Harris said brokerage gross margin was 11.9%, slightly below the low end of the company’s outlook, declining 160 basis points sequentially and 130 basis points year-over-year. He characterized the dynamic as a squeeze on a largely contractual, enterprise-focused book of business because costs moved faster than revenue per load.CEO Drew Wilkerson said EBITDA came in below expectations primarily because brokerage margins tightened toward the end of the quarter. He attributed the margin pressure to capacity ex ...

Group 1 - The results are challenging due to a margin squeeze between contracted operations and increasing upstream rates [1] - The investment approach focuses on operational aspects and long-term earnings power rather than market-driven dynamics [1] - The majority of recommendations will be holds, indicating a cautious stance in a bullish market [1] Group 2 - There is no current or planned investment position in the companies mentioned, ensuring an unbiased analysis [2] - The article reflects the author's personal opinions without any compensation from the companies discussed [2] - Seeking Alpha emphasizes that past performance does not guarantee future results and that opinions may not represent the platform as a whole [3]

Core Insights - RXO's fourth quarter earnings report reflected anticipated negativity, with a focus on highlighting improvements rather than losses [1][2] - Management emphasized structural changes to position the company for a potential turnaround in the freight market [2] Financial Performance - The company reported lower EBITDA and a net loss for the quarter, continuing a trend from previous periods [2] - CFO James Harris projected a decrease in EBITDA for the first quarter compared to the fourth quarter, indicating limited growth in spot opportunities and sale rates [7] Market Conditions - The freight market is showing signs of strengthening, but early stages are challenging for brokers due to rising spot rates while contract rates remain stagnant [3][4] - In December, spot rates increased by approximately 15% month over month, outpacing contractual sale rates, but demand remains low [4] Spot Market Dynamics - RXO's chief strategy officer noted a slight sequential increase in spot loads from Q3 to Q4, with expectations for further increases if demand improves [6] - The SONAR Outbound Tender Rejection Index indicates a strong spot market, reflecting increased freight activity [4] AI Integration - RXO faces challenges in convincing investors of its profitability improvements through AI, similar to C.H. Robinson, which has seen significant stock growth attributed to its AI initiatives [8]

RXO (NYSE:RXO) Q4 2025 Earnings call February 06, 2026 08:00 AM ET Company ParticipantsBrian Ossenbeck - Managing DirectorDrew Wilkerson - Chairman and CEOJamie Harris - CFOJared Weisfeld - Chief Strategy OfficerKen Hoexter - Managing DirectorLucas Severa - VP of Equity ResearchRavi Shankar - Managing DirectorStephanie Moore - Managing DirectorConference Call ParticipantsAri Rosa - AnalystMatt Milask - AnalystScott Group - Managing Director and Senior AnalystTom Wadewitz - Senior Equity Research AnalystOper ...

RXO (NYSE:RXO) Q4 2025 Earnings call February 06, 2026 08:00 AM ET Company ParticipantsBrian Ossenbeck - Managing DirectorDrew Wilkerson - Chairman and CEOJamie Harris - CFOJared Weisfeld - Chief Strategy OfficerKen Hoexter - Managing DirectorLucas Severa - VP of Equity ResearchRavi Shankar - Managing DirectorStephanie Moore - Managing DirectorConference Call ParticipantsAri Rosa - AnalystMatt Milask - AnalystScott Group - Managing Director and Senior AnalystTom Wadewitz - Senior Equity Research AnalystOper ...

