What changed in QXO, Inc.'s 10-K — 2024 vs 2025
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Paragraph-level year-over-year comparison of QXO, Inc.'s 2024 and 2025 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2025 report.
+392 added−218 removedSource: 10-K (2026-02-27) vs 10-K (2025-03-04)
Top changes in QXO, Inc.'s 2025 10-K
392 paragraphs added · 218 removed · 77 edited across 7 sections
- Item 1A. Risk Factors+158 / −114 · 38 edited
- Item 7. Management's Discussion & Analysis+135 / −40 · 14 edited
- Item 1. Business+72 / −35 · 14 edited
- Item 1C. Cybersecurity+10 / −17 · 2 edited
- Item 2. Properties+6 / −4 · 3 edited
Item 1. Business
Business — how the company describes what it does
14 edited+58 added−21 removed3 unchanged
Item 1. Business
Business — how the company describes what it does
14 edited+58 added−21 removed3 unchanged
2024 filing
2025 filing
Biggest changeHe has more than three decades of experience in global investment banking, where he has provided critical advisory services for large M&A and capital markets transactions. Prior to Barclays, Essaid was a managing director of media and telecom M&A at Credit Suisse from 2015 to 2021. Earlier, he was a partner at Perella Weinberg Partners.
Biggest changeEssaid served in senior leadership roles at Barclays, most recently as global head of M&A, after previously serving as the bank's co-head of global M&A and co-head of Americas M&A. He has more than three decades of experience in global investment banking, where he has provided critical advisory services for large M&A and capital markets transactions.
The SEC maintains a website at www.sec.gov that contains reports, proxy and information statements and other information regarding QXO and other issuers that file electronically with the SEC. 7 Table of Contents
The SEC maintains a website at www.sec.gov that contains reports, proxy and information statements and other information regarding QXO and other issuers that file electronically with the SEC. 8 Table of Contents
Jacobs has served as non-executive chairman of the board of directors of GXO Logistics, Inc. since August 2, 2021, and RXO, Inc. since November 1, 2022. Additionally, he is the managing member of Jacobs Private Equity, LLC and Jacobs Private Equity II, LLC. Prior to XPO, Mr.
Jacobs served as non-executive chairman of the board of directors of GXO Logistics, Inc. from August 2, 2021 to December 31, 2025, and RXO, Inc. from November 1, 2022 to May 21, 2025. Additionally, he is the managing member of Jacobs Private Equity, LLC and Jacobs Private Equity II, LLC. Prior to XPO, Mr.
He has been the executive chairman of the board of directors of XPO, Inc. (“XPO”) since November 1, 2022, and was previously chairman and chief executive officer from September 2, 2011 to November 1, 2022. Mr.
He was previously executive chairman of the board of directors of XPO, Inc. (“XPO”) from November 1, 2022 to December 31, 2025, and chairman and chief executive officer from September 2, 2011 to November 1, 2022. Mr.
Chris Signorello has served as Chief Legal Officer since June 6, 2024. Mr. Signorello previously served in senior legal roles with XPO, Inc. from 2017 to 2023, most recently as deputy general counsel and chief compliance officer from 2021 to 2023.
Signorello previously served in senior legal roles with XPO, Inc. from 2017 to 2023, most recently as deputy general counsel and chief compliance officer from 2021 to 2023 and, prior to that, as senior vice president, litigation counsel from 2017 to 2023.
Our future success depends in significant part upon the continued services of our key sales, technical, and senior management personnel and our ability to attract and retain highly qualified sales, technical, and managerial personnel.
Human Capital As of December 31, 2025, we had 7,794 active employees. Our future success depends in significant part upon the continued services of our key sales, operations, technical, and senior management personnel and our ability to attract and retain highly qualified sales, operations, technical and managerial personnel.
Prior to XPO, he was with industrial and consumer products leader Henkel Corporation for nearly a decade, where he was associate general counsel, among other leadership positions. Earlier, he spent nine years with the product liability and commercial litigation practice groups at Goodwin Procter LLP. Available Information Our website address is www.qxo.com.
Prior to XPO, he was with industrial and consumer products leader Henkel Corporation for nearly a decade, where he was associate general counsel, among other leadership positions. Earlier, he spent nine years with the product liability and commercial litigation practice groups at Goodwin Procter LLP. Valeri Liborski has served as chief technology officer since April 21, 2025. Mr.
We value our diverse employees and provide career and professional development opportunities that foster the success of our company. An effective approach to human capital management requires that we invest in talent, development, culture and employee engagement. We aim to create an environment where our employees are encouraged to make positive contributions and fulfill their potential.
In addition, we create working environments where everyone is safe from bullying, harassment, and discrimination. We value our diverse employees and provide career and professional development opportunities that foster the success of our company. An effective approach to human capital management requires that we invest in talent, development, culture and employee engagement.
He served eight years as chairman and chief executive officer of United Waste Systems. Ihsan Essaid has served as Chief Financial Officer since July 15, 2024. Mr. Essaid most recently served as global head of M&A at Barclays, after previously serving as the bank's co-head of global M&A and co-head of Americas M&A.
He served eight years as chairman and chief executive officer of United Waste Systems. Ihsan Essaid has served as chief financial officer since July 15, 2024. From September 2021 to July 2024, Mr.
Our customers are primarily small and mid-sized companies in the manufacturing, distribution and service industries. Our Strategy Our strategy is to create a tech-forward leader in the $800 billion building products distribution industry with the goal of generating outsized stockholder value through accretive acquisitions and organic growth, including greenfield openings, and operational transformation of acquired businesses.
Our Strategy Our goal is to become the tech-enabled leader in the $800 billion building products distribution industry and generate outsized value for shareholders. We are executing our strategy toward a target of $50 billion in annual revenues within the next decade through accretive acquisitions and organic growth, including greenfield openings, and operational transformation of acquired businesses.
Our aim is to create a highly engaged and motivated workforce where employees are inspired by leadership, engaged in purpose-driven, meaningful work and have opportunities for growth and development. We are committed to creating and maintaining a work environment in which employees are treated with respect and dignity.
Our aim is to create a highly engaged and motivated workforce where employees are inspired by leadership, engaged in purpose-driven, valuable work, have opportunities for growth and development and focus on executing their jobs with the utmost integrity and honesty. The safety of our team members and customers is our highest priority.
Information about our Executive Officers The following table and biographical summaries set forth information, including principal occupation and business experience, about our executive officers: Name Age Position Brad Jacobs 68 Chief Executive Officer Ihsan Essaid 57 Chief Financial Officer Chris Signorello 51 Chief Legal Officer Brad Jacobs has served as Chief Executive Officer and Chairman of our Board of Directors (the “Board”) since June 6, 2024.
Conversely, we expect low net income levels or net losses in quarters ending March 31, when winter construction cycles and cold weather patterns have an adverse impact on our customers’ ability to conduct their business. 7 Table of Contents Information about our Executive Officers The following table and biographical summaries set forth information, including principal occupation and business experience, about our executive officers: Name Age Position Brad Jacobs 69 Chief Executive Officer Ihsan Essaid 59 Chief Financial Officer Chris Signorello 52 Chief Legal Officer Valeri Liborski 58 Chief Technology Officer Brad Jacobs has served as chief executive officer and chairman of our Board of Directors (the “Board”) since June 6, 2024.
None of QXO’s employees are represented by a collective bargaining agreement and QXO has never experienced a work stoppage. 6 Table of Contents Human capital management is critical to our ongoing business success, which requires investing in our people.
We have 320 employees that are represented by labor unions and there are no material outstanding labor disputes. Human capital management is critical to our ongoing business success, which requires investing in our people.
Item 1. Business Overview QXO, Inc. (“QXO”, “we”, or the “Company”) was formerly known as SilverSun Technologies, Inc. (“SilverSun”).
Item 1. Business Company QXO, Inc. (“QXO”, “we”, “our”, or the “Company”) was created to build a tech-forward leader in the approximately $800 billion building products distribution sector. The Company was formerly known as SilverSun Technologies, Inc. (“SilverSun”). On June 6, 2024, we changed the Company’s name from SilverSun to QXO.
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On June 6, 2024, we changed the Company’s name from SilverSun to QXO and changed its ticker symbol on the Nasdaq Stock Market, LLC (“Nasdaq”) from SSNT to QXO, upon completing a $1.0 billion cash investment in SilverSun by Jacobs Private Equity II, LLC (“JPE”) and certain minority co-investors.
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Prior to the Beacon Acquisition (as defined below), QXO was primarily a technology solutions and professional services company, providing critical software applications, consulting and other professional services, including specialized programming, training and technical support to small and mid-size companies in the manufacturing, distribution and services industries. On April 29, 2025, the Company completed its acquisition of Beacon Roofing Supply, Inc.
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Refer to Note 3 - Equity of Item 8 of Part II, “Financial Statements and Supplementary Data” of this Annual Report for further details about the investment and related changes to our capital structure.
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(“Beacon”), pursuant to the Agreement and Plan of Merger, dated as of March 20, 2025 (the “Merger Agreement”), by and among QXO, Beacon, and Queen MergerCo, Inc., a Delaware corporation and wholly owned subsidiary of QXO (“Merger Sub”).
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On January 17, 2025, we transferred the listing of our common stock, par value $0.00001 per share (the “common stock”), from Nasdaq to the New York Stock Exchange (the “NYSE”). The Company’s listing and trading of the common stock on Nasdaq ended at market close on January 16, 2025.
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Pursuant to the terms of the Merger Agreement, Merger Sub merged with and into Beacon (the “Beacon Acquisition”), with Beacon surviving as a wholly owned subsidiary of QXO and being renamed QXO Building Products, Inc. (“QXO Building Products”).
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The Company’s common stock began trading on the NYSE on January 17, 2025. QXO is a technology solutions and professional services company that helps businesses manage and monetize their enterprise assets. We do this through our legacy operations, which provide critical software applications, consulting and other professional services, including specialized programming, training and technical support.
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QXO Building Products has served the building industry for over 95 years and operates approximately 600 branches throughout all 50 states in the U.S. and seven provinces in Canada. QXO Building Products offers an extensive range of high-quality professional grade exterior products and serves over 110,000 residential and non-residential customers.
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We are executing our strategy toward a target of tens of billions of dollars of annual revenue in the next decade. We grow our legacy business with a multi-pronged plan that fosters recurring revenue, customer retention and the steady expansion of our installed customer base, accomplished via sales and acquisitions.
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QXO Building Products’ scale and leading position in the roofing and complementary building products distribution market made it the ideal initial acquisition for QXO’s value creation playbook. As a result of the Beacon Acquisition, QXO has transitioned to a building products distribution company and is the largest publicly-traded distributor of roofing, waterproofing and complementary building products in North America.
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As we gain new customers, we help them digitally transform their business with further technologies and third-party software we represent, including application hosting, cybersecurity, warehouse management, human capital management, payment automation, sales tax compliance and many other value-added capabilities.
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Our Industry Building Products Distribution Building products distribution is a large industry, with approximately $800 billion in annual revenue in 2024, split roughly equally between North America and Western Europe. The industry is characterized by a mix of national, multi-regional and local distributors, with a fragmented customer base. Building products distribution benefits from powerful growth tailwinds.
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Many of our offerings are billed on a subscription basis, increasing our monthly recurring revenue from new business in tandem with cross-selling. Our model is designed to increase average revenue per customer over the course of the relationship, facilitating our growth without a commensurate increase in costs of sales, and enhancing our profitability profile.
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In the United States (the “U.S.”), we believe the supply of homes is approximately four million units short of demand. There are also strong tailwinds for residential repair and re-roofing (“R&R”) activity. The average age of an existing single-family home in the U.S. is over 40 years, which creates ongoing demand for repairs.
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Our legacy business has five core components: • Enterprise Resource Planning Software Substantially all our initial sales of enterprise resource planning (“ERP”) financial accounting solutions consist of pre-packaged software and associated services to customers in the United States.
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In the non-residential space, the average structure is even older at over 50 years, requiring greater levels of ongoing maintenance and refurbishment. Further, there is good visibility into infrastructure spending across North America and Europe. In North America alone, an additional $2 trillion of spending is expected to be required over the next two decades to keep the infrastructure safe.
