Greetings. Welcome to the QXO update conference call. At this time, all participants are in listen-only mode. A question-and-answer session will follow the formal presentation. If anyone should require operator assistance during the conference, please press star zero from your telephone keypad. Please note that this conference is being recorded. Before we begin, the comments today will include forward-looking statements. Forward-looking statements are not guaranteed, and actual results may differ materially from those expressed or implied in forward-looking statements. Comments will also refer to certain non-GAAP financial measures. The company has provided reconciliations of these non-GAAP financial measures to GAAP measures in its press release, which is available on the company's website. I will now turn the call over to Brad Jacobs. Thank you. You may begin.
Good morning, everybody. With me today in Greenwich are QXO's Chief Strategy Officer, Matt Fassler, and Chief Investment Officer, Mark Manduca. The purpose of this call is twofold. First, I will cover the new venture I am starting, as announced earlier today, and then we will spend most of the time on the excellent progress we are making at QXO. This includes our pre-released third quarter results, our detailed progress with core components of the business, and the opportunities ahead. After my prepared remarks, Mark, Matt, and I will be happy to take your questions. To launch the new venture, I will be leading a $1 billion cash investment in what will be the ninth company I have started. As described in today's press release, my family office, Jacobs Private Equity, together with a group of minority co-investors, has agreed to invest in a public company called CKX Lands.
CKX is listed on the NYSE American under the ticker CKX. The investment is expected to consist of $900 million from me and $100 million from co-investors led by HRTG Partners, formerly Sequoia Heritage. Upon closing, I will own a majority stake in CKX and become its Chairman and CEO, while continuing to serve as Chairman and CEO of QXO. CKX is currently a land management company. It earns its revenue from royalty interests and mineral leases related to oil and gas production on its land, as well as timber sales and surface rents. The industry for my new venture is still to be determined. Once we close the investment, CKX will become a platform for growth, operating as a standalone public company under a new name.
The proposed transaction is intended to give CKX's existing stockholders the opportunity to receive an upfront cash payment of $20.8 million, retain the value of the existing business, and participate in the potential upside of our future plans. Completion of the investment remains subject to applicable closing conditions, including CKX stockholder approval. Over my career, I founded and led $8 billion or multi-billion dollar businesses, including six public companies. I love building multi-billion dollar market leaders, and I am excited to have the opportunity to do it again. My approach to creating value has been consistent across a wide range of industries. It is bring in exceptional people, improve operations, invest in technology, and grow both organically and through disciplined acquisitions. My teams and I have completed approximately 500 M&A transactions across these businesses. Last year, I concluded my chairmanships of XPO, GXO, and RXO.
That gave me the capacity to create this new venture while continuing to lead QXO to its massive potential. I want to emphasize that I remain intensely committed to QXO. My enthusiasm for QXO is sky-high, and the progress we are making gives me even more confidence in our ability to accelerate organic growth, expand margins, and create substantial shareholder value. As you may have gathered from our preliminary release this morning, the month of September came in much stronger than expected. We pre-released third quarter adjusted EBITDA of $557 million on revenue of $4.9 billion, with an adjusted EBITDA margin of 11.4%. We will provide many more details later this week in our earnings release and 10-Q, but suffice it to say, the quarter ended on a high note.
Today, I want to focus on why we are so excited about the progress we are making at QXO and the positive outlook from here. Our acquisitions of Beacon, Kodiak, and TopBuild gave us leadership positions in some of the most important parts of the building products industry, extensive customer relationships, and management depth. These are the critical attributes to create substantial shareholder value. In North America, we are now the number one distributor of insulation products, number one in waterproofing, number two in roofing, and number one or number two in lumber and building materials in key regions. We are also the number one installer in the insulation space. Our company's 28,000 employees serve 194,000 customers through a network of 1,150 branches across all 50 states and seven Canadian provinces.
Our customers include residential, commercial, and industrial general contractors, subcontractors of all types, including roofing, insulation, and framing, as well as production and custom home builders. Our third quarter performance demonstrates that our strategy is working across the board. We are achieving stronger pricing, customer engagement, cross-selling, and service execution. These are accelerating sales trends and profitable market share gains. Company-wide, in the third quarter, trends in organic revenue per day improved for the second consecutive quarter, and pricing improved overall by 2.2% year-over-year, with nine of our 11 areas delivering positive pricing. In roofing and waterproofing, sales of higher-margin complementary products grew 4.2% to $607 million, including 16% growth in gutters and accessories, 15% in fiber cement, and 7% in windows. Private label penetration in roofing and waterproofing also reached a record 10.6% of sales, up about 50 basis points year-over-year.
Together, these results demonstrate our growing ability to capture a greater share of customer spending across a broader range of products. Sales momentum accelerated into October, with daily sales increasing 5.4% year-over-year across the company by month's end. Roofing and waterproofing, which we have owned the longest, grew 9.1% in October. These results build on a year of profitable market share gains and demonstrate the growing impact of our commercial initiatives and service improvements. In the third quarter, on-time delivery in roofing and waterproofing improved by 650 basis points, and out-of-stocks for key products improved more than 25%. Invoice accuracy improved from the low 90s at the outset of the year to the high 90s in the third quarter. Face-to-face customer meetings increased 57% from July to early November.
