XPO Logistics (XPO) 10 May 222022 Q1 Earnings call transcript

Welcome to the XPO Logistics Q1 2022 Earnings Conference Call and Webcast. My name is Laura, and I will be your operator for today's call. [Operator Instructions]. Please note that this conference is being recorded.

Before the call begins, let me read a brief statement on behalf of the company regarding forward-looking statements and the use of non-GAAP financial measures.

risks, company of making by results applicable involve number the within forward-looking their to call, factors statements. a meaning other those the security of the differ this materially will cause projected certain be statements nature, that from During could and in actual forward-looking uncertainties laws, which, in company's actual materially is differ discussion the SEC as A filings to of release. factors results that its well as in could the earnings cause contained the release earnings in on made as are to today, call law. required statements of no company the this forward-looking The any by except company's of or made forward-looking update obligation only statements to extent these and has the

measures, such the under Reconciliations tables contained as SEC its rules. During measures financial comparable earnings non-GAAP applicable release defined and related refer call, this company financial also the of the to the company's are may website. GAAP financial the measures in most on non-GAAP to or certain

You may Investor can the additional the to and Mr. in the measures, now release, find I company's non-GAAP financial will you forward-looking Brad earnings of information website. over regarding important Jacobs, turn a of statements begin. the copy section call which contains Jacobs. company's

and American our of President Good Matt President Ravi CIO Tulsyan, today of Mario Fassler, Officer; Wilkerson, call. morning, our LTL; Drew North our for Acting everybody. in Thanks joining our Harik, CFO; me and With Greenwich are transportation. Chief Strategy

beat in EBITDA. quarter, highest results grew income, solid EBITDA including over of adjusted generating XX% our straight you EPS, history. delivered As first of on any We revenue year's across beats and saw, we adjusted net quarter revenue, the by quarter quarterly our with revenue last a adjusted record eighth

EPS full which had first our by in up momentum, revenue growth adjusted year-over-year of more was at To EPS, EBITDA net American guiding, and also adjusted double-digit our we core midpoint, reflect adjusted financial quarter. North LTL raised XX%. We're beat. than businesses, growth quarter of quarter the year the outlook our the XX%. We and delivered first Both diluted to now by income, for brokerage, records truck

Our of months improvements are a network is business we're just Many ahead ago. today LTL than very X the of was driving it network plan. different

be our year-over-year expect ratio basis by and operating adjusted more to points expect XXX And for gains, sequentially XXX continue better the operating points improvement year than second the We in for ratio, improve least to later quarter estate to inflect the at excluding we to than adjusted XXXX. to our real basis quarter. full

is goal LTL carrier Our to create customers a that shareholders. our world-class our delights and

to American to brokerage. North fire cylinders there. continuing on truck We're Turning all

This Our do exceeded quarter. profitably. volume XX% business share brokerage for consecutive best-in-class the it take and to continuing growth is sixth

an edge process excellent our European to finally, a brokerage at of the In achieved leverage typical year-over-year which XX% divestiture first most business quarter. grow is first runway pure-play company. track, And range. top in we months, deleveraging he's He'll recently architect in of platform, Connect. due spin-off up were long a that net the lead the quarter. dollars American as the large X.Xx sequentially, X% brokerage have margin target to veteran growth planned I'm quarter our as XXXX, outperforming The joining us digital brought the to of Xx, Wilkerson. part on First spin-off, our X which the the will we with the seasonality our XPO since our up rose is down as operations, pleased of is been and a transportation. to CEO, and brokerage from had have be we're lined effectiveness main ratio in we Drew Drew pleased President North of

excellent an and produced quarter So our in outlook. raised we sum,

have multiple brokerage our operations LTL including avenues the ongoing the of for and our European of divestiture tech-enabled We business, creation, the spin-off platform, company-specific transformation of our our value deleveraging. continuing

Now sheet. our I'll Ravi and results Ravi? ask our to balance cover

and our Brad, and Today, first of everyone. morning, our good outlook balance the sheet will results, discuss I quarter our for XXXX. you, liquidity Thank balance and

revenue the the adjusted The delivered the strong prices quarter, net and billion, year-over-year fuel was EPS. of a impact growth For record Revenue XX% quarter first FX EBITDA and for growth XX%. points. we accounted diluted year-over-year. brokerage $X.X X record adjusted reflects revenue, $XXX adjusted in strong EBITDA segment. in Organic and for up was quarter XX% by for services This grew real particularly adjusted million. EBITDA of growth year-over-year sales, We QX to other was the in XX%. a growth our from estate Adjusting gains in

Looking X-year was up adjusted XX%. at a EBITDA stack,

For the EBITDA adjusted margin quarter, was our X.X%.

pressures costs corporate Excluding Corporate the and estate conditions offset sales. an pricing spin-off quarter real our were we gains of Operating the structure This of were XX% optimize favorable, the as down basis was on from purchased following and stayed quarter labor in inflationary year-over-year. to XX cost improvement transportation. year-over-year in firm. This partially points by the was continued environment GXO.

