What changed in this filing

/stocks — the workspaceLOADING

Item 1. Business

2025-02-27 compared with 2024-02-13 · 42 added, 40 removed, 206 unchanged (28% of the section changed)

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The largest component is our core truck brokerage business.

Our operations also include three asset-light, brokered transportation services, all of which complement our truck brokerage business:

managed transportation, last mile and freight forwarding.

Our operations also include asset-light managed transportation and last mile services, which complement our truck brokerage business.

Our truck brokerage business has a history of generating robust free cash flow conversion and a high return on invested capital.

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We price our service on either a contract or a spot basis.

Notable factors driving volume growth in our business include our ability to access massive truckload capacity for shippers through our carrier relationships;

Notable factors that enable volume growth in our business include our ability to access massive truckload capacity for shippers through our carrier relationships;

our proprietary, cutting-edge technology;

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and favorable long-term industry tailwinds.

As of December 31, 2023, we had approximately 115,000 carriers in our North American truck brokerage network, and access to more than 1.4 million trucks.

We provide our customers with highly efficient access to capacity through our digital brokerage technology.

This proprietary platform is a major differentiator for our truck brokerage business, and together with our pricing technology, we believe it can unlock incremental profitable growth well beyond our current levels.

Our complementary services for managed transportation, last mile and freight forwarding also utilize our digital brokerage technology.

This proprietary platform is a major differentiator for our truck brokerage business, and together with our pricing technology, we believe it can unlock incremental profitable growth.

Our complementary services for managed transportation and last mile also utilize our digital brokerage technology.

Our managed transportation service provides asset-light solutions for shippers who outsource their freight transportation to gain reliability, visibility and cost savings.

The service uses proprietary technology to enhance our revenue synergy, with cross-selling to truck brokerage, last mile and freight forwarding.

The service uses proprietary technology to enhance our revenue synergy, with cross-selling to truck brokerage and last mile.

Our managed transportation offering includes bespoke load planning and procurement, complex solutions tailored to specific challenges, performance monitoring, engineering and data analytics, among other services.

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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.

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population and serving a customer base of omnichannel and e-commerce retailers and direct-to-consumer manufacturers.

Our freight forwarding service is a scalable, asset-light offering managed with advanced technology that facilitates ocean, road and air transportation and assists with customs brokerage.

We are a U.S.-based freight forwarder with a global network of company-owned and partner-owned locations and coverage of key trade lanes that reach approximately 150 countries and territories.

The Separation

On November 1, 2022, the Company completed its separation from XPO, Inc.

(formerly known as XPO Logistics, Inc.) (“XPO”) (the “Spin-off” or “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.

The 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 (“EMA”), a Transition Services Agreement (“TSA”) and an Intellectual Property License Agreement (“IPLA”).

(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.

The 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.

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.

(“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.

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

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Our brokerage platform synergizes these operating strengths within a single digital freight marketplace.

In the fourth quarter of 2023, approximately 97% of our truck brokerage transactions were created or covered digitally — and, as that percentage continues to grow, we are able to process more volume per head over time.

Drivers of Value Creation

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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.

We are also well established as a truckload broker of choice across diversified industry sectors, with a notable presence in the e-commerce and retail sectors.

We are also well established as a freight broker of choice across diversified industry sectors, with a notable presence in the e-commerce and retail sectors and believe that shippers look to do business with brokers of greater scale.

We expect to benefit from both overall industry growth in demand for truckload transportation, and a long runway for increased broker penetration of for-hire trucking.

• Proprietary Technology:

We believe we are strongly differentiated by our technology as a leading innovator of sophisticated brokerage solutions that enhance visibility, reliability, speed, accuracy and cost effectiveness, and by the fully automated transactional capabilities of our digital platform.

As more and more shippers outsource their road freight needs to brokers, they increasingly prefer brokers that have the digital capabilities we offer.

We believe our technology strongly differentiates us as a leading innovator of complex brokerage solutions that enhance visibility, reliability, speed, accuracy and cost effectiveness, and by the fully automated transactional capabilities of our digital platform.

We have continued to invest in our cutting-edge technology, including artificial intelligence and machine learning, based on decades of high-quality internal data sets that include attributes that we believe are not available elsewhere.

As more and more shippers outsource their shipping needs to brokers, we believe they increasingly prefer brokers that have a combination of excellent customer service, people and digital capabilities that we offer.

• Long-Tenured, Blue-Chip Customer Relationships in Attractive Verticals:

Our customer base includes numerous long-term relationships with market leaders and other world-class companies across a diversified array of customer verticals.

Our customer base includes numerous long-term relationships with market leaders and other world-class companies across a diverse array of customer verticals.

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:

We utilize an asset-light business model that gives us agility and generates strong free cash flow.

Our asset-light model generates high returns with strong free cash flow characteristics.

