GXO Logistics, Inc. 10-Q

ITEM 1. FINANCIAL STATEMENTS GXO Logistics, Inc. Condensed Consolidated Statements of Operations (Unaudited) Three Months Ended June 30, Six Months Ended June 30, (Dollars in millions, shares in thousands, except per share amounts) 2026 2025 2026 2025 Revenue $ 3,441 $ 3,299 $ 6,739 $ 6,276 Direct operating expense 2,933 2,813 5,741 5,371 Selling, general and administrative expense 295 272 591 533 Depreciation and amortization expense 117 110 232 219 Transaction and integration costs 12 14 28 36 Restructuring costs and other 5 2 8 19 Regulatory matter — ( 1 ) — 65 Net loss on divestiture of business 2 — 23 — Operating income 77 89 116 33 Other income (expense), net 6 ( 10 ) 16 ( 15 ) Interest expense, net ( 35 ) ( 36 ) ( 67 ) ( 68 ) Income (loss) before income taxes 48 43 65 ( 50 ) Income tax expense ( 21 ) ( 15 ) ( 33 ) ( 17 ) Net income (loss) 27 28 32 ( 67 ) Net income attributable to noncontrolling interests (“NCI”) ( 2 ) ( 2 ) ( 3 ) ( 3 ) Net income (loss) attributable to GXO $ 25 $ 26 $ 29 $ ( 70 ) Earnings (loss) per share Basic $ 0.22 $ 0.23 $ 0.25 $ ( 0.60 ) Diluted $ 0.22 $ 0.23 $ 0.25 $ ( 0.60 ) Weighted-average shares outstanding used in computation of earnings (loss) per share Basic 115,013 114,812 114,862 116,890 Diluted 115,718 115,055 115,780 116,890 See accompanying Notes to Condensed Consolidated Financial Statements. 2 GXO Logistics, Inc. Condensed Consolidated Statements of Comprehensive Income (Unaudited) Three Months Ended June 30, Six Months Ended June 30, (In millions) 2026 2025 2026 2025 Net income (loss) $ 27 $ 28 $ 32 $ ( 67 ) Other comprehensive income (loss), net of tax Foreign currency translation adjustments — 136 ( 24 ) 210 Cash flow hedges ( 1 ) — ( 1 ) ( 1 ) Fair value hedges ( 3 ) — ( 2 ) — Pension plans 1 ( 8 ) 5 ( 12 ) Other comprehensive income (loss), net of tax ( 3 ) 128 ( 22 ) 197 Comprehensive income, net of tax 24 156 10 130 Less: Comprehensive income attributable to NCI — 5 3 7 Comprehensive income attributable to GXO $ 24 $ 151 $ 7 $ 123 See accompanying Notes to Condensed Consolidated Financial Statements. 3 GXO Logistics, Inc. Condensed Consolidated Balance Sheets (Unaudited) June 30, December 31, (Dollars in millions, shares in thousands, except per share amounts) 2026 2025 ASSETS Current assets Cash and cash equivalents $ 769 $ 854 Accounts receivable, net of allowance of $ 14 and $ 15 2,070 2,028 Other current assets 414 406 Total current assets 3,253 3,288 Long-term assets Property and equipment, net of accumulated depreciation of $ 2,208 and $ 2,126 1,261 1,151 Operating lease assets 2,698 2,563 Goodwill 3,727 3,781 Intangible assets, net of accumulated amortization of $ 805 and $ 781 839 909 Other long-term assets 593 570 Total long-term assets 9,118 8,974 Total assets $ 12,371 $ 12,262 LIABILITIES AND EQUITY Current liabilities Accounts payable $ 707 $ 758 Accrued expenses 1,445 1,492 Current debt 751 446 Current operating lease liabilities 779 745 Other current liabilities 439 434 Total current liabilities 4,121 3,875 Long-term liabilities Long-term debt 2,452 2,619 Long-term operating lease liabilities 2,137 2,044 Other long-term liabilities 639 709 Total long-term liabilities 5,228 5,372 Commitments and Contingencies (Note 14) Stockholders’ Equity Common Stock, $ 0.01 par value per share; 300,000 shares authorized, 120,458 and 119,868 shares issued and 114,770 and 114,512 shares outstanding, respectively 1 1 Treasury stock, at cost; 5,688 and 5,356 shares, respectively ( 218 ) ( 202 ) Preferred Stock, $ 0.01 par value per share; 10,000 shares authorized, 0 issued and outstanding — — Additional Paid-In Capital (“APIC”) 2,680 2,667 Retained earnings 747 718 Accumulated Other Comprehensive Income (Loss) (“AOCIL”) ( 223 ) ( 201 ) Total stockholders’ equity before NCI 2,987 2,983 NCI 35 32 Total equity 3,022 3,015 Total liabilities and equity $ 12,371 $ 12,262 See accompanying Notes to Condensed Consolidated Financial Statements. 4 GXO Logistics, Inc. Condensed Consolidated Statements of Cash Flows (Unaudited) Six Months Ended June 30, (In millions) 2026 2025 Cash flows from operating activities: Net income (loss) $ 32 $ ( 67 ) Adjustments to reconcile net income (loss) to net cash provided by operating activities Depreciation and amortization expense 232 219 Stock-based compensation expense 23 23 Deferred tax benefit ( 1 ) ( 25 ) Other ( 8 ) 7 Changes in operating assets and liabilities Accounts receivable ( 63 ) 18 Other assets ( 36 ) 39 Accounts payable ( 44 ) ( 151 ) Accrued expenses and other liabilities ( 28 ) ( 31 ) Net cash provided by operating activities 107 32 Cash flows from investing activities: Capital expenditures ( 130 ) ( 125 ) Proceeds from sale of property and equipment 4 2 Net cash used in investing activities ( 126 ) ( 123 ) Cash flows from financing activities: Common stock repurchased and excise tax paid ( 18 ) ( 200 ) Net borrowings under revolving credit