XPO’s (NYSE:XPO) Q2 CY2026 Sales Beat Estimates

Freight delivery company XPO (NYSE:XPO) announced better-than-expected revenue in Q2 CY2026, with sales up 13.2% year on year to $2.36 billion. Its non-GAAP profit of $1.70 per share was 15.5% above analysts’ consensus estimates.

Is now the time to buy XPO? Find out by accessing our full research report, it’s free.

Mario Harik, chairman and chief executive officer of XPO, said, “We accelerated our performance significantly in the second quarter, delivering 56% year-over-year growth in adjusted diluted EPS and 25% growth in adjusted EBITDA, excluding real estate gains.

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. Even a bad business can shine for one or two quarters, but a top-tier one grows for years. Over the last five years, XPO grew its sales at a tepid 4.5% compounded annual growth rate. This fell short of our benchmark for the industrials sector and is a poor baseline for our analysis.

We at StockStory place the most emphasis on long-term growth, but within industrials, a half-decade historical view may miss cycles, industry trends, or a company capitalizing on catalysts such as a new contract win or a successful product line. XPO’s recent performance shows its demand has slowed as its annualized revenue growth of 3.4% 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 13.2%, and its $2.36 billion of revenue exceeded Wall Street’s estimates by 2.8%.

Looking ahead, sell-side analysts expect revenue to grow 5.6% over the next 12 months. While this projection indicates its newer products and services will spur better top-line performance, it is still below the sector average.

ONE MORE THING: The $21 AI Application Stock Wall Street Forgot. While Wall Street obsesses over who’s building AI, one company is already using it to print money. And nobody’s paying attention.

AI chip stocks trade at ridiculous valuations. This company processes a trillion consumer signals monthly using AI and trades at a third of the price. The gap won’t last. The institutions will figure it out. You need to see this first. Read the FREE Report Before They Notice.

Operating Margin

XPO was profitable over the last five years but held back by its large cost base. Its average operating margin of 6.8% 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 Q2, XPO generated an operating margin profit margin of 11.5%, up 2 percentage points year on year. The increase was encouraging, and because its operating margin rose more than its gross margin, we can infer it was more efficient with expenses such as marketing, R&D, and administrative overhead.

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.

Sadly for XPO, its EPS declined by 2.7% annually over the last five years while its revenue grew by 4.5%. However, its operating margin actually improved during this time, telling us that non-fundamental factors such as interest expenses and taxes affected its ultimate earnings.

We can take a deeper look into XPO’s earnings to better understand the drivers of its performance. A five-year view shows XPO has diluted its shareholders, growing its share count by 4.4%. This dilution overshadowed its increased operational efficiency and has led to lower per share earnings. Taxes and interest expenses can also affect EPS but don’t tell us as much about a company’s fundamentals.

Like with revenue, we analyze EPS over a shorter period to see if we are missing a change in the business.

For XPO, its two-year annual EPS growth of 14.1% was higher than its five-year trend. This acceleration made it one of the faster-growing industrials companies in recent history.

In Q2, XPO reported adjusted EPS of $1.70, up from $1.05 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 to grow 14.3% from $4.66 to $5.33.

Key Takeaways from XPO’s Q2 Results

We enjoyed seeing XPO beat analysts’ EBITDA expectations this quarter. We were also glad its revenue outperformed Wall Street’s estimates. Zooming out, we think this quarter featured some important positives. The stock traded up 1.2% to $201.85 immediately following the results.

XPO may have had a good quarter, but does that mean you should invest right now? 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).