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QXO Reports Third Quarter 2024 Results

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QXO reported Q3 2024 financial results with a loss of $0.01 per share. Total revenue decreased 2.0% to $13.16 million, with software product revenue up 6.2% to $3.03 million and service revenue down 4.2% to $10.13 million. The company posted net income of $17.1 million, including $57.0 million in interest income. Adjusted EBITDA was negative $11.47 million compared to positive $665,000 in Q3 2023. QXO completed private placements raising $4.1 billion, increasing outstanding shares to 409.4 million. The company holds $5.04 billion in cash with no debt.

QXO ha riportato i risultati finanziari del terzo trimestre del 2024 con una perdita di $0,01 per azione. Le entrate totali sono diminuite del 2,0% a $13,16 milioni, con le entrate da prodotti software aumentate del 6,2% a $3,03 milioni e le entrate da servizi diminuite del 4,2% a $10,13 milioni. L'azienda ha registrato un reddito netto di $17,1 milioni, includendo $57,0 milioni di proventi da interessi. EBITDA rettificato è stato negativo $11,47 milioni rispetto a un positivo $665.000 nel terzo trimestre del 2023. QXO ha completato collocamenti privati raccogliendo $4,1 miliardi, aumentando le azioni in circolazione a 409,4 milioni. L'azienda detiene $5,04 miliardi in contanti senza debiti.

QXO reportó resultados financieros del tercer trimestre de 2024 con una pérdida de $0,01 por acción. Los ingresos totales disminuyeron un 2,0% a $13,16 millones, con ingresos por productos de software que aumentaron un 6,2% a $3,03 millones y los ingresos por servicios que disminuyeron un 4,2% a $10,13 millones. La compañía reportó un ingreso neto de $17,1 millones, incluyendo $57,0 millones en ingresos por intereses. EBITDA ajustado fue negativo de $11,47 millones en comparación con un positivo de $665,000 en el tercer trimestre de 2023. QXO completó colocaciones privadas recaudando $4,1 mil millones, aumentando las acciones en circulación a 409,4 millones. La empresa tiene $5,04 mil millones en efectivo sin deudas.

QXO는 2024년 3분기 재무 결과를 보고하며 주당 손실이 $0.01이라고 발표했습니다. 총 수익은 2.0% 감소하여 $13.16 백만에 이르렀고, 소프트웨어 제품 수익은 6.2% 증가하여 $3.03 백만, 서비스 수익은 4.2% 감소하여 $10.13 백만이었습니다. 회사는 이자 수익 $57.0 백만을 포함하여 순이익 $17.1 백만을 기록했습니다. 조정된 EBITDA는 2023년 3분기 $665,000와 비교하여 -$11.47 백만으로 나타났습니다. QXO는 사모펀드로 $4.1 billion을 모금하여 유통 주식을 409.4 백만으로 증가시켰습니다. 회사는 $5.04 billion의 현금을 보유하고 있으며 부채는 없습니다.

QXO a annoncé des résultats financiers pour le troisième trimestre 2024 avec une perte de 0,01 $ par action. Le chiffre d'affaires total a diminué de 2,0 % pour atteindre 13,16 millions de dollars, avec un chiffre d'affaires des produits logiciels en hausse de 6,2 % à 3,03 millions de dollars et un chiffre d'affaires de services en baisse de 4,2 % à 10,13 millions de dollars. L'entreprise a affiché un revenu net de 17,1 millions de dollars, incluant 57,0 millions de dollars de revenus d'intérêts. EBITDA ajusté était de -11,47 millions de dollars par rapport à 665 000 dollars positifs au troisième trimestre 2023. QXO a réalisé des placements privés levant 4,1 milliards de dollars, augmentant le nombre d'actions en circulation à 409,4 millions. La société détient 5,04 milliards de dollars en liquidités sans dettes.

QXO hat im dritten Quartal 2024 finanzielle Ergebnisse mit einem Verlust von $0,01 pro Aktie gemeldet. Der Gesamtumsatz sank um 2,0% auf $13,16 Millionen, während der Umsatz aus Softwareprodukten um 6,2% auf $3,03 Millionen stieg und die Serviceumsätze um 4,2% auf $10,13 Millionen zurückgingen. Das Unternehmen verzeichnete einen Nettogewinn von $17,1 Millionen, einschließlich $57,0 Millionen Zinserträge. Bereinigtes EBITDA betrug -$11,47 Millionen im Vergleich zu $665.000 im dritten Quartal 2023. QXO hat private Platzierungen in Höhe von $4,1 Milliarden abgeschlossen, wodurch die ausstehenden Aktien auf 409,4 Millionen erhöht wurden. Das Unternehmen hält $5,04 Milliarden in bar und hat keine Schulden.

