GXO Logistics, Inc.

Previous wording

Direct operating expense is comprised of both fixed and variable expenses and consists of operating costs related to our warehouses, including personnel costs, rent expenses, utility costs, equipment maintenance and repair costs, transportation costs, costs of materials and supplies, and information technology expenses. Direct operating expense for the three months ended June 30, 2025 increased by 18%, or $424 million, to $2.8 billion compared with $2.4 billion for the same period in 2024. The increase reflects $148 million from the Wincanton Acquisition, growth in our business and foreign currency movements. As a percentage of revenue, Direct operating expense for the three months ended June 30, 2025, was 85.3% compared with 83.9% for the same period in 2024. The increase in Direct operating expense as a percentage of revenue was primarily related to the Wincanton Acquisition.

Current wording

Direct operating expense is comprised of both fixed and variable expenses and consists of operating costs related to our warehouses, including personnel costs, rent expenses, utility costs, equipment maintenance and repair costs, transportation costs, costs of materials and supplies, and information technology expenses. Direct operating expense for the three months ended September 30, 2025 increased by 7%, or $186 million, to $2.9 billion compared with $2.7 billion for the same period in 2024. The increase reflects growth in our business and foreign currency movements. As a percentage of revenue, Direct operating expense for the three months ended September 30, 2025, was 84.2% compared with 84.6% for the same period in 2024.

Previous wording

Selling, general and administrative expense (“SG&A”) primarily consists of salary and benefits costs for executive and administrative functions, professional fees, bad debt expense and legal costs. SG&A for the three months ended June 30, 2025 increased by $2 million, to $272 million compared with $270 million for the same period in 2024.

Current wording

Selling, general and administrative expense (“SG&A”) primarily consists of salary and benefits costs for executive and administrative functions, professional fees, bad debt expense and legal costs. SG&A for the three months ended September 30, 2025 increased by $20 million, to $285 million compared with $265 million for the same period in 2024.

Previous wording

Depreciation and amortization expense for the six months ended June 30, 2025 increased by $28 million, to $219 million compared with $191 million for the same period in 2024. Amortization expense was $59 million and $41 million for the six months ended June 30, 2025 and 2024, respectively. Depreciation and amortization expense increased primarily due to the Wincanton Acquisition.

Current wording

Depreciation and amortization expense for the three months ended September 30, 2025 increased by $7 million, to $118 million compared with $111 million for the same period in 2024. Amortization expense was $31 million and $36 million for the three months ended September 30, 2025 and 2024, respectively.

Previous wording

Transaction and integration costs for the three months ended June 30, 2025 and 2024 were $14 million and $15 million, respectively, and primarily related to the Wincanton Acquisition.

Current wording

Transaction and integration costs for the three months ended September 30, 2025 and 2024 were $14 million and $21 million, respectively, and primarily related to the Wincanton Acquisition.

Previous wording

Other income (expense), net decreased to an expense, primarily due to increased unrealized foreign currency loss on foreign currency contracts. Other income (expense), net was as follows:

Current wording

Other income (expense), net increased from expense to income, primarily due to foreign currency gain on foreign currency contracts. Other income (expense), net was as follows:

Previous wording

Income tax expense for the three months ended June 30, 2025 was $15 million compared with $14 million for the same period in 2024. Our effective tax rate for the three months ended June 30, 2025 was 34.6% compared with 25.4% for the same period in 2024. The increase in our effective tax rate was primarily driven by a decrease in pre-tax income.

Current wording

Income tax expense for the three months ended September 30, 2025 and 2024 was $28 million compared with $7 million, respectively, and the Company’s effective tax rate for the three months ended September 30, 2025 and 2024 was 31.2% and 16.5%, respectively . The change in the Company’s effective tax rate was primarily driven by a jurisdictional shift in pre-tax income.

Previous wording

Revenue for the six months ended June 30, 2025 increased by 18%, or $974 million, to $6.3 billion compared with $5.3 billion for the same period in 2024. The increase reflects $655 million from the Wincanton Acquisition and growth in our business. Foreign currency favorable movements increased our revenue by $94 million for the six months ended June 30, 2025.

Current wording

Revenue for the nine months ended September 30, 2025 increased by 14%, or $1.2 billion, to $9.7 billion compared with $8.5 billion for the same period in 2024. The increase reflects $655 million from the Wincanton Acquisition, and growth in our business. Favorable foreign currency movements increased our revenue by $209 million for the nine months ended September 30, 2025.

Previous wording

Direct operating expense for the six months ended June 30, 2025 increased by 21%, or $926 million, to $5.4 billion compared with $4.4 billion for the same period in 2024. The increase reflects $595 million from the Wincanton Acquisition, growth in our business and foreign currency movements. As a percentage of revenue, Direct operating expense for the six months ended June 30, 2025, was 85.6% compared with 83.8% for the same period in 2024. The increase in Direct operating expense as a percentage of revenue was primarily related to the Wincanton Acquisition.

