RXO, Inc.
For the period ended Jun 30, 2026. Filed Aug 6, 2026.
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A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Jun 30, 2026 · Filed Aug 6, 2026
RXO$27.60-1.0%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2026-03-31; filed 2026-05-07.
0001929561-26-000026
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2026-06-30; filed 2026-08-06.
0001929561-26-000036
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 55 previous paragraphs and 64 current paragraphs.
38 unchanged; 17 reworded; 5 added; 0 removed; 0 previous and 4 current paragraphs rearranged.
Tables are not compared: 3 previous and 4 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (5)
Current report
Revenue increased by $355 million, or 25.0%, to $1.8 billion in the second quarter of 2026, compared with $1.4 billion for the same quarter in 2025. The year-over-year increase in the second quarter of 2026 was driven by a $324 million increase in truck brokerage revenue, primarily as a result of a 44% increase in revenue per load driven by increases in freight rates and fuel prices. Truck brokerage load volume increased 2% year-over-year, excluding the impact in both periods of the business transitioned from truck brokerage to managed transportation; volume growth was driven by an increase in accretive spot volume. The increase in revenue was also driven by a $29 million increase in last mile revenue as a result of a 6% increase in rates and a 3% increase in volume.
Current report
Six Months Ended June 30, 2026 Compared with Six Months Ended June 30, 2025
Current report
Direct operating expense (exclusive of depreciation and amortization) of $103 million in the first six months of 2026 increased $8 million, or 8.4%, from $95 million in the same period in 2025. As a percentage of revenue, direct operating expense (exclusive of depreciation and amortization) decreased to 3.2% in the first six months of 2026 compared with 3.3% in the same period of 2025 driven primarily by improved operating leverage.
Current report
SG&A of $408 million in the first six months of 2026 decreased $16 million, or 3.8%, from $424 million in the same period in 2025. As a percentage of revenue, SG&A decreased to 12.8% in the first six months of 2026 compared with 14.9% for the same period in 2025 driven primarily by cost savings from restructuring actions and improved operating leverage.
Current report
Depreciation and amortization expense for the first six months of 2026 was $52 million, compared with $62 million for the same period in 2025. The decrease was attributable to a $5 million reduction in depreciation expense and a $5 million reduction in intangible amortization expense.
Reworded paragraphs (17)
Previous wording
The Company’s condensed consolidated financial statements include the accounts of RXO, Inc. and its majority-owned subsidiaries. All intercompany accounts and transactions have been eliminated. In management’s opinion, the condensed consolidated financial statements reflect all adjustments that are of a normal recurring nature and are necessary for a fair presentation of financial condition, results of operations and cash flows for the interim periods presented. Operating results for the three months ended March 31, 2026 are not necessarily indicative of the results that may be expected for the year ending December 31, 2026. Refer to Note 2—Basis of Presentation and Significant Accounting Policies for additional details regarding the basis of presentation used for the Company’s condensed consolidated financial statements.
Current wording
The Company’s condensed consolidated financial statements include the accounts of RXO, Inc. and its majority-owned subsidiaries. All intercompany accounts and transactions have been eliminated. In management’s opinion, the condensed consolidated financial statements reflect all adjustments that are of a normal recurring nature and are necessary for a fair presentation of financial condition, results of operations and cash flows for the interim periods presented. Operating results for the three and six months ended June 30, 2026 are not necessarily indicative of the results that may be expected for the year ending December 31, 2026. Refer to Note 2—Basis of Presentation and Significant Accounting Policies for additional details regarding the basis of presentation used for the Company’s condensed consolidated financial statements.
Previous wording
Direct operating expense (exclusive of depreciation and amortization) of $50 million in the first quarter of 2026 increased $2 million, or 4.2%, from $48 million in the same quarter in 2025. As a percentage of revenue, direct operating expense (exclusive of depreciation and amortization) increased to 3.5% in the first quarter of 2026 compared with 3.3% in the same quarter in 2025 driven primarily by changes in cost mix between periods.
Current wording
Direct operating expense (exclusive of depreciation and amortization) of $53 million in the second quarter of 2026 increased $6 million, or 12.8%, from $47 million in the same quarter in 2025. As a percentage of revenue, direct operating expense (exclusive of depreciation and amortization) decreased to 3.0% in the second quarter of 2026 compared with 3.3% in the same quarter in 2025 driven primarily by improved operating leverage.
