Teleconferência de Resultados do 3T26 da GXO: Crescimento Orgânico Acelera, Pipeline Atinge US$ 3,1 Bilhões

Principais Destaques

• A GXO Logistics (NYSE: GXO) registrou uma receita de US$ 3,6 bilhões no 3T26, uma alta de 5,7% em relação ao ano anterior, enquanto o crescimento orgânico da receita acelerou para 6,4%, seu ritmo mais rápido em mais de três anos.
• O EBITDA ajustado permaneceu estável na comparação anual em US$ 251 milhões. A margem EBITDA ajustada foi de 7,0%, com melhora de cerca de 60 pontos-base na comparação sequencial, mas refletindo custos de implantação de novos negócios e investimentos em capacidades comerciais, sistemas de gestão de mão de obra e no GXO IQ.
• O LPA diluído ajustado subiu 13%, para US$ 0,89. O lucro líquido foi de US$ 65 milhões, o fluxo de caixa operacional foi de US$ 156 milhões e o fluxo de caixa livre foi de US$ 85 milhões.
• A conquista de novos negócios atingiu US$ 375 milhões, alta de 34% em relação ao mesmo período do ano anterior. O pipeline de vendas cresceu mais de 30%, atingindo o recorde de US$ 3,1 bilhões, incluindo cerca de US$ 1,3 bilhão na América do Norte.
• A GXO reiterou suas projeções para o ano de 2026, incluindo um crescimento orgânico da receita de 4% a 5%, EBITDA ajustado entre US$ 945 milhões e US$ 965 milhões e LPA diluído ajustado de US$ 2,95 a US$ 3,15.
• A administração espera iniciar 2027 com mais de US$ 850 milhões em receita incremental vinda de contratos assinados, acima dos US$ 774 milhões contratados para 2026 e o maior nível na história da empresa.

Principais Resultados Financeiros

Desempenho Operacional e de Negócios

Tecnologia e eletrônicos de consumo foi o vertical de crescimento mais rápido da GXO, com aumento de 19% na receita, impulsionado pela atividade de data centers. Os verticais estratégicos de crescimento — incluindo data centers, aeroespacial e defesa, ciências da vida e industrial — responderam por cerca de 40% das conquistas no acumulado do ano. As conquistas do terceiro trimestre nesses verticais foram quase três vezes superiores ao nível do ano anterior.

A América do Norte seguiu como a maior oportunidade de crescimento comercial. Seu pipeline aumentou mais de 80% na comparação anual, para aproximadamente US$ 1,3 bilhão. O pipeline combinado do Reino Unido e da Europa atingiu cerca de US$ 1,7 bilhão. A GXO também relatou importantes conquistas nos setores de e-commerce e varejo no Reino Unido e na Europa Continental.

A empresa garantiu US$ 375 milhões em novos negócios durante o trimestre, 34% acima do ano anterior. Os contratos assinados ultrapassaram US$ 1 bilhão até o final do trimestre, quase se igualando ao total de todo o ano de 2025, restando ainda um trimestre. A administração afirmou que a GXO estava conquistando mais de 30% das oportunidades, apesar de frequentemente competir contra seis a oito fornecedores.

Aproximadamente 33% das conquistas no acumulado do ano vieram de concorrentes, enquanto 26% vieram de clientes terceirizando serviços pela primeira vez. A administração atribuiu o aumento da terceirização primária à crescente complexidade das cadeias de suprimentos, especialmente nos setores de aeroespacial e defesa e de tecnologia.

A GXO continuou a implementar seu sistema unificado de gestão de mão de obra nos EUA, Reino Unido, Países Baixos, Polônia e Espanha. A administração espera que os benefícios de produtividade comecem a surgir em 2027. O GXO IQ, a plataforma de IA para armazéns da empresa, está em operação em todas as três regiões, e a GXO segue no caminho certo para implementá-la em cerca de 50 unidades em 2026.

A integração da Wincanton está substancialmente concluída após o desinvestimento do seu negócio dedicado de varejo alimentar no Reino Unido. A GXO afirmou que está encerrando o ano com US$ 60 milhões em sinergias de custos anualizadas (run-rate).

Projeções da Administração

A GXO reiterou as seguintes projeções para o ano de 2026:

Para o 4T26, a administração espera um crescimento orgânico ligeiramente acima de 5%, assumindo volumes estáveis na comparação anual. Se as tendências recentes de volume continuarem, o crescimento poderá ser semelhante aos 6,4% do 3T, segundo a empresa.

A administração espera outra melhora sequencial da margem no 4T, sustentada por economias em suprimentos (procurement), iniciativas de produtividade do GXO Way, menor cancelamento de contratos (churn) e o benefício integral das sinergias da Wincanton.

A GXO espera entrar em 2027 com mais de US$ 850 milhões em receita incremental já garantidos, em comparação com os US$ 630 milhões identificados ao final do 3T. A administração também espera que as assinaturas de novos negócios em todo o ano de 2026 se aproximem de US$ 1,3 bilhão.

A empresa espera que os investimentos em capital (capex) permaneçam entre 2% e 3% da receita nos próximos anos. A administração estima que os sistemas unificados de gestão de mão de obra possam reduzir os custos de mão de obra em 5% a 15% em operações individuais ao longo de uma implementação plurianual, enquanto ferramentas de IA podem proporcionar uma melhoria adicional de produtividade na faixa média de um dígito percentual.

Riscos e Pontos de Atenção

As margens do 3T foram pressionadas pelo uso de recursos externos de implementação para dar suporte a lançamentos de clientes mais rápidos do que o planejado. A administração caracterizou esses custos como específicos do cronograma e da escala dos projetos do 3T, reconhecendo ao mesmo tempo a necessidade de manter a capacidade de implementação alinhada com a aceleração nas conquistas de contratos.

As perspectivas para o 4T assumem volumes estáveis, apesar do benefício de 1% no volume no 3T. A administração descreveu sua postura para a alta temporada como cautelosamente otimista e afirmou que a demanda dos clientes e as tendências de volume continuarão sendo monitoradas semana a semana.

