RXO Announces First-Quarter Results, Successful Migration of Coyote Coverage Operations to the RXO Connect$(R)$ Platform
-- Carrier and coverage operations now occurring in one unified system,
enabling future cost-of-purchased-transportation synergies.
-- Raising synergy estimate; now expect greater than $70 million of cash
synergies.
-- Less-than-truckload brokerage volume increased by 26% year-over-year in
the first quarter.
-- Last Mile achieved 24% year-over-year stop growth, an acceleration from
the fourth quarter of 2024.
CHARLOTTE, N.C.--(BUSINESS WIRE)--May 07, 2025--
RXO $(RXO)$ today reported its first-quarter financial results and announced the successful migration of Coyote coverage operations to the RXO Connect(R) platform.
"Our technology team has been working diligently to integrate the best features of the legacy Coyote technology platform into RXO Connect. Today, I'm pleased to announce a critical integration milestone -- carrier and coverage operations are now happening in one system, which will enable us to leverage our scale and realize future cost-of-purchased-transportation synergies," said Drew Wilkerson, chief executive officer of RXO. "We have made significant progress with the integration of Coyote and are again raising our synergy estimate. We now expect cash synergies to be more than $70 million. This estimate does not include cost-of-purchased-transportation opportunities, which we expect will be significant."
Wilkerson said, "In the first quarter, RXO grew less-than-truckload brokerage volume by 26% year-over-year and saw continued momentum within Last Mile, which achieved stop growth of 24% year-over-year. RXO is well positioned for the long term because of our larger scale, exceptional service, comprehensive solutions, industry-leading innovation and deep customer relationships."
Companywide Results
RXO's revenue was $1.4 billion for the first quarter, compared to $913 million in the first quarter of 2024. Gross margin was 16.0%, compared to 17.4% in the first quarter of 2024.
The company reported a first-quarter 2025 GAAP net loss of $31 million, compared to a net loss of $15 million in the first quarter of 2024. The first-quarter 2025 GAAP net loss included $20 million in transaction, integration, restructuring and other costs. Adjusted net loss in the quarter was $5 million, compared to an adjusted net loss of $4 million in the first quarter of 2024.
Adjusted EBITDA was $22 million, compared to $15 million in the first quarter of 2024. Adjusted EBITDA margin was 1.5%, compared to 1.6% in the first quarter of 2024.
Transaction, integration, restructuring and other costs, and amortization of intangibles, impacted GAAP earnings per share by $0.15, net of tax. For the first quarter, RXO reported a GAAP diluted loss per share of $0.18. Adjusted diluted loss per share was $0.03.
Brokerage
Volume in RXO's Brokerage business, including the impact of the Coyote Logistics acquisition in both periods, declined by 1% year-over-year in the first quarter. Less-than-truckload volume increased by 26% but was offset by an 8% decline in full truckload volume.
Brokerage gross margin was 13.3% in the first quarter.
Complementary Services
Managed Transportation increased the synergy loads provided to Brokerage.
Last Mile stops grew by 24% year-over-year.
RXO's complementary services gross margin was 21.0% for the quarter.
Second-Quarter Outlook
RXO expects second-quarter 2025 adjusted EBITDA to be between $30 million and $40 million. The company expects second-quarter 2025 Brokerage gross margin to be between 13% and 15%.
Conference Call
The company will hold a conference call and webcast on Wednesday, May 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 81237.
A live webcast of the conference call will be available on the investor relations area of the company's website, http://investors.rxo.com. A replay of the conference call will be available through May 14, 2025, by calling toll-free (from U.S./Canada) 1-888-660-6264; international callers dial +1-289-819-1325. Use the passcode 81237#. Additionally, the call will be archived on http://investors.rxo.com.
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 RXO.com 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 loss and adjusted diluted 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 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 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 second 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 March 31,
--------------------------------------
(Dollars in millions, shares in
thousands, except per share
amounts) 2025 2024
--------------------------------- ----------- ----------
Revenue $ 1,433 $ 913
Cost of transportation and
services (exclusive of
depreciation and
amortization) 1,153 699
Direct operating expense
(exclusive of depreciation
and amortization) 48 53
Sales, general and
administrative expense 210 145
Depreciation and amortization
expense 32 16
Transaction and integration
costs 6 1
Restructuring costs 14 11
----------- ----------
Operating loss $ (30) $ (12)
----------- ----------
Other expense -- 1
Interest expense, net 9 8
----------- ----------
Loss before income taxes $ (39) $ (21)
Income tax benefit (8) (6)
----------- ----------
Net loss $ (31) $ (15)
=========== ==========
Loss per share data
Basic $ (0.18) $ (0.13)
Diluted $ (0.18) $ (0.13)
Weighted-average common shares
outstanding
Basic 168,023 117,217
Diluted 168,023 117,217
RXO, Inc.
