RXO (RXO) investor relations material

Strategic transformation and integration

• Completed Coyote acquisition in September 2024, making RXO the third largest brokered transportation provider in North America.

• Integration executed rapidly, with operational and technology cutovers largely finished within 12 months.

• Combined data, sales, operations, and technology platforms now enable unified service and improved efficiency.

• Integration focused on leveraging scale, reducing costs, and expanding into new customer segments, especially SMB and food/beverage.

• Despite operational success, financial results lag expectations due to market softness and aggressive contract pricing.

Market environment and industry trends

• Freight market remains in a prolonged soft environment, with 2025 shipment levels at lows not seen since the Great Financial Crisis.

• Industry has seen a 10% reduction in brokerage capacity over the past three years, with small and mid-sized brokers exiting.

• Shippers are consolidating freight with larger brokers, while small brokers face margin and compliance pressures.

• Regulatory changes, including stricter CDL requirements and English proficiency, are reducing driver and carrier supply.

• Spot rates are rising despite weak demand, driven by supply contraction and regulatory impacts.

Technology, AI, and productivity

• Over $100 million invested annually in technology, supporting AI and automation initiatives.

• AI and machine learning have driven a 38% productivity increase over two years, with further gains expected.

• Unified data lake and orchestration layer enable deployment of agentic AI for both cost and margin improvements.

• AI is used in last mile, carrier management, and internal productivity, reducing manual labor and unlocking incremental margin.

• Technology and scale provide a competitive edge over smaller brokers unable to match investment or compliance standards.