last the Our rate EPS in adjusted during XX%. was was $XX The $XX interest compared million the to year the paydown effective reflects approximately ago tax billion of This million $X quarter expense quarter of year. the for debt period. during

asset was interest This CapEx majority for equipment Our towards the $XXX from $XXX on $XX ago, adjusted with and cash million year lower expense. from $X.XX, diluted additional proceeds business. up Growth $X continuing generated primarily the of year-over-year adjusted received million EBITDA American the quarter spend LTL spent for was North and a going of operations, flow higher earnings increase growth by purchases up was driven $X.XX of which million was share from We increase CapEx of an million per XX%. sales.

in were above cash was related free $XX costs was the contemplated This flow expectation. guidance. outflows free our result, not of million, our $XX a includes transaction flow of impact cash As which cash million to our that

X making the pure-play of are to complete remain on We on powerhouses, we and QX to strategy platform brokerage tech-enabled of track our significant transportation progress spin-off this create our in year.

step we an our proceeds sale the quarter took intermodal approximately multiple $XXX give borrowing strategic of deleverage proceeds from $XXX on step XXXX quarter our a completed under sheet. of After Including our balance the reduce the balance under our with We to intermodal of plan billion XXx of at our debt cash when of represented quarter important last $X combined notes. facilities, with we liquidity our EBITDA. outstanding This we significant cash XXXX facility. This the debt was million, $X of cash, billion capacity for business of no of million we which sale available had borrowings part plan, end. ended repaid the business, As and ABL committed end, sheet. quarter us in the another

net leverage quarter was adjusted Our at end Xx EBITDA.

leverage our our guidance and below quarter We we our visibility, to full we market yesterday. Xx ongoing close light are plan, of of expect ahead on year-end. strong after first year updated deleveraging now be before In schedule results and earnings

in The and The year the billion quarter adjusted same. real remains sale full the new the you remainder the we Our year. reflects intermodal billion. guidance of the for $X.XX of outperformance, for strong February estate assumptions update outlook gave our business EBITDA to first our is $X.XX

million. quarter, of a EBITDA sale, for our of the we adjusted the Pro implies the forma our year-over-year guidance midpoint be to rate EBITDA For second quarter second $XXX expect intermodal million XX%. to growth $XXX

guide from have resulting raised and to of to our in range $X.XX expense This our of reduction implies interest paydown our for new a year guidance outlook debt. growth EPS increase midpoint We XX%. full year-over-year the of of The EPS adjusted adjusted reflects $X.XX. our EBITDA

On our outlook million the cash full front, flow year $XXX free flow remains $XXX to for million. cash

outlook outflows. transaction-related our reminder, a all As cash excludes

depreciation $XXX year $XXX million, is expense million, the amortization and guidance reflecting of from for the approximately intermodal full Our sale business. down

to I to our interest from remain XXXX. expense guidance of turn execute and million, change million continuing There Matt. expect $XXX plan, now no previous on over conclusion, is to million million strategic our balance to In for of and the our CapEx about $XXX previously. prospects to will the We we excited are tax for things down rate. $XXX we $XXX

Thanks, XX% LTL LTL We starting revenue our Ravi. billion, highest in the quarter our segment. with our I'll by quarter $X.X grew results, history. to first operating any review revenue year-over-year of North American

revenue percentage points the X% Excluding X.X by which had We flow excluding our of nicely grew improved. in X% quarter fourth seasonality. weight Yield, year-over-year. X.X% day fuel, year-over-year. we per increased from quarter acceleration per represented day, a growth The increase outpaced from the fourth our decline of tonnage fuel, network in level typical X% as rate

underlying increase we're and shipment pricing initiatives. fourth increased our with pricing these per fourth flat environment weight driving quarter. from X% in were yield X% own firm, growth X.X% length the and versus The Our Adjusting for pricing stronger. company-specific in factors, our remains quarter, of LTL haul the trends increased of a

stronger even date. is to growth yield this Our quarter

the biggest improved higher Our gains was and which adjusted significantly year-over-year points quarter, than LTL real increase quarter in we And XXX guided to our the we ratio booked adjusted than ago our notably adjusted XX.X%. than driver our basis operating That's was XXX seasonality. the February. was The by sequentially, points point in of from of OR and our in first numbers quarter. ratio the transportation. purchased better single basis fourth no from typical such higher the note gains guidance, cost year-over-year year better a increase first with XXX the operating Both basis exclude that, estate, consistent

