RXO down -10% as Q2 23 results disappoint in weak market

Trucking brokerage firm RXO announced today Q2 23 numbers that put a lot pressure on its stock, down -10% to $19.7 before midday (EST).

(The full release is here.)

RXO CEO Drew Wilkerson said in his prepared remarks that the company “executed well in a soft freight market”.

“In our brokerage business, we continued to gain significant market share and recorded 10 percent volume growth year-over-year. We set several brokerage volume records in the quarter, including total volume, quarterly loads per day and monthly loads per day. Companywide and brokerage gross margin remained strong at 18.6 percent and 15.4 percent, respectively.”

He added:

“Our margin performance was the result of continued customer and carrier adoption of RXO’s cuttingedge, AI-enabled technology, including our industry-leading pricing algorithms,” Wilkerson said. “Ninetysix percent of RXO’s orders in the quarter were created or covered digitally and 78 percent of carriers using our technology returned to our platform within seven days.”

Wilkerson concluded “market share gains are accelerating, and we are well-positioned at this stage of the freight cycle. We will continue to provide outstanding customer service, grow market share profitably and control costs while investing for the future. Following this playbook will enable significant earnings growth when the cycle inflects, and we remain confident in our ability to deliver our long-term adjusted EBITDA target.”

The stock closed down -10.4% at $19.65 for the day.