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What changed in RXO, Inc.'s 10-K — 2024 vs 2025

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Paragraph-level year-over-year comparison of RXO, Inc.'s 2024 and 2025 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2025 report.

+178 added−206 removedSource: 10-K (2026-02-09) vs 10-K (2025-02-27)

Top changes in RXO, Inc.'s 2025 10-K

178 paragraphs added · 206 removed · 138 edited across 8 sections

Item 1. Business

Business — how the company describes what it does

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Biggest changeThe Separation was completed under a Separation and Distribution Agreement and various other agreements that govern aspects of the Company’s relationship with XPO, including, but not limited to, a Tax Matters Agreement (“TMA”), an Employee Matters Agreement, a Transition Services Agreement and an Intellectual Property License Agreement. 2 Table of Contents The Coyote Acquisition On September 16, 2024 (the “acquisition date”), the Company acquired the technology-driven, asset-light based truckload freight brokerage services business, as well as certain assets used to conduct haulage, dedicated transport and warehousing services in the United Kingdom (collectively, “Coyote”), from United Parcel Service of America, Inc.
Biggest changeThe Coyote Acquisition On September 16, 2024, the Company acquired the technology-driven, asset-light truckload freight brokerage services business, as well as certain assets used to conduct haulage, dedicated transport and warehousing services in the United Kingdom (collectively, “Coyote”), from United Parcel Service of America, Inc. (“UPS”) and certain subsidiaries of UPS.
This fully automated, cloud-based platform encompasses Freight Optimizer, as well as our mobile app, application programming interface (“API”) integrations, self-service dashboards and real-time functionality for transacting and tracking freight shipments. The technology gives shippers access to our growing transportation network and our valuable market data, and it gives independent truck drivers the ability to secure loads through our mobile app.
This fully automated, cloud-based platform encompasses Freight Optimizer, as well as our mobile app, application programming interface integrations, self-service dashboards and real-time functionality for transacting and tracking freight shipments. The technology gives shippers access to our growing transportation network and our valuable market data, and it gives independent truck drivers the ability to secure loads through our mobile app.
We compete on quality of service, depth of capacity, technological capabilities, reliability, expertise and price. Our competitors include local, regional, national and international companies operating in North America that offer the same services we provide; some have larger customer bases, significantly more resources and more experience than we have. Our competitors include C.H.
We compete on quality of service, depth of capacity, technological capabilities, reliability, expertise and price. Our competitors include local, regional, national and international companies operating in North America that offer the same services we provide; some have larger customer bases, significantly more resources and more experience than we have. Our primary competitors include C.H.
Available Information The U.S. Securities and Exchange Commission (the “SEC”) maintains an Internet site that contains reports, proxy and information statements and other information regarding issuers that file electronically with the SEC at www.sec.gov . Our corporate website is www.rxo.com .
Available Information The U.S. Securities and Exchange Commission (the “SEC”) maintains an Internet site that contains reports, proxy and information statements and other information regarding issuers that file electronically with the SEC at https://www.sec.gov . Our corporate website is www.rxo.com .
Our motor carrier subsidiaries must comply with the safety and fitness regulations of the DOT, including those related to, without limitation, controlled substances and alcohol, hours-of service compliance, vehicle maintenance, hazardous materials compliance, driver fitness, unsafe driving, and minimum insurance requirements.
Our motor carrier subsidiaries must comply with the safety and fitness regulations of the DOT, including those related to, without limitation, controlled substances and alcohol, hours-of service compliance, vehicle maintenance, hazardous materials compliance, driver fitness and language proficiency, unsafe driving, and minimum insurance requirements.
Refer to Note 3 — Acquisition to the consolidated financial statements in this Annual Report on Form 10-K for disclosures regarding the Company’s acquisition of Coyote. Relationship-Based Operating Structure Our truck brokerage business operates as an intermediary between shippers and carriers (truck and fleet owners), connecting truckload supply and demand.
Refer to Note 3 — Acquisition to the consolidated financial statements in this Annual Report on Form 10-K for disclosures regarding the Company’s acquisition of Coyote. 2 Table of Contents Relationship-Based Operating Structure Our truck brokerage business operates as an intermediary between shippers and carriers (truck and fleet owners), connecting truckload supply and demand.
Department of Homeland Security, also regulate aspects of our operations. 5 Table of Contents In addition, our motor carriers that engage independent contractor owner-operators to provide transportation and delivery services are subject to the Federal Leasing Regulations, which are applicable to written agreements between the carriers and those owner-operators.
Department of Homeland Security, also regulate aspects of our operations. In addition, our motor carriers that engage independent contractor owner-operators to provide transportation and delivery services are subject to the Federal Leasing Regulations, which are applicable to written agreements between the carriers and those owner-operators.
Drivers of Value Creation We have identified five key drivers of value creation in our truck brokerage business: • Critical Scale in an Expanding Industry with Low Penetration : We are one of the largest brokers of full truckload freight transportation in the United States, with a carrier pool that gives us access to vast truck capacity to serve high shipper demand for transportation.
Drivers of Value Creation We have identified five key drivers of value creation in our truck brokerage business: • Critical Scale in an Expanding Industry with Low Penetration : We are one of the largest brokers of full truckload freight transportation in North America, with a carrier pool that gives us access to vast truck capacity to serve high shipper demand for transportation.
These executives have worked together for many years, creating value through operational excellence, data science and a people-centric culture. Our Strategy Our strategy is designed to deliver value through our extensive carrier relationships, excellent customer service, automated shipper-carrier interactions, end-to-end digital tracking and data analyses generated by our proprietary algorithms.
These executives have worked together for many years, creating value through operational excellence, data science and a people-centric culture. 3 Table of Contents Our Strategy Our strategy is designed to deliver value through our extensive carrier relationships, excellent customer service, automated shipper-carrier interactions, end-to-end digital tracking and data analyses generated by our proprietary algorithms.
(“UPS”) and certain subsidiaries of UPS. We acquired Coyote for $1.038 billion in cash, subject to certain additional customary adjustments. The purchase price was subsequently increased by $10 million for working capital and other post-closing adjustments totaling $10 million, which was paid in the first quarter of 2025.
We acquired Coyote for $1.038 billion in cash, subject to certain additional customary adjustments. The purchase price was subsequently increased by $10 million for working capital and other post-closing adjustments, which was paid in the first quarter of 2025.
You may request a printed copy of these materials without charge by writing to: Investor Relations, RXO, Inc., 11215 North Community House Road, Charlotte, North Carolina 28277. 10 Table of Contents
You may request a printed copy of these materials without charge by writing to: Investor Relations, RXO, Inc., 11215 North Community House Road, Charlotte, North Carolina 28277.
Importantly, our digital brokerage platform creates ongoing value for RXO in four key areas: • Increases market share and revenue generation by providing real-time visibility into available supply and demand for current and future time periods, leading to optimal transportation management; 4 Table of Contents • Ensures competitive rates by engaging customers and carriers through user-friendly interfaces underpinned by cutting-edge pricing technology; • Optimizes for value and margin with dynamic pricing algorithms that use machine learning, and generates superior, real-time market intelligence harvested from load-matching data; and • Improves productivity by facilitating transactions through cost-efficient automated processes and messaging, increasing the productivity of RXO’s customer and carrier representatives, and enabling our business to manage more volume without a commensurate increase in expense.
Importantly, our digital brokerage platform creates ongoing value for RXO in four key areas: • Increases market share and revenue generation by providing real-time visibility into available supply and demand for current and future time periods, leading to optimal transportation management; • Ensures competitive rates by engaging customers and carriers through user-friendly interfaces underpinned by cutting-edge pricing technology; • Optimizes for value and margin with dynamic pricing algorithms that use machine learning, and generates superior, real-time market intelligence harvested from load-matching data; and • Improves productivity by facilitating transactions through cost-efficient automated processes and messaging, increasing the productivity of RXO’s customer and carrier representatives, and enabling our business to manage more volume without a commensurate increase in expense. 4 Table of Contents Customers and Markets RXO provides services to customers ranging in size from small businesses to Fortune 100 companies and sector leaders.
Our tiered sales organization tailors its approach to each prospective customer based on size and profitability potential. 3 Table of Contents • Asset-Light Model Generates High Returns and Substantial Free Cash Flow: Our asset-light model generates high returns with strong free cash flow characteristics.
Our tiered sales organization tailors its approach to each prospective customer based on size and profitability potential. • Asset-Light Model Generates High Returns and Substantial Free Cash Flow: Our asset-light model generates high returns with strong free cash flow characteristics.
Our motor carriers are also subject to various state regulations, including state operating authority requirements where intrastate motor carriage is regulated, emission-compliance standards such as those promulgated by the California Air Resources Board, and vehicle registration and licensing requirements in certain states and local jurisdictions where we operate.
This risk is addressed in greater detail below. 5 Table of Contents Our motor carriers are also subject to various state regulations, including state operating authority requirements where intrastate motor carriage is regulated, emission-compliance standards such as those promulgated by the California Air Resources Board, and vehicle registration and licensing requirements in certain states and local jurisdictions where we operate.
In March 2017, he was named president of XPO’s North American brokerage business; and in February 2020, he was named president of XPO’s North American transportation division, with P&L responsibility for truck brokerage, expedite, intermodal, drayage, managed transportation, last mile and freight forwarding. He served in this role until the Separation. Prior to XPO, Mr.
In March 2017, he was named president of XPO’s North American brokerage business; and in February 2020, he was named president of XPO’s North American transportation division, with P&L responsibility for truck brokerage, expedite, intermodal, drayage, managed transportation, last mile and freight forwarding. He served in this role until the spin-off of RXO from XPO in November 2022.
In addition, RXO continues to cover the majority of health care costs to minimize the inflationary impact on employees. Our Health and Safety RXO is committed to providing a safe and healthy workplace, both physically and emotionally, for employees of all backgrounds and abilities, and to safeguarding the public’s welfare. We have numerous occupational safety and health standards in place.
Our Health and Safety RXO is committed to providing a safe and healthy workplace, both physically and emotionally, for employees of all backgrounds and abilities, and to safeguarding the public’s welfare. We have numerous occupational safety and health standards in place.
Also, separate from regulatory requirements, the use of independent contractors within the transportation industry continues to face legal changes from regulatory agencies and private litigants. This risk is addressed in greater detail below.
Also, separate from regulatory requirements, the use of independent contractors within the transportation industry continues to face legal changes from regulatory agencies and private litigants.
Information about our Executive Officers Our executive officers are as follows: Name Age Position Drew Wilkerson 41 Chief Executive Officer James Harris 62 Chief Financial Officer Jeff Firestone 54 Chief Legal Officer Drew Wilkerson is a transportation industry veteran with 18 years of experience in brokerage operations.
Information about our Executive Officers Our executive officers are as follows: Name Age Position Drew Wilkerson 42 Chairman of the Board and Chief Executive Officer James Harris 63 Chief Financial Officer Jeff Firestone 55 Chief Legal Officer Drew Wilkerson is a transportation industry veteran with 19 years of experience in brokerage operations.
In addition, we offer technology-enabled managed expedite services that automate transportation procurement for time-critical freight moved by road and air charter carriers. We also offer freight forwarding services, including facilitation of ocean and air transportation, customs brokerage and additional domestic services. Our last mile offering is an asset-light service that facilitates consumer deliveries performed by highly qualified third-party contractors.
In addition, we offer technology-enabled managed expedite services that automate transportation procurement for time-critical freight moved by road and air charter carriers. We also offer freight forwarding services, including facilitation of ocean and air transportation, customs brokerage and additional domestic services including middle mile.
The diversification of our customer base minimizes concentration risk: in 2024, our top 20 customers in total and our top five customers in total accounted for approximately 38% and 23% of our revenue, respectively, with our largest customer accounting for approximately 9.9% of revenue.
The diversification of our customer base minimizes concentration risk: in 2025, our top 20 customers in total and our top five customers in total accounted for approximately 37% and 23% of our revenue, respectively. Revenue from our largest customer represented approximately $653 million, or 11.4%, of total revenue.
We are the largest provider of outsourced last mile transportation for heavy goods in the United States, positioned within 125 miles of the vast majority of the U.S. population and serving a customer base of omnichannel and e-commerce retailers and direct-to-consumer manufacturers. The Separation On November 1, 2022, the Company completed its separation from XPO, Inc.
Our last mile offering is an asset-light service that facilitates consumer deliveries performed by highly qualified third-party contractors. We are the largest provider of outsourced last mile transportation for heavy goods in the United States, positioned within 125 miles of the vast majority of the U.S. population and serving a customer base of omnichannel and e-commerce retailers and direct-to-consumer manufacturers.
Wilkerson held leadership positions in sales, operations, and customer and carrier relationship management with C.H. Robinson Worldwide. 9 Table of Contents James Harris is a career CFO with over 36 years of experience in B2B sectors, including two decades with public companies. He served as chief financial officer of XPO’s North American transportation division from September 2022, until the Separation.
Prior to XPO, Mr. Wilkerson held leadership positions in sales, operations, and customer and carrier relationship management with C.H. Robinson Worldwide. James Harris is a career CFO with over 37 years of experience in B2B sectors, including two decades with public companies.
Risk Management and Insurance We maintain insurance for commercial automobile liability, commercial general liability, cargo legal liability, workers’ compensation and employers’ liability, umbrella and excess liability, cyber risk, and property coverage 7 Table of Contents with coverage limits, deductibles and self-insured retention levels that we believe are reasonable given the varying historical frequency, severity and timing of claims.
Risk Management and Insurance We participate in a combination of self-insurance programs, partially through our wholly-owned captive insurance company, and purchased insurance that are managed to provide for commercial automobile liability, commercial general liability, cargo legal liability, workers’ compensation and employers’ liability, umbrella and excess liability, cyber risk, and property coverage with coverage limits, deductibles and self-insured retention levels that we believe are reasonable given the varying historical frequency, severity and timing of claims. 7 Table of Contents Seasonality Our volumes are typically higher in the fourth quarter due to peak season demand for our services from our customers in the consumer and transportation sectors.
Other Regulations We are subject to a variety of other U.S. and foreign laws and regulations, including, but not limited to, the Foreign Corrupt Practices Act and other anti-bribery and anti-corruption statutes, and export and sanction laws.
Federal Maritime Commission, which establishes the qualifications, regulations, licensing and bonding requirements for arranging international transportation to or from the United States as an OTI. 6 Table of Contents Other Regulations We are subject to a variety of other U.S. and foreign laws and regulations, including, but not limited to, the Foreign Corrupt Practices Act and other anti-bribery and anti-corruption statutes, and export and sanction laws.
We attract candidates from a variety of talent sources and build our pipeline by offering rewarding and challenging career opportunities. We create exceptional employee training experiences that are innovative and collaborative, and we believe it starts by listening to our people. We garner feedback from our employees through many channels, including surveys, roundtables, town halls, and leadership forums.
We create exceptional employee training experiences that are innovative and collaborative, and we believe they start by listening to our people. We garner feedback from our employees through many channels, including surveys, roundtables, town halls, and leadership forums. In turn, we offer numerous career development opportunities including career workshops, forums, online learning, leadership training, high-potential cohorts, and more.
He serves on the board of trustees of Appalachian State University. Jeff Firestone served as chief legal officer of XPO’s North American transportation division from August 2022 until the separation. Prior to XPO, he held senior legal positions with United Parcel Service during a 22-year tenure, including executive legal responsibility for corporate matters, litigation, governance, compliance and risk mitigation.
Prior to XPO, he held senior legal positions with United Parcel Service during a 22-year tenure, including executive legal responsibility for corporate matters, litigation, governance, compliance and risk mitigation.
At RXO, we encourage our employees to bring their authentic selves to work and to welcome everyone, regardless of gender identity, sexual orientation, race, ethnicity, national origin, religion, life experience, veteran status, and disability. With a focus on making transportation simpler and more effective for everyone, we continually strive to be an employer of choice.
The demand for best-in-class performance shapes our approach to human capital management and ensures we provide an exceptional work environment for our employees. At RXO, we encourage our employees to bring their authentic selves to work and to welcome everyone, regardless of gender identity, sexual orientation, race, ethnicity, national origin, religion, life experience, veteran status, and disability.
Additionally, some of our subsidiaries are licensed as an Ocean Transportation Intermediary (“OTI”), since they operate as a non-vessel-operating common carrier, and/or as an Ocean Freight Forwarder licensed by the U.S. 6 Table of Contents Federal Maritime Commission, which establishes the qualifications, regulations, licensing and bonding requirements for arranging international transportation to or from the United States as an OTI.
A substantial portion of our international air freight business is transacted with other IATA members. Additionally, some of our subsidiaries are licensed as an Ocean Transportation Intermediary (“OTI”), since they operate as a non-vessel-operating common carrier, and/or as an Ocean Freight Forwarder licensed by the U.S.
Of these employees, 34% were in hourly roles and 66% were in salaried positions. Approximately 36% of our employees are female. Additionally, as of December 31, 2024, fewer than 20 of these employees were covered by a collective bargaining agreement.
Our People As of December 31, 2025, we operated with 9,218 team members, including 6,906 full-time and part-time employees (“regular employees”) and 2,312 temporary workers. Of our regular employees, 36% were in hourly roles and 64% were in salaried positions, and 36% are female. As of December 31, 2025, fewer than 20 employees were covered by a collective bargaining agreement.
We center our program efforts on professional development, competitive compensation, and dedicated loyalty to empowering a safe and purposeful experience for our team members and their families. Our People As of December 31, 2024, we operated with 9,873 team members 7,540 full-time and part-time employees and 2,333 temporary workers.
With a focus on making transportation simpler and more effective for everyone, we continually strive to be an employer of choice. We center our program efforts on professional development, competitive compensation, and dedicated loyalty to empowering a safe and purposeful experience for our team members and their families.
Led by our passion for technology and solutions, we have a pioneering spirit and entrepreneurial mindset that draws on an agile approach to move quickly and adapt easily. Our success is grounded from a strong governance structure, code of ethics, good corporate citizenship, and commitment to employee engagement.
Human Capital Management Overview At RXO, our values are the key to our unique culture and ability to deliver for everyone we serve. Led by our passion for technology and solutions, we have a pioneering spirit and entrepreneurial mindset that draws on an agile approach to move quickly and adapt easily.
Our Rewards RXO’s total rewards offering is designed to attract, retain, and drive our people. We provide competitive compensation and benefits from day one. Our comprehensive suite of health and well-being benefit programs supports the various needs of our employees and their families.
Our employees are encouraged to participate in strategic, cross-functional initiatives, allowing them to develop professionally and play a key role in contributing to the Company’s results. 8 Table of Contents Our Rewards RXO’s total rewards offering is designed to attract, retain, and drive our people. We provide competitive compensation and benefits from day one.
(formerly known as XPO Logistics, Inc.) (“XPO”) (the “Spin-off” or the “Separation”) and the Company's common stock began regular-way trading on the New York Stock Exchange under the ticker symbol “RXO.” RXO is a Delaware corporation, which was originally formed in May 2022.
RXO’s common stock, par value of $0.01 per share, began trading on the New York Stock Exchange under the ticker symbol “RXO” on November 1, 2022. RXO was incorporated as a Delaware corporation in May 2022.
We equally pride ourselves in our ability to perform with excellence, celebrate our unique strengths, operate safely, and build strong relationships. The demand for best-in-class performance shapes our approach to human capital management and ensures we provide an exceptional work environment for our employees.
Our success is grounded from a strong governance structure, code of ethics, good corporate citizenship, and commitment to employee engagement. We equally pride ourselves in our ability to perform with excellence, celebrate our unique strengths, operate safely, and build strong relationships.
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Customers and Markets RXO provides services to customers ranging in size from small businesses to Fortune 100 companies and sector leaders.
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The United States Supreme Court recently accepted review of a negligent selection case against a broker and it will likely decide whether these state law negligence-based claims against brokers are preempted by federal law.
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A substantial portion of our international air freight business is transacted with other IATA members.
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RXO Workforce (1) Total # Total % Regular 6,906 75% Hourly 2,502 36% Salaried 4,404 64% Male 4,343 63% Female 2,482 36% Others/Undisclosed 81 1% Temporary 2,312 25% Total Workforce 9,218 100% (1) Gender representation includes regular employees who have self-identified.
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Seasonality Our volumes are typically higher in the fourth quarter due to peak season demand for our services from our customers in the consumer and transportation sectors. Human Capital Management Overview At RXO, our values are the key to our unique culture and ability to deliver for everyone we serve.
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Our Talent Engagement We believe acquiring top talent and investing in the development of our people gives us a sustainable competitive advantage. We attract candidates from a variety of talent sources and build our pipeline by offering rewarding and challenging career opportunities.
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RXO Workforce (1) Total # Total % Regular 7,540 76% Hourly 2,531 34% Salaried 5,009 66% Male 4,709 62% Female 2,748 36% Others/Undisclosed 83 1% Temporary 2,333 24% Total Workforce 9,873 100% (1) Gender representation includes regular employees who have self-identified. 8 Table of Contents Our Talent Engagement We believe acquiring top talent and investing in the development of our people gives us a sustainable competitive advantage.
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Our comprehensive suite of health and well-being benefit programs supports the various needs of our employees and their families. In addition, RXO continues to cover the majority of health care costs to minimize the inflationary impact on employees.
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In turn, we offer numerous career development opportunities including career workshops, forums, online learning, leadership training, high-potential cohorts, and more. Our employees are encouraged to participate in strategic, cross-functional initiatives, allowing them to develop professionally and play a key role in contributing to the Company’s results.
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He served as chief financial officer of XPO’s North American transportation division from September 2022, until the spin-off of RXO from XPO in November 2022.
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He serves on the board of trustees of Appalachian State University. 9 Table of Contents Jeff Firestone served as chief legal officer of XPO’s North American transportation division from August 2022 until the spin-off of RXO from XPO in November 2022.

Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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Biggest changeRisks Related to Litigation and Regulation We are subject to claims arising from our transportation operations. We use the services of thousands of transportation companies in connection with our transportation operations. From time to time, the drivers employed and engaged by the motor carriers we contract with are involved in accidents, which may result in serious personal injuries.
Biggest changeWe may not have sufficient liquidity to repay or refinance our indebtedness if such indebtedness were accelerated upon an event of default. 16 Table of Contents Risks Related to Litigation and Regulation We are subject to claims arising from our transportation operations. We use the services of thousands of transportation companies in connection with our transportation operations.
RISK FACTORS The following are important factors that could affect our financial performance and could cause actual results for future periods to differ materially from our anticipated results or other expectations, including those expressed in any forward-looking statements made in this Annual Report or our other filings with the SEC or in oral presentations such as telephone conferences and webcasts open to the public.
The following are important factors that could affect our financial performance and could cause actual results for future periods to differ materially from our anticipated results or other expectations, including those expressed in any forward-looking statements made in this Annual Report or our other filings with the SEC or in oral presentations such as telephone conferences and webcasts open to the public.
To date, several governments, including the European Union (“EU”) and China have imposed tariffs on certain goods imported from the United States. These actions may contribute to weakness in the global economy that could adversely affect our results of operations.
To date, several governments, including the European Union and China have imposed tariffs on certain goods imported from the United States. These actions may contribute to weakness in the global economy that could adversely affect our results of operations.
Also, due to recent advances in technology and well-known efforts on the part of computer hackers and cyber-terrorists to breach data security of companies, we face risks associated with potential failure to adequately protect critical corporate, customer and employee data, which, if released, could adversely impact our customer relationships, our reputation, and even violate privacy laws.
Also, due to recent advances in technology and well-known efforts on the part of computer hackers and cyber-criminals to breach data security of companies, we face risks associated with potential failure to adequately protect critical corporate, customer and employee data, which, if released, could adversely impact our customer relationships, our reputation, and even violate privacy laws.
Our ability to secure sufficient equipment or other transportation services to meet our commitments to customers or provide our services on competitive terms is subject to inherent risks, many of which are beyond our control, including equipment and labor shortages in the transportation industry, interruptions or stoppages in transportation services, “Acts of God” or acts of terrorism, changes in regulations impacting transportation, increases in operating expenses for carriers that result in a reduction in available carriers, and changes in transportation rates; and if we are unable to meet our commitments to our customers or provide our services on competitive terms, our operating results could be 13 Table of Contents materially and adversely affected, and our customers could shift their business to our competitors temporarily or permanently.
Our ability to secure sufficient equipment or other transportation services to meet our commitments to customers or provide our services on competitive terms is subject to inherent risks, many of which are beyond our control, including equipment and labor shortages in the transportation industry, interruptions or stoppages in transportation services, “Acts of God” or acts of terrorism, changes in regulations impacting transportation, increases in operating expenses for carriers that result in a reduction in available carriers, and changes in transportation rates; and if we are unable to meet our commitments to our customers or provide our services on competitive terms, our operating results could be materially and adversely affected, and our customers could shift their business to our competitors temporarily or permanently.
Even without any new legislation or regulation, increased public concern regarding greenhouse gases emitted by transportation carriers could harm the reputations of companies operating in the transportation industry and shift consumer demand toward more locally sourced products and away from our services. We are subject to governmental regulations and political conditions, which could negatively impact our business.
Even without any new legislation or regulation, increased public concern regarding greenhouse gases emitted by transportation carriers could harm the reputations of companies operating in the transportation industry and shift consumer demand toward more locally sourced products and away from our services. 17 Table of Contents We are subject to governmental regulations and political conditions, which could negatively impact our business.
Risks Related to Our Credit and Liquidity Challenges in the commercial and credit environment may adversely affect our future access to capital on favorable terms. Volatility in the world financial markets could increase borrowing costs or affect our ability to access the capital markets.
Risks Related to Our Credit and Liquidity Challenges in the commercial and credit environment may adversely affect our future access to capital on favorable terms. Volatility in global financial markets could increase borrowing costs or affect our ability to access the capital markets.
Failure to manage our growth effectively, or obtain necessary working capital, could have a material adverse effect on our business, results of operations, cash flows and financial condition. Our inability to successfully manage the costs and operational difficulties of adding new customers or more volume from existing customers may negatively affect our financial condition and operations.
Failure to manage our growth effectively, or obtain necessary working capital, could have a material adverse effect on our business, results of operations, cash flows and financial condition. 18 Table of Contents Our inability to successfully manage the costs and operational difficulties of adding new customers or more volume from existing customers may negatively affect our financial condition and operations.
Our failure to meet our customers’ expectations during these seasonal peaks may negatively affect our customer relationships, could expose us to penalties under our contractual arrangements with customers and ultimately could negatively affect our business and our results of operations. Risks Related to Third-Party Relationships We depend on third parties in the operation of our business.
Our failure to meet our customers’ expectations during these seasonal peaks may negatively affect our customer relationships, could expose us to penalties under our contractual arrangements with customers and ultimately could negatively affect our business and our results of operations. 12 Table of Contents Risks Related to Third-Party Relationships We depend on third parties in the operation of our business.
For a discussion of our goodwill impairment testing, see “Critical Accounting Policies and Estimates—Evaluation of Goodwill” in “Management’s Discussion and Analysis of Financial Condition and Results of Operations.” 19 Table of Contents Any acquisitions that we may complete in the future may be unsuccessful or result in other risks or developments that adversely affect our financial condition and results.
For a discussion of our goodwill impairment testing, see “Critical Accounting Policies and Estimates—Evaluation of Goodwill” in “Management’s Discussion and Analysis of Financial Condition and Results of Operations.” Any acquisitions that we may complete in the future may be unsuccessful or result in other risks or developments that adversely affect our financial condition and results.
You should carefully consider the following factors in conjunction with “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in Item 7 and our Consolidated Financial Statements and related Notes in Item 8.
You should carefully consider the following factors in conjunction with “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in Part II, Item 7 and our Consolidated Financial Statements and related Notes in Part II, Item 8.
The results of these matters cannot be predicted with certainty and an unfavorable resolution of one or more of these matters could have a material adverse effect on our financial condition, results of operations or cash flows. Our business may be materially adversely affected by labor disputes or organizing efforts .
The results of these matters cannot be predicted with certainty and an unfavorable resolution of one or more of these matters could have a material adverse effect on our financial condition, results of operations or cash flows. 13 Table of Contents Our business may be materially adversely affected by labor disputes or organizing efforts .
Alternatively, if a court were to find this exclusive forum provision inapplicable to, or unenforceable in respect of, one or more of the specified types of actions or proceedings described above, we may incur additional costs associated with resolving such matters in other jurisdictions, which could negatively affect our business, results of operations and financial condition. 25 Table of Contents
Alternatively, if a court were to find this exclusive forum provision inapplicable to, or unenforceable in respect of, one or more of the specified types of actions or proceedings described above, we may incur additional costs associated with resolving such matters in other jurisdictions, which could negatively affect our business, results of operations and financial condition. 21 Table of Contents Item 1B.
There are many factors that could impair our profitability, including the following: (i) competition from other transportation services companies, some of which offer different services or have a broader coverage network, more fully developed information technology systems and greater capital resources than we do; (ii) a reduction in the rates charged by our competitors to gain business, especially during times of declining economic growth, which may limit our ability to maintain or increase our rates, maintain our operating margins or achieve significant growth in our business; (iii) shippers soliciting bids from multiple carriers for their shipping needs, which may result in the depression of freight rates or loss of business to competitors; (iv) the establishment by our competitors of cooperative relationships to increase their ability to address shipper needs; (v) decisions by our current or prospective customers to develop or expand internal capabilities for some of the services we provide; (vi) the development of new technologies or business models that could result in our disintermediation in certain services we provide; and (vii) competition from other transportation services companies and technology companies that are aggressively pursuing strategies and business models to digitize their services and expand their digital service offerings, including through the development and implementation of new technology that provides a significant competitive advantage.
There are many factors that could impair our profitability, including the following: (i) competition from other transportation services companies, some of which offer different services or have a broader coverage network, more fully developed information technology systems and greater capital resources than we do; (ii) a reduction in the rates charged by our competitors to gain business, especially during times of declining economic growth, which may limit our ability to maintain or increase our rates, maintain our operating margins or achieve significant growth in our business; (iii) shippers soliciting bids from multiple carriers for their shipping needs, which may result in the depression of freight rates or loss of business to competitors; (iv) the establishment by our competitors of cooperative relationships to increase their ability to address shipper needs; (v) decisions by our current or prospective customers to develop or expand internal capabilities for some of the services we provide; (vi) the development of new technologies or business models that could result in our disintermediation in certain services we provide; and (vii) competition from other transportation services companies and technology companies that are aggressively pursuing strategies and business models to digitize their services and expand their digital service offerings, including through the development and implementation of new technology that provides a significant competitive advantage. 10 Table of Contents Economic recessions and other factors that reduce economic activity could have a material adverse impact on our business.
Any of these factors could have an adverse effect on our business, results of operations or financial condition, as well as on the price of our common stock. Volatility in fuel prices impacts our fuel surcharge revenue and may impact our profitability.
Any of these factors could have an adverse effect on our business, results of operations or financial condition, as well as on the price of our common stock. 11 Table of Contents Volatility in fuel prices impacts our fuel surcharge revenue and may impact our profitability.
In some instances where we have entered into contract freight rates with customers, in the event market conditions change and those contracted rates are below market rates, we may be required to provide transportation services at a loss.
In some instances where we have entered into contract freight rates with customers, in the event market conditions change and those contracted rates are below market rates, we may be required to provide transportation services at a loss or lower margin.
If we determine that our goodwill has become impaired, we may incur impairment charges, which would negatively impact our operating results. As of December 31, 2024, we had $1.1 billion of goodwill on our Consolidated Balance Sheet. Goodwill represents the excess of cost over the fair value of net assets acquired in business combinations.
If we determine that our goodwill has become impaired, we may incur impairment charges, which would negatively impact our operating results. As of December 31, 2025, we had $1.1 billion of goodwill on our Consolidated Balance Sheets. Goodwill represents the excess of cost over the fair value of net assets acquired in business combinations.
Any such failure could result in harm to our reputation and have an ongoing adverse impact 15 Table of Contents on our business, results of operations and financial condition, including after the underlying failures have been remedied.
Any such failure could result in harm to our reputation and have an ongoing adverse impact on our business, results of operations and financial condition, including after the underlying failures have been remedied.
In the future, existing holders of our common stock may be diluted because of equity issuances for acquisitions, capital market transactions or otherwise, including any equity awards that we will grant to our directors, officers and employees.
In the future, existing holders of our common stock may be diluted because of equity issuances for acquisitions, capital market transactions or otherwise, including any equity awards that we will grant to our directors, officers and employees. Our employees have stock-based awards that correspond to shares of our common stock.
These factors subject our business to various risks that may have a material impact on our operating results and future prospects. These risks may include the following: 11 Table of Contents • A reduction in overall freight volume reduces our opportunities for growth.
These factors subject our business to various risks that may have a material impact on our operating results and future prospects. These risks may include the following: • A reduction in overall freight volume reduces our opportunities for growth.
In addition, we have other expenses that are primarily variable but are fixed for a period of time, as well as certain significant fixed expenses; • A prolonged, escalated or expanded war in Ukraine or sanctions imposed in response to the war, the Israel-Hamas war and future conflicts may adversely impact global supply chain activities and the economy at large; and • The U.S. government has made significant changes in U.S. trade policy and has taken certain actions that have negatively impacted U.S. trade, including imposing tariffs on certain goods imported into the United States.
In addition, we have other expenses that are primarily variable but are fixed for a period of time, as well as certain significant fixed expenses; • Prolonged, escalated or expanded current and future international conflicts, and potential sanctions imposed in response to these conflicts, may adversely impact global supply chain activities and the economy at large; and • The U.S. government has made significant changes in U.S. trade policy and has taken certain actions that have negatively impacted U.S. trade, including imposing tariffs on certain goods imported into the United States.
We have grown rapidly and substantially over prior years, including by expanding our internal resources, making acquisitions and entering into new markets, and we intend to continue to focus on rapid growth, including organic growth and potentially additional acquisitions.
We may not successfully manage our growth. We have grown rapidly and substantially over prior years, including by expanding our internal resources, making acquisitions and entering into new markets, and we intend to continue to focus on rapid growth, including organic growth and potentially additional acquisitions.
We derive a significant portion of our total revenue from our largest customers. Our top five customers comprised approximately 23% of our consolidated total revenue for the year ended December 31, 2024. Our largest customer comprised approximately 9.9% of our consolidated total revenue for the year ended December 31, 2024.
We derive a significant portion of our total revenue from our largest customers. Our top five customers comprised approximately 23% of our consolidated total revenue for the year ended December 31, 2025. Our largest customer comprised approximately 11.4% of our consolidated total revenue for the year ended December 31, 2025.
Any such divestitures may not yield the targeted improvements in our business. Divestitures involve risks, including difficulties in the separation of operations, services, and personnel, disruption in our operations or businesses, finding a suitable purchaser, and the diversion of management’s attention from our other businesses.
We may in the future sell certain businesses or exit particular markets. Any such divestitures may not yield the targeted improvements in our business. Divestitures involve risks, including difficulties in the separation of operations, services, and personnel, disruption in our operations or businesses, finding a suitable purchaser, and the diversion of management’s attention from our other businesses.
Any failure to identify and address such defects or errors or prevent a cyber-attack could result in service interruptions, operational difficulties, loss of revenues or market share, liability to our customers or others, the diversion of corporate resources, injury to our reputation or increased service and maintenance costs.
We may be subject to cybersecurity attacks and other intentional hacking. Any failure to identify and address such defects or errors or prevent a cyber-attack could result in service interruptions, operational difficulties, loss of revenues or market share, liability to our customers or others, the diversion of corporate resources, injury to our reputation or increased service and maintenance costs.
These provisions include: • the ability of our remaining directors to fill vacancies on our board of directors; 23 Table of Contents • limitations on stockholders’ ability to call a special stockholder meeting or act by written consent; • rules regarding how stockholders may present proposals or nominate directors for election at stockholder meetings; • the right of our board of directors to issue preferred stock without stockholder approval; and • a classified board of directors, with each class serving a staggered three-year term, which could have the effect of making the replacement of incumbent directors more time consuming and difficult.
These provisions include: • the ability of our remaining directors to fill vacancies on our board of directors; • limitations on stockholders’ ability to call a special stockholder meeting or act by written consent; • rules regarding how stockholders may present proposals or nominate directors for election at stockholder meetings; • the right of our board of directors to issue preferred stock without stockholder approval; and • a classified board of directors, with each class serving a staggered three-year term, which could have the effect of making the replacement of incumbent directors more time consuming and difficult. 20 Table of Contents In addition, we are subject to Section 203 of the Delaware General Corporation Law (the “DGCL”), which could have the effect of delaying or preventing a change of control.
Any of these events could adversely affect our financial condition and results of operations. We may not realize all of the anticipated benefits of any divestitures we may make in the future, or the benefits of any such divestitures may take longer to realize than expected. We may in the future sell certain businesses or exit particular markets.
Any of these events could adversely affect our financial condition and results of operations. 19 Table of Contents We may not realize all of the anticipated benefits of any divestitures we may make in the future, or the benefits of any such divestitures may take longer to realize than expected.