Current wording

Direct operating expense for the nine months ended September 30, 2025 increased by 16%, or $1.1 billion, to $8.2 billion compared with $7.1 billion for the same period in 2024. The increase reflects $595 million from the Wincanton Acquisition, growth in our business and foreign currency movements. As a percentage of revenue, Direct operating expense for the nine months ended September 30, 2025, was 85.1% compared with 84.1% for the same period in 2024. The increase in Direct operating expense as a percentage of revenue was primarily related to the Wincanton Acquisition.

Previous wording

SG&A for the six months ended June 30, 2025 increased by $14 million, to $533 million compared with $519 million for the same period in 2024. SG&A increased primarily due to the Wincanton Acquisition.

Current wording

SG&A for the nine months ended September 30, 2025 increased by $34 million, to $818 million compared with $784 million for the same period in 2024. SG&A increased primarily due to the Wincanton Acquisition.

Previous wording

Depreciation and amortization expense for the three months ended June 30, 2025 increased by $11 million, to $110 million compared with $99 million for the same period in 2024. Amortization expense was $30 million and $22 million for the three months ended June 30, 2025 and 2024, respectively. Depreciation and amortization expense increased primarily due to the Wincanton Acquisition.

Current wording

Depreciation and amortization expense for the nine months ended September 30, 2025 increased by $35 million, to $337 million compared with $302 million for the same period in 2024. Amortization expense was $90 million and $77 million for the nine months ended September 30, 2025 and 2024, respectively. Depreciation and amortization expense increased primarily due to the Wincanton Acquisition.

Previous wording

Transaction and integration costs for the six months ended June 30, 2025 and 2024 were $36 million and $34 million, respectively and primarily related to the Wincanton Acquisition.

Current wording

Transaction and integration costs for the nine months ended September 30, 2025 and 2024 were $50 million and $55 million, respectively and primarily related to the Wincanton Acquisition.

Previous wording

Restructuring costs and other were primarily related to severance in connection with actions taken to optimize certain administrative functions. Restructuring costs and other for the six months ended June 30, 2025 were $19 million, compared with $17 million for the same period in 2024.

Current wording

Restructuring costs and other were primarily related to severance paid to our executive team, as well as actions taken to optimize certain administrative functions. Restructuring costs and other for the nine months ended September 30, 2025 were $22 million, compared with $26 million for the same period in 2024.

Previous wording

Regulatory matter and litigation expense for the six months ended June 30, 2025 and 2024, were $65 million and $60 million, respectively. For the six months ended June 30, 2025, we recorded $65 million of expense related to a regulatory matter for the deductibility of value-added tax payments made by us to certain third-party service providers challenged by the Italian authorities. For the six months ended June 30, 2024, we recorded $60 million of litigation expense related to a dispute between us and one of our customers, which was settled in the second quarter of 2024. For additional information regarding our regulatory and legal matters, see Note 14. “Commitments and Contingencies”in Part I, Item 1 of this Quarterly Report on Form 10-Q.

Current wording

Regulatory matter and litigation expense for the nine months ended September 30, 2025 and 2024, were $65 million and $59 million, respectively. For the nine months ended September 30, 2025, we recorded $65 million of expense related to a regulatory matter for the deductibility of value-added tax payments made by us to certain third-party service providers challenged by the Italian authorities. For the nine months ended September 30, 2024, we recorded

Previous wording

Other income (expense), net decreased to an expense, primarily due to increased unrealized foreign currency loss on foreign currency contracts. Other income (expense), net was as follows:

Current wording

Other income (expense), net decreased from income to expense, primarily due to foreign currency loss on foreign currency contracts. Other income (expense), net was as follows:

Previous wording

Income before income taxes for the three months ended June 30, 2025 was $43 million compared with $53 million for the same period in 2024. The decrease in income before income taxes was due to higher operating income, offset by higher other expense, net, and higher interest expense, net.

Current wording

Income before income taxes for the nine months ended September 30, 2025 was $38 million compared with $49 million for the same period in 2024. The decrease in income before income taxes primarily reflects higher operating income due to growth in our business, offset by higher other expense, net and interest expense, net.

Previous wording

While the United States has not adopted Pillar Two, we have incorporated the estimated annual effect of Pillar Two into our income tax provision for the six months ended June 30, 2025, and we expect to incur additional income tax related to Pillar Two during fiscal 2025. For the six months ended June 30, 2024, Pillar Two did not have a material impact on our income tax expense. Pillar Two did not have a material impact on our fiscal 2024 income tax expense. We continue to monitor Pillar Two developments, including the impact of the statement issued by the G7 on June 28, 2025 regarding the interplay between the U.S. international tax system and Pillar Two as it relates to U.S.-headquartered companies.

Current wording

While the United States has not adopted Pillar Two, we have incorporated the estimated annual effect of Pillar Two into our income tax provision for the nine months ended September 30, 2025, and we expect to incur additional income tax related to Pillar Two during fiscal 2025. For the nine months ended September 30, 2024, Pillar Two did not have a material impact on our income tax expense. We continue to monitor Pillar Two developments, including the impact of the statement issued by the Group of Seven (“G7”) on June 28, 2025 regarding the interplay between the U.S. international tax system and Pillar Two as it relates to U.S.-headquartered companies.

