, topping $782 million. Kelleher said commercial changes implemented over the past year significantly improved regional performance, with first-half North American wins increasing 85% from the same period a year ago, according to FreightWaves. Chief Strategy Officer Kristine Kubacki added, according to FreightWaves, that North America's sales pipeline expanded 34% year over year, pushing the company's overall commercial pipeline back to $2.7 billion only weeks after the quarter ended. According to FreightWaves, GXO now has more than $1 billion in incremental revenue secured for 2026 and approximately $353 million already committed for 2027.
Kelleher said, according to FreightWaves, that about 40% of new business wins came from four strategic verticals the company has prioritized: aerospace and defense, technology and data centers, industrials and life sciences. "We're winning more and we're winning better," he told analysts, pointing to expanded relationships with Nike, PepsiCo, Marks & Spencer, Boeing and Raytheon, plus a major new hyperscaler data center customer.
This quarter marks five years since GXO became an independent public company. The foundation established over the past five years combined with new leadership and a new strategic agenda are now translating into results. We're seeing real momentum build behind our strategy and we're still in the early innings.
— Patrick Kelleher, CEO, GXO Logistics
AI and robotics push
FreightWaves reported that GXO IQ, the company's proprietary AI platform, has shifted from launch mode into scaled deployment, with the technology expected to reach approximately 50 facilities by the end of 2026. The platform is used to improve demand forecasting, inventory replenishment, labor planning and warehouse picking. GXO also expects to deploy around 20,000 robots across its global network this year. On humanoid robots, Kelleher said, according to FreightWaves, that GXO remains in the testing phase: "We have done 45 pilots on humanoids so far. We have not achieved ROI on humanoids yet. I think we are a couple of years away from that."
Profitability focus
Chief Financial Officer Mark Suchinski told analysts, according to FreightWaves, that expanding profitability is now a primary focus. Investments in standardized operating dashboards, labor management systems, procurement and automation are expected to begin producing measurable margin improvements later this year. Kelleher acknowledged the company's profit gap, saying, "We lag our competitive peers in terms of EBITDA and EBIT performance," and that the company is focused on closing that gap. FreightWaves also reported that GXO operates more than 970 facilities totaling approximately 200 million square feet, with a global workforce of more than 130,000 people, positioning it as one of the largest pure-play contract logistics providers in the world.
Watch list
FreightWaves reported the following factors bear monitoring: GXO's expectation that growth will accelerate into 2027; GXO IQ's planned expansion to roughly 50 facilities by end of 2026; the planned deployment of about 20,000 robots globally this year; and margin improvements from automation and labor-management investments expected later this year. The company's commercial pipeline stood at $2.7 billion only weeks after the quarter closed.
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