Who is QXO? - PODCAST TRANSCRIPT

Editor's note: The following is the transcript of a live interview with Matt Fassler, Chief Strategy Officer with QXO. You can read the interview below, listen to the podcast or watch the recording.

Intro: Hello everyone and welcome to this month's RLW from RoofersCoffeeShop. My name is Heidi Ellsworth and we are here today to learn something that I have been really excited about and waiting for and that is who is QXO. I tell you what, we have record attendance today. Everyone is excited to find out who this is, what it's all about and we are honored here at the coffee shops to have QXO in the house with Matt Fassler to talk about that. 

Heidi Ellsworth: But before we get started, let's just do a few housekeeping and we want to remind everyone this is being recorded and it will be available within 24 to 48 hours. Also, the chat is open. We are ready for questions, so let's bring those questions on, as you all know, comments, how you're feeling, all the excitement around that, a few emojis here and there. We're excited to see you in the chat. Please let us know who you are and where you're calling in from so we can see that as you're chatting away. So we're looking forward to that. So let's get started. As I said, I am very, very excited to introduce Matt Fassler to the roofing industry here on this RLW. Matt, welcome. 

Matt Fassler: Thank you, Heidi. We are so excited to be here and the honor is definitely mine and ours here at QXO as we get to know you better and get to know our customers better. 

Heidi Ellsworth: I tell you what, this is a big deal, Matt. This is a really big deal and we're very excited to hear everything that you have going. But, can you tell us a little bit about you and about just what you do with QXO? 

Matt Fassler: Of course. So I am the chief strategy officer of the company. I report to Brad Jacobs, our CEO. I work as the title suggests, across our strategic function that could include M&A, it includes our transformation work, it includes a bit of finance, it includes being out in the field and getting to know our wonderful associates, being out in the branches, being out with our drivers and staying really, really close to the business. I came to QXO. I was actually a founding member of the organization. Brad Jacobs is our founder and our chairman and our CEO and we worked together starting a couple of years back to think about industries that really fit our playbook for transformation and growth. And, together with a group of colleagues, started QXO. And obviously, address the building products industry and roofing in doing so. 

Matt Fassler: Prior to that, I had worked with Brad and some of our other colleagues here at XPO, where we were fortunate to achieve enormous success in the transportation and logistics sector. And prior to that, I had a first career on Wall Street, [inaudible 00:03:20] consumer companies. But I did a lot of the home improvement space. So in a sense of coming back to my roots, I enter the roofing industry with my colleagues at QXO. 

Heidi Ellsworth: Well, Matt, I have to tell you, there is a rumor out there that once you're in roofing, you never leave roofing. So be careful. We have a good time together. We like this industry. So this is excellent. Speaking of which, again, I'm going to say the chat is open and I already see people out here. Ken Kelly, I see you there. Leanne. Thank you all for being here. Please let us know where you're calling from. And, feel free to ask questions and make comments as we go along with this exciting hour. So okay, Matt, let's start. You gave us a little bit of history there about how QXO started, but I'm really interested in why building products. You said you came home a little bit to the home improvement, but give us the bigger picture of why building products and how it's such a great fit for QXO. 

Matt Fassler: Absolutely. And by the way, I am daunted as I look at people who are online and we have an international audience. 

Heidi Ellsworth: Yes, me too. 

Matt Fassler: I'm very, very flattered by that on behalf of my colleagues and myself. So we were very much attracted to the building product space, because it is a perfect fit for the transformation playbook that we've executed as a team in the past and are going to execute again here at QXO. The industry we're addressing is a large one. There's an $800 billion total adjustable market between North America and Western Europe. It's a fragmented industry. There are more than 20,000 potential acquisition targets in the regions that we intend to service. It's about 7,000 in North America, almost twice that many in Europe. M&A, buying companies, is a big part of our business plan and a fragmented industry is very well suited for M&A and for consolidation. It's a growing industry. Why is it a growing industry? U.S. homes are in short supply. We haven't yet recovered from the housing shortage that followed the great financial crisis a number of years ago. 

Matt Fassler: Structures are aged. They need to get fixed. The average home in the U.S. is over 40 years. The average commercial structure in the U.S. is over 50-years-old. The nation is in need of at least $2 trillion of incremental infrastructure investment over the next 20 years. This is a great recipe for long run organic growth. Really, really important for us as we look at an industry, that we choose an industry where the trend is our friend, where it's more likely than not that the industry will be growing for many, many years. We also like to seek industries that are under-penetrated by technology. Now, technology is everywhere, but it has come to some industries faster than others. As we looked at this industry among many others, we thought that we could run our business a bit more efficiently than perhaps the average distributor, that we could bring cutting-edge ideas and cutting-edge technology to the business and really importantly, that we could help use that technology to help our customers improve their businesses. 

