RXO Reports First-Quarter Results and Provides Second-Quarter Outlook Amid Improving Freight Market Trends
RXO has reported its financial results for the first quarter, along with its outlook for the second quarter of fiscal year 2026, highlighting continued operational momentum in its Brokerage segment, improving freight market conditions, and expanding demand within its Managed Transportation business. Despite a challenging demand environment and year-over-year pressure on profitability metrics, the company emphasized sequential improvements in key operating indicators and a strengthening pipeline that it believes positions the business for a more favorable supply-driven recovery ahead.
Strong Operational Momentum Despite Mixed Demand Conditions
Chairman and Chief Executive Officer Drew Wilkerson opened the discussion by emphasizing that RXO continues to build momentum across its core operations, even as broader freight demand remains relatively soft. He noted that the company is successfully converting a strong Brokerage sales pipeline, signaling improving execution and customer engagement across its network.
Wilkerson highlighted that Brokerage volumes declined by 8% year-over-year in the first quarter, reflecting ongoing market softness and cyclical pressure across the transportation sector. However, he pointed out an important sequential trend: full truckload volume improved consistently each month throughout the quarter, indicating strengthening demand patterns as the period progressed.
One of the most notable operational highlights was the improvement in the company’s truckload spot mix, which increased by 500 basis points sequentially. This shift toward higher spot market participation contributed directly to an improvement in gross profit per load, reinforcing RXO’s ability to adapt to evolving freight dynamics and optimize its network for profitability.
Expansion in Managed Transportation and Sales Pipeline Growth
Beyond Brokerage operations, RXO reported continued progress in its Managed Transportation business, which plays a key role in diversifying its revenue base and deepening customer relationships. During the quarter, the company secured more than $100 million in new freight under management, reflecting strong demand from shippers seeking integrated logistics solutions and outsourced transportation management services.
In addition, RXO’s late-stage sales pipeline expanded by more than $200 million during the quarter. This growth signals an increasing level of customer engagement and potential future conversion into managed freight volumes, which could provide incremental stability and revenue visibility in upcoming periods.
Wilkerson emphasized that these developments reflect a broader strengthening of the company’s commercial momentum, even as the industry continues to navigate uneven demand conditions. He noted that RXO is increasingly being selected as the carrier of choice for spot freight, project-based shipments, and mini-bid opportunities, reinforcing the strength of its asset-light brokerage model and its ability to respond flexibly to market needs.
Market Conditions Show Early Signs of Structural Improvement
From a macroeconomic perspective, RXO believes that the freight market is beginning to show early signs of improvement. According to Wilkerson, the most meaningful driver of this shift is supply-side tightening, as carriers continue to exit the market in response to prolonged pricing pressure and weaker freight demand over recent periods.
While overall demand remains soft, RXO sees these supply reductions as a structural development rather than a temporary fluctuation. The company believes that this dynamic is gradually setting the stage for a more balanced freight environment, where tightening capacity could support improved pricing and margin recovery across the industry.
Wilkerson expressed increased confidence that these carrier exits represent a long-term structural shift in the market rather than a short-term adjustment. As a result, RXO expects a supply-driven recovery to continue taking shape over time, which could support improved profitability across its Brokerage operations.
Financial Performance Overview
For the first quarter of fiscal 2026, RXO reported revenue of $1.4 billion, consistent with the same period in the prior year. This stable top-line performance reflects the company’s ability to maintain revenue levels despite lower Brokerage volumes and ongoing market headwinds.
However, profitability metrics reflected continued pressure. The company reported a gross margin of 14.2%, down from 16.0% in the first quarter of 2025. The decline in gross margin highlights the impact of lower Brokerage volumes and shifts in freight mix, although sequential improvements in spot market activity partially offset these pressures.
GAAP and Adjusted Earnings Results
RXO reported a GAAP net loss of $36 million for the first quarter of 2026, compared to a net loss of $31 million in the same quarter of the previous year. The increased loss reflects a combination of operational pressures and one-time items recorded during the quarter.
The GAAP results included $9 million in transaction, integration, restructuring, and other costs. Additionally, the company recorded an $11 million debt extinguishment loss, which was related to the refinancing of RXO’s senior notes. These items contributed meaningfully to the overall net loss for the quarter.
On an adjusted basis, RXO reported a net loss of $16 million, compared to an adjusted net loss of $5 million in the first quarter of 2025. While still negative, the adjusted results provide a clearer view of ongoing operational performance excluding one-time charges and financing-related expenses.
Adjusted EBITDA for the quarter was $6 million, down from $22 million in the first quarter of 2025. The decline reflects lower gross margins and ongoing market pressure, although sequential operational improvements suggest early signs of stabilization in underlying business performance. Adjusted EBITDA margin came in at 0.4%, compared to 1.5% in the prior-year period.
Earnings Per Share Impact and Adjustments
Earnings per share were also affected by several non-recurring and non-operational factors during the quarter. These included transaction, integration, restructuring, and other costs, along with amortization of intangible assets, a discrete tax item, and the previously mentioned debt extinguishment loss.
In total, GAAP diluted loss per share for the first quarter was $0.21. On an adjusted basis, diluted loss per share was $0.09, reflecting a more normalized view of the company’s financial performance after excluding one-time and non-cash items.
Second-Quarter Outlook and Expected Improvement
Looking ahead, RXO expressed optimism that the positive trends observed in volume and Brokerage gross profit per load will continue into the second quarter. Management expects a significant sequential improvement in financial performance, driven by strengthening market conditions, improving execution, and continued optimization of freight mix.
The company believes that its scale, asset-light operating model, and advanced technology capabilities, including the deployment of agentic artificial intelligence across its operations, will continue to enhance efficiency and improve service quality.
Wilkerson noted that RXO is increasingly leveraging AI-driven systems to improve decision-making, optimize freight matching, and enhance operational performance across its brokerage and transportation platforms. These technological investments are viewed as a key competitive advantage as the company navigates a dynamic freight environment.
Strategic Positioning and Long-Term Outlook
RXO reiterated its belief that the ongoing reduction in carrier capacity across the trucking industry is structural in nature and will contribute to a sustained recovery over time. As weaker operators exit the market, remaining capacity is expected to tighten, potentially improving pricing power and profitability across the sector.
The company believes it is well positioned to benefit from this shift due to its scalable, asset-light model and strong customer relationships. Its ability to serve spot freight, project-based shipments, and mini-bid opportunities provides flexibility in a volatile environment, while its Managed Transportation business offers long-term contract stability and recurring revenue opportunities.
Wilkerson concluded that RXO remains confident in its long-term strategy and its ability to generate strong shareholder returns over time. While short-term financial performance reflects ongoing industry challenges, the company sees improving fundamentals, a strengthening pipeline, and favorable structural shifts in supply as key drivers of future growth.
RXO’s first-quarter 2026 results reflect a company operating through a transitional freight market, balancing short-term pressure with early signs of operational improvement and strategic progress. While revenue remained stable year-over-year, profitability was impacted by lower gross margins, integration-related costs, and refinancing expenses.
However, sequential improvements in Brokerage performance, increasing spot market activity, and strong growth in Managed Transportation commitments suggest that underlying business momentum is building. Combined with a tightening supply environment and expanding use of advanced technology, RXO is positioning itself for potential recovery in the quarters ahead.
As the company moves into the second quarter, management expects continued sequential improvement and remains focused on leveraging its scale, technology, and network strength to navigate evolving market conditions and capture long-term growth opportunities.
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