Logistics provider XPO Inc. (NYSE:XPO) revealed its latest quarterly results on Thursday, unveiling a financial performance that exceeded market expectations for the fourth quarter of 2025. The company reported a total revenue of $2.01 billion, marking a 4.7% increase compared to the same period in the previous year and surpassing analysts' estimates of $1.96 billion. This top-line growth reflects XPO's continued ability to grow its business amid a competitive transportation and logistics landscape.
Adjusted net income for the quarter was reported at $105 million, a slight decrease compared with $107 million recorded in Q4 2024. However, adjusted earnings per share (EPS) rose to 88 cents, outpacing the consensus analyst projection of 77 cents. This divergence suggests effective cost management and operational efficiencies helped cushion the income decline.
Operating income experienced a marginal reduction, moving from $148 million in the fourth quarter of 2024 to $143 million in the latest period. Despite this slight decrease, adjusted EBITDA improved to $312 million from $303 million year-over-year, highlighting better earnings before interest, taxes, depreciation, and amortization. The company also generated $226 million in operating cash flow and closed the quarter with $310 million in cash and cash equivalents, maintaining strong liquidity.
During the quarter, XPO repurchased $65 million worth of its shares, indicating confidence in the company’s valuation and a commitment to enhancing shareholder value.
Segment Analysis
XPO's North American Less-Than-Truckload (LTL) segment registered revenues of $1.17 billion, reflecting a modest 0.8% increase compared to the prior year. Excluding fuel surcharges, yield improved by 5.2% year-over-year, evidencing effective pricing strategies. However, volumes saw a decline, with shipments per day falling 1.6% and tonnage per day dropping 4.5%. Notwithstanding these decreases, the LTL segment achieved an adjusted operating ratio of 84.4%, improving by 180 basis points from the previous year’s figure. This enhanced efficiency was described by CEO Mario Harik as "outperforming seasonality," revealing solid operational execution during a period which often presents seasonal challenges.
Adjusted EBITDA for the North American LTL operations advanced by 1.8% year-over-year, reaching $285 million, which underscores the segment's ability to improve margins despite volume headwinds.
The European Transportation segment contributed $846 million in revenue, rising 10.6% from the prior year. Its adjusted EBITDA increased to $32 million from $27 million year-over-year, demonstrating profitable growth in the region.
CEO Harik emphasized the company's success in combining mix and pricing initiatives, which yielded the twelfth consecutive quarter of sequential revenue increases per shipment excluding fuel. He also underscored the impact of artificial intelligence developments in reducing costs to serve by enhancing network efficiency and labor productivity, thereby supporting the company's profitability.
Market Reaction and Outlook
Following these results, XPO's stock price responded positively, rising 5.29% to $188.99 at the time of reporting. The shares remain at a critical resistance level, suggesting investor optimism about the company's forward trajectory.
The shares' performance reflects investor recognition of XPO’s operational improvements, profitable growth, and strategic use of technology and pricing to enhance margins in a competitive environment.
Summary
XPO Inc.'s fourth-quarter earnings report highlighted its capacity to grow revenue beyond market expectations while maintaining solid profitability. Despite minor decreases in volume measurements in the North American LTL segment, pricing power and efficiency gains contributed to improved operational margins. The European segment's robust revenue and earnings growth further underpinned the company's strong multi-regional presence. Coupled with substantial cash flow generation and an active share repurchase program, XPO positioned itself favorably in the transportation and logistics sector at the end of 2025.