XX.X% to Third-party linehaul our use recover in of increased near to term miles to volume XX.X% as from the our prior ago. year new more linehaul with miles linehaul capacity. onboarding proportion aligns the This total third-party plan as in a quarter a

by Headwinds increases for $X.X contracts segment, brokerage is and we American the this and basis our We loads brokerage are to highlights In ago. year other truckload outstanding years quarter. record billion X.X% EBITDA as cycle we XX% our new XX% profit XX% which day to This segment a pricing largest contractual revenue are our and will planned record our business, spin-off this big by cycle XX% abate subject segment from million. is as a purchased increased from Those grew by in. to versus linehaul by American to our another revenue most of XX year. year and core brokerage adjusted The Adjusted points a driver North for price pricing. per X a up had from from addition, this starting the a services margin later LTL. EBITDA truck ago. ago year X.X% be of North expanded this business $XXX to and In transportation in ago

dollars margin XX% year-over-year. quarter quarter rose basis, First of nearly another truck higher in tough the in On were first from Margin QX. quarter comp the first against brokerage than X% rose and dollars a XXXX. revenue XX% tripled sequential

truck revenue growth fourth and a we're our Europe quarter. geographies, revenue brokerage saw drivers U.K. in in points a two our will the strong uncertainty in pleased by the minute. speak from percentage accelerating Our and reflects in context in European with Drew in France, organic grew European the environment. We Organic X X%, of in in more execution acceleration about both specific the resilience largest market. growth the dynamic our

straight Year our expect grateful General continue named recognition Iberia for truck platform. us during France the leading position quarter. we received fourth We're as of Supplier of build external We LTL some for on to in broader and the Motors the within brokerage to our U.K., provider the year. a and pan-European

materiality addition, members XXXX. sustainability we ESG of our published of Indexes progress strong the week, on given initiatives status record In employer we which community. our index hiring our annual Last military report, details our recently for were for and fourth VETS

download can report this You online.

the year Finally, LTL SpinCo want those that brokerage vision deep key use mention dive stand-alone events give into RemainCo to later separate hold spin. financial our we events and to you plan completing prior and longer-term company. for a for this to targets both our I to We'll investor our each

American for LTL. over North Now Mario to I'll comments his on it turn

Matt, everyone. Thanks, morning, good and

Brad a it said, ago. than X LTL different is was business As very months

We're balanced. handling. freight sharp and metrics and areas network on-site fluid back significantly transit in stronger levels. prepandemic more service such efficiency to as much has brought realizing is network Our key our rebound The

an and a we're pricing Our proprietary off investment across importantly, is many example. to widespread to launched initiative, LTL technology their Most drive initiative we building there network. to excitement new it they productivity. further just triggered further I'll improve announced the package team are on month, also optimize track, of you in weeks, on improve trailer new, around freight. the a delivery. in the seen on-time we've and how in out rolling national initiatives This and give capacity we've organization. with in wave quality the the few our best great of practices loading momentum we We're field. a When this enthusiasm customers engaging In the tidal kicked

beat to is the It LTL In operating progress that is delights and and ratio there, transformation better won't direction. than ratio create carrier tomorrow, year-over-year February, the LTL our adjusted the already reality, but guide basis improvement. goal quarter. our operating year-over-year in Our wanted our happen backdrop for that helped customers to we're we're you reflecting I world-class points guide. our because to a of give in the in first us moving we we in towards back In degradation, guided moving commitment the did first continuous XXX undertaking the investors.

of us an operating for quarter. the ratio estate QX just gave real XXX adjusted Our was ex This points. XX.X% basis degradation

in underlying inflect this a of points expect additional as ex billion, quarter in than estate on in we're at we drive year-over-year of revenue first ratio some quarter, year. later improvement the the is years XXX improvement the the for the reported to to We record We operating to trends than we coming year-over-year We XXs. And would. basis point operating well real into ratio of get target higher adjusted basis full which to favorable. $X.X said ratio points adjusted of hundreds are XX% more And last improvement for year. plan OR importantly,

accelerated you in X%. was the quarter a you we Tonnage sequential record the When one within told Our trends positive. down per was year-over-year in Growth quarter. slightly at first shipment expect. rates improvement step every the also look yield are deeper, to month year-over-year revenue

Our environment. We're quarter pricing coming March. operating gains robust yield also in throughout accelerated with a the very in the strongest

in Usually, typical flat sequentially, I the Our seasonality. ratio tonnage mentioned, in X% is to quarter up tonnage plan. our than which of QX momentum was the as operating is is ahead building And from better QX. our

XXX We to than expect adjusted QX quarter operating basis ratio our points more QX. from second by improve to

very So track. is the business on much

the year-end expand I investing our to first net sites want XXXX. doors net Now These we're the some since California actions of new opened took areas we recently are two a target capacity deploy growth. technology. in new new quarter our and cover to doors by added October XXX bring main and terminals to in XXX We These where Georgia. against of

