RXO Reports Fourth-Quarter Results Amid Tightening Freight Market, Highlights Sales Momentum and Long-Term Positioning
RXO, a leading asset-light transportation and logistics services provider, has reported its financial results for the fourth quarter, offering a detailed snapshot of performance during a period marked by accelerating changes in the freight market. While the company faced continued pressure from soft demand and tightening truckload capacity, RXO emphasized strong sales momentum, expanding customer opportunities, and strategic investments designed to support long-term profitable growth.
Chairman and Chief Executive Officer Drew Wilkerson said the quarter reflected a complex operating environment, with shifting market dynamics impacting near-term profitability but also setting the stage for future growth.
In the fourth quarter, tightening in the freight market accelerated, driven by continued reductions in truckload capacity,” Wilkerson said. “This impacted our buy rates and squeezed our Brokerage gross margin. While demand remained soft, we have significant sales momentum. The Brokerage late-stage pipeline for new business grew by more than 50% year-over-year, and our Managed Transportation business was awarded more than $200 million of freight under management in the fourth quarter.
Wilkerson added that RXO’s strategic focus remains firmly centered on profitability, cash flow generation, and long-term performance rather than short-term market fluctuations.
We remain focused on profitable growth and long-term performance,” he said. “Our larger scale, asset-light model and improving cost structure drive strong cash flow. Furthermore, our technology continues to advance through transformational AI, and our new $450 million lending facility ensures we’ll have flexibility across all market cycles. RXO is well positioned for the long term.
Challenging Market Conditions Shape Fourth-Quarter Performance
The fourth quarter unfolded against the backdrop of a freight market that continued to adjust after several years of volatility. Reductions in truckload capacity accelerated during the period, tightening available supply and influencing pricing dynamics across the industry. For brokers such as RXO, this tightening environment affected buy rates and compressed margins, particularly as customer demand remained subdued.
Despite these headwinds, RXO emphasized that the underlying fundamentals of its business remain sound. The company pointed to continued customer engagement, a growing sales pipeline, and expanding managed transportation relationships as indicators of future revenue potential once market conditions stabilize.
Companywide Financial Results
For the fourth quarter, RXO reported revenue of $1.5 billion, compared with $1.7 billion in the same period of 2024. The year-over-year decline reflects softer freight demand across several modes, as well as pricing pressures associated with changing market conditions.
Gross margin for the quarter was 14.8%, down from 15.5% in the fourth quarter of 2024. The margin contraction was largely attributable to the tightening freight environment, which increased carrier costs and limited pricing flexibility in the Brokerage segment.
RXO reported a GAAP net loss of $46 million for the fourth quarter of 2025, compared with a net loss of $25 million in the prior-year period. On a per-share basis, the company recorded a GAAP diluted loss of $0.27 for the quarter.
The reported GAAP net loss included $31 million in transaction, integration, restructuring, and other costs. A significant portion of these charges—$12 million—was related to a goodwill impairment associated with the restructuring of RXO’s ground and air express service offering within its Managed Transportation business.
Including these items and amortization of intangibles, GAAP earnings per share were negatively impacted by $0.20, net of tax.
Adjusted Results Provide Clearer View of Core Operations
Excluding transaction-related and restructuring costs, RXO reported an adjusted net loss of $11 million for the fourth quarter. This compares with adjusted net income of $10 million in the fourth quarter of 2024, highlighting the impact of the current freight cycle on profitability.
On an adjusted basis, diluted loss per share was $0.07 for the quarter.
Adjusted EBITDA totaled $17 million, down from $42 million in the same quarter last year. The adjusted EBITDA margin was 1.2%, compared with 2.5% in the fourth quarter of 2024. Management attributed the decline primarily to margin compression in Brokerage and lower overall freight volumes.
Despite the decline, RXO emphasized that its asset-light model continues to support cash flow generation and operational flexibility, particularly as cost structures improve and technology investments scale across the organization.
Brokerage Segment: Mixed Volume Trends
RXO’s Brokerage business experienced a 4% year-over-year decline in total volume during the fourth quarter, reflecting broader industry softness. Performance varied by mode, with growth in less-than-truckload services partially offset by declines in full truckload activity.
Less-than-truckload (LTL) volume increased by 31% year over year, demonstrating continued customer interest in flexible, cost-efficient shipping options amid uncertain demand patterns. The growth in LTL underscores RXO’s ability to capture share in segments where customers seek alternatives to traditional truckload shipping.
However, this strength was offset by a 12% decline in full truckload volume, a segment that remains sensitive to broader economic conditions, inventory adjustments, and capacity shifts. The reduction in truckload activity also contributed to margin pressure, as tightening capacity pushed up carrier rates while customer pricing remained competitive.
Even with these challenges, RXO highlighted encouraging trends within its sales pipeline. The company reported that its Brokerage late-stage pipeline for new business grew by more than 50% year over year, signaling strong customer engagement and potential revenue upside once freight demand improves.
Managed Transportation: Expanding Freight Under Management
RXO’s Managed Transportation business emerged as a bright spot during the quarter. In the fourth quarter alone, the segment was awarded more than $200 million of freight under management, reflecting growing demand from shippers seeking integrated, technology-enabled transportation solutions.
Managed Transportation offerings allow customers to outsource complex logistics functions, including network design, carrier sourcing, freight audit and payment, and performance analytics. As supply chains become more dynamic and cost pressures persist, many shippers are turning to managed solutions to improve efficiency and visibility.
The restructuring of RXO’s ground and air express service offering within this segment, while resulting in a goodwill impairment charge during the quarter, is intended to streamline operations and sharpen the company’s strategic focus going forward.
Technology and AI as Strategic Differentiators
RXO continues to invest heavily in technology, with a particular emphasis on artificial intelligence and data-driven optimization. Management highlighted ongoing advancements in transformational AI as a key differentiator in both Brokerage and Managed Transportation.
These technologies are designed to enhance pricing accuracy, improve carrier matching, optimize routing decisions, and deliver better service outcomes for customers. Over time, RXO expects these investments to support margin expansion, improve scalability, and strengthen customer retention.
By embedding AI-driven tools across its platform, RXO aims to operate more efficiently across freight cycles while delivering consistent value to shippers and carriers alike.
Strengthened Financial Flexibility
During the quarter, RXO also secured a new $450 million lending facility, reinforcing its financial flexibility and liquidity position. Management emphasized that this facility provides the company with the ability to navigate market volatility, invest strategically, and pursue growth opportunities across all stages of the freight cycle.
The enhanced liquidity supports RXO’s long-term strategy, allowing it to maintain discipline during downturns while remaining prepared to scale quickly when market conditions improve.
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