GXO revenue rises to $3.59bn as contract wins grow but margins narrow

GXO Logistics increased third-quarter revenue by 5.7% year on year to $3.59 billion, supported by additional contract business, FreightWaves reported. The global contract logistics provider recorded organic revenue growth of 6.4% for the three months to 30 September, its strongest rate in more than three years, while its pipeline of potential sales reached a record.

New business secured during the quarter totalled $375 million, up 34% from a year earlier. It was the second successive quarter in which contract wins increased by more than 30%. The sales pipeline expanded by more than 30% to $3.1 billion. Chief executive Patrick Kelleher credited the strategy introduced over the past year, saying GXO was securing more work in its core markets and targeted growth sectors while becoming better at turning opportunities into revenue.

The stronger sales performance did not translate into higher operating earnings. Operating income dropped to $96 million from $118 million, while adjusted earnings before interest, taxes, depreciation and amortisation held steady at $251 million. The adjusted EBITDA margin slipped to 7% from 7.4%. Direct operating expenses climbed to $3.06 billion from $2.86 billion, growing faster than revenue and weighing on profitability, according to FreightWaves.

Cash generation also weakened. Operating cash flow declined to $156 million from $232 million, and free cash flow fell to $85 million from $187 million. Net income nevertheless increased to $65 million from $60 million, with diluted earnings per share rising to 56 cents from 51 cents. Adjusted diluted earnings per share reached 89 cents, against 79 cents a year earlier.

Year-to-date contract wins exceeded $1 billion, approaching the total secured during all of 2025. About 40% came from strategic growth industries, including aerospace and defence, technology, industrial operations and life sciences. Technology and consumer electronics revenue rose 18.6% to $498 million, while industrial and manufacturing revenue increased 4.9% to $405 million. Omnichannel retail remained the largest customer segment, contributing $1.69 billion, up 2.7%.

The UK retained its position as GXO’s biggest geographic market, with revenue rising 7.6% to $1.75 billion. US revenue grew 5.6% to $846 million. GXO maintained its full-year 2026 financial guidance despite the pressure on margins and cash flow. Revenue for the first nine months reached $10.33 billion, up 6.8%, while adjusted EBITDA increased to $670 million from $626 million.