As projeções da GXO permanecem expostas a variações cambiais, condições econômicas globais, demanda do consumidor, restrições de mão de obra e de cadeia de suprimentos e inflação. No entanto, a administração argumentou que a logística contratual está menos ligada diretamente ao PIB e pode se beneficiar quando fluxos comerciais e estratégias de estoque em mudança levam os clientes a redesenhar ou terceirizar suas operações da cadeia de suprimentos.

A rápida implementação de novos contratos pode continuar gerando custos iniciais de curto prazo. A melhora da margem também depende da execução do GXO Way, do procurement global, dos sistemas de gestão de mão de obra e da implementação do GXO IQ.

Destaques das Perguntas e Respostas com Analistas

• Crescimento orgânico: A administração afirmou que a aceleração atual reflete iniciativas comerciais lançadas cerca de 14 meses anteriores e observou que a logística contratual normalmente tem um ciclo de vendas de seis meses. A empresa espera melhora contínua ao entrar em 2027.
• Margens em verticais estratégicos: A GXO afirmou que os novos contratos assinados aumentam as margens. Contratos nos setores de data centers e aeroespacial e defesa tendem a envolver serviços mais complexos e de maior valor agregado, sendo geralmente mais duradouros do que os contratos tradicionais.
• Ambiente competitivo: A administração afirmou que a Amazon não afetou o negócio de logística contratual da GXO e não surge nas concorrências que a GXO disputa. A empresa citou automação, robótica, tecnologia e IA como diferenciais-chave.
• Retenção de clientes: A GXO continua a planejar com base em uma taxa de retenção de 95%, mas vê potencial para uma melhora de um a dois pontos percentuais em 2027, sustentada por seu modelo global de sucesso do cliente e renovações de contrato de mais longo prazo.
• Data centers: A administração afirmou que a demanda e as solicitações de proposta continuaram fortes na América do Norte, Europa Continental e Ásia. Os verticais estratégicos de crescimento representam cerca de um terço do pipeline.
• Visibilidade de receita para 2027: Os atuais US$ 630 milhões de receita incremental garantida para 2027 ficam atrás do valor comparável do ano anterior porque aquela comparação incluía o grande contrato do NHS. Mesmo assim, a administração espera que o total ao final do ano ultrapasse US$ 850 milhões à medida que novas conquistas no 4T forem assinadas.

Transcrição Completa da Teleconferência de Resultados

Transcrição completa da teleconferência de resultados

Comentários da administração

Operator

Welcome to the GXO Third Quarter 2026 Earnings Conference Call Webcast. My name is Kevin, and I'll be your operator for today's call. [Operator Instructions] Please note that this conference is being recorded.

Before the call begins, let me read a brief statement on behalf of the company regarding the forward-looking statements the use of non-GAAP financial measures and the company's guidance. During this call, the company will be making certain forward-looking statements within the meaning of applicable securities laws, which, by their nature, involve a number of risks, uncertainties and other factors that could cause actual results to differ materially from those projected in forward-looking statements. A discussion of factors that could cause actual results to differ materially is contained in the company's SEC filings.

The forward-looking statements in the company's earnings release are made on this call are made only as of today, and the company has no obligation to update any of these forward-looking statements, except to extent required by law. The company also may refer to certain non-GAAP financial measures as defined our applicable SEC rules during the call. Reconciliations of such non-GAAP financial measures to the most comparable GAAP measures are contained in the company's earnings release and the related financial tables are on its website. Unless otherwise stated or results reported on this call are reported in the United States dollars. The company will also remind you that this guidance incorporates business trends to date and what it believes today to be appropriate assumptions.

The company's results are inherently unpredictable and may be materially affected by many factors, including fluctuations in foreign exchange rates, changes in global economic conditions and consumer demand and spending, labor market and global supply chain constraints, inflationary pressures and the various factors detailed in its filings with the SEC. It is not possible for the company to actually predict demand for its services. And therefore, actual results could differ materially from guidance.

You can find a copy of the company's earnings release, which contains additional important information regarding forward-looking statements and non-GAAP financial measures in the Investors section of the company's website.

I will now turn the call over to GXO's Chief Executive Officer, Patrick Kelleher. Mr. Kelleher, you may begin.

Patrick Kelleher

Good morning, and thank you for joining our third quarter 2026 results call. Joining me today are Mark Suchinski, our Chief Financial Officer; and Kristine Kubacki, our Chief Strategy Officer. I'm pleased that we're beginning to see the results of the strategy we set in motion over the past year. stronger commercial performance, improving North America business and a growing technology lead that we're enabling across our network.

The headline for the quarter is simple. Organic growth accelerated to its fastest pace in over 3 years. Adjusted EPS grew 13% year-over-year, and our commercial engine delivered another quarter of strong wins with a record pipeline supporting our continued growth.

Starting on Slide 4. Our performance through the first 9 months keeps 2026 firmly on plan. We are delivering financial results while investing in the capabilities that will accelerate growth. And our leading indicators for 2027 are wins, our pipeline and the revenue we've already secured continue to build.

In the third quarter, revenue was $3.6 billion, up 5.7% with organic growth of 6.4%. Adjusted EBITDA was $251 million, in line with prior year and adjusted diluted EPS was up 13%. Mark will walk through the details shortly. And year-to-date, approximately 40% of our new business wins have come from our strategic growth verticals and which include data centers, A&D, life sciences and industrials.

Moving to Slide 5. Commercial momentum continued in the third quarter. We signed $375 million of new business wins, up 34% versus the prior year, our second consecutive quarter of this level of growth, led by our largest global accounts and our strategic growth verticals. Looking into the fourth quarter, we expect new business wins to again show strong growth year-over-year. Our wins are also turning into revenue faster and we're carrying that momentum into next year.

We expect to enter 2027 with more than $850 million of incremental revenue from new business wins. That's ahead of the $774 million we had entering 2026 and the highest level we've ever carried into a new year. Through the end of the quarter, signed wins have exceeded $1 billion, nearly matching what we won in all of 2025 with a quarter still to go. And even after a quarter of rapid conversions, our sales pipeline grew to a record $3.1 billion at quarter end, up more than 30% year-over-year.

