Revenue rose 36% year‑over‑year to $1.421 billion, driven by a 1% increase in brokerage volume and a 43% jump in less‑than‑truckload shipments. The acquisition of Coyote Logistics, completed in September 2024, added $442 million in complementary services, lifting total revenue to the $1.4 billion range reported by analysts. The growth, however, was offset by a softer freight market that pressured pricing and reduced the mix of higher‑margin full truckload shipments.
Gross margin fell to 16.5% from 17.3% in the prior quarter, a decline largely attributable to higher transportation costs—fuel, labor, and carrier rates—combined with intensified price competition. The brokerage gross margin, a key profitability lever, slipped to 13.5% from 13.7% year‑over‑year, reflecting the market’s tightening capacity and the need to lower buy rates to win business.
GAAP net loss for the quarter was $14 million, a significant improvement over the $31 million loss reported in Q3 2024, but still a loss compared to the $243 million loss reported by some sources for that period. Adjusted EBITDA was $32 million, down 1% from $33 million a year earlier, and adjusted earnings per share were $0.01 versus the consensus estimate of $0.03–$0.04, a miss of roughly 67%. The miss was driven by the margin compression described above and the continued integration costs associated with Coyote Logistics.
For Q4 2025, management guided adjusted EBITDA of $20 million to $30 million, a range that falls below the $32 million achieved in Q3. The guidance signals management’s concern about ongoing headwinds—soft freight demand, rising carrier costs, and capacity exits—while still reflecting confidence that cost‑control initiatives and technology integration will gradually improve margins. The company reiterated its focus on completing the RXO Connect platform integration to unlock further synergies.
CEO Drew Wilkerson noted that “market conditions tightened late in the third quarter as truckload capacity exits accelerated, impacting both our buy rates and brokerage gross margin.” He added that the firm has achieved more than $125 million in annualized expense savings, including $65 million in post‑spend cost reductions and $60 million in Coyote‑related synergies, and announced an additional $30 million in incremental savings. Wilkerson emphasized that the company remains focused on optimizing its cost structure, automating processes, and delivering value to customers, carriers, and shareholders.
Analysts reacted to the earnings miss and cautious guidance with a negative market response, citing the significant shortfall in adjusted EPS and revenue relative to estimates, as well as the lower Q4 EBITDA range. The miss underscored the company’s vulnerability to freight market volatility, while the guidance highlighted the need for continued margin improvement before profitability can be restored. The overall sentiment reflects concern about near‑term profitability, despite the revenue growth driven by the Coyote acquisition.
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