0001929561FALSE00019295612025-02-052025-02-05

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
 
Date of Report (Date of earliest event reported): February 5, 2025
 
RXO, INC.
(Exact name of registrant as specified in its charter)
Delaware
001-4151488-2183384
(State or other jurisdiction of
incorporation)
(Commission File Number)
(IRS Employer
Identification No.)
 
11215 North Community House Road28277
Charlotte, NC
(Address of principal executive offices)(Zip Code)
 
(980) 308-6058
(Registrant’s telephone number, including area code)
 
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
☐
Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
☐
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
☐
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
☐
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
Securities registered pursuant to Section 12(b) of the Act:
Title of each class Trading
symbol(s)		 
Name of each exchange on which
registered
Common stock, par value $0.01 per share
 RXO New York Stock Exchange
 
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
 
Emerging growth company ☐
 
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

 




Item 2.02.    Results of Operations and Financial Condition.
On February 5, 2025, RXO, Inc. (the “Company”) issued a press release announcing its results of operations for the fiscal quarter and year ended December 31, 2024. A copy of the press release is furnished as Exhibit 99.1 to this Current Report on Form 8-K.
Item 7.01.    Regulation FD Disclosure.
On February 5, 2025, the Company released a slide presentation related to its results of operations for the fiscal quarter and year ended December 31, 2024. A copy of this slide presentation is furnished as Exhibit 99.2 to this Current Report on Form 8-K.
The slide presentation should be read together with the Company’s filings with the Securities and Exchange Commission, including the Annual Report on Form 10-K for the fiscal year ended December 31, 2024 once available.
The information furnished in Items 2.02 and 7.01, including Exhibits 99.1 and 99.2, shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities of that Section, and shall not be deemed to be incorporated by reference into any filing of the Company under the Exchange Act or the Securities Act of 1933, as amended, except as shall be expressly set forth by specific reference in such filing.
Item 9.01.    Financial Statements and Exhibits.
 
(d) Exhibits.
 
Exhibit No. Description
99.1 
99.2
104Cover Page Interactive Data File (embedded within the Inline XBRL document)
 
 
 
SIGNATURE
 
Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the registrant has duly caused this Current Report on Form 8-K to be signed on its behalf by the undersigned hereunto duly authorized.
 
Date: February 5, 2025
RXO, INC. 
 
By:/s/ James E. Harris 
James E. Harris 
Chief Financial Officer 
 
 

 


Exhibit 99.1
capture.jpg

RXO Reports Fourth-Quarter Results

•Coyote acquisition remains ahead of schedule. Raising annualized cost synergy estimate to be at least $50 million
•Brokerage volume increased by 10% sequentially from the third quarter
•Managed Transportation sales pipeline now nearly $2 billion in freight under management
•Last Mile stop growth continued to accelerate and grew 15% year-over-year

CHARLOTTE, N.C. — February 5, 2025 — RXO (NYSE: RXO) today announced its financial results for the fourth quarter of 2024.
Drew Wilkerson, chief executive officer of RXO, said, “The integration of Coyote Logistics remains ahead of schedule and we’re again raising our estimate for annualized cost synergies. We now expect to achieve at least $50 million in synergies.”

Wilkerson continued, “In the fourth quarter, RXO grew combined brokerage volume by 10% sequentially, the result of our focus on providing the best service, solutions, innovation and relationships in the industry. Momentum continued within our complementary services. In Managed Transportation, our sales pipeline is now nearly $2 billion in freight under management, and in Last Mile, we grew stops by 15% year-over-year. While the freight market remains soft, our playbook of strategically investing in our business while controlling costs, along with our increased scale, positions us well for the future.”
Companywide Results
RXO’s revenue was $1.7 billion for the fourth quarter, compared to $1.0 billion in the fourth quarter of 2023. Gross margin was 15.5%, compared to 18.0% in the fourth quarter of 2023.
The company reported a fourth-quarter 2024 GAAP net loss of $20 million, compared to net income of $2 million in the fourth quarter of 2023. The fourth-quarter 2024 GAAP net loss included $34 million in transaction, integration, restructuring and other costs. Adjusted net income in the quarter was $10 million, compared to $7 million in the fourth quarter of 2023.
Adjusted EBITDA was $42 million, compared to $31 million in the fourth quarter of 2023. Adjusted EBITDA margin was 2.5%, compared to 3.2% in the fourth quarter of 2023.
Transaction, integration, restructuring and other costs, amortization of intangibles, and a discrete tax item impacted GAAP earnings per share by $0.18, net of tax. For the fourth quarter, RXO reported a GAAP diluted loss per share of $0.12. Adjusted diluted earnings per share were $0.06.

