Latest news with #DrewWilkerson
Yahoo
5 days ago
- Business
- Yahoo
LTL proving to be big growth engine at RXO
In a freight market that is not offering any help to its truckload operations, 3PL RXO Inc. has found a short-term savior: its growing LTL business. In a quarterly earnings report that on major financial numbers reflected the reality of the ongoing freight recession, RXO executives in their earnings call with analysts boasted of the big gains it is making in its push to grow LTL activities on both an outright basis and as a percentage of the company's total operations. RXO's (NYSE: RXO) overall brokerage volume growth was up 1% year over year, which CEO Drew Wilkerson noted still exceeded the Cass Freight Index, which contracted more than 3% for the quarter. But for RXO, its LTL brokerage volume was up by 45% year-on-year, and it follows a 26% growth in the first quarter. 'We continue to win in this area because we make LTL shipping easy for our customers,' Wilkerson said. The CEO said RXO has made a push in its LTL operations by investing in 'cutting edge technology that improves productivity and reduces costs for our team while giving LTL customers complete visibility.' Wilkerson said RXO has relationships with 'nearly all the LTL providers in North America.' 'Growing our LTL business is a key part of our company strategy, because it provides a stable source of EBITDA with strong margins across market cycles,' he said. In his comments on the call, Jared Weisfeld, RXO's chief strategy officer, said LTL activities were 32% of all brokerage volume in the second quarter. That was up 1,000 basis points from a year ago, he said, and was the highest level in RXO history. Not surprisingly, when phone lines were open to questions from analysts, one of the first was about the ongoing trend of LTL being a growing share of the RXO business. Wilkerson said the change grows out of 'the relationships we have on the truckload side. These are customers who have been with us a really long time, and they're large customers, and they come to us and they say, LTL is a small piece of our overall transportation spend. I'm working with a few of the national players, but I'm having to go into different platforms, and I'm having to look for claims, lost shipments, damages, all of those things.' Familiarity with RXO platform a key plus But Wilkerson said since these customers are familiar with RXO and in particular its online platform RXO Connect, they see that as a logical step to move some of their LTL business–which might be a small percent of their overall freight spend–onto that platform. 'They think if we can put everything on RXO Connect and now we can start capitalizing on some of the capacity from the regional players as well, this can be something that gives us better visibility,' he said. Wilkerson also drove home the message that the latest numbers are not an aberration. 'LTL is going to be part of our growth story for a long time,' he said. 'We're just getting started. He reviewed the company's data. LTL volume recently had been just about 10% of overall brokerage volume. It's now more than 30%. 'I want that volume to get up over 50%,' he said. What he described as the inherent stability of LTL relative to truckload 'adds to margins.' Gross profit per load, according to Wilkerson, 'doesn't have the volatility that truckload does. So it's good stable EBITDA for us as a book of business.' Wilkerson brought in an unusual benchmark for the LTL business: the price of a candy bar. Snickers, in particular. The Snickers analogy An analyst noted that despite the excitement about LTL, its gross profit per load has moved down slightly in recent months, according to a table in RXO's presentation. The size of the gross profit per load was not disclosed, but the graphic on its movement showed LTL brokerage volume at RXO soaring and gross profit moving down slightly in the last two quarters. 'I don't think you can walk outside of your office in New York and buy a Snickers bar for how little gross profit per load is down whenever you look at it sequentially,' Wilkerson said. (The author of this article, not having bought a Snickers bar in New York recently despite residing a train ride away from Manhattan, is unaware of how much it costs. But you can buy a box of 40 of them on Amazon for $51.90 before any shipping or taxes. You can also do the math). But that is a positive, Wilkerson said. 'That's the beauty of the LTL business,' he said. The RXO chart showing little change in the gross profit per load shows that 'it is very, very stable on what it does.' Some of the RXO LTL business that it has recently onboarded, Wilkerson said, has been for relatively short length of haul distances. 'So that means your revenue per load comes down, and therefore the gross profit per load is a little bit lower on those, but it's still a good margin percentage,' he said. 'It's highly automated and accretive.' Among other key points made on the call: –With the completion of merging the technologies of both RXO and the legacy Coyote Logistics brokerage–acquired by RXO in the third quarter of last year–efficiencies are starting to develop in many areas. Weisfeld said the company's 'buy rate'–what it pays to secure capacity–has improved by about 30 to 50 basis points 'in a period where rates were inflationary. So that yield is a significant cost avoidance.' –Truckload brokerage volume declined 12% year on year, Wilkerson said. But he said truckload gross margin was 14.4% in the quarter, which was above the midpoint of the company's projections. Gross profit per load in truckload was up 7% sequentially, which Wilkerson said was the strongest sequential increase at RXO in three years. It is expected to rise in the third quarter as well. Technology enhancements and the productivity gains that go along with that are the primary drivers of that improvement, he added. Weisfeld said a slowdown in automotive activity accounted for about 25% of the decline in truckload brokerage volume. 'RXO is uniquely exposed to the current automotive headwinds,' he said. –The split between contract and spot business at RXO was 73% for contract and 27% for spot. 'We continue to operate in a prolonged soft freight environment with minimal spot opportunities,' Weisfeld said. More articles by John Kingston In brief comments, Trimble CEO introduces new product for matching capacity with shippers At C.H. Robinson, improved profitability, productivity and a lot fewer workers Each driver's payout in Lytx Illinois biometrics case will be between about $650 and $850 The post LTL proving to be big growth engine at RXO appeared first on FreightWaves. Sign in to access your portfolio
Yahoo
6 days ago
- Business
- Yahoo
RXO Announces Second-Quarter Results