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We resell Sage, Accumatica, and other ERP software products, and provide related services, including installation, implementation, support, training, and a technical help desk. • Value-Added Services for ERP Our consulting and professional services organization shepherds our customer relationships from installation to go-live and forward as needed.
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Building products distribution is an industry where scale offers key advantages. Larger distributors have greater purchasing power, which allows them to pass through higher cost savings to customers. Larger distributors also have the resources to invest in differentiating technology. These factors drive a virtuous cycle of market share gains and fixed cost leverage.
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A significant portion of our service revenue comes from continuing to work with existing customers as their needs change, with flexible revenue options that include prepaid services, time and materials as utilized and annual support. • IT Managed Network Services and Business Consulting We provide comprehensive managed Software-as-a-Service (“SaaS”) solutions, such as infrastructure-as-a-service, cybersecurity, cloud hosting, business continuity, disaster recovery, data back-up, network maintenance and server applications upgrade services. 5 Table of Contents • Cybersecurity Our cybersecurity-as-a-service offering is managed by our security operations center and includes incident response, cybersecurity assessments and hacking simulations.
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At the same time, the building products distribution industry is highly fragmented, with over 7,000 distributors in North America and approximately 13,000 in Europe. This fragmentation presents an attractive opportunity for consolidation in the industry.
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This SaaS offering is particularly valuable to customers in compliance-driven and regulated industries, including financial services, pension administration, insurance and the land and title sector. • Application Hosting Our SaaS hosting solutions enable applications to reside securely in a remote cloud infrastructure and be accessed by our customers through the internet, eliminating many of the costs of maintaining business technologies on site.
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North American Roofing and Complementary Products Specialty distributors of roofing and complementary building products serve the critical role of facilitating supply chain relationships between a small number of manufacturers and thousands of local, regional and national contractors.
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Our Company has executed this plan successfully to expand into new geographies and create additional revenue and profit streams. This has strengthened our legacy operating platform and expanded our footprint to nearly every U.S. state.
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The distributor is a value-added partner who can advise contractors on job-specific residential or commercial product bundles and provide last-mile delivery and logistics services. Distributors may also extend trade credit and use digital platforms to aid customers in optimizing their businesses.
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Industry As a value-added reseller of business application software, we offer solutions for accounting and business management, financial reporting, managed services, ERP, human capital management (HRM), warehouse management system (WMS), customer relationship management (CRM), and business intelligence (BI). Additionally, we have our own development staff building software solutions for various ERP enhancements.
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We estimate the roofing distribution market and related complementary products in the U.S. and Canada to be an approximately $65 billion market. The core roofing market across residential and commercial roofing represents approximately $37 billion of annual sales, with a 3% to 5% long-term annual market growth outlook, according to a third-party industry report.
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Our value-added services focus on consulting and professional services, specialized programming, training, and technical support. The majority of our customers are small and mid-sized companies. Customers and Markets We market our products primarily throughout North America. For the years ended December 31, 2024 and 2023, no single customer accounted for ten percent or more of our consolidated revenues base.
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Additionally, we believe the distribution market for complementary building products, including siding, waterproofing, plywood / oriented strand board (“OSB”) and windows and doors, represents approximately $28 billion in annual sales, according to our internal estimates.
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Intellectual Property We regard our technology and other proprietary rights as essential to our business. We rely on copyright, trade secret, confidentiality procedures, contract provisions, and trademark law to protect our technology and intellectual property.
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We believe that the market for these complementary products will grow faster than the rest of the roofing products industry at a rate of 4% to 6% per annum. 4 Table of Contents Favorable Long-Term Industry Fundamentals The roofing distribution industry benefits from several favorable long-term sector fundamentals, most notably a significant concentration in R&R spend, which constitutes approximately 80% of industry revenue.
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We have also entered into confidentiality agreements with our consultants and corporate partners and intend to control access to, and distribution of our products, documentation, and other proprietary information.
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Of the revenue that is derived from R&R spend, approximately 94% is considered non-discretionary and driven by leaks, age, weather damage and deterioration. Growth in the weather event-driven portion of demand has increased as severe weather events quadrupled in frequency and doubled in economic impact over the last 20 years.
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Competition Our markets are highly fragmented, and the business is characterized by a large number of participants, including several large companies, as well as a significant number of small, privately-held, local competitors. A significant portion of our revenue is currently derived from requests for proposals (“RFPs”) and price is often an important factor in awarding such agreements.
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The remaining 20% of industry revenue is from new construction activity which is expected to benefit from the estimated domestic housing shortage of four million units. This equates to an approximately eight-year backlog at current build rates. Other secular trends supporting long-term fundamentals include increasing regulatory and insurance requirements, which drive the need for waterproofing and preventative restoration.
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Accordingly, our competitors may underbid us if they elect to price their services aggressively to procure such business. Our competitors may also develop the expertise, experience and resources to provide services that are equal or superior in both price and quality to our services, and we may not be able to enhance our competitive position.
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We plan to enhance organizational design, optimize the supply chain and drive commercial excellence, deploying technology across these initiatives. We intend to achieve this by leveraging our clearly-defined strategies: • Deploy Foundational Actions to Drive Improvements in QXO Building Products’ Existing Operations We will apply our proven strategy to drive revenue, margin and free cash flow.
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The principal competitive factors for our professional services include geographic presence, breadth of service offerings, technical skills, quality of service and industry reputation. We believe we compete favorably with our competitors on the basis of these factors.
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We will lead with technology, building and buying world-class systems that enhance visibility across the organization, its suppliers and its customers in order to deliver attractive and immediate return on investment. We will prioritize customer satisfaction, optimizing our go-to-market strategy based on end-to-end digital customer, focusing on delivering superior service with on-time / in-full fulfillment.
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Human Capital As of December 31, 2024, we had 211 full time employees with 53 of our employees engaged in sales and marketing activities, 96 employees engaged in service fulfillment, and 62 employees performing administrative functions.
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We will seek to create a culture of accountability throughout our organization. • Enhance Market Share Growth through Commercial Excellence Initiatives and Greenfield Developments We will deploy a number of key initiatives to improve our revenue growth, including: optimizing assortment; improving inventory planning to drive pinpoint coverage by item, customer segment, and location; optimizing pricing; and driving salesforce excellence, including segmenting salesforce coverage based on customer needs and aligning incentives with the most critical key performance indicators.
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We emphasize our core values of innovation, encouragement, motivation, and curiosity with our employees to instill our culture and create an environment of growth and positivity.
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We will aim to accelerate growth in product lines complementary to roofing (for example, waterproofing, insulation and siding); expand our private label offerings; and increase our penetration of digital sales.
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We will deploy technology-driven solutions to drive revenue, including AI-led solutions to enhance lead generation, AI-led data analysis to better understand price elasticity, and AI-driven predictive analytics to improve inventory forecast accuracy by SKU. • Deliver Margin Expansion via Organizational Redesign, Supply Chain Initiatives and Inventory Planning We will seek to improve customer service and enhance our cost structure to drive increased agility by reassessing organizational design, reducing management layers and standardizing branch- and warehouse-level operating models.
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We intend to increase G&A cost efficiency by deploying a zero-based budgeting approach to cost centers including travel and entertainment, IT maintenance and personnel services, and outsourcing select back-office functions where appropriate.
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We will deploy our considerable experience in logistics to optimize our network, by determining the optimal number, size and location of facilities to remove overlap and drive branch-level returns; measuring routes and service against miles driven and fleet utilization; addressing warehouse operational excellence through standardized shipping and handling processes; and increasing the use of cutting edge route optimization software to enhance fleet utilization and the customer delivery experience.
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We intend to grow revenue faster than industry rates. • Pursue Accretive M&A Using Our Proven Strategy and Diversify Our Platform into High-Growth Adjacencies within Building Product Distribution We will look to complete strategic, transformative acquisitions to deliver above-market growth for QXO in the building products distribution industry.
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Within roofing, we believe there is a compelling opportunity to continue the consolidation effort that QXO Building Products has historically pursued. We believe that approximately 30% of the roofing supply industry remains fragmented, held by over 500 dealers that remain locally competitive. We see extensive M&A opportunities in complementary categories, including insulation, siding and waterproofing, among others.
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Outside of roofing, we expect to continue to evaluate acquisition opportunities in the remainder of the approximately $800 billion building products distribution industry across North America and Western Europe.
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Consistent with this strategy, we are actively involved in processes for potential acquisitions. 5 Table of Contents Recent Developments In January 2026, the Company entered into an investment agreement with AP Quince Holdings, L.P., a fund managed by affiliates of Apollo Global Management, Inc., and the other investors party thereto, pursuant to which such investors committed until July 15, 2026 (the “Initial Commitment Period”) to purchase up to 300,000 shares of a new series of Series C Convertible Perpetual Preferred Stock, par value $0.001 per share (the “Series C Preferred Stock”), for an aggregate purchase price of $3.0 billion to fund one or more Qualifying Acquisitions (as defined below).
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The Initial Commitment Period will be extended with respect to the commitment for a Qualifying Acquisition up to an additional 12 months if a definitive acquisition agreement for such Qualifying Acquisition is executed before the expiration of the Initial Commitment Period.
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The Company intends to use the net proceeds from the investment to fund all or a portion of the consideration for one or more acquisitions of assets, equity or businesses (or portions thereof) for a purchase price in excess of $1.5 billion or as otherwise determined by the Company (each, a “Qualifying Acquisition”) and related fees and expenses.
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Any issuance of the Series C Preferred Stock would close at or around the closing of a Qualifying Acquisition. Additionally, in January 2026, the Company sold 31.6 million shares of the Company’s common stock in an underwritten public offering at a price of $23.80 per share.
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The closing of the equity offering was completed on January 20, 2026 and the Company raised $749.4 million in net proceeds from the equity offering, after deducting offering costs of $3.8 million.
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The Company also granted the underwriters in the public offering a 30-day option to purchase up to an additional 4.7 million shares of the Company’s common stock at a price of $23.80 per share less underwriting discounts and commissions. The option to purchase additional shares expired unexercised at the end of the 30-day period.
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On February 10, 2026, the Company entered into a definitive agreement to acquire Kodiak Building Partners from Court Square Capital Partners for approximately $2.25 billion (the “Kodiak Acquisition”).
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The purchase price comprises $2.0 billion of cash and 13.2 million of the Company’s common shares (the “Consideration Shares”), with the Company retaining the right to repurchase these shares at $40 per share. The transaction is expected to close early in the second quarter of 2026, subject to the satisfaction of customary closing conditions.
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Our Customers Our customer base is composed of professional contractors, home builders, building owners, lumberyards, and retailers across the U.S. and Canada who depend on reliable local access to building products for residential and non-residential projects. Our customers vary in size, ranging from relatively small contractors to large contractors and builders that operate on a national scale.
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For the year ended December 31, 2025, no single customer accounted for more than 1% of our net sales. Products and Services Our product lines are designed to meet the requirements of our residential, non-residential and complementary building products customers.
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We carry one of the most extensive arrays of high-quality branded products in the industry, including our private label brand, TRI-BUILT ® . Our TRI-BUILT ® products offer a high-quality and superior-value alternative for our customers while delivering higher margins and brand exclusivity in the marketplace.
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We fulfill the vast majority of our warehouse orders with inventory on hand because of the breadth and depth of the inventories at our branches. In the residential market, asphalt shingles comprise the largest share of the products we sell. In the non-residential market, single-ply membranes, insulation, and accessories comprise the largest share of our product offerings.
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In the area of complementary building products, waterproofing, siding, plywood / OSB, and windows and doors comprise the largest share of the products in our portfolio. Beyond product delivery, we provide superior value-added services to our customers through our knowledgeable sales force that possesses an in-depth understanding of roofing and the building products we provide.
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Our sales force provides guidance to our customers throughout the lifecycles of their projects, including training and technical support. Trademarks and Intellectual Property Our rights in our intellectual property, including trademarks, patents, trade secrets, copyrights and domain names, as well as contractual provisions and restrictions on use of our intellectual property, are important to our business.
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We own a number of trademark registrations and applications in the U.S. and in foreign jurisdictions. Competition Our competition is primarily composed of national, regional and local specialty distributors and big box retailers. Among distributors, we compete against a small number of large distributors and many small, privately-owned distributors.
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Although we are the largest publicly-traded distributor of roofing, waterproofing and complementary building products in North America, the industry remains highly fragmented and competitive.
