XPO Logistics has announced financial results for Q1 2018. Revenue increased 18.4% year-over-year to $4.19bn.
Adjusted net income attributable to common shareholders, a non-GAAP financial measure, was $80.9m for the quarter, compared with $37.9m for the same period in 2017.
Adjusted earnings before interest, taxes, depreciation and amortization (“adjusted EBITDA”), improved to $330.2m for the quarter, excluding $7.2m of integration and rebranding costs. This compares with $290.0m of adjusted EBITDA for the same period in 2017.
The company’s transportation segment generated revenue of $2.77bn for the quarter, a 16.0% increase from the same period in 2017. Segment revenue growth was led by increases in freight brokerage and last mile in North America, as well as dedicated truckload transportation in Europe, and favourable foreign exchange rates.
Operating income for the transportation segment increased to $139.0m in the quarter, compared with $105.3m for the same period in 2017. Adjusted EBITDA for the segment was $265.6m, an increase of 13.6% from the first quarter of 2017. The increases in operating income and adjusted EBITDA were primarily the result of the growth in North American freight brokerage and European dedicated truckload, as well as an adjusted operating ratio of 87.8% for North American less-than-truckload, reflecting a year-over-year improvement of 120 basis points.
The company’s logistics segment generated revenue of $1.45bn for the quarter, a 23.2% increase from the same period in 2017. The increase in revenue was led by strong global demand for e-commerce contract logistics, as well as gains from the industrial sector in North America and the fashion sector in Europe, particularly in the UK, Netherlands, Spain and Italy. Favourable foreign exchange rates were also a benefit to revenue.
Operating income for the logistics segment increased to $47.5m, compared with $32.9m for the same period in 2017. Adjusted EBITDA for the segment was $111.9m, an increase of 28.2% from Q1 2017. The increases in operating income and adjusted EBITDA were primarily due to revenue growth and site productivity improvements, partially offset by higher direct operating costs related to new contract start-ups.
Bradley Jacobs, chairman and chief executive officer of XPO Logistics, said, “We’re off to a strong start in 2018. We delivered record first quarter results for revenue, net income, EPS and adjusted EBITDA. Our 11% organic revenue growth reflected a healthy diversification of customer verticals and service lines. Organic growth in last mile was 15%, and logistics was 14%, both driven by e-commerce demand. Profit significantly outpaced revenue in our logistics segment, with operating income up 44% and adjusted EBITDA up 28%. In our transportation segment, we grew freight brokerage revenue by 30% in a tight market. We expanded our margins in North American freight brokerage and European dedicated truckload, and improved our adjusted operating ratio in North American less-than-truckload to 87.8%.”
Jacobs continued, “We’re making disciplined investments in innovation and sales to propel long-term growth. We recently introduced our digital freight marketplace, smart warehouse platform and voice integration for consumer self-service. In April, we announced XPO Direct, a shared-space distribution network of warehouses and last mile hubs that gives customers flexible capacity. In sales, we won a record $972m of new business in the first quarter, and our sales pipeline stands at $3.6bn. We remain on track to deliver at least $1.6bn of adjusted EBITDA and approximately $625m of free cash flow this year.”
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