- 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
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.
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.
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
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, 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)
2024
2023
2024
2023
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
expense
218
146
666
591
Depreciation and amortization expense
33
15
87
67
Transaction and integration costs
15
—
53
12
Restructuring costs
18
4
33
16
Operating income (loss)
(24
)
14
(56
)
39
Other expense
1
2
218
3
Interest expense, net
8
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
Basic
164,407
117,012
133,412
116,871
Diluted
164,407
119,575
133,412
119,456
RXO, Inc.
Consolidated Balance
Sheets
(Unaudited)
December 31,
(Dollars in millions, shares in thousands,
except per share amounts)
2024
2023
ASSETS
Current assets
Cash and cash equivalents
$
35
$
5
Accounts receivable, net of $13 and $12 in
allowances, respectively
1,228
743
Other current assets
78
48
Total current assets
1,341
796
Long-term assets
Property and equipment, net of $317 and
$293 in accumulated depreciation, respectively
135
124
Operating lease assets
274
195
Goodwill
1,124
630
Identifiable intangible assets, net of
$146 and $118 in accumulated amortization, respectively
499
68
Other long-term assets
45
12
Total long-term assets
2,077
1,029
Total assets
$
3,418
$
1,825
LIABILITIES AND STOCKHOLDERS’
EQUITY
Current liabilities
Accounts payable
$
573
$
414
Accrued expenses
375
199
Short-term debt and current maturities of
long-term debt
17
3
Short-term operating lease liabilities
75
53
Other current liabilities
26
13
Total current liabilities
1,066
682
Long-term liabilities
Long-term debt and obligations under
finance leases
351
356
Deferred tax liabilities
87
7
Long-term operating lease liabilities
213
146
Other long-term liabilities
84
40
Total long-term liabilities
735
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, respectively
2
1
Additional paid-in capital
1,904
590
Retained earnings (Accumulated
deficit)
(279
)
6
Accumulated other comprehensive loss
(10
)
(3
)
Total equity
1,617
594
Total liabilities and equity
$
3,418
$
1,825
RXO, Inc.
Consolidated Statements of
Cash Flows
(Unaudited)
Years Ended December
31,
(In millions)
2024
2023
Operating activities
Net income (loss)
$
(285
)
$
4
Adjustments to reconcile net income
(loss) to net cash from operating activities
Depreciation and amortization expense
87
67
Stock compensation expense
23
19
Deferred tax benefit
(24
)
(8
)
Deemed non-pro rata distribution
216
—
Impairment of operating lease assets
13
—
Other
7
9
Changes in assets and
liabilities
Accounts receivable
(110
)
158
Other current assets and other long-term
assets
1
(14
)
Accounts payable
(60
)
(86
)
Accrued expenses, other current
liabilities and other long-term liabilities
120
(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 facilities
238
76
Repayment of borrowings on revolving
credit facilities
(226
)
(71
)
Proceeds from issuance of common stock and
pre-funded warrants
1,125
—
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
)
Other
11
(2
)
Net cash provided by (used in)
financing activities
1,108
(117
)
Effect of exchange rates on cash, cash
equivalents and restricted cash
(2
)
1
Net increase (decrease) in cash, cash
equivalents and restricted cash
30
(93
)
Cash, cash equivalents and restricted
cash, beginning of period
5
98
Cash, cash equivalents and restricted
cash, end of period
$
35
$
5
Supplemental disclosure of cash flow
information:
Cash paid for income taxes, net
4
27
Cash paid for interest, net
27
32
Purchases of property and equipment in
accounts payable
3
2
Accrued tax withholdings related to
vesting of stock compensation awards
15
—
RXO, Inc.
Revenue Disaggregated by
Service Offering
(Unaudited)
Three Months Ended December
31,
Years Ended December
31,
(In millions)
2024
2023
2024
2023
Revenue
Truck brokerage
$
1,267
$
610
$
3,029
$
2,358
Last mile
290
257
1,055
1,014
Managed transportation
141
154
600
690
Eliminations
(31
)
(43
)
(134
)
(135
)
Total
$
1,667
$
978
$
4,550
$
3,927
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)
2024
2023
2024
2023
Reconciliation of Net Income (Loss) to
Adjusted EBITDA
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 (1)
19
4
252
17
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, 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)
2024
2023
2024
2023
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 assets
17
3
28
13
Transaction and integration costs
15
—
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
Diluted
169,885
119,575
136,684
119,456
(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, 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)
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
%
(1)
Complementary services include last mile
and managed transportation services.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20250205632321/en/
Media Nina Reinhardt nina.reinhardt@rxo.com
Investor Kevin Sterling kevin.sterling@rxo.com
RXO (NYSE:RXO)
Historical Stock Chart
From Jan 2025 to Feb 2025
RXO (NYSE:RXO)
Historical Stock Chart
From Feb 2024 to Feb 2025