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The principal competitive factors in our business include, but are not limited to, the availability of materials and supplies; technical product knowledge and advisory expertise; delivery and other services including digital capabilities; pricing of products; and the availability of credit and capital.
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We believe we compete favorably with our competitors on the basis of these factors. 6 Table of Contents Supply Chain We are a key distributor for our suppliers due to our industry expertise, scale, track record of growth, financial strength, and the substantial volume of products that we distribute.
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Item 1A. Risk Factors
Risk Factors — what could go wrong, per management
38 edited+120 added−76 removed35 unchanged
Item 1A. Risk Factors
Risk Factors — what could go wrong, per management
38 edited+120 added−76 removed35 unchanged
2024 filing
2025 filing
Biggest changeOur Charter provides that certain courts in the State of Delaware or the federal district courts of the United States for certain types of lawsuits is the sole and exclusive forum for substantially all disputes between us and our stockholders, which could limit our stockholders’ ability to obtain a favorable judicial forum for disputes with us or our directors, officers or employees.
Biggest changeAny provision of our Charter, our amended and restated bylaws, or the DGCL that has the effect of delaying or deterring a change in control could limit the opportunity for our stockholders to receive a premium for their shares of our common stock, and could also affect the price that some investors are willing to pay for our common stock. 20 Table of Contents Our Charter provides that certain courts in the State of Delaware or the federal district courts of the United States for certain types of lawsuits is the sole and exclusive forum for substantially all disputes between us and our stockholders, which could limit our stockholders’ ability to obtain a favorable judicial forum for disputes with us or our directors, officers or employees.
Our success in markets we may chose to enter in the future depends substantially on our ability to source local materials on terms that are favorable to us. In the event of a global trade war or regional dispute, local suppliers may choose to allocate their resources to local players in their markets and provide us with less favorable terms.
Our success in markets we may choose to enter in the future depends substantially on our ability to source local materials on terms that are favorable to us. In the event of a global trade war or regional dispute, local suppliers may choose to allocate their resources to local players in their markets and provide us with less favorable terms.
We are highly dependent on the leadership of Brad Jacobs as Chairman and Chief Executive Officer and we have benefited substantially from his leadership and performance. Our ability to successfully implement our business strategy depends to a significant extent on the continued service and performance of Mr. Jacobs. The loss of Mr.
We are dependent on the leadership of Brad Jacobs as chairman and chief executive officer and we have benefited substantially from his leadership and performance. Our ability to successfully implement our business strategy depends to a significant extent on the continued service and performance of Mr. Jacobs. The loss of Mr.
JPE currently holds 900,000 shares of Convertible Preferred Stock and 197,109,065 Warrants, which may be converted or exchanged into an aggregate of 394,218,132 shares of common stock.
JPE currently holds 900,000 shares of Convertible Perpetual Preferred Stock and 197,109,065 Warrants, which may be converted or exchanged into an aggregate of 394,218,132 shares of common stock.
These provisions provide for the following: • the right of JPE to designate a majority of our Board; • the ability of our remaining directors to fill vacancies on our Board; • limitations on stockholders’ ability to call a special stockholder meeting or act by written consent; • rules regarding how stockholders may present proposals or nominate directors for election at stockholder meetings; • the right of our Board to issue preferred stock without stockholder approval; and • the limitation of liability of, and provision of indemnification to, our directors and officers.
These provisions provide for the following: • the right of JPE to designate Board members; • the ability of our remaining directors to fill vacancies on our Board; • limitations on stockholders’ ability to call a special stockholder meeting or act by written consent; • rules regarding how stockholders may present proposals or nominate directors for election at stockholder meetings; • the right of our Board to issue preferred stock without stockholder approval; and • the limitation of liability of, and provision of indemnification to, our directors and officers.
Risk Factors The following are important factors that could affect our business, financial condition or results of operations and could cause actual results for future periods to differ materially from our anticipated results or other expectations, including those expressed in any forward-looking statements made in this Annual Report, our other filings with the SEC or in presentations such as telephone conferences and webcasts open to the public.
Risk Factors The following are important factors that could affect our business, financial condition or results of operations and could cause actual results for future periods to differ materially from our anticipated results or other expectations, including those expressed in any forward-looking statements made in this Annual Report, our other filings with the SEC or in presentations such as webcasts open to the public.
Our ability to consummate an acquisition is dependent on a number of factors and conditions that require time, attention and collaboration across multiple parties, including receipt of all necessary regulatory approvals of the contemplated transaction. 12 Table of Contents Certain acquisition opportunities may not result in the consummation of a transaction.
Our ability to consummate an acquisition is dependent on a number of factors and conditions that require time, attention and collaboration across multiple parties, including receipt of all necessary regulatory approvals of the contemplated transaction. Certain acquisition opportunities may not result in the consummation of a transaction.
Jacobs’ services could impair our ability to execute our business plan and could, therefore, have a material adverse effect on our business, financial condition and results of operations. The past performance by Brad Jacobs or our management team may not be indicative of future performance or results.
Jacobs’ services could impair our ability to execute our business plan and could, therefore, have a material adverse effect on our business, financial condition and results of operations. 13 Table of Contents The past performance by Brad Jacobs or our management team may not be indicative of future performance or results.
JPE’s right to designate persons to the Board will generally decrease proportionally together with a decrease in the Investors’ ownership or control (together with affiliates) of Convertible Preferred Stock, shares of common stock or other voting securities, or Warrants exercisable for such securities, calculated 10 Table of Contents on a fully diluted, as-converted basis. Accordingly, Mr.
JPE’s right to designate persons to the Board will generally decrease proportionally with a decrease in the Investors’ ownership or control (together with affiliates) of Convertible Perpetual Preferred Stock, shares of common stock or other voting securities, or Warrants exercisable for such securities, calculated on a fully diluted, as-converted basis. Accordingly, Mr.
Sales of substantial amounts of our common stock in the public markets, or the perception that such sales might occur, could cause the market price of our common stock to decline significantly, even if our business is doing well.
Risks Related to Ownership of our Common Stock Future sales of substantial amounts of our common stock in the public markets, or the perception that such sales might occur, could cause the market price of our common stock to decline significantly, even if our business is doing well.
Our Chairman and Chief Executive Officer, Brad Jacobs, beneficially owns or controls approximately 31.4% of the voting power of our capital stock (including the voting power attributable to our preferred stock). This concentration of ownership and voting power allows Mr.
Our chairman and chief executive officer, Brad Jacobs, beneficially owns or controls approximately 22.1% of the voting power of our capital stock (including the voting power attributable to our preferred stock). This concentration of ownership and voting power allows Mr.
So long as the Investors party to the Investment Agreement collectively own or control (together with their affiliates) Convertible Preferred Stock, shares of common stock or other voting securities, or Warrants exercisable for such securities, representing, in the aggregate, at least 45% of the total voting power of the capital stock of the Company, calculated on a fully-diluted, as-converted basis, JPE will continue to be entitled to designate a majority of persons to our Board.
So long as the Investors party to the Investment Agreement collectively own or control (together with their affiliates) Convertible Perpetual Preferred Stock, shares of common stock or other voting securities, or Warrants exercisable for such securities, representing, in the aggregate, at least 30% of the total voting power of the capital stock of the Company, calculated on a fully-diluted, as-converted basis, JPE will continue to be entitled to designate 40% of the total Board members.
If a court were to find the exclusive choice of forum provision contained in our Charter to be inapplicable or unenforceable in an action, we may incur additional costs associated with resolving such action in other jurisdictions, which could materially adversely affect our business, financial condition and results of operations.
If a court were to find the exclusive choice of forum provision contained in our Charter to be inapplicable or unenforceable in an action, we may incur additional costs associated with resolving such action in other jurisdictions, which could materially adversely affect our business, financial condition and results of operations. Item 1B. Unresolved Staff Comments Not applicable.
Risks Related to our Management We are highly dependent on the continued leadership of Brad Jacobs as Chairman and Chief Executive Officer. The possibility of 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.
We are dependent on the continued leadership of Brad Jacobs as chairman and chief executive officer. The possibility of 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.
Such sales may also result in substantial dilution to our existing stockholders, and new investors could gain rights, preferences and privileges senior to the holders of our common stock.
Such sales may also result in substantial dilution to our existing stockholders, and new investors could gain rights, preferences and privileges senior to the holders of our common stock. 19 Table of Contents The concentration of ownership by Mr.
Jacobs, is currently entitled to designate a majority of persons to the Board in connection with each meeting of stockholders at which directors are to be elected because the investors (the “Investors”) party to the Investment Agreement (as defined below) beneficially own or control approximately 49.2% of the voting power of our capital stock when calculated on a fully-diluted, as-converted basis, assuming the exercise of the Company Warrants.
Jacobs, is currently entitled to designate 40% of the total Board members in connection with each meeting of stockholders at which directors are to be elected because the Investors party to the Investment Agreement beneficially own or control approximately 39.4% of the voting power of our capital stock when calculated on a fully-diluted, as-converted basis, assuming the exercise of the Warrants.
We are unable to predict the effect that sales may have on the prevailing market price of our common stock. 8 Table of Contents Sales of our common stock by current stockholders may make it more difficult for us to sell equity or equity-related securities in the future at a time and price that we deem reasonable or appropriate, and make it more difficult to sell shares of our common stock.
Sales of our common stock by current stockholders may make it more difficult for us to sell equity or equity-related securities in the future at a time and price that we deem reasonable or appropriate, and make it more difficult to sell shares of our common stock.
We have filed a registration statement registering 789,549,465 shares of common stock held by, or issuable upon conversion or exercise of securities held by, stockholders party to certain agreements with the Company providing them with registration rights.
We have filed a registration statement and prospectus supplements registering the resale of 857,077,924 shares of common stock held by, or issuable upon conversion or exercise of securities held by, stockholders party to certain agreements with the Company providing them with registration rights.
As a result, your ability to achieve a return on your investment may depend on appreciation in the market price of our common stock.
We currently do not intend to pay dividends on our common stock in the foreseeable future. As a result, your ability to achieve a return on your investment may depend on appreciation in the market price of our common stock.
We expect that significant additional capital may be needed in the future to support our business growth. To the extent we raise additional capital by issuing common stock, convertible securities or other equity securities, investors may be materially diluted by subsequent sales.
To the extent we raise additional capital by issuing common stock, convertible securities or other equity securities, investors may be materially diluted by subsequent sales.
In addition, pursuant to the Company’s registration rights agreement with JPE and certain other investors party thereto, JPE has certain demand registration rights that may require us to conduct underwritten offerings of shares. Any shares of common stock sold in these offerings will be freely tradable.
In connection with that transaction, we also entered into a registration rights agreement with JPE and certain of the Investors, pursuant to which JPE has certain demand registration rights that may require us to conduct underwritten offerings of the underlying shares. Any shares of common stock sold in these offerings will be freely tradable.
Our business is subject to the risk of claims involving current and former employees, affiliates, suppliers, competitors, stockholders, government regulatory agencies or others through private actions, class actions, whistleblower claims, administrative proceedings, antitrust enforcement, regulatory actions or other proceedings. 15 Table of Contents Due to the inherent uncertainties of litigation, it is often difficult to accurately predict the ultimate outcome of any such actions or proceedings.
Our business is subject to the risk of claims involving current and former employees, affiliates, suppliers, competitors, stockholders, government regulatory agencies or others through private actions, class actions, whistleblower claims, administrative proceedings, antitrust enforcement, regulatory actions or other proceedings.
General geopolitical instability and the responses to it, such as the possibility of sanctions, trade restrictions and changes in tariffs, including tariffs imposed by the United States and China, and the possibility of additional tariffs, non-tariff barriers or other trade restrictions between the United States and other countries where we might in the future distribute or sell products, could adversely impact our business.
Building products shortages and price increases for building products could cause distribution delays and increase our costs, which in turn could reduce our competitiveness and impact our ability to do business with certain counterparties. 14 Table of Contents General geopolitical instability and the responses to it, such as the possibility of sanctions, trade restrictions and changes in tariffs, including tariffs imposed by the United States and China, and the possibility of additional tariffs, non-tariff barriers or other trade restrictions between the United States and other countries where we might in the future distribute or sell products, could adversely impact our business.
