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QXO Reports Second Quarter 2024 Results

GREENWICH, Conn., Aug. 14, 2024 (GLOBE NEWSWIRE) — QXO, Inc. (Nasdaq: QXO) today announced its second quarter results for the three and six months ended June 30, 2024.

Financial Highlights for the Three Months Ended June 30, 2024, Compared with the Three Months Ended June 30, 2023:

Financial Highlights for the Six Months Ended June 30, 2024, Compared with the Six Months Ended June 30, 2023:

The year-over-year declines in three- and six-month 2024 Adjusted EBITDA were due to higher employee-related costs in the second quarter, reflecting the introduction of a new senior management team to execute the company’s expansive growth plan.

Brad Jacobs, chairman and chief executive officer of QXO, said, “I’m pleased that we’ve achieved three significant milestones in less than 10 weeks since launching QXO. We have an accomplished senior management team and board of directors in place, and approximately $5 billion of cash to execute our strategy, following two private placements. These are all cornerstones of our plan to become a tech-forward leader in building products distribution through accretive acquisitions and organic growth.”

For more details on QXO’s three- and six-month results, refer to the company’s Form 10-Q filed with the U.S. Securities and Exchange Commission (“SEC”), accessible at www.sec.gov.

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 document 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:

You should not rely on forward-looking statements as predictions of future events, and you should understand that these statements are not guarantees of performance or results, and our actual results could differ materially from those expressed in the forward-looking statements due to a variety of factors. We have based the forward-looking statements contained in this document primarily on our current assumptions, expectations and projections about future events and trends that we believe may affect our business, financial condition, and results of operations. Moreover, we operate in a very competitive and rapidly changing environment. New risks and uncertainties emerge from time to time, and it is not possible for us to predict all risks and uncertainties that could have an impact on the forward-looking statements contained in this document. The results, events and circumstances reflected in the forward-looking statements may not be achieved or occur, and actual results, events or circumstances could differ materially from those described in the forward-looking statements.

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)
 
    June 30, 2024       December 31, 2023  
ASSETS (unaudited)        
Current assets:              
Cash and cash equivalents $ 971,284     $ 6,143  
Accounts receivable, net   3,015       2,969  
Prepaid expenses and other current assets   5,539       2,684  
Total current assets   979,838       11,796  
Property and equipment, net   511       503  
Operating lease right-of-use assets   380       522  
Intangible assets, net   4,486       4,919  
Goodwill   1,140       1,140  
Deferred tax assets   1,614       1,444  
Other non-current assets   216       171  
Total assets $ 988,185     $ 20,495  
LIABILITIES AND STOCKHOLDERS’ EQUITY              
Current liabilities:              
Accounts payable $ 6,194     $ 4,563  
Accrued expenses   5,397       2,681  
Deferred revenue   3,113       3,161  
Long-term debt – current portion   784       702  
Finance lease obligations – current portion   141       154  
Operating lease liabilities – current portion   217       263  
Total current liabilities   15,846       11,524  
Long-term debt net of current portion   693       994  
Finance lease obligations net of current portion   247       247  
Operating lease liabilities net of current portion   164       259  
Total liabilities   16,950       13,024  
Commitments and contingencies              
Stockholders’ equity:              
Preferred stock, $0.001 par value; authorized 10,000,000 shares, 1,000,000 and 0 shares issued and outstanding as of June 30, 2024 and December 31, 2023, respectively   498,684        
Common stock, $0.00001 par value; authorized 2,000,000,000 shares, 664,284 and 664,448 shares issued and outstanding as of June 30, 2024 and December 31, 2023, respectively          
Additional paid-in capital   474,951       9,419  
Accumulated deficit   (2,400 )     (1,948 )
Total stockholders’ equity   971,235       7,471  
Total liabilities and stockholders’ equity $ 988,185     $ 20,495  
QXO, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except per share data)
 