Brokerage volume growth of 1% year over year driven by less-than-truckload volume growth of 45% Beginning to realize benefits from unified carrier coverage operations; Brokerage gross margin of 14.4% in the quarter Last Mile achieved 17% year-over-year stop growth, the fourth consecutive quarter of double-digit growth Strong quarterly cash performance with cash balance increasing sequentially CHARLOTTE, N.C., August 07, 2025--(BUSINESS WIRE)--RXO (NYSE: RXO) today reported its second-quarter financial results. RXO Chairman and CEO Drew Wilkerson said, "RXO executed well in the second quarter despite the prolonged soft freight market. Our Brokerage business outperformed the market, growing volume by 1% year-over-year driven by 45% growth in less-than-truckload volume. We're seeing early benefits from our newly combined carrier and coverage operations, and we delivered Brokerage gross margin of 14.4% in the quarter. Last Mile continued its impressive run of year-over-year growth, achieving 17% stop growth, the fourth consecutive quarter of double-digit growth. Our cash performance in the quarter was strong, and we increased our cash balance sequentially from the first quarter." Wilkerson continued, "The actions we're taking now are yielding results in the short term and positioning us well for the long term. We're focused on growing profitably, and we're realizing the benefits of our increased scale. That scale, combined with our cutting-edge technology, is driving productivity improvements. RXO is uniquely positioned to deliver increased earnings power and free cash flow over the long term and across market cycles." Companywide Results RXO's revenue was $1.4 billion for the second quarter, compared to $930 million in the second quarter of 2024. Gross margin was 17.8%, compared to 19.0% in the second quarter of 2024. The company reported a second-quarter 2025 GAAP net loss of $9 million, compared to a net loss of $7 million in the second quarter of 2024. The second-quarter 2025 GAAP net loss included $10 million in transaction, integration, restructuring and other costs. Adjusted net income in the quarter was $7 million, compared to adjusted net income of $4 million in the second quarter of 2024. Adjusted EBITDA was $38 million, compared to $28 million in the second quarter of 2024. Adjusted EBITDA margin was 2.7%, compared to 3.0% in the second quarter of 2024. Transaction, integration, restructuring and other costs, and amortization of intangibles, impacted GAAP earnings per share by $0.09, net of tax. For the second quarter, RXO reported a GAAP diluted loss per share of $0.05. Adjusted diluted earnings per share was $0.04. Brokerage Volume in RXO's Brokerage business, including the impact of the Coyote Logistics acquisition in both periods, increased by 1% year over year in the second quarter. Less-than-truckload volume increased by 45% but was partially offset by a 12% decline in full truckload volume. Brokerage gross margin was 14.4% in the second quarter. Complementary Services Managed Transportation again increased the synergy loads provided to Brokerage. Last Mile stops grew by 17% year-over-year. RXO's complementary services gross margin was 22.8% for the quarter. Third-Quarter Outlook RXO expects third-quarter 2025 adjusted EBITDA to be between $33 million and $43 million. In Brokerage, the company expects overall volume growth to be approximately flat year-over-year and gross margin to be between 13.5% and 15.0% in the third quarter. Conference Call The company will hold a conference call and webcast on Thursday, August 7 at 8 a.m. Eastern Daylight Time. Participants can call in toll-free (from U.S./Canada) at 1-800-549-8228; international callers dial +1-289-819-1520. The conference ID is 82712. A live webcast of the conference call will be available on the investor relations area of the company's website, A replay of the conference call will be available through August 13, 2025, by calling toll-free (from U.S./Canada) 1-888-660-6264; international callers dial +1-289-819-1325. Use the passcode 82712#. Additionally, the call will be archived on About RXO RXO (NYSE: RXO) is a leading provider of asset-light transportation solutions. RXO offers tech-enabled truck brokerage services together with complementary solutions including managed transportation and last mile delivery. The company combines massive capacity and cutting-edge technology to move freight efficiently through supply chains across North America. The company is headquartered in Charlotte, N.C. Visit for more information and connect with RXO on Facebook, X, LinkedIn, Instagram and YouTube. Non-GAAP Financial Measures We provide reconciliations of the non-GAAP financial measures contained in this release to the most directly comparable measure under GAAP, which are set forth in the financial tables attached to this release. The non-GAAP financial measures in this release include: adjusted earnings before interest, taxes, depreciation and amortization ("adjusted EBITDA"); adjusted EBITDA margin; and adjusted net income (loss) and adjusted diluted income (loss) per share ("adjusted EPS"). We believe that these adjusted financial measures facilitate analysis of our ongoing business operations because they exclude items that may not reflect, or are unrelated to, RXO's core operating performance, and may assist investors with comparisons to prior periods and assessing trends in our underlying businesses. Other companies may calculate these non-GAAP financial measures differently, and therefore our measures may not be comparable to similarly titled measures of other companies. These non-GAAP financial measures should only be used as supplemental measures of our operating performance. Adjusted EBITDA, adjusted EBITDA margin, adjusted net income (loss) and adjusted EPS include adjustments for transaction and integration costs, as well as restructuring costs and other adjustments as set forth in the attached tables. Management uses these non-GAAP financial measures in making financial, operating and planning decisions and evaluating RXO's ongoing performance. We believe that adjusted EBITDA and adjusted EBITDA margin improve comparability from period to period by removing the impact of our capital structure (interest and financing expenses), asset base (depreciation and amortization), tax impacts and other adjustments that management has determined do not reflect our core operating activities and thereby assist investors with assessing trends in our underlying business. We believe that adjusted net income (loss) and adjusted EPS improve the comparability of our operating results from period to period by removing the impact of certain costs that management has determined do not reflect our core operating activities, including amortization of acquisition-related intangible