UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
_______________________________________________________
FORM 10-Q
_______________________________________________________
(Mark One)
| ☒ | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 | ||||
For the quarterly period ended June 30, 2026
or
| ☐ | 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 August 3, 2026, there were 114,684,579 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 June 30, 2026 | ||||||||
Table of Contents | ||||||||
| Page | ||||||||
1
PART I—FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
GXO Logistics, Inc.
Condensed Consolidated Statements of Operations
(Unaudited)
| Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||||||||||||||
| (Dollars in millions, shares in thousands, except per share amounts) | 2026 | 2025 | 2026 | 2025 | ||||||||||||||||||||||
| Revenue | $ | 3,441 | $ | 3,299 | $ | 6,739 | $ | 6,276 | ||||||||||||||||||
| Direct operating expense | 2,933 | 2,813 | 5,741 | 5,371 | ||||||||||||||||||||||
| Selling, general and administrative expense | 295 | 272 | 591 | 533 | ||||||||||||||||||||||
| Depreciation and amortization expense | 117 | 110 | 232 | 219 | ||||||||||||||||||||||
| Transaction and integration costs | 12 | 14 | 28 | 36 | ||||||||||||||||||||||
| Restructuring costs and other | 5 | 2 | 8 | 19 | ||||||||||||||||||||||
| Regulatory matter | — | (1) | — | 65 | ||||||||||||||||||||||
| Net loss on divestiture of business | 2 | — | 23 | — | ||||||||||||||||||||||
| Operating income | 77 | 89 | 116 | 33 | ||||||||||||||||||||||
| Other income (expense), net | 6 | (10) | 16 | (15) | ||||||||||||||||||||||
| Interest expense, net | (35) | (36) | (67) | (68) | ||||||||||||||||||||||
| Income (loss) before income taxes | 48 | 43 | 65 | (50) | ||||||||||||||||||||||
| Income tax expense | (21) | (15) | (33) | (17) | ||||||||||||||||||||||
| Net income (loss) | 27 | 28 | 32 | (67) | ||||||||||||||||||||||
| Net income attributable to noncontrolling interests (“NCI”) | (2) | (2) | (3) | (3) | ||||||||||||||||||||||
| Net income (loss) attributable to GXO | $ | 25 | $ | 26 | $ | 29 | $ | (70) | ||||||||||||||||||
| Earnings (loss) per share | ||||||||||||||||||||||||||
| Basic | $ | 0.22 | $ | 0.23 | $ | 0.25 | $ | (0.60) | ||||||||||||||||||
| Diluted | $ | 0.22 | $ | 0.23 | $ | 0.25 | $ | (0.60) | ||||||||||||||||||
| Weighted-average shares outstanding used in computation of earnings (loss) per share | ||||||||||||||||||||||||||
| Basic | 115,013 | 114,812 | 114,862 | 116,890 | ||||||||||||||||||||||
| Diluted | 115,718 | 115,055 | 115,780 | 116,890 | ||||||||||||||||||||||
See accompanying Notes to Condensed Consolidated Financial Statements.
2
GXO Logistics, Inc.
Condensed Consolidated Statements of Comprehensive Income
(Unaudited)
| Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||||||||||||||
| (In millions) | 2026 | 2025 | 2026 | 2025 | ||||||||||||||||||||||
| Net income (loss) | $ | 27 | $ | 28 | $ | 32 | $ | (67) | ||||||||||||||||||
| Other comprehensive income (loss), net of tax | ||||||||||||||||||||||||||
| Foreign currency translation adjustments | — | 136 | (24) | 210 | ||||||||||||||||||||||
| Cash flow hedges | (1) | — | (1) | (1) | ||||||||||||||||||||||
| Fair value hedges | (3) | — | (2) | — | ||||||||||||||||||||||
| Pension plans | 1 | (8) | 5 | (12) | ||||||||||||||||||||||
| Other comprehensive income (loss), net of tax | (3) | 128 | (22) | 197 | ||||||||||||||||||||||
| Comprehensive income, net of tax | 24 | 156 | 10 | 130 | ||||||||||||||||||||||
| Less: Comprehensive income attributable to NCI | — | 5 | 3 | 7 | ||||||||||||||||||||||
| Comprehensive income attributable to GXO | $ | 24 | $ | 151 | $ | 7 | $ | 123 | ||||||||||||||||||
See accompanying Notes to Condensed Consolidated Financial Statements.
3
GXO Logistics, Inc.
Condensed Consolidated Balance Sheets
(Unaudited)
| June 30, | December 31, | |||||||||||||
| (Dollars in millions, shares in thousands, except per share amounts) | 2026 | 2025 | ||||||||||||
| ASSETS | ||||||||||||||
| Current assets | ||||||||||||||
| Cash and cash equivalents | $ | 769 | $ | 854 | ||||||||||
Accounts receivable, net of allowance of $14 and $15 | 2,070 | 2,028 | ||||||||||||
| Other current assets | 414 | 406 | ||||||||||||
| Total current assets | 3,253 | 3,288 | ||||||||||||
| Long-term assets | ||||||||||||||
Property and equipment, net of accumulated depreciation of $2,208 and $2,126 | 1,261 | 1,151 | ||||||||||||
| Operating lease assets | 2,698 | 2,563 | ||||||||||||
| Goodwill | 3,727 | 3,781 | ||||||||||||
Intangible assets, net of accumulated amortization of $805 and $781 | 839 | 909 | ||||||||||||
| Other long-term assets | 593 | 570 | ||||||||||||
| Total long-term assets | 9,118 | 8,974 | ||||||||||||
| Total assets | $ | 12,371 | $ | 12,262 | ||||||||||
| LIABILITIES AND EQUITY | ||||||||||||||
| Current liabilities | ||||||||||||||
| Accounts payable | $ | 707 | $ | 758 | ||||||||||
| Accrued expenses | 1,445 | 1,492 | ||||||||||||
| Current debt | 751 | 446 | ||||||||||||
| Current operating lease liabilities | 779 | 745 | ||||||||||||
| Other current liabilities | 439 | 434 | ||||||||||||
| Total current liabilities | 4,121 | 3,875 | ||||||||||||
| Long-term liabilities | ||||||||||||||
| Long-term debt | 2,452 | 2,619 | ||||||||||||
| Long-term operating lease liabilities | 2,137 | 2,044 | ||||||||||||
| Other long-term liabilities | 639 | 709 | ||||||||||||
| Total long-term liabilities | 5,228 | 5,372 | ||||||||||||
Commitments and Contingencies (Note 14) | ||||||||||||||
| Stockholders’ Equity | ||||||||||||||
Common Stock, $0.01 par value per share; 300,000 shares authorized, 120,458 and 119,868 shares issued and 114,770 and 114,512 shares outstanding, respectively | 1 | 1 | ||||||||||||
Treasury stock, at cost; 5,688 and 5,356 shares, respectively | (218) | (202) | ||||||||||||
Preferred Stock, $0.01 par value per share; 10,000 shares authorized, 0 issued and outstanding | — | — | ||||||||||||
| Additional Paid-In Capital (“APIC”) | 2,680 | 2,667 | ||||||||||||
| Retained earnings | 747 | 718 | ||||||||||||
| Accumulated Other Comprehensive Income (Loss) (“AOCIL”) | (223) | (201) | ||||||||||||
| Total stockholders’ equity before NCI | 2,987 | 2,983 | ||||||||||||
| NCI | 35 | 32 | ||||||||||||
| Total equity | 3,022 | 3,015 | ||||||||||||
| Total liabilities and equity | $ | 12,371 | $ | 12,262 | ||||||||||
See accompanying Notes to Condensed Consolidated Financial Statements.
4
GXO Logistics, Inc.