facilities — 8 Repayments of debt — ( 55 ) Repayments of finance lease obligations ( 25 ) ( 24 ) Proceeds from exercise of stock options 7 — Taxes paid related to net share settlement of equity awards ( 17 ) ( 7 ) Net obligations under factoring arrangements ( 10 ) ( 12 ) Net changes in bank overdraft positions 1 64 Other — ( 1 ) Net cash used in financing activities ( 62 ) ( 227 ) Effect of exchange rates on cash and cash equivalents ( 3 ) 40 Net decrease in cash, restricted cash and cash equivalents ( 84 ) ( 278 ) Cash, restricted cash and cash equivalents, beginning of period 857 485 Cash, restricted cash and cash equivalents, end of period $ 773 $ 207 Non-cash financing activities: Excise tax liability related to stock repurchases $ — $ 2 Reconciliation of cash, restricted cash and cash equivalents June 30, 2026 December 31, 2025 Cash and cash equivalents $ 769 $ 854 Restricted Cash (included in Other current assets) 3 2 Restricted Cash (included in Other long-term assets) 1 1 Total cash, restricted cash and cash equivalents $ 773 $ 857 See accompanying Notes to Condensed Consolidated Financial Statements. 5 GXO Logistics, Inc. Condensed Consolidated Statements of Changes in Equity (Unaudited) Common Stock APIC Retained Earnings AOCIL Equity Before NCI NCI Total Equity (Shares in thousands, dollars in millions) Shares Amount Treasury Stock Balance as of March 31, 2026 115,024 $ 1 $ ( 202 ) $ 2,669 $ 722 $ ( 222 ) $ 2,968 $ 35 $ 3,003 Net income — — — — 25 — 25 2 27 Other comprehensive income (loss) — — — — — ( 1 ) ( 1 ) ( 2 ) ( 3 ) Common stock issued under employee stock plans and exercises of stock options 103 — — — — — — — — Tax withholding on vesting of stock-based compensation awards ( 25 ) — — ( 2 ) — — ( 2 ) — ( 2 ) Stock-based compensation — — — 13 — — 13 — 13 Common stock repurchased ( 332 ) — ( 16 ) — — — ( 16 ) — ( 16 ) Balance as of June 30, 2026 114,770 $ 1 $ ( 218 ) $ 2,680 $ 747 $ ( 223 ) $ 2,987 $ 35 $ 3,022 Common Stock APIC Retained Earnings AOCIL Equity Before NCI NCI Total Equity (Shares in thousands, dollars in millions) Shares Amount Treasury Stock Balance as of December 31, 2025 114,512 $ 1 $ ( 202 ) $ 2,667 $ 718 $ ( 201 ) $ 2,983 $ 32 $ 3,015 Net income (loss) — — — — 29 — 29 3 32 Other comprehensive income — — — — — ( 22 ) ( 22 ) — ( 22 ) Common stock issued under employee stock plans and exercises of stock options 890 — — 7 — — 7 — 7 Tax withholding on vesting of stock-based compensation awards ( 300 ) — — ( 17 ) — — ( 17 ) — ( 17 ) Stock-based compensation — — — 23 — — 23 — 23 Common stock repurchased ( 332 ) — ( 16 ) — — — ( 16 ) — ( 16 ) Balance as of June 30, 2026 114,770 $ 1 $ ( 218 ) $ 2,680 $ 747 $ ( 223 ) $ 2,987 $ 35 $ 3,022 See accompanying Notes to Condensed Consolidated Financial Statements. 6 GXO Logistics, Inc. Condensed Consolidated Statements of Changes in Equity (Unaudited) Common Stock APIC Retained Earnings AOCIL Equity Before NCI NCI Total Equity (Shares in thousands, dollars in millions) Shares Amount Treasury Stock Balance as of March 31, 2025 116,955 $ 1 $ ( 111 ) $ 2,635 $ 590 $ ( 245 ) $ 2,870 $ 34 $ 2,904 Net income — — — — 26 — 26 2 28 Other comprehensive income — — — — — 125 125 3 128 Stock-based compensation — — — 11 — — 11 — 11 Vesting of stock compensation awards 125 — — — — — — — — Tax withholding on vesting of stock-based compensation awards ( 38 ) — — ( 1 ) — — ( 1 ) — ( 1 ) Common stock repurchased ( 2,590 ) — ( 91 ) — — — ( 91 ) — ( 91 ) Dividends to NCI — — — — — — — ( 4 ) ( 4 ) Balance as of June 30, 2025 114,452 $ 1 $ ( 202 ) $ 2,645 $ 616 $ ( 120 ) $ 2,940 $ 35 $ 2,975 Common Stock APIC Retained Earnings AOCIL Equity Before NCI NCI Total Equity (Shares in thousands, dollars in millions) Shares Amount Treasury Stock Balance as of December 31, 2024 119,496 $ 1 $ — $ 2,629 $ 686 $ ( 313 ) $ 3,003 $ 32 $ 3,035 Net income (loss) — — — — ( 70 ) — ( 70 ) 3 ( 67 ) Other comprehensive income — — — — — 193 193 4 197 Stock-based compensation — — — 23 — — 23 — 23 Vesting of stock compensation awards 495 — — — — — — — — Tax withholding on vesting of stock-based compensation awards ( 183 ) — — ( 7 ) — — ( 7 ) — ( 7 ) Common stock repurchased ( 5,356 ) — ( 202 ) — — — ( 202 ) — ( 202 ) Dividends to NCI — — — — — — — ( 4 ) ( 4 ) Balance as of June 30, 2025 114,452 $ 1 $ ( 202 ) $ 2,645 $ 616 $ ( 120 ) $ 2,940 $ 35 $ 2,975 See accompanying Notes to Condensed Consolidated Financial Statements. 