XPO (XPO) Q2 2025 earnings summary

Executive summary

• Q2 2025 revenue was $2.08B, flat year-over-year, with net income of $106M and adjusted EBITDA of $340M, exceeding expectations despite a prior-year one-time European tax benefit.

• North American LTL segment delivered $1.24B in revenue and $300M in adjusted EBITDA, with an adjusted operating ratio of 82.9% and margin expansion driven by yield growth and cost efficiencies.

• Technology and AI initiatives drove operational improvements, cost savings, and improved service metrics, including on-time performance and damage claims ratio.

• European Transportation segment reported $841M in revenue, up 4% year-over-year, with adjusted EBITDA of $44M.

• Company operates in North American LTL and European Transportation, serving 55,000 customers in 17 countries with 38,000 employees as of June 30, 2025.

Financial highlights

• Adjusted EBITDA for Q2 2025 was $340M, down slightly from $343M in Q2 2024; adjusted EBITDA margin was 16.3%.

• Net income was $106M ($0.89 diluted EPS); adjusted net income was $125M, with adjusted diluted EPS of $1.05.

• Cash flow from operations was $247M in Q2; net capex was $191M; quarter-end liquidity was $824M, with $225M in cash and equivalents.

• Operating income was $198M, up 0.5% year-over-year.

• Six-month revenue was $4.03B, down 1.5% from 2024; six-month net income was $175M.

Outlook and guidance

• Management expects continued margin expansion and earnings growth, with Q3 operating ratio to remain flat sequentially and full-year tonnage down mid-single digits.

• Full-year 2025 gross capex expected between $600M and $700M, funded by cash, operations, and liquidity.

• Sequential yield and revenue per shipment growth expected to continue in Q3 and Q4.

• North American LTL targets through 2027: revenue CAGR of 6–8%, adjusted EBITDA CAGR of 11–13%, and at least 600 bps improvement in adjusted operating ratio.

• Management believes existing liquidity and capital resources are sufficient for the next 12 months.