Condensed Consolidated Balance Sheets
(Unaudited)
March 31, December 31,
----------- ----------------
(Dollars in millions, shares in
thousands, except per share amounts) 2025 2024
---------------------------------------- ------ ---------
ASSETS
Current assets
Cash and cash equivalents $ 16 $ 35
Accounts receivable, net of $11 and
$13 in allowances, respectively 1,150 1,227
Other current assets 89 77
------ ---------
Total current assets 1,255 1,339
------ ---------
Long-term assets
Property and equipment, net of $333
and $317 in accumulated
depreciation, respectively 143 135
Operating lease assets 256 276
Goodwill 1,124 1,123
Identifiable intangible assets, net
of $134 and $146 in accumulated
amortization, respectively 484 499
Other long-term assets 42 42
------ ---------
Total long-term assets 2,049 2,075
------ ---------
Total assets $ 3,304 $ 3,414
====== =========
LIABILITIES AND EQUITY
Current liabilities
Accounts payable $ 498 $ 568
Accrued expenses 358 373
Short-term debt and current
maturities of long-term debt 17 17
Short-term operating lease
liabilities 80 81
Other current liabilities 11 26
------ ---------
Total current liabilities 964 1,065
------ ---------
Long-term liabilities
Long-term debt and obligations under
finance leases 387 351
Deferred tax liabilities 77 88
Long-term operating lease liabilities 201 215
Other long-term liabilities 88 83
------ ---------
Total long-term liabilities 753 737
------ ---------
Commitments and Contingencies
Equity
Preferred stock, $0.01 par value;
10,000 shares authorized; 0 shares
issued and outstanding as of March
31, 2025 and December 31, 2024 -- --
Common stock, $0.01 par value;
300,000 shares authorized; 163,912
and 162,517 shares issued and
outstanding as of March 31, 2025 and
December 31, 2024, respectively 2 2
Additional paid-in capital 1,908 1,904
Accumulated deficit (315) (284)
Accumulated other comprehensive loss (8) (10)
------ ---------
Total equity 1,587 1,612
------ ---------
Total liabilities and equity $ 3,304 $ 3,414
====== =========
RXO, Inc.
Condensed Consolidated Statements of Cash Flows
(Unaudited)
Three Months Ended March 31,
--------------------------------------
(In millions) 2025 2024
--------------------------------- --- ---------- ---------
Operating activities
Net loss $ (31) $ (15)
Adjustments to reconcile net loss
to net cash from operating
activities
Depreciation and amortization
expense 32 16
Stock compensation expense 7 5
Deferred tax benefit (11) (7)
Impairment of operating lease
assets 4 --
Other 2 2
Changes in assets and liabilities
Accounts receivable 76 27
Other current assets and other
long-term assets (10) (1)
Accounts payable (56) (41)
Accrued expenses, other
current liabilities and other
long-term liabilities (15) 21
--- ---------- ---------
Net cash provided by (used in)
operating activities (2) 7
--- ---------- ---------
Investing activities
Payment for purchases of
property and equipment (15) (11)
Business acquisition, net of
cash acquired (10) --
--- ---------- ---------
Net cash used in investing
activities (25) (11)
--- ---------- ---------
Financing activities
Proceeds from borrowings on
revolving credit facilities 300 39
Repayment of borrowings on
revolving credit facilities (265) (31)
Payment for tax withholdings
related to vesting of stock
compensation awards (17) (2)
Other (11) --
--- ---------- ---------
Net cash provided by financing
activities 7 6
--- ---------- ---------
Effect of exchange rates on
cash, cash equivalents and
restricted cash 1 --
Net increase (decrease) in cash,
cash equivalents and restricted
cash (19) 2
Cash, cash equivalents, and
restricted cash, beginning of
period 35 5
--- ---------- ---------
Cash, cash equivalents, and
restricted cash, end of period $ 16 $ 7
=== ========== =========
Supplemental disclosure of cash
flow information:
Leased assets obtained in
exchange for new operating
lease liabilities $ 4 $ 23
Cash paid for income taxes,
net 1 1
Cash paid for interest, net 2 1
Purchases of property and
equipment in accounts
payable, accrued expenses and
other liabilities 11 2
Accrued tax withholdings 1 --
related to vesting of stock
compensation awards
RXO, Inc.
