RXO Inc. (NYSE:RXO) is one of the best IPO stocks to buy and hold for 3 years. On September 10, Barclays analyst Brandon Oglenski maintained a Buy rating on RXO Inc. with a price target of $17. The previous month, RXO Inc. reported a total revenue of $1.4 billion in Q2 2025, with a gross margin of 17.8%. Despite facing a prolonged soft freight market and challenges in the automotive sector, RXO achieved an adjusted EBITDA of $38 million, reaching the high end of its guidance. This resulted in an adjusted ...

Question-and-Answer SessionAbsolutely. So maybe you can start out by just running through what you're seeing out there. Obviously, a lot of focus on the 2Q to 3Q transition, whether we saw any pull forward into 2Q where there's been a normal seasonality into 3Q or not, data is a little bit over the place. So kind of what do you see from your perspective?Drew WilkersonChairman & CEO Yes. I mean, I think it starts with -- as we all know, we're still in a soft freight market. And so as you look at Q3, around t ...

RXO (NYSE:RXO) FY Conference September 10, 2025 01:45 PM ET Company ParticipantsDrew Wilkerson - Chairman & CEOJared Weisfeld - Chief Strategy OfficerConference Call ParticipantsNone - AnalystNoneGreat. So let's resume with transportation content. And next up, we have RXO and very happy to welcome back to Laguna, CEO Drew Volkerson and Chief Strategy Officer, Jared Weiswold. Gentlemen, thanks so much for coming back to Laguna.Drew WilkersonThanks Thanks for having us. Always great to be here.NoneAbsolutely. ...

RXO (RXO) 2025 Conference September 04, 2025 08:10 AM ET Company ParticipantsJoseph Hafling - VP - Equity ResearchDrew Wilkerson - Chairman & CEOJared Weisfeld - Chief Strategy OfficerConference Call ParticipantsNone - AnalystJoseph HaflingGreat. Well, good morning, everybody. Thank you all for being here this morning. If you for those of you that don't know me, my name is Joe Halfling. I work with Steph Moore on the Jefferies team helping to cover the transport side, and we're pleased to have the RXO team ...

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UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 ___________________________________ Form 10-Q ___________________________________ (Mark One) ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended June 30, 2025 or o TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from ____________ to ____________ Commission File Number: 001-41514 ________________________ ...

Financial Data and Key Metrics Changes - The company achieved adjusted EBITDA of $38 million, at the high end of the guidance range provided last quarter [4][21] - Total revenue for the quarter was $1.4 billion, with a gross margin of 17.8% and an adjusted EBITDA margin of 2.7% [21][24] - Adjusted free cash flow conversion was 58%, with cash on the balance sheet increasing to $18 million [14][28] Business Line Data and Key Metrics Changes - Brokerage revenue was $1.025 billion, representing 69% of total revenue, with LTL volume growing by 45% year over year [23][34] - Truckload volume declined by 12%, primarily due to automotive weakness, while truckload gross profit per load improved by 7% sequentially [9][34] - Last Mile revenue increased by 19% year over year, with stops growing by 17%, marking the fourth consecutive quarter of double-digit growth [13][25] Market Data and Key Metrics Changes - The overall freight market remains soft, with a contraction of more than 3% in the cash freight index [6][15] - Automotive volume was down 28% year over year, contributing to the overall decline in truckload volume [34][102] - The company expects to continue operating in a soft freight market with limited spot opportunities [76] Company Strategy and Development Direction - The company is focused on driving profitable growth across market cycles while advancing its technology platform [16][19] - Growth will come from both the core truckload business and premium services, with a strong emphasis on LTL and Managed Transportation [19][20] - The integration of Coyote is nearly complete, with expectations for significant operating leverage as the market improves [31][49] Management's Comments on Operating Environment and Future Outlook - Management noted that while the freight market is soft, there are signs of tightening driven by capacity adjustments rather than improved demand [15][41] - There is cautious optimism among customers regarding trade policy clarity, which may unlock demand [31][106] - The company anticipates strong cash performance in the third quarter, with adjusted EBITDA expected to be between $33 million and $43 million [29][47] Other Important Information - The company has invested over $100 million annually in technology to enhance productivity and customer experience [19][20] - The integration of technology platforms is expected to be substantially complete by the end of the third quarter [12][49] - The company maintains a strong liquidity position with over $575 million in total committed liquidity [28] Q&A Session Summary Question: Comments on truckload volumes and optimizing price, volume, and service - Management explained that automotive weakness accounted for a portion of the volume decline, but efforts to optimize pricing and service have improved gross profit per load by 7% sequentially [55][56] Question: Margin characteristics of LTL growth compared to truckload - Management highlighted that LTL growth is driven by strong customer relationships and stable margins, with LTL now representing over 30% of overall volume [67] Question: Underlying freight market assumptions for the third quarter - Management expects continued automotive headwinds and a soft freight market, but anticipates improvements in procurement and profitability [76][78] Question: Impact of AI on productivity - Management noted that productivity has increased by 45% over the last two years, driven by AI and machine learning in pricing algorithms [110]