A third of our regions are already exceeding our 95% on-time delivery target, with a large opportunity to replicate these improvements across the network. Critically, our commercial momentum is translating into improved profitability. In Q3, year-over-year gross margin in roofing and waterproofing inflected positively, despite the soft external environment. We are encouraged by the direction of the metrics, and we are still in the early stages of realizing the full benefits of the changes underway. Our insulation distribution business continues to perform well, with revenue accelerating in Q3. We generated a particularly strong performance in our mechanical insulation distribution unit, which posted a strong 16% year-over-year revenue increase, due in part to its leading position with data centers. Our pricing to customers is a major company-specific lever for us.
Importantly, our investments in growth have strengthened our ability to earn more price by improving the customer experience and creating a more compelling value proposition. We have built a broader offering, wider product availability, and faster customer service with more reliable deliveries. We have instilled more rigorous governance over excessive price overrides and improved the tools, management, and incentives that support pricing decisions. Our goal is to price consistently based on data and in a way that is fair to our customers and to QXO. Company-wide, our year-over-year pricing has improved by 400 basis points from - 1.7% in April to + 2.3% in September. Pricing turned positive in June and has strengthened in each subsequent month throughout Q3. Roofing and waterproofing showed an even larger improvement over the same period, moving from - 1.1% in April to + 4.1% in September.
These metrics demonstrate our ability to improve pricing even during the current soft environment. Going forward, we are implementing sophisticated pricing analytics across the acquired businesses, and we see multiple runways to improve pricing, including the commercial deal process, customer-specific negotiations, and linking quoting decisions more closely to customer profitability. Procurement is another major lever for us. We have established centralized category leadership, and we are in the process of bringing our spend together across the businesses. Our three major acquisitions have approximately $12 billion of spend, including about $11 billion in direct products and materials, and more than $1.1 billion in indirect goods and services. Approximately $7.6 billion of that spend is with suppliers serving at least two of legacy Beacon, Kodiak, or TopBuild. This includes over 1,000 direct suppliers and about 200 indirect suppliers.
Within that overlap, approximately $5 billion is with suppliers serving all three legacy businesses. These existing supplier relationships represent an opportunity to align pricing, rebates, and contract terms, and to negotiate using our combined purchasing power. We are pursuing these opportunities through coordinated negotiations, supplier consolidations, stronger rebate capture, and wider adoption of common purchasing agreements. Our goal is to reward strategic supplier partners with more of our business, allowing them to grow rapidly with us while we improve cost, availability, and service for our customers. We have already realized procurement synergies across a number of indirect categories such as fleet, technology, and waste disposal. Cross-selling is another key focus as we continue to integrate the three businesses. We have about 194,000 unique customers now, and almost none of them currently buy our full product offering.
We already have ongoing relationships with these customers, and in many cases, we're already on their job sites. We've developed a good sense of their requirements and their total spend. Our goal is to earn a much larger share of their business and drive substantial organic growth. The majority of our customers have compelling reasons to consolidate suppliers and reduce complexity. Many need multiple categories of traditional building materials, and some also need engineered components. The total scope of our offering can help customers reduce their total construction costs, address labor shortages, simplify procurement, and mitigate project delays. For example, our strong relationships with production home builders are typically rooted in our truss and wall panel capabilities, as well as insulation, where we solve some of their greatest needs.
At the same time, it creates an opportunity for us to expand share of wallet by becoming their primary supplier for a wider range of building materials, with the added value of scale to support their growth. We're achieving early success with a cross-selling pilot in Tampa, where we serve 18 trades. The pilot is surfacing the time and cost efficiencies QXO can bring to a single project by combining distribution, installation services, and field management across the trades. By coordinating crews and services, we can eliminate duplicate trips to job sites, reduce material handling, improve scheduling, and shorten construction cycles. For example, we can combine interior trim and garage door installation into a single visit, or arrange to have the work performed on site. We can also help customers realize scalable savings in their most precious resource, labor, including time spent in coordination and construction.
These same benefits apply to large-scale commercial projects like data centers. In some geographies, we can supply foundation rebar, insulation, roofing, waterproofing, and commercial doors for the same project, creating a unique value proposition for customers. That contractor has fewer supplier relationships to manage, with meaningful time and cost benefits, and we earn a greater share of the business. We can extend that opportunity even further with project-level visibility. Our technology will tell us whether we've supplied a hospital's roofing, mechanical insulation, building insulation, doors, and other requirements, allowing us to pursue the categories we're missing. Now, we're also making a concerted effort to reactivate dormant accounts. Between the companies we bought, there are tens of thousands of dormant customers, including 2,000 substantial ones who together used to do nearly a half a billion dollars of business with our legacy companies. We want that business back.