Matt Fassler: Now, Brad Jacobs, our chairman and CEO and our founder has started seven companies that reached a billion dollars or more of revenue. All of the businesses that he founded were in industries that had similar characteristics. And, as Brad was moving away from the CEO role at XPO and pursuing his next venture and the venture that became QXO, he diligenced many, many industries. And as we sifted through them with all of these criteria, size, fragmentation, growth, the opportunity to improve the business through technology, this is one of the very few that checked all the boxes. And in fact, it checked them collectively better than any other we had assessed. One item in particular with regards to roofing... And I know we'll speak a lot about roofing over the course of this discussion. Roofing is a steady business. It's an essential business. It's a business driven by repair and remodel. This is not a discretionary purchase, it's a purchase that we make out of need. If your roof is leaking, you need to fix it. And that, within building products, is one of the factors that drove us to roofing. 

Heidi Ellsworth: It all makes sense. And really, we've all been living it and breathing it and personally I can say it's great when the industry grabs the attention of a company like yours and with your history and really sees the potential. The potential of this industry, we all believe in that. I'm curious, Matt, on as you're looking at it, what lessons can you bring from all of this great history of you all working together and all of Brad's companies? What history can you bring to the roofing industry? And, when I say roofing, I think we got to be... It's exteriors, right? Because, you're exteriors interiors, you're doing distribution across the board with construction materials. But what lessons are you bringing into this market? 

Matt Fassler: Sure. And by the way, as you asked this question, I am daunted, because we have well over 100. 

Heidi Ellsworth: I know. 

Matt Fassler: And I shouldn't check, but I did. And so, what an amazing crowd that you have attracted and it really raises the bar for us here to do a good job. 

Heidi Ellsworth: There we go. 

Matt Fassler: So you asked a question about lessons that we bring from other industries. So we're bringing experience that we've developed building the multi-billion dollar companies that Brad has developed in the past, some of which I worked at with him. Naming some, XPO was a leader, is a leader in lesson truckload distribution and prior to spinning off two very successful additional businesses, was also in the contract logistics and freight brokerage space. Brad founded United Rentals, which quickly became the largest equipment rental company globally and remains so today. And Brad founded a company called United Waste, which was a consolidator in the waste management business back in the late-80s and early 1990s and did exceptionally well for shareholders. 

Matt Fassler: From buying and building those companies and creating tremendous amount of shareholder value and building fantastic enterprises, there's a few things we learned. Buy businesses intelligently. It's really important to buy a business at the right price. It needs to be a business that has good foundations. It's got to have good bones, if you will, the way you would look at a house. It's got to have good bones. But, the opportunity to be improved. If we look at companies that have a solid foundation, but perhaps some opportunities to tweak or upgrade business practices and we can buy it at the right price, that is a hallmark of an ideal acquisition for us. Secondly, integrate them quickly. Now, this is a little controversial for some people. Do you want to just buy it and leave it alone? Do you want to buy it and just own it and collect the profits, maybe reinvest the profits, but really just run a confederation of businesses? That is not the case. 

Matt Fassler: We want to operate one integrated enterprise that benefits from scale, that benefits from the effort and the momentum of the larger business. We improve operations. Part of this is integration. We bring ourselves together. We find the best ideas in the company and we improve the company along the lines of those ideas. And, we use technology as a force multiplier, if you will. Technology moves information. Technology moves product. Technology drives insight. It gives us enormous leverage in running a business. So buying well, buying the right business as well, integrating them quickly. Alongside that, improving operations and using technology through the process are all essential parts of what we've done through our careers. Because we've completed 500 acquisitions or more over a period of decades, Brad has been involved in all of them, different members of the team, involved in different groups of them. We know how to scale a business, both through M&A and organically. And we've embedded a very high performing team. 

Matt Fassler: Some of us have worked together before. There's a group of us who came... Most of us in the earliest days, some of us more recently, who spent time together at XPO and GXO. There are people who've gone back even further with Brad. Some of the people on the team are new. Some of our most senior people got here a week or two ago. Given where we are in our growth trajectory, we continue to seek and welcome new talent. Everyone has a great background, but we have senior people with experience at Amazon, at Goldman Sachs, at Kraft Heinz, at Microsoft, at Walmart. This is an addition to XPO and that family of companies. And if you think about what we've done in the past, at XPO, there were two large acquisitions of public companies that we made basically adjacent to each other, consecutively in 2015, 2016. 

Matt Fassler: We doubled the profits at each of those two large acquisitions in just three years. And we have publicly articulated our plans to double the profits of the Beacon business that we acquired and we intend to replicate the success that we've been fortunate to have through hard work and hopefully some acumen in prior businesses here at QXO. 

