What changed in this filing

/stocks — the workspaceLOADING

Item 8. Financial Statements and Supplementary Data

2026-02-27 compared with 2025-03-04 · 934 added, 498 removed, 169 unchanged (89% of the section changed)

2 unchanged sentences

Report of Independent Registered Public Accounting Firm (PCAOB ID:

Consolidated Financial Statements

Consolidated Balance Sheets

Consolidated Statements of Operations

Consolidated Statements of Comprehensive (Loss) Income

Consolidated Statements of Stockholders’ Equity

2 unchanged sentences

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Stockholders and the Board of Directors of QXO, Inc.

Opinion on the Financial Statements

We have audited the accompanying consolidated balance sheet of QXO, Inc.

(the “Company”) as of December 31, 2025, the related consolidated statements of operations, comprehensive (loss) income, stockholders' equity, and cash flows, for the year ended December 31, 2025, and the related notes (collectively referred to as the “financial statements”).

In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2025, and the results of its operations and its cash flows for the year ended December 31, 2025, in conformity with accounting principles generally accepted in the United States of America.

Basis for Opinion

These financial statements are the responsibility of the Company’s management.

Our responsibility is to express an opinion on the Company’s financial statements based on our audit.

We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S.

federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audit in accordance with the standards of the PCAOB.

Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud.

The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting.

As part of our audit, we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company's internal control over financial reporting.

Accordingly, we express no such opinion.

Our audit included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks.

Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements.

Our audit also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements.

We believe that our audit provides a reasonable basis for our opinion.

Critical Audit Matter

The critical audit matter communicated below is a matter arising from the current-period audit of the financial statements that was communicated or required to be communicated to the audit committee and that (1) relates to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments.

The communication of critical audit matters does not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.

Customer Relationships Intangible Asset — Refer to Notes 2 and 3 to the financial statements

Critical Audit Matter Description

The Company completed the acquisition of Beacon Roofing Supply, Inc.

(“Beacon”) for $10.6 billion on April 29, 2025.

The Company accounted for the acquisition under the acquisition method of accounting for business combinations.

Accordingly, the purchase price was allocated to the assets acquired and liabilities assumed based on their respective fair values, including a customer relationship intangible asset of $3,900.6 million.

Management estimated the fair value of the customer relationship intangible asset using the multi-period excess earnings method, which is an income approach methodology.

A key assumption in the fair value measurement is the customer attrition rate (“attrition rate”), which projects the percentage of customer revenue from an existing customer base that is lost over the customer relationship intangible asset’s estimated useful life.

We identified the attrition rate assumption as a critical audit matter because of its significance to the fair value of the customer relationships intangible asset.

This required a high degree of auditor judgment and an increased extent of effort, including the need to involve our fair value and data specialists when performing audit procedures to evaluate the reasonableness of management’s selected attrition rate.

How the Critical Audit Matter Was Addressed in the Audit

Our audit procedures related to the attrition rate used in valuing the customer relationship included the following, among others:

• We evaluated management’s process for estimating the attrition rate by:

◦ Comparing historical customer retention data for Beacon to management’s assumptions.

◦ Assessing the completeness and accuracy of the underlying data used to determine the estimated attrition rate.

◦ Performing a retrospective review of the attrition rate using actual results.

• With the assistance of our fair value and data specialists, we evaluated the reasonableness of the attrition rate by:

◦ Performing sensitivity analyses to assess the impact of reasonably possible changes in the attrition rate on the calculated fair value of the customer relationship intangible asset.

◦ Developing a range of independent attrition rate estimates using both historical Beacon Roofing Supply experience and relevant industry benchmarks and comparing these to the rate selected by management.

◦ Recalculating the attrition rate and verifying the mathematical accuracy of the fair value model.

◦ Performing a benchmarking analysis within transactions conducted in the building product distribution industry.

/s/ DELOITTE & TOUCHE LLP

Tempe, Arizona

February 27, 2026

We have served as the Company’s auditor since 2025.

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Stockholders and Board of Directors of QXO, Inc.

Opinion on the Financial Statements

We have audited the accompanying consolidated balance sheets of QXO, Inc.

(the “Company”) as of December 31, 2024 and 2023, the related consolidated statements of operations, stockholders’ equity, and cash flows for each of the two years in the period ended December 31, 2024, and the related notes (collectively referred to as the “financial statements”).

In our opinion, based on our audits, the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2024 and 2023, and the results of its operations and its cash flows for each of the two years in the period ended December 31, 2024, in conformity with accounting principles generally accepted in the United States of America.

We have audited the accompanying consolidated balance sheet of QXO, Inc.

(the “Company”) as of December 31, 2024, the related consolidated statements of operations, stockholders’ equity and cash flows for the year ended December 31, 2024, and the related notes (collectively referred to as the “financial statements”).

In our opinion, based on our audit, the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2024, and the results of its operations and its cash flows for the year ended December 31, 2024, in conformity with accounting principles generally accepted in the United States of America.

Basis for Opinion

These financial statements are the responsibility of the Company’s management.

Our responsibility is to express an opinion on the Company’s financial statements based on our audits.

Our responsibility is to express an opinion on the Company’s financial statements based on our audit.

We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (“PCAOB”) and are required to be independent with respect to the Company in accordance with the U.S.

federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB.

Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud.

We conducted our audit in accordance with the standards of the PCAOB.

Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud.

The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting.

As part of our audits we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting.

As part of our audit we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company's internal control over financial reporting.

Accordingly, we express no such opinion.

Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks.

Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements.

Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements.

We believe that our audits provide a reasonable basis for our opinion.

Critical Audit Matters

Critical audit matters are matters arising from the current period audit of the financial statements that were communicated or required to be communicated to the audit committee and that:

(1) relate to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments.

We determined that there are no critical audit matters.

Our audit also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements.

We believe that our audit provides a reasonable basis for our opinion.

/s/ MARCUM LLP

We have served as the Company’s auditor since 2004.

Marlton, New Jersey

March 4, 2025

We have served as the Company’s auditor from 2004 to 2025.

AND SUBSIDIARIES

Consolidated Balance Sheets

(in thousands, except share and per share data)

(in millions, except per share amounts)

2025 December 31,

2 unchanged sentences

Accounts receivable, net

Inventories, net 1,497.3 —

Vendor rebates receivable 427.0 —

Income tax receivable 31.6 —

Prepaid expenses and other current assets 83.7 18.4

1 unchanged sentence

Property and equipment, net 688.6 0.4

Operating lease right-of-use assets 259 522

Intangible assets, net 4,024 4,919

Goodwill 5,111.3 1.2

Deferred tax assets 2,603 1,444

Other non-current assets 192 171

Intangibles, net 3,819.1 4.0

Operating lease right-of-use assets, net 689.6 0.3

Deferred income tax assets, net

Other assets, net 32.4 0.2

Total assets $ 15,887.3 $ 5,098.3

3 unchanged sentences

Accrued expenses 574.3 38.6

Deferred revenue 2,900 3,161

Long-term debt – current portion — 702

Finance lease obligations – current portion 128 154

Operating lease liabilities – current portion 188 263

Current portion of operating lease liabilities 107.5 0.2

Current portion of finance lease liabilities 49.2 0.1

Total current liabilities 1,550.0 45.1

Long-term debt net of current portion — 994

Finance lease obligations net of current portion 190 247

Operating lease liabilities net of current portion 71 259

Long-term debt, net 3,057.3 —

Deferred income tax liabilities, net

Operating lease liabilities 561.8 0.1

Finance lease liabilities 138.7 0.2

Other long-term liabilities 25.5 —

Total liabilities 6,180.5 45.4

1 unchanged sentence

Stockholders’ equity:

Preferred stock, $ 0.001 par value;

authorized 10,000,000 shares, 1,000,000 and 0 shares issued and outstanding as of December 31, 2024 and December 31, 2023, respectively

Mandatory Convertible Preferred Stock, $ 0.001 par value;

0.6 shares and 0.0 shares authorized, issued and outstanding as of December 31, 2025 and December 31, 2024, respectively

Convertible Preferred Stock, $ 0.001 par value;

authorized 10.0 shares, 1.0 shares issued and outstanding as of December 31, 2025 and December 31, 2024

Common stock, $ 0.00001 par value;

authorized 2,000,000,000 shares, 409,430,195 and 664,448 shares issued and outstanding as of December 31, 2024 and December 31, 2023, respectively 1

authorized 2,000.0 shares;

674.5 and 409.4 shares issued and outstanding as of December 31, 2025 and December 31, 2024, respectively

Additional paid-in capital 9,046.9 4,560.5

Accumulated deficit ( 6,229 ) ( 1,948 )

Retained earnings (accumulated deficit) ( 394.5 ) ( 6.2 )

Accumulated other comprehensive loss ( 2.3 ) —

Total stockholders’ equity 9,706.8 5,052.9

1 unchanged sentence

See accompanying notes to the consolidated financial statements.

________________________________________

1 Amounts have been adjusted to reflect the 8-for-1 Reverse Stock Split effective June 6, 2024.

See Note 3 - Equity for additional details.

AND SUBSIDIARIES

Consolidated Statements of Operations

(in thousands, except per share data)

(in millions, except per share amounts)

Year Ended December 31,

Software product, net $ 15,261 $ 14,111

Service and other, net 41,612 40,406

Total revenue, net 56,873 54,517

Cost of revenue:

Software product 9,434 8,513

Service and other 24,507 24,390

Total cost of revenue 33,941 32,903

Operating expenses:

Selling, general and administrative expenses 92,943 22,097

Depreciation and amortization expenses 989 828

Total operating expenses 93,932 22,925

Net sales $ 6,842.2 $ 56.9

Cost of products sold 5,269.5 33.8

Gross profit 1,572.7 23.1

Operating expense:

Selling, general and administrative 1,394.8 93.0

Depreciation 108.4 0.2

Amortization 314.7 0.9

Total operating expense 1,817.9 94.1

Loss from operations ( 245.2 ) ( 71.0 )

Other income (expense), net:

Interest income (expense), net 121,812 ( 56 )

Total other income (expense) 121,812 ( 56 )

Income (loss) before taxes 50,812 ( 1,367 )

Provision (benefit) for income taxes 22,843 ( 297 )

Net income (loss) $ 27,969 $ ( 1,070 )

Interest (expense) income, net

( 47.7 ) 121.8

Loss on debt extinguishment ( 49.7 ) —

Other income, net

(Loss) income before (benefit from) provision for income taxes ( 337.1 ) 50.8

(Benefit from) provision for income taxes ( 57.7 ) 22.8

Net (loss) income $ ( 279.4 ) $ 28.0

Loss per common share - basic and diluted (Note 7)

$ ( 0.63 ) $ ( 0.11 )

Total weighted-average common shares outstanding:

1 unchanged sentence

Diluted 613.0 204.0

(1) Results include Beacon’s operations from the date of acquisition on April 29, 2025 through December 31, 2025.

See accompanying notes to the consolidated financial statements.

________________________________________

1 Amounts have been adjusted to reflect the 8-for-1 Reverse Stock Split effective June 6, 2024.

See Note 3 - Equity for additional details.

AND SUBSIDIARIES

Consolidated Statements of Comprehensive (Loss) Income

(in millions)

Year Ended December 31,

Net (loss) income $ ( 279.4 ) $ 28.0

Other comprehensive loss:

Foreign currency translation adjustment ( 2.3 ) —

Total other comprehensive loss ( 2.3 ) —

Comprehensive (loss) income $ ( 281.7 ) $ 28.0

(1) Results include Beacon’s operations from the date of acquisition on April 29, 2025 through December 31, 2025.

See accompanying notes to the consolidated financial statements.

AND SUBSIDIARIES

Consolidated Statements of Stockholders ’ Equity (1)

(in thousands)

Preferred Stock Common Stock Additional

Capital Accumulated

Deficit Total

Stockholders’

Shares Amount Shares 1

Balance at January 1, 2023 — $ — 657 $ — $ 10,429 $ ( 878 ) $ 9,551

Common stock dividend — — — — ( 1,051 ) — ( 1,051 )

Shares issued for cashless exercise of stock options — — 7 — — — —

Share-based compensation — — — — 41 — 41

Net loss — — — — — ( 1,070 ) ( 1,070 )

Balance at December 31, 2023 — $ — 664 $ — $ 9,419 $ ( 1,948 ) $ 7,471

(in millions)

Mandatory Convertible Preferred Stock Convertible Preferred Stock

Common Stock Additional Paid-in Capital Retained Earnings (Accumulated Deficit) Accumulated Other Comprehensive Loss

Shares Amount Shares Amount Shares

Balance as of December 31, 2023

— $ — — $ — 0.7 $ — $ 9.4 $ ( 1.9 ) $ — $ 7.5

Issuance of Convertible Preferred Stock and Warrants, net of issuance costs — — 1.0 498.6 — — 483.0 — — 981.6

Issuance of common stock and pre-funded warrants, net of issuance costs — — — — 408.7 — 4,051.1 — — 4,051.1

Cash paid for fractional shares — — — — ( 45 ) — ( 45 )

Common stock dividend — — — — — — ( 17.4 ) — — ( 17.4 )

Preferred stock dividend — — — — — ( 32,250 ) ( 32,250 )

Share-based compensation — — — — 34,513 — 34,513

Net income — — — — — 27,969 27,969

Balance at December 31, 2024 1,000 $ 498,621 409,430 $ 4 $ 4,560,503 $ ( 6,229 ) $ 5,052,899

See accompanying notes to the consolidated financial statements.

Convertible Preferred Stock dividend

— — — — — — — ( 32.3 ) — ( 32.3 )

1 Amounts have been adjusted to reflect the 8-for-1 Reverse Stock Split effective June 6, 2024.

See Note 3 - Equity for additional details.

Stock-based compensation — — — — — — 34.4 — — 34.4

— — — — — — — 28.0 — 28.0

Balance as of December 31, 2024

— $ — 1.0 $ 498.6 409.4 $ — $ 4,560.5 $ ( 6.2 ) $ — $ 5,052.9

Issuance of Mandatory Convertible Preferred Stock, net of issuance costs 0.6 558.1 — — — — — — — 558.1

Mandatory Convertible Preferred Stock dividend — — — — — — — ( 18.9 ) — ( 18.9 )

Convertible Preferred Stock dividend — — — — — — — ( 90.0 ) — ( 90.0 )

Issuance of common stock, net of issuance costs — — — — 256.6 — 4,256.0 — — 4,256.0

Proceeds from stock option exercises — — — — 3.8 — 18.9 — — 18.9

Awards assumed in acquisition — — — — — — 87.5 — — 87.5

Vesting of stock-based compensation awards — — — — 4.7 — — — — —

Tax withholdings for stock-based compensation awards — — — — — — ( 20.5 ) — — ( 20.5 )

Stock-based compensation — — — — — — 144.5 — — 144.5

Other comprehensive loss

— — — — — — — — ( 2.3 ) ( 2.3 )

— — — — — — — ( 279.4 ) — ( 279.4 )

Balance as of December 31, 2025

0.6 $ 558.1 1.0 $ 498.6 674.5 $ — $ 9,046.9 $ ( 394.5 ) $ ( 2.3 ) $ 9,706.8

(1) Results include Beacon’s operations from the date of acquisition on April 29, 2025 through December 31, 2025.

See accompanying notes to the consolidated financial statements.

