Company: QXO-PB
Filing Date: 2025-05-08
Form Type: 10-Q
Source: 0001628280-25-023834
Chunk: 42

Company: QXO, Inc.
Filing Date: 2025-05-08
Form: 10-Q
Item: Part I, Item 1
Chunk 42
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 that are accessible at the measurement date for assets or liabilities. The fair value hierarchy gives the highest priority to Level 1 inputs.Level 2: Observable prices that are based on inputs not quoted on active markets but corroborated by market data.Level 3: Unobservable inputs are used when little or no market data is available. The fair value hierarchy gives the lowest priority to Level 3 inputs.

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The Company’s current financial assets and liabilities approximate fair value due to their short-term nature and include cash and cash equivalents, accounts receivable, accounts payable, and accrued liabilities. Property and EquipmentThe following is a summary of property and equipment, net:As of(in thousands)March 31, 2025December 31, 2024Leasehold improvements$99 $99 Equipment, furniture, and fixtures4,344 4,198 Property and equipment4,443 4,297 Less: Accumulated depreciation(3,908)(3,852)Property and equipment, net$535 $445 Depreciation expense related to these assets for the three months ended March 31, 2025 was $56,200, compared with $66,900 for the three months ended March 31, 2024.Deferred RevenueDeferred revenue consists of maintenance on proprietary products (contract liabilities), customer telephone support services (contract liabilities) and deposits for future consulting services that will be earned as such services are performed over the contractual or stated period, which generally ranges from three to twelve months.Advertising and MarketingAdvertising and marketing expenses consist of advertising and payroll related expenses for personnel engaged in marketing, business development and selling activities. These costs are expensed as incurred. Share-Based CompensationThe Company recognizes share-based compensation expense based on the equity award’s grant date fair value. For grants of restricted stock units (“RSUs”) subject to service-based vesting conditions, the fair value is established based on the market price of the common stock on the date of the grant. For grants of performance-based restricted stock units (“pRSUs”) subject to market-based vesting conditions, the fair value is established using a Monte Carlo simulation lattice model. The determination of the fair value of share-based awards is affected by the Company’s stock price and a number of assumptions, including volatility, performance period, risk-free interest rate and expected dividends. The Company accounts for forfeitures as they occur. The grant date fair value of each RSU is amortized over the requisite service period.Interest Income (Expense), net The following table presents