North America led that growth and our pipeline across the U.K. and Europe also grew. Wins are also weighted more heavily towards the strategic growth verticals and multi-region customers we are targeting. Mark and Kristine will discuss our financial results and commercial wins in more detail shortly.

Moving to Slide 6. We are making excellent progress on our 3 priorities: a new commercial playbook strengthening operational excellence through the GXO Way and advancing our technology leadership through automation and GXO IQ, our warehouse AI platform. First, on commercial. We believe the results I just walked through are the clearest evidence that our new commercial playbook is working. We're winning more and we're winning across both core and strategic verticals.

In the third quarter, we won new business and expanded relationships with blue-chip customer brands, including Applied Materials, Boeing, NetApp, Unilever and L'Oreal. Our core business continues to grow alongside our strategic verticals. One of our largest wins in the quarter was with the leading U.K. online fashion retailer, and as in the second quarter, we had sizable e-commerce wins in Europe.

North America remains our biggest opportunity, and it is where the execution of our new playbook is most visible. Our pipeline there is up more than 80% year-over-year, and we are converting more of it. Across our Americas and Asia Pacific region, new business wins so far this year have already exceeded the total for all of 2025 and we're winning larger, more complex mandates than we were a year ago.

In the quarter, we again saw strong momentum with our technology and data center customers, where we see no signs of slowing and there are more RFPs in the market than ever. We're also building out our aerospace and defense capabilities, including the recent appointment of former military and defense industry veteran, Dan Davis to lead the vertical, a West Point graduate and former U.S. Army Field Artillery Officer, Dan brings a rare combination, military experience, industrial experience and commercial leadership. Second, operations.

We launched the GXO Way playbook across more sites and we've begun rolling out a unified labor management system with rollouts now live in the U.S., U.K., Netherlands, Poland and Spain. We expect these to start delivering productivity benefits in 2027. We've also advanced our global procurement strategy to unlock cost savings across our sites. Third, in technology, GXO IQ is now live across all 3 of our regions and we remain on track to meet or exceed our target of roughly 50 sites deployed in 2026.

We've also expanded our technology organization around 2 mandates: Balaji Rangaswamy, our new Chief Information Officer, strengthening the enterprise systems that serve as the foundation that lets us scale while Nizar Trigui, our Chief Technology Officer; is accelerating AI, automation and robotics across our network. So to bring it together, we delivered a strong third quarter. We are accelerating organic growth and see continued commercial momentum through the end of the year and into 2027.

Our 3 strategic initiatives across commercial, operations and technology are moving from plan to execution, and we're pleased with the results we've seen today. And we will have more to share on what's driving that momentum at our Investor Day on November 16 at the New York Stock Exchange. This quarter is early evidence of the plan we'll discuss in full that day. The leadership team and I will take you through our long-term strategy, where we see GXO growing, our technology and automation road map and our financial framework and capital allocation priorities. We look forward to seeing many of you in New York. And for those who can't join in person, the event will be webcast live.

With that, I hand the call to Mark.

Mark Suchinski

Thank you, Patrick, and good morning, everyone. Strong commercial momentum is beginning to drive an acceleration in our organic growth. We delivered a solid third quarter, our fastest organic growth in over 3 years, adjusted EBITDA, in line with our expectations and double-digit growth in adjusted EPS.

Turning to Slide 7. GXO delivered third quarter revenue of $3.6 billion, up 5.7% year-over-year and up 6.4% organically, with contributions from all of our regions, including strong growth in the U.K., our largest market and our fastest growth in North America and Asia Pacific in more than 2 years. By vertical, technology and consumer electronics led the way with revenue up 19%, driven by the rapid growth in data centers.

We delivered adjusted EBITDA of $251 million, in line with the prior year and an adjusted EBITDA margin of 7%. Sequentially, adjusted EBITDA increased by more than $30 million and margin expanded by about 60 basis points versus the second quarter. The third quarter year-over-year margin reflects start-up costs on the new business we're onboarding, with more of this year's wins going live within the year, along with investments in our commercial organization, our labor management system and GXO IQ that we expect to deliver productivity benefits in 2027.

Net income was $65 million and adjusted EPS was $0.89, up 13% year-over-year. Adjusted EPS grew faster than adjusted EBITDA, primarily on lower tax rate and a modestly lower share count.

Moving to Slide 8. In the quarter, we generated operating cash flow of $156 million and free cash flow of $85 million. Year-over-year free cash flow primarily reflects the timing of our ERP implementation as well as higher net CapEx than the third quarter last year. Consistent with the prior year, we expect the fourth quarter to be our strongest cash generation quarter of the year, and we remain on track to deliver our full year free cash flow conversion target.

Turning to the balance sheet. We ended the quarter with $340 million of cash, total debt of $2.8 billion and net leverage of 2.7x. During the quarter, we repurchased $84 million of shares, bringing year-to-date purchases to $100 million or 2.1 million shares at an average price of $47.46 and that leaves $200 million remaining under our existing authorization. With an investment-grade balance sheet, we have the flexibility to keep investing in high-return organic growth, continue to delever and return capital to shareholders, and we will stay disciplined in how we balance the 3.

We completed the divestment of Wincanton's dedicated grocery business in the U.K. and the Wincanton integration is now substantially complete. As we close the year, we are delivering run rate cost synergies of $60 million.

Turning to our full year outlook on Slide 9. We're reiterating our 2026 guidance. Organic revenue growth of 4% to 5%, adjusted EBITDA of $945 million to $965 million, adjusted diluted EPS and of $2.95 to $3.15 and free cash flow conversion of 30% to 40%. We entered the fourth quarter with new business ramping. Our productivity program is gaining traction and a cost base we are managing tightly, which sets us up for a solid finish to the year.

Behind that, the shared systems we have been putting in place from a single operating dashboard and labor management tools, the global procurement data gives us 1 way of running the network, which we believe will turn faster growth into higher margins over time.

With that, over to you, Kristine.

