RXO (RXO) 7 Nov 242024 Q3 Earnings call transcript

Welcome to the RXO Q3 2024 Earnings Conference Call and Webcast. My name is Joelle, 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 and uncertainties and other factors that could cause actual results to differ materially from those in forward-looking statements.

A discussion of today's factors that could cause actual results to differ materially is contained in the company's SEC filings as well as in the earnings release.

and a section company's for the on information forward-looking to the release additional company refer of regarding Relations reconciliations its Investor the statements uses should when copy measures results. earnings of in important non-GAAP discussing You financial and that disclosures company's website

your call I the Drew Mr. over will now Wilkerson, conference. Wilkerson, to turn you may begin

Chief in Strategy you morning. Charlotte and Jared to morning, thank for Jamie joining Harris; I'm want Officer, everyone, X and RXO's with are here Officer, Chief Weisfeld. There I main Financial Good today. points this convey

First, already acquisition RX's the earning completed early combined the seeing of The Coyote increases quarter. the over Logistics ahead long term. wins from we in our transformative power integration business. significantly we're The and acquisition is of schedule,

As our we're at $XX for million. and synergies raising least cost now expect a result, estimate

tech once expect integrated. In purchase of addition, significant transportation cost we benefits platforms are within to our achieve

it sheet was balance Our is pre-acquisition. stronger even than

decreased by Our a our financing. more of as leverage equity successful than XX% result

the soft, commitments cash RXO financial deliver our adjusted on EBITDA, adjusted for and remains while brokerage gross flow market continued margin. to Second, free

these achieved while completing solid a transformative acquisition. results we Importantly,

mid-September. I'm our and engagement, that tech on update employee momentum customers Logistics, pleased by transformative closed new acquisition extremely giving continued Last massive start in an in opportunities. our our we in ahead Coyote with synergy integrating grew you services stops significant we Mile, our Third, of on in Managed quarter, XX%. of impressive customer of we're care taking I'll We the a and And wins complementary pipeline fostering schedule Transportation. by an which

comments across our deep in those of our more to for to integration I the our impressed to hungry high. our I me RXO. the show seasoned leaders brought bench all-employee received is a organization the that each for excited has Everyone up We across through acquisition the people business. the quarterly prospects results about quickly be The survey stepped detail. growth. cover advance me deliver conducted recently and it and people. continue of Morale elements are Let by whole company and

remain people integration. through take the focused care Our on of customers our we

that across about We pricing effectively structured the growth we're ensures organization opportunities. communicating and customer process have needs, a

Since bid of acquisition, in runs we've consistently front customers our ensure been to that smoothly. season

Many since have a stand-alone Our customers' integration has focus where customer and cross-selling received decide yielded met have helping conversations season. and I've positive. RXO the personally is quickly for I've customers Coyote those us during growth neither opportunities candid seen the feedback feedback bid of with dozens to would as and acquisition overwhelmingly been of nor company. that

XXX and the for we're Specifically, since capacity that spot been scale. cross-selling Also, increased benefits were loads awarded offered opportunities our of some RXO where has solution. more distinct Coyote acquisition, Coyote RXO. legacy additional to the there realize have of services We're special starting legacy using the closing than and to projects

employees on all our practices X.X to closely dives carrier our best integrate both from legacy We've RXO both legacy and for our identified have customers, and tech now to teams the our over Coyote a together When worked technology, the it do road technology network I and our year. map the contract next in using. last to comes that months are our teams deep have

will about talk later result expect at cost a more smooth of $XX we million, estimate the call. Jamie least of far, million our more than integration now so this at $XX the least As in of synergies, initial

has more Just Coyote fund sheet. financing strengthened after also and Leverage acquisition. to talent, as acquisition the relationships the by balance of decreased equity the strengthening is customer our XX% it than bench successful our technology,

performance RXO about increase expectations. quarter guidance legacy a range. results, third in with less and in saw so building we're in our offset year-over-year. within RXO similar was and at rapidly RXO the business our highlighted our decreased XX% walk of that of and by quarter, million. by quarter. last delivered the their midpoint in LTL our $XX Full business by X% we Volume was $XX I'll you Jared business, in legacy partially had did EBITDA than of EBITDA will Next, X% the million came later truckload volume in well. line forecasted line adjusted we to delivered truckload in talk volume. This quarter third what we through call. Last adjusted what Coyote as scale which Legacy brokerage more in that declined

LTL has strategy, season momentum We're of gross Coyote. transportation management doubled effective bid pleased We've that yielded the with than along our continued more brokerage volume margin see purchase Our services. acquisition within our XX.X%. of to complementary with of

the awarded The than more under the $XXX new In another Managed fund. in onboard our expect Transportation, in billion. of In total new annualized that's than current customers management fourth $X.X business, Managed million pipeline we in sales greater quarter, more us XX% substantial, $XXX quarter. fund million in Transportation's FUM than to or freight remained

long will We have that in converting for runway Managed a pipeline fuel growth and RXO. across growth Transportation

basis by big and delivered leader industry. grew brands scale, and deep because In We the Mile remain deliveries service we of our Last RXO the because the services Top bulky XX.X%, of customers stability our year-over-year. Last providing X% gross trust the financial up margin and building third of relationships year-over-year, quarter, service. Complementary quarter. with the technology, in in exceptional best XXX points Mile was of focus an XX% growth from second on industry the stocks acceleration

overall freight margin give the to while to market. you changes The update slightly. gross load-to-truck the was ratio previous I'd in declined, rejections in on freight increased industry like an didn't the many XX.X% market company-wide compared see when We quarter. RXO's conditions national tender quarter. the

not yet they into volume translated On the but strength. have soft. demand Port side, strong, volumes conditions remain over-the-road remained

tightness and quarter, carriers rates side, see the On Freight exits in each October, continue market in acute the rate of In the slow. for the many to challenging to month be supply we continue continue exit However, to did carriers. Helene to muted due weeks. we're season another the season, continued holiday as in The strike. brief port closely the environment, tightness has the monitoring Heading but year. Milton well anticipate into this recent peak Hurricane macroeconomic as

