XPO (XPO) Q4 2025 earnings summary

Executive summary

• Q4 2025 Adjusted EBITDA was $312M, up 11% year-over-year, with Adjusted Diluted EPS of $0.88, nearly flat year-over-year, and LTL Adjusted Operating Income up 14% to $181M.

• LTL Adjusted Operating Ratio improved by 180 bps year-over-year to 84.4%, with record service quality and reduced damages for the 15th consecutive quarter.

• North American LTL revenue was $1.17B and Adjusted EBITDA $285M; European Transportation revenue was $846M, Adjusted EBITDA $32M.

• Net income for Q4 was $59M, impacted by lower real estate gains and higher restructuring expenses.

• Investments in network, equipment, and AI-driven technology enhanced productivity, cost efficiency, and service quality.

Financial highlights

• Q4 2025 revenue reached $2.01B, up 4.7% year-over-year, with operating income of $143M and Adjusted Net Income of $105M.

• Adjusted EBITDA margin for Q4 was 15.5%; LTL yield excluding fuel rose 5.2% year-over-year.

• Cash flow from operations was $226M, with $310M in cash at year-end and $84M in net CapEx.

• $65M in stock repurchases and $65M in term loan repayments were completed in Q4.

• Depreciation expense rose 11% due to ongoing investments.

Outlook and guidance

• Management expects significant acceleration in free cash flow in 2026, supporting increased share repurchases and debt reduction.

• 2026 planning: $500–$600M gross CapEx, $205–$215M interest expense, 24–25% adjusted effective tax rate, and 118M diluted shares.

• Projecting 100–150 bps improvement in LTL operating ratio for 2026, with mid-single-digit revenue per shipment growth and flat weight per shipment.

• CapEx as a percent of revenue expected to moderate to 8–12% in 2026, boosting free cash flow by over 50% year-over-year.

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