GXO Logistics : First Quarter 2026 Earnings Call Transcript

Published: 2026-05-06 19:50:38 ET GXO

Published on 05/06/2026 at 07:50 pm EDT

Presenters

Patrick Kelleher - Chief Executive Ofﬁcer Baris Oran - Chief Financial Ofﬁcer Kristine Kubacki - Chief Strategy Ofﬁcer

Q&A Participants Stephanie Moore - Jefferies

Ravi Shanker - Morgan Stanley Chris Wetherbee - Wells Fargo Scott Schneeberger - Oppenheimer Ari Rosa - Citi

Bruce Chan - Stifel

Brian Ossenbeck - J.P. Morgan

Jeff Kauffman - Vertical Research Partners

Uday Khanapurkar - TD Cowen Harrison Bauer - Susquehanna Kevin Gainey - Thompson Davis & Co.

Operator

Welcome to the GXO ﬁrst quarter 2026 Earnings Conference Call and Webcast. My name is Sachi and I'll be your operator for today's call.

At this time, all participants are in a listen-only mode. Later, we will conduct a question-and-answer session. If anyone should require operator assistance during the conference, please press star-zero on your telephone keypad.

Please note that this conference is being recorded.

Before the call begins, let me read a brief statement on behalf of the Company regarding forward-looking statements, the use of non-GAAP ﬁnancial measures, and the Company's guidance:

During this call, the Company will be making certain forward-looking statements within the meaning of applicable securities law, which, by their nature, involve a number of risks, uncertainties, and other factors that could cause actual results to differ materially from those projected in the forward-looking statements.

A discussion of factors that could cause actual results to differ materially is contained in the Company's SEC ﬁlings. The forward-looking statements in the Company's earnings release or made on this call are made only as of today, and the Company has no obligation to update any of these forward-looking statements, except to extent required by law.

The Company also may refer to certain non-GAAP ﬁnancial measures as deﬁned under applicable SEC rules during this call. Reconciliations of such non-GAAP ﬁnancial measures to the most comparable GAAP measures are contained in the Company's earnings release, and the related ﬁnancial tables are on its website.

Unless otherwise stated, all results reported on this call are reported in United States dollars.

The Company will also remind you that its guidance incorporates business trends to date and what it believes today to be appropriate assumptions. The Company's results are inherently unpredictable and may be materially affected by many factors, including ﬂuctuations in foreign exchange rates, changes in global economic conditions and consumer demand and spending, labor market and global supply chain constraints, inﬂationary pressures, and the various factors detailed in its ﬁlings with the SEC.

It is not possible for the Company to actually predict demand for its services, and, therefore, actual results could differ materially from guidance. You can ﬁnd a copy of the Company's earnings release, which contains additional important information regarding forward-looking statements and non-GAAP ﬁnancial measures, in the Investors section on the Company's website.

I will now turn the call over to GXO's Chief Executive Ofﬁcer, Patrick Kelleher. Mr. Kelleher, you may begin.

Patrick Kelleher - GXO Chief Executive Offficer

Good morning and thank you for joining our ﬁrst quarter 2026 results call. Joining me today are Mark Suchinski, our Chief Financial Ofﬁcer, and Kristine Kubacki, our Chief Strategy Ofﬁcer.

GXO delivered a strong ﬁnish to 2025, setting a solid foundation to accelerate organic growth and proﬁtability in 2026 and beyond.

Before we get into the quarter, I want to take a moment to welcome Mark, who is joining us for his ﬁrst earnings call as our Chief Financial Ofﬁcer.

Mark's decades of experience driving enterprise performance through labor productivity, contracting, and pricing improvements as well as deep expertise in aerospace and defense, one of our most important growth verticals, is exactly what we need as we accelerate growth and expand margins. His track record of driving value creation aligns directly with where we're headed in this new era of growth.

With Mark on board, we have the right team in place to deliver on our strategic priorities. A big welcome Mark!

Mark Suchinski - GXO Chief Financial Offficer

Thank you, Patrick. I'm truly excited to be part of the GXO team.

Patrick Kelleher - GXO Chief Executive Offficer

And we are thrilled to have you. Now, turning to the quarter.

