XPO Posts Solid Second Quarter 2025 Results, Exceeding Expectations on Adjusted Earnings and Operational Efficiency
XPO, a leading provider of freight transportation services, today released its financial results for the second quarter ended June 30, 2025. While headline earnings were lower than the prior year, the company outperformed analyst expectations on several key operational and financial metrics—demonstrating continued momentum in its strategy to build long-term profitability and customer value.
Financial Overview: Resilient Performance in a Challenging Market
XPO reported diluted earnings per share (EPS) of $0.89 for Q2 2025, down from $1.25 in the same quarter of 2024. On an adjusted basis, diluted EPS came in at $1.05, modestly lower than the $1.12 reported a year ago but ahead of Wall Street forecasts. Adjusted net income for the quarter stood at $125 million, compared with $135 million in Q2 2024.
Despite ongoing softness in the broader freight market, the company’s revenue remained stable year-over-year. XPO generated total revenue of $2.08 billion in the second quarter of 2025, matching its performance from the same period last year. Operating income rose slightly to $198 million, compared with $197 million in Q2 2024. Net income declined to $106 million from $150 million a year earlier, primarily due to the absence of a one-time tax benefit recorded in the previous year related to XPO’s former European operations.
Adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA)—a key non-GAAP metric used by management and investors to evaluate operational profitability—stood at $340 million, just slightly below the $343 million posted in Q2 2024.
CEO Mario Harik Highlights Operational Strength
Commenting on the results, XPO Chief Executive Officer Mario Harik emphasized the company’s continued strength despite a challenging freight environment. “We delivered strong results in the second quarter, with adjusted EBITDA of $340 million and adjusted diluted EPS of $1.05, both exceeding expectations,” Harik said.
He credited the company’s ability to adapt and excel under difficult conditions, pointing to gains in pricing, service quality, and internal efficiency. “In our North American LTL [less-than-truckload] business, we achieved an adjusted operating ratio of 82.9%, reflecting an industry-best year-over-year improvement of 30 basis points,” he added.
An operating ratio below 85% is typically considered a mark of excellence in the LTL segment, and XPO’s improvement amid an industry downturn suggests strong internal controls and cost management. Harik noted that while tonnage declined due to macroeconomic softness, the company still managed to expand market share, particularly among local and regional customers.
LTL Business Delivers Margin Expansion and Productivity Gains
One of the cornerstones of XPO’s strategy is the growth and optimization of its North American LTL business. During the second quarter, XPO continued to execute on this front, demonstrating notable improvements in pricing and cost structure.
Revenue per shipment increased by 5.6% year-over-year, and yield, excluding fuel surcharge revenue, grew by 6.1%. These pricing improvements were driven by a combination of strategic pricing initiatives and the company’s premium service offerings, which helped it win more business despite overall volume declines.
XPO’s cost discipline was particularly evident in its linehaul operations. The company significantly reduced its reliance on external carriers, cutting purchased transportation costs by 53% compared to the same period in 2024. This was achieved by insourcing a record number of linehaul miles—a move that not only improved margins but also allowed for better control over delivery quality and scheduling.
Further gains in labor productivity were achieved, supported by XPO’s proprietary technology platforms. These systems optimize workforce deployment, route planning, and network efficiency, which are critical to delivering superior service while managing costs.
Technology-Driven Execution Sets XPO Apart
XPO has made considerable investments in technology to modernize its operations and improve performance. The company’s proprietary tools include machine learning algorithms that forecast demand, AI-powered routing platforms, and real-time tracking and dispatch systems. These innovations have enabled faster, more efficient service for customers, while giving XPO better visibility into its own operations.
Harik emphasized that technology continues to play a central role in driving productivity and supporting long-term strategic goals. “We’re executing at a high level and consistently outperforming the industry, with a strategy that positions us to deliver long-term margin expansion and earnings growth,” he said.
Cash Flow and Liquidity Position Remain Healthy
In addition to operational success, XPO maintained a solid balance sheet and strong cash flow generation. During the second quarter, the company generated $247 million in cash flow from operating activities. After capital expenditures of $191 million—most of which were directed toward fleet expansion, facility upgrades, and technology infrastructure—XPO ended the quarter with $225 million in cash and cash equivalents.
This liquidity provides the company with financial flexibility to invest in growth initiatives, navigate economic headwinds, and return value to shareholders if warranted.
Strategic Positioning
Looking ahead, XPO’s management remains cautiously optimistic. While macroeconomic uncertainty continues to pressure freight volumes across the industry, XPO believes its differentiated operating model, strong pricing power, and disciplined cost management position it well for future growth.
The company is focused on strengthening its core LTL network, expanding its customer base, and enhancing operational efficiency through innovation. Key performance metrics—such as yield, labor productivity, and operating ratio—are expected to continue trending positively as XPO leverages its scale and proprietary tools.
Investors and analysts are watching closely as XPO executes on its long-term plan. The company has reiterated its strategic goal of achieving margin expansion and sustainable earnings growth by focusing on high-return investments, technology-driven efficiency, and a customer-first service philosophy.
In a freight market defined by ongoing volatility, XPO has once again demonstrated its ability to deliver consistent performance and outpace industry peers. With stable revenue, robust adjusted earnings, improved margins, and a clear strategy for long-term value creation, the company enters the second half of 2025 with strong momentum.
As Harik noted, “Our world-class team and service culture continue to set us apart. We are winning in the market, driving innovation, and building a company that is well-positioned to lead the next chapter of growth in freight transportation.”