RXO (RXO) 7 Aug 242024 Q2 Earnings call transcript

Welcome to the RXO Q2 2024 Earnings Conference Call and Webcast. My name is Sharon, 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 within 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 its earnings release.

You should refer to a copy of the company's earnings release in the Investor Relations section on the company's website for additional important information regarding forward-looking statements and disclosures, and reconciliations of non-GAAP financial measures that the company uses when discussing its results. I will now turn the call over to Drew Wilkerson. Mr. begin. may you Wilkerson,

have takeaways ranges; and an Brokerage with third, for have of the at our Jamie guidance sequential RXO's Officer, in actions and EBITDA and we Mile, Brokerage and X Chief we everyone, away and have in to here Managed today: significant LTL, growth, won with in and Harris; actions and today. result high and year-over-year both third to achieved in adjusted the our Strategy years, rate taken momentum Transportation first, profitability; impressive main are Weisfeld. There Charlotte lastly, in Chief adjusted to stops Jared margin like thank morning, we new business end X improve the growth both in you joining walk quarter. second, EBITDA, fastest we you in expect have delivered year-over-year I'm and I'd volume growth Good pipeline; nearly gross Financial truckload Officer, sales Last full significantly

you our Now to walk in a continues executed market. of $XX through adjusted me second million what RXO quarter be freight soft well let with results. EBITDA

in volume with by Our Brokerage business grew truckload a less XX% volume. X% increase than

volume comparisons, truckload our and project business in loads XX% the increased improves. of quarter remains represented XX% We we The our spot well of bid and walked the robust. a when truckload continue quarter volume and of down the which our to year-over-year. Full was strategy contributing midpoint the business, XXXX. Cross-border build contract profitable tough was last second XX% demand scale expectations. Full to growth. you in We're the us earn tough hitting above cross-border result quarter volume Brokerage to market by represents but season is now our LTL positions mix to volume and decline X% of through Brokerage comparison of the

lead customers for spot service and and relationships projects. to RXO loads strong Our choose

our Importantly, dynamics of XX.X%. the transportation you major Brokerage with In with Managed grew Brokerage services yielded our billion. total in in effective The management we more awarded business provided results. margin $XXX quarter Transportation, and combined discuss our quarter. FUM Freight of detail. Complementary to more strategy bid or a purchased were is Brokerage Synergy margin season than contributor the loads million we $X.X sales talked Jared again to FUM, will about our substantial, last greater us year-over-year in pipeline Under Management than in new gross customers

Runway best and top of will This for in goods and growth turning stops The customers the national across Managed in the that service. provide grew because the relationships brands nearly was of in scale, to RXO, We deep and exceptional with and bulky retailers financial industry. largest with service Last are long the focus stability providers result X% a X technology, those to like Mile quarter, years. converting rate build of our have our large the pipeline Mile RXO. In Transportation year-over-year, a second by fastest fuel Last growth big

volume #X but XXX up in our more driven XX% was of increase quarter. Last was talk basis We stronger annualized points the gross The services position results primarily bolster company-wide adjusted XX% continue performance, this provider initiative. deliveries. Complementary million margin few and in and Mile to Mile big Last expect than $XX of effort margin to the about was profitability EBITDA. we included which as year-over-year. gross bulky the generate minutes, this a a in of RXO's more Jamie will by

market. about overall the freight talk Let's

metrics soft, the improved remain since key conditions quarter. While most industry first

continued side, supply the in each month carriers quarter. exit to the On

compared to when rate slowed the of However, first exit the quarter.

seasonally term moved Carrier as increase, ratio a the higher have and rates As capacity of season quarter started road load-to-truck progressed. the continued produce result exits. check, was This we to DOT anticipated, national while be demand at indicators and for on gross unsustainable short mixed. with many our puts that an to view side, this our level continue consistent pressure carriers. On margin rates are is

project moderated has customers index our and our sustainable, we market, inflation all strategic tell tightening market decisions results our capture of seeing quarter strategy We and inventory to positions contractual too the While focused It's This the when weakened. recovers. anticipation retail the us and volume healthy: whether industrial the make in reliably recovery. are the honoring to second rates. continue on we're contributed confidence but well consumer spot to market remain ISM and needs to freight serving labor and position will have is soon

was Let's compared to talk high expectations and single-digits for down July slowest and case to the June what typically month July the quarter in month are be what quarter. when third about mid saw truckload Full the in we year. year-over-year. volume that the and approximately we single-digits is the our down expect this of

progressed, improvement we an see July As our margin. gross did in

decline season Brokerage grow to quarter, anticipate that low double-digit of quarter-over-quarter. We bid but third truckload comparison the tough and LTL volume of is anticipate slightly For we This strategy because a full will mid quarter the by single-digit volume year-over-year decline percentage. that single-digit high will will by pricing low third continue, basis percentage and a will the primarily that on XXXX. growth a in to our to

quarter second volume quarter the on second contract up XX% of by you volume third take to decline, volume contract volume our In will be be of stack. recall, year, anticipated those over X-year continue XX% grew gains sticky. by approximately market year-over-year share the XX% the with full since XXXX. third the than last long quarter, term and Brokerage profitable the in Even truckload full a quarter truckload grew will will year-over-year. RXO As more

to While grow in Coyote track our disciplined on and also right ability detail to environment, will our the adjusted strong our focus minutes. This planned prolonged and to strategic is freight quarter. on the the Jamie close the performance Jared cycle in confidence more again in make of operating We're a in us give sequentially acquisition EBITDA a we're discuss still in investments margin costs Logistics. fourth soft in year-over-year. few first our half like point guidance of and

RXO carriers, June, Coyote Many RXO Coyote acquisition at and spend share early impressed This time. cycle. closes. team right an a have the the significantly deal call have mentioned key in days the at carriers As value knowledge. the their wide will and since few scale due energy, and and be will progress. I've integration our I with had with and point is time after customers, Coyote we've we range large passion I'm since of for members good our business freight our mindset right in process this excited have good to in create roles been about in for and profitable are customers made that investors. will at that by more the increased even and had on started We're confident a the substantial scale buying growth. I acquisition the opportunity and diligence some common employees primed remain its

continuing is our about well cost. growth to But set when market earnings continuous months. the remain disciplined hear innovation, You'll on to now, progress close and focused of when comprehensive we're for relationships. more it most service, comes RXO coming positioned We'll and solutions, to the customer provide deliver weeks the the best also in inflects.

will Now results in financial more discuss Jamie? Jamie our detail.

