What changed in this filing

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Item 8. Financial Statements and Supplementary Data

2026-02-09 compared with 2025-02-27 · 219 added, 249 removed, 787 unchanged (37% of the section changed)

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REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the shareholders and the Board of Directors of RXO, Inc.

To the stockholders and the Board of Directors of RXO, Inc.

Opinion on the Financial Statements

We have audited the accompanying consolidated balance sheet of RXO, Inc.

and subsidiaries (the "Company") as of December 31, 2024, the related consolidated statements of operations, comprehensive income (loss), cash flows, and changes in equity, for the year ended December 31, 2024, and the related notes (collectively referred to as the "financial statements").

In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2024, and the results of its operations and its cash flows the year ended December 31, 2024, in conformity with accounting principles generally accepted in the United States of America.

We have audited the accompanying consolidated balance sheets of RXO, Inc.

and subsidiaries (the “Company”) as of December 31, 2025 and 2024, the related consolidated statements of operations, comprehensive income (loss), cash flows, and changes in equity, for the years ended December 31, 2025 and 2024, and the related notes (collectively referred to as the “financial statements”).

In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2025 and 2024, and the results of its operations and its cash flows for the years ended December 31, 2025 and 2024, in conformity with accounting principles generally accepted in the United States of America.

We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Company’s internal control over financial reporting as of December 31, 2025, based on criteria established in Internal Control — Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission and our report dated February 9, 2026 , expressed an unqualified opinion on the Company's internal control over financial reporting.

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federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audit in accordance with the standards of the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB.

Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud.

Our audit included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks.

Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks.

Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements.

Our audit also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements.

We believe that our audit provides a reasonable basis for our opinion.

Critical Audit Matters

The critical audit matters communicated below are matters arising from the current-period audit of the financial statements that were communicated or required to be communicated to the audit committee and that (1) relate to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments.

The communication of critical audit matters does not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit matters below, providing separate opinions on the critical audit matters or on the accounts or disclosures to which they relate.

Acquisition — Coyote Logistics — Customer Relationships — Refer to Note 3 to the financial statements

Critical Audit Matter Description

On September 16, 2024, the Company acquired Coyote for an aggregate purchase price of $1.048 billion.

The Company accounts for acquired businesses using the acquisition method of accounting by recording assets and liabilities acquired at their respective fair values.

Related to the acquisition, the Company recorded intangible assets related to customer relationships.

The determination of the acquisition date fair value of the customer relationship intangible assets required the Company to make significant estimates and assumptions regarding estimated future

revenues, estimated future earnings before interest, taxes, depreciation and amortization (“estimated future EBITDA”), and discount rate.

We identified the fair value of an acquired customer relationship intangible asset as a critical audit matter because of the significant estimates and assumptions management makes to fair value these assets.

This required a high degree of auditor judgment and an increased extent of effort, including the need to involve our fair value specialists, when performing audit procedures to evaluate the reasonableness of management's forecast of future revenue and EBITDA and the selection of the discount rate for the customer relationships.

How the Critical Audit Matter Was Addressed in the Audit

Our audit procedures related to the Company’s forecasted revenue and EBITDA and the selection of the discount rate included the following, among others:

• We tested the design and operating effectiveness of controls over management’s purchase price allocation procedures, including controls over forecasts of revenue growth rates, EBITDA margins and the determination of the discount rate.

• We evaluated the reasonableness of management’s forecasts by comparing the forecasts to:

◦ Historical results

◦ Third-party economic research, industry performance, and peer company performance

• With the assistance of our fair value specialists, we evaluated the reasonableness of the valuation methodology and the discount rate by performing certain procedures, that included:

◦ Evaluating whether the fair value models being used are appropriate considering the acquired entity’s circumstances and valuation methodology employed

◦ Testing the underlying source information and mathematical accuracy of the calculations

◦ Evaluating the discount rate, including testing the underlying market-based source information and the mathematical accuracy of the calculations, and developing a range of independent valuation assumptions and comparing those to the discount rate selected by management

Self-insurance Liabilities – Refer to Note 2 to the financial statements

Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements.

We believe that our audits provide a reasonable basis for our opinion.

Critical Audit Matter

The critical audit matter communicated below is a matter arising from the current-period audit of the financial statements that was communicated or required to be communicated to the audit committee and that (1) relates to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments.

The communication of critical audit matters does not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing separate opinions on the critical audit matter or on the accounts or disclosures to which it relates.

Self-insurance Automobile Liabilities - Refer to Note 2 to the financial statements

Critical Audit Matter Description

The Company participates in a combination of self-insurance programs and purchased insurance that are managed to provide for the costs of liability, vehicular, and workers compensation (self-insured claims).

The Company participates in a combination of self-insurance programs and purchased insurance that are managed to provide for the costs of liability, automobile, and workers compensation (self-insured claims).

The Company records estimates of the undiscounted liabilities associated with claims incurred as of the balance sheet date, including estimates of claims incurred, but not yet reported, by considering historical experience, demographic, and severity factors, and judgments about current and expected levels of cost per claim and retention levels.

We identified the assessment of the estimated liabilities for self-insured claims as a critical audit matter.

The subjectivity of estimating the claims accruals for pending claims and incurred but not reported claims requires a high degree of auditor judgment and an increased extent of effort, including the need to involve our actuarial specialists, when performing audit procedures to evaluate whether claims accruals are appropriately stated as of December 31, 2024.

We identified the assessment of certain of the estimated liabilities for self-insured automobile claims as a critical audit matter.

