RXO, Inc. (RXO)

RXO reported third-quarter revenue of $1.9 billion on 29 October, up from $1.4 billion a year earlier 2. It earned net income of $3 million, against a net loss of $14 million in the same quarter of 2025 2. Gross margin, which is revenue minus the cost of moving the freight, fell to 14.6 percent from 16.5 percent 2.

Revenue per truckload rose 48 percent, which the filing ties to higher freight rates and fuel prices, while load volume rose 2 percent 1. Truckload spot freight, priced load by load, reached 51 percent of volume, up from 29 percent a year earlier 2. RXO prices its service either under a contract or on a spot basis 1.

On 5 October, C.H. Robinson agreed to acquire RXO in a cash-and-stock deal that RXO's release puts at $5.8 billion, with closing expected in the first half of 2027 2. Each RXO share would convert into $17.25 in cash plus 0.0856 of a C.H. Robinson share, or holders may elect all cash or all stock, subject to proration 3. The deal needs approval from a majority of RXO shares and antitrust clearance, and RXO held no earnings call because of it 32.

RXO came out of XPO, where its chief executive Drew Wilkerson ran the North American transportation division from February 2020 until the spin-off in November 2022 4. Its shares began trading on the New York Stock Exchange on 1 November 2022 4. The company says it was incorporated in Delaware in May 2022 4.

In 2023, revenue was $3.9 billion and net income was $4 million 4. Truck brokerage, the business of placing shippers' loads with independent carriers, brought in $2.4 billion of it, last mile $1.0 billion and managed transportation $690 million 4. These service lines are counted before $135 million of sales between them 4.

RXO agreed on 24 June 2024 to acquire Coyote Logistics, a freight brokerage, from UPS for $1.025 billion in cash 8. The Trucker reported that the deal would make RXO the third-largest provider of brokered transportation in North America 8. Coyote had generated about $3.2 billion in revenue in 2023, and RXO expected annualized cost savings of at least $25 million 8.

RXO completed the purchase on 16 September 2024, paying $1.038 billion in cash, then $10 million more for working capital and other post-closing adjustments 4. Revenue for 2024 rose to $4.6 billion, but the company lost $290 million, partly because of a one-time $216 million charge tied to a private placement of shares in August 2024 4. The filing says that charge represented a deemed non-pro rata distribution 4.

In 2025, revenue grew 26.2 percent to $5.7 billion, mostly because Coyote counted for a full year 4. Truck brokerage revenue rose $1.2 billion, last mile rose $141 million on 13 percent more volume, and managed transportation fell $51 million on lower automotive expedite volume 4. Expedite means rush shipments of time-critical freight 4.

Costs rose faster than revenue in 2025 4. Cost of transportation reached 80.3 percent of revenue from 78.4 percent, because capacity left the market after regulatory changes and enforcement, and the rates RXO paid carriers rose faster than the contract rates it charged 4. The company lost $100 million for the year and recorded a $12 million goodwill impairment on its ground and air express unit 4.

RXO refinanced in early 2026 with a $450 million asset-based revolving credit facility signed on 5 February 1. On 20 February it issued $400 million of 6.375 percent notes due 2031 and used part of the proceeds to redeem its 7.50 percent notes due 2027 1. The redemption cost an $11 million loss 1.

Through the first nine months of 2026, revenue was $5.1 billion, up 18.7 percent, and the net loss narrowed to $42 million from $54 million 1. The third quarter then turned a profit, and on 4 October RXO signed the merger agreement with C.H. Robinson 3.

Truck brokerage

Truck brokerage is the largest part of RXO: a shipper has freight to move, and RXO finds an independent carrier with an open truck through its RXO Connect platform 4. Carriers sign a non-exclusive, renewable one-year agreement 4. Revenue was $4.2 billion in 2025 and $1.4 billion in the third quarter of 2026, against $1.0 billion a year earlier 41.

In the third quarter, brokerage truckload volume rose 3 percent and less-than-truckload volume, for smaller shipments, rose 2 percent 2. Brokerage gross margin was 12.6 percent 2. The company's top 20 customers made up about 37 percent of 2025 revenue, the top five about 23 percent, and the largest customer about $653 million, or 11.4 percent 4.

Its main rivals, named in the annual report, are C.H. Robinson, Echo Global Logistics, Expeditors, Forward Air, Flexport, J.B. Hunt, Landstar System, Total Quality Logistics and Uber Freight 4. FreightWaves described the pending deal as combining the No. 1 and No. 3 truck brokerages in the country 6.

