XPO Logistics, Inc. (NYSE:XPO) Q2 2017 Earnings Conference Call - Final Transcript
Aug 03, 2017 • 08:30 am ET
Welcome to the XPO Logistics Q2 2017 Earnings Conference Call and Webcast. My name is Michelle and I will be your operator for today's call. [Operator Instructions]
Before the call begins, let me read a brief statement on behalf of the Company regarding the forward-looking statements and the use of non-GAAP financial measures. During this call, the Company will make 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 the 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 or 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 the extent required by the law.
During this call, the Company also may refer to certain non-GAAP financial measures as defined under applicable SEC rules. 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 or in the Investors section on the Company's website at www.xpo.com.
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 on the Company's website.
I will now turn the call over to Brad Jacobs. Mr. Jacobs, you may begin.
Thank you, Michelle and good morning, everybody. Thanks for joining our earnings call. With me in Greenwich this morning are John Hardig, our CFO; Scott Malat, our Chief Strategy Officer; and Tavio Headley, our Head of IR. We delivered very strong second quarter. We reached a record level for revenue. We hit a new high for net income and we achieved a Company best for adjusted EBITDA.
Our expanded sales force continues to be on a roll. Through June, we signed up new business of $1.43 billion, that's up 62% from a year ago. And we built up our global sales pipeline to more than $3.3 billion, a new high watermark. On a year-over-year basis, we again improved margins in both transportation and logistics as we grew EBITDA faster than revenue. We also generated strong cash flow from operations of $216 million and free cash flow of $98 million ahead of expectations. These positive results are being driven by three factors, our leadership positions in some of the fastest growing parts of transportation and logistics; our strength in e-commerce and our cost out initiatives.
We will continue to significantly invest in technology and in our sales organization. In North American LTL, in the second quarter, we delivered the best adjusted operating ratio in more than 20 years. We have a large number of initiatives underway in LTL to generate new business, increase yield, improve trailer utilization and continue strict cost controls, among other initiatives. Since we