Heidi Ellsworth: Wow. I mean, that is a wealth of knowledge and a playbook, right? I mean, you have a playbook. You know where you're going. 

Matt Fassler: We do. We do. And really, in a sense, we have a playbook and we were looking for an industry that fit that playbook. Of course, we're going to learn new things. Of course, we're going to learn a lot about the roofing units. We've learned a lot. We're going to learn a lot more and the rest of building products. We're going to learn about new technology as it evolves. But the core of what we're trying to do and we're going to do is something we have done before. 

Heidi Ellsworth: That's great. That's so interesting. Let's take that next step, what you were just saying, that you had the playbook and it fit the industry you were coming into. So I mean, I know we talked a little bit about this at the beginning, but let's go a little bit deeper. What makes roofing so attractive to you all? 

Matt Fassler: Oh my. There's a very long list. And a couple of these are on the slide that you have prepared. 80% or so of the business is repair, remodel, as opposed to new construction. This work is not optional. This work is essential. There's really nothing discretionary about a roof. It's an industry for that reason that's resilient through all economic cycles. We studied Beacon very, very carefully. Beacon grew its revenue organically, that is, without M&A, revenue excluding the impact of M&A in 17 of the past 21 years. That includes points in time during the financial crisis. It includes COVID. We'd be hard-pressed to find a sector within housing and construction and building supplies and building materials that had that resilience during moments of economic volatility. Adding to that, infrastructure work and storm recovery contribute to demand. We have all lived this and we're all continuing to live it professionally and personally, but major weather events in the U.S. have quadrupled in the past 20 years. 

Matt Fassler: We've had a lot of storms. And, there's a lot of repair and remodel and recovery associated with that. At a moment in time when tariffs are a really big topic, roofing has limited tariff exposure. Most of the products we sell are made in the U.S. and sold in the U.S., so we're really outside the conversation. Or really should say, tariffs are really outside the conversation about our business. Tariffs exist, they impact the broader economy, but they're not top of mind as we plan our business. Beacon has a very strong install base. We were able to enter this industry through a very, very well-positioned company. Beacon had 110,000 customers or more. Well over a million deliveries. I think the number is 1.4 million deliveries annually. 

Matt Fassler: This is also a segment of building products that puts a premium on logistics that fits with our team's background. They mentioned a moment ago that XPO was in the business of trucking and logistics. I still sit on the board as [inaudible 00:18:29] of GXO, which is the largest pure play contract logistics business in the world. We have a phenomenal head of supply chain, who came from Walmart, from Genuine Parts, who has run logistics at massive scale and amazing efficiency. 

Matt Fassler: So the logistics dynamic, again, plays to our background and plays to our strength. You're going to see us streamlining inbound transportation, outbound transportation. And then, of course, there's a big opportunity to build an industry-leading e-commerce platform. And maybe, we'll have the opportunity to talk a bit more about e-commerce. 

Heidi Ellsworth: Yes. Yeah, I think everyone is really looking at that technology and how that's going to play in there. And really, the amount of opportunity and growth there is in roofing brings that right to the front of what we're doing. But I think, Matt, there's also questions on how large scale M&A fits into roofing. So one of the things that we have going on in roofing, you well know, is that we have a large amount of M&A on the contractor level, a large amount of M&A on the distributor level and on the manufacturer level. So with all of your experience, it'd be really interesting how you see that fitting in into this industry. 

Matt Fassler: Absolutely. Happy to. So M&A, well-executed, helps us to help all of our stakeholders and drive value across our ecosystem. So with M&A, we can buy better. That scale gives us the opportunity to increase our impact and we can share that value with our customers. The scale that comes from M&A gets us better market insight. If you're big, you have the right points of contact. And if you're listening, you can use technology to read and react and process and implement. So your insights on the market are better, your insights on pricing are better and you're able to cascade those through your organization. Scale also can drive better tech. Now, that's not automatic. That's a decision. If you're larger, you can use that scale to invest more in technology than smaller distributors. This helps service. 

Matt Fassler: And we know that delivering superior service is the name of the game. That has been the case in every business we've worked in and we have done best as an organization. This is the team that's come to QXO and more recently to the roofing space. We've done best as an organization for each other, for our shareholders and of course, for our customers, as our customer service has been strongest. Service means delivering on time. Service means delivering in full. We can do this with warehouse management tools. We can do this with route optimization. We use technology again to understand price in the market. We use it to interface with our vendors. We are going to centralize procurement. We had an element of that. We're going to improve that. We're also going to introduce-leading e-commerce and inventory visibility. The percentage of industry revenue derived from e-commerce is currently only mid-single digit. This is where building products were at large. 

Heidi Ellsworth: Yeah. 