7 GXO Logistics, Inc. Notes to Condensed Consolidated Financial Statements (Unaudited) 1. Basis of Presentation and Significant Accounting Policies and Estimates Basis of Presentation The accompanying unaudited Condensed Consolidated Financial Statements of GXO Logistics, Inc. (“GXO” or the “Company”) have been prepared in accordance with generally accepted accounting principles in the United States of America (“GAAP”) for interim financial information and pursuant to the rules of the United States Securities and Exchange Commission (the “SEC”). Accordingly, they do not include all of the information and notes required by GAAP for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included. Operating results for the interim periods are not necessarily indicative of the results that may be expected for the year ending December 31, 2026. The Company’s Condensed Consolidated Financial Statements include the accounts of GXO and its majority-owned subsidiaries and variable interest entities of which the Company is the primary beneficiary. The Company has eliminated intercompany accounts and transactions. The accompanying Condensed Consolidated Financial Statements and Notes thereto should be read in conjunction with the Annual Report on Form 10-K for the year ended December 31, 2025. The Company presents its operations as one reportable segment. Accounting Pronouncements Issued But Not Yet Adopted In November 2024, the FASB issued ASU 2024-03, Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses. This standard requires all public companies to disclose more detailed information about certain costs and expenses in the notes to the financial statements in interim and annual reporting periods. This standard is effective for annual reporting periods beginning after December 15, 2026, with early adoption permitted. The Company does not expect this standard to have a material impact on its results of operations, financial position or cash flows and is currently evaluating the impact of adopting this standard on its disclosures. In September 2025, the FASB issued ASU 2025-06, Intangibles- Goodwill and Other- Internal-Use Software (Subtopic 350-40): Targeted Improvements to the Accounting for Internal-Use Software. The amendments in this update remove all references to prescriptive and sequential software development stages (referred to as “project stages”) throughout Subtopic 350-40. Therefore, an entity is required to start capitalizing software costs when certain capitalization criteria are met. The ASU also supersedes guidance on website development costs. The amendments are effective for all entities for annual reporting periods beginning after December 15, 2027, and interim reporting periods within those annual reporting periods. Early adoption is permitted as of the beginning of an annual reporting period. The Company is currently evaluating the impact of this standard on its results of operations, financial position or cash flows, and the impact of adopting this standard on its disclosures. 8 2. Revenue Recognition Revenue disaggregated by geographical area was as follows: Three Months Ended June 30, Six Months Ended June 30, (In millions) 2026 2025 2026 2025 United Kingdom $ 1,684 $ 1,590 $ 3,279 $ 2,981 United States 782 767 1,533 1,519 Netherlands 256 253 526 485 France 213 216 421 402 Spain 181 166 343 309 Italy 112 105 221 200 Other 213 202 416 380 Total $ 3,441 $ 3,299 $ 6,739 $ 6,276 The Company’s revenue can also be disaggregated by various verticals, reflecting the customers’ principal industry. Revenue disaggregated by industry was as follows: Three Months Ended June 30, Six Months Ended June 30, (In millions) 2026 2025 2026 2025 Omnichannel retail $ 1,637 $ 1,626 $ 3,198 $ 3,048 Technology and consumer electronics 439 402 872 795 Industrial and manufacturing 408 403 802 765 Consumer packaged goods 331 290 665 574 Food and beverage 341 359 658 673 Other 285 219 544 421 Total $ 3,441 $ 3,299 $ 6,739 $ 6,276 Contract Assets and Liabilities The contract asset and contract liability balances from contracts with customers were as follows: June 30, December 31, (In millions) 2026 2025 Contract assets and contract costs included in: Other current assets $ 35 $ 36 Other long-term assets 254 235 Total contract assets $ 289 $ 271 Contract liabilities included in: Other current liabilities $ 272 $ 279 Other long-term liabilities 110 101 Total contract liabilities $ 382 $ 380 9 Contract liabilities represent the Company’s obligation to transfer services to a customer for which the Company has received consideration, or the amount due from a customer before the related services have been transferred. Revenue recognized included in contract liabilities at the beginning of the period was as follows: Three Months Ended June 30, Six Months Ended June 30, (In millions) 2026 2025 2026 2025 Revenue recognized $ 17 $ 24 $ 229 $ 221 3. Segment Information The Company is organized geographically into three operating segments: (i) Americas and Asia-Pacific, (ii) United Kingdom and Ireland, and (iii) Continental Europe. The Company’s reporting unit results are regularly provided to the Chief Operating Decision Maker (“CODM”). The CODM is our Chief Executive Officer, who assesses the Company’s performance and allocates resources. The CODM evaluates the Company’s performance and allocates resources primarily based on adjusted earnings before interest, taxes, depreciation and