X be our progress Arkansas the These will XXXX we're fleet gateway trailers more our quarter, quarter our great more our into us forward. manufacturing in X/X the there. larger in gives South. making any facility also way produced first in LTL of Florida. levers of In We're Bernardino in It than will sites So of for largest in expanding going regions than in the history. one The the trailers. and other California. capacity manufacturing growth retail and San terminal terminal expands from us And serve also a in growing Southern Atlanta the demand

and fleet opened in Florida, help us will Ohio, shops maintenance York, Nevada costs. New new maintenance also which manage We

and of this We at growth for on continue we're to X% budget X% again CapEx revenue to plan. year,

and launched optimizing specialized success pricing airline in sectors, industry, David's better to contract pricing as In they In developments, sure the decades on And brought the management. In developments now and of rolled LTL. for around can the those our automated enhance performance, our accessorials with on pricing results. including data. transportation XX%. revenue price front, are other platform, On able digital analytics capture advanced for make he on increases QX, of includes new career Phalen self-service pricing account which recent President dashboard our include a means Senior where to Vice we dollars. yield we automated David by to application technology experts focus in billing customer accelerated we time to This more is analyzing customer negotiate board we proprietary the driven April, shipment out with experience. ongoing Pricing renewals of tools for

levers quarter, as into piece-level for cost proprietary well to our we'll network. models tracking management This new be cost as visibility enhance introducing functionality

strategy comprehensive to one succeeded just confidence to succeed goal and first LTL it in we optimization carrier. every business. sum world-class comes creating that years the owned dramatically increasing at up, we'll LTL as LTL a for So our growth we're And we down goal: this we returns the over have X

adjusted laser We it that in XXXX. continue EBITDA focused continue people, industry. LTL our to is the Con-way. us superb has steam expect grow the efficiency $X least to the XXXX nearly generate some What have are service. in when operators LTL we by generated acquired billion you're network customer we're tripled our to adjusted will ahead, the EBITDA because in support of from seeing And in in from at best on we of LTL momentum XXXX who full the and of This

brokerage. will Drew Drew? Now cover truck

North another Mario. American brokerage Thanks, very strong quarter. truck had

at continue outpace We on by in up were It very fourth revenue. XX%. increased gets XX%. to And the sequentially it a we the consecutive driving of volume industry margin up growth percentage Gross freight healthy and needs XX% loads customers' growth, and than first year-over-year our was from fourth margin what a our quarter. load dollars were operate margin our and That's our XX%, per by experience over double sure increase in do XX%. make more quarter, the margin sixth best, quarter, to the quarter our where load year-over-year increase In was use be. technology strong a do the to

our volume both exactly and as engine There start advantages trends a as to continued margin April the platform. our intended. we percentage. with year, compelling five the we of and specific growth working So built are We a with in model strong that's strong same

is our of is locked This revenue based, of good basis. on into an future gives performance. the revenue up about and XX% business First, that XX% us annual contract contract visibility

with customer leaders Second, long-term market customers verticals. many think we blue-chip of strategic These relationships have partner. across us as diverse a

brokerage tenure have XX customers of years. XX an a average years, top with XX top customers of us Our our and have XX tenure

pool Third, who truck we're our the capacity This continuing to massive with independent of capacity. of value is customers proposition. expand at provide our heart carriers our

customers which we Connect carriers access March, than more XX,XXX trucks. our to have America to continues carriers relationships attract of to and our is business. technology, with in X.X million As Fourth North XPO and

is our first can give rapid want advantage loads thousands state-of-the-art the registered are two Connect love and digital platform. one usage In XPO to of the basis. quarter, business we the on and first-mover carrier growth. XX%. More we behind carriers brokerage to Carriers because main Connect was customers year-over-year trends them realizing have Our the increasingly, up shippers outsourcing these with that secular on our At us work are a drivers time, interrelated XPO of daily to favor. was shippers were technology same weekly access and capabilities. brokers, truckload transportation number lets brokerage with capitalize in XX% a XX%, that up do up customers us carriers on of digital more registered

with great advantage as in whom technologists puts brokerage in the Together, of number position truck and these XX% up off the XXX,XXX built delivers We which downloads management platform team, spin early a us play. will is of were of to The pure or exceptional a is higher outsized fifth privilege to a operators covered trending XPO. digitally our brokerage sequentially. that spin-off. our all since strong days be is a loads of work and quarter. points second we've results And also joining already That best-in-class It's the the X our compelling cumulative in created surpassed app. quarter, mobile

investors go we'll new transportation flexible, billion manage our and continue grow it as capital. take a to that, very spin-off is X, will a resilience of the the As I'll to operator, easier excited the over high our to there. to and we'll public economic innovate asset-light level about to to With for separate on spend From return Q&A. invested We're turn business it business when the from appreciate our day to company, next model, $X.X it this and be complete. company business

[Operator Instructions].

