XPO (XPO) risk factors, FY2025 10-K

Risks related to Our Business Model

1. 01Economic recessions and other factors that reduce freight volumes, both in North America and Europe, could have a material adverse impact on our business

Risks related to Our Strategy and Operations

1. 02Our company-specific action plan to enhance network efficiencies and drive growth in our North American LTL business, and other management actions to improve our North American LTL business, may not be effective or timely, and may not improve our results of operations or cash flow from operations as planned
2. 03Our profitability may be materially adversely impacted if our investments in equipment and service centers do not match customer demand for these resources or if there is a decline in the availability of funding sources for these investments
3. 04Failure to successfully implement our cost and revenue initiatives could cause our future financial results to suffer28% rewritten
4. 05We may not successfully manage our growth37% rewritten
5. 06We may sell or otherwise divest our European business, which may have an adverse effect on our results of operations and cash flows, the market price of our common stock, and on our North American LTL business
6. 07If we determine that our goodwill has become impaired, we may incur impairment charges, which would negatively impact our operating results
7. 08Issues related to the intellectual property rights on which our business depends, whether related to our failure to enforce our own rights or infringement claims brought by others, could have a material adverse effect on our business, financial condition and results of operations
8. 09We are exposed to currency exchange rate fluctuations because a significant proportion of our assets, liabilities and earnings are denominated in foreign currencies
9. 10We are subject to risks associated with the availability and price of fuel, all of which are subject to political, economic and market factors that are outside of our control
10. 11Productivity of our fleet historically decreases during the winter season and extreme or unusual weather conditions, whether due to climate change or otherwise, can disrupt our operations, impact freight volumes, and increase our costs, all of which could have a material adverse effect on our business results32% rewritten
11. 12Our reputation could be harmed if we fail to satisfy evolving stakeholder expectations regarding environmental matters66% rewritten

Risks related to Our Use of Technology

1. 13Our business will be seriously harmed if we fail to develop, implement, maintain, upgrade, enhance, protect and integrate our information technology systems, including those systems of any businesses that we acquire
2. 14A significant breach of our information security systems, networks or processes could materially adversely affect our business61% rewritten
3. 15A failure of our information technology infrastructure may materially adversely affect our business

Risks related to Our Credit and Liquidity

1. 16Our indebtedness could adversely affect our financial condition
2. 17The execution of our strategy could depend on our ability to raise capital in the future, and our inability to do so could prevent us from achieving our growth objectives
3. 18We may be adversely affected by interest rate changes because of our floating rate credit facilities37% rewritten

Risks related to Third-Party Relationships

1. 19We depend on third parties in the operation of our business
2. 20Increases in driver compensation and difficulties with attracting and retaining drivers could adversely affect our revenues and profitability
3. 21If we are unable to attract and retain management talent and key employees, our business, results of operations and financial position could be adversely affected
4. 22Our business may be materially adversely affected by labor disputes
5. 23Labor disputes involving our customers could affect our operations. If our customers experience plant slowdowns or closures because they are unable to negotiate labor contracts, our revenue and profitability could be negatively impacted
6. 24Efforts by labor organizations to organize employees at certain locations in North America, if successful, may impact costs and efficiencies at those locations

Risks related to Litigation and Regulations

1. 25We are involved in multiple lawsuits and are subject to various claims that could result in significant expenditures and impact our operations
2. 26An increase in the number or severity of self-insured claims or an increase in insurance premiums could have an adverse effect on us
3. 27We are subject to risks associated with defined benefit plans for our current and former employees, which could have a material adverse effect on our earnings and financial position
4. 28Changes in income tax regulations for U.S. and multinational companies may increase our tax liability35% rewritten
5. 29We are subject to governmental regulations, political conditions, and emissions-control regulations which could substantially increase operating expenses or negatively impact our business70% rewritten
6. 30regulations, or by third-party transportation providers who pass increased costs on to us, this could adversely affect our results of operations to the extent we are unable to obtain a corresponding increase in price from our customersNew
7. 31Failure to comply with trade compliance and anti-corruption laws and regulations applicable to our operations could expose us to potential fines, criminal sanctions, or reputational harm60% rewritten

Risks related to Our Markets and Competition

1. 32We operate in a highly competitive industry and, if we are unable to adequately address factors that may adversely affect our revenue and costs, our business could suffer