XPO (XPO) Q2 2026 earnings summary

Executive summary

• Achieved record Q2 2026 results with revenue up 13.2% to $2.4 billion, adjusted EBITDA up 27.6% to $434 million, and adjusted diluted EPS up 61.9%, driven by strong North American LTL and European Transportation performance, operational execution, and technology investments.

• North American LTL segment saw 36% growth in adjusted operating income on 15.2% revenue growth, with a record adjusted operating ratio of 79.9% (improved by 300 basis points year-over-year), and shipments per day up 2.8%.

• Service quality reached new highs, with LTL damage claims ratio below 0.2% for the second consecutive quarter, supporting market share gains and nearly 90% improvement in damages since Q4 2021.

• Investments in fleet, network capacity, and proprietary AI-driven technology (including trailer loading and route optimization) delivered measurable productivity and efficiency gains.

• Free cash flow accelerated, supported by operational improvements and capital allocation to debt repayment and share repurchases.

Financial highlights

• Q2 2026 revenue was $2.4 billion (+13.2% YoY); adjusted EBITDA reached $434 million (+27.6% YoY); net income was $162 million (+52.8% YoY); adjusted diluted EPS was $1.70 (+61.9% YoY); free cash flow for the quarter was $207 million.

• North American LTL revenue was $1.43 billion (+15.2% YoY), with adjusted EBITDA of $390 million and margin improved to 27.3%.

• European Transportation revenue was $927 million (+10.2% YoY), with adjusted EBITDA of $48 million (+9.1% YoY); segment faced restructuring costs impacting operating income.

• Operating income margin improved to 11.5% in Q2 2026 (from 9.5% in Q2 2025); adjusted EBITDA margin rose to 18.4%.

• Cash and cash equivalents were $298 million; total liquidity at quarter end was $898 million.

Outlook and guidance

• Management expects continued margin expansion and free cash flow growth, with full-year gross capex anticipated at $500–$600 million and guidance raised for margin and cash flow.

• Third quarter OR expected to be below 81%, with mid-single digit tonnage growth and sequential acceleration in revenue per shipment ex-fuel.

• Long-term goal to achieve annual LTL operating ratio in the low 70s and generate billions in cumulative free cash flow.

• North American LTL targets for 2021–2027: revenue CAGR of 6–8%, adjusted EBITDA CAGR of 11–13%, and adjusted operating ratio improvement of at least 600 basis points.

• Existing liquidity and capital resources are sufficient for the next 12 months and beyond.