RXO 4Q 2024 Earnings Press Release | 1

Brokerage
Volume in RXO’s Brokerage business, including the impact of the Coyote Logistics acquisition in both periods, declined by 6% year-over-year in the fourth quarter. Less-than-truckload volume increased by 1% but was offset by an 8% decline in full truckload volume. Brokerage volume grew by 10% sequentially in the fourth quarter.
Brokerage gross margin was 13.2% in the fourth quarter.
Complementary Services
Managed Transportation has nearly $2 billion in new freight under management in its sales pipeline.
The number of Last Mile stops grew by 15% year-over-year.
RXO’s complementary services gross margin was 21.1% for the quarter.
First-Quarter Outlook
RXO expects first-quarter 2025 adjusted EBITDA to be between $20 million and $30 million. The company expects first-quarter 2025 Brokerage gross margin to be between 12% and 14%.
Conference Call
The company will hold a conference call and webcast on Wednesday, February 5 at 8 a.m. Eastern Standard 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 45015.
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 February 12, 2025, by calling toll-free (from U.S./Canada) 1-888-660-6264; international callers dial +1-289-819-1325. Use the passcode 45015#. 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 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.
Media Contact
Nina Reinhardt
nina.reinhardt@rxo.com

Investor Contact
Kevin Sterling
kevin.sterling@rxo.com

RXO 4Q 2024 Earnings Press Release | 2

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 and adjusted diluted earnings per share (“adjusted diluted 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 and adjusted diluted 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 and adjusted diluted 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 first 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 first-quarter outlook and our expected cost 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
RXO 4Q 2024 Earnings Press Release | 3

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: 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; our ability to successfully integrate Coyote Logistics and realize the anticipated benefits of the acquisition; 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 4Q 2024 Earnings Press Release | 4


RXO, Inc.
Consolidated Statements of Operations
(Unaudited)

Three Months Ended December 31,Years Ended December 31,
(Dollars in millions, shares in thousands, except per share amounts)2024202320242023
Revenue$1,667 $978 $4,550 $3,927 
Cost of transportation and services (exclusive of depreciation and amortization)1,357 743 3,565 2,967 
Direct operating expense (exclusive of depreciation and amortization)50 56 202 235 
Sales, general and administrative expense218 146 666 591 
Depreciation and amortization expense33 15 87 67 
Transaction and integration costs15 — 53 12 
Restructuring costs18 4 33 16 
Operating income (loss)(24)14 (56)39 
Other expense1 2 218 3 
Interest expense, net8 8 30 32 
Income (loss) before income taxes(33)4 (304)4 
Income tax provision (benefit)(13)2 (19)— 
Net income (loss)$(20)$2 $(285)$4 
Earnings (loss) per share data
Basic$(0.12)$0.02 $(2.14)$0.03 
Diluted$(0.12)$0.02 $(2.14)$0.03 
Weighted-average common shares outstanding
Basic164,407117,012133,412116,871
Diluted164,407119,575133,412119,456
RXO 4Q 2024 Earnings Press Release | 5

RXO, Inc.
Consolidated Balance Sheets
(Unaudited)