AND SUBSIDIARIES

Consolidated Statements of Cash Flows

(in thousands)

Cash flows from operating activities:

Net income (loss) $ 27,969 $ ( 1,070 )

Adjustments to reconcile net income (loss) to net cash provided by operating activities:

Deferred income taxes ( 1,159 ) ( 338 )

(in millions)

Year Ended December 31,

Operating Activities

Net (loss) income $ ( 279.4 ) $ 28.0

Adjustments to reconcile net (loss) income to net cash provided by operating activities:

Depreciation 108.4 0.2

Amortization of intangibles 875 672

Amortization 314.7 0.9

Stock-based compensation 144.5 34.4

Amortization of debt issuance costs 6.7 —

Loss on debt extinguishment 49.7 —

Provision for credit losses 13.8 —

Non-cash lease expense 88.0 0.3

Provision for expected losses 50 115

Share-based compensation 34,513 41

Changes in assets and liabilities:

Deferred income taxes ( 60.6 ) ( 1.1 )

Changes in operating assets and liabilities:

Accounts receivable 159.8 0.2

Inventories 287.8 —

Vendor rebates receivable ( 186.8 ) —

Income tax receivable ( 11.0 ) —

Prepaid expenses and other current assets 19.9 ( 12.2 )

Other assets ( 21 ) 16

Accounts payable 1,631 1,291

Accrued expenses 33,011 222

Deferred revenue ( 261 ) ( 618 )

Operating lease liabilities ( 263 ) ( 126 )

Accounts payable and accrued expenses ( 326.4 ) 34.4

Other assets and liabilities ( 67.7 ) ( 0.3 )

Net cash provided by operating activities 261.4 84.8

Cash flows from investing activities:

Purchase of property and equipment ( 102 ) ( 121 )

Acquisition of assets — ( 279 )

Investing Activities

Capital expenditures ( 78.2 ) ( 0.1 )

Acquisition of business, net of cash acquired ( 10,556.5 ) —

Net cash used in investing activities ( 10,630.3 ) ( 0.1 )

Cash flows from financing activities:

Financing Activities

Borrowings under revolving lines of credit 841.9 —

Payments under revolving lines of credit ( 842.0 ) —

Borrowings under term loan 2,250.0 —

Payments under term loan ( 1,400.0 ) —

Borrowings under senior notes 2,250.0 —

Payment of debt issuance costs ( 114.5 ) —

Payment of other debt — ( 1.7 )

Payments under equipment financing facilities and finance leases ( 30.3 ) ( 0.2 )

Proceeds from issuance of common stock related to equity awards 18.9 —

Proceeds from issuance of common stock, net of issuance costs 4,256.0 —

Proceeds from issuance of Mandatory Convertible Preferred Stock, net of issuance costs 558.1 —

Proceeds from issuance of Convertible Preferred Stock and warrants, net of issuance costs — 981.6

Proceeds from the issuance of common stock and pre-funded warrants, net of issuance costs — 4,051.1

Proceeds from issuance of preferred stock and warrants, net of issuance costs 981,538 —

Payment of preferred stock dividend ( 32,250 ) —

Payment of taxes related to net share settlement of equity awards ( 20.5 ) —

Payment of common-stock dividend — ( 17.4 )

Payment of long-term debt ( 1,696 ) ( 784 )

Payment for fractional shares ( 45 ) —

Payment of finance lease obligations ( 170 ) ( 215 )

Net cash provided by (used in) financing activities 4,981,080 ( 2,050 )

Net increase (decrease) in cash, cash equivalents and restricted cash 5,065,861 ( 1,866 )

Cash, cash equivalents and restricted cash, beginning of year 6,143 8,009

Cash, cash equivalents and restricted cash, end of year $ 5,072,004 $ 6,143

Cash paid during year for:

Payment of dividends on Convertible Preferred Stock ( 90.0 ) ( 32.3 )

Payment of dividends on Mandatory Convertible Preferred Stock ( 14.8 ) —

Net cash provided by financing activities 7,662.8 4,981.1

Effect of exchange rate changes on cash, cash equivalents and restricted cash ( 0.5 ) —

Net (decrease) increase in cash, cash equivalents and restricted cash ( 2,706.6 ) 5,065.8

Cash, cash equivalents and restricted cash, beginning of period 5,072.0 6.2

Cash, cash equivalents and restricted cash, end of period $ 2,365.4 $ 5,072.0

Supplemental Cash Flow Information

Cash paid during the period for:

Interest $ 138.0 $ 0.1

Income taxes $ — $ 301

Income taxes, net of refunds

(1) Results include Beacon’s operations from the date of acquisition on April 29, 2025 through December 31, 2025.

See accompanying notes to the consolidated financial statements.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 1 – DESCRIPTION OF BUSINESS

(“QXO”, “we”, “our”, or the “Company”) was formerly known as SilverSun Technologies, Inc.

(“SilverSun”).

On June 6, 2024, we changed the Company’s name from SilverSun to QXO and changed its ticker symbol on the Nasdaq Stock Market, LLC (“Nasdaq”) from SSNT to QXO, upon completing a $ 1.0 billion cash investment in SilverSun by Jacobs Private Equity II, LLC (“JPE”) and certain minority co-investors.

Refer to Note 3 - Equity for further details about the investment and related to changes to our capital structure.

AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

Description of Business

Prior to the Beacon Acquisition (as defined below), QXO, Inc.

(“QXO” or the “Company”) was primarily a technology solutions and professional services company, providing critical software applications, consulting and other professional services, including specialized programming, training and technical support to small and mid-size companies in the manufacturing, distribution and services industries.

On January 17, 2025, the Company transferred the listing of its common stock, par value $ 0.00001 per share (the “common stock”), from Nasdaq to the New York Stock Exchange (the “NYSE”).

1 unchanged sentence

The Company’s common stock began trading on the NYSE on January 17, 2025.

QXO is a technology solutions and professional services company that helps businesses manage and monetize their enterprise assets.

We do this through our legacy operations, which provide critical software applications, consulting and other professional services, including specialized programming, training, and technical support.

Our customers are primarily small and mid-size companies in the manufacturing, distribution and services industries.

Our strategy is to build QXO into a tech-forward leader in the $800 billion building products distribution industry with the goal of generating outsized stockholder value through accretive acquisitions and organic growth, including greenfield openings and operational transformation of acquired businesses.

We are executing our strategy toward a target of tens of billions of dollars in annual revenue in the next decade.

NOTE 2 – BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES

Beacon Acquisition

On March 20, 2025, QXO entered into an Agreement and Plan of Merger (the “Merger Agreement”) with Beacon Roofing Supply, Inc., a Delaware corporation (“Beacon”), and Queen MergerCo, Inc., a Delaware corporation and wholly owned subsidiary of QXO (“Merger Sub”), pursuant to which QXO agreed to acquire Beacon for a purchase price of $ 124.35 per share of common stock (the “Merger Consideration”) of Beacon (the “Beacon Acquisition”).

On April 29, 2025 (the “Closing Date”), pursuant to the Merger Agreement, Merger Sub merged with and into Beacon, with Beacon remaining as the surviving entity and being renamed QXO Building Products, Inc.

(“QXO Building Products”), and the Company completed its acquisition of Beacon in a transaction that valued Beacon at $ 10.6 billion.

As a result of the Beacon Acquisition, QXO has transitioned to a building products distribution company and is the largest publicly-traded distributor of roofing, waterproofing and complementary building products in North America.

The Company plans to become the tech-enabled leader in the $800 billion building products distribution industry and generate outsized value for shareholders.

The Company is executing its strategy toward a target of $ 50 billion in annual revenues within the next decade through accretive acquisitions and organic growth.

The Company serves customers in all 50 states throughout the United States (the “U.S.”) and seven provinces in Canada.

The Company’s material subsidiary is QXO Building Products.

Basis of Presentation and Significant Accounting Policies

Basis of Presentation and Principles of Consolidation

The accompanying consolidated financial statements contain all adjustments necessary to present fairly the financial position of the Company as of December 31, 2024, the results of operations for the year ended December 31, 2024 and 2023 and cash flows for the years ended December 31, 2024 and 2023 in accordance with accounting principles generally accepted in the United States (“GAAP”).

All significant inter-company transactions and accounts have been eliminated in consolidation.

The accompanying consolidated financial statements contain all adjustments necessary to present fairly the financial position of the Company as of December 31, 2025 and December 31, 2024, the results of operations for the years ended December 31, 2025 and 2024, and cash flows for the years ended December 31, 2025 and 2024 in accordance with accounting principles generally accepted in the U.S.

All inter-company transactions and accounts have been eliminated in consolidation.

The Beacon Acquisition has been accounted for using the acquisition method of accounting in accordance with Accounting Standards Codification (“ASC”) Topic 805 (“ASC 805”), Business Combinations.

As the legacy Beacon business now comprises substantially all of the Company and has significantly larger operations compared to the Company prior to the Beacon Acquisition, QXO determined that Beacon is the predecessor entity (“predecessor”) for financial reporting purposes.

The Company also determined that the Beacon Acquisition represented a fundamental change in QXO’s operations.

Reclassifications

The Company has reclassified certain prior period amounts to conform with the current period presentation in the consolidated balance sheets related to unbilled services and deferred charges which are now presented within prepaid expenses and other current assets.

Additionally, the Company has reclassified certain prior period amounts to conform with the current period presentation in the consolidated statements of operations related to selling and marketing expenses, general and administrative expenses, share-based compensation, and other expense which is now presented within selling, general, and administrative expenses.

As further discussed in Note 3 – Equity , all per share amounts and common share amounts have been adjusted on a retroactive basis to reflect the Reverse Stock Split (as defined below).

The Company has reclassified certain prior period amounts to conform with the current period presentation in the consolidated statements of operations related to revenue, cost of sales, depreciation and amortization, which are now presented to conform with the predecessor’s historical presentation.

The Company has also reclassified certain prior period amounts to conform with the current period presentation in the consolidated balance sheets related to deferred revenue, which is now presented within accrued expenses.

Use of Estimates

The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of these consolidated financial statements, as well as the reported amounts of revenue and expenses during the reporting period.

Significant items subject to such estimates include inventories, purchase price allocations, income taxes and vendor rebates receivable.

Actual results could differ from those estimates.

Business Combinations

The Company records acquisitions resulting in the consolidation of a business using the acquisition method of accounting.

Under this method, the Company records the assets acquired, including intangible assets that can be identified, and liabilities assumed based on their estimated fair values at the date of acquisition.

Various Level 3 fair value assumptions are used in the determination of these estimated fair values, including items such as sales growth rates, cost synergies, customer attrition rates, discount rates, and other prospective financial information.

The purchase price in excess of the fair value of the assets acquired and liabilities assumed is recorded as goodwill.

Estimates associated with the accounting for acquisitions may change as additional information becomes available regarding the assets acquired and liabilities assumed.

Management believes these estimates are based on reasonable assumptions, however they are inherently uncertain and unpredictable, therefore actual results may differ.

During the measurement period, which is up to one year from the acquisition date, the Company may adjust provisional amounts that were recognized at the acquisition date to reflect new information obtained about facts and circumstances that existed as of the acquisition date.

Transaction costs associated with acquisitions are expensed as incurred and are included as a component of selling, general and administrative expense within the consolidated statements of operations.

Cash, Cash Equivalents and Restricted Cash

The Company considers all highly liquid investments purchased with original maturities of three months or less to be cash equivalents.

The Company maintains cash balances across a diversified portfolio of global financial institutions that exceed FDIC insured limits.

The Company has not experienced any losses in such accounts.

Amounts included in restricted cash represent those required to be set aside by a contractual agreement as collateral for the Company’s credit card program.

The following table provides a reconciliation of cash and cash equivalents:

(in thousands) December 31, 2024 December 31, 2023

The Company maintains cash balances across a diversified portfolio of global financial institutions that exceed Federal Deposit Insurance Corporation insured limits.

The Company believes these global financial institutions to be financially sound with minimal credit risk and the Company has not experienced any losses in such accounts.

Amounts included in restricted cash primarily represent those required to be set aside by a contractual agreement as collateral for the Company’s credit card program.

The following table provides a reconciliation of cash, cash equivalents and restricted cash:

(in millions) December 31,

2025 December 31,

Cash and cash equivalents $ 2,361.6 $ 5,068.5

1 unchanged sentence

Total cash, cash equivalents and restricted cash $ 2,365.4 $ 5,072.0

Accounts Receivable and Allowance for Credit Losses

Accounts receivable consist primarily of invoices for maintenance and professional services.

Full payment for software ordered by customers is primarily due in advance of ordering from the software supplier.

Payments for maintenance and support plan renewals are due before the beginning of the maintenance period.

Terms under our professional service agreements are generally 50% due in advance and the balance on completion of the services.

The Company maintains an allowance for bad debt estimated by considering a number of factors, including the length of time the amounts are past due, the Company’s previous loss history and the customer’s current ability to pay its obligations.

Accounts are written off against the allowance when deemed uncollectible.

Recoveries of receivables previously written off are recorded as a reduction of bad debt expense when received.

Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 326-20-30-2, Financial Instruments – Credit Losses, requiring a reporting entity to use a pooled approach to estimate expected credit losses for financial assets with similar risk characteristics.

If a financial asset does not share similar risk characteristics with other financial assets held by the reporting entity, the allowance for credit losses should be determined on an individual basis.

Similar risk characteristics for trade receivables may include customer credit rating, trade receivable aging category (e.g., 30-90 days past due), industry, geographical location of the customer, product line, and other factors that may influence the likelihood of the customer not being able to pay for the goods or services.

The Company utilizes this individual approach for its trade receivables and unbilled services as each customer does not share similar risks.

Trade receivables and unbilled services with customers are financial assets analyzed by the Company under the expected credit loss model.

To measure expected credit losses, trade receivables are grouped based on shared risk characteristics (i.e., the relevant industry sector and customer's geographical location) and days past due (i.e., delinquency status), while considering the following, if appropriate:

• Customers in the same geographical location share similar risk characteristics associated with the macroeconomic environment of their region.

• The expected credit loss rate is likely to increase as receivables move to older aging buckets.

The Company used the following aging categories to estimate the risk of delinquency status:

(i) 0 days past due;

(ii) 1-30 days past due;

(iii) 31-60 days past due;

(iv) 61-90 days past due;

and (v) over 90 days past due.

The following table represents the roll-forward of the allowance for expected credit losses:

(in thousands) December 31, 2024 December 31, 2023

Balance at beginning of year $ 510 $ 490

Current period provision for expected losses 50 115

Write-offs ( 13 ) ( 95 )

Balance at end of year $ 547 $ 510

Prepaid Expenses and Other Current Assets

The following table presents the components of prepaid expenses and other current assets:

(in thousands) December 31, 2024 December 31, 2023

Interest receivable $ 11,051 $ —

Restricted cash 3,500 —

Prepaid expenses and other current assets 3,788 2,684

Total prepaid expenses and other current assets $ 18,339 $ 2,684

Accounts Receivable

The Company records accounts receivable at the contractual amount and records an allowance for credit losses for the amount the Company estimates it may not collect.

In determining the allowance for credit losses, the Company considers historical collection experience, the age of the accounts receivable balances, the credit quality and risk of its customers, any specific customer collection issues, current economic conditions, and other factors that may impact customers’ ability to pay.

The Company also considers reasonable and supportable forecasts of future economic conditions and their expected impact on customer collections in determining the allowance for credit losses.

Accounts receivable balances are written off once the receivables are no longer deemed collectible.

For the year ended December 31, 2025, no single customer accounted for more than 1% of our net sales.

The following table represents the roll-forward of the allowance for credit losses for the year ended December 31, 2025 and the year ended December 31, 2024:

(in millions) December 31,

2025 December 31,

Balance at beginning of period $ 0.5 $ 0.5

Current period provision for expected credit losses

Balance at end of period $ 13.0 $ 0.5

The Company’s inventories primarily represent finished goods, consisting of products available for sale.

Inventories acquired in connection with acquisitions are recorded at fair value as of the date of the acquisition.

The Company’s inventories not acquired in connection with acquisitions are accounted for using the weighted-average cost method and valued at the lower of cost or net realizable value.

Inventory costs consist of product and inbound shipping and handling costs.

Inventory valuation requires the Company to make judgments, based on currently available information, about the likely method of disposition, such as through sales to individual customers or returns to product vendors.

Vendor Rebates

The Company’s arrangements with vendors typically provide for rebates after it makes a special purchase and/or monthly, quarterly and/or annual rebates of a specified amount of consideration payable when a number of measures have been achieved.

Annual rebates are generally related to a specified cumulative level of purchases on a calendar-year basis.

The Company accounts for such rebates as a reduction of the inventory value until the product is sold, at which time such rebates reduce cost of products sold in the consolidated statements of operations.

Throughout the year, the Company estimates the amount of the periodic rebates based upon the expected level of purchases.

The Company continually revises these estimates to reflect actual rebates earned based on actual purchase levels.

Property and Equipment

Property and equipment acquired in connection with acquisitions are recorded at fair value as of the date of the acquisition and depreciated utilizing the straight-line method over the estimated remaining useful lives.

All other additions are recorded at cost, and depreciation is computed using the straight-line method.

The Company reviews the estimated useful lives of its fixed assets on an ongoing basis.

The estimated useful lives of property and equipment are principally as follows:

Buildings 40 years

Equipment 3 to 7 years

Furniture and fixtures 7 years

Software 3 to 5 years

Finance lease assets and leasehold improvements Shorter of the estimated useful life or lease term, considering renewal options expected to be exercised.

The following is a summary of property and equipment, net:

2025 December 31,

(in millions)

Equipment $ 259.5 $ 4.0

Finance lease assets 216.9 —

Leasehold improvements 124.5 0.1

Furniture and fixtures 29.7 0.2

Software 31.2 —

Land and buildings 59.6 —

Construction in progress 55.1 —

Total property and equipment 776.5 4.3

Accumulated depreciation ( 87.9 ) ( 3.9 )

Total property and equipment, net $ 688.6 $ 0.4

The Company accounts for its leases in accordance with ASC 842, Leases.

