RXO, Inc. (RXO) Q3 2025 Earnings Call

Investor webinar replay

Replay transcript excerpt

Welcome to the RSO Q3 2025 earnings conference call and webcast. My name is Michael, and I will be your operator for today's call. Please note that this conference is being recorded. During this call, the company will make certain forward-looking statements with the meaning of federal securities laws, which, by their nature, involve a number of risks, uncertainties, and other factors that could cause actual results to differ materially from those in the forward-looking statements. A discussion of factors that could cause actual results to differ materially is contained in the company's SEC filings as well as in its earnings release. You should refer to a copy of the company's earnings release in the Investors Relations section on the company's website for additional information regarding forward-looking statements and disclosures and reconciliations of non-GAAP financial measures the company uses when discussing its results. I will now turn the call over to Drew Wilkerson. Mr. Wilkerson, you may now begin. Good morning, everyone. Thank you for joining today. I'm here in Charlotte with RxO's Chief Financial Officer, Jamie Harris, and Chief Strategy Officer, Jared Weisfeld. This morning, we announced our third quarter results. Year-over-year, overall brokerage volume grew 1%, driven by less than truckload volume growth of 43%. Brokerage truckload volume declined by 11% year-over-year, but increased by 1% sequentially. Last-mile stops grew by 12% year-over-year, the fifth consecutive quarter of double-digit growth. And we added cash to the balance sheet and had 56% adjusted free cash flow conversion. Brokerage gross margin was 13.5%, and RSO's EBITDA was $32 million in the quarter, below our expectations. Contrary to our assumptions on last quarter's call, the market ti...