RXO Grows Revenue 57%, Reports Larger Quarterly Loss
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RXO reported a year-over-year jump in revenue but also a decline in earnings while presenting .
The Charlotte, N.C.-based asset-light transportation provider posted a net loss of $31 million, or 13 cents a diluted share, for the three months ending March 31. That compared with a loss of $15 million, or negative 18 cents a share, during the same time the previous year. Total revenue increased 57% to $1.43 billion from $913 million.
RXO noted in the earnings report that the first-quarter net loss included $20 million in transaction, integration, restructuring and other costs. The adjusted net loss in the quarter was $5 million, compared with an adjusted net loss of $4 million last year. The report also highlighted how much of the quarter was focused on the continued integration of Coyote Logistics.
During a call with investors, RXO CEO Drew Wilkerson provided an update.
“Our carrier and coverage operations are now working out of one platform, Freight Optimizer,” Wilkerson said. “Our carrier network now has access to significantly more freight, and our reps now have access to an even larger network of carriers to cover that freight. The increased capacity is helping us to find the best truck for each load, enabling us to better serve our customers.”
Wilkerson added that the early results from this migration have been encouraging. The most immediate outcome was that it proved the scalability of existing technologies as they remained stable during the migration process. The company also noticed how its carrier operations team is working together as one network much faster than expected.
“This exceeded our expectations and we’re already seeing signs of buying better when it comes to purchase transportation,” Wilkerson said. “We’re now turning our attention to migrating legacy Coyote customers. In fact, we’ve already migrated all the master customer data and we’re already managing several legacy Coyote customers within our platform.”
Wilkerson expects that the bulk of the technology integration will be complete by the end of the third quarter. He noted that the technology and coverage teams have been working since the acquisition to ensure a smooth and successful transition. He also highlighted that additional opportunities for synergies were found as the integration has progressed.
Regarding market conditions, Wilkerson reported that the weather-related tightness seen in January eased as the quarter progressed.
“We quickly reduced our cost of purchase transportation resulting in an improved gross profit per load throughout the quarter,” Wilkerson said. “We also made significant progress improving legacy Coyote’s profitability.”
Truck brokerage revenue increased 89.2% to $1.07 billion from $564 million. The report noted that volumes declined 1% year over year in the first quarter. This included the impact of the Coyote Logistics acquisition in both periods. Less-than-truckload volume increased 26%, but was offset by an 8% decline in full truckload volume. Brokerage gross margin was 13.3% in the first quarter.
Complementary services revenue increased 8.1% to $415 million from $384 million. The report noted that the segment was able to increase the synergy loads provided to brokerage. The segment also includes last-mile and managed transportation services. Last Mile stops grew 24% year over year, while gross margin was 21% for the quarter.
RXO ranks No. 16 on the Transport Topics Top 100 list of the largest logistics companies in North America.
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