Private label is another attractive part of the business. Our TRI-BUILT brand now represents 10.6% of our roofing and waterproofing sales, which is an all-time high. The gross margin on private label is substantially higher than on similar market-branded products. We're developing additional TRI-BUILT categories and giving our salespeople incentives to sell private label. Trailing 12-month TRI-BUILT sales at the end of Q3 were $943 million, all of it at legacy Beacon. Our target is to grow this to more than $2 billion over the next three years, while also expanding private label at legacy Kodiak and TopBuild operations. In terms of execution, we're putting experienced operators into branches that are underperforming their potential and introducing common operating metrics to identify opportunities for greater efficiency. We're focusing on four fundamentals: frequent customer contact, disciplined pricing, appropriate staffing, and agile inventory management.
Legacy TopBuild used this approach effectively in its lower-performing locations, and we're extending it across the company, demonstrating a key benefit of quality M&A, applying proven operating practices where they can have the greatest impact. We're even more excited today about TopBuild than we were when we announced the acquisition. Bringing TopBuild into QXO has given us additional commercial exposure, including major multi-year projects and a presence at approximately 22,000 job sites every day. We have substantial opportunities to deepen these customer relationships, cross-sell products and services, and capture a greater share of wallet. On the installation side, we have highly experienced installers who know how to complete a job efficiently and pass inspection. We can build on that expertise by strengthening sales management, improving training for new hires, and giving employees better technology. Technology will help us accelerate many of the improvements.
I'm extremely pleased with the tech team we've assembled and the tech roadmap we're executing. We're implementing a new ERP system, a proprietary point-of-sale system, an upgraded CRM platform with advanced AI capabilities, and a warehouse management system. We're also integrating tools for pricing and procurement, fleet technology, e-commerce, and human resources. When this is fully rolled out, our employees will be able to get their work done in one connected, AI-enabled environment. They'll be able to spend less time entering the same information into different systems or tracking down information that will be readily available. The new ecosystem will give our people more capacity to serve customers and run the business. We're currently testing the tech in a number of locations under real-life operating conditions and training employees to use it. Then, we'll accelerate the rollout.
Our expectation is to have the vast majority of revenue across legacy TopBuild, Beacon, and Kodiak on the new platform over the next year. This will deliver significant advantages by making transactions easier to complete and improving the overall customer experience. We'll be able to create quotes in seconds or minutes rather than hours or days, provide real-time visibility into inventory and order status, and automate inventory scanning, slotting, and picking. More efficient inventory replenishment will reduce working capital requirements without compromising customer fulfillment. We'll use the tools to optimize the logistics, with more efficient loads and routes equating to a reduction in transportation costs. In addition, we're improving our e-commerce capabilities so customers can check inventory, get accurate quotes, place orders, and track deliveries online.
The goal is to make it easy for customers to do business with QXO so that each time they use us, we earn their loyalty for the next transaction. AI is a key driver of both operational excellence and margin expansion. One project we're particularly encouraged by could effectively double sales force productivity in one of our business units. More broadly, we see the potential to boost productivity in a number of daily workflows. Let me put all of these opportunities in the context of our long-term plan. Our goal is to grow adjusted EBITDA from the approximately $1.75 billion reflected in current consensus estimates to $4 billion by 2030, before additional acquisitions. This takes into account market growth, share gains, productivity improvements, and synergies as we integrate Kodiak and TopBuild.
In addition, we believe there will continue to be opportunities to purchase small businesses on highly accretive terms. Between now and 2030, we estimate that acquisitions we can fund with internally generated cash flow could contribute up to $1.5 billion of additional EBITDA, taking the total EBITDA opportunity to approximately $5.5 billion by 2030. Our operations are highly cash generative, and we have no debt maturities prior to 2031. We have a covenant-light capital structure and over $2 billion of available liquidity. Nearly two-thirds of our debt stack is fixed rate. We have substantial flexibility to invest in organic growth and pursue accretive acquisitions. The operating metrics are inflecting upward, and we're still in the early stages of realizing benefits from the strong foundation we've built. We have a large, highly satisfied customer base served by experienced operators.
We have a big opportunity to make the business more productive and much more valuable over time. To sum up, there's a lot of excitement in the room. There's a new venture on the horizon. We feel great about QXO's performance and outlook, and we look forward to meeting you face-to-face at key forums in the coming days and weeks. I remain wholeheartedly committed to QXO, and I'm confident in our ability to execute the plan we've outlined this morning. Thank you for your interest and your support. We'll now open the call for questions. Operator?
Thank you. We'll now be conducting a question-and-answer session. We ask you please limit yourself to one question and one follow-up. If you'd like to ask a question at this time, you may press star one on your telephone keypad, and a confirmation tone will indicate your line is in the question queue. You may press star two if you'd like to remove your question from the queue. For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star keys. Thank you, and our first question is from the line of Trevor Allinson with Wolfe Research. Please proceed with your questions.
Hi, good morning. Thank you for taking my question. You guys have been clearly very busy over the last 12-18 months with acquisitions, technology implementation, among other things. If you could, in your own words, could you summarize everything that you've done, all the changes you guys have implemented at QXO over the last year and a half? Thanks.
