Slide 1: Fourth Quarter 2022 Results
Fourth Quarter 2022 Results February 7, 2023
Slide 2: Forward-looking statements and Non-GAAP financial measures
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 ab
Slide 3: Q4 2022 highlights
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 financial
Slide 4: Strong fourth-quarter financial and operating results
Strong fourth-quarter financial and operating results Gross margin $ and % Adjusted EBITDA and margin %1 Brokerage y/y volume growth $230 $227 M $80 $77 M 5.9 $219 M 5.85 $70 $64 M $220 5.8 $60 5.75 4% $210 $50 5.7 5.65 $200 19.6% $40 5.8% 5.7% 5.6 $190 17.1% $30 5.55 $180 5.5 $20 5.45 $170 $10 5.4
Slide 5: Diversified business with brokerage gaining share profitably
Diversified business with brokerage gaining share profitably Brokerage Q4 revenue by service offering • Q4 volume growth of 4% y/y • +56% on a 3-year stack 7% • RXO volume record in the quarter Truck Brokerage • Gross margin of 17.9%, +290 bps y/y 11% Last Mile 24% 58% Managed Complementary services
Slide 6: Best-in-class technology
Best-in-class technology Loads created or covered digitally RXO Drive™ app downloads Average weekly users +30% y/y 920K 87%* Q4 registered carriers 81% 847K +42% y/y Q3 22 Q4 22 Q3 22 Q4 22 7-Day carrier retention 74% * The result of continued technology adoption as well as a platform capability wit
Slide 7: Differentiated sales model
Differentiated sales model 14% y/y growth in $1M+ Brokerage bid Strong sales pipeline revenue customers opportunities increased with momentum by ~70% y/y* heading into 2023 66% growth over the last ~30% increase in customers Highest since Q3 2019 two years RXO has a strong sales pipeline, attracting
Slide 8: Q4 2022 adjusted EPS bridge
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) See
Slide 9: Balance sheet update
Balance sheet update Capital Structure (millions) Q4 2022 Leverage (1) Current Maturities of Long-term Debt $ 4 3.0x Long-term Debt 451 Target 2.5x 1.0x – 2.0x Total Debt $ 455 Less: Cash 98 2.0x Net Debt (1) $ 357 1.5x 1.5x 1.0x 1.2x Available Liquidity (millions) Q4 2022 Cash $ 98 0.5x Revolver 50
Slide 10: Post-spin cash walk
Post-spin cash walk 1 Strong underlying post-spin free cash flow conversion in excess of 60% of EBITDA Note: In millions and adjustments in walk above represent approximate amounts. Spin occurred on November 1, 2022. 10 (1) 12/31/22 Adjusted Cash Balance represents a Non-GAAP Financial Measure.
Slide 11: Outlook commentary and FY 2023 assumptions
Outlook commentary and FY 2023 assumptions Outlook commentary • 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 g
Slide 12: Key investment highlights
Key investment highlights 1 Large addressable market with secular tailwinds 5 Diverse exposure across attractive end markets 2 Market-leading platform with complementary transportation solutions 6 Tiered approach to sales drives multi-faceted growth opportunities 3 Proprietary technology drives effi
Slide 13: Appendix
Appendix RXO
Slide 14: Financial reconciliations
Financial reconciliations Reconciliation of net income (loss) to adjusted EBITDA and adjusted EBITDA margin $ in millions Three Months Ended December 31, Years Ended December 31, 2022 2021 2022 2021 Net income (loss) $ (4) $ 42 $ 92 $ 150 Interest expense 5 - 4 - Income tax provision (benefit) (2) 1
Slide 15: Financial reconciliations (cont.)
Financial reconciliations (cont.) Reconciliation of net income (loss) to adjusted net income and adjusted diluted earnings per share (Dollars in millions, shares in thousands, except per share amounts) Three Months Ended December 31, Years Ended December 31, 2022 2021 2022 2021 Net income (loss) $ (
Slide 16: Financial reconciliations (cont.)
Financial reconciliations (cont.) Reconciliation of Gross Margin and Gross Margin as a Percentage of Revenue Three Months Ended December 31, Years Ended December 31, $ in millions 2022 2021 2022 2021 Revenue Truck brokerage $ 664 $ 846 $ 2,929 $ 2,749 Other complementary services (1) 488 514 2,006 2
Slide 17: Financial reconciliations (cont.)
Financial reconciliations (cont.) 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 Adjusted EBITDA for the year ended December 31, 2022