XPO Q2 Results: Net profit rises 53% YoY, EPS hits $1.70
XPO Inc reported Q2 2026 net income of $162 million, up 52.8% YoY, with revenue growing 13.2% to $2.36 billion. Adjusted diluted EPS rose 61.9% to $1.70. North American LTL drove growth with record operating ratios, while European operations faced restructuring headwinds.
*this image is generated using AI for illustrative purposes only.
XPO Inc delivered robust second quarter 2026 financial results, reporting net income of $162 million, up 52.8% from $106 million in the same period of 2025. The Greenwich, Connecticut-based less-than-truckload (LTL) carrier generated total revenue of $2.36 billion, a 13.2% year-over-year increase, driven by yield growth and volume expansion in its North American segment. This performance underscores the company’s operational leverage and margin expansion capabilities during a strengthening freight demand cycle.
Diluted earnings per share (EPS) reached $1.36, compared to $0.89 in the prior year quarter. On a non-GAAP basis, adjusted diluted EPS surged 61.9% to $1.70 from $1.05. Operating income climbed 36.9% to $271 million, while adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) rose 27.6% to $434 million. The results reflect improved service quality, with a damage claims ratio below 0.2%, and productivity gains from AI implementation across the network.
Segment Performance
The North American Less-Than-Truckload segment was the primary growth engine, with revenue increasing 15.2% to $1.43 billion. Operating income for the segment jumped 43.2% to $285 million. Key operational metrics showed yield excluding fuel rising 4.4% year-over-year, while shipments per day increased 2.8%. The segment’s adjusted operating ratio improved by 300 basis points to a record 79.9%. Conversely, the European Transportation segment reported an operating loss of $6 million, compared to an income of $11 million in the prior year, primarily due to restructuring costs. However, its adjusted EBITDA grew 9.1% to $48 million.
| Metric | Q2 2026 | Q2 2025 | Change % |
|---|---|---|---|
| Total Revenue | $2,355 million | $2,080 million | 13.2% |
| Net Income | $162 million | $106 million | 52.8% |
| Diluted EPS | $1.36 | $0.89 | 52.8% |
| Adjusted Diluted EPS | $1.70 | $1.05 | 61.9% |
| Adjusted EBITDA | $434 million | $340 million | 27.6% |
Cash Flow and Balance Sheet
XPO generated $308 million in cash flow from operating activities in the quarter. The company ended the period with $298 million in cash and cash equivalents. Capital allocation included $101 million in net capital expenditures, $70 million in common stock repurchases, and $70 million in term loan repayments. Total assets stood at $8.33 billion as of June 30, 2026, with long-term debt at $3.05 billion.
What the Numbers Show
The divergence between GAAP operating income and adjusted metrics highlights the impact of restructuring and integration costs. While GAAP operating income rose 36.9%, adjusted EBITDA growth of 27.6% suggests that core operational profitability is expanding steadily, albeit slightly slower than the headline top-line revenue growth of 13.2%. The significant improvement in the North American LTL adjusted operating ratio to 79.9% indicates successful cost containment and yield management, which is critical for sustaining margins in the competitive LTL sector. The European segment’s GAAP loss, despite positive adjusted EBITDA, signals ongoing investment in restructuring rather than organic decline.
How sustainable is the record 79.9% adjusted operating ratio in North America as freight demand normalizes and competitive pricing pressures return?
What specific milestones must the European segment achieve to offset restructuring costs and return to consistent GAAP profitability in the near term?
To what extent will the recent AI-driven productivity gains translate into long-term margin expansion versus short-term operational efficiency?
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