XPO Inc.
10/30/2025 | Press release | Distributed by Public on 10/30/2025 06:28
Quarterly Report for Quarter Ending September 30, 2025 (Form 10-Q)
Management's Discussion and Analysis of Financial Condition and Results of Operations.
Cautionary Statement Regarding Forward-Looking Statements
This Quarterly Report on Form 10-Q and other written reports and oral statements we make from time to time contain forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended (the "Securities Act"), and Section 21E of the Securities Exchange Act of 1934, as amended (the "Exchange Act"). All statements other than statements of historical fact are, or may be deemed to be, forward-looking statements. In some cases, forward-looking statements can be identified by the use of forward-looking terms such as "anticipate," "estimate," "believe," "continue," "could," "intend," "may," "plan," "potential," "predict," "should," "will," "expect," "objective," "projection," "forecast," "goal," "guidance," "outlook," "effort," "target," "trajectory" or the negative of these terms or other comparable terms. However, the absence of these words does not mean that the statements are not forward-looking. These forward-looking statements are based on certain assumptions and analyses made by the Company in light of its experience and its perception of historical trends, current conditions and expected future developments, as well as other factors it believes are appropriate in the circumstances. These forward-looking statements are subject to known and unknown risks, uncertainties and assumptions that may cause actual future results, levels of activity, performance or achievements to be materially different from our expected future results, levels of activity, performance or achievements expressed or implied by such forward-looking statements. Factors that might cause or contribute to a material difference include those discussed below and the risks discussed in the Company's other filings with the Securities and Exchange Commission (the "SEC"). All forward-looking statements set forth in this Quarterly Report on Form 10-Q are qualified by these cautionary statements, and there can be no assurance that the actual results or developments anticipated by the Company will be realized or, even if substantially realized, that they will have the expected consequence to or effects on the Company or its business or operations. The following discussion should be read in conjunction with the Company's unaudited Condensed Consolidated Financial Statements and related notes thereto included elsewhere in this Quarterly Report on Form 10-Q, and with the audited consolidated financial statements and related notes thereto included in the Annual Report on Form 10-K for the year ended December 31, 2024 (the "2024 Form 10-K"). Forward-looking statements set forth in this Quarterly Report on Form 10-Q speak only as of the date hereof, and we do not undertake any obligation to update forward-looking statements to reflect subsequent events or circumstances, changes in expectations or the occurrence of unanticipated events, except to the extent required by law.
Executive Summary
XPO, Inc., together with its subsidiaries ("XPO," "we" or the "Company"), is a leading provider of freight transportation services, with company-specific avenues for value creation. We use our proprietary technology to move goods efficiently through our customers' supply chains in North America and Europe. As of September 30, 2025, we had approximately 38,000 employees serving approximately 55,000 customers through 605 locations in 17 countries.
Our company has two reportable segments: North American Less-Than-Truckload ("LTL"), the largest component of our business, and European Transportation. Our North American LTL segment includes the results of our trailer manufacturing operation.
Within the tables presented, certain amounts may not add due to the use of rounded numbers. Unless otherwise indicated, percentages presented are calculated from the underlying numbers in millions.
North American LTL Segment
LTL in North America is a bedrock industry providing a critical service to the economy, with secular growth drivers, a favorable pricing environment and an established competitive landscape. XPO is one of the largest LTL networks in North America, with approximately 9% share of the U.S. market, estimated to be $53 billion in 2024.
We provide approximately 37,000 shippers with critical geographic density and day-definite domestic services to approximately 99% of U.S. zip codes, as well as cross-border services to Mexico, Canada and the Caribbean. Our capacity and reach give us the ability to manage large freight volumes efficiently and balance our network to leverage fixed costs. For the trailing 12 months ended September 30, 2025, our customer-focused organization of
truck drivers, service center teams and sales professionals worked together to move approximately 17 billion pounds of freight through our network.
Importantly, our LTL business historically has generated a high return on invested capital and robust free cash flow. This supports our ongoing investments in people, network capacity and proprietary technology. We manage the business to specific objectives, such as on-time delivery and damage-free transport of customer freight, the optimal sourcing of linehaul transportation, and the strategic expansion of our footprint in markets with long-term demand. Since implementing our growth plan in the fourth quarter of 2021, we have added more than 2,000 net new doors to our network - this includes the acquisition of service centers previously operated by Yellow Corporation (the "Yellow Asset Acquisition"), completed in December 2023.
Additionally, we have continued to advance a host of initiatives that are specific to XPO and largely independent of the macroeconomic environment. Our in-house trailer manufacturing facility and truck driver schools are self-reliant capabilities that are competitively advantageous for us, particularly when industry conditions make it difficult to source equipment or drivers. In 2024, we produced over 4,400 trailers and continued to invest in training commercial drivers at our XPO driver schools.
Specific to our technology, we believe that we have a large opportunity to drive further growth and profitability in our LTL network through innovation. For more information, see "Technology" below.
European Transportation Segment
XPO has a unique pan-European transportation platform with leading positions in key geographies: We are the #1 full truckload broker and the #1 pallet network (LTL) provider in France; the #1 full truckload broker and the #1 LTL provider in Iberia (Spain and Portugal); and a top-tier dedicated truckload provider in the U.K., where we also have the largest single-owner LTL network. We serve an extensive base of customers in the consumer, trade and industrial markets, including many sector leaders that have long-tenured relationships with us.
Our range of freight services in Europe encompasses dedicated truckload, LTL, full truckload brokerage, warehousing, managed transportation, last mile, freight forwarding and, increasingly, multimodal solutions customized for our customers, such as road-rail and road-short sea combinations. Our operators use our proprietary technology to manage these services within our digital ecosystem in Europe.
Technology
One of the ways in which we deliver superior service to our customers is by empowering our employees with technology. Our industry is evolving, and customers want to de-risk their supply chains by forming relationships with reliable service providers that have invested in innovation.
We have built a highly scalable ecosystem on the cloud that deploys our software consistently across our operating footprint. In our North American LTL business, the caliber of our technology is mission-critical to our success; it optimizes pricing, linehaul, labor planning, pickup-and-delivery and dock operations - the main components of the service we provide. We have been investing in proprietary artificial intelligence ("AI") technology and are implementing these initiatives across a number of high-impact applications where intelligent automation and better decision-making are directly enhancing profitability. We see artificial intelligence playing a major role in how we operate, compete, and create value over the long term.
An LTL network of our scale has hundreds of thousands of activities underway at any given time, all managed on our technology. For the trailing 12 months ended September 30, 2025, we moved approximately 17 billion pounds of freight 779 million miles, including moving linehaul freight an average of 2.5 million miles a day.
With intelligent route-building, we can reduce empty miles in our linehaul network and improve load factor. Our proprietary optimization models analyze massive amounts of data including volume, capacity, and dimensions and generate instructions to maximize trailer utilization, reduce cost, and enhance service. We use our real-time visualization tools to drive efficiencies with pickups and deliveries and developed a robust pricing platform for contractual account management.
Consolidated Summary Financial Table
|
Three Months Ended September 30, |
Percent of Revenue | Change | Nine Months Ended September 30, | Percent of Revenue | Change | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| (Dollars in millions) |
2025
|
2024
|
2025 | 2024 | 2025 vs. 2024 |
2025
|
2024
|
2025 | 2024 | 2025 vs. 2024 | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Revenue | $ | 2,111 | $ | 2,053 | 100.0 | % | 100.0 | % | 2.8 | % | $ | 6,146 | $ | 6,150 | 100.0 | % | 100.0 | % | (0.1) | % | ||||||||||||||||||||||||||||||||||||||||||
|
Salaries, wages and employee
benefits
|
876 | 852 | 41.5 | % | 41.5 | % | 2.8 | % | 2,579 | 2,541 | 42.0 | % | 41.3 | % | 1.5 | % | ||||||||||||||||||||||||||||||||||||||||||||||
| Purchased transportation | 424 | 430 | 20.1 | % | 20.9 | % | (1.4) | % | 1,250 | 1,303 | 20.3 | % | 21.2 | % | (4.1) | % | ||||||||||||||||||||||||||||||||||||||||||||||
|
Fuel, operating expenses and
supplies
|
406 | 399 | 19.2 | % | 19.4 | % | 1.8 | % | 1,183 | 1,213 | 19.2 | % | 19.7 | % | (2.5) | % | ||||||||||||||||||||||||||||||||||||||||||||||
| Operating taxes and licenses | 21 | 21 | 1.0 | % | 1.0 | % | - | % | 61 | 61 | 1.0 | % | 1.0 | % | - | % | ||||||||||||||||||||||||||||||||||||||||||||||