Drew, and morning you, good Thank everyone.

XX Gross of quarter Let's performance XXXX. points in basis $XXX to detail. second second points review quarter up in our in the generated million up $XXX basis XX%, We margin million more XXX compared and year-over-year. revenue sequentially was

was the XXXX. of range Our second May. quarter $XX of million the EBITDA adjusted to the in above in $XX midpoint you we million to compares This guidance provided

adjusted expense points Below line, sequentially was basis X%, points up margin Our down $X basis XX was and interest EBITDA the our XXX year-over-year. million.

share per earnings $X.XX. adjusted was our quarter, the For

EPS You X of can Slide to bridge adjusted presentation. the earnings find a on

Transportation was from I'd quarter Now existing revenue and Mile XX% truckload an due in by business. in down was growth increase increase up sequentially generated solid volume nearly million to the margin declined Complimentary business, automotive Last of performance XX to in gross year-over-year, our season the was our The overview at year-over-year. rates The our bid to customers. by guidance. basis million was remained and and business customer new year-over-year grew within driven Mile like seasonality while down focus slightly XX.X% well revenue, XX first volume a procuring by purchased expanded sequential recovery of primarily basis market XX% years. high year-over-year. rates. our X% year-over-year. primarily freight The fastest services points $XXX X% increased full points gross basis points quarter of of Managed in honoring the expedite lower our as and to Brokerage quarter, margin due X% gross stops services the year-over-year. Complimentary anticipated stops margin and to as due end towards $XXX sequentially that on Last lines remains of an XXX of and basis sequentially margin lower X% within transportation revenue our primarily Brokerage X points give the strategy performance Brokerage Similar by soft. XXX by in decline sequentially effectively. our

profitability than Mile the second by the costs. benefits consultant strategy Last we approach plenty gross impacted specifically of an margin of implementation for EBITDA which $XX second million, complementary several contributed to have fees. Mile. annualized was lines of business this expansion. to significantly the professional initiatives adjusted in realized throughout quarter, services with are initiative in onetime we but of in to Last the an In improvement this the opportunities one resulting Earlier pleased year, partnered has approximately associated I'd this like we design of reduce and was adjusted outside impact Mile, have on. our of quarter purchased performance. We're EBITDA initiative offset future All expand underway, with Last the that to more positively a already million. We In though quarter, our phased a performance, accelerate still The $X in transportation quarter

Looking we return adjusted annualized forward implemented, to an impressive fully on EBITDA be dollars the impact $XX expect than million, and spent. more the when

As cash, Slide to we refer discuss X. please

at free $X impacted of negative the freight X which was by flow trailing cycle. Over months, our adjusted cash levels bottom million, the lower profitability the was

semiannual of previously strategic of for of our offering the our working impact capital, legacy the notably, settlement increased our quick includes: use this discussed and of interest carriers. liability Additionally, claims; pay payment; usage

in million, of flat than cash with $XX $X which shared on the the ended the negative we Our adjusted with was million with quarter We flow cash of $X prior negative May. sheet, our second quarter. balance you in expectation million, free quarter the slightly better

cash free flow the Our revolving cash credit our with restructuring-related sequentially, facility outflows. of usage increased by The in and million million adjusted $X cash consistent difference $XX was primary estimate. quarter between

We conversion the continue to market excited the XX% expect through cash and produce will generation a XX% RXO to flow about market as range that inflects. remain cycles of

] our strong business, cycling market flow with As see last Quarter quarter. of and This rapidly first recovers. is delever [ committed than end liquidity leverage higher Slide you EBITDA, can to our end leverage we X.Xx. the the ratio remain adjusted the as free quarter XX given comfortable We with position adjusted current remains approximately the strong our our trailing year's and on our liquidity was months EBITDA. at X.Xx leverage million of of expect to leverage gross due cash was $XXX characteristics X, net of

cost P&L quarter, with reductions XXXX. We Last complete. to these to annualized least reductions actions for updated are The a million approximately these reductions were reductions cost. cost in $XX of associated expense to and of The outflows $XX expect strong our under Moving million XXX%. million. at now cost return we approximately annualized cash $XX cost just million, achieve to $XX expectations

were While gross reductions offset market the load and in declines us per operating recovers. leverage well a for large portion year-over-year of by these they profit position inflationary pressures, cost the when

nature. mostly Importantly, in structural these are cost-outs

market well is out more in than million costs Over for invested taken while the annualized the strategically recovery. the months, business. XX of positioned we've RXO $XX last

cost charges restructuring and any as discussing else Importantly, synergies from today, include charges resulting with from these impact upcoming or the savings Coyote everything we're don't acquisition.

quarter third and Now our for let's year. expectations full the discuss

confidence cost still trade EBITDA our we're growth. another prolonged and operating in adjusted in gives strong performance a of While quarter us soft sequential margin discipline environment,

to expect and in $XX million between million We adjusted QX. EBITDA of deliver $XX

flow on year, cash the more free quarter expect also assumptions full unchanged. adjusted than of free We a Jared for adjusted strong cash conversion which remain XX an our provide shortly. Slide includes XX%. will more with outlook modeling our flow detail

the exclude of assumptions the Logistics. impact previously, mentioned Coyote pending As these acquisition of