assets, transaction and integration costs, restructuring costs and other adjustments as set out in the attached tables, and thereby may assist investors with comparisons to prior periods and assessing trends in our underlying business. With respect to our financial outlook for the third quarter of 2025 adjusted EBITDA, a reconciliation of this non-GAAP measure to the corresponding GAAP measure is not available without unreasonable effort due to the variability and complexity of the reconciling items described above that we exclude from this non-GAAP measure. The variability of these items may have a significant impact on our future GAAP financial results and, as a result, we are unable to prepare the forward-looking statement of income and statement of cash flows prepared in accordance with GAAP that would be required to produce such a reconciliation. Forward-looking Statements This release includes forward-looking statements, including statements relating to our outlook, integration with Coyote Logistics and cash synergies. All statements other than statements of historical fact are, or may be deemed to be, forward-looking statements. In some cases, forward-looking statements can be identified by the use of forward-looking terms such as "anticipate," "estimate," "believe," "continue," "could," "intend," "may," "plan," "predict," "should," "will," "expect," "project," "forecast," "goal," "outlook," "target," or the negative of these terms or other comparable terms. However, the absence of these words does not mean that the statements are not forward-looking. These forward-looking statements are based on certain assumptions and analyses made by us in light of our experience and our perception of historical trends, current conditions and expected future developments, as well as other factors we believe are appropriate in the circumstances. These forward-looking statements are subject to known and unknown risks, uncertainties and assumptions that may cause actual results, levels of activity, performance, or achievements to be materially different from any future results, levels of activity, performance or achievements expressed or implied by such forward-looking statements. Factors that might cause or contribute to a material difference include the risks discussed in our filings with the SEC and the following: the effect of the completion of the transaction to acquire Coyote Logistics on the parties' business relationships and business generally; competition and pricing pressures; economic conditions generally; fluctuations in fuel prices; increased carrier prices; severe weather, natural disasters, terrorist attacks or similar incidents that cause material disruptions to our operations or the operations of the third-party carriers and independent contractors with which we contract; our dependence on third-party carriers and independent contractors; labor disputes or organizing efforts affecting our workforce and those of our third-party carriers; legal and regulatory challenges to the status of the third-party carriers with which we contract, and their delivery workers, as independent contractors, rather than employees; our ability to develop and implement suitable information technology systems and prevent failures in or breaches of such systems; the impact of potential cyber-attacks and information technology or data security breaches; issues related to our intellectual property rights; our ability to access the capital markets and generate sufficient cash flow to satisfy our debt obligations; litigation that may adversely affect our business or reputation; increasingly stringent laws protecting the environment, including transitional risks relating to climate change, that impact our third-party carriers; governmental regulation and political conditions; our ability to attract and retain qualified personnel; our ability to successfully implement our cost and revenue initiatives and other strategies; our ability to successfully manage our growth; our reliance on certain large customers for a significant portion of our revenue; damage to our reputation through unfavorable publicity; our failure to meet performance levels required by our contracts with our customers; the inability to achieve the level of revenue growth, cash generation, cost savings, improvement in profitability and margins, fiscal discipline, or strengthening of competitiveness and operations anticipated or targeted; a determination by the IRS that the distribution or certain related separation transactions should be treated as taxable transactions; and the impact of the separation on our businesses, operations and results. All forward-looking statements set forth in this release are qualified by these cautionary statements and there can be no assurance that the actual results or developments anticipated by us will be realized or, even if substantially realized, that they will have the expected consequences to or effects on us or our business or operations. Forward-looking statements set forth in this release speak only as of the date hereof, and we do not undertake any obligation to update forward-looking statements to reflect subsequent events or circumstances, changes in expectations or the occurrence of unanticipated events, except to the extent required by law. RXO, Inc. Condensed Consolidated Statements of Operations (Unaudited) Three Months Ended June 30, Six Months Ended June 30, (Dollars in millions, shares in thousands, except per share amounts) 2025 2024 2025 2024 Revenue $ 1,419 $ 930 $ 2,852 $ 1,843 Cost of transportation and services (exclusive of depreciation and amortization) 1,118 700 2,271 1,399 Direct operating expense (exclusive of depreciation and amortization) 47 50 95 103 Sales, general and administrative expense 214 154 424 299 Depreciation and amortization expense 30 17 62 33 Transaction and integration costs 7 7 13 8 Restructuring costs 3 2 17 13 Operating income (loss) $ — $ — $ (30 ) $ (12 ) Other expense 2 — 2 1 Interest expense, net 8 8 17 16 Loss before income taxes $ (10 ) $ (8 ) $ (49 ) $ (29 ) Income tax benefit (1 ) (1 ) (9 ) (7 ) Net loss $ (9 ) $ (7 ) $ (40 ) $ (22 ) Loss per share Basic $ (0.05 ) $ (0.06 ) $ (0.24 ) $ (0.19 ) Diluted $ (0.05 ) $ (0.06 ) $ (0.24 ) $ (0.19 ) Weighted-average common shares outstanding Basic 168,525 117,579 168,275 117,398 Diluted 168,525 117,579 168,275 117,398 RXO, Inc. Condensed Consolidated Balance Sheets (Unaudited) June 30, December 31, (Dollars in millions, shares in thousands, except per share amounts) 2025 2024 ASSETS Current assets Cash and cash equivalents $ 18 $ 35 Accounts receivable, net of $16 and $13 in allowances, respectively 1,065 1,227 Other current assets 101 77 Total current assets 1,184 1,339 Long-term assets Property and equipment, net of $351 and $317 in accumulated depreciation, respectively 137 135 Operating lease assets 250 276 Goodwill 1,125 1,123 Identifiable intangible assets, net of $144 and $146 in accumulated amortization, respectively 474 499 Other long-term assets 31 42 Total long-term assets 2,017 2,075 Total assets $ 3,201 $ 3,414 LIABILITIES AND EQUITY Current liabilities Accounts payable $ 461 $ 568 Accrued expenses 315 373 Short-term debt and current maturities of long-term debt 16 17 Short-term operating lease liabilities 75 81 Other current liabilities 13 26 Total current liabilities 880 1,065 Long-term liabilities Long-term debt and obligations under finance leases 387 351 Deferred tax liabilities 75 88 Long-term operating lease liabilities 201 215 Other long-term liabilities 70 83 Total long-term liabilities 733 737 Commitments and Contingencies Equity Preferred stock, $0.01 par value; 10,000 shares authorized; 0 shares issued and outstanding as of June 30, 2025 and December 31, 2024 — — Common stock, $0.01 par value; 300,000 shares authorized; 163,970 and 162,517 shares issued and outstanding as of June 30, 2025 and December 31, 2024, respectively 2 2 Additional paid-in capital 1,915 1,904 Accumulated deficit (324 ) (284 ) Accumulated other comprehensive loss (5 ) (10 ) Total equity 1,588 1,612 Total liabilities and equity $ 3,201 $ 3,414 RXO, Inc. Condensed Consolidated Statements of Cash Flows (Unaudited) Six Months Ended June 30, (In millions) 2025 2024 Operating activities Net loss $ (40 ) $ (22 ) Adjustments to reconcile net loss to net cash from operating activities Depreciation and amortization expense 62 33 Stock compensation expense 14 11 Deferred tax benefit (13 ) (9 ) Impairment of operating lease assets 4 — Other 6 2 Changes in assets and liabilities Accounts receivable 159 13 Other current assets and other long-term assets (7 ) 1 Accounts payable (93 ) (27 ) Accrued expenses, other current liabilities and other long-term liabilities (71 ) — Net cash provided by operating activities 21 2 Investing activities Payment for purchases of property and equipment (29 ) (22 ) Proceeds from sale of property and equipment 1 — Business acquisition, net of cash acquired (10 ) — Other (5 ) — Net cash used in investing activities (43 ) (22 ) Financing activities Proceeds from borrowings on revolving credit facilities 261 119 Repayment of borrowings on revolving credit facilities (227 ) (92 ) Payment for equity issuance costs (1 ) — Payment for tax withholdings related to vesting of stock compensation awards (18 ) (3 ) Repayment of debt and finance leases (1 ) (1 ) Other (10 ) (1 ) Net cash provided by financing activities 4 22 Effect of exchange rates on cash, cash equivalents and restricted cash 2 — Net increase (decrease) in cash, cash equivalents and restricted cash (16 ) 2 Cash, cash equivalents, and restricted cash, beginning of period 35 5 Cash, cash equivalents, and restricted cash, end of period $ 19 $ 7 Supplemental disclosure of cash flow information: Leased assets obtained in exchange for new operating lease liabilities $ 22 $ 49 Cash paid for income taxes, net 4 2 Cash paid for interest, net 16 15 Purchases of property and equipment in accounts payable, accrued expenses and other liabilities 10 1 Accrued tax withholdings related to vesting of stock compensation awards — 1 RXO, Inc. Revenue Disaggregated by Service Offering (Unaudited) Three Months Ended June 30, Six Months Ended June 30, (In millions) 2025 2024 2025 2024 Revenue Truck brokerage $ 1,025 $ 543 $ 2,092 $ 1,107 Last mile 315 265 593 497 Managed transportation 142 156 279 308 Eliminations (63 ) (34 ) (112 ) (69 ) Total $ 1,419 $ 930 $ 2,852 $ 1,843 RXO, Inc. Reconciliation of Net Loss to Adjusted EBITDA and Adjusted EBITDA Margin (Unaudited) Three Months Ended June 30, Six Months Ended June 30, (In millions) 2025 2024 2025 2024 Reconciliation of Net Loss to Adjusted EBITDA Net loss $ (9 ) $ (7 ) $ (40 ) $ (22 ) Interest expense, net 8 8 17 16 Income tax benefit (1 ) (1 ) (9 ) (7 ) Depreciation and amortization expense 30 17 62 33 Transaction and integration costs 7 7 13 8 Restructuring and other costs 3 4 17 15 Adjusted EBITDA (1) $ 38 $ 28 $ 60 $ 43 Revenue $ 1,419 $ 930 $ 2,852 $ 1,843 Adjusted EBITDA margin (1) (2) 2.7 % 3.0 % 2.1 % 2.3 % (1) See the "Non-GAAP Financial Measures" section of the press release. (2) Adjusted EBITDA margin is calculated as Adjusted EBITDA divided by Revenue. RXO, Inc. Reconciliation of Net Loss to Adjusted Net Income (Loss) and Adjusted Diluted Income (Loss) Per Share (Unaudited) Three Months Ended June 30, Six Months Ended June 30, (Dollars in millions, shares in thousands, except per share amounts) 2025 2024 2025 2024 Reconciliation of Net Loss to Adjusted Net Income (Loss) and Adjusted Diluted Income (Loss) Per Share Net loss $ (9 ) $ (7 ) $ (40 ) $ (22 ) Amortization of intangible assets 11 3 26 6 Transaction and integration costs 7 7 13 8 Restructuring and other costs 3 4 17 15 Income tax associated with adjustments above (1) (5 ) (3 ) (14 ) (7 ) Adjusted net income (loss) (2) $ 7 $ 4 $ 2 $ — Adjusted diluted income (loss) per share (2) $ 0.04 $ 0.03 $ 0.01 $ — Weighted-average shares outstanding Diluted 169,077 119,837 169,143 117,398 (1) The tax impact of non-GAAP adjustments represents the tax benefit (expense) calculated using the applicable statutory tax rate that would have been incurred had these adjustments been excluded from net loss. Our estimated tax rate on non-GAAP adjustments may differ from our GAAP tax rate due to differences in the methodologies applied. (2) See the "Non-GAAP Financial Measures" section of the press release. RXO, Inc. Calculation of Gross Margin and Gross Margin as a Percentage of Revenue (Unaudited) Three Months Ended June 30, Six Months Ended June 30, (Dollars in millions) 2025 2024 2025 2024 Revenue Truck brokerage $ 1,025 $ 543 $ 2,092 $ 1,107 Complementary services (1) 457 421 872 805 Eliminations (63 ) (34 ) (112 ) (69 ) Revenue $ 1,419 $ 930 $ 2,852 $ 1,843 Cost of transportation and services (exclusive of depreciation and amortization) Truck brokerage $ 877 $ 462 $ 1,801 $ 946 Complementary services (1) 304 272 582 522 Eliminations (63 ) (34 ) (112 ) (69 ) Cost of transportation and services (exclusive of depreciation and amortization) $ 1,118 $ 700 $ 2,271 $ 1,399 Direct operating expense (exclusive of depreciation and amortization) Truck brokerage $ — $ — $ 1 $ — Complementary services (1) 47 50 94 103 Direct operating expense (exclusive of depreciation and amortization) $ 47 $ 50 $ 95 $ 103 Direct depreciation and amortization expense Truck brokerage $ — $ 1 $ — $ 1 Complementary services (1) 2 2 5 4 Direct depreciation and amortization expense $ 2 $ 3 $ 5 $ 5 Gross margin Truck brokerage $ 148 $ 80 $ 290 $ 160 Complementary services (1) 104 97 191 176 Gross margin $ 252 $ 177 $ 481 $ 336 Gross margin as a percentage of revenue Truck brokerage 14.4 % 14.7 % 13.9 % 14.5 % Complementary services (1) 22.8 % 23.0 % 21.9 % 21.9 % Gross margin as a percentage of revenue 17.8 % 19.0 % 16.9 % 18.2 % (1) Complementary services include last mile and managed transportation services. 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Business Wire