| Insurance and claims | 43 | 33 | 2.0 | % | 1.6 | % | 30.3 | % | 118 | 105 | 1.9 | % | 1.7 | % | 12.4 | % | ||||||||||||||||||||||||||||||||||||||||||||||
|
(Gains) losses on sales of
property and equipment
|
1 | - | - | % | - | % | NM | (2) | (5) | - | % | (0.1) | % | (60.0) | % | |||||||||||||||||||||||||||||||||||||||||||||||
|
Depreciation and amortization
expense
|
134 | 126 | 6.3 | % | 6.1 | % | 6.3 | % | 388 | 365 | 6.3 | % | 5.9 | % | 6.3 | % | ||||||||||||||||||||||||||||||||||||||||||||||
|
Pre-Con-way acquisition
environmental matter
|
35 | - | 1.7 | % | - | % | NM | 35 | - | 0.6 | % | - | % | NM | ||||||||||||||||||||||||||||||||||||||||||||||||
| Legal matter | - | - | - | % | - | % | - | % | (13) | - | (0.2) | % | - | % | NM | |||||||||||||||||||||||||||||||||||||||||||||||
|
Transaction and integration
costs
|
1 | 13 | - | % | 0.6 | % | (92.3) | % | 7 | 39 | 0.1 | % | 0.6 | % | (82.1) | % | ||||||||||||||||||||||||||||||||||||||||||||||
| Restructuring costs | 6 | 3 | 0.3 | % | 0.1 | % | 100.0 | % | 26 | 17 | 0.4 | % | 0.3 | % | 52.9 | % | ||||||||||||||||||||||||||||||||||||||||||||||
| Operating income | 164 | 176 | 7.8 | % | 8.6 | % | (6.8) | % | 513 | 511 | 8.3 | % | 8.3 | % | 0.4 | % | ||||||||||||||||||||||||||||||||||||||||||||||
| Other income | (2) | (15) | (0.1) | % | (0.7) | % | (86.7) | % | (4) | (31) | (0.1) | % | (0.5) | % | (87.1) | % | ||||||||||||||||||||||||||||||||||||||||||||||
| Debt extinguishment loss | - | - | - | % | - | % | - | % | 5 | - | 0.1 | % | - | % | NM | |||||||||||||||||||||||||||||||||||||||||||||||
| Interest expense | 54 | 56 | 2.6 | % | 2.7 | % | (3.6) | % | 166 | 170 | 2.7 | % | 2.8 | % | (2.4) | % | ||||||||||||||||||||||||||||||||||||||||||||||
|
Income before income tax
provision
|
112 | 135 | 5.3 | % | 6.6 | % | (17.0) | % | 346 | 372 | 5.6 | % | 6.0 | % | (7.0) | % | ||||||||||||||||||||||||||||||||||||||||||||||
| Income tax provision | 30 | 40 | 1.4 | % | 1.9 | % | (25.0) | % | 89 | 60 | 1.4 | % | 1.0 | % | 48.3 | % | ||||||||||||||||||||||||||||||||||||||||||||||
| Net income | $ | 82 | $ | 95 | 3.9 | % | 4.6 | % | (13.7) | % | $ | 257 | $ | 312 | 4.2 | % | 5.1 | % | (17.6) | % | ||||||||||||||||||||||||||||||||||||||||||
NM - Not meaningful.
Three and Nine Months Ended September 30, 2025 Compared with Three and Nine Months Ended September 30, 2024
Our consolidated revenue for the third quarter of 2025 increased 2.8% to $2.11 billion, compared with the same quarter in 2024. Our consolidated revenue for the first nine months of 2025 was flat at $6.15 billion, compared with the same period in 2024. Foreign currency movement increased revenue by approximately 2.8 percentage points in the third quarter of 2025 and by approximately 1.1 percentage points in the first nine months of 2025. After taking into effect the impact of foreign currency movements, revenue in the third quarter of 2025 was flat compared to the same quarter in 2024, and revenue in the first nine months of 2025 decreased compared to the same period in 2024. The year-over-year decrease in the first nine months of 2025 primarily reflects a revenue decline in our North American LTL segment, driven by lower fuel surcharge revenue and lower shipments per day.
Salaries, wages and employee benefits includes compensation-related costs for our employees, including salaries, wages, incentive compensation, healthcare-related costs and payroll taxes, and covers drivers and dockworkers, operations and facility workers and employees in support roles and other positions. Salaries, wages and employee benefits for the third quarter of 2025 was $876 million, or 41.5% of revenue, compared with $852 million, or 41.5% of revenue, for the same quarter in 2024. Salaries, wages and employee benefits for the first nine months of 2025 was $2.6 billion, or 42.0% of revenue, compared with $2.5 billion, or 41.3% of revenue, for the same period in 2024. As a percentage of revenue, both periods reflect higher costs due to the insourcing of a greater proportion of
linehaul from third-party transportation providers in our North American LTL segment and wage inflation, offset by savings from restructuring actions and productivity improvements enabled by our AI-driven optimization tools.