Coyote $XX million the of depreciation year and $XX expense XX%. compensation XXXX million $XX approximately $XX long-term net million; intangibles XX%, We and expense excluding to and $XX between million; continue full million above transaction million capital million; expect acquisition-related million; stock-based expenses, between tax $XX of of approximately $XX between and interest following: approximately $XX and our to expect $XX expenditures which restructuring rate between is amortization million expense million; and and expectation be million; $XX between adjusted costs $XX our we effective integration

should also we're phase freight diluted model given an execution the share very You XXX our current approximately of shares. Overall, pleased of average with cycle. count the million

opportunities to-date margins. opportunities significant Last and to all improved our gross the complementary tightening Our Brokerage ahead across pleased margin the in we're especially improvement despite solid business market, is and We're improve margin Mile and generating services. the seeing pipeline structurally gross with

to to results Now, more I'd detail Weisfeld, who Jerry in talk it ] Chief our outlook. [ turn our about our will like Officer, over Strategy and

Thanks, morning, Jamie, and good everyone.

to in Brokerage We second XX%. exceeding guidance year-over-year quarter, market growth, the growing of our volume continued the XX% X% robust LTL was outperform growth with year-over-year. by

basis midpoint down X% volume we the down of above basis and was the award continue the year-over-year. year-over-year. Full truckload quarter. XXX XX% and volume strong volume full of LTL and provided sequentially XXX because year-over-year, our volume Brokerage quarter, in represented service represented last XX% down to the second points of basis freight LTL XXX us Full up in sequentially relationships. Brokerage XXX Our points customers quarter, truckload points truckload points basis range of

XXX full business believe in a starting and our We contract underlying growing volume spot quarter full compared contractual was our mix. Contract contract of majority second when and represented this so quarter We of a flat the contract In year-over-year. to is also perspective. the contract a representation quarter. volume second XX% basis accurate approximately overall forward, truckload our sequentially the more in that LTL truckload in from quickly favorable communicate up maintained spot mix X% X% a With going this quarter, mix volume up and and of of LTL quarter, full nature, and freight grew considering and the XXXX. is vast our truckload volume year-over-year, of points we'll

speaks gains. volume Importantly, to was across trends. Retail our volume XX%, our our full truckload retail our with X-year full our on truckload a volume contract consistent flat multiyear market over share and performance verticals remain stack, largely grew by consolidated was e-commerce Within healthy. which year-over-year. business, at our major approximately Inventory positions customers

in exceeded retailers largest year-over-year country, X growth the for revenue As quarters. consecutive growth the inventory has last the

encouraging, at indicators While and this manufacturing approximately flat industrial lows. Volume with confidence to continues consumer leading also sitting from year-over-year. was fall multi-month is many customers

Brokerage Automotive territory the with While earlier months. grew volume has some year gross May. we a the the high of few there the a you XX% were profitability signs ISM XX% range perspective, PMI, end than component in margin manufacturing in by to quarters. From encouraging provided was toward last new the been contractionary the at the XX% orders in year-over-year, of last slower few although for pace XX.X%

AI gross gross out load strengthened visibility pricing Brokerage and lower the seasonality. momentarily. In customers technology on moved launched new expected, for rolled the due per as second enhanced expand As quarter and We quarter, and enhancements. progressed to several cross-border we margin tracking this I'll profit algorithms.

LTL XX% first enhancements quarter, to We to slightly accuracy rolled capabilities drive quarter. at in bill. expand X-day carrier LTL down time strong continue XX% remains in and our billing automation to the improved retention from and out the

basis, person rolling day more measured per Brokerage by Brokerage to our productivity become XX% even Our over financial review improved and productive. like business our year-over-year. I'd now in in per detail. to On enables technology loads a market by XX-month performance as more our people conditions

in compared XX can quarter. improvement consolidated of basis better per of our find get first mix moderating load load and to quarter down when of for basis a was prices. impacts on fourth just revenue percentage it's consider those information by items, length load year-over-year, presentation. When on an this You price year-over-year, point of on year-over-year year-over-year decline. quarter's easing. through the sense when to compared changes the basis, X% the a haul, single-digits XXX XX Slides Revenue a also consecutive of declines fuel last per per to the declined To That's important low normalizing

volume While continued we haul of growth. mix have to lapped length we the robust our headwinds, LTL expect a given headwind be

per inflected revenue margin As the dilutive compared of consolidated to margin and but a to load is revenue expectation per of at reminder, LTL roughly truckload. truckload LTL slightly June, year-over-year. ahead in scale, load when of positive EBITDA revenue runs per higher Full percentage month full flat our at load, year-over-year gross

Let's second XX approximately discuss move and Brokerage We gross of to industry margin entered Slide the margin and with trends. a quarter gross RXO monthly XX%.

market tightened as were high to and produce DOT of toward to to encouraging guidance a Thanks we technology and margin and load-to-truck freight still seasonal both ratio a to market our tender effectively strategy there our the ability an due The X.X%, soft perspective, some Roadcheck. still factors, in averaging As leverage tightening higher the procure expected, sequentially year-over-year environment, post second bid and prolonged the moved most despite rejections the season season to progressed notably end industry quarter gross and quarter, conditions. From respectively. national in able operating signs. but are approximately we're capacity, X.X%

regional due national heavily average produce tightness to season. influenced the pockets was by of However,

retail customers. demand over-the-road port side, consistent growth translated of strength, inventory the not our also is the On volume volume This has robust. with been year-to-date yet while it into positions has improved

macroeconomic have I as monitoring mentioned However, recently are earlier, weakened. that the indicators we

remain demand truckload to there is much supply, challenged. economics carrier current unit capacity too relative and to Turning still

almost exits been and demand. supply, susceptible impacted with years; carrier being monthly in for X by the authority likely However, there now more term environment is near the changes reduced to have

determine the this recovery, moving in beginning of is the early While if the it's too metrics are to right direction. industry

