Third quarter revenue Greenwich, Conn.-based truckload brokerage and less-than-truckload (LTL) services provider XPO Logistics set a new company, according to the company’s earnings release, which was issued earlier today.
Coming in at $3.27 billion, quarterly revenue posted a 22% annual gain, topping industry analyst estimates, at $3.093 billion. And XPO’s quarterly adjusted EBITDA, at $307 million, set a new third quarter record, increasing 15% annually, as well as representing the fifth consecutive quarter XPO set a quarterly adjusted EBITDA record. What’s more, XPO said that it has upped its fourth quarter guidance to between $300 million-to-$305 million, up from $297 million, with 2021 EBITDA expected to be up 46% annually.
Quarterly XPO performance metrics:
XPO said that it plans to implement what it called a company-specific action plan to “enhance network efficiencies and drive growth in its high-ROIC LTL business,” including:
“Company-wide we had an excellent third quarter, with record revenue and a solid beat on the bottom line,” said XPO Chairman and CEO Brad Jacobs in a statement. “Our truck brokerage business had another phenomenal quarter, while our less-than-truckload results were mixed. In North American truck brokerage, every major metric was up year-over-year by large double-digits. We grew third quarter gross and net revenue in truck brokerage by 62%, on a 37% increase in load count per day. Our top 20 customers increased their total volume with us by 45%, and our share of wallet is trending up with key customers. These gains are being driven by our massive brokered capacity, robust digital capabilities and customer trust in our experienced brokerage leaders. We’ve tripled the number of customers on our XPO Connect digital platform from a year ago, and carrier usage is up over 100%. More than 550,000 drivers have downloaded the app to date.”
On the LTL side, he said that North American LTL has its strongest yield growth yet, up 6% excluding fuel year-over-year.
“However, our operating ratio was negatively impacted by our decision to continue insourcing purchased transportation in the midst of driver and equipment constraints,” he said. “We took actions that are gaining rapid traction — our yield growth accelerated again in October, and our network is more balanced now than it was a few weeks ago. We’re still targeting at least $1 billion of adjusted EBITDA in LTL in 2022. And over the next 12 to 24 months, we plan to invest more capital to expand our North American LTL door count by approximately 6% in key metros, following the 264-door Chicago Heights terminal we just opened.”
XPO CIO and Acting Head of North American LTL Mario Harik told LM that looking ahead the fourth quarter outlook looks very tight, in terms of tight capacity and high demand, and is expected to remain the case into 2022.
“The driver shortage, capacity, and inventory levels all factor into this,” he said. “We believe it is going to last a while and are capitalizing on it with our great technology, which was shown with our 37% annual increase in truck brokerage loads in the third quarter. We are continuing to take market share and help our customers [secure] capacity through our technology platform to service their capacity needs.”
On the LTL side, he said it the market is seeing firm pricing conditions, given the shortage of drivers and capacity. And he added that the LTL business is benefitting from higher e-commerce and retail sales volumes, too.
“What we are seeing are higher yields and higher demand from customers as well,” he said.