Purchased transportation includes costs of procuring third-party freight transportation. Purchased transportation for the third quarter of 2025 was $424 million, or 20.1% of revenue, compared with $430 million, or 20.9% of revenue, for the same quarter in 2024. Purchased transportation for the first nine months of 2025 was $1.25 billion, or 20.3% of revenue, compared with $1.30 billion, or 21.2% of revenue, for the same period in 2024. The year-over-year decrease as a percentage of revenue in both periods primarily reflects the insourcing of a greater proportion of linehaul from third-party transportation providers in our North American LTL segment, partially offset by higher purchased transportation in our European Transportation segment for the first nine months of 2025.
Fuel, operating expenses and supplies includes the cost of fuel purchased for use in our vehicles as well as related taxes, maintenance and lease costs for our equipment, including tractors and trailers, costs related to operating our owned and leased facilities, bad debt expense, third-party professional fees, information technology expenses and supplies expense. Fuel, operating expenses and supplies for the third quarter of 2025 was $406 million, or 19.2% of revenue, compared with $399 million, or 19.4% of revenue, for the same quarter in 2024. Fuel, operating expenses and supplies for the first nine months of 2025 was $1.18 billion, or 19.2% of revenue, compared with $1.21 billion, or 19.7% of revenue, for the same period in 2024. The year-over-year decrease as a percentage of revenue for the third quarter of 2025 primarily reflects lower maintenance costs in our North American LTL segment and lower fuel costs in our European Transportation segment, partially offset by higher fuel costs in our North American LTL segment. The year-over-year decrease as a percentage of revenue for the first nine months of 2025 primarily reflects lower fuel costs in both segments and lower maintenance costs in our North American LTL segment.
Operating taxes and licenses includes tax expenses related to our vehicles and our owned and leased facilities as well as license expenses to operate our vehicles. Operating taxes and licenses was $21 million for the third quarter of 2025 and 2024, and $61 million for the first nine months of 2025 and 2024.
Insurance and claims includes costs related to vehicular and cargo claims for both purchased insurance and self-insurance programs. Insurance and claims for the third quarter of 2025 was $43 million, compared with $33 million for the same quarter in 2024. Insurance and claims for the first nine months of 2025 was $118 million, compared with $105 million for the same period in 2024. The year-over-year increase in both periods primarily reflects higher vehicular insurance costs in our North American LTL segment.
(Gains) losses on sales of property and equipment for the third quarter of 2025 was a loss of $1 million, compared with $0 million for the same quarter in 2024. (Gains) losses on sales of property and equipment for the first nine months of 2025 was a gain of $2 million, compared with a gain of $5 million for the same period in 2024.
Depreciation and amortization expense for the third quarter of 2025 was $134 million, compared with $126 million for the same quarter in 2024. Depreciation and amortization expense for the first nine months of 2025 was $388 million, compared with $365 million for the same period in 2024. The year-over-year increase in both periods reflects the impact of capital investments in property, tractors and trailers in our North American LTL segment.
Pre-Con-way acquisition environmental matter for the third quarter of 2025 and the first nine months of 2025 was a charge of $35 million. There were no comparable charges in 2024. This matter relates to environmental and product liability claims involving truck and part manufacturing plants of a former subsidiary of Con-way, which they sold in 1981 long before XPO's acquisition of Con-way in 2015. The matter is solely related to a legacy Con-way truck manufacturing business and is unrelated to the operations of our North American LTL segment.
Legal matter for the third quarter of 2025 and the first nine months of 2025 was a gain of $0 million and $13 million, respectively. There were no comparable gains in 2024. The gain recognized in 2025 reflects the settlement of claims against certain truck manufacturers related to purchases by our European Transportation segment covering periods prior to our acquisition of Norbert Dentressangle SA in 2015.
Transaction and integration costs for the third quarter of 2025 were $1 million, compared with $13 million for the same quarter in 2024. Transaction and integration costs for the first nine months of 2025 were $7 million, compared with $39 million for the same period in 2024. The year-over-year decrease in both periods primarily relates to no further stock-based compensation costs in the current year for certain employees related to strategic initiatives.
Restructuring costs for the third quarter of 2025 were $6 million, compared with $3 million for the same quarter in 2024. Restructuring costs for the first nine months of 2025 were $26 million, compared with $17 million for the same period in 2024. The restructuring costs in both periods primarily related to restructuring actions in our European Transportation segment. We engage in restructuring actions as part of our ongoing efforts to best use our resources and infrastructure. For more information, see Note 4-Restructuring Charges to our Condensed Consolidated Financial Statements.
Other income for the third quarter of 2025 was $2 million, compared with $15 million for the same quarter in 2024. Other income for the first nine months of 2025 was $4 million, compared with $31 million for the same period in 2024. The year-over-year decrease in both periods reflects a decrease in investment income of $9 million and $13 million, respectively, in the third quarter of 2025 and the first nine months of 2025 related to a past investment in a private company that we sold in 2024, as well as a decrease in net periodic pension income in both 2025 periods.