Let's break gross would out our Brokerage so it go to thought historical truckload LTL our rapidly, per Slide volume trends. and growing to we XX. be load profit helpful volume full With LTL

we To the gross seasonal gross quarter profitability full when full load due factors, to per quarter. lower profit the second in truckload quarter moved through, modestly improved first progressed profit compared just as per truckload but walked As RXO's our levels. second trough the at to XX% recovers, remained will was our gross the in EBITDA. load through some truckload cycle per average. there load approximately profit below RXO's to the full color, quarter, give flow more be X-year adjusted strong When

to business has years. Moving few past LTL the Slide our rapidly grown XX, over

Brokerage meaningful cyclical stable market give opportunities. per now LTL forward EBITDA. This assumes some key to outlook. with LTL no gross like of contributor a Importantly, and our improvement spot you outlook At profit in limited color be look quarter more scale, operates less load. will I conditions and third on freight

Brokerage. with start Let's

to We sequentially. quarter to decline expect consolidated the and volume Brokerage to slightly single-digit by increase third percent mid year-over-year low in

We and well scale performing volume expect third expect we as XX% business by to we in The to grow is XX% the again year-over-year. LTL to quarter. LTL increase volume

year-over-year, full difficult by bid Turning expect to to the our XXXX, to compared significantly outperforming growth. a low comps. which sequential double-digit to volume a percent grew high by and on truckload the single-digit declined market by the our XX% strategy expect approximately expand to broader single-digits. decline we On in want more we when primarily volume truckload to historical season truckload, We basis, a full quarter. I second mid be flat volume full to due volume

of high in percent truckload volume in result of low contract and on year last as expect to fourth full get year-over-year of full As this year. the digit broader the A pronounced most quarter stack, double this be to would third truckload our the in volume single-digit significantly tougher we growth mentioned dynamic X-year ahead approximately market. XX% decline quarter, quarter comps progresses we still a

third consolidated load per revenue of moderating quarter, quarter revenue per the the improve marking we load, expect year-over-year consecutive again to in declines Moving declines. fifth to

approximately flat per expect to quarter. the We year-over-year revenue truckload third load be in full

between be market second We XX% despite similar quarter, XX% and our expect conditions. Brokerage in the the gross to outlook third for tightening freight margin quarter, to

We improve and per profit expect to third Brokerage the July point the seasonally with gross throughout gross quarter, of representing low load quarter. the margin percentage

come we're initiative Services. Complementary In the described Managed we quarter, Turning the a to second Mile, Jamie and be profitability as this improve that to seasonal while online; in back will decline largely automotive by volume Transportation, expect Last quarter offset earlier. expecting from plants throughout the

quarter to takeouts. be again quarter RXO's We the continued costs, to from run our a We're continuing we're EBITDA summary, all soft of remain improving than and third tangible with pipeline gains, sequentially between the sustained progress billion, Transportation full profitability. Last market we together, Putting expect greater share third the on it multiyear on million. In rate also in million the will continue grow market. disciplined Managed $XX execute cost Brokerage $XX and of well $X.X and momentum, freight entering quarter adjusted third and to benefit Mile

growth when and the Coyote of deliver We the to it of to earnings operator acquisition Q&A. turn that, I'll strong for forward quarter. With the the look closing to half fourth the market in over expect first inflects

[Operator Instructions] Schneeberger Oppenheimer. question Scott from with First comes

third still quarter more second down so Jared's expect up relative there understanding in following comments quarter. volumes of Just third some year-over-year quarter, it was around you on than

that's the slowest year, mentioned You seasonally. July, month but of expected

quarter, you balance get but for it to the as be -- to volume flattish, over some out I sense speak you fourth the maybe year, seasonal anticipation can was how consideration looking So well. that, going that quarter on that you holiday with it for a Jared the to thought season just want sounds -- I I maybe? anticipate third mean, quarter to second to heard like speak sequentially, say build

morning. Sure, Scott. Good

So this QX volume double term, QX, down, long while right, at last we business to One, over year-over-year. on the it truckload full and to if throughout volume the X you move quarter low look things. the about look you're at up I the XX% expect X into multiyear comps year-over-year, over that I'd last with really progression volume think guide last full it contract you that's say digit single-digit with from what translates the when gains. is QX, our that than we truckload call even higher volume tough to up the QX from we years, high to volume where And X growth. of for combine when speaks year share more over think our XX% was market was years, that which

moving importantly, And also quarter full up to both think sequential I expect QX automotive and Brokerage will back will the a truckload Managed from throughout slightly benefit and basis as volumes on Transportation. volumes be move we QX, sequentially. higher plants be about should the as to flat online, quarter progresses, which come

Great. Appreciate that.

an load, per Now XX. Side decline, revenue on you've had improving

think periods Year-over-year easy, you now. least too potential much load And occur now. potentially even a challenging challenging but seeing When improvement that is relatively I a Or about that indications foresee coming And X at quarters metric just comps more any to per environment quarters? you in can year-over-year could talk revenue do this you this consecutive becoming over in this in of of there? anticipate year? inflection coming the now? later that are demonstration continued

absolutely. Yes,

of of our of full was June, per importantly, slightly flat. truckload our think positively, in revenue I expectation load which the month inflected ahead

think our I that that's talked that see months did and ago. to improvement, bid strategy we direct reflection season of about you we a X So

quarter I communicating But are fact third in year. look and year, LTL this on as the full that a the of it to our inflect market with the month how will of the the right, it'll proud really have quarter half fifth later that depend the truckload, positive We of I importantly, forward percentage back increasing we the easing. did a of consecutive mark mix But to think June. think relates mix. do freight we shift, it evolves, of As on

question Group Your with Research. Wolfe Scott next from comes

on like that market, starting right? just a and rejections range. X% load-to-truck just about Maybe little X% the color talked So you to bit, in

volume July that to and [ we're Where opportunities? are getting start real and ] early-August, some we're where Yes. for, real see second see we think what's in quarter, start level for Opportunities pricing spot I to the we some there. looking opportunities,

is Scott, morning, this Drew. Good

load-to-truck what We start at at rejections see we mid we're see look just you is you over spots. start seeing, it, to the X:X seeing still single-digits below we spots seeing ] what low If If in, July, -- when load X:X. [ is you to Tender those ratios look typically overall. still X was to closer double And itching a call from digits. start ratio. want it truck to at

next have come later say us caused that the early a through, has I anything year that loads you are I it's wouldn't that some inflection could We say turning. you seen spot anticipate market but seeing that or to market year. or in see

little that bit Is that's the that QX? like high growth do think ratios? Last Mile, hit we Okay. Helpful. leverage of -- a know, It of lower. then QX, talk just the And to then we've QX Brokerage Is can positive clarify point forwarding? that? how maybe to small, EBITDA inflect it's it that's just but can in you on about drivers seasonally it -- driving the the I improvement And you a -- it? sequential big factor EBITDA is the is with starting sounds