On the and has inventory positive rebounded. healthy side, has moderated. positions Retail recently are inflation consumer confidence

in market labor sector have the economy weakened. However, the of the industrial

the us will to project to well needs contributed volume quarter third We This our to We continue our ensure conditions. strategy and properly no freight. contractual market playbook spot focused to positioned on rates. remain and matter reliably lean our capture customers' servicing is our RXO honoring position results and into

I'm customers several stress. the communities our discuss to short rates up that times Hurricane tightening of Jamie Jared during built customers serve quarter fourth that assistance combined market outlook but other both serve volume for were and to came detail, to conditions our sequentially Recently, and us us as in relationships be by and more work Milton. term. affected the in crisis impacting expect Helene buy with them in that will we've brokerage and with deep the customers proud to our are they their enabling we our

turn, they transportation a even broader will customers and positioned on no freight can to While With cost by of market as RXO provide larger the array services capitalize arise. when with believe more we is I opportunities one knows effectively. that scale, uniquely our

drive complementary portfolio services organic differentiated of RXO. across Our growth will

Our algorithms exceptional leverage that machine continuously improve in proprietary drives employee-facing AI to and increases technology includes ongoing learning and that pricing software productivity.

to of us Our and this future all we flow M&A free cash expect positions strong for lead and balance well greater earnings, sheet to conversion.

to Jamie more discuss in I'll detail. over our Now it financial to Jamie? turn results

Thank morning, everyone. you, Drew, good and

to Let's results, on therefore, contribution XX We the acquisition from Coyote. include margin review We generated our My will legacy was RXO legacy $X.XX company, specifically or financial unless to performance more in our completed the X third weeks revenue. XX.X%. quarter Coyote and billion Coyote. comments of Logistics combined Gross refer September in detail. of referring

Our EBITDA $XX million. adjusted was

Our adjusted X.X%. was EBITDA margin

some year-over-year. Adjusted the at revenue $XXX quarter. you the interest points to XX you $XX compares August. of of the our million $XX million. the legacy up we This RXO's expense Legacy EBITDA margin was down detail was million $X the Below give X.X%, basis in third about XXXX. range EBITDA quarter me X% in midpoint Adjusted year-over-year. performance RXO line, provided was to million, Let in was

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

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

recorded item charge, stock a and placement. as One $XXX between of of bridge date We RXO's noncash associated an our the accounting price of charge note is on private price placement with million the the on of financing. closing part issuance effective the acquisition market common difference the represents which of the private the equity

classified From million, X% brokerage. business. of I'd been a within an was in Please overview has gross perspective, RXO's revenue year-over-year, our Now into was the $XXX XX% represented to Coyote's profitability Combined million revenue revenue performance XX.X%. remained due truckload at lines you volume. and revenue $XXX primarily margin lower solid down of of that brokerage note our Legacy brokerage full to our all legacy of total quarter. give brokerage like

and year-over-year. of year-over-year $XXX the RXO came Transportation, was guidance automotive basis XX% Legacy in online plants the managed volumes range revenue. flat margin soft. XXX revenue our Managed later quarter points down brokerage total gross overall In and million, expedite the Complementary demand represented auto below was slightly midpoint XX.X%, of services and quarter, of in while was remain back

managed continues growth performance. of year-over-year. to XXX both Services contributed from Mile by quarter's to and XX% basis gross grew year-over-year, perform this rate. XX.X% Last last increased accelerating Complementary last well mile margin points and transportation stocks

discuss we cash, As X. Slide to please refer

Legacy cash strong which collections represents $XX mostly to conversion quarter. the our and quarter This This was from to than at XX%. XX% exceed flow expectation, better was EBITDA attributable better-than-expected third adjusted RXO in very in adjusted was million. an free the

by of We cash X million, free bottom with was trailing interest $XX months, free a flow $X cash weeks impacted cycle from flow adjusted the quarter RXO includes at semiannual levels represents outstanding notes. adjusted cash over flow adjusted Over was associated of freight the Including conversion X the EBITDA. X the senior XX% lower the trailing months profitability was payment million. a our and legacy which Coyote,

it expectations. For with line internal the X-month our was period, X. This in was

been cash the the primarily headwind, in We on fourth by differences quarter with legacy ended capital associated already financing timing a collected associated the working the flow of the cash quarter. from $XX this of acquisition with of of the balance equity quarter capital with has function business, on increase was sheet. cash working The much Coyote. impacted the Free prior was Coyote million

most current expenses, incurred previously cash charges. transaction However, this costs the as that of it's future important result used balance is mainly for of and be note restructuring to the timing will

million. $XX fourth cash We quarter approximately be our $X to to expect balance million

Slide the on see can our X, you is liquidity in history. been it's our As company's position strongest

