RXO, Inc. (NYSE:RXO) Q1 2024 Earnings Conference Call May 2, 2024 8:00 AM ET Company Participants Drew Wilkerson - CEO James Harris - CFO Jared Weisfeld - CSO Conference Call Participants Stephanie Moore - Jefferies Tom Wadewitz - UBS Scott Schneeberger - Oppenheimer Brandon Oglenski - Barclays Ken Hoexter - Bank of America Jason Seidl - TD Cowen Ravi Shanker - Morgan Stanley Jordan Alliger - Goldman Sachs Daniel Imbro - Stephens Inc. Kevin Gainey - Thompson Davis Operator Welcome to the 1Q 2024 RXO Earning ...

– LTL: up more than 30% 14 7 Diverse exposure across attractive end markets Adjusted diluted earnings (loss) per share 2 $ (0.03) $ 0.11 Financial reconciliations (cont.) RXO • Stock-based compensation: $24-$26M 3 16 1 See the "Non-GAAP financial measures" section. 2 Includes the cash component of these line items. 3 Adjusted EBITDA for all periods presented is reconciled above. 4 Free cash flow conversion from adjusted EBITDA is calculated as free cash flow divided by adjusted EBITDA. 5 Adjusted free cash ...

Business Model and Operations - The company operates an asset-light business model that generates strong free cash flow and high returns on invested capital[26]. - The proprietary RXO Connect™ digital brokerage platform enhances service delivery and operational productivity, leveraging advanced technology for real-time freight management[29]. - The company’s managed transportation service includes bespoke load planning and performance monitoring, enhancing revenue synergy across its service offerings[19]. - The company’s last mile service is the largest provider of outsourced last mile transportation for heavy goods in the U.S., serving a diverse customer base[20]. - The company benefits from a long-tenured customer base across various sectors, including e-commerce and retail, which supports revenue stability[26]. - The company aims to capitalize on increasing broker penetration in the for-hire trucking industry, driven by shippers' growing preference for digital brokerage services[30]. - The company’s freight forwarding service covers approximately 150 countries and territories, enhancing its global reach and operational capabilities[21]. Financial Performance and Customer Base - The top 20 customers accounted for approximately 38% of the company's revenue in 2023, with the largest customer contributing about 9.5%[32]. - The top five customers accounted for approximately 21% of the company's total revenue for the year ended December 31, 2023, with the largest customer representing about 9.5%[115]. - The company has experienced higher volumes in the fourth quarter due to peak season demand from consumer sectors[53]. - RXO's volumes typically increase in the fourth quarter due to peak season demand from customers in consumer sectors[53]. Workforce and Employee Engagement - As of December 31, 2023, the company operated with a total workforce of 8,432, including 6,051 full-time and part-time employees and 2,381 temporary workers[56]. - 45% of the company's employees are in hourly roles, while 55% are in salaried positions, with approximately 38% of employees being female[56]. - The company has a strong commitment to diversity, equity, and inclusion, encouraging employees to bring their authentic selves to work[57]. - RXO's total rewards program is designed to attract and retain talent, providing competitive compensation and benefits from day one[59]. - The company has a focus on professional development and offers numerous career development opportunities, including workshops and leadership training[58]. Regulatory and Compliance - The company is subject to various federal and state regulations, including those related to emissions and independent contractor classifications, which could impact operational costs and legal exposure[49][50]. - RXO's operations are subject to various regulations, including those from the Federal Motor Carrier Safety Administration and state regulations affecting motor carriers[38][40]. - The company is subject to environmental regulations concerning hazardous materials and emissions, with a focus on compliance and risk management[50][51]. - The company maintains insurance for various liabilities, including commercial automobile liability and workers' compensation, with coverage limits deemed reasonable based on historical claims[52]. Market Conditions and Risks - The transportation services industry is highly competitive, with risks including reduced revenues and profit margins due to competition from other companies and pricing pressures during economic downturns[69]. - Economic recessions can significantly impact demand for transportation services, leading to reduced revenues and increased competition for pricing[70]. - Fluctuations in fuel prices can materially affect profitability, as fuel expenses are a major cost for independent contractors and third-party carriers[73]. - A reduction in overall freight volume can limit growth opportunities, and financial distress among customers may lead to increased working capital needs[75]. - Labor disputes and organizing efforts could disrupt operations, negatively impacting revenues and customer relationships[87]. - The company relies on third-party carriers for operations, and any changes in their classification as independent contractors could increase operational costs and liabilities[83]. - Cybersecurity risks pose a threat to the company's operations, with potential breaches leading to operational difficulties and reputational harm[93]. - Changes in international trade policies and tariffs could adversely affect global transportation volumes and customer demand[75]. Corporate Structure and Governance - The company completed its separation from XPO, Inc. on November 1, 2022, and began trading on the New York Stock Exchange under the ticker symbol "RXO"[22]. - RXO began regular trading as a standalone public company on November 1, 2022, with historical financial information not necessarily indicative of future results[122]. - RXO's historical financial results included allocations of corporate expenses from XPO, which may be less than the expenses incurred as a separate entity[123]. - RXO may face increased volatility in cash flows and working capital requirements post-Separation, potentially necessitating additional financing[123]. - The company has a strong governance structure and commitment to employee engagement, which supports its operational effectiveness and corporate culture[54]. - RXO's amended and restated certificate of incorporation includes provisions that may deter hostile takeovers, potentially affecting stockholder interests[136]. - The Separation may trigger tax liabilities under Section 355(e) of the Internal Revenue Code, with RXO required to indemnify XPO for such taxes[138]. - RXO's exclusive forum provision may discourage lawsuits against the company and its directors[139].