The Company leases office space and equipment.

The Company concludes on whether an arrangement is a lease at inception.

This determination as to whether an arrangement contains a lease is based on an assessment as to whether a contract conveys the right to the Company to control the use of identified property, plant or equipment for period of time in exchange for consideration.

Leases with an initial term of 12 months or less are not recorded on the balance sheet.

The Company recognizes these lease expenses on a straight-line basis over the lease term.

The Company has assessed its contracts and concluded that its leases consist of finance and operating leases.

The Company mostly operates in leased branch facilities and corporate offices, which are accounted for as operating leases.

The leases typically provide for a base rent plus real estate taxes and insurance.

Certain of the leases provide for escalating rents over the lives of the leases, and rent expense is recognized over the terms of those leases on a straight-line basis.

In addition, the Company leases equipment, such as trucks and forklifts.

Equipment leases are accounted for as either operating or finance leases.

The Company determines whether an arrangement is a lease at inception.

The determination as to whether an arrangement contains a lease is based on an assessment as to whether a contract conveys the right to the Company to control the use of identified property or equipment for a period of time in exchange for consideration.

Operating leases are included in operating lease right-of-use (“ROU”) assets, current portion of operating lease liabilities, and operating lease liabilities in the Company’s consolidated balance sheets.

Finance leases are included in property and equipment, net, current portion of financial lease liabilities, and finance lease liabilities in the Company’s consolidated balance sheets.

ROU assets represent the Company’s right to use an underlying asset for the lease term and lease liabilities represent the Company’s obligation to make lease payments arising from the lease.

Operating lease ROU assets and liabilities are recognized at commencement date based on the present value of lease payments over the lease term.

As most of the Company’s leases do not provide an implicit rate, the Company determines an incremental borrowing rate based on the information available at commencement date in determining the present value of lease payments.

Operating lease ROU assets and liabilities are recognized at the lease commencement date based on the present value of lease payments over the lease term.

As most of the Company’s leases do not provide an implicit rate, the Company determines an incremental borrowing rate based on the information available at the commencement date in determining the present value of lease payments.

The incremental borrowing rate represents a significant judgment that is based on an analysis of the Company’s credit rating, country risk, treasury and corporate bond yields, as well as comparison to the Company’s borrowing rate on its most recent loan.

The Company uses the implicit rate when readily determinable.

The operating lease ROU asset also includes any lease payments made and excludes lease incentives.

Lease expense for lease payments is recognized on a straight-line basis over the lease term.

The Company has lease agreements with lease and non-lease components, which are generally accounted for separately.

The Company finances purchases of hardware and computer equipment through finance lease agreements.

Finance lease liabilities are recognized based on the present value of the future minimum lease payments over the lease term at commencement date.

Goodwill is the excess of acquisition cost of an acquired entity over the fair value of the identifiable net assets acquired.

Goodwill is not amortized but tested for impairment annually or whenever indicators of impairment exist.

These indicators may include a significant change in the business climate, legal factors, operating performance indicators, competition, sale or disposition of a significant portion of the business or other factors.

The Company completed its impairment analysis as of December 31, 2024.

No impairment losses were identified or recorded for the years ended December 31, 2024 and 2023.

Definite Lived Intangible Assets and Long-lived Assets

Purchased intangible assets are recorded at fair value using an independent valuation at the date of acquisition and are amortized over the useful lives of the asset using the straight-line amortization method.

The Company assesses potential impairment of its intangible assets and other long-lived assets when there is evidence that recent events or changes in circumstances have made recovery of an asset’s carrying value unlikely.

Factors the Company considers important, which may cause impairment include, among others, significant changes in the manner of use of the acquired asset, negative industry or economic trends, and significant underperformance relative to historical or projected operating results.

No impairment losses were identified and recorded for the years ended December 31, 2024 and 2023, respectively.

The operating lease ROU assets also include any prepaid lease payments and lease incentives.

The Company’s lease terms include periods under options to extend or terminate the lease when it is reasonably certain that those options will be exercised.

The Company generally uses the base, non-cancelable lease term when determining the lease assets and liabilities.

Operating lease expense is recognized on a straight-line basis over the lease term.

For finance leases, the lease asset is depreciated over the lease term and interest expense is recorded using the effective interest method.

The Company’s lease agreements generally contain lease and non-lease components.

Non-lease components primarily include payments for maintenance and utilities.

The Company has elected to combine fixed payments for non-lease components with lease payments and account for them together as a single lease component, which increases the lease assets and liabilities.

Payments under the Company’s lease agreements are primarily fixed.

However, certain lease agreements contain variable payments, which are expensed as incurred and are not included in the operating lease assets and liabilities.

These amounts include payments affected by the Consumer Price Index and reimbursements to landlords for items such as property insurance and common area costs.

The Company’s lease agreements do not contain any material residual value guarantees or material restrictive covenants.

On an annual basis and at interim periods when circumstances require, the Company tests the recoverability of its goodwill and indefinite-lived intangible assets and reviews for indicators of impairment.

Examples of such indicators include a significant change in the business climate, legal factors, operating performance indicators, competition, sale or disposition of a significant portion of the business or other factors.

The following table sets forth the change in the carrying amount of goodwill during the year ended December 31, 2025:

(in millions)

Balance at beginning of period $ 1.2

Acquisitions 5,111.2

Translation and other adjustments ( 1.1 )

Balance at end of period $ 5,111.3

Intangible Assets

The Company amortizes certain identifiable intangible assets that have finite lives, currently consisting of customer relationships and trade names.

These amortizable intangible assets are amortized over the useful lives of the asset using the straight-line amortization method.

Amortizable intangible assets are tested for impairment, when deemed necessary, based on undiscounted cash flows and, if impaired, are written down to fair value based on either discounted cash flows or appraised values.

The following table summarizes intangible assets by category:

As of Weighted-Average Remaining Life (1)

(in millions, except time periods)

2025 December 31,

Amortizable intangible assets:

Customer relationships and other

$ 3,908.7 $ 9.4 9.3

Total amortizable intangible assets

4,138.6 9.4 9.0

Accumulated amortization ( 320.2 ) ( 5.4 )

Total amortizable intangible assets, net

Indefinite-lived domain names

Total intangibles, net $ 3,819.1 $ 4.0

(1) As of December 31, 2025.

The following table summarizes the estimated future amortization expense for intangible assets for each of the next five years ending December 31 and thereafter:

(in millions)

Thereafter 1,687.4

Total future amortization expense $ 3,818.4

Accrued Expenses

The following table presents the components of accrued expenses:

(in thousands) December 31, 2024 December 31, 2023

Accrued payroll and benefits $ 8,142 $ 1,910

Accrued income taxes 24,002 —

Accrued other 3,548 771

(in millions) December 31,

2025 December 31,

Inventory $ 170.0 $ —

Selling, general and administrative 146.8 —

Customer rebates 148.4 —

Payroll and employee benefit costs 66.5 8.1

Interest expense 27.1 —

Income taxes — 24.0

Other 15.5 6.5

Total accrued expenses $ 574.3 $ 38.6

Asset Retirement Obligations

A liability for an asset retirement obligation is recorded in the period in which it is incurred.

When an asset retirement obligation liability is initially recorded, the Company capitalizes the cost by increasing the carrying amount of the related long-lived asset.

For each subsequent period, the liability is increased for accretion expense and the capitalized cost is depreciated over the useful life of the related asset.

The Company recognized asset retirement obligations in connection with the Beacon Acquisition.

As of December 31, 2025, the carrying amount of the Company’s asset retirement obligations was $ 25.5 million, which is included in other long-term liabilities on the consolidated balance sheets.

Financial Instruments

6 unchanged sentences

The fair value hierarchy gives the lowest priority to Level 3 inputs.

The Company’s current financial assets and liabilities approximate fair value due to their short-term nature and include cash and cash equivalents, accounts receivable, accounts payable, and accrued liabilities.

Property and Equipment

The following is a summary of property and equipment, net:

(in thousands) December 31, 2024 December 31, 2023

Leasehold improvements $ 99 $ 166

Equipment, furniture, and fixtures 4,198 3,943

Property and equipment 4,297 4,109

Accumulated depreciation and amortization ( 3,852 ) ( 3,606 )

Property and equipment, net $ 445 $ 503

Depreciation expense related to these assets for the years ended December 31, 2024 and 2023 was $ 246,900 and $ 328,900 , respectively.

Revenue Recognition

The Company has elected the significant financing component practical expedient in accordance with ASC 606, Revenue from Contracts with Customers.

In determining the transaction price, the Company does not adjust the promised amount of consideration for the effects of a significant financing component as the Company expects, at contract inception, that the period between when the entity transfers a promised good or service to a customer and when the customer pays for that good or service will be one year or less.

The Company determines revenue recognition through the following five steps:

• Identify the contract with a customer;

• Identify the performance obligations in the contract;

• Determine the transaction price;

• Allocate the transaction price to the performance obligation in the contract;

• Recognize revenue when or as the entity satisfies a performance obligation

Software product revenue is recognized when the product is delivered to the customer and the Company’s performance obligation is fulfilled.

Service revenue is recognized when the professional consulting, maintenance or other ancillary services are provided to the customer.

Most of our service revenue is based on time arrangements which require the client to pay based on the number of hours worked at agreed-upon rates.

The Company recognizes revenues for these arrangements based on hours incurred and contracted rates utilizing a right-to-invoice practical expedient because we have a right to consideration for services completed to date.

For all performance obligations related to contracts with a duration for less than one year, the Company has elected to apply the optional exemption provided in ASC 606 and, therefore, is not required to disclose the aggregate amount of transaction price allocated to performance obligations that are unsatisfied or partially satisfied at the end of the reporting period.

With respect to professional, maintenance, and ancillary services revenue that are included in deferred revenue, these revenues are earned and recognized over the contractual or stated period, which generally ranges three to twelve months.

Deferred revenue also includes deposits for future consulting, which are recognized when earned and billed to customer.

Maintenance and subscription revenue is recognized on a gross basis when the Company primarily acts as the principal in these transactions.

Maintenance and subscription revenue is recognized on a net basis when the Company primarily acts as an agent in a transaction.

Shipping and handling costs charged to customers are classified as revenue, and the shipping and handling costs incurred are included in cost of revenues.

Share-Based Compensation

The Company recognizes share-based compensation expense based on the equity award’s grant date fair value.

For grants of restricted stock units (“RSUs”) subject to service-based vesting conditions, the fair value is established based on the market price of the common stock on the date of the grant.

The Company’s current financial assets and liabilities approximate fair value due to their short-term nature and include cash and cash equivalents, accounts receivable, vendor rebates receivable, income tax receivable, prepaid expenses and other current assets, accounts payable and accrued liabilities.

Net sales represent the consideration the Company expects to be entitled to in exchange for transferring products to customers.

Performance obligations are satisfied at a point in time, and net sales are recognized when control of the product transfers to the customer, which occurs when the customer accepts the delivery of our product or takes possession of our product with rights and rewards of ownership.

Substantially all of the Company’s contracts have a single performance obligation—to deliver products—and are short-term in nature.

The Company does not provide extended payment terms, and payment is due shortly after control transfers.

The Company generally does not require prepayments;

however, to the extent customers make payments in advance of delivery, the Company records a liability.

Total customer advances as of December 31, 2025 was $ 20.1 million, and are expected to be recognized as revenue in the following year due to the short-term nature of the contracts.

There were no customer advances as of December 31, 2024.

Net sales are presented net of variable consideration, including estimated product returns, customer sales incentives (including volume rebates), and early payment discounts taken.

The Company estimates product returns based on historical return rates and records accrued sales returns and defers the related cost of products sold.

Total accrued sales returns as of December 31, 2025 was $ 26.6 million and total cost of products sold deferred was $ 20.4 million.

There were no accrued sales returns or cost of products sold deferred as of December 31, 2024.

Provisions for early payment discounts are accrued in the same period in which the sale occurs based on historical experience.

Commissions paid to internal sales teams to obtain contracts are expensed as incurred because the related contracts have a duration of one year or less.

Sales taxes collected from customers and remitted to governmental authorities are excluded from net sales.

The Company offers sales incentives to customers, primarily volume rebates based on achieving specified sales levels.

These volume rebates are not in exchange for a distinct good or service and therefore reduce net sales when the related revenue is recognized.

The Company estimates volume rebate accruals based on contract terms, historical experience, and performance levels.

Total accrued sales incentives as of December 31, 2025 was $ 148.4 million.

There were no accrued sales incentives as of December 31, 2024.

Shipping and handling amounts billed to customers are included in net sales.

Related shipping and handling costs are accounted for as fulfillment activities and are recognized in cost of products sold when control of the products transfers to the customer.

Customer advances, sales returns, and sales incentives are included in accrued expenses, early payment discounts are included in accounts receivable, net, and cost of products sold deferred are included in prepaid and other current assets in the consolidated balance sheets.

Stock-Based Compensation

The Company recognizes stock-based compensation expense based on the equity award’s grant date fair value.

For grants of restricted stock units (“RSUs”) subject to service-based vesting conditions, the fair value is established based on the market price of the Company’s common stock on the date of the grant.

For grants of performance-based restricted stock units (“PRSUs”) subject to market-based vesting conditions, the fair value is established using a Monte Carlo simulation lattice model.

The determination of the fair value of share-based awards is affected by the Company’s stock price and a number of assumptions, including volatility, performance period, risk-free interest rate and expected dividends.

The determination of the fair value of stock-based awards is affected by the Company’s stock price and a number of assumptions, including volatility, performance period, risk-free interest rate and expected dividends.

The Company accounts for forfeitures as they occur.

The grant date fair value of each RSU is amortized over the requisite service period.

Advertising and Marketing

Advertising and marketing expenses consist of advertising and payroll related expenses for personnel engaged in marketing, business development and selling activities.

These costs are expensed as incurred.

Interest Income (Expense), net

The following table presents the components of interest income (expense), net:

The grant date fair value of each award is amortized over the requisite service period.

Advertising Costs

Advertising costs are expensed as incurred.

Interest (Expense) Income, Net

The following table presents the components of interest (expense) income, net:

Year Ended December 31,

(in thousands) 2024 2023

(in millions) 2025 2024

Interest income $ 125.8 $ 121.9

Interest expense ( 173.5 ) ( 0.1 )

Interest income (expense), net $ 121,812 $ ( 56 )

The Company accounts for income taxes using the asset and liability method.

Deferred tax assets are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases and operating loss and tax credit carryforwards.

Deferred income tax assets and liabilities are measured using the currently enacted tax rates that apply to taxable income in effect for the years in which those tax assets and liabilities are expected to be realized or settled.

The Company regularly assesses the likelihood that its deferred income tax assets will be realized.

To the extent that the Company believes any amounts are not more likely than not to be realized, a valuation allowance is recorded to reduce the deferred income tax assets.

The Company recognizes the effect of income tax positions only if those positions are more likely than not of being sustained.

Recognized income tax positions are measured at the largest amount that is greater than 50% likely of being realized.

Changes in recognition or measurement are reflected in the period in which the change in judgment occurs.

The Company recognizes interest and penalties related to income tax matters as income tax expense.

During the years ended December 31, 2024 and 2023 the Company did not incur any expense related to interest or penalties for income tax matters, and no such amounts were accrued as of December 31, 2024 and 2023.

Deferred Revenue

Deferred revenue consists of maintenance on proprietary products (contract liabilities), customer telephone support services (contract liabilities) and deposits for future consulting services that will be earned as such services are performed over the contractual or stated period, which generally ranges from three to twelve months.

Recent Authoritative Pronouncements

Recently Adopted Accounting Pronouncements

In November 2023, the FASB issued Accounting Standards Update (ASU) 2023-07, Segment Reporting (Topic 280):

Improvements to Reportable Segment Disclosures.

The amendments in the ASU increase reportable segment disclosure requirements primarily through enhanced disclosures for significant segment expenses.

In addition, the amendments enhance interim disclosure requirements, clarify circumstances in which an entity can disclose multiple segment measures of profit and loss, and provide new segment disclosure requirements for entities with a single reportable segment, among other disclosure requirements.

This update became effective beginning with the Company’s 2024 fiscal year annual reporting period.

The impact is limited to financial statement disclosures.

See Note 13 – Segment Information .

Recently Issued Accounting Pronouncements

In November 2024, the FASB issued ASU 2024-03, Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosure (Subtopic 220-40):

Disaggregation of Income Statement Expense, which requires disclosure in the notes to the financial statements of specified information about certain costs and expenses.

