Slide 1: Second Quarter 2024 Results
Second Quarter 2024 Results August 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: Q2 2024 highlights
Q2 2024 highlights 1 Strong execution in a prolonged soft freight market 2 Solid Brokerage profitability and robust LTL volume growth 3 Momentum in Managed Transportation pipeline 4 Last Mile stops grew at the fastest rate in nearly two years 5 Strategic technology and growth investments 3
Slide 4: Second-quarter financial and operating results
Second-quarter financial and operating results 1 Gross margin $ and % Adjusted EBITDA and margin % Brokerage y/y volume growth $200 $100 590.00% $190 $179M 585.00% $90 $180 $177M $80 580.00% $170 $70 575.00% 570.00% $160 $60 565.00% $150 $50 19.0% $38M $140 18.6% $40 560.00% $130 $30 $28M 555.00% $1
Slide 5: Diversified portfolio; momentum across all lines of business
Diversified portfolio; momentum across all lines of business Brokerage Revenue by service offering • Volume growth of 4% y/y – LTL volume growth of 40% y/y – Full truckload volume decline of 2% y/y Truck Brokerage 16% • Solid profitability; gross margin of 14.7% Last Mile 56% Complementary services
Slide 6: Continuing to invest in the future
Continuing to invest in the future Growth and productivity investments Multiple technology enhancements to the RXO platform 97% • Strengthened cross-border freight tracking and visibility Q2 loads • Enhanced AI pricing algorithm capabilities created or covered digitally • Increased fraud and theft p
Slide 7: Q2 2024 adjusted EPS bridge
Q2 2024 adjusted EPS bridge Earnings per share Q2-24 Q2-23 GAAP diluted EPS $(0.06) $ 0.03 Amortization of intangible assets 0.03 0.03 Transaction, integration and restructuring costs 0.09 0.05 Income tax associated with adjustments above (0.03) (0.03) 1 Adjusted diluted EPS $0.03 $ 0.08 2 RXO repor
Slide 8: Trailing six-month cash walks
Trailing six-month cash walks Adjusted free cash flow Cash balance 1 Adj. free cash flow impacted by lower levels of profitability at this stage of the freight cycle Note: In millions. 1 Adjusted EBITDA and adjusted FCF are non-GAAP financial measures. 2 Adjusted EBITDA excludes certain NEO spin-rel
Slide 9: Q2 capital structure snapshot
Q2 capital structure snapshot Capital structure (millions) Q2 2024 Notes due 2027 $ 355 • RXO continues to have a strong liquidity position Revolver 18 • LTM leverage increased as RXO cycled through higher adj. EBITDA quarters Finance leases, asset financing, ST debt & other 35 Total debt, principal
Slide 10: Historical y/y brokerage revenue per load and gross margin trends
Historical y/y brokerage revenue per load and gross margin trends 49% • Q2 y/y revenue per load decline 41% 45% moderated ~800 bps when compared to Q1 – Fourth consecutive quarter of y/y improvement 21% 18% 11% 12% – TL rev/load inflected positive y/y in month of June 7% – Expect another y/y improve
Slide 11: Q2 monthly Brokerage gross margin trends
Q2 monthly Brokerage gross margin trends Seasonal market tightness as the quarter progressed Monthly gross profit and margin trends • Roadcheck and produce season led to tighter market conditions • Load-to-truck ratio and industry-wide tender rejections moved higher • Limited spot opportunities • On
Slide 12: Historical full truckload volume and gross profit per load trends
Historical full truckload volume and gross profit per load trends RXO’s Brokerage gross profit per load increased modestly from the first quarter 12
Slide 13: Historical LTL volume and gross profit per load trends
Historical LTL volume and gross profit per load trends LTL growing rapidly with stable gross profit per load 13
Slide 14: Q3 2024 outlook and FY 2024 modeling assumptions
Q3 2024 outlook and FY 2024 modeling assumptions 1 2 Q3 2024 outlook • Companywide adjusted EBITDA : $28M-$34M • Brokerage volume down low-to-mid single digit % year-over-year – LTL: up 10%-20% – Full truckload: down high-single to low-double digit % • Brokerage gross margin: 13%-15% FY 2024 • Capit
Slide 15: 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 16: Appendix
Appendix RXO
Slide 17: Financial reconciliations
Financial reconciliations Reconciliation of net income (loss) to adjusted EBITDA and adjusted EBITDA margin Twelve Months Ended Year Ended Three Months Ended June 30, Six Months Ended June 30, June 30, December 31, (Dollars in millions) 2024 2023 2024 2023 2024 3 2023 Net income (loss) $ (7) $ 3 $ (
Slide 18: Financial reconciliations (cont.)
Financial reconciliations (cont.) Reconciliation of net income (loss) to adjusted net income (loss) and adjusted diluted earnings (loss) per share Three Months Ended June 30, Six Months Ended June 30, (Dollars in millions, shares in thousands, except per share amounts) 2024 2023 2024 2023 Net income
Slide 19: Financial reconciliations (cont.)
Financial reconciliations (cont.) Reconciliation of cash flows from operating activities to free cash flow and adjusted free cash flow Six Months Ended June 30, (Dollars in millions) 2024 2023 Net cash provided by operating activities $ 2 $ 66 Payment for purchases of property and equipment (22) (28
Slide 20: Financial reconciliations (cont.)
Financial reconciliations (cont.) Calculation of gross margin and gross margin as a percentage of revenue Three Months Ended June 30, Six Months Ended June 30, (Dollars in millions) 2024 2023 2024 2023 Revenue Truck brokerage $ 543 $ 557 $ 1,107 $ 1,157 Complementary services 1 421 437 805 874 Elimi
Slide 21: Financial reconciliations (cont.)
Financial reconciliations (cont.) Reconciliation of bank adjusted EBITDA; Calculation of gross leverage and net leverage June 30, (Dollars in millions) 2024 Reconciliation of bank adjusted EBITDA Adjusted EBITDA 1, 2 for the trailing twelve months ended June 30, 2024 $ 100 Adjustments per credit agr
Slide 22: RXO
RXO