RXO Announces Results for Third-Quarter 2023, Including 18 Percent Brokerage Volume Growth
Press Release | Charlotte, NC | November 7, 2023
- Full-truckload brokerage volume increased 13 percent year-over-year and less-than-truckload volume increased 55 percent year-over-year
- Momentum in RXO’s brokerage business accelerated as the quarter progressed; set multiple brokerage records in the quarter including total volume, quarterly loads per day and monthly loads per day
- Companywide gross margin of 17.7 percent; brokerage gross margin of 15.1 percent
CHARLOTTE, N.C. — November 7, 2023 — RXO (NYSE: RXO) today announced its financial results for the third quarter of 2023.
Drew Wilkerson, chief executive officer of RXO, said, “RXO continued to execute well in the third quarter. We achieved a record number of loads per day in our brokerage business and grew brokerage volume by double-digits for the second consecutive quarter. Brokerage gross margin remained strong. Our experienced team, our deep customer relationships, and continued adoption of our cutting-edge, AI-enabled technology all contributed to our results.
“While RXO’s results improved as the third quarter progressed, the market remains soft and we’re monitoring the freight markets closely. We’ll continue to follow our playbook of taking profitable market share while controlling costs and making strategic investments in our business,” Wilkerson said. “In the third quarter, we onboarded new brokerage employees and made significant tech investments. We believe this will enable RXO to continue to achieve outsized growth when the market inflects. RXO is uniquely positioned to outperform.”
Companywide Results
The company’s revenue was $1.0 billion for the third quarter, compared to $1.1 billion in the third quarter of 2022. Gross margin was 17.7 percent, compared to 19.6 percent in the third quarter of 2022.
The company reported a third-quarter 2023 GAAP net loss of $1 million, compared to net income of $13 million in the third quarter of 2022. The GAAP net loss included $5 million in transaction, integration, restructuring and other costs. Adjusted net income1 in the quarter was $6 million, compared to $39 million in the third quarter of 2022.
Adjusted EBITDA1 was $26 million, compared to $66 million in the third quarter of 2022. Adjusted EBITDA margin1 was 2.7 percent, compared to 5.8 percent in the third quarter of 2022.
Transaction, integration, restructuring and other costs, and amortization of intangibles, impacted GAAP earnings per share by $0.06, net of tax. For the third quarter, RXO reported a GAAP diluted loss per share of $0.01. Adjusted diluted earnings per share1 were $0.05.
RXO’s brokerage business grew volume 18 percent year-over-year in the third quarter. Brokerage gross margin was 15.1 percent in the third quarter.
Brokerage contract volume increased by 30 percent year-over-year in the third quarter, the result of a strong brokerage sales pipeline, which has increased in size by 115 percent since the third quarter of 2021.
The company expects brokerage volumes to continue to grow on a year-over-year basis in the fourth quarter of 2023.
RXO’s complementary services gross margin was 20.0% for the quarter, up 90 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 third quarter, and the company continues to expect to grow full-year last mile EBITDA year-over-year.
In the third quarter of 2023, 97 percent of RXO’s brokerage loads were created or covered digitally using RXO’s cutting-edge technology platform, up from 81 percent in the third quarter of 2022.
The seven-day carrier retention rate was 77 percent, compared to 75 percent in the third quarter of 2022.
In early November, RXO exercised a feature under its Revolving Credit Agreement that increased total commitments from $500 million to $600 million. RXO simultaneously repaid all outstanding obligations under its Term Loan Credit Agreement. These transactions have no impact to the company’s net debt and liquidity and are expected to save the company more than $1 million per year in pre-tax interest expense.
The company will hold a conference call and webcast on Tuesday, November 7 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 11616211.
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 November 7, 2024, by calling toll-free (from U.S./Canada) 1-877-674-7070; international callers dial +1-416-764-8692. Use the passcode 616211#. 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. RXO’s proprietary technology connects approximately 10,000 customers with over 100,000 independent carriers across North America. The company is headquartered in Charlotte, N.C. Visit RXO.com for more information and connect with RXO on Facebook, Twitter, LinkedIn, Instagram and YouTube.
1 For definitions of non-GAAP measures see the “Non-GAAP Financial Measures” section in the full press release.