Previous wording

As of June 30, 2025, we held cash and cash equivalents of $205 million and restricted cash of $2 million, and we had $1,003 million of borrowing capacity, net of letters of credit under our revolving credit facilities.

Current wording

As of September 30, 2025, we held cash and cash equivalents of $339 million and restricted cash of $5 million, and we had $969 million of borrowing capacity, net of letters of credit under our revolving credit facilities.

Previous wording

We believe that our cash and cash equivalents on hand, cash flows from operations, the revolving credit facilities, and the use of our factoring programs will provide sufficient liquidity to operate our business and fund our current and assumed obligations for at least the next 12 months.

Current wording

We believe that our cash and cash equivalents on hand, our cash flows generated by our operations, amounts available under the revolving credit facilities, the use of our factoring programs, and refinancing options available to us in the capital markets, will provide sufficient liquidity to operate our business and fund our current and assumed obligations for at least the next 12 months and for the foreseeable future thereafter.

Previous wording

Current assets primarily decreased due to cash used for the repurchase of our common stock and repayment of debt, partially offset by an increase in accounts receivable resulting from foreign currency translation. Long-term assets primarily increased due to the addition of operating lease assets and the impact of foreign currency translation. Current liabilities primarily increased due to bank overdraft and the increase in the fair value of our derivatives. Long-term liabilities primarily increased due to the addition of capital and operating lease liabilities and the increase in the fair value of our derivatives. Also, our assets and liabilities increased due to foreign currency translation from our non-USD operations, primarily the British pound sterling and the Euro.

Current wording

Current liabilities primarily increased due to the current portion of our long-term debt. Our assets and liabilities increased due to foreign currency translation from our non-USD operations, primarily the British pound sterling and the Euro, compared to December 31, 2024.

Previous wording

Cash flows provided by operating activities for the six months ended June 30, 2025 decreased by $133 million compared with the same period in 2024. The decrease was primarily due to lower income and increased working capital consumption driven by accounts payable for the six months ended June 30, 2025, compared with the same period in 2024.

Current wording

Cash flows provided by operating activities for the nine months ended September 30, 2025, decreased by $99 million compared with the same period in 2024. The decrease was due to working capital consumption resulting from decreased collections and increased vendor payments, partially offset by income (loss) adjusted for non-cash items for the nine months ended September 30, 2025, compared with the same period in 2024.

Previous wording

Investing activities used $123 million of cash for the six months ended June 30, 2025 and $1.0 billion for the same period in 2024. During the six months ended June 30, 2025 we used $125 million of cash to purchase property and equipment and received $2 million of cash from sales of property and equipment. During the six months ended June 30, 2024 we used $863 million, net of cash received, to fund the Wincanton Acquisition, used $161 million of cash to purchase property and equipment and received $10 million of cash from sales of property and equipment.

Current wording

Investing activities used $169 million and $1.1 billion of cash for the nine months ended September 30, 2025 and September 30, 2024, respectively. During the nine months ended September 30, 2025, we utilized $269 million of cash to purchase property and equipment, settled $1 million of cash in cross-currency swap agreements, and received $101 million of cash from sales of property and equipment. The nine months ended September 30, 2025, include the purchase of property and equipment, which was sold for $90 million in the third quarter of 2025. During the nine months ended September 30, 2024, we utilized $863 million, net of cash acquired, to fund the Wincanton Acquisition, utilized $255 million of cash to purchase property and equipment, settled $5 million of cash in cross-currency swap agreements, and received $16 million of cash from sales of property and equipment.

Previous wording

Financing activities used $227 million and generated $857 million of cash for the six months ended June 30, 2025 and June 30, 2024, respectively. The primary use of cash from financing activities during the six months ended June 30, 2025 was $200 million to repurchase shares of our common stock under the Repurchase Plan, $55 million to repay debt, $24 million to repay finance lease obligations 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 our revolving credit facilities. The primary source of cash from financing activities during the six months ended June 30, 2024 was $1.1 billion of proceeds from issuance of long-term debt and $3 million increase in bank overdraft, partially offset by $196 million of cash used to repay debt, $19 million of cash used to repay finance lease obligations and $7 million in payments for employee taxes on net settlement of equity awards.

Current wording

Financing activities used $266 million and generated $829 million of cash for the nine months ended September 30, 2025 and September 30, 2024, respectively. The primary use of cash from financing activities during the nine months ended September 30, 2025 was $200 million to repurchase shares of our common stock under the Repurchase Plan, $56 million to repay debt, $38 million to repay finance lease obligations and $8 million in payments for employee taxes on net settlement of equity awards, partially offset by $38 million of net borrowings under our revolving credit facilities. The source of cash from financing activities during the nine months ended September 30, 2024, was $1.1 billion of proceeds from issuance of long-term debt, partially offset by $150 million of cash used to repay debt, $32 million of cash used to repay finance lease obligations, and $8 million in payments for employee taxes on net settlement of equity awards.