Well, that would be a long answer, but I'll try my best. What have we accomplished in the last year and a half? In a word, or maybe two words, a lot. A real lot. First, we started by concentrating on the people. We have 28,000 team members, and we wanted to make sure that every single one of those 28,000 people understands the vision of what we intend to accomplish here, that we're creating a world-class building products distributor and installer, and we will be recognized by customers as the leading provider of these products and services. We made sure that everybody knows what the vision is and what their role is in accomplishing that vision. We started to tie compensation to how well people deliver on their levers. We upgraded talent where necessary. We improved the org chart.
We reduced unnecessary layers in the org chart. We right-sized spans of control, and we invested in the development of our people. Specifically, for example, we created what we call Precision Leadership training, which is a proprietary course in how to be an effective leader of people, and it's gotten rave reviews from our managers who are both early in career and late in career. We're expanding this training to our sales organization now. By the way, I was delighted that Forbes recently named us one of the 20 most trusted companies in America, and I think that's pretty cool for a company that's only been around for a year or two. It's not coincidental. We've mobilized the entire company to focus on the key levers. Let's go over those key levers. I'll try to be brief.
On sales, one important thing we've done is we've redesigned compensation incentives so that we're rewarding salespeople for what we want them to focus on, like cross-selling, for example. We're rewarding people for selling private label. Our private label margin is about 2,000 basis points higher than the rest of our product mix, so that's a high priority for us. We reactivated 3,300 dormant accounts, and we've got tens of thousands of dormant account opportunities to go. We've increased face-to-face customer meetings. We've introduced data-driven pricing. We've largely centralized procurement and strengthened strategic relationships with our key suppliers. We've intensely focused on operational excellence. We've optimized the inventory mix, we've optimized on time and in full, we've optimized invoice accuracy, so everything that goes into excellently running the business.
We designed a cutting-edge tech stack that, once we fully implement it, will definitely differentiate us in the eyes of the customer, and will also give us a big cost advantage in terms of productivity and efficiency. Let me point out the main components of the tech stack. We have a next-gen point-of-sale system that we've designed. We've got a warehouse management system, a transportation management system. We've got pricing tools. We have an AI-enabled CRM. We've got procurement bots. All these things are connected on a unified modern ERP. We've already rolled out dozens and maybe hundreds, many, many bespoke productivity and efficiency tools. E-commerce. We believe that e-commerce is going to be a more and more important channel over the next decade for our customers. That's what we're hearing from customers. They want to save time. E-commerce helps them save time.
We've developed an omnichannel platform that integrates all the customer touchpoints, e-commerce, physical branches, sales reps, mobile apps, everything related to customer service, and put it into one seamless shopping experience. That will save customers time, that will lower our cost to serve them, and ultimately should increase our share of customer spend. I think the proof is in the pudding. When you look at the numbers and do the work, you see the results. For example, we're obviously in a very weak external market, but company-wide pricing is up 2.2%. Look at the trend in the pricing. Go back to April. In April, pricing was down 1.7% year-over-year. In May, it was also down, but not as much, down only 0.5%. Then pricing inflected positive in June. June, it was up 1.1%, and July was up a little bit more, 1.2%.
August was up a little bit more than that, 1.8%. In September, it was up 2.3%. Look at roofing. In roofing, the improvement in pricing was even more pronounced. April was down 1.1%. May was flat. June was up 1.9%. July was up 2.9%. August was up 3.6%. September was up 4.1%. A really nice trend there, with year-over-year margin trends inflecting positively in Q3. Starting the fourth quarter, October company-wide daily sales increased 5.4% year-over-year. So, nice trend here. In roofing, which we've owned the longest, daily sales were up in October 9.1%. Look, customers are very demanding, and they should be. They want a lot of things from us, and the thing they want the most is product availability. They want us to have in stock what they want to buy, when they want to buy it.
They want us to say yes pretty much all the time. We categorize all of our inventory as either A, B, or C, depending on the turns, the velocity of the turns, how fast-moving each SKU is. On the A items, where we want to be in stock almost all the time, we've improved the out-of-stocks by more than 25%. On-time and in-full delivery, another very important thing for our customers. Year-over-year, if you look at OTIF, on time and in full, it's up 650 basis points, a really good improvement there. Invoice accuracy, another really important thing for customers, was in the low 90s, now in the high 90s. Face-to-face customer meetings, getting in front of customers, finding out what they need, bonding with them, helping them solve their problems. Face-to-face customer meetings up 57% since July.
I talked about private label in the opening remarks. Very important for us because it's 2,000 basis points higher than the rest of our mix. We're now up to 10.6% of our roofing sales, so really good progress there. The bottom line for me is, we've addressed virtually every part of the company, from people to sales to pricing to procurement, ops, tech. I'm sure I'm leaving one or two things out, but pretty much everything in the company, and we've made tremendous progress in a very short period of time. We're just beginning to realize the benefits of all these activities. Sorry for the long speech, but I get very excited about this stuff. Thanks for the question, Trevor.
The next question is from the line of Garik Shmois with D.A. Davidson. Please proceed with your question.
Oh, hi. Thanks for taking my question. I was hoping you could expand on how you get from the $1.75 billion of EBITDA to $4 billion by 2030, and if you can just give us some updated building blocks in the bridge, that would be great. Thanks.