Condensed Consolidated Statements of Cash Flows
(Unaudited)
| Six Months Ended June 30, | ||||||||||||||
| (In millions) | 2026 | 2025 | ||||||||||||
| Cash flows from operating activities: | ||||||||||||||
| Net income (loss) | $ | 32 | $ | (67) | ||||||||||
Adjustments to reconcile net income (loss) to net cash provided by operating activities | ||||||||||||||
| Depreciation and amortization expense | 232 | 219 | ||||||||||||
| Stock-based compensation expense | 23 | 23 | ||||||||||||
Deferred tax benefit | (1) | (25) | ||||||||||||
| Other | (8) | 7 | ||||||||||||
| Changes in operating assets and liabilities | ||||||||||||||
| Accounts receivable | (63) | 18 | ||||||||||||
| Other assets | (36) | 39 | ||||||||||||
| Accounts payable | (44) | (151) | ||||||||||||
| Accrued expenses and other liabilities | (28) | (31) | ||||||||||||
| Net cash provided by operating activities | 107 | 32 | ||||||||||||
| Cash flows from investing activities: | ||||||||||||||
| Capital expenditures | (130) | (125) | ||||||||||||
| Proceeds from sale of property and equipment | 4 | 2 | ||||||||||||
| Net cash used in investing activities | (126) | (123) | ||||||||||||
| Cash flows from financing activities: | ||||||||||||||
| Common stock repurchased and excise tax paid | (18) | (200) | ||||||||||||
| Net borrowings under revolving credit facilities | — | 8 | ||||||||||||
| Repayments of debt | — | (55) | ||||||||||||
| Repayments of finance lease obligations | (25) | (24) | ||||||||||||
| Proceeds from exercise of stock options | 7 | — | ||||||||||||
| Taxes paid related to net share settlement of equity awards | (17) | (7) | ||||||||||||
| Net obligations under factoring arrangements | (10) | (12) | ||||||||||||
| Net changes in bank overdraft positions | 1 | 64 | ||||||||||||
| Other | — | (1) | ||||||||||||
| Net cash used in financing activities | (62) | (227) | ||||||||||||
| Effect of exchange rates on cash and cash equivalents | (3) | 40 | ||||||||||||
| Net decrease in cash, restricted cash and cash equivalents | (84) | (278) | ||||||||||||
| Cash, restricted cash and cash equivalents, beginning of period | 857 | 485 | ||||||||||||
Cash, restricted cash and cash equivalents, end of period | $ | 773 | $ | 207 | ||||||||||
| Non-cash financing activities: | ||||||||||||||
| Excise tax liability related to stock repurchases | $ | — | $ | 2 | ||||||||||
| Reconciliation of cash, restricted cash and cash equivalents | June 30, 2026 | December 31, 2025 | ||||||||||||
| Cash and cash equivalents | $ | 769 | $ | 854 | ||||||||||
| Restricted Cash (included in Other current assets) | 3 | 2 | ||||||||||||
| Restricted Cash (included in Other long-term assets) | 1 | 1 | ||||||||||||
| Total cash, restricted cash and cash equivalents | $ | 773 | $ | 857 | ||||||||||
See accompanying Notes to Condensed Consolidated Financial Statements.
5
GXO Logistics, Inc.
Condensed Consolidated Statements of Changes in Equity
(Unaudited)
| Common Stock | APIC | Retained Earnings | AOCIL | Equity Before NCI | NCI | Total Equity | ||||||||||||||||||||||||||||||||||||||||||||||||||
| (Shares in thousands, dollars in millions) | Shares | Amount | Treasury Stock | |||||||||||||||||||||||||||||||||||||||||||||||||||||
| Balance as of March 31, 2026 | 115,024 | $ | 1 | $ | (202) | $ | 2,669 | $ | 722 | $ | (222) | $ | 2,968 | $ | 35 | $ | 3,003 | |||||||||||||||||||||||||||||||||||||||
| Net income | — | — | — | — | 25 | — | 25 | 2 | 27 | |||||||||||||||||||||||||||||||||||||||||||||||
| Other comprehensive income (loss) | — | — | — | — | — | (1) | (1) | (2) | (3) | |||||||||||||||||||||||||||||||||||||||||||||||
| Common stock issued under employee stock plans and exercises of stock options | 103 | — | — | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||||
| Tax withholding on vesting of stock-based compensation awards | (25) | — | — | (2) | — | — | (2) | — | (2) | |||||||||||||||||||||||||||||||||||||||||||||||
| Stock-based compensation | — | — | — | 13 | — | — | 13 | — | 13 | |||||||||||||||||||||||||||||||||||||||||||||||
| Common stock repurchased | (332) | — | (16) | — | — | — | (16) | — | (16) | |||||||||||||||||||||||||||||||||||||||||||||||
| Balance as of June 30, 2026 | 114,770 | $ | 1 | $ | (218) | $ | 2,680 | $ | 747 | $ | (223) | $ | 2,987 | $ | 35 | $ | 3,022 | |||||||||||||||||||||||||||||||||||||||
| Common Stock | APIC | Retained Earnings | AOCIL | Equity Before NCI | NCI | Total Equity | ||||||||||||||||||||||||||||||||||||||||||||||||||
| (Shares in thousands, dollars in millions) | Shares | Amount | Treasury Stock | |||||||||||||||||||||||||||||||||||||||||||||||||||||
| Balance as of December 31, 2025 | 114,512 | $ | 1 | $ | (202) | $ | 2,667 | $ | 718 | $ | (201) | $ | 2,983 | $ | 32 | $ | 3,015 | |||||||||||||||||||||||||||||||||||||||
| Net income (loss) | — | — | — | — | 29 | — | 29 | 3 | 32 | |||||||||||||||||||||||||||||||||||||||||||||||
| Other comprehensive income | — | — | — | — | — | (22) | (22) | — | (22) | |||||||||||||||||||||||||||||||||||||||||||||||
| Common stock issued under employee stock plans and exercises of stock options | 890 | — | — | 7 | — | — | 7 | — | 7 | |||||||||||||||||||||||||||||||||||||||||||||||
| Tax withholding on vesting of stock-based compensation awards | (300) | — | — | (17) | — | — | (17) | — | (17) | |||||||||||||||||||||||||||||||||||||||||||||||
| Stock-based compensation | — | — | — | 23 | — | — | 23 | — | 23 | |||||||||||||||||||||||||||||||||||||||||||||||
| Common stock repurchased | (332) | — | (16) | — | — | — | (16) | — | (16) | |||||||||||||||||||||||||||||||||||||||||||||||
| Balance as of June 30, 2026 | 114,770 | $ | 1 | $ | (218) | $ | 2,680 | $ | 747 | $ | (223) | $ | 2,987 | $ | 35 | $ | 3,022 | |||||||||||||||||||||||||||||||||||||||
See accompanying Notes to Condensed Consolidated Financial Statements.
6
GXO Logistics, Inc.
