RXO INC (NYSE:RXO) Reports Mixed Q2 2025 Results with EPS Beat and Revenue Miss

RXO INC (NYSE:RXO) reported its second-quarter 2025 financial results, delivering mixed performance relative to analyst expectations. The company's revenue came in at $1.42 billion, falling short of the consensus estimate of $1.45 billion. However, adjusted earnings per share (EPS) of $0.04 exceeded the projected $0.02, reflecting improved profitability despite a challenging freight market.

Key Financial Highlights

• Revenue: $1.42 billion (vs. $1.45 billion estimated)
• Adjusted EPS: $0.04 (vs. $0.02 estimated)
• GAAP Net Loss: $9 million (vs. $7 million loss in Q2 2024)
• Adjusted EBITDA: $38 million (up from $28 million YoY)
• Gross Margin: 17.8% (down from 19.0% YoY)

Market Reaction

The stock showed a modest pre-market gain of 3.43%, suggesting cautious optimism from investors. While revenue missed expectations, the stronger-than-expected adjusted EPS and improved EBITDA likely contributed to the positive sentiment. Over the past month, RXO shares have declined 10.34%, reflecting broader market concerns around freight demand and economic conditions.

Operational Performance

• Brokerage Segment:

  • Volume increased 1% year-over-year, driven by a 45% surge in less-than-truckload (LTL) shipments, offset by a 12% decline in full truckload volume.
  • Gross margin held steady at 14.4%, indicating disciplined cost management.

• Last Mile Segment:

  • Achieved 17% growth in stops, marking the fourth consecutive quarter of double-digit expansion.
  • Complementary services gross margin improved to 22.8%, showcasing operational efficiency.

Outlook

For Q3 2025, RXO anticipates adjusted EBITDA between $33 million and $43 million, with brokerage volume expected to remain flat year-over-year. Gross margin in the segment is projected between 13.5% and 15.0%, reflecting ongoing pricing pressures in the freight market.

Analyst Estimates vs. Company Guidance

• Q3 2025 Revenue Estimate: $1.53 billion
• Full-Year 2025 Revenue Estimate: $6.13 billion

While RXO did not provide explicit revenue guidance, its EBITDA outlook suggests confidence in maintaining profitability despite softer demand.

Conclusion

RXO’s Q2 results highlight resilience in a difficult freight environment, with cost controls and LTL growth driving earnings upside. The market’s positive pre-market reaction indicates relief over profitability, though revenue headwinds remain a concern.

For more detailed earnings estimates and historical performance, visit RXO’s earnings page.

Disclaimer: This article is not investment advice. Investors should conduct their own research before making decisions.