RXO 2025 Q2 Earnings Narrowed Losses Amid Strong Revenue Growth

RXO(RXO) reported its fiscal 2025 Q2 earnings on Aug 07th, 2025. The company delivered robust revenue growth while narrowing its per-share loss, though its net loss expanded year over year. The earnings report reflects a mixed financial performance, with management expressing optimism about future operational leverage and cash flow generation.

RXO(RXO) reported total revenue of $1.42 billion for Q2 2025, a 52.6% increase compared to $930 million in Q2 2024. This growth was driven across multiple business segments, with the truck brokerage segment contributing $1.02 billion, marking the largest component. The last-mile segment added $315 million in revenue, while managed transportation generated $142 million. Eliminations, which typically account for intersegment adjustments, resulted in a reduction of $63 million. Despite the strong top-line performance, the company posted a net loss of $9 million for the quarter, which widened by 28.6% from $7 million in the prior year period. However, RXO narrowed its per-share loss to $0.05 from $0.06 in the same quarter of 2024, representing a 16.7% improvement in profitability per share.

RXO’s truck brokerage business outperformed expectations, contributing significantly to the overall revenue increase. The segment showed particular strength in less-than-truckload (LTL) services, which grew by 45%. The company also noted improved truckload gross profit per load, up 7% sequentially, and emphasized the benefits of its integrated technology platform. The last-mile and managed transportation segments also played a supportive role in the broader revenue expansion.

RXO’s earnings report indicated that while per-share losses improved, the net loss widened. This discrepancy highlights the scale of the company’s operations, where the per-share metric benefited from a lower share count, while absolute losses increased due to higher expenses or lower margins in certain areas. The narrowing of the per-share loss suggests operational improvements and cost discipline, which are encouraging signs for long-term profitability.

Following the earnings release, RXO’s stock price experienced a downturn, with the shares dropping 6.22% during the latest trading day and 4.34% over the past week. The stock has fallen 13.72% month-to-date, reflecting a broader market reaction to the company’s financial results. A post-earnings trading strategy involving buying RXO after a beat and selling after 30 days returned 18.78%, but it underperformed the market by 49.07%. The strategy's low drawdown and Sharpe ratio of 0.15 indicate a conservative approach with limited risk but modest returns.

CEO Drew Wilkerson expressed confidence in the company’s long-term growth trajectory, emphasizing strong Q2 performance and adjusted EBITDA of $38 million, which aligned with the high end of guidance. Wilkerson highlighted the brokerage business’s 1% year-over-year volume growth and the company’s ability to generate operating leverage as conditions improve. Strategic priorities include technology investments, productivity gains, and disciplined cost management, all of which are expected to drive future earnings and free cash flow. Wilkerson conveyed optimism about RXO’s ability to navigate market cycles and deliver strong results over time.

For the third quarter of 2025, RXO expects adjusted EBITDA in the range of $33 million to $43 million. The company anticipates sequential improvement in truckload brokerage profitability and a reduction in SG&A costs compared to Q2. Depreciation expenses are projected to be between $17 million and $19 million, with amortization between $9 million and $11 million. RXO’s adjusted free cash flow conversion rate of 58% in Q2 was a positive sign, and the company expects to maintain a 40% to 60% conversion rate across market cycles. With 2026 CapEx estimated between $45 million and $55 million, RXO plans to continue investing in growth while maintaining a disciplined capital allocation strategy.

Additional News
In the week following RXO’s earnings release, several notable news developments emerged. In Nigeria, the Nigeria Export Processing Zones Authority (NEPZA) intervened in a dispute over the potential revocation of the Abuja Technology Village Free Zone’s status, signaling government support for tech-driven economic initiatives. The Federal Government also announced plans to expand its National Cash Transfer Programme to cover 15 million beneficiaries, underscoring ongoing efforts to support vulnerable populations. Meanwhile, geopolitical developments included Germany’s decision to suspend arms exports to Israel over concerns about Gaza control, reflecting shifting international dynamics in response to global tensions.