$XXX EBITDA. the revolver pro Logistics. undrawn Coyote associated XX million trailing prior of Quarter after at end acquisition significantly was forma end quarter equity with the ode the decreased Our of was Last quarter. months, successful adjusted from leverage XX-month gross the leverage of execution X.Xx financing third the

scale was potential merits of the is The benefits combined the cash structure, company of current increased our the cash With capital and free one of of significant. generation conversion the strategic free acquisition. associated flow flow

about talk Let's least of We than estimate million. cost $XX at million Coyote annualized now more higher of $XX integration. at our synergies, least the initial XX% expect

these of with from end in expect incremental with synergies we estimate first a synergies annualized completed. of will quarter XXXX. at realized our increased close. benefit million of synergies XXXX will expectations integration Consistent completed. our few is likely least Now we today's of $XX first in million the within of total the P&L quarter, with of $XX The $XX ago, annualized late of months XX months the associated at synergies be of will as the Most technology a million occur associated completed have the fourth

RXO will year spending system technology. per our primary in into be unified To significant some was million Connect savings. approximately move result context, will legacy $XX give Coyote platform in and operational one additional

be pleased believe have Importantly, of of very do these is we combined potential the to transportation, and opportunities now than significant. more context, across annual include brokerage our into the We're of the not To purchase schedule. transportation put this we're cost for progress, with synergies purchase ahead $X which cost billion.

labor automotive and the remains Managed sector grow, the conditions. expectations recently quarter increased, brokerage reflects macroeconomic quarter. weakened. healthy, Now In the from and I'd market. conditions legacy we're continues Transportation, although muted in margin you market additional soft fourth reasonably We're customer give outlook tightening Overall, card peak and fourth to impact outlook. for has assuming the to our softness mix. assuming and season some let's discuss GDP environment market continued consumer the have confidence freight industrial gross insights our regarding a and brokerage, the like In both market our

our expecting last third stops not mile We're in quarter. typical the in better-than-expected seasonal given increase

For combined generate the in company, provide the EBITDA adjusted shortly. million our Jared to $XX and between will of more details we expect on fourth million $XX outlook quarter.

results reflect Slide XX includes company. the our for combined fourth of modeling the quarter, assumptions which the

rate following: between approximately million XX%. compensation and approximately $XX million and Restructuring, $XX million. million; We million, $XX and integration expenditures amortization transaction expense million tax adjusted and of of expense capital between expect $XX $X million $XX of $XX intangibles $X the of expense expenses an million net $XX million. $X and approximately and of between depreciation effective stock-based interest million,

diluted shares. approximately share of average You count fully should model million also XXX an

share expected approximately to diluted be million is Year-end XXX fully count shares.

assumptions additional earnings now. but can our I a during call, We quarter fourth February there modeling few will give provide are in assumptions XXXX you

and amortization XX% expect and expect $XX tax approximately to be $XX XXXX at XX%. intangible by driven acquisition. expense between million our approximately we unchanged We million. of effective expense adjusted increase should of be Interest the rate Coyote The is

the We current pleased continue be given with to very cycle. of freight execution the our phase

of we've customers. The together, received well schedule. ahead teams working of The integration are positive and from feedback Coyote is

free positioning While excited still term the environment, and of freight we long prolonged in for cash soft are flow combined the are company. the earnings operating power a generation we're the about and RXO

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

Thanks, everyone. and Jamie, morning, good

I'll typically start do, our I overview the performance As with of in an quarter. brokerage

legacy both RXO For this quarter only, Coyote. on perspective I'll legacy and give

With schedule, basis. the combined starting we'll of integration next on talk quarter, results a ahead about

growth with in down down the XX% solid Legacy to RXO our XX% consistent truckload year-over-year. in quarter, mix at was RXO month improved volume the flat was points LTL truckload and volume sequentially full of down X% in high Legacy brokerage single in XXX brokerage volume represented expectations and the The sequentially low year-over-year, was quarter XX% of X% line down year-over-year. year-over-year. volume of basis year-over-year. points Legacy volume. Full basis our volume was with quarter up expectations, LTL our double digits. brokerage every flat and XXX digits RXO represented

in our Contracts year-over-year. business mix represented spot volume maintained also full our XX% We points basis XXX quarter, down favorable truckload by quarter XXX and and and a the of points contract XX% sequentially. XXX Spot of in the basis volume volume in of up truckload full the quarter. increased sequentially points basis represented

volume full we truckload that in at at of improvement, was this share and our project truckload benefited third as years. multiyear X-year increased consistent only the it While our end first the contract quarter, our XX% on a of bottom modest legacy some to our quarter, a with percentage X time stack, This RXO the market from opportunities the full volume cycle. In is speaks freight by grew a that gains. mix which view the spot of is are the over over

moderating. announced to continues the Let's Legacy quarter. Volume Coyote legacy increased volume legacy of truck full including has year-over-year now brokerage intermodal, Coyote's represented are since in was we and LTL trends move declines XX% to loan mix. and truckload, XX% volume Coyote's volume of improve. full the acquisition

alone volume Specifically, improved consecutive the was but legacy full Coyote year-over-year, quarter. truckload third XX.X% have for trends down approximately

Connect. and for talk we technology trailer implemented drop We reviewing are RXO a RXO quarter, I'd the fuel performance visibility market more extra strengthened fleet, Flex that enhancements about option tracking financial on which like our introduced detail, new our third RXO card Slide in solution in several for XX. and RXO detailed prepay and to Before conditions legacy the in

