RXO Sees 70% Q4 Revenue Growth, Boosted by Coyote Deal

In the fourth quarter of 2024, RXO reported a significant revenue increase of over 70%, reaching $1.67 billion, up from $978 million a year earlier. Despite this growth, the Charlotte, N.C.-based transportation provider experienced a net loss of $20 million, contrasting with a modest profit of $2 million for the same quarter in the previous year. The company attributed the revenue surge to a 10% sequential growth in combined brokerage volume and an expanding sales pipeline in managed transportation, estimated at nearly $2 billion in freight under management. RXO's acquisition of Coyote Logistics has progressed ahead of expectations, aiming to diversify and strengthen its customer base. CEO Drew Wilkerson expressed a cautious optimism about RXO's strategy of investing while controlling costs amid a soft freight market. This approach included adjusting for significant integration and restructuring costs that contributed to the net loss, though the adjusted net income showed a slight improvement compared to the previous year. For the full year, RXO recorded a net loss of $285 million on total revenues of $4.55 billion, compared to a profit in the prior year. The firm also noted a remarkable 108% increase in truck brokerage revenue, driven in part by the Coyote acquisition, despite a 6% decline in year-over-year brokerage volumes. RXO’s performance underscores the ongoing challenges in the freight sector, with mixed signals across various service offerings, notably a decline in full truckload volumes while less-than-truckload volumes held steady. From a transportation perspective, RXO's experience highlights critical trends in the industry, including the importance of strategic acquisitions to enhance service offerings and market reach. The performance fluctuations in trucking segments indicate the need for adaptability in operations to respond to changing market conditions. Companies should carefully monitor their integration processes to ensure they can capitalize on growth opportunities while managing costs effectively. This balance is essential for navigating the complexities of today’s freight environment, where demand can shift rapidly.