XPO, Inc. reported fourth‑quarter 2025 results that included $2.01 billion in revenue, a 4% year‑over‑year increase, and GAAP diluted earnings per share of $0.50, down from $0.63 in the same quarter of 2024. The company’s adjusted diluted EPS of $0.88 beat the consensus estimate of $0.76 by $0.12, a 15.8% lift that reflects disciplined cost management and a favorable mix shift toward higher‑margin LTL services.
Revenue growth was driven primarily by the North American LTL segment, which generated $1.45 billion in revenue, up 12% YoY, and contributed a 14% rise in adjusted operating income. The European Transportation segment, while posting a 9% revenue increase to $260 million, reported a widening operating loss, underscoring the challenges in that market and the company’s consideration of divestiture.
Adjusted operating income rose 14% to $1.12 billion, and the adjusted operating ratio improved to 84.4%, a 180‑basis‑point gain. Management attributed the margin expansion to AI‑driven route optimization, labor productivity gains, and a stronger pricing mix in the LTL business.
GAAP net income fell to $0.78 billion, a decline driven by the loss of a $0.15 billion real‑estate gain and $0.07 billion in restructuring charges. These one‑time items offset the underlying earnings strength and caused the GAAP EPS miss relative to the $0.76 estimate.
Looking ahead, XPO expressed confidence in continued margin expansion and a “significant acceleration in free cash flow.” The company reiterated its focus on AI investments, cost discipline, and a potential European exit, positioning itself for outsized share and margin gains as freight demand recovers.
Market reaction was mixed: investors praised the adjusted EPS beat and LTL margin gains, while concerns about GAAP profitability and the European segment’s losses tempered enthusiasm. The overall sentiment reflects a recognition of strong core execution amid headwinds in legacy markets.
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