Yes, I can. Both, I give you the how you get there, I give you the building blocks. Thanks for the question, Garik. It's a very clear roadmap to get from where we are now, roughly $1.75 billion of EBITDA, to $4 billion by 2030. By the way, the $4 billion of EBITDA in 2030 assumes we just take all the free cash flow that we expect to generate between now and 2030, and just take that and pay down debt with it. If instead we took that free cash flow and did small acquisitions at single-digit EBITDA multiples, that gets us to $5.5 billion in EBITDA. The main levers, to answer your question, are mainly the things I've been talking about: sales, pricing, procurement, inventory management, operational excellence, and all that underpinned by state-of-the-art technology and a very highly motivated workforce.
Let me give you a little detail on almost all of those. Start with sales. We now have 194,000 customers, general contractors, subcontractors of all different types, home builders of all sizes, from the big production guys to regional and custom builders. And those customers are spread across the whole spectrum, residential, commercial, industrial, including data centers. As I said in the prepared remarks, we don't have a lot of cross-selling going on today, yet we will. We have fantastic relationships with those 194,000 customers, but we're typically selling them only a small part of what we could support them with, because we bought three different companies. Those three companies were independent before we bought them, obviously. Take a data center, for example.
We may have a fantastic relationship, and we do have fantastic relationships with lots and lots of data centers, but we're mainly selling them insulation, and there's no reason why we can't also be selling them waterproofing, for example. Every data center needs waterproofing. There's no reason we can't be selling them roofing. They all need roofs. Data centers don't need a lot of windows, but we can sell them a lot of doors. The cross-selling opportunity, not just with data centers, but throughout those customers we got, it's really enormous. There's no, in my mind, no better customer to get more business from than a customer you're already serving. So cross-selling is a big, big, big part of our future. Home builders. Home builders are a big opportunity too.
One of the main reasons we bought Kodiak is that they brought phenomenal relationships with the big production home builders and the custom builders. They were mainly selling them lumber or trusses or engineered products. So we're building on those great relationships, and we're going to sell them much, much more. We've already started talking to many, many of these customers about this, and there's a lot of appetite for this. I talked about dormant accounts a few minutes ago. These are customers who already have an account open with us. We know them, they know us. No matter why they left, we want to get their business back, and that's another big opportunity. Another lever is private label. I talked about that earlier too.
We make 2,000 basis points higher margin on private label than the rest of the business, so we're motivating our sales force to sell more private label, and we're going to add more SKUs under our private label. Pricing. Maybe I should have started with pricing, such a huge lever. We've made a lot of progress on pricing, but man, we've got a long way to go. The goal is to have pricing done objectively, based on data, using algorithms that take into account price elasticity and have everything integrated across the system, meaning the order fill rates, the percentage of the time a customer asks for a quote, and we're able to say, yes, we have that in stock.
Here's our quote. Demand forecasting, inventory management, and pricing is intimately intertwined with all those things, and you need the tech to process all that information in real time and deliver what's the right price that's fair for us and fair for the customer. Pricing is your best lever in pretty much any business because there's just no cost associated with it. Any extra price goes right to pretax. I'm not just talking about raising prices. It's optimizing prices. I think we're on a good trajectory to getting price where it needs to be, and I think we have an excellent pricing team. So I'm very optimistic about continuing that momentum. So a lot of data, a lot of data crunching, and tech enablement. Procurement. As a distributor, well, we're a distributor and an installer, but as a distributor, procurement is very, very important.
As we get bigger and grow, we will deserve and earn better rebates, and we will pass some of those savings from the rebates onto our customers, and we will keep some of that for ourselves. Let's talk about indirect procurement. Indirect procurement, we have thousands of suppliers. I am talking about everything from rent and garbage removal to pens and papers and computers to toilet paper. We have made very good progress on this, and now that we have owned all three companies for a few months, we have a huge opportunity to unify all of our spend. You do not have one branch buying Pepsi and another branch buying Coke, or you do not have one branch buying office supplies from Staples, another branch buying from Office Depot. There is nothing really visionary about this.
We have done this many, many times at several companies over the years, and it is fairly mathematical, and the outcome is predictable. You consolidate suppliers, get a lot of savings, particularly as we get. Those savings increase as we earn it, as we get bigger. Let's talk about direct procurement. What do we want? We want deep relationships with a smaller number of strategic supplier partners. We want to be important partners with them, and preferably their most important partner. There is quite a lot of overlap among the key suppliers across the three acquisitions we have recently done. We have a number of suppliers who we now buy over $1 billion a year from, and many, many more that we buy hundreds of millions of dollars from.
We want to get the billion-dollar price or the hundreds of millions of dollars price, and that is only fair. Let's talk about inventory management. We are investing so we have the right products in the right place at the right time. Availability of our fast-moving A items has been going up. We still have ways to go, but we have gone up a lot, lot. We have significantly reduced out-of-stocks on those A items. We are able to say yes much, much more often than predecessor companies were able to. Look, anybody can lower price to win lower margin or unprofitable market share. We are not doing that. We are investing in a better customer experience, and getting inventory right is a real big part of that. That is how we earn the right to take share and get a little more price, by giving customers better value.