Previous wording
SG&A of $197 million in the first quarter of 2026 decreased $13 million, or 6.2%, from $210 million in the first quarter of 2025. As a percentage of revenue, SG&A decreased to 13.8% in the first quarter of 2026 compared with 14.7% for the same quarter in 2025 driven primarily by cost savings from restructuring actions.
Current wording
SG&A of $211 million in the second quarter of 2026 decreased $3 million, or 1.4%, from $214 million in the second quarter of 2025. As a percentage of revenue, SG&A decreased to 11.9% in the second quarter of 2026 compared with 15.1% for the same quarter in 2025 driven primarily by cost savings from restructuring actions and improved operating leverage.
Previous wording
Depreciation and amortization expense for the first quarter of 2026 was $26 million, compared with $32 million for the same quarter in 2025. The decrease was primarily due to a $5 million decrease in intangible amortization expense.
Current wording
Depreciation and amortization expense for the second quarter of 2026 was $26 million, compared with $30 million for the same quarter in 2025. The decrease was primarily due to a $4 million decrease in depreciation expense.
Previous wording
Restructuring costs for the first quarter of 2026 and 2025 were $7 million and $14 million, respectively, and primarily comprised severance and operating lease impairment costs.
Current wording
Restructuring costs for the second quarter of 2026 and 2025 were $7 million and $3 million, respectively, and primarily comprised severance and operating lease impairment costs.
Previous wording
Revenue decreased by $8 million in the first quarter of 2026 to $1,425 million, compared with $1,433 million for the same quarter in 2025. The year-over-year decrease in revenue in the first quarter of 2026 was driven by (i) a $14 million decrease in revenue in our managed transportation business, driven primarily by a decrease in expedite ground volume and (ii) a $13 million decrease in last mile revenue as a result of an 8% decrease in volume. This was partially offset by a $30 million increase in truck brokerage revenue, primarily as a result of a 12% increase in revenue per load driven by increases in freight rates and fuel prices, partially offset by an 8% decrease in volume.
Current wording
Revenue increased by $347 million, or 12.2%, to $3.2 billion in the first six months of 2026, compared with $2.9 billion for the same period in 2025. The year-over-year increase in the first six months of 2026 was driven by a $354 million increase in truck brokerage revenue, primarily as a result of a 27% increase in revenue per load driven by increases in freight rates and fuel prices. Truck brokerage load volume decreased 4% year-over-year, excluding the impact in both periods of the business transitioned from truck brokerage to managed transportation. The increase in revenue was also driven by a $16 million increase in last mile revenue as a result of a 5% increase in rates, partially offset by a 2% decrease in volume.
Previous wording
Cost of transportation and services (exclusive of depreciation and amortization) in the first quarter of 2026 was $1,171 million, or 82.2% of revenue, compared with $1,153 million, or 80.5% of revenue in the same quarter in 2025. The year-over-year increase as a percentage of revenue during the first quarter of 2026 was driven primarily by (i) a 1.9 percentage point increase in truck brokerage cost of transportation and services as a percentage of revenue as the market remained tight in the first quarter of 2026, with capacity continuing to exit, driven primarily by regulatory changes and enforcement, which caused buy rates to increase faster than our contractual sell rates and (ii) a 0.8 percentage point increase in last mile cost of transportation and services as a percentage of revenue as a result of freight mix changes.
Current wording
Cost of transportation and services (exclusive of depreciation and amortization) in the first six months of 2026 was $2.6 billion, or 82.6% of revenue, compared with $2.3 billion, or 79.6% of revenue in the same period in 2025. The year-over-year increase as a percentage of revenue in the first six months of 2026 was driven primarily by (i) a 2.9 percentage point increase in truck brokerage cost of transportation and services as a percentage of revenue as the market remained tight in the first six months of 2026, with capacity continuing to exit, driven primarily by regulatory changes and enforcement, which caused buy rates to increase faster than our contractual sell rates and (ii) a 1.3 percentage point increase in last mile cost of transportation and services as a percentage of revenue as a result of freight mix changes.
Previous wording
Transaction and integration costs for the first quarter of 2026 and 2025 were $2 million and $6 million, respectively, and primarily comprised acquisition integration costs.
Current wording
Transaction and integration costs for the first six months of 2026 and 2025 were $6 million and $13 million, respectively, and primarily comprised acquisition integration costs.