If we fail to anticipate and manage any of these dynamics successfully, our business, financial condition and results of operations could be adversely affected. Risks Related to Our Legacy Business Our legacy business may fail to develop new products or may incur unexpected expenses or delays.
If we fail to anticipate and manage any of these dynamics successfully, our business, financial condition and results of operations could be adversely affected. Risks Related to the Acquisition of Beacon We may be unable to integrate Beacon successfully and realize the anticipated benefits of the Beacon Acquisition.
Although the pool of potential purchasers for such businesses is typically small, those potential purchasers can be aggressive in their approach to acquiring such businesses. Furthermore, we may need to use third-party financing in order to fund some or all of these potential acquisitions, thereby increasing our acquisition costs.
Furthermore, we may need to use third-party financing in order to fund some or all of these potential acquisitions, thereby increasing our acquisition costs.
Unless we consent in writing to the selection of an alternative forum, the federal district courts of the United States shall be the exclusive forum for the resolution of any complaint asserting a cause of action arising under the Securities Act, the Exchange Act or such other federal securities laws. 11 Table of Contents Any person or entity purchasing or otherwise acquiring any interest in shares of our capital stock will be deemed to have notice of and, to the fullest extent permitted by law, to have consented to the provisions of our Charter described above.
Unless we consent in writing to the selection of an alternative forum, the federal district courts of the United States shall be the exclusive forum for the resolution of any complaint asserting a cause of action arising under the Securities Act, the Exchange Act or such other federal securities laws.
Any sales of shares by these stockholders could have a negative impact on the trading price of our common stock and result in dilution. An active, liquid trading market for our common stock may not develop or, if developed, may not be sustained.
As a consequence, these shares can be freely sold in the public market upon issuance. Any sales of shares by these stockholders could have a negative impact on the trading price of our common stock and result in dilution.
We face competition for businesses that fit our acquisition strategy and, therefore, we may have to acquire targets at sub-optimal prices or, alternatively, forego certain acquisition opportunities. Our acquisition strategy is focused on the acquisition of businesses in the building products distribution industry. In pursuing such acquisitions, we may face competition from other potential purchasers.
Our acquisition strategy is focused on the acquisition of businesses in the building products distribution industry. In pursuing such acquisitions, we may face competition from other potential purchasers. Although the pool of potential purchasers for such businesses is typically small, those potential purchasers can be aggressive in their approach to acquiring such businesses.
Such inability to obtain additional financing when needed could have a material adverse effect on our business, results of operations, cash flow, financial condition and prospects. New investors in future financing transactions could gain rights, preferences and privileges senior to those of the Company’s existing stockholders.
New investors in future financing transactions could gain rights, preferences and privileges senior to those of the Company’s existing stockholders. We expect that significant additional capital may be needed in the future to support our business growth.
Also, financial stability is important to suppliers and customers in choosing distributors for their products, and it affects the favorability of the terms on which we would be able to obtain our products from suppliers and sell products to our customers.
Financial stability also plays a critical role, as suppliers and customers consider it when selecting distributors for their products, and it influences the favorability of the terms under which we purchase products from suppliers and sell them to customers.
Recently, regulatory and enforcement focus on data protection has heightened in the United States. Failure to comply with applicable data protection regulations or other data protection standards may expose us to litigation, fines, sanctions or other penalties, which could harm our business, our reputation, results of operations and financial condition.
Moreover, failure to comply with the regulatory requirements applicable to our business could expose us to investigation, enforcement actions, litigation, and substantial fines and penalties that could adversely affect our financial condition, results of operations, and cash flows.
Additionally, we may not be able to identify or execute alternative arrangements on favorable terms, if at all. If we fail to consummate and integrate our acquisitions in a timely and cost-effective manner, our business, financial condition and results of operations could be adversely affected.
Additionally, we may not be able to identify or execute alternative arrangements on favorable terms, if at all. If we cannot complete acquisitions that we identify on acceptable terms, our inorganic growth rate may decline.
Some of our competitors may be part of larger companies, and, therefore, may have access to greater financial and other resources than those to which we have access. We may not be able to maintain our costs at a level sufficiently low for us to compete effectively.
Some competitors have been, or may be, acquired by larger companies and therefore may have access to greater financial and other resources than we do. As a result, we may be unable to maintain a cost structure low enough to compete effectively. If we cannot compete successfully, our future net sales and net income could decline.
We have also registered on Form S-8 all shares of common stock that are issuable under our 2024 Omnibus Incentive Compensation Plan. As a consequence, these shares can be freely sold in the public market upon issuance.
We have also registered and will continue to register on Form S-8 all shares of common stock that are issuable under the QXO, Inc. 2024 Omnibus Incentive Plan, including shares of common stock that are issuable upon the exercise and/or vesting of equity awards granted in connection with the Beacon Acquisition that replaced certain previously outstanding Beacon awards.
Competitive factors in our industry include pricing, availability of products, service, delivery capabilities, customer relationships, geographic coverage, and breadth of product offerings.
The building products distribution industry is highly fragmented and competitive, with relatively low barriers to entry for local competitors. Competition is driven by factors such as pricing, product availability, service quality, delivery capabilities, customer relationships, geographic reach, and breadth of product offerings.
Risks Related to Our Industry Our industry is highly fragmented and competitive. If we are unable to compete effectively, our net sales and operating results may be reduced. The building products distribution industry is highly fragmented and competitive, and the barriers to entry for local competitors are relatively low.
Moreover, social media has dramatically increased the rate at which negative publicity can be disseminated before there is any meaningful opportunity to respond to or address an issue to protect our reputation. Our industry is highly fragmented and competitive. If we are unable to compete effectively, our net sales and operating results may be reduced.
Any such failure could result in harm to our reputation and have an ongoing adverse impact on our business, results of operations and financial condition, including after the underlying failures have been remedied.
A failure to comply with the covenants under the Credit Facilities, the Indenture or any of our other existing or future indebtedness could result in an event of default, which, if not cured or waived, could have a material adverse effect on our business, financial condition and results of operations.
Risks Related to Acquisitions The failure to consummate acquisitions expeditiously, or at all, could have a material adverse effect on our business prospects, financial condition, results of operations or the price of our common stock.
Any such liabilities, individually or in the aggregate, could have a material adverse effect on our business, financial condition and results of operations. 15 Table of Contents Risks Related to Our Indebtedness Our substantial indebtedness could adversely affect our financial condition. We incurred, through our wholly owned subsidiary QXO Building Products, Inc.
Removed
Risks Related to Ownership of our Common Stock The market price of our common stock may be highly volatile, and you could lose all or a substantial portion of your investment.
Added
Unless otherwise indicated or the context otherwise requires, references in this section to historical results, risks and impacts to the business are with respect to Beacon and its consolidated subsidiaries prior to the Beacon Acquisition.
Removed
The trading price of our common stock may be highly volatile and could be subject to wide fluctuations in response to various factors, some of which are beyond our control and may not be related to our operating performance.
Added
Risks Related to Product Supply and Vendor Relations An inability to obtain the products that we distribute could result in lost revenues and reduced margins and damage relationships with customers. We distribute roofing materials and other complementary building products, such as siding and waterproofing, that are manufactured by a number of major suppliers.
Removed
Our common stock has a concentrated ownership among our significant stockholders and, as a result, our common stock may be less liquid and have greater stock price volatility than the common stock of companies with broader public ownership.
Added
Disruptions in our sources of supply may occur as a result of various reasons, including unanticipated demand, production or delivery difficulties, the loss of key supplier arrangements, or broad disruptive events (whether globally, in the U.S., or abroad), such as wars, terrorist actions, cybersecurity attacks or other technological disruptions with respect to manufacturers or the material vendors we rely on, trade disputes, labor disputes, changes in regulation, macroeconomic events, government shutdowns, natural disasters, including those that may be linked to climate change, and/or a pandemic.
Removed
Since June 13, 2024, when we first sold common stock pursuant to the Purchase Agreements at a price of $9.14 per share, and until we filed our registration statement on Form S-3, the reported closing sale price of our common stock had been highly volatile, ranging from $41.74 to $205.40, in each case substantially higher than the price at which we sold common stock in connection with the private placements pursuant to purchase agreements we entered into on June 13, 2024 and July 22, 2024.
Added
When shortages occur, building material suppliers often allocate products among distributors, and sourcing materials from a limited number of suppliers can increase our risk. During the year ended December 31, 2025, we had three suppliers that each contributed 10% or more of total purchases and, in total, represented nearly 35% of total purchases.
Removed
While the market prices of our common stock may respond to developments regarding our liquidity, operating performance and prospects, and developments regarding our industry, we believe that historical market prices also reflected market and trading dynamics unrelated to our underlying business, or macro or industry fundamentals, and we do not know if these dynamics will occur again.
Added
Although we believe that our relationships with our suppliers are strong and that we would have access to similar products from competing suppliers should products be unavailable from current sources, any supply shortage, particularly of the most commonly sold items, could result in a loss of revenues and reduced margins and damage our reputation and relationships with customers.
Removed
Under the circumstances, we caution you that investing in our common stock is subject to a high degree of risk.
Added
A change in supplier pricing and demand could adversely affect our income and gross margins. Many of the products that we distribute are subject to price changes based upon manufacturers’ raw material costs, energy costs, labor costs, and tariffs as well as other manufacturer pricing decisions.
Removed
Our stock price could continue to be subject to wide fluctuations in response to a variety of other factors, which include: • whether we achieve our anticipated corporate objectives; • changes in financial or operational estimates or projections; • termination of lock-up agreements or other restrictions on the ability of our stockholders and other security holders to sell our securities; and • general economic or political conditions in the United States or elsewhere.
Added
For example, as a distributor of residential roofing supplies, our business is sensitive to asphalt prices, which are highly volatile and often linked to oil prices, as oil is a significant input in asphalt production. Shingle prices have been volatile in recent years, partly due to volatility in asphalt prices.
Removed
In addition, the stock market in general has experienced extreme price and volume fluctuations that have often been unrelated or disproportionate to the operating performance of the affected companies.
Added
Other products we distribute, such as plywood and OSB, experienced price volatility largely due to supply and demand imbalances in recent years.
Removed
Such rapid and substantial price volatility, including any stock run-up, may be unrelated to our actual or expected operating performance and financial condition or prospects, making it difficult for prospective investors to assess the rapidly changing value of our common stock.
Added
In addition to the rising costs of commodities and raw materials, supplier pricing and demand can also be affected by inflationary pressures and other conditions that make it more costly for our suppliers to distribute their products to us, such as fuel shortages, fuel cost increases, or labor shortages.
Removed
This volatility may prevent you from being able to sell your shares of common stock at or above the price you paid for them.
Added
We may also experience price volatility related to the implementation of tariffs on imported steel or other products. For example, certain of our vendors use steel as a product input, and they may increase prices as a result of tariffs incurred or the overall impact of tariffs on domestic steel prices.
Removed
Substantial sales of securities by these stockholders, or the perception that substantial sales will be made in the public market, could have a material adverse effect on the market price for our common stock.
Added
Historically, we have generally been able to pass increases in prices on to our customers. Although we often are able to pass on manufacturers’ price increases, our ability to pass on increases in costs in a timely fashion depends on the competitiveness of pricing environments and other market conditions.
Removed
There has been limited trading volume of our common stock since we began trading on Nasdaq and, following the transfer of our listing in January 2025, the NYSE. An active, liquid trading market for our common stock may not be sustained.
Added
By contrast, the inability to pass along cost increases or a delay in doing so could result in lower operating margins. In addition, higher prices could impact demand for these products, resulting in lower sales volumes. 9 Table of Contents A change in vendor rebates could adversely affect our income and gross margins.
Removed
The lack of an active market may reduce the market price of our common stock, and you may not be able to sell your shares at an attractive price, or at all.
Added
The terms on which we purchase products from many of our vendors entitle us to receive a rebate based on the volume of our purchases. These rebates effectively reduce our costs for products. Vendors may adversely change the terms of some or all of these programs for a variety of reasons, including if market conditions change.
Removed
An inactive market may also impair our ability to raise capital by selling shares of our common stock in the future and may impair our ability to enter into strategic collaborations or acquire companies by using our shares of common stock as consideration.
Added
Although these changes would not affect the net recorded costs of product already purchased, it may lower our gross margins on products we sell and therefore the income we realize on such sales in future periods.