December 31,
(Dollars in millions, shares in thousands, except per share amounts)20242023
ASSETS
Current assets
Cash and cash equivalents$35 $5 
Accounts receivable, net of $13 and $12 in allowances, respectively1,228 743 
Other current assets78 48 
Total current assets1,341 796 
Long-term assets
Property and equipment, net of $317 and $293 in accumulated depreciation, respectively135 124 
Operating lease assets274 195 
Goodwill1,124 630 
Identifiable intangible assets, net of $146 and $118 in accumulated amortization, respectively499 68 
Other long-term assets45 12 
Total long-term assets2,077 1,029 
Total assets$3,418 $1,825 
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities
Accounts payable$573 $414 
Accrued expenses375 199 
Short-term debt and current maturities of long-term debt17 3 
Short-term operating lease liabilities75 53 
Other current liabilities26 13 
Total current liabilities1,066 682 
Long-term liabilities
Long-term debt and obligations under finance leases351 356 
Deferred tax liabilities87 7 
Long-term operating lease liabilities213 146 
Other long-term liabilities84 40 
Total long-term liabilities735 549 
Commitments and Contingencies
Equity
Preferred stock, $0.01 par value; 10,000 shares authorized; 0 shares issued and outstanding as of December 31, 2024 and 2023— — 
Common stock, $0.01 par value; 300,000 shares authorized; 162,517 and 117,026 shares issued and outstanding as of December 31, 2024 and 2023, respectively2 1 
Additional paid-in capital1,904 590 
Retained earnings (Accumulated deficit)(279)6 
Accumulated other comprehensive loss(10)(3)
Total equity1,617 594 
Total liabilities and equity$3,418 $1,825 



RXO 4Q 2024 Earnings Press Release | 6

RXO, Inc.
Consolidated Statements of Cash Flows
(Unaudited)

Years Ended December 31,
(In millions)20242023
Operating activities
Net income (loss)$(285)$4 
Adjustments to reconcile net income (loss) to net cash from operating activities
Depreciation and amortization expense87 67 
Stock compensation expense23 19 
Deferred tax benefit(24)(8)
Deemed non-pro rata distribution216 — 
Impairment of operating lease assets13 — 
Other7 9 
Changes in assets and liabilities
Accounts receivable(110)158 
Other current assets and other long-term assets1 (14)
Accounts payable(60)(86)
Accrued expenses, other current liabilities and other long-term liabilities120 (60)
Net cash provided by (used in) operating activities(12)89 
Investing activities
Payment for purchases of property and equipment(45)(64)
Business acquisition, net of cash acquired(1,019)— 
Other— (2)
Net cash used in investing activities(1,064)(66)
Financing activities
Proceeds from borrowings on revolving credit facilities238 76 
Repayment of borrowings on revolving credit facilities(226)(71)
Proceeds from issuance of common stock and pre-funded warrants1,125 — 
Payment for equity issuance costs(30)— 
Repayment of debt and finance leases(3)(104)
Payment for debt issuance costs(3)— 
Payment for tax withholdings related to vesting of stock compensation awards(4)(14)
Repurchase of common stock— (2)
Other11 (2)
Net cash provided by (used in) financing activities1,108 (117)
Effect of exchange rates on cash, cash equivalents and restricted cash(2)1 
Net increase (decrease) in cash, cash equivalents and restricted cash30 (93)
Cash, cash equivalents and restricted cash, beginning of period5 98 
Cash, cash equivalents and restricted cash, end of period$35 $5 
Supplemental disclosure of cash flow information:
Cash paid for income taxes, net4 27 
Cash paid for interest, net2732 
Purchases of property and equipment in accounts payable32 
Accrued tax withholdings related to vesting of stock compensation awards15— 
RXO 4Q 2024 Earnings Press Release | 7

RXO, Inc.
Revenue Disaggregated by Service Offering
(Unaudited)

Three Months Ended December 31,Years Ended December 31,
(In millions)2024202320242023
Revenue
Truck brokerage$1,267$610$3,029$2,358
Last mile2902571,0551,014
Managed transportation141154600690
Eliminations(31)(43)(134)(135)
Total$1,667$978$4,550$3,927
RXO 4Q 2024 Earnings Press Release | 8

RXO, Inc.
Reconciliation of Net Income (Loss) to Adjusted EBITDA and Adjusted EBITDA Margin
(Unaudited)