6 days ago
- Business
- Business Wire
RXO Announces Second-Quarter Results
CHARLOTTE, N.C.--(BUSINESS WIRE)--RXO (NYSE: RXO) today reported its second-quarter financial results. RXO Chairman and CEO Drew Wilkerson said, 'RXO executed well in the second quarter despite the prolonged soft freight market. Our Brokerage business outperformed the market, growing volume by 1% year-over-year driven by 45% growth in less-than-truckload volume. We're seeing early benefits from our newly combined carrier and coverage operations, and we delivered Brokerage gross margin of 14.4% in the quarter. Last Mile continued its impressive run of year-over-year growth, achieving 17% stop growth, the fourth consecutive quarter of double-digit growth. Our cash performance in the quarter was strong, and we increased our cash balance sequentially from the first quarter.' Wilkerson continued, 'The actions we're taking now are yielding results in the short term and positioning us well for the long term. We're focused on growing profitably, and we're realizing the benefits of our increased scale. That scale, combined with our cutting-edge technology, is driving productivity improvements. RXO is uniquely positioned to deliver increased earnings power and free cash flow over the long term and across market cycles.' Companywide Results RXO's revenue was $1.4 billion for the second quarter, compared to $930 million in the second quarter of 2024. Gross margin was 17.8%, compared to 19.0% in the second quarter of 2024. The company reported a second-quarter 2025 GAAP net loss of $9 million, compared to a net loss of $7 million in the second quarter of 2024. The second-quarter 2025 GAAP net loss included $10 million in transaction, integration, restructuring and other costs. Adjusted net income in the quarter was $7 million, compared to adjusted net income of $4 million in the second quarter of 2024. Adjusted EBITDA was $38 million, compared to $28 million in the second quarter of 2024. Adjusted EBITDA margin was 2.7%, compared to 3.0% in the second quarter of 2024. Transaction, integration, restructuring and other costs, and amortization of intangibles, impacted GAAP earnings per share by $0.09, net of tax. For the second quarter, RXO reported a GAAP diluted loss per share of $0.05. Adjusted diluted earnings per share was $0.04. Brokerage Volume in RXO's Brokerage business, including the impact of the Coyote Logistics acquisition in both periods, increased by 1% year over year in the second quarter. Less-than-truckload volume increased by 45% but was partially offset by a 12% decline in full truckload volume. Brokerage gross margin was 14.4% in the second quarter. Complementary Services Managed Transportation again increased the synergy loads provided to Brokerage. Last Mile stops grew by 17% year-over-year. RXO's complementary services gross margin was 22.8% for the quarter. Third-Quarter Outlook RXO expects third-quarter 2025 adjusted EBITDA to be between $33 million and $43 million. In Brokerage, the company expects overall volume growth to be approximately flat year-over-year and gross margin to be between 13.5% and 15.0% in the third quarter. Conference Call The company will hold a conference call and webcast on Thursday, August 7 at 8 a.m. Eastern Daylight Time. Participants can call in toll-free (from U.S./Canada) at 1-800-549-8228; international callers dial +1-289-819-1520. The conference ID is 82712. A live webcast of the conference call will be available on the investor relations area of the company's website, A replay of the conference call will be available through August 13, 2025, by calling toll-free (from U.S./Canada) 1-888-660-6264; international callers dial +1-289-819-1325. Use the passcode 82712#. Additionally, the call will be archived on About RXO RXO (NYSE: RXO) is a leading provider of asset-light transportation solutions. RXO offers tech-enabled truck brokerage services together with complementary solutions including managed transportation and last mile delivery. The company combines massive capacity and cutting-edge technology to move freight efficiently through supply chains across North America. The company is headquartered in Charlotte, N.C. Visit for more information and connect with RXO on Facebook, X, LinkedIn, Instagram and YouTube. Non-GAAP Financial Measures We provide reconciliations of the non-GAAP financial measures contained in this release to the most directly comparable measure under GAAP, which are set forth in the financial tables attached to this release. The non-GAAP financial measures in this release include: adjusted earnings before interest, taxes, depreciation and amortization ('adjusted EBITDA'); adjusted EBITDA margin; and adjusted net income (loss) and adjusted diluted income (loss) per share ('adjusted EPS'). We believe that these adjusted financial measures facilitate analysis of our ongoing business operations because they exclude items that may not reflect, or are unrelated to, RXO's core operating performance, and may assist investors with comparisons to prior periods and assessing trends in our underlying businesses. Other companies may calculate these non-GAAP financial measures differently, and therefore our measures may not be comparable to similarly titled measures of other companies. These non-GAAP financial measures should only be used as supplemental measures of our operating performance. Adjusted EBITDA, adjusted EBITDA margin, adjusted net income (loss) and adjusted EPS include adjustments for transaction and integration costs, as well as restructuring costs and other adjustments as set forth in the attached tables. Management uses these non-GAAP financial measures in making financial, operating and planning decisions and evaluating RXO's ongoing performance. We believe that adjusted EBITDA and adjusted EBITDA margin improve comparability from period to period by removing the impact of our capital structure (interest and financing expenses), asset base (depreciation and amortization), tax impacts and other adjustments that management has determined do not reflect our core operating activities and thereby assist investors with assessing trends in our underlying business. We believe that adjusted net income (loss) and adjusted EPS improve the comparability of our operating results from period to period by removing the impact of certain costs that management has determined do not reflect our core operating activities, including