The subjectivity of estimating the claims liabilities for pending claims and incurred but not reported claims requires a high degree of auditor judgment and an increased extent of effort, including the need to involve our actuarial specialists, when performing audit procedures to evaluate whether claims liabilities are appropriately stated as of December 31, 2025.

How the Critical Audit Matter Was Addressed in the Audit

Our audit procedures related to the self-insured claims accrual included the following, among others:

• Evaluated the design and tested the operating effectiveness of certain internal controls related to the self-insured claims accruals, including controls over the projected development of known claims and incurred but not reported claims.

Our audit procedures related to the self-insured claims – automobile liability included the following, among others:

• Evaluated the design and tested the operating effectiveness of certain internal controls related to the self-insured automobile claims liabilities, including controls over the projected development of known claims and incurred but not reported claims.

• Tested the underlying data and inputs for completeness and accuracy that served as the basis for the actuarial analysis, including reconciling the claims data to the Company’s actuarial analysis and testing current year claims and payment data.

• Evaluated assumptions used in determining the liability, including expected level of cost per claim, in relation to recent historical loss payment trends and severity factors.

• With the assistance of our actuarial specialists, we developed an independent range of estimates of the claims accruals, utilizing loss development factors from the Company's historical data and industry claim development factors, and compared our estimated range to management's recorded reserve.

• Compared the Company’s actuarial reserving methodologies with accepted actuarial methods and procedures.

• Evaluated assumptions and data used in determining the liability, including the ultimate loss selection, historical loss triangles, exposures by year (revenue and mileage), and the expected level of cost per claim, in relation to recent historical loss payment trends and severity factors.

• With the assistance of our actuarial specialists, we developed an independent range of estimates of the claims liabilities, utilizing loss development factors from the Company’s historical data and industry claim development factors, and compared our estimated range to management's recorded liability.

• Evaluating the reasonableness of the methodologies used in management’s estimate based on actuarial methods followed in the insurance industry associated with such liabilities.

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REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the shareholders and the Board of Directors of RXO, Inc.

To the stockholders and the Board of Directors of RXO, Inc.

Opinion on Internal Control over Financial Reporting

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We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the consolidated financial statements as of and for the year ended December 31, 2025, of the Company and our report dated February 9, 2026 , expressed an unqualified opinion on those financial statements.

As described in Management’s Annual Report on Internal Control over Financial Reporting, management has excluded Coyote from its assessment of internal control over financial reporting as of December 31, 2024, because it was acquired by the Company in a business combination purchase during the year ended December 31, 2024.

We have also excluded Coyote from our audit of internal control over financial reporting.

Coyote is a wholly owned subsidiary whose total assets (excluding goodwill and intangibles, which were included in management's assessment of internal control over financial reporting as of December 31, 2024) and total revenues excluded from management’s assessment and our audit of internal control over financial reporting represent approximately 36% and 17%, respectively, of the related consolidated financial statement amounts as of and for the year ended December 31, 2024.

Basis for Opinion

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(2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company;

and (3) provide reasonable

assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company's assets that could have a material effect on the financial statements.

and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements.

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Opinion on the Consolidated Financial Statements

We have audited the accompanying consolidated balance sheet of RXO, Inc.

and subsidiaries (the Company) as of December 31, 2023, the related consolidated statements of operations, comprehensive income (loss), cash flows, and changes in equity for each of the years in the two-year period ended December 31, 2023, and the related notes (collectively, the consolidated financial statements).

In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2023, and the results of its operations and its cash flows for each of the years in the two-year period ended December 31, 2023, in conformity with U.S.

We have audited the accompanying consolidated statements of operations, comprehensive income (loss), cash flows, and changes in equity of RXO, Inc.

for the year ended December 31, 2023, and the related notes (collectively, the consolidated financial statements).

In our opinion, the consolidated financial statements present fairly, in all material respects, the results of its operations and its cash flows for the year ended December 31, 2023, in conformity with U.S.

generally accepted accounting principles.

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These consolidated financial statements are the responsibility of the Company’s management.

Our responsibility is to express an opinion on these consolidated financial statements based on our audits.

Our responsibility is to express an opinion on these consolidated financial statements based on our audit.

We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S.

federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB.

We conducted our audit in accordance with the standards of the PCAOB.

Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud.

Our audits included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks.

Our audit included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks.

Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements.

Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements.

We believe that our audits provide a reasonable basis for our opinion.

Our audit also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements.

We believe that our audit provides a reasonable basis for our opinion.

We served as the Company’s auditor from 2022 to 2023.

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Total assets $ 3,277 $ 3,414

LIABILITIES AND STOCKHOLDERS’ EQUITY

LIABILITIES AND EQUITY

Current liabilities

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Additional paid-in capital 1,929 1,904

Retained earnings (Accumulated deficit) ( 284 ) 6

Accumulated deficit ( 384 ) ( 284 )

Accumulated other comprehensive loss ( 6 ) ( 10 )

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Restructuring costs 38 33 16

Goodwill impairment 12 — —

Operating income (loss) ( 79 ) ( 56 ) 39

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Net income (loss) $ ( 100 ) $ ( 290 ) $ 4

Earnings (loss) per share data

Earnings (loss) per share

Basic $ ( 0.59 ) $ ( 2.17 ) $ 0.03

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Other comprehensive income (loss), net of tax

Foreign currency translation gain (loss), net of tax effect of $ 0 , $ 0 and $ 0

$ ( 7 ) $ 1 $ ( 2 )