amortization, adjusted for transaction and integration costs, restructuring costs and other, regulatory matters, net loss on divestiture of business and unrealized gain/loss on foreign currency contracts (“Adjusted EBITDA”). The CODM uses Adjusted EBITDA to communicate performance targets to the segment managers, to allocate resources to the segments, and to monitor segment performance. Additionally, the CODM considers the performance of this measure against planned and forecasted amounts to make investing and resource allocation decisions. The actual results are used in assessing the performance of the Company and in establishing management’s compensation. For disclosure purposes, we aggregate these three operating segments into one reportable segment due to the similar nature of their operations and economic characteristics. 10 The Company’s segment results were as follows: Three Months Ended June 30, Six Months Ended June 30, (In millions) 2026 2025 2026 2025 Revenue $ 3,441 $ 3,299 $ 6,739 $ 6,276 Direct operating expense 2,933 2,813 5,741 5,371 Selling, general and administrative expense (1) 281 257 561 503 Other income (expense), net (2)(3) ( 6 ) 2 ( 12 ) ( 3 ) Segment Adjusted EBITDA $ 233 $ 227 $ 449 $ 405 Less: Corporate expenses (4) 14 15 30 30 Depreciation expense 89 80 175 160 Amortization of intangible assets acquired 28 30 57 59 Transaction and integration costs 12 14 28 36 Restructuring costs and other 5 2 8 19 Regulatory matter — ( 1 ) — 65 Net loss on divestiture of business 2 — 23 — Unrealized (gain) loss on foreign currency contracts (3) — 8 ( 4 ) 18 Interest expense, net 35 36 67 68 Income (loss) before income taxes 48 43 65 ( 50 ) Income tax expense ( 21 ) ( 15 ) ( 33 ) ( 17 ) Net income (loss) $ 27 $ 28 $ 32 $ ( 67 ) (1) Excludes unallocated corporate expenses. (2) Other income (expense), net, excluding unrealized (gain) loss on foreign currency contracts. (3) Included in Other income (expense), net in the Condensed Consolidated Statements of Operations. (4) Corporate expenses include unallocated costs related to corporate functions such as salaries and benefits, rent, and professional fees, which are recorded in Selling, general and administrative expenses in the Condensed Consolidated Statements of Operations. 4. Leases The Company has entered into noncancelable operating and finance leases primarily for real estate and warehouse equipment. The Company determines whether an arrangement is a lease at inception and, if so, whether that lease meets the classification criteria for a finance or an operating lease at the commencement date. Total lease cost recorded in the Condensed Consolidated Statements of Operations was as follows: Three Months Ended June 30, Six Months Ended June 30, (In millions) 2026 2025 2026 2025 Operating lease cost (1)(2) $ 226 $ 238 $ 438 $ 444 Finance lease cost: Amortization of the right-of-use assets (3) 16 8 26 15 Interest on the lease liabilities (4) 8 4 12 8 Total finance lease cost 24 12 38 23 Variable lease cost (1) 69 42 132 86 Short-term lease cost (1) 54 49 101 96 Total lease cost (5) $ 373 $ 341 $ 709 $ 649 11 (1) Operating, variable, short-term lease costs are primarily included in Direct operating expense in the Condensed Consolidated Statements of Operations. (2) For the three and six months ended June 30, 2026, the Company recorded a net benefit of $ 4 million and $ 30 million, respectively, from a real estate transaction that resulted in an early termination of a lease. (3) Amortization of right-of-use assets is included in Depreciation and amortization in the Condensed Consolidated Statements of Operations. (4) Interest on the lease liabilities is included in Interest expense, net in the Condensed Consolidated Statements of Operations. (5) Total lease cost excludes sublease income for all periods presented, as it was not material. The following amounts were recorded in the Condensed Consolidated Balance Sheets related to leases: June 30, December 31, (In millions) 2026 2025 Operating leases: Operating lease assets $ 2,698 $ 2,563 Current operating lease liabilities $ 779 $ 745 Long-term operating lease liabilities 2,137 2,044 Total operating lease liabilities $ 2,916 $ 2,789 Finance leases: Property and equipment, net $ 432 $ 306 Current debt $ 74 $ 45 Long-term debt 401 281 Total finance lease liabilities $ 475 $ 326 Supplemental cash flow information related to leases was as follows: Six Months Ended June 30, (In millions) 2026 2025 Right-of-use assets obtained in exchange for lease liabilities: Operating leases $ 559 $ 514 Finance leases 178 85 5. Goodwill The following table presents the changes in Goodwill for the six months ended June 30, 2026: (In millions) Balance as of December 31, 2025 $ 3,781 Impact of foreign exchange translation ( 54 ) Balance as of June 30, 2026 $ 3,727 12 6. Intangible Assets The following table summarizes identifiable intangible assets subject to amortization: June 30, 2026 December 31, 2025 (In millions) Gross Carrying Amount Accumulated Amortization Net Value Gross Carrying Amount Accumulated Amortization Net Value Customer relationships $ 1,564 $ ( 765 ) $ 799 $ 1,609 $ ( 747 ) $ 862 Trade names and trademarks 63 ( 33 ) 30 64 ( 29 ) 35 Developed technology 17 ( 7 ) 10 17 ( 5 ) 12 Total $ 1,644 $ ( 805 ) $ 839 $ 1,690 $ ( 781 ) $ 909 Intangible asset amortization expense was $ 28 million and $ 30 million for the three months ended June 30, 2026 and June 30, 2025, respectively, and $ 57 million and $ 59 million for the six months ended June 30, 2026 and June 30, 2025, respectively. 