GXO Logistics on Tuesday reported better-than-expected first-quarter earnings, driven by growth in aerospace, defense and technology logistics contracts, while executives dismissed concerns that Amazon’s newly expanded supply chain services could threaten the company’s business model.
The contract logistics provider reported first-quarter revenue of $3.3 billion, up 10.8% year over year, while adjusted EBITDA rose 23% to $200 million. Adjusted diluted earnings per share rose 72% to 50 cents.
GXO also raised its full-year guidance for adjusted EBITDA to a range of $935 million to $975 million and increased adjusted diluted EPS guidance to between $2.90 and $3.20.
CEO Patrick Kelleher said GXO’s pipeline hit a record $2.7 billion during the quarter as the company expanded further into higher-margin verticals such as aerospace and defense, industrial, life sciences and data center infrastructure.
“2026 is off to a good start,” Kelleher said on Wednesday’s earnings conference call. “In the first quarter, we delivered strong revenue and profitability growth, underscoring the strength and predictability of our business model.”
GXO Logistics (NYSE: GXO), headquartered in Greenwich, Connecticut, is one of the largest sole-source contract logistics providers in the world. It has more than 970 facilities totaling approximately 200 million square feet, with a global workforce of more than 130,000 people.
GXO generated $227 million in new business during the quarter, with approximately 40% tied to strategic growth sectors including aerospace and defense, technology, industrials and life sciences.
Executives repeatedly emphasized GXO’s growing role in AI infrastructure and data center logistics during the earnings conference call.
“In the first quarter, we added $227 million in new business wins across key verticals, including notable contracts in aerospace and defense, several technology advancements, including further growth in AI cloud infrastructure with hyperscalers,” Kelleher said during the call.
Kelleher said the company’s sales pipeline is now at the highest level in GXO’s history, with more than $500 million tied to strategic growth verticals.
“Our total portfolio is now at the highest level in GXO’s history,” Kelleher said. “And in the quarter, 40% of the gains occurred in our strategic growth, aerospace and defense, industrial, life sciences and technology verticals, particularly data centers.”
A major focus during the earnings call centered on Amazon’s recent expansion into broader third-party supply chain and warehousing services, which analysts questioned as a potential competitive threat to traditional contract logistics providers.
Kelleher dismissed those concerns, saying Amazon’s move validates the long-term outsourcing opportunity in logistics rather than undermining GXO’s business.
“I’ve been in this industry for 32 years and I really saw Amazon’s announcement this week as a fantastic validation of the opportunity that lies before GXO and the contract logistics industry,” Kelleher said.
Kelleher noted that approximately 70% of the global contract logistics market remains outsourced, representing a significant long-term growth opportunity for third-party providers.
“Amazon sells access to its supply chain, while at GXO we create custom solutions for our customers, and that distinction means everything to our blue-chip customers,” Kelleher said. “We are not a one-size-fits-all provider. What we do is customized, operationally complex and relationship-based.”
Kelleher also said that many enterprise customers would be reluctant to provide Amazon with deeper visibility into their supply chain operations and data.
“For enterprise customers, protecting their data is a top priority,” Kelleher said. “Many companies will be reluctant to give a competitor deeper visibility into their inventory, demand patterns, sales channels and financials.”
Executives acknowledged that GXO competes directly with Amazon in sharing e-commerce fulfillment through GXO Direct, which Kelleher said accounts for less than 6% of the company’s total revenue.
“The area of the business where I see us competing with Amazon in the future, and we’ve been in the past for a while, is with Amazon’s FBA product, which is very similar to our GXO direct product offering,” Kelleher said.
Still, Kelleher said GXO differentiates itself through high-touch logistics services tailored to premium brands.
“I think where we differentiate ourselves competitively as GXO direct is that we serve high-value brands that take advantage of our value-added services in packaging, engraving and white glove type services for those very high-end brands,” he said.
Beyond e-commerce, GXO executives said the company continues to benefit from accelerating demand linked to industrial reshoring, defense supply chains and the expansion of artificial intelligence infrastructure.
The company launched a Defense Advisory Board in the US during the quarter and established the Taurus Defense Supply Chain Alliance in the UK following the Wincanton acquisition.
GXO also continued to expand its GXO IQ warehouse platform, an AI-powered system designed to improve warehouse startup efficiency, automation implementation and productivity. The company said it expects GXO IQ to be deployed at more than 50 sites by the end of the year.
“Our first-mover advantage is real and we are taking advantage of it,” Kelleher said regarding the company’s automation and robotics strategy.
Executives said GXO expects organic revenue growth to accelerate during the second half of 2026 as newly signed contracts move into production and deployment phases.
GXO ended the quarter with $794 million in cash and $1.6 billion in total liquidity, while maintaining leverage of 2.5 times adjusted EBITDA.
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