We the also quarter. at remains our flatbed XX% Seven security out mode, and features our rolled in from strong improved in second contract across algorithms retention pricing XX% platform. down we the enhanced carrier day quarter, within

productivity day per from our loads will Our by RXO more even people be legacy to XX%. best rolling brokerage standpoint, a as per operational We on improved this measured technology technology be person Connect complete and a We're of RXO system. within the and technology From business the enables profitability strategy capabilities of primary integration Coyote in substantially XX-month will integration both XX months our productive drive productivity. integrating anticipate by world become improved unique our basis, to first close.

and RXO financial I'd conditions now legacy like performance in detail. our more brokerage to review market

You can the revenue declines declined X% better those by To load of by of of haul, declined Truckload load mix in quarter of the than was consecutive per view Revenue When quarter. load on year-over-year. a get per presentation. year-over-year, fuel on year-over-year consider find of basis, flat this items, through Slides a less easing. our XX and impacts it's X% per information year-over-year changes fifth the important load in per the length price prices. for to revenue normalizing XX

and and XX throughout consistent margin Gross discuss were September improved Slide to quarter the to performance unchanged industry compared at trends. when soft XX% move third relatively brokerage approximately the gross load in to legacy throughout and per KPIs and market. continue conditions RXO margin Let's gross was profit reflect monthly freight a quarter July. Market industry

recently we're tender October and load-to-truck in still in been The with market some to While a encouraging moving ratio national have market, the soft rejections there began tighten signs. higher.

ratio also to tightening, and to X.X%, with increased have higher. tender buy X:X national increased the have the moved market load-to-truck rejections Specifically, rates

at improved customers. the inventory ports. also yet is side, than into with has volume volume Big our growing of been port the retail has X year-to-date positions not consistent year-to-date demand it growth the This Coast over-the-road while West strength, On XX% translated more robust,

current compared much There carrier challenged. is even unit and too pace supply. to demand when the truckload Carrier but continued, relative to Turning second at an quarter. capacity economics exits still remain slower to

believe being more changes impacted is by near-term we However, susceptible to demand. still environment the in

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

quarterly legacy Let's go to load at truckload Slide RXO full profit XX look and gross per trends.

through, As progressed. compared as in improved second profit we that just when conditions to market load Recall our while the quarter gross July, tightened September per walked

with So the a quarter third lower we starting entered point.

profit brokerage stable with XX. with Slide and per than more to of customers Coyote LTL market our We've business outperform size volume the RXO LTL Legacy LTL significant gross load. the acquisition of now continues Moving to have I'd broader business. grow to doubled give the our business even with color more of on look our and now has The Coyote's pronounced outlook. that by faster. some fourth quarter, business like a you seasonality into the to combined legacy driven mix forward primarily fourth more opportunities quarter

We and volume brokerage Coyote grow a on in Legacy basis expect quarter. the RXO both to Legacy fourth sequential

XX% to combined to a expect to We X% year-over-year increase volume which represents decline. sequentially, brokerage X% by XX%

quarter and mix. be margin Coyote XX% tightening brokerage expect customer legacy We gross freight to in between market XX% and to due conditions the fourth

RXO benefited experiencing to increase both with legacy in some from helping and tightening during projects the partially market legacy RXO While and offset. conditions, rates month Legacy of buy Coyote October, an special are spot opportunities

seen we type quarter. assuming there and not ahead not volume of runway project growth continue these similar us Coyote through of think special the but projects that rest yet Legacy of Coyote significant are reaccelerate to work. We the is win similar opportunities, has

until more $XXX services. freight management our term, and of than impact In fund expect than awarded complementary to EBITDA the momentum the to from quarter. tremendous transportation headwinds million quarter, more Transportation, $XXX the in near under year. to in automotive has fourth business. Managed occur with we Turning onboard business managed the The million this next industry-wide in won't And impact continued

peak fourth of well, million. Last quarter. be third of quarter EBITDA it which and stop rate to $XX for Historically, assumes expect seasonally into the continues and season This and of market million meaningful compared EBITDA we months all growth. is spot to the the and when in year-over-year freight although adjusted to declined a adjusted RXO's $XX together, another slower quarter, December. no expect from Mile opportunities the the execute our at range in a improvement muted quarter the the weakest in company. limited first Putting fourth strong November combined conditions, we quarter seasonally

Drew's significantly Coyote earlier close, like to our on commentary To power. I'd long-term of increases that acquisition build RXO's earnings

that from in believe still soft are we we current higher normalized While power earnings prolonged is a environment, rate operating RXO levels. materially

Let me extend on this.

trough a perspective, third cyclical load profit truckload the full quarter, average. gross our truckload per at was full legacy From levels. over X-year RXO per below In XX% profit remains gross load

profit organization. below just significant. to cross-selling flow-through the The XX% truckload trucking acquisition peak, Excluding there load the EBITDA. will was recovers, X-year immediate gross the and of per growth the still the volume combined our strong adjusted opportunity We COVID be higher the full the average. our to massive When X Coyote we're over seeing cycle brokerage company across opportunities market accelerate and combined is of is closed

of million. schedule, We'll to ahead complete. Coyote also integration $XX cost which is transportation, least should those of purchase associated our the once at of integration be technology benefits and not with include opportunities is see substantially significant. Our synergy annualized does begin cost raised This to we've estimate

can scaled capacity contribute to the growth. have built have additional which a for also future M&A, balance We sheet earnings and platform

it I'll to that, turn With for over the Q&A. operator

[Operator Instructions].

