GXO Reports Profit, Revenue Increased in Fourth Quarter

CEO Malcolm Wilson Touts a Billion Dollars of Annualized New Business Wins
GXO warehouse
GXO's expertise in automation and robotics sets the company apart from its competition, according to CEO Malcolm Wilson. (GXO Logistics/Blue Yonder Media)

[Stay on top of transportation news: Get TTNews in your inbox.]

GXO Logistics reported an increase in earnings and revenue year-over-year during the fourth quarter despite the softer freight market, the company detailed Feb. 14.

The Greenwich, Conn.-based contract logistics firm posted net income of $73 million, or 61 cents a diluted share, for the three months ending Dec. 31. That compared with $46 million, 39 cents, during the same time the previous year. Total revenue increased by 4.9% to $2.59 billion from $2.47 billion.

GXO ranks No. 6 on the Transport Topics Top 100 list of the largest logistics companies in North America.

“2023 was a stellar year for GXO,” CEO Malcolm Wilson said during a call with investors. “We signed a billion dollars of annualized new business wins, positioning GXO for continued growth. We deployed a record amount of automation, helping our customers to operate more efficiently. And we acquired [PFSweb], a premier fulfillment provider in high growth verticals.”


See more transportation stock listings

Wilson also noted that expectations for adjusted earnings before interest, taxes, depreciation and amortization were increased throughout the year to $741 million. That compared with $728 million for 2022. GXO also converted a record 40% of that adjusted EBITDA into free cash flow.

“We benefited this quarter from our balanced portfolio," Wilson added. "Over 1,000 companies partner with GXO across 27 countries where we operate. We handled record volumes for some while managing a softer peak for others.”

For the full year, GXO reported net income of $233 million, or $1.92, on revenue of $9.78 billion, compared with net income of $200 million, $1.67, on revenue of $8.99 billion in 2022. The company also reported that it significantly increased its new partnerships with a diverse group of customers.

“For the full year 2023, we generated $9.8 billion of revenue, growing 9%, of which 2% was organic,” Wilson said. “As you’ll recall, our initial adjusted EBITDA guidance for the year was a range of $700 [million] to $730 million. We are proud to say we beat the midpoint of that guidance by a healthy $26 million, with our full-year adjusted EBITDA coming in at $741 million. During the year, we closed a tremendous $1 billion of annualized new business wins.”

Wilson stressed that the new business gains emphasize the demand for the company’s services, and he pointed to customers outsourcing certain work to GXO as a particular area of growth over the past two years.

“When you look into the details of that, the portion of outsourcing has increased in our new business,” GXO Chief Financial Officer Baris Oran told Transport Topics. “First, many of our blue-chip customers — these are huge global brands — are investing in direct-to-consumer channels, e-fulfillment.”

Oran noted that the direct-to-consumer model works well for many companies, as it offers greater access to consumer data, better pricing power and less inventory to manage. He also identified automation as a huge driving force in gaining these customers, since it’s a way for them to reduce operational costs at a time when there are limited options to do so.

“They’re looking for partners, such as GXO, to help them to reduce costs in their operation,” Oran said. “We are the leader in automation and robotics deployment in warehouses, and it’s a phenomenal way to take cost out of the picture.”

GXO has deployed automation throughout its operations and set volume records at two of its highly automated sites and is testing new technologies, such as AI-powered robots and humanoids. The company said it expects demand for robotics and automation to increase.


COMTO's April Rai offers tips to increase workforce diversity and grow profits.. Tune in above or by going to RoadSigns.ttnews.com.  

Susquehanna International Group believes GXO leadership has set realistic expectations for the year ahead after the second half of last year ended with a volume-driven slowdown. The investment company added that news on trends for organic growth so far through the first quarter are encouraging.

“Management’s tone was optimistic on their pipeline into 2024, noting that while customers are continuing to prioritize pricing power over volumes [and are carefully managing inventory levels as a result], signs of ‘green shoots’ in both North America and U.K. markets should yield more robust sales-driven growth this year,” SIG analyst Bascome Majors said in a report.

Want more news? Listen to today's daily briefing above or go here for more info

GXO gained most of its revenue for the quarter through the omnichannel retail vertical, increasing 5.9% to $1.09 billion from $1.03 billion during the 2022 period. The technology and consumer electronics vertical revenue followed, with contributions rising 2.1% to $382 million from $374 million.

Food and beverage vertical revenue increased 2.8% to $327 million from $318 million; industrial and manufacturing vertical revenue decreased 1.1% to $266 million from $269 million; and consumer packaged goods revenue increased 29% to $325 million from $252 million.