RXO Reports Fourth-Quarter Results
Written by Emily J. Thompson, Senior Investment Analyst
Updated: Feb 05 2025
0mins
Should l Buy RXO?
Source: Businesswire
Financial Performance: RXO reported a revenue of $1.7 billion for Q4 2024, up from $1.0 billion in the same quarter last year, but incurred a GAAP net loss of $20 million due to integration costs related to the Coyote Logistics acquisition.
Growth and Outlook: The company anticipates achieving at least $50 million in annualized cost synergies from the Coyote integration and expects first-quarter 2025 adjusted EBITDA to range between $20 million and $30 million, despite a soft freight market.
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Analyst Views on RXO
Wall Street analysts forecast RXO stock price to fall over the next 12 months. According to Wall Street analysts, the average 1-year price target for RXO is 15.42 USD with a low forecast of 11.00 USD and a high forecast of 20.00 USD. However, analyst price targets are subjective and often lag stock prices, so investors should focus on the objective reasons behind analyst rating changes, which better reflect the company's fundamentals.
16 Analyst Rating
3 Buy
11 Hold
2 Sell
Hold
Current: 16.900
Low
11.00
Averages
15.42
High
20.00
Current: 16.900
Low
11.00
Averages
15.42
High
20.00
About RXO
RXO, Inc. is a provider of asset-light transportation solutions. The Company offers tech-enabled truck brokerage services together with complementary solutions, including managed transportation and last-mile delivery. It combines massive capacity and cutting-edge technology to move freight through supply chains across North America. Its self-learning RXO Connect digital brokerage platform encompasses Freight Optimizer, as well as its mobile app, application programming interface (API) integrations, self-service dashboards and real-time functionality for transacting and tracking freight shipments. Its managed transportation service provides asset-light solutions for shippers who outsource their freight transportation. Its control tower solution leverages the expertise of a dedicated team focused on continuous improvement, and digital, door-to-door visibility into order status and freight in transit. Its last mile offering is an asset-light service that facilitates consumer deliveries.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
RXO, Inc. Q4 2025 Earnings Call Insights
- Revenue and Profit Performance: RXO reported $1.5 billion in total revenue for Q4 2025, with a gross margin of 14.8% and adjusted EBITDA of $17 million, despite facing rising transportation costs and soft Last Mile demand, indicating the company's resilience in a challenging market environment.
- Market Outlook and Strategy: Management expects Q1 2026 adjusted EBITDA to range between $5 million and $12 million, reflecting ongoing weak freight demand and elevated transportation costs, although optimism remains for a strong sales pipeline in truckload expected to resume growth by mid-year.
- Technology and Innovation Investment: RXO implemented an AI-based load recommendation system in its RXO Connect platform, resulting in a 24% year-over-year increase in digital bids per carrier, which not only enhances operational efficiency but also strengthens customer relationships, demonstrating the company's ongoing commitment to technology investment.
- Cost Control and Restructuring: Despite facing restructuring costs and market pressures, management emphasized addressing challenges through optimizing cost structures and enhancing operational flexibility, with expected restructuring and integration expenses of $25 million to $30 million in 2026, reflecting the company's strategic planning for the future.
See More
RXO Q4 Earnings Report Analysis
- Earnings Performance: RXO reported a Q4 non-GAAP EPS of -$0.07, missing expectations by $0.03, indicating ongoing profitability pressures, while revenue of $1.5 billion, down 11.8% year-over-year, exceeded forecasts by $10 million, reflecting weak market demand.
- Adjusted EBITDA Decline: Adjusted EBITDA fell to $17 million from $42 million in Q4 2024, with the adjusted EBITDA margin decreasing from 2.5% to 1.2%, highlighting challenges in cost management and profitability.
- Brokerage Business Dynamics: RXO's brokerage volume declined by 4% year-over-year in Q4, despite a 31% increase in less-than-truckload volume, offset by a 12% drop in full truckload volume, resulting in a brokerage gross margin of 11.9%, indicating intensified market competition.
- Future Outlook: RXO expects Q1 2026 adjusted EBITDA to range between $5 million and $12 million, with overall brokerage volume anticipated to decline by 5% to 10% year-over-year and gross margin projected between 11% and 13%, reflecting a cautious outlook on future market conditions.
See More
RXO Reports Q4 Results: Market Tightening Impacts Gross Margin
- Market Tightening Affects Margin: RXO's brokerage gross margin fell to 11.9% in Q4 2025 from 13.2% in Q4 2024 due to ongoing reductions in truckload capacity, indicating increased competitive pressure on profitability amid a tightening market.
- Significant Sales Pipeline Growth: The brokerage's late-stage sales pipeline grew by over 50% year-over-year, suggesting that despite soft market demand, the company maintains strong sales momentum, potentially laying the groundwork for future revenue growth.
- Managed Transportation Secures Major Contracts: RXO's Managed Transportation segment was awarded over $200 million in freight management contracts in the fourth quarter, which not only strengthens the company's market position but also provides a solid foundation for future revenue increases.
- New Financing Enhances Flexibility: RXO finalized a $450 million asset-based lending facility, replacing its previous $600 million unsecured revolving credit line, which enhances financial flexibility across market cycles and supports the company's long-term strategic objectives.