That is very core to what we are doing here. It is laser-focused on the customer experience through all the things I have been talking about, and therefore, the customers want to do more business with us, and they are willing to pay a little bit more because the value is better. Another lever is the underperforming branches. Most of our branches are doing very well, but like any company, particularly one that has just completed three significant acquisitions, we have a minority, a significant minority, that are underperforming. Ironically, I consider that a good thing in the sense that we can turn those underperforming branches into better-performing branches, and that is a contributor to the roadmap. All the things that we are working on, all the levers, they are supported by technology innovation, and we need leading-edge tech to do all these things.
If we want customers to make us their first call or their first place that they go, we need to have a system that helps them get in and out fast, get some accurate information right away, and facilitates being on time and in full in terms of the last-mile delivery. Great technology enables all that, and there's a big variance between companies that can hit the ball out of the park on all these components and those that can't. Technology is the enabler, in my opinion. The technology also gives us a cost advantage because we can run the business more intelligently, more efficiently, more knowledgeably. The last lever I would list would be people. Maybe I should have said that first because people are so critical to the whole plan.
We're constantly refining the org chart and the compensation so that we can motivate and reward fairly people for doing the right things, for helping customers and fulfilling our mission to be the most customer-centric company in this industry. I want QXO to be a powerful magnet for talent. So, I want this to be the company that everyone in the industry wants to come work for. Ultimately, I want that to be reflected in the stock market by the highest multiple in the industry. All of these things, if we execute on all of these things well, it should translate into the numbers. Organic revenue should be higher than the market growth. If we're delivering great, superior customer service, we'll get more business from our customers. Our volume growth should be higher. Our pricing should be a little bit higher.
It'll show up in the margins. Over time, our margins should expand further as we become more efficient and get operating leverage on the fixed cost. This should translate not just into growing EBITDA, but growing free cash flow as well. So, when you put all this together, this is not a macro-dependent plan. It's an identifiable set of opportunities, very specific, very concrete, including the key ones I've just been talking about, and within our own business. These are things that we have control over, and that's what gives us confidence in our ability to grow EBITDA from about $1.75 billion today to $4 billion of EBITDA in 2030. Then if we use the cash flow not just to pay down debt, but we use it to do tuck-ins, to $5.5 billion.
Our next question is from the line of Tyler Grason with Patient Capital. Please proceed with your question.
Hi, thanks for taking my question. QXO is still in the early stages of its transformation. How do you balance building the new company with delivering on your commitments at QXO? Thank you.
Well, I have a lot of time. I work pretty much from when I wake up to pretty much when I go to sleep, and pretty much seven days a week. So, a lot of time, and I am doing stuff I am very familiar with. This is basically all I have been doing for a few decades. Over the last year, I got off of the three XPO boards, XPO, GXO, RXO, so that freed up a lot of time. So, I am very confident I can do both QXO and whatever NewCo is going to be called. We do not know the name yet. When you look back at XPO, for example, it was much more complex than running QXO and the new company. We had many, many, many companies inside the company before we divided up into three.
We had a European business, we had a contract logistics business, we had asset-based LTL. We had an asset-based trucking company before we sold it. We had a non-asset brokerage company. We had the leading last-mile logistics for heavy goods company. We had several billion dollars of freight under management in our managed transportation organization. We had an expedite business. We had an intermodal business. We had a lot of things going on. We had more than 150,000 employees over 30 different countries. So, doing lots of things at the same time is not a new thing for me. But I want to emphasize, I am 100% fully committed to QXO. I own about a quarter of the company. Pretty much all my friends and family are in the stock. My interests are firmly aligned with shareholders, and QXO is in great shape. We have made a ton of progress.
We got tons of momentum. We are doing well, even in a tough environment. When the market turns, we get a little help from the external environment, I am very confident we are going to soar. So, thank you for the question.
The next question is from the line of Adam Baumgarten with Vertical Research Partners. Please proceed with your question.
Hey, Brad. Just curious, what inspired the idea for the new company? Maybe why now? Just because you've been so active with QXO on the M&A side. What gives you the confidence to build another industry-defining business? Maybe if you could kind of give us a sense for how big you think this could be over time.
Thank you for the questions, Adam. It's not a new idea. This shouldn't really be a surprise to people. The people who know me, I've done it eight times before. This is what I do. It's part of my DNA. I've been doing it for 47 years. Everybody's into something, and I'm into building world-class companies. That's what I'm into. I enjoy it. I'm pretty good at it. I get a lot of happiness from doing this. So, really, that's my motivation. To your question about why now, because QXO is in excellent shape. QXO has a lot of momentum. QXO has gotten a lot done in a short period of time, and QXO is very well-positioned for when the market turns. I have the time, so the opportunity is there. You asked a question about what gives me confidence that I can do it again.
I don't want to be guilty of hubris, but I have done this a few times before. We all know that the past is not a guarantee of the future, but the playbook's worked really well so far, and I think the odds are pretty high that this will be successful. I understand how to do this, how to pick the right industry, how to get the right people, how to get these people to work together constructively, how to intensely listen to customers, how to intensely listen to employees, how to address what they want, how to run an organization efficiently, how to run it productively, how to get employee engagement sky-high, how to get customer satisfaction sky-high, how to lean into technology. So, it's the same playbook. It's the same playbook over and over again.
