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Sep 30
RXO Q3 2025 Earnings Report
RXO reported its third-quarter financial results, experiencing market tightening and weakened demand, which impacted brokerage gross margin, while also implementing new cost initiatives.
Key Takeaways
RXO reported third-quarter revenue of $1.4 billion, a GAAP net loss of $14 million, and adjusted EBITDA of $32 million. The company faced market tightening and weakened demand, particularly affecting brokerage gross margin, but saw growth in less-than-truckload volume and last-mile stops. New cost initiatives are expected to yield over $30 million in incremental savings.
Revenue for the third quarter was $1.4 billion, an increase from $1.0 billion in the third quarter of 2024.
The company reported a GAAP net loss of $14 million, an improvement from a net loss of $243 million in the third quarter of 2024.
Adjusted EBITDA was $32 million, with an adjusted EBITDA margin of 2.3%.
Brokerage volume grew by 1% year over year, driven by a 43% increase in less-than-truckload volume, despite an 11% decline in full truckload volume.
RXO
RXO
RXO Revenue by Segment
Revenue by Segment
Truck brokerage Revenue
CapyFin.comLast mile Revenue
CapyFin.comManaged transportation Revenue
CapyFin.com Forward Guidance
RXO expects fourth-quarter 2025 adjusted EBITDA to be between $20 million and $30 million. In Brokerage, overall volume is expected to decline by a low-single-digit percentage, and gross margin is projected to be between 12% and 13%.
Positive Outlook
- New cost initiatives are expected to yield more than $30 million of incremental savings.
- The full-truckload market has significantly tightened, driven by capacity exits, which is expected to persist throughout the fourth quarter.
- RXO is well positioned due to its scale as the third-largest brokered transportation provider in North America.
- Best-in-class technology is enabling the company to realize benefits from its larger scale.
- The asset-light business model is poised to generate strong cash flow over the long term.
Challenges Ahead
- Market conditions tightened late in the third quarter, impacting buy rates and Brokerage gross margin.
- Further weakening of demand across the business was observed as the third quarter progressed, continuing into the fourth quarter.
- Contractual brokerage gross margin is expected to be squeezed due to market tightness.
- Fourth-quarter 2025 adjusted EBITDA is expected to be lower, between $20 million and $30 million, compared to $32 million in Q3 2025.
- Overall volume in the Brokerage business is expected to decline by a low-single-digit percentage in the fourth quarter.
Revenue & Expenses
Visualization of income flow from segment revenue to net income