Kristine Kubacki

Thanks, Mark. Good morning, everyone. I'd like to spend a few minutes on the drivers behind our commercial momentum and on the future growth we have already secured. Turning to Slide 10. Even with winds up more than 30% for the past 2 quarters, our pipeline has continued to build. North America has been the biggest driver with its pipeline up more than 80% over the past year to around $1.3 billion, while our pipeline across the U.K. and Europe also grew to around $1.7 billion.

As a reminder, the pipeline naturally fluctuates as we convert opportunities into wins, yet the year-over-year trend is clearly moving in the right direction. Growth was broad-based. Third quarter wins in our strategic growth verticals were nearly 3x the prior year level, led by technology and data centers. And year-to-date, they account for approximately 40% of our wins. At the same time, our core continues to grow.

We have sizable wins in e-commerce and retail in both the U.K. and Continental Europe. Our new commercial playbook and aligned strategic priorities position us to grow across our strategic verticals while maintaining focus on our core.

Moving to Slide 11. We I want to highlight our revenue visibility. From the business we've signed, we've secured more than $1 billion of incremental revenue for 2026, a record and we've already built $630 million of expected incremental revenue for 2027. We added $267 million in the third quarter alone versus $206 million in the same quarter last year. With the continued growth in the fourth quarter wins that Patrick described, we are confident we will exceed the prior year figure and enter 2027 with more than $850 million of incremental revenue already secured, a record level.

That growth comes from 3 sources. Year-to-date, about 33% of our wins came from competitors, from new activity with existing and new customers and 26% from customers outsourcing for the first time. This level of visibility gives us confidence in the durability of our growth and in the predictability of our cash flow and future earnings it can generate.

To wrap up, our commercial engine is firing on all fronts. We are expanding our relationships with the world's largest brands in our core, and we are building real scale in faster-growing strategic verticals. With a record pipeline, wins on pace to exceed last year's total and a growing base of secured revenue for 2027, we carry strong momentum into the fourth quarter. Thank you.

And with that, I will hand the call back over to the operator for Q&A.

Operator

[Operator Instructions]

Our first question today is coming from Stephanie Moore from Jefferies.

Perguntas e respostas

Stephanie Benjamin Moore

Great, congrats on a nice quarter here. I guess starting with I guess starting with the organic growth performance. So as you noted, organic growth accelerated to over 6% in the quarter and look, the pipeline has grown pretty meaningfully since even the beginning of the year, -- so I think what's interesting as I look at this is, I guess, the momentum appears to be generating before you've really seen the full benefit of a lot of your actions. Obviously, you called out the new Chief Commercial Officer, the commercial playbook in place.

So I guess what extent do you view the momentum we're seeing today is just kind of the beginning of this commercial reset -- and then how much confidence do you have that this growth can continue to accelerate as these initiatives mature? And what should we be really looking for there as these initiatives mature?

Patrick Kelleher

Yes. Sure, Stephanie. I'll kick off, and then Mark will provide some additional commentary. I think you're absolutely right. In our business, contract logistics, we're about a 6-month sales cycle. And so the results that we're seeing are really the results of initiatives that we kicked off when I joined about 14 months ago. Our focus, especially on North America, our emphasis on the strategic B2B verticals most notably aerospace and defense and technology where we're seeing great progress on data center new business wins there. Those are bearing fruit now.

I'm really proud that we did that without taking our focus off the core business of retail consumer omnichannel and CPG, where we've also continued to see great growth. And so the focus on North America, the focus on the strategic verticals has been additive to the organic growth agenda with the 6-month sales cycle. We are really in the beginning of the acceleration of that agenda. We had over 30% year-on-year increase in contract wins in Q2. We signaled we would achieve that in Q3, and we did and I can signal today that we will achieve that acceleration in Q4 through the end of the year.

So really confident that as we step into 2027. We're going to continue to drive improvements in organic growth in the business, both on the new business wins as well as customer retention. Mark, maybe you want to comment on a few of the organic growth metrics that we're seeing.

Mark Suchinski

Sure, Patrick. And Stephanie, just to provide maybe a little bit of color on the organic growth and the momentum that Patrick just talked about. And as we just discussed, 6.4% organic growth in the third quarter. I'm trying to give you a little bit of look ahead into the fourth quarter and how we see it. We expect 4Q organic growth to be slightly above 5% with the assumption of flat volumes.

Now in comparison, Q3 organic growth reflects a 1% volume benefit. So we've guided all year with the assumption that volumes are flat. We think that's prudent to do that. But we do know that fourth quarter peak season, holiday season is a good 1 for our industry. And so if volume trends hold during the fourth quarter, we could see organic growth similar to the type of growth that we posted here in the third quarter. So I just wanted to decompose the organic growth assumptions for our listeners on the call.

Patrick Kelleher

And the 1 thing I'd add to that is when you look at the revenue that we have booked for 2027, we see ourselves exiting the year at $850 million plus, so more than $850 million of revenue going into 2027. That would be a record for us exiting the year will sign close to $1.3 billion of new business. That's up from just over $1 billion in 2025. And our pipeline is $3 billion today, and growing. And I think what is most exciting about the $3 billion pipeline is that it is diversified across all of the industry sectors that we participate in 40% of that pipeline in our B2B industry verticals where we're putting a lot of emphasis on growth.

So all of the components are in place. We've got the projects to work on to deliver the organic growth that we're talking about, and that is why we have such great confidence going into Q4 and into 2027.

Stephanie Benjamin Moore

Very clear. And just 1 quick follow-up. As we think about those strategic growth verticals in the B2B space, obviously, I think we can understand the TAM of those verticals and the growth opportunity. But is there anything you would like to call out about those I guess, customers in general from just maybe a margin standpoint, return standpoint of those particular contracts?

Patrick Kelleher

Yes. I think that's a great call out. the new contracts that we're winning are margin accretive to us. And so our teams are doing a very good job around pricing discipline. We want to make sure that in terms of achieving our margin aspirations and I've said very clearly in the past, we should be at or better than our peers in terms of our margin performance. Winning new business that is margin accretive is really important to that. Our pricing disciplines have been very strong throughout the year to deliver that.

In terms of margin performance, I would comment as it relates to growth, we're ahead of where I thought we would be in terms of the deacceleration of the commercial agenda. We are spending some external money to support the start-up of new operations because we're ahead of plan. We are working to position internal operational resources to fuel our organic growth agenda, but the positioning of that resources has lagged what has been overperformance in the new contract signings.

