RXO had a rough first quarter, but the company is optimistic about the second quarter despite rising spot freight rates against lower contract numbers.
The company's adjusted EBITDA for the second quarter is expected to be between $27 million and $37 million, which is significantly better than its first-quarter adjusted EBITDA of $6 million.
RXO expects flat year-over-year volume growth, but it also anticipates a sequential increase in truckload gross profit per load.
The company's revenue was flat at $1.4 billion, but its gross margin was 14.2%, compared to 16% in the first quarter of 2025.
The industry is heavily influenced by spot freight rates, which can have a significant impact on carriers' bottom lines.
RXO's spot mix increased from 28% sequentially to 33% of volume in the quarter, helping produce a sequential increase in gross profit per load.
The growth in truckload spot mix was 600 basis points year-over-year, indicating a positive trend for the company.
Despite the challenges, RXO is forecasting contract rates to be up high-single digits for all of 2026.
The company's focus on increasing its spot mix and managing costs will be crucial in navigating the industry's complexities.
As the industry continues to evolve, carriers like RXO must adapt to changing market conditions to remain competitive.
The industry's reliance on spot freight rates makes it challenging for carriers like RXO to predict revenue and profitability. However, the company's focus on increasing its spot mix may help mitigate these challenges.