Previous wording
Debt extinguishment loss for the first quarter of 2026 was $11 million, resulting from the redemption of our outstanding 7.50% Notes due 2027 and the write off of the related unamortized debt issuance costs and discount.
Current wording
Debt extinguishment loss for the first six months of 2026 was $11 million, resulting from the redemption of our outstanding 7.50% Notes due 2027 and the write off of the related unamortized debt issuance costs and discount.
Previous wording
Our effective income tax rates were 25.5% and 19.2% for the first quarter of 2026 and 2025, respectively. The effective tax rates for the first quarter of 2026 and 2025 were calculated using the discrete method. Our effective tax rate for the first quarter of 2026 differs from the U.S. corporate income tax rate of 21% primarily due to the recognition of discrete tax benefits. Our effective tax rate for the first quarter of 2025 differs from the U.S. corporate income tax rate of 21% primarily due to the effect of non-deductible expenses when experiencing a pre-tax loss.
Current wording
Our effective income tax rates were 21.1% and 18.2% for the first six months of 2026 and 2025, respectively. The effective tax rates for the first six months of 2026 and 2025 were calculated using the discrete method. Our effective tax rate for the first six months of 2026 differs from the U.S. corporate income tax rate of 21% primarily due to the effect of nondeductible expenses when experiencing a pre-tax loss, partially offset by the recognition of discrete tax benefits. Our effective tax rate for the first six months of 2025 differs from the U.S. corporate income tax rate of 21% primarily due to the effect of nondeductible expenses when experiencing a pre-tax loss.
Previous wording
As of March 31, 2026, the Company had $365 million available under the ABL Facility, net of $35 million of outstanding borrowings and $50 million of outstanding letters of credit.
Current wording
As of June 30, 2026, the Company had $335 million available under the ABL Facility, net of $65 million of outstanding borrowings and $50 million of outstanding letters of credit.
Previous wording
The 2031 Notes bear interest at a rate of 6.375% per annum payable semiannually in cash in arrears on May 15 and November 15 of each year, beginning November 15, 2026, and mature on May 15, 2031, unless repurchased or redeemed earlier, if applicable. The 2031 Notes were issued at an issue price of 100.00% of par. The company may redeem the 2031 Notes in whole or in part prior to the 2031 redemption date at predetermined prices depending on the date the 2031 Notes are redeemed.
Current wording
The 2031 Notes bear interest at a rate of 6.375% per annum payable semiannually in cash in arrears on May 15 and November 15 of each year, beginning November 15, 2026, and mature on May 15, 2031, unless repurchased or redeemed earlier, if applicable. The 2031 Notes were issued at an issue price of 100% of par. The Company may redeem the 2031 Notes in whole or in part prior to the 2031 redemption date at predetermined prices depending on the date the 2031 Notes are redeemed.
Previous wording
Total assets decreased by $9 million from December 31, 2025 to March 31, 2026, primarily due to (i) a $10 million decrease in accounts receivable as a result of a sequential decrease in revenue, (ii) an $11 million decrease in identifiable intangible assets as a result of amortization and (iii) a $16 million decrease in operating lease assets as a result of amortization, partially offset by a $24 million increase in other current assets primarily as a result of the timing of prepaid contracts.
Current wording
Total assets increased by $182 million from December 31, 2025 to June 30, 2026, primarily due to (i) a $218 million increase in accounts receivable as a result of an increase in revenue and (ii) a $23 million increase in other current assets primarily as a result of the timing of prepaid contracts, partially offset by (i) a $33 million decrease in operating lease assets as a result of amortization and (ii) a $21 million decrease in identifiable intangible assets as a result of amortization.
Previous wording
Total liabilities increased by $23 million from December 31, 2025 to March 31, 2026, primarily due to a $43 million increase in long-term debt as a result of debt refinancing transactions completed in the first quarter of 2026, partially offset by a $14 million decrease in short-term and long-term operating lease liabilities as a result of lease payments.
Current wording
Total liabilities increased by $217 million from December 31, 2025 to June 30, 2026, primarily due to (i) a $174 million increase in accounts payable as a result of an increase in third party transportation costs and (ii) a $91 million increase in short-term and long-term debt used to fund working capital needs associated with the increase in revenue, partially offset by a $33 million decrease in short-term and long-term operating lease liabilities as a result of lease payments.