Condensed Consolidated Statements of Changes in Equity
(Unaudited)
| Common Stock | APIC | Retained Earnings | AOCIL | Equity Before NCI | NCI | Total Equity | ||||||||||||||||||||||||||||||||||||||||||||||||||
| (Shares in thousands, dollars in millions) | Shares | Amount | Treasury Stock | |||||||||||||||||||||||||||||||||||||||||||||||||||||
| Balance as of March 31, 2025 | 116,955 | $ | 1 | $ | (111) | $ | 2,635 | $ | 590 | $ | (245) | $ | 2,870 | $ | 34 | $ | 2,904 | |||||||||||||||||||||||||||||||||||||||
| Net income | — | — | — | — | 26 | — | 26 | 2 | 28 | |||||||||||||||||||||||||||||||||||||||||||||||
| Other comprehensive income | — | — | — | — | — | 125 | 125 | 3 | 128 | |||||||||||||||||||||||||||||||||||||||||||||||
| Stock-based compensation | — | — | — | 11 | — | — | 11 | — | 11 | |||||||||||||||||||||||||||||||||||||||||||||||
| Vesting of stock compensation awards | 125 | — | — | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||||
| Tax withholding on vesting of stock-based compensation awards | (38) | — | — | (1) | — | — | (1) | — | (1) | |||||||||||||||||||||||||||||||||||||||||||||||
| Common stock repurchased | (2,590) | — | (91) | — | — | — | (91) | — | (91) | |||||||||||||||||||||||||||||||||||||||||||||||
| Dividends to NCI | — | — | — | — | — | — | — | (4) | (4) | |||||||||||||||||||||||||||||||||||||||||||||||
| Balance as of June 30, 2025 | 114,452 | $ | 1 | $ | (202) | $ | 2,645 | $ | 616 | $ | (120) | $ | 2,940 | $ | 35 | $ | 2,975 | |||||||||||||||||||||||||||||||||||||||
| Common Stock | APIC | Retained Earnings | AOCIL | Equity Before NCI | NCI | Total Equity | ||||||||||||||||||||||||||||||||||||||||||||||||||
| (Shares in thousands, dollars in millions) | Shares | Amount | Treasury Stock | |||||||||||||||||||||||||||||||||||||||||||||||||||||
| Balance as of December 31, 2024 | 119,496 | $ | 1 | $ | — | $ | 2,629 | $ | 686 | $ | (313) | $ | 3,003 | $ | 32 | $ | 3,035 | |||||||||||||||||||||||||||||||||||||||
| Net income (loss) | — | — | — | — | (70) | — | (70) | 3 | (67) | |||||||||||||||||||||||||||||||||||||||||||||||
| Other comprehensive income | — | — | — | — | — | 193 | 193 | 4 | 197 | |||||||||||||||||||||||||||||||||||||||||||||||
| Stock-based compensation | — | — | — | 23 | — | — | 23 | — | 23 | |||||||||||||||||||||||||||||||||||||||||||||||
| Vesting of stock compensation awards | 495 | — | — | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||||
| Tax withholding on vesting of stock-based compensation awards | (183) | — | — | (7) | — | — | (7) | — | (7) | |||||||||||||||||||||||||||||||||||||||||||||||
| Common stock repurchased | (5,356) | — | (202) | — | — | — | (202) | — | (202) | |||||||||||||||||||||||||||||||||||||||||||||||
| Dividends to NCI | — | — | — | — | — | — | — | (4) | (4) | |||||||||||||||||||||||||||||||||||||||||||||||
| Balance as of June 30, 2025 | 114,452 | $ | 1 | $ | (202) | $ | 2,645 | $ | 616 | $ | (120) | $ | 2,940 | $ | 35 | $ | 2,975 | |||||||||||||||||||||||||||||||||||||||
See accompanying Notes to Condensed Consolidated Financial Statements.
7
GXO Logistics, Inc.
Notes to Condensed Consolidated Financial Statements
(Unaudited)
1. Basis of Presentation and Significant Accounting Policies and Estimates
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 adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included.
Operating results for the interim periods are not necessarily indicative of the results that may be expected for the year ending December 31, 2026. 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 accounts and transactions. 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.
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 standard is effective for annual reporting periods beginning after December 15, 2026, with early adoption permitted. The Company does not expect this standard to have a material impact on its results of operations, financial position or cash flows and 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.
8
2. Revenue Recognition
Revenue disaggregated by geographical area was as follows:
| Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||||||||||||||
| (In millions) | 2026 | 2025 | 2026 | 2025 | ||||||||||||||||||||||
| United Kingdom | $ | 1,684 | $ | 1,590 | $ | 3,279 | $ | 2,981 | ||||||||||||||||||
| United States | 782 | 767 | 1,533 | 1,519 | ||||||||||||||||||||||
| Netherlands | 256 | 253 | 526 | 485 | ||||||||||||||||||||||
| France | 213 | 216 | 421 | 402 | ||||||||||||||||||||||
| Spain | 181 | 166 | 343 | 309 | ||||||||||||||||||||||
| Italy | 112 | 105 | 221 | 200 | ||||||||||||||||||||||
| Other | 213 | 202 | 416 | 380 | ||||||||||||||||||||||
| Total | $ | 3,441 | $ | 3,299 | $ | 6,739 | $ | 6,276 | ||||||||||||||||||
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 June 30, | Six Months Ended June 30, | |||||||||||||||||||||||||
| (In millions) | 2026 | 2025 | 2026 | 2025 | ||||||||||||||||||||||
| Omnichannel retail | $ | 1,637 | $ | 1,626 | $ | 3,198 | $ | 3,048 | ||||||||||||||||||
| Technology and consumer electronics | 439 | 402 | 872 | 795 | ||||||||||||||||||||||
| Industrial and manufacturing | 408 | 403 | 802 | 765 | ||||||||||||||||||||||
| Consumer packaged goods | 331 | 290 | 665 | 574 | ||||||||||||||||||||||
| Food and beverage | 341 | 359 | 658 | 673 | ||||||||||||||||||||||
| Other | 285 | 219 | 544 | 421 | ||||||||||||||||||||||
| Total | $ | 3,441 | $ | 3,299 | $ | 6,739 | $ | 6,276 | ||||||||||||||||||
Contract Assets and Liabilities
The contract asset and contract liability balances from contracts with customers were as follows:
| June 30, | December 31, | |||||||||||||
| (In millions) | 2026 | 2025 | ||||||||||||
| Contract assets and contract costs included in: | ||||||||||||||
| Other current assets | $ | 35 | $ | 36 | ||||||||||
| Other long-term assets | 254 | 235 | ||||||||||||
| Total contract assets | $ | 289 | $ | 271 | ||||||||||
| Contract liabilities included in: | ||||||||||||||
| Other current liabilities | $ | 272 | $ | 279 | ||||||||||
| Other long-term liabilities | 110 | 101 | ||||||||||||
| Total contract liabilities | $ | 382 | $ | 380 | ||||||||||
9
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 as follows:
| Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||||||||||||||
| (In millions) | 2026 | 2025 | 2026 | 2025 | ||||||||||||||||||||||
Revenue recognized | $ | 17 | $ | 24 | $ | 229 | $ | 221 | ||||||||||||||||||
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 adjusted 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.
10
The Company’s segment results were as follows:
| Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||||||||||||||
| (In millions) | 2026 | 2025 | 2026 | 2025 | ||||||||||||||||||||||
| Revenue | $ | 3,441 | $ | 3,299 | $ | 6,739 | $ | 6,276 | ||||||||||||||||||
| Direct operating expense | 2,933 | 2,813 | 5,741 | 5,371 | ||||||||||||||||||||||
Selling, general and administrative expense(1) | 281 | 257 | 561 | 503 | ||||||||||||||||||||||
Other income (expense), net(2)(3) | (6) | 2 | (12) | (3) | ||||||||||||||||||||||
| Segment Adjusted EBITDA | $ | 233 | $ | 227 | $ | 449 | $ | 405 | ||||||||||||||||||
| Less: | ||||||||||||||||||||||||||
Corporate expenses(4) | 14 | 15 | 30 | 30 | ||||||||||||||||||||||
| Depreciation expense | 89 | 80 | 175 | 160 | ||||||||||||||||||||||
| Amortization of intangible assets acquired | 28 | 30 | 57 | 59 | ||||||||||||||||||||||
| Transaction and integration costs | 12 | 14 | 28 | 36 | ||||||||||||||||||||||
| Restructuring costs and other | 5 | 2 | 8 | 19 | ||||||||||||||||||||||
| Regulatory matter | — | (1) | — | 65 | ||||||||||||||||||||||
| Net loss on divestiture of business | 2 | — | 23 | — | ||||||||||||||||||||||
Unrealized (gain) loss on foreign currency contracts(3) | — | 8 | (4) | 18 | ||||||||||||||||||||||
| Interest expense, net | 35 | 36 | 67 | 68 | ||||||||||||||||||||||
| Income (loss) before income taxes | 48 | 43 | 65 | (50) | ||||||||||||||||||||||
| Income tax expense | (21) | (15) | (33) | (17) | ||||||||||||||||||||||
| Net income (loss) | $ | 27 | $ | 28 | $ | 32 | $ | (67) | ||||||||||||||||||
(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.