Our Bank of question America. line Hoexter with comes of Ken the first

congrats. the team, on and nice quarter outlook. Brad job And and Drew,

So if start Brad. I out, can

during the You made quarter. comments some

contracts You noted noted in you some weakness lower in Matt, market. that rate. cycling at are trucking of the some a linehaul the

to contract on Is points I margin? want pricing you And industry just down seeing forward more that with strength I are rates LTL guess basis that side? the the then in Or is contrast So for cost already? to in target the how on your of continue? that understand, does still hundreds going

Yes, this. I'll take

for had come have linehaul linehaul last completed we the just our our actually that slightly yearly they so as a on seen, On parties, new linehaul, where when we and bid through third-party outsource year-on-year in. to we've of we increases here the contractual but level up QX third basis. And nowhere week rates, contractual rates miles is to where rates versus on used near gone well year be, the last obviously,

are outsourcing up. rates still a it the rates across this carriers we're obviously, side but the on competitive seeing multiple moderating, are was with what But there. linehaul So is LTL. bid, And contractual

gains basis talk about due that your -- then. of you that on going -- solely margin LTL when points the hundreds And forward? to thoughts Is pricing going

OR Yes. and and One the second three at and excellence costs. at is forward, one moving driven When volume in categories. pricing, the looking is improvement operational look quarter it's really by we LTL is one

side, pricing pricing. the to continue see very robust On we

into we full improvement So the crossed year territory. quarter And we into heading second with quarter year-on-year. double-digit ended first the X% a here, of

month around accelerate then finally component, more third side, the then the low is through of up starting year, it's the volume -- headwinds efficient. saw second side, being we also, mid-single And be last May. of network digit the head would the purchased transportation for as such On in year well expect the the end cost the year. on -- the quarter, second much down we as with half much to cost a back our in to here And headwind we quarter and as we and the lower

footprint that quarter. substantially, overall now points basis is network the more than of also which to cost down, leads our So in our OR second fluidity improvement has improved XXX

question of line with from next Group comes the Our Research. Wolfe Scott

Can And you about think potential I you GRI. talk quarter, LTL? last the talked about another the contractual environment for in pricing LTL

If this you And or And timing any update Brad, can environment give the an all? at there. separately, put give on update process you Europe? risk can risk in at then the in Europe does just macro of this at

with I'll has European It's to thing is start Russia-Ukraine the vibrant last it. Scott. process well. a process. affected date, And going The part, the not

to And -- LTL, look quarter it we in quarter we second for very far date. and When accelerated on strong. our although in the the and to accelerated pricing yield to quarter digit from the X% in double and at XX%, our us, be crossed -- renewals quarter so Scott, environment first contract the continues first

very a environment. remains it strong So

think that listing I more you -- can or this separate point, likely? do sale at is a Brad, a

think sale a I is.

Our of Chris next Citigroup. question line comes Wetherbee with from the

terms cost linehaul on of a we've on was April bigger Sticking truckload you through know I maybe in picture. -- second looking little I a you for, of low I so a takeout little contracting are us sense in April? how just side. the looking in sense trending. the and decline I think bit maybe single-digit could maybe Mario, When things then, how want sort was you're some volume tonnage progression about LTL, are where of think, And give quarter. the of get gone you to wondering,

to trying efficiency. been network improve you've think I

I you issues. think you back where before set had was actually it it to

of to we to start guiding of sense for from sequential margin want from back the want to the the good I you're sort get maybe and to over half positive Still year. can sense wrung be that a costs needed expect happening a here. are that about the of that how the we I is what So progression are when the get to should a of and to know guidance out of standpoint, generate still system rest think just I improve.

Okay. Thanks, Chris.

all, tonnage. of QX first So

So And April our we just expect -- growth far so when range. we mid-single in April has however, down digits, day. day QX And it low per to the to mentioned. revenue accelerated when within of revenue April, as in tonnage I growth to the look the comes month that be versus per revenue was

look had at win we tonnage the momentum course expect rate April the year and the team whole, a sales because team still build month tonnage sales of we we the very best to of when years. That the momentum here as has great through Now is past over the have in in driven momentum energized. we've the X

We of the the in have either in about month or closed early May, or multimillion-dollar close that have dozens May including month opportunities top of to April of a new XX customer.

build year we building expect more the into of than QX going improvement XXX back -- basis and basis a QX half. year, the of in that's it's improvement. of why through from XXX very and full environment, healthy expect points of we points we that momentum OR least So when the OR at And the to expect momentum balance, think about the on course still we a

big week past side and linehaul look for at as the of to starting effect. so Now the the into when is component we cost these obviously purchased finalize now of be our and this new are cost bid we it, transportation, -- costs rates a normalize will are

labor or P&D about in a as in the into dock right think costs and a when our So you that's terms running much to well. lot metrics Similarly, more up going of an efficient of dock trending our network, be of year. the efficiency are costs, we're when half back higher the P&D these labor improvement of

the to the of be as lead year. So would half And half of some these costs the back the also when these back -- into and year, reducing we head rehandling of all well. would

think lot pressures these I on a abate a cost of year-on-year basis.