The amendments are effective for the fiscal years beginning after December 15, 2026, and for interim periods within the fiscal years beginning after December 15, 2027.

Early adoption is permitted.

The amendments should be applied either prospectively to financial statements issued for reporting periods after the effective date of this ASU or retrospectively to any or all prior periods presented in the financial statements.

The Company is currently evaluating the new guidance to determine the impact it may have on its consolidated financial statements and related disclosure.

In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740):

Improvements to Income Tax Disclosures , which requires disaggregated information about a reporting entity’s effective tax rate reconciliation, as well as information related to income taxes paid to enhance the transparency and decision usefulness of income tax disclosures.

This ASU will be effective beginning with the Company’s 2025 annual reporting period.

The Company is currently evaluating the timing and impacts of adoption of this ASU.

In July 2023, the FASB issued ASU 2023-03, Presentation of Financial Statements (Topic 205), Income Statement—Reporting Comprehensive Income (Topic 220), Distinguishing Liabilities from Equity (Topic 480), Equity (Topic 505), and Compensation—Stock Compensation (Topic 718):

Amendments to SEC Paragraphs Pursuant to SEC Staff Accounting Bulletin No.

120, SEC Staff Announcement at the March 24, 2022 EITF Meeting, and Staff Accounting Bulletin Topic 6.B, Accounting Series Release 280—General Revision of Regulation S-X:

Income or Loss Applicable to Common Stock.

This update requires the:

i) disclosure and presentation of income or loss related to common stock transactions on the face of the income statement, ii) modification of the existing classification and measurement of redeemable preferred shares and redeemable equity-classified shares, and iii) modification of accounting treatment for stock-based compensation.

The FASB has not set an effective date for ASU 2023-03 and early adoption is permitted.

The Company is currently evaluating the impact of the provisions of ASU 2023-03 on its consolidated financial statement disclosures.

NOTE 3 – EQUITY

Investment Agreement

Interest (expense) income, net

$ ( 47.7 ) $ 121.8

The Company accounts for income taxes using the liability method, which requires the recognition of a current tax liability or asset for current taxes payable or refundable and a deferred tax liability or asset for the estimated future tax effects of temporary differences between the financial statement and tax reporting bases of assets and liabilities to the extent that they are realizable.

Deferred tax expense (benefit) results from the net change in deferred tax assets and liabilities during the year.

ASC 740 prescribes a recognition threshold and measurement attribute for the financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return.

Based on this guidance, the Company analyzes its filing positions in all of the federal, state, and foreign jurisdictions where it is required to file income tax returns, as well as all open tax years in these jurisdictions.

Tax benefits from uncertain tax positions are recognized if it is more likely than not that the position is sustainable based solely on its technical merits.

The Company’s accounting policy is to recognize any interest and penalties related to uncertain tax positions in (benefit from) provision for income taxes in the consolidated statements of operations.

Recent Accounting Pronouncements — Adopted

In December 2023, the Financial Accounting Standards Board (“FASB”) issued ASU 2023-09, “Improvements to Income Tax Disclosures,” a final standard on improvements to income tax disclosures.

The standard requires disaggregated information about a registrant's effective tax rate reconciliation as well as information on income taxes paid.

This standard should be applied prospectively, with retrospective application permitted.

The standard is effective for fiscal years beginning after December 15, 2024, with early adoption permitted.

The Company adopted this standard on December 31, 2025 using the prospective method of adoption.

The Company analyzed ASU 2023-09 and the impacts on the Company’s effective tax rate table and income taxes paid table in Note 12.

The Company adjusted its effective tax rate table for the year ended December 31, 2025 to align with the increased information requirements and required descriptions.

Due to the Company’s minimal foreign tax footprint, no jurisdictions were required to be detailed out separately in the effective tax rate table.

Additionally, the Company provided a table of income taxes paid, net of refunds, for the year ended December 31, 2025 in Note 12.

The significant federal, state, and foreign jurisdictions were determined based on a threshold of 5% of total income taxes paid, net of refunds.

Recent Accounting Pronouncements — 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.” The standard requires disclosure of disaggregated information about certain financial statement expense line items presented on the consolidated statements of operations in the notes to the financial statements on an interim and annual basis.

The standard can be applied either prospectively or retrospectively and is effective for fiscal years beginning after December 15, 2026, and interim periods within fiscal years beginning after December 15, 2027, with early adoption permitted.

The Company is currently evaluating the impact of this standard on its consolidated financial statements and related disclosures.

In July 2025, the FASB issued ASU 2025-05, “Financial Instruments – Credit Losses (Topic 326):

Measurement of Credit Losses for Accounts Receivable and Contract Assets”.

The standard provides a practical expedient to assume that conditions as of the balance sheet date remain unchanged over the life of the asset when estimating expected credit losses for current accounts receivable and current contract assets arising from transactions accounted for under ASC Topic 606.

This standard should be applied prospectively and is effective for fiscal years beginning after December 15, 2025, and interim periods within those fiscal years, with early adoption permitted.

The Company is currently evaluating the impact of this standard on its consolidated financial statements and related 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 standard modernizes the recognition and disclosure framework for internal-use software costs, removing all references to software development stages and introducing a more judgment-based approach.

This standard can be applied either prospectively, retrospectively, or utilizing a modified transition approach and is effective for fiscal years beginning after December 15, 2027, and interim periods within those fiscal years, with early adoption permitted.

The Company is currently evaluating the impact of this standard on its consolidated financial statements and related disclosures.

Beacon Roofing Supply, Inc.

On March 20, 2025, QXO entered into a Merger Agreement with Beacon and Merger Sub, pursuant to which QXO agreed to acquire Beacon for a purchase price of $ 124.35 per share of common stock of Beacon.

On the Closing Date, pursuant to the Merger Agreement, Merger Sub merged with and into Beacon, with Beacon remaining as the surviving entity and being renamed QXO Building Products, Inc., and the Company completed its acquisition of Beacon.

As a result of the Beacon Acquisition, QXO has transitioned to a building products distribution company and is the largest publicly traded distributor of roofing, waterproofing and complementary building products in North America.

The Beacon Acquisition was a key milestone in the Company’s plan to become to tech-enabled leader in the $800 billion building products distribution industry and generate outsized value for shareholders.

The Company was determined to be the accounting acquirer in the Beacon Acquisition in accordance with ASC 805 primarily due to having board and common share voting control over the combined company, and its managers, including the chief executive officer, directing the activities of the newly merged entity.

Furthermore, the Beacon Acquisition was initiated by QXO, and the Company retained the QXO name subsequent to the Beacon Acquisition.

The historical financial statements of QXO prior to April 29, 2025 are reflected in this Annual Report as QXO’s historical financial statements.

Accordingly, the financial results of QXO as of and for any periods prior to April 29, 2025 do not include the financial results of Beacon and current and future results will not be comparable to historical results.

Additionally, in considering the foregoing principles of predecessor determination and in light of the Company’s specific facts and circumstances, the Company determined that Beacon is the predecessor entity for financial reporting purposes.

Purchase Price

The following table summarizes the components of the preliminary aggregate purchase consideration paid to acquire Beacon and is subject to adjustments:

(in millions)

Cash paid for outstanding Beacon common stock (1)

Converted Beacon RSUs and options attributable to pre-combination service (2)

Payment of Beacon debt, including accrued interest (3)

Preliminary aggregate acquisition consideration

cash acquired

Preliminary aggregate acquisition consideration, net of cash acquired

(1) The cash component of the preliminary aggregate acquisition consideration represents 62.2 million shares of outstanding common stock of Beacon multiplied by the $ 124.35 per share cash portion of the acquisition consideration.

(2) This amount represents the value of outstanding equity awards held by Beacon employees that were converted into replacement QXO instruments with identical terms.

The conversion was based on the volume-weighted average trading price of QXO common stock for the five consecutive trading days ending on the trading day immediately preceding the Closing Date.

The fair value of replacement equity-based awards attributable to pre-acquisition service was recorded as part of the consideration transferred.

This amount also includes cash paid by QXO of $ 16.0 million to settle RSUs for non-employee members of the board of directors of Beacon, which were accelerated in full, cancelled and paid in cash for $ 124.35 per share.

See Note 8 for additional information.

(3) This amount represents the cash paid by QXO to settle Beacon’s senior secured term loan B facility, senior secured notes, and outstanding line of credit borrowings of $ 1.26 billion, $ 1.25 billion and $ 370.8 million, respectively.

Additionally, accrued interest expense of $ 30.1 million and a breakage fee of $ 37.8 million was paid for early termination of Beacon’s debt at the closing of the Beacon Acquisition.

Preliminary Purchase Price Allocation

The Company applied the acquisition method of accounting in accordance with ASC 805, Business Combinations, and recognized assets acquired and liabilities assumed at their fair values as of the effective date of the Beacon Acquisition, with the excess purchase consideration recorded to goodwill.

Goodwill reflects the assembled workforce of Beacon as well as operating synergies that are expected to result from the Beacon Acquisition.

All preliminary goodwill is not deductible for tax purposes.

The purchase price allocation is preliminary and subject to change.

The Company is continuing to obtain information to complete its valuation of certain assets and liabilities, in addition to ensuring all other assets and liabilities and contingencies have been identified and recorded.

The Company has estimated the preliminary fair value of assets acquired and liabilities assumed based on information currently available and will continue to adjust those estimates as additional information pertaining to events or circumstances present at the Closing Date becomes available during the measurement period.

The Company will reflect measurement period adjustments, if any, in the period in which the adjustments occur, and the Company will finalize its accounting for the Beacon Acquisition within one year of the Closing Date.

The following table presents the preliminary allocation of the purchase price to the assets acquired and liabilities assumed, and a reconciliation to total consideration transferred.

The allocation of the purchase price is ongoing, and the Company continues to ascertain the reasonableness of the fair value of the assets acquired and liabilities assumed.

Subsequent to the determination of the preliminary purchase price allocation, the Company recorded certain measurement period adjustments primarily related to accounts receivable, inventories, and deferred income taxes.

The measurement period adjustments had a net impact of decreasing goodwill by $ 27.4 million.

(in millions)

Accounts receivable

Vendor rebates receivable

Income tax receivable

Prepaid expenses and other current assets 81.1

Property and equipment

Goodwill 5,111.2

Operating lease right-of-use assets

Other non-current assets

Accounts payable ( 1,138.2 )

Accrued expenses ( 527.0 )

Deferred income taxes

Other long-term liabilities ( 27.5 )

Operating lease liabilities ( 668.2 )

Finance lease liabilities ( 181.5 )

Preliminary aggregate acquisition consideration

The following table presents a summary of intangible assets acquired and the weighted-average useful life of these assets:

(in millions, except weighted-average useful life)

Preliminary Fair Value

Weighted-Average Useful Life in Years

Customer relationships

$ 3,900.6 10.0

Total intangible assets acquired

$ 4,130.6 9.6

The preliminary fair value estimate of the customer relationships intangible asset was determined using the multi-period excess earnings method.

The excess earnings methodology is an income approach methodology that estimates the projected cash flows of the business attributable to the customer relationships intangible asset, net of charges for the use of other identifiable assets of the business including working capital, fixed assets and other intangible assets.

The preliminary fair value estimate of the trade names intangible asset was determined using the relief-from-royalty method, which presumes the owner of the asset avoids hypothetical royalty payments that would need to be made for the use of the asset if the asset was not owned.

A key assumption in the fair value measurement of the customer relationships intangible asset is the customer attrition rate, which projects the percentage of customer revenue from an existing customer base that is lost over the customer relationships intangible asset’s estimated useful life.

Other key inputs used in the discounted cash flow analyses and other areas of judgment include projected financial information, discount rates used to present value future cash flows, royalty rates, economic useful life of assets and tax rates, as relevant, that market participants would consider when estimating fair values.

The Company incurred transaction costs of approximately $ 74.8 million related to the Beacon Acquisition.

These costs were associated with legal and professional services and were recognized in selling, general and administrative expenses on the consolidated statements of operations.

Unaudited Pro Forma Combined Financial Information

The following unaudited pro forma combined financial information presents the combined results of the Company and Beacon as if the Beacon Acquisition had been completed on January 1, 2024.

The unaudited pro forma combined financial information presented below does not give effect to the May 2025 and June 2025 common and preferred (including Mandatory Convertible Preferred Stock) equity financings (as further discussed in Note 6), as these financings were not directly attributable to the Beacon Acquisition.

The proceeds from equity financings completed in May 2025 were used to repay indebtedness under the Notes (as defined in Note 9) previously issued as part of financings that were completed to effectuate the Beacon Acquisition.

As this repayment of indebtedness was not directly attributable to the Beacon Acquisition, the related reduction in interest expense is not reflected in this unaudited pro forma combined financial information.

The unaudited pro forma combined financial information is presented for informational purposes and is not indicative of the results of operations that would have been achieved if the Beacon Acquisition had occurred on January 1, 2024, nor is it indicative of future results.

The following table presents the Company’s pro forma combined net sales and net loss:

Year Ended December 31,

(in millions)

$ 9,536.8 $ 9,820.1

$ ( 332.4 ) $ ( 215.9 )

The unaudited pro forma combined financial information includes, where applicable, adjustments for:

(i) Acquisition accounting in accordance with ASC 805;

(ii) Financing transactions directly attributable to the Beacon Acquisition;

(iii) Transaction costs incurred by the Company that were directly attributable to the Beacon Acquisition.

These pro forma adjustments are based on available information as of the date hereof and upon assumptions that the Company believes are reasonable to reflect the impact of the Beacon Acquisition on the Company’s historical financial information on a supplemental pro forma basis.

Adjustments do not include costs related to integration activities, cost savings or synergies that have been or may be achieved by the combined business.

Kodiak Building Partners Acquisition

On February 10, 2026, the Company entered into a definitive agreement to acquire Kodiak Building Partners from Court Square Capital Partners for approximately $ 2.25 billion.

The purchase price comprises $ 2.0 billion of cash and 13.2 million of the Company’s common shares, with the Company retaining the right to repurchase these shares at $ 40 per share.

The transaction is expected to close early in the second quarter of 2026, subject to the satisfaction of customary closing conditions.

Restructuring

Subsequent to the Beacon Acquisition, the Company developed a restructuring plan to streamline and simplify the organization, improve efficiency and reduce costs.

As a result of the restructuring plan, the Company recorded $ 100.7 million in pre-tax restructuring charges , comprised of $ 54.6 million of severance and employee-related costs associated with corporate workforce optimization, a $ 41.1 million stock-based compensation charge associated with the impacted employees, and $ 5.0 million of lease abandonment costs.

These restructuring charges are reflected in selling, general and administrative expenses on the consolidated statements of operations for the year ended December 31, 2025.

The severance and employee-related costs were recorded in accrued expenses, while the stock-based compensation charge was reflected as an adjustment to common stock and additional paid-in capital on the consolidated balance sheets.

The severance and employee-related restructuring charge liability is expected to be paid in full by June 2026.

The following table shows the change in the restructuring charge liability during the year ended December 31, 2025:

Severance and

Employee-related

(in millions)

Restructuring charge liability as of December 31, 2024

Restructuring charges 54.6 5.0

Payments ( 28.4 ) —

Non-cash settlement — ( 5.0 )

Restructuring charge liability as of December 31, 2025

Severance and employee-related costs consist primarily of salary continuation benefits, prorated annual incentive compensation, continuation of health care benefits, outplacement services and retention awards issued to certain key employees.

Severance and employee-related benefits are determined pursuant to the Company’s written severance plans and are recognized when the benefits are determined to be probable of being paid and are reasonably estimable.

Retention awards are recognized on a straight-line basis from the communication date to the end of the requisite retention period.

Lease abandonment costs primarily represent the write-off of the remaining carrying value of operating lease ROU assets for branch facilities that were abandoned in connection with the Company's restructuring plan.

These lease abandonment charges are recognized as of the cease-use date.

Other exit-related costs, including costs to close branch facilities, are recognized as incurred.

Segment Reporting and Geographic Information

Segment Reporting

Operating segments are defined as components of an entity for which separate discrete financial information is available and regularly reviewed by the Chief Operating Decision Maker (“CODM”) in deciding how to allocate resources to an individual segment and in assessing performance.

The Company’s CODM, the chief executive officer, reviews consolidated results of operations to make decisions, therefore the Company views its operations and manages its business as a single operating segment.

The Company’s revenues for its single operating segment are primarily derived from the sale of residential and non-residential roofing products, as well as complementary products, such as siding and waterproofing.