Foreign currency gain (loss) $ 4 $ ( 7 ) $ 1

Other comprehensive income (loss) 4 ( 7 ) 1

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Impairment of operating lease assets 4 13 —

Goodwill impairment 12 — —

Changes in assets and liabilities

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Payment for equity issuance costs ( 1 ) ( 30 ) —

Proceeds from issuance of debt — — 451

Repayment of debt and finance leases ( 2 ) ( 3 ) ( 104 )

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Repurchase of common stock — — ( 2 )

Net transfers to XPO — — ( 621 )

Other ( 10 ) 11 ( 2 )

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Cash paid for interest, net 32 27 32

Purchases of property and equipment in accounts payable 3 2 4

Purchases of property and equipment in accounts payable, accrued expenses and other liabilities 11 3 2

Accrued tax withholdings related to vesting of stock compensation awards — 15 —

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Consolidated Statements of Changes in Equity

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

(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 December 31, 2022

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Net income — — — 4 — 4

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

Stock compensation expense — — 3 — — 29 32

Vesting of stock compensation awards 1,237 — — — — — —

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

Net transfers to XPO — — — — ( 602 ) ( 602 )

Issuance of common stock and reclassification of XPO investment 115,163 1 588 — — ( 589 ) —

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

Net income — — — 4 — — 4

Other comprehensive income — — — — 1 1

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

Net loss — — — ( 100 ) — ( 100 )

Other comprehensive income — — — — 4 4

Stock compensation expense — — 29 — — 29

Vesting of stock compensation awards 1,643 — — — — —

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

Balance as of December 31, 2025 164,160 $ 2 $ 1,929 $ ( 384 ) $ ( 6 ) $ 1,541

See accompanying notes to consolidated financial statements.

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We present our operations in the consolidated financial statements as one reportable segment.

On November 1, 2022, the Company completed the separation (the “Separation”) from XPO, Inc.

(formerly known as XPO Logistics, Inc.) (“XPO”) in a transaction intended to be tax-free for U.S.

federal income tax purposes.

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.

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.

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.

Basis of Presentation and Significant Accounting Policies

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.

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”).

Prior to the Separation, the Company’s historical assets and liabilities presented were wholly owned by XPO and were reflected on a historical cost basis.

In connection with the Separation, the Company’s assets and liabilities were transferred to the Company on a carry-over basis.

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.

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.

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.

The majority of these allocated costs are recorded within Sales, general and administrative expense;

Depreciation and amortization expense;

Transaction and integration costs;

and Restructuring costs in the Consolidated Statements of Operations.

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.

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.

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.

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.

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.

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.

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.

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Use of Estimates

The preparation of consolidated financial statements in conformity with GAAP requires the use of estimates, judgments and assumptions that affect the reported amounts in the consolidated financial statements and accompanying notes.

The preparation of consolidated financial statements in conformity with U.S.

generally accepted accounting principles (“GAAP”) requires the use of estimates, judgments and assumptions that affect the reported amounts in the consolidated financial statements and accompanying notes.

The Company bases its estimates and judgments on historical information and on various other assumptions that it believes are reasonable under the circumstances.

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The estimate of variable consideration is determined by the expected value or most likely amount method and factors in current, past and forecasted experience with the customer.

Cash and Cash Equivalents

Cash, Cash Equivalents and Restricted Cash

We consider all highly liquid investments with an original maturity of three months or less on the date of purchase to be cash equivalents.

Bank overdraft positions occur when the sum of payments honored by the Company’s bank exceed the amount of cash available in the Company’s account.

As of December 31, 2025, our restricted cash included in Other current assets on our Consolidated Balance Sheets was $ 1 million.

Restricted cash relates to amounts that are subject to contractual restrictions and are not readily available.

Accounts Receivable and Allowance for Credit Losses

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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, 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.

See Note 9 — Goodwill and Intangible Assets for more information on our goodwill.

Intangible Assets and Long-lived Assets

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We amortize intangible assets on a straight-line basis or on a basis consistent with the pattern in which the economic benefits are realized.

The estimated useful life is 4 to 16 years for customer relationships and 0.5 to 15 years for trade names.

The estimated useful life is 4 to 16 years for customer relationships and 15 years for trade names.

Accrued Expenses

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Total accrued expenses $ 397 $ 373

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.

We participate in a combination of self-insurance programs, partially through a 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.

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We report tax-related interest and penalties as a component of income tax expense.

Up until the date of the Separation, the operations of the Company were included in the consolidated U.S.

federal, certain state, local and foreign income tax returns filed by XPO, where applicable.

Income tax expense and other income tax related information contained in the consolidated financial statements up until the date of the Separation were presented on a separate return basis as if the Company had filed its own tax returns.

As a result, actual tax transactions included in the consolidated financial statements of XPO may not be included in our consolidated financial statements.

Similarly, the tax treatment of certain items reflected in our consolidated financial statements may not be reflected in the consolidated financial statements and tax returns of XPO.

Up until the date of the Separation, the income taxes of the Company as presented in the consolidated financial statements may not have been indicative of the income taxes that the Company will incur post-Separation.

Foreign Currency Translation and Transactions

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The Company accounts for forfeitures as they occur.

Recent Accounting Pronouncements

Adoption of New Accounting Standard

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.

We adopted this standard on January 1, 2024, on a retrospective basis.

Refer to Note 4 — S egment R e porting for required disclosures.

Accounting Pronouncements Issued but Not Yet Effective

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.

In December 2023, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No.

2023-09, Income Taxes (Topic 740) - Improvements to Income Tax Disclosures (“ASU 2023-09”).

ASU 2023-09 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.

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.

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.

Refer to Note 15 — Income Taxes for required disclosures.

Accounting Pronouncements Issued but Not Yet Effective

In November 2024, the FASB issued ASU No.

2024-03, Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures (Subtopic 220-40) - Disaggregation of Income Statement Expenses (“ASU 2024-03”).

ASU 2024-03 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.

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We are currently evaluating the impact of the new guidance.

In July 2025, the FASB issued ASU 2025-05, Financial Instruments - Credit Losses (Topic 326):

Measurement of Credit Losses for Accounts Receivable and Contract Assets (“ASU 2025-05”), which creates a new optional practical expedient related to the estimation of future expected credit losses on accounts receivable.

If elected, this expedient removes the requirement, when estimating expected credit losses, to consider changes in forecasted macroeconomic conditions, such as changes in unemployment rates or gross domestic product growth.

Instead, companies electing the practical expedient may assume that current conditions as of the balance sheet date will not change for the remaining life of the asset.

The amendments in ASU 2025-05 are effective for annual reporting periods beginning after December 15, 2025, including interim periods within those fiscal years.

Early adoption is permitted and the amendments should be applied prospectively.

We are currently evaluating the potential impact of the new guidance.

In September 2025, the FASB issued ASU 2025-06, Intangibles - Goodwill and Other - Internal Use Software (Subtopic 350-40):

Targeted Improvements to the Accounting for Internal-Use Software (“ASU 2025-06”).

ASU 2025-06 improves the operability of the accounting for internal-use software by removing all references to software development project stages so that the guidance is neutral to different software development methods.

This standard is effective for annual periods beginning after December 15, 2027, including interim periods within those fiscal years, and early adoption is permitted.

We are currently evaluating the potential impact of the new guidance.

In December 2025, the FASB issued ASU 2025-11, Interim Reporting (Topic 270):

Narrow-Scope Improvements (“ASU 2025-11”), which clarifies the guidance in Topic 270 to improve the consistency of interim financial reporting.

ASU 2025-11 provides a comprehensive list of required interim disclosures and introduces a disclosure principle requiring entities to disclose events since the end of the last annual reporting period that have a material impact on the entity.

This standard is effective for fiscal years beginning after December 15, 2027, including interim periods within those fiscal years, with early adoption permitted.

We are currently evaluating the potential impact of the new guidance.

On July 4, 2025, the U.S.

enacted into law H.R.1, commonly referred to as “The One Big Beautiful Bill Act” (the “Act”).

The Act contains several key tax provisions impacting businesses, including the permanent reinstatement of 100% bonus depreciation for qualified property and the restoration of immediate expensing of domestic research and experimental expenditures.

The Act also modifies the business interest deduction limitation as well as several international tax provisions.

The legislation has various effective dates of implementation from 2025 through 2027.

The impact of the Act has been reflected in our consolidated financial statements for the year ended December 31, 2025.

The Act did not have any material impact on our effective tax rate or cash flow in the current fiscal year.

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.

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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.

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.

The Transaction was accounted for under the acquisition method of accounting.

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 consolidated financial statements as of and for the year ended December 31, 2024 include the financial results of Coyote from the acquisition date.

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.

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

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

During the measurement period, adjustments to the preliminary purchase price allocation were made primarily to reflect the final valuation of acquired identifiable intangible assets, property and equipment, self-insured liabilities and deferred tax liabilities.

(In millions)

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Goodwill recognized in the Transaction is not expected to be deductible for tax purposes.

The fair values of the assets acquired and liabilities assumed are considered preliminary and subject to adjustment as additional information is obtained and reviewed.

The final allocation of the purchase price may differ from the preliminary allocation based on completion of the valuation.

The Company expects to finalize the purchase price allocation within the measurement period, which will not exceed one year from the acquisition date.

The following table summarizes the preliminary purchase price allocated to the identifiable intangible assets acquired:

(In millions) Fair Value Weighted Average Useful Life (Years)

The following table summarizes the purchase price allocated to the identifiable intangible assets acquired:

(Dollars in millions) Fair Value Weighted Average Useful Life (Years)

Customer relationships $ 444 15

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Cost of transportation and services (exclusive of depreciation and amortization) 4,611 3,565 2,967

3,565 2,967 3,624

Direct operating expense (exclusive of depreciation and amortization) 190 202 235

Segment sales, general and administrative expense (1)

Other segment items (2)

( 1 ) 1 ( 1 )

Sales, general and administrative expense (1)

Other expense (income) 1 ( 1 ) 1

Segment adjusted EBITDA $ 144 $ 136 $ 169

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Restructuring and other costs 39 36 17

Goodwill impairment 12 — —

Other expense — 219 2

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(1) Excludes unallocated corporate expenses and other costs.

(2) Other segment items category includes other expense.

(In millions) 2025 2024

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The majority of our revenue, based on sales office location, is generated in the U.S.

Approximately 7 %, 7 % and 9 % of our revenues were generated outside the U.S.

(primarily in Canada, Mexico, Asia and Europe) for the years ended December 31, 2024, 2023 and 2022, respectively.

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

(primarily in Canada, Mexico, Europe and Asia) for each of the years ended December 31, 2025, 2024 and 2023.

Our revenue disaggregated by service offering is as follows:

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Food and beverage 907 578 438

Automotive 412 411 390

Logistics and transportation 519 419 197

Automotive 369 412 411

Other 723 610 605

Total $ 5,742 $ 4,550 $ 3,927

For the year ended December 31, 2025, revenue from our largest customer represented approximately $ 653 million, or 11.4 %, of total revenue.

Performance Obligations

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

These actions generally include severance and impairment of real estate 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:

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 roll-forward of the Company’s restructuring activity:

Year Ended December 31, 2025

(In millions) Reserve Balance

December 31, 2023 Acquisition Charges Incurred Payments Reserve Balance

December 31, 2024 Charges Incurred Payments and Other Reserve Balance

December 31, 2025

Severance $ 5 $ 21 $ ( 18 ) $ 8

Facilities 2 — 19 ( 6 ) 15

Contract termination — — 1 ( 1 ) —

Equipment and facilities 15 17 ( 13 ) 19

Total $ 20 $ 38 $ ( 31 ) $ 27

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(In millions) Reserve Balance

December 31, 2022 Charges Incurred Payments Reserve Balance

December 31, 2023 Acquisition Charges Incurred Payments and Other Reserve Balance

December 31, 2024

Severance $ 4 $ 1 $ 13 $ ( 13 ) $ 5

Facilities 1 4 ( 3 ) 2

Equipment and facilities 2 — 19 ( 6 ) 15

Contract termination — — 1 ( 1 ) —

Total $ 6 $ 1 $ 33 $ ( 20 ) $ 20

We expect the majority of the cash outlays related to the remaining restructuring liability at December 31, 2024 to be complete within twelve months.

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

Cash outlays related to the remaining equipment and facilities restructuring liability at December 31, 2025 will be completed over the remaining term of the impaired leases.

Property and Equipment

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As of December 31, 2025, we had additional operating leases that have not yet commenced with future undiscounted lease payments of $ 52 million.

These operating leases will commence in 2025 and 2026, with initial lease terms ranging from 3 years to 11 years .

These operating leases will commence in 2026, with initial lease terms ranging from 7 years to 11 years .

Goodwill and Intangible Assets

The following table presents the changes in Goodwill for the year ended December 31, 2024:

The following table presents the changes in goodwill for the years ended December 31, 2025 and 2024:

(In millions)

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Balance as of December 31, 2024 1,123

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 December 31, 2024.

Goodwill impairment

Adjustments to acquired goodwill (2)

Foreign exchange translation 1

Balance as of December 31, 2025 $ 1,111

Goodwill $ 1,123

Accumulated impairment losses ( 12 )

Balance as of December 31, 2025 $ 1,111

(1) Represents the excess of the purchase price over the estimated fair value of net assets acquired resulting from the Coyote acquisition.

(2) Represents adjustments to the preliminary purchase price allocation for the Coyote acquisition.

As of November 30, 2025, we completed our annual impairment tests for goodwill.

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.

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.

No impairments resulted for our remaining reporting units as their assessed fair values exceeded their carrying values.

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 2025 or 2024.

Identifiable intangible assets as of December 31, 2023 consisted entirely of customer relationships, with a gross carrying amount of $ 186 million and accumulated amortization of $ 118 million.

The following table summarizes the balance of our identifiable intangible assets as of December 31, 2025:

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Total $ 617 $ ( 164 ) $ 453

The following table summarizes the balance of our identifiable intangible assets as of December 31, 2024:

(In millions) Gross Carrying Amount Accumulated Amortization Net Book Value

Customer relationships $ 630 $ ( 139 ) $ 491

Trade name 15 ( 7 ) 8

Total $ 645 $ ( 146 ) $ 499

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

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Estimated amortization expense $ 42 $ 41 $ 38 $ 37 $ 36 $ 259

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 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.

Actual amounts of amortization expense may differ from estimated amounts due to 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 $ 47 million, $ 28 million and $ 13 million for the years ended December 31, 2025, 2024 and 2023, respectively.

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355 351 355 349

Finance leases, asset financing and other 19 19 7 7

Finance leases, asset financing and short-term debt 18 18 19 19

Total debt and obligations under finance leases 408 404 374 368

Current maturities of long-term debt 17 17 3 3

Short-term debt and current maturities of long-term debt 17 17 17 17

Total long-term debt and obligations under finance leases $ 391 $ 387 $ 357 $ 351

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Principal payments on debt $ 15 $ 355 $ — $ 35 $ — $ —

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”).

The Notes bear interest at a rate of 7.50 % per annum payable semiannually in cash in arrears on May 15 and November 15 of each year, beginning May 15, 2023, and mature on November 15, 2027, unless earlier repurchased or redeemed, if applicable.

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 December 31, 2025.

We may redeem the Notes, in whole or in part, at any time at a redemption price equal to (i) 101.875 % of the principal amount to be redeemed if the redemption occurs during the 12-month period beginning on November 15, 2025 and (ii) 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).

The Notes and their guarantees are unsecured, senior indebtedness for us and our guarantors.

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

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

Revolving Credit Facilities

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

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

The effective interest rate on the Revolver was 5.40 % as of December 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.

The covenants in the Revolver are customary for financings of this type.

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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.

To the extent there is more than $ 50 million of the Company’s Notes (as defined below) outstanding on the date that is 91 days prior to the earlier of the extended maturity date and the maturity date of the Notes, then the extended maturity date will be subject to a springing earlier maturity date that is 91 days prior to the earlier of the extended maturity date and the Notes maturity date, unless the Notes are refinanced or replaced with debt that matures at least 91 days after the extended maturity date.

To the extent there is more than $ 50 million of the Company’s Notes outstanding on the date that is 91 days prior to the earlier of the extended maturity date and the maturity date of the Notes, then the extended maturity date will be subject to a springing earlier maturity date that is 91 days prior to the earlier of the extended maturity date and the Notes maturity date, unless the Notes are refinanced or replaced with debt that matures at least 91 days after the extended maturity date.

As of December 31, 2025, the Company had $ 565 million committed under the Revolver, net of outstanding borrowings.

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.

We also have a non-U.S.

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This facility has a one-year term and we had $ 15 million outstanding as of December 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”).

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 December 31, 2024.

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).

The Notes and its guarantees are unsecured, senior indebtedness for us and our guarantors.

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

At December 31, 2024, the Company was in compliance with the covenants of the Notes.

Letters of Credit

The Company maintains a bilateral unsecured letter of credit facility.

As of December 31, 2025, we had $ 41 million in aggregate face amount of letters of credit outstanding under the 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 the option to request an increase in the revolving commitment by up to the greater of $ 200 million and the amount, if positive, by which the borrowing base exceeds the aggregate commitments of the lenders, not to exceed 5 % of the aggregate amount of the commitments of the lenders at such time.

A portion of the ABL Facility, not to exceed $ 100 million, is available for the issuance of letters of credit.

On February 5, 2026, the $ 41 million in aggregate face amount of letters of credit outstanding described above were converted into letters of credit issued and outstanding under the ABL Facility.

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

Proceeds from loans under the ABL Facility were used to repay and terminate the existing Revolver.

The ABL Facility is secured by a first priority perfected security interest (subject to customary exceptions) in all assets of the credit parties, whether consisting of personal, tangible or intangible property;

provided that all interests in fee-owned real property and all leasehold interests in real property are excluded.

Amounts available to be drawn under the ABL Facility are determined by calculating the applicable borrowing base, which is based upon applicable percentages of the values of eligible investment grade accounts receivable, eligible non-investment grade accounts receivable, eligible unbilled accounts receivable, and eligible liquid assets, less reserves.

Outstanding amounts 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 SOFR plus an applicable margin;

interest is payable quarterly.

Subject to customary exceptions and restrictions, the Company may voluntarily prepay outstanding amounts under the ABL Facility at any time without premium or penalty.

Any voluntary prepayments made will not reduce commitments under the ABL Facility.

The ABL Facility contains mandatory prepayment provisions which require prepayment of amounts outstanding under the ABL Facility (i) upon the receipt of proceeds from the issuance of any non-permitted indebtedness and (ii) when there is an availability shortfall.

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.

Fair Value Measurements

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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.

On August 12, 2024, the Company entered into purchase agreements with investors in 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.

1 unchanged sentence

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 consolidated statements of operations for the year ended December 31, 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.

In connection with the private placement common stock issuance completed in August 2024, a deemed non-pro rata distribution of $ 216 million was recorded within Other expense in the consolidated statements of operations for the year ended December 31, 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.

5 unchanged sentences

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 during 2024.

There were no share repurchases under the 2023 Share Repurchase Program during 2025 or 2024.

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

2 unchanged sentences

Stock-Based Compensation

Prior to the Separation, RXO employees participated in XPO’s equity incentive plan, pursuant to which they were granted restricted stock units (“RSUs”), performance-based restricted stock units (“PRSUs”) and non-qualified or incentive stock options.

All awards granted under these plans were related to XPO common shares.

In connection with the Separation, and in accordance with the Employee Matters Agreement (“EMA”) and the RXO, Inc.

2022 Omnibus Incentive Plan (the “2022 Incentive Plan” or the “Plan”) adopted in 2022, the Company’s employees with outstanding former XPO stock-based awards received replacement stock-based awards under the Plan at Separation.

The value of the replaced stock-based awards was designed to preserve the aggregate intrinsic value of the award immediately after the Separation when compared to the aggregate intrinsic value of the award immediately prior to the Separation.

In connection with the Separation, certain holders of outstanding XPO share-based compensation awards received an adjusted award consisting of both shares of XPO common stock and shares of RXO common stock.

Non-vested shares outstanding, as shown in the table below, exclude 0.2 and 1.7 million shares held by non-RXO employees at December 31, 2024 and December 31, 2023, respectively, consisting of certain XPO employees, former employees of XPO as of the distribution date, and XPO non-employee directors who remained on the XPO Board of Directors on the distribution date, that will be settled in RXO common stock once vested under the EMA.

Additionally, one employee of RXO was granted RSUs and PRSUs in XPO stock in connection with the Separation.

Non-vested shares outstanding, as shown in the table below, exclude these 6 thousand and 12 thousand shares at December 31, 2024 and December 31, 2023, respectively, as they will be settled in XPO common stock in accordance with the EMA.

The Company recognizes stock-based compensation expense related only to those awards held by RXO employees.

In October 2022, the Company established the 2022 Incentive Plan, which authorizes the issuance of up to 13.9 million shares of common stock as awards.

Under the 2022 Incentive Plan, directors, officers and employees may be granted various types of stock-based compensation awards, including stock options, restricted stock, RSUs, PRSUs, stock appreciation rights and cash incentive awards (collectively, “Awards”).

In October 2022, the Company established the RXO, Inc.

2022 Omnibus Incentive Plan (the “2022 Incentive Plan” or the “Plan”), which authorizes the issuance of up to 13.9 million shares of common stock as awards.