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 June 30, | Six Months Ended June 30, | |||||||||||||||||||||||||
| (In millions) | 2026 | 2025 | 2026 | 2025 | ||||||||||||||||||||||
Operating lease cost(1)(2) | $ | 226 | $ | 238 | $ | 438 | $ | 444 | ||||||||||||||||||
| Finance lease cost: | ||||||||||||||||||||||||||
Amortization of the right-of-use assets(3) | 16 | 8 | 26 | 15 | ||||||||||||||||||||||
Interest on the lease liabilities(4) | 8 | 4 | 12 | 8 | ||||||||||||||||||||||
| Total finance lease cost | 24 | 12 | 38 | 23 | ||||||||||||||||||||||
Variable lease cost(1) | 69 | 42 | 132 | 86 | ||||||||||||||||||||||
Short-term lease cost(1) | 54 | 49 | 101 | 96 | ||||||||||||||||||||||
Total lease cost(5) | $ | 373 | $ | 341 | $ | 709 | $ | 649 | ||||||||||||||||||
11
(1) Operating, variable, short-term lease costs are primarily included in Direct operating expense in the Condensed Consolidated Statements of Operations.
(2) For the three and six months ended June 30, 2026, the Company recorded a net benefit of $4 million and $30 million, respectively, from a real estate transaction that resulted in an early termination of a lease.
(3) Amortization of right-of-use assets is included in Depreciation and amortization in the Condensed Consolidated Statements of Operations.
(4) Interest on the lease liabilities is included in Interest expense, net in the Condensed Consolidated Statements of Operations.
(5) Total lease cost excludes sublease income for all periods presented, as it was not material.
The following amounts were recorded in the Condensed Consolidated Balance Sheets related to leases:
| June 30, | December 31, | |||||||||||||
| (In millions) | 2026 | 2025 | ||||||||||||
| Operating leases: | ||||||||||||||
| Operating lease assets | $ | 2,698 | $ | 2,563 | ||||||||||
| Current operating lease liabilities | $ | 779 | $ | 745 | ||||||||||
| Long-term operating lease liabilities | 2,137 | 2,044 | ||||||||||||
| Total operating lease liabilities | $ | 2,916 | $ | 2,789 | ||||||||||
| Finance leases: | ||||||||||||||
| $ | 432 | $ | 306 | |||||||||||
| $ | 74 | $ | 45 | |||||||||||
| 401 | 281 | |||||||||||||
| Total finance lease liabilities | $ | 475 | $ | 326 | ||||||||||
Supplemental cash flow information related to leases was as follows:
| Six Months Ended June 30, | ||||||||||||||
| (In millions) | 2026 | 2025 | ||||||||||||
| Right-of-use assets obtained in exchange for lease liabilities: | ||||||||||||||
| Operating leases | $ | 559 | $ | 514 | ||||||||||
| Finance leases | 178 | 85 | ||||||||||||
5. Goodwill
The following table presents the changes in Goodwill for the six months ended June 30, 2026:
| (In millions) | ||||||||
Balance as of December 31, 2025 | $ | 3,781 | ||||||
| Impact of foreign exchange translation | (54) | |||||||
Balance as of June 30, 2026 | $ | 3,727 | ||||||
12
6. Intangible Assets
The following table summarizes identifiable intangible assets subject to amortization:
| June 30, 2026 | December 31, 2025 | |||||||||||||||||||||||||||||||||||||
| (In millions) | Gross Carrying Amount | Accumulated Amortization | Net Value | Gross Carrying Amount | Accumulated Amortization | Net Value | ||||||||||||||||||||||||||||||||
| Customer relationships | $ | 1,564 | $ | (765) | $ | 799 | $ | 1,609 | $ | (747) | $ | 862 | ||||||||||||||||||||||||||
| Trade names and trademarks | 63 | (33) | 30 | 64 | (29) | 35 | ||||||||||||||||||||||||||||||||
| Developed technology | 17 | (7) | 10 | 17 | (5) | 12 | ||||||||||||||||||||||||||||||||
| Total | $ | 1,644 | $ | (805) | $ | 839 | $ | 1,690 | $ | (781) | $ | 909 | ||||||||||||||||||||||||||
Intangible asset amortization expense was $28 million and $30 million for the three months ended June 30, 2026 and June 30, 2025, respectively, and $57 million and $59 million for the six months ended June 30, 2026 and June 30, 2025, respectively.
7. Debt and Financing Arrangements
The following table summarizes the carrying value of the Company’s debt:
| June 30, | December 31, | |||||||||||||||||||
| (In millions, except percentages) | Rate(1) | 2026 | 2025 | |||||||||||||||||
| Unsecured notes due 2026 | 1.65 | % | $ | 400 | $ | 400 | ||||||||||||||
Unsecured notes due 2029(2) | 6.25 | % | 595 | 594 | ||||||||||||||||
Unsecured notes due 2031(3) | 2.65 | % | 398 | 398 | ||||||||||||||||
Unsecured notes due 2034(4) | 6.50 | % | 491 | 491 | ||||||||||||||||
Euro unsecured notes due 2030 (€500 principal)(5) | 3.75 | % | 565 | 580 | ||||||||||||||||
Five-Year Term Loan due 2027 | 5.12 | % | 275 | 275 | ||||||||||||||||
| Finance leases and other debt | Various | 479 | 327 | |||||||||||||||||
| Total Debt | $ | 3,203 | $ | 3,065 | ||||||||||||||||
Less: Current debt(6) | 751 | 446 | ||||||||||||||||||
| Total Long-term debt | $ | 2,452 | $ | 2,619 | ||||||||||||||||
(1) Interest rate as of June 30, 2026.
(2) Net of unamortized discount and debt issuance costs of $5 million and $6 million as of June 30, 2026 and December 31, 2025, respectively.
(3) Net of unamortized discount and debt issuance costs of $2 million as of June 30, 2026 and December 31, 2025.
(4) Net of unamortized discount and debt issuance costs of $9 million as of June 30, 2026 and December 31, 2025.
(5) Net of unamortized discount and debt issuance costs of $6 million and $7 million as of June 30, 2026 and December 31, 2025, respectively.
(6) As of June 2026, current debt includes $400 million unsecured notes due in July 2026 and $275 million five-year term loan due in May 2027. As of December 31, 2025, current debt includes $400 million unsecured notes due in July 2026.
Repayments of Debt
Upon maturity in July 2026, the Company repaid $400 million of unsecured notes using cash on hand.
Revolving Credit Facilities
The Company has a five-year unsecured, multicurrency 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 June 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.
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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 for the Company’s debt securities, which are customary for financings of this type, limit the Company’s ability to incur indebtedness and grant liens, among other restrictions. In addition, the facilities require the Company to maintain a consolidated leverage ratio below a specified maximum. As of June 30, 2026, the Company complied 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 June 30, | Six Months Ended June 30, | |||||||||||||||||||||||||
| (In millions) | 2026 | 2025 | 2026 | 2025 | ||||||||||||||||||||||
| Receivables sold in period | $ | 661 | $ | 792 | $ | 1,262 | $ | 1,394 | ||||||||||||||||||
| Cash consideration | 658 | 787 | 1,255 | 1,385 | ||||||||||||||||||||||
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 market participants 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 June 30, 2026 and December 31, 2025, due to their short-term nature.
