0001929561-25-000113
SEC filingRXO revenue rose 36.6% YoY in Q3 to $1.42B and 48.2% in 9M to $4.27B, driven by Coyote acquisition, narrowing operating loss while transportation costs rose as a percent of revenue.
RXO reported Q3 2025 revenue of $1.421B, up 36.6% YoY from $1.040B, and 9M revenue of $4.273B, up 48.2% from $2.883B. Growth was led by the Coyote acquisition, adding $384M to Q3 truck brokerage and $1.4B to 9M truck brokerage. Last mile contributed an additional $37M in Q3 and $133M in 9M on 12% and 18% volume gains, respectively. Managed transportation declined $14M in Q3 and $43M in 9M due to lower expedite automotive volumes.
Cost of transportation and services rose to 80.0% of Q3 revenue (77.8% prior year) and 79.8% for 9M (76.6% prior year), reflecting faster buy-rate increases than contractual sell rates amid tightening capacity and freight-mix shifts in last mile. Direct operating expense fell 2.0% in Q3 and 5.9% in 9M as a percent of revenue, aided by cost initiatives and Coyote scale. SG&A increased 39.6% in Q3 and 41.1% in 9M, largely from Coyote, yet declined as a percent of revenue in the 9M period.
Operating loss narrowed to $(7)M in Q3 from $(20)M but widened slightly to $(37)M for 9M from $(32)M. Net loss improved sharply to $(14)M in Q3 and $(54)M in 9M, aided by the absence of the prior-year $216M one-time charge.
RXO operates as a single reportable segment. Truck brokerage remains the dominant growth driver post-Coyote, while last mile benefits from volume expansion and managed transportation faces headwinds from automotive expedite softness.
Management highlighted continued investment in technology and real estate within 2025 capital expenditures and stated existing liquidity is sufficient for the next 12 months. No quantitative guidance was provided.
As of September 30, 2025, RXO held $25 million in cash and cash equivalents, down from $35 million at December 31, 2024. Total debt stood at $403 million (carrying value), including $355 million in 7.50% Notes due 2027 and $35 million drawn on the revolver. The company had $383 million available under its $600 million revolving credit facility after considering financial covenants. Shareholders' equity was $1,580 million, a decrease from $1,612 million at year-end 2024, primarily due to net losses.
Remaining performance obligations (fixed consideration) totaled $16 million as of September 30, 2025, with approximately 94% expected to be recognized over the next three years. The company also has restructuring liabilities of $22 million, primarily for equipment and facilities, with cash outlays expected over the remaining lease terms. There were no letters of credit outstanding on the revolver.
RXO's 2023 Share Repurchase Program had $123 million remaining authorization as of September 30, 2025, with no repurchases during the quarter. The company paid $43 million for property and equipment in the nine months ended September 30, 2025. Debt activity included $471 million in borrowings and $438 million in repayments on revolving credit facilities, resulting in a net increase of $35 million in revolver debt. No dividends were declared.
The company operates as one reportable segment. Revenue disaggregation by service offering for the three months ended September 30, 2025: Truck brokerage $1,039 million, Last mile $305 million, Managed transportation $137 million, with eliminations of $60 million. Approximately 7% of revenue was generated outside the U.S. By industry sector, Retail/e-commerce contributed $530 million, Industrial/manufacturing $270 million, Food and beverage $229 million, Logistics and transportation $123 million, Automotive $88 million, and Other $181 million.
For the nine months ended September 30, 2025, RXO, Inc. generated $44 million in cash from operating activities, a substantial turnaround from the $5 million cash used in operations during the same period in 2024. This improvement was achieved despite a net loss of $54 million, which was more than offset by $105 million in non-cash adjustments, primarily $88 million in depreciation and amortization and $22 million in stock compensation expense. A significant driver of the positive operating cash flow was a $120 million reduction in accounts receivable, indicating strong collections. This was partially offset by a $74 million decrease in accounts payable and a $73 million decrease in accrued expenses and other liabilities, which consumed cash.
Investing activities used $56 million in cash, primarily for $43 million in capital expenditures, up from $33 million in the prior year, and a $10 million business acquisition. The company's capital expenditure intensity remains moderate relative to its asset-light business model. Financing activities were minimal, providing only $1 million in net cash, a stark contrast to the $1,107 million provided in the prior year, which was largely due to a $1,125 million equity issuance. The company did not repurchase shares or pay dividends during the period. Overall, the net decrease in cash for the period was $9 million, ending with a cash balance of $26 million.