Yes. Scott, that flattish we've comps with do but obviously, time We in to XX the really coming lower side, basis to as leverage moves up QX the over kind QX this there's QX. you, initiatives cost talked the is the QX. cycle down agree a Jamie. year-over-year. forward. operational previously EBITDA We of beginning kind We see are P&L Look to points in see at through with of XX have, some to full. the to flow story. about the cost It's of We began

And so we that coming we yes, sheet. strong, good balance see about It's very down. but, feel our

Any If color deal? I ask on Okay. clarity more Coyote the for more. just one could financing

get into can't details the We right now. Yes. specific

we the about committed in announcement, deal of financial for talked at the bridge. form the As a got we've in place

do at we will financing pulled in -- our leverage as announcement, getting defined profile by of we all back to of and What sit to be the is that more are expect profile the want together. leverage such We to neutral. time of our financing credit be later. we the the emphasize though, credit our least There our process at come

so, that. about feel good And very we

with Next Stephanie Moore question comes from Jefferies.

that touch pricing hoping seeing elaborate progressed. talk hoping changed cycle season what as be you strategy, has maybe well? could about a was as a has could little I standpoint bid the if was bit you all -- your I on Kind might at competitive this of bit from you a

Drew. transparency at first implemented. look It is of that we a to put through in year next at middle were important quarter us, bid. to When we that received on place call, position the this felt when communicated rates our would the we felt that like you well customers. and inflect, took Stephanie, for of was service like a at market what We said could the some Yes. it before we being least we next providing, bids was season's we the were point the that

mini with in believe going is communicating execution -- continue us the with happy we're put and the receive that team our strong projects that, bids. to has has the been position of spots, where we have margins a the team's by market strength for on to customers us So delivered and

to prior Got question you've helpful. with cost had then I and the a just initiative. the success And wanted it. some of That's on -- up follow

wanted quantified About bit of in some Are to -- has been I running progress those -- initiatives. you like kind very, a little better if very earlier seem just Maybe touch those on think, line? it you if you more, could expected? those than strong? in of the does the

what in Yes. they're with expected, well an thought line running both amount we as as say timing. the as from would I

We're in last talked line the but that what quarter, those about throughout of are phased we're QX, in to full expecting. in we Stephanie, with see As right the year. impact beginning QX, they're hit

Tom next Your question UBS. with from comes Wadewitz

I just but XQ I is year in maybe seasonality, normal Brokerage truckload call, on in comps? truckload wanted do just on Or what's worst know compared how I'm I XQ. not you of saying volume you a -- but the for volume decline versus about saying the normal we this XQ the that's had similar think to volume, seasonality Brokerage if Brokerage to what versus understand XQ. Are the earlier year sure volume that question you're to

Tom, it's Jared.

you're right. So

respect -- to from volume. QX to QX expecting from typical are with QX our We seasonality

to expect quarter. throughout We improve the volume

year will Modest I of main Managed there also Brokerage and the QX online, perspective, think right? QX, XX% both sequentially point We coming year-over-year, truckload. plants drivers and versus volume with about growth with the a volumes. on throughout volumes to sequential your sequentially flat QX to automotive one Transportation respect continued comps, up last And About year. back to strength the come right? grew from full impacting down the

tougher do to from comps a QX. our QX little bit get So

Okay.

normal of flat kind is XQ So truckload seasonality XQ. versus

Yep.

right. I think, it about thinking you're

Okay. Good.

at initiatives, SG&A I as that is cost that it in place? of I something it down quarter, SG&A? increase sequentially. here, like that? the think the do how in the And about the the I've look initiatives What's it million, right, if cost costs if numbers go was On like looks in Or in think, $X was we -- potentially that got I think up the comes driver

inside of Mile and now. We're done party primary us how Yes. a an had in SG&A. going we purchased the to This accelerate paid, trans. taking -- That's hit help carriers. of The in outside my with remarks, talked second quarter. is market we with We primary all out some implement Last increased cost resources paying to restructure focused in those Those about that on really driver the outside and down fees brought the taking we're that Jamie. where initiative to we driver we

Okay.

SG&A. are in So fees the

a how so, think separating, if decoupling PT -- think you lowering costs guess PT lowering you from want benefit there'd How from project, about of too, PT right? that that's you weak costs get obviously I do component cyclical a you that might when the to And I kind easier you in costs then for maybe versus kind of do Okay. weak but that cyclical market, lower think structurally Last so a to do would a about Mile, be related you market? to structurally do. And

Yes.

second pay; all we We feel aligned small think the a applies that it's we of of efficient. to repeatable in a your we've how good markets. the in program time a our part fully into benefits did, very seeing what through importantly, we an to really quarter, and details -- the run it, about of point, approached call can, of would the sustainable but XXXX. we that we're exactly the it believe market started that of all that think number. getting at how to without We very of first all going I That manner structured So -- to We of mentioned number We amongst P&L, out. just over sites. million it's remarks it incentives overall We program. in we kind identified least begins a for being come $XX more

question Cowen. Jason TD comes Seidl from Your with next

you little Drew, gross Jamie to at Jared, at the a one XX%. margin, assumed backdrops your to of both of bit wanted talk guidance ends the so for and XX%? and on ranges? Can XX% the XX% chat One -- about at the

It's Jared. Morning. Sure.

