RXO, Inc. ( (RXO) ) has released its Q3 earnings. Here is a breakdown of the information RXO, Inc. presented to its investors.
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RXO, Inc. is a leading provider of asset-light transportation solutions, specializing in tech-enabled truck brokerage services, managed transportation, and last-mile delivery across North America. The company recently announced its third-quarter financial results for 2024, highlighting the successful integration of its recent acquisition, Coyote Logistics. The integration is ahead of schedule, with RXO raising its annualized cost synergy estimate to at least $40 million, and the company has strengthened its balance sheet while reducing its leverage ratio significantly.
The third quarter saw RXO achieve a companywide gross margin of 17.3%, with its Brokerage business securing a solid 13.7% gross margin despite challenging market conditions. The Managed Transportation division was awarded over $300 million in new freight under management, and the Last Mile segment grew by 11% year-over-year. However, RXO reported a GAAP net loss of $243 million, largely due to transaction, integration, and restructuring costs related to the Coyote acquisition. On an adjusted basis, the company recorded a net income of $7 million, reflecting a modest improvement from the previous year.
Key financial metrics included a revenue increase to $1.04 billion, up from $976 million in the third quarter of 2023, and an adjusted EBITDA of $33 million, compared to $26 million in the prior year. The acquisition of Coyote Logistics has positioned RXO as the third-largest freight broker in North America, enhancing its capacity to provide comprehensive solutions to customers while achieving significant cost efficiencies through technology integration and vendor spend reductions.
Looking forward, RXO remains focused on strategic investments and cost control, aiming to provide superior service and innovative solutions. The company anticipates an adjusted EBITDA of between $40 million and $45 million for the fourth quarter of 2024, with Brokerage gross margins projected to be between 12% and 14%, indicating cautious optimism for continued growth and profitability.