I wrote down, you asked about how big could this be. It really depends on the industry that we end up picking. I am not building the next company, and I have not built any company for a top-line bragging rights to build an empire. I am just not into that at all. I am trying to create shareholder value, dramatic shareholder value, and that is what the goal is. We could do that with a $5 billion revenue company. We could do that with a $100 billion revenue company. I just do not know yet, because I do not know what the industry is going to be. Scalability helps a lot, so I lean towards the larger, but smaller could be there too. If you look at the playbook, look how we have created all these bigger firms. One of the main fundamental ingredients is scaling it.
Starting a company at a certain level, and five, 10 years later, boom, there is much bigger level. You get all the advantages of scale and the economies being bigger and so forth. I do not know what industry we will do. There are still lots of industries with potential for running our playbook, and we will figure that out shortly.
Our next question is from the line of Joshua Gonzalez with Apollo Global Management. Please proceed with your question.
Hi, I appreciate the time. You have done this a couple times. What do you see as the biggest challenge in building NewCo?
Well, first of all, thank you for the partnership, and thank you for the money, Josh. We really appreciate it. With respect to the biggest challenge, it is the same challenge in any startup. It is always the people. Maybe in 20 years, it will be the bots or the AI or the robots, but for now, we are people. It is a company run by people. You have to get the right people. You have to get the right people, and you have to get the right interactions between those people. Those two things are very, very crucial. You have to get the culture right, and you have to get the right industry that has certain characteristics to it. It has to be an industry that is not a melting ice cube. It has to be an industry that has growth to it, just organic growth.
It has to be something that is fragmented, where it is already not consolidated. We do not want to be the little guy. Very important, it has to be something that is not going to get disrupted by AI or other advances in technology. That is a very big factor in my mind, picking an industry that, looking out 10, 20 years from now, is still going to exist, and it is still going to be valued, and it is not going to be replaced by AI-powered humanoid robots. I think if you get the things I just mentioned right, nothing is easy, but I think you get a lot of wind to your back. Get the right org chart, get the right people, get the right rules of engagement, get the right compensation tied to the goals, and let it happen.
The next question is from the line of Jeffrey Stevenson with Loop Capital. Please proceed with your question.
Thanks for taking my question, and Brad, congrats on today's announcement. Drawing on your experience building QXO, what would you approach differently this time at the new company?
Not much, Jeff, because as the cliché goes, don't fix something that ain't broke. The playbook's worked very well so far. We've had very nice returns. We've created market-leading companies that are still leaders long after I've gone, durable companies. I want to do as much exactly the same as before as possible, and as little different as possible. It's the same approach to business. It's no secret. I've written two books about it. It's all out in the open. I want to stick to the playbook. The playbook's worked. What's different now? Not much is different right now except for one big thing, which is tech and AI, and that's good and bad. We got to look at the opportunities, we got to look at the threats, and we can't minimize the gravity of the tech evolution that's going on.
On the one hand, we've got lots of capabilities now that we didn't have before, and we have tools that weren't available in the past. I know I, as a CEO, just like every CEO in the world now who's using AI tools, you can be so much more productive. You get so much more information much quickly, information that in the past didn't even get to you if you were the CEO, or if it got to you in dribs and drabs over weeks or months, you get, boom, you get it the same day now. So technology's good, AI's good, but it's going to change so much, and it's not written yet. The book isn't written yet about how this AI stuff's going to play out. We got to be aware of that.
We got to see what's going to change and make sure we're on the right side of that change. To answer your question specifically, Jeff, the basic principles stay unchanged, and we're going to try to stick to them as much as possible.
Our next question is from the line of Christine Yao with Morgan Stanley. Please proceed with your question.
Hi, thanks for the question. I want to ask about M&A. How are you guys thinking about the acquisition landscape for the new company? Is the priority to establish scale quickly or to be selective about the business you acquire?
Thank you for the question, Christine. It might be a roll-up, meaning an M&A roll-up. That is probably what it will be because that is what I have done a lot of, and I enjoy it. But it could be a roll-out. By roll-up, I mean buy a bunch of companies, integrate them, improve them, get the synergies, transform them. By roll-out, I mean find a business that works and just repeat it. Go back to United Rentals back in the 1990s and the early 2000s. We did 200 some odd acquisitions, got a ton of press for it. We also did an equal number, or roughly equal number of cold starts, that we called them greenfields back then, which meant we bought or leased space. We had three different templates for the sizes, and we located them exactly where we wanted them, and it was very organized.
When you do M&A, you get a lot of great stuff, and you get speed, but you get baggage too, and you got to work through all that stuff. The ROIs, when you analyze it, when you look back at United Rentals, we got much higher ROIs on the greenfields. It was much less capital that we had employed, and we designed them from scratch. I was on a plane ride the other day with a couple guys who run this veterinary chain, and I was very, very impressed what they had to say. They did not do any acquisitions, and now they have a large number, I forget the exact number, of vet urgent care hospitals around the country with huge profits, huge free cash flow, and they just got real estate and hired people and opened them up.