Removed
If too few securities or industry analysts publish research, or publish inaccurate or unfavorable research, about our business, the price of our common stock and our trading volume could decline. The trading market for our common stock will depend in part on the research and reports that securities or industry analysts publish about us or our business.
Added
Risks Related to Acquisitions and our Growth Strategy We may not be able to identify potential acquisition targets or successfully complete acquisitions on acceptable terms, which could slow our inorganic growth rate. Our growth strategy includes acquiring other businesses in the building products distribution industry.
Removed
If too few securities or industry analysts commence coverage of our Company, the trading price for our common stock would likely be negatively affected. Furthermore, if one or more of the analysts who cover us downgrade us or publish inaccurate or unfavorable research about our business, the price of our common stock would likely decline.
Added
We continually seek additional acquisition candidates in selected markets, which include engaging in exploratory discussions with potential acquisition candidates, as well as engaging in competitive bidding processes for potential acquisition candidates.
Removed
If one or more of these analysts cease coverage of our company or fail to publish reports on us regularly, demand for our common stock could decrease, which might cause the price of our common stock and trading volume to decline. We currently do not intend to pay dividends on our common stock in the foreseeable future.
Added
We are unable to predict whether or when we will be able to identify any suitable acquisition candidates, or, if we do, the likelihood that any such potential acquisition will be completed.
Removed
Raising additional equity capital from public or private markets to pursue our business plan may cause our existing holders of common stock to experience substantial dilution or their shares to have a significant decline in trading price. We may raise additional equity capital from public or private markets to pursue our business plan for acquisitions.
Added
In addition, our current and potential competitors have made and may continue to make acquisitions that include acquisition candidates in which we were, or would have been, interested in pursuing and such competitors may establish cooperative relationships among themselves or with third parties.
Removed
Any future significant issuances of common stock could result in dilution to our existing holders of common stock. Moreover, any significant issuances of common stock or securities convertible into, or exercisable or exchangeable for, our common stock could result in a substantial decline in the trading price of our common stock.
Added
In the event that our inorganic growth does not keep pace with any significant consolidation among businesses in the building products distribution industry, our competitive position could be adversely affected. We may not be able to effectively integrate newly acquired businesses into our operations or achieve expected cost savings or profitability from our acquisitions.
Removed
In particular, in June and July 2024 we did, and in the future we may, issue additional shares of common stock at a significant discount from the current trading price of our common stock. As a result, our common stockholders would experience immediate dilution upon the purchase of any shares of our common stock sold at such a discount.
Added
Acquisitions involve numerous risks, including: • unforeseen difficulties or disruptions in integrating operations, technologies, services, accounting, and employees; • diversion of financial and management resources from existing operations; • unforeseen difficulties related to entering geographic regions where we do not have prior experience; • potential loss of key employees; • unforeseen cybersecurity risks related to the businesses acquired or to the manufacturers and vendors the acquired businesses rely on; • unforeseen liabilities and expenses associated with businesses acquired; and • inability to generate sufficient revenue or realize sufficient cost savings to offset acquisition or investment costs.
Removed
In addition, the perception that new issuances of our securities could occur could adversely affect the market price of our common stock. 9 Table of Contents If we are unable to arrange additional future financing on acceptable terms, our ability to pursue potential acquisition opportunities or fund our working capital needs could be limited.
Added
As a result, if we fail to evaluate, execute, and integrate acquisitions properly, we might not achieve the anticipated benefits of such acquisitions and we may incur costs in excess of what we anticipate. 10 Table of Contents We face competition for businesses that fit our acquisition strategy and, therefore, we may have to acquire targets at sub-optimal prices or, alternatively, forego certain acquisition opportunities.
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Item 1C. Cybersecurity
Cybersecurity — threats and controls disclosure
2 edited+8 added−15 removed0 unchanged
Item 1C. Cybersecurity
Cybersecurity — threats and controls disclosure
2 edited+8 added−15 removed0 unchanged
2024 filing
2025 filing
Biggest changeFor a discussion of risks from cybersecurity threats that could be reasonably likely to materially affect us, please see our Risk Factors discussion under the headings “General Risks – We could be affected by cyberattacks or beaches of our information systems, any of which could have a material adverse effect on our business” and “General Risks – A failure of our information technology infrastructure, information systems, networks or processes may materially adversely affect our business” in this Annual Report.
Biggest changeFor a discussion of risks from cybersecurity threats that could be reasonably likely to materially affect us, please see our Risk Factors discussion under the headings “Risks Related to Information Technology” in this Annual Report.
Prior to exchanging any sensitive data or integrating with any key third-party provider, we assess their cybersecurity fitness against our risk posture and request changes as we deem necessary. 17 Table of Contents As of December 31, 2024, we have not identified any risks from cybersecurity threats (including any previous cybersecurity incidents) that have materially affected, or are reasonably likely to materially affect, the Company, including our business strategy, our results of operations or our financial condition.
We also maintain cybersecurity insurance coverage as part of our overall insurance portfolio. 21 Table of Contents As of December 31, 2025, we have not identified any risks from cybersecurity threats (including any previous cybersecurity incidents) that have materially affected, or are reasonably likely to materially affect, the Company, including our business strategy, our results of operations or our financial condition.
Removed
Item 1C. Cybersecurity The secure processing, maintenance and transmission of sensitive data, including confidential and other proprietary information about our business and our employees, customers, suppliers and business partners, is important to our operations and business strategy. As a result, cybersecurity, data classification and data protection are key components of our long-term strategy.
Added
Item 1C. Cybersecurity Our information security program is designed to protect and preserve the confidentiality, integrity, and availability of our information technology assets. This program is overseen by our chief information security officer (“CISO”), whose team is responsible for leading the cybersecurity strategy, policy, standards, threat detection and prevention, and incident response processes.
Removed
We regularly assess risks from cybersecurity threats, monitor our information systems for potential vulnerabilities, and test those systems pursuant to our cybersecurity policies, processes, and practices, which are integrated into our overall risk management program.
Added
Our CISO reports directly to our chief information officer (“CIO”) on the effectiveness of our cybersecurity program and has 20 years of IT experience, including leadership roles with enterprise responsibility for IT audit, IT infrastructure, and cybersecurity. Our cybersecurity risk management system is integrated into our broader enterprise risk management (“ERM”) framework.
Removed
To protect our information systems from cybersecurity threats, we use various security tools that are designed to help identify, escalate, investigate, resolve, and recover from cybersecurity incidents in a timely manner.
Added
This ERM process is facilitated by a risk committee, which is comprised of senior leaders from key functional and operational areas across the company. The risk committee has separate discussions for each risk with senior-level risk owners who have firsthand knowledge of their commercial or functional area. For cybersecurity-related risks, these discussions include the CISO and other key IT leadership.
Removed
Our security operations team (“SOT”), which is comprised of internal security professionals and reports to the Chief Information Officer (“CIO”), has first line responsibility for our cybersecurity risk management processes as they relate to day-to-day operations.
Added
Through these discussions, the risk committee develops an enterprise-wide risk profile, which it then reviews and refines with the executive leadership team before presenting it to the Board.
Removed
Our audit and compliance team (“ACT”), which is comprised of a team lead and the CIO, has second line responsibility and works in partnership with our executive leadership team (“ELT”) and other internal teams to coordinate efforts, priorities and oversight. Our ACT assesses cybersecurity threats and risks based on probability and potential impact to key business systems and processes.
Added
In addition to reports to the Board on our enterprise risks, at least annually, the Audit Committee reviews with management the Company’s cybersecurity assessment and risk management policies, including any significant cybersecurity or data privacy risk exposures and management’s plans to monitor or mitigate them.
Removed
Threats and risks that can cause major damage or service impact that the ACT considers high are incorporated into our overall risk management program.
Added
We employ various technical controls and measures to protect against cybersecurity attacks, which align with functions identified in the National Institute of Standards and Technology Cybersecurity 2.0 Framework. These include, among other things, a cybersecurity awareness training program for all employees and frequent phishing simulations.
Removed
The ACT develops a mitigation plan for each identified high threat and risk and reports its progress with respect to mitigation of such threats and risks to the Technology Risk Management Committee, which is part of our ELT and consists of both management-level employees and members of the Board; such high-level cybersecurity threats and risks are tracked as part of our overall risk management program.
Added
The information security team also reviews our information security systems for unauthorized system access, cybersecurity incidents, indicators of compromise, and unusual traffic on our systems. Our CISO continuously monitors the effectiveness of our processes and controls, which drives investment decisions in our cybersecurity program.
Removed
We collaborate with third parties to assess the effectiveness of our cybersecurity incident prevention and response systems and processes as our SOT deems necessary or appropriate. These include cybersecurity assessors, consultants, and other external cybersecurity experts to assist in the identification, verification, and validation of cybersecurity threats and risks, as well as to support associated mitigation plans when necessary.
Added
We periodically engage external subject matter experts who provide independent qualitative and quantitative assessments of the cybersecurity program maturity and response readiness. Additionally, we use processes, such as third-party risk monitoring security rating agencies, to oversee and identify material risks from cybersecurity threats associated with our use of third-party technology and systems.
Removed
Our System and Organization Controls (SOC) Type 2 audit, completed in September 2024, attests to the effectiveness of our security and risk management controls. We have also developed a third-party cybersecurity risk management process to conduct due diligence on external entities critical to our ongoing business operations, including those that perform cybersecurity services.
Removed
We sponsor a multi-faceted security awareness program that includes regular, mandatory trainings for our personnel on data protection and malware detection, policy and process awareness, periodic phishing simulations and other kinds of preparedness testing including disaster recovery exercises. We maintain a cross-functional cybersecurity incident response plan with defined roles, responsibilities and reporting protocols.
Removed
This plan, which we evaluate and test on a regular basis, focuses on responding to and recovering from any significant cybersecurity incident as well as mitigating any impact from such incidents on our business. Generally, when a cybersecurity incident or suspected cybersecurity incident is identified, the SOT would escalate the issue to the ACT for initial analysis and guidance.
Removed
In the event of a significant cybersecurity incident, the ELT would typically be tasked with preparing an initial response. The ELT, with support from the ACT, would be responsible for determining whether a particular cybersecurity incident (alone or in combination with other factors) triggers any reporting or notification responsibilities under applicable law or regulation or pursuant to any contractual obligation.
Removed
The ACT, in consultation with the ELT and other members of senior management, updates its strategy at least annually to account for changes in our business strategy, legal and regulatory developments across our geographic footprint and further developments in the cybersecurity threat landscape. In addition, we periodically engage a third-party provider to conduct an external assessment of our cybersecurity program.
Removed
The results of this assessment, which are reported to the Board, assist us in determining whether any further changes to our existing policies and practices are warranted. As indicated above, we engage third-party providers to assist us with our cybersecurity risk management and strategy.
Removed
Some of these providers provide us with ongoing assistance (such as threat monitoring, mitigation strategies, updates on emerging trends and developments and policy guidance) while we engage others to provide targeted assistance (such as security and forensic expertise) as needed.
Item 2. Properties
Properties — owned and leased real estate
3 edited+3 added−1 removed0 unchanged
Item 2. Properties
Properties — owned and leased real estate
3 edited+3 added−1 removed0 unchanged
2024 filing
2025 filing
Biggest changeThe following table sets forth the location, use, and size of certain of our properties as of February 25, 2025: Use Location Square Footage Corporate Office Greenwich, CT 3,100 Corporate Office East Hanover, NJ 5,129 Corporate Office Greensboro, NC 2,267 Corporate Office Sisters, OR 545 Corporate Office Phoenix, AZ 2,105 We believe that all of our properties have been adequately maintained, are in good condition, and are generally suitable and adequate for our current needs.
Biggest changeItem 2. Properties Our main properties include corporate office space and branch facilities. We believe that all of our properties have been adequately maintained, are in good condition and are generally suitable and adequate for our current needs. Additional space may be required as we expand our business activities.
Item 4. Mine Safety Disclosures Not applicable. 18 Table of Contents PART II
Mine Safety Disclosures Not applicable. 22 Table of Contents PART II
Additional space may be required as we expand our business activities. We do not foresee any significant difficulties in obtaining additional facilities if deemed necessary. Item 3. Legal Proceedings For information related to our legal proceedings, refer to Note 8 – Commitments and Contingencies of Item 8 of Part II, “Financial Statements and Supplementary Data” of this Annual Report.
