RXO Reports Successful Migration of Coyote Coverage & Reports First Quarter Financial Results

May 7, 2025  by Karen Parrish in Business Strategy, Industry   

“Our technology team has been working diligently to integrate the best features of the legacy Coyote technology platform into RXO Connect. Today, I’m pleased to announce a critical integration milestone – carrier and coverage operations are now happening in one system, which will enable us to leverage our scale and realize future cost-of-purchased-transportation synergies,” said Drew Wilkerson, chief executive officer of RXO.

“We have made significant progress with the integration of Coyote and are again raising our synergy estimate. We now expect cash synergies to be more than $70 million. This estimate does not include cost-of-purchased-transportation opportunities, which we expect will be significant.”

Wilkerson said, “In the first quarter, RXO grew less-than-truckload brokerage volume by 26% year-over- year and saw continued momentum within Last Mile, which achieved stop growth of 24% year-over-year. RXO is well positioned for the long term because of our larger scale, exceptional service, comprehensive solutions, industry-leading innovation and deep customer relationships.”

Companywide Results
RXO’s revenue was $1.4 billion for the first quarter, compared to $913 million in the first quarter of 2024. Gross margin was 16.0%, compared to 17.4% in the first quarter of 2024.

The company reported a first-quarter 2025 GAAP net loss of $31 million, compared to a net loss of $15 million in the first quarter of 2024. The first-quarter 2025 GAAP net loss included $20 million in transaction, integration, restructuring and other costs. Adjusted net loss in the quarter was $5 million, compared to an adjusted net loss of $4 million in the first quarter of 2024.

Adjusted EBITDA was $22 million, compared to $15 million in the first quarter of 2024. Adjusted EBITDA margin was 1.5%, compared to 1.6% in the first quarter of 2024.

Transaction, integration, restructuring and other costs, and amortization of intangibles, impacted GAAP earnings per share by $0.15, net of tax. For the first quarter, RXO reported a GAAP diluted loss per share of $0.18. Adjusted diluted loss per share was $0.03.

Brokerage
Volume in RXO’s Brokerage business, including the impact of the Coyote Logistics acquisition in both periods, declined by 1% year-over-year in the first quarter. Less-than-truckload volume increased by 26% but was offset by an 8% decline in full truckload volume.

Brokerage gross margin was 13.3% in the first quarter.

Complementary Services
Managed Transportation increased the synergy loads provided to Brokerage. Last Mile stops grew by 24% year-over-year.

RXO’s complementary services gross margin was 21.0% for the quarter.

Second-Quarter Outlook

RXO expects second-quarter 2025 adjusted EBITDA to be between $30 million and $40 million. The company expects second-quarter 2025 Brokerage gross margin to be between 13% and 15%.

Conference Call

The company will hold a conference call and webcast on Wednesday, May 7 at 8 a.m. Eastern Daylight 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 81237.

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 May 14, 2025, by calling toll-free (from U.S./Canada) 1-888-660-6264; international callers dial +1-289-819-1325. Use the passcode 81237#. Additionally, the call will be archived on http://investors.rxo.com.