I think happens our overall be depending of market will there factor the of cost to in what terms biggest freight conditions PT. on

higher a at it on lower I to the we're able market midpoint probably buy bit towards little So probably see bookends, tightens more, little both bit the the If you if see it end. end. a better, the towards think you

freight not opportunities. relatively markets does that to in spot remain material and QX, that improvement it expectation QX encompassed our is assume in importantly think, from guide unchanged I

Okay. Fair enough.

expect on telling a other if about on to terms And mentioned that in are asset-based And customers further, sort you could does your little project that bit of know talked look when then, should sort some profit the know think calls. their have that? You How we potential gross carriers in what What will of the about how you we quarters? loads. impact project of for loads? I of the now? --

driven that lot Project the of loads what's a in and are something market. really ongoing, are

think you if going there So loads It's about now. that at right Hurricane are on right project that Debby going are right not scale, now. are on now, project are but great loads there

as increase You loads tender typically increase. rejections project see

mini tighter bids spots people core truckload carrier. projects see start start and customers becomes, can loads of a they so bids. put the been mini have When see rejected you rejecting loads, market the try times a So out many too that you more to new to find

It also, about should sense. 'XX? quickly, think the forward as we Okay. headcount in going makes we look Real how

sure Just make to headcount? say you correct. Did heard you we want

Correct. headcounts. Yes,

as growth, overall the we tried the of is now to to we're We going some keep where and branches in staffed into that always adding that spot where around staffed we look Headcount Coyote. When be head you places is in an are dealing for for right and acquisition there's XX% growth good are, at at like to with being customers carriers. mark. we've be

we've some some that on. like to feel got invest So and areas flat going areas to we're hold in

next Your Hoexter comes America. of Ken with question from Bank

a on you up there's to target in there where is follow that? little more season Just from there anything or bid solely else that margin down on think that -- is gross sequentially, just another pressure bit

Ken, it's Jared.

I moved tightening I market So QX and mentioned, as think we think, higher. tender conditions have played rejections ratio result right? out, as that progressed the load-to-truck a it's of

provided, pricing is -- we to year, our the for this So and gave the talked strategy able And our market effectively. think I to we tightening XX%, earlier we're bid importantly, you XX% QX think the we pretty that I navigate that same conditions. to range reflects market about tightening overall that guidance despite range the that

that, clarify truckload bit I little that right? macro on if getting of a for everything about little given to Is those looking of [ just you right? then forward the of you're the statistics a through bit ran market, weaker that ] can, you're said, kind improving and some So and you Jared, despite looking stats, an

we right. Yes. It's -- what that's I think,

seeing in some and are looking load-to-truck KPIs some terms encouraging We the specifically of signs ratio we're that of freight tender at, projections.

I is. how in think to sustainable call too terms this of early it's

to heavily I strength. by of well. talked port want there I in lot as we But A volume recognize QX. about, signs, think, throughout also important the definitely some regional as of a some few pockets developments it's macro think influenced But be notably, of produce encouraging we that the tightness most the season. cognizant in to are recent was

know, talked want anything if process Sticking Jamie, driving or of with more anything Complementary anything upward that that? you a Was that doing Jamie on Mile the the growth anything margin outsized -- gross you're second. there was there Or move. is to forwarding don't versus Was drove else? Last it that about? that Mile for Last detail I

pleased Yes. Complementary We very Services. were with our

up year-over-year was both Our as well margin sequential. as

what from our most of lines was we're contributed think business. all I margin being pleased is the of with up

to quarter. quarter and We Ken, of based. making on a to going very trans, line was Last was Mile initiatives really But the our quarter Mile our stops. We've hit we're were that to it Last purchased to this program. out not contribute all nice broad in it the really just We -- one, on, So bottom broad I If there. now good profit got our call had well. I lot margin, a year-over-year the progress based. that did it, initiative because implementing of we're you great number performed But had we cost terms of X% had think a very up

little And or now and their that about is timeframe going term then bit follow-up, But near at for and of about given how talk don't of my gotten of Coyote, talked the we've performing perspective ahead I'm a guess scale perspective? just financial they're have you're interim announced Great. sale of any I it's the acquiring little the -- -- given the how you terms surprised what can here. what the over preparation know, in from UPS on I integration? you updates kind

the do of Coyote, of we I to question. off happy love in We update terms that. Ken, about talking financials you. no the so with appreciate what There's shared

sequential in who the improvement what results. the volume broader -- shared think should declines business the roughly us don't back growth their they we're what you I see June, market. started to and to in not was June we yet, where volume were ones comment remember I going with that with their in on line don't on with business think owning -- owning the us If

what UPS, integration office back a carriers hoping for on happening moving to a coming Things and we nicely would say that what still customers track. lot I and progressing best to XX. lot right that's think parts from excitement. of but to I There's a to from initiatives there's look There's planning Day does basis. on X operational is are weekly like, now, everything Day is of that

right? I Jamie you quantified integration gave planned think, just And costs, costs, integration haven't costs, year's this right?

year the related right. That's were to exclusively numbers gave we full Ken RXO. And

Coyote included have We from anything yet. not

Your Zazula with David next Barclays. comes from question

or reconfirm change of just you know about if investors, get maybe little a provide asked additional use, any I your to specifically and respect but bit confirmation commitment you just in not Coyote, color could potentially did use on or more it, financing? anchor investors, to with Jamie, anchor the plan the bridge financing

Yes.

details is on financing more looks right will a We of of with we MFN don't the well. all, be had at Orbis well committed and of use -- financing. Can't going bridge. We're of track from Orbis. We to part very that. the but that what in expect announcement, MFN X get our banking intend we're primary, to financing said details like both feel do first We we community into the come time permanent So like permanent as now, and our the form soon. as bridge, that

big June, intended credit financing forma our the we about leverage, least be that in is our takeaway think by plan our we'll defined permanent I is talked to reiterate today, leverage. at neutral, pro for