See More
RXO Q4 Revenue Reaches $1.469 Billion, Below IBES Estimate of $1.487 Billion (Amount Corrected)
Revenue Comparison: Corrected revenue for Q4 is reported at USD 1,469 million.
Estimates Adjustment: This figure is slightly lower than the Ibes estimate of USD 1,487 million.
See More
RXO INC - BORROWERS COULD RAISE REVOLVING COMMITMENT BY AS MUCH AS $200 MILLION - SEC FILING
Increased Borrowing Costs: Borrowers may face rising costs due to a potential increase in commitment fees by up to $200 million.
Impact on Borrowers: The increase in fees could significantly affect borrowers' financial obligations and overall borrowing strategies.
See More
RXO INC SECURES $450 MILLION REVOLVING CREDIT FACILITY IN CREDIT AGREEMENT - SEC FILING
- Credit Agreement Details: The agreement includes a revolving credit facility valued at $450 million.
- Purpose of the Facility: The credit facility is intended for general corporate purposes and financial flexibility.
See More
RXO, Inc. Q4 2025 Earnings Call Insights
- Revenue and Profit Performance: RXO reported $1.5 billion in total revenue for Q4 2025, with a gross margin of 14.8% and adjusted EBITDA of $17 million, despite facing rising transportation costs and soft Last Mile demand, indicating the company's resilience in a challenging market environment.
- Market Outlook and Strategy: Management expects Q1 2026 adjusted EBITDA to range between $5 million and $12 million, reflecting ongoing weak freight demand and elevated transportation costs, although optimism remains for a strong sales pipeline in truckload expected to resume growth by mid-year.
- Technology and Innovation Investment: RXO implemented an AI-based load recommendation system in its RXO Connect platform, resulting in a 24% year-over-year increase in digital bids per carrier, which not only enhances operational efficiency but also strengthens customer relationships, demonstrating the company's ongoing commitment to technology investment.
- Cost Control and Restructuring: Despite facing restructuring costs and market pressures, management emphasized addressing challenges through optimizing cost structures and enhancing operational flexibility, with expected restructuring and integration expenses of $25 million to $30 million in 2026, reflecting the company's strategic planning for the future.
See More
RXO Q4 Earnings Report Analysis
- Earnings Performance: RXO reported a Q4 non-GAAP EPS of -$0.07, missing expectations by $0.03, indicating ongoing profitability pressures, while revenue of $1.5 billion, down 11.8% year-over-year, exceeded forecasts by $10 million, reflecting weak market demand.
- Adjusted EBITDA Decline: Adjusted EBITDA fell to $17 million from $42 million in Q4 2024, with the adjusted EBITDA margin decreasing from 2.5% to 1.2%, highlighting challenges in cost management and profitability.
- Brokerage Business Dynamics: RXO's brokerage volume declined by 4% year-over-year in Q4, despite a 31% increase in less-than-truckload volume, offset by a 12% drop in full truckload volume, resulting in a brokerage gross margin of 11.9%, indicating intensified market competition.
- Future Outlook: RXO expects Q1 2026 adjusted EBITDA to range between $5 million and $12 million, with overall brokerage volume anticipated to decline by 5% to 10% year-over-year and gross margin projected between 11% and 13%, reflecting a cautious outlook on future market conditions.
See More
RXO Reports Q4 Results: Market Tightening Impacts Gross Margin
- Market Tightening Affects Margin: RXO's brokerage gross margin fell to 11.9% in Q4 2025 from 13.2% in Q4 2024 due to ongoing reductions in truckload capacity, indicating increased competitive pressure on profitability amid a tightening market.
- Significant Sales Pipeline Growth: The brokerage's late-stage sales pipeline grew by over 50% year-over-year, suggesting that despite soft market demand, the company maintains strong sales momentum, potentially laying the groundwork for future revenue growth.
- Managed Transportation Secures Major Contracts: RXO's Managed Transportation segment was awarded over $200 million in freight management contracts in the fourth quarter, which not only strengthens the company's market position but also provides a solid foundation for future revenue increases.
- New Financing Enhances Flexibility: RXO finalized a $450 million asset-based lending facility, replacing its previous $600 million unsecured revolving credit line, which enhances financial flexibility across market cycles and supports the company's long-term strategic objectives.
See More
RXO Q4 Revenue Reaches $1.469 Billion, Below IBES Estimate of $1.487 Billion (Amount Corrected)
Revenue Comparison: Corrected revenue for Q4 is reported at USD 1,469 million.
Estimates Adjustment: This figure is slightly lower than the Ibes estimate of USD 1,487 million.
See More
RXO INC - BORROWERS COULD RAISE REVOLVING COMMITMENT BY AS MUCH AS $200 MILLION - SEC FILING
Increased Borrowing Costs: Borrowers may face rising costs due to a potential increase in commitment fees by up to $200 million.
Impact on Borrowers: The increase in fees could significantly affect borrowers' financial obligations and overall borrowing strategies.
See More
RXO INC SECURES $450 MILLION REVOLVING CREDIT FACILITY IN CREDIT AGREEMENT - SEC FILING
- Credit Agreement Details: The agreement includes a revolving credit facility valued at $450 million.
- Purpose of the Facility: The credit facility is intended for general corporate purposes and financial flexibility.
See More