And so we've had some short-term expense associated with start-up costs. We don't see that everything in our growth agendas. We rightsized the operational organization to deliver against growth but that did have an impact on EBITDA margins in Q3, but really to reinforce the margins of the new business that we're signing is accretive. Kristine, maybe any other comments on that?

Kristine Kubacki

Yes, Stephanie, I just wanted to highlight a little bit on the data centers in aerospace and defense in particular. Those are very complex mandates, very complicated supply chains and the services that we're doing for our customers are a bit different than probably what you see in kind of the core business that we're doing. It tends to be stickier. It tends to be higher value-added services. So we're excited about that. And I would also say that we're very excited on our Investor Day to give you a deep dive look, in particular, into aerospace and defense and what we actually do inside the data center, so stay tuned.

Operator

Your next question is coming from Chris Wetherbee from Wells Fargo.

Christian Wetherbee

Maybe kind of picking up on the margin point. I guess, maybe if there's any incremental detail you want to give about the start-up costs? And then, I guess, if we think about some of the growth opportunities coming from these complex mandates like data centers and aerospace and defense, I guess, how do we kind of think about the progression of those start-up costs? What drops away, I guess, as we go into the fourth quarter?

Obviously, the guide does call for some margin expansion, I think, on a year-over-year basis. So can you just maybe talk a little bit about sort of the margin progression and then maybe bigger picture, how we see that sort of expanding as we move forward from here.

Mark Suchinski

Yes, Chris, it's Mark. Maybe we just pivot to expectations of margins we're starting to see some green shoots in the fourth quarter. But really, we're looking for another sequential improvement in margins in the fourth quarter, specifically from the GXO Way. Global procurement, establishing that organization in the middle of the year, we'll start to drive some procurement savings. We continue to be focused on continuous improvement initiatives via the GXO Way and we're also seeing a more favorable balance between net wins and exits in the fourth quarter.

So a little less churn in the fourth quarter than what we saw in the third quarter and the second quarter, as we told you historically. In addition to that, we'll where the Wincanton synergies are behind us, and we'll really see the full benefit from those win savings. So really, that's how I would walk the third quarter to the fourth quarter. And as Patrick said, we did have some additional costs associated with some new large-scale customer start-ups.

But overall, I think that's how I would how I would position the margin improvement from Q3 to Q4. And then just generally speaking, as we move into 2027, broadly speaking, we're really focused on productivity and efficiencies, and a lot of that is going to come from not only the commercial side by growing the B2B, higher-margin but as we go into 2027, the rollout of our labor management systems, the further deployment of GXO IQ.

And so all of that will start to quicken as we move into 2027. But we're right where we thought. We -- we hit our guide here in the third quarter, and I think I've provided you some color here on how we see fourth quarter shaping up versus the third quarter.

Christian Wetherbee

Okay. That's very helpful. I appreciate that. And then maybe, Patrick, can you comment a little bit on the competitive landscape. So I know there's been some discussion over the course of the last several months about new entrants and other concerns like that. Obviously, sort of the pipeline looks like it's growing the success in the key verticals that you're focusing on looks pretty good.

So maybe provide us with a little bit of perspective and if you can sort of weave in a little bit of maybe what your expectations are for the opportunity on organic growth in '27, that would be helpful.

Patrick Kelleher

Sure. I think maybe back to the May time frame, a lot was made of statements that Amazon made about coming into the space. And I think that is maybe what you're referring to as new entrants -- we have continued to not see any impact of Amazon's statement in contract logistics. I think they're absolutely having an impact in last mile in ocean and air freight and in fact, we think they're a great provider in those 2 areas and probably we'd look to leverage their services.

In contract logistics, as I said back in May and on last call, they're simply not a competitor in our space. Our value proposition is very different in terms of what we bring to our customers versus what they're offering to the marketplace. And I continue to reiterate, we haven't lost any business to Amazon in contract logistics. We don't see them in bids, competitive bids that we're in. And so that really has not been a factor.

The marketplace is competitive. There are a number of players in the industry, but we have a $3 billion pipeline. In many cases, we are competing against 6, 7, 8 providers for opportunities, but we're winning better than 30% of those. And so we're winning more than our fair share. We are competing, which I think speaks very strongly to the value proposition that we have and especially underpinned by our agenda of robotics automation technology, AI, and so we really feel good about our competitive position in the market.

When we look to our TAM and opportunities to grow that pipeline, certainly putting emphasis on North America, which has been a big driver of our organic growth this year as well as the B2B verticals really will provide us the opportunity to continue to grow the pipeline that we have today, as Kristine referenced, especially on aerospace and defense, we are just getting started there. We already have a great book of business there, but in terms of the pipeline build. There's significant opportunities to play for that aren't represented in our pipeline yet.

And then I would point to Asia, where we have a relatively small business but we're really starting with strategic emphasis there, which we will accelerate in 2027. We are winning new business in Asia, including data centers, by the way. And so great progress there to grow the pipeline in 2027. And so all those factors give us a lot of confidence that, number one, we're positioned really well competitively in contract logistics as 1 of the market leaders. We have great industry verticals to target for continued growth and geographic expansion opportunities, both with the emphasis in North America and Asia to continue to build out our TAM, which should fuel organic growth going forward.

Operator

Our next question is coming from Ari Rosa from Citigroup.

Ariel Rosa

So congratulations on some strong results here and the positive momentum. I'm curious to hear just to get your thoughts on kind of where macro conditions currently stand? And then as we think about both the pipeline and the sustainability of some of these results, how vulnerable are they to macro conditions? And if we see a change in macro conditions, kind of what's your level of confidence on being able to continue with some of the momentum that we're seeing here clearly gaining traction.

Patrick Kelleher

Yes. Sure. I think it's a great question. I've talked in the past about contract logistics as an industry and the sensitivity of the industry to macro conditions being geopolitical, economic. We are less connect to GDP performance. We're less connected to geopolitical challenges with the exception of maybe an environment of those challenges creates tailwinds for the industry when customers need to make changes to their supply chain.