In the ﬁrst quarter, we delivered revenue of $3.3 billion dollars, up 11% versus prior year, and adjusted EBITDA of $200 million dollars, up 23%. Adjusted diluted EPS increased 72% to $0.50. Organic revenue growth was 4% in the quarter - with every region contributing - demonstrating the resilience and global strength of our business model in a dynamic geopolitical environment. We entered 2026 with strong revenue visibility, and we have continued to build on that momentum.

In the ﬁrst quarter, we added $227 million dollars in new business wins across key verticals - including notable contracts in aerospace and defense, several technology wins, including further growth in AI cloud infrastructure with hyperscalers, and an expansion with the NHS in the UK.

In Consumer, we secured a meaningful new partnership with L'Oréal in Europe. We're also seeing encouraging momentum in North America with our largest win in the quarter coming from our rapidly expanding aerospace and defense business. These wins demonstrate strong commercial momentum and give us conﬁdence in our ability to accelerate organic growth in 2026. We now have $870 million dollars of expected incremental new business revenue already secured for 2026 - up 19% compared to this time last year - giving us a strong line-of-sight into the balance of the year. And we're already beginning to build visibility into 2027.

Mark and Kristine will discuss our ﬁnancial outlook and new business wins in more detail shortly. But I'm pleased to announce that after a strong start to the year, we are raising our full-year guidance for adjusted EBITDA and adjusted EPS. We now expect a 22% increase in adjusted EPS at the midpoint of the range.

Now let me walk you through what's driving that conﬁdence. We're focused on three strategic priorities: sharpening commercial execution, strengthening operational discipline, and leading in AI and next-generation automation. These are the levers that will accelerate growth and expand margins.

To execute on these priorities, we brought in new leadership across Commercial, Operations, and our Americas and Asia Paciﬁc region. That team is now in place and delivering results.

First, on Commercial - we're diversifying into strategic growth verticals. Karen Bomber joined in January and is focused on three key areas: bringing a uniﬁed global approach to account management that mirrors how our customers operate, pricing that reﬂects the value we deliver, and faster, more consistent commercial processes. And we are already seeing momentum.

Our total pipeline now stands at the highest level in GXO's history. And, in the quarter, 40% of wins were in our strategic growth verticals - aerospace and defense, industrial, life sciences and technology, particularly data centers. Our sales

pipeline is accelerating, up 20% from the fourth quarter, of which more than half a billion dollars is in our strategic growth verticals. We also saw positive

year-over-year volume growth in these verticals, helping to offset softer volumes in

retail and consumer.

And we have seen the momentum building speciﬁcally In North America - one of the largest and fastest-growing logistics markets globally. Our new management team and targeted marketing investments are gaining traction. In the ﬁrst quarter, win rates notably increased and the pipeline grew 35% sequentially, giving us increased conﬁdence in the opportunity ahead.

In the region, we continue to beneﬁt from our leadership position in B2B verticals

- particularly aerospace and defense and data centers - while also seeing broader momentum emerging in consumer verticals, including consumer staples.

During the quarter, we launched the Defense Advisory Board in the U.S. and established the Torus Defense Supply Chain in the UK, a signiﬁcant alliance that positions GXO as the leading supply chain provider to the UK defense industry, building on the expertise and relationships Wincanton brings to our platform.

Second, in Operations, we have begun to implement the GXO Way - our new global framework for standardizing and scaling excellence across the full operational lifecycle. This gives us the platform to drive more consistent, repeatable execution at scale which will make GXO even more competitive as a growth partner for customers and drive margin expansion.

Third, in Technology, we are making clear progress on our automation and AI strategies. GXO IQ reached an important milestone this quarter as we began scaling the platform - launching several new sites, with the rollout expected to accelerate through the year. We are targeting more than 50 sites by year-end.

The deployment of automated solutions continued to advance as well, including a ﬂeet of Autonomous-Mobile-Robots in the Netherlands and our ﬁrst Autoload solution in Europe. This not only enhances how we deliver - driving greater efﬁciency and productivity for our customers - it creates ongoing value and strengthens the durability of our partnerships. On humanoids - we will launch more pilots across the U.S. and Europe later this year. Our ﬁrst-mover advantage is real - and we're building on it.