Matt Fassler: That's expected to triple in the next five years and we intend to lead that charge. As the average contractor, many of you, gets younger, younger at heart certainly, but also the demographics are moving in that direction, the expectations for a seamless e-commerce experience are going to increase. And, they will doubtlessly, excuse me, spill over into our world. We've heard from our people and from our customers that their expectation of what we're going to bring to this industry in terms of e-commerce capability is increasing. Just to give you an anecdote, unscripted anecdote, we had our quarterly operating review yesterday and we have a phenomenal tech leader who's running e-commerce, who actually did come from Amazon. And prior to that, had been at Microsoft. And, his standard for delivering a top-flight e-commerce experience with a user interface that people will love, with inventory visibility that our customers will love are very, very high. And the room was absolutely buzzing. 

Matt Fassler: At the end of our session, we have an impromptu, "Go around the room. Who's your MVP from today? Who said something that impressed you? Who are you walking away from this meeting feeling best about? Like you learned something new from them or about them?" And my friend, Val, who is overseeing our e-commerce effort, probably had a tie for most votes. I made him one of my top contributors. He was blushing through the end of that meeting, because a lot of people called him out. One of the good things about our culture, we're not afraid to pile on. The fact that someone else said, "Well, he did a good job." Doesn't mean that you go choose someone across the table just to make them feel good. We reward contributions. And some of our most valuable contributions of the highest visibility improvements to the business are coming in technology. 

Heidi Ellsworth: That's the thing. And we've been seeing it. I've been so involved, obviously, on the tech front for many, many years. But to see this and to really see how it's a plan, a plan to really help the contractors go to that next level. I do have one question for you, Matt, that I want to bring up. And it said, Matt, you have mentioned how you are shielded from the tariffs and their uncertainty for your U.S. locations due to American manufacturing, made in the USA. Is QXO finding this a challenge for your Canadian locations? 

Matt Fassler: Great question. We have a really important business in Canada. A lot of our Canadian business is sourced inside of Canada. We do have a very small amount of cross-border business. U.S. vendors selling into Canada. Canadian vendors selling into the U.S. The totality of that impact is really not material for QXO overall. But we have a very nice and very important Canadian business with wonderful Canadian associates. We're managing that quite well. It's a great question. It's a question that we asked, as we were looking at Beacon and buying Beacon before it joined QXO. 

Heidi Ellsworth: Great. And I want to remind everybody that the chat is open and the Q&A, so if you have questions, please let us know. And, I see some questions coming in. I think we may answer those a little bit on the next slide and then I'll come back to that one. 

Matt Fassler: By the way, I like Louis's question, so I do hope we- 

Heidi Ellsworth: Okay. Okay. Well, let's do it then. I like that. "Will the e-commerce site be friendly to commercial roofers? Some distribution channels have begun an e-commerce integration, but it's geared more towards residential contractors." 

Matt Fassler: ... The first thing, Louis, that you should know is that we as a company are paying attention to this webinar. And, one of the reasons we love to wave the flag, but we love to listen and we love to learn and we love to get your great ideas. So that's points. And so, you're being heard here more broadly. Secondly, we have a really, really big and really, really important commercial business with a fantastic sales force. Some of the most energetic, magnetic, charismatic people, probably not business, our commercial salespeople who write some really big tickets with very long-term relationships, helping to build some really important landmark structures in the United States and they've done it over a very long period of time. And by the way, we have a really big and important RESI business. We have a really, really big and really, really important commercial business and I think pound for pound, we're a little bit bigger in terms of market share and commercial than we are in residential. 

Matt Fassler: By the way, we have what we call our complimentary business. Within the complimentary business, the biggest single piece is waterproof, even though there are other pieces as well. We intend to address each of our audiences with our e-commerce offering. We will have ways to work with commercial contractor and of course, we understand all the differences. We understand the differences in lead time. We understand the differences in project size. Obviously, the products are often different. So we are going to adjust the e-commerce offering to fit the needs of each of those verticals. What's going to be common is the technology underpinning them. The aesthetic will be consistent. The branding will be consistent. The tools that get you product information, the suggestive tools, the interface, the mobile applications, all of those will come from a common platform. But in terms of the commercial front end, that's going to be seamlessly integrated with our commercials offline, if you will, so that we have a single approach to the customer. So if you're a commercial customer, you'll have a salesperson. And then, of course, you'll have access online that's going to make perfect sense for what you do. 

Heidi Ellsworth: That's excellent, because I think everybody is looking at that. In fact, Louis says, "My sales rep is why I use QXO." There you go. "Dylan Valentine out in Southern Cal. Would hate to lose him, but it's nice to have more optics into who we decide to work with." So I think that's a compliment overall. 