still back in there's is cost But to -- on other again, of obviously, portions. Now inflationary costs pressure these wages the half. going the with abate all would and

purchase costs higher lower the actually were trends. to When out. you're That's forward? make market? helpful. the contract Or contracts just relying just correct? about how those are net that I spot clarification sure I of renewals, less you're be plays understand levels, just at higher because on So going these on -- it'll are want One point renewing thinking you the

had a move from you as go higher, the The OR flips we Consequently, go increases Those through bit back the PT We in we and little headwind through half. as factor increases costs increases for the year. diminishes to as diminish QX. the but abating are favorable are year. to the big a

Our of comes Oglenski next Barclays. question the line from with Brandon

release guess the before don't point, volume the this this that's the service have X% you're coming going like X% year. down now market to term, do to perspective between customers? the trends in the that's your mean recovered And I network and low you time? I longer you mid-single on have think door you guys think and quarter, think a or digits in have I growth at fully guys with single to you but talked right And is? next So with about from belabor where Do

Yes.

cover Let all of them. me to try

tonnage. on So why one -- is first the

environment. So crosswinds to it's say fair freight in there are the that

that on of a getting Now in feedback with the of also group still from review we're just in some when what lockdowns from country. hearing last the inflows demand feedback I'll hearing the lot of we their customers. what's salespeople had of into goods China engage customers. But here yesterday. we a company the tell And get the frequently happening, optimism limited And you about we're we they're

are or customers. And also impacting the of the shortages, raw our the some shortages shortages, chip of some material industrial

will, And vitality through capacity the half. back the abate, pure-play when we I attractive the as overall the the so an what our momentum of than they as a dynamics in ROIC energized the tailwinds has sales has higher of will and mentioned company-wide LTL Today, that is about doors adding don't -- as a great is driving is at X is top into a have as very become plan, being in we terms for completed. perspective, these us that. that spin cycles. the we XX%, year. feel a great excited ROIC obviously we half lever. back a results provider we're And we're and And industry head our team these in natural short-term earlier, is look when sales adding LTL door where from now Now

yields when doors, both well perspective where we equipment obviously gain network, the get volume So are top growing we on the industry. of our and back going the think about market adding vision share it's and and to the a line from headcount, long-term as of from to a capitalizing supporting

question next line Wadewitz the from of Tom UBS. Our comes with

Tom. for DiMattia Michael is This

the You renewals fuel. in in accelerate mentioned than per new ex about tonnage greater that going should that impacting contract were you Does think quarter, imply per or improve hundredweight growth wins XX% was to day that also, the we And second the revenue quarter? new expect up which yields contract how forward?

take the that. of I'll first part

weight and per saw per haul prepared in higher my a weight think First alluded or of We of all, rather, to growth day bit. moderate -- remarks. length shipment move I this I

relative trends. underlying dampened pricing reported a that yields So to bit

in currently quarter-to-date. tracking are yield double digits We

So our contracting. on take part And seeing the the increases yield will price you're contract. much to second track closer on Mario

getting from what environment. on a it be we're Based very continues to pricing customers, robust Yes.

today just perspective, I And and LTL. have in be said great customer, pricing from opportunities If continues XX% industry. as the XX players the firm you the billion roughly of pipeline you our a of those sales to top about environment in is top have well. And LTL $XX the of industry, manage think still momentum pricing think robust. in dynamics, landed when we XX we earlier, And in you as terms business to that continue a

line question Chappell of comes next ISI. from Evercore with Jonathan Our the

intermodal. about overall, EBITDA forward? the is at brokerage the going quarter the back forma most and tens But If margin obviously you we look thinking brokerage the and have? Clearly, whole going to other impact try enterprise we for margin Is intermodal that to into And that that about you're basis points more run think business pro of going was go how the substantially? the what the that guidance as then rate for should to LTL a the down and of deceleration and other, first that from there's EBITDA. gave that is on adjusted for means what a as

It's for had will your the Matt. I'll an year. our speak -- to of you on second the the divestiture about answer that the get hopefully, impact guidance of intermodal for that And rest the . help question.

So about was out. had we quarter end of million the you out X. the through range for of that $XX X the if reflects gave modeled just additional and delta plus today, the of guidance entering at of guidance midpoint The at adjusted quarters the we from at midpoint you the first EBITDA versus that quarter for the the change year which intermodal fourth about look $XX we million million at the EBITDA. obviously beat, That's guidance that coming about the and $XX issued

increase interest So range debt proceeds through X the trends factors intermodal expense, paydown of as Obviously, those in transaction. the reflects the business for the are of great from rest for X. EPS as lower the all the quarters the well reflecting

