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    Home - E-commerce & Retail - New contracts fuel GXO ecommerce revenue 21% in Q1
    E-commerce & Retail

    New contracts fuel GXO ecommerce revenue 21% in Q1

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    New contracts fuel GXO ecommerce revenue 21% in Q1
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    GXO Logistics reported a 21% year-over-year revenue increase in Q1 2025, reaching $2.98 billion, as demand for ecommerce fulfillment, automation, and outsourced logistics continued to accelerate amid global supply chain uncertainty.

    The logistics provider operates fulfillment services for major retailers, manufacturers, and health care organizations. It credited the growth to a combination of new ecommerce contracts, ongoing site automation, and early gains from artificial intelligence (AI) deployments. Ecommerce drove 42% of GXO’s new business in the first quarter, while automation and outsourcing each contributed 39% and 41% of profits, respectively.

    “We’re seeing strong momentum in ecommerce and automation as customers look for dependable partners to help navigate trade disruptions, labor pressures, and shifting inventory strategies,” said CEO Malcolm Wilson on the company’s Q1 earnings call. “GXO is increasingly the first call when complexity hits.”

    GXO Logistics revenue in Q1

    The company signed up for $228 million in new business in the first quarter and reported a record $2.5 billion sales pipeline. Among the new wins was a landmark $2.5 billion, 10-year contract with the United Kingdom’s National Health Service Supply Chain, which is the largest in GXO’s history. The contract expands GXO’s footprint in health care logistics.

    Adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) for the quarter was $163 million, with growth fueled by new site startups and improved operational productivity. GXO reported an adjusted net income of $34 million. It attributed an accepted accounting principles (GAAP) net loss of $95 million to one-time regulatory and restructuring costs.

    “We’re delivering growth not just by adding revenue, but by operating smarter,” said Baris Oran, GXO chief financial officer, on the Q1 earnings call. “AI and automation are driving site-level efficiencies that will ramp throughout 2025 and beyond.”

    The company said organic growth was 3% in the quarter. And all three of its operating regions showed year-over-year increases. Continental Europe led organic expansion. Meanwhile, the North American business benefited from strength in aerospace, technology, and infrastructure verticals. Oran said consumer inventory levels remained elevated in fashion and technology categories, particularly in United States warehouses, but emphasized that two-thirds of GXO’s business is outside North America.

    GXO forecast

    The company is reaffirming full-year guidance for 3% to 6% organic revenue growth. It also reaffirms adjusted EBITDA of $840 million to $860 million. Executives cite resilience from long-term contracts and geographic diversification as factors supporting the outlook, even amid potential tariff hikes and macroeconomic volatility.

    Ecommerce customers are increasingly tapping GXO for bonded warehousing, rebagging, retagging, and reverse logistics to mitigate supply chain risks.

    “We’ve seen significant demand for bonded warehouse services, especially among consumer-facing customers in North America,” Oran said. “These are strategic differentiators, even if they’re not yet material to our profit and loss statement.”

    GXO cost savings from AI

    Chief strategy officer Kristine Kubacki said the company has more than 20 AI modules in live operation across sites. They handle tasks such as stock-keeping unit (SKU) dimensioning, initiative-taking replenishment, and order routing. GXO also piloted AI-driven reverse logistics to reduce manual touches in returns processing.

    “We’re now seeing the first wave of cost savings from our AI tools,” Kubacki said. “It’s early, but the long-term productivity lift is significant.”

    GXO is also preparing to integrate its Wincanton acquisition in the coming weeks, pending final regulatory clearance from the United Kingdom’s Competition and Markets Authority. Wilson said the company is on track to unlock $58 million in annual cost synergies. It expects to begin integration this summer.

    “With $732 million in new revenue already booked for 2025 and another $316 million lined up for 2026, we’re building durable, tech-forward growth,” said Wilson. “The structural shift toward outsourced, automated fulfillment is only gaining speed, and GXO is positioned to lead.”

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