QXO Reveals More on How It's Going to Grow and Profit

QXO Chairman and CEO Brad Jacobs released May 11 an investor Q&A in which he elaborated on the company's cross-selling, one-stop-shop strategy as it combines TopBuild, Kodiak Building Partners, and its already acquired Beacon Building Products. Some highlights:

1) TopBuild's roughly 22,000 job site visits/day "will give give us valuable job site intelligence in real time. We can use that information to optimize inventory placement around the network, proactively cross-sell, increase wallet share, and align procurement." 

2) QXO plans on mid- to high-single-digit growth "for the combined business across the cycle." This is at a time when lots of other construction supply companies expect business to be flat at best. Its aim remains to reach $50 billion in revenue. It feels it can hit $4 billion in adjusted EBITDA by that date, and with more acquisitions adjusted EBITDA could hit $5.5 billion.

3) The company's focus has shifted from M&A to integrating its three parts, though QXO will keep pursuing tuck-in acquisitions and "exceptional" deals with long-term value.

4) "Growth comes from cross-selling, bundled offerings, improved service, enhanced digital tools, CRM capabilities, and more systematic use of customer data. We can sell across lumber, siding, decking, windows and doors, insulation, waterproofing, and roofing. A key aspect of our value proposition is our ability to maintain sticky relationships with both large builders and smaller local contractors by serving them more completely." Jacobs thinks the combined company can improve the legacy firms' total margins by 200 basis points.

5) TopBuild won't be run independently, but will be part of "one cohesive QXO team" running North America in which TopBuild's current management will remain. 

6) "The biggest synergy bucket [from acquiring TopBuild] is comprised of sales excellence, especially pricing discipline and cross-selling, followed by scaled procurement. This is not a headcount-reduction or cost-slashing strategy." 

7) Builders want one-stop-shopping and fewer supplier relationships partly because it enables services like pre-kitted materials. 

8) "We're definitely trimming the tail of small suppliers," Jacobs said. Meanwhile, QXO plans to offer its bigger suppliers better market access, longer planning horizons and strong digital channels. "In return, we expect suppliers to lean in with their best cost, superior service, innovation, and differentiated solutions."

9) It will take up to two years to show meaningful progress at TopBuild.

10) Jacobs revealed Kodiak's revenue by product category--something the company didn't do when it was privately held. The major buckets and share of total revenue are: traditional lumber (21%), doors and windows (18%), manufactured components (10%), gypsum (6%). Kodiak's 2025 revenues totaled $2.57 billion in 2025, Webb Analytics' Construction Supply 150 reports.

11) Here's the technology QXO says it has implemented so far: 

• · Pricing tools (Pricefx) 

• Demand forecasting and inventory management systems (S&OP)

• Consolidation of financial systems 

• Lead generation tools 

• AI negotiation capabilities 

• Asset management software ·

• AI procurement agents 

• Cybersecurity enhancements 

• Internal communication platforms

And here is what it plans to roll out by Q1 2027 for Beacon and Q3 2027 for the rest:

• Enterprise resource planning (ERP) 

• Point-of-sale (POS) 

• Warehouse management (WMS) 

• Transportation management (TMS) 

• Human resources management (HRIS) 

• Procure-to-Pay (P2P) 

• Last mile delivery

12) QXO revealed its rejuvenation work for Beacon includes:

• Reducing organizational layers from nine to four 

• Upgrading approximately 2,500 of 8,300 employees onboarded ·

• Hiring for dedicated “hunter” sales roles 

• Launching a call center to contact prospective new customers and reactivate 25,000 dormant accounts 

• Centralizing procurement, moving from about 1,600 buyers to a more controlled structure 

• Improving pricing discipline by using data and dispersion analysis 

• Reconfiguring inventory management processes to increase in-stock levels of fast-moving items 

• Bringing selective transportation in-house to reduce cost and improve control 

• Introducing new employee training programs

In addition, QXO says its key initiatives for roofing customer experience include:

• Reconfiguring inventory into A/B/C categories to improve availability 

• Reducing quote times with new pricing technology 

• Improving invoice accuracy toward best-in-class levels 

• Enhancing delivery performance with transportation management technology 

• Investing heavily in training and service culture 

12) How much more are customers willing to pay for good service? QXO believes 2% to 7% more if you can be better at: 

• Product availability

• Speed of quoting

• Accuracy of invoicing

• On Time and In Full Delivery

• Well-trained quality sales and support people