The CODM evaluates performance for the Company’s single operating segment and decides how to allocate resources based on the Company’s consolidated net income that is reported in the consolidated statements of operations as net (loss) income.

The measure of segment assets is reported on the consolidated balance sheets as total assets.

These results are used to assess segment performance and determine the compensation of certain employees.

The operating segment financial information regularly reviewed by the CODM, inclusive of assets, revenue, expenses, profit or loss and noncash items are presented on a consolidated basis.

Other segment items included in consolidated net income are depreciation, amortization, interest income (expense), net, loss on debt extinguishment, other income, net, and provision for (benefit from) income taxes, which are reflected on the consolidated statements of operations.

The following table presents information regarding the components of revenue, significant segment expenses and consolidated net (loss) income representative of the significant categories regularly provided to the CODM when managing the Company’s one operating segment:

Year Ended December 31,

(in millions)

Residential roofing products $ 3,307.1 $ —

Non-residential roofing products 1,883.9 —

Complementary building products 1,592.7 —

Software products and services 58.5 56.9

Total net sales $ 6,842.2 $ 56.9

Cost of products sold $ 5,269.5 $ 33.8

Selling, general administrative expenses (1)

Stock-based compensation 144.5 34.4

Other segment items 457.3 ( 97.9 )

Net (loss) income $ ( 279.4 ) $ 28.0

(1) Excludes stock-based compensation.

Geographic Information

Net sales in the U.S.

accounted for approximately 97 % of total net sales for the year ended December 31, 2025, and approximately 96 % of the Company’s long-lived assets were in the U.S.

as of December 31, 2025.

All of the Company’s net sales were derived from the U.S.

for the year ended December 31, 2024, and all of the Company’s long-lived assets were in the U.S.

as of December 31, 2024.

The CODM does not review geographic asset information when assessing performance or allocating resources.

April 2024 Investment Agreement

On April 14, 2024, the Company entered into the Amended and Restated Investment Agreement (the “Investment Agreement”) among the Company, JPE and the other investors party thereto (collectively, the “Investors”), providing for, among other things, an aggregate investment by the Investors of $ 1.0 billion in cash in the Company.

Pursuant to the Investment Agreement, we issued and sold an aggregate of 1,000,000 shares of Convertible Perpetual Preferred Stock, par value $ 0.001 per share (the “Convertible Preferred Stock”), which were initially convertible into an aggregate of 219,010,074 shares of common stock at an initial conversion price of $ 4.566 per share and issued and sold warrants exercisable for an aggregate of 219,010,074 shares of common stock (the “Warrants”).

Additionally, we amended the Company’s certificate of incorporation to, among other things, effect an 8:1 reverse stock split with respect to the Company’s common stock (the “Reverse Stock Split”).

The Investment Agreement and related transactions closed on June 6, 2024 (the “Equity Investment”) and generated gross proceeds of approximately $ 1.0 billion before deducting fees and offering expenses.

Following the closing of the Equity Investment, the Board of Directors of the Company (the “Board”) was reconstituted such that:

i) the number of seats on the Board was designated by JPE, ii) each of the directors (including Mr.

Jacobs) was designated by JPE, iii) each standing committee of the Board was reconstituted in a manner designated by JPE, and iv) Mr.

Jacobs was appointed as Chairman of the Board and Chief Executive Officer of the Company.

Pursuant to the Investment Agreement, the Company issued and sold an aggregate of 1,000,000 shares of Convertible Perpetual Preferred Stock, par value $ 0.001 per share (the “Convertible Preferred Stock”), which are initially convertible into an aggregate of 219.0 million shares of common stock at an initial conversion price of $ 4.566 per share and issued and sold warrants exercisable for an aggregate of 219.0 million shares of common stock (the “Warrants”).

The Investment Agreement and related transactions closed on June 6, 2024 (the “Equity Investment”) and generated gross proceeds of $ 1.0 billion before deducting fees and offering expenses.

On June 6, 2024, the Company amended its certificate of incorporation to effect an 8:1 reverse stock split with respect to the Company’s common stock (the “Reverse Stock Split”), which reduced the Company’s issued and outstanding share count of common stock from 5.3 million to 0.7 million shares (par value $ 0.00001 per share).

The Company has recast all share and per-share data and amounts to show the effects of the Reverse Stock Split.

Issuance of Convertible Preferred Stock

On June 6, 2024, under the terms of the Investment Agreement, the Company issued 1,000,000 shares of Convertible Preferred Stock.

The Convertible Preferred Stock has an initial liquidation preference of $ 1.0 thousand per share, for an aggregate initial liquidation preference of $ 1 billion.

On June 6, 2024, under the terms of the Investment Agreement, the Company issued 1.0 million shares of Convertible Preferred Stock.

The Convertible Preferred Stock has an initial liquidation preference of $ 1,000 per share, for an aggregate initial liquidation preference of $ 1.0 billion.

The Convertible Preferred Stock is convertible at any time, in whole or in part and from time to time, at the option of the holder thereof into a number of shares of common stock equal to the then-applicable liquidation preference divided by the conversion price, which initially is $ 4.566 per share of common stock (subject to customary anti-dilution adjustments).

Shares of Convertible Preferred Stock are initially convertible into an aggregate of 219,010,074 shares of common stock (after giving effect to the Reverse Stock Split).

Shares of Convertible Preferred Stock are initially convertible into an aggregate of 219.0 million shares of common stock (after giving effect to the Reverse Stock Split).

The Convertible Preferred Stock is not redeemable or subject to any required offer to purchase.

The Convertible Preferred Stock ranks, with respect to dividend rights and distribution of assets upon liquidation, winding-up or dissolution, senior to the Company’s common stock.

The Convertible Preferred Stock ranks, with respect to dividend rights and distribution of assets upon liquidation, winding-up or dissolution, senior to the Company’s common stock and Mandatory Convertible Preferred Stock (as defined below).

Holders of Convertible Preferred Stock will vote together with the holders of the Company’s common stock on an “as-converted” basis on all matters, except as otherwise required by law.

In addition, the approval of holders of at least a majority of the outstanding shares of the Convertible Preferred Stock, voting separately as a single class, will be required for certain matters set forth in the Certificate of Designation for the Convertible Preferred Stock.

Dividends on the Convertible Preferred Stock are payable quarterly, when, as and if declared by the Board at the rate per annum of 9 % per share on the then-applicable liquidation preference (subject to certain exceptions in the event that the Company pays dividends on shares of its common stock).

During the year ended December 31, 2024, the Company paid $ 32.3 million of quarterly dividends to holders of Convertible Preferred Stock.

Subsequent to the close of the year ended December 31, 2024, the Company paid an additional $ 22.5 million of quarterly dividends to holders of Convertible Preferred Stock.

The aggregate number of shares of the Company’s common stock subject to the Warrants is 219,010,074 shares.

Dividends on the Convertible Preferred Stock are payable quarterly, when, as and if declared by the Company’s board of directors at the rate per annum of 9 % per share on the then-applicable liquidation preference (subject to certain exceptions in the event that the Company pays dividends on shares of its common stock).

During the year ended December 31, 2025, the Company paid $ 90.0 million of dividends to holders of Convertible Preferred Stock.

Subsequent to the close of the year ended December 31, 2025, the Company paid $ 22.5 million of quarterly dividends to holders of Convertible Preferred Stock.

The aggregate number of shares of the Company’s common stock subject to the Warrants is 219.0 million shares.

The Warrants are exercisable at the option of the holder at any time until June 6, 2034.

1 unchanged sentence

Each Warrant may be exercised, in whole or in part, at any time or times on or after the issuance date and on or before the expiration date at the election of the holder (in such holder’s sole discretion) by means of a “cashless exercise” in which the holder will be entitled to receive a number of shares of the Company’s common stock equal to the quotient of the product of the Closing Sale Price (as defined in the Warrant Certificate) of a share of the Company’s common stock on the trading day immediately preceding the date on which the holder elects to exercise its Warrant, less the adjusted exercise price, multiplied by the number of shares of the Company’s common stock issuable upon exercise of such Warrant, divided by the aforementioned Closing Sale Price of a share of the Company’s common stock on the trading day immediately preceding the date on which the holder elects to exercise its Warrant.

Equity Investment Dividend

Under the terms of the Investment Agreement, the Company declared a $ 17.4 million special cash dividend to its stockholders of record as of the day before the closing of the Equity Investment.

The dividend was paid on June 12, 2024 from proceeds received by the Company from the Equity Investment.

Reverse Stock Split

On June 6, 2024, as contemplated by the Investment Agreement, the Company effected an 8:1 Reverse Stock Split, which reduced the Company's issued and outstanding share count of common stock from 5,315,581 to 664,284 shares (par value $ 0.00001 per share).

The Company has recast all share and per-share data and amounts to show the effects of the Reverse Stock Split.

Private Placements

On June 13, 2024, the Company entered into purchase agreements with certain institutional and accredited investors to issue and sell in a private placement an aggregate of 340,932,212 shares of our common stock at a price of $ 9.14 per share, and pre-funded warrants (the "Pre-Funded Warrants") to purchase 42,000,000 shares of our common stock at a price of $ 9.13999 per Pre-Funded Warrant.

On June 13, 2024, the Company entered into purchase agreements with certain institutional and accredited investors to issue and sell in a private placement an aggregate of 340.9 million shares of the Company’s common stock at a price of $ 9.14 per share, and pre-funded warrants (the “Pre-Funded Warrants”) to purchase 42.0 million shares of the Company’s common stock at a price of $ 9.13999 per Pre-Funded Warrant.

Each Pre-Funded Warrant has an exercise price of $ 0.00001 per share, is exercisable immediately and until the Pre-Funded Warrant is exercised in full.

The closing of the issuance and sale of these securities was consummated on July 19, 2024, and generated gross proceeds of approximately $ 3.5 billion before deducting agent fees and offering expenses.

On July 22, 2024, we entered into additional purchase agreements with certain institutional and accredited investors to issue and sell in a private placement an aggregate of 67,833,699 shares of our common stock at a price of $ 9.14 per share.

The closing of the issuance and sale of these securities was consummated on July 25, 2024, and generated gross proceeds of approximately $ 620 million, before deducting agent fees and offering expenses.

NOTE 4 – EARNINGS (LOSS) PER COMMON SHARE

The Company’s Convertible Preferred Stock is classified as a participating security.

Basic and diluted earnings (loss) per share is computed using the two-class method, which is an earnings allocation method that determines earnings (loss) per share for common shares and participating securities.

The weighted-average number of common shares outstanding used in the basic and diluted net loss per share calculation include pre-funded warrants as the pre-funded warrants are exercisable at any time for nominal consideration.

Both basic and diluted earnings (loss) per common share are adjusted on a retroactive basis to reflect the Reverse Stock Split as discussed in Note 2 – Basis of Presentation and Significant Accounting Policies.

The closing of the private placement was completed on July 19, 2024.

On July 22, 2024, the Company entered into purchase agreements with certain institutional and accredited investors to privately place 67.8 million shares of its common stock at a price of $ 9.14 per share.

The closing of the private placement was completed on July 25, 2024.

On March 17, 2025, the Company entered into purchase agreements with certain institutional investors to privately place 67.5 million shares of its common stock at a price of $ 12.30 per share.

The closing of the private placement was contingent upon the completion of the Beacon Acquisition and was completed on April 29, 2025.

As a result of the closing, the Company raised $ 823.8 million in net proceeds, after deducting offering costs of $ 6.8 million, to partially fund the Beacon Acquisition and related costs.

Issuance of Mandatory Convertible Preferred Stock

On May 27, 2025, the Company completed a preferred stock offering, through which QXO issued and sold 11.5 million depositary shares (“Depositary Shares”), each representing a 1/20th interest in a share of the Company’s 5.50 % Series B Mandatory Convertible Preferred Stock, liquidation preference $ 1,000 per share, par value $ 0.001 per share (the “Mandatory Convertible Preferred Stock”).

The amount issued included 1.5 million Depositary Shares issued pursuant to the exercise in full of the option granted to the underwriters to purchase additional Depositary Shares.

The Company received net proceeds from the offering of $ 558.1 million, after deducting underwriting discounts, commissions and offering expenses of $ 16.9 million.

The Mandatory Convertible Preferred Stock will accumulate dividends (which may be paid in cash or, subject to certain limitations, in shares of common stock or in any combination of cash and common stock) at a rate per annum equal to 5.50 % on the liquidation preference of $ 1,000 per share, payable when, as and if declared by the Company’s board of directors (or an authorized committee thereof), on February 15, May 15, August 15 and November 15 of each year, beginning on August 15, 2025 and ending on, and including, May 15, 2028.

Given the requirement to pay dividends in any settlement outcome of the Mandatory Convertible Preferred Stock, the Company accrues dividends whether or not they are formally declared by the Company’s board of directors.

During the year ended December 31, 2025, the Company paid $ 14.8 million of dividends to holders of Mandatory Convertible Preferred Stock.

Subsequent to the close of the year ended December 31, 2025, the Company paid $ 7.9 million of quarterly dividends to holders of Mandatory Convertible Preferred Stock.

Mandatory Conversion

The following table illustrates the conversion rate per share of the Mandatory Convertible Preferred Stock, subject to certain anti-dilution adjustments, based on the applicable market value of the common stock:

Applicable Market Value of Common Stock

Conversion Rate per Share of Mandatory Convertible Preferred Stock

Greater than $ 20.2126 (the “Threshold Appreciation Price”)

49.4740 shares of common stock

Equal to or less than the Threshold Appreciation Price but greater than or equal to the Initial Price Between 49.4740 and 60.6060 shares of common stock, determined by dividing $ 1,000 by the applicable market value

Less than $ 16.50 (the “Initial Price”)

60.6060 shares of common stock

The following table illustrates the conversion rate per Depositary Share, subject to certain anti-dilution adjustments, based on the applicable market value of the common stock:

Applicable Market Value of Common Stock Conversion Rate per Depository Share Representing a 1/20th interest in a share of the Mandatory Convertible Preferred Stock

Greater than the Threshold Appreciation Price 2.4737 shares of common stock

Equal to or less than the Threshold Appreciation Price but greater than or equal to the Initial Price Between 2.4737 and 3.0303 shares of common stock, determined by dividing $ 50 by the applicable market value

Less than the Initial Price 3.0303 shares of common stock

Optional Conversion

Other than the occurrence of a fundamental change (as defined in the Company’s Certificate of Designations relating to the Mandatory Convertible Preferred Stock) at any time prior to May 15, 2028, a holder of Mandatory Convertible Preferred Stock may elect to convert such holder’s shares of Mandatory Convertible Preferred Stock, in whole or in part, at the minimum conversion rate of 49.4740 shares of common stock per share of Mandatory Convertible Preferred Stock (equivalent to 2.4737 shares of common stock per Depositary Share), subject to certain anti-dilution and other adjustments.

Because each Depositary Share represents a 1/20th fractional interest in a share of Mandatory Convertible Preferred Stock, a holder of Depositary Shares may convert its Depositary Shares only in lots of 20 Depositary Shares.

Fundamental Change Conversion

If a fundamental change occurs on or prior to May 15, 2028, holders of the Mandatory Convertible Preferred Stock will have the right to convert their shares of Mandatory Convertible Preferred Stock, in whole or in part, into shares of common stock at the fundamental change conversion rate during the period beginning on, and including, the effective date of such fundamental change and ending on, and including, the earlier of (a) the date that is 20 calendar days after such effective date (or, if later, the date that is 20 calendar days after holders receive notice of such fundamental change) and (b) May 15, 2028.

For the avoidance of doubt, the period described in the immediately preceding sentence may not end on a date that is later than May 15, 2028.

The Mandatory Convertible Preferred Stock ranks, with respect to dividend rights and distribution of assets upon liquidation, winding-up or dissolution, (i) senior to the Company’s common stock and each other class or series of capital stock, whether outstanding or established after the date of issuance of the Mandatory Convertible Preferred Stock, the terms of which do not expressly provide that it ranks senior to or on a parity with the Mandatory Convertible Preferred Stock as to payment of dividends and distribution of assets upon liquidation, winding-up or dissolution, and (ii) junior to the Convertible Preferred Stock.

The Mandatory Convertible Preferred Stock ranks on a parity with or junior to each class or series of capital stock, the terms of which expressly provide for a pari passu or senior ranking, respectively, relative to the Mandatory Convertible Preferred Stock.

Voting Rights

Holders of Mandatory Convertible Preferred Stock will not have voting rights, except with respect to issuances of securities senior to the Mandatory Convertible Preferred Stock, amendments to the Company’s Fifth Amended and Restated Certificate of Incorporation that would materially and adversely affect the rights of the holders of Mandatory Convertible Preferred Stock, or in the event of a merger, consolidation, exchange or reclassification involving the Mandatory Convertible Preferred Stock, or non-payment of dividends for six consecutive quarters.