amortization of acquisition-related intangible assets, transaction and integration costs, restructuring costs and other adjustments as set out in the attached tables, and thereby may assist investors with comparisons to prior periods and assessing trends in our underlying business. With respect to our financial outlook for the third quarter of 2025 adjusted EBITDA, a reconciliation of this non-GAAP measure to the corresponding GAAP measure is not available without unreasonable effort due to the variability and complexity of the reconciling items described above that we exclude from this non-GAAP measure. The variability of these items may have a significant impact on our future GAAP financial results and, as a result, we are unable to prepare the forward-looking statement of income and statement of cash flows prepared in accordance with GAAP that would be required to produce such a reconciliation. Forward-looking Statements This release includes forward-looking statements, including statements relating to our outlook, integration with Coyote Logistics and cash synergies. All statements other than statements of historical fact are, or may be deemed to be, forward-looking statements. In some cases, forward-looking statements can be identified by the use of forward-looking terms such as "anticipate," "estimate," "believe," "continue," "could," "intend," "may," "plan," "predict," "should," "will," "expect," "project," "forecast," "goal," "outlook," "target,' or the negative of these terms or other comparable terms. However, the absence of these words does not mean that the statements are not forward-looking. These forward-looking statements are based on certain assumptions and analyses made by us in light of our experience and our perception of historical trends, current conditions and expected future developments, as well as other factors we believe are appropriate in the circumstances. These forward-looking statements are subject to known and unknown risks, uncertainties and assumptions that may cause actual results, levels of activity, performance, or achievements to be materially different from any future results, levels of activity, performance or achievements expressed or implied by such forward-looking statements. Factors that might cause or contribute to a material difference include the risks discussed in our filings with the SEC and the following: the effect of the completion of the transaction to acquire Coyote Logistics on the parties' business relationships and business generally; competition and pricing pressures; economic conditions generally; fluctuations in fuel prices; increased carrier prices; severe weather, natural disasters, terrorist attacks or similar incidents that cause material disruptions to our operations or the operations of the third-party carriers and independent contractors with which we contract; our dependence on third-party carriers and independent contractors; labor disputes or organizing efforts affecting our workforce and those of our third-party carriers; legal and regulatory challenges to the status of the third-party carriers with which we contract, and their delivery workers, as independent contractors, rather than employees; our ability to develop and implement suitable information technology systems and prevent failures in or breaches of such systems; the impact of potential cyber-attacks and information technology or data security breaches; issues related to our intellectual property rights; our ability to access the capital markets and generate sufficient cash flow to satisfy our debt obligations; litigation that may adversely affect our business or reputation; increasingly stringent laws protecting the environment, including transitional risks relating to climate change, that impact our third-party carriers; governmental regulation and political conditions; our ability to attract and retain qualified personnel; our ability to successfully implement our cost and revenue initiatives and other strategies; our ability to successfully manage our growth; our reliance on certain large customers for a significant portion of our revenue; damage to our reputation through unfavorable publicity; our failure to meet performance levels required by our contracts with our customers; the inability to achieve the level of revenue growth, cash generation, cost savings, improvement in profitability and margins, fiscal discipline, or strengthening of competitiveness and operations anticipated or targeted; a determination by the IRS that the distribution or certain related separation transactions should be treated as taxable transactions; and the impact of the separation on our businesses, operations and results. All forward-looking statements set forth in this release are qualified by these cautionary statements and there can be no assurance that the actual results or developments anticipated by us will be realized or, even if substantially realized, that they will have the expected consequences to or effects on us or our business or operations. Forward-looking statements set forth in this release speak only as of the date hereof, and we do not undertake any obligation to update forward-looking statements to reflect subsequent events or circumstances, changes in expectations or the occurrence of unanticipated events, except to the extent required by law. RXO, Inc. Condensed Consolidated Balance Sheets (Unaudited) June 30, (Dollars in millions, shares in thousands, except per share amounts) 2025 2024 ASSETS Current assets Cash and cash equivalents $ 18 $ 35 Accounts receivable, net of $16 and $13 in allowances, respectively 1,065 1,227 Other current assets 101 77 Total current assets 1,184 1,339 Long-term assets Property and equipment, net of $351 and $317 in accumulated depreciation, respectively 137 135 Operating lease assets 250 276 Goodwill 1,125 1,123 Identifiable intangible assets, net of $144 and $146 in accumulated amortization, respectively 474 499 Other long-term assets 31 42 Total long-term assets 2,017 2,075 Total assets $ 3,201 $ 3,414 LIABILITIES AND EQUITY Current liabilities Accounts payable $ 461 $ 568 Accrued expenses 315 373 Short-term debt and current maturities of long-term debt 16 17 Short-term operating lease liabilities 75 81 Other current liabilities 13 26 Total current liabilities 880 1,065 Long-term liabilities Long-term debt and obligations under finance leases 387 351 Deferred tax liabilities 75 88 Long-term operating lease liabilities 201 215 Other long-term liabilities 70 83 Total long-term liabilities 733 737 Commitments and Contingencies Equity Preferred stock, $0.01 par value; 10,000 shares authorized; 0 shares issued and outstanding as of June 30, 2025 and December 31, 2024 — — Common stock, $0.01 par value; 300,000 shares authorized; 163,970 