Debt extinguishment loss was not material for the third quarter of 2025 and $5 million for the first nine months of 2025, which related to the refinancing of our term loan facility in the first quarter of 2025. There was no debt extinguishment loss in the comparable 2024 periods.
Interest expense decreased to $54 million for the third quarter of 2025, compared with $56 million for the same quarter in 2024. Interest expense decreased to $166 million for the first nine months of 2025, compared with $170 million for the same period in 2024. The year-over-year decrease in both periods is primarily due to lower interest rates on our variable rate debt, partially offset by lower interest income.
Our effective income tax rates were 26.9% and 29.7% for the third quarters of 2025 and 2024, respectively, and 25.8% and 16.0% for the first nine months of 2025 and 2024, respectively. The effective income tax rates for the third quarter and nine-month periods of 2025 and 2024 were based on forecasted full-year effective income tax rates, adjusted for discrete items that occurred within the periods presented. The decrease in our effective income tax rate for the third quarter of 2025 compared to the same period in 2024 was primarily driven by a decrease in losses for which no tax benefit can be recognized and an adjustment in the third quarter of 2024 related to the legal entity reorganization in our European Transportation business. The increase in our effective income tax rate for the first nine months of 2025 compared to the same period in 2024 was primarily driven by a one-time tax benefit of $40 million associated with the legal entity reorganization in our European Transportation business that occurred in 2024, partially offset by a decrease in losses for which no tax benefit can be recognized.
As previously disclosed, we expect the legal entity reorganization in our European Transportation business to generate an aggregate net cash refund of approximately $45 million. In 2024, we made tax payments of $7 million, and in the third quarter of 2025 we received a cash refund of approximately $49 million. We expect to receive the remaining $3 million cash refund in the fourth quarter of 2025 or early 2026.
In July 2025, the One Big Beautiful Bill Act was signed into law. The legislation includes modifications to the international tax framework and the restoration of favorable tax treatment for certain business provisions including 100% bonus depreciation for qualified property placed in service after January 19, 2025, immediate expensing of domestic research and experimental costs, and business interest expense limitations. We recognized the effects of the legislation during the third quarter for the provisions currently enacted, which increased our deferred tax liability. We anticipate that the legislation will reduce our federal income tax liability and related tax payments for current and future years but will not have a significant impact on our annual effective tax rate.
Segment Financial Results
Our chief operating decision maker ("CODM") regularly reviews financial information at the operating segment level to allocate resources to the segments and to assess their performance. For our North American LTL and European Transportation segments, our CODM evaluates segment profit (loss) based on adjusted earnings before interest, taxes, depreciation and amortization ("adjusted EBITDA"), which we define as income before debt extinguishment loss, interest expense, income tax provision, depreciation and amortization expense, legal matters, transaction and integration costs, restructuring costs and other adjustments. Segment adjusted EBITDA includes an allocation of corporate costs. See Note 2-Segment Reporting to our Condensed Consolidated Financial Statements for further information and a reconciliation of adjusted EBITDA to Net income.
North American Less-Than-Truckload Segment
| Three Months Ended September 30, | Percent of Revenue | Change | Nine Months Ended September 30, | Percent of Revenue | Change | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| (Dollars in millions) | 2025 | 2024 | 2025 | 2024 | 2025 vs. 2024 | 2025 | 2024 | 2025 | 2024 | 2025 vs. 2024 | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Revenue | $ | 1,255 | $ | 1,251 | 100.0 | % | 100.0 | % | 0.3 | % | $ | 3,667 | $ | 3,743 | 100.0 | % | 100.0 | % | (2.0) | % | ||||||||||||||||||||||||||||||||||||||||||
|
Adjusted EBITDA (1)
|
308 | 284 | 24.5 | % | 22.7 | % | 8.5 | % | 857 | 836 | 23.4 | % | 22.3 | % | 2.5 | % | ||||||||||||||||||||||||||||||||||||||||||||||
| Depreciation and amortization | 98 | 89 | 7.8 | % | 7.1 | % | 10.1 | % | 283 | 257 | 7.7 | % | 6.9 | % | 10.1 | % | ||||||||||||||||||||||||||||||||||||||||||||||
(1) Percent of Revenue is calculated using the underlying unrounded amounts.
