QXO — Third Quarter 2026 Earnings Summary

Financial Performance:

• Net sales for the three months ended September 30, 2026, totaled $4.895 billion, compared to $2.728 billion in the same period in 2025.
• Net sales for the nine months ended September 30, 2026, totaled $9.871 billion, compared to $4.648 billion in the same period in 2025.
• Gross profit for the three months ended September 30, 2026, was $1.380 billion (28.2% margin), compared to $636 million (23.3% margin) in 2025.
• Adjusted Gross Profit for the three months ended September 30, 2026, was $1.397 billion (28.5% margin), compared to $687 million (25.2% margin) in 2025.
• Net loss for the three months ended September 30, 2026, was $123 million, compared to $139 million in 2025.
• Net loss for the nine months ended September 30, 2026, was $405 million, compared to $189 million in 2025.
• Adjusted EBITDA for the three months ended September 30, 2026, was $557 million, compared to $301 million in 2025.
• Adjusted EBITDA for the nine months ended September 30, 2026, was $830 million, compared to $497 million in 2025.
• Adjusted Net Income for the three months ended September 30, 2026, was $229 million, compared to $166 million in 2025.
• Adjusted Net Income for the nine months ended September 30, 2026, was $302 million, compared to $311 million in 2025.
• Basic and diluted loss per common share for the three months ended September 30, 2026, was $(0.17), compared to $(0.24) in 2025.
• Adjusted Diluted Earnings per Common Share for the three months ended September 30, 2026, was $0.13, compared to $0.14 in 2025.
• Cash and cash equivalents were $528 million as of September 30, 2026, down from $2,362 million as of December 31, 2025.
• Total debt (current and long-term) was $9,278 million as of September 30, 2026, compared to $3,057 million as of December 31, 2025.
• Goodwill increased to $14,536 million as of September 30, 2026, from $5,111 million as of December 31, 2025.
• Net cash used in investing activities for the nine months ended September 30, 2026, was $11.040 billion, primarily driven by acquisitions.
• Net cash provided by financing activities for the nine months ended September 30, 2026, was $9.373 billion.

Guidance and Future Outlook:

• The company targets reaching $4 billion in adjusted EBITDA by 2030 from existing businesses.
• The company targets $50 billion in annual revenue within the decade through organic growth and disciplined acquisitions.
• Management noted that organic daily revenue trends improved for the second consecutive quarter despite a soft construction market.
• Companywide pricing increased 2.2% year over year.

Business Segments and Product Lines:

• Net sales for the third quarter included $1.64 billion from TopBuild and $589 million from Kodiak.
• In the Roofing and Waterproofing segment, complementary product sales grew 4.2%.
• TRI-BUILT reached a record 10.6% of sales.
• Mechanical insulation distribution revenue grew 16%, supported by strong data center demand.
• The company serves 194,000 customers across legacy Beacon, Kodiak, and TopBuild businesses.
• The company is connecting sales, inventory, and warehouse systems to improve efficiency and enable real-time inventory checks.
• AI initiatives are being deployed to help salespeople identify opportunities to sell additional products and win back dormant accounts.

Market and Competitive Landscape:

• QXO serves an $800 billion market.
• The company is the largest distributor and installer of insulation.
• The company is the second-largest distributor of roofing products.
• The company is the second-largest publicly traded distributor of lumber and building materials.
• The company is the largest distributor of waterproofing products.
• The company aims to help customers work with fewer suppliers, coordinate installation, and reduce construction costs through a broader offering.

Risks and Challenges:

• Risks include inability to obtain products, changes in supplier pricing, and vendor rebates affecting margins.
• Risks related to identifying, completing, and integrating acquisition targets are present.
• Safety record maintenance and liability exposure from construction defect and warranty claims are cited as risks.
• Industry demand may soften due to cyclicality, economic conditions, inflation, interest rates, labor shortages, weather, and commodity prices.
• Risks related to IT systems, cybersecurity, and digital transformation initiatives exist.
• Dependence on Chairman and CEO Brad Jacobs is a noted risk.
• Risks include potential impairment of goodwill or intangible assets resulting from acquisitions.
• Obligations under indebtedness incurred for acquisitions and potential challenges in raising additional capital are highlighted.
• Risks related to insurance, bonding, and regulatory proceedings are mentioned.

Management Commentary and Tone:

• Brad Jacobs, Chairman and CEO, stated that the company is prioritizing higher-margin products.
• Management expressed confidence in significant opportunities to grow by further integrating businesses and improving purchasing terms.
• Management emphasized that technology will help serve customers better and operate more efficiently across the network.
• The tone regarding future growth is confident, citing specific revenue and EBITDA targets for 2030.

Other Key Points:

• The Board of Directors authorized a common share repurchase program of $500 million with no expiration date.
• The repurchase program may be suspended or discontinued at any time and does not obligate the Company to repurchase any shares.
• The financial results for the three and nine months ended September 30, 2026, include legacy Kodiak results from April 1, 2026, and legacy TopBuild results from July 1, 2026.
• The financial results for the nine months ended September 30, 2025, include legacy Beacon results from April 29, 2025.
• The company issued Series C Preferred Stock with proceeds of $2,989 million (net of issuance costs) during the nine months ended September 30, 2026.
• Common stock issued as consideration for acquisitions totaled $5,641 million for the nine months ended September 30, 2026.
• The company paid $181 million in interest and $13 million in income taxes, net of refunds, during the nine months ended September 30, 2026.