Matt Fassler: That's great to hear. Dylan will get a shout-out from me. And, I'll let everyone at the company know that he was called out. We have a phenomenal sales team. We are trying to help our sales force with new tools to enhance their reach and give them more time to work directly with customers and to help you grow your businesses. And, all we want to do is enhance the relationships between our best salespeople and their customers. And we want to win a lot more customers. We want to earn a lot more business. And everything we're talking about today is in the interest of making that happen. 

Heidi Ellsworth: Yeah, yeah. We all win when we all rise. That's how it works. Well, let's talk a little bit more about some of those opportunities with contractors. Technology, e-commerce, number one bullet. So Louis, you've brought us right into it. Thank you so much. What else, Matt? 

Matt Fassler: Sure. So we think about opportunities. We have a win room that our sales enablement team is setting up to make sure that we are connecting with the right contractors who might not have been front and center for us or who might've been prior relationships for us, who for one reason or another had lapsed. We're not leaving a single stone unturned as we seek out new business and look to ensure strong relationships across the industry. As the slide says here, you're reading my mind, we are looking to improve the quality and availability of our inventory. Our branch teams and our central teams are using AI powered tools for inventory forecasting. We want to drive higher fill rates, we want to drive fewer delays. We paid a lot of attention the minute we got to Beacon, to say, "Hey, where are we light? Are there any SKUs, are there any items where we're running short on days of inventory?" And we made a pronounced commitment to build our inventory in those areas to ensure that we can fulfill customer's needs. We've rebalanced our inventory in essence to improve the availability of items. 

Matt Fassler: There's this amazing stat in our business. 4% of SKUs drive 80% of revenue. We know where we have to make our bed. And if and when we don't, we've done a pretty good job. I don't want to jump the gun. We have a long way to go. But we've done a pretty good job of getting those in-stocks optimized. We're doing a better job from inventory awareness by developing warehouse management systems and AI enabled TMSs or transportation management systems to improve warehouse and transportation efficiency. This is a big deal for contractors who want their items in-stock and delivered on time. I see here better support. One of the things we're doing by making the sales force more efficient, we're carving out time for certain people in the sales organization to be responsive and reactive. And the others to make sure they're going out and reaching our best customers and earning their business. 

Heidi Ellsworth: Wow. Well, you have a couple more questions, Matt, that go right along with what you're talking about. And I do want to make one comment myself is, as I'm sure you're very well aware, after COVID, there was a lot of pain around material shortages. And to hear you say that as a top priority of making sure that that isn't happening, I think, is going to be... A lot of people will be hearing that very excited. 

Matt Fassler: We're in control. I'm sorry to interrupt you. 

Heidi Ellsworth: No, go ahead. 

Matt Fassler: [inaudible 00:34:18] there. And, we have to be ready to play in any environment. And, one of the great things about having... We have this amazing inventory team. We have got another new hire who did not work with us before. He's a young gun. And, he's got incredible energy. And so, he was one of the other MVPs at the meeting yesterday. We are driving our coordination between inventory management, sales and marketing, our SNOP process, if you will and that has amazing reverberations across the organization and it's really happening. 

Heidi Ellsworth: That is great. Well, you've got a couple of great questions here. The first one is from Jennifer Jenkins. And she says, "What emphasis on technology, is there any prioritization for early focus between upstream, your supply chain, in-house automation or customer facing tools with contractors?" Anything beyond e-commerce? Just some of your priorities. 

Matt Fassler: I mean, it feels like you've been sitting in our planning meetings. We're really focused on all of it. We're going to, over time and very deliberately, upgrade our ARP. We're going to upgrade the interface that our employees have. Okay? This gives them the opportunity to work more efficiently. It'll make it easier for us to integrate acquisitions large and small. It'll also improve the taxonomy around product assortment, making sure that we have the ability to implement the proper categorization that reverberates across the organizations, the merchandising, in terms of marketing, in terms of e-commerce. You want to make sure that your product information management system is set up appropriately. 

Matt Fassler: So that's a really important adjustment that we're going to make. When it comes to supply chain, we're building out warehouse management, as I mentioned, we're building out transportation management, we're driving the e-commerce front end as well. When you asked about customer facing tools beyond e-commerce, I'd say, e-commerce really is writ large. E-commerce really is our engagement and communication with our customers. That includes driving visibility for customers. It includes tools that we have to hold ourselves and our people accountable. We want every delivery on time in full with negligible tolerance and very, very strong visibility on that. We want to respond, assuming that we get it as we get it, share that visibility with our customers. That's something that we think can be done even better on a go-forward basis. So that's Jennifer's question. Jennifer- 

Heidi Ellsworth: Yeah, that's Jennifer's. 

Matt Fassler: ... Thank you for your very smart question. Deeply appreciated. I don't know where Jennifer is based. I see her. She's in the Q&A. She didn't give her location. That's okay. I got a thumbs up. I love that. That's cool. 

Heidi Ellsworth: That's terrific. 