Last mile

Last mile is delivery of large, heavy goods to a home, done by third-party contractors that RXO arranges 4. RXO calls itself the largest provider of outsourced last mile transportation for heavy goods in the United States 4. Revenue was $1.2 billion in 2025, and $334 million in the third quarter of 2026 against $305 million a year earlier 41.

Last mile stops rose 5 percent in the third quarter, and rates rose 4 percent 21. Complementary services, which means last mile and managed transportation together, earned a gross margin of 18.7 percent 2. Its customers are online and omnichannel retailers and makers that sell direct to consumers 4.

Managed transportation

Managed transportation runs a shipper's freight buying for it, with load planning, a control tower that tracks orders, managed expedite and freight forwarding by ocean and air 4. Revenue was $549 million in 2025 and $163 million in the third quarter of 2026, up from $137 million 41. RXO said it was awarded about $140 million of freight under management in the quarter 2.

Offices, people and leadership

As of 31 December 2025, RXO operated 171 principal locations, mostly leased, in North America, Asia and Europe, with its executive office leased in Charlotte, North Carolina 4. It had 9,218 team members, of whom 6,906 were regular employees and 2,312 were temporary workers 4.

Drew Wilkerson is chairman and chief executive, James Harris is chief financial officer and Jeff Firestone is chief legal officer 4. Wilkerson joined XPO in 2012 and earlier held leadership positions at C.H. Robinson, the company now set to acquire RXO 4.

Current problems

RXO's last mile subsidiary faces class and collective actions that claim drivers were misclassified, a matter that came with the business when XPO spun it off 4. In one claim RXO reached an agreement to settle for an immaterial amount, without admitting liability, and it defends the others 4.

The pending merger brings its own risks, which the quarterly report lists: possible stockholder litigation, costs payable whether or not the deal closes, and employee departures 1. FreightWaves reported that RXO had posted ten consecutive quarters of net losses before this quarter's profit 62.

The umbrella, in words

RXO reports as one segment and sells under its own name, with RXO Connect as the name of its brokerage platform 14. Its annual report says RXO maintains 39 subsidiaries and lists those providing freight services, among them RXO Last Mile, Inc., RXO Managed Transport, LLC, RXO Freight Forwarding, Inc. and Bounce Logistics, LLC 5.

It owns Coyote through subsidiaries including Coyote Logistics, LLC and Coyote Logistics Midco, Inc., bought from UPS in September 2024 54. It also lists subsidiaries in Canada, Mexico, Europe and Asia, among them RXO Global Services India Private Limited 5.

The quarterly report says MFN Partners LP, which beneficially owns about 19 percent of the common stock, has agreed to vote for the merger 1. A separate support agreement covers about 17.04 percent of the shares 3.

RXO and C.H. Robinson say the merger should close in the first half of 2027 3. Either party may end the agreement if it has not closed by 4 July 2027, with two optional three-month extensions if only the regulatory approvals remain 3.

Closing needs a majority vote of RXO's shares, clearance under the Hart-Scott-Rodino antitrust law and other countries' laws, and an effective registration statement on Form S-4 that C.H. Robinson is to file 3. RXO's 10-Q lists required antitrust clearances among the conditions 1.

If the agreement ends in certain cases, such as a rival offer that RXO accepts, RXO must pay C.H. Robinson a $175 million termination fee 3. After closing, RXO would be delisted from the New York Stock Exchange and C.H. Robinson shares would stay on Nasdaq 3.

C.H. Robinson expects about $300 million in net run-rate cost savings within two years of closing, according to Logistics Viewpoints 7. FreightWaves reported that the savings span technology, real estate and overhead 6. Management also said the combined company would keep an investment-grade credit rating, FreightWaves reported 6.

Until then RXO says its priorities are unchanged, and Wilkerson said on 29 October that the company has strong momentum heading into the fourth quarter 2. RXO has $123 million left on a 2023 repurchase authorization and made no repurchases in 2026 so far 1.

At closing, outstanding restricted stock units, which are share awards to employees, would be cancelled and converted into the standard cash-and-share consideration, paid within five business days 3. Awards granted after the agreement date would instead convert into C.H. Robinson restricted stock units 3.

RXO says it expects to incur significant merger costs, including legal, advisory, regulatory and possible retention and severance costs, whether or not the deal closes 1. Third-quarter net income already included $7 million of transaction, integration, restructuring and other costs 2.

At 30 September 2026 RXO had $335 million available under its credit facility, after $65 million of borrowings and $50 million of letters of credit 1.

The 6.375 percent notes pay their first interest on 15 November 2026, and the $450 million credit facility runs to 5 February 2031 1.