GXO Logistics Reports 19% Revenue Surge in Q2 2024
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GXO Logistics saw a 19% revenue boost in the second quarter of 2024, reaching $2.85 billion. However, the Greenwich, Conn.-based contract logistics firm reported a drop in net income to $39 million from $66 million in the same period last year. Earnings per diluted share fell to 32 cents from 55 cents.
GXO ranks No. 5 on the Transport Topics Top 100 list of the largest logistics companies in North America and No. 4 on the dry storage warehousing sector list.
“GXO has delivered a strong second quarter, rounding out a great first half, and we’re pleased to be reaffirming our full-year 2024 guidance today,” CEO Malcolm Wilson said during a call with investors. “During the quarter, we signed about $270 million of new business wins. Our pipeline grew for the third consecutive quarter.”
Wilson added that the pipeline of new business now stands at a 12-month high of $2.3 billion. He also noted that the company has won more than $520 million in new business through the first half of the year. Wilson said contract duration is increasing as customers seek to outsource to a company with global scale that can manage the complexity of their supply chain.
Wilson
“We’re also pleased to have expanded our relationships with several long-standing customers this quarter,” Wilson said. “Our land and expanse strategy remains a core tenant of our long-term organic growth plan. And today, about half of our revenue comes from customers we’ve grown to serve in more than one country. New contracts we win are the key to our growth.”
GXO is on track to sign a record amount of new business this year. Wilson believes the industry reached the bottom of the inventory cycle in Q4. He has seen volume trends beginning to improve, while e-commerce has returned to sustainable structural growth at an industry level.
“Customer demand for outsourcing has remained strong throughout the cycle as customers look to improve productivity, reduce complexity and recognize their supply chain as part of their strategy,” Wilson said. “About half of the contracts we’ve signed this quarter were for newly outsourced activities.”
GXO completed its acquisition of British transport and logistics services company Wincanton during the quarter. The company expects the acquisition to create significant value by allowing new and existing customers to benefit from a broader range of services and capabilities across an expanded global platform.
“We’re also pleased to have completed our acquisition of Wincanton in the second quarter,” Wilson said. “This deal exemplifies our M&A strategy. In Wincanton, we’ve acquired a platform to expand our presence in target verticals across the U.K. and Europe, including aerospace, defense and industrials. We have acquired Wincanton at an attractive valuation.”
Wilson highlighted operations in Germany as particularly important to his growth strategy. There, the company started operations on a 20-year contract with Levi’s and signed a new deal with retailer and coffee distributor Tchibo.
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“In both Europe and U.K. markets, we’re seeing our customers grow more confident and launch new and larger projects,” Wilson said. “This bodes well for our future growth, along with our acquisition of Wincanton. [In] North America, while we’re currently seeing softer demand for goods, we’ve signed record new business wins in the first half of this year. Our long-term contractual business model gives us confidence in delivering our 2027 targets of $15.5 to $16 billion of revenue.”
Omnichannel retail operations led GXO’s revenue growth, surging 28.3% year over year to $1.32 billion. The consumer packaged goods and industrial and manufacturing sectors also saw strong growth, each increasing by more than 20%. Technology and consumer electronics posted modest gains, while the food and beverage channel experienced a slight decline. These five sectors represent GXO’s primary revenue streams.
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