Rxo, Inc. · NYSE:RXO
Rxo — Q4 2022 Earnings Presentation
18 slides from Rxo's earnings presentation, Feb 7, 2023
Slide 1: Fourth Quarter 2022 Results
Fourth Quarter 2022 Results February 7, 2023 Exhibit 99.2
Slide 2: Forward-looking statements and Non-GAAP financial measures
2 Forward-looking statements and Non-GAAP financial measures Forward-looking statements This presentation includes forward-looking statements, including statements relating to our continued year-over-year brokerage volume growth in the first quarter of 2023, our five-year financial targets, and our
Slide 3: Q4 2022 highlights
3 Q4 2022 highlights 1 Strong financial and operating results 2 Brokerage gaining share profitably with support from complementary services 3 Winning strategy: best-in-class technology, differentiated sales model 4 Strong balance sheet and cash flow from operations 5 Remain confident in 2027 financi
Slide 4: Strong fourth-quarter financial and operating results
4 Strong fourth-quarter financial and operating results Strong results despite a muted peak season and decline in gross profit per load RXO’s brokerage business continues to outperform and gain profitable market share Adjusted EBITDA and margin %1 $77 M $64 M 5.8% 5.7% 5.4 5.45 5.5 5.55 5.6 5.65 5.7
Slide 5: Diversified business with brokerage gaining share profitably
5 Diversified business with brokerage gaining share profitably Q4 revenue by service offeringBrokerage • Q4 volume growth of 4% y/y • +56% on a 3-year stack • RXO volume record in the quarter • Gross margin of 17.9%, +290 bps y/y Complementary services • ~62% of FY2022 revenue with customers doing b
Slide 6: Best-in-class technology
6 Best-in-class technology 81% 87%* Q3 22 Q4 22 847K 920K Q3 22 Q4 22 RXO Drive™ app downloadsLoads created or covered digitally RXO customers and carriers continue to adopt our best-in-class technology * The result of continued technology adoption as well as a platform capability within RXO Connect
Slide 7: Differentiated sales model
7 Differentiated sales model 14% y/y growth in $1M+ revenue customers 66% growth over the last two years Brokerage bid opportunities increased by ~70% y/y* Strong sales pipeline with momentum heading into 2023 Highest since Q3 2019 RXO has a strong sales pipeline, attracting new customers to the pla
Slide 8: Q4 2022 adjusted EPS bridge
8 Q4 2022 adjusted EPS bridge Earnings Per Share Q4-21 Q4-22 GAAP Diluted EPS $0.36 $( 0.03) Amortization of intangible assets, net of tax 0.04 0.03 Transaction, integration and restructuring costs, net of tax 0.01 0.28 Adjusted Diluted EPS (1) $ 0.41 $ 0.28 RXO delivered adjusted EPS of $0.28 (1) S
Slide 9: Balance sheet update
9 Balance sheet update 1.5x 1.2x 0.0x 0.5x 1.0x 1.5x 2.0x 2.5x 3.0x Gross* Net** Capital Structure (millions) Q4 2022 Current Maturities of Long-term Debt $ 4 Long-term Debt 451 Total Debt $ 455 Less: Cash 98 Net Debt (1) $ 357 Available Liquidity (millions) Q4 2022 Cash $ 98 Revolver 500 Total Capa
Slide 10: Post-spin cash walk
10 Post-spin cash walk Note: In millions and adjustments in walk above represent approximate amounts. Spin occurred on November 1, 2022. (1) 12/31/22 Adjusted Cash Balance represents a Non-GAAP Financial Measure. Strong underlying post-spin free cash flow conversion in excess of 60% of EBITDA 1
Slide 11: Outlook commentary and FY 2023 assumptions
11 Outlook commentary and FY 2023 assumptions • Continued y/y brokerage volume growth in Q1 2023 • FY 2023 gross profit per load will moderate vs. FY 2022 as the cost of purchased transportation stabilizes and lower contract rates come into effect • Confident in five-year financial guidance, which c
Slide 12: Key investment highlights
12 Key investment highlights 1 Large addressable market with secular tailwinds 2 Market-leading platform with complementary transportation solutions 3 Proprietary technology drives efficiency, volume and margin expansion 4 Long-term relationships with blue-chip customers 5 Diverse exposure across at
Slide 13: Appendix
Appendix RXO 13
Slide 14: Financial reconciliations
14 Financial reconciliations (1) See the “Non-GAAP Financial Measures” section. (2) Adjusted EBITDA margin is calculated as adjusted EBITDA divided by revenue. Reconciliation of net income (loss) to adjusted EBITDA and adjusted EBITDA margin $ in millions 2022 2021 2022 2021 Net income (loss) (4)$ 4
Slide 15: Financial reconciliations (cont.)
15 Financial reconciliations (cont.) (1) The income tax rate applied to reconciling items is based on the GAAP annual effective tax rate, excluding discrete items and contribution- and margin-based taxes. (2) See the "Non-GAAP Financial Measures" section. Reconciliation of net income (loss) to adjus
Slide 16: Financial reconciliations (cont.)
16 Financial reconciliations (cont.) (1) Other complementary services include freight forwarding, last mile and managed transportation services. (2) Gross margin is calculated as Revenue less Cost of transportation and services (exclusive of depreciation and amortization) and Direct operating expens
Slide 17: Financial reconciliations (cont.)
17 Financial reconciliations (cont.) (1) See the “Non-GAAP Financial Measures” section. Reconciliation of net leverage and net debt $ in millions December 31, 2022 Reconciliation of Net Debt Total debt 455$ Cash and cash equivalents 98 Net debt (1) 357$ Reconciliation of Net Leverage Net debt 357$ A
Slide 18: RXO
rRXO Massive capacity. Cutting edge-technology.