Three Months Ended December 31,Years Ended December 31,
(In millions)2024202320242023
Reconciliation of Net Income (Loss) to Adjusted EBITDA
Net income (loss)$(20)$2$(285)$4
Interest expense, net883032
Income tax provision (benefit)(13)2(19)—
Depreciation and amortization expense33158767
Transaction and integration costs15—5312
Restructuring and other costs (1)
19425217
Adjusted EBITDA (2)
$42$31$118$132
Revenue$1,667$978$4,550$3,927
Adjusted EBITDA margin (2) (3)
2.5 %3.2 %2.6 %3.4 %

(1)Other for the year ended December 31, 2024 reflects a one-time charge of $216 million representing a deemed non-pro rata distribution in connection with the private placement common stock issuance completed in August 2024.
(2)See the “Non-GAAP Financial Measures” section of the press release.
(3)Adjusted EBITDA margin is calculated as Adjusted EBITDA divided by Revenue.


RXO 4Q 2024 Earnings Press Release | 9

RXO, Inc.
Reconciliation of Net Income (Loss) to Adjusted Net Income and Adjusted Diluted Earnings Per Share
(Unaudited)

Three Months Ended December 31,Years Ended December 31,
(Dollars in millions, shares in thousands, except per share amounts)2024202320242023
Reconciliation of Net Income (Loss) to Adjusted Net Income and Adjusted Diluted Earnings Per Share
Net income (loss)$(20)$2 $(285)$4 
Amortization of intangible assets17 3 28 13 
Transaction and integration costs15 — 53 12 
Restructuring and other costs (1)
19 4 252 17 
Income tax associated with adjustments above (2)
(16)(2)(26)(10)
Discrete tax item(5)— (5)— 
Adjusted net income (3)
$10 $7 $17 $36 
Adjusted diluted earnings per share (3)
$0.06 $0.06 $0.12 $0.30 
Weighted-average shares outstanding
Diluted169,885119,575136,684119,456

(1)Other for the year ended December 31, 2024 reflects a one-time charge of $216 million representing a deemed non-pro rata distribution in connection with the private placement common stock issuance completed in August 2024.
(2)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.
(3)See the “Non-GAAP Financial Measures” section of the press release.

RXO 4Q 2024 Earnings Press Release | 10

RXO, Inc.
Calculation of Gross Margin and Gross Margin as a Percentage of Revenue
(Unaudited)

Three Months Ended December 31,Years Ended December 31,
(Dollars in millions)2024202320242023
Revenue
Truck brokerage$1,267$610$3,029$2,358
Complementary services (1)
4314111,6551,704
Eliminations(31)(43)(134)(135)
Revenue$1,667$978$4,550$3,927
Cost of transportation and services (exclusive of depreciation and amortization)
Truck brokerage$1,100$519$2,610$1,993
Complementary services (1)
2882671,0891,109
Eliminations(31)(43)(134)(135)
Cost of transportation and services (exclusive of depreciation and amortization)$1,357$743$3,565$2,967
Direct operating expense (exclusive of depreciation and amortization)
Truck brokerage$—$—$1$1
Complementary services (1)
5056201234
Direct operating expense (exclusive of depreciation and amortization)$50$56$202$235
Direct depreciation and amortization expense
Truck brokerage$—$1$1$1
Complementary services (1)
2287
Direct depreciation and amortization expense$2$3$9$8
Gross margin
Truck brokerage$167$90$417$363
Complementary services (1)
9186357354
Gross margin$258$176$774$717
Gross margin as a percentage of revenue
Truck brokerage13.2 %14.8 %13.8 %15.4 %
Complementary services (1)
21.1 %20.9 %21.6 %20.8 %
Gross margin as a percentage of revenue15.5 %18.0 %17.0 %18.3 %

(1)Complementary services include last mile and managed transportation services.

