Freight delivery company XPO (NYSE: XPO) reported Q1 CY2026 results exceeding the market’s revenue expectations, with sales up 7.3% year on year to $2.10 billion. Its non-GAAP profit of $1.01 per share was 14.4% above analysts’ consensus estimates.
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XPO (XPO) Q1 CY2026 Highlights:
- Revenue: $2.10 billion vs analyst estimates of $2.04 billion (7.3% year-on-year growth, 3% beat)
- Adjusted EPS: $1.01 vs analyst estimates of $0.88 (14.4% beat)
- Adjusted EBITDA: $319 million vs analyst estimates of $313.1 million (15.2% margin, 1.9% beat)
- Operating Margin: 8.3%, in line with the same quarter last year
- Free Cash Flow was $72 million, up from -$49 million in the same quarter last year
- Market Capitalization: $25.44 billion
Mario Harik, chairman and chief executive officer of XPO, said, “We reported a strong start to 2026, with 38% growth in adjusted diluted EPS and 15% growth in adjusted EBITDA, year-over-year. These results mark an acceleration in our performance and the momentum we’re building across the business.
Company Overview
Owning a mobile game simulating freight operations for the Tour de France, XPO (NYSE: XPO) is a transportation company specializing in expedited shipping services.
Revenue Growth
A company’s long-term performance is an indicator of its overall quality. Any business can experience short-term success, but top-performing ones enjoy sustained growth for years. Unfortunately, XPO’s 5.6% annualized revenue growth over the last five years was tepid. This was below our standard for the industrials sector and is a poor baseline for our analysis.
Long-term growth is the most important, but within industrials, a half-decade historical view may miss new industry trends or demand cycles. XPO’s recent performance shows its demand has slowed as its annualized revenue growth of 2.8% over the last two years was below its five-year trend. We’re wary when companies in the sector see decelerations in revenue growth, as it could signal changing consumer tastes aided by low switching costs. 
This quarter, XPO reported year-on-year revenue growth of 7.3%, and its $2.10 billion of revenue exceeded Wall Street’s estimates by 3%.
Looking ahead, sell-side analysts expect revenue to grow 4.7% over the next 12 months. While this projection indicates its newer products and services will catalyze better top-line performance, it is still below the sector average.
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Operating Margin
Operating margin is an important measure of profitability as it shows the portion of revenue left after accounting for all core expenses – everything from the cost of goods sold to advertising and wages. It’s also useful for comparing profitability across companies with different levels of debt and tax rates because it excludes interest and taxes.
XPO was profitable over the last five years but held back by its large cost base. Its average operating margin of 6.5% was weak for an industrials business. This result isn’t too surprising given its low gross margin as a starting point.
On the plus side, XPO’s operating margin rose by 3.9 percentage points over the last five years, as its sales growth gave it operating leverage.
In Q1, XPO generated an operating margin profit margin of 8.3%, in line with the same quarter last year. This indicates the company’s cost structure has recently been stable.
Earnings Per Share
We track the long-term change in earnings per share (EPS) for the same reason as long-term revenue growth. Compared to revenue, however, EPS highlights whether a company’s growth is profitable.
XPO’s unimpressive 7% annual EPS growth over the last five years aligns with its revenue performance. On the bright side, this tells us its incremental sales were profitable.
Like with revenue, we analyze EPS over a shorter period to see if we are missing a change in the business.
XPO’s two-year annual EPS growth of 12.5% was great and topped its 2.8% two-year revenue growth.
Diving into XPO’s quality of earnings can give us a better understanding of its performance. While we mentioned earlier that XPO’s operating margin was flat this quarter, a two-year view shows its margin has expanded. This was the most relevant factor (aside from the revenue impact) behind its higher earnings; interest expenses and taxes can also affect EPS but don’t tell us as much about a company’s fundamentals.
In Q1, XPO reported adjusted EPS of $1.01, up from $0.73 in the same quarter last year. This print easily cleared analysts’ estimates, and shareholders should be content with the results. Over the next 12 months, Wall Street expects XPO’s full-year EPS of $4.01 to grow 18%.
Key Takeaways from XPO’s Q1 Results
We enjoyed seeing XPO beat analysts’ revenue expectations this quarter. We were also glad its EPS outperformed Wall Street’s estimates. On the other hand, its adjusted operating income missed. Overall, this print had some key positives. The stock traded up 1.7% to $220.33 immediately following the results.
So do we think XPO is an attractive buy at the current price? We think that the latest quarter is only one piece of the longer-term business quality puzzle. Quality, when combined with valuation, can help determine if the stock is a buy. We cover that in our actionable full research report which you can read here (it’s free).
