RXO, Inc.

What they do

RXO operates a brokered transportation platform, with its largest component being core truck brokerage, connecting shippers with independent carriers via proprietary digital and pricing technology. It also offers asset-light managed transportation, including load planning, procurement, and freight forwarding, and last mile services for heavy goods, positioning itself as the largest U.S. provider of outsourced last mile heavy goods delivery.

Revenue drivers

• Truck Brokerage — Core business that places freight with carriers on contract or spot basis, generating revenue from gross margins on shipments; drove 2% truckload volume growth in Q2 2026.
• Managed Transportation — Asset-light solutions for shippers outsourcing freight, including control tower, expedite, and freight forwarding; awarded ~$100 million in additional freight under management in Q2 2026.
• Last Mile — Asset-light consumer deliveries for omnichannel and e-commerce retailers; grew stops 3% year over year in Q2 2026 on market share gains.

Recent performance

In Q2 2026, RXO reported revenue of $1.8 billion, up from $1.4 billion in Q2 2025, with gross margin at 13.9% versus 17.8% previously. GAAP net loss was $9 million, flat year over year, but adjusted net income rose to $10 million from $7 million. Adjusted EBITDA was $40 million, up from $38 million, with margin declining to 2.3% from 2.7%. Brokerage volume grew 2%, with truckload spot mix at 42%, and complementary services gross margin hit 21.1%. Full-year 2025 revenue was $5.74 billion with a net loss of $100 million.

Strategy

RXO focuses on leveraging its proprietary digital brokerage and pricing technology to gain market share and improve profitability, particularly in truck brokerage. Management emphasizes cross-selling across complementary services to drive synergies. The company aims to capitalize on the freight cycle recovery, with plans to continue growing volume and gross profit per load. It also maintains an asset-light model to generate robust free cash flow conversion and high return on invested capital.

Risks

• Freight cycle volatility — Results are sensitive to truckload market conditions; volume and spot mix can swing sharply, impacting gross profit per load and margins.
• Integration costs from Coyote acquisition — The $1.038 billion Coyote acquisition incurred additional working capital adjustments and ongoing integration, restructuring, and other costs ($13 million in Q2 2026) that pressure profitability.
• Customer concentration — Large shippers may negotiate lower rates, and loss of a major customer could significantly affect revenue and volumes.
• Economic downturn and inflation — Inflation raises operating costs, and a recession could depress freight activity levels, reducing demand for brokerage services.

Outlook

Management expects positive Brokerage trends to continue in Q3 2026, with anticipated volume and gross profit per load growth both sequentially and year-over-year. The company guides Q3 2026 adjusted EBITDA to be between $35 million and $45 million. In Brokerage, overall volume growth is expected to increase by a low-to-mid-single-digit percentage year over year.