RXO shares slump as tight trucking market squeezes brokerage margins

RXO (NYSE:RXO) reported a wider-than-expected fourth-quarter loss as a rapid tightening in the full-truckload market drove up costs faster than the company could pass them to customers.

The Charlotte, North Carolina-based freight broker saw its shares tumble more than 10% in early trading Friday after posting an adjusted loss of $0.07 per share.

Analysts had anticipated a smaller loss of $0.04.

Revenue fell to $1.5 billion from $1.7 billion a year ago, missing consensus estimates as a double-digit decline in full truckload volumes more than offset a 31% surge in less-than-truckload (LTL) business.

"In the fourth quarter, tightening in the freight market accelerated, driven by continued reductions in truckload capacity," Chief Executive Officer Drew Wilkerson said in a statement.

This capacity crunch increased "buy rates"—what RXO pays carriers—and compressed the firm’s signature brokerage gross margin to 11.9%.

The company’s overall adjusted EBITDA fell to $17 million, down from $42 million in the prior year, as the industry grapples with a protracted soft demand environment.

Despite the margin squeeze, RXO signaled internal progress on its restructuring efforts.

The company took a $12 million goodwill impairment charge related to a pivot in its Managed Transportation express offerings but reported awarding over $200 million in new freight under management.

Looking ahead, RXO provided a cautious outlook for the first quarter of 2026, forecasting adjusted EBITDA between $5 million and $12 million as it continues to integrate its Coyote Logistics acquisition and deploy AI-driven pricing tools.