Our ability to issue debt or enter into other financing arrangements on acceptable terms could be adversely affected if there is a material decline in the demand for our services or in the financial health of our customers or suppliers or if there are other significantly unfavorable changes in economic conditions. 16 Table of Contents We incurred debt obligations that could adversely affect our business and profitability and our ability to meet other obligations.
Our ability to issue debt or enter into other financing arrangements on acceptable terms could be adversely affected if there is a material decline in the demand for our services or in the financial health of our customers or suppliers or if there are other significantly unfavorable changes in economic conditions.
If we fail to comply with any of the covenants under our debt and are unable to obtain a waiver or amendment, such failure may result in an event of default under our indebtedness. We may not have sufficient liquidity to repay or refinance our indebtedness if such indebtedness were accelerated upon an event of default.
If we fail to comply with any of the covenants under our debt and are unable to obtain a waiver or amendment, such failure may result in an event of default under our indebtedness.
We are implementing various cost and revenue initiatives to further increase our profitability, including advanced pricing analytics and revenue management tools, our digital brokerage platform, our shared distribution network, cross-selling to strategic accounts, workforce productivity and further back-office optimization.
We are implementing various cost and revenue initiatives to further increase our profitability, including advanced pricing analytics and revenue management tools, our digital brokerage platform, our shared distribution network, cross-selling to strategic accounts, workforce productivity and further back-office optimization. If we are not able to successfully implement these cost and revenue initiatives, our future financial results may suffer.
As of December 31, 2024, we had $374 million of outstanding debt and finance leases, consisting primarily of $355 million of our unsecured notes, in addition to $600 million of undrawn commitments under the unsecured, multi-currency revolving credit facility that matures in 2029 (the “Revolver”). We may also incur additional indebtedness in the future.
As of December 31, 2025, we had $408 million of outstanding debt and finance leases, consisting primarily of $355 million of our unsecured notes, in addition to $565 million of undrawn commitments under the unsecured, multi-currency revolving credit facility that matures in 2029 (the “Revolver”).
Significant changes in the price or availability of fuel in future periods, or significant changes in our ability to mitigate fuel price increases through the use of fuel surcharges, could have a material adverse impact on our operations, fleet capacity and ability to generate both revenues and profits. 12 Table of Contents Higher carrier prices may result in decreased income from operations and increases in working capital usage.
Significant changes in the price or availability of fuel in future periods, or significant changes in our ability to mitigate fuel price increases through the use of fuel surcharges, could have a material adverse impact on our operations, fleet capacity and ability to generate both revenues and profits.
Material increases in liability claims or workers’ compensation claims, or the unfavorable resolution of claims, or our failure to recover, in full or in part, under indemnity provisions could materially and adversely affect our operating results.
Material increases in liability claims or workers’ compensation claims, or the unfavorable resolution of claims, or our failure to recover, in full or in part, under indemnity provisions could materially and adversely affect our operating results. In addition, significant increases in insurance costs or the inability to purchase insurance as a result of these claims could reduce our profitability.
Our stockholders will not be deemed to have waived compliance with the federal securities laws and the rules and regulations thereunder. 24 Table of Contents This exclusive forum provision may limit the ability of our stockholders to bring a claim in a judicial forum that such stockholders find favorable for disputes with RXO or our directors or officers, which may discourage such lawsuits against RXO and our directors and officers.
This exclusive forum provision may limit the ability of our stockholders to bring a claim in a judicial forum that such stockholders find favorable for disputes with RXO or our directors or officers, which may discourage such lawsuits against RXO and our directors and officers.
Such awards will have a dilutive effect on the number of RXO shares outstanding, and therefore on our earnings per share, which could adversely affect the market price of our common stock.
We anticipate that the compensation committee of our board of directors will grant additional stock-based awards to our employees under the employee benefits plan. Such awards will have a dilutive effect on the number of RXO shares outstanding, and therefore on our earnings per share, which could adversely affect the market price of our common stock.
In addition, significant increases in insurance costs or the inability to purchase insurance as a result of these claims could reduce our profitability. 17 Table of Contents Our third-party carriers are subject to increasingly stringent laws protecting the environment, including transitional risks relating to climate change, which could directly or indirectly have a material adverse effect on our business.
Our third-party carriers are subject to increasingly stringent laws protecting the environment, including transitional risks relating to climate change, which could directly or indirectly have a material adverse effect on our business.
Our technology may not be successful or may not achieve the desired results, and we may require additional training or different personnel to successfully implement this technology. Our technology development process may be subject to cost overruns or delays in obtaining the expected results, which may result in disruptions to our operations.
Our technology may not be successful or may not achieve the desired results, and we may require additional training or different personnel to successfully implement this technology.
Motor carriers can be expected to charge higher prices if market conditions warrant or to cover higher operating expenses. Our income from operations may decrease if we are unable to increase our pricing to our customers. Increased demand for over the road transportation services and changes in regulations may reduce available capacity and increase motor carrier pricing.
Higher carrier prices may result in decreased income from operations and increases in working capital usage. Motor carriers can be expected to charge higher prices if market conditions warrant or to cover higher operating expenses. Our income from operations may decrease if we are unable to increase our pricing to our customers.
Any sales in connection with the Registration Rights Agreement and such purchase agreements, or the prospect of any such sales, could adversely impact the market price of our common stock. Any stockholder’s percentage of ownership in RXO may be diluted in the future at any given time.
Any sales of these registered shares, or the prospect of any such sales, could adversely impact the market price of our common stock and could impair our ability to raise capital through future sales of equity securities. Any stockholder’s percentage of ownership in RXO may be diluted in the future at any given time.
Unauthorized access to data and other confidential or proprietary information may be obtained through break-ins, network breaches by unauthorized parties, employee theft or misuse, or other misconduct.
Any security incident involving such third parties could compromise the integrity or availability of, or result in the theft of, our and our customers’ data. Unauthorized access to data and other confidential or proprietary information may be obtained through break-ins, network breaches by unauthorized parties, employee theft or misuse, or other misconduct.
These third parties may have access to our systems, provide hosting services or otherwise process data about us or our customers, employees or partners. Our ability to monitor such third parties’ security measures is limited. Any security incident involving such third parties could compromise the integrity or availability of, or result in the theft of, our and our customers’ data.
We rely on third parties to provide us with a number of operational and technical services. These third parties may have access to our systems, provide hosting services or otherwise possess data about us or our customers, employees or partners. Our ability to monitor such third parties’ security measures is limited.
Further successful unionization by our employees or organizing efforts could lead to business interruptions, work stoppages and the reduction of service levels due to work rules that could have an adverse effect on our customer relationships and our revenues, earnings, financial position and outlook. 14 Table of Contents Risks Related to Our Use of Technology Our business will be seriously harmed if we fail to develop, implement, maintain, upgrade, enhance, protect and integrate our information technology systems, including those systems of any businesses that we acquire.
Further successful unionization by our employees or organizing efforts could lead to business interruptions, work stoppages and the reduction of service levels due to work rules that could have an adverse effect on our customer relationships and our revenues, earnings, financial position and outlook.
Efforts to enforce our intellectual property rights may be time-consuming and costly, distract management’s attention, divert our resources and ultimately be unsuccessful. Moreover, should we fail to develop and properly manage future intellectual property, this could adversely affect our market positions and business opportunities.
Efforts to enforce our intellectual property rights may be time-consuming and costly, distract management’s attention, divert our resources and ultimately be unsuccessful.
We could be affected by cyberattacks or breaches of our information systems, any of which could have a material adverse effect on our business. We may be subject to cybersecurity attacks and other intentional hacking.
Our technology development process may be subject to cost overruns or delays in obtaining the expected results, which may result in disruptions to our operations. 14 Table of Contents We could be affected by cyberattacks or breaches of our information systems, any of which could have a material adverse effect on our business.
Third-party security incidents could result in the loss of our or our customers’ data, expose us to liability, harm our reputation, damage our competitiveness and adversely impact our financial results. We rely on third parties to provide us with a number of operational and technical services.
Moreover, should we fail to develop and properly manage future intellectual property, this could adversely affect our market positions and business opportunities. 15 Table of Contents Third-party security incidents could result in the loss of our or our customers’ data, expose us to liability, harm our reputation, damage our competitiveness and adversely impact our financial results.
The resulting types and/or amounts of damages may be excluded by or exceed the amount of insurance coverage maintained by the third-party carrier.
From time to time, the drivers employed and engaged by the motor carriers we contract with are involved in accidents, which may result in serious personal injuries. The resulting types and/or amounts of damages may be excluded by or exceed the amount of insurance coverage maintained by the third-party carrier.
As of December 31, 2024, JPE and the significant stockholders beneficially owned 21.6 million shares of our common stock with registration rights, which represents approximately 13.3% of our outstanding shares of common stock.
We have entered into agreements with certain stockholders that granted such stockholders certain registration rights. Pursuant to these agreements, we registered for resale 28.5 million shares of our common stock, which represents approximately 17.4% of our outstanding shares of common stock as of December 31, 2025.
Removed
Economic recessions and other factors that reduce economic activity could have a material adverse impact on our business.
Added
Increased demand for over-the-road transportation services, changes in regulations and increased enforcement of existing regulations may reduce available capacity and increase motor carrier pricing.
Removed
If we are not able to successfully implement these cost and revenue initiatives, our future financial results may suffer. 18 Table of Contents We may not successfully manage our growth.
Added
Risks Related to Our Use of Technology Our business will be seriously harmed if we fail to develop, implement, maintain, upgrade, enhance, protect and integrate our information technology systems, including those systems of any businesses that we acquire.
Removed
Risks Related to the Acquisition of Coyote We may be unable to integrate Coyote successfully and realize the anticipated benefits of the Coyote acquisition. On September 16, 2024, we completed the acquisition of Coyote for $1.038 billion in cash, subject to certain additional customary adjustments.
Added
We use, and may continue to expand our use of, machine learning and artificial intelligence (“AI”) technologies to deliver our services and operate our business.
Removed
The successful integration of Coyote and operations into those of our own and our ability to realize the expected synergies and benefits of the transaction are subject to a number of risks and uncertainties, many of which are outside of our control.
Added
If we fail to successfully integrate AI into our platform and business processes, or if we fail to keep pace with rapidly evolving AI technological developments, including attracting and retaining talented AI developers and programmers and cybersecurity personnel, we may face a competitive disadvantage.
Removed
We will also be required to devote significant management attention and resources to integrating business practices, cultures and operations of each business.
Added
At the same time, the use or offering of AI technologies may result in new or expanded risks and liabilities, including enhanced government or regulatory scrutiny, litigation, privacy and compliance issues, ethical concerns, confidentiality, reputational harm, and security risks.
Removed
The risks and uncertainties relating to integrating the two businesses include, among other things: • the challenge of integrating complex organizations, systems, operating procedures, compliance programs, technology, networks and other assets of Coyote; • the difficulties harmonizing differences in the business cultures of our company and Coyote; • the difficulties of integrating Coyote's European business and operating it in a complex commercial and regulatory environment; • the inability to successfully integrate our respective businesses in a manner that permits us to achieve the cost savings, synergies and other anticipated benefits from the Coyote acquisition; • the inability to minimize the diversion of management attention from ongoing business concerns during the process of integrating Coyote into our businesses; • the inability to resolve potential conflicts that may arise relating to customer, supplier and other important relationships of our business and Coyote; • difficulties in retaining key management and other key employees; and • the challenge of managing the expanded operations of a significantly larger and more complex company and coordinating geographically separate organizations. 20 Table of Contents We incurred substantial expenses to consummate the Coyote acquisition but may not realize the anticipated cost synergies and other benefits.
Added
It is not possible to predict all of the risks related to the use of AI and changes in laws, rules, directives, and regulations governing the use of AI that may adversely affect our ability to develop and use AI or subject us to legal liability.
Removed
In addition, even if we are able to integrate Coyote successfully, the anticipated benefits of the Coyote acquisition may not be realized fully, or at all, or may take longer to realize than expected.
Added
The cost of complying with laws and regulations governing AI could be significant and would increase our operating expenses, which could adversely affect our business, financial condition and results of operations. Further, market demand and acceptance of AI technologies are uncertain, and we may be unsuccessful in efforts to further incorporate AI into our processes.
Removed
Given the size and significance of the Coyote acquisition, we may encounter difficulties in the integration of the operations of Coyote and may fail to realize the full benefits and synergies of the Coyote acquisition, which could adversely impact our business, results of operation and financial condition. Coyote may have liabilities that are not known to us.
Added
We incurred debt obligations that could adversely affect our business and profitability and our ability to meet other obligations.
Removed
Coyote may have liabilities that we failed, or were unable, to discover in the course of performing our due diligence investigations.
Added
On February 5, 2026, we entered into the ABL Facility (as defined below) and, in connection therewith, the Revolver was fully repaid and terminated. Refer to Note 10 — Debt to the consolidated financial statements for additional information. We may also incur additional indebtedness in the future.
Removed
We cannot assure you that the indemnification available to us under the purchase agreement in respect of the Coyote acquisition in connection with such agreement will be sufficient in amount, scope or duration to fully offset the possible liabilities associated with the business of Coyote or property that we assumed upon consummation of the Coyote acquisition.
Added
Our stockholders will not be deemed to have waived compliance with the federal securities laws and the rules and regulations thereunder.
Removed
We may learn additional information about Coyote that materially adversely affects us, such as unknown or contingent liabilities and liabilities related to compliance with applicable laws. Any such liabilities, individually or in the aggregate, could have a material adverse effect on our business, financial condition and results of operations. Acquisition accounting adjustments could adversely affect our financial results.
Removed
We account for the Coyote acquisition using the acquisition method of accounting. We allocate the total estimated purchase price to net tangible assets and amortizable intangible assets, and based on their fair values as of the acquisition date record the excess, if any, of the purchase price over those fair values as goodwill.
Removed
Differences between preliminary estimates and the final acquisition accounting may occur, and these differences could have a material impact on the consolidated financial statements and the combined company’s future results of operations and financial position.
Removed
Risks Related to the Separation We have a limited operating history as a standalone, publicly traded company, and our historical financial information, prior to the Separation, is not necessarily representative of the results we would have achieved as a standalone, publicly traded company and may not be a reliable indicator of our future results.
Removed
The financial information in this Annual Report refers to RXO as a public company that began regular-way trading on November 1, 2022. Prior to the Separation, we derived our combined financial statements from XPO’s accounting records and presented these on a standalone basis as if RXO had been operated independently from XPO.
Removed
Our historical financial information, prior to the Separation, does not necessarily reflect the financial condition, results of operations or cash flows that we will achieve as a standalone publicly traded company. Prior to the Separation, we were able to benefit from XPO’s shared economies of scope and scale in costs, employees, vendor relationships and customer relationships.
Removed
Additionally, XPO performed various corporate functions for us, such as legal, treasury, accounting, human resources, investor relations, and finance. Our historical financial results, prior to the Separation, reflect allocations of corporate expenses from XPO for such functions, which may be less than the expenses we will incur as a separate, publicly traded company.
Removed
In addition, our working capital requirements and capital for our general corporate purposes, including capital expenditures and acquisitions, historically were part of the corporate-wide cash management policies of XPO.
Removed
Following the completion of the Separation, our results of operations, cash flows, working capital and financing requirements may be subject to increased volatility and our ability to fund capital expenditures and investments, and service debt, may be diminished and we may need to obtain additional financing from banks, through public offerings or private placements of debt or equity securities, strategic relationships or other arrangements, which may or may not be available and may be more costly.
Removed
For these reasons, as well as the additional risks related to the Separation noted below, we may not achieve the expected benefits of the Separation. 21 Table of Contents If the Separation, together with certain related transactions, does not qualify as a transaction that is generally tax-free for U.S. federal income tax purposes, we could be subject to significant tax liabilities, and, in certain circumstances, we could be required to indemnify XPO for material amounts of taxes and other related amounts pursuant to indemnification obligations under the TMA.
Removed
In addition, if certain internal restructuring transactions were to fail to qualify as transactions that are generally tax-free for U.S. federal or non-U.S. income tax purposes, we, as well as XPO, could be subject to significant tax liabilities.
Removed
In connection with the Separation, XPO received an opinion of outside counsel regarding the qualification of the Separation, together with certain related transactions, as a “reorganization” within the meaning of Sections 355 and 368(a)(1)(D) of the Internal Revenue Code (the “Code”).
Removed
The opinion of counsel was based upon and relies on, among other things, various facts and assumptions, as well as certain representations, statements and undertakings of XPO and RXO, including those relating to the past and future conduct of XPO and RXO.

