qxo-20240930

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

____________

FORM 10-Q

____________

x QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended: September 30, 2024

o TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to

Commission File Number: 001-38063

QXO, INC.

(Exact name of registrant as specified in its charter)


Delaware (State or other jurisdiction of incorporation)			16-1633636 (IRS Employer Identification No.)

Five American Lane

Greenwich, CT 06831

(Address of principal executive offices)

(888) 998-6000

(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:


Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock, par value $0.00001 per share	QXO	The Nasdaq Capital Market

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the past 12 months, and (2) has been subject to such filing requirements for the past 90 days. Yes x No o

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes x No o

Indicate by check mark whether the registrant is large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See definition of “large accelerated filer,” accelerated filer” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act:


Large accelerated filer	o	Accelerated filer	o

Non-accelerated filer	x	Smaller Reporting Company	x

		Emerging Growth Company	o

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. o

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes o No x

As of November 6, 2024, there were 409,430,195 shares outstanding of the registrant’s common stock.

QXO, INC.

TABLE OF CONTENTS


		Page No.
PART I.	FINANCIAL INFORMATION

Item 1.	Financial Statements (Unaudited):
	Condensed Consolidated Balance Sheets as of September 30, 2024 and December 31, 2023	5
	Condensed Consolidated Statements of Operations for the Three and Nine Months Ended September 30, 2024 and 2023	6
	Condensed Consolidated Statements of Stockholders’ Equity for the Three and Nine Months Ended September 30, 2024 and 2023	7
	Condensed Consolidated Statements of Cash Flows for the Nine Months Ended September 30, 2024 and 2023	9
	Notes to Condensed Consolidated Financial Statements	10

Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	19
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	23
Item 4.	Controls and Procedures	23

PART II.	OTHER INFORMATION

Item 1.	Legal Proceedings	24
Item 1A.	Risk Factors	24
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	24
Item 3.	Defaults Upon Senior Securities	24
Item 4.	Mine Safety Disclosures	24
Item 5.	Other Information	24
Item 6.	Exhibits	25
	SIGNATURES

PART I – FINANCIAL INFORMATION

CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS

This Quarterly Report on Form 10-Q (this “Quarterly Report”) contains forward-looking statements. 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 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.

Item 1. Financial Statements (Unaudited)

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
Commitments and contingencies (Note 8)
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, respectively1	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

See accompanying notes to the unaudited condensed consolidated financial statements.

1 Amounts have been adjusted to reflect the 8-for-1 Reverse Stock Split effective June 6, 2024. See Note 3 - Equity for additional details.

QXO, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(in thousands, except per share data)

(Unaudited)


	Three Months Ended				Nine 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 (Note 4)	$	(0.01)	$	(3.21)	$	(0.10)	$	(2.27)
Total weighted average common shares outstanding:1
Basic	358,813		657		120,919		657
Diluted	358,813		657		120,919		657

See accompanying notes to the unaudited condensed consolidated financial statements.

1 Amounts have been adjusted to reflect the 8-for-1 Reverse Stock Split effective June 6, 2024. See Note 3 - Equity for additional details.

QXO, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY

(in thousands)

(Unaudited)

FOR THE THREE MONTHS ENDED SEPTEMBER 30, 2024


	Preferred Stock			Common Stock			Additional Paid-in Capital		Retained Earnings (Accumulated Deficit)		Total Stockholders’ Equity
	Shares	Amount		Shares	Amount
Balance at July 1, 2024	1,000	$	498,684	664	$	—	$	474,951	$	(2,400)	$	971,235
Issuance of convertible preferred stock and warrants, net of issuance costs	—	(63)		—	—		(60)		—		(123)
Issuance of common stock and pre-funded warrants, net of issuance costs	—	—		408,766	4		4,051,099		—		4,051,103

Preferred stock dividend	—	—		—	—		—		(9,750)		(9,750)
Share-based compensation	—	—		—	—		13,985		—		13,985
Net income	—	—		—	—		—		17,132		17,132
Balance at September 30, 2024	1,000	$	498,621	409,430	$	4	$	4,539,975	$	4,982	$	5,043,582

FOR THE THREE MONTHS ENDED SEPTEMBER 30, 2023


	Preferred Stock			Common Stock			Additional Paid-in Capital		Accumulated Deficit		Total Stockholders’ Equity
	Shares	Amount		Shares1	Amount
Balance at July 1, 2023	—	$	—	657	$	—	$	10,471	$	(256)	$	10,215
Common stock dividend	—	—		—	—		(1,051)		—		(1,051)

Net loss	—	—		—	—		—		(2,110)		(2,110)
Balance at September 30, 2023	—	$	—	657	$	—	$	9,420	$	(2,366)	$	7,054

See accompanying notes to the unaudited condensed consolidated financial statements.

1 Amounts have been adjusted to reflect the 8-for-1 Reverse Stock Split effective June 6, 2024. See Note 3 - Equity for additional details.

QXO, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY (CONTINUED)

(in thousands)

(Unaudited)

FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2024


	Preferred Stock			Common Stock			Additional Paid-in Capital		Retained Earnings (Accumulated Deficit)		Total Stockholders’ Equity
	Shares	Amount		Shares1	Amount
Balance at January 1, 2024	—	$	—	664	$	—	$	9,419	$	(1,948)	$	7,471

Issuance of convertible preferred stock and warrants, net of issuance costs	1,000	498,621		—	—		482,917		—		981,538
Issuance of common stock and pre-funded warrants, net of issuance costs	—	—		408,766	4		4,051,099		—		4,051,103
Cash paid for fractional shares	—	—		—	—		(45)		—		(45)
Common stock dividend	—	—		—	—		(17,400)		—		(17,400)
Preferred stock dividend	—	—		—	—		—		(9,750)		(9,750)
Share-based compensation	—	—		—	—		13,985		—		13,985
Net income	—	—		—	—		—		16,680		16,680
Balance at September 30, 2024	1,000	$	498,621	409,430	$	4	$	4,539,975	$	4,982	$	5,043,582

FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2023


	Preferred Stock			Common Stock			Additional Paid-in Capital		Accumulated Deficit		Total Stockholders’ Equity
	Shares	Amount		Shares1	Amount
Balance at January 1, 2023	—	$	—	657	$	—	$	10,430	$	(877)	$	9,553
Common stock dividend	—	—		—	—		(1,051)		—		(1,051)
Share-based compensation	—	—		—	—		41		—		41
Net loss	—	—		—	—		—		(1,489)		(1,489)
Balance at September 30, 2023	—	$	—	657	$	—	$	9,420	$	(2,366)	$	7,054

See accompanying notes to the unaudited condensed consolidated financial statements.

____________________________________

1 Amounts have been adjusted to reflect the 8-for-1 Reverse Stock Split effective June 6, 2024. See Note 3 - Equity for additional details.

QXO, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH