What changed in this filing

/stocks — the workspaceLOADING

Item 1. Financial Statements

2025-05-07 compared with 2024-11-07 · 98 added, 189 removed, 267 unchanged (52% of the section changed)

1 unchanged sentence

Condensed Consolidated Balance Sheets

September 30, December 31,

March 31, December 31,

(Dollars in millions, shares in thousands, except per share amounts) 2025 2024

29 unchanged sentences

10,000 shares authorized;

0 shares issued and outstanding as of September 30, 2024 and December 31, 2023

0 shares issued and outstanding as of March 31, 2025 and December 31, 2024

Common stock, $ 0.01 par value;

300,000 shares authorized;

160,790 and 117,026 shares issued and outstanding as of September 30, 2024 and December 31, 2023, respectively

163,912 and 162,517 shares issued and outstanding as of March 31, 2025 and December 31, 2024, respectively

Additional paid-in capital 1,908 1,904

Retained earnings (Accumulated deficit) ( 259 ) 6

Accumulated deficit ( 315 ) ( 284 )

Accumulated other comprehensive loss ( 8 ) ( 10 )

3 unchanged sentences

Condensed Consolidated Statements of Operations

Three Months Ended September 30, Nine Months Ended September 30,

Three Months Ended March 31,

(Dollars in millions, shares in thousands, except per share amounts) 2025 2024

6 unchanged sentences

Restructuring costs 14 11

Operating income (loss) $ ( 20 ) $ 6 $ ( 32 ) $ 25

Operating loss $ ( 30 ) $ ( 12 )

Other expense — 1

Interest expense, net 9 8

Income (loss) before income taxes $ ( 242 ) $ ( 3 ) $ ( 271 ) $ —

Income tax provision (benefit) 1 ( 2 ) ( 6 ) ( 2 )

Net income (loss) $ ( 243 ) $ ( 1 ) $ ( 265 ) $ 2

Earnings (loss) per share data

Loss before income taxes $ ( 39 ) $ ( 21 )

Income tax benefit ( 8 ) ( 6 )

Net loss $ ( 31 ) $ ( 15 )

Loss per share data

Basic $ ( 0.18 ) $ ( 0.13 )

4 unchanged sentences

See accompanying notes to condensed consolidated financial statements.

Condensed Consolidated Statements of Comprehensive Income (Loss)

Three Months Ended September 30, Nine Months Ended September 30,

Condensed Consolidated Statements of Comprehensive Loss

Three Months Ended March 31,

(In millions) 2025 2024

Net income (loss) $ ( 243 ) $ ( 1 ) $ ( 265 ) $ 2

Other comprehensive income (loss), net of tax

Foreign currency translation, net of tax effect of $ — , $ — , $ — and $ —

$ — $ — $ ( 2 ) $ —

Other comprehensive income (loss) — — ( 2 ) —

Comprehensive income (loss) $ ( 243 ) $ ( 1 ) $ ( 267 ) $ 2

Net loss $ ( 31 ) $ ( 15 )

Other comprehensive income

Foreign currency translation gain

Other comprehensive income 2 —

Comprehensive loss $ ( 29 ) $ ( 15 )

See accompanying notes to condensed consolidated financial statements.

Condensed Consolidated Statements of Cash Flows

Nine Months Ended September 30,

Three Months Ended March 31,

(In millions) 2025 2024

Operating activities

Net income (loss) $ ( 265 ) $ 2

Adjustments to reconcile net income (loss) to net cash from operating activities

Net loss $ ( 31 ) $ ( 15 )

Adjustments to reconcile net loss to net cash from operating activities

Depreciation and amortization expense 32 16

1 unchanged sentence

Deferred tax benefit ( 11 ) ( 7 )

Deemed non-pro rata distribution 216 —

Impairment of operating lease assets 4 —

Changes in assets and liabilities

Accounts receivable 76 27

Other assets 22 ( 13 )

Other current assets and other long-term assets ( 10 ) ( 1 )

Accounts payable ( 56 ) ( 41 )

Accrued expenses and other liabilities 15 ( 48 )

Accrued expenses, other current liabilities and other long-term liabilities ( 15 ) 21

Net cash provided by (used in) operating activities ( 2 ) 7

2 unchanged sentences

Business acquisition, net of cash acquired ( 10 ) —

Other — ( 1 )

Net cash used in investing activities ( 25 ) ( 11 )

2 unchanged sentences

Repayment of borrowings on revolving credit facilities ( 265 ) ( 31 )

Proceeds from issuance of common stock and pre-funded warrants 1,125 —

Payment for equity issuance costs ( 30 ) —

Payment for tax withholdings related to vesting of stock compensation awards ( 17 ) ( 2 )

Repurchase of common stock — ( 2 )

Repayment of debt and finance leases ( 3 ) ( 3 )

Net cash provided by (used in) financing activities 1,107 ( 17 )

Other ( 11 ) —

Net cash provided by financing activities 7 6

Effect of exchange rates on cash, cash equivalents and restricted cash 1 —

Net increase in cash, cash equivalents and restricted cash 50 6

Net increase (decrease) in cash, cash equivalents and restricted cash ( 19 ) 2

Cash, cash equivalents, and restricted cash, beginning of period 35 5

2 unchanged sentences

Leased assets obtained in exchange for new operating lease liabilities $ 4 $ 23

Leased assets obtained in exchange for new finance lease liabilities — 1

Cash paid for income taxes, net 1 1

Cash paid for interest, net 2 1

Purchases of property and equipment in accounts payable, accrued expenses and other liabilities 11 2

Accrued tax withholdings related to vesting of stock compensation awards 1 —

See accompanying notes to condensed consolidated financial statements.

1 unchanged sentence

(Dollars in millions, shares in thousands) Shares Amount Additional Paid-in Capital Retained Earnings (Accumulated Deficit) Accumulated Other Comprehensive Loss Total Equity

Balance as of June 30, 2024 117,607 $ 1 $ 599 $ ( 16 ) $ ( 5 ) $ 579

Balance as of December 31, 2024 162,517 $ 2 $ 1,904 $ ( 284 ) $ ( 10 ) $ 1,612

Net loss — — — ( 31 ) — ( 31 )

Other comprehensive loss — — — — — —

Other comprehensive income — — — — 2 2

Stock compensation expense — — 7 — — 7

1 unchanged sentence

Tax withholdings related to vesting of stock compensation awards — — ( 3 ) — — ( 3 )

Deemed non pro-rata distribution — — 216 — — 216

Issuance of common stock and pre-funded warrants, net of issuance costs 43,070 1 1,095 — — 1,096

Balance as of September 30, 2024 160,790 $ 2 $ 1,914 $ ( 259 ) $ ( 5 ) $ 1,652

Balance as of March 31, 2025 163,912 $ 2 $ 1,908 $ ( 315 ) $ ( 8 ) $ 1,587

(Dollars in millions, shares in thousands) Shares Amount Additional Paid-in Capital Retained Earnings (Accumulated Deficit) Accumulated Other Comprehensive Loss Total Equity

1 unchanged sentence

Net loss — — — ( 15 ) — ( 15 )

Other comprehensive loss — — — — ( 2 ) ( 2 )

Stock compensation expense — — 17 — — 17

Vesting of stock compensation awards 694 — — — — —

Tax withholdings related to vesting of stock compensation awards — — ( 4 ) — — ( 4 )

Deemed non pro-rata distribution — — 216 — — 216

Issuance of common stock and pre-funded warrants, net of issuance costs 43,070 1 1,095 — — 1,096

Balance as of September 30, 2024 160,790 $ 2 $ 1,914 $ ( 259 ) $ ( 5 ) $ 1,652

(Dollars in millions, shares in thousands) Shares Amount Additional Paid-in Capital Retained Earnings Accumulated Other Comprehensive Loss Total Equity

Balance as of June 30, 2023 116,954 $ 1 $ 587 $ 5 $ ( 4 ) $ 589

Net loss — — — ( 1 ) — ( 1 )

Stock compensation expense — — 5 — — 5

Vesting of stock compensation awards 48 — — — — —

Tax withholdings related to vesting of stock compensation awards — — ( 3 ) — — ( 3 )

Repurchase of common stock — — — — — —

Balance as of September 30, 2023 117,002 $ 1 $ 589 $ 4 $ ( 4 ) $ 590

(Dollars in millions, shares in thousands) Shares Amount Additional Paid-in Capital Retained Earnings Accumulated Other Comprehensive Loss Total Equity

Balance as of December 31, 2022 116,400 $ 1 $ 588 $ 2 $ ( 4 ) $ 587

Net income — — — 2 — 2

Other comprehensive income — — — — — —

Stock compensation expense — — 5 — — 5

1 unchanged sentence

Tax withholdings related to vesting of stock compensation awards — — ( 2 ) — — ( 2 )

Repurchase of common stock ( 100 ) — ( 2 ) — — ( 2 )

Balance as of September 30, 2023 117,002 $ 1 $ 589 $ 4 $ ( 4 ) $ 590

Balance as of March 31, 2024 117,544 $ 1 $ 593 $ ( 9 ) $ ( 3 ) $ 582

See accompanying notes to condensed consolidated financial statements.

15 unchanged sentences

In management’s opinion, the condensed consolidated financial statements reflect all adjustments that are of a normal recurring nature and are necessary for a fair presentation of financial condition, results of operations and cash flows for the interim periods presented.

Operating results for the three and nine months ended September 30, 2024 are not necessarily indicative of the results that may be expected for the year ending December 31, 2024.

Operating results for the three months ended March 31, 2025 are not necessarily indicative of the results that may be expected for the year ending December 31, 2025.

Significant Accounting Policies

Our significant accounting policies are disclosed in Note 2 to the 2024 Form 10-K.

There have been no material changes to the Company’s significant accounting policies as of September 30, 2024, except for the additional critical accounting policy below.

Business Combinations

We apply the acquisition method of accounting with respect to the identifiable assets and liabilities of a business combination and record the assets acquired and liabilities assumed at their estimated fair values as of the acquisition date.

The excess of the cost of the acquired business and the fair value of the assets acquired and liabilities assumed is recognized as goodwill.

Estimates of fair value represent management’s best estimate of assumptions and about future events and uncertainties, including significant judgments related to future cash flows, discount rates, competitive trends, margin and revenue growth assumptions, including customer attrition rates, market comparables and others.

Inputs used are generally obtained from historical data supplemented by current and anticipated market conditions and growth rates.

While we use our best estimates and assumptions to accurately value assets acquired and liabilities assumed at the acquisition date, as well as contingent consideration, where applicable, our estimates are inherently uncertain and subject to refinement.

As a result, during the measurement period, which may be up to one year from the acquisition date, we record adjustments to the assets acquired and liabilities assumed with the corresponding offset to goodwill.

Upon the conclusion of the measurement period or final determination of the values of assets acquired or liabilities assumed, whichever comes first, any subsequent adjustments are recognized in our consolidated statements of operations.

Significant judgment is required in estimating the fair value of identifiable intangible assets and in assigning their respective useful lives.

The fair value estimates are based on historical information and on future expectations and assumptions deemed reasonable by management, but which are inherently uncertain.

See Note 3—Acquisition to our condensed consolidated financial statements included elsewhere in this Form 10-Q for further information regarding the fair value determination of each of the classes of identifiable intangible assets.

Determining the useful life of an intangible asset also requires judgment.

The useful lives of identifiable intangibles with determinable useful lives are based on a variety of factors, including but not limited to, the competitive environment, historical customer attrition rates, market share, operating plans and the macroeconomic environment.

The costs of determinable-lived intangible assets are amortized to expense over the estimated useful life.

Lease liabilities, included in Short-term operating lease liabilities and Long-term operating lease liabilities in the condensed consolidated balance sheets as of the acquisition date, are measured at the present value of the future minimum lease payments over the remaining lease term and the incremental borrowing rate of RXO as if the acquired leases were new leases as of the acquisition date.

Right-of-use assets, included in Operating lease assets in the condensed consolidated balance sheets as of the acquisition date, are equal to the amount of the lease liability at the acquisition date adjusted for any off-market terms of the lease.

The remaining lease term is based on the remaining term at the acquisition date plus any renewal or extension options that the Company is reasonably certain to exercise.

There have been no material changes to the Company’s significant accounting policies as of March 31, 2025.

Accounting Pronouncements Issued but Not Yet Effective

In November 2023, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2023-07, “Segment Reporting (Topic 280) - Improvements to Reportable Segment Disclosures.” The amendments in this update improve reportable segment disclosure requirements through enhanced disclosures about significant segment expenses.

The ASU expands public entities’ segment disclosures by requiring disclosure of significant segment expenses that are regularly provided to the chief operating decision maker and included within each reported measure of segment profit or loss, an amount and description of its composition for other segment items and interim disclosures of a reportable segment’s profit or loss and assets.

All disclosure requirements of the ASU are required for entities with a single reportable segment.

The amendments are effective for fiscal years beginning after December 15, 2023, and interim periods for our fiscal years beginning after December 15, 2024, and should be applied on a retrospective basis to all periods presented.

Early adoption is permitted.

We are continuing to evaluate the impact of the new guidance, which we expect to be disclosure only, with no impact to the Company’s consolidated balance sheet, consolidated statement of operations, and consolidated statement of cash flows.

In December 2023, the FASB issued ASU 2023-09, “Income Taxes (Topic 740) - Improvements to Income Tax Disclosure.” The ASU seeks to enhance income tax information primarily through changes in the rate reconciliation and income taxes paid information.

The amendments are effective for annual periods beginning after December 15, 2024 on a prospective basis.

The Company will adopt this standard beginning with the Company’s Annual Report on Form 10-K for the fiscal year ending December 31, 2025.

The Company does not except the adoption to have a material impact on our annual financial statement disclosures.

In November 2024, the FASB issued ASU 2024-03, “Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures:

Disaggregation of Income Statement Expenses”.

The ASU seeks to improve the disclosures about a public business entity’s expenses by requiring more detailed information about the types of expenses in commonly presented expense captions.

The amendments are effective for annual periods beginning after December 15, 2026 and interim reporting periods after December 15, 2027 on either a prospective or retrospective basis.

Early adoption is permitted.

We are currently evaluating the impact of the new guidance.

In March 2024, the SEC issued the final rules under SEC Release No.

33-11275, The Enhancement and Standardization of Climate-Related Disclosures for Investors.

In April 2024, the SEC voluntarily stayed implementation of the final rules as a result of pending judicial review.

These rules, if adopted, will require registrants to disclose certain climate-related information, including Scope 1 and Scope 2 greenhouse gas emissions and other climate-related topics, in registration statements and annual reports, when material.

Disclosure requirements, absent the results of pending judicial review, will begin phasing in with the Company’s annual reporting for the year ending December 31, 2025.

We are currently evaluating the impact the rules will have on our disclosures.

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.

1 unchanged sentence

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.

We believe the acquisition of Coyote enhances our competitive position with greater scale, a broader array of service offerings and strengths in a more diverse set of end markets.

1 unchanged sentence

The purchase price was preliminarily allocated to the underlying assets acquired and liabilities assumed based upon their estimated fair values at the acquisition date.

The condensed consolidated financial statements as of and for the three and nine months ended September 30, 2024 include the financial results of Coyote from the acquisition date.

The Company incurred acquisition-related costs of $ 21 million and $ 26 million for the three and nine months ended September 30, 2024, respectively, which are included in Transaction and integration costs in the condensed consolidated statements of operations.

The following table summarizes the preliminary allocation of consideration to Coyote’s identifiable tangible and intangible assets acquired and liabilities assumed by the Company at the acquisition date.

4 unchanged sentences

Property and equipment 25

Intangible assets 509

Identifiable intangible assets 459

Operating lease assets 85

23 unchanged sentences

Total $ 459 15

Coyote’s results of operations are included in the condensed consolidated statements of operations from the acquisition date.

The revenue and pre-tax loss included in the condensed consolidated statements of operations for the Coyote acquisition subsequent to the acquisition date was $ 105 million and $ 2 million, respectively, for the three and nine months ended September 30, 2024.

The following unaudited pro forma financial information presents the Company’s results of operations as if the Coyote acquisition occurred on January 1, 2023.

The unaudited pro forma information includes adjustments for intangible assets acquired and elimination of historical intercompany transactions between RXO and Coyote.

The pro forma results for the nine months ended September 30, 2023 includes a non-recurring charge of $ 216 million related to the deemed non-pro rata distribution.

The unaudited pro forma financial information is for informational purposes only and is not necessarily indicative of our consolidated results of operations of the combined business had the acquisition been completed as of January 1, 2023 or of the results of our future operations of the combined business.

Three Months Ended September 30, Nine Months Ended September 30,

(In millions) 2024 2023 2024 2023

(In millions) Three Months Ended March 31, 2024

Revenue $ 1,582

Loss before income taxes ( 18 )

Segment Reporting

The tables below provide information about the Company’s reportable segment:

Three Months Ended March 31,

(In millions) 2025 2024

Revenue $ 1,433 $ 913

Cost of transportation and services (exclusive of depreciation and amortization 1,153 699

Direct operating expense (exclusive of depreciation and amortization) 48 53

Sales, general and administrative expense (1)

Other expense — 1

Segment adjusted EBITDA $ 29 $ 19

Unallocated corporate expenses 7 4

Depreciation and amortization expense 32 16

Transaction and integration costs 6 1

Restructuring and other costs 14 11

Interest expense, net 9 8

Consolidated loss before income taxes $ ( 39 ) $ ( 21 )

(1) Excludes unallocated corporate expenses and other costs.

(In millions) March 31, 2025 December 31, 2024

Segment assets $ 3,233 $ 3,345

Corporate assets 71 69

Total assets $ 3,304 $ 3,414

Revenue Recognition

3 unchanged sentences

Approximately 6 % and 7 % of our revenues were generated outside the U.S.

(primarily in Canada, Mexico, Asia and Europe) for the three months ended September 30, 2024 and 2023, respectively.

Approximately 8 % and 7 % of our revenues were generated outside the U.S.

(primarily in Canada, Mexico, Asia and Europe) for the nine months ended September 30, 2024 and 2023, respectively.

(primarily in Canada, Mexico, Europe and Asia) for the three months ended March 31, 2025 and 2024, respectively.

Our revenue disaggregated by service offering is as follows:

Three Months Ended September 30, Nine Months Ended September 30,

Three Months Ended March 31,

(In millions) 2025 2024

4 unchanged sentences

Total $ 1,433 $ 913

Revenue of $ 105 million for the Coyote acquisition subsequent to the acquisition date is included in Truck brokerage.

Our revenue disaggregated by industry sector is as follows:

Three Months Ended September 30, Nine Months Ended September 30,

Three Months Ended March 31,

(In millions) 2025 2024

2 unchanged sentences

Food and beverage 233 103

Automotive 101 103 305 310

Logistics and transportation 125 42

Automotive 96 101

Other 170 127

4 unchanged sentences

(i) have original expected durations of one year or less or (ii) contain variable consideration.

As of September 30, 2024, the fixed consideration component of our remaining performance obligations was approximately $ 39 million, and we expect approximately 100 % of that amount to be recognized over the next 3 years.

As of March 31, 2025, the fixed consideration component of our remaining performance obligations was approximately $ 31 million, and we expect approximately 96 % of that amount to be recognized over the next 3 years and the remainder thereafter.

We estimate remaining performance obligations at a point in time and actual amounts may differ from these estimates due to contract revisions or terminations.

1 unchanged sentence

We engage in restructuring actions as part of our ongoing efforts to best use our resources and infrastructure.

These actions generally include severance and facility-related costs, including impairment of operating lease assets, and are intended to improve our efficiency and profitability going forward.

The following is a rollforward of the Company’s restructuring liability, which is included in Accrued expenses in the Condensed Consolidated Balance Sheets:

Nine Months Ended September 30, 2024

These actions generally include severance and impairment of real estate and equipment operating lease assets, and are intended to improve our efficiency and profitability going forward.

The following is a rollforward of the Company’s restructuring activity:

Three Months Ended March 31, 2025

(In millions) Reserve Balance

December 31, 2023 Acquisition Charges Incurred Payments Reserve Balance

September 30, 2024

December 31, 2024 Charges Incurred Payments Reserve Balance

March 31, 2025

Severance $ 5 $ 8 $ ( 4 ) $ 9

Facilities 2 — 4 ( 4 ) 2

Contract termination — — 1 — 1

Equipment and facilities 15 6 ( 2 ) 19

Total $ 20 $ 14 $ ( 6 ) $ 28

We expect the majority of the cash outlays related to the remaining restructuring liability at September 30, 2024 to be complete within twelve months.

Property and Equipment

The following table summarizes our property and equipment:

(In millions) September 30, 2024 December 31, 2023

Property and equipment

Buildings and leasehold improvements $ 45 $ 33

Vehicles, tractors and trailers 24 24

Machinery and equipment 44 41

Computer software and equipment 362 319

Total property and equipment, gross 475 417

accumulated depreciation ( 300 ) ( 293 )

Total property and equipment, net $ 175 $ 124

Net book value of capitalized internally-developed software included in property and equipment, net $ 103 $ 63

Depreciation of property and equipment and amortization of computer software was $ 16 million and $ 43 million for the three and nine months ended September 30, 2024.

Depreciation of property and equipment and amortization of computer software was $ 12 million and $ 42 million for the three and nine months ended September 30, 2023.

Goodwill and Intangible Assets

The following table presents the changes in Goodwill for the nine months ended September 30, 2024:

(In millions)

Balance as of December 31, 2023 $ 630

Acquired goodwill 397

Balance as of September 30, 2024 $ 1,027

Acquired goodwill represents the excess of consideration transferred over the estimated fair value of the underlying net assets acquired resulting from RXO’s acquisition of Coyote.

There were no cumulative goodwill impairments as of September 30, 2024.

Our identifiable intangible assets consist of customer relationships and trade names, all of which are definite-lived.

We did not recognize any impairment of our identified intangible assets in the three and nine months ended September 30, 2024 and 2023, respectively.

The following table summarizes the balance of our identifiable intangible assets:

(In millions) September 30, 2024 December 31, 2023

Customer relationships $ 680 $ 186

Trade name 15 —

Total identifiable intangible assets, gross 695 186

Accumulated amortization ( 130 ) ( 118 )

Total identifiable intangible assets, net $ 565 $ 68

Estimated future amortization expense for amortizable intangible assets for the next five years and thereafter is as follows:

(In millions) Remaining 2024 2025 2026 2027 2028 Thereafter

Estimated amortization expense $ 17 $ 50 $ 45 $ 44 $ 41 $ 368

Actual amounts of amortization expense may differ from estimated amounts due to changes in estimated fair value of intangibles acquired in the acquisition of Coyote during the one-year measurement period, changes in foreign currency exchange rates, additional intangible asset acquisitions, future impairment of intangible assets, accelerated amortization of intangible assets and other events.

Intangible asset amortization expense was $ 5 million and $ 11 million for the three and nine months ended September 30, 2024, respectively.

Intangible asset amortization expense was $ 4 million and $ 10 million for the three and nine months ended September 30, 2023, respectively.

We expect the majority of the cash outlays related to the remaining restructuring liability at March 31, 2025 to be complete within twelve months.

The following table summarizes the principal balance and carrying value of our debt:

September 30, 2024 December 31, 2023

March 31, 2025 December 31, 2024

(In millions) Principal Balance Carrying Value Principal Balance Carrying Value

6 unchanged sentences

Total long-term debt and obligations under finance leases $ 392 $ 387 $ 357 $ 351

(1) The carrying value of the 7.50 % Notes due 2027 is presented net of unamortized debt issuance cost and discount of $ 6 million and $ 8 million as of September 30, 2024 and December 31, 2023, respectively.

(1) The carrying value of the 7.50 % Notes due 2027 is presented net of unamortized debt issuance cost and discount of $ 5 million and $ 6 million as of March 31, 2025 and December 31, 2024, respectively.

Revolving Credit Facilities

2 unchanged sentences

The Company is required to pay a commitment fee on any unused commitment, based on pricing levels set forth in the agreement.

The effective interest rate on the Revolver was 8.00 % as of March 31, 2025.

On November 2, 2023, the Company exercised a feature to increase the total commitments under the Revolver from $ 500 million to $ 600 million.

2 unchanged sentences

On August 8, 2024, the Company and lenders entered into an amendment, which, following the completion of the Coyote acquisition on September 16, 2024, increased the Company’s maximum consolidated leverage ratio to not greater than 4.50 :1.00.

At September 30, 2024, the Company was in compliance with the covenants of the Revolver.

There were no letters of credit outstanding on the Revolver at September 30, 2024.

At March 31, 2025, the Company was in compliance with the covenants of the Revolver.

There were no letters of credit outstanding on the Revolver at March 31, 2025.

In addition, the amendment extended, upon the completion date of the Coyote acquisition, the Revolver maturity date five years from the amendment date to September 16, 2029.

2 unchanged sentences

revolving credit facility with a maximum commitment of approximately $ 15 million.

This facility has a one-year term and we had $ 13 million outstanding as of September 30, 2024 classified as short-term debt.

This facility has a one-year term and we had $ 15 million outstanding as of March 31, 2025 classified as short-term debt.

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”).

1 unchanged sentence

The Notes were issued at an issue price of 98.962 % of par.

The effective interest rate on the Notes was 8.13 % as of September 30, 2024.

We may redeem the Notes, in whole or in part, at any time on or after November 15, 2024 at a redemption price equal to (i) 103.750 % of the principal amount to be redeemed if the redemption occurs during the 12-month period beginning on November 15, 2024, (ii) 101.875 % of the principal amount to be redeemed if the redemption occurs during the 12-month period beginning on November 15, 2025 and (iii) 100 % of the principal amount to be redeemed if the redemption occurs on or after November 15, 2026, in each case plus accrued and unpaid interest, if any, to, but excluding, the redemption date.

At any time prior to November 15, 2024, we may also redeem up to 40 % of the Notes with the net cash proceeds of certain equity offerings at a redemption price equal to 107.500 % of the principal amount of the Notes to be redeemed, plus accrued and unpaid interest, if any, to, but excluding, the redemption date.

In addition, at any time prior to November 15, 2024, we may redeem the Notes, in whole or in part, at a redemption price equal to 100 % of the principal amount of the Notes to be redeemed, plus accrued and unpaid interest, if any, to, but excluding, the redemption date plus an applicable “make-whole” premium.

The effective interest rate on the Notes was 8.13 % as of March 31, 2025.

We may redeem the Notes, in whole or in part, at any time at a redemption price equal to (i) 103.750 % of the principal amount to be redeemed if the redemption occurs during the 12-month period beginning on November 15, 2024, (ii) 101.875 % of the principal amount to be redeemed if the redemption occurs during the 12-month period beginning on November 15, 2025 and (iii) 100 % of the principal amount to be redeemed if the redemption occurs on or after November 15, 2026, in each case plus accrued and unpaid interest, if any, to, but excluding, the redemption date.

The Notes are guaranteed by each of our direct and indirect wholly-owned domestic subsidiaries (other than certain excluded subsidiaries).

1 unchanged sentence

The Notes contain covenants customary for debt securities of this nature.

At September 30, 2024, the Company was in compliance with the covenants of the Notes.

At March 31, 2025, the Company was in compliance with the covenants of the Notes.

Fair Value Measurements

8 unchanged sentences

The Company bases its fair value estimates on market assumptions and available information.

The carrying values of cash and cash equivalents, accounts receivable, accounts payable, accrued expenses and short-term debt and current maturities of long-term debt approximated their fair values as of September 30, 2024 and December 31, 2023, due to their short-term nature and/or being receivable or payable on demand.

The carrying values of cash and cash equivalents, accounts receivable, accounts payable, accrued expenses and short-term debt and current maturities of long-term debt approximated their fair values as of March 31, 2025 and December 31, 2024, due to their short-term nature and/or being receivable or payable on demand.

The fair value of our debt and classification in the fair value hierarchy is as follows:

(In millions) Level September 30, 2024 December 31, 2023

(In millions) Level March 31, 2025 December 31, 2024

Revolver 3 $ 35 $ —

3 unchanged sentences

Stockholders’ Equity

On August 12, 2024, the Company entered into purchase agreements with investors to which the Company agreed to issue and sell to the investors in a private placement an aggregate of 20,954,780 shares of the Company’s common stock, par value $ 0.01 per share (“common stock”), at a purchase price of $ 20.21 per share and pre-funded warrants to purchase 6,259,471 shares of common stock at a purchase price of $ 20.20 per warrant.

The aggregate gross proceeds from the private placement were $ 550 million before deducting offering expenses.

The Company incurred $ 6 million in equity issuance costs related to the private placement, which were recorded as a reduction to Additional paid-in capital in the condensed consolidated balance sheets.

Net proceeds from the private placement were used to finance a portion of the acquisition of Coyote on September 16, 2024.

In connection with the private placement, a deemed non-pro rata distribution of $ 216 million was recorded within Other expense in the condensed consolidated statements of operations for the three and nine months ended September 30, 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.

On September 9, 2024 the Company agreed to sell 19,230,770 shares of the Company’s common stock at a public offering price of $ 26.00 per share.

In connection with the offering, the Company granted the underwriters an option to purchase up to an additional 2,884,615 shares of common stock, which was exercised in full.

The aggregate gross proceeds from the public offering, including the shares issued pursuant to the option granted to and exercised by the underwriters, were $ 575 million before deducting offering expenses.

The Company incurred $ 24 million in equity issuance costs related to the public offering, which were recorded as a reduction to Additional paid-in capital in the condensed consolidated balance sheets.

Net proceeds from the public offering were used to finance a portion of the acquisition of Coyote on September 16, 2024.

On May 2, 2023, the Company’s Board of Directors authorized the repurchase of up to $ 125 million of the Company’s common stock (the “2023 Share Repurchase Program”).

During 2023, the Company repurchased 100,000 shares of its common stock for $ 2 million at an average price of $ 20.53 per share, funded by available cash.

There were no share repurchases under the 2023 Share Repurchase Program in the nine months ended September 30, 2024.

As of September 30, 2024, $ 123 million remained approved to be used for share repurchases under the 2023 Share Repurchase Program.

There were no share repurchases under the 2023 Share Repurchase Program in the three months ended March 31, 2025.

As of March 31, 2025, $ 123 million remained approved to be used for share repurchases under the 2023 Share Repurchase Program.

The 2023 Share Repurchase Program does not have an expiration date and may be suspended or discontinued at any time at the discretion of the Company’s Board of Directors.

1 unchanged sentence

Earnings per Share

The computations of basic and diluted earnings per share are as follows:

Three Months Ended September 30, Nine Months Ended September 30,

The computations of basic and diluted loss per share are as follows:

Three Months Ended March 31,

(Dollars in millions, shares in thousands, except per share data) 2025 2024

Net income (loss) $ ( 243 ) $ ( 1 ) $ ( 265 ) $ 2

Net loss $ ( 31 ) $ ( 15 )

Basic weighted-average common shares 168,023 117,217

134,095 116,970 123,004 116,823

Dilutive effect of stock-based awards — —

1 unchanged sentence

168,023 117,217

Basic earnings (loss) per share $ ( 1.81 ) $ ( 0.01 ) $ ( 2.15 ) $ 0.02

Diluted earnings (loss) per share $ ( 1.81 ) $ ( 0.01 ) $ ( 2.15 ) $ 0.02

Basic loss per share $ ( 0.18 ) $ ( 0.13 )

Diluted loss per share $ ( 0.18 ) $ ( 0.13 )

Antidilutive shares excluded from diluted weighted-average common shares 1,512 2,514

(1) Of the 6,259,471 pre-funded warrants issued in the private placement, warrants to purchase 2,558,753 shares of common stock do not require stockholder approval.

Therefore, basic and diluted weighted-average common shares include 2,558,753 pre-funded warrants from their August 13, 2024 issuance date, as the exercise price of $0.01 per share is not substantive.

(2) Amounts may not be additive due to rounding.

Commitments and Contingencies

15 unchanged sentences

Our last mile subsidiary is involved in several class action and collective action cases involving misclassification claims.

The misclassification claims related solely to our last mile business, which operated as a wholly owned subsidiary of XPO until the spin-off of RXO was completed.

The misclassification claims relate solely to our last mile business, which operated as a wholly owned subsidiary of XPO until the spin-off of RXO was completed.

Pursuant to the Separation and Distribution Agreement between XPO and RXO, the liabilities of XPO’s last mile subsidiary, including legal liabilities, if any, related to the misclassification claims, were spun-off as part of RXO as of November 1, 2022.

Pursuant to the Separation and Distribution Agreement, RXO has agreed to indemnify XPO for certain matters relating to RXO, including indemnifying XPO from and against any liabilities, damages, costs, or expenses incurred by XPO arising out of or resulting from the misclassification claims.

In one of the misclassification claims, Muniz v.

RXO Last Mile, Inc.

, we recently reached an agreement to settle the matter for an immaterial amount without admitting any liability.

We have accrued the full amount of the settlement.

We continue to believe the other misclassification claims are without merit and we intend to defend the Company vigorously in these matters.

We continue to believe the misclassification claims are without merit and we intend to defend the Company vigorously in these matters.

We do not believe that the incurrence of a loss is probable at this time and, accordingly, we have not accrued for any losses in these matters.

Further, the plaintiffs have not quantified damages sought in the other misclassification claims and we are unable at this time to determine the amount of the possible loss or range of loss, if any, that we may incur as a result of the other misclassification claims.

Further, the plaintiffs have not quantified damages sought in the misclassification claims and we are unable at this time to determine the amount of the possible loss or range of loss, if any, that we may incur as a result of the misclassification claims.

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-Q

Item 1. Financial Statements