So as trade flows change, warehouse locations need to change, inventory holding strategies change those changes result in opportunities for companies to look at outsourcing, supply chain activity as an alternative to operating themselves. And that fuels opportunities for the contract with visits industry and us, especially as technology, robotics, automation, AI, not humonoids, become more prevalent in the execution of supply chain. Supply chain execution is becoming more complex and the expertise that we bring and the solutions that we have to address supply chain complexity are driving customers to make a decision to outsource versus in-source.

And we've talked about from an industry perspective, only about 30% of supply chain spend is outsourced. And so there's a lot of white space. 70% of spend is white space for us to go after to grow the business. We don't need to take market share from competitors to thrive. And we are seeing the trend of outsourcing accelerate, I think, because supply chains are more complex and supply chain execution is becoming more challenging, and there's a huge value proposition associated with hiring experts like GXO to deliver against those solutions.

So from a macro, we are not really sensitive to some of the big macro economic drivers that are happening. And in fact, those are serving as tailwinds for us today.

Ariel Rosa

That's really helpful. Appreciate the color. And then just as a follow-up, I was hoping you could give us a bit more context on GXO IQ. Just -- how should we think about what the upside potential is from that? And is there a good way to think about the costs associated with developing and deploying GXO IQ and what the return profile looks like from that investment.

Patrick Kelleher

Yes, sure. So for those who don't know, GXO IQ is our middleware solution. That is our data lake, in the platform for deployment of AI and productivity improvement tools to our operations. And we're working to integrate GXO IQ with all of our operations, over 50 will be integrated this year. We, in terms of AI, have a team who are developing our own proprietary AI, but we also leverage external partners and the things that they have developed, which keeps our development costs very low.

The benefit of AI in our operations is just 1 component of many elements of the GXO Way that we're pursuing. When we look at the deployment of our labor management systems, unified labor management system approach around the world. We think that's 5% to 15% improvement in labor costs and individual operations. And we'll be on that journey over a multiyear period to get that deployed and realize the benefits. When we look at AI, we think it's a mid-single-digit percentage improvement to productivity on top of that. And so we have a lot of emphasis to get those tools out to the business, and there's a great -- a really strong return on investment associated with that for ourselves and for our customers as we share in the cost savings generated by that.

I see AI is going to continue to feature in a very big way in our business. We're seeing great results from the tools that we've deployed already in the mid-single digits benefit that I talked about. And so we'll continue to accelerate that. That will contribute EBITDA margin improvement. It will also continue to strengthen our value proposition to customers as we share costs as we share cost savings with them.

Operator

Our next question is coming from Richa Harnain from Deutsche Bank.

Richa Talwar

I just wanted to follow up a little bit more about the start-up costs. Is this just something that will be reoccurring to some extent as you bring on new customers and any strategic verticals if so, like when do they typically start to taper off? Is it a 1-quarter adjustment or something and then you start to get compensated for those costs? Or is this something unique to this past quarter about the start-up?

And then I think there was something said about Wincanton related cost in the quarter to that led to some outside weakness. That seems to be in the rearview now. But just wanted to understand, I guess, big picture, like what's artificially depressing the Q3 margin in relation to its potential? We're hearing lots of good things on this call with respect to how organic growth accelerated. You have the GXO IQ starting to build up the unified labor management savings starting to trickle in.

So I just want to understand again like what the potential is for margin uplift if we didn't have maybe some of these unique costs weighing on results.

Patrick Kelleher

It's a fantastic question to call out. And so I would say, first, the site costs in Q3 are really unique. So the period and the projects that we were working on and the timing of those coming on. I was reflecting back to -- I don't know if it was the last call or the call before I was asked what keeps me up at night or what would be the biggest headwind to our organic growth agenda. And I talked about the importance of matching our operational capability, particularly on implementation with our organic growth agenda and particularly an accelerating growth agenda.

With organic growth accelerating at the pace it has, we really found ourselves in Q3 stretched in terms of implementation resource. So we were quick to go outside for outside consultative health on implementation activities, that's a onetime thing to support those activities while concurrently. We've been putting operational resource in place to support the growth agenda going forward. That's really about rightsizing our implementation teams, our operations teams to meet the expectations that are created on the new business signings side.

And so I feel first of all, we are customer service first. So we have 0 hesitancy in engaging outside resource to make sure we successfully implement 4 customers even if it comes at a short-term cost. We are long-term focused and we're going to deliver a long-term, strong organic growth agenda. We want to make sure we perform strong out of the gate when we win business, and we'll do that even when it comes at the cost.

As we look forward, what's really important is that we have consistency in the delivery of our organic growth agenda. So we have to have the sales materialize when we are positioning resource for implementation and keeping that in balance. And I feel very good about coming out of Q3 into Q4, where we are on that agenda. And I feel especially good about how we're moving into 2027, rightsizing the organization and focused on delivering organic growth.

And remember, this is an inflection point for GXO really coming out of the 5-year agenda of strong M&A. I've talked about the priority being organic growth, Q3 in terms of some of those external start-up costs associated with implementations of those growing pains and making that inflection. But the team is on top of it, and we're going to deliver really well against that.

Richa Talwar

Right. I appreciate it. And if I could just squeeze in 1 more clarification around conversations or expectations rather for peak. What are your conversations with customers right now? I think it was alluded to that we have a good season here. But curious what kind of puts and takes you're considering for peak and how you're preparing for that?

Patrick Kelleher

Yes. So I think, as Mark said, we saw across the board about a 1% lift in volume. I would characterize our posture right now is cautiously optimistic. We are positioning labor for the peak that our customers are wanting and expecting to see. So we're stepping into Q4, sharing our customers' confidence in that but in terms of how we are guiding Q4, we are on the basis of flat volume to last year. So being prudent in that.

And we'll continue to see week-by-week over the next 7 weeks here, how that plays out.

Operator

Thank you. Our next question is coming from Brian Ossenbeck from JPMorgan.

