XPO, Inc. ( XPO ) shares are trading higher after it reported second-quarter FY24 results.

Revenue growth of 8.5% Y/Y to $2.097 billion, beating the consensus of $2.072 billion. The increase in revenue was aided by higher yield and tonnage per day in the North American LTL segment.

Operating income was $197 million, compared to $107 million a year ago. Adjusted EPS was $1.12, up 57.7% Y/Y, beating the consensus of $1.01.

Adjusted EBITDA increased 40.6% Y/Y to $343 million in the quarter, and the margin expanded to 16.5% from 12.7% last year in the same quarter.

North American Less-Than-Truckload revenue was $1.27 billion (+12.0% Y/Y). The adjusted operating ratio was 83.2%, up 440 bps YoY. 

The segment saw a 4.5% Y/Y increase in daily shipments, a 3.4% Y/Y rise in daily tonnage, and a 9.0% Y/Y increase in yield, excluding fuel.

European Transportation generated revenue of $808 million (+3.5% Y/Y), and the adjusted EBITDA margin was 6.1%, up 10 bps Y/Y, in the quarter. 

The company generated $210 million of cash flow from operating activities in the quarter and ended the quarter with $250 million of cash and cash equivalents on hand.

Additionally, XPO opened 14 of the 28 service centers acquired in December, with another 10 anticipated to open this year.

Mario Harik, chief executive officer of XPO, said, “Our strong performance demonstrates the steady progress we’re making toward becoming the LTL service leader in North America. We’ll continue to build our service offering, invest in capacity ahead of demand and operate more efficiently. This strategy is creating a long runway for future margin expansion.” 

Investors can gain exposure to the stock via ProShares Trust ProShares Supply Chain Logistics ETF and The Alger ETF Trust Alger Weatherbie Enduring Growth ETF .

Price Action: XPO shares are up 6.5% at $122.39 at last check Thursday.

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