RXO, Inc. (NYSE:RXO) Q2 2024 Earnings Conference Call August 7, 2024 8:00 AM ET

Company Participants

Drew Wilkerson – CEO
James Harris – CFO
Jared Weisfeld - CSO

Conference Call Participants

Scott Schneeberger – Oppenheimer
Scott Group - Wolfe Research
Stephanie Moore – Jefferies
Tom Wadewitz – UBS
Jason Seidl - TD Cowen
Ken Hoexter - Bank of America
David Zaslav - Barclays
Ravi Shanker - Morgan Stanley
David Hicks - Raymond James
Daniel Imbro - Stephens Inc.
Bruce Chan - Stifel

Operator

Welcome to the Q2 2024 RXO Earnings Conference Call. 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 filing as well as in its earnings release. You should refer to the copy of the company's earnings release in the Investors 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 for discussing its results.

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

Drew Wilkerson

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

Now let me walk you through our second quarter results. RXO executed well with adjusted EBITDA of $28 million in what continues to be a soft freight market. Our brokerage business grew volume by 4%, with a 40% increase in less than truckload volume. We continue to build scale in our LTL business, which now represents 20% of our brokerage volume and is contributing to profitable growth.