RXO, Inc. (NYSE:RXO) Q4 2023 Earnings Conference Call February 8, 2024 8:00 AM ET Company Participants Drew Wilkerson - CEO James Harris - CFO Jared Weisfeld - CSO Conference Call Participants Ken Hoexter - Bank of America Jordan Alliger - Goldman Sachs Stephanie Moore - Jefferies Brandon Oglenski - Barclays Allison Poliniak - Wells Fargo Scott Schneeberger - Oppenheimer Ravi Shanker - Morgan Stanley Scott Group - Wolfe Research Bruce Chan - Stifel Jack Atkins - Stephens Operator Welcome to RXO Q4 2023 Earn ...

$140 Adjusted EBITDA and margin %1Brokerage y/y volume growth Solid execution in a prolonged soft freight market RXO's brokerage business continues to outperform and gain profitable market share | --- | --- | --- | --- | --- | --- | |-----------|---------------------------------------------------------------------------------------------------------------------------------------------------------------|-------|----------------------------------------------------------------------------------------|-------|- ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 ___________________________________ Form 10-Q ___________________________________ (Mark One) x QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended September 30, 2023 or o TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from ____________ to ____________ Commission File Number: 001-41514 ___________________ ...

Revenue Performance - Revenue for Q2 2023 decreased by 21.5% to $963 million, down from $1,226 million in Q2 2022, primarily due to a $198 million decrease in truck brokerage revenue and a $36 million decrease in freight forwarding revenue [76]. - For the first six months of 2023, revenue decreased by 22.3% to $1.973 billion from $2.538 billion in the same period of 2022, primarily due to a $422 million decrease in truck brokerage revenue [84]. Cost and Expenses - Cost of transportation and services for Q2 2023 was $723 million, representing 75.1% of revenue, compared to $904 million or 73.7% of revenue in Q2 2022, driven by a 5.4 percentage point increase in truck brokerage costs [77]. - Direct operating expenses for Q2 2023 were $59 million, or 6.1% of revenue, up from $56 million or 4.6% of revenue in Q2 2022, reflecting deleverage on lower revenue [78]. - SG&A expenses for Q2 2023 were $144 million, or 15.0% of revenue, compared to $166 million, or 13.5% of revenue in Q2 2022, with higher compensation-related costs contributing to the increase [79]. - Transportation and services costs for the first six months of 2023 were $1.5 billion, or 75.1% of revenue, down from $1.9 billion, or 75.8% of revenue in the same period of 2022 [85]. - Direct operating expenses for the first six months of 2023 were $120 million, or 6.1% of revenue, compared to $111 million, or 4.4% of revenue in the same period of 2022 [86]. - SG&A expenses for the first six months of 2023 were $297 million, or 15.1% of revenue, down from $327 million, or 12.9% of revenue in the same period of 2022 [87]. - Depreciation and amortization expense for the first six months of 2023 was $36 million, a decrease from $42 million in the same period of 2022 [88]. Net Income and Tax - Net income for Q2 2023 was $3 million, down from $44 million in Q2 2022, resulting in a net income margin of 0.3% compared to 3.6% in the prior year [75]. - The effective income tax rate for Q2 2023 was 44.0%, significantly higher than the 24.3% rate in Q2 2022, influenced by state income taxes and non-deductible expenses [82]. - The effective income tax rate for the first six months of 2023 was (11.0)%, compared to 24.3% for the same period in 2022 [90]. Cash Flow and Assets - Net cash provided by operating activities for the first six months of 2023 was $66 million, a decrease of $111 million (62.7%) compared to $177 million in the same period of 2022 [96]. - Cash used in investing activities for the first six months of 2023 was $28 million, compared to $24 million in the same period of 2022 [99]. - Financing activities used $13 million of cash in the first six months of 2023, compared to generating $30 million in the same period of 2022 [100]. - Total current assets decreased by $113 million (11.0%) from December 31, 2022, to June 30, 2023, primarily due to a $157 million decrease in accounts receivable [95]. - Total liabilities decreased by $121 million from December 31, 2022, to June 30, 2023, driven primarily by a $69 million decrease in accounts payable [95]. Business Model and Operations - The company had approximately 121,000 carriers in its North American truck brokerage network, with access to over 1.5 million trucks as of June 30, 2023 [64]. - The company operates an asset-light business model, focusing on truck brokerage, managed transportation, last mile, and freight forwarding services [62]. - Transaction and integration costs for Q2 2023 were $4 million, down from $18 million in Q2 2022, primarily related to spin-off costs [81].

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 ___________________________________ Form 10-Q ___________________________________ (Mark One) x QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended March 31, 2023 or o TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from ____________ to ____________ Commission File Number: 001-41514 _______________________ ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 _______________________________________________________ Form 10-K _______________________________________________________ (Mark One) ☒ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended December 31, 2022 or ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Commission File Number: 001-41514 RXO, INC. (Exa ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 ___________________________________ Form 10-Q ___________________________________ (Mark One) x QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended September 30, 2022 or o TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from ____________ to ____________ Commission File Number: 001-41514 ___________________ ...