That's obviously, I give going is mean, ratio XX, helpful, Matt. XX, mean there can But, basis pro is adjusted it just is any to to And forma operating may in better-margin that at what brokerage business. forward? intermodal you points, too Or all, guide say? early the XX a

segment-level intermodal margin don't move margins. think business I really for different the the sufficiently and terms is EBITDA in difference needle rest of between the of adjusted the to

the from comes question Poliniak Fargo. next Allison with Wells of Our line

-- market and share with Is consistent of viewing accessorial you given I any year? tools then around technology continue And highlighted Is for this quarter? the you're gains, there the to mentioned. of pricing have how context second, way the to think you charges what story Mario, market share your those think pricing, way it's disaggregate I and you would there. about say, a these been there you highlight to this a growth us expectations in contribution brokerage, for the to gains

pricing Allison. platform. the on I'll Thanks, talk

the advanced the it pricing by course shipment platform driven very So in around we data. us the analytics of allows launched excited -- year because customer new about and we're through QX it's with continuous enhancements

leads pricing our time data quarter, a the that in manual processing with the we coming demand pricing reduces negotiating as much also so. in can RFP model XX%, pricing, customer helps improve to look we by board. where new well. and customer market experts. capabilities more on -- efficiently. team and we're And adjust experts submitted as us tasks conditions really It So analyze And supporting costing us based lead pricing past, sales with allows where do our we it tools. costing to across this data and network proprietary it RFPs analyze to manual we data, we're to enables more enables spend generation the how Similarly, customer of It also our we which dynamic launching into at the improved as also

at crossed first look you yield the when we from obviously quarter second in contract digit. Now in our the mark the XX% quarter. to quarter double the overall X% results, with accelerated the in first We renewals double-digit

much of a the able of to contribution to technology that as having people how get but tough to the definitely the doing, work be big part that. that it's are doing is Now technology versus is was

This is Drew.

question, volume innings truck out team. go part grown XX% brokerage we're and second by of the On take Obviously, to X share our in continuing the quarters. for early of we've within your market consecutive

Of $XX billion -- trucking we're our overall, roughly brokers a $X billion. brokerage for-hire that, is And industry is the So billion. market. $XXX -- is have this about trucking

look you market. we've it, X% when share of only about So got the at

Our technology continue out to go us advantage allowing and given first-mover to has and share. take is us

from line Schneeberger Scott of comes Oppenheimer. question next Our with the

are right orders, seen type X,XXX quarter. any then is, do new on in is congratulations cycle seen XX% from covered are we would say up your you where basis a for one feel you've what the penetration of financial on that great contributes? we go? what to now? and thought the How two-parter you've move the follow-up contribution of the anticipate brokerage, where brokerage you last past high on we actually And you, And role. -- point digitally First from kind truck and there in announcement on XX% Drew, on In truck

Yes.

thank for So the you question.

cycle, a year-over-year the it on now basis and you So are overall. look up at on right rates

As a actually the we you start goes indicators the that show tighten the back half year, capacity year heading there on. that few into as are could of

volume about distributors XXX, time. beverage that got coming create which where to during is First, season, major XXX in, days you've going and their your up that's beverage pick

thing built-up which little a a going checkpoint to and chaos demand have causes week typically in bit the sitting market. is the also And in China over the U.S. third of in of you of that's have comes the the that's lot You hit ports. summer, DOT ports that come over

bit up of an a the customers XX-year something sticky to can year. that as a you the So both It's into investment invested do. with. could I us allowed back working and tells there's become that the to to that orders, all we in that been head don't with the to Obviously, day the half up X. we're carriers that into it's from technology limit that going has see go think we for it's what something right. digital it tighten On little our you're continue of we've us, and

go. that us continue that off to that allows come And technology you one have our we'll on that. EBITDA one things -- of So see hit and continue margins, to things of is we expect the to to that in of it's best-in-class and gains the

the Appreciate going And update strategy us your Could the of kind regard remind Great. the us to forward? company you largest and founder another ownership Brad, just in that. shares. and as with then April transaction your had shareholder, in in you

length call. at plan XXbX-X to more the my earnings discussed I we to add last in anything have that. don't Well,

is very Chairman my non-Executive the future with company, I non-Executive for new XPO I'll a of to time. GXO. to be I'm allow the will of spin. I'd remain terms long plan who someone than of as In XPO CEO long I'll me. with be remain do Chairman like Executive investors comes as I me. better for And along Chairman think of until

Instructions]. [Operator

Bascome next question Susquehanna. the Our comes from Majors of with line

external there? question looking the on last search of What's you're of internal LTL do And a at? line And to kind like? that the corollary look the you where update still you what's balance can candidates as time versus Brad, us stand? President the

add and that. don't to We lineup ongoing. search anything to is new our Well, the still management have

timing, as makes delay to sense. soon We're terms We're In as going not it going rush it. to of it. not

make soon it. sense, as it we'll then As do

of had terms external, internal other In versus question about you possibilities. all the we're considering

long as always are. story we're we flexible short, So staying

with Our comes next Company. question the Benchmark Kuhn of Christopher line from

was I as just just and price into better orders digital transparency the what the up you wondering was -- the better. be I and right, that mentioned gets of going are profile will margin

question, the Thanks for Christopher.

though, orders to line digital trend percentage far It overall margin SG&A in with goes. leverage does us Christopher. the leverage, allow our as Our as orders

So the EBITDA margins can be higher.