In closing, GXO is off to a strong start in 2026. The underlying business is showing positive momentum, our strategic priorities are beginning to gain traction, and our team is fully focused on driving long-term value creation. I look forward to sharing more on our long-term strategy and progress at our Investor Day to be scheduled after third quarter earnings.

With that, I will hand the call to Mark.

Thank you, Patrick - and good morning, everyone. Again, it's a pleasure to join you for my ﬁrst earnings call as CFO of GXO. In my ﬁrst ﬁve weeks, I've had the opportunity to meet with our site teams, our customers, and colleagues across the business. My initial takeaways are very clear: we have a strong foundation and a signiﬁcant growth opportunity ahead of us.

GXO has built a formidable enterprise - one with signiﬁcant global scale, a competitive advantage in automation and AI, and a caliber of customer base that very few companies in the world can match.

My priorities are fully aligned with Patrick's - to operate as a single, connected global ﬁrm - powering our commercial growth strategy, leveraging the GXO Way to drive consistent global execution and optimizing our cost structure. We will also ensure disciplined capital allocation that drives long-term shareholder value. I look forward to sharing more on each of these areas in the quarters ahead.

In the ﬁrst quarter, GXO delivered revenue of $3.3 billion dollars, up 10.8% year over year, of which 4.1% was organic. Every region contributed - a clear demonstration of the breadth and resilience of our contractual business model in a dynamic macro environment.

We delivered adjusted EBITDA of $200 million dollars, up 22.7% from this time last year. This resulted in an adjusted EBITDA margin of 6.1%, up 60 basis points

year-over-year.

We delivered net income of $5 million dollars and adjusted net income attributable to GXO of $58 million dollars - up 70.6% year over year. Adjusted diluted EPS was

$0.50, up 72.4% from the ﬁrst quarter a year ago.

We generated $31 million dollars of operating cash ﬂow in the quarter, while free cash ﬂow was an outﬂow of $31 million dollars - in line with typical seasonality. We are managing working capital efﬁciently and investing in the business at high returns.

Turning to our balance sheet, we ended the quarter with $794 million dollars in cash on hand and a strong liquidity position of $1.6 billion dollars. Our leverage levels held steady at 2.5x. Our investment grade balance sheet is strong and positions GXO for proﬁtable growth. We remain focused on disciplined allocation of capital to enhance long-term value for our shareholders.

The integration of Wincanton is progressing at pace. We remain on track to deliver run-rate cost synergies of $60 million dollars by year-end 2026. We also expect to capture signiﬁcant revenue synergies in the years ahead.

Turning to the outlook for the full year, we over delivered versus our guidance for the ﬁrst quarter. We saw strong underlying performance from our core business, as well as beneﬁting from certain contract termination costs that had been anticipated in the ﬁrst quarter and are now expected to be incurred over the remainder of the year. As a result, for our full-year 2026 guidance, we are:

Maintaining organic revenue growth of 4% to 5%

Raising adjusted EBITDA to a range of $935 million dollars to

$975 million dollars;

Raising adjusted diluted earnings per share to a range of $2.90 to $3.20 - up 22% at the midpoint; and

Maintaining free cash ﬂow conversion of 30% to 40%.

With strong operating performance, a record sales pipeline, and a solid ﬁnancial foundation, we're well-positioned to accelerate growth and expand margins in 2026 and beyond.

With that, over to you Kristine.

Thanks, Mark. Good morning, everyone.

The ﬁrst quarter results again demonstrate the strength and resilience of our business model. I'd like to provide more context on the drivers of that growth, the durability we see across our business, and how we are positioning GXO for the next phase of value creation.

Patrick has been clear about our strategic priorities - sharpening our commercial strategy, strengthening our execution and leading the deployment of AI and

next-generation automation. Together, these priorities will drive long-term proﬁtable growth.

Commercially, we are making signiﬁcant progress deepening our global relationships with blue-chip customers and expanding across geographies and into high-growth verticals. In the ﬁrst quarter, we won $227 million dollars in new contracts, and our pipeline grew to $2.7 billion dollars - a record for GXO, and a clear reﬂection of the momentum that has built since Patrick joined in August of last year.