7. Debt and Financing Arrangements The following table summarizes the carrying value of the Company’s debt: June 30, December 31, (In millions, except percentages) Rate (1) 2026 2025 Unsecured notes due 2026 1.65 % $ 400 $ 400 Unsecured notes due 2029 (2) 6.25 % 595 594 Unsecured notes due 2031 (3) 2.65 % 398 398 Unsecured notes due 2034 (4) 6.50 % 491 491 Euro unsecured notes due 2030 (€ 500 principal) (5) 3.75 % 565 580 Five-Year Term Loan due 2027 5.12 % 275 275 Finance leases and other debt Various 479 327 Total Debt $ 3,203 $ 3,065 Less: Current debt (6) 751 446 Total Long-term debt $ 2,452 $ 2,619 (1) Interest rate as of June 30, 2026. (2) Net of unamortized discount and debt issuance costs of $ 5 million and $ 6 million as of June 30, 2026 and December 31, 2025, respectively. (3) Net of unamortized discount and debt issuance costs of $ 2 million as of June 30, 2026 and December 31, 2025. (4) Net of unamortized discount and debt issuance costs of $ 9 million as of June 30, 2026 and December 31, 2025. (5) Net of unamortized discount and debt issuance costs of $ 6 million and $ 7 million as of June 30, 2026 and December 31, 2025, respectively. (6) As of June 2026, current debt includes $ 400 million unsecured notes due in July 2026 and $ 275 million five-year term loan due in May 2027. As of December 31, 2025, current debt includes $ 400 million unsecured notes due in July 2026. Repayments of Debt Upon maturity in July 2026, the Company repaid $ 400 million of unsecured notes using cash on hand. Revolving Credit Facilities The Company has a five-year unsecured, multicurrency revolving credit facility expiring in 2029 (the “Revolving Credit Agreement”). The aggregate commitment of all lenders under the Revolving Credit Agreement is equal to $ 800 million, of which $ 100 million is available for the issuance of letters of credit. As of June 30, 2026 and December 31, 2025, no amounts were outstanding, and letters of credit were $ 7 million and $ 6 million, respectively, under the Revolving Credit Agreement. 13 Borrowings under revolving credit facilities maturing in three months or less are presented net in the Condensed Consolidated Statement of Cash Flows. Covenants and Compliance The covenants for the Company’s debt securities, which are customary for financings of this type, limit the Company’s ability to incur indebtedness and grant liens, among other restrictions. In addition, the facilities require the Company to maintain a consolidated leverage ratio below a specified maximum. As of June 30, 2026, the Company complied with the covenants contained in its debt and financing arrangements. Factoring Programs The Company sells certain of its trade receivables on a non-recourse basis to third-party financial institutions under various factoring agreements. Information related to the trade receivables sold under the factoring agreements was as follows: Three Months Ended June 30, Six Months Ended June 30, (In millions) 2026 2025 2026 2025 Receivables sold in period $ 661 $ 792 $ 1,262 $ 1,394 Cash consideration 658 787 1,255 1,385 8. Fair Value Measurements and Financial Instruments Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The levels of inputs used to measure fair value are: • Level 1—Quoted prices for identical instruments in active markets; • Level 2—Quoted prices for similar instruments in active markets; quoted prices for identical or similar instruments in markets that are not active; and model-derived valuations in which all significant inputs are observable in active markets; and • Level 3—Valuations based on inputs that are unobservable, generally utilizing pricing models or other valuation techniques that reflect management’s judgment and estimates. Assets and Liabilities The Company bases its fair value estimates on market assumptions and available information. The carrying values of cash and cash equivalents, accounts receivable, accounts payable, accrued expenses and current maturities of long-term debt approximated their fair values as of June 30, 2026 and December 31, 2025, due to their short-term nature. 