RXO forecasts improved second quarter performance despite challenging first-quarter results
Company expects adjusted EBITDA to reach between $27 million and $37 million in the coming quarter, with contract rate growth anticipated for 2026
RXO has released its first-quarter earnings, reporting a GAAP net loss of $36 million and an adjusted EBITDA of $6 million. The truckload freight brokerage attributes this underperformance to a market environment where rising spot freight rates negatively impacted lower contract volumes. Despite these pressures, the company maintains an optimistic outlook for the second quarter, forecasting adjusted EBITDA between $27 million and $37 million.
Revenue for the period remained flat at approximately $1.4 billion, slightly down from the same period last year. This stagnation coincided with a compressed gross margin of 14.2%, a reduction from the 16% recorded in the first quarter of 2025. The cost of transportation and services also increased to $1.171 billion, rising from $1.153 billion in the prior year period.
A key factor in the company's recent performance has been a strategic shift in its volume mix. RXO reported that its spot mix increased to 33 per cent of total volume in the first quarter, up from 28 per cent in the fourth quarter of 2025. This represents a 600 basis point growth year-on-year and contributed to the largest sequential increase in gross profit per load in more than three years.
Looking ahead, RXO anticipates sequential increases in truckload gross profit per load for the second quarter. The broker also raised its forecast for contract rates for all of 2026 to high-single digits growth, an upward revision from earlier expectations of low to mid-single digits. The company expects this rate environment to support its financial targets as it navigates the current market structure.
While the first quarter presented significant challenges with an adjusted net loss of $16 million compared to $5 million a year earlier, management believes the trajectory is improving. The firm notes that the divergence between spot and contract rates has been the primary constraint on profitability, but the shift toward a higher spot mix has begun to mitigate the impact of rising costs on overall margins.
Investors will be watching closely as RXO enters the second quarter, where the company expects to realise the benefits of its revised rate outlook and volume mix strategy. The path forward relies on sustained growth in contract rates and the continued ability to balance spot market exposure with stable contract volumes.