14
Debt
The fair value of debt was as follows:
| June 30, 2026 | December 31, 2025 | |||||||||||||||||||||||||||||||
| (In millions) | Level | Fair Value | Carrying Value | Fair Value | Carrying Value | |||||||||||||||||||||||||||
| Unsecured notes due 2026 | 2 | $ | 400 | $ | 400 | $ | 394 | $ | 400 | |||||||||||||||||||||||
| Unsecured notes due 2029 | 2 | 620 | 595 | 631 | 594 | |||||||||||||||||||||||||||
| Unsecured notes due 2031 | 2 | 355 | 398 | 358 | 398 | |||||||||||||||||||||||||||
| Unsecured notes due 2034 | 2 | 525 | 491 | 540 | 491 | |||||||||||||||||||||||||||
| Euro unsecured notes due 2030 | 2 | 569 | 565 | 586 | 580 | |||||||||||||||||||||||||||
Five-Year Term Loan due 2027 | 2 | 273 | 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:
| June 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 | $ | 600 | $ | 50 | $ | 422 | $ | 33 | Other current liabilities | |||||||||||||||||||||||
| Cross-currency swaps | 1,222 | 83 | 1,400 | 143 | Other long-term liabilities | |||||||||||||||||||||||||||
| Derivatives designated as fair value hedges: | ||||||||||||||||||||||||||||||||
| Cross-currency swaps | $ | 236 | $ | 5 | $ | — | $ | — | Other long-term assets | |||||||||||||||||||||||
| Cross-currency swaps | — | — | 236 | 1 | Other long-term liabilities | |||||||||||||||||||||||||||
| Derivatives not designated as hedges: | ||||||||||||||||||||||||||||||||
| Foreign currency option contracts | $ | 217 | $ | 3 | $ | 308 | $ | 3 | Other current assets | |||||||||||||||||||||||
| Foreign currency option contracts | 223 | 1 | 316 | 4 | Other current liabilities | |||||||||||||||||||||||||||
| Foreign currency forward contracts | 137 | — | — | — | Other current assets | |||||||||||||||||||||||||||
| Foreign currency forward contracts | 3 | — | 231 | 1 | Other current liabilities | |||||||||||||||||||||||||||
As of June 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.
15
The effect of hedges on AOCIL and in the Condensed Consolidated Statements of Operations was as follows:
| Three Months Ended June 30, 2026 | Six Months Ended June 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) | $ | 6 | $ | 1 | $ | 1 | $ | 45 | $ | — | $ | 2 | ||||||||||||||||||||||||||
| Cash flow hedges | ||||||||||||||||||||||||||||||||||||||
Interest rate swaps(1) | — | 1 | — | — | 1 | — | ||||||||||||||||||||||||||||||||
| Fair value hedges | ||||||||||||||||||||||||||||||||||||||
Cross-currency swaps(2) | (3) | — | — | (1) | 1 | — | ||||||||||||||||||||||||||||||||
(1) Amounts reclassified to Net income are reported in Interest expense, net in the Condensed Consolidated Statements of Operations.
(2) Amounts reclassified to Net income are reported in Other income, net in the Condensed Consolidated Statements of Operations.
| Three Months Ended June 30, 2025 | Six Months Ended June 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) | $ | (195) | $ | — | $ | 1 | $ | (271) | $ | (3) | $ | 2 | ||||||||||||||||||||||||||
| Cash flow hedges | ||||||||||||||||||||||||||||||||||||||
Interest rate swaps(1) | (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 recognized in Other income (expense), net in the Condensed Consolidated Statements of Operations for foreign currency options and forward contracts were as follows:
| Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||||||||||||||
| (In millions) | 2026 | 2025 | 2026 | 2025 | ||||||||||||||||||||||
| Foreign currency gain (loss) on foreign currency contracts | $ | 2 | $ | (6) | $ | 5 | $ | (14) | ||||||||||||||||||
16
9. Restructuring Costs and Other
Restructuring costs and other primarily consisted of severance paid to exiting members of the Company’s leadership team and to individuals as part of an initiative to optimize corporate expenses.
The following table summarizes changes in the restructuring liability, which is included in Accrued expenses and Other long-term liabilities in the Condensed Consolidated Balance Sheets.
| (In millions) | ||||||||
Balance as of December 31, 2025 | $ | 15 | ||||||
| Charges incurred | 8 | |||||||
| Payments | (13) | |||||||
Balance as of June 30, 2026 | $ | 10 | ||||||
As of June 30, 2026, $8 million of the restructuring liability is expected to be paid in the next 12 months.
10. 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 six months ended June 30, 2026, the Company recorded $2 million and $23 million, respectively, as an additional impairment due to a further reduction in estimated fair value.
Assets and liabilities held for sale were not material as of June 30, 2026 and December 31, 2025, and are included in Other current assets and Other current liabilities, respectively, in the Condensed Consolidated Balance Sheets. The Company expects to complete the Wincanton Divestment before the end of the year.
11. Employee Benefit Plans
Defined Benefit Plans
The Company offers pension plans in certain jurisdictions, with the most significant 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 and excludes them from the disclosure below.
17
Components of the net periodic benefit income recognized under the U.K. Retirement Plans were as follows:
| Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||||||||||||||
| (In millions) | 2026 | 2025 | 2026 | 2025 | ||||||||||||||||||||||
| Interest cost | $ | (21) | $ | (21) | $ | (41) | $ | (42) | ||||||||||||||||||
| Expected return on plan assets | 29 | 27 | 58 | 54 | ||||||||||||||||||||||
| Amortization of net loss | (1) | (2) | (3) | (3) | ||||||||||||||||||||||
Net periodic pension income(1) | $ | 7 | $ | 4 | $ | 14 | $ | 9 | ||||||||||||||||||
(1) Net periodic pension income was recorded in 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 as follows:
| Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||||||||||||||
| (In millions) | 2026 | 2025 | 2026 | 2025 | ||||||||||||||||||||||
Defined contribution costs(1) | $ | 26 | $ | 23 | $ | 64 | $ | 54 | ||||||||||||||||||
(1) Defined contribution plan costs were primarily recorded in Direct operating expense in the Condensed Consolidated Statements of Operations.
12. Income Taxes
Income tax expense for the six months ended June 30, 2026, was $33 million compared with $17 million for the six months ended June 30, 2025. The Company’s effective tax rate for the six months ended June 30, 2026 and June 30, 2025, was an expense on pre-tax income of 50.6% and an expense on pre-tax loss of (35.3)%, respectively. The change to the Company’s effective tax rate was primarily driven by an increase in pre-tax income, an increase in unrecognized tax benefits for the six months ended June 30, 2026, and a regulatory matter during the six months ended June 30, 2025.
13. 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 and is accounted for under the cost method, inclusive of share repurchase costs and excise tax on share repurchases in excess of issuances. During the six months ended June 30, 2026 and June 30, 2025, the Company repurchased approximately 332 thousand and 5.4 million shares of its common stock for an aggregate purchase price of $16 million and $202 million, respectively, including share repurchase costs and excise tax. As of June 30, 2026 and December 31, 2025, $284 million and $300 million remained authorized under the Repurchase Plan, respectively. During July 2026, the Company repurchased an additional 104 thousand shares of its common stock for an aggregate purchase price of $5 million, including share repurchase costs.