Under the 2022 Incentive Plan, directors, officers and employees may be granted various types of stock-based compensation awards, including stock options, restricted stock, restricted stock units (“RSUs”), performance-based restricted stock units (“PRSUs”), stock appreciation rights and cash incentive awards (collectively, “Awards”).

As of December 31, 2025, 4.3 million shares of common stock were available for the grant of Awards under the 2022 Incentive Plan.

Prior to the Separation, the stock-based compensation expense recorded by the Company includes the expense associated with the employees historically attributable to the Company’s operations, as well as the expense associated with the allocation of equity-based compensation expense for XPO corporate employees.

The amounts presented are not necessarily indicative of future awards and do not necessarily reflect the costs that the Company would have incurred as an independent company for the periods presented.

Our stock-based compensation expense is recorded in Sales, general and administrative expense on our Consolidated Statements of Operations:

The following table summarizes stock-based compensation expense recorded in Sales, general and administrative expense in our Consolidated Statements of Operations:

Years Ended December 31,

(In millions) 2025 2024 2023

Restricted stock and restricted stock units $ 17 $ 14 $ 9

Performance-based restricted stock units 6 5 23

Restricted stock and RSUs $ 21 $ 17 $ 14

Total stock-based compensation expense $ 29 $ 23 $ 19

6 unchanged sentences

The number of RSUs and PRSUs vested includes shares of our common stock that we withheld or sold on behalf of our employees to satisfy the minimum tax withholdings.

The Company granted a portion of PRSUs subject to market-based vesting conditions.

The Company determines the fair value of PRSUs subject to market-based vesting conditions using a Monte Carlo simulation model that incorporates the probability of the market conditions being met as of the grant date.

Assumptions used in the Monte Carlo simulation model for the estimated fair value were as follows:

Years Ended December 31,

Expected volatility

44.2 % 41.3 %

Risk-free interest rate

A summary of RSU and PRSU award activity for the year ended December 31, 2025 is presented below:

RSUs Weighted-Average Grant Date Fair Value Number of PRSUs Weighted-Average Grant Date Fair Value

Number of RSUs

Weighted-Average Grant Date Fair Value Number of PRSUs

Weighted-Average Grant Date Fair Value

Outstanding as of December 31, 2024

6 unchanged sentences

The total aggregate fair value of RSUs and PRSUs that vested during 2025, 2024 and 2023 was $ 20 million, $ 18 million and $ 13 million, respectively.

Total aggregate fair value of awards vested prior to the Separation was derived from XPO’s stock price at grant.

As of December 31, 2025, all outstanding RSUs vest subject to service conditions.

Of the outstanding PRSUs as of December 31, 2024, 607 thousand vest subject to service and performance conditions and 494 thousand vest subject to service and market conditions.

Of the outstanding PRSUs as of December 31, 2025, 0.5 million vest subject to service and performance conditions and 1.0 million vest subject to service and market conditions.

As of December 31, 2025, unrecognized compensation cost related to unvested RSUs and PRSUs of $ 32 million is anticipated to be recognized over a weighted-average period of approximately 1.5 years.

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.

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.

Income before taxes related to our U.S.

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Total income tax provision (benefit) $ ( 15 ) $ ( 14 ) $ —

The reconciliation of the statutory federal income tax rate to the effective income tax rate consists of the following:

The table below provides the updated requirements of ASU 2023-09 for 2025.

See Note 2 — Basis of Presentation and Significant Accounting Policies for additional details on the adoption of ASU 2023-09.

The reconciliation of the statutory federal income tax rate to the effective income tax rate for the year ended December 31, 2025, consists of the following:

Year Ended December 31, 2025

(Dollars in millions) $ %

Provision for income taxes at U.S.

federal statutory rate $ ( 24 ) 21.0 %

State and local income taxes, net of federal benefit (1)

Foreign tax effects:

Return to provision ( 4 ) 3.5

Valuation allowance 5 ( 4.3 )

Other foreign jurisdictions 1 ( 0.9 )

Research and development tax credits ( 2 ) 1.7

Non-taxable or non-deductible items:

Meals and entertainment 1 ( 0.9 )

Non-deductible compensation 2 ( 1.7 )

Goodwill impairment 2 ( 1.7 )

Other adjustments 1 ( 0.8 )

Total income tax benefit and effective tax rate $ ( 15 ) 13.3 %

(1) State taxes in California, Georgia, Pennsylvania and Texas made up the majority (greater than 50%) of the tax effect in this category.

As previously disclosed for the years ended December 31, 2024 and 2023, prior to the adoption of ASU 2023-09, the reconciliation of the statutory federal income tax rate to the effective income tax rate consists of the following:

Years Ended December 31,

2024 2023 2022

federal statutory tax rate 21.0 % 21.0 %

4 unchanged sentences

Foreign operations (1)

( 0.8 ) 32.2 ( 0.8 )

Provision to return and deferred tax adjustments ( 0.4 ) 4.5

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Federal tax credit carryforwards Various times starting in 2045 2 2

State tax credit carryforwards Various times starting in 2026 — 1

(1) Some losses have unlimited carryforward periods.

21 unchanged sentences

and various states and foreign jurisdictions.

As of December 31, 2024, we have no tax years under examination by the IRS or in any foreign jurisdictions.

We are under examination in various states.

federal tax return after the Separation date of November 1, 2022, certain state and local returns after 2016 and non-U.S.

