Latest news with #RXO
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3 days ago
- Business
- Yahoo
Opposing strategies put brokerages on top
The recent earnings reports from C.H. Robinson and RXO provide a unique look into how two prominent players in the freight brokerage industry are navigating a challenging market. While both companies have faced similar market conditions, each has adopted unique strategies that reflect different priorities and approaches to maintaining profitability and growth. C.H. Robinson reported a boost in profitability despite a drop in total revenue, attributed to the divestiture of its European Surface Transportation business. Their adjusted operating margin saw a notable increase, rising to 31.1%, a significant leap from earlier periods. Additionally, productivity gains have been significant at C.H. Robinson, as evidenced by an 11.2% reduction in headcount while maintaining a steady revenue stream. C.H. Robinson remains focused on increasing efficiency and effectiveness through a leaner workforce and the implementation of advanced technologies, such as agentic AI. On the other hand, RXO has embraced a growth-oriented strategy, particularly evident in its Less-Than-Truckload (LTL) operations. While their revenue experienced a noteworthy increase compared to the previous year, RXO's gross margins declined slightly from 19% to 17.8%. Despite the compression in margins, RXO's decision to invest heavily in its LTL segment has paid off, with volume growth soaring by 45% year over year. This strategic focus on LTL is seen as a key driver for their future profitability due to its stable EBITDA contributions across market cycles. RXO has successfully leveraged technology to improve productivity and reduce costs, aligning with its overarching strategy to scale profitably. When directly comparing the performance of the two companies, each showcases distinct strengths in particular areas. C.H. Robinson has excelled in maintaining profitability by reducing personnel costs and maintaining a sharp focus on technology to navigate the freight market. On the other hand, RXO's strategy has been characterized by aggressive growth in specific segments and has shown an ability to adapt rapidly to new market opportunities, as seen in their expanding LTL business. Both companies have emphasized the role of technology in gaining a competitive edge, yet their implementations differ. C.H. Robinson continues to capitalize on its tech stack to differentiate itself in the marketplace. By doing so, it manages to weather market fluctuations while enhancing productivity internally and externally. Meanwhile, RXO pursues technological integration through acquisitions, such as the merger with Coyote Logistics, to streamline operations and gain efficiency, which has enabled them to improve brokerage margins incrementally despite a tough market. The opposite approaches offer lessons in resilience during uncertain economic times. C.H. Robinson's focus on internal productivity and efficiency contrasts with RXO's strategy of expansion and technological integration for scaling operations. Both paths have yielded tangible benefits, but the overall success will depend largely on how these strategies align with future market conditions. Leadership perspectives have become the North Star for each company's future guidance. At C.H. Robinson, CEO Dave Bozeman has been leading through a phase of consolidation, emphasizing a disciplined reduction in headcount without compromising operational capabilities. This positions C.H. Robinson to potentially capitalize quickly on any market upturn. RXO's Drew Wilkerson, on the other hand, is navigating the company through a period of expansion, particularly in sectors like LTL that he believes could offer sustained growth and less volatility compared to traditional freight segments. Both companies are giants in the 3PL and freight broker industry. They represent a broader picture of what others in the space are dealing with, just without the over $1 billion in revenue on a balance sheet. Q2 earnings season has continually shown that those getting creative with solving problems, adopting new technology, and focusing on efficiency remain at the head of the pack. The post Opposing strategies put brokerages on top appeared first on FreightWaves. Sign in to access your portfolio
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4 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
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4 days ago
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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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Yahoo
4 days ago
- Business
- Yahoo
First look: some small signs of improvement sequentially and year-on-year at RXO
Revenue figures for RXO (NYSE: RXO) were stronger on a year-on-year basis, but the acquisition of Coyote Logistics from UPS did not take place until the third quarter of last year, making the comparison less than perfect. Revenue was $1.41 billion compared to $930 million a year ago. Sequentially, when the comparison is on an equal basis reflecting the Coyote business, revenue at RXO was down slightly from $1.43 billion in the first quarter. More significant of RXO's financial position on a year-on-year basis was the company's gross margin of 17.8% in the second quarter, compared to 19% a year earlier. The second quarter gross margin in 2025 was identical to that of 2025's first quarter. RXO said its brokerage volume growth was up 1% year-over year. Full truckload volume was down 12% year-on-year. But the company's less than truckload volume took a big jump of 45% compared to the second quarter of 2024. The truck brokerage margin at RXO was improved sequentially at 14.4%, compared to 13.3% in the first quarter. But it was down from 14.7% a year earlier. RXO in both the second quarter of 2024 and 2025 was essentially a breakeven company on an operating basis. The net loss on a GAAP basis was $9 million in 2025's second quarter and $7 million a year earlier. Adjusted net income in the quarter, a non-GAAP measure, was a positive $7 million, compared to adjusted net income of $4 million in the second quarter of 2024. The breakeven operating income in 2Q 2025 was an improvement over the $30 million operating loss posted in the first quarter. The net loss per share was minus 5 cents in the second quarter of 2025, minus 6 cents a year earlier and minus 18 cents in the first quarter of 2024. Adjusted EBITDA in the second quarter was $38 million, rising from $28 million in the second quarter of 2024. That line item was $22 million in the first quarter. In the prepared statement released with the earnings, RXO CEO Drew Wilkerson said the company 'executed well in the second quarter despite the prolonged soft freight market.' Besides citing the growth in brokerage volume, he said the company's Last Mile has 'continued its impressive run of year-over-year growth, achieving 17% stop growth.' 'We're focused on growing profitably, and we're realizing the benefits of our increased scale,' he said in the statement. 'That scale, combined with our cutting-edge technology, is driving productivity improvements.' More articles by John Kingston Averitt pay increase could be a sign of some acceleration in driver wages 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 First look: some small signs of improvement sequentially and year-on-year at RXO appeared first on FreightWaves.
Business Wire
4 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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