18
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 March 31, 2026 | $ | 92 | $ | (133) | $ | 1 | $ | — | $ | (182) | $ | — | $ | (222) | ||||||||||||||||||||||||||||||
| Other comprehensive income (loss) before reclassifications | (4) | 6 | — | (3) | — | 2 | 1 | |||||||||||||||||||||||||||||||||||||
| Amounts reclassified to net income | — | (2) | (1) | — | 1 | — | (2) | |||||||||||||||||||||||||||||||||||||
| Tax amounts | 1 | (1) | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||
| Other comprehensive income (loss), net of tax | (3) | 3 | (1) | (3) | 1 | 2 | (1) | |||||||||||||||||||||||||||||||||||||
| As of June 30, 2026 | $ | 89 | $ | (130) | $ | — | $ | (3) | $ | (181) | $ | 2 | $ | (223) | ||||||||||||||||||||||||||||||
| 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 | (58) | 45 | — | (1) | 3 | — | (11) | |||||||||||||||||||||||||||||||||||||
| Amounts reclassified to net income | — | (2) | (1) | (1) | 3 | — | (1) | |||||||||||||||||||||||||||||||||||||
| Tax amounts | — | (9) | — | — | (1) | — | (10) | |||||||||||||||||||||||||||||||||||||
| Other comprehensive income (loss), net of tax | (58) | 34 | (1) | (2) | 5 | — | (22) | |||||||||||||||||||||||||||||||||||||
| As of June 30, 2026 | $ | 89 | $ | (130) | $ | — | $ | (3) | $ | (181) | $ | 2 | $ | (223) | ||||||||||||||||||||||||||||||
| 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 March 31, 2025 | $ | (64) | $ | (26) | $ | 3 | $ | (159) | $ | 1 | $ | (245) | ||||||||||||||||||||||||||
| Other comprehensive income (loss) before reclassifications | 288 | (194) | (1) | (12) | (3) | 78 | ||||||||||||||||||||||||||||||||
| Amounts reclassified to net income | — | (1) | — | 2 | — | 1 | ||||||||||||||||||||||||||||||||
| Tax amounts | (1) | 44 | 1 | 2 | — | 46 | ||||||||||||||||||||||||||||||||
| Other comprehensive income (loss), net of tax | 287 | (151) | — | (8) | (3) | 125 | ||||||||||||||||||||||||||||||||
| As of June 30, 2025 | $ | 223 | $ | (177) | $ | 3 | $ | (167) | $ | (2) | $ | (120) | ||||||||||||||||||||||||||
19
| 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 | 419 | (270) | (2) | (18) | (4) | 125 | ||||||||||||||||||||||||||||||||
| Amounts reclassified to net loss | — | 1 | — | 3 | — | 4 | ||||||||||||||||||||||||||||||||
| Tax amounts | (1) | 61 | 1 | 3 | — | 64 | ||||||||||||||||||||||||||||||||
| Other comprehensive income (loss), net of tax | 418 | (208) | (1) | (12) | (4) | 193 | ||||||||||||||||||||||||||||||||
| As of June 30, 2025 | $ | 223 | $ | (177) | $ | 3 | $ | (167) | $ | (2) | $ | (120) | ||||||||||||||||||||||||||
14. 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. The Company reviews and adjusts accruals for loss contingencies quarterly and as additional information becomes available. If a loss is not both probable and reasonably estimable, or if an exposure to a loss exists in excess of the amount accrued, the Company assesses whether there is at least a reasonable possibility that a loss, or additional loss, may have been incurred. If there is a reasonable possibility that a loss, or additional loss, may have been incurred, the Company discloses the estimate of the possible loss or range of loss if it is material and an estimate can be made, or discloses that such an estimate cannot be made. The determination as to whether a loss can reasonably be considered to be possible or probable is based on management’s assessment, together with legal counsel, regarding the ultimate outcome of the matter.
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.
20
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 with high efficiency 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 through customer outsourcing of logistics services.
Our business model is asset-light and historically resilient in cycles, with high returns, strong free cash flow, and visibility into revenue and earnings. The vast majority of our contracts with customers are long-term, and our warehouse lease arrangements generally align with the length of those contracts. 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 is typically designed to cover warehouse, technology, and equipment costs, while the variable component is determined based on expected volumes and associated labor costs. Under fixed-price contracts, the Company agrees to perform the specified work for a pre-determined 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 provide for the payment of allowable costs incurred during contract performance, plus a specified margin.
21
Results of Operations
Three Months Ended June 30, 2026 compared with the Three Months Ended June 30, 2025
| Three Months Ended June 30, | ||||||||||||||||||||||||||
| (In millions, except percentages) | 2026 | 2025 | $ Change | % Change | ||||||||||||||||||||||
| Revenue | $ | 3,441 | $ | 3,299 | $ | 142 | 4 | % | ||||||||||||||||||
| Direct operating expense | 2,933 | 2,813 | 120 | 4 | % | |||||||||||||||||||||
| Selling, general and administrative expense | 295 | 272 | 23 | 8 | % | |||||||||||||||||||||
| Depreciation and amortization expense | 117 | 110 | 7 | 6 | % | |||||||||||||||||||||
| Transaction and integration costs | 12 | 14 | (2) | (14) | % | |||||||||||||||||||||
| Restructuring costs and other | 5 | 2 | 3 | n/m | ||||||||||||||||||||||
| Regulatory matter | — | (1) | 1 | (100) | % | |||||||||||||||||||||
| Net loss on divestiture of business | 2 | — | 2 | n/m | ||||||||||||||||||||||
| Operating income | 77 | 89 | (12) | (13) | % | |||||||||||||||||||||
| Other income (expense), net | 6 | (10) | 16 | n/m | ||||||||||||||||||||||
| Interest expense, net | (35) | (36) | 1 | (3) | % | |||||||||||||||||||||
| Income before income taxes | 48 | 43 | 5 | 12 | % | |||||||||||||||||||||
| Income tax expense | (21) | (15) | (6) | 40 | % | |||||||||||||||||||||
| Net income | $ | 27 | $ | 28 | $ | (1) | (4) | % | ||||||||||||||||||
n/m - not meaningful
Revenue for the three months ended June 30, 2026, increased by 4%, or $142 million, to $3.4 billion compared with $3.3 billion for the same period in 2025. The increase reflects growth in our business and $29 million of foreign currency movements for the three months ended June 30, 2026.
Direct operating expense for the three months ended June 30, 2026, increased by 4%, or $120 million, to $2.9 billion compared with $2.8 billion for the same period in 2025. As a percentage of revenue, Direct operating expense for the three months ended June 30, 2026, was 85.2% compared with 85.3% for the same period in 2025. The increase in Direct operating expense reflects growth in our business and $24 million of foreign currency movements for the three months ended June 30, 2026.
Selling, general and administrative expense for the three months ended June 30, 2026, increased by $23 million, to $295 million compared with $272 million for the same period in 2025. The increase reflects growth in our business.
22
Other income (expense), net increased from expense to income, due to higher pension income and foreign currency gain on foreign currency contracts in the current period. Other income (expense), net was as follows:
| Three Months Ended June 30, | ||||||||||||||||||||||||||
| (In millions, except percentages) | 2026 | 2025 | $ Change | % Change | ||||||||||||||||||||||
Net periodic pension income | $ | 6 | $ | 4 | $ | 2 | 50 | % | ||||||||||||||||||
| Foreign currency gain (loss): | ||||||||||||||||||||||||||
Realized gain (loss) on foreign currency contracts | 1 | (4) | 5 | n/m | ||||||||||||||||||||||
| Unrealized loss on foreign currency contracts | — | (8) | 8 | (100) | % | |||||||||||||||||||||
Foreign currency transaction and remeasurement loss, net of foreign currency contracts on intercompany loans | (1) | (2) | 1 | (50) | % | |||||||||||||||||||||
| Total foreign currency loss | — | (14) | 14 | (100) | % | |||||||||||||||||||||
| Other income (expense), net | $ | 6 | $ | (10) | $ | 16 | n/m | |||||||||||||||||||
n/m - not meaningful
Interest expense, net was as follows:
| Three Months Ended June 30, | ||||||||||||||||||||||||||
| (In millions, except percentages) | 2026 | 2025 | $ Change | % Change | ||||||||||||||||||||||
Debt and capital leases | $ | 44 | $ | 45 | $ | (1) | (2) | % | ||||||||||||||||||
Cross-currency swaps | (8) | (8) | — | — | % | |||||||||||||||||||||
Interest income | (1) | (1) | — | — | % | |||||||||||||||||||||
| Interest expense, net | $ | 35 | $ | 36 | $ | (1) | (3) | % | ||||||||||||||||||
23
Six Months Ended June 30, 2026 compared with the Six Months Ended June 30, 2025
| Six Months Ended June 30, | ||||||||||||||||||||||||||
| (In millions, except percentages) | 2026 | 2025 | $ Change | % Change | ||||||||||||||||||||||
| Revenue | $ | 6,739 | $ | 6,276 | $ | 463 | 7 | % | ||||||||||||||||||
| Direct operating expense | 5,741 | 5,371 | 370 | 7 | % | |||||||||||||||||||||
| Selling, general and administrative expense | 591 | 533 | 58 | 11 | % | |||||||||||||||||||||
| Depreciation and amortization expense | 232 | 219 | 13 | 6 | % | |||||||||||||||||||||
| Transaction and integration costs | 28 | 36 | (8) | (22) | % | |||||||||||||||||||||
| Restructuring costs and other | 8 | 19 | (11) | (58) | % | |||||||||||||||||||||
| Regulatory matter | — | 65 | (65) | (100) | % | |||||||||||||||||||||
| Net loss on divestiture of business | 23 | — | 23 | n/m | ||||||||||||||||||||||
| Operating income | 116 | 33 | 83 | n/m | ||||||||||||||||||||||
| Other income (expense), net | 16 | (15) | 31 | n/m | ||||||||||||||||||||||
| Interest expense, net | (67) | (68) | 1 | (1) | % | |||||||||||||||||||||
| Income (loss) before income taxes | 65 | (50) | 115 | n/m | ||||||||||||||||||||||
| Income tax expense | (33) | (17) | (16) | 94 | % | |||||||||||||||||||||
| Net income (loss) | $ | 32 | $ | (67) | $ | 99 | n/m | |||||||||||||||||||
n/m - not meaningful
Revenue for the six months ended June 30, 2026, increased by 7%, or $463 million, to $6.7 billion compared with $6.3 billion for the same period in 2025. The increase reflects growth in our business and $227 million of foreign currency movements for the six months ended June 30, 2026.
