Good morning, everyone. Thanks for joining us today. I'm Scott Schnaber, the Senior Business and Industrial Services Analyst at Oppenheimer. It's our pleasure to have RXO here to speak on the company's investment story. We have with us from the company, CEO Drew Wilkerson and Chief Strategy Officer Jared Weisfeld. RXO is a leading tech-enabled transportation brokerage platform with truck brokerage at the cornerstone asset. We'll be using a fireside chat format. I'll ask management some high-level questions upfront, get an overview of the business. Later in the session, I'll facilitate questions from the audience. Throughout, feel free to send them in to me. Let's go ahead and get started. Gentlemen, to set the tone, please provide an overview of the services RXO provides in the primary end markets it serves. Thanks. Yeah, Scott, thank you for having us this morning. If you look at RXO, there are three lines of business. As you mentioned, we are led by our tech-enabled truck brokerage business. It has been one of the fastest growing truck brokerages over the last decade. Our business is well diversified. We do business in retail and industrial manufacturing, as well as automotive and home building supplies. There is a diversified portfolio. One of the things that we have done over the last year is we did a transformative acquisition of Coyote Logistics from UPS. Off of that, we were able to increase our exposure into food and beverage from what we are doing there. We also have two complementary lines of business. The first is managed transportation. When you think about managed transportation, it fits hand in glove with truck brokerage. That's where a customer outsources all of their business to us or a large portion of their business to us. At that point, if our brokerage has good service, they're providing market rates, they're creating solutions for the customers, managed trans gets to act as a customer to our truck brokerage and our other lines of business. The last line of business is our last mile line of business. We're the leader in the space of home deliveries of big and bulky goods, and we have been forever. When you look at that space, we've got a network that puts us within roughly 120 mi of 9`0% of the U.S. population. If you think of large companies that are doing home deliveries, they start their conversation with RXO because of our size, because of our scale, because of our technology, the history we've got creating solutions. That's a business, if you even look just last quarter, in the first quarter we announced yesterday, that they grew stocks by 24% on a year-over-year basis. Excellent. Thanks, Drew. Let's talk truck brokerage specifically to start. The industry has historically increased its penetration within the for-hire truckload market. Please discuss the secular trend and the underlying drivers of it. Yeah, I think it starts with flexibility, Scott. Whenever I started, brokers were typically just a backup carrier. I started in the industry almost 20 years ago. They were a backup carrier, and they were a stop gap for whenever routing guides broke down. Now what you've seen take place is brokers have become a strategic partner for some of the largest companies in the world. It is because of the flexibility that you're able to offer with capacity and the dependability that you're able to offer from a capacity standpoint. When you look at what we're able to do for a customer, whenever a customer's needs go up, because large brokers who have scale, who have access to more than 100,000 carriers, are able to flex capacity up to meet the customer's demand. If the customer's demand falls, you're able to pull capacity back and reallocate it somewhere else. You're able to keep tapping into capacity. I think one of the reasons why you've seen brokers grow so significantly is when you look at the large brokers, think about the investments in technology that have been there. For companies like RXO, where we use our technology to go in and talk to customers about what type of lanes they're shipping, are they shipping them on the right days, is there different ways that we could be routing their freight, could we be doing consolidations between LTL and truckload, how do you provide the best solution for the customer and use technology? The last thing that I'll highlight is typically asset-based carriers have held drop trailers very close to the vest. You've seen companies like RXO for more than a decade invest in drop trailer business. That's something that has been good, steady business that helps us look and feel like an asset-based carrier just with a lot more capacity than what they've got. Got it. Thanks. RXO, it's become the third largest truck broker in North America. This was upon acquiring Coyote back in September. Please discuss both the revenue and the cost opportunities identified operationally and financially. Jared, do you want to take that one or do you want me to? Sure, happy to. Scott, when you think about the revenue opportunities, cross-selling as it relates to the acquisition of Coyote, we're really excited about the opportunities there. We're actually already seeing some benefits. With the legacy Coyote customer base, we've identified to date over 700 opportunities as it relates to cross-selling opportunities. Some of these are small to medium business in terms of leveraging some of the existing services that RXO had that legacy Coyote did not, especially within