RXO (RXO) Q1 2025 earnings summary

Executive summary

• Completed migration and integration of Coyote carrier and coverage operations to RXO Connect/Freight Optimizer, unifying operations and enhancing network capacity and efficiency.

• Achieved 26% year-over-year growth in less-than-truckload (LTL) brokerage volume and 24% growth in last-mile stops.

• Raised expected cash synergy estimate from Coyote integration to over $70 million, including $60 million in annualized operating expense synergies and $10 million in capital synergies.

• Last Mile segment continued to gain significant and profitable market share.

• Coyote acquisition completed for $1.048 billion, expanding scale and service offerings.

Financial highlights

• Q1 2025 revenue was $1.43 billion, up from $913 million in Q1 2024, reflecting the impact of the Coyote acquisition.

• Gross margin was 16.0%, down from 17.4% in Q1 2024.

• Adjusted EBITDA was $22 million (1.5% margin), up from $15 million (1.6%) in Q1 2024.

• Reported GAAP net loss was $31 million, including $20 million in transaction, integration, and restructuring costs.

• Adjusted net loss was $5 million; adjusted diluted loss per share was $0.03.

Outlook and guidance

• Q2 2025 adjusted EBITDA expected between $30 million and $40 million.

• Brokerage gross margin expected between 13% and 15% in Q2 2025.

• 2025 capital expenditure estimate reduced to $65–$75 million; 2026 CapEx expected at $45–$55 million.

• Q2 volume outlook: low to mid-single digit decline year-over-year, with truckload down and LTL up strongly.

• 2025 adjusted effective tax rate expected at 30–33% due to lower pre-tax income; long-term target remains 25%.