RXO (RXO) Q4 2025 Earnings Call Transcript

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Fri, February 6, 2026 astatine 8:35 AM CST 52 min read

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Feb. 6, 2026, 8 a.m. ET

• Chief Executive Officer — Drew Wilkerson

• Chief Financial Officer — James E. Harris

• Chief Strategy Officer — Jared Ian Weisfeld

Drew Wilkerson: Good morning, everyone. Thank you for joining today. With maine present successful Charlotte are RXO's Chief Financial Officer, James E. Harris, and Chief Strategy Officer, Jared Ian Weisfeld. This morning, I privation to screen 3 cardinal points. First, we proceed to instrumentality decisive actions to mitigate the effects of the prolonged brushed freight marketplace and important capableness reductions which are squeezing our brokerage gross margin. We person a rigorous disciplined attack to optimizing our outgo operation and our gross nett per load. We are taking steps to augment our bearer base, turn brokerage volume, turn businesses that are unchangeable sources of EBITDA, and leverage our heavy lawsuit relationships and last-mile hub web to plan unsocial solutions for customers.

Second, we person a beardown brokerage late-stage income pipeline for caller business, which grew much than 50% twelvemonth implicit year. Most of that maturation is driven by afloat truckload. Our managed proscription concern continues to triumph and besides has a precise beardown pipeline. Third, we finalized a caller asset-based lending installation which replaces our revolver. Our caller installation is right-sized for our needs, decreases our cost, and provides america with accrued flexibility crossed each marketplace cycles. Now let's sermon our fourth-quarter results. In brokerage, wide measurement declined by 4% twelvemonth implicit year. Less than truckload measurement maturation of 31% was much than offset by a 12% diminution successful truckload volume. Brokerage gross borderline was 11.9%.

In complementary services, managed proscription was awarded much than $200 cardinal of freight nether management, and last-mile stops grew by 3% twelvemonth implicit year. Complementary services gross borderline was 20.2%. Overall, RXO's EBITDA was $17 cardinal successful the quarter, beneath our expectations chiefly owed to a much pronounced brokerage borderline compression towards the extremity of the quarter. This was chiefly driven by capableness exits which led to the largest November to December summation successful industry-wide bargain rates successful sixteen years. In December, rates accrued by astir 15% period implicit month, overmuch faster than our contractual merchantability rates. At the aforesaid time, request remains brushed with not capable spot loads to offset the emergence successful acquisition proscription costs.

Sonar tender rejections and the load-to-truck ratio reached the highest levels of the twelvemonth successful December and some accrued further successful January. Because our publication of concern is mostly contractual, with endeavor customers, this affected our near-term brokerage gross borderline performance. That said, winning declaration concern is simply a hallmark of our brokerage exemplary due to the fact that it positions america to triumph accretive spot opportunities, mini bids, and peculiar projects. The capableness reductions successful the manufacture correspond 1 of the largest structural changes to truckload proviso since deregulation and should acceptable the marketplace up for a sharper inflection erstwhile request recovers. The regulatory actions volition besides assistance amended the wide information of the manufacture arsenic good arsenic assistance combat theft and fraud.