News / GXO eyes new verticals as it reports flat results

Pure-play contract logistics operator GXO is starting a “new era of growth”,  focusing on North America and particular verticals, with “little needed to be done” in Europe, recently appointed chief executive Patrick Kelleher told The Loadstar.

The company reported fourth-quarter results which were essentially flat, year on year, in terms of adjusted EBITDA of $255m, although a rise in revenues, to $3.5bn over the $3.25bn it booked last year, indicated EBITDA margin contracting from 7.7% to 7.3%.

It was a similar picture for full-year 2025, with an adjusted EBIDTA of $881m, compared with $815m last year. However, revenues increased from $11.7bn in 2024 to $13.2bn, with EBITDA margin compressing from 7% to 6.7%.

In an interview with The Loadstar following the company’s earnings call, Mr Kelleher (below) explained that “a pivot to organic growth” would be key to improving margins.

“GXO has doubled in size since the spin-off [from XPO], predominantly through M&A, and a lot of management time was put into the integration of that M&A. At the same time, organic growth declined from the spin-off in 2021, when it was high teens, to mid-single digit now.

“This is about harvesting all that has been built through M&A; we’re at an inflection point where organic growth is the new priority at the right time based on M&A integration having been done,” he said.

However, he added that M&A activity would still be explored, although restricted to North America and select verticals.

“The M&A strategy is very clear – we are in a market leadership position in the UK and Europe and have very little need to add to what we already have done.

“My priority for M&A sits very solidly with bolt-on acquisitions that can enhance our competitiveness and value proposition in aerospace/defence, industrial technology, and life sciences, and in North America, both for scale and competency.

“In contrast to Europe and the UK, the North American market remains very fragmented – there are a few top players and a long tail, and particularly in what I call the B2B industry, verticals present some really interesting opportunities for us,” he told The Loadstar.

Its 2026 guidance is for 4%-5% organic revenue growth and an adjusted EBITDA of $930m-$970m.

The aerospace/defence, life sciences, and industrial, particularly hyperscalers, were three key verticals repeatedly mentioned by GXO executives during the earnings call as prime targets, and Mr Kelleher noted that this had in part been driven by last year’s acquisition of Wincanton.

“The growth of those verticals, particularly aerospace/defence and life sciences, really came from M&A.  The team members at Wincanton brought not only additional competencies, but an energy and a drive for organic growth and winning customers, and GXO is really benefiting from the things those people are bringing to the business,” he said.

He added that the divestiture of part of Wincanton’s grocery operations, as required by the UK’s competition regulator, “progresses on plan”, although timing remained fluid.