Registered Equity Offerings

In April 2025, the Company sold 37.7 million shares of the Company’s common stock in an underwritten public offering at a price of $ 13.25 per share.

The closing of the equity offering was completed on April 21, 2025 and the Company raised $ 487.7 million in net proceeds from the equity offering, after deducting offering costs of $ 12.3 million.

The Company also granted the underwriters in the public offering a 30-day option to purchase up to an additional 5.7 million shares of the Company’s common stock at a price of $ 13.25 per share less underwriting discounts and commissions.

On May 5, 2025, the option was partially exercised with respect to 4.0 million shares resulting in an additional $ 51.8 million of net proceeds.

The remaining option to purchase additional shares expired unexercised at the end of the 30-day period.

In May 2025, the Company sold 48.5 million shares of the Company’s common stock in an underwritten public offering at a price of $ 16.50 per share.

The Company also granted the underwriters in the public offering a 30-day option to purchase up to an additional 7.3 million shares of the Company’s common stock at a price of $ 16.50 per share less underwriting discounts and commissions.

On May 21, 2025, the option was exercised in full.

The closing of the equity offering was completed on May 23, 2025 and the Company raised $ 892.4 million in net proceeds from the equity offering, after deducting offering costs of $ 27.6 million.

In June 2025, the Company sold 89.9 million shares of the Company’s common stock in an underwritten public offering at a price of $ 22.25 per share.

The closing of the equity offering was completed on June 26, 2025 and the Company raised $ 1.96 billion in net proceeds from the equity offering, after deducting offering costs of $ 37.8 million.

The Company also granted the underwriters in the public offering a 30-day option to purchase up to an additional 13.5 million shares of the Company’s common stock at a price of $ 22.25 per share less underwriting discounts and commissions.

On July 24, 2025, the option was partially exercised with respect to 1.7 million shares resulting in additional net proceeds of $ 38.1 million.

The remaining option to purchase additional shares expired unexercised at the end of the 30-day period.

In January 2026, the Company sold 31.6 million shares of the Company’s common stock in an underwritten public offering at a price of $ 23.80 per share.

The closing of the equity offering was completed on January 20, 2026 and the Company raised $ 749.4 million in net proceeds from the equity offering, after deducting offering costs of $ 3.8 million.

The Company also granted the underwriters in the public offering a 30-day option to purchase up to an additional 4.7 million shares of the Company’s common stock at a price of $ 23.80 per share less underwriting discounts and commissions.

The option to purchase additional shares expired unexercised at the end of the 30-day period.

January 2026 Investment Agreement

Subsequent to the close of the year ended December 31, 2025, the Company entered into an investment agreement in January 2026 (the “January 2026 Investment Agreement”) with AP Quince Holdings, L.P., a fund managed by affiliates of Apollo Global Management, Inc., and the other investors party thereto (collectively, the “January 2026 Investors”).

Pursuant to the January 2026 Investment Agreement, the January 2026 Investors committed until July 15, 2026 (the “Initial Commitment Period”) to purchase up to 300,000 shares of a new series of Series C Convertible Perpetual Preferred Stock, par value $ 0.001 per share (the “Series C Preferred Stock”), for an aggregate purchase price of $ 3.0 billion to fund one or more acquisitions of assets, equity or businesses (or portions

thereof) for a purchase price in excess of $ 1.5 billion or as otherwise determined by the Company (each, a “Qualifying Acquisition”).

The Initial Commitment Period will be extended with respect to the commitment for a Qualifying Acquisition up to an additional 12 months if a definitive acquisition agreement for such Qualifying Acquisition is executed before the expiration of the Initial Commitment Period.

Earnings (Loss) Per Common Share

Basic earnings (loss) per common share is computed using the two-class method, which is an earnings allocation method that determines earnings (loss) per share for common shares and participating securities.

Basic net income (loss) per share is calculated by dividing net income (loss) attributable to common stockholders by the weighted-average number of common shares outstanding during the period, without consideration for common share equivalents or the conversion of the Company’s Convertible Preferred Stock and Mandatory Convertible Preferred Stock.

The weighted-average number of common shares outstanding used in the basic and diluted net loss per share calculation include the Pre-Funded Warrants as the Pre-Funded Warrants are exercisable at any time for nominal consideration.

Common share equivalents consist of the incremental common shares issuable upon the exercise of stock options and vesting of restricted stock unit awards.

Diluted net income (loss) per common share is calculated by utilizing the most dilutive result of the if-converted and two-class methods.

In both methods, net income (loss) attributable to common stockholders and the weighted-average common shares outstanding are adjusted to account for the impact of the assumed issuance of potential common shares that are dilutive, subject to dilution sequencing rules.

The following table presents the components and calculations of basic and diluted net income (loss) per common share attributable to common stockholders:

(in millions, except per share amounts;

certain amounts may not recalculate due to rounding)

Year Ended December 31,

(in thousands, except per share data)

Basic and diluted loss per share computation:

Net income (loss) $ 27,969 $ ( 1,070 )

Preferred stock dividend ( 51,000 ) -

Basic and diluted earnings (loss) per common share computation:

Net (loss) income $ ( 279.4 ) $ 28.0

Convertible Preferred Stock dividend

( 90.0 ) ( 51.0 )

Mandatory Convertible Preferred Stock dividend

Undistributed earnings allocated to participating securities — —

Loss attributable to common shareholders

$ ( 388.3 ) $ ( 23.0 )

Weighted-average common shares 571.0 185.0

1 unchanged sentence

Total weighted-average common shares outstanding 613.0 204.0

Basic and diluted loss per share $ ( 0.11 ) $ ( 1.63 )

The following table summarizes securities that, if exercised, would have an antidilutive effect on diluted loss per share attributable to the common shareholder.

Basic and diluted loss per common share

$ ( 0.63 ) $ ( 0.11 )

Subsequent to the year ended December 31, 2025, the Company sold 31.6 million shares of the Company’s common stock in an underwritten public offering, the impact of which was not included in the computation of diluted net income (loss) per common share.

The following table includes the number of shares that may be dilutive common shares in the future.

These shares were not included in the computation of diluted net income (loss) per common share because the effect was either anti-dilutive or the requisite performance conditions were not met:

Year Ended December 31,

(in thousands) 2024 2023

Stock options — —

(in millions)

Convertible Preferred Stock

Warrants 219,010 —

Mandatory Convertible Preferred Stock

Stock-based awards

Total potential dilutive securities not included in loss per share 459,910 —

NOTE 5 – INTANGIBLE ASSETS

Intangible assets consist of proprietary developed software, intellectual property, and customer lists.

Proprietary developed software is carried at cost less accumulated amortization;

intellectual property, customer lists and acquired contracts are carried at acquisition date fair value less accumulated amortization.

On November 13, 2023, SWK Technologies, Inc.

acquired the customer list and prepaid time from clients of JCS Computer Resource Corporation (“JCS”) pursuant to an Asset Purchase Agreement for cash of $ 278,500 , and a promissory note in the amount of $ 1.0 million (the JCS Note”) for a total of $ 1.3 million.

The JCS Note balance was paid in full on July 24, 2024.

The customer list was recognized as an intangible asset and will be amortized over its estimated useful life of seven years .

The following table provides information about the Company’s identified intangible assets :

Estimated Useful Lives

(in thousands)

December 31, 2024 December 31, 2023

Proprietary developed software $ 390 $ 390 5 – 7

Intellectual property, customer list, and acquired contracts 9,049 9,069 5 – 15

$ 9,439 $ 9,459

accumulated amortization ( 5,415 ) ( 4,540 )

Total intangible assets $ 4,024 $ 4,919

Amortization expense related to the above intangible assets was $ 875,300 and $ 672,000 , respectively, the years ended December 31, 2024 and 2023.

There was no impairment of intangible assets for the years ended December 31, 2024 and 2023, respectively.

The Company expects future amortization expense to be the following:

(in thousands)

thereafter 515

Total intangible asset amortization $ 4,024

NOTE 6 – LONG-TERM DEBT

During the year ended December 31, 2024, the Company extinguished all long-term debt obligations.

As of December 31, 2023, the Company’s long-term debt was $ 1.7 million.

NOTE 7 – LEASES

The Company leases its corporate offices and data centers under non-cancelable operating lease agreements.

The terms of the Company’s real estate leases generally range from 3 to 5 years.

Corporate office leases expire at various dates through 2026.

The Company also leases certain equipment under finance leases.

The terms of equipment leases generally range from 3 to five years .

These leases expire at various dates through 2027.

The following table presents the operating and financing lease-related assets and liabilities recorded on the consolidated balance sheets:

(in thousands) As of

Leases Balance Sheet Classification December 31, 2024 December 31, 2023

Operating Operating lease right-of-use assets $ 259 $ 522

Finance Property and equipment, net 197 332

Total lease assets $ 456 $ 854

Operating Operating lease liabilities – current portion $ 188 $ 263

Finance Finance lease obligations – current portion 128 154

Operating Operating lease liabilities net of current portion 71 259

Finance Finance lease obligations net of current portion 190 247

Total lease liabilities $ 577 $ 923

The following table presents supplemental weighted-average information for operating and finance leases as follows:

December 31, 2024 December 31, 2023

Weighted average remaining lease term

1.4 years 2.1 years

2.4 years 2.9 years

Weighted-average discount rate

Operating 4.77 % 4.77 %

Finance 7.77 % 7.15 %

The following table presents components of lease cost for operating and finance leases as follows:

(in thousands) Year Ended December 31,

Lease cost 2024 2023

Operating lease cost

Finance lease cost:

Amortization of leased assets

Interest on lease liabilities 28 2

Short-term lease cost and variable lease cost

Net lease cost $ 709 $ 745

The following table presents supplemental cash flow information related to operating and finance leases as follows:

Year Ended December 31,

(in thousands) 2024 2023

Cash paid for amounts included in the measurement of lease liabilities:

Operating cash flows for operating leases $ 279 $ 376

Financing cash flows for finance leases $ 170 $ 215

Leased assets obtained in exchange for new lease obligations:

Operating leases $ — $ 562

Finance leases $ 87 $ —

The table below presents the maturity of lease liabilities as of December 31, 2024:

(in thousands) Operating Leases Finance Leases

2025 $ 197 $ 149

Total lease payments

( 11 ) ( 41 )

Present value of lease liabilities

NOTE 8 – COMMITMENTS AND CONTINGENCIES

Legal Matters

Various legal claims arise from time to time in the normal course of business.

In assessing loss contingencies related to legal proceedings that are pending against the Company, or unasserted claims that may result in such proceedings, the Company evaluates the perceived merits of any legal proceedings or unasserted claims as well as the perceived merits of the amount of relief sought or expected to be sought therein.

The Company believes that it has adequately accrued for the potential impact of loss contingencies that are probable and reasonably estimable, and does not believe that the ultimate resolution of any matters to which it is presently a party will have a material adverse effect on the Company’s 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.

NOTE 9 – ASSET PURCHASE AGREEMENT

On November 13, 2023, SWK Technologies, Inc.

acquired the customer list and prepaid time from clients of JCS Computer Resource Corporation (“JCS”) pursuant to an Asset Purchase Agreement for cash of $ 278,500 and a promissory note in the amount of $ 1.0 million (the “JCS Note”) for a total consideration of $ 1.3 million.

The customer list was recognized as an intangible asset and will be amortized over its estimated useful life.

The JCS Note balance was paid in full on July 24, 2024.

NOTE 10 – EQUITY-BASED COMPENSATION

Total potential dilutive securities not included in loss per common share

Subsequent to the year ended December 31, 2025, the Company received commitments from investors for investing up to $ 3.0 billion for the issuance of up to 300,000 shares of Series C Preferred Stock with a stated value of $ 10,000 per share contingent on a Qualifying Acquisition, the issuance of which may result in dilutive common shares in the future.

If issued, the stated value of the Series C Preferred Stock will be, at the option of the holders, convertible into the Company’s common stock at an initial conversion price of $ 23.25 per share.

Stock-based Compensation

At the special meeting of the Company’s stockholders on May 30, 2024, the stockholders approved the QXO, Inc.

2024 Omnibus Incentive Plan (the “2024 Plan”).

The 2024 Plan provides for the grant of options intended to qualify as incentive stock options (“ISOs”), nonqualified stock options (“NSOs”), stock appreciation rights (“SARs”), restricted share awards, RSUs, performance awards, cash incentive awards, deferred share units and other equity-based and equity-related awards, as well as cash-based awards.

Subject to adjustment for changes in capitalization, the maximum aggregate number of shares of common stock that may be delivered pursuant to awards granted under the 2024 Plan shall be equal to 30,000,000 (the “Plan Share Limit”), of which 30,000,000 shares of common stock may be delivered pursuant to ISOs granted under the 2024 Plan (such amount,

the “Plan ISO Limit”).

The Company may act prior to the first day of any calendar year to provide that there shall be no increase in the Plan Share Limit for such calendar year or that the increase in the Plan Share Limit for such calendar year shall be a lesser number of shares than would otherwise occur.

The Omnibus Plan provides that the Plan Share Limit automatically increase on January 2 of each calendar year commencing on January 1, 2025 and ending on January 1, 2034, in an amount equal to three percent ( 3 %) of the sum of:

The 2024 Plan provides for the grant of options intended to qualify as incentive stock options (“ISOs”), nonqualified stock options (“NSOs”), stock appreciation rights (“SARs”), restricted share awards, RSUs, PRSUs, cash incentive awards, deferred share units and other equity-based and equity-related awards, as well as cash-based awards.

The 2024 Plan provides that the Plan Share Limit shall automatically increase on January 1 of each calendar year commencing on January 1, 2025 and ending on January 1, 2034 in an amount equal to three percent ( 3 %) of the sum of:

i) the number of shares of common stock outstanding as of December 31 of the preceding calendar year, and ii) the number of shares of common stock into which the Convertible Preferred Stock outstanding on December 31 of the preceding calendar year are convertible.

The Compensation and Talent Committee took no action to alter the automatic increase effective January 1, 2025 in the Plan Share Limit under the Omnibus Plan.

The automatic renewal increased the share pool availability from 8.1 million shares at December 31, 2024 to 27.0 million shares available under the Plan for fiscal 2025.

The Company granted RSUs which vest subject to the employee’s continued employment with the Company through the applicable vesting date.

The Company recorded share-based compensation expense for RSUs on a straight-line basis over the requisite service period.

The following table summarizes the activity related to the Company’s RSUs awards for the year ended December 31, 2024:

(in thousands, except for weighted average grant date fair value) Number of RSUs Weighted Average Grant Date Fair Value

The Compensation and Talent Committee took no action to alter the automatic increase effective January 1, 2026 in the Plan Share Limit under the 2024 Plan.

The automatic renewal increased the Plan Share Limit to 62.0 million shares, including shares available for issuance as a result of the Converted Beacon Stock Plan (as defined below), for the calendar year commencing on January 1, 2026.

As part of the Beacon Acquisition, the Company assumed the remaining shares authorized and available for future issuance under the Beacon Roofing Supply, Inc.

2024 Stock Plan into the 2024 Plan as of the Closing Date (the “Converted Beacon Stock Plan”), which was adjusted based on the equity award exchange ratio discussed below and subject to certain regulatory limits.

As a result, 21.5 million additional shares were added to the 2024 Plan’s Plan Share Limit as of the Closing Date and may only be used to grant equity awards to employees that were former Beacon employees on the Closing Date or QXO employees hired after the Closing Date.

A portion of the additional shares were used to grant the Converted RSUs and Converted NSOs (as defined and further discussed below).

As of December 31, 2025, there were 35.2 million additional shares of the Company’s common stock reserved for future issuance under the 2024 Plan.

Beacon Equity Awards

On the Closing Date of the Beacon Acquisition, the Company converted outstanding Beacon stock-based incentive awards issued to Beacon employees under the Beacon Roofing Supply, Inc.

2024 Stock Plan at a 9.8380 equity award exchange ratio.

In accordance with the terms of the Merger Agreement, the equity award exchange ratio was determined as the Merger Consideration divided by the volume-weighted average closing sale price of one share of QXO’s common stock for the five consecutive trading days ended April 28, 2025 of $ 12.64 per share.

Employee-held outstanding Beacon RSUs were converted into corresponding QXO RSUs, subject to the same service-based vesting terms as immediately prior to the Beacon Acquisition.