As Patrick and Mark have both noted, we are deliberately leveraging our strong positions in aerospace and defense and technology, including data center infrastructure, to capture the rapidly growing opportunities in these verticals. We are also continuing to build on our strong foundations in life sciences and the broader industrial vertical.

In the ﬁrst quarter, approximately 40% of our wins and a quarter of our pipeline came from these strategic growth verticals - a direct result of our deep capabilities, technical expertise and strong competitive positioning. With supply chains continuing to grow in complexity and reshore, we have increasing conﬁdence in the durability and resilience of our growth outlook. And with a combined TAM of over $200 billion across these verticals, the runway ahead remains substantial.

Taken together, our recent wins translate to $870 million dollars in incremental revenue already secured for 2026 - up 19% from where we stood at this point last year. This gives us conﬁdence in our full-year guidance and provides clear visibility into our long-term growth trajectory.

The second priority Patrick outlined was strengthening our execution - leveraging our position as the leading pure-play contract logistics provider to drive better outcomes for our customers and improved proﬁtability for GXO. Central to that is our leadership in automation, technology, and AI.

In the ﬁrst quarter, we made meaningful strategic progress on this front, as we began expanding GXO IQ into a scaled platform.

We have moved from pilot to global rollout, launching GXO IQ at a large consumer products site - with a seamless implementation. We are now accelerating deployment across North America and Europe, with UK sites set to follow later in the year.

As a reminder, GXO IQ is an AI-powered warehouse technology platform that improves start-up efﬁciency, accelerates productivity, and enhances data security. GXO IQ simpliﬁes implementations and makes our proprietary AI modules and automation capabilities truly scalable. We are targeting to expand GXO IQ to more than 50 sites by year-end.

In combination with strengthening our operating model, in the quarter, we have begun to reshape our organization to drive sharper execution. Our new COO Bart Beeks, who joined in January, is overseeing the launch of the GXO Way - our operating framework designed to turn proven excellence into repeatable advantage. This means standardizing implementation best practices, accelerating front-line automation deployment, and leveraging our global procurement capabilities to drive scale and expertise beneﬁts for our customers.

Overall, these strategic priorities are serving to diversify GXO's revenue base, making our growth even more durable and driving our proﬁtability and cash ﬂow. We look forward to sharing more at our Investor Day after third quarter earnings, where we'll provide more detail on our long-term strategy and ﬁnancial framework.

With that, I'll hand it back to the operator for Q&A.

Thank you. We will now be conducting a question-and-answer session. If you would like to ask a question, please press star one on your telephone keypad. A conﬁrmation tone will indicate your line is in the question queue. You may press star 2 to remove your question from the queue.

For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star key. One moment please, while we poll for questions. Our ﬁrst question is from Stephanie Moore from Jeffries. Please

go ahead.

Hi, good morning. Thank you everybody. Congrats on the strong quarter and obviously a really good start to the year. I was hoping that you could address a topic that is probably clearly top of mind with investors this past week.

So, I think most have probably seen this, but I'm obviously talking about the announcement from Amazon of its expanded supply-chain services. I think it would be helpful if you could just maybe speak to your competitive moat and differentiated service proposition, and how that differs from other players such as Amazon, or really any other well-backed company that would look to expand fulﬁllment or warehousing services. I think that would be a helpful place to start. Thank you.

Absolutely, Stephanie, and thanks for the question, and good morning to you. I've been in this industry for 32 years, and I really viewed Amazon's announcement this week as a fantastic validation of the opportunity that's in front of GXO and of the contract logistics industry.

This is a massive market. It's approximately half a trillion dollars and growing - very exciting. Today, roughly 70% of the market, that being contract logistics, is in-sourced, which is a huge opportunity. So, we don't view this as really changing the overall competitive dynamic.

I would point out that we provide a fundamentally different offering. Amazon is selling access to its supply chain, whereas GXO - we build custom solutions for our customers. That distinction means everything to our blue-chip customers. We're not a one-size-ﬁts-all provider. What we do is bespoke, operationally complex, and relationship driven. The more complex the supply chain, the more bespoke really matters.