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Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

4 edited+1 added−0 removed4 unchanged
Biggest changeOur CIO has over 30 years of experience in the technology field, and our CISO has over 20 years of experience in the technology and cybersecurity fields, including over 10 years of experience as a CISO or Head of Information Security for various organizations.
Biggest changeOur HIS has more than 30 years of experience in the technology and cybersecurity fields, including 20 years of cybersecurity experience in the U.S. defense industrial base. Our CFO has over 35 years of experience, inclusive of roles with direct oversight of information technology.
Our cybersecurity risk management and identification has been integrated into our broader enterprise risk management framework which is regularly reported on to the Audit Committee of our Board of Directors. Additionally, our CIO and CISO provide periodic reports to our Board of Directors, as well as to our Chief Executive Officer and other members of our senior management as appropriate.
Our cybersecurity risk management and identification has been integrated into our broader enterprise risk management framework which is regularly reported on to the Audit Committee of our Board of Directors. Additionally, our HIS provides periodic reports to our Board of Directors, as well as to our Chief Executive Officer and other members of our senior management as appropriate.
ITEM 1C. CYBERSECURITY Our information security program is managed by our Chief Information Officer (“CIO”) and Chief Information Security Officer (“CISO”), who are responsible for assessing, monitoring and managing our cybersecurity risks.
Item 1C. Cybersecurity. Our information security program is managed by our Head of Information Security (“HIS”), who is responsible for assessing, monitoring and managing our cybersecurity risks. Our Chief Financial Officer (“CFO”) provides oversight of our information security program.
These reports include updates on our cybersecurity risks and threats, the status of activities to strengthen our information security systems, assessments of the information security program, and the emerging threat landscape.
These reports include updates on our cybersecurity risks and threats, the status of activities to strengthen our information security systems, assessments of the information security program, and the emerging threat landscape. We have implemented robust incident monitoring and response processes, which are overseen by our HIS.
Added
Security events are evaluated, ranked by severity and prioritized for response and remediation by the information technology team. Incidents are evaluated to determine materiality as well as operational, business and privacy impacts and are reported to management as appropriate.