All RSUs held by a non-employee member of the board of directors of Beacon, whether vested or unvested, were accelerated in full and cancelled in exchange for a cash payment equal to the product of (i) the Merger Consideration and (ii) the number of Beacon shares underlying such RSUs.

Each outstanding Beacon PRSU was also converted into QXO RSUs, with the performance-based vesting condition deemed satisfied at target and the resulting award subject solely to time-based vesting (collectively, the “Converted RSUs”).

All outstanding stock option awards were converted into corresponding QXO NSOs (the “Converted NSOs”).

The exercise price of Converted NSOs was adjusted using the equity award exchange ratio such that the award holders maintained the same economic benefit as of the Closing Date.

The total fair value of the Converted RSUs and Converted NSOs was $ 176.8 million as of the Beacon Acquisition’s Closing Date, of which $ 87.5 million was related to pre-combination expense and was included as a component of purchase price.

The remaining fair value of $ 89.3 million relates to post-combination expense, of which $ 59.3 million was recognized during the year ended December 31, 2025.

As of December 31, 2025, the future unrecognized stock-based compensation expense related to the outstanding Converted RSUs was $ 23.9 million, which will be recognized over a remaining service period of 1.3 years.

As of December 31, 2025, the future unrecognized stock-based compensation expense related to the outstanding Converted NSOs was $ 0.7 million, which will be recognized over a remaining service period of 0.9 years.

Converted NSOs

Converted NSOs generally expire 10 years after the grant date and, except under certain conditions, the options are subject to continued employment and vest in three annual installments over the three-year period following the grant date.

During the year ended December 31, 2025, the Company issued 5.1 million of Converted NSOs with a weighted-average exercise price of $ 5.04 , of which 3.8 million were exercised during the period at a weighted-average exercise price of $ 5.02 .

There was no other activity related to NSOs during the year ended December 31, 2025.

The Company grants RSUs which vest subject to the employee’s continued employment with the Company through the applicable vesting date.

The following table summarizes the activity related to the Company’s RSUs for the year ended December 31, 2025:

(in millions, except for weighted-average grant date fair value)

Number of RSUs Weighted-Average Grant Date Fair Value

Balance at beginning of period 13.5 $ 11.57

Granted 1.8 $ 17.70

Converted RSUs

( 6.7 ) $ 12.77

Forfeited ( 2.2 ) $ 12.12

Balance at end of period 16.1 $ 12.69

As of December 31, 2024, total unrecognized compensation expense related to unvested RSUs was $ 143.1 million and is expected to be recognized over a weighted-average period of 4.93 years.

The Company granted pRSUs which include a service-based vesting condition and a market condition for exercisability.

(1) The number of RSUs vested includes 2.0 million RSUs that vested on December 31, 2025, but were not legally settled until January 2026.

The following table summarizes additional information regarding RSUs:

Year Ended December 31,

Weighted-average fair value per share of RSUs granted and converted

$ 13.94 $ 11.57

Total grant date fair value of RSUs vested $ 86.0 $ —

Total intrinsic value of RSUs released $ 122.7 $ —

As of December 31, 2025, total unrecognized stock-based compensation expense related to unvested RSUs was $ 148.0 million and is expected to be recognized over a weighted-average period of 3.4 years.

The Company grants PRSUs which include a service-based vesting condition and a market condition for exercisability.

The service condition is subject to the employee’s continued employment with the Company through the applicable vesting date.

The vesting of certain pRSUs is also subject to achievement of performance goals relating to the Company’s TSR compared to the TSR ranking of each company that is in the S&P 500 index.

The vesting of certain PRSUs is also subject to achievement of performance goals relating to the Company’s total stock return compared to the total stock return ranking of each company that is in the S&P 500 index.

The performance goals for a portion of the PRSUs will be measured over a cumulative performance period ending on December 31, 2028, and the performance goals for the remainder of the PRSUs will be measured based on designated performance periods that occur within such cumulative period.

10 unchanged sentences

The following table summarizes the activity related to the Company’s PRSUs for the year ended December 31, 2025:

(in thousands, except for weighted average grant date fair value) Number of pRSUs Weighted Average Grant Date Fair Value

(in millions, except for weighted-average grant date fair value)

Number of PRSUs

Weighted- Average Grant Date Fair Value

Balance at beginning of period 8.4 $ 20.24

1 unchanged sentence

Balance at end of period 8.8 $ 20.17

As of December 31, 2024, total unrecognized compensation expense related to unvested pRSUs was $ 148.5 million and is expected to be recognized over a weighted-average period of 3.52 years.

The fair value of the RSUs with a market condition was determined on the date of grant using a Monte Carlo model to simulate total stockholder return for the Company and peer companies with the following assumptions:

Performance Period 4.42 years

Weighted-average risk-free interest rate 4.03 %

Weighted-average expected volatility 40 %

Weighted-average dividend yield 0 %

As of December 31, 2025, total unrecognized stock-based compensation expense related to unvested PRSUs was $ 103.4 million and is expected to be recognized over a weighted-average period of 2.8 years.

Subsequent to the year ended December 31, 2025, 2.4 million PRSUs with performance goals relating to the Company’s total stock return compared to the total stock return ranking of each company that is in the S&P 500 index for the performance period ended December 31, 2025 vested upon certification of the results by the Compensation and Talent Committee of the Company’s board of directors.

The fair value of PRSUs with a market condition is determined on the date of grant using a Monte Carlo model to simulate total stockholder return for the Company and peer companies.

The following weighted-average assumptions were used in the Monte Carlo model in determining the fair value of PRSUs granted during the year ended December 31, 2025 and 2024:

Year Ended December 31,

Performance period

3.66 years 4.42 years

Risk-free interest rate

Expected volatility

42.3 % 40.0 %

Dividend yield

The risk-free interest rate is based on the U.S.

1 unchanged sentence

Expected volatility is based on historical volatility of the stock of the Company’s peer industry group.

Share-Based Compensation Expense

Share-based compensation expense is included within selling, general and administrative expenses in the consolidated statements of operations.

The Company recognized share-based compensation expense as follows:

(in thousands) Year Ended December 31,

pRSUs $ 21,860 $ —

RSUs 12,653 —

Stock options — 41

Total share-based compensation expense $ 34,513 $ 41

The RSUs and PRSUs may vest in whole or in part before the applicable vesting date if the grantee’s employment is terminated by the Company without cause or by the grantee with good reason (as defined in the grant agreement), upon death or disability of the grantee or in the event of a change in control of the Company.

Upon vesting, the RSUs and pRSUs result in the issuance of shares of the Company’s common stock after required tax withholdings.

Upon vesting, the RSUs and PRSUs result in the issuance of shares of the Company’s common stock.

The holders of the RSUs and PRSUs do not have the rights of a stockholder and do not have voting rights until shares are issued and delivered in settlement of the awards.

NOTE 11 – INCOME TAXES

The components of income (loss) before taxes and the income tax provision (benefit) are as follows:

Stock-Based Compensation Expense

Stock-based compensation expense is included within selling, general and administrative expenses in the consolidated statements of operations.

The Company recognized stock-based compensation expense as follows:

Year Ended December 31,

(in thousands) 2024 2023

United States income (loss) before provision (benefit) for income taxes $ 50,812 $ ( 1,367 )

(in millions)

Total stock-based compensation expense

$ 144.5 $ 34.4

The following table summarizes all outstanding debt:

December 31, 2025

(in millions) Principal Balance Carrying Value Fair Value

Long-term Debt, net

Term Loan Facility (1)

$ 850.0 $ 827.8 $ 852.1

2,250.0 2,229.5 2,356.9

Long-term debt, net $ 3,100.0 $ 3,057.3 $ 3,209.0

(1) Interest rate of 5.72 % as of December 31, 2025.

(2) Interest rate of 6.75 % as of December 31, 2025.

The Company did not have any outstanding debt as of December 31, 2024.

As of December 31, 2025, all outstanding debt was classified as Level 2 in the fair value hierarchy.

The fair values of QXO Building Products’ Notes and Term Loan Facility were based upon recent trading prices.

Senior Secured Notes

On April 29, 2025, Merger Sub (the “Issuer”) completed the issuance and sale of $ 2.25 billion in aggregate principal amount of 6.75 % Senior Secured Notes due 2032 (the “Notes”).

The Notes were issued pursuant to an Indenture, dated as of April 29, 2025 (as supplemented, the “Indenture”), and, upon consummation of the Beacon Acquisition, QXO Building Products assumed the obligations under the Notes and the Indenture and certain of QXO Building Products’ subsidiaries (collectively, the “Subsidiary Guarantors”) guaranteed QXO Building Products’ obligations under the Notes and the Indenture.

The Notes are secured by first-priority liens on substantially all assets of the Issuer and the Subsidiary Guarantors, other than the ABL Priority Collateral (as defined below) (the “Notes Priority Collateral”) and by second-priority liens on substantially all of the Issuer’s and the Subsidiary Guarantors’ inventory, receivables and related assets (the “ABL Priority Collateral”), in each case, subject to certain exceptions and permitted liens.

The Notes will mature on April 30, 2032.

Interest on the Notes accrues at 6.75 % per annum and will be paid semi-annually, in arrears, on April 30 and October 30 of each year, beginning October 30, 2025.

Proceeds from the Notes were used to partially fund the Beacon Acquisition and related transaction expenses.

On or after April 30, 2028, the Issuer may redeem the Notes at its option, in whole at any time or in part from time to time, at the redemption prices set forth in the Indenture.

In addition, prior to April 30, 2028, the Issuer may redeem the Notes at its option, in whole at any time or in part from time to time, at a redemption price equal to 100 % of the principal amount of the Notes redeemed, plus a “make-whole” premium and accrued and unpaid interest, if any.

Notwithstanding the foregoing, at any time prior to April 30, 2028, the Issuer may also redeem up to 50 % of the aggregate principal amount of the Notes with funds in an aggregate amount not to exceed the net cash proceeds from certain equity offerings at a redemption price equal to 106.75 % of the principal amount of the Notes to be redeemed, plus accrued and unpaid interest, if any.

In addition, prior to April 30, 2028, the Issuer may redeem during each twelve-month period up to 10 % of the original aggregate principal amount of the Notes at a redemption price equal to 103 %, plus accrued and unpaid interest, if any.

The Indenture includes customary affirmative and negative covenants with respect to the Issuer and its restricted subsidiaries.

These covenants are subject to a number of important qualifications and exceptions.

Additionally, upon the occurrence of specified change of control events, the Issuer must offer to repurchase the Notes at 101 % of the principal amount, plus accrued and unpaid interest, if any, to, but excluding, the purchase date.

The Indenture also provides for customary events of default.

As of December 31, 2025, the Issuer and its restricted subsidiaries were in compliance with these covenants.

Debt issuance costs of $ 22.2 million related to the Notes were capitalized and are being amortized over the term of the financing arrangement.

As of December 31, 2025, the outstanding balance on the Notes, net of $ 20.5 million of unamortized debt issuance costs, was $ 2.23 billion.

Term Loan Facility

On April 29, 2025, Merger Sub, as initial borrower, entered into a Term Loan Credit Agreement (the “Term Loan Credit Agreement”) with Queen HoldCo, LLC (“Holdings”), the lenders party thereto and Goldman Sachs Bank USA, as administrative agent, which provides for senior secured financing consisting of a term loan facility (the “Term Loan Facility”) in an aggregate principal amount of $ 2.25 billion.

Upon the consummation of the Beacon Acquisition, QXO Building Products entered into a joinder to the Term Loan Credit Agreement as the surviving borrower (the “Borrower”).

The facility matures on April 30, 2032.

Proceeds from the Term Loan Facility were used to partially fund the Beacon Acquisition and related transaction expenses.

Borrowings under the Term Loan Facility bear interest at variable rates based on Term SOFR or a base rate, in each case plus an applicable margin.

The facility requires scheduled quarterly amortization payments in an annual amount equal to 1.0 % of the original principal amount of borrowings under the Term Loan Facility, with the remaining balance due at maturity.

The Term Loan Facility also requires the Borrower to make certain mandatory prepayments.

The Borrower can make voluntary prepayments at any time without penalty, except in connection with a repricing event in respect of the Term Loan Facility, subject to customary breakage costs.

Any refinancing through the issuance of certain debt or any repricing amendment, in either case, that constitutes a “repricing event” applicable to the term loans resulting in a lower yield occurring at any time during the first six months after the closing date of the Term Loan Facility will be accompanied by a 1.00 % prepayment premium or fee, as applicable.

The Term Loan Facility is unconditionally guaranteed by Holdings on a limited‑recourse basis and secured by a first-priority lien on the equity interests of the Borrower held by Holdings.

The Term Loan Facility is also guaranteed by each Subsidiary Guarantor and secured by a first-priority lien with respect to the Notes Priority Collateral and a second-priority lien with respect to the ABL Priority Collateral.

The Term Loan Facility is secured on a ratable basis with the Notes with respect to the Notes Priority Collateral and the ABL Priority Collateral.

The Term Loan Credit Agreement includes customary affirmative and negative covenants with respect to the Borrower and its restricted subsidiaries.

These covenants are subject to a number of important qualifications and exceptions.

The Term Loan Credit Agreement contains certain customary events of default, including relating to a change of control.

As of December 31, 2025, the Borrower and its restricted subsidiaries were in compliance with these covenants.

The principal amount of borrowing under the Term Loan Facility was reduced by an original issue discount (“OID”) of 1 %.

OID costs of $ 22.5 million and debt issuance costs of $ 50.9 million related to the Term Loan Facility were capitalized and are being amortized over the term of the financing arrangement.

On May 29, 2025, the Borrower made a voluntary principal prepayment of $ 1.40 billion under the Term Loan Facility.

As a result, the Borrower was relieved of its obligation to make quarterly amortization payments in an annual amount equal to 1.0 % of the original principal amount of borrowings under the Term Loan Facility.

Additionally, as a result of the principal prepayment, the Borrower recognized a loss on debt extinguishment of $ 45.7 million comprised of $ 14.0 million of unamortized OID costs and $ 31.7 million of unamortized debt issuance costs related to the Term Loan Facility.

On November 5, 2025, the Borrower amended the Term Loan Credit Agreement in order to refinance the Term Loan Facility.

The amendment reduced the applicable margin for borrowings under the Term Loan Facility from 3.00 % to 2.00 % for Term SOFR borrowings and from 2.00 % to 1.00 % for base rate borrowings (the “Term Loan Refinancing”).

As a result of the Term Loan Refinancing, the Borrower recognized a loss on debt extinguishment of $ 4.0 million, which is comprised of $ 0.9 million of unamortized OID costs, $ 2.2 million of unamortized debt issuance costs, and $ 0.9 million of third-party fees associated with the modification of the Term Loan Facility.

Additionally, new debt issuance costs of $ 0.1 million were capitalized and are being amortized over the term of the financing arrangement.

The loss on debt extinguishment resulting from the principal prepayment and the subsequent Term Loan Refinancing was separately recognized on the consolidated statements of operations.

As of December 31, 2025, the outstanding balance on the Term Loan Facility, net of $ 6.8 million of unamortized OID costs and $ 15.4 million of unamortized debt issuance costs, was $ 827.8 million.

ABL Credit Agreement

On April 29, 2025, Merger Sub, as initial borrower, entered into the Asset-Based Revolving Credit Agreement (the “ABL Credit Agreement”), with Holdings, the lenders party thereto and Citibank, N.A., as administrative agent and collateral agent, which provides for an asset-based revolving credit facility (the “ABL Facility”), with an aggregate borrowing availability equal to the lesser of $ 2.0 billion, and the borrowing base.

Upon the consummation of the Beacon Acquisition, the Borrower entered into a joinder to the ABL Credit Agreement as the surviving borrower.

The ABL Facility matures on April 29, 2030.

Based on the Borrower’s borrowing base as of December 31, 2025, the Borrower had $ 1.97 billion borrowing capacity under the ABL Facility.

Borrowings under the ABL Facility bear interest at a rate equal to, at the Borrower’s option, either (a) (x) Term SOFR determined by reference to the secured overnight financing rate published by the Federal Reserve Bank of New York, which rate shall be no less than zero or (y) a base rate determined by reference to the highest of (i) the federal funds rate plus 0.50 % per annum, (ii) the prime rate quoted by the Wall Street Journal as the “Prime Rate” and (iii) the sum of one-month adjusted Term SOFR plus 1.00 % per annum, which base rate shall be no less than 1.00 %, or (b) (x) with respect to borrowings of Canadian dollars, Term CORRA determined by reference to the interbank offered rate administered by the CORRA Administrator, which rate shall be no less than zero or (y) a base rate determined by reference to the highest of (i) zero ( 0 %), (ii) the one-month Term CORRA plus 1.00 % per annum or (iii) the prime rate reported by Reuters, in each case plus an applicable margin based on excess availability set forth in the ABL Credit Agreement.