There are a couple of differences to our model that I really want to point out. First is control. For enterprise customers, protecting their data is a top priority. Many companies are going to be reluctant to give a competitor deeper visibility into their inventory, demand patterns, sales channels, ﬁnancials.

Number two, we offer a ﬂexible tech stack that is vendor-agnostic, so we're not beholden to a single technology solution.

And number three, our capabilities extend way beyond retail into sectors like aerospace and defense and industrial, just to name a few.

We see our moat as really the combination of factors. Our client aligned, customized solutions, feature long-term contracts, cutting-edge technology, deep vertical know-how, high-quality execution. And I think those are all key differentiators.

We're really focused on delivering value for our customers, shareholders and teammates, with a focus on discipline in executing our strategic plans and executing for our customers. So, we really feel great about how GXO is positioned as a leader in the contract logistics industry to continue to win and grow this year and into 2027 and beyond.

Thanks, Patrick. That's helpful. I guess one question on just the quarter itself. Maybe if you could just speak to, I think the EBITDA performance was better than we had initially expected. So, as you think about that underlying performance, do you think that this is a testament of some of the cost actions that your team has kind of implemented more recently?

Maybe talk through what this could mean in terms of the momentum of those cost actions as the year progresses. Just wanted to get a sense of your underlying conﬁdence in the ability to really look for some of the productivity savings that you've called out before. Thanks, guys.

Good morning, Stephanie. Thanks for the question. As you indicated, we had a really strong performance in the ﬁrst quarter in our core business. We feel good about that. The initiatives that are in place are starting to take hold here. And so it's a clear indication that what we're doing, we're on the right track here.

And so I think as we move throughout the year, we continue to win new business and focus on very disciplined execution for our customers, along with the initiatives that Bart Beeks, our new COO, is driving. We feel good about our ability to drive margins in the long term. And you're seeing it show up in the ﬁrst quarter. And that's one of the reasons why we felt conﬁdent but prudent in our approach to raising guidance.

Great. Thanks, everybody. Appreciate it.

Thank you.

The next question is from Ravi Shanker from Morgan Stanley. Please go ahead.

Great, thanks. Morning, everyone. Just on the current environment, can you just clarify if you've seen any blips in customer activity or planning at all because of the conﬂict in the Middle East, and what the outlook looks like for the rest of the year?

Yes. First, I would say that for GXO, we have virtually no direct exposure to the region, and we are not seeing any material impact from the conﬂict.

Our volumes for the ﬁrst quarter overall were relatively ﬂat, which is something that we had actually forecasted and saw coming into the quarter. B2B volumes in our aerospace and defense, industrial, technology, and life sciences sectors were slightly up, and B2C volumes in retail and CPG slightly down, but netting out to being ﬂat. We continue to see great energy from customers around the exploration of outsourcing and through our new business development in the ﬁrst quarter. Clearly, customers are continuing to commit to solutions going forward.

I think a great testament to the health of the industry and the opportunities out there is the increase that we saw in our pipeline in the ﬁrst quarter. So, record pipeline, now up to $2.7 billion. We're seeing great conversion on that pipeline. And based on the ﬂow of projects coming in week by week, we see that continuing in the medium term, long term as we look towards the end of the year.

Great, that's helpful. And maybe as a follow-up on the Amazon topic. Thanks for the clariﬁcation on what you see as your moat there, particularly the point on custom solutions.

Is there any part of your business, do you think, where you do not have the level of complexity or customization that you would like to have - or any end markets or geographies where you think as a result of this development, you would maybe want to pivot away from and maybe towards others?

Sure. So, the area of the business where I do see us competing with Amazon going forward - and we have been in the past for a while - is with Amazon's FBA product, which is very similar to our GXO Direct product offering, which is our shared use e-commerce offering.

That business for GXO Direct grew in 2025. It grew 5% in the ﬁrst quarter of this year, but it does represent just under 6% of our total business, so relatively small in the overall scheme of GXO's business in total.

