XPO (XPO) Q4 2024 earnings summary

Executive summary

• Achieved record full-year revenue of $8.1 billion, up 4% year-over-year, with adjusted EBITDA rising 27% to $1.3 billion and adjusted diluted EPS up 31% to $3.83.

• Delivered strong Q4 results with operating income up 24% to $148 million, adjusted EBITDA up 15% to $303 million, and adjusted diluted EPS up 16% to $0.89.

• North American LTL segment outperformed, integrating 25 new service centers, expanding network capacity, and maintaining a young, cost-efficient fleet.

• Entered 2025 with momentum, supported by network investments and expectations for continued margin expansion.

• LTL purchased transportation expense reduced by 47% year-over-year.

Financial highlights

• Q4 2024 revenue was $1.92 billion, down 1% year-over-year, mainly due to lower fuel surcharge revenue; full-year revenue rose 4.2% to $8.07 billion.

• Q4 adjusted EBITDA was $303 million (up 14.8%), including a $34 million real estate gain; full-year adjusted EBITDA was $1.27 billion (up 27.1%).

• Q4 net income from continuing operations was $76 million (up 31%); full-year net income was $387 million (up 101.6%).

• Q4 diluted EPS was $0.63 (up 28.6%); adjusted diluted EPS was $0.89 (up 15.6%). Full-year diluted EPS was $3.23 (up 99.4%); adjusted diluted EPS was $3.83 (up 31.2%).

• Generated $189 million in Q4 operating cash flow and deployed $108 million in net CapEx in Q4.

Outlook and guidance

• 2025 planning assumptions: gross CapEx of $600–$700 million, interest expense of $220–$230 million, adjusted effective tax rate of 24–25%, and diluted share count of 120 million.

• Baseline expectation for 2025 is 150 basis points of OR improvement, with flattish tonnage assumed; any demand recovery would be upside.

• North American LTL revenue CAGR target of 6–8% and adjusted EBITDA CAGR of 11–13% through 2027.

• CapEx as a percentage of revenue expected to moderate in 2025 after significant network expansion.

• Management expects continued margin expansion and competitive strength in a recovering freight market, driven by recent network investments and operational execution.