Ariel comes from question with first Rosa Your Citigroup.

obviously, that employee certainly million. only the the not the customer see the do on acquisition. about talk lot a just Coyote going How been can gives curious acquisition. integrations seeing It through month of of get -- that attrition that complicated. to over synergy target. you since be like we it's detail a you positive hear It's there. with the what do to more wanted how very momentum the closed we get to comfortable confidence this raise just like confident process? Congratulations big And or you're higher kind I $XX a little to on that sounds of notion I'm then you're target

the take of Jamie. is first This part I'll that. Thanks.

raise to least So at million. $XX did we

this the came been we've September really areas able increase transaction close as to big XX, X from. on As

a the integration. The first is one know, to is you And this technology. as key

putting ahead We the plan X way and together. of platforms are of execution schedule the on

We we the of the matter from firmly view as the a Connect ahead a million schedule. platform. to of this year And go old as reference, [indiscernible] on made platform. tech. Coyote bringing Coyote features have lot RXO $XX decision to We're a But of

And originally so have as we moving there's is. say of savings rapidly believe have to we more is, closed visibility than integration there. seen anticipated, the as spend bucket have now we the second happen additional I'd vendor and our better the what transaction

initially more have with We probably vendors overlap we than thought.

also services, type and We we vendors vendor and have put very scale. similar purchase more and can get together

a X you of when So significant synergies in those kind just that we is we available. together, increase think put see

a which include of significant. also as cost transportation, reminder, purchase be that the And does can not

Think if actually it in context If we surpass billion that spend largest be about that can not could And $X of specific be annually, save about and included there, a so number you it's haven't the million. $X far. while it's you $XX just think a our number, given billion some we give could targets of combined synergy year. could X% we a

context to and the Now we're work number. the have efficiency of just give We is naming set that population the the buying. not that we you with transportation

far. so pleased the I the part. very we're is synergies think Drew with other going take to So And

question, of and retention. your difficult on then employee integration was customer part Ariel, you Transportation. at welcome second was back about it to it the Government and When look

want we retaining of you the top things days up. to employees the a excited acquisitions. And always standpoint, there. of that employee there. an back the about being go helped on talked be you on was be making we sure and us engagement that Three to early and was if there they one successful M&A, from first focused have found So that They're and are I lot talent morale And we to XPO, did that

on Our here, survey we're employees quarter-over-quarter a actually these scores is important. up retaining basis,

well sales level operational as to by every and leader for you as enterprise rep, sales every retention every at well If agreed look have above. signing as agreement as leader VP a stay key already on

the servicing customers keeping the together, core So team is the important.

you that my the that of personally on is same holds the all And already several customer true customers had retention. with feedback direct getting a with do And I spending time customer piece mentioned from events reports. customers. we're met positive. extremely by for is second And lot The we've call that dozens. of I the The already

then thing on is of teams of together lot And the between together we've integration. X best focus last we would tech the both that the a time the And worlds. of spent bringing

make As RFPs, on we Coyote deal we've that is integrated platform, tools RXO into things carriers, carrier are would us there Connect several to to system, go from whether efficient. whether we the that it's we learned it that sure there employees more want are our make with that are some how that that use

opportunity would to around mode. the but of stages of of get think in say lot a lot there's a we a integrating organization the I we've we're the lot back and very growth there. So hunger acquisition, excitement got early into of

the I under see follow-up, That's umbrella. in just you If my exciting, certainly. We're with could quarter do on hone guys for can maybe fourth Coyote what your excited to outlook.

million adjusted EBITDA, run or call and if some million think $XX of be quarter kind to of of Coyote announced to $XX like EBITDA your million the of then the you stand-alone So it million about sounded when RXO June presentation, I $XX in did back around the $XX was acquisition, EBITDA, the of which would kind million synergies rate, doing $XX annualized when a it, in you acquisition were I quarter. think detailing third

RXO? for What's component a below as we of Coyote? think there kind about contribution seasonal from X with headwind pieces bit the of businesses little this So maybe impactful of kind is what's just fourth of where the combined XXXX. how then help And the me contribution quarter, maybe the are were coming suggest kind component in they or would the that seasonal from

Yes.

when So I for what fourth really, focus seeing. there's X quarter, we're things that the on at Ari, look would you

transportation go us, Coyote came purchase in same and of up And October. spot for But while First, some mode able the and as to just that building is we're came a to solutions. within creating had That's as have projects prepared And that that about legacy as synergies our opportunity a in, we're actually loads the opportunities saw legacy through. into highlighted not you during to viewing some Jared serving Coyote group, to growth those both the contract well. month great business I where RXO commentary, did they're another thing. not be acquisition, get that talk

We're that relationships service. the customers we're the stress. first make project We've that on times of got and and spot on building loads great call

the The in the were we is seasonally muted you well season. a performed second us. And that told we Last third for quarter peak thing Mile expecting

piece, have So miles automotive the business to last last the is industry transportation our thing down for expect and And and both then brokerage maintenance is a of EBITDA business down. quarter-over-quarter. that go we lot automotive

So that guide. is impacting the

we're looking business us, in For synergies, the out the and future good towards a we this what on able position. purchase as at doing being capitalize term, build very look of in long of for off the to we're transportation

Scott with Your Schneeberger next question Oppenheimer. comes from

to the or normal discuss of all of year seasonality Coyote little topic that could pieces, and isolation? X as this quarter bit is more a in in the compare fourth what and company an you fourth RXO expected how may on staying the Just quarter, aggregate as that

some you more those magnitude. occurred of a question, of the the to kind speak in to special as then X projects October, part And that could

occurred port repeat. You assume strikes expect or don't unique some behind associated were and weather, I they to quantification you them very to something, just that mentioned what there. with

the I'll it over for then the start Drew Jared. it's with to first question and second. Scott, hand

concept of the X thing such over QX, years, seasonality, to right? to as unique the it's real X QX last No a X from seasonality. been So

think the would was what I conditions So about have here talking what respect just overall the October. think market I with is to question month Drew tightened really of about prior in in