and 162,517 shares issued and outstanding as of June 30, 2025 and December 31, 2024, respectively 2 2 Additional paid-in capital 1,915 1,904 Accumulated deficit (324 ) (284 ) Accumulated other comprehensive loss (5 ) (10 ) Total equity 1,588 1,612 Total liabilities and equity $ 3,201 $ 3,414 Expand RXO, Inc. Condensed Consolidated Statements of Cash Flows (Unaudited) Six Months Ended June 30, (In millions) 2025 2024 Operating activities Net loss $ (40 ) $ (22 ) Adjustments to reconcile net loss to net cash from operating activities Depreciation and amortization expense 62 33 Stock compensation expense 14 11 Deferred tax benefit (13 ) (9 ) Impairment of operating lease assets 4 — Other 6 2 Changes in assets and liabilities Accounts receivable 159 13 Other current assets and other long-term assets (7 ) 1 Accounts payable (93 ) (27 ) Accrued expenses, other current liabilities and other long-term liabilities (71 ) — Net cash provided by operating activities 21 2 Investing activities Payment for purchases of property and equipment (29 ) (22 ) Proceeds from sale of property and equipment 1 — Business acquisition, net of cash acquired (10 ) — Other (5 ) — Net cash used in investing activities (43 ) (22 ) Financing activities Proceeds from borrowings on revolving credit facilities 261 119 Repayment of borrowings on revolving credit facilities (227 ) (92 ) Payment for equity issuance costs (1 ) — Payment for tax withholdings related to vesting of stock compensation awards (18 ) (3 ) Repayment of debt and finance leases (1 ) (1 ) Other (10 ) (1 ) Net cash provided by financing activities 4 22 Effect of exchange rates on cash, cash equivalents and restricted cash 2 — Net increase (decrease) in cash, cash equivalents and restricted cash (16 ) 2 Cash, cash equivalents, and restricted cash, beginning of period 35 5 Cash, cash equivalents, and restricted cash, end of period $ 19 $ 7 Supplemental disclosure of cash flow information: Leased assets obtained in exchange for new operating lease liabilities $ 22 $ 49 Cash paid for income taxes, net 4 2 Cash paid for interest, net 16 15 Purchases of property and equipment in accounts payable, accrued expenses and other liabilities 10 1 Accrued tax withholdings related to vesting of stock compensation awards — 1 Expand RXO, Inc. Revenue Disaggregated by Service Offering (Unaudited) Revenue Truck brokerage $ 1,025 $ 543 $ 2,092 $ 1,107 Last mile 315 265 593 497 Managed transportation 142 156 279 308 Eliminations (63 ) (34 ) (112 ) (69 ) Total $ 1,419 $ 930 $ 2,852 $ 1,843 Expand (1) See the 'Non-GAAP Financial Measures' section of the press release. (2) Adjusted EBITDA margin is calculated as Adjusted EBITDA divided by Revenue. Expand RXO, Inc. Reconciliation of Net Loss to Adjusted Net Income (Loss) and Adjusted Diluted Income (Loss) Per Share (Unaudited) Three Months Ended June 30, Six Months Ended June 30, (Dollars in millions, shares in thousands, except per share amounts) 2025 2024 2025 2024 Reconciliation of Net Loss to Adjusted Net Income (Loss) and Adjusted Diluted Income (Loss) Per Share Net loss $ (9 ) $ (7 ) $ (40 ) $ (22 ) Amortization of intangible assets 11 3 26 6 Transaction and integration costs 7 7 13 8 Restructuring and other costs 3 4 17 15 Income tax associated with adjustments above (1) (5 ) (3 ) (14 ) (7 ) Adjusted net income (loss) (2) $ 7 $ 4 $ 2 $ — Weighted-average shares outstanding Diluted 169,077 119,837 169,143 117,398 Expand (1) The tax impact of non-GAAP adjustments represents the tax benefit (expense) calculated using the applicable statutory tax rate that would have been incurred had these adjustments been excluded from net loss. Our estimated tax rate on non-GAAP adjustments may differ from our GAAP tax rate due to differences in the methodologies applied. (2) See the 'Non-GAAP Financial Measures' section of the press release. Expand RXO, Inc. Calculation of Gross Margin and Gross Margin as a Percentage of Revenue (Unaudited) Three Months Ended June 30, Six Months Ended June 30, (Dollars in millions) 2025 2024 2025 2024 Revenue Truck brokerage $ 1,025 $ 543 $ 2,092 $ 1,107 Complementary services (1) 457 421 872 805 Eliminations (63 ) (34 ) (112 ) (69 ) Revenue $ 1,419 $ 930 $ 2,852 $ 1,843 Cost of transportation and services (exclusive of depreciation and amortization) Truck brokerage $ 877 $ 462 $ 1,801 $ 946 Complementary services (1) 304 272 582 522 Eliminations (63 ) (34 ) (112 ) (69 ) Cost of transportation and services (exclusive of depreciation and amortization) $ 1,118 $ 700 $ 2,271 $ 1,399 Direct operating expense (exclusive of depreciation and amortization) Truck brokerage $ — $ — $ 1 $ — Complementary services (1) 47 50 94 103 Direct operating expense (exclusive of depreciation and amortization) $ 47 $ 50 $ 95 $ 103 Direct depreciation and amortization expense Truck brokerage $ — $ 1 $ — $ 1 Complementary services (1) 2 2 5 4 Direct depreciation and amortization expense $ 2 $ 3 $ 5 $ 5 Gross margin Truck brokerage $ 148 $ 80 $ 290 $ 160 Complementary services (1) 104 97 191 176 Gross margin $ 252 $ 177 $ 481 $ 336 Gross margin as a percentage of revenue Truck brokerage 14.4 % 14.7 % 13.9 % 14.5 % Complementary services (1) 22.8 % 23.0 % 21.9 % 21.9 % Gross margin as a percentage of revenue 17.8 % 19.0 % 16.9 % 18.2 % Expand (1) Complementary services include last mile and managed transportation services. 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Yahoo
11-06-2025
- Business
- Yahoo
RXO Q1 Earnings Call: Technology Integration and Synergy Progress Underpin Outlook Amid Freight Weakness
Freight Delivery Company RXO (NYSE:RXO) fell short of the market's revenue expectations in Q1 CY2025, but sales rose 57% year on year to $1.43 billion. Its non-GAAP loss of $0.03 per share was $0.01 below analysts' consensus estimates. Is now the time to buy RXO? Find out in our full research report (it's free). Revenue: $1.43 billion vs analyst estimates of $1.48 billion (57% year-on-year growth, 3.5% miss) Adjusted EPS: -$0.03 vs analyst estimates of -$0.02 ($0.01 miss) Adjusted EBITDA: $22 million vs analyst estimates of $22.7 million (1.5% margin, 3.1% miss) EBITDA guidance for Q2 CY2025 is $35 million at the midpoint, above analyst estimates of $34.37 million Operating Margin: -2.1%, in line with the same quarter last year Sales Volumes fell 1% year on year (11% in the same quarter last year) Market Capitalization: $2.7 billion RXO's first quarter results reflected significant progress in business integration and technology upgrades, even as external market conditions remained soft. Management attributed performance largely to the successful integration of the Coyote acquisition, which enabled carrier and coverage operations to consolidate onto a single technology platform. CEO Drew Wilkerson highlighted a 26% year-over-year increase in