14 Debt The fair value of debt was as follows: June 30, 2026 December 31, 2025 (In millions) Level Fair Value Carrying Value Fair Value Carrying Value Unsecured notes due 2026 2 $ 400 $ 400 $ 394 $ 400 Unsecured notes due 2029 2 620 595 631 594 Unsecured notes due 2031 2 355 398 358 398 Unsecured notes due 2034 2 525 491 540 491 Euro unsecured notes due 2030 2 569 565 586 580 Five-Year Term Loan due 2027 2 273 275 272 275 Financial Instruments The Company directly manages its exposure to risks arising from business operations and economic factors, including fluctuations in interest rates and foreign currencies. The Company uses derivative instruments to manage the volatility related to these exposures. The notional amount and fair value of derivative instruments were as follows: June 30, 2026 December 31, 2025 Balance Sheet Location (In millions) Notional Amount Fair Value Notional Amount Fair Value Derivatives designated as net investment hedges: Cross-currency swaps $ 600 $ 50 $ 422 $ 33 Other current liabilities Cross-currency swaps 1,222 83 1,400 143 Other long-term liabilities Derivatives designated as fair value hedges: Cross-currency swaps $ 236 $ 5 $ — $ — Other long-term assets Cross-currency swaps — — 236 1 Other long-term liabilities Derivatives not designated as hedges: Foreign currency option contracts $ 217 $ 3 $ 308 $ 3 Other current assets Foreign currency option contracts 223 1 316 4 Other current liabilities Foreign currency forward contracts 137 — — — Other current assets Foreign currency forward contracts 3 — 231 1 Other current liabilities As of June 30, 2026 and December 31, 2025, the derivatives were classified as Level 2 within the fair value hierarchy. The derivatives are valued using inputs other than quoted prices such as foreign exchange rates and yield curves. 15 The effect of hedges on AOCIL and in the Condensed Consolidated Statements of Operations was as follows: Three Months Ended June 30, 2026 Six Months Ended June 30, 2026 (In millions) Amount of Gain (Loss) Recognized in Other Comprehensive Income on Derivative Gain (Loss) Reclassified from AOCIL into Net Income Gain (Loss) Recognized in Net Income on Derivative (Excluded from effectiveness testing) Amount of Gain (Loss) Recognized in Other Comprehensive Income on Derivative Gain (Loss) Reclassified from AOCIL into Net Income Gain (Loss) Recognized in Net Income on Derivative (Excluded from effectiveness testing) Net investment hedges Cross-currency swaps (1) $ 6 $ 1 $ 1 $ 45 $ — $ 2 Cash flow hedges Interest rate swaps (1) — 1 — — 1 — Fair value hedges Cross-currency swaps (2) ( 3 ) — — ( 1 ) 1 — (1) Amounts reclassified to Net income are reported in Interest expense, net in the Condensed Consolidated Statements of Operations. (2) Amounts reclassified to Net income are reported in Other income, net in the Condensed Consolidated Statements of Operations. Three Months Ended June 30, 2025 Six Months Ended June 30, 2025 (In millions) Amount of Gain (Loss) Recognized in Other Comprehensive Income on Derivative Gain (Loss) Reclassified from AOCIL into Net Income Gain (Loss) Recognized in Net Income on Derivative (Excluded from effectiveness testing) Amount of Gain (Loss) Recognized in Other Comprehensive Income on Derivative Gain (Loss) Reclassified from AOCIL into Net Income Gain (Loss) Recognized in Net Income on Derivative (Excluded from effectiveness testing) Net investment hedges Cross-currency swaps (1) $ ( 195 ) $ — $ 1 $ ( 271 ) $ ( 3 ) $ 2 Cash flow hedges Interest rate swaps (1) ( 1 ) — — ( 2 ) — — (1) Amounts reclassified to Net income are reported in Interest expense, net in the Condensed Consolidated Statements of Operations. Derivatives Not Designated as Hedges Gains and losses recognized in Other income (expense), net in the Condensed Consolidated Statements of Operations for foreign currency options and forward contracts were as follows: Three Months Ended June 30, Six Months Ended June 30, (In millions) 2026 2025 2026 2025 Foreign currency gain (loss) on foreign currency contracts $ 2 $ ( 6 ) $ 5 $ ( 14 ) 16 9. Restructuring Costs and Other Restructuring costs and other primarily consisted of severance paid to exiting members of the Company’s leadership team and to individuals as part of an initiative to optimize corporate expenses. The following table summarizes changes in the restructuring liability, which is included in Accrued expenses and Other long-term liabilities in the Condensed Consolidated Balance Sheets. (In millions) Balance as of December 31, 2025 $ 15 Charges incurred 8 Payments ( 13 ) Balance as of June 30, 2026 $ 10 As of June 30, 2026, $ 8 million of the restructuring liability is expected to be paid in the next 12 months. 