Financial Data and Key Metrics Changes - In Q4 2025, RXO reported total revenue of $1.5 billion, with a gross margin of 14.8% and adjusted EBITDA of $17 million, resulting in an adjusted EBITDA margin of 1.2% [14][15] - The overall brokerage volume declined by 4% year-over-year, with brokerage gross margin at 11.9%, down 160 basis points sequentially and 130 basis points year-over-year [4][16] - For the full year, RXO achieved total revenue of $5.7 billion, with a gross margin of 16.2% and adjusted EBITDA of $109 million, yielding an adjusted EBITDA margin of 1.9% [18] Business Line Data and Key Metrics Changes - Brokerage revenue was $1.1 billion, down 14% year-over-year, representing 72% of total revenue, while complementary services revenue was $431 million, flat year-over-year, accounting for 28% of total revenue [15][16] - Managed transportation generated $133 million in revenue, down 6% year-over-year, while last-mile business revenue grew by 3% year-over-year to $298 million [17] - LTL volume grew by 31%, marking the fourth consecutive quarter of double-digit growth, indicating strong momentum in this area [12] Market Data and Key Metrics Changes - The industry-wide buy rates saw the largest increase from November to December in 16 years, with rates rising about 15% month-over-month in December [5][31] - Tender rejections and load-to-truck ratios reached the highest levels of the year in December, continuing into January, indicating tightening market conditions [5][31] - The regulatory actions related to non-domiciled CDLs and English language proficiency are expected to improve safety and reduce theft and fraud, impacting near-term results but potentially benefiting large-scale brokerages in the long term [6][35] Company Strategy and Development Direction - RXO is focused on optimizing its cost structure and gross profit per load while expanding its carrier base and growing stable sources of EBITDA [3][4] - The company aims to leverage its technology platform and customer relationships to drive growth, particularly in managed transportation and last-mile services [10][12] - RXO is investing in transformational AI capabilities to enhance operational efficiency and improve service delivery, positioning itself for long-term growth [10][36] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the potential for a demand recovery, citing positive developments in manufacturing data as a leading indicator for the economy [24] - The company anticipates continued soft demand across all lines of business in Q1 2026, with expected adjusted EBITDA between $5 million and $12 million [21][34] - Management remains confident in RXO's ability to return to growth mode and outperform the market, supported by a strong late-stage brokerage sales pipeline [8][40] Other Important Information - RXO finalized a new asset-based lending facility of $450 million, replacing its previous $600 million revolver, which provides better pricing and flexibility [20] - The company achieved an adjusted free cash flow conversion of 43% in 2025, with a target range of 40%-60% over the long term [19][58] - A $12 million goodwill impairment was recorded due to restructuring within the managed transportation business, which was non-cash [15] Q&A Session Summary Question: Can you unpack the 50% increase in the late-stage brokerage pipeline? - Management noted that the increase reflects strong customer relationships and a return to growth mode post-Coyote integration, with bids typically implemented in Q2 [39] Question: How is AI helping with SMB outreach? - AI initiatives are driving productivity improvements, with a 19% increase in productivity year-over-year, and are expected to enhance margins in the second half of the year [41][42] Question: How do company actions and market dynamics work together in 2026? - Management highlighted that company-specific initiatives are in place to drive growth, and they are not solely relying on market recovery [46] Question: What impact did winter weather have in Q1? - Winter weather resulted in an estimated $2 million negative EBITDA impact due to operational disruptions [49][51] Question: What are the expectations for spot volumes and EBITDA? - Spot volumes are up year-over-year, and management indicated that improvements in gross profit per load could significantly enhance EBITDA during a recovery [55][56]

分组1 - RXO reported a quarterly loss of $0.07 per share, missing the Zacks Consensus Estimate of a loss of $0.04, and compared to earnings of $0.06 per share a year ago, representing an earnings surprise of -80.88% [1] - The company posted revenues of $1.47 billion for the quarter ended December 2025, missing the Zacks Consensus Estimate by 0.85%, and down from $1.67 billion year-over-year [2] - RXO has surpassed consensus EPS estimates only once in the last four quarters and has not beaten consensus revenue estimates during the same period [2] 分组2 - RXO shares have increased by approximately 31.2% since the beginning of the year, while the S&P 500 has declined by 0.7% [3] - The company's earnings outlook is crucial for investors, as it includes current consensus earnings expectations for upcoming quarters and any recent changes to these expectations [4] - The current consensus EPS estimate for the coming quarter is -$0.07 on revenues of $1.38 billion, and for the current fiscal year, it is $0.14 on revenues of $5.95 billion [7] 分组3 - The Zacks Industry Rank indicates that the Transportation - Services sector is currently in the top 30% of over 250 Zacks industries, suggesting that stocks in the top 50% outperform those in the bottom 50% by more than 2 to 1 [8] - RXO's estimate revisions trend was unfavorable ahead of the earnings release, resulting in a Zacks Rank 4 (Sell) for the stock, indicating expected underperformance in the near future [6]

Fourth Quarter 2025 Results February 6, 2026 Non-GAAP financial measures and forward-looking statements Non-GAAP financial measures 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"); adjuste ...

RXO management in its third quarter earnings call, several weeks after the fourth quarter already had begun, said things were not going the way the brokerage would have desired. Several key numbers in RXO’s fourth quarter earnings released Friday morning backed that up. Various numbers showed just how tough the quarter was for RXO, the latest data in line with challenging results reported by standalone brokers and the brokerages within trucking companies. Those various results show what happens when the f ...

Exhibit 10.1 EXECUTION VERSION ASSET-BASED REVOLVING CREDIT AGREEMENT by and among RXO, INC. and CERTAIN SUBSIDIARIES OF RXO, INC. NAMED HEREIN as Borrowers, THE OTHER CREDIT PARTIES SIGNATORY HERETO, as Credit Parties, THE LENDERS SIGNATORY HERETO FROM TIME TO TIME, as Lenders, BANK OF AMERICA, N.A., as the Agent, BANK OF AMERICA, N.A. and CITIBANK N.A., as Joint Lead Arrangers and Joint Bookrunners BARCLAYS BANK PLC, WELLS FARGO BANK N.A., GOLDMAN SACHS BANK USA and MORGAN STANLEY SENIOR FUNDING, INC., as ...