We lease approximately 97% of our branch facilities, and the remaining 3% are owned. Item 3. Legal Proceedings For information related to our legal proceedings, refer to Note 11 – Commitments and Contingencies of Item 8 of Part II, “Financial Statements and Supplementary Data” of this Annual Report. Item 4.
Removed
Item 2. Properties We lease and operate our corporate offices in five locations, including our headquarters in Greenwich, Connecticut.
Added
We do not foresee any significant difficulties in obtaining additional facilities if deemed necessary. Corporate Offices Our corporate headquarters is located on leased premises in Greenwich, Connecticut. We also lease other corporate office space, with our largest offices located in Herndon, Virginia, Coppell, Texas, and Seattle, Washington.
Added
These locations have corporate functions such as executive management, accounting, sales, human resources, legal, marketing, supply chain management, business development and information technology. Our leased corporate offices range in size from approximately 600 square feet to 25,200 square feet.
Added
Branch Facilities As of December 31, 2025, we operated approximately 600 branch facilities throughout all 50 states in the U.S. and seven provinces in Canada. Of our total branch facilities, approximately 96% were located in the U.S. and approximately 4% were located in Canada. Our branch facilities range in size from approximately 2,000 square feet to 148,700 square feet.
Item 5. Market for Registrant's Common Equity
Market for Common Equity — stock, dividends, buybacks
4 edited+2 added−0 removed2 unchanged
Item 5. Market for Registrant's Common Equity
Market for Common Equity — stock, dividends, buybacks
4 edited+2 added−0 removed2 unchanged
2024 filing
2025 filing
Biggest changeDividend Information On June 12, 2024, the Board paid a $17.4 million special cash dividend to its stockholders of record in connection with the Amended and Restated Investment Agreement, entered into in April 2024 (the “Investment Agreement”), among the Company, Jacobs Private Equity II, LLC (“JPE”) and the other investors party thereto, and related transactions.
Biggest changeDividend Information On June 12, 2024, the Board paid a $17.4 million special cash dividend to its stockholders of record in connection with the Investment Agreement and related transactions. See Note 6 - Equity of Item 8 of Part II, “Financial Statements and Supplementary Data” of this Annual Report for additional information regarding the Investment Agreement and dividends.
Holders of Common Equity As of February 25, 2025, there were 273 stockholders of record. An additional number of stockholders are beneficial holders of our common stock in “street name” through banks, brokers and other financial institutions that are the record holders.
Holders of Common Equity As of February 19, 2026, there were 177 stockholders of record. An additional number of stockholders are beneficial holders of our common stock in “street name” through banks, brokers and other financial institutions that are the record holders.
See Note 3 - Equity of Item 8 of Part II, “Financial Statements and Supplementary Data” of this Annual Report for additional information regarding the Investment Agreement and dividends.
For additional information regarding dividends and restrictions on our ability to pay dividends, see Note 6 - Equity and Note 9 - Debt of Item 8 of Part II, “Financial Statements and Supplementary Data” of this Annual Report.
Unregistered Equity Securities There were no unregistered sales of the Company’s equity securities during 2024 that were not previously disclosed in a Quarterly Report on Form 10-Q or in a Current Report on Form 8-K. Transfer Agent Our transfer agent is Equiniti Trust Company, LLC, which is located at 48 Wall Street, Floor 23, New York, NY 10005. Item 6.
Unregistered Equity Securities There were no unregistered sales of the Company’s equity securities during the year ended December 31, 2025 that were not previously disclosed in a Quarterly Report on Form 10-Q or in a Current Report on Form 8-K.
Added
We cannot provide any assurance that we will declare or pay cash dividends on our common stock in the future. We currently anticipate that we will retain all of our future earnings, if any, for use in the operation and expansion of our business and we do not anticipate paying cash dividends in the foreseeable future.
Added
Transfer Agent Our transfer agent is Equiniti Trust Company, LLC, which is located at 28 Liberty Street, Floor 53, New York, NY 10005. Item 6. Reserved 23 Table of Contents
Item 7. Management's Discussion & Analysis
Management's Discussion & Analysis (MD&A) — revenue / margin commentary
14 edited+121 added−26 removed7 unchanged
Item 7. Management's Discussion & Analysis
Management's Discussion & Analysis (MD&A) — revenue / margin commentary
14 edited+121 added−26 removed7 unchanged
2024 filing
2025 filing
Biggest changeThe period-to-period comparison of financial results is not necessarily indicative of future results: (in thousands, except percentages) Year Ende d % of net revenue December 31, 2024 December 31, 2023 % Change December 31, 2024 December 31, 2023 Consolidated Statements of Operations Revenue: Software product, net $ 15,261 $ 14,111 8.1 % 26.8 % 25.9 % Service and other, net 41,612 40,406 3.0 % 73.2 % 74.1 % Total revenue, net 56,873 54,517 4.3 % 100.0 % 100.0 % Cost of revenue: Product 9,434 8,513 10.8 % 16.6 % 15.6 % Service and other 24,507 24,390 0.5 % 43.1 % 44.7 % Total cost of revenue 33,941 32,903 3.2 % 59.7 % 60.3 % Operating expenses: Selling, general and administrative expenses 92,943 22,097 320.6 % 163.4 % 40.5 % Depreciation and amortization expenses 989 828 19.4 % 1.7 % 1.5 % Total operating expenses 93,932 22,925 309.7 % 165.1 % 42.0 % Loss from operations (71,000) (1,311) NM (124.8 %) (2.4 %) Interest income (expense), net 121,812 (56) NM 214.2 % (0.1 %) Income (loss) before taxes 50,812 (1,367) NM 89.3 % (2.5 %) Provision (benefit) for income taxes 22,843 (297) NM 40.2 % (0.5 %) Net income (loss) $ 27,969 $ (1,070) NM 49.2 % (2.0 %) NM = Not Meaningful Revenue, net Our consolidated net revenue for the year ended December 31, 2024 increased $2.4 million or 4.3% compared with the same period in the prior year.
Biggest changeYear Ended December 31, % of net sales (2) (in millions, except percentages) 2025 (1) 2024 2025 2024 Net sales $ 6,842.2 $ 56.9 100.0 % 100.0 % Cost of products sold 5,269.5 33.8 77.0 % 59.4 % Gross profit 1,572.7 23.1 23.0 % 40.6 % Operating expense: Selling, general and administrative 1,394.8 93.0 20.4 % 163.4 % Depreciation 108.4 0.2 1.6 % 0.4 % Amortization 314.7 0.9 4.6 % 1.6 % Total operating expense 1,817.9 94.1 26.6 % 165.4 % Loss from operations (245.2) (71.0) (3.6) % (124.8) % Interest (expense) income, net (47.7) 121.8 (0.7) % 214.1 % Loss on debt extinguishment (49.7) — (0.7) % — % Other income, net 5.5 — 0.1 % — % (Loss) income before (benefit from) provision for income taxes (337.1) 50.8 (4.9) % 89.3 % (Benefit from) provision for income taxes (57.7) 22.8 (0.8) % 40.1 % Net (loss) income $ (279.4) $ 28.0 (4.1) % 49.2 % (1) Results include Beacon’s operations from the date of acquisition on April 29, 2025 through December 31, 2025.
We consider an accounting estimate to be critical if: (i) the accounting estimate requires us to make assumptions about matters that were highly uncertain at the time the accounting estimate was made, and (ii) changes in the estimate that are reasonably likely to occur from period to period or use of different estimates that we reasonably could have used in the 23 Table of Contents current period, would have a material impact on our financial condition or results of operations.
We consider an accounting estimate to be critical if: (i) the accounting estimate requires us to make assumptions about matters that were highly uncertain at the time the accounting estimate was made, and (ii) changes in the estimate that are reasonably likely to occur from period to period or use of different estimates that we reasonably could have used in the current period, would have a material impact on our financial condition or results of operations.
We have provided a reconciliation below of Adjusted EBITDA to net income (loss), the most directly comparable GAAP financial measure. Management uses Adjusted EBITDA in making financial, operating and planning decisions and evaluating QXO’s ongoing performance.
We have also provided a reconciliation below of Adjusted EBITDA to net income (loss), the most directly comparable financial measure as measured in accordance with GAAP, as well as a calculation of net margin and Adjusted EBITDA Margin. Management uses these non-GAAP financial measures in making financial, operating and planning decisions and evaluating QXO’s ongoing performance.
We believe that Adjusted EBITDA facilitates analysis of our ongoing business operations because it excludes items that may not be reflective of, or are unrelated to, QXO’s core operating performance, and may assist investors with comparisons to prior periods and assessing trends in our underlying business.
We believe these non-GAAP financial measures facilitate analysis of our ongoing business operations because they exclude items that may not be reflective of, or are unrelated to, QXO’s core operating performance, and may assist investors with comparisons to prior periods and assessing trends in our underlying business.
On July 22, 2024, we entered into additional purchase agreements with certain institutional and accredited investors to issue and sell in a private placement an aggregate of 67,833,699 shares of our common stock at a price of $9.14 per share.
On July 22, 2024, the Company entered into purchase agreements with certain institutional and accredited investors to privately place 67.8 million shares of its common stock at a price of $9.14 per share. The closing of the private placement was completed on July 25, 2024.
Each Pre-Funded Warrant has an exercise price of $0.00001 per share, is exercisable immediately and until the Pre-Funded Warrant is exercised in full. The closing of the issuance and sale of these securities was consummated on July 19, 2024, and generated gross proceeds of approximately $3.5 billion before deducting agent fees and offering expenses.
Each Pre-Funded Warrant has an exercise price of $0.00001 per share, is exercisable immediately and until the Pre-Funded Warrant is exercised in full. The closing of the private placement was completed on July 19, 2024.
For more information on the Investment Agreement, refer to Note 3 - Equity of Item 8 of Part II, “Financial Statements and Supplementary Data” of this Annual Report . 22 Table of Contents On June 13, 2024, we entered into purchase agreements with certain institutional and accredited investors to issue and sell in a private placement an aggregate of 340,932,212 shares of our common stock at a price of $9.14 per share, and pre-funded warrants (the “Pre-Funded Warrants”) to purchase 42,000,000 shares of our common stock at a price of $9.13999 per Pre-Funded Warrant.
Private Placements On June 13, 2024, the Company entered into purchase agreements with certain institutional and accredited investors to issue and sell in a private placement an aggregate of 340.9 million shares of the Company’s common stock at a price of $9.14 per share, and pre-funded warrants (the “Pre-Funded Warrants”) to purchase 42.0 million shares of the Company’s common stock at a price of $9.13999 per Pre-Funded Warrant.
The following discussion should be read in conjunction with our consolidated financial statements and notes thereto appearing elsewhere in this Annual Report. Overview QXO, Inc. (“QXO”, “we”, or the “Company”) was formerly known as SilverSun Technologies, Inc. (“SilverSun”).
The following discussion should be read in conjunction with our consolidated financial statements and notes appearing elsewhere in this report. Overview Prior to the Beacon Acquisition (as defined below), QXO, Inc.
We do this through our operations, which provide critical software applications, consulting and other professional services, including specialized programming, training and technical support. Our customers are primarily small and mid-sized companies in the manufacturing, distribution and service industries.
(“QXO”, “we”, “our”, or the “Company”) was primarily a technology solutions and professional services company, providing critical software applications, consulting and other professional services, including specialized programming, training and technical support to small and mid-size companies in the manufacturing, distribution and services industries.
We continually evaluate our liquidity requirements in light of our operating needs, growth initiatives and capital resources. We believe that our existing liquidity and sources of capital are sufficient to support our operations over the next 12 months. Cash provided by operating activities Cash provided by operating activities increased by $84.3 million, compared with the prior year.
We believe that our existing liquidity and sources of capital are sufficient to support our operations over the next 12 months.
Subsequent to the close of the year ended December 31, 2024, we paid an additional $22.5 million of quarterly dividends to holders of Convertible Preferred Stock. The Company’s cash balance was $5.1 billion as of December 31, 2024 and consisted primarily of cash on deposit with banks and investments in money market funds.
Liquidity and Capital Resources The Company’s cash balance was $2.36 billion as of December 31, 2025 and consisted primarily of cash on deposit with banks and investments in money market funds.