Revenue in our North American LTL segment increased 0.3% to $1.26 billion for the third quarter of 2025, compared with $1.25 billion for the same quarter in 2024. Revenue decreased 2.0% to $3.67 billion for the first nine months of 2025, compared with $3.74 billion for the same period in 2024. Revenue included fuel surcharge revenue of $194 million and $195 million, respectively, for the third quarters of 2025 and 2024, and $555 million and $613 million, respectively, for the first nine months of 2025 and 2024. The year-over-year decrease in fuel surcharge revenue for the first nine months of 2025 was primarily driven by lower diesel prices and lower volume.
We evaluate the revenue performance of our LTL business using several commonly used metrics, including volume (weight per day in pounds) and yield, which is a commonly used measure of LTL pricing trends. We measure yield using gross revenue per hundredweight, excluding fuel surcharges. Impacts on yield can include weight per shipment and length of haul, among other factors, while impacts on volume can include shipments per day and weight per shipment. The following table summarizes our key revenue metrics:
| Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||||||||||||||||||||||||
| 2025 | 2024 | Change % | 2025 | 2024 | Change % | |||||||||||||||||||||||||||||||||
| Pounds per day (thousands) | 65,236 | 69,470 | (6.1) | % | 66,158 | 70,950 | (6.8) | % | ||||||||||||||||||||||||||||||
| Shipments per day | 50,094 | 51,921 | (3.5) | % | 49,763 | 52,281 | (4.8) | % | ||||||||||||||||||||||||||||||
| Average weight per shipment (in pounds) | 1,302 | 1,338 | (2.7) | % | 1,329 | 1,357 | (2.0) | % | ||||||||||||||||||||||||||||||
|
Gross revenue per hundredweight, excluding
fuel surcharges
|
$ | 25.77 | $ | 24.34 | 5.9 | % | $ | 25.16 | $ | 23.67 | 6.3 | % | ||||||||||||||||||||||||||
Percentages presented are calculated using the underlying unrounded amounts.
The year-over-year increase in revenue, excluding fuel surcharge revenue, for the third quarter of 2025 reflects higher yield, primarily related to our improvements in service quality and the benefit of numerous pricing initiatives, partially offset by lower volume. The decrease in volume per day for the third quarter of 2025 reflects lower shipments per day and lower average weight per shipment. The year-over-year decrease in revenue, excluding fuel surcharge revenue, for the first nine months of 2025 reflects the same dynamics.
Adjusted EBITDA was $308 million for the third quarter of 2025, compared with $284 million for the same quarter in 2024. Adjusted EBITDA was $857 million for the first nine months of 2025, compared with $836 million for the same period in 2024. The increase in adjusted EBITDA for both periods reflects higher yield, productivity improvements, lower purchased transportation, and lower maintenance costs, partially offset by lower volume, wage inflation, higher vehicular insurance costs, and lower pension income. Adjusted EBITDA for the first nine months of 2025 was also impacted by lower fuel surcharge revenue partially offset by lower fuel costs.
Depreciation and amortization expense increased to $98 million in the third quarter of 2025 compared with $89 million for the same quarter in 2024. Depreciation and amortization expense increased to $283 million in the first nine months of 2025 compared with $257 million for the same period in 2024. The increase in both the third quarter and first nine months of 2025 was due to the impact of capital investments in property, tractors and trailers.
European Transportation Segment
| Three Months Ended September 30, | Percent of Revenue | Change | Nine Months Ended September 30, | Percent of Revenue | Change | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| (Dollars in millions) | 2025 | 2024 | 2025 | 2024 | 2025 vs. 2024 | 2025 | 2024 | 2025 | 2024 | 2025 vs. 2024 | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Revenue | $ | 857 | $ | 803 | 100.0 | % | 100.0 | % | 6.7 | % | $ | 2,479 | $ | 2,407 | 100.0 | % | 100.0 | % | 3.0 | % | ||||||||||||||||||||||||||||||||||||||||||
|
Adjusted EBITDA (1)
|
38 | 44 | 4.5 | % | 5.4 | % | (13.6) | % | 115 | 131 | 4.6 | % | 5.4 | % | (12.2) | % | ||||||||||||||||||||||||||||||||||||||||||||||
| Depreciation and amortization | 35 | 36 | 4.1 | % | 4.5 | % | (2.8) | % | 101 | 106 | 4.1 | % | 4.4 | % | (4.7) | % | ||||||||||||||||||||||||||||||||||||||||||||||
(1) Percent of Revenue is calculated using the underlying unrounded amounts.
Revenue in our European Transportation segment increased 6.7% to $857 million for the third quarter of 2025, compared with $803 million for the same quarter in 2024. Revenue increased 3.0% to $2.5 billion for the first nine months of 2025, compared with $2.4 billion for the same period in 2024. Foreign currency movement increased revenue by approximately 7.1 percentage points in the third quarter of 2025 and by approximately 2.9 percentage points in the first nine months of 2025. Revenue was essentially flat in both periods of 2025, compared to the same periods in 2024, after taking into effect the impact of foreign currency movement.
