GXO Logistics (GXO) Q4 2023 earnings summary

Executive summary

• FY 2023 revenue was $9.778B, up 9% reported and 2% organically; adjusted EBITDA was $741M and net income was $229M.

• Record operating cash flow was $558M and free cash flow was $302M, up 26% YoY; free cash flow conversion was 41%.

• Signed more than $1B in annualized new business wins; the Q4 win pipeline represented $568M of expected FY 2024 revenue and $229M for FY 2025.

Financial highlights

• Q4 revenue was $2.590B vs. $2.467B; operating income was $87M vs. $74M, net income $73M vs. $46M, and diluted EPS $0.61 vs. $0.39.

• Q4 adjusted EBITDA was $193M vs. $205M; adjusted net income was $84M vs. $99M and adjusted diluted EPS $0.70 vs. $0.83.

• FY revenue was $9.778B vs. $8.993B; operating income was $318M vs. $242M, net income $229M vs. $197M, and diluted EPS $1.92 vs. $1.67.

• FY adjusted EBITDA was $741M vs. $728M; adjusted net income was $309M vs. $335M and adjusted diluted EPS $2.59 vs. $2.85.

• FY operating cash flow was $558M vs. $542M; free cash flow was $302M vs. $240M.

Outlook and guidance

• FY 2024 targets: organic revenue growth of 2%–5%, adjusted EBITDA of $760M–$790M, adjusted diluted EPS of $2.70–$2.90, and free cash flow conversion of 30%–40%.

• FY 2024 adjusted EBITDAR target is $1.90B–$1.95B; guidance reflects current FX rates and the PFSweb acquisition.

• Expected adjusted EBITDA phasing for 2024: ~20% in Q1, ~24% in Q2, and ~28% each in Q3 and Q4.

• Signed customer wins are expected to contribute $568M of incremental revenue in 2024 and a further $229M in 2025, based on Dec. 31, 2023 FX rates.

• The sales pipeline stood at ~ $2B; 2025 bookings were 29% higher than the prior year.