10. Divestiture In 2024, the Company completed the acquisition of Wincanton plc (now Wincanton Limited) (the “Wincanton Acquisition”). The Wincanton Acquisition was subject to review by the U.K. Competition and Markets Authority (the “CMA”). In 2025, the CMA approved the Wincanton Acquisition, subject to the divestment of certain grocery contracts in the U.K. (the “Wincanton Divestment”). In the fourth quarter of 2025, the Company met the held-for-sale criteria for the anticipated Wincanton Divestment and recorded a $ 37 million write-down loss, including $ 4 million of goodwill, $ 21 million of customer relationships, and a $ 12 million fair value adjustment. For the three and six months ended June 30, 2026, the Company recorded $ 2 million and $ 23 million, respectively, as an additional impairment due to a further reduction in estimated fair value. Assets and liabilities held for sale were not material as of June 30, 2026 and December 31, 2025, and are included in Other current assets and Other current liabilities, respectively, in the Condensed Consolidated Balance Sheets. The Company expects to complete the Wincanton Divestment before the end of the year. 11. Employee Benefit Plans Defined Benefit Plans The Company offers pension plans in certain jurisdictions, with the most significant in the U.K. In the U.K., the Company sponsors two defined benefit pension schemes (the “U.K. Retirement Plans”). The U.K. Retirement Plans do not allow for new plan participants or additional benefit accruals. The funded status of the U.K. Retirement Plans was recorded in Other long-term assets in the Condensed Consolidated Balance Sheets. The Company considers its other defined benefit pension plans not material to its Consolidated Financial Statements and excludes them from the disclosure below. 17 Components of the net periodic benefit income recognized under the U.K. Retirement Plans were as follows: Three Months Ended June 30, Six Months Ended June 30, (In millions) 2026 2025 2026 2025 Interest cost $ ( 21 ) $ ( 21 ) $ ( 41 ) $ ( 42 ) Expected return on plan assets 29 27 58 54 Amortization of net loss ( 1 ) ( 2 ) ( 3 ) ( 3 ) Net periodic pension income (1) $ 7 $ 4 $ 14 $ 9 (1) Net periodic pension income was recorded in Other income (expense), net in the Condensed Consolidated Statements of Operations. Defined Contribution Plans Also, the Company has defined-contribution retirement plans for its United States employees and employees of certain foreign subsidiaries. In these plans, employees are allowed to contribute a portion of their salaries and bonuses to the plans, and the Company matches a portion of the employee contributions. Defined contribution plan costs were as follows: Three Months Ended June 30, Six Months Ended June 30, (In millions) 2026 2025 2026 2025 Defined contribution costs (1) $ 26 $ 23 $ 64 $ 54 (1) Defined contribution plan costs were primarily recorded in Direct operating expense in the Condensed Consolidated Statements of Operations. 12. Income Taxes Income tax expense for the six months ended June 30, 2026, was $ 33 million compared with $ 17 million for the six months ended June 30, 2025. The Company’s effective tax rate for the six months ended June 30, 2026 and June 30, 2025, was an expense on pre-tax income of 50.6 % and an expense on pre-tax loss of ( 35.3 )%, respectively. The change to the Company’s effective tax rate was primarily driven by an increase in pre-tax income, an increase in unrecognized tax benefits for the six months ended June 30, 2026, and a regulatory matter during the six months ended June 30, 2025. 13. Stockholders’ Equity Stock Repurchase Plan In 2025, the Company’s board of directors authorized and announced a repurchase plan for up to $ 500 million of its common stock (the “Repurchase Plan”). The Repurchase Plan permits shares of common stock to be repurchased from time to time in management’s discretion, through a variety of methods, including a 10b5-1 trading plan, open market purchases, privately negotiated transactions or otherwise. The timing and number of shares of common stock repurchased will depend on a variety of factors, including price, general business and market conditions, alternative investment opportunities and funding considerations. The Repurchase Plan does not obligate the Company to repurchase any specific number of shares of common stock and may be suspended or discontinued at any time. The repurchase of shares of the Company’s common stock is recorded as treasury stock within equity and is accounted for under the cost method, inclusive of share repurchase costs and excise tax on share repurchases in excess of issuances. During the six months ended June 30, 2026 and June 30, 2025, the Company repurchased approximately 332 thousand and 5.4 million shares of its common stock for an aggregate purchase price of $ 16 million and $ 202 million, respectively, including share repurchase costs and excise tax. As of June 30, 2026 and December 31, 2025, $ 284 million and $ 300 million remained authorized under the Repurchase Plan, respectively. During July 2026, the Company repurchased an additional 104 thousand shares of its common stock for an aggregate purchase price of $ 5 million, including share repurchase costs. 