less-than-truckload (LTL) brokerage volumes, offset by continued softness in full truckload and automotive-related shipments. The company also reported notable productivity gains, with technology-driven improvements raising efficiency by 17% over the past year. Wilkerson described the quarter as one where 'productivity over the last 12 months increased by about 17%,' and pointed to the company's asset-light model as a key factor in managing through volatility. Looking ahead, RXO's forward guidance is shaped by ongoing integration benefits, operational flexibility, and a cautious approach to market uncertainty. Management emphasized the potential for additional cost savings as technology and procurement systems from the Coyote acquisition are fully leveraged. CFO Jamie Harris noted, 'We have significant opportunity to purchase transportation more effectively,' which could translate to meaningful margin improvements as the year progresses. While the company expects continued growth in LTL and last-mile services, executives cautioned that truckload volumes remain under pressure due to macroeconomic uncertainty and shifting customer strategies in response to trade policy changes. Management believes enhanced technology and scale position RXO for margin expansion once market conditions stabilize. Management pointed to integration synergies, LTL volume growth, and technology-driven productivity as primary factors shaping first quarter outcomes, while highlighting automotive headwinds and ongoing market softness as key challenges. Coyote integration milestone: The successful migration of both RXO and Coyote carrier and coverage operations onto one transportation management system (Freight Optimizer) allowed for better freight matching and improved scalability. Management emphasized the early realization of cross-company operational efficiencies. Raised synergy expectations: After reviewing integration progress, RXO increased its estimate for annualized cash synergies from the Coyote acquisition to more than $70 million, driven by operating expense reductions and capital expenditure savings. CFO Jamie Harris explained that these estimates exclude further potential benefits from optimizing transportation procurement and cross-selling opportunities. LTL volume strength: Less-than-truckload (LTL) brokerage volumes grew 26% year-over-year, in stark contrast to ongoing softness in the broader truckload market. Management attributed this outperformance to new customer wins and the company's ability to offer integrated solutions for complex freight needs. Last-mile segment momentum: The last-mile delivery business saw a 24% increase in stops, benefiting from existing customer growth, new customer acquisitions, and expanded service in new markets. Management described last-mile as a 'stable and growing source of EBITDA.' Automotive sector headwinds: Weakness in automotive volumes, particularly in managed transportation and expedited shipments, weighed on both revenue and gross profit. Harris quantified the impact as a $10 million year-over-year gross profit headwind, noting the higher margin typically associated with automotive-related freight. RXO's near-term outlook is shaped by integration-driven cost efficiencies, LTL and last-mile growth, and ongoing caution about freight market demand. Procurement and synergy realization: Management expects further margin improvement as unified procurement and technology systems enable more effective purchase transportation. Early wins in cost reductions are expected to ramp up as contract rate increases phase in through the year. Continued LTL and last-mile expansion: Ongoing growth in less-than-truckload brokerage and last-mile delivery is expected to help offset softness in full truckload volumes. Management highlighted cross-selling opportunities and new customer wins as drivers of segment resilience. Freight demand uncertainty: Executives remain cautious about overall freight market demand due to macroeconomic headwinds, customer responses to tariff changes, and persistent automotive sector weakness. The company's guidance incorporates a range of scenarios, with flexibility to further reduce costs if volumes deteriorate. In coming quarters, the StockStory team will monitor (1) the pace and scale of realized cost synergies from the Coyote integration, (2) ongoing growth in LTL and last-mile delivery volumes, and (3) RXO's ability to manage through continued softness in full truckload and automotive-related freight. Sustained productivity gains from technology investments and the impact of shifting trade policies will also be key signposts for future performance. RXO currently trades at a forward P/E ratio of 58.5×. At this valuation, is it a buy or sell post earnings? The answer lies in our full research report (it's free). The market surged in 2024 and reached record highs after Donald Trump's presidential victory in November, but questions about new economic policies are adding much uncertainty for 2025. While the crowd speculates what might happen next, we're homing in on the companies that can succeed regardless of the political or macroeconomic environment. Put yourself in the driver's seat and build a durable portfolio by checking out our Top 5 Strong Momentum Stocks for this week. This is a curated list of our High Quality stocks that have generated a market-beating return of 183% over the last five years (as of March 31st 2025). Stocks that made our list in 2020 include now familiar names such as Nvidia (+1,545% between March 2020 and March 2025) as well as under-the-radar businesses like the once-micro-cap company Kadant (+351% five-year return). Find your next big winner with StockStory today.
Yahoo
28-05-2025
- Business
- Yahoo
RXO to Present at the Wells Fargo 2025 Industrials and Materials Conference
CHARLOTTE, N.C., May 28, 2025--(BUSINESS WIRE)--RXO (NYSE: RXO) today announced that Drew Wilkerson, chief executive officer, and Jared Weisfeld, chief strategy officer, will present at the Wells Fargo 2025 Industrials and Materials Conference in Chicago, Ill., on June 11, 2025, from 4-4:35 p.m. EDT. The live webcast and a replay of the presentation will be available at About RXO RXO (NYSE: RXO) is a leading provider of asset-light transportation solutions. RXO offers tech-enabled truck brokerage services together with complementary solutions including managed transportation, freight forwarding and last mile delivery. The company combines massive capacity and cutting-edge technology to move freight efficiently through supply chains across North America. The company is headquartered in Charlotte, N.C. Visit for more information and connect with RXO on Facebook, X, LinkedIn, Instagram and YouTube. View source version on Contacts Media Contact Nina Investor Contact Kevin