Right, right.

gross you that possible it over flows is the be as fewer EBITDA or So higher employees? leverage could trend margins down, over revenue employees could but

possible. absolutely Yes, that's

Our next from Brian of JPMorgan. with comes question Ossenbeck line the

and forward. a the secondarily a sense headcount of your as be have the maybe to thinking two-parter picture, in on of a like terms side, just pipeline maybe then that what So you talk you're would you've last And in you those about, here you, you'll been of hit to but the of how just the you're hear just big same, how thoughts of investing And do give that for low-growth us can entity? or Drew. still Can headcount answer you what's quarters? think focused is couple targets on I just you the else in bringing more in kind that on on generating going system, the the separate much

we've the got working. that Yes, absolutely. model is picture, Thank proven question. you On is big that for a

more go allowed to X the and it's to by continue for than and grow over the has XX% Xx. execute want outperform growth we model. last out years volume us us quarters, to It by industry last for to the allowed the X So revenue to

things continue model. now. the right on to execute we're on to going But focused I'm there's So three that

continuing is out that the an build first The that operators have business. in technologists complements we and management team great the to exceptional

XPO and to share. is piece customers delight Connect. go our out the continue And go and service to third evolve second customers and to extremely to outperform market to our and continue The is well out take continue and

to be of what tool they're XPO for to whether using that goal if to shipping that it's transportation We decisions, should whether transportation shippers want they're they that as is have or make their mode what day using, go-to the be tool. something consolidate to their the Our are Connect that for of they it's go-to week something.

And last as the you add X-year significantly are added. outpaces forward. headcount as On head count third headcount, trend, that over -- on we've we still to your at continuing point we on volume go look a it,

little anything just years? of couple the rather capabilities? on follow there you the quarters up adding is step in you're in And terms what quick, out real more and there -- of bells a Or change and a little functionality you're rolling or on point of more next whistles more of XPO in that's Connect, thinking terms bit just adding to are more

the you That's get we're and we on basis. continue do that to that the the something we biweekly as constantly more do. Day excited And to a We're spinoff. closer bells with to and whistles. Investor We share adding

Bruce of Stifel. the line from question comes Chan next with Our

go a There's rotation been -- might Brad. just space. talk the in this of there's a to consumer-to-services Just been lot about

about talking here, look and of already like business across lines, that you you right is we're or peers Some probably mile shift is book When place now? been have already happened. see saying your they occurring across your taking business that, evidence do especially final

loosening supply unfinished see our spoke on more moving you Obviously, we're economy industrial the as in customer If into Mario way goods both -- their the way goods. for their supply consumer and we're way opportunity industrial goods make services, so we the is still business, about the raw consumer about and goods to of into chains chains. back. goods think its the to -- make obviously

couple consumer or the And load and rather revenue see base to business, in of has majority where up good our The business. has shape. been and XX%, from had balance of strong strong and customer -- very consumer customers, there have our customers years. very revenue industrial going better obviously sheet signs in of a is comprise very momentum Consumer LTL. in that continuously if was brokerage growth that you companies consumer about You're think

seeing consumer. So what indication some that's we're the from of

change be, ago, announced the you're current guess LTL demand, about shaking the when follow-up consumer brokerage think team going does I you. a Got is how the spin side, guys way the does does of forward? there how how in while -- only you -- industrial about the now, little cycle you move on the anything right at current spin management side, do would you current to economy change, think any environment out is my was the on talk the as -- the a the

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spin. So the full on speed we're ahead going no,

we today's this like turn to Jacobs session. Ladies remarks. reached and for question-and-answer gentlemen, to over I'd Brad of have the closing back end call

to ahead the everyone multiple create plan have enormous you, shareholder leave and of with outsized In points. operator. LTL, Number value. I'd like we're avenues we to one, on thank And we're executing Well, momentum. following

perform of was you day growth. the XXX expect And In OR grew full month market. at for we continue more growth basis the at exceeds to levels. we first best-in-class significantly outperform in XX%. to to And Year-over-year a flip first in in to the OR in in continue we brokerage, year-over-year expect April improvement favorable should per truck In brokerage. April and quarter's the loans QX, the quarter, the revenue of look than firmly April, If on back comparisons our basis ever year. points we generate margin for best at dollars half truck

sheet Xx On brought on pleased balance the side, leverage first from in X.X the we year, and of the I'm quarter, we X.X below by to end that remain down plan. is reduce to leverage ahead track this very of which

to On X great expect fourth the quarter. great nicely, and the spin, to X we're companies we company in turn progressing

So to at everyone. a forward seeing great day. thank upcoming the I'd look like that, conferences. We with Have you to

conference. This today's concludes

may time. rest the this you your You of your lines disconnect your for Thank at day. participation. Enjoy