Positive
  • Software product revenue increased 6.2% YoY to $3.03 million
  • Strong cash position of $5.04 billion with no debt
  • Net income of $17.1 million, boosted by $57.0 million interest income
  • Successfully raised $4.1 billion through private placements
Negative
  • Total revenue declined 2.0% YoY to $13.16 million
  • Service revenue decreased 4.2% YoY to $10.13 million
  • Adjusted EBITDA turned negative at -$11.47 million vs +$665,000 in Q3 2023
  • Significant shareholder dilution with shares outstanding increasing to 409.4 million

Insights

QXO's Q3 results reveal a complex financial picture. The $17.1 million net income appears strong but is primarily driven by $57 million in interest income rather than operational performance. Core revenue declined by 2% year-over-year, with software revenue growing 6.2% while service revenue dropped 4.2%. The negative Adjusted EBITDA of $11.47 million compared to last year's positive $665,000 signals significant operational challenges.

The massive $5.04 billion cash position from recent private placements positions QXO for potential acquisitions in the building products distribution space. However, increased employee costs and negative operational metrics suggest execution risks in their growth strategy. The substantial share dilution to 409.4 million shares warrants attention from existing shareholders.

QXO's strategic pivot into the $800 billion building products distribution industry represents a bold transformation play. The company's aggressive fundraising of $4.1 billion indicates plans for significant M&A activity. However, the current operational metrics raise concerns about execution capability. The decline in service revenue and negative EBITDA suggest challenges in maintaining existing business segments while pursuing this ambitious expansion.

The market will likely focus on acquisition announcements and integration plans in coming quarters, as the success of this transformation heavily depends on effective capital deployment. The substantial cash position provides a safety net but also creates pressure to generate returns above current interest income levels.

GREENWICH, Conn., Nov. 13, 2024 (GLOBE NEWSWIRE) -- QXO, Inc. (Nasdaq: QXO) today announced its financial results for the third quarter 2024. The company reported a loss of $0.01 per basic and diluted share attributable to common shareholders.

THIRD QUARTER 2024 SUMMARY RESULTS
                      
 Three Months Ended    Nine Months Ended   
 September 30, September 30, Percent September 30, September 30, Percent
(in thousands) 2024    2023   Change 2024  2023  Change
Revenue:                     
Software product, net$3,028  $2,850  6.2% $10,284  $9,471  8.6%
Service and other, net 10,127   10,573  (4.2)%  31,846   30,337  5.0%
Total revenue, net$13,155  $13,423  (2.0)% $42,130  $39,808  5.8%
                      
Net income (loss)$17,132  $(2,110) NM $16,680  $(1,489) NM
                      
Adjusted EBITDA1$(11,469) $665  NM $(12,177) $2,033  NM
NM - Not Meaningful                     

1 See "Non-GAAP Financial Measures” section for additional information on non-GAAP financial measures.

Brad Jacobs, chairman and chief executive officer of QXO, said, “With over $5 billion in cash, no debt and a seasoned leadership team, we’re poised to make QXO a leader in the $800 billion building products distribution industry.”

Third Quarter Highlights

Total revenue for the quarter was $13.16 million, compared with $13.42 million for the same period in 2023. Software product revenue was $3.03 million, compared with $2.85 million for the same period in 2023. Service and other revenue was $10.13 million, compared with $10.57 million for the same period in 2023.

Net income, inclusive of $57.0 million interest income, was $17.1 million.

Adjusted EBITDA, a non-GAAP measure, was negative $11.47 million, compared with positive $665,000 for the same period in 2023. The decline in Adjusted EBITDA relates to higher employee-related costs, reflecting the introduction of a new senior management team to execute QXO’s expansive growth plan.

The company completed two previously announced private placements during the quarter, raising approximately $4.1 billion to support its growth strategy and increasing the number of common shares outstanding to 409.4 million.

As of September 30, 2024, the company had approximately $5.04 billion in cash on hand.