Adjusted EBITDA was $38 million for the third quarter of 2025, compared with $44 million for the same quarter in 2024. Adjusted EBITDA was $115 million for the first nine months of 2025, compared with $131 million for the same period in 2024. The decrease in adjusted EBITDA in both periods primarily reflects higher salaries, wages and employee benefits and higher purchased transportation, partially offset by lower fuel costs.
Depreciation and amortization expense decreased to $35 million in the third quarter of 2025 compared with $36 million for the same quarter in 2024. Depreciation and amortization expense decreased to $101 million in the first nine months of 2025 compared with $106 million for the same period in 2024.
Liquidity and Capital Resources
Our cash and cash equivalents balance was $335 million as of September 30, 2025, compared to $246 million as of December 31, 2024. Our principal existing sources of cash are: (i) cash generated from operations; (ii) borrowings available under our Revolving Credit Facility (as defined below); and (iii) proceeds from the issuance of other debt. As of September 30, 2025, we have approximately $600 million available to draw under our Revolving Credit Facility, after considering outstanding letters of credit of less than $1 million. Additionally, we have a $200 million uncommitted secured evergreen letter of credit facility, under which we had issued $133 million in aggregate face amount of letters of credit as of September 30, 2025.
In February 2025, we terminated our Second Amended and Restated Revolving Credit Agreement, as amended, and entered into a Revolving Credit Agreement (the "Revolving Credit Agreement"). The Revolving Credit Agreement provides for revolving credit commitments in an aggregate amount of $600 million (the "Revolving Credit Facility"). See Note 6-Debt to our Condensed Consolidated Financial Statements for further information.
As of September 30, 2025, we had approximately $935 million of total liquidity. We continually evaluate our liquidity requirements in light of our operating needs, growth initiatives and capital resources. We believe that our existing liquidity and sources of capital are sufficient to support our operations over the next 12 months.
Trade Receivables Securitization and Factoring Programs
We sell certain of our trade accounts receivable on a non-recourse basis to third-party financial institutions under factoring agreements. We also sell trade accounts receivable under a securitization program for our European transportation business. We use trade receivables securitization and factoring programs to help manage our cash flows and offset the impact of extended payment terms for some of our customers. For more information, see Note 1-Organization, Description of Business and Basis of Presentation to our Condensed Consolidated Financial Statements.
The maximum amount of net cash proceeds available at any one time under our securitization program, inclusive of any unsecured borrowings, is €200 million (approximately $235 million as of September 30, 2025). As of September 30, 2025, €1 million (approximately $1 million) was available under the program. Under the securitization program, we service the receivables we sell on behalf of the purchasers. The program expires in July 2026.
Term Loan Facility
In February 2025, we amended our Senior Secured Term Loan Credit Agreement. Pursuant to the amendment, the lenders provided the company (a) a term loan B facility in an aggregate principal amount of $700 million, maturing on May 24, 2028 (the "Refinancing Term Loan B-2 Facility"), and (b) a term loan B facility in an aggregate principal amount of $400 million, maturing on February 1, 2031 (the "Refinancing Term Loan B-3 Facility" and together with the Refinancing Term Loan B-2 Facility, the "Refinancing Term Loan Facilities"). The proceeds of the Refinancing Term Loan Facilities were used to refinance our existing term loans. We recorded a debt extinguishment loss of $5 million in the first quarter of 2025 due to this refinancing.
In July 2025, we used cash on hand to repay $50 million of outstanding principal under the Refinancing Term Loan B-2 Facility, which was scheduled to mature in 2028. In September 2025, we gave notice to repay an additional $65 million of outstanding principal under the Refinancing Term Loan B-2 Facility to occur in October 2025. As a result, as of September 30, 2025, we classified $65 million of the Refinancing Term Loan B-2 Facility within Short-term borrowings and current maturities of long-term debt. In October 2025, we used cash on hand to repay $65 million of outstanding principal under this loan.
The Refinancing Term Loan Facilities bear interest at a rate per annum equal to, at the Company's option, either alternate base rate ("ABR") or Term Secured Overnight Financing Rate ("SOFR") plus (i) in the case of ABR Loans, 0.75% or, (ii) in the case of Term SOFR Loans, 1.75%, which, in each case after September 30, 2025, shall be reduced by 0.25% upon the achievement of a Consolidated First Lien Net Leverage Ratio (as defined in the Amended Term Loan Credit Agreement) of less than or equal to 1.21 to 1.00. The Refinancing Term Loan Facilities are secured by a lien on substantially all of our assets and the assets of our guarantors, with certain exceptions.