There are examples of having dramatic returns without having to do M&A, but I like doing M&A. I like organic growth too, and it depends on the industry and what creates most shareholder value. That is the North Star for us, is how do you create shareholder value? But I do not know how much roll-up, how much roll-out, so I cannot answer that yet. With respect to the industry, I mean, I barely started looking. The first thing was to get the vehicles. Now with CKX Lands, we got a great vehicle, and we have a head start because a few years ago, we looked at 55 industries, and there are other choices as well from that we looked at too and could not do more than one at the time.
I expect to get a lot of inbound ideas from partners around the world after today's announcement. I like exploring ideas. I like poking holes in each one of them and see if they are still standing after you poke holes in them. I love doing diligence on big value creation opportunities. Again, what I am looking for is scalability. Above everything else, it has to be something that you can create a lot of value and competitive advantage and customer delight by getting bigger, where there's economies of scale, where there's advantages to size. I like big markets. It's hard to create a big company in a small market. Something that's got a large TAM and total addressable market is very, very helpful.
I want to do something that's durable, going back to what I was saying in response to the earlier question, something that's not going to get disrupted by robotics or AI or other tech stuff. If anyone has a great idea, send me an email or hit me up on LinkedIn.
The next question is from the line of Trey Grooms with Stephens. Please proceed with your question.
Hey, good morning. Brad, you've raised substantial capital to build businesses before. You mentioned the playbook here, so is this going to be the same playbook with the new venture you announced today?
I don't know what the industry's going to be, Trey, so I don't know how capital-intensive it's going to be. It's too early to decide how we finance something because I don't know what we're financing yet, but we're starting pretty amply financed. We're starting with $1 billion equity, and we have a public company currency. I don't like to start with a $20 million Series A and come back later for another $50 million of Series B, and we're in a hurry. We don't have the patience for that. But if the goal is very large, like we pick something that we intend to be $50 billion or $100 billion, yeah, we're most likely going to raise more capital.
If we pick a smaller industry, if we see an opportunity to create dramatic shareholder value, but it's something smaller, maybe we raise some capital, but nowhere near as much. I'm not trying to dodge the question. I just don't know the answer yet.
Thank you. Our final question is from the line of Scott Schneeberger with Oppenheimer. Please proceed with your question.
Thanks very much. Good morning, and congratulations, Brad. I'm curious on how you're thinking about the timeline of the rollout. I know it's probably a first-half closure, but just how should we think about the timing of the new endeavor? And obviously, you have a very good management leadership team around you. How are you thinking about building out the leadership team for the new company? What are you looking for, and how large is that going to be initially? Thanks.
Scott, good to hear you. I think this will be the, assuming you cover the next company I start, which I hope you do, I think that will be like the fourth Brad Jacobs company you have covered, so thank you very much for that coverage over the decades. I very much appreciate it. The good stuff and the bad stuff. I appreciate the coverage. Thank you so much. With respect to your question, I love the question because it is core to the playbook in terms of the people. The playbook calls for exceptional people. The top few dozen people in a company set the tone for the thousands and thousands of other employees, so it is really, really important that those people are amazing. What I mean by, and that is the key thing.
If you can get several dozen amazing, talented people and get them all to get along with each other and work as a team. I always say teamwork makes the dream work, and I just love that phrase. Everything else, you can solve all the other issues that come up, but you need that. You need a few dozen people who are fantastic, who are very collaborative with each other, and then you can just rock the world. What do I mean by amazing? What I mean by amazing is somebody, when you meet them, they just dazzle you. They just captivate you. You meet them, you go, wow, that is a really impressive professional. I really admire that person. They really have their act together. They know what they are doing. They are very professional. They are very skillful.
They have a big ego on one hand because they want to accomplish grandiose things, but they have a Buddhist zero ego on the other hand because it is all about the team. It is not people who say I a lot. People say we a lot. You want people who want to work really, really hard. You do not want to be forcing people to work hard. You want to have the dynamic such that people are really into it and they get their heart into it, and they want to work really hard, and you want to be in a situation where you are telling them, can you work a little less hard? You are working too hard. Smart people, hardworking, intelligent, those are the kind of things we look for in any position, and that is not going to change. You asked something else about the timing.
I do not know the timing. The journey begins today, and we are in no hurry. We have no gun to our head. We are in a hurry to find the right industry to go after next, but we are not in a hurry to do the wrong industry. It could happen real fast. It could take a little more time, and we are very patient about that.
Thank you. This will conclude our question- and- answer session. I would like to turn the floor back over to Mr. Jacobs for closing remarks.
Thank you, operator, and thank you everyone on the call who joined us today, and thank you for your questions. I am looking forward to building this new venture, and at the same time, I remain enthusiastically committed to leading QXO to its substantial potential as a long-term value engine for our shareholders. We look forward to sharing more of our third quarter results later this week and continuing the conversation in conferences coming up tomorrow and other venues coming up as well. Thank you for your continued support, and have a fantastic day.
Ladies and gentlemen, thank you for your participation. This will conclude today's call. You may disconnect your lines at this time. Have a wonderful day.