About QXO
QXO provides technology solutions, primarily to clients in the manufacturing, distribution and service sectors. The company provides consulting and professional services, including specialized programming, training and technical support, and develops proprietary software. As a value-added reseller of business application software, QXO offers solutions for accounting, financial reporting, enterprise resource planning, warehouse management systems, customer relationship management, business intelligence and other applications. QXO plans to become a tech-forward leader in the $800 billion building products distribution industry. The company is targeting tens of billions of dollars of annual revenue in the next decade through accretive acquisitions and organic growth. Visit QXO.com for more information.

Non-GAAP Financial Measures

As required by the rules of the SEC, we provide reconciliations of the non-GAAP financial measures contained in this press release to the most directly comparable measure under GAAP, which are set forth in the financial tables attached to this press release.

QXO’s non-GAAP financial measures in this press release include Adjusted EBITDA.

We believe that the above adjusted financial measure facilitates analysis of our ongoing business operations because it excludes items that may not be reflective of, or are unrelated to, QXO’s core operating performance, and may assist investors with comparisons to prior periods and assessing trends in our underlying business. Other companies may calculate this non-GAAP financial measure differently, and therefore our measure may not be comparable to similarly titled measures of other companies. This non-GAAP financial measure should only be used as a supplemental measure of our operating performance.

Adjusted EBITDA includes adjustments for share-based compensation, transaction, and severance costs as set forth in the attached reconciliation. Transaction adjustments are generally incremental costs that result from an actual or planned acquisition or divestiture and may include transaction costs, consulting fees, retention awards, internal salaries and wages (to the extent the individuals are assigned full-time to integration and transformation activities) and certain costs related to integrating and converging IT systems. Management uses this non-GAAP financial measure in making financial, operating and planning decisions and evaluating QXO’s ongoing performance.

We believe that Adjusted EBITDA improves comparability from period to period by removing the impact of our capital structure (interest and financing expenses), asset base (depreciation and amortization), tax impacts and other adjustments as set out in the attached tables that management has determined are not reflective of core operating activities and thereby assist investors with assessing trends in our underlying businesses.

Because of these limitations, you should consider Adjusted EBITDA alongside other financial performance measures, including various cash flow metrics, net income (loss), and our other GAAP results.

Forward-Looking Statements
This release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Statements that are not historical facts, including statements about beliefs, expectations, targets and goals are forward-looking statements. These statements are based on plans, estimates, expectations and/or goals at the time the statements are made, and readers should not place undue reliance on them. In some cases, readers can identify forward-looking statements by the use of forward-looking terms such as “may,” “will,” “should,” “expect,” “opportunity,” “intend,” “plan,” “anticipate,” “believe,” “estimate,” “predict,” “potential,” “target,” “goal,” or “continue,” or the negative of these terms or other comparable terms. Forward-looking statements involve inherent risks and uncertainties and readers are cautioned that a number of important factors could cause actual results to differ materially from those contained in any such forward-looking statements. Factors that could cause actual results to differ materially from those described herein include, among others:

  • risks associated with potential significant volatility and fluctuations in the market price of the company’s common stock;
  • risks associated with raising additional equity or debt capital from public or private markets to pursue the company’s business plan, including potentially one or more additional private placements of common stock, and the effects that raising such capital may have on the company and its business, including the risk of substantial dilution or that the company’s common stock may experience a substantial decline in trading price;
  • the possibility that additional future financings may not be available to the company on acceptable terms or at all;
  • the possibility that an active, liquid trading market for the company’s common stock may not develop or, if developed, may not be sustained;
  • the possibility that the company’s outstanding warrants and preferred stock may or may not be converted or exercised, and the economic impact on the company and the holders of common stock of the company that may result from either such exercise or conversion, including dilution, or the continuance of the preferred stock remaining outstanding, and the impact its terms, including its dividend, may have on the company and the common stock of the company;
  • uncertainties regarding the company’s focus, strategic plans and other management actions;
  • the risk that the company is or becomes highly dependent on the continued leadership of Brad Jacobs as chairman and chief executive officer and the possibility that the loss of Mr. Jacobs in these roles could have a material adverse effect on the company’s business, financial condition and results of operations;
  • the possibility that the concentration of ownership by Mr. Jacobs may have the effect of delaying or preventing a change in control of the company and might affect the market price of shares of the common stock of the company;
  • the risk that Mr. Jacobs’ past performance may not be representative of future results;
  • the risk that the company is unable to attract and retain world-class talent;
  • the risk that the failure to consummate any acquisition expeditiously, or at all, could have a material adverse effect on the company's business prospects, financial condition, results of operations or the price of the company’s common stock;
  • risks that the company may not be able to enter into agreements with acquisition targets on attractive terms, or at all, that agreed acquisitions may not be consummated, or, if consummated, that the anticipated benefits thereof may not be realized and that the company encounter difficulties in integrating and operating such acquired companies, or that matters related to an acquired business (including operating results or liabilities or contingencies) may have a negative effect on the company or its securities or ability to implement its business strategy, including that any such transaction may be dilutive or have other negative consequences to the company and its value or the trading prices of its securities;
  • risks associated with cybersecurity and technology, including attempts by third parties to defeat the security measures of the company and its business partners, and the loss of confidential information and other business disruptions;
  • the possibility that new investors in any future financing transactions could gain rights, preferences and privileges senior to those of the company’s existing stockholders;
  • the possibility that building products distribution industry demand may soften or shift substantially due to cyclicality or seasonality or dependence on general economic and political conditions, including inflation or deflation, interest rates, governmental subsidies or incentives, consumer confidence, labor and supply shortages, weather and commodity prices;
  • the possibility that regional or global barriers to trade or a global trade war could increase the cost of products in the building products distribution industry, which could adversely impact the competitiveness of such products and the financial results of businesses in the industry;
  • risks associated with periodic litigation, regulatory proceedings and enforcement actions, which may adversely affect the company’s business and financial performance;
  • uncertainties regarding general economic, business, competitive, legal, regulatory, tax and geopolitical conditions; and
  • other factors, including those set forth in the company’s filings with the U.S. Securities and Exchange Commission, including its Annual Report on Form 10-K for the fiscal year ended December 31, 2023 and subsequent Quarterly Reports on Form 10-Q.

