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Monday, November 9, 2026

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QXO's $QXO roofing prices went from 1.1% below a year earlier in April to 4.1% above in September, per the November 9 call. Roofing and waterproofing, the business $QXO has owned longest, also grew its gross margin y/y in Q3, and its October daily sales rose 9.1% y/y, vs. 5.4% for all of $QXO. CEO Brad Jacobs said September "came in much stronger than expected." In my earlier post, I estimated that everything but TopBuild, the insulation business $QXO bought on July 1, made ~$272M of Q3 adjusted EBITDA, the same as in Q2. A higher roofing gross margin and flat adjusted EBITDA can both be right if $QXO's spending on people and technology grew faster than its gross profit, which the full Q3 report on November 12 should show. Jacobs also kept the $4B 2030 adjusted EBITDA target, but now measures it from "about $1.75 billion today," down from the "almost $2 billion" of 2025 combined EBITDA in $QXO's July investor Q&A. He said the ~$1.75B reflects current consensus estimates, so with the target unchanged, EBITDA now has to grow ~2.3x instead of ~2x. Jacobs told Tyler Grason of Patient Capital, who asked how he'd balance QXO with his new venture, CKX, that he works "pretty much seven days a week" and owns "about a quarter of the company." $QXO also said it has no debt maturities before 2031, over $2B of liquidity, and nearly two-thirds of its debt at fixed rates. So I read the call as the roofing business finally turning, but from a lower starting point than $QXO used in July. What I'd want to see in the full Q3 report on November 12: 1) Roofing: Its adjusted EBITDA vs. Q3 2025, if $QXO breaks it out, to see whether the gross margin gain carried through. 2) Costs: Whether operating expenses grew faster than gross profit across $QXO.
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QXO's $QXO CEO Brad Jacobs just announced his ninth company, which he'll run as chairman and CEO while keeping both roles at QXO. His firm, Jacobs Private Equity, is putting $900M of a $1B investment into CKX Lands $CKX, a small Louisiana land company that will be renamed and operate "in an industry to be determined," in a deal expected to close in early 2027. Jacobs started $QXO the same way in 2024, when his firm put $900M of a $1B investment into SilverSun Technologies, a small software reseller, and renamed it QXO. $QXO pre-released its Q3 results on November 9, three days before its full report, for a call that also covered Jacobs' new venture. Q3 sales rose 79% y/y to $4.90B, and adjusted EBITDA rose 85% to $557M, lifting the margin to 11.4% from 8.4% in Q2. In my August 16 update, I wrote that TopBuild, the insulation distributor and installer $QXO bought on July 1, would be the first acquisition that lifts the blended margin rather than pulling it down. TopBuild made an 18.4% adjusted EBITDA margin on $6.2B of sales in 2025, or ~$285M/quarter on ~$1.55B. If TopBuild earned that average in Q3, the rest of $QXO (its roofing business plus Kodiak, the lumber and building materials distributor it bought on April 1) made ~$272M on ~$3.34B of sales, an ~8.1% margin. That's the same $272M as Q2, and less than the $301M $QXO made in Q3 2025, before it owned Kodiak or TopBuild. So unless TopBuild fell short of its 2025 pace, the margin gain came from what $QXO bought, not from Jacobs improving the businesses it already owned. Jacobs says ending his $XPO, $GXO, and $RXO chairmanships in 2025 gave him the capacity for CKX. $QXO also named Ken West, who led three business segments at Honeywell $HON, president and COO as of September 1 to run its day-to-day operations. At ~$13.50/share, even after a ~17% jump on November 9, $QXO still trades in the low-to-mid teens my June 7 deep dive had as the bear case, where margins stall. The ~$24.60 base case, where combined margins move toward 14% by 2028, would be an ~82% gain. What I'd want to see from here: 1) TopBuild: Its Q3 adjusted EBITDA, if the November 12 report breaks it out, to confirm what the rest of $QXO earned. 2) Leverage: Net debt as of September 30 vs. the $7-9B I estimated in June, with Q3 interest expense up to $163M from $38M in Q2. 3) Management: Whether any $QXO executives move to CKX before the deal closes in early 2027.

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