Second Quarter 2025 Results August 7, 2025 We provide reconciliations of the non-GAAP financial measures contained in this presentation to the most directly comparable measure under GAAP, which are set forth in the financial tables attached to this presentation. The non-GAAP financial measures in this presentation include: adjusted earnings before interest, taxes, depreciation and amortization ("EBITDA margin"); adjusted EBITDA margin; bank-adjusted EBITDA; free cash flow and free cash flow as a percentage ...

RXO Second-Quarter 2025 Financial Results [Financial and Operational Highlights](index=1&type=section&id=Financial%20and%20Operational%20Highlights) RXO achieved 1% brokerage volume growth, a 45% LTL volume surge, and 17% Last Mile stop growth in Q2 2025, improving cash sequentially - Brokerage business outperformed the market, with volume growing **1% year-over-year**[2](index=2&type=chunk) - Less-than-truckload (LTL) volume was a key driver, growing **45% year-over-year**[2](index=2&type=chunk)[6](index=6&type=chunk) - Last Mile segment achieved **17% year-over-year stop growth**, its fourth consecutive quarter of double-digit growth[2](index=2&type=chunk)[6](index=6&type=chunk) - The company is realizing early benefits from its newly combined carrier and coverage operations, achieving a Brokerage gross margin of **14.4%**[2](index=2&type=chunk)[6](index=6&type=chunk) - Cash performance was strong, with the cash balance increasing sequentially from Q1 2025[2](index=2&type=chunk)[6](index=6&type=chunk) [Companywide Financial Performance](index=1&type=section&id=Companywide%20Financial%20Performance) RXO's Q2 2025 revenue grew significantly, reporting a GAAP net loss, but achieving increased adjusted net income and adjusted EBITDA Q2 2025 Key Financial Metrics | Metric | Q2 2025 | Q2 2024 | | :--- | :--- | :--- | | Revenue ($) | $1.4 billion | $930 million | | Gross Margin | 17.8% | 19.0% | | GAAP Net Loss ($) | $(9) million | $(7) million | | Adjusted Net Income ($) | $7 million | $4 million | | Adjusted EBITDA ($) | $38 million | $28 million | | Adjusted EBITDA Margin | 2.7% | 3.0% | | GAAP Diluted Loss Per Share ($) | $(0.05) | $(0.06) | | Adjusted Diluted EPS ($) | $0.04 | $0.03 | - The Q2 2025 GAAP net loss included **$10 million** in transaction, integration, restructuring, and other costs[4](index=4&type=chunk) - Adjustments for transaction, integration, restructuring costs, and amortization of intangibles impacted GAAP earnings per share by **$0.09**, net of tax[5](index=5&type=chunk) [Segment Performance](index=2&type=section&id=Segment%20Performance) RXO's Q2 2025 segment performance was mixed, with Brokerage volume up 1% due to LTL, and Complementary Services achieving 17% Last Mile stop growth [Brokerage](index=2&type=section&id=Brokerage) The Brokerage segment's volume grew year-over-year, fueled by LTL volume offsetting a full truckload decline, achieving a solid gross margin Brokerage Segment Performance (Q2 2025 vs Q2 2024) | Metric | Change | | :--- | :--- | | Overall Volume | +1% YoY | | Less-than-truckload Volume | +45% YoY | | Full Truckload Volume | -12% YoY | - Brokerage gross margin was **14.4%** in the second quarter[7](index=7&type=chunk) [Complementary Services](index=2&type=section&id=Complementary%20Services) Complementary Services saw Last Mile stops grow significantly, with Managed Transportation providing synergy loads to Brokerage, and achieving a strong gross margin - Last Mile stops grew by **17% year-over-year**[8](index=8&type=chunk) - Managed Transportation continued to increase synergy loads provided to the Brokerage segment[8](index=8&type=chunk) - Complementary services gross margin was **22.8%** for the quarter[8](index=8&type=chunk) [Third-Quarter Outlook](index=2&type=section&id=Third-Quarter%20Outlook) RXO anticipates Q3 2025 adjusted EBITDA between $33 million and $43 million, with flat brokerage volume growth and a projected gross margin - Q3 2025 adjusted EBITDA is expected to be between **$33 million** and **$43 million**[9](index=9&type=chunk) - In Brokerage, Q3 2025 overall volume growth is expected to be approximately **flat year-over-year**[9](index=9&type=chunk) - Brokerage gross margin for Q3 2025 is projected to be between **13.5%** and **15.0%**[9](index=9&type=chunk) [Financial Statements](index=5&type=section&id=Financial%20Statements) The unaudited condensed consolidated financial statements detail RXO's Q2 2025 net loss, total assets, and net cash provided by operating activities for the first six months [Condensed Consolidated Statements of Operations](index=5&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations) For Q2 2025, RXO generated $1.419 billion in revenue, but increased costs led to a net loss of $9 million Q2 Statement of Operations Highlights (in millions) | Account | Q2 2025 ($) | Q2 2024 ($) | | :--- | :--- | :--- | | Revenue | $1,419 | $930 | | Cost of transportation and services | $1,118 | $700 | | Sales, general and administrative expense | $214 | $154 | | Operating income (loss) | $0 | $0 | | Net loss | $(9) | $(7) | [Condensed Consolidated