RXO’s fourth quarter results disappointed the market, with revenue slightly missing analyst estimates and a wider-than-expected non-GAAP loss per share. Management attributed underperformance to ongoing softness in freight demand and sharp increases in transportation costs, which compressed brokerage margins. CEO Drew Wilkerson acknowledged that a significant tightening in truckload supply—driven by industry-wide carrier exits and regulatory actions—created “one of the largest structural changes to truckload supply since deregulation.” The company’s cost optimization and technology integration efforts were not enough to offset these near-term pressures, and management openly described the environment as challenging.
Is now the time to buy RXO? Find out in our full research report (it’s free for active Edge members).
RXO (RXO) Q4 CY2025 Highlights:
- Revenue: $1.47 billion vs analyst estimates of $1.48 billion (11.9% year-on-year decline, 0.7% miss)
- Adjusted EPS: -$0.07 vs analyst expectations of -$0.04 (68% miss)
- Adjusted EBITDA: $17 million vs analyst estimates of $18.68 million (1.2% margin, 9% miss)
- EBITDA guidance for Q1 CY2026 is $8.5 million at the midpoint, below analyst estimates of $12.67 million
- Operating Margin: -2.9%, down from -1.4% in the same quarter last year
- Sales Volumes fell 4% year on year (-6% in the same quarter last year)
- Market Capitalization: $2.13 billion
While we enjoy listening to the management's commentary, our favorite part of earnings calls are the analyst questions. Those are unscripted and can often highlight topics that management teams would rather avoid or topics where the answer is complicated. Here is what has caught our attention.
Our Top 5 Analyst Questions From RXO’s Q4 Earnings Call
- Ravi Shanker (Morgan Stanley) pressed for details on the 50% sales pipeline increase and timing for margin improvement. CEO Drew Wilkerson explained most pipeline growth comes from enterprise customers and expects bid wins to convert to volume by mid-year.
- Stephanie Moore (Jefferies) questioned whether company-specific actions could offset market headwinds. Chief Strategy Officer Jared Weisfeld responded that RXO is actively pursuing growth through its pipeline and technology initiatives, not waiting for macro recovery.
- Scott Group (Wolfe Research) asked why increased tender rejections have not produced greater spot volume. Wilkerson noted spot volumes are up but not enough to offset contractual margin compression; he highlighted potential EBITDA upside if gross profit per load improves.
- Ariel Luis Rosa (Citigroup) sought clarity on expected outperformance in truckload and LTL dynamics. Wilkerson said outperformance is measured against external market indices, with confidence in returning to volume growth, especially as LTL benefits from enterprise customer relationships.
- Ken Hoexter (Bank of America) inquired about persistent restructuring costs and sequential EBITDA declines. CFO James Harris explained most restructuring charges are legacy actions and emphasized ongoing efficiency gains and real estate consolidation.
Catalysts in Upcoming Quarters
In the coming quarters, our analysts will focus on (1) the pace of late-stage sales pipeline conversion and new customer onboarding, (2) margin recovery as regulatory capacity tightening unfolds, and (3) evidence of AI-driven productivity translating into lower cost per load and improved gross profit. Execution on further real estate optimization and integration of technology platforms will also be key milestones.
RXO currently trades at $12.95, down from $16.58 just before the earnings. Is the company at an inflection point that warrants a buy or sell? Find out in our full research report (it’s free).
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