Brian Ossenbeck

Maybe start with a quick follow-up on the peak season. We're seeing some fairly significant congestion in the West Coast ports. I don't think you have any direct operations in those areas, but clearly a leading indicator and tied into the rest of the supply chain. So I don't know if that's coming up in your customer conversations or in some of your in some of your planning because we're starting to see some fairly significant delays coming out of the ports. So is that feeding into your view on peak season? Or is that separate?

Patrick Kelleher

Yes. We are not being impacted by that today. At least I'm not hearing that from customers. I think the positioning of peak inventory really happened in the August, September time frame. In order to meet the needs of the next 8 weeks, at least for the customers that we're servicing. So as you say, we don't have any core operations, certainly. We're taking a lot of freight in from support to our warehouses, but the inventory has already been positioned to deliver it with our customers.

Brian Ossenbeck

Understood, Patrick. Just a quick follow-up. The exposure to to data centers in that whole supply chain. Can you give a little bit more context on that maybe in terms of how much of the incremental new wins are coming from these customers? And if you can give, also a little bit of flavor in terms of how much of the current book of business is related to those sorts of contracts. And it does seem like it's still moving forward at a pretty good clip for you guys, especially in new geographies, it sounds like as well.

Kristine Kubacki

Yes, Brian, this is Kristine. I think we saw really good growth both in new business wins and then even in existing business around not only data centers but as Patrick mentioned, the strategic growth verticals, I think you can see in our revenue breakout around technology. It was our fastest-growing vertical. I think we're encouraged that the growth is only picking up. I think you can see our strategic growth vertical wins, whether you're looking year-to-date or in the quarter are up 3 times over where they were last year.

And then certainly, within the pipeline, they are about 1/3 of our pipeline, but the RFPs are coming quick. We're winning business very quick in this space. So the TAM, not only growing in North America, but as Patrick mentioned, we're winning in this space in Continental Europe, and we're now winning in Asia. So the TAM just continues to expand for us and a lot more to come as we move into 2027.

Operator

Next question is coming from Ravi Shanker from Morgan Stanley.

Ravi Shanker

A wanted to ask you a big picture question on your current churn levels. Is it where you want it to be? Kind of how much room for improvement do you see -- how much of it is within your control? And anything in particular that you guys can do to maybe kind of reduce that? Not saying it's elevated our saying this any signs of improvement there or any kind of leverage you can do to get that better over time?

Patrick Kelleher

Yes. So I'm really happy with the trajectory on churn. Mark referenced that in his comments as it relates to our EBITDA margin trajectory going forward. So we're seeing lots of improvement on customer retention. We continue to signal and plan around 95% retention, but we do see of 1 or 2-point opportunity there in terms of improving retention going into 2027.

I would say that the launch of our global customer success model is already yielding benefits. So we're putting resource and attention to our top customers, and especially those who are doing business with us across multiple geographies. We are being more deliberate around collecting customer feedback through our MPS approach and putting mechanisms in place to action that feedback so that we make sure that customers are getting the very best experience that they can have today, not even waiting for the renewals.

And we've had some really great renewals this year where we're extending customer relationships even beyond 10 years in many cases. So not only retaining but creating increased contract length through that renewal process. And a lot of that is underpinned by investment in robotics, automation and technology in our customers' business and our customers really looking for longevity in the benefit of those investments. So our retention is going to continue to contribute to organic growth as we step into 2027. We'll share more details about that on our Investor Day, November 16.

Ravi Shanker

Great. Looking forward to that. And maybe just a quick follow-up on the macro. What are you hearing from your shipper customers? Do they feel like they're in a good spot here with their demand levels and inventory levels? Or does it feel like there are coil spring kind of waiting to pounds as soon as the macro gets better, which could drive meaningful upside to like the base activity level for '27?

Patrick Kelleher

Yes. I think -- it's hard for me to comment on that in the aggregate. I would say feedback I get from customers varies a little bit when you talk about North America, U.K., Europe and so forth. But generally, as I would say, cautiously optimistic I think you characterized the coiled spring. I think people have been waiting for the coiled spring for a while. Hopefully, that cold spring comes soon, and especially as we move into 2027. But generally, from the things that we see in the macro, the economies continue to perform fairly steady.

And we're not seeing the 5% to 10% in the aggregate volume increase in the near term. But we're seeing lots of good support for year-on-year volume stability and maybe 1 or 2 percentage improvement on volume year-on-year.

Operator

Thank your next question today is coming from Jason Seidl from TD Cowen.

Jason Seidl

Patrick, Kristine. I wanted to talk a little bit about your new contract wins and some of your strategic vertical focus. When I look to the percentage of your new wins coming from just strictly outsourcing, it really jumped as a percentage of overall business, right? It's 26%, I think last quarter it was 17%. Is this just a function of the new verticals tend to be more new outsourcers?

Patrick Kelleher

Yes, absolutely. I think that is the case, especially in Aerospace and Defense and technology, where we're seeing a lot of new outsourcer activity. I think -- as I said, I think that comes with supply chain complexity. When you look at the aerospace industry and the complexity of that supply chain to begin with and suppliers' efforts to keep pace with the backlog that exists there. The application of the solutions that we have in those industries, I think, is resonating really well, delivering real results. I think we'll continue to see that level of new outsourcing increase.

Jason Seidl

Yes, we're definitely encouraged to see that growth there, especially when you look at the margin profile. My follow-up is going to be more on the volume outlook. I just want to make sure I'm getting this right. You guys are basically just choosing to continue to guide to flat volumes as you've been doing all year long. But you do have, I think, easier comps coming up in the fourth quarter and plus what you've seen thus far, let's call it, 1/3 of the way in here is favorable. Is that a good way to characterize the outlook?

Patrick Kelleher

Yes. I think that's really fair. So I think we have been consistent and prudent in assuming flat volumes. And when we've been wrong, we've been wrong by 1% or 2%. And so we like the prudency of assuming flat and realizing that 1% or 2% improvement, obviously, it differs by the industry verticals that we participate in. But in the aggregate, that feels like a prudent path forward. But as you say, I think with opportunity for some upside.

Jason Seidl

Appreciate the time. Nice job in the quarter. Thank you.

Operator

Next question is coming from Scott Schneeberger from Oppenheimer.

