XPO Logistics, Inc.

Q2 revenue was $2.4 billion, up 13% year over year. LTL revenue rose 15% to $1.4 billion. Company adjusted EBITDA was $434 million; excluding $9 million of real estate gains, adjusted EBITDA increased 25% year over year to $425 million. LTL adjusted EBITDA was $390 million, with margin improving 310 bps to 27.4%. Operating income rose 37% to $271 million, net income was $162 million, and diluted EPS was $1.36; adjusted diluted EPS was $1.70, or $1.64 excluding real estate gains, up 56%. Free cash flow was $207 million, cash on hand was $298 million, liquidity was approximately $898 million, and net leverage improved to 2.1x. For the full year, management now expects OR improvement of at least 200 bps, above the original 100-150 bps target, and expects free cash flow to more than double versus 2025. For Q3, management expects OR below 81% and said normal seasonality would have implied north of 82%.

Mario Harik framed the quarter as evidence that XPO's earnings power is scaling, pointing to record company-wide results, record LTL margins, and service metrics that he said are at the best levels in company history. He emphasized the strategy of pairing superior service with capacity investment and proprietary technology, saying that this combination is driving profitable market share gains and should support above-market pricing and margin expansion over time. He also gave a longer-term target of an annual LTL operating ratio in the low 70s or better and billions of dollars of cumulative free cash flow in the coming years, which he presented with an upbeat tone.

Kyle Wismans focused on the financial bridge from volume, pricing, and cost control to stronger cash generation. He highlighted 13% revenue growth, 310 bps of LTL margin improvement to 27.4%, $207 million of free cash flow, and $101 million of net capex, while noting $70 million of share repurchases and $70 million of term loan repayments in the quarter; in July the company repaid another $100 million of term loan debt, bringing year-to-date paydown to $200 million. He also said the company expects full-year free cash flow to at least double versus 2025 and reiterated that moderating capex should help drive stronger EBITDA conversion and more flexibility for buybacks and debt reduction.

Analysts pressed management on how far and how fast margins could improve, with questions about the path to a low-70s OR, the durability of July volume strength, pricing, and the impact of AI and productivity tools. Management said Q3 OR should be below 81%, full-year OR improvement should be at least 200 bps, and the long-term OR target reflects steady yield outperformance plus growth in premium services and small-to-medium customers. On demand, management said July tonnage was above 6% year over year, with market share gains the biggest driver but also early signs of truckload-to-LTL conversion and a strengthening industrial backdrop. Questions on technology and productivity were answered with specifics on the new trailer-loading AI pilot, which improved load quality by more than 40% and cut damages by 50% at pilot sites.