I think where we do competitively differentiate as GXO Direct is that we are servicing high-value brands that leverage our value-added services in packaging, etching and really white-glove type services for those very high-end brands. It's a high-touch customer experience, and I think we're well positioned to continue to compete as GXO Direct in that space.

The next question is from Chris Wetherbee from Wells Fargo. Please go ahead.

Hey. Thanks, guys. Good morning. Maybe one sort of shorter-term question and then maybe a little bit bigger. I guess as you think about demand and maybe what the second quarter could look like, kind of curious to get a sense of what you think organic revenue trends look like as you go through the year. So, you came in a little bit better than what we thought in the ﬁrst quarter.

I don't know if you see an acceleration as you move into Q2 - I know we're kind of in the range that you guys gave for the full year, but any thoughts on the second quarter and kind of what you're seeing from demand in the month of April?

Hi, Chris. It's Mark. Let me just respond to that. As he indicated, we had solid revenue organic growth in the ﬁrst quarter of 4.1%. We expect the second quarter to be about the same that we saw in the ﬁrst quarter. And with the pipeline and the wins that we've achieved and the line of sight that we have here in the second quarter, we're seeing the organic growth then accelerate in the back half of

the year.

So, I think the ﬁrst half of the year, it's going to be at the lower end of the range, whereas in the back half of the year it's going to be at the higher end of the range, based on the visibility that we have today.

And that visibility is really reinforced by the fact that we're seeing the signings happening today, and it's really about the timing of the implementation of the business that we have sold, and when that revenue is coming on in 2026.

And then I think based on the signings we're seeing, and particularly the acceleration of the pipeline and the good conversion rates that we're seeing, we have a lot of conﬁdence going into 2027 around the continuation of accelerating organic growth.

That's super helpful and a great segue. I wanted to ask a little bit about building that incremental revenue wins for 2027. So, at $168 million, I think you're a little lower than what you've been the last couple of years there. Is it just sort of a timing dynamic, I guess, as you guys have sort of reconstituted, some of the management team has not lost enough that there could be some transition dynamics that play out here. But how do you think that builds as we go through the rest of the year?

Yes, I see that solely as a timing dynamic around when ink hit paper in the ﬁrst quarter versus actually signing contracts in the second quarter and beyond. And I think it'll really come down to timing of implementation in terms of how much lands this year versus how much carries into 2027. As I said, we're very conﬁdent in our direction there, and maybe Kristine, if you want to comment on the pipeline.

Yes. Hi, Chris. I would just simply state that we feel very good, of course, about the record pipeline that we have and the underlying trends that we're seeing in the business. I think simply, we plan to sign more this year as we move forward, and a large part of that will simply fall into 2027 - we'll see that layering on.

So, we feel very good and have every bit of conﬁdence that we'll see accelerating growth through the back half of this year and into 2027.

Great. Thanks very much for the time. Appreciate it.

The next question is from Scott Schneeberger from Oppenheimer & Co. Please go ahead.

Thanks very much. Good morning. Patrick, I'd like to touch again on the sales pipeline

- an all-time high - and you certainly highlighted the 25% from the strategic growth sectors, and it sounds like a lot of progress is being made there. And congratulations. I'm curious to hear on the other 75% of the pipeline, what are the primary verticals that are building, and where you're seeing conversion. Thanks.

Hi, Scott. It's Kristine. I think we're very encouraged about what we saw in terms of the wins that we had in the ﬁrst quarter. So, it was $227 million, and 40% of those were in our new verticals.

So, we had good signings from across our technology. We signed four more contracts, including one internationally, for data centers. Aerospace and defense was actually our largest contract win in the quarter. So, despite that, we still have a great representation of the pipeline as we move into the second quarter.

But I think obviously, 75% of the pipeline is in our core business, and that just shows that we're continuing to see momentum in the core of geographies and our core verticals, omnichannel, retail and the like, and consumer. Very strong. Our value proposition is resonating with customers, and certainly in a dynamic environment, our value proposition only grows.

Great, thanks for that. And then considering it was ﬁrst quarter and often a time of year where reverse logistics is quite meaningful on returns post the holiday season. Any update on that area of your business - what percent of revenue it represents, what that mix may be going to, and maybe some of the proﬁtability attributes of that business? Thanks.

