RXO, Inc. Reports 15.9% Revenue Growth to $4.55 Billion, Faces Operating Loss

RXO, Inc. reported a significant increase in revenue for the fiscal year ending December 31, 2024, achieving $4.55 billion, a 15.9% rise from $3.93 billion in 2023. This growth was primarily driven by the acquisition of Coyote, which contributed approximately $796 million to the revenue. However, RXO experienced a decline in its legacy truck brokerage revenue, which fell by $125 million due to a 7% decrease in revenue per load, influenced by fluctuating fuel prices and market conditions. The managed transportation segment also saw a revenue drop of $90 million, attributed to decreased rates and volumes in ocean and expedite air services.

The company's operating income turned negative, reporting a loss of $56 million compared to a profit of $39 million in the previous year. This decline was largely due to increased costs associated with the Coyote acquisition, which included $49 million in transaction and integration costs. Additionally, RXO incurred a one-time charge of $216 million related to a deemed non-pro rata distribution from a private placement of common stock. The overall net loss for the year was $290 million, a significant drop from a net income of $4 million in 2023.

In terms of strategic developments, RXO completed the acquisition of Coyote on September 16, 2024, for $1.038 billion, enhancing its market position and service offerings. This acquisition is expected to provide synergies and broaden RXO's capabilities in the freight brokerage sector. The company also reported a workforce of 9,873 employees as of December 31, 2024, reflecting its growth and operational expansion.

Operationally, RXO's truck brokerage business remains a key component, with a focus on leveraging its proprietary digital brokerage platform, RXO Connect®. The platform aims to optimize freight management and enhance customer service. The company continues to face challenges in the competitive transportation market, with a need to adapt to changing economic conditions and customer demands. RXO's management has indicated a commitment to improving operational efficiency and profitability through ongoing investments in technology and strategic initiatives.

Looking ahead, RXO's management expressed cautious optimism about future growth, emphasizing the importance of integrating Coyote and capitalizing on market opportunities. The company aims to navigate the complexities of the transportation industry while focusing on enhancing its service offerings and maintaining strong customer relationships. However, RXO also acknowledged potential risks, including economic fluctuations and regulatory changes, which could impact its performance in the coming years.