Item 2. Properties

Properties — owned and leased real estate

3 edited+0 added−0 removed0 unchanged
Biggest changeLocation Leased Facilities Owned Facilities Customer Facilities (1) Total North America 154 2 21 177 Asia 8 — — 8 Europe 7 — — 7 Corporate 6 — — 6 Total 175 2 21 198 (1) Locations owned or leased by customers. We lease our current executive office located in Charlotte, North Carolina.
Biggest changeLocation Leased Facilities Customer Facilities (1) Total North America 132 20 152 Asia 8 — 8 Europe 6 — 6 Corporate 5 — 5 Total 151 20 171 (1) Locations owned or leased by customers. We lease our current executive office located in Charlotte, North Carolina.
ITEM 2. PROPERTIES As of December 31, 2024, we operated 198 principal locations, primarily located in North America, including 21 locations owned or leased by our customers.
Item 2. Properties. As of December 31, 2025, we operated 171 principal locations, primarily located in North America, including 20 locations owned or leased by our customers.
We believe that our facilities are sufficient for our current needs.
We believe that our facilities are sufficient for our current needs. 22 Table of Contents

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

1 edited+1 added−1 removed0 unchanged
Biggest changeITEM 3. LEGAL PROCEEDINGS Information with respect to certain legal proceedings is included in Note 1 7 — Commitments and Contingencies to our consolidated financial statements (included in Part II, Item 8 of this Annual Report) and is incorporated herein by reference.
Biggest changeItem 3. Legal Proceedings. Information with respect to certain legal proceedings is included in Note 17 — Commitments and Contingencies to our consolidated financial statements (included in Part II, Item 8 of this Annual Report) and is incorporated herein by reference. For an additional discussion of certain risks associated with legal proceedings, see “Risk Factors” above. Item 4.
Removed
For an additional discussion of certain risks associated with legal proceedings, see “Risk Factors” above. 26 Table of Contents
Added
Mine Safety Disclosures. Not applicable. 23 Table of Contents PART II

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

3 edited+0 added−0 removed2 unchanged
Biggest changeThe stock performance assumes $100 was invested on November 1, 2022, in our common stock and each index, including reinvestment of dividends through December 31, 2024. 28 Table of Contents 11/1/2022 12/31/2022 6/30/2023 12/31/2023 6/30/2024 12/31/2024 RXO, Inc. $ 100.00 $ 90.24 $ 118.94 $ 122.04 $ 137.20 $ 125.08 Dow Jones Transportation Average $ 100.00 $ 99.05 $ 114.86 $ 117.59 $ 114.01 $ 117.56 S&P SmallCap 600 $ 100.00 $ 96.39 $ 101.28 $ 109.77 $ 108.00 $ 117.26 Unregistered Sales of Equity Securities and Use of Proceeds None.
Biggest changeThe stock performance assumes $100 was invested on November 1, 2022, in our common stock and each index, including reinvestment of dividends through December 31, 2025. 24 Table of Contents 11/1/2022 12/31/2022 12/31/2023 12/31/2024 12/31/2025 RXO, Inc. $ 100.00 $ 90.24 $ 122.04 $ 125.08 $ 66.32 Dow Jones Transportation Average $ 100.00 $ 99.05 $ 117.59 $ 117.56 $ 128.37 S&P SmallCap 600 $ 100.00 $ 96.39 $ 109.77 $ 117.26 $ 122.22 Unregistered Sales of Equity Securities and Use of Proceeds None.
Stock Performance Graph The following graph sets forth the cumulative total stockholder return to RXO’s stockholders for the period beginning November 1, 2022, the date of the Separation, through December 31, 2024, as well as the corresponding returns on the Dow Jones Transportation Average and S&P SmallCap 600 index.
Stock Performance Graph RXO became a standalone publicly traded company on November 1, 2022. The following graph sets forth the cumulative total stockholder return to RXO’s stockholders for the period beginning November 1, 2022, through December 31, 2025, as well as the corresponding returns on the Dow Jones Transportation Average and S&P SmallCap 600 index.
ITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES Market Information On November 1, 2022, our common stock began regular-way trading on the New York Stock Exchange (“NYSE”) under the ticker symbol “RXO.” As of February 24, 2025, there were approximately 98 registered holders of our common stock.
Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities. Market Information Our common stock is traded on the New York Stock Exchange under the ticker symbol “RXO.” As of February 5, 2026, there were approximately 94 registered holders of our common stock.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