So to the you're gross QX QX. of margin buy from impact seeing rates the compress

bit But second harder. we Coyote that. saw felt opportunities As projects we'll part, special legacy said the dovetail and helped that earlier, offset RXO squeeze a and legacy some definitely little

really to QX really to of tie respect a aspect increased to it the brokerage second with about standpoint purchase to piece. to that it doesn't we from Drew cost piece, of think the -- really seasonal So to QX I'll which transportation, QX from it And when QX. difficult makes is from bridge which hand that

that special the whenever is to contract want projects at those. were the thing talked would RXO into there does is the our I of that receive position that business is relationships turn. built X market we've that of a about and loads projects, say customers on with the our size for Scott, power first special years spot that us sample whenever a small what seeing put of This base to we

are times call. So I I first want to stress of water customer's and that clear something make there is that was think that's RXO this

couple a out were did build those. few that to projects of for as relate Milton right there we that for were a projects but to being retail some and choice there this some special Hurricane You're on customer's special weeks Helene able on well as days, of the call of and the tightness were the also that port

not abundant, up they picking we're fair there, whenever are spots certainly are share. while than more So our

XX% in fourth follow-up bit keep stops The over Mile. in I'll the that like good my to Last and on you're quarter. in It to year-over-year pull down a sounds that go very quarter. go sounds a anticipating strong. money the up forward third thematically consistent

over maybe Just had I there. just initiatives seasonality year. historical update you curious some front looks pricing pricing want the then the how with on an Last that maybe there? Mile, in commentary your And past also some

it's then it hand Scott, Jared. part question. part and second to Jamie I'll of for the Sure. over the the first take

stops year-on-year had It XX% growth to quarter in terms volume QX. Last an Mile right. accelerated of in excellent year-over-year. you're So

we business, to assuming given overall the growth season, for expecting at but we are But So QX. are stops we're in a peak rate when mile a compared slower again muted seeing. year-over-year grow last what to

translate mile QX to will last that So sequentially QX, those into dynamics. from being EBITDA given down

other the question. for Jamie to it hand I'll then And

Yes.

that price think well. you're and our go the Mile project carrier purchase trans continues cost to referring I Last of So to stops regarding and business, in

mentioned go annualized we carriers That we had our to well. last purchase identified that number continues there. of $XX the cost trends we out think can to take in we I about believe quarter, million

little to in project You'll see incremental quarter. quarter. P&L, a continues roll see bit the very excited a in the saw it. about But the go small well, fourth we're that We'll we into third and additional

comes Barclays. question ] with next Razula Your from [ David

of cash a next Could needs about in terms bit those little about you talk especially do the increased year out? the synergy of think needs for getting with integration, costs costs, you cash what

Yes.

is So Jamie. this

$XX be associated million about see that getting raised to spend. our guide a to cash we $XX a outflow million. with $XX million We approximately So

go million call balance of quarter to see, in the next $XX spent fourth that with the You'll being year. $XX it, out

a relatively on then Where to business seems to volume view And seems like with that yourself the come like the quarter, side. during do position spot contract XXXX. it capture it you're in in you expecting that lower the

think the we turn. when I don't that One, will know market Yes.

that is that come. be be the thing will I position to in we put whenever ourselves we it think do the the call does can best customer's

today, that but faster. And As the wasn't got able the we the picking rooms the with share. there cycle to how end month talked able spot make were, in turns we we've be being here and out were about go history customers, product when to in of the get to decisions a helping in of we lot take them of market to to projects, they we consumers about sit loads up, where and a October were there

highlighted things highlighted exiting in rejections capacity cycle up to is, you're the much how are, his see Jared ratio in the what some how the for the much load-to-truck of what what turns what that position sitting And there's up that bottom customers service and we're and be the go happens. future, at the of here cycle, to to while think the in to us the in we a we're to of we're Jared whenever able good prepared or tender you're be demand overall is there for market watching room going is commentary, The that industry. that watching and lot of a

from with Moore Next Stephanie question Jefferies. comes

potential This is is I'm of I that how peak little into coming about maybe and Stephanie more. see range to season? peak your a outcomes Hoffman bit wanted ] expectations the season here you Joe for [ quarter? is on it margin -- in if the margin the you in a for on Or curious gross normal headwind. drag And business the UPS just mix fourth still a pretty you mentioned quarter? ask

level with are able cause that you we customers of at in margin there customer that position when additional running be customer, down our customer-specific that think that right impact known customer well I the for year, other grow mean at network. like that a just to think RXO within a a business not quarter-over-quarter, I'm to significant view for as us a position a down, look break gross quarter. down a from looking we're coming go services have going all fourth business that, UPS to we for that partnership typically the But the mix profitability. is are profitable. high the And that it's to that any is at margins We is our at and obviously, they I the in great you us. percentage. will

and front environment maybe and down, rates Got increasing a dynamic you're environment of a forward may going then hearing be it. now. the forward. what of retail in interest on of There obviously, pretty right industrial macro pull if lot terms industrial both better. customers from come And Curious we're and in expectations looks and housing imports

conversations curious have customers your been? So what with

it's Joe, Jared.

the the in the excess on have dollar inventory encouragingly, at positions retailers largest the retail quarters last improved with X inventory of side, growth. for revenue So growth I country, think in

if down on to industrial to that the ISM decline component in quarter. for is you've I'm both with certainly Industrial, here. and shows the restocking I the retail were So industrial the side, up year-over-year consumer new orders and think sure certainly seen there respect potential similarly, the industrial continues volumes

So by been that's the weakness. impacted

term. Our overall positions by weakness we right, But in industrial terms the the long those that interest sector as point, shall impacted large the volumes are forward. But by economy customers well. And been to of the I of sectors movements. think of have both rate lot going both a of in been means in the the influenced see for what inventory are they've importantly, healthiest our your

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

I hit the basis but you're is because the right? we're a the Ari's the is terms cut on or So that to rates, there? onetime in strikes up? pre-shipping And follow-up the combined from Is things RXO, Or like of that at significant like the turn impact, so EBITDA Coyote. getting a was Or only of to of margin else want EBITDA that or buy points? I if to the buy But sounds main mentioned? mile other all is final because the driver question market kind in it climbing seemed the of there get PT then at indication XXX squeezed want the going it on I that gross pressure ports you basis. of falling something seeing on Was

you see to loads projects. and able up, October. has The some saw was absolutely buy in spot RXO gone that the Legacy month of and

it legacy per was legacy at impact not as actually much profit load So did RXO. did It Coyote. what gross for it as positive

know with did correlation go saw but the Coyote purchase same spot legacy of that already, I something projects. put We a like this So and transportation And us and bids we not and these position in up, told is we ourselves see be many the has thing spot projects excited. able customers to loads position can got there ourselves. go in that loads serve take out extremely as to

customers to spot. into And with back is that anxious having us the see early I'm get they're conversations

term QX's while us, a of is bullish I than it extremely what with. into the we an for on it for diligence it's the long case has positive. And realize So more numbers, the business, impact that went

say I QX, I'd muted to part of wouldn't still again, season. Ken, stock given in being expecting say expecting we're at QX, a mile just are is relative pressured, And that rate on that a question, slower we peak growth your second the last year-over-year

Yes.

shifts seeing from Let asset-based then but about limited that been Drew, them of on XX%. a peak. terms me follow on brokers I low of the And some up carriers meaningful talked kind you that asset-based end something of XQ the to gave same muted said in the to What's seeing lot high carriers. more that at and kind in Jamie, improvement, peak? through not and optimistic you're Is question, because that of all? you A of XX% guess

Yes.

when have what And service. this at they're last that they X.X folks our on working use is customers with time with. you've seen the been had go hear great for customers and depend from So that have carriers the shrinking of you look that years we that to number the

For is starting now. with those opportunity actually to seen that bid customers. same the have stages we're of as early far. of very It's we're we're an conversations the thing We're that with XXXX receiving season, with to the largest them. some grow seeing we've been some but so our us, of positive right customers feedback in

we what in on about are the and And of second managed of range Yes. some automotive the in Ken, XX%, volume, XX% we softer Drew We talked market last question, that gave, mean, part both mile. seeing trans. we the brokerage the built seeing to your called functions I about we out, were

peak the high right about end, think now. the quarter you season on we're halfway where low through If end,

have And decent weeks. so might over the happen what about next we X visibility fairly X to

XX% our to But our to that something low caused be So up? go at of point, could Absolutely. is and I say -- bookends. of it XX% that think you the this kind at was there that visibility look could high -- kind the to

If peak And it will be we've capacity to to be Ken, there bandwidth we're participate But and then be we'll for expecting season, right to it. there's the there's cover now, surprise customers one, the in we'll the a a great us. it. muted. got and if then service

with Chan from Bruce next comes question people. Your

in Jared, you of improvement productivity. some talked about the

where revenue net move you loads Just now? that wraps integration And at once in wondering of terms this can stable of that if up? it settle you And productivity, day, per versus Is what pre-deal think person sits point? of whether do that's head headcount you kind to look lower? a like give when sense that today. number ultimately, us where Does out metric per did per expect or the about

Yes. Thanks, Bruce.

suite to what last continue respect additional from give think to our into can a you not components some color breakdown I you the I'm get to productivity, making rolling increased we're productivity significant go here headcount. But of the see to technology the basis. So advances months digits with about up standpoint. been and as just for XX respect across going the benefit last innovation suite. quarters XX% on a over And we of few mid-double to and punching we've the about benefits at ahead with continue product

Coyote, integration -- they're within but only with Coyote and bit ball legacy complete substantially and especially We going is about the think getting there a productivity the in both we and us is, a think ahead productivity. you up platform, When even as further standpoint. little behind complete productivity where groups from increasing next months, onto not the the RXO line technology advancing a XX legacy Connect, bringing RXO one unified then

I think as productivity for margin EBITDA well adjusted opportunity operating therefore, there's improvements it leverage. incremental incremental and relates significant as to

Great. Okay.

that, to it say that kind is fair sequentially? of accelerate So number then

person to we per to We're where outlook, terms stopping give initiatives see state don't -- assume think per all. a with a think optimal in in significant if to near ahead but There certainly not you about is of we productivity productivity will, going the future runway at is loads day.

us continuing reps with in tools we're productivity. early stages top on we're our what productivity. is to side, to increase being this from are doing, And doing improve at for both look what know systems, a the opportunity continue you to pull to the of lot technology there's able of When

And Fair that project talked understand I it Okay. Drew, sure from quarter? fourth of follow-up. the I just a properly. continuing then Is and legacy you the the benefits about to to enough. want make spot RXO in some business.