But we're do. very the -- market feedback well. investment us, sees great as later. -- reacted for the to that come We've heard acquisition has that a Coyote pleased market. that we as we on so great with And more from We're community the pleased

little then, And if could follow up past I maybe a investments. on

in growth support capital made XXXX had this in -- going build business point. the the operational in So a seems the at of some you investments be and like XXXX, more story is growth, which to to

growth right not in investment numbers paying the off? we up how for future? can it what how the is you now So that in And see about sets

talked CapEx investments the a for anticipated Yes, of we the real We've said a long estate, I'll if ] were start at we which made the that. number. We that did we We terms locations, a make about some year. last than term of investment. growth capacity [ strategic We that's X% Last little in believe you still about lot higher date us to span of will. that back year really revenue was some in give that. physical investments

run through CapEx, We investments but also of in are the that run technology spend. constantly expenses making also our form through operating

and the with look what of constantly being and to platform larger were majority CapEx, our at we customers. trying updated that keep to our take tech fresh you If it is spend. leading can to edge and We're offer our

carriers -- to our of an intend those that Lowes, technology. I efficiencies, the better employee able in it digitally mean, see for the of are internal how our ] loads example created by we our to for shippers productivity, pay off look technology be as by we will forward, form you to be we As [ believe use efficiency, to many technology, for from use usage.

significant a positioning kind if profitability. both recovers I when And look a size So the it theme, we bigger customer into as that relationships, spend, our terms we'll cost well pay-off. would we're see technology of optimization, flow ourselves as have to for market of opportunity, kind in roll continuing through that of you our our at the growth

from question with Ravi Your Morgan Shanker comes Stanley. next

for mean gaining be conversely good kind you're to of now there just is start and price, very the in couple potentially out this competitors hear being that that a think, which a on the talking is cycle. large Obviously, not? obviously your understandable you -- in one others point of does that of are with time some kind who of But mentioned share I share. seem that pretty are at kind disciplined industry losing So to about long to your

seeing And of asset-heavy upcycle. any the share the well? of shipper see carriers a Are And those mentioned pricing have going as would asset-light seeing dynamics guys so, you your some you peers how also to marketplace? switch from of

Yes.

in quarter, your kudos it to a for think There's it's largest did our had you a strong They I'll it's One, that They X parts. So winners. them. room question margins. mentioned multiple great with take market. I competitor, large

for it's kudos great to think I a them quarter.

there getting far always I've price doing As business. used this are of and as, way as been a who market? in players the had irrational years, Absolutely. people have XX you've for

that we've forgetting the business. on we think carrier. And service, we're what value the now, to the innovation see your And a our never at them always providing apologize. part long look as it For looked way in relationship. that customers I us, over solutions, We right that's term question significant and so I'm then, last of doing at Ravi,

Assets.

Yes.

Assets, yes.

back and go what's last XX over look The -- asset. you at Look, the years. happened

you if single-digits to XXXX, over XX% you from XXXX go saw go So to of from the Brokerage market. truckload

large that. as I And to doing you'll share carriers in think large whenever long we will beneficiary term. see think they've to be cycle, continue winners I the a X.X the they're working trend last the over carriers I of this think reduce that, that. with. of term. the in time brokers over What positioned from take continue see long that it's the the that we've you you And the that, asset-based of ourselves number see a been over during one years, that part of soft been And cycle, customers

helpful. Understood. Really

since is been think post-Coyote? in else. everything stock mid-cycle with down price spin. a Coyote a kind the wrap up, to the just the especially cycle about lies obviously all maybe Obviously big the How your here, where acquisition, normalized then tumultuous so cycle and do and And up quite big of this period big Obviously, pretty you it's move. EPS

Kind And think $X you that at how ] in north range earnings up [ of, of of, last doing during Is it the kind that is so, it do back you Kind of $X.XX? of here? were cycle. $X? dollar

Jared. Ravi, it's

to terms the was pleased earnings both of market. benefits but think per from transaction transaction about to forward into quarter. to is accretion, the right of adjusted specifics immediately the and be think how excited When we cash get in accretive yes, about that now that to perspective are to closing what in the going free about share scale we that fourth in we going adjusted are in are. to Not significant how half first market benefits specific the said of we flow. So the comes the is as the accretion, that as looking enterprise the ultimately of Coyote And to we're terms it the

Hicks next Your question James. comes Raymond from David with

contract First, and volumes upcycle, spot just to XQ seen in from your that how on to kind the the to kind wanted about hit talked kind serve you commitment but -- of will on well of flat mix you of side, we've that the XQ.

just that rather of market those seen if the market. saw get rewarded of to So, kind before kind seasonality a more getting kind between mix I'm spot the the than return seasonality volumes? does obviously to spot curious to of consistent gains shifts spot rate just contracts? we there's we've you of lag need with and Or more start

We market the tighten supply talked for to at. just the demand volumes July be ratio earlier about being load-to-truck looking in that to and think I X:X. has really spot a that you're It's over there.

versus X a spots. in the So to it's seasonal -- loads to spot in more of of ] time inching whenever see [ and being of see appear. But year point start you it it's closer the that demand X:X supply when a you

there season season. many them see a peak do still during But more a market. typically too You or is the now, produce right carriers in

significance demand loads has it where put there the and sort to any spot supply in of So not market. in is

then, competition lot kind this everyone is there's was big differentiating Mexico and the kind we've opportunities. season, of opportunity. see just of, itself up of how Okay. throughout a It cross-border That's RXO kind that helpful. seems growth there. like And out in curious, growing earnings talks heard of, to I

Yes.