The Amended Term Loan Credit Agreement contains customary mandatory prepayment requirements, representations and warranties, events of default, reporting and other affirmative covenants and negative covenants, including limitations on indebtedness, liens, investments, dividends, repayments of junior financings and asset sales, in each case subject to a number of important exceptions and qualifications.
The weighted average interest rate of our term loans was approximately 5.88% as of September 30, 2025.
Share Repurchases
In March 2025, our Board of Directors authorized repurchases of up to $750 million of our common stock. The repurchase authorization permits us to purchase shares in both the open market and in private transactions, with the timing and number of shares dependent on a variety of factors, including price, general business and market conditions, alternative investment opportunities and funding considerations. We retire common shares that we repurchase upon settlement. The new share repurchase program has no expiration date and may be utilized over time, with no obligation to repurchase any specific number of shares. We may suspend or discontinue this program at any time. This plan replaced our previous share repurchase plan, authorized in February 2019.
In the third quarter of 2025, we repurchased 388 thousand shares of common stock with an aggregate value of $50 million at an average price of $128.86 per share. In the first nine months of 2025, we repurchased 471 thousand shares of common stock with an aggregate value of $60 million at an average price of $127.37 per share. The share repurchases were funded by cash on hand. As of September 30, 2025, our remaining share repurchase authorization was $690 million.
Loan Covenants and Compliance
As of September 30, 2025, we were in compliance with the covenants and other provisions of our debt agreements. Any failure to comply with any material provision or covenant of these agreements could have a material adverse effect on our liquidity and operations.
Sources and Uses of Cash
| Nine Months Ended September 30, | ||||||||||||||
| (In millions) | 2025 | 2024 | ||||||||||||
| Net cash provided by operating activities | $ | 760 | $ | 619 | ||||||||||
| Net cash used in investing activities | (532) | (598) | ||||||||||||
| Net cash used in financing activities | (185) | (59) | ||||||||||||
During the nine months ended September 30, 2025, we generated cash from operating activities of $760 million. We used cash during the period primarily to: (i) purchase property and equipment of $551 million; (ii) repurchase common stock of $57 million; (iii) make payments on debt and finance leases of $56 million; (iv) repay $50 million of outstanding principal under the Refinancing Term Loan B-2 Facility; and (v) make net payments of $47 million related to tax withholding obligations in connection with the vesting of restricted shares.
During the nine months ended September 30, 2024, we generated cash from operating activities of $619 million. We used cash during this period primarily to: (i) purchase property and equipment of $623 million; (ii) make payments on debt and finance leases of $64 million; and (iii) make payments of $21 million related to tax withholding obligations in connection with the vesting of restricted shares.
Cash flows from operating activities for the nine months ended September 30, 2025 increased by $141 million, compared with the same period in 2024. The increase primarily reflects the impact of operating assets and liabilities utilizing $26 million of cash in the first nine months of 2025, compared with utilizing $166 million during the same period in 2024.
Investing activities used $532 million of cash in the nine months ended September 30, 2025 and $598 million of cash in the nine months ended September 30, 2024. During the nine months ended September 30, 2025, we used $551 million to purchase property and equipment, as compared to a $623 million usage of cash in the same period in 2024. The decrease is due to planned reductions in capital expenditures in 2025 compared to 2024.
Financing activities used $185 million of cash in the nine months ended September 30, 2025 and $59 million of cash in the nine months ended September 30, 2024. The primary uses of cash from financing activities during the first nine months of 2025 were $57 million to repurchase common stock, $56 million used to repay borrowings, primarily related to finance lease obligations, $50 million to repay outstanding principal under the Refinancing Term Loan B-2 Facility, which was scheduled to mature in 2028, and $47 million to make net payments for tax withholdings on restricted shares, primarily during the first quarter of 2025. The primary uses of cash from financing activities during the first nine months of 2024 were $64 million used to repay borrowings, primarily related to finance lease obligations, and $21 million to make payments for tax withholdings on restricted shares. The primary source of cash from financing activities during the first nine months of 2025 was $24 million of proceeds from bank overdrafts, as compared to $32 million in the same period of 2024.
There were no material changes to our December 31, 2024 contractual obligations during the nine months ended September 30, 2025. We anticipate full year gross capital expenditures to be between $600 million and $700 million in 2025, funded by cash on hand, cash generated from operations and available liquidity.
New Accounting Standards
Information related to new accounting standards is included in Note 1-Organization, Description of Business and Basis of Presentation to our Condensed Consolidated Financial Statements in this Quarterly Report on Form 10-Q.
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