GXO Logistics reported higher third-quarter revenue but lower operating income and free cash flow as direct operating expenses grew faster than sales and its operating margin narrowed.
Revenue for the three months ended Sept. 30, 2026, totaled $3.590 billion, up from $3.395 billion a year earlier. Organic revenue growth, which excludes foreign-exchange effects, was 6.4%. Operating income declined to $96 million from $118 million, and operating margin narrowed to 2.7% from 3.5%.
Direct operating expenses rose 7.2% to $3.064 billion. GXO attributed the increase mainly to labor and other operating costs, new-customer start-ups and operations ramping toward expected productivity levels, as well as changes in customer and business mix. Productivity and cost-management efforts partly offset the increases, the company said.
Adjusted EBITDA, a non-GAAP measure, held at $251 million. Cash flow from operations fell to $156 million from $232 million, while free cash flow, also a non-GAAP measure, decreased to $85 million from $187 million.
GXO reported $375 million in new business wins for the quarter, 34% more than a year earlier. Wins for the first nine months topped $1 billion, and the company’s sales pipeline reached a record $3.1 billion, more than 30% above the year-earlier level. GXO said aerospace and defense, technology, industrial and life sciences accounted for roughly 40% of wins booked so far this year.
Results differed across business lines. Technology and consumer electronics revenue increased 18.6% to $498 million, while food and beverage revenue fell 5.4% to $351 million.
CEO Patrick Kelleher said GXO was “entering 2027 from a position of strength.” The company reaffirmed its full-year 2026 guidance: organic revenue growth of 4% to 5%, adjusted EBITDA of $945 million to $965 million, adjusted diluted earnings per share of $2.95 to $3.15, and free cash flow conversion of 30% to 40%.
GXO’s Investor Day is scheduled for Nov. 16 at 9 a.m. ET at the New York Stock Exchange, with a webcast.
