0001628280-26-034130
SEC filingBeacon Acquisition drove revenue to $1.73B but net loss widened to $227M due to acquisition-related costs.
For Q1 2026, QXO reported net sales of $1.73 billion, a dramatic increase from $13.5 million in Q1 2025, driven entirely by the Beacon Acquisition completed on April 29, 2025. Gross profit rose to $409.3 million (23.7% margin) from $5.4 million (40.0% margin), with margin compression reflecting the lower-margin building products distribution mix versus the prior year's software-centric revenue. Operating loss widened to $251.9 million from $39.3 million, as SG&A increased to $497.0 million (including $39.2M stock-based comp, $16.3M restructuring, $19.3M transaction costs, and $11.4M transformation costs). Net loss was $227.1 million versus net income of $8.8 million in the prior year, largely due to higher interest expense ($31.1M expense vs $56.6M income) from debt issued for the Beacon Acquisition and increased depreciation/amortization. Adjusted EBITDA (a non-GAAP measure) turned positive at $1.2 million compared to negative $9.0 million in the prior year, indicating improving operational leverage excluding non-recurring charges.
All revenue segments except software products and services were newly added via Beacon Acquisition. Residential roofing products led with $799.1 million (46.2% of total), followed by non-residential roofing ($463.6M, 26.8%) and complementary building products ($452.9M, 26.2%). The legacy software segment contributed $14.6 million (0.8%), up from $13.5 million in Q1 2025. Management noted that Beacon's sales were down year-over-year due to macroeconomic headwinds, but the acquisition transformed QXO into the largest publicly-traded distributor of roofing and building products in North America. The acquisition of Kodiak Building Partners ($2.25B) closed on April 1, 2026, and will further expand the building products portfolio.
Management's outlook focuses on achieving $50 billion in annual revenues within the next decade through accretive acquisitions and organic growth. The proposed $17 billion acquisition of TopBuild is expected to close in Q3 2026, subject to approvals. Seasonality is expected to drive higher net sales and net income in Q2, Q3, and Q4, while Q1 typically has lower activity due to winter weather. Liquidity remains strong with $3.05 billion cash on hand and access to a $2.0 billion ABL Facility, supporting ongoing transformation and acquisition strategy. No specific numerical guidance was provided for upcoming quarters.
As of March 31, 2026, QXO held $3.05B in cash and equivalents, providing ample liquidity for ongoing operations and future acquisitions. Total debt stood at $3.06B, consisting of a $2.25B Senior Secured Notes at 6.75% and an $850M Term Loan Facility (net of discounts and costs). Shareholders' equity was $10.16B, reflecting significant capital raised through equity offerings and preferred stock. Inventory increased to $1.67B, up from $1.50B at year-end 2025.
No explicit purchase commitments beyond normal operations were disclosed in the Notes. However, lease commitments (operating and finance) total $1.01B in future payments, with $155M due within 12 months. The company also has an undrawn $2.0B ABL facility with $1.98B borrowing capacity, backed by collateral.
During Q1 2026, QXO paid $30.4M in preferred stock dividends ($22.5M on Convertible Preferred, $7.9M on Mandatory Convertible Preferred). No common stock dividends were declared. Capital expenditures were $22.5M (1.3% of sales), primarily for equipment and software. Debt net change was minimal (+$1.3M) due to amortization of debt issuance costs; no new borrowings or repayments occurred. The company continues to prioritize M&A, evidenced by the subsequent Kodiak ($2.25B) and TopBuild ($17B) acquisitions.
QXO operates as a single reporting segment. Revenue for Q1 2026 totaled $1.73B, with residential roofing products contributing 46% ($799M), non-residential roofing 27% ($464M), complementary building products 26% ($453M), and legacy software & services 1% ($15M). Geographically, 98% of sales came from the U.S., with the remainder from Canada. The segment reported an operating loss of $252M, reflecting acquisition-related costs and restructuring charges.