RXO 4Q 2024 Earnings Press Release | 11
Fourth Quarter 2024 Results February 5, 2025

 
2 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 (“adjusted EBITDA”); free cash flow and free cash flow as a percentage of adjusted EBITDA (“free cash flow conversion”); adjusted free cash flow and adjusted free cash flow as a percentage of adjusted EBITDA (“adjusted free cash flow conversion”); net debt, gross leverage and net leverage; and adjusted net income and adjusted diluted earnings per share (“adjusted diluted 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 and adjusted diluted 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 and adjusted diluted 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. We believe that free cash flow, free cash flow conversion, adjusted free cash flow and adjusted free cash flow conversion are important measures of our ability to repay maturing debt or fund other uses of capital that we believe will enhance stockholder value, and may assist investors with assessing trends in our underlying business. We calculate free cash flow as net cash provided by operating activities less payment for purchases of property and equipment plus proceeds from sale of property and equipment. We define adjusted free cash flow as free cash flow less cash paid for transaction, integration, restructuring and other costs. We believe that net debt, gross leverage and net leverage are important measures of our overall liquidity position. Net debt is calculated by removing cash and cash equivalents from the principal balance of our total debt. Gross leverage is calculated as the principal balance of our total debt as a ratio of trailing twelve months adjusted EBITDA. Net leverage is calculated as net debt as a ratio of trailing twelve months adjusted EBITDA. With respect to our financial outlook for the first 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 presentation includes forward-looking statements, including statements relating to our outlook and 2025 assumptions, integration with Coyote Logistics and expected cost 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: 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; governmental regulation and political conditions; 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; 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; our ability to successfully integrate Coyote Logistics and realize the anticipated benefits of the acquisition; 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 presentation 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 presentation 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.

 
3 Q4 2024 highlights 1 Coyote integration remains ahead of schedule; raising cost synergy estimate 2 Double-digit sequential volume growth in Brokerage 3 Managed Transportation sales pipeline continues to grow 4 Last Mile year-over-year stop growth accelerated 5 Brokerage market tightened throughout the quarter

 
4 $176M $258M Q4 23 Q4 24 As reported fourth-quarter financial results RXO delivered Q4 2024 adjusted EBITDA in-line with guidance Adjusted EBITDA and margin %2Gross margin $ and % 1 Q4 2023 revenue, gross margin and adjusted EBITDA represent legacy RXO only. 2 See the “Non-GAAP financial measures” section. $31M $42M Q4 23 Q4 24 3.2% 2.5%18.0% Revenue $978M $1,667M Q4 23 Q4 24 15.5% 1

 
5 Diversified portfolio with momentum in complementary services Q4 revenue by service offering 75% 17% 8% Truck Brokerage Last Mile Managed Transportation Excludes impact of eliminations. Numbers may not add up to 100% due to rounding. Brokerage (combined) 1 • Volume: Up 10% q/q, down 6% y/y – LTL: Up 1% y/y, 18% of volume – Full truckload: Down 8% y/y, 82% of volume • Truckload volume mix: 76% contract, 24% spot • Gross margin of 13.2% Complementary services • Managed Trans. sales pipeline ~$2B in new FUM • Last Mile stop growth accelerated to 15% y/y • Strong gross margin of 21.1%, up 20 bps y/y • Cross-selling into legacy Coyote customer base 1 Prior periods include the impact of the Coyote Logistics acquisition.

 
6 Coyote integration update People / Operations • Continuing to retain key talent • Expanded service offerings and larger scale resulting in significant cross-selling opportunities – Managed outsourced transportation – Cross-border services – Last Mile • Leveraging combined capacity to better serve customers Coyote integration ahead of schedule; raising cost synergy estimate to at least $50M Technology • Significant progress with RXO Connect® as primary system – Migrated critical capabilities to the cloud – Enabled unified shipper tracking experience • Integrating core corporate systems • Continue to anticipate technology integration to be substantially complete by end of Q3 Synergies • Raising cost synergy estimate and now expect at least $50M – Excludes opportunities for improved cost of purchased transportation • Annualized cost synergy actions: – $25M completed end of 2024 – $25M incremental in 2025 – These actions will result in incremental realized savings of $25M-$30M in 2025

 
7 Adjusted EPS bridge Earnings per share Q4-24 Q4-23 GAAP diluted EPS $(0.12) $0.02 Amortization of intangible assets 0.10 0.03 Transaction, integration and restructuring costs 0.20 0.03 Tax associated with adjustments above1 and discrete tax item (0.12) (0.02) Adjusted diluted EPS2 $0.06 $0.06 RXO reported Q4 2024 adjusted diluted EPS of $0.06 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.

