Slide 1: Third Quarter 2024 Results
Third Quarter 2024 Results November 7, 2024
Slide 2: Non-GAAP financial measures and forward-looking statements
Non-GAAP financial measures and forward-looking statements Non-GAAP financial measures We provide reconciliations of the non-GAAP financial measures contained in this presentation to the most directly comparable measure under GAAP, which are set forth in the financial tables attached to this present
Slide 3: Q3 2024 highlights
Q3 2024 highlights 1 Coyote integration ahead of schedule; raising cost synergy estimate 2 Continued strong execution in a prolonged soft freight market 3 Improvement in legacy RXO gross profit per load during the quarter 4 Sustained growth momentum in Managed Transportation 5 Last Mile year-over-ye
Slide 4: Third-quarter financial results
Third-quarter financial results 1 Revenue Gross margin $ and % Adjusted EBITDA and margin % 2 $2M $105M $14M $976M $31M $935M $173M $166M $26M $1.04B $180M $33M 17.7% 17.3% 3 3 2.7% 3.2% Q3 23 Q3 24 Q3 23 Q3 24 Q3 23 Q3 24 Legacy Coyote Revenue Legacy Coyote Gross Margin Legacy Coyote Adj. EBITDA Le
Slide 5: Diversified portfolio with momentum in complementary services
Diversified portfolio with momentum in complementary services Legacy RXO Brokerage Combined Q3 revenue by service offering 1 2 • Volume y/y: Down 5% – LTL volume y/y: Up 13% – Full truckload volume y/y: Down 9% Truck Brokerage 14% • Solid profitability; gross margin of 13.8% Last Mile 25% Complement
Slide 6: Coyote integration update
Coyote integration update People / Operations Technology Synergies • Cultural alignment; focused on • RXO Connect® will be primary • Expect at least $40M of annualized retaining key talent operational system cost synergies • Positive customer feedback; - Integrating unique capabilities – >$15M compl
Slide 7: Q3 2024 adjusted EPS bridge
Q3 2024 adjusted EPS bridge Earnings per share Q3-24 Q3-23 GAAP diluted EPS $(1.81) $ (0.01) Amortization of intangible assets 0.04 0.03 Transaction, integration and restructuring costs 1.81 0.04 Income tax associated with adjustments above (0.02) (0.01) 1 Impact of dilutive shares 0.03 0.00 Adjuste
Slide 8: Trailing three and six-month adjusted FCF walks
Trailing three and six-month adjusted FCF walks 1 Three month adjusted free cash flow Six month adjusted free cash flow 1 1 Trailing 3-month legacy RXO adj. free cash flow represented an 87% conversion Note: In millions. 1 Adjusted EBITDA and adjusted FCF are non-GAAP financial measures. 2 Adjusted
Slide 9: Q3 capital structure snapshot
Q3 capital structure snapshot Capital structure Q3 2024 Notes due 2027 $ 355 • LTM leverage decreased significantly after the successful upsizing of the equity financing to fully Finance leases, asset financing, ST debt & other 33 fund the acquisition of Coyote Logistics Total debt, principal balanc
Slide 10: Continuing to invest in the future
Continuing to invest in the future Growth and productivity investments 97% 2 Multiple technology enhancements to the RXO platform • Additional technology offerings supporting RXO Flex Fleet visibility Q3 loads created or • Introduced a pre-pay option for RXO Extra™ in RXO Connect® covered digitally
Slide 11: Historical y/y legacy RXO brokerage revenue per load and gross margin
Historical y/y legacy RXO brokerage revenue per load and gross margin 1 49% • Q3 y/y revenue per load declined 3% y/y 41% 45% – Fifth consecutive quarter of y/y improvement 21% – Truckload rev/load down <1% y/y in the quarter 18% 11% 12% 7% • Revenue per load was approximately flat -3% -7% year-over
Slide 12: Legacy RXO brokerage GM performance and current market conditions
Legacy RXO brokerage GM performance and current market conditions Market conditions relatively unchanged through Q3 Legacy RXO brokerage gross margin 1 • Load-to-truck ratio and industry-wide tender rejections reflect continued soft freight market • Limited spot opportunities, although spot mix slig
Slide 13: Historical legacy RXO full truckload volume and gross profit per load
Historical legacy RXO full truckload volume and gross profit per load 1 Legacy RXO’s Brokerage full truckload gross profit per load was down modestly sequentially 1 Q3 2024 results and prior periods refer to legacy RXO and exclude the impact of the Coyote Logistics acquisition since September 16, 20
Slide 14: Historical legacy RXO LTL volume and gross profit per load
Historical legacy RXO LTL volume and gross profit per load 1 Legacy RXO LTL brokerage volume is growing quickly with stable gross profit per load 1 Q3 2024 results and prior periods refer to legacy RXO and exclude the impact of the Coyote Logistics acquisition since September 16, 2024. 14
Slide 15: Q4 2024 combined company outlook and modeling assumptions
Q4 2024 combined company outlook and modeling assumptions 1 Q4 2024 outlook • Adjusted EBITDA : $40M-$45M 2 • Brokerage q/q volume : Up 5-10% 2 • Brokerage y/y volume : Down 5%-10% • Brokerage gross margin: 12%-14% Q4 2024 • Capital expenditures: $16M-$18M modeling assumptions • Depreciation: $20M-$
Slide 16: Key investment highlights
Key investment highlights 1 Large addressable market with secular tailwinds 5 Market-leading platform with complementary transportation solutions 2 Track record of above-market growth and high profitability 6 Tiered approach to sales drives multi-faceted growth opportunities 3 Proprietary technology
Slide 17: Appendix
Appendix RXO
Slide 18: Financial reconciliations
Financial reconciliations Reconciliation of net income (loss) to adjusted EBITDA and adjusted EBITDA margin Twelve Months Ended Year Ended Three Months Ended September 30, Nine Months Ended September 30, September 30, December 31, (Dollars in millions) 2024 2023 2024 2023 2024 3 2023 Net income (los
Slide 19: Financial reconciliations (cont.)
Financial reconciliations (cont.) Reconciliation of net income (loss) to adjusted net income and adjusted diluted earnings per share Three Months Ended September 30, Nine Months Ended September 30, (Dollars in millions, shares in thousands, except per share amounts) 2024 2023 2024 2023 Net income (l
Slide 20: Financial reconciliations (cont.)
Financial reconciliations (cont.) Reconciliation of cash flows from operating activities to free cash flow and adjusted free cash flow Three Months Ended Six Months Ended Six Months Ended Three Months Ended Nine Months Ended September 30, September 30, June 30, September 30, March 31, (Dollars in mi
Slide 21: Financial reconciliations (cont.)
Financial reconciliations (cont.) Calculation of gross margin and gross margin as a percentage of revenue Three Months Ended Nine Months Ended September 30, September 30, (Dollars in millions) 2024 2023 2024 2023 Revenue Truck brokerage $ 655 $ 591 $ 1,762 $ 1,748 1 Complementary services 419 419 1,
Slide 22: Financial reconciliations (cont.)
Financial reconciliations (cont.) Reconciliation of bank adjusted EBITDA; Calculation of gross leverage September 30, (Dollars in millions) 2024 Reconciliation of bank adjusted EBITDA Adjusted EBITDA 1, 2 for the trailing twelve months ended September 30, 2024 $ 107 3 Adjustments per credit agreemen
Slide 23: RXO
RXO