Matt Fassler: And then, we'll know we have a customer with a great question wherever you happen to be. 

Heidi Ellsworth: Let's see. So Jennifer, if you want to put where you're from in the chat, that would be great. If you don't, that's okay too. 

Matt Fassler: That's okay. 

Heidi Ellsworth: And we have another one from Steve, from Toronto Roofers. "My question is what are the key milestones on your digital roadmap for the next five years? And how do you anticipate those changes will reshape the sales dynamic for QXO? Specifically, what's your view on the future mix of digital versus traditional sales values?" Interesting. 

Matt Fassler: It's funny, we were having... Heidi, I'll confess to our audience, you and I had a five-minute chat before we got started. 

Heidi Ellsworth: Yes. 

Matt Fassler: We spoke about, in a different context actually, meeting the customer where they were, but also building out where you want them to be, right? It's the customer's decision. We want to be there for them. So right now, the majority of the business obviously is transacted in, we might call it, a terrestrial way. There could be an online interface for some of it. But there is a nice e-commerce piece. We were talking yesterday at our company meeting, sharing some of our internal thinking that there's no reason why the business wouldn't be at least 50% online. And what does online mean? It would be sourced online. Fulfillment is not necessarily that different. But certainly having an online element to engagement. And my view is why not? If that is the best way to address the customer's need. 

Matt Fassler: So Steve's specific question, Steve from Toronto Roofers, on the digital roadmap, a lot of it is building the internal tools, ensuring that the ERP is focus built, designed and optimized for what we are doing. Again, we're standing on the shoulders of giants, but we have the opportunity for real improvement. And then, building out the WMS, building out the TMS, building out the e-commerce engine and the interface for people in the organization. Our tech roadmap is really not a five-year roadmap. It's more of a 24-month roadmap. 

Heidi Ellsworth: Wow. 

Matt Fassler: We move very, very quickly. We work hard. We pull hard. And we pride ourselves on innovation. So I think the biggest value I can add in answering Steve's question, five years is a long time for us. We hope to make a lot of headway sooner than that. And, ultimately, it's all in service of the customer. Whether it enables us to take costs out for them, gives them better visibility, gives them better speed, gives them better on-time in full delivery. 

Heidi Ellsworth: Yeah. And when you think about what's going on with AI, with robotics, with everything, five years, who knows what's going to be happening? It's going to be crazy. 

Matt Fassler: We try to have a pretty good idea. But, we're it's a lot. Absolutely. 

Heidi Ellsworth: Yeah, that is so great. And I do want to note here, Jennifer is with Gutter Gloves. Sorry, Jennifer. Out of Franklin, Tennessee. So thank you, Jennifer. That is awesome. Okay, Matt, let's talk a little bit about the operational level. And really, what this change is going... How it's going to affect that. 

Matt Fassler: Yeah, sure. So we have streamlined our organization charts. We've reduced layers. We've broadened spans. What you're seeing now is faster decisions made at the local level. This is something that we want our customers to experience firsthand. You should also, our contractor customers, benefit from higher end stock rates, fewer missed deliveries due to the inventory rebalancing that I spoke about a moment ago. Our sales teams are in the process of getting equipped with better real-time pricing tools, better CRM integration tools. We want their experience to drive speed. We want their experience for you. We want them to drive accuracy for you. We want them to drive proper credit approvals faster for you. We want you, as a customer, to benefit from the knowledge that we accumulate about your engagement, your interest, your needs, your prior purchases through strong CRM compliance. And those of my colleagues at QXO, who are listening and I hope we have some people from the home team here. It's so important, right? Information is so powerful. And the network effect that we create when we record and share internally, the work we're doing, helps each of us tremendously. 

Matt Fassler: A couple of other things to talk to, our branches are getting upgraded systems and interfaces to understand their business trends, their inventory, tracking their customers. We're going to be talking about voice-to-text point-of-sale systems, upgrade of the mobile apps, which I intimated a moment ago. And we're investing in proper staffing and servicing at the branch level. We have amazing people in the field. We came to this company from the outside. Huge positive surprise about the amazing, terrific people who worked at Beacon. We're really, really... Oh, Beth, thank you. Thank you. That's awesome. Great to see. We're very, very engaged with and impressed by the thousands of people who joined us, who are working alongside us today at QXO. Christine, thank you so much. Amazing. I'm flattered to have you on the line. Thank you. 

Heidi Ellsworth: Yeah. Oh my gosh. This is so great. Let's move on and talk. Thank you for being in the chat. Everyone. Please let us know. Raise your hand. Get in there in that chat. But let's, Matt, look at the last three months and what's happened. Because I have to tell you, being in sales and marketing my entire career in roofing, you all impressed the heck out of me with what you did with your rebranding. So please share. 

