RXO's Q2 2025 Earnings Call: Unraveling Contradictions in Volume Decline, Market Trends, and Profitability

Automotive volume decline, market conditions and volume trends, volume decline and market conditions, gross profit per load improvement, LTL growth and market positioning are the key contradictions discussed in RXO's latest 2025Q2 earnings call.



Earnings and Revenue Performance:
- RXO reported an adjusted EBITDA of $38 million for Q2, meeting the high end of their guidance range.
- Total revenue was $1.4 billion, with 69% attributed to brokerage services.
- The growth was driven by strong LTL volume increase and improved brokerage profitability, despite a prolonged soft freight market.

Brokerage Volume and LTL Growth:
- Brokerage volume grew by 1% year-over-year, outperforming the broader market with 45% growth in LTL volume.
- The LTL market growth is attributed to RXO's technology platform, which provides productivity gains and improved customer visibility.

Integration and Efficiency:
- The company achieved significant cost savings through carrier and coverage migration, resulting in improved purchase transportation efficiency.
- The integration of carrier networks enabled better access to transportation options, leading to cost avoidance of approximately 30 to 50 basis points.

Last Mile and Complementary Services Growth:
- Last mile stops grew by 17% year-over-year, marking the fourth consecutive quarter of double-digit growth.
- The growth in last mile services is due to strong customer relationships, technological advantages, and financial stability.

Freight Market Conditions:
- The freight market remained soft, with capacity rationalization and tightness driven by produce season, rather than improved demand.
- The market conditions did not impact RXO's ability to effectively procure transportation, leading to increased truckload gross profit per load.