Non-GAAP Financial Measures Adjusted EBITDA To provide investors with additional information regarding our financial results, we have disclosed here and elsewhere in this Annual Report Adjusted EBITDA, a non-GAAP financial measure that we calculate as net income (loss) excluding depreciation and amortization; share-based compensation; income tax (benefit) provision; interest (income) expense; transaction costs; transformation costs; severance costs and other items that we do not consider representative of our underlying operations.
Non-GAAP Financial Measures To provide investors with additional information regarding our financial results, we have disclosed here and elsewhere in this Annual Report Adjusted Gross Profit, Adjusted Gross Margin, Adjusted Net Income (Loss), Adjusted Diluted Earnings (Loss) per Common Share (“Adjusted Diluted EPS”), Adjusted EBITDA and Adjusted EBITDA Margin, which represent non-GAAP financial measures.
We are executing our strategy toward a target of tens of billions of dollars of annual revenue in the next decade. 20 Table of Contents Results of Operations for the Year Ended December 31, 2024 and 2023 The following tables set forth our results of operations for the periods presented and express the relationship of certain line items as a percentage of net sales for those periods.
We are executing our strategy toward a target of $50 billion in annual revenues within the next decade through accretive acquisitions and organic growth. Results of Consolidated Operations The following tables set forth our results of operations for the periods presented. The period-to-period comparison of financial results is not necessarily indicative of future results.
Under the terms of the Convertible Preferred Stock, dividends are paid quarterly when, as and if declared by the Board, at the rate per annum of 9% per share. During the year ended December 31, 2024, we paid $32.3 million of quarterly dividends to holders of Convertible Preferred Stock.
During the year ended December 31, 2025, the Company paid $90.0 million of dividends to holders of Convertible Preferred Stock. Subsequent to the close of the year ended December 31, 2025, the Company paid $22.5 million of quarterly dividends to holders of Convertible Preferred Stock.
Removed
On June 6, 2024, we changed the Company’s name from SilverSun to QXO and changed its ticker symbol on Nasdaq from SSNT to QXO, upon completing a $1.0 billion cash investment in SilverSun by Jacobs Private Equity II, LLC (“JPE”) and certain minority co-investors.
Added
Beacon Acquisition On March 20, 2025, QXO entered into an Agreement and Plan of Merger (the “Merger Agreement”) with Beacon Roofing Supply, Inc., a Delaware corporation (“Beacon”), and Queen MergerCo, Inc., a Delaware corporation and wholly owned subsidiary of QXO (“Merger Sub”), pursuant to which QXO agreed to acquire Beacon for a purchase price of $124.35 per share of common stock (the “Merger Consideration”) of Beacon (the “Beacon Acquisition”).
Removed
Refer to Note 3 - Equity of Item 8 of Part II, “Financial Statements and Supplementary Data” of this Annual Report for further details about the investment and related changes to our capital structure. On January 17, 2025, the Company transferred the listing of its common stock, par value $0.00001 per share (the “common stock”), from Nasdaq to the NYSE.
Added
On April 29, 2025 (the “Closing Date”), pursuant to the Merger Agreement, Merger Sub merged with and into Beacon, with Beacon remaining as the surviving entity and being renamed QXO Building Products, Inc. (“QXO Building Products”), and the Company completed its acquisition of Beacon in a transaction that valued Beacon at $10.6 billion.
Removed
The Company’s listing and trading of the common stock on Nasdaq ended at market close on January 16, 2025. The Company’s common stock began trading on the NYSE on January 17, 2025. QXO, Inc. is a technology solutions and professional services company that helps businesses manage and monetize their enterprise assets.
Added
As a result of the Beacon Acquisition, QXO has transitioned to a building products distribution company and is the largest publicly-traded distributor of roofing, waterproofing, and complementary building products in North America. We plan to become the tech-enabled leader in the $800 billion building products distribution industry and generate outsized value for shareholders.
Removed
Our strategy is to create a tech-forward leader in the $800 billion building products distribution industry with the goal of generating outsized stockholder value through accretive acquisitions and organic growth, including greenfield openings and operational transformation of acquired businesses.
Added
(2) Percent of net sales may not foot due to rounding. 24 Table of Contents Comparison of the Years Ended December 31, 2025 and 2024 Net Sales The following table summarizes net sales by line of business for the periods presented: Year Ended December 31, % of net sales (in millions, except percentages) 2025 (1) 2024 2025 2024 Residential roofing products $ 3,307.1 $ — 48.3 % — % Non-residential roofing products 1,883.9 — 27.5 % — % Complementary building products 1,592.7 — 23.3 % — % Software products and services 58.5 56.9 0.9 % 100.0 % Total net sales $ 6,842.2 $ 56.9 100.0 % 100.0 % (1) Net sales include Beacon’s operations from the date of acquisition on April 29, 2025 through December 31, 2025.
Removed
Net revenue for the year ended December 31, 2024 increased across our lines of business as we grew our customer base through strategic acquisitions and continued renewals of our subscription-based services. Specifically, software product revenue increased as we expanded our Sage Intacct and Acumatica product lines, and service revenue increased as we expanded our hosting application services and consulting practices.
Added
Net sales for the year ended December 31, 2025 increased to $6.84 billion compared to $56.9 million for the year ended December 31, 2024.
Removed
Cost of revenue Cost of revenue for the year ended December 31, 2024 increased $1.0 million or 3.2% associated with the increase in revenue, compared with the same period in the prior year.
Added
The increase in net sales was primarily driven by the Beacon Acquisition as Beacon’s net sales for the period of April 29, 2025 through December 31, 2025 are included in net sales for the year ended December 31, 2025.
Removed
Margin increased to 40.3%, compared with 39.6% for the same period in the prior year, as we expanded our product offerings in newly acquired lines of business to grow our customer base. Operating expenses Selling, general and administrative expenses for the year ended December 31, 2024 increased $70.8 million or 320.6%, compared with the same period in the prior year.
Added
Beacon’s sales for the year ended December 31, 2025, which includes sales for the pre-acquisition period of January 1, 2025 through April 28, 2025, were down relative to Beacon’s sales for the year ended December 31, 2024 primarily due to macroeconomic headwinds consistent with the broader building products industry as well as the absence of named storms in the U.S. during the year ended December 31, 2025.
Removed
The year-over-year increases in operating expenses are primarily due to: i) salary and expense and share-based compensation associated with the new senior management team put in place to execute our expansive growth plan, ii) the severance payment contemplated in the Investment Agreement for Mark Meller and, iii) certain transaction costs associated with the private placements and our strategic plan.
Added
Cost of Products Sold Cost of products sold for the year ended December 31, 2025 increased to $5.27 billion, up from $33.8 million for the year ended December 31, 2024. The comparative increase was primarily due to higher cost of products sold associated with increased net sales as a result of the Beacon Acquisition.
Removed
Depreciation and amortization expense for the year ended December 31, 2024 increased $0.2 million or 19.4%, compared with the same period in the prior year.
Added
Cost of products sold was also negatively impacted by the inventory fair value adjustments of $131.7 million as a result of recording Beacon’s inventory at fair value on the acquisition date.
Removed
The year-over-year increases are attributed to higher amortization expense associated with the acquisition of JCS in 2023. 21 Table of Contents Interest income (expense), net Interest income for the year ended December 31, 2024 increased $121.9 million, compared with the same period in the prior year.
Added
Selling, General and Administrative (“SG&A”) Expense SG&A expense for the year ended December 31, 2025 increased to $1.39 billion, up from $93.0 million for the year ended December 31, 2024.
Removed
The increase is attributed to the interest earned on our cash position due to the cash infusion from the Equity Investment (as defined below) and the private placements that closed in July 2024.
Added
The increase in SG&A expense was primarily driven by costs incurred to support the ongoing operations of our business subsequent to the Beacon Acquisition, including payroll and employee benefit costs, warehouse operating costs, and general and administrative costs.
Removed
Other companies may calculate this non-GAAP financial measure differently, and therefore our measure may not be comparable to similarly titled measures of other companies. This non-GAAP financial measure should only be used as a supplemental measure of our operating performance.
Added
The increase in SG&A expense was also attributable to increases in stock-based compensation expense of $110.1 million, acquisition-related transaction costs of $70.9 million and restructuring charges of $56.8 million. Depreciation Expense Depreciation expense was $108.4 million for the year ended December 31, 2025, compared to $0.2 million for the year ended December 31, 2024.
Removed
Because of these limitations, you should consider Adjusted EBITDA alongside other financial performance measures, net income (loss), and our other GAAP results. The following table presents a reconciliation of net income (loss) to Adjusted EBITDA.
Added
The comparative increase was primarily due to an increase in property and equipment as a result of the Beacon Acquisition. Amortization Expense Amortization expense was $314.7 million for the year ended December 31, 2025, compared to $0.9 million for the year ended December 31, 2024.
Removed
Year Ended December 31, (in thousands) 2024 2023 Reconciliation of net income (loss) to Adjusted EBITDA Net income (loss) $ 27,969 $ (1,070) Add (deduct): Depreciation and amortization 1,122 1,001 Share-based compensation 34,513 41 Interest (income) expense (121,812) 56 Provision (benefit) for income taxes 22,843 (297) Transaction costs 12,765 2,986 Severance costs 2,768 — Adjusted EBITDA $ (19,832) $ 2,717 The year-over-year decline for the year ended December 31, 2024 Adjusted EBITDA was due to higher employee-related costs, reflecting the introduction of a new senior management team to execute the Company’s expansive growth plan.
Added
The comparative increase was primarily due to amortization expense associated with new customer relationships and trade names intangible assets recognized as a result of the Beacon Acquisition. Interest (Expense) Income, Net Interest (expense) income, net was $(47.7) million for the year ended December 31, 2025, compared to $121.8 million for the year ended December 31, 2024.
Removed
Liquidity and Capital Resources On June 6, 2024, we closed the Equity Investment under the Investment Agreement that we entered into on April 14, 2024 among the Company, JPE and certain minority investors.
Added
The comparative increase in interest expense was primarily due to additional debt that was issued by QXO Building Products in connection with the Beacon Acquisition, resulting in higher interest expense. Interest (expense) income, net for the year ended December 31, 2025 was partially offset by interest income of $125.8 million recognized on interest-bearing cash accounts.
Removed
Pursuant to the Investment Agreement, we issued and sold an aggregate of 1,000,000 shares of Convertible Perpetual Preferred Stock, par value $0.001 per share (the “Convertible Preferred Stock”), which were initially convertible into an aggregate of 219,010,074 shares of common stock at an initial conversion price of $4.566 per share, and we issued and sold warrants exercisable for an aggregate of 219,010,074 shares of common stock (the “Warrants”).
Added
Interest (expense) income, net for the year ended December 31, 2024 was $121.8 million comprised of interest income of $121.9 million recognized on interest-bearing cash accounts and interest expense of $0.1 million. 25 Table of Contents Loss on Debt Extinguishment Loss on debt extinguishment was $49.7 million for the year ended December 31, 2025 due to the principal prepayment of $1.40 billion under the Term Loan Facility in May 2025 and the subsequent refinancing of the Term Loan Facility in November 2025.
Removed
Upon closing, the Equity Investment generated gross proceeds of $1.0 billion, before deducting agent fees and offering expenses.
Added
The loss on debt extinguishment includes the pro-rata extinguishment of previously capitalized original issue discounts and debt issuance costs and third-party fees associated with the modification of the Term Loan Facility. Income Taxes The Company’s effective tax rate for the year ended December 31, 2025 was 17.1%, compared to 45.0% for the year ended December 31, 2024.
Removed
The closing of the issuance and sale of these securities was consummated on July 25, 2024, and generated gross proceeds of approximately $620 million, before deducting agent fees and offering expenses.
Added
The Company’s effective tax rates for the year ended December 31, 2025 and 2024 were based on the U.S. federal statutory tax rate of 21% and state jurisdictional income tax rates, adjusted for permanent items including compensation above $1 million, inclusive of equity awards, paid to covered employees under Internal Revenue Code Section 162(m), excess tax benefits related to equity compensation and non-deductible transaction costs due to the Beacon Acquisition, coupled with the pre-tax loss during the year ended December 31, 2025.
