GXO Logistics, Inc.

GXO Logistics (NYSE: GXO) operates warehouses, distribution, order fulfillment and returns services for other companies. It earns revenue by managing the movement of customers' goods, including online orders. Its contracts include fixed-price work and arrangements that reimburse allowable costs plus a margin. The ability to organize labor, space and equipment efficiently matters to the profit left from each contract.

The United Kingdom supplied $1.75 billion of GXO's $3.59 billion revenue in the third quarter of 2026; the United States supplied $846 million. Retail customers selling through stores and online accounted for $1.69 billion. These are revenue breakdowns, rather than separately reported profit segments.

Faster growth has not yet lifted quarterly margins

Organic revenue growth accelerated from 3.4% in the second quarter to 6.4% in the third, which GXO called its fastest pace in more than three years. The current organic comparison removes currency movements. Both third-quarter periods include Wincanton, acquired in April 2024.

Direct operating expenses increased $207 million against $195 million of additional revenue. Transaction and integration costs also rose $12 million. Lower tax expense, rather than higher pretax income, allowed consolidated net income to rise. Adjusted net income attributable to GXO increased to $102 million from $91 million.

Adjusted EBITDA removes interest, taxes, depreciation, amortization and selected costs or gains. Current adjustments include integration, restructuring, divestiture losses and unrealized currency gains. Adjusted EPS also removes acquired-intangible amortization and applies tax adjustments. These measures retain stock-based compensation.

Cash, debt and the property comparison

Quarterly operating cash flow fell to $156 million from $232 million. Over nine months it was essentially flat, so the quarterly decline followed an improvement in the first half.

GXO calculates free cash flow as operating cash flow minus capital spending plus property and equipment sale proceeds. The prior-year filing says nine-month capital spending included buying assets sold for $90 million in the third quarter. Both purchases and sales therefore feature in that year's cash-flow comparison.

At September 30, cash excluding restricted cash was $340 million, against $2.82 billion of total debt, including $497 million of finance leases and other debt. GXO's net debt was $2.48 billion after including bank overdrafts and subtracting cash. Net leverage was 2.7 times trailing adjusted EBITDA.

Cash fell $514 million from year-end. Nine-month financing outflows included $401 million of debt repayments, $46 million of finance-lease repayments and $102 million for share repurchases and excise tax. August disclosures had already identified the July redemption of $400 million in notes.

What the next results can test

The November outlook retained August's annual targets: 4% to 5% organic revenue growth, $945 million to $965 million adjusted EBITDA, $2.95 to $3.15 adjusted diluted EPS and 30% to 40% free-cash-flow conversion. Conversion means free cash flow divided by adjusted EBITDA. August had narrowed the profit ranges without changing their midpoints.

GXO signed $375 million in new business during the third quarter, up 34%. Those wins represent annualized contract values, rather than revenue already earned. The sales pipeline reached a record $3.1 billion. The near-term test is whether that activity produces more profit per sales dollar while GXO meets its annual cash-conversion target.