RXO (RXO) Barclays 43rd Annual Industrial Select Conference summary

Technology and business model

• AI and technology are leveraged to improve productivity and unlock incremental revenue, aiming for long-term structural margin improvement.

• Strong focus remains on customer relationships and service, especially for complex and high-value freight.

• Compliance and high-quality carrier partnerships are emphasized, with rigorous internal procedures for onboarding carriers.

• Large network of nearly 120,000 carriers provides a competitive advantage, especially as regulatory changes remove fringe capacity.

• Integration of Coyote is complete, with all operations, technology, and people unified on one system.

Market conditions and performance

• Recent quarters have seen margin pressure due to a supply shock and rising truckload buy rates, with Q1 volumes guided down 5-10% year-over-year.

• LTL segment remains strong, up 5% year-over-year in Q1, following a 31% increase in Q4.

• The market is described as supply-constrained, with tender rejections rising despite muted demand.

• Contract rates for 2026 are expected to be up low- to mid-single digits year-over-year.

• The supply-demand balance is fragile, and any demand uptick could quickly shift market dynamics.

Growth outlook and strategy

• Late-stage brokerage sales pipeline is up over 50% year-over-year, driven by new business from both existing and new customers.

• Outperformance versus the market is expected to resume as early as mid-year, with easing comps and strong bid season results.

• Profitable growth is prioritized, with over $155 million in costs removed since the XPO spin-off.

• Double-digit volume growth remains a medium-term goal, with a focus on outperforming the market through cycles.

• The business is positioned for significant margin improvement and cash flow generation as the market turns.