Removed
Under the terms of the Investment Agreement, we declared a $17.4 million special cash dividend to its stockholders of record as of the day before the closing of the Equity Investment. The dividend was paid from proceeds received from the Equity Investment.
Added
In July 2025, the One Big Beautiful Bill Act (“OBBBA”) was enacted into law in the U.S. The OBBBA includes numerous provisions that affect corporate taxation, including changes to bonus depreciation, the expensing of domestic research costs, and modifications to certain U.S. international tax rules.
Removed
The year-over-year increase is attributed to interest income earned in the period offset by higher personnel costs associated with the execution of the Company’s strategy as contemplated in the Investment Agreement. Cash used in investing activities Cash used in investing activities decreased by $298,000, compared with the same period in the prior year.
Added
The Company has analyzed the impacts of the OBBBA and reflected them in the current period. These impacts do not have a material effect on the tax rate for the year ended December 31, 2025. Realization of our deferred tax assets depends on the reversal of our deferred tax liabilities.
Removed
The year-over-year decrease relates to assets purchased from JCS Computer Resource Corporation (“JCS”) during 2023 for $278,500 that did not exist during 2024. Investment in capital expenditures is mainly associated with IT equipment to support the business.
Added
In considering our need for a valuation allowance, we consider our historical and future projected taxable income, as well as other objectively verifiable evidence, including our utilization of tax attributes net operating loss carryforwards through the realization of deferred tax liabilities.
Removed
Cash provided by (used in) financing activities Cash provided by financing activities was $5.0 billion, compared with $2.1 million of cash used in financing activities in the prior year. The year-over-year increase is attributed to the Equity Investment of June 6, 2024 and the private placements in July 2024.
Added
We believe that it is at least more likely than not that the benefit of the year-to-date losses will be realized in future periods.
Removed
The Company paid the common stock dividend, the preferred stock dividend, and paid its long-term debt obligations with proceeds from these investments.
Added
However, our future effective tax rate may be affected by our ongoing assessment of the need for a valuation allowance on our deferred tax assets or liabilities, or changes in tax laws, regulations, or accounting principles, tax planning initiatives, as well as certain discrete items.
Removed
There are items within our financial statements that require estimation but are not deemed critical, as defined above. For a detailed discussion of our significant accounting policies and related judgments, see Note 2 – Basis of Presentation and Significant Accounting Policies of the Notes to Consolidated Financial Statements, in “Item 8. Financial Statements and Supplementary Data” of this report.
Added
We calculate Adjusted Gross Profit as gross profit excluding inventory fair value adjustments, and we calculate Adjusted Gross Margin as Adjusted Gross Profit divided by net sales.
Removed
Off-Balance Sheet Arrangements During for the year ended December 31, 2024, we did not engage in any material off-balance sheet activities or have any relationships or arrangements with unconsolidated entities established for the purpose of facilitating off-balance sheet arrangements or other contractually narrow or limited purposes.
Added
We calculate Adjusted Net Income (Loss) as net income (loss) excluding amortization; stock-based compensation; loss on debt extinguishment; restructuring costs; transaction costs; transformation costs; inventory fair value adjustments; and the income tax associated with such adjusting items.
Removed
Further, we have not guaranteed any obligations of unconsolidated entities, nor do we have any commitment or intent to provide additional funding to any such entities.
Added
We calculate Adjusted Diluted EPS as Adjusted Net Income (Loss) divided by the weighted-averaged number of common shares outstanding during the period plus the effect of dilutive common share equivalents based on the most dilutive result of the if-converted and two-class methods.
Added
We calculate Adjusted EBITDA as net income (loss) excluding depreciation; amortization; stock-based compensation; interest (income) expense, net; loss on debt extinguishment; provision for (benefit from) income taxes; restructuring costs; transaction costs; transformation costs; and inventory fair value adjustments that we do not consider representative of our underlying operations. We calculate Adjusted EBITDA Margin as Adjusted EBITDA divided by net sales.
Added
We have provided a reconciliation below of Adjusted Gross Profit to gross profit, the most directly comparable financial measure as measured in accordance with GAAP, as well as a calculation of gross margin and Adjusted Gross Margin.
Added
We have provided a reconciliation below of Adjusted Net Income (Loss) to net income (loss), the most directly comparable financial measure as measured in accordance with GAAP, as well as a calculation of diluted earnings (loss) per common share and Adjusted Diluted EPS.
Added
Other companies may calculate these non-GAAP financial measures differently, and therefore our measures may not be comparable to similarly titled measures of other companies. 26 Table of Contents Adjusted Gross Profit and Adjusted Gross Margin A reconciliation of gross profit and gross margin to Adjusted Gross Profit and Adjusted Gross Margin is as follows: Year Ended December 31, (in millions, except percentages) 2025 (1) 2024 Gross profit $ 1,572.7 $ 23.1 Inventory fair value adjustments (2) 131.7 — Adjusted Gross Profit $ 1,704.4 $ 23.1 Net sales $ 6,842.2 $ 56.9 Gross margin (3) 23.0 % 40.6 % Adjusted Gross Margin (3) 24.9 % 40.6 % (1) Results include Beacon’s operations from the date of acquisition on April 29, 2025 through December 31, 2025.
Added
(2) Represents the inventory fair value adjustments related to recording the inventory of acquired businesses at fair value on the date of acquisition. The inventory fair value adjustments related to acquired businesses were fully recognized during the year ended December 31, 2025. (3) Gross margin is calculated as gross profit divided by net sales.
Added
Adjusted Gross Margin is calculated as Adjusted Gross Profit divided by net sales. 27 Table of Contents Adjusted Net Income and Adjusted Diluted EPS A reconciliation of net loss and diluted loss per common share to Adjusted Net Income and Adjusted Diluted EPS is as follows: Year Ended December 31, (in millions, except per share amounts) 2025 (1) Net loss $ (279.4) Benefit from income taxes (57.7) Loss before provision for income taxes (337.1) Amortization 314.7 Stock-based compensation 144.5 Loss on debt extinguishment (2) 49.7 Restructuring costs 59.6 Transaction costs 83.7 Transformation costs 44.9 Inventory fair value adjustments (3) 131.7 Adjusted income before provision for income taxes 491.7 Income tax associated with the adjustments above (4) (129.0) Adjusted Net Income $ 362.7 Convertible Preferred Stock dividend (90.0) Mandatory Convertible Preferred Stock dividend (18.9) Undistributed income allocated to participating securities (5.5) Adjusted Net Income attributable to common stockholders $ 248.3 Basic and diluted loss per common share $ (0.63) Adjusted Diluted EPS (5) $ 0.34 Adjusted diluted weighted-average common shares outstanding (5) 727.3 (1) Results include Beacon’s operations from the date of acquisition on April 29, 2025 through December 31, 2025.
Added
(2) Represents extinguishment costs resulting from the partial prepayment of borrowings under the Term Loan Facility (as defined below) in May 2025 and the subsequent refinancing of the Term Loan Facility (as defined below) in November 2025. (3) Represents the inventory fair value adjustments related to recording the inventory of acquired businesses at fair value on the date of acquisition.
Added
The inventory fair value adjustments related to acquired businesses were fully recognized during the year ended December 31, 2025. (4) The effective tax rate to calculate Adjusted Net Income (Loss) for the year ended December 31, 2025 is 26.3% due to the tax calculated on adjusted income (loss) before provision for income taxes.
Added
(5) Adjusted Diluted EPS is calculated as Adjusted Net Income (Loss) divided by the weighted-average number of common shares outstanding during the period plus the effect of dilutive common share equivalents based on the most dilutive result of the if-converted and two-class methods. 28 Table of Contents Adjusted EBITDA and Adjusted EBITDA Margin A reconciliation of net (loss) income and net margin to Adjusted EBITDA and Adjusted EBITDA Margin is as follows: Year Ended December 31, (in millions, except percentages) 2025 (1) 2024 Net (loss) income $ (279.4) $ 28.0 Depreciation 108.4 0.2 Amortization 314.7 0.9 Stock-based compensation 144.5 34.4 Interest expense (income), net 47.7 (121.8) Loss on debt extinguishment (2) 49.7 — (Benefit from) provision for income taxes (57.7) 22.8 Restructuring costs 59.6 2.8 Transaction costs 83.7 12.8 Transformation costs 44.9 — Inventory fair value adjustments (3) 131.7 — Adjusted EBITDA $ 647.8 $ (19.9) Net sales $ 6,842.2 $ 56.9 Net margin (4) (4.1) % 49.2 % Adjusted EBITDA Margin (4) 9.5 % (35.0) % (1) Results include Beacon’s operations from the date of acquisition on April 29, 2025 through December 31, 2025.
Added
(2) Represents extinguishment costs resulting from the partial prepayment of borrowings under the Term Loan Facility (as defined below) in May 2025 and the subsequent refinancing of the Term Loan Facility (as defined below) in November 2025. (3) Represents the inventory fair value adjustments related to recording the inventory of acquired businesses at fair value on the date of acquisition.
Added
The inventory fair value adjustments related to acquired businesses were fully recognized during the year ended December 31, 2025. (4) Net margin is calculated as net income (loss) divided by net sales. Adjusted EBITDA margin is calculated as Adjusted EBITDA divided by net sales.
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Seasonality The demand for exterior building materials is closely correlated to both seasonal changes and unpredictable weather patterns, therefore demand fluctuations are expected. In general, we expect our net sales and net income to be the highest in quarters ending June 30, September 30, and December 31, which represent the peak months of construction and re-roofing.
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Conversely, we expect low net income levels or net losses in quarters ending March 31, when winter construction cycles and cold weather patterns have an adverse impact on our customers’ ability to conduct their business.
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In addition, we may choose to raise additional funds at any time through equity or debt financing arrangements, which may or may not be needed for additional working capital, acquisitions or other strategic investments. We continually evaluate our liquidity requirements considering our operating needs, growth initiatives and capital resources.
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Item 7A. Quantitative and Qualitative Disclosures About Market Risk
Market Risk — interest-rate, FX, commodity exposure
2 edited+3 added−2 removed0 unchanged
Item 7A. Quantitative and Qualitative Disclosures About Market Risk
Market Risk — interest-rate, FX, commodity exposure
2 edited+3 added−2 removed0 unchanged
2024 filing
2025 filing
Biggest changeThe fair value of our cash and cash equivalents would not be significantly affected by either an increase or decrease in interest rates due mainly to the short term nature of these instruments. We have exposure to changes in interest rates due to our significant cash balance, which totaled $5.1 billion at December 31, 2024.
Biggest changeInterest Rate Risk Our cash equivalents consist primarily of demand and money market accounts and have an original maturity date of 90 days or less. The fair value of our cash and cash equivalents would not be significantly affected by either an increase or decrease in interest rates due mainly to the short-term nature of these instruments.
Item 7A. Quantitative and Qualitative Disclosures About Market Risk We do not hold any derivative instruments and do not engage in any hedging activities. We have operations only within the United States and therefore do not have foreign currency exposure. We are exposed to market risks in the ordinary course of our business, including the effects of interest rate changes.
Item 7A. Quantitative and Qualitative Disclosures about Market Risk We have operations principally within the U.S. and therefore have only minimal foreign currency exposure. We are exposed to market risks in the ordinary course of our business, including the effects of interest rate changes. Information relating to quantitative and qualitative disclosures about these market risks is set forth below.
Removed
Information relating to quantitative and qualitative disclosures about these market risks is set forth below. Interest Rate Risk Our cash equivalents consist primarily of demand and money market accounts and have an original maturity date of 90 days or less.
Added
As of December 31, 2025, we had no outstanding borrowings under our asset-based revolving lines of credit and outstanding borrowings, net of unamortized debt issuance costs, of $827.8 million under our Term Loan Facility and $2.23 billion under our Notes.
Removed
Assuming an annual average cash balance of $5.1 billion, a hypothetical 1% change in the interest rate would impact our net interest income by $51 million. 24 Table of Contents
Added
Borrowings under our ABL Facility and Term Loan Facility incur interest on a floating rate basis while borrowings represented by our Notes incur interest on a fixed rate basis. As of December 31, 2025, our weighted-average effective interest rate on debt instruments with variable rates was 5.72%.
Added
A 10% increase or decrease in interest rates would not have a material effect on our interest income or expense. 35 Table of Contents