Matt Fassler: I can't believe it's only three months. 

Heidi Ellsworth: I know. 

Matt Fassler: We were Sitting at our operator view yesterday and it was July 30th. Said, "July 30th." I said, "Oh my goodness. We bought this company on April 29th." It's three months and a day. And, a lot of us feel like we've been together forever. Some of our divisional presidents were in the room, like Larry and Pete and Alan and others from the old vegan and it was like, "Oh my goodness. I feel like I've known you guys my whole professional life." And that's an amazing testimony. Talk about integrating the businesses, right? We are one group of people. 

Matt Fassler: So we rebranded to QXO on day one. This included e-commerce. It included our customer facing app. Generally speaking, you went out through a branch, the signage said QXO. I was amazed. I was absolutely amazed. But, we believe in this. Brad believes in it. He's done it before. And we've done it before. You can build a brand out of nothing. And if you bring people together and give them a cause, it's a business cause, it's a business mission and a point of pride. And that point of pride is your collective effort around the set of values and the desire to succeed, it takes on a life of its own. And this is why that speed is so very important. And the fact that speed is important in itself sends a message, not only to the people inside the company, but to our customers as well. And these guys really want to be this QXO. "What do they stand for? What is this all about? Why is it so important?" And then, they see what we bring to the table. 

Matt Fassler: As I intimated a moment ago, we flattened the organization chart. We removed layers to improve accountability and speed. We promoted a lot of people. We took a lot of very high potential people and gave them more responsibilities. And we continue to do that. We rolled out a very visible transformation roadmap across pricing and procurement and assortment and logistics and compensation. We launched, as I said earlier, I think, a win room for lead generation. And it's already converting. 

Matt Fassler: And those of you who've gotten new calls, you've heard from us, it's probably the win room that led us to go find you. And there's more of that coming, by the way. We realigned incentives, ensuring that our sales force got paid for outcomes that were really important to the business. We improved our warehouse operations. We were bringing in better skew handling and automation. One thing we did, we surveyed 3,500 employees and we used their feedback to guide our roadmap. Brad Jacob reads every single response. And the senior management team are expected to read every single response. It is a daunting task. It is a daunting responsibility. And it is the most educational reading you can do. You're getting an encyclopedia of your company written freshly every three months. 

Heidi Ellsworth: Yeah. Wow. 

Matt Fassler: And, we ask our people, "What's your job satisfaction? And what is your best idea or your best ideas to improve the company?" We also asked, by the way, when we arrived, "What would we be crazy to change?" So we don't ask a lot of questions. It's not 50 questions. It's three questions. One's a numerical answer and the two have substantive answers. And we absolutely take them to heart. Brad held a live town hall the day we announced, another one the day we closed. We had over 3000 attendees on each of them. He took questions just as you're doing now. I've learned something from him about how to engage in moments like this and how very important it is. He is a very, very accessible CEO. He understands how to draw ideas from an organization and build that camaraderie, but to do it with substance and to do it by building a culture of listening and mutual reinforcement. So that's a small part of the changes that we made. 

Matt Fassler: Tammy asked a question, if I can just say it, "What was the investment to rebrand?" It was significant. It was a real amount of money. And, we knew that, going in. But, it was really important for us to do it, to launch the company with success and to bring the company together. So what does QXO stand for? So Brad founded XPO. XPO came from Old Story Express One, it was the company, XPO became the ticker and then when we spun a couple of companies out of QXO. We had RXO. And then, we had GXO. The XO always means love, right? So that's a common factor. Q could mean quality. But we have now, of the 26 possible blank XO combinations that could trade in the New York Stock Exchange, we now own four of those tickers. 

Matt Fassler: If you watch CNBC, hopefully, from time to time, you see them. You see one of them across your screen. So it's a brand of sorts that Brad has built around his businesses and we share very businesses, different shareholders, for the most part. Independent businesses. We are trying to make money for our own shareholders and different groups of employees and totally arm's length, but we do share a desire to drive great customer outcomes, great employee outcomes, great shareholder outcomes. 

Heidi Ellsworth: That's great. Well, I have a really interesting question that came in through the Q&A that I want to make sure we get out there. And it said, "You mentioned plans..." And it's from Ben. Thank you, Ben Krieger. "You mentioned plans to streamline and expand your procurement efforts. As a roofing tool manufacturer who has been working to become a vendor for QXO after a distributor I was working with was bought by Beacon and then QXO less than a month later, can you speak more on your plans to expand your product offerings and make new technologies available to the market?" 