It the was October. month in of

peak would commentary, and upside November. we come stronger it seen prepared over not from If As November into than we that the carry largely expected. said season a being was December, there have into in

question comes Wolfe. Your with from Group Scott next

can for QX? forma with start you -- Can just you EBITDA share pro the

forma? pro Company

Yes.

Yes. Yes.

trailing think about the X didn't gives specifics So you I weeks, own back the about and of million for the that deck, into and the won't $XX at, -- the it Coyote of if we you at look But because for of quarter business. a you XX last look in $X incremental whole on go then you million. slide if think, the kind Page XX I get

get year. But a appropriate of kind think were fair the where you don't be if is full for kind $XX amount. be. for to because now would million kind where somewhere specifics quarter. We weeks We the be run don't for business. look might of you of that in million get RXO, want you probably think extrapolate not But ownership of those we Coyote the to into to rate on the between would $X X I were didn't extrapolate we if the numbers, it into

And Jared, had than lower then, Okay. is typically seasonally comment you a QX. about QX

little improvement of EBITDA synergy this think the QX, -- then think like beyond ultimately out given you you earnings forward just out? can QX, ramp of business a full it year I thoughts power sounds how see the some on that about to Just like and if in combined there's play to right? just any do just Would a could basis? going broaden do that seasonality normal maybe you're better and expect talking sequential about, like you than Or squeezes that

Yes, sure.

start, So I'll Scott.

XX% that that to how X But the ways. quarter decline. certainly we've down heavily still months in is QX, to case over what no that down, happens caution is depends few years. a -- between QX or at There's QX from you the There's think looked seasonally on with the the for RXO seasonally is been X typical It the last XX% over really and season I know, here you about typically certainly data historically anywhere of out -- when it lot really Generally, as -- that's Coyote. So the QX X should would shapes next years. just weakest it's different and to And you the standpoint. Because in to decline right? and then last synergy else So all all certainly QX, the at number increased minimal be of peak run a peak XX% from $XX we terms X QX, look see by $X in to equal, benefit P&L taking here actions not season, ultimately, at season we're QX. very the the relative right? contribution point, lower the least of a you'll million, synergy it's your to expecting it we're full a impact standpoint right, million in certainly realization of rate muted in a when to about

So hopefully, gives that some perspective.

my And prepared commentary power increased then organization. even terms that more long-term now of earnings section in of have power, was confidence the last long-term where terms in of we about combined the earnings

You full at now run synergies, is rate of $XX which least at million. look

we've the terms and Q&A on If -- business power by you you yield opportunities that prepared even long-term synergies us cross-selling the transportation would purchase and think $XX what the X% the earnings that Jamie X cost as pool look during at that his of million the hit the potentially billion just example. with gives cost more like. in of an seen last transportation, in in remarks of just with bind weeks, $X confidence another purchase right? And of looks

prepared add, basis. commentary at but I to want sure everything important that you're to just I looking Jared said, earnings that in And there's with a agree that think factor normalized that just on Jared's make I highlighted was one

XX% sits. the load if you above at average. -- you the biggest say out it take in still it's factors of where X-year per XX% average. And gross X-year over highs, profit you look One XX% our today, is below profitability if is our over over where COVID our is And

So a to there's drive towards of of with and runway of lot that, normalized earnings, factors biggest being able back there. that's one the

David from with comes question next Raymond Your Hicks James.

equation? albeit or As a you that market. tough how hallmark a fits volumes acceleration over you volume growth really of go into of against as comps versus timing kind has of volume the you decelerating the here Can guys been and slowed late, for maybe down

the their volume Coyote's to But gotten better RXO what declines year. if over that similar volume were look trends you said were. We have

at You're taken this right. and look know we've over long-term long that we the on We market a basis term, business share.

what us. all you way Xx growing 'XX phenomenal back than we 'XX If was go XXXX, through growing. the brokerage and faster industry volume growth for to were the were XXXX years

that many we different make XXXX, into had position to and out there a to strategy continue could the wanted ourselves that put that we honor a we the to customers could for so As contractual with spot there put rates in sure and in very to bits. we that we loads put build bid came relationship in transparent that be service were our we we in on projects

The market lot it's obviously spot loads, been haven't of ever stronger there than hasn't the and is turned what the with but position customers been. a

So I'm volume to confident growth over outperform the continue the perspective. term, from market we'll long a

RXO you're convergence gross of extremely doing gross profit and bring difference kind per -- between helpful. to then of what between That's maybe there end X? the higher is to to Okay. the do you and a Coyote kind margin or just low, And sizable Legacy moving there load Legacy

bit There's RXO load say a Coyote's gross profit couple of that yes, legacy where would is. a per is One, things I behind little there.

click customer the a at lower it profit factors there's is to biggest do there, where of business they have gross it point runs a load. One and puts efficient mix and but some per out that

of realize to especially load, able be some is the per opportunity profit improve time, being thing inflects. projects. both over we able to large second we The cycle to have that these gross talked think groups as about an

no over remarks. to turn time. closing will management I are call the for further There this now questions at

than Last by our transportation anticipate Joelle. commitments managed and leverage momentum $XX and schedule, both now delivered on Mile. ratio you, We our Coyote in is we quarter Thank ahead the third synergies. annualized million of with in decreased We've least and integration continued more the cost completed in XX%. The acquisition at

the close relationships. work remain this As Coyote soft your providing prolonged of set you we innovation integrate and fully time continuous most to we and business best solutions, the freight morning. on customer service, navigate Thank the for comprehensive cycle, focused the all

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