• Net income attributable to GXO grew to $66 million; operating income increased by 25%; operating margins improved by 49 basis points; and adjusted EBITDA1 grew to $200 million
• Cash flow from operations of $243 million in 3Q 2023 compared to $116 million in 3Q 2022; 3Q 2023 free cash flow1 of $191 million compared to $47 million in 3Q 2022
• Updated full-year 2023 guidance[2]:
- Adjusted diluted earnings per share1 upgraded from $2.45-$2.65 to $2.55-$2.65
- Adjusted EBITDA1 upgraded from $725-$755 million to $730-$755 million
- Organic revenue growth1 revised from 6-8% to 2-4%
- Free cash flow conversion1 of approximately 30% of adjusted EBITDA reiterated
Business Highlights
• Signed new business wins of $841 million year to date; $181 million of new business wins in 3Q 2023, almost half of which came from companies outsourcing their operations
• Secured incremental 2024 revenue from new business wins of $520 million, and incremental 2025 revenue of $187 million, through 3Q 2023
• Sales pipeline remains at approximately $2 billion
• Closed the acquisition of PFSweb on October 23, 2023
GREENWICH, Conn. — November 7, 2023 — GXO Logistics, Inc. (NYSE: GXO) today announced results for the third quarter 2023.
Malcolm Wilson, Chief Executive Officer of GXO, said, “Our third quarter results reflect the resilience of our contractual business model as well as our high-caliber operational and financial execution. We delivered record revenue, year-over-year growth in net income attributable to GXO and adjusted EBITDA, consistent margins, robust cash flow from operations, and outstanding wins. We continue to take market share: through the third quarter, we have secured more than half a billion dollars of new business for 2024. While the macro environment is uncertain, we’re driving strong performance in new business wins, profits and cash flow.
“We believe our successful acquisition of PFSweb positions us squarely for growth, particularly in North America, where PFS generates the majority of its revenue. This is a fantastic organization with a unique set of capabilities and a customer base of globally recognized brands that complements our own. We are already working as one team to create commercial opportunities for our customers and our business.
“Reflecting the resilience of our business model, and the acquisition of PFS, we are upgrading our guidance for full-year adjusted EBITDA and EPS, for the third time this year, while revising our full-year organic revenue growth guidance to reflect expectations for a softer peak season.
“Looking ahead to next year, our structural business drivers remain strong and we’re seeing an acceleration of the trends that are driving our growth, as customers look to increase productivity, optimize their working capital, and better serve their end consumers. We will continue to grow by capitalizing on our proven track record of transforming supply chains into a competitive advantage, while maintaining a rigorous focus on contract governance, cost discipline and capital allocation to create value for all our stakeholders=.”
• Third Quarter 2023 Results
Revenue increased to $2.5 billion, up 8% year over year, compared with $2.3 billion for the third quarter 2022. Organic revenue1 grew by 3%.
Operating income increased to $90 million, up 25% year over year, compared with $72 million for the third quarter 2022.
Net income attributable to GXO was $66 million, up 5% year over year, compared with $63 million for the third quarter 2022. Diluted earnings per share was $0.55, up 4% year over year, compared with $0.53 for the third quarter 2022.
Adjusted earnings before interest, taxes, depreciation and amortization (“adjusted EBITDA1”) increased to $200 million from $192 million in the third quarter 2022.
Adjusted net income attributable to GXO1 was $82 million, compared with $89 million for the third quarter 2022. Adjusted diluted earnings per share1 was $0.69, compared with $0.75 for the third quarter 2022.
GXO generated $243 million of cash flow from operations, compared with $116 million for the third quarter 2022. In the third quarter of 2023, GXO generated $191 million of free cash flow1 compared to $47 million for the third quarter 2022.
• Cash Balances and Outstanding Debt
As of September 30, 2023, cash and cash equivalents and debt outstanding were $473 million and $1.6 billion, respectively, as part of GXO’s investment grade balance sheet.
• 2023 Guidance
GXO’s current 2023 financial outlook is as follows:
• Organic revenue growth1 of 2% to 4% (revised from 6% to 8%);
• Adjusted EBITDA1 of $730 million to $755 million (upgraded from $725 million to $755 million);
• Free cash flow1 conversion of approximately 30% of adjusted EBITDA1 reiterated; and
• Adjusted diluted earnings per share1 of $2.55 to $2.65 (upgraded from $2.45 to $2.65).
• Conference Call
GXO will hold a conference call on Wednesday, November 8, 2023, at 8:30 a.m. Eastern Time. Participants can call toll-free (from US/Canada) 877-407-8029; international callers dial +1 201-689-8029. Conference ID: 13741225. A live webcast of the conference will be available on the Investor Relations area of the company’s website, investors.gxo.com. The conference will be archived until November 22, 2023. To access the replay by phone, call toll-free (from US/Canada) 877-660-6853; international callers dial +1 201-612-7415. Use participant passcode 13741225.