 
8 Trailing three month adjusted free cash flow walk Note: In millions. 1 Adjusted EBITDA and adjusted FCF are non-GAAP financial measures. 2 Adjusted EBITDA excludes certain NEO spin-related stock-based compensation. Trailing 3-month RXO adjusted free cash flow represented a 14% conversion Three month adjusted free cash flow 1 1 • Trailing 3-month RXO adjusted free cash flow represented a 14% conversion – Cash flow in the quarter lower due to semi- annual interest payment – Conversion also impacted by lower profitability at the bottom of the freight cycle and timing of working capital • Remain comfortable with long-term conversion of 40%-60%

 
9 Capital structure snapshot Capital structure Q4 2024 Notes due 2027 $ 355 Finance leases, asset financing, ST debt & other 33 Total debt, principal balance & other $ 388 Less: cash 35 Net debt1 $ 353 Committed liquidity Q4 2024 Cash $ 35 Revolver 600 Total capacity $ 635 Note: In millions. 1 See the “Non-GAAP financial measures” section. 2 See appendix for leverage calculations. 3 LTM period includes the impact of the Coyote Logistics acquisition. LTM leverage1,2,3 1.7x 1.6x Gross Net RXO has a strong balance sheet with low leverage and a robust liquidity position

 
10 -16% -9% -4% 23% 48% 47% 45% 21% 6% 12% 1% -13% -21% -26% -21% -18% -14% -10% -4% -1% 0% Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 TL Rev / Ld (% △ y/y) Brokerage GM % Brokerage truckload revenue per load and gross margin trends Revenue per load trends continue to improve • Q4 truckload revenue per load flat y/y – Excludes the impact of changes in fuel prices and length of haul • Revenue per load trends have improved to start the year – Truckload revenue per load up low single-digit % • Expect 2025 contract rates up y/y – Transitioning from the bottom of the freight cycle to an inflationary rate environment 2019 2020 2021 2023 2024 1 All periods prior to Q4 2024 exclude the impact of the Coyote Logistics acquisition. 2 Truckload only, excluding LTL, and excludes the impact of changes in fuel prices and length of haul. 2022 1,2 1 Includes the impact of Coyote

 
11 Monthly gross margin trends and market update Market conditions tightened as Q4 progressed and remained tight to start Q1 Market conditions tightened significantly • Load-to-truck ratio and industry-wide tender rejections moved higher • Capacity-driven market tightening with continued carrier exits • Demand trends remained soft with another muted peak season • Brokerage GM moved lower throughout the quarter, as expected Market remained tight to start Q1 • Industry KPIs remain elevated, despite seasonal softness – Impact largely due to inclement weather and capacity squeeze – Some project opportunities, although not enough to offset increase in buy rates

 
12 Full truckload volume and gross profit per load trends1 1 All periods prior to Q4 2024 exclude the impact of the Coyote Logistics acquisition. With the acquisition of Coyote, full truckload volume increased by >125%

 
13 LTL volume and gross profit per load trends1 LTL brokerage volume is growing with stable gross profit per load 1 All periods prior to Q4 2024 exclude the impact of the Coyote Logistics acquisition.

 
14 Outlook and modeling assumptions • Adjusted EBITDA1 : $20M-$30M • Brokerage y/y volume (combined) 2: Down mid-to-high single-digit % • Brokerage gross margin: 12%-14% Q1 2025 outlook FY 2025 modeling assumptions • Brokerage y/y volume growth (combined) 2 • Capital expenditures: $75M-$85M – Includes ~$15M of strategic real estate spend • Depreciation: $70M-$80M, Amortization of intangibles: $45M-$50M • Stock-based compensation: $30M-$35M • Restructuring + transaction & integration expenses: $40M-$50M • Net interest expense: $32M-$36M • Adjusted effective tax rate: 27%-29% • Fully diluted weighted-average shares outstanding: ~170M 1 See the “Non-GAAP financial measures” section. 2 Prior period includes the impact of the Coyote Logistics acquisition.