44 edited+21 added−21 removed31 unchanged
Biggest changeRXO has one reportable segment. 32 Table of Contents Results of Operations Years Ended December 31, Percent of Revenue (Dollars in millions) 2024 2023 2022 2024 2023 2022 Revenue $ 4,550 $ 3,927 $ 4,796 100.0 % 100.0 % 100.0 % Cost of transportation and services (exclusive of depreciation and amortization) 3,565 2,967 3,624 78.4 % 75.6 % 75.6 % Direct operating expense (exclusive of depreciation and amortization) 202 235 226 4.4 % 6.0 % 4.7 % Sales, general and administrative expense 666 591 640 14.6 % 15.0 % 13.3 % Depreciation and amortization expense 87 67 86 1.9 % 1.7 % 1.8 % Transaction and integration costs 53 12 84 1.2 % 0.3 % 1.8 % Restructuring costs 33 16 13 0.7 % 0.4 % 0.3 % Operating income (loss) (56) 39 123 (1.2) % 1.0 % 2.6 % Other expense 218 3 — 4.8 % 0.1 % — % Interest expense, net 30 32 4 0.7 % 0.8 % 0.1 % Income (loss) before income taxes (304) 4 119 (6.7) % 0.1 % 2.5 % Income tax provision (benefit) (14) — 27 (0.3) % — % 0.6 % Net income (loss) $ (290) $ 4 $ 92 (6.4) % 0.1 % 1.9 % Year Ended December 31, 2024 Compared with Year Ended December 31, 2023 Revenue increased by 15.9% to $4.6 billion in 2024, compared with $3.9 billion in 2023.
Biggest changeRXO has one reportable segment. 27 Table of Contents Results of Operations Years Ended December 31, Percent of Revenue (Dollars in millions) 2025 2024 2023 2025 2024 2023 Revenue $ 5,742 $ 4,550 $ 3,927 100.0 % 100.0 % 100.0 % Cost of transportation and services (exclusive of depreciation and amortization) 4,611 3,565 2,967 80.3 % 78.4 % 75.6 % Direct operating expense (exclusive of depreciation and amortization) 190 202 235 3.3 % 4.4 % 6.0 % Sales, general and administrative expense 832 666 591 14.5 % 14.6 % 15.0 % Depreciation and amortization expense 116 87 67 2.0 % 1.9 % 1.7 % Transaction and integration costs 22 53 12 0.4 % 1.2 % 0.3 % Restructuring costs 38 33 16 0.7 % 0.7 % 0.4 % Goodwill impairment 12 — — 0.2 % — % — % Operating income (loss) (79) (56) 39 (1.4) % (1.2) % 1.0 % Other expense 1 218 3 — % 4.8 % 0.1 % Interest expense, net 35 30 32 0.6 % 0.7 % 0.8 % Income (loss) before income taxes (115) (304) 4 (2.0) % (6.7) % 0.1 % Income tax provision (benefit) (15) (14) — (0.3) % (0.3) % — % Net income (loss) $ (100) $ (290) $ 4 (1.7) % (6.4) % 0.1 % Year Ended December 31, 2025 Compared with Year Ended December 31, 2024 Revenue increased by 26.2% to $5.7 billion in 2025, compared with $4.6 billion in 2024.
A prolonged period of inflation could cause interest rates, fuel, wages and other costs to continue to increase, which would adversely affect our results of operations unless our pricing to our customers correspondingly increases. Generally, inflationary increases in labor and operating costs related to our operations have historically been offset through price increases.
A prolonged period of inflation could cause interest rates, fuel, wages and other costs to increase, which would adversely affect our results of operations unless our pricing to our customers correspondingly increases. Generally, inflationary increases in labor and operating costs related to our operations have historically been offset through price increases.
We acquired Coyote for $1.038 billion in cash, subject to certain additional customary adjustments. The purchase price was subsequently increased by $10 million for working capital and other post-closing adjustments totaling $10 million, which was paid in the first quarter of 2025.
We acquired Coyote for $1.038 billion in cash, subject to certain additional customary adjustments. The purchase price was subsequently increased by $10 million for working capital and other post-closing adjustments, which was paid in the first quarter of 2025.
The income approach of determining fair value is based on the present value of estimated future cash flows, which requires us to make various judgmental assumptions, including assumptions about the timing and amount of future cash flows, growth rates and discount rates.
The income approach of determining fair value is based on the present value of estimated future cash flows, which requires us to make various assumptions, including assumptions about the timing and amount of future cash flows, growth rates and discount rates.
Discussions of 2022 items and year-to-year comparisons between 2023 and 2022 are not included in this Annual Report and can be found in Part II, Item 7, “ Management’s Discussion and Analysis of Financial Condition and Results of Operations ” in our Annual Report on Form 10-K for the year ended December 31, 2023.
Discussions of 2023 items and year-to-year comparisons between 2024 and 2023 are not included in this Annual Report and can be found in Part II, Item 7, “ Management’s Discussion and Analysis of Financial Condition and Results of Operations ” in our Annual Report on Form 10-K for the year ended December 31, 2024.
For further discussion of potential impacts of these macroeconomic effects on our business, refer to Item 1 A — Risk Factors . Impact of Inflation Economic inflation can have a negative impact on our operating costs, and any economic recession could depress activity levels and adversely affect our results of operations.
For further discussion of potential impacts of these macroeconomic effects on our business, refer to Item 1A — Risk Factors . Impact of Inflation Economic inflation can have a negative impact on our operating costs, and any economic recession could depress activity levels and adversely affect our results of operations.
Capital Expenditures Our 2024 capital expenditures include capital associated with strategic investments in technology, equipment and real estate. The level and the timing of the Company’s capital expenditures within these categories can vary as a result of a variety of factors outside of our control, such as the timing of new contracts and availability of labor and equipment.
Capital Expenditures Our 2025 capital expenditures include capital associated with strategic investments in technology, equipment and real estate. The level and the timing of the Company’s capital expenditures within these categories can vary as a result of a variety of factors outside of our control, such as the timing of new contracts and availability of labor and equipment.
Liquidity and Capital Resources Overview Our ability to fund our operations and anticipated capital needs are reliant upon the generation of cash from operations, supplemented as necessary by utilization of our revolving credit facilities.
Liquidity and Capital Resources Overview Our ability to fund our operations and anticipated capital needs are reliant upon the generation of cash from operations, supplemented as necessary by utilization of our revolving credit facility.
Debt and Financing Arrangements Revolving Credit Facilities On October 18, 2022, we entered into a five-year, $500 million, unsecured, multi-currency revolving credit facility (the “Revolver”) with $50 million available for the issuance of letters of credit. Loans under the Revolver bear interest at a fluctuating rate plus an applicable margin based on the Company's credit ratings.
Revolving Credit Facilities On October 18, 2022, we entered into a five-year, $500 million unsecured, multi-currency revolving credit facility (the “Revolver”) with $50 million available for the issuance of letters of credit. Loans under the Revolver bear interest at a fluctuating rate plus an applicable margin based on the Company's credit ratings.
This section of this Annual Report generally discusses 2024 and 2023 items and year-to-year comparisons between 2024 and 2023.
This section of this Annual Report generally discusses 2025 and 2024 items and year-to-year comparisons between 2025 and 2024.
Insurance We participate in a combination of self-insurance programs and purchased insurance that are managed to provide for the costs of medical, casualty, liability, vehicular, cargo, workers’ compensation, cyber risk and property claims. Insurance coverage levels are adjusted annually based on risk tolerance and premium expense.
Insurance We participate in a combination of self-insurance programs, partially through our wholly-owned captive insurance company, and purchased insurance that are managed to provide for the costs of medical, casualty, liability, vehicular, cargo, workers’ compensation, cyber risk and property claims. Insurance coverage levels are adjusted annually based on risk tolerance and premium expense.
Our effective income tax rates were 4.6% and (13.0)% for 2024 and 2023, respectively. Our effective tax rate for 2024 differs from the U.S. corporate income tax rate of 21% primarily due to the effect of large non-deductible tax items associated with the Coyote acquisition and related common stock issuances.
Our effective tax rate for 2024 differs from the U.S. corporate income tax rate of 21% primarily due to the effect of large non-deductible tax items associated with the Coyote acquisition and related common stock issuances.
There were no amounts outstanding under the Revolver as of December 31, 2024. On November 2, 2023, the Company exercised a feature to increase the total commitments under its Revolver from $500 million to $600 million. 34 Table of Contents The Revolver requires the Company to maintain a minimum interest coverage ratio of not less than 3.00:1.00.
There was $35 million outstanding under the Revolver as of December 31, 2025. On November 2, 2023, the Company exercised a feature to increase the total commitments under its Revolver from $500 million to $600 million. The Revolver requires the Company to maintain a minimum interest coverage ratio of not less than 3.00:1.00.
Our forecasts also reflect expectations concerning future economic conditions, interest rates and other market data. The market approach of determining fair value is based on comparable market multiples for companies engaged in similar businesses, as well as recent transactions within our industry. We believe our approach, which utilizes multiple valuation techniques, yields the most appropriate evidence of fair value.
Our forecasts also reflect expectations concerning future economic conditions, interest rates and other market data. The market approach of determining fair value is based on comparable market multiples for companies engaged in similar businesses, as well as recent transactions within our industry.
We are the largest provider of outsourced last mile transportation for heavy goods in the United States, positioned within 125 miles of the vast majority of the U.S. population and serving a customer base of omnichannel and e-commerce retailers and direct-to-consumer manufacturers.
We are the largest provider of outsourced last mile transportation for heavy goods in the U.S., positioned within 125 miles of the vast majority of the U.S. population and serving a customer base of omnichannel and e-commerce retailers and direct-to-consumer manufacturers. 26 Table of Contents The Coyote Acquisition On September 16, 2024, the Company acquired Coyote from UPS and certain subsidiaries of UPS.
For our 2024 goodwill assessment, we performed a quantitative analysis for our reporting units using a combination of the income and market approaches.
For our 2025 goodwill assessment, we performed a quantitative analysis for our reporting units using a combination of the income and market approaches. As of November 30, 2025, we completed our annual impairment tests for goodwill.
In addition, we offer technology-enabled managed expedite services that automate transportation procurement for time-critical freight moved by road and air charter carriers. We also offer freight forwarding services, including facilitation of ocean and air transportation, customs brokerage and additional domestic services. Our last mile offering is an asset-light service that facilitates consumer deliveries performed by highly qualified third-party contractors.
In addition, we offer technology-enabled managed expedite services that automate transportation procurement for time-critical freight moved by road and air charter carriers. We also offer freight forwarding services, including facilitation of ocean and air transportation, customs brokerage and additional domestic services including middle mile.
Many of the factors used in assessing fair value are outside the control of management, and assumptions and estimates may change in future periods. Changes in assumptions or estimates could materially affect the estimate of the fair value of a reporting unit, and therefore could affect the likelihood and amount of any potential impairment.
Changes in assumptions or estimates could materially affect the estimate of the fair value of a reporting unit, and therefore could affect the likelihood and amount of any potential impairment.
However, the pricing environment generally becomes more competitive during economic downturns, which may, as it has in the past, affect our ability to obtain price increases from customers both during and following such periods.
However, the pricing environment generally becomes more competitive during economic downturns, which may, as it has in the past, affect our ability to obtain price increases from customers both during and following such periods. Basis of Presentation Cost of transportation and services (exclusive of depreciation and amortization) primarily includes the cost of providing or procuring freight transportation for RXO customers.
We also have a non-U.S. revolving credit facility with a maximum commitment of approximately $14 million. This facility has a one-year term and we had $14 million outstanding as of December 31, 2024 classified as short-term debt. See Note 10 — Debt to the consolidated financial statements for additional information.
We also have a non-U.S. revolving credit facility with a maximum commitment of approximately $17 million. This facility has a one-year term and we had $15 million outstanding as of December 31, 2025 classified as short-term debt.