18 Accumulated Other Comprehensive Income - Loss The following tables summarize the changes in AOCIL by component: Foreign Currency Adjustment (In millions) Foreign Currency Translation Adjustments Net Investment Hedges Cash Flow Hedges Fair Value Hedges Defined Benefit Plans Less: AOCIL attributable to NCI AOCIL attributable to GXO As of March 31, 2026 $ 92 $ ( 133 ) $ 1 $ — $ ( 182 ) $ — $ ( 222 ) Other comprehensive income (loss) before reclassifications ( 4 ) 6 — ( 3 ) — 2 1 Amounts reclassified to net income — ( 2 ) ( 1 ) — 1 — ( 2 ) Tax amounts 1 ( 1 ) — — — — — Other comprehensive income (loss), net of tax ( 3 ) 3 ( 1 ) ( 3 ) 1 2 ( 1 ) As of June 30, 2026 $ 89 $ ( 130 ) $ — $ ( 3 ) $ ( 181 ) $ 2 $ ( 223 ) Foreign Currency Adjustment (In millions) Foreign Currency Translation Adjustments Net Investment Hedges Cash Flow Hedges Fair Value Hedges Defined Benefit Plans Less: AOCIL attributable to NCI AOCIL attributable to GXO As of December 31, 2025 $ 147 $ ( 164 ) $ 1 $ ( 1 ) $ ( 186 ) $ 2 $ ( 201 ) Other comprehensive income (loss) before reclassifications ( 58 ) 45 — ( 1 ) 3 — ( 11 ) Amounts reclassified to net income — ( 2 ) ( 1 ) ( 1 ) 3 — ( 1 ) Tax amounts — ( 9 ) — — ( 1 ) — ( 10 ) Other comprehensive income (loss), net of tax ( 58 ) 34 ( 1 ) ( 2 ) 5 — ( 22 ) As of June 30, 2026 $ 89 $ ( 130 ) $ — $ ( 3 ) $ ( 181 ) $ 2 $ ( 223 ) Foreign Currency Adjustment (In millions) Foreign Currency Translation Adjustments Net Investment Hedges Cash Flow Hedges Defined Benefit Plans Less: AOCIL attributable to NCI AOCIL attributable to GXO As of March 31, 2025 $ ( 64 ) $ ( 26 ) $ 3 $ ( 159 ) $ 1 $ ( 245 ) Other comprehensive income (loss) before reclassifications 288 ( 194 ) ( 1 ) ( 12 ) ( 3 ) 78 Amounts reclassified to net income — ( 1 ) — 2 — 1 Tax amounts ( 1 ) 44 1 2 — 46 Other comprehensive income (loss), net of tax 287 ( 151 ) — ( 8 ) ( 3 ) 125 As of June 30, 2025 $ 223 $ ( 177 ) $ 3 $ ( 167 ) $ ( 2 ) $ ( 120 ) 19 Foreign Currency Adjustment (In millions) Foreign Currency Translation Adjustments Net Investment Hedges Cash Flow Hedges Defined Benefit Plans Less: AOCIL attributable to NCI AOCIL attributable to GXO As of December 31, 2024 $ ( 195 ) $ 31 $ 4 $ ( 155 ) $ 2 $ ( 313 ) Other comprehensive income (loss) before reclassifications 419 ( 270 ) ( 2 ) ( 18 ) ( 4 ) 125 Amounts reclassified to net loss — 1 — 3 — 4 Tax amounts ( 1 ) 61 1 3 — 64 Other comprehensive income (loss), net of tax 418 ( 208 ) ( 1 ) ( 12 ) ( 4 ) 193 As of June 30, 2025 $ 223 $ ( 177 ) $ 3 $ ( 167 ) $ ( 2 ) $ ( 120 ) 14. Commitments and Contingencies The Company is involved, and will continue to be involved, in numerous legal proceedings arising from the conduct of its business. These proceedings may include personal injury claims arising from the transportation and handling of goods, contractual disputes and employment-related claims, including alleged violations of wage and hour laws. The Company establishes accruals for specific legal proceedings when it is considered probable that a loss has been incurred and the amount of the loss can be reasonably estimated. The Company reviews and adjusts accruals for loss contingencies quarterly and as additional information becomes available. If a loss is not both probable and reasonably estimable, or if an exposure to a loss exists in excess of the amount accrued, the Company assesses whether there is at least a reasonable possibility that a loss, or additional loss, may have been incurred. If there is a reasonable possibility that a loss, or additional loss, may have been incurred, the Company discloses the estimate of the possible loss or range of loss if it is material and an estimate can be made, or discloses that such an estimate cannot be made. The determination as to whether a loss can reasonably be considered to be possible or probable is based on management’s assessment, together with legal counsel, regarding the ultimate outcome of the matter. Management of the Company believes that it has adequately accrued for the potential impact of loss contingencies that are probable and reasonably estimable. Management of the Company does not believe that the ultimate resolution of any matters to which the Company is presently a party will have a material adverse effect on its results of operations, financial condition or cash flows. However, the results of these matters cannot be predicted with certainty, and an unfavorable resolution of one or more of these matters could have a material adverse effect on the Company’s financial condition, results of operations or cash flows. Legal costs related to these matters are expensed as they are incurred. The Company carries liability and excess umbrella insurance policies that are deemed sufficient to cover potential legal claims arising in the normal course of conducting its operations. In the event the Company is required to satisfy a legal claim outside the scope of the coverage provided by insurance, its financial condition, results of operations or cash flows could be negatively impacted. 20