Hi, Scott, it's Kristine again. Great question. As you know, returns are an extremely complex operation for us, and one of our skilled expertise that GXO does.

And, in fact, we've seen very encouraging trends across our reverse logistics business. It remains probably around about 10% of our pipeline and of our business today, but we did see high-single-digit growth for us in the quarter. And obviously because of the complexity of the operations, it remains a very value-added service for us from a proﬁtability standpoint.

Great. Thanks very much.

The next question is from Ari Rosa from Citi. Please go ahead.

Yes, hi. Good morning. Patrick, I was hoping you could comment just for some context, because obviously the market feels confused, and we saw the stock get a bit hit obviously on the Amazon threat.

Just help us understand - when companies leave GXO, or when they make the decision to, kind of, not renew the contract, what are the typical reasons that happens?

And then if you could also comment on how often you see Amazon in a competitive bidding process. And do you have any concern that their, kind of, stepping up their presence in this space could lead to something of an erosion of pricing power or greater pricing competition in the industry? Thanks.

Yes. So, to take the ﬁrst question, our churn rate is less than 5%. That trend is continuing. When customers leave, it is typically rarely because of, rarely, a bankruptcy, but we do see those. Typically, it's a restructuring of supply chain. It is closing one warehouse node in order to open up a new node somewhere else. And then a very, very small part, of course, in a competitive bid to competitors.

But our churn rate continues to be very healthy. And we see that going forward, even improving, as we focus on even more account management. You would have seen that with the introduction of Ajit Kara into the strategic account management role that we announced a little while ago.

In terms of Amazon's presence in the market, I think they've been very clear around selling into existing infrastructure. Providing standalone bespoke solutions is very different from selling into existing capacity in standard solutions. Outside their platform, in selling a standalone bespoke solution, the game is very different. The market is populated with very formidable competitors in that space - GXO leading in my mind, in that regard in the contract logistics industry.

When I look at our customers, they are the chief supply chain ofﬁcers. We have many former chief supply chain ofﬁcers on our board, within our organization, running our business. When you look at their job and the things that are most important to them, cost matters. Service is critical. They can differentiate between transactional supply chain activity like air freight and parcel in establishing

short-term contracts for freight rates and buying capacity. The strategic decision associated with outsourcing in contract logistics requires an approach to a

long-term relationship of purpose-built supply-chain warehouse operation, a focus on continuous improvement over what is a long term - typically, our average contract is ﬁve years.

So, the business is very different. The engagement with the customer is very different. The way in which our organization supports the delivery of those solutions for our customers is very different than if we were selling into a standardized solution, as Amazon is putting forth.

So, I feel really conﬁdent that at the most senior levels within our customers' organization, we are the right answer for the strategic outsourcing aspect of their supply chain. And certainly there is a role to play for air freight, parcel and so forth. And the competitive dynamics are very different from the competitive dynamics in contract logistics. And that's why I'm really conﬁdent that we're so well positioned to succeed in what is a very big market.

And as I said in the beginning, I think it was really a great thing that Amazon called out what an incredible opportunity there is in supply chain, and what a great industry this is to invest in.

That's helpful, thank you. It certainly seems like there's a lot of confusion out there.

I was excited to see that you guys have loosely set a date now for the Investor Day, obviously still a while away, and I'm sure there's going to be a lot of work in terms of reﬁning long-term targets. But at a high level, maybe help us understand how you think of the objectives for the Investor Day, and what is it that you'd really like to get across, or what is it that you feel perhaps the market is misunderstanding or investors are misunderstanding about GXO.

Sure. You can expect, on Investor Day, GXO will lay out our three-year strategy. We will go in substantially more depth on organic growth, where to play, how to win, and how we see ourselves delivering organic growth over the next three years. We will go deeper on the operational levers in terms of productivity improvement, the glide path on SG&A, insight into the investments that we will be making and continue to make, and driving performance of the business, both on top line and bottom line

Disclaimer

GXO Logistics Inc. published this content on May 05, 2026, and is solely responsible for the information contained herein. Distributed via Public Technologies (PUBT), unedited and unaltered, on May 06, 2026 at 23:47 UTC.