 
15 Key investment highlights 1 Large addressable market with secular tailwinds 2 Track record of above-market growth and high profitability 3 Proprietary technology drives productivity, volume and margin expansion 4 Long-term relationships with blue-chip customers 5 Market-leading platform with complementary transportation solutions 6 Tiered approach to sales drives multi-faceted growth opportunities 7 Diverse exposure across attractive end markets 8 Experienced and proven leadership team

 
16 Appendix

 
17 Financial reconciliations 1 See the “Non-GAAP financial measures” section. 2 Adjusted EBITDA margin is calculated as adjusted EBITDA divided by revenue. Reconciliation of net income (loss) to adjusted EBITDA and adjusted EBITDA margin (Dollars in millions) 2024 2023 2024 2023 Net income (loss) (20)$ 2$ (285)$ 4$ Interest expense, net 8 8 30 32 Income tax provision (benefit) (13) 2 (19) - Depreciation and amortization expense 33 15 87 67 Transaction and integration costs 15 - 53 12 Restructuring and other costs 19 4 252 17 Adjusted EBITDA 1 42$ 31$ 118$ 132$ Revenue 1,667$ 978$ 4,550$ 3,927$ Adjusted EBITDA margin 1, 2 2.5% 3.2% 2.6% 3.4% Three Months Ended December 31, Years Ended December 31,

 
18 Financial reconciliations (cont.) 1 The tax impact of non-GAAP adjustments represents the tax 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. (Dollars in millions, shares in thousands, except per share amounts) 2024 2023 2024 2023 Net income (loss) (20)$ 2$ (285)$ 4$ Amortization of intangible assets 17 3 28 13 Transaction and integration costs 15 - 53 12 Restructuring and other costs 19 4 252 17 Income tax associated with the adjustments above 1 (16) (2) (26) (10) Discrete tax item (5) - (5) - Adjusted net income 2 10$ 7$ 17$ 36$ Adjusted diluted earnings per share 2 0.06$ 0.06$ 0.12$ 0.30$ Fully diluted weighted-average common shares outstanding 169,885 119,575 136,684 119,456 Years Ended December 31,Three Months Ended December 31, Reconciliation of net income (loss) to adjusted net income and adjusted diluted earnings per share

 
19 1 See the “Non-GAAP financial measures” section. 2 Includes the cash component of these line items. 3 See Reconciliation of net income (loss) to adjusted EBITDA. 4 Free cash flow conversion from adjusted EBITDA is calculated as free cash flow divided by adjusted EBITDA. 5 Adjusted free cash flow conversion from adjusted EBITDA is calculated as adjusted free cash flow divided by adjusted EBITDA. 6 Three months ended December 31, 2024 is calculated as the twelve months ended December 31, 2024 less the nine months ended September 30, 2024. Financial reconciliations (cont.) Three Months Ended December 31, Nine Months Ended September 30, (Dollars in millions) 2024 6 2024 2023 2024 Net cash provided by (used in) operating activities (7)$ (12)$ 89$ (5)$ Payment for purchases of property and equipment (12) (45) (64) (33) Free cash flow 1 (19)$ (57)$ 25$ (38)$ Transaction and integration costs 2 18 42 8 24 Restructuring and other costs 2 7 22 16 15 Adjusted free cash flow 1 6$ 7$ 49$ 1$ Adjusted EBITDA 1, 3 42$ 118$ 132$ 76$ Free cash flow conversion from adjusted EBITDA 1, 4 -45.2% -48.3% 18.9% -50.0% Adjusted free cash flow conversion from adjusted EBITDA 1, 5 14.3% 5.9% 37.1% 1.3% Years Ended December 31, Reconciliation of cash flows from operating activities to free cash flow and adjusted free cash flow

