XPO (XPO) Q3 2025 earnings summary

Executive summary

• Achieved adjusted EBITDA of $342 million in Q3 2025, up 6% year-over-year, and adjusted diluted EPS of $1.07, up 11% year-over-year, both exceeding expectations excluding a $35 million legal charge.

• Revenue for Q3 2025 increased 2.8% year-over-year to $2.11 billion, with net income at $82 million, down from $95 million in Q3 2024 due to the legal charge.

• North American LTL segment delivered record-high adjusted operating income and EBITDA, with yield (excluding fuel) up 5.9% year-over-year and revenue per shipment increasing for the 11th consecutive quarter.

• Service quality improved with best-ever damage frequency and 14 consecutive quarters of improved on-time performance.

• AI-driven productivity and network optimization drove cost efficiency and margin outperformance.

Financial highlights

• Q3 2025 revenue was $2.11 billion; North American LTL revenue was $1.26 billion, and European Transportation revenue was $857 million.

• Adjusted EBITDA was $342 million (up from $333 million in Q3 2024); adjusted EBITDA margin improved to 16.2% from 15.6% a year ago.

• Net income was $82 million; adjusted net income was $128 million; diluted EPS was $0.68 due to the $35 million legal charge.

• Cash flow from operations was $371 million, with $335 million in cash on hand and $935 million in total liquidity at quarter end.

• $50 million in common stock was repurchased and $50 million of term loan repaid during the quarter.

Outlook and guidance

• Management expects to materially outperform typical seasonality in Q4, with further margin and operating ratio improvement.

• Full-year 2025 gross capex projected at $600–$700 million, with capex expected to moderate and increase free cash flow conversion.

• North American LTL targets (2021–2027): revenue CAGR 6–8%, adjusted EBITDA CAGR 11–13%, and at least 600 bps operating ratio improvement.

• Existing liquidity and capital sources are sufficient to support operations over the next 12 months.