Balance Sheets](index=6&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) As of June 30, 2025, RXO's balance sheet shows decreased total assets, with significant accounts receivable and goodwill, alongside total liabilities and equity Balance Sheet Summary (in millions) | Account | June 30, 2025 ($) | Dec 31, 2024 ($) | | :--- | :--- | :--- | | Cash and cash equivalents | $18 | $35 | | Total current assets | $1,184 | $1,339 | | Total assets | $3,201 | $3,414 | | Total current liabilities | $880 | $1,065 | | Total liabilities | $1,613 | $1,802 | | Total equity | $1,588 | $1,612 | [Condensed Consolidated Statements of Cash Flows](index=7&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) For the first six months of 2025, net cash from operating activities improved, while investing activities used cash and financing activities provided a net cash inflow Six Months Ended June 30 Cash Flow Summary (in millions) | Activity | 2025 ($) | 2024 ($) | | :--- | :--- | :--- | | Net cash provided by operating activities | $21 | $2 | | Net cash used in investing activities | $(43) | $(22) | | Net cash provided by financing activities | $4 | $22 | | Net (decrease) in cash | $(16) | $2 | [Supplemental Financial Information](index=8&type=section&id=Supplemental%20Financial%20Information) This section provides detailed breakdowns of revenue by service, GAAP to non-GAAP reconciliations, and gross margin analysis by segment, offering deeper operational insights [Revenue by Service Offering](index=8&type=section&id=Revenue%20by%20Service%20Offering) In Q2 2025, Truck Brokerage was the largest revenue contributor, with Last Mile revenue growing and Managed Transportation revenue seeing a slight decline Q2 Revenue by Service (in millions) | Service | Q2 2025 ($) | Q2 2024 ($) | | :--- | :--- | :--- | | Truck brokerage | $1,025 | $543 | | Last mile | $315 | $265 | | Managed transportation | $142 | $156 | | **Total (after eliminations)** | **$1,419** | **$930** | [Reconciliation of Non-GAAP Measures](index=9&type=section&id=Reconciliation%20of%20Non-GAAP%20Measures) The company reconciles its GAAP net loss to non-GAAP measures, adjusting Q2 2025's GAAP net loss to Adjusted EBITDA and Adjusted Net Income Q2 2025 Reconciliation of Net Loss to Adjusted EBITDA (in millions) | Line Item | Amount ($) | | :--- | :--- | | Net loss | $(9) | | Interest expense, net | $8 | | Income tax benefit | $(1) | | Depreciation and amortization expense | $30 | | Transaction and integration costs | $7 | | Restructuring and other costs | $3 | | **Adjusted EBITDA** | **$38** | Q2 2025 Reconciliation of Net Loss to Adjusted Net Income (in millions) | Line Item | Amount ($) | | :--- | :--- | | Net loss | $(9) | | Amortization of intangible assets | $11 | | Transaction and integration costs | $7 | | Restructuring and other costs | $3 | | Income tax associated with adjustments | $(5) | | **Adjusted net income** | **$7** | [Gross Margin Analysis](index=11&type=section&id=Gross%20Margin%20Analysis) RXO's overall gross margin decreased in Q2 2025, with Truck Brokerage at 14.4% and Complementary Services achieving a higher 22.8% gross margin Q2 Gross Margin as a Percentage of Revenue | Segment | Q2 2025 | Q2 2024 | | :--- | :--- | :--- | | Truck brokerage | 14.4% | 14.7% | | Complementary services | 22.8% | 23.0% | | **Total Company** | **17.8%** | **19.0%** | [Important Disclosures](index=3&type=section&id=Important%20Disclosures) This section provides legal and financial disclosures, explaining non-GAAP measures and including a forward-looking statements disclaimer outlining risks [Non-GAAP Financial Measures](index=3&type=section&id=Non-GAAP%20Financial%20Measures) RXO explains its use of non-GAAP financial measures like Adjusted EBITDA and Adjusted EPS to analyze ongoing business operations by excluding non-core items - The company uses non-GAAP measures like adjusted EBITDA and adjusted EPS to facilitate analysis of ongoing business operations and assist with comparisons to prior periods[15](index=15&type=chunk) - Adjustments include transaction and integration costs, restructuring costs, and amortization of acquisition-related intangible assets[16](index=16&type=chunk)[17](index=17&type=chunk) - A reconciliation of the forward-looking Q3 2025 adjusted EBITDA to the corresponding GAAP measure is not available without unreasonable effort due to the variability of reconciling items[18](index=18&type=chunk) [Forward-looking Statements](index=3&type=section&id=Forward-looking%20Statements) This section serves as a legal safe harbor, cautioning that non-historical statements are forward-looking and subject to numerous risk factors - The release contains forward-looking statements regarding outlook, integration with Coyote Logistics, and cash synergies, which are based on current assumptions and are not guarantees of future performance[19](index=19&type=chunk) - Key risks that could affect future results include competition, pricing pressures, economic conditions, fuel price fluctuations, and the ability to successfully integrate the Coyote Logistics acquisition[20](index=20&type=chunk)