The Borrower is also required to pay a commitment fee equal to 0.20 % per annum (depending on the average utilization of the commitments) to the lenders under the ABL Facility in respect of the unutilized commitments thereunder.

The Borrower can make voluntary prepayments at any time without penalty, subject to customary breakage costs.

The ABL Facility (and at the Borrower’s option certain hedging, cash management and bank product obligations secured under the ABL Facility) is unconditionally guaranteed by Holdings on a limited‑recourse basis and secured by a second-priority lien on the equity interests of the Borrower held by Holdings.

The ABL Facility is also guaranteed by each Subsidiary Guarantor and secured by a second-priority lien with respect to the Notes Priority Collateral and a first-priority lien with respect to the ABL Priority Collateral.

The ABL Credit Agreement includes customary affirmative and negative covenants with respect to the Borrower and its restricted subsidiaries.

These covenants are subject to a number of important qualifications and exceptions.

The ABL Credit Agreement contains certain customary events of default, including relating to a change of control.

The ABL Facility requires that the Borrower, commencing on or after the last day of the first full fiscal quarter ending after the closing date of the ABL Facility, maintain a minimum fixed charge coverage ratio of 1.0 to 1.0 at any time that availability is less than the greater of (x) $ 120 million and (y) 10 % of the lesser of (i) the borrowing base at such time and (ii) the aggregate amount of ABL Facility commitments at such time.

As of December 31, 2025, the Borrower and its restricted subsidiaries were in compliance with these covenants.

Debt issuance costs of $ 18.8 million related to the ABL Facility were capitalized and are being amortized ratably over the term of the financing arrangement.

The debt issuance costs related to the ABL Facility are presented as an asset, included in other assets, net on the consolidated balance sheets.

As of December 31, 2025, there were $ 16.3 million of unamortized debt issuance costs related to the ABL Facility.

As of December 31, 2025, there was no outstanding balance on the ABL Facility.

The Borrower and its restricted subsidiaries had $ 21.2 million in outstanding standby letters of credit issued under the ABL Facility as of December 31, 2025.

Other Information

All required principal payments on outstanding debt are due after December 31, 2030.

Under the terms of the ABL Facility, the Term Loan Facility and the Notes, QXO Building Products is limited in making certain restricted payments, including dividends on its common stock.

Based on the provisions in the respective debt agreements and given the Company’s intention to not pay common stock dividends in the foreseeable future, the Company does not believe that the restrictions are significant.

The Company primarily operates in leased branch facilities and corporate offices, which are accounted for as operating leases.

The real estate leases expire between 2026 and 2037.

The Company also leases equipment, such as trucks and forklifts.

Equipment leases are accounted for as either operating or finance leases.

The equipment leases expire between 2026 and 2032.

The following table presents components of lease costs recognized in the consolidated statements of operations:

Year Ended December 31,

(in millions)

Operating lease costs $ 119.3 $ 0.3

Finance lease costs:

Amortization of right-of-use assets 33.1 0.2

Interest on lease obligations 8.1 —

Variable lease costs 13.6 0.2

Total lease costs $ 174.1 $ 0.7

The following table presents supplemental cash flow information related to the Company’s leases:

Year Ended December 31,

(in millions)

Cash paid for amounts included in measurement of lease obligations:

Operating cash outflows from operating leases $ 107.4 $ 0.3

Operating cash outflows from finance leases $ 8.0 $ —

Financing cash outflows from finance leases $ 30.3 $ 0.2

Right-of-use assets obtained in exchange for new finance lease liabilities $ 34.5 $ 0.1

Right-of-use assets obtained in exchange for new operating lease liabilities $ 29.2 $ —

As of December 31, 2025, the Company’s operating leases had a weighted-average remaining lease term of 6.1 years and a weighted-average discount rate of 6.59 %, and the Company’s finance leases had a weighted-average remaining lease term of 4.2 years and a weighted-average discount rate of 6.59 %.

The following table summarizes future lease payments for each of the next five years ending December 31 and thereafter:

(in millions)

2026 $ 148.0 $ 60.1

2027 148.8 54.8

2028 131.2 43.6

2029 111.3 30.5

2030 89.9 18.9

Thereafter 190.8 6.3

Total future lease payments 820.0 214.2

Imputed interest ( 150.7 ) ( 26.3 )

Total lease liabilities $ 669.3 $ 187.9

Commitments and Contingencies

Various legal claims arise from time to time in the normal course of business.

The components of (loss) income before (benefit from) provision for income taxes and (benefit from) provision for income taxes are as follows:

Year Ended December 31,

(in millions)

(Loss) income before (benefit from) provision for income taxes

$ ( 350.2 ) $ 50.8

Foreign 13.1 —

Total $ ( 337.1 ) $ 50.8

(Benefit from) provision for income taxes

Provision for (benefit from) current income taxes

federal $ 0.7 $ 16.6

Foreign 3.4 —

state and local ( 0.8 ) 7.4

Total current tax provision 24,002 41

Total provision for current income taxes 3.3 24.0

(Benefit from) provision for deferred income taxes

federal ( 52.7 ) ( 0.7 )

state and local ( 8.3 ) ( 0.5 )

Total deferred tax (benefit) ( 1,159 ) ( 338 )

Total provision (benefit) $ 22,843 $ ( 297 )

The Company’s effective income tax rate reconciliation is as follows for the periods presented:

Total benefit from deferred income taxes ( 61.0 ) ( 1.2 )

Total (benefit from) provision for income taxes

federal ( 52.0 ) 15.9

Foreign 3.4 —

state and local ( 9.1 ) 6.9

Total (benefit from) provision for income taxes $ ( 57.7 ) $ 22.8

The following table is a reconciliation of the U.S.

federal statutory income tax rate of 21% to the Company’s effective tax rate for the year ended December 31, 2025 pursuant to the disclosure requirements of ASU 2023-09.

See Note 2 for additional details regarding the Company’s prospective adoption of ASU 2023-09.

Year Ended December 31, 2025

Federal income tax rate 21.0 % 21.0 %

(in millions, except percentages)

federal statutory income tax rate $ ( 70.8 ) 21.0 %

Domestic federal

Non-taxable and non-deductible items

Section 162(m) limitation 19.6 ( 5.8 ) %

Non-taxable stock compensation ( 5.3 ) 1.6 %

Non-deductible transaction costs 4.8 ( 1.4 ) %

Other 0.2 ( 0.1 ) %

Changes in valuation allowance ( 0.1 ) — %

Other 2.1 ( 0.6 ) %

Domestic state and local income taxes, net of federal effect (1)

( 8.9 ) 2.6 %

Foreign tax effects

Other foreign jurisdictions 0.7 ( 0.2 ) %

Effective tax rate $ ( 57.7 ) 17.1 %

(1) State and local income taxes in California, Florida, Pennsylvania, Georgia, New Jersey, New York, Maryland, Illinois, and Virginia comprise the majority of the domestic state and local income taxes, net of federal effect category.

The following table is a reconciliation of the U.S.

federal statutory income tax rate of 21% to the Company’s effective tax rate for the year ended December 31, 2024:

Year Ended December 31, 2024

federal statutory income tax rate 21.0 %

State income tax, net of federal benefit

1 unchanged sentence

Return to provision for prior year

Change in valuation allowance ( 0.2 %) 5.0 %

Effective income tax rate 45.0 % 22.0 %

Deferred taxes are the result of temporary differences between the bases of assets and liabilities for financial reporting and income tax purposes.

Deferred tax assets and liabilities are comprised of the following:

(in thousands) December 31, 2024 December 31, 2023

Changes in valuation allowance ( 0.2 ) %

Effective tax rate 45.0 %

Deferred taxes are the result of temporary differences between the bases of assets and liabilities for financial reporting purposes.

Deferred tax assets and liabilities are compromised of the following:

(in millions)

Deferred tax assets:

Net operating loss carry forwards $ 656 $ 1,417

Long lived assets 1,645 210

Lease liabilities $ 164.9 $ —

Share-based payments 20.4 1.4

Accrued expenses 20.9 0.1

Allowance for doubtful accounts 154 135

Deferred tax assets 3,975 1,912

Deferred tax liabilities:

Long lived assets ( 1,236 ) ( 128 )

Inventory valuation 38.5 —

Allowance for credit losses 16.4 0.1

Net operating loss 25.9 0.7

Tax credit carryforwards 0.3 —

Intangible assets — 0.5

Total deferred tax assets 287.5 2.8

Deferred tax liabilities:

Net deferred tax asset 2,739 1,784

Intangible assets ( 848.5 ) —

Lease right-of-use assets ( 170.5 ) —

Property and equipment ( 107.9 ) ( 0.1 )

Financing ( 7.8 ) —

Total deferred tax liabilities ( 1,134.7 ) ( 0.1 )

Valuation allowance — ( 0.1 )

Net deferred tax assets $ 2,603 $ 1,444

Net deferred income tax (liabilities) assets $ ( 847.2 ) $ 2.6

As of December 31, 2025 and December 31, 2024, the Company had U.S.

federal net operating loss carryforwards of $ 102.5 million and $ 3.4 million, respectively, all of which have an indefinite carryforward.

Certain acquired net operating loss carryforwards are subject to an annual limitation but are expected to be realized.

As of December 31, 2025, the Company had state net operating loss carryforwards of $ 5.5 million that expire in varying amounts over the next 20 years.

As of December 31, 2024, the Company had no state net operating loss carryforwards.

The Company regularly assesses the need for a valuation allowance of its deferred tax assets, and to the extent it is determined that an adjustment is needed, such adjustment will be recorded in the period that the determination is made.

As of December 31, 2024 and 2023, the Company had U.S.

federal net operating loss carryforwards of $ 3.4 million and $ 5.8 million, respectively.

The federal net operating loss carryforwards will expire at various amounts beginning in the year ending December 31, 2026, if not utilized.

Utilization of the net operating losses remaining as of December 31, 2024 is subject to an annual limitation provided for in Section 382 of the Internal Revenue Code of 1986, as amended (the “Code”) and any annual limitation could result in the expiration of net operating loss carryforwards before utilization.

Approximately $ 3.4 million of federal net operating losses are currently limited from use under such provisions the annual limitation could result in the expiration of net operating loss carryforwards before utilization.

The Company has a valuation allowance recorded for the deferred tax asset related to the net operating losses that are more-likely-than-not to expire unutilized.

As of December 31, 2024 and 2023, the Company had state net operating loss carryforwards of $ 0 and $ 1.7 million, respectively.

NOTE 12 – RELATED PARTY TRANSACTIONS

Upon the closing of the Equity Investment, pursuant to the execution of the Investment Agreement, the Company reimbursed JPE for certain transactional, market research and employee costs related to establishing the foundation for QXO to move forward.

These costs, as defined in the Investment Agreement, equated to a total reimbursement of $ 15.3 million, which was treated as a reduction of the proceeds received from the Equity Investment.

In connection with the Equity Investment, Mark Meller was terminated as CEO of SilverSun Technologies, Inc.

and entered into a new employment agreement to serve as President of SWK Technologies, a wholly-owned subsidiary of QXO.

Meller received a lump-sum payment of $ 2.8 million in connection with this agreement.

In connection with the private placement that closed on July 25, 2024, certain directors and officers of the Company purchased an aggregate of 262,585 shares of common stock for $ 2.4 million.

NOTE 13 – SEGMENT INFORMATION

The Company’s CODM is its Chief Executive Officer.

The Company provides technology solutions to help customers manage their enterprise assets.

Through its legacy operations, the Company provides a package of solutions to assist customers in their digital transformations.

All of the Company’s long-lived assets held in the United States and all the Company’s revenues are derived from the United States.

Because of the nature of the Company’s technology solutions being highly integrated to support each customer, the CODM reviews financial information on a consolidated basis for purposes of making operating decisions, allocating resources and evaluating performance.

As such, the Company has determined it operates in one operating segment and one reportable segment.

The CODM uses Adjusted EBITDA and consolidated net income, the measure consistent with U.S.

GAAP, to measure segment profit or loss, allocate resources and assess performance.

Further, the CODM reviews significant expenses at the consolidated level to manage the Company’s operations.

Other segment items included in consolidated net income are depreciation and amortization, interest income, and the provision for income taxes, which are reflected in the consolidated statements of operations.

The following table presents information regarding the components of revenue, significant segment expenses and consolidated net income representative of the significant categories regularly provided to the CODM when managing the Company’s one operating segment:

(in thousands) Year Ended December 31,

Software revenue $ 15,261 $ 14,111

Professional consulting revenue 17,916 18,648

Maintenance revenue 5,356 5,203

Ancillary service revenue 18,340 16,555

Total revenue, net $ 56,873 $ 54,517

Purchased software and services 20,894 20,964

Employee compensation and benefits 46,984 26,696

Share-based compensation 34,513 41

Professional Fees 18,572 1,155

General and administrative expenses (1)

Other segment items ( 97,847 ) 759

Net income (loss) $ 27,969 $ ( 1,070 )

(1) Includes advertising and marketing, and other corporate overhead expenditures.

NOTE 14 – SUBSEQUENT EVENTS

In January 2025, the Company and its wholly owned subsidiary, Queen MergerCo, Inc., announced a cash tender offer to acquire all outstanding shares of Beacon Roofing Supply, Inc.

(“Beacon”), a specialty distributor of building products, at a purchase price of $ 124.25 per share.

The offer is subject to several conditions and is scheduled to expire at 5:00 p.m., New York City time, on March 10, 2025, unless further extended.

The Company has secured full financing commitments.

These commitments, combined with the Company’s cash on hand, fully cover the purchase price, any required refinancing of Beacon’s debt, and associated transaction costs.

As a result of the Beacon Acquisition, the Company recorded net deferred tax liabilities of $ 910.3 million.

This consists of $ 900.4 million of intangible assets and $ 122.7 million of fixed assets, partially offset by inventories, net operating losses, 163(j) carryforwards, and other deferred tax assets and credit carryforwards of $ 112.8 million.

The increase in deferred tax assets as of December 31, 2025 as compared to December 31, 2024 primarily relates to additional U.S.

federal and state net operating loss carryforwards from the current year taxable loss position and increases in the book basis of inventories from the Beacon Acquisition.

The increase in deferred tax liabilities as of December 31, 2025 as compared to December 31, 2024 primarily relates to intangible and fixed assets recognized in connection with the Beacon Acquisition, which are not deductible for tax purposes when amortized or depreciated.

In July 2025, the One Big Beautiful Bill Act (“OBBBA”) was enacted into law in the U.S.

The OBBBA includes numerous provisions that affect corporate taxation, including changes to bonus depreciation, the expensing of domestic research costs, and modifications to certain U.S.

international tax rules.

The Company has analyzed the impacts of the OBBBA and reflected them in the current period.

These impacts do not have a material effect on the tax rate for the year ended December 31, 2025.

The majority of the tax law changes will take effect in future years.

The Company’s non-domestic subsidiary, Beacon Roofing Supply Canada Company (“BRSCC”), is treated as a controlled foreign corporation.

BRSCC’s taxable income, which reflects all of the Company’s Canadian operations, is being taxed only in Canada and would generally be taxed in the U.S.

only upon an actual or deemed distribution.

The Company expects that BRSCC’s earnings will be indefinitely reinvested for the foreseeable future;

therefore, no U.S.

deferred tax asset or liability for the differences between the book basis and the tax basis of BRSCC has been recorded as of December 31, 2025.

Under the Tax Cuts and Jobs Act enacted in December 2017, future distributions from foreign subsidiaries will generally be subject to a federal dividends received deduction in the U.S.

Should the earnings be remitted as dividends, the Company may be subject to additional foreign withholding and state income taxes.

It is not practicable to estimate the amount of any additional taxes which may be payable on the undistributed earnings.

As of December 31, 2025 and December 31, 2024, there were no uncertain tax positions which, if recognized, would affect the Company’s effective tax rate.

The following table presents income taxes paid, net of refunds, disaggregated by significant federal, state, and foreign jurisdictions for the year ended December 31, 2025.

The significant federal, state, and foreign jurisdictions were determined based on a threshold of 5% of total income taxes paid, net of refunds, in accordance with ASU 2023-09.

(in millions)

Year Ended December 31, 2025

federal $ 22.0

state and local

Connecticut 6.0

state and local income taxes paid, net of refunds 13.0

Total income taxes paid, net of refunds $ 38.2

Changes in and Disagreements with Accountants on Accounting and Financial Disclosure

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 8. Financial Statements and Supplementary Data