This amendment also extended the Revolver maturity date to September 16, 2029, subject to a springing earlier maturity date based on outstanding borrowings under the Company’s existing notes. Refer to Note 10 — Debt to the consolidated financial statements for additional information. We also have a non-U.S. revolving credit facility with a maximum commitment of approximately $14 million.
This amendment also extended the Revolver maturity date to September 16, 2029, subject to a springing earlier maturity date based on outstanding borrowings under the Company’s existing notes. Refer to Note 10 — Debt to the consolidated financial statements for additional information. As of December 31, 2025, the Company had $565 million committed under the Revolver, net of outstanding borrowings.
A summary of our significant accounting policies is contained in Note 2 — Basis of Presentation and Significant Accounting Policies to our consolidated financial statements.
Critical Accounting Policies and Estimates We prepare our consolidated financial statements in accordance with U.S. generally accepted accounting principles (“GAAP”). A summary of our significant accounting policies is contained in Note 2 — Basis of Presentation and Significant Accounting Policies to our consolidated financial statements.
We believe that we have significant discretion over the amount and timing of our capital expenditures as we are not subject to any agreement that would require significant capital expenditures on a designated schedule or upon the occurrence of designated events.
We believe that we have significant discretion over the amount and timing of our capital expenditures as we are not subject to any agreement that would require significant capital expenditures on a designated schedule or upon the occurrence of designated events. 29 Table of Contents Debt and Financing Arrangements Notes On October 25, 2022, we completed an offering of $355 million in aggregate principal amount of unsecured notes (the “Notes” or the “7.50% Notes due 2027”).
During the measurement period, which is up to one year from the acquisition date, we may adjust provisional amounts that were recognized at the acquisition date to reflect new information obtained about facts and circumstances that existed as of the acquisition date.
During the measurement period, which is up to one year from the acquisition date, we may adjust provisional amounts that were recognized at the acquisition date to reflect new information obtained about facts and circumstances that existed as of the acquisition date. 32 Table of Contents Determining the fair value of assets acquired and liabilities assumed requires our management to make significant estimates and assumptions for intangible assets, contract obligations assumed, and pre-acquisition contingencies, where applicable.
Investing activities used $1,064 million of cash in 2024 compared with $66 million of cash used in 2023. The primary uses of cash in 2024 were (i) $1,019 million for the acquisition of Coyote, net of cash acquired, and (ii) $45 million to purchase property and equipment. The primary use of cash in 2023 was to purchase property and equipment.
The primary uses of cash in 2024 were (i) $1.0 billion for the acquisition of Coyote, net of cash acquired, and (ii) $45 million for purchases of property and equipment. 31 Table of Contents Net cash provided by financing activities in 2025 was $1 million compared with $1.1 billion in 2024.
The year-over-year increase in revenue was driven primarily by a $796 million increase in revenue as a result of the Coyote acquisition in our truck brokerage business.
The year-over-year increase in revenue in 2025 was driven by (i) a $1.2 billion increase in truck brokerage revenue, primarily as a result of the Coyote acquisition and (ii) a $141 million increase in last mile revenue, primarily as a result of a 13% increase in volume.
Refer to Note 3 — Acquisition for additional information related to assets acquired and liabilities assumed. 35 Table of Contents Cash Flow Activity Our cash flows from operating, investing and financing activities are summarized as follows: Years Ended December 31, (In millions) 2024 2023 $ Change Net cash provided by (used in) operating activities $ (12) $ 89 $ (101) Net cash used in investing activities (1,064) (66) (998) Net cash provided by (used in) financing activities 1,108 (117) 1,225 Effect of exchange rates on cash, cash equivalents and restricted cash (2) 1 (3) Net increase (decrease) in cash, cash equivalents and restricted cash $ 30 $ (93) $ 123 Net cash used in operating activities for 2024 decreased by $101 million compared with 2023.
Cash Flow Activity Our cash flows from operating, investing and financing activities are summarized as follows: Years Ended December 31, (In millions) 2025 2024 $ Change Net cash provided by (used in) operating activities $ 51 $ (12) $ 63 Net cash used in investing activities (71) (1,064) 993 Net cash provided by financing activities 1 1,108 (1,107) Effect of exchange rates on cash, cash equivalents and restricted cash 2 (2) 4 Net increase (decrease) in cash, cash equivalents and restricted cash $ (17) $ 30 $ (47) Net cash provided by operating activities in 2025 was $51 million compared with $12 million used in 2024.
As of December 31, 2024, we had $355 million of the Notes outstanding with interest payable semiannually in cash in arrears on May 15 and November 15 of each year, beginning May 15, 2023. The Notes mature on November 15, 2027, unless earlier repurchased or redeemed, if applicable.
See Note 8 — Leases to the consolidated financial statements for additional information. As of December 31, 2025, we had $355 million of the Notes outstanding with interest payable semiannually in cash in arrears on May 15 and November 15 of each year, beginning May 15, 2023.
Transaction and integration costs for 2024 included $49 million as a result of the Coyote acquisition. Transaction and integration costs for 2023 primarily comprised spin-off related costs. 33 Table of Contents Restructuring costs in 2024 and 2023 were $33 million and $16 million, respectively, and primarily comprised severance and operating lease impairment costs.
Transaction and integration costs for 2025 and 2024 included $19 million and $49 million, respectively, attributable to the Coyote acquisition. Restructuring costs in 2025 and 2024 were $38 million and $33 million, respectively, and primarily comprised severance costs and operating lease impairments.
SG&A of $666 million in 2024 increased $75 million, or 12.7%, from $591 million in 2023, primarily due to the Coyote acquisition. As a percentage of revenue, SG&A decreased to 14.6% in 2024 compared with 15.0% in 2023 driven primarily by cost savings from restructuring actions executed in 2024.
As a percentage of revenue, SG&A decreased to 14.5% in 2025 compared with 14.6% in 2024 driven primarily by improved leverage as a result of increased scale due to the Coyote acquisition, as well as cost savings from restructuring actions. Depreciation and amortization expense in 2025 was $116 million, compared with $87 million in 2024.
Equity Offering During 2024, the Company completed both a private placement and public offering of its common stock. Total proceeds from these offerings, net of related issuance costs, of approximately $1.1 billion were used to fund the acquisition of Coyote on September 16, 2024.
Total proceeds from these offerings, net of related issuance costs, of approximately $1.1 billion were used to fund the acquisition of Coyote on September 16, 2024. Refer to Note 13 — Stockholders' Equity to the consolidated financial statements for additional information.
Other expense in 2024 includes a one-time charge of $216 million representing a deemed non-pro rata distribution in connection with the private placement common stock issuance completed in August 2024, based on the difference between the issuance price and the closing market price of common stock on August 12, 2024, the effective date of the private placement.
Goodwill impairment in 2025 was $12 million and was driven by the impairment of our ground and air express reporting unit resulting from our annual goodwill assessment. Other expense in 2024 included a one-time charge of $216 million representing a deemed non-pro rata distribution in connection with the private placement common stock issuance completed in August 2024.
Loan Covenants and Compliance As of December 31, 2024, we were in compliance with the covenants and other provisions of our debt agreements. Any failure to comply with any material provision or covenant of these agreements could have a material adverse effect on our liquidity and operations.
Any failure to comply with any material provision or covenant of these agreements could have a material adverse effect on our liquidity and operations. Equity Offering During 2024, the Company completed both a private placement and public offering of its common stock.
As of November 30, 2024, we completed our annual impairment tests for goodwill with all of our reporting units having fair values in excess of their carrying values, resulting in no impairment of goodwill. 37 Table of Contents A quantitative goodwill impairment test, when performed, includes estimating the fair value of a reporting unit using an income approach and/or a market-based approach.
A quantitative goodwill impairment test, when performed, includes estimating the fair value of a reporting unit using an income approach and/or a market-based approach.
Direct operating expense (exclusive of depreciation and amortization) of $202 million in 2024 decreased $33 million, or 14.0%, compared with $235 million in 2023. As a percentage of revenue, direct operating expense (exclusive of depreciation and amortization) decreased to 4.4% in 2024 compared to 6.0% in 2023 due to cost reduction initiatives.
As a percentage of revenue, direct operating expense (exclusive of depreciation and amortization) decreased to 3.3% in 2025 compared to 4.4% in 2024 driven primarily by cost reduction initiatives and improved leverage as a result of increased scale due to the Coyote acquisition.
Cost of transportation and services (exclusive of depreciation and amortization) in 2024 was $3.6 billion, or 78.4% of revenue, compared with $3.0 billion, or 75.6% of revenue in 2023.
This was partially offset by a $51 million decrease in revenue in our managed transportation business, driven primarily by a decrease in automotive expedite volume. Cost of transportation and services (exclusive of depreciation and amortization) in 2025 was $4.6 billion, or 80.3% of revenue, compared with $3.6 billion, or 78.4% of revenue in 2024.
The year-over-year increase as a percentage of revenue in 2024 was driven primarily by (i) a 1.6 percentage point increase in truck brokerage cost of transportation and services as a percentage of revenue, as lower freight rates were not fully offset by corresponding reductions in cost of purchased transportation, and (ii) a 0.5 percentage point increase in last mile cost of transportation and services as a percentage of revenue as a result of freight mix changes.
The year-over-year increase as a percentage of revenue during 2025 was driven primarily by (i) a 0.5 percentage point increase in truck brokerage cost of transportation and services as a percentage of revenue as the market tightened during 2025, with capacity rapidly exiting in certain regions driven primarily by regulatory changes and enforcement, which caused buy rates to increase faster than our contractual sell rates and (ii) a 2.7 percentage point increase in last mile cost of transportation and services as a percentage of revenue as a result of freight mix changes.
In addition, we have obligations for agreements to purchase goods or services entered into in the ordinary course of business that are enforceable and legally binding. 36 Table of Contents Critical Accounting Policies and Estimates We prepare our consolidated financial statements in accordance with GAAP.
See Note 10 — Debt to the consolidated financial statements for additional information. In connection with entering into the ABL Facility, on February 5, 2026, the existing Revolver was fully repaid and terminated. In addition, we have obligations for agreements to purchase goods or services entered into in the ordinary course of business that are enforceable and legally binding.
Contractual Obligations We lease certain facilities and equipment under non-cancellable operating and finance lease arrangements. As of December 31, 2024, our outstanding discounted obligations under operating and finance leases were $296 million and $4 million, respectively. See Note 8 — Leases to the consolidated financial statements for additional information.
The primary source of cash from financing activities in 2024 was $1.1 billion in net proceeds from the issuance of common stock. Contractual Obligations We lease certain facilities and equipment under non-cancellable operating and finance lease arrangements. As of December 31, 2025, our outstanding discounted obligations under operating and finance leases were $266 million and $3 million, respectively.
Depreciation and amortization expense in 2024 was $87 million, compared with $67 million in 2023. Depreciation and amortization expense for 2024 included $19 million as a result of the Coyote acquisition. Transaction and integration costs in 2024 and 2023 were $53 million and $12 million, respectively.
Depreciation and amortization expense for 2025 included an increase of $28 million attributable to a full year of Coyote activity in 2025. 28 Table of Contents Transaction and integration costs in 2025 were $22 million, compared with $53 million in 2024.
As of December 31, 2024, we had no amounts outstanding under the Revolver. Interest on any outstanding borrowings is payable monthly or quarterly, depending on RXO’s upfront election. Borrowings under the Revolver are payable, at our option, at any time prior to or at maturity on September 16, 2029.
The Notes mature on November 15, 2027, unless earlier repurchased or redeemed, if applicable. As of December 31, 2025, we had $35 million outstanding under the Revolver. Interest on any outstanding borrowings is payable monthly or quarterly, depending on RXO’s upfront election.