 
20 Financial reconciliations (cont.) 1 Complementary services include Last Mile and Managed Transportation services. Calculation of gross margin and gross margin as a percentage of revenue               (Dollars in millions)   2024   2023 2024   2023 Revenue               Truck brokerage   1,267$   610$ 3,029$   2,358$ Complementary services 1   431   411 1,655   1,704 Eliminations   (31)   (43) (134)   (135) Revenue   1,667$   978$ 4,550$   3,927$                 Cost of transportation and services (exclusive of depreciation and amortization)               Truck brokerage   1,100$   519$ 2,610$   1,993$ Complementary services 1   288   267 1,089   1,109 Eliminations   (31)   (43) (134)   (135) Cost of transportation and services (exclusive of depreciation and amortization)   1,357$   743$ 3,565$   2,967$                 Direct operating expense (exclusive of depreciation and amortization)               Truck brokerage   -$   -$ 1$   1$ Complementary services 1   50   56 201   234 Direct operating expense (exclusive of depreciation and amortization)   50$   56$ 202$   235$ Direct depreciation and amortization expense Truck brokerage -$ 1$ 1$ 1$ Complementary services 1 2 2 8 7 Direct depreciation and amortization expense   2$ 3$ 9$ 8$ Gross margin               Truck brokerage   167$ 90$ 417$ 363$ Complementary services 1   91 86 357 354 Gross margin   258$   176$ 774$   717$                 Gross margin as a percentage of revenue               Truck brokerage   13.2%   14.8% 13.8%   15.4% Complementary services 1   21.1%   20.9% 21.6%   20.8% Gross margin as a percentage of revenue   15.5%   18.0% 17.0%   18.3% Years Ended December 31, Three Months Ended December 31,

 
21 Financial reconciliations (cont.) 1 See the “Non-GAAP financial measures” section. 2 See reconciliation of net income (loss) to adjusted EBITDA. 3 Represents stock compensation expense and other non-recurring items included in sales, general and administrative expense. December 31, (Dollars in millions) 2024 Reconciliation of bank-adjusted EBITDA   Adjusted EBITDA 1, 2 for the year ended December 31, 2024 118$ Adjustments per credit agreement 3 for the year ended December 31, 2024 28 Expected incremental annualized synergies associated with Coyote acquisition 44 Coyote Adjusted EBITDA for the period January 1, 2024 through September 15, 2024 34 Bank-adjusted EBITDA 224$ Calculation of gross leverage Total debt, principal balance and other 388$ Bank-adjusted EBITDA 224 Gross leverage 1 1.7x Calculation of net leverage Total debt, principal balance and other, net of cash and cash equivalents 353$ Bank-adjusted EBITDA 224 Net leverage 1 1.6x Reconciliation of bank-adjusted EBITDA; Calculation of gross and net leverage

 

 
v3.25.0.1
Cover
Feb. 05, 2025
Cover [Abstract]  
Document Type 8-K
Document Period End Date Feb. 05, 2025
Entity Registrant Name RXO, INC.
Entity Incorporation, State or Country Code DE
Entity File Number 001-41514
Entity Tax Identification Number 88-2183384
Entity Address, Address Line One 11215 North Community House Road
Entity Address, City or Town Charlotte
Entity Address, State or Province NC
Entity Address, Postal Zip Code 28277
City Area Code (980)
Local Phone Number 308-6058
Written Communications false
Soliciting Material false
Pre-commencement Tender Offer false
Pre-commencement Issuer Tender Offer false
Title of 12(b) Security Common stock, par value $0.01 per share
Trading Symbol RXO
Security Exchange Name NYSE
Entity Emerging Growth Company false
Entity Central Index Key 0001929561
Amendment Flag false
RXO (NYSE:RXO)
Historical Stock Chart
From Jan 2025 to Feb 2025 Click Here for more RXO Charts.
RXO (NYSE:RXO)
Historical Stock Chart
From Feb 2024 to Feb 2025 Click Here for more RXO Charts.