Matt Fassler: First of all, Ben, matt.fassler.qxo.com, send me an email. I want to make sure you get the proper focus and attention. And by the way, anyone else who's listening, who for any reason has something to say that you want us to hear, you now have my email address and I'll make sure it gets to the right person. We are always looking to grow. We're looking to grow within our core categories. Thanks, Heidi, for doing that. We're looking to grow within our core categories, within roofing, commercial and residential. Within waterproofing, within siding, within some of the other complementary products, in that we sell. And there are certain complementary areas that are a little less consolidated where we have more opportunity to grow. They are less well-developed. We can maybe have more impact on those markets. We're hungry to understand those and to grow in them. 

Matt Fassler: And, we have aspirations to become a $50 billion company. Some of that might happen in roofing, some of it might happen in areas that are directly adjacent to roofing. Some of those areas might be further afield. So we have been, really for more than two years now, voraciously consuming every piece of insight we get about the business. We've obviously put our money where our mouth is and we put our money against that research and into a really high quality sector. So Ben, that's the way we're thinking. If you have something particular you want me to look at to make sure that we understand that you're getting the proper sounding here at the company, we'll absolutely take a look. 

Heidi Ellsworth: Matt, thank you. That's more than anybody can ask. We are getting right down to the end. So we've talked a lot about this, Matt, but maybe, I would love for you just to zero in a little bit on one of the bullet points on here. Amazon-like e-commerce experience. I think that's going to capture a lot of people's attention. And if there's any other things we want to summarize, that would be great. 

Matt Fassler: I mean, tech has to be embedded in every function. I mean, there are a lot of things that make Amazon a great company. As a consumer, you face technology, but also technology is embedded in their operations. By the way, look at Walmart, same thing. Some of the most amazing... And by the way, Walmart, you're dealing with more so through the store. Walmart is one of the most tech forward companies in America. I talked about the benefits of scale for investing in technology. Walmart does it. It is no accident that our head of supply chain has a Walmart heritage. Our head of procurement came directly from Walmart. Our head of e-commerce technology has spent a lot of time at Amazon, is still based in Seattle in fact and we've been hiring in that part of the world. So tech is embedded in our pricing tools. Tech is embedded in our sales tools. Tech is embedded in our business intelligence tools. Tech is embedded in our forecasting. It's embedded in our warehouses, embedded in our transportation management. Both of those are more so on the come. But they'll be very, very high impact. 

Matt Fassler: The way we store access and manipulate data, really, really foundational for us. And across the board, intelligent automation is replacing manual effort, all for the betterment of the customer's experience. We want to be able to do more for contractors, want to do it at the right cost. We want to give you good value. We want to have better visibility. And at the same time, you will have better visibility. 

Heidi Ellsworth: That is great. I love it. And, you can just take that right onto the next thing, because what should everyone expect? Let's bring it home. 

Matt Fassler: We want to be a trusted partner. We lead with integrity. Do the right thing is one of our six core values as a company. We want to, as I've said already, be a tech forward leader. We want to invest in tools that help contractors win. We want to be transparent. We want our pricing to be transparent. We want product availability to be transparent. We want service expectations to be transparent. We want to make good on those. We want to give you local service that is backed by our national scale and all the benefits that brings. We have a culture that values safety, which I haven't spoken enough today. That's my one shortcoming on today's webinar. There might be others. But- 

Heidi Ellsworth: There will be others. 

Matt Fassler: ... Safety is critical for us along with reliability and respect. Lead with safety is actually our first value. Our top value. We have a team that we want to be easy to work with. We raise the vibe. We seek to raise the vibe. You got to come in, when you work with us, come in smiling, come out optimistic, come in enthusiastic. All of our customers deserve that. And we never stop building. We have a mindset of continuous improvement that starts from the top. I've worked with Brad for seven years. He is an incredibly curious and driven person. He's a highly focused person. His curiosity, his innovation, his intensity are infectious in our culture. And, his insistence that we focus on the customer, listen to the customer is part of our chemistry. It's become part of our collective DNA. It's really, really important. So you should expect us to deploy all of that for the benefit of the contractor. 

Heidi Ellsworth: That is great. Matt, wow, thank you. This is beyond expectations. This has been so informative. You got a heart that just came up. People are saying, "Thank you." 

Matt Fassler: I am moved. I am moved. 

Heidi Ellsworth: Everything. Oh, thank you so much for being on. And thank you for embracing this industry that we love so much and taking us to places that are just going to be pretty dang wonderful. So thank you so much. 

Matt Fassler: Heidi, you are amazing and your enterprise is amazing and the product you bring to people, it's fantastic. The industry is lucky to have you. And we are so fortunate to be included in that family. Thank you so much. 

Outro: Thank you. You made my day. And all of you made our day. Thank you so much for being on here. Record attendance. We appreciate each and every one of you. Be sure to have a great day and join us next month for our next RLW. And I have to tell you, if you're wondering who Amrise is, join us at the end of August and you'll find out then. Once again, thank you, Matt, so much.