  (Unaudited)    
  Three Months Ended Six Months Ended
    June 30, 2024       June 30, 2023       June 30, 2024       June 30, 2023  
Revenue:                              
Software product, net $ 3,776     $ 3,298     $ 7,256     $ 6,620  
Service and other, net   10,764       9,959       21,719       19,765  
Total revenue, net   14,540       13,257       28,975       26,385  
Cost of revenue        
Product   2,369       2,027       4,568       3,960  
Service and other   6,376       6,045       12,955       11,883  
Total cost of revenue   8,745       8,072       17,523       15,843  
Operating expenses:                              
Selling, general and administrative expenses   9,835       4,525       15,024       9,305  
Depreciation and amortization expenses   261       204       501       411  
Total operating expenses   10,096       4,729       15,525       9,716  
(Loss) income from operations   (4,301 )     456       (4,073 )     826  
Other income (expense), net:                              
Interest income (expense), net   3,470       (17 )     3,450       (35 )
Total other income (expense)   3,470       (17 )     3,450       (35 )
(Loss) income before taxes   (831 )     439       (623 )     791  
(Benefit) provision for income taxes   (240 )     95       (171 )     170  
Net (loss) income $ (591 )   $ 344     $ (452 )   $ 621  
(Loss) earnings per common share – basic and fully diluted $ (9.93 )   $ 0.52     $ (9.72 )   $ 0.95  
Weighted average shares outstanding:                              
Basic   664       657       664       657  
Diluted   664       657       664       657  
QXO, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)
(Unaudited)
 
  Six Months Ended June 30,
    2024       2023  
Cash flows from operating activities:    
Net (loss) income $ (452 )   $ 621  
Adjustments to reconcile net (loss) income to net cash used in operating activities:              
Deferred income taxes   (171 )     220  
Depreciation   142       178  
Amortization of intangibles   432       324  
Non-cash lease expense   140       188  
Provision for expected losses   25       (68 )
Share-based compensation         41  
Changes in assets and liabilities:              
Accounts receivable   (71 )     73  
Prepaid expenses and other current assets   (2,855 )     (611 )
Other assets   (144 )      
Accounts payable   1,631       (452 )
Accrued expenses   829       (257 )
Deferred revenue   (48 )     (393 )
Operating lease liabilities   (141 )     (188 )
Net cash used in operating activities   (683 )     (324 )
Cash flows from investing activities:              
Purchase of property and equipment   (62 )     (24 )
Net cash used in investing activities   (62 )     (24 )
Cash flows from financing activities:              
Payment of long-term debt   (219 )     (422 )
Proceeds from issuance of preferred stock and warrants, net of offering costs   983,650        
Payment of common-stock dividend   (17,400 )      
Cash payment for fractional shares   (45 )      
Payment of finance lease obligations   (100 )     (109 )
Net cash provided by (used in) financing activities   965,886       (531 )
Net increase (decrease) in cash   965,141       (879 )
Cash, beginning of period   6,143       8,009  
Cash, end of period $ 971,284     $ 7,130  
Cash paid during period for:              
Interest $ 23     $ 58  
Income taxes $     $ 23  
QXO, INC. AND SUBSIDIARIES
RECONCILIATION OF NET (LOSS) INCOME TO ADJUSTED EBITDA
(in thousands)
(Unaudited)
 
  Three Months Ended Six Months Ended
  June 30, 2024     June 30, 2023       June 30, 2024       June 30, 2023  
                               
Net (loss) income $ (591 )   $ 344     $ (452 )   $ 621  
Add (deduct):        
Depreciation and amortization   303       249       574       502  
Share-based compensation                     41  
Interest (income) expense   (3,470 )     17       (3,450 )     35  
(Benefit) provision for income taxes   (240 )     95       (171 )     170  
Transaction costs   23             23        
Severance costs   2,768             2,768        
Adjusted EBITDA $ (1,207 )   $ 705     $ (708 )   $ 1,369  


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