XX%, if If even comps. look And with think growth last at I tough this you over we our cross-border the was just what was XX%. remember year, did it you year, over

a you bridge. cross-border to Trade to start got positioning able in pull facility continue We close definitely to us, there access and see as well as right continue customers for their to do to as that. is Laredo World crossing you're distribution ourselves once player easy going trailers. is So see through closer think we trend a more freight nearshoring with to transloads and We've the them. at We're that It nearshoring be we're large you're there. a centers

question next Your Stephens. Imbro Daniel with from comes

just on Yes. some Maybe the side, starting Services clarifiers. Complimentary

modeling the You in of standpoint caught out, I next through What billion should I business $X.X of you pipeline. mean can about does curious have Management think the Drew, Frieght op terms of sales I start flowing the And that to those wins, flow guess. through all $XXX Under income? million annual Just think I year? guess, kind wins? of if that in you contributions talk from

freight come our and got in lot a -- $XXX We've data. we've you We've what customers Jared And million the in onboard. relationships lines freight, means business, that more other truck are onboard Yes. I continue if got that got to a start, piece. to be coming income on increase on that have loads I'll provider. basis. largely a year-over-year could op new that is FUM with are the then ability, as service mean, they well, of we synergy the Brokerage see can

Gross at we're the out. guide we is at where win and improving of profitability. gross Brokerage feel up the but track Last Managed volume we Transportation, within load is unexpected got at ourselves Transportation look Mile we've to putting Last it, We that got Transportation Managed ahead load, on not expectations numbers we in been for got FUM cycle. have the On convert are X the finish first. Mile's long gap. line. FUM Managed in a profitability. a track now, point racking per per and the get think Brokerage the there in FUM below growth, looking it to you volume, $X.X X right the to put if Brokerage I Transportation term that's longer is And of for whenever of there we're wins things in key we growth good one profit is it us position, or this And at X profit look are the over obviously term we good, Managed is that is billion, But there There

And in we of terms Drew's what to of point, it's in terms significant have. FUM,

clearly within through, customer-by-customer, the it's awarded so to But to going about the when about should relative addition get billion it's, yield volumes is to the in about our late-stage pipeline. better Trans $X going entire organization. Managed think into synergy of going significant to business. million results FUM specifics ultimately, you quarter, vary in we're that in way our not think drop I $XXX think you that. across our the $X.X within to I billion That's to Managed that's think Trans And approximate

side trend in growth should line. a Great. that Or this XQ little Slide And a term down to XX, in a Just bit XQ. on more out we a headwinds XQ? more diverging think set mean expectations. then volume to that where Does you the market improvement? this maybe its in growth your follow script, then, flatten in different bit about line are said Just Drew, at peak is TL I we curve? big on cycle. And volumes just a chart volume that at way. look thinking from up, Jared, truckload point RXO on to level I volume just than that long If maturity return in we're want about Can trend trend ask without from the

over we market volume term. the the growth, to For expect outperform the truckload long

few a there not about lot last right at If we there's spot for now, the you been hasn't what look of years. loads talked and

a XX% contractual on So when XX% we the third at over growing be X-year for very Those our stack of quarter. it'll the second are in numbers what's over about on and for the talk volume going strong quarter, at market. still

per market the So this to continue term gross profit I the outperform long load. to for and expect

XX, XX% it's average. X-year is trough below that at can -- on and see You our Slide levels is

you significant returns the see it. at as the got start of that, that earnings behind see you So power to we've

growth develops quarter, quarter. fourth going peak peak happens and it to season volume going right way fourth think to on And Daniel, fourth the get not now. how about what for into quarter That's the of here to into is, we're be prestaging in function a

So stay is tuned on hundred comp that. our points. get that But I basis call think point it, the from QX does tougher a QX, to few by,

Helpful. the color, guys. I appreciate

Bruce with next question Stifel. Chan comes from Your

on of an is again core easy comps do what's back just volume the touch to just the Good for acceleration the much in Can as to driving you Maybe year that share? strength? winning segment? How about a Mile year in how of we the the market growth see from into minute Last maybe here. And break topline down some think last that half versus you in improvement maybe of the move versus there.

Yes. less was I last home don't spending by think that that less I deliveries last year, think lot. year when and end you're having a looking the consumer at from comps

so they're seeing doing same thing. still year, you're And this what the

who for what a have we they who share that from financially-stable seeing that got hubs market we've good trust in and in over scale hearing have as leader significant. doing us Mile give puts that Last million have do built a -- And XXX space, a long population. the our relationships companies our have strong XXX technology, miles service, the Last are time. We've market customers period with great them the from roughly to footprint, business the been large, gains And footprint of want time. So a and is are U.S. you're that Mile of XX% away

strong continue go there and we're be able to out to position So a to in win.

bringing talk business "Hey, us want to our actually potentially are new about we to to -- haven't customers that doing Our customers on you saying, and coming we with. more large We're business." customers done

basis to So quarter. continue on do a side, Last year-over-year third we the on expect to grow. Last stops Mile the in Mile

a the some it's the Obviously, transpired and think then big And When maybe past? parts better, quarter, just you've the question laid same a Okay. helpful. here. of takes, That's of kind what of feel about picture puts challenging the about you and you midterm with a real do moving cycle. targets lot that very worse, been in out this

Yes.

we that We're over be ahead a FUM that. that would Mile thought growth, you things that point put think, there's XXXX I start look load, we're one. track is: Brokerage talked Brokerage is would of significantly we And we some to Brokerage which the Transportation just a the targets volume on potential profitability sort where where on some at cycle would growth. the is we about of big right X thought bit in now. Managed couple out turn convert we're there time. There profit quarters thought for by this and of next that in be behind pipeline. And little of we if per with volume We're numbers on whenever we ahead gross But driver. this at growth. we the be. ahead on running improvement, We Last key

we one are is X that the we're you when more and at the key drivers, look behind on one is So about where good we feel than that anything. market-driven

have questions over call will to this further for no the Wilkerson, comments. closing back turn you Mr. We at time. I

today, the focused is relationships. the The stops in to on rest growth, cost long Thank third you managing large enjoy joining grow the acquisition costs, and outperform significant In expect We're underlying of quarter, service, for second sequentially wins continuous over providing and to track, purchased and of the and -- and your the on EBITDA innovation we're Coyote the I best the transportation. We Mile quarter, Brokerage positioned Last Sharon. deep RXO remain set you, Thank Managed increase including customer profitability. effectively in and In customer summer. me year-over-year. Transportation to comprehensive volume our delivered continue solutions, term. well we of most

Ladies you lines. conference call for We today. and your and that for participating you disconnect please your this concludes thank gentlemen, ask