RXO Announces Results for Fourth-Quarter 2023, Including Double-Digit Brokerage Volume Growth for Third-Consecutive Quarter
Press Release | Charlotte, NC | February 8, 2024
- Full-truckload brokerage volume increased 11 percent year-over-year and less-than-truckload volume increased 45 percent year-over-year
- Continued momentum in RXO’s brokerage business with multiple brokerage records in the quarter including total volume and quarterly loads per day
- Companywide gross margin of 18.0 percent; brokerage gross margin of 14.8 percent
CHARLOTTE, N.C. — February 8, 2024 — RXO (NYSE: RXO) today announced its financial results for the fourth quarter and full year of 2023.
Drew Wilkerson, chief executive officer of RXO, said, “RXO continued to execute well in the fourth quarter despite the prolonged soft freight environment. For the third consecutive quarter, our brokerage business delivered double-digit volume growth with strong gross margin. Our managed transportation business secured several new managed expedite customers, solidifying our position as a leading provider of this service. Our focus on profitable growth and cost discipline enabled us to expand companywide gross margin sequentially.
“I’m proud of all that we achieved in 2023, our first full year as a standalone company. We responded quickly to our customers’ needs and changing market conditions; as a result, our customers awarded us more freight,” Wilkerson said. “In 2024, we will remain focused on our playbook – taking profitable market share while making strategic investments in our business. Given the current market conditions, we continue to reduce costs, which, combined with our strong brokerage sales pipeline, will position RXO to deliver rapid earnings growth when the market inflects.”
Companywide Results
The company’s revenue was $1.0 billion for the fourth quarter, compared to $1.1 billion in the fourth quarter of 2022. Gross margin was 18.0 percent, compared to 19.5 percent in the fourth quarter of 2022.
The company reported fourth-quarter 2023 GAAP net income of $2 million, compared to a net loss of $4 million in the fourth quarter of 2022. Fourth-quarter 2023 GAAP net income included $4 million in transaction, integration, restructuring and other costs. Adjusted net income in the quarter was $7 million, compared to $33 million in the fourth quarter of 2022.
Adjusted EBITDA was $31 million, compared to $64 million in the fourth quarter of 2022. Adjusted EBITDA margin was 3.2 percent, compared to 5.7 percent in the fourth quarter of 2022.
Transaction, integration, restructuring and other costs, and amortization of intangibles, impacted GAAP earnings per share by $0.04, net of tax. For the fourth quarter, RXO reported a GAAP diluted earnings per share of $0.02. Adjusted diluted earnings per share were $0.06.
RXO’s brokerage business grew volume 15 percent year-over-year in the fourth quarter, including full truckload volume growth of 11 percent and less-than-truckload volume growth of 45 percent. Brokerage gross margin was 14.8% in the fourth quarter.
Brokerage contract volume increased by 23 percent year-over-year in the fourth quarter, the result of a strong brokerage sales pipeline, which has increased in size by 24 percent since the fourth quarter of 2022.
The company expects brokerage volumes to continue to grow on a year-over-year basis in the first quarter of 2024.
RXO’s complementary services gross margin was 20.9% for the quarter, up 40 basis points year-over-year. Loads provided by RXO’s managed transportation business to its brokerage business increased both year-over-year and quarter-over-quarter.
RXO’s last mile business grew EBITDA year-over-year in the fourth quarter and for the full year.
In the fourth quarter of 2023, 97 percent of RXO’s brokerage loads were created or covered digitally using RXO’s cutting-edge technology platform, up from 87 percent in the fourth quarter of 2022.
The seven-day carrier retention rate was 76 percent, up 200 basis points year-over-year.
The company will hold a conference call and webcast on Thursday, February 8 at 8 a.m. Eastern Standard Time. Participants can call in toll-free (from U.S./Canada) at 1-888-259-6580; international callers dial +1-206-962-3782. The conference ID is 34416829.
A live webcast of the conference call will be available on the investor relations area of the company’s website, http://investors.rxo.com. A replay of the conference call will be available through February 29, 2024, by calling toll-free (from U.S./Canada) 1-877-674-7070; international callers dial +1-416-764-8692. Use the passcode 416829#. Additionally, the call will be archived on http://investors.rxo.com.
For the full press release, click here.
RXO (NYSE: RXO) is a leading provider of asset-light transportation solutions. RXO offers tech-enabled truck brokerage services together with complementary solutions including managed transportation, freight forwarding and last mile delivery. The company combines massive capacity and cutting-edge technology to move freight efficiently through supply chains across North America. The company is headquartered in Charlotte, N.C. Visit RXO.com for more information and connect with RXO on Facebook, X (FKA Twitter), LinkedIn, Instagram and YouTube.
1 For definitions of non-GAAP measures see the “Non-GAAP Financial Measures” section in the full press release.