Direct operating expense for the six months ended June 30, 2026, increased by 7%, or $370 million, to $5.7 billion compared with $5.4 billion for the same period in 2025. As a percentage of revenue, Direct operating expense for the six months ended June 30, 2026, was 85.2% compared with 85.6% for the same period in 2025. The increase in Direct operating expense reflects growth in our business and $191 million of foreign currency movements for the six months ended June 30, 2026. For the six months ended June 30, 2026, we recorded a net benefit of $30 million, primarily in rent expense, from a real estate transaction that occurred in the fourth quarter of 2025, which resulted in an early termination of a lease. The increase in Direct operating expense before recognizing the real estate transaction was in line with our business growth.
Selling, general and administrative expense for the six months ended June 30, 2026, increased by $58 million, to $591 million compared with $533 million for the same period in 2025. The increase reflects growth in our business and $22 million of foreign currency movements for the six months ended June 30, 2026.
Transaction and integration costs for the six months ended June 30, 2026 and June 30, 2025, were $28 million and $36 million, respectively, and primarily related to the acquisition and integration of Wincanton.
Restructuring costs and other costs for the six months ended June 30, 2026 and June 30, 2025, were $8 million and $19 million, respectively. Restructuring costs primarily consisted of severance paid to exiting members of the Company’s leadership team and to individuals as part of an initiative to optimize corporate expenses.
Regulatory matter for the six months ended June 30, 2025 was $65 million and related to the deductibility of value-added tax payments we made to certain third-party service providers, which was settled in 2025.
Net loss on divestiture of business for the six months ended June 30, 2026, was $23 million and related to a further reduction of the estimated fair value of certain grocery contracts. See Note 10. “Divestiture,” to the Condensed Consolidated Financial Statements.
24
Other income (expense), net increased from expense to income, due to higher pension income and foreign currency gain on foreign currency contracts in the current period. Other income (expense), net was as follows:
| Six Months Ended June 30, | ||||||||||||||||||||||||||
| (In millions, except percentages) | 2026 | 2025 | $ Change | % Change | ||||||||||||||||||||||
Net periodic pension income | $ | 13 | $ | 9 | $ | 4 | 44 | % | ||||||||||||||||||
| Foreign currency gain (loss): | ||||||||||||||||||||||||||
Realized loss on foreign currency contracts | — | (4) | 4 | (100) | % | |||||||||||||||||||||
| Unrealized gain (loss) on foreign currency contracts | 4 | (18) | 22 | n/m | ||||||||||||||||||||||
Foreign currency transaction and remeasurement loss, net of foreign currency contracts on intercompany loans | — | (2) | 2 | (100) | % | |||||||||||||||||||||
| Total foreign currency gain (loss) | 4 | (24) | 28 | n/m | ||||||||||||||||||||||
| Other | (1) | — | (1) | n/m | ||||||||||||||||||||||
| Other income (expense), net | $ | 16 | $ | (15) | $ | 31 | n/m | |||||||||||||||||||
n/m - not meaningful
Interest expense, net was as follows:
| Six Months Ended June 30, | ||||||||||||||||||||||||||
| (In millions, except percentages) | 2026 | 2025 | $ Change | % Change | ||||||||||||||||||||||
Debt and capital leases | $ | 87 | $ | 88 | $ | (1) | (1) | % | ||||||||||||||||||
Cross-currency swaps | (16) | (17) | 1 | (6) | % | |||||||||||||||||||||
Interest income | (4) | (3) | (1) | 33 | % | |||||||||||||||||||||
| Interest expense, net | $ | 67 | $ | 68 | $ | (1) | (1) | % | ||||||||||||||||||
Income (loss) before income taxes for the six months ended June 30, 2026, was income of $65 million compared with a loss of $50 million for the same period in 2025. The increase from loss to income reflects higher operating income, primarily due to growth in our business, including a net benefit of $30 million from a real estate transaction, and the non-recurrence of a regulatory matter in 2025, offset by a net loss related to the Wincanton Divestment and other income from higher pension income and foreign currency gains on foreign currency contracts.
Income tax expense for the six months ended June 30, 2026, was $33 million compared with $17 million for the same period in 2025. Our effective tax rate for the six months ended June 30, 2026, was an expense on pre-tax income of 50.6%, compared to an expense on pre-tax loss of (35.3)% for the same period in 2025. The change to our effective tax rate was primarily driven by an increase in pre-tax income, an increase in unrecognized tax benefits for the six months ended June 30, 2026, and a regulatory matter during the six months ended June 30, 2025.
Liquidity and Capital Resources
Our ability to fund our operations and anticipated capital needs is reliant upon the generation of cash from operations, supplemented as necessary by periodic utilization of our revolving credit facility and factoring programs. Our principal uses of cash in the future will be primarily to fund our operations, working capital needs, capital expenditures, repayment of borrowings and strategic business development transactions. The timing and magnitude of our new contract start-ups can vary and may positively or negatively impact our cash flows. We continually evaluate our liquidity requirements and capital structure in light of our operating needs, growth initiatives and capital resources.
25
As of June 30, 2026, we held cash and cash equivalents of $769 million and restricted cash of $4 million, and we had $793 million of borrowing capacity, net of letters of credit under our revolving credit facility. Upon maturity in July 2026, we repaid $400 million of unsecured notes using cash on hand.
In 2025, our board of directors authorized and announced a repurchase plan for up to $500 million of our common stock (the “Repurchase Plan”). The Repurchase Plan permits shares of common stock to be repurchased from time to time in management’s discretion. 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. We expect to fund any remaining repurchases with existing cash on hand, borrowings under our revolving credit facility, and/or other financing sources. In the second quarter of 2026, we repurchased $16 million of shares. As of June 30, 2026, $284 million remained authorized under the Repurchase Plan. During July 2026, we repurchased an additional $5 million of shares.
We believe that our cash and cash equivalents on hand, our cash flows generated by our operations, amounts available under the revolving credit facility, the use of our factoring programs, and refinancing options available to us in the capital markets will provide sufficient liquidity to operate our business, including the repayment of the current portion of our debt, for at least the next 12 months and for the foreseeable future thereafter.
For additional information regarding our cash requirements from lease obligations, indebtedness, and contractual obligations, see Note 4. “Leases,” Note 7. “Debt and Financing Arrangements,” and Note 14. “Commitments and Contingencies” in Part I, Item 1 of this Quarterly Report on Form 10-Q.