Core Viewpoint - RXO is anticipated to report a year-over-year decline in earnings despite an increase in revenues, which could significantly influence its stock price in the near term [1][2]. Earnings Expectations - The upcoming earnings report is expected to show quarterly earnings of $0.02 per share, reflecting a year-over-year decrease of 33.3% [3]. - Revenues are projected to reach $1.45 billion, representing a 56% increase from the same quarter last year [3]. Estimate Revisions - The consensus EPS estimate has been revised down by 10.53% over the last 30 days, indicating a reassessment by analysts [4]. - The Most Accurate Estimate for RXO is higher than the Zacks Consensus Estimate, resulting in a positive Earnings ESP of +50.00% [12]. Earnings Surprise Prediction - The Zacks Earnings ESP model suggests that a positive reading indicates a likely earnings beat, particularly when combined with a strong Zacks Rank [10]. - RXO currently holds a Zacks Rank of 4, which complicates the prediction of an earnings beat despite the positive Earnings ESP [12]. Historical Performance - In the last reported quarter, RXO was expected to post a loss of $0.02 per share but actually reported a loss of $0.03, resulting in a surprise of -50.00% [13]. - Over the past four quarters, RXO has only beaten consensus EPS estimates once [14]. Conclusion - RXO does not appear to be a strong candidate for an earnings beat, and investors should consider additional factors when evaluating the stock ahead of the earnings release [17].