Scott Schneeberger

For my first one, in the press release, it was indicated that you're converting opportunities more quickly. I'm curious, is that a result of the end markets you're pursuing where the sales cycle is just faster? Or is it something you're doing internally with the sales force that's maybe boosting that?

Patrick Kelleher

Yes. I think it's a combination of the industry verticals that we're focused on. And I think it is good commercial discipline in terms of moving from customer conversation to close to implementation Kristine, maybe you want to comment on the pace of implementation of the business that we're winning in comparison to the past.

Kristine Kubacki

Yes. So Scott, it's Kristine. So we are seeing the conversion. I think you saw this manifest in the second quarter. We had $410 million in wins in the second quarter. And with that, in a matter of 3 weeks, we rebuilt the pipeline very, very quickly with the amount of RFPs. Not only are we winning faster, but we are implementing faster. So we're kind of winning more in the year for the year. I think we're up about 10 percentage points on a year-over-year basis of business that we're winning in the year for the year versus last year. And I think it's primarily driven by data centers and that that we're able to move very, very quickly in the industry that is obviously scaling very quickly and that is a differentiator for us in the marketplace.

Scott Schneeberger

Great. Go ahead, Patrick.

Patrick Kelleher

I was just going to add. No, I think that threads perfectly to what I talked about in terms of implementation costs in the third quarter. meaning to leverage some external resources for that because we are winning and implementing faster and much faster than we have in the past. And so we're rightsized there now to meet the needs of those faster implementations, but that was definitely a reality associated with increased sales.

Scott Schneeberger

Sounds good. On the follow-up, I guess, probably, Mark, for you. With the -- it's essentially a CapEx free cash flow question. With the pursuit of the new verticals and expanding into more so in North America, and it sounds like a bit into Asia a bit more now. Are you seeing more open book or closed book contracts. What does that mean? And it sounds like a push towards B2B more with those verticals. Is that -- what's it going to do for the CapEx profile going forward? Is it going to increase, decrease? It sounds like it's going to be good for margins, but just curious on the CapEx and obviously, free cash flow from there.

Mark Suchinski

Yes. Thanks, Scott. As you said, I mean, we're focused on the B2B and growing quicker in North America. Just generally speaking, though North America tends to be fixed variable closed book type contracts. And as you indicated, those are typically higher margin. So that's good as we think about the future from a margin profile standpoint. When we think about CapEx just holistically, as we're growing in North America, and I've looked at the data, I would say just slightly as a percent of revenue, just slightly higher on closed book contracts and open book contracts.

I've done some analysis on that. So I don't think the higher growth in North America specifically relates to fixed price contracts is going to generate additional CapEx. I think we think holistically about our entire book of business. We do know that the B2B verticals, in some instances, could create some CapEx needs but I think we continue to believe over the course of the next couple of years, our CapEx as a percent of revenue based on our growth projections will continue to be somewhere between 2% and 3%. We don't think that there is any substantial need to increase CapEx. There are some instances from an automation robotic standpoint that those services can be bought as a service as opposed to CapEx.

So we're -- we don't expect that to be significantly higher probably a tick higher as it relates to B2B in North America, but I don't think anything materially different than what we've seen in the past.

Operator

Next question today is coming from Bruce Chan from Stifel.

Unknown Analyst

This is Andrew Cox on for Bruce. I just wanted to talk a little bit about the incremental wins for 2027 that have been secured. I think the presentation called out $630 million which is down about 10% -- nearly 10% from the comparable year ahead revenue at this point last year. And that's, of course, even as you guys have had strong quarterly wins and pipeline exceeding $3 billion -- you called out some expectations for strong 4Q signing expectations.

I was just kind of wondering where that's coming from. That hasn't really been the case in recent years. would love to know if there's anything incremental to call out about the 4Q signings? And then also just kind of reconciling the lower year ahead revenue at this point with your confidence of accelerating growth into next year.

Patrick Kelleher

Yes. So I think it's a great question for us to wrap up on. So our year-to-date signings that carry into 2027 comp against the number that included NHS, which was a very large contract in the prior year. As I said, we will exit the year at $850 million or higher, and that will be a record for us as we look at revenue carrying into the following year, so $850 million or higher into 2027. And we can say that for the confidence that we have in delivering the pipeline, closed on deals for the fourth quarter of this year. And so we will end the year this year at a $1.3 billion of new business signings with that $850 million carrying into the following year. And Kristine, anything to wrap up on that.

Kristine Kubacki

Yes. I think just to add a little bit of color. I think with the confidence that we have with where the pipeline was at $3.1 billion, I think we added $267 million in the quarter for 2027. I think if you kind of back into it, I think we're looking for over $300 million in wins in the fourth quarter. And obviously, a large chunk of that will set up into 2027. And driving that over $850 million.

And then just to remind you, we will still win business in the first quarter, the second quarter, the first half of the year in the year, for the year. As we mentioned, we're winning business faster with the strategic growth verticals, the pipeline growing, the commercial momentum. So I think we feel very good about the layering and the building of momentum as we move into 2027 to drive accelerated organic growth.

Operator

We reached the end of our question-and-answer session. I'd like to turn the floor back over to Patrick for any further closing comments.

Patrick Kelleher

Yes. Thank you very much. We're really pleased with the momentum we're seeing across GXO. Over the past year, we've sharpened our operating model, strengthened leadership in our capabilities and create a greater alignment across the business. Today, we're beginning to see those efforts reluctant in our growth, commercial momentum and operational performance from a record pipeline levels and strong new business wins, so the rollout of the unified labor management system and accelerated deployment of GXO IQ, we're seeing increased evidence that our strategy is gaining traction.

Most importantly, we're building a more connected and more effective organization that is better positioned to deliver for our customers and shareholders over the long term. We're really confident in the direction of the business, and we're excited about the opportunities that lie ahead. We're looking forward to discussing our strategy, sharing more detail on how we're positioned GXO for sustainable growth at Investor Day on November 16 and with that, thank you for joining.

Operator

Thank you. That does conclude today's teleconference. You may disconnect your lines at this time, and have a wonderful day. We thank you for your participation today.