Financial Condition
The following table summarizes our asset and liability balances:
| June 30, | December 31, | |||||||||||||||||||||||||
| (In millions, except percentages) | 2026 | 2025 | $ Change | % Change | ||||||||||||||||||||||
Current assets | $ | 3,253 | $ | 3,288 | $ | (35) | (1) | % | ||||||||||||||||||
Long-term assets | 9,118 | 8,974 | 144 | 2 | % | |||||||||||||||||||||
Current liabilities | 4,121 | 3,875 | 246 | 6 | % | |||||||||||||||||||||
Long-term liabilities | 5,228 | 5,372 | (144) | (3) | % | |||||||||||||||||||||
There were no material changes in our total assets and total liabilities from December 31, 2025 to June 30, 2026, other than the reclassification of $275 million of debt from long-term to current.
Cash Flow Activity
Our cash flows from operating, investing and financing activities, as reflected on our Condensed Consolidated Statements of Cash Flows, are summarized as follows:
| Six Months Ended June 30, | ||||||||||||||||||||||||||
(In millions, except percentages) | 2026 | 2025 | $ Change | % Change | ||||||||||||||||||||||
| Net cash provided by operating activities | $ | 107 | $ | 32 | $ | 75 | n/m | |||||||||||||||||||
| Net cash used in investing activities | (126) | (123) | (3) | 2 | % | |||||||||||||||||||||
| Net cash used in financing activities | (62) | (227) | 165 | (73) | % | |||||||||||||||||||||
| Effect of exchange rates on cash and cash equivalents | (3) | 40 | (43) | n/m | ||||||||||||||||||||||
| Net decrease in cash, restricted cash and cash equivalents | $ | (84) | $ | (278) | $ | 194 | (70) | % | ||||||||||||||||||
n/m - not meaningful
26
Operating Activities
Cash flows provided by operating activities for the six months ended June 30, 2026, increased by $75 million compared with the same period in 2025. The increase was due to higher net income adjusted for the net effect of non-cash items and lower accounts payable cash outflow, partially offset by higher cash usage from accounts receivable and other assets. For the six months ended June 30, 2026 and June 30, 2025, net cash provided by our factoring programs was $14 million and $78 million, respectively.
Investing Activities
Investing activities used $126 million and $123 million of cash for the six months ended June 30, 2026 and June 30, 2025, respectively. During the six months ended June 30, 2026, we utilized $130 million of cash to purchase property and equipment and received $4 million from the sale of property and equipment. During the six months ended June 30, 2025, we utilized $125 million of cash to purchase property and equipment and received $2 million from the sale of property and equipment.
Financing Activities
Financing activities used $62 million and $227 million of cash for the six months ended June 30, 2026 and June 30, 2025, respectively. The primary use of cash from financing activities during the six months ended June 30, 2026, was $25 million to repay finance lease obligations, $18 million to repurchase shares of our common stock pursuant to the Repurchase Plan and to pay excise tax, $17 million in payments for employee taxes on net settlement of equity awards and $10 million net obligations under factoring arrangements, partially offset by $7 million in proceeds from the exercise of stock options and $1 million increase in bank overdraft. The primary use of cash from financing activities during the six months ended June 30, 2025, was $200 million used to repurchase shares of our common stock pursuant to the Repurchase Plan, $55 million to repay debt, $24 million to repay finance lease obligations, $12 million net obligations under factoring arrangements and $7 million in payments for employee taxes on net settlement of equity awards, partially offset by $64 million increase in bank overdraft and $8 million of net borrowings under revolving credit facilities.
27
Guaranteed Securities: Summarized Financial Information
The following information is provided to comply with Rule 13-01 of Regulation S-X under the Exchange Act of 1934 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 six months ended June 30, 2026, and as of June 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 (“GAAP”).
| GXO | ||
| Summarized Results of Operations | ||
| Standalone and Unconsolidated (Unaudited) | ||
| Six Months Ended | ||||||||
| (In millions) | June 30, 2026 | |||||||
| Revenue | $ | — | ||||||
| Costs and expenses | 11 | |||||||
| Operating loss | $ | (11) | ||||||
| Dividend income and other income from non-guarantor subsidiaries | 50 | |||||||
| Other income, net | 3 | |||||||
| Interest income, net from non-guarantor subsidiaries | 23 | |||||||
| Interest expense, net | (34) | |||||||
| Income tax benefit | 1 | |||||||
| Net income attributable to GXO standalone | $ | 32 | ||||||
28
| GXO | ||
| Summarized Assets and Liabilities | ||
| Standalone and Unconsolidated (Unaudited) | ||
| June 30, | December 31, | |||||||||||||
| (In millions) | 2026 | 2025 | ||||||||||||
| Current assets | $ | 467 | $ | 519 | ||||||||||
| Investments in non-guarantor subsidiaries | 2,368 | 2,361 | ||||||||||||
| Notes receivable from non-guarantor subsidiaries | 716 | 860 | ||||||||||||
| Other noncurrent assets | 76 | 81 | ||||||||||||
| Total assets | $ | 3,627 | $ | 3,821 | ||||||||||
| Accounts payable to non-guarantor subsidiaries | $ | 411 | $ | 384 | ||||||||||
| Current debt | 675 | 400 | ||||||||||||
| Other current liabilities | 91 | 93 | ||||||||||||
| Long-term debt | 1,484 | 1,758 | ||||||||||||
| Notes payable to non-guarantor subsidiaries | 4 | 210 | ||||||||||||
| Other noncurrent liabilities | 107 | 167 | ||||||||||||
| Total liabilities | $ | 2,772 | $ | 3,012 | ||||||||||
| GXO Capital | ||
| Summarized Results of Operations | ||
| Standalone and Unconsolidated (Unaudited) | ||
| Six Months Ended | ||||||||
| (In millions) | June 30, 2026 | |||||||
| Revenue | $ | — | ||||||
| Costs and expenses | — | |||||||
| Operating income | $ | — | ||||||
| Interest expense, net | (12) | |||||||
| Income tax benefit | 3 | |||||||
| Loss attributable to GXO Capital standalone | $ | (9) | ||||||
| GXO Capital | ||
| Summarized Assets and Liabilities | ||
| Standalone and Unconsolidated (Unaudited) | ||
| June 30, | December 31, | |||||||||||||
| (In millions) | 2026 | 2025 | ||||||||||||
| Current assets | $ | 3 | $ | 3 | ||||||||||
| Investments in non-guarantor subsidiaries | 2,350 | 2,350 | ||||||||||||
| Other noncurrent assets | 1 | 1 | ||||||||||||
| Total assets | $ | 2,354 | $ | 2,354 | ||||||||||
| Current liabilities | $ | 13 | $ | 6 | ||||||||||
| Long-term debt | 565 | 580 | ||||||||||||
| Total liabilities | $ | 578 | $ | 586 | ||||||||||
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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
As of June 30, 2026, the Company’s contractual obligations had not materially changed compared with December 31, 2025.
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 and Significant Accounting Policies and Estimates” 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 six months ended June 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, as of June 30, 2026. Based on that evaluation, our CEO and CFO concluded that our disclosure controls and procedures as of June 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.
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PART II—OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
See Note 14. “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 second quarter of 2026:
| 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) | ||||||||||||||||||||||
| April 1 - April 30 | — | $ | — | — | $ | 300,000,016 | ||||||||||||||||||||
| May 1 - May 31 | — | $ | — | — | $ | 300,000,016 | ||||||||||||||||||||
| June 1 - June 30 | 331,816 | $ | 48.64 | 331,816 | $ | 283,859,477 | ||||||||||||||||||||
| Total | 331,816 | $ | 48.64 | 331,816 | ||||||||||||||||||||||
(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 13. “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.
31
ITEM 6. EXHIBITS
32
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.
GXO Logistics, Inc. | ||||||||
Date: August 5, 2026 | By: | /s/ Patrick Kelleher | ||||||
| Patrick Kelleher | ||||||||
| (Chief Executive Officer) | ||||||||
(Principal Executive Officer) | ||||||||
Date: August 5, 2026 | By: | /s/ Mark Suchinski | ||||||
Mark Suchinski | ||||||||
| (Chief Financial Officer) | ||||||||
(Principal Financial Officer) | ||||||||
33