Previous wording
Net cash used in operating activities for the first three months of 2026 was $7 million compared with $2 million used in the same period in 2025. The increase in net cash used by operating activities was primarily due to lower income.
Current wording
Net cash used in operating activities for the first six months of 2026 was $47 million compared with $21 million provided by operating activities in the same period in 2025. The increase in net cash used by operating activities was primarily due to increased working capital requirements associated with higher revenue. The increase in revenue resulted in higher accounts receivable and a corresponding use of cash, partially offset by increased accounts payable.
Previous wording
Net cash used in investing activities for the first three months of 2026 was $17 million compared with $25 million in the same period in 2025. The use of cash in the first three months of 2026 was $17 million for purchases of property and equipment. The uses of cash in the first three months of 2025 were (i) $15 million for purchases of property and equipment and (ii) $10 million paid related to the Coyote acquisition for working capital and post-closing adjustments.
Current wording
Net cash used in investing activities for the first six months of 2026 was $29 million compared with $43 million in the same period in 2025. The use of cash in the first six months of 2026 was $29 million for purchases of property and equipment. The primary uses of cash in the first six months of 2025 were (i) $29 million for purchases of property and equipment and (ii) $10 million paid related to the Coyote acquisition for working capital and post-closing adjustments.
Previous wording
Net cash provided by financing activities for the first three months of 2026 was $28 million compared with $7 million in the same period in 2025. The primary source of cash in the first three months of 2026 was $400 million in proceeds from the issuance of the 2031 Notes, partially offset by (i) $362 million paid for the redemption of the 2027 Notes and (ii) $8 million paid for debt issuance costs. The primary source of cash in the first three months of 2025 was $35 million in net proceeds from borrowings, partially offset by $17 million in payments for tax withholdings primarily attributable to the vesting of stock compensation awards held by non-RXO employees at the time of the Company’s spin-off from XPO, Inc.
Current wording
Net cash provided by financing activities for the first six months of 2026 was $74 million compared with $4 million in the same period in 2025. The primary sources of cash in the first six months of 2026 were (i) $400 million in proceeds from the issuance of the 2031 Notes and (ii) $49 million in net proceeds from borrowings on revolving credit facilities, partially offset by (i) $362 million paid for the redemption of the 2027 Notes and (ii) $9 million paid for debt issuance costs. The primary source of cash in the first six months of 2025 was $34 million in net proceeds from borrowings on revolving credit facilities, partially offset by $18 million in payments for tax withholdings primarily attributable to the vesting of stock compensation awards held by non-RXO employees at the time of the Company’s spin-off from XPO, Inc.
Rearranged current paragraphs (4)
Current report — wording carried from elsewhere
Cost of transportation and services (exclusive of depreciation and amortization) in the second quarter of 2026 was $1.5 billion, or 83.0% of revenue, compared with $1.1 billion, or 78.8% of revenue in the same quarter in 2025. The year-over-year increase as a percentage of revenue during the second quarter of 2026 was driven primarily by a 3.8 percentage point increase in truck brokerage cost of transportation and services as a percentage of revenue as the market remained tight in the second quarter of 2026, with capacity continuing to exit, driven primarily by regulatory changes and enforcement, which caused buy rates to increase faster than our contractual sell rates. The increase in truck brokerage cost of transportation and services as a percentage of revenue was also due to higher fuel prices, which lead to increased revenue without a meaningful corresponding increase in gross profit dollars, as fuel costs are a passthrough over time. In addition, last mile cost of transportation and services as a percentage of revenue increased 1.7 percentage points as a result of freight mix changes.
Current report — wording carried from elsewhere
Transaction and integration costs for the second quarter of 2026 and 2025 were $4 million and $7 million, respectively, and primarily comprised acquisition integration costs.
Current report — wording carried from elsewhere
Our effective income tax rates were (3.7)% and 14.5% for the second quarter of 2026 and 2025, respectively. The effective tax rates for the second quarter of 2026 and 2025 were calculated using the discrete method. Our effective tax rates for the second quarter of 2026 and 2025 differ from the U.S. corporate income tax rate of 21% primarily due to the effect of non-deductible expense when experiencing a pre-tax loss.
Current report — wording carried from elsewhere
Restructuring costs for the first six months of 2026 and 2025 were $14 million and $17 million, respectively, and primarily comprised severance and operating lease impairment costs.