The company cautions that forward-looking statements should not be relied on as predictions of future events, and these statements are not guarantees of performance or results. Forward-looking statements herein speak only as of the date each statement is made. The company undertakes no obligation to update any of these statements in light of new information or future events, except to the extent required by applicable law.

Media Contact:
Joe Checkler
joe.checkler@qxo.com
203-609-9650

Investor Contact:
Mark Manduca
mark.manduca@qxo.com
203-321-3889

 
QXO, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands, except share and per share data)
 September 30,
2024

December 31,
2023
ASSETS(unaudited) 
Current assets:  
Cash and cash equivalents$5,037,112 $6,143 
Accounts receivable, net 2,236  2,969 
Prepaid expenses and other current assets 16,291  2,684 
Total current assets 5,055,639  11,796 
Property and equipment, net 456  503 
Operating lease right-of-use assets 320  522 
Intangible assets, net 4,246  4,919 
Goodwill 1,160  1,140 
Deferred tax assets 1,444  1,444 
Other non-current assets 202  171 
Total assets$5,063,467 $20,495 
LIABILITIES AND STOCKHOLDERS’ EQUITY  
Current liabilities:  
Accounts payable$3,861 $4,563 
Accrued expenses 12,488  2,681 
Deferred revenue 2,867  3,161 
Long-term debt – current portion -  702 
Finance lease obligations – current portion 126  154 
Operating lease liabilities – current portion 205  263 
Total current liabilities 19,547  11,524 
Long-term debt net of current portion -  994 
Finance lease obligations net of current portion 223  247 
Operating lease liabilities net of current portion 115  259 
Total liabilities 19,885  13,024 
   
Stockholders’ equity:  
Preferred stock, $0.001 par value; authorized 10,000,000 shares, 1,000,000 and 0 shares issued and outstanding as of September 30, 2024 and December 31, 2023, respectively 498,621  - 
Common stock, $0.00001 par value; authorized 2,000,000,000 shares, 409,430,195 and 664,448 shares issued and outstanding as of September 30, 2024 and December 31, 2023, respectively 4  - 
Additional paid-in capital 4,539,975  9,419 
Retained earnings (accumulated deficit) 4,982  (1,948)
Total stockholders’ equity 5,043,582  7,471 
Total liabilities and stockholders’ equity$5,063,467 $20,495 
   


QXO, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except per share data)
(Unaudited)
 
