XPO reports annual revenues up 26% y-o-y and exceptional Q4 2021

XPO

XPO has reported its 2021 financial year results, also achieving record earnings in Q4 2021 according to what stated by the company. Results exclude the logistics segment GXO, which was spun off on August 2, 2021.

According to the CEO Brad Jacobs: “The company as a whole performed well, and we reported a Q4 that delivered a number of record results. The company’s growth was led by our two largest businesses: North American LTL and truck brokerage. In LTL, the company delivered record fourth quarter revenues and record year-over-year growth in yield. Our adjusted operating ratio in the quarter degraded year-over-year, which was expected, given some third quarter challenges within our network. But the negative trend bottomed out in October when the company launched its LTL action plan, [generating an] immediate impact on our year-over-year performance. The biggest tailwind driving our volume is XPO Connect, our digital brokerage platform. Shipper and carrier adoption of Connect is growing extremely fast.”

The company added that 70% of its brokerage orders in North America were created or covered digitally.

In 2021, the company reported revenues totalling $12.8bn, up 26% year-on-year (y-o-y), which it considers a full-year company record. Operating income for the year totalled $616m, compared with $228m for 2020, and adjusted EBITDA of 1.2bn exceeded the company’s guidance.

North American Less-Than-Truckload segment increased revenues to $4.1bn, compared with $3.5bn for 2020, and operating income of $618m and adjusted EBITDA totalling $904m. North America truck brokerage business segment revenues totalled $2.7bn, with $427m margins. XPO stated it is growing North American truck brokerage three times faster than the industry average.

As far as Q4 2021 is concerned, during the quarter, revenues increased 14% to $3.4bn, a record for any quarter in the company’s history according to XPO. Net income for the reporting period was $126m, compared with $34m for Q4 2020. Operating income was $174m, compared with $153m for Q4 2020. Adjusted EBITDA was $323m, up 12% y-o-y, exceeding the company’s guidance range and the highest adjusted EBITDA of any Q4 to date.

During the quarter, North America LTL’s business segment reported revenues of $1.0bn, with operating income reaching $137m and adjusted EBITDA totalling $210m. In the North American truck brokerage business, Q4 2021 revenues totalled $846m, with margins of $128m. The company’s use of tech in LTL is to continuously improve its margin as it grows its revenues — primarily by optimising pricing, linehaul, dock productivity and pickup-and-delivery routing.

Looking ahead, the company estimates 2022 adjusted EBITDA of up to $1.4bn, a y-o-y increase of 11% at the mid-point, including first quarter adjusted EBITDA of up to $285m, with North American LTL expected to generate at least $1bn of full year adjusted EBITDA.

XPO said it expected annual technology spend of over $300m will continue to differentiate the company as a leading industry innovator. XPO also intends to double driver graduate count in 2022 vs. 2021.

Source: XPO Logistics

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