RXO (RXO) Citi's Global Industrial Tech & Mobility Conference 2026 summary

Market environment and demand outlook

• Freight demand has been soft for over three years, with the industry in a prolonged recession and goods vs. services mix at 15-year lows.

• Recent ISM readings and consumer confidence have shown signs of improvement, offering cautious optimism for a potential rebound.

• Supply has tightened significantly due to regulatory changes, with tender rejections doubling despite soft demand.

• The market is described as fragile, where any incremental demand could quickly shift the balance.

• Q1 volume is expected to be down 5%-10% year-over-year, reflecting both tough comps and ongoing demand weakness.

Business performance and growth strategy

• Brokerage truckload volumes are down double digits, but LTL volumes have grown, with Q4 up 31% year-over-year.

• The late-stage sales pipeline is up more than 50% year-over-year, driven by both new and existing customers and successful Coyote integration.

• Q1 adjusted EBITDA is projected at $5M-$12M, reflecting margin pressure from supply shocks and persistent tight market conditions.

• Incremental gross profit from new business can yield 50%-80%+ incremental margins, offering strong operating leverage as the cycle turns.

• Cost reductions of over $155M and technology investments are expected to drive future margin expansion.

Industry structure, consolidation, and technology

• Regulatory changes are removing fringe capacity, favoring large, compliant brokers and accelerating industry consolidation.

• The top nine brokers now represent about half the market, with further M&A and organic consolidation expected.

• Brokerage penetration is projected to rise from 20% to mid/high 20% in five years, with potential to reach 40% longer term.

• Technology and AI are seen as enablers for productivity, margin improvement, and competitive differentiation, but relationships and service remain core to the business.

• Proprietary data, compliance, and a two-sided network are viewed as durable moats against digital disintermediation.