GXO Logistics, Inc.

Previous wording

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 in sectors that demonstrate high growth and/or durable demand, with significant growth potential through customer outsourcing of logistics services.

Current wording

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.

Previous wording

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 in nature, and our warehouse lease arrangements generally align with contract length. The Company has both fixed-price contracts (closed book or hybrid contracts) and cost-plus contracts (open book contracts). 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 the performance of the contract plus a specified margin.

Current wording

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.

Previous 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.

Current wording

Direct operating expense for the three months ended March 31, 2026, increased by 10%, or $250 million, to $2.8 billion compared with $2.6 billion for the same period in 2025. As a percentage of revenue, Direct operating expense for the three months ended March 31, 2026, decreased to 85.1% compared with 85.9% for the same period in 2025. The increase reflects growth in our business and $158 million of foreign currency movements for the three months ended March 31, 2026. For the three months ended March 31, 2026, we recorded a net benefit of $28 million, primarily in rent expense, from a real estate transaction that 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.

Previous 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.

Current wording

Depreciation and amortization expense for the three months ended March 31, 2026, increased by $6 million, to $115 million, compared with $109 million for the same period in 2025. Amortization expense was $29 million for both the three months ended March 31, 2026, and 2025.

Previous 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.

Current wording

Transaction and integration costs for the three months ended March 31, 2026, and 2025, were $16 million and $22 million, respectively, and primarily related to the acquisition and integration of Wincanton plc (now Wincanton Limited).

Previous 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

Current wording

Regulatory matter for the three months ended March 31, 2025, was $66 million and related to the deductibility of value-added tax payments we made to certain third-party service providers, which was settled in 2025.

Previous 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.

Current wording

Income (loss) before income taxes for the three months ended March 31, 2026, was income of $17 million compared with a loss of $93 million for the same period in 2025. The increase from loss to income reflects higher operating income, primarily due to growth in our business and a net benefit of $28 million from a real estate transaction, lower regulatory matters, and unrealized gain on foreign currency contracts.

Previous wording

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 facilities 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, repurchases of our common stock 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.

Current wording

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.

Previous 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.

Current wording

As of March 31, 2026, we held cash and cash equivalents of $794 million and restricted cash of $3 million, and we had $793 million of borrowing capacity, net of letters of credit under our revolving credit facility.

Previous wording

On February 18, 2025, our board of directors authorized and announced the repurchase of up to $500 million (the “Repurchase Plan”) of our common stock. 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. We will fund the repurchases with existing cash, borrowings on our revolving credit facility, and/or other financing sources. 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. As of September 30, 2025, the remaining authorization under the Repurchase Plan was $300 million.

Current wording

In February 2025, our board of directors authorized and announced the repurchase of 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 on our revolving credit facility, and/or other financing sources. No shares were repurchased during the first quarter of 2026. As of March 31, 2026, the remaining authorization under the Repurchase Plan was $300 million.

Previous 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.

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 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.

Previous wording

For additional information regarding our cash requirement 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.

Current wording

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.

Previous 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.

Current wording

Cash flows provided by operating activities for the three months ended March 31, 2026, increased by $2 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, offset by working capital consumption in 2026.

Previous 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.

Current wording

Investing activities used $62 million and $77 million of cash for the three months ended March 31, 2026, and March 31, 2025, respectively. During the three months ended March 31, 2026, we utilized $65 million of cash to purchase property and equipment and received $3 million from the sale of property and equipment. During the three months ended March 31, 2025, we utilized $78 million of cash to purchase property and equipment and received $1 million from the sale of property and equipment.

Previous 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.

Current wording

Financing activities used $26 million and $66 million of cash for the three months ended March 31, 2026, and March 31, 2025, respectively. The primary use of cash from financing activities during the three months ended March 31, 2026, was $15 million in payments for employee taxes on net settlement of equity awards and $14 million to repay finance lease obligations, partially offset by $7 million in proceeds from the exercise of stock options. The primary use of cash from financing activities during the three months ended March 31, 2025, was $106 million used to repurchase shares of our common stock pursuant to the Repurchase Plan, $11 million to repay finance lease obligations and $6 million in payments for employee taxes on net settlement of equity awards, partially offset by $56 million of net borrowings under revolving credit facilities.

Previous wording

Information related to new accounting standards is included in Note 1. “Basis of Presentation and Significant Accounting Policies” in Part I, Item 1 of this Quarterly Report on Form 10-Q.

Current wording

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.