4Q'25 Earnings Presentation F O R W A R D L O O K I N G S T A T E M E N T S The following is a "safe harbor" statement under the Private Securities Litigation Reform Act of 1995: Certain statements and information in this presentation may constitute "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995, including, among others, statements regarding (i) our expectations about our intrinsic value or our prospects for growth and value creation and (ii) our fina ...

Summary of RXO Conference Call (December 02, 2025) Company Overview - **Company**: RXO (NYSE: RXO) - **Industry**: Truckload Brokerage and Freight Transportation Key Points and Arguments Industry Conditions - RXO is experiencing a prolonged soft rate market, with Cass Freight Shipments down 7% year-over-year in October, approaching lows not seen since the Great Financial Crisis of 2008 [1][10] - The divergence between the freight economy and the broader macroeconomy is notable, with positive GDP growth and a strong services economy despite weak overall shipments [1][2] - Goods consumption is at a 15-year low relative to services, indicating a structural shift in the market [2] Supply Side Dynamics - Structural changes on the supply side are significant, with the FMCSA estimating that 200,000 non-domiciled CDLs may exit the market in the coming years due to regulatory enforcement [2][36] - The tightening of supply is reflected in industry metrics such as load-to-truck ratios and tender rejections, which have increased, indicating a potential for better market conditions [4][5] Financial Outlook - RXO's Q4 outlook projects adjusted EBITDA between $20 million and $30 million, with expectations of sequential growth in truckload volumes from Q3 to Q4 [8][10] - Rising costs of purchased transportation are impacting the typical seasonal uplift in adjusted EBITDA, leading to a muted peak season outlook [8][9] Regulatory Environment - Recent regulatory actions, including the executive order on English language proficiency for truck drivers and the pause on non-domiciled CDLs, are expected to have long-term positive implications for the industry by improving safety and reducing fraudulent practices [36][38] - The potential exit of non-domiciled CDLs could represent about 5% of overall capacity, significantly impacting the market structure [36][37] Market Performance and Projections - RXO has seen a decline in truckload volumes, with Q1 down 8%, Q2 down 11%, and Q3 down 12%, but anticipates stabilization and potential growth in 2026 as automotive headwinds ease [32][33] - The company is focused on maintaining strong relationships with shippers and leveraging its integrated operations post-Coyote acquisition to outperform the market [30][33] Technology and AI Integration - RXO is investing heavily in technology, spending over $100 million annually, and is optimistic about leveraging AI to improve operational efficiency and margins [49][50] - The integration of AI tools has already saved significant man-hours and is expected to enhance productivity and revenue opportunities moving forward [51][52] Conclusion - RXO is navigating a challenging freight environment characterized by regulatory changes and market softness but is positioned to leverage its scale, technology investments, and operational efficiencies to drive future growth and profitability [30][38]