 Three Months EndedNine Months Ended
 September 30,
2024
September 30,
2023
September 30,
2024
September 30,
2023
Revenue:    
Software product, net$3,028 $2,850 $10,284 $9,471 
Service and other, net 10,127  10,573  31,846  30,337 
Total revenue, net 13,155  13,423  42,130  39,808 
Cost of revenue    
Software product 1,822  1,754  6,390  5,714 
Service and other 5,891  6,319  18,846  18,201 
Total cost of revenue 7,713  8,073  25,236  23,915 
Operating expenses:    
Selling, general and administrative expenses 39,023  7,712  54,047  17,018 
Depreciation and amortization expenses 245  196  746  608 
Total operating expenses 39,268  7,908  54,793  17,626 
Loss from operations (33,826) (2,558) (37,899) (1,733)
Other income (expense), net:    
Interest income (expense), net 56,989  (8) 60,438  (42)
Total other income (expense) 56,989  (8) 60,438  (42)
Income (loss) before taxes 23,163  (2,566) 22,539  (1,775)
Provision (benefit) for income taxes 6,031  (456) 5,859  (286)
Net income (loss)$17,132 $(2,110)$16,680 $(1,489)
Loss per common share – basic and diluted$(0.01)$(3.21)$(0.10)$(2.27)
Total weighted average common shares outstanding:    
Basic 358,813  657  120,919  657 
Diluted 358,813  657  120,919  657 
     


QXO, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)
(Unaudited)
 Nine Months Ended September 30.
  2024  2023 
Cash flows from operating activities:  
Net income (loss)$16,680 $(1,489)
Adjustments to reconcile net income (loss) to net cash provided by operating activities:  
Deferred income taxes -  (236)
Depreciation 198  253 
Amortization of intangibles 653  486 
Non-cash lease expense 202  273 
Provision for expected losses 25  (55)
Share-based compensation 13,985  41 
Changes in assets and liabilities:  
Accounts receivable 708  (407)
Prepaid expenses and other current assets (10,106) 1,996 
Other assets (31) 7 
Accounts payable (702) 229 
Accrued expenses 9,807  398 
Deferred revenue (294) (405)
Operating lease liabilities (202) (273)
Net cash provided by operating activities 30,923  818 
Cash flows from investing activities:  
Purchase of property and equipment (64) (75)
Net cash used in investing activities (64) (75)
Cash flows from financing activities:  
Proceeds from the issuance of common stock and pre-funded warrants, net of issuance costs 4,051,103  - 
Proceeds from issuance of preferred stock and warrants, net of issuance costs 981,538  - 
Payment of preferred stock dividend (9,750) - 
Payment of common-stock dividend (17,400) (1,051)
Payment of long-term debt (1,696) (659)
Payment for fractional shares (45) - 
Payment of finance lease obligations (140) (162)
Net cash provided by (used in) financing activities 5,003,610  (1,872)
Net increase (decrease) in cash, cash equivalents and restricted cash 5,034,469  (1,129)
Cash, cash equivalents and restricted cash, beginning of period 6,143  8,009 
Cash, cash equivalents and restricted cash, end of period$5,040,612 $6,880 
Cash paid during period for:  
Interest$57 $57 
Income taxes$- $23 
   


QXO, INC. AND SUBSIDIARIES
RECONCILIATION OF NET INCOME (LOSS) TO ADJUSTED EBITDA
(in thousands)
(Unaudited)
     
 Three Months EndedNine Months Ended
 September 30,
2024
September 30,
2023
September 30,
2024
September 30,
2023
     
Net income (loss)$17,132 $(2,110)$16,680 $(1,489)
Add (deduct):    
Depreciation and amortization 277  237  851  739 
Share-based compensation 13,985  -  13,985  41 
Interest (income) expense (56,989) 8  (60,438) 42 
Provision (benefit) for income taxes 6,031  (456) 5,859  (286)
Transaction costs 8,095  2,986  8,118  2,986 
Severance costs -  -  2,768  - 
Adjusted EBITDA$(11,469)$665 $(12,177)$2,033 
     

FAQ

What was QXO's revenue in Q3 2024?

QXO reported total revenue of $13.16 million in Q3 2024, a 2.0% decrease from $13.42 million in Q3 2023.

How much cash does QXO have on hand as of September 30, 2024?

QXO had approximately $5.04 billion in cash on hand as of September 30, 2024.

What was QXO's Adjusted EBITDA in Q3 2024?

QXO's Adjusted EBITDA was negative $11.47 million in Q3 2024, compared to positive $665,000 in Q3 2023.

How much did QXO raise in private placements during Q3 2024?

QXO raised approximately $4.1 billion through private placements during Q3 2024.

QXO, Inc.

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QXO Stock Data

6.54B
392.56M
4.12%
78.28%
1.22%
Software - Application
Services-computer Processing & Data Preparation
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United States of America
GREENWICH