RXO Inc (NYSE:RXO) posted weaker-than-expected fourth-quarter results on Friday, as a tightening full-truckload market weighed heavily on brokerage margins, triggering a sharp sell-off in the stock.
Shares of RXO Inc dropped nearly 11% in premarket trading after the logistics group reported an adjusted loss of $0.07 per share for the quarter, compared with analyst expectations for a $0.04 loss. Revenue totaled $1.5 billion, slightly ahead of the $1.49 billion consensus estimate but down from $1.7 billion in the same period last year. Brokerage gross margin narrowed to 14.8%, from 15.5% a year earlier.
“In the fourth quarter, tightening in the freight market accelerated, driven by continued reductions in truckload capacity. This impacted our buy rates and squeezed our Brokerage gross margin,” said RXO Chairman and CEO Drew Wilkerson.
Despite the margin pressure and softer demand backdrop, RXO pointed to encouraging commercial momentum. The company said its Brokerage late-stage pipeline for new business expanded by more than 50% year on year, while its Managed Transportation segment secured over $200 million of freight under management during the quarter.
Looking ahead, management struck a cautious tone. RXO expects first-quarter 2026 adjusted EBITDA in the range of $5 million to $12 million. Brokerage volumes are forecast to fall between 5% and 10% year on year, with gross margin projected at 11% to 13%.
“We remain focused on profitable growth and long-term performance. Our larger scale, asset-light model and improving cost structure drive strong cash flow,” Wilkerson added.
The company also recently completed a $450 million asset-based lending facility, replacing its prior $600 million unsecured revolving credit line, which RXO said provides greater flexibility to navigate changing market conditions.