0001929561-26-000026
SEC filingRXO posted a $8M YoY revenue decline to $1.425B in Q1 2026 with operating loss narrowing to $28M, driven by truck brokerage rate gains offset by volume weakness and higher buy rates.
Revenue declined $8 million YoY to $1,425 million. Truck brokerage revenue rose $30 million on 12% higher revenue per load from rate and fuel increases, offset by 8% lower volume. Managed transportation fell $14 million on lower expedite ground volume; last mile dropped $13 million on 8% volume decline. Cost of transportation and services increased 1.7pp to 82.2% of revenue as buy rates rose faster than sell rates amid tight capacity. SG&A declined $13 million to 13.8% of revenue from restructuring savings. Operating loss narrowed $2 million to $28 million. Net loss widened $5 million to $36 million after an $11 million debt extinguishment loss.
RXO operates as one reportable segment. The asset-light truck brokerage platform remains the core driver, complemented by managed transportation and last mile services that leverage the same digital brokerage technology. Mix shifted toward higher-margin truck brokerage, yet overall margins compressed due to cost-of-transportation pressure.
Management highlighted continued technology investment and cost discipline. Liquidity is supported by the new $450 million ABL Facility ($365 million available) and $400 million 2031 Notes issuance. Capital expenditures remain discretionary with focus on technology, equipment and real estate. No quantitative guidance was provided.
As of March 31, 2026, RXO held $21M in cash and cash equivalents, with total debt of $447M (carrying value) and shareholders' equity of $1,509M. The company's ABL facility provides $365M of available borrowing capacity (net of $35M outstanding borrowings and $50M letters of credit). The effective interest rate on the ABL facility was 4.92%. The company also has a non-U.S. revolving credit facility with $15M outstanding classified as short-term debt.
RXO disclosed remaining performance obligations of $55M (fixed consideration component) as of March 31, 2026, with approximately 93% expected to be recognized over the next four years. The company also has restructuring reserves of $29M, with severance liabilities expected to be paid within twelve months and equipment/facilities liabilities over remaining lease terms.
RXO issued $400M of 6.375% notes due 2031 and used proceeds to redeem all $355M of its 7.50% notes due 2027, incurring an $11M debt extinguishment loss. Net debt increased by $43M. Capital expenditures were $17M (1.2% of revenue). No share buybacks or dividends were reported.
RXO operates as one reportable segment but discloses revenue by service offering: Truck brokerage ($1,097M, +2.8% YoY), Last mile ($265M, -4.7% YoY), and Managed transportation ($123M, -10.2% YoY). Approximately 7% of revenue was generated outside the U.S. Segment adjusted EBITDA was $17M, down from $29M in the prior year, reflecting higher costs and restructuring charges.
RXO's cash flow statement for Q1 2026 reveals a company in a cash-consumptive phase, with net cash used in operating activities of $7 million, a significant decline from the $2 million used in Q1 2025. This negative operating cash flow contrasts with a net loss of $36 million, though the loss includes non-cash charges such as $26 million in depreciation and amortization, $7 million in stock compensation, and an $11 million debt extinguishment loss. The primary driver of the operating cash outflow was a substantial $36 million use of cash from accrued expenses and other liabilities, which more than offset a $49 million source from accounts payable. A $27 million increase in other current and long-term assets also consumed cash.
Capital expenditure intensity remains moderate at $17 million, slightly above the prior year's $15 million. The company does not report free cash flow, but combining the negative $7 million from operations with $17 million in capex implies a significant free cash flow deficit. No dividends or share repurchases were made, preserving liquidity. Financing activities provided a net $28 million, primarily from a complex refinancing involving $400 million in new debt proceeds, partially offset by $362 million used to repurchase existing debt and $8 million in issuance costs. Overall, cash increased by $4 million to $22 million, but the underlying operational cash generation remains weak, heavily reliant on working capital swings and financing to maintain liquidity.