As of December 31, 2025, we have no tax years under examination by the IRS, states or in any foreign jurisdictions.

federal tax return after the completion of the separation from XPO, Inc.

on November 1, 2022, certain state and local returns after 2017 and non-U.S.

returns after 2011 are open under relevant statutes of limitations and are subject to audit.

3 unchanged sentences

Where necessary, taxes resulting from foreign distributions of current and accumulated earnings have been considered in our provision for income taxes.

For the years ended December 31, 2024 and December 31, 2023, $ 1 million and $ 1 million of deferred tax liability was recorded.

For each of the years ended December 31, 2025 and December 31, 2024, $ 1 million of deferred tax liability was recorded.

We have not recorded incremental income taxes for outside basis differences in its investments in foreign subsidiaries as these amounts are indefinitely reinvested.

Determining the amount of unrecognized deferred tax liability related to the outside basis differences in these entities is not practicable.

Cash Paid for Income Taxes

The following is a supplemental schedule of cash paid for income taxes, net of refunds, for the year ended December 31, 2025:

(In millions) Year Ended December 31, 2025

State and local $ 3

Total cash paid for income taxes, net of refunds $ 7

Individual jurisdictions equaling 5% or more of the total cash paid for income taxes, net of refunds, for the year ended December 31, 2025 include Canada at $ 1.6 million, Mexico at $ 1.2 million, Texas at $ 0.7 million, Florida at $ 0.4 million, India at $ 0.4 million and North Carolina at $ 0.3 million.

Earnings Per Share

Prior to the Separation, RXO employees participated in XPO’s equity incentive plan, pursuant to which they were granted RSUs, PRSUs and non-qualified or incentive stock options.

All awards granted under these plans were related to XPO common shares.

In connection with the Separation, outstanding awards held by RXO employees were converted in accordance with the EMA, with RXO employees either receiving converted awards solely in RXO based shares or a combination of RXO and XPO shares.

The conversion methodology used was calculated in accordance with the EMA and with the purpose of maintaining the aggregate intrinsic value of the award immediately after the Separation when compared to the aggregate intrinsic value immediately prior to the Separation.

In connection with the Separation, outstanding XPO share-based compensation awards held by non-RXO employees, consisting of certain XPO employees, former employees of XPO as of the distribution date, and XPO non-employee directors who remained on the XPO Board of Directors on the distribution date, received an adjusted award consisting of both shares of XPO common stock and shares of RXO common stock.

As of the Separation date, 3.3 million total shares, including 2.4 million RSUs and 0.9 million PRSUs, were converted in this manner.

Approximately 1.5 million, 1.1 million and 0.5 million of these awards vested or were forfeited in 2024, 2023 and 2022, respectively, resulting in 0.2 million, 1.7 million and 2.8 million shares remaining outstanding at December 31, 2024, 2023 and 2022, respectively.

The adjusted RSU awards are subject to the same terms and vesting conditions that applied to the original XPO award immediately before the distribution.

The adjusted PRSU awards are subject to the same terms and vesting conditions that applied to the original XPO award immediately before the distribution, provided that the XPO Compensation Committee may modify the applicable performance-based vesting conditions prior to the effective time (including by deeming the applicable performance-based vesting conditions to be achieved at a designated performance level).

As these awards will ultimately be settled in RXO shares upon vesting, they have been included in our calculation of diluted weighted-average common shares outstanding as of December 31, 2024, 2023 and 2022.

Diluted earnings per share is computed by giving effect to all potentially dilutive stock awards that are outstanding.

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For all pre-funded warrants, the exercise price of $ 0.01 per share is not substantive.

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

Commitments and Contingencies

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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.

In one of the misclassification claims, Gonzalez v.

RXO Last Mile, Inc.

, we settled the matter in July 2024 for an immaterial amount without admitting any liability.

, 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 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.

Related Party

Prior to the Separation, the Company did not operate as a standalone business and the consolidated financial statements were derived from the consolidated financial statements and accounting records of XPO.

Transactions between the Company and XPO, and other non-RXO subsidiaries of XPO, that occurred prior to the Separation have been classified as related-party transactions.

Transactions that originated with XPO prior to the Separation were cash settled or forgiven as of November 1, 2022.

For amounts that were forgiven, the amounts have been recorded as an adjustment to XPO Investment.

Allocation of General Corporate Expenses

Post-Separation, costs were no longer allocated from XPO to the Company;

therefore, no related amounts were reflected on the Company’s financial statements for the years ended December 31, 2024 and December 31, 2023.

Prior to the Separation, certain shared costs were allocated to the Company from XPO’s corporate overhead.

The Consolidated Statements of Operations include expenses for certain centralized functions and other programs provided and/or administered by XPO that were charged directly to the Company.

In addition, for purposes of preparing these consolidated financial statements, a portion of XPO’s total corporate expenses have been allocated to the Company.

See Note 2 — Basis of Presentation and Significant Accounting Policies for a discussion of the methodology used to allocate such costs for purposes of preparing these consolidated financial statements.

Costs included in our Consolidated Statements of Operations for our allocated share of XPO’s corporate overhead are as follows:

Year Ended December 31,

(In millions) 2022

Sales, general and administrative expense $ 50

Depreciation and amortization expense 9

Transaction and integration costs 46

Restructuring costs 7

Transactions with XPO and its non-RXO Subsidiaries

Revenue and costs generated from related parties are as follows:

Year Ended December 31,

(In millions) 2022

Revenue $ 109

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 other misclassification claims.

Changes in and Disagreements With Accountants on Accounting and Financial Disclosure.

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 8. Financial Statements and Supplementary Data