Revenue Disaggregated by Service Offering
(Unaudited)
Three Months Ended March 31,
--------------------------------------
(In millions) 2025 2024
----------------------------- --- ----------- --------
Revenue
Truck brokerage $ 1,067 $ 564
Last mile 278 232
Managed transportation 137 152
Eliminations (49) (35)
--- ----------- --------
Total $ 1,433 $ 913
=== =========== ========
RXO, Inc.
Reconciliation of Net Loss to Adjusted EBITDA and Adjusted EBITDA Margin
(Unaudited)
Three Months Ended March 31,
--------------------------------------
(In millions) 2025 2024
--------------------------------- --- ----------- --- -------
Reconciliation of Net Loss to
Adjusted EBITDA
Net loss $ (31) $ (15)
Interest expense, net 9 8
Income tax benefit (8) (6)
Depreciation and amortization
expense 32 16
Transaction and integration
costs 6 1
Restructuring and other costs 14 11
--- ----------- --- -------
Adjusted EBITDA (1) $ 22 $ 15
=== =========== === =======
Revenue $ 1,433 $ 913
Adjusted EBITDA margin (1) (2) 1.5% 1.6%
(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 Loss and Adjusted Diluted Loss
Per Share
(Unaudited)
Three Months Ended March 31,
--------------------------------------
(Dollars in millions, shares in
thousands, except per share
amounts) 2025 2024
--------------------------------- ----------- ----------
Reconciliation of Net Loss to
Adjusted Net Loss and Adjusted
Diluted Loss Per Share
Net loss $ (31) $ (15)
Amortization of intangible
assets 15 3
Transaction and integration
costs 6 1
Restructuring and other costs 14 11
Income tax associated with
adjustments above (1) (9) (4)
----------- ----------
Adjusted net loss (2) $ (5) $ (4)
=========== ==========
Adjusted diluted loss per share
(2) $ (0.03) $ (0.03)
Weighted-average shares
outstanding
Diluted 168,023 117,217
(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 income
(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 March 31,
--------------------------------------
(Dollars in millions) 2025 2024
--------------------------------- ---------- ---- ------- ---
Revenue
Truck brokerage $ 1,067 $ 564
Complementary services (1) 415 384
Eliminations (49) (35)
---------- --- -------
Revenue $ 1,433 $ 913
---------- ---- ------- ---
Cost of transportation and
services (exclusive of
depreciation and amortization)
Truck brokerage $ 924 $ 484
Complementary services (1) 278 250
Eliminations (49) (35)
---------- --- -------
Cost of transportation and
services (exclusive of
depreciation and amortization) $ 1,153 $ 699
---------- ---- ------- ---
Direct operating expense
(exclusive of depreciation and
amortization)
Truck brokerage $ 1 $ --
Complementary services (1) 47 53
---------- ---- ------- ---
Direct operating expense
(exclusive of depreciation and
amortization) $ 48 $ 53
---------- ---- ------- ---
Direct depreciation and
amortization expense
Truck brokerage $ -- $ --
Complementary services (1) 3 2
---------- ---- ------- ---
Direct depreciation and
amortization expense $ 3 $ 2
---------- ---- ------- ---
Gross margin
Truck brokerage $ 142 $ 80
Complementary services (1) 87 79
---------- ---- ------- ---
Gross margin $ 229 $ 159
---------- ---- ------- ---
Gross margin as a percentage of
revenue
Truck brokerage 13.3% 14.2%
Complementary services (1) 21.0% 20.6%
---------- --- -------
Gross margin as a percentage of
revenue 16.0% 17.4%
---------- --- -------
(1) Complementary services include
last mile and managed
transportation services.
View source version on businesswire.com: https://www.businesswire.com/news/home/20250507341453/en/
CONTACT: Media Contact
Nina Reinhardt
nina.reinhardt@rxo.com
Investor Contact
Kevin Sterling
kevin.sterling@rxo.com
(END) Dow Jones Newswires
May 07, 2025 06:30 ET (10:30 GMT)
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