RXO, Inc. Reports 57% Revenue Growth to $1.433 Billion in Q1 2025

RXO, Inc. reported significant financial growth in its first quarter of 2025, with revenues reaching $1.433 billion, a 57% increase from $913 million in the same period of 2024. This surge in revenue was primarily driven by a $503 million increase in truck brokerage revenue, largely attributed to the acquisition of Coyote, a technology-driven freight brokerage service, completed in September 2024. However, the company also reported a net loss of $31 million, compared to a loss of $15 million in the prior year, reflecting increased operational costs associated with the acquisition and restructuring efforts.

The company's cost of transportation and services rose to $1.153 billion, representing 80.5% of total revenue, up from 76.6% in the previous year. This increase was largely due to the Coyote acquisition, which added significant operational expenses. Additionally, sales, general, and administrative expenses increased by 44.8% to $210 million, driven by the integration of Coyote and other operational costs. Despite these challenges, RXO's adjusted EBITDA improved to $29 million from $19 million year-over-year, indicating some operational efficiency gains.

In terms of operational metrics, RXO's customer engagement showed positive trends, particularly in its last mile services, which saw a 24% increase in volume, contributing an additional $46 million in revenue. The company also reported a decrease in direct operating expenses as a percentage of revenue, down to 3.3% from 5.8%, reflecting cost reduction initiatives. However, the overall employee headcount and customer counts were not disclosed in the filing, leaving some operational indicators unreported.

Geographically, RXO continues to generate the majority of its revenue from the U.S., with approximately 6% of revenues coming from international markets, including Canada, Mexico, Europe, and Asia. The company is focused on leveraging its digital brokerage technology to enhance service offerings and expand its market share. The acquisition of Coyote is expected to enhance RXO's competitive position by providing greater scale and a broader array of services.

Looking ahead, RXO's management expressed confidence in the company's ability to navigate the challenges posed by inflation and competitive pricing pressures. The company anticipates that its existing liquidity and capital resources will support operations and growth initiatives over the next 12 months. RXO is also in the process of integrating Coyote into its operations, which is expected to yield synergies and improve profitability in the long term.