Our effective tax rate for 2023 differs from the U.S. corporate income tax rate of 21% primarily due to a discrete tax benefit of $2 million from changes in reserves for uncertain tax positions.
Our effective income tax rates were 13.3% and 4.6% for 2025 and 2024, respectively. Our effective tax rate for 2025 differs from the U.S. corporate income tax rate of 21% primarily due to the effect of non-deductible expenses when experiencing a pre-tax loss.
The decrease in cash provided by operating activities was due primarily to the decrease in net income between periods and changes in working capital. The $294 million decrease in net income was driven primarily by higher non-cash adjustments including a $216 million deemed non-pro rata distribution and increased depreciation and amortization expense related to the Coyote acquisition.
The increase in net cash provided by operating activities was primarily due to higher income and changes in working capital. Net cash used in investing activities in 2025 was $71 million compared with $1.1 billion used in 2024.
Sales, general and administrative expense (“SG&A”), including the allocated costs of XPO prior to the Separation, primarily consists of salaries and commissions for the sales function; salary and benefit costs for executive and certain administration functions; third-party professional fees; facility costs; bad debt expense; and legal costs. 31 Table of Contents Prior to the Separation, the historical results of operations included allocations of XPO costs and expenses including XPO’s corporate function which incurred a variety of expenses including, but not limited to, information technology, human resources, accounting, sales and sales operations, procurement, executive services, legal, corporate finance and communications.
Sales, general and administrative expense (“SG&A”) primarily consists of salaries and commissions for the sales function; salary and benefit costs for executive and certain administration functions; third-party professional fees; facility costs; bad debt expense; and legal costs. The Company’s consolidated financial statements include the accounts of RXO, Inc. and its majority-owned subsidiaries. All intercompany accounts and transactions have been eliminated.
Removed
The Separation On November 1, 2022, we completed the separation from XPO, which we refer to as the Separation. The Separation was accomplished by the distribution of 100 percent of the outstanding common stock of RXO to XPO stockholders as of the close of business on October 20, 2022, the record date for the distribution.
Added
Our last mile offering is an asset-light service that facilitates consumer deliveries performed by highly qualified third-party contractors.
Removed
XPO stockholders received one share of RXO common stock for every share of XPO common stock held at the close of business on the record date. On November 1, 2022, RXO became a standalone publicly-traded company. 30 Table of Contents The Coyote Acquisition On the acquisition date, the Company acquired Coyote from UPS and certain subsidiaries of UPS.
Added
The $1.0 billion increase is primarily attributable to a full year of Coyote activity in 2025.
Removed
Basis of Presentation Prior to the Separation, the Company’s financial statements were prepared on a standalone combined basis and were derived from the consolidated financial statements and accounting records of XPO (the “historical financial statements”). On November 1, 2022, the Company became a standalone publicly traded company, and its financial statements post-Separation are prepared on a consolidated basis.
Added
Direct operating expense (exclusive of depreciation and amortization) of $190 million in 2025 decreased $12 million, or 5.9%, from $202 million in 2024.
Removed
The combined financial statements for all periods presented prior to the Separation are now also referred to as “consolidated financial statements,” and have been prepared under the U.S. generally accepted accounting principles (“GAAP”). Cost of transportation and services (exclusive of depreciation and amortization) primarily includes the cost of providing or procuring freight transportation for RXO customers.
Added
SG&A of $832 million in 2025 increased $166 million, or 24.9%, from $666 million in 2024, primarily attributable to a full year of Coyote activity in 2025.
Removed
An allocation of these expenses is included to burden all business units comprising XPO’s historical results of operations, including RXO. The charges reflected have either been specifically identified or allocated using drivers including proportionally adjusted earnings before interest, taxes, depreciation and amortization, which includes adjustments for transaction and integration costs, as well as restructuring costs and other adjustments, or headcount.
Added
As of December 31, 2025, the Company's available borrowing capacity under the Revolver, after giving effect to the financial covenants described above, was $202 million. In connection with entering into the ABL Facility, on February 5, 2026, the existing Revolver was fully repaid and terminated.
Removed
The Company believes the assumptions regarding allocations of XPO corporate expenses are reasonable. Nevertheless, the consolidated financial statements may not reflect the results of operations, cash flows and financial position had the Company been a standalone entity during the periods presented.
Added
ABL Facility On February 5, 2026, we entered into an asset-based five-year revolving credit facility (the “ABL Facility”) in an amount of up to $450 million, with $100 million available for the issuance of letters of credit. Proceeds from loans under the ABL Facility were used to repay and terminate the existing Revolver.
Removed
The majority of these allocated costs are recorded within SG&A; Depreciation and amortization expense; Transaction and integration costs; and Restructuring costs in the Consolidated Statements of Operations.
Added
Loans under the ABL Facility bear interest at a rate per annum equal to, at the Company’s election: (i) a base rate plus an applicable margin or (ii) an adjusted term Secured Overnight Financing Rate (“SOFR”) plus an applicable margin; interest is payable quarterly.
Removed
All charges and allocations for facilities, functions and services performed by XPO organizations have been deemed settled in cash by RXO to XPO in the year in which the cost was recorded in the Consolidated Statements of Operations.
Added
The Company is required to pay a commitment fee on any unused commitment, based on pricing levels set forth in the agreement.
Removed
For the periods ended before the Separation, XPO investment represents XPO’s historical investment in RXO and includes the net effects of transactions with and allocations from XPO as well as RXO’s accumulated earnings.
Added
The ABL Facility contains customary representations and warranties, events of default and financial, affirmative and negative covenants for facilities of this type, including, but not limited to, financial covenants relating to a fixed charge coverage ratio, a minimum liquidity requirement and a minimum excess availability requirement, and restrictions on indebtedness, liens, investments and acquisitions, asset dispositions, specified agreements, restricted payments and prepayment of certain indebtedness.
Removed
Certain transactions between RXO and XPO, including XPO’s non-RXO subsidiaries, have been included in these consolidated financial statements, and are considered to be effectively settled at the time the transaction is recorded.
Added
Refer to Note 10 — Debt to the consolidated financial statements for additional information. 30 Table of Contents Loan Covenants and Compliance As of December 31, 2025, we were in compliance with the covenants and other provisions of our debt agreements.
Removed
The total net effect of the cash settlement of these transactions is reflected in the Consolidated Statements of Cash Flows as a financing activity and in the Consolidated Statements of Changes in Equity as XPO investment.
Added
Financial Condition Our asset and liability balances are summarized as follows: December 31, (In millions) 2025 2024 $ Change % Change Total current assets $ 1,317 $ 1,339 $ (22) (1.6) % Total long-term assets 1,960 2,075 (115) (5.5) % Total current liabilities 1,038 1,065 (27) (2.5) % Total long-term liabilities 698 737 (39) (5.3) % Total assets decreased by $137 million from December 31, 2024 to December 31, 2025, primarily due to (i) an $18 million decrease in cash and cash equivalents, as described in the Cash Flow Activity section below, (ii) a $46 million decrease in identifiable intangible assets as a result of amortization and (iii) a $38 million decrease in operating lease assets primarily as a result of amortization.
Removed
The components of the net transfers to and from XPO include certain costs allocated from XPO’s corporate functions, income tax expense, certain cash receipts and payments made on behalf of RXO and general financing activities.
Added
Total liabilities decreased by $66 million from December 31, 2024 to December 31, 2025, primarily due to (i) a $30 million decrease in short-term and long-term operating lease liabilities as a result of lease payments and (ii) a $37 million decrease in deferred tax liabilities.
Removed
For the periods ended before the Separation, the Company was a member of the XPO consolidated group, and its U.S. taxable income was included in XPO’s consolidated U.S. federal income tax return as well as in the tax returns filed by XPO with certain state and local taxing jurisdictions.
Added
These decreases were partially offset by a $36 million increase in long-term debt and obligations under finance leases.
Removed
For the periods ended after the Separation, the Company will file a consolidated U.S. federal income tax return as well as certain state and local income tax returns. The Company’s consolidated financial statements include the accounts of RXO, Inc. and its majority-owned subsidiaries. The Company has eliminated intercompany accounts and transactions.
Added
The primary uses of cash in 2025 were (i) $59 million for purchases of property and equipment and (ii) $10 million paid related to the Coyote acquisition for working capital and post-closing adjustments.
Removed
This was partially offset by (i) a $125 million decrease in legacy RXO truck brokerage revenue, driven primarily by a 7% decrease in revenue per load, which was impacted by a combination of fuel prices, freight mix and transportation market rates, partially offset by a 1% increase in legacy RXO load volume and (ii) a $90 million decrease in revenue in our managed transportation business, driven primarily by a decrease in ocean and expedite air rates and volume.
Added
The primary source of cash in 2025 was $33 million in net proceeds from borrowings on revolving credit facilities, partially offset by $19 million in payments for tax withholdings primarily attributable to the vesting of stock compensation awards held by non-RXO employees at the spin which are now substantially complete.
Removed
This facility has a one-year term and we had $14 million outstanding as of December 31, 2024 classified as short-term debt. Notes On October 25, 2022, we completed an offering of $355 million in aggregate principal amount of unsecured notes (the “Notes” or the “7.50% Notes due 2027”).
Added
Borrowings under the Revolver are payable, at our option, at any time prior to or at maturity on September 16, 2029. We also have a non-U.S. revolving credit facility with a maximum commitment of approximately $17 million. This facility has a one-year term and we had $15 million outstanding as of December 31, 2025 classified as short-term debt.
Removed
Refer to Note 1 3 — Stockholders ' Equity to the consolidated financial statements for additional information.
Added
During 2025, our ground and air express reporting unit experienced lower than anticipated operating results and changing market fundamentals, resulting in the decision to restructure the reporting unit.
Removed
Financial Condition The following table summarizes our asset and liability balances as of December 31, 2024 and 2023: December 31, (In millions) 2024 2023 $ Change % Change Total current assets $ 1,339 $ 796 $ 543 68.2 % Total long-term assets 2,075 1,029 1,046 101.7 % Total current liabilities 1,065 682 383 56.2 % Total long-term liabilities 737 549 188 34.2 % Total assets and liabilities increased from December 31, 2023 to December 31, 2024, primarily due to the acquisition of Coyote.
Added
Based on the quantitative assessment performed in 2025, we recognized an impairment loss of $12 million to fully impair the goodwill of our ground and air express reporting unit as the discounted cash flows expected to be generated by the reporting unit were not sufficient to recover its carrying value.

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

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Biggest changeITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK We are exposed to market risk related to changes in foreign currency exchange rates, commodity prices, interest rates and the price of diesel fuel purchased for use by third-party carriers who perform the physical freight movements we arrange.
Biggest changeWe are exposed to market risk related to changes in foreign currency exchange rates, commodity prices, interest rates and the price of diesel fuel purchased for use by third-party carriers who perform the physical freight movements we arrange.
We believe that this foreign currency exchange rate risk will not have a material impact on our financial results. 38 Table of Contents
We believe that this foreign currency exchange rate risk will not have a material impact on our financial results. 34 Table of Contents
Added
Item 7A. Quantitative and Qualitative Disclosures About Market Risk. Our market risk disclosures involve forward-looking statements. Actual results could differ materially from those projected in such forward-looking statements.

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