Because we have invested significantly in our proprietary platform for more than a decade, we believe that we can leverage our historical invested capital to generate strong returns.

• Experienced and Cohesive Leadership and Strong Company Values:

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These executives have worked together for many years, creating value through operational excellence, data science and a people-centric culture.

Our strategy is designed to deliver value through our resources, including extensive carrier relationships, automated shipper-carrier interactions, end-to-end digital tracking and data analyses generated by our proprietary algorithms.

Our services are both highly responsive to customer needs and proactive in identifying potential improvements.

Furthermore, we have instilled a culture that defines success as mutually beneficial results for our stockholders and other stakeholders.

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.

We believe our services are both highly responsive to customer needs and allow us to be proactive in identifying potential improvements.

Furthermore, our culture defines success as mutually beneficial results for our stockholders and other stakeholders.

Management’s growth and optimization strategy is to:

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• Continue to recruit and retain talented customer and carrier sales representatives, and continuously improve their productivity with our state-of-the-art technology;

• Continue to attract high-caliber independent carriers to provide third-party transportation services for our customers;

• Continue to attract and retain high-caliber independent carriers to provide third-party transportation services for our customers;

• Capitalize on our first-mover technology advantage to continue to gain share of the truck brokerage industry by optimizing brokerage processes and pricing for customers and carriers, and by enhancing the productivity of our operations.

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Importantly, our digital brokerage platform creates ongoing value for RXO in four key areas:

• Increases 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;

• 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;

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Our competitors include C.H.

Robinson, Coyote, Echo, Expeditors, Forward Air, Flexport, J.B.

Hunt, Landstar System, Total Quality Logistics, Transfix and Uber Freight.

Robinson, Echo Global Logistics, Expeditors, Forward Air, Flexport, J.B.

Hunt, Landstar System, Total Quality Logistics, and Uber Freight.

Due to the competitive nature of our industry, we strive to strengthen existing business relationships and forge new relationships.

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Customs broker by the U.S.

Customs and Border Protection (the “CBP”) in each U.S.

district where it performs services.

Customs and Border Protection (the “CBP”).

Customs brokers are required to maintain prescribed records and are subject to periodic audits by the CBP.

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Our subsidiaries that offer air freight and expedited air charter transportation services are subject to regulation by the Transportation Security Administration (“TSA”) governing air cargo security for all loads, regardless of origin or destination.

Some of our subsidiaries are regulated as “indirect air carriers” by the TSA.

One of our subsidiaries is regulated as an “indirect air carrier” by the TSA.

The CBP, TSA and relevant non-U.S.

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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 with coverage limits, deductibles and self-insured retention levels that we believe are reasonable given the varying historical frequency, severity and timing of claims.

Our volumes are typically higher in the fourth quarter due to peak season demand for our services from our customers in consumer sectors.

with coverage limits, deductibles and self-insured retention levels that we believe are reasonable given the varying historical frequency, severity and timing of claims.

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

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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 diverse strengths, operate safely, and build strong relationships.

The demand for best-in-class performance to lead results shapes our approach to human capital management and ensures we provide an exceptional work environment for our employees.

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.

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.

We center our program efforts on professional development, competitive compensation, and dedicated loyalty to empowering a safe, inclusive, and purposeful experience for our team members and their families.

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.

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.

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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.

RXO Workforce (1)

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(1) Gender representation includes regular employees who have self-identified.

Diversity, Equity and Inclusion (“DE&I”)

We take pride in our commitment to fostering an inclusive workplace that encourages a diversity of backgrounds and perspectives at every level across the organization.

We value individuality and understand that a diversity of talents, identities, backgrounds and experiences is key to driving innovation and growth.

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 diverse talent sources and build our pipeline by offering rewarding and challenging career opportunities.

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.

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We provide competitive compensation and benefits from day one.

Our comprehensive suite of health and well-being benefit programs supports the diverse needs of our employees and their families.

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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James Harris is a career CFO with over 36 years of experience in B2B sectors, including two decades with public companies.

He has served as chief financial officer of XPO’s North American transportation division from September 2022, until the Separation.

He served as chief financial officer of XPO’s North American transportation division from September 2022, until the Separation.

Prior to XPO, he was CFO and treasurer of SPX Technologies from August 2020 to September 2022, and earlier held positions as CFO and then interim CEO of Elevate Textiles, Inc.

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Our corporate website is www.rxo.com .

On this website, you can access, free of charge, our reports on Forms 10-K, 10-Q and 8-K, as well as specialized disclosure reports on Form SD, Proxy Statements on Schedule 14A and amendments to these materials.

On this website, you can access, free of charge, our reports on Forms 10-K, 10-Q and 8-K, as well as Proxy Statements on Schedule 14A and amendments to these materials.

Materials are available online as soon as reasonably practicable after we electronically submit them to the SEC.

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Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 1. Business