complementary services. Where we've seen some significant momentum is on the managed transportation and last mile side of the business in terms of our complementary services, where some of legacy Coyote customers have already been onboarded in terms of those areas of business. That's not something that we were necessarily counting on this early in on the transaction. Really excited there. I think there's a lot of opportunity as it relates to future cross-selling and future revenue opportunities. On the cost side, we've now raised our synergy estimate three times since the acquisition. We're now at a total of $70 million of cash synergies. That's broken down between $60 million of operating expense synergies and $10 million of capital expenditure synergies. I would use the words more than for each. We think there's more than $70 million of cash synergies to come. We've executed quickly on them already, have taken actions to achieve more than $50 million on an annualized basis. Extremely pleased with how quickly we've moved on both the revenue and cost side. Sounds good. Chris, could you please provide an overview of where we are presently in the truck brokerage cycle and any look ahead indications for where it could be going? Thanks. Yeah, when you look at it, we're still in a soft freight environment. We've been in a soft freight environment for almost three years now. It's the longest downturn that I've seen in my career of doing this. We don't look at it and say, "Hey, we're just going to go out there and we're going to control what we can control with the environment." We're looking at how can we build a more stable business for the next downturn? How can we be prepared for the upturn whenever it comes? When you look at being able to do a transformative acquisition for us at the bottom of the cycle, there's not a better time in the market to be able to prepare yourself for the upturn, to diversify your book of business, to be able to expand your carrier network, because our carrier networks between the two groups did not have a lot of carrier overlap. For us, we look at it as where we are at in the cycle and what we can do. Now as you think about preparing for the next down cycle, two strategic pillars that we have are we want to continue to grow out our freight under management and managed transportation. We have already talked about how much synergy that provides to the rest of the company. If you look at that, that's something that we've talked about in the past, that we've got a very, very strong pipeline. We've had some big wins in managed transportation. As those are onboarded, they will fill out to the rest of the company. The second one is in LTL. If you look this quarter, we grew LTL by 25% on a year-over-year basis. We're doing that because large companies are coming to us and they're saying, "We understand your services on technology. We understand what you're able to do for us on full truckload." LTL is a small piece of our overall transportation spend, but it's a big part of our headaches on a daily basis whenever I think about claims, lost shipments, damages, tracking loads, working with multiple carriers, working with multiple platforms. How can you pull this together for us? We've been able to do that with a high rate of success for these large companies. I think we're in the very early innings of doing it. The one thing that you like about LTL is typically it's got a very stable gross profit per load. You may see it move a little bit, but that trend line stays about on average through a cycle. When you talk about building stable EBITDA for the next downturn, growing managed transportation and growing our LTL business are two strategic pillars for us. Thanks, Drew. Let's talk now, please, about the potential magnitude for EBITDA growth at RXO upon a rebound in the truck brokerage cycle. As you mentioned, it's been a very prolonged downturn. There's a lot of leverage in the model, though. Can you speak to what can occur upon a rebound? Sure. When you look at where we are right now, Scott, as Drew mentioned, we're still operating within a soft environment, right? It's been one of the longest downturns, if not the longest downturn on record. Everything we're doing in terms of optimizing the cost structure is in the name of preparing the operating model for future operating leverage upon that rebound. I mentioned earlier the quick actions that we've taken on the Coyote side in terms of synergies with more than $50 million of actions to date in terms of annualized cost synergies in addition to the $10 million of CapEx synergies. I think it's really important to note that a vast majority of those costs are structural in nature in terms of removed from the P&L. You think about that future operating margin leverage and the ability to go ahead and have those incremental profits drop to the bottom line, right? We're going to have a more efficient P&L. Gross profit per load in our truck brokerage business is a very important metric. That's still more than 20% behind our multi-year average. When you start to see an improvement in gross profit per load, and if it's attributable to price, in some cases, it can drop from gross profit down to EBITDA 70%-80%. Really, really strong flow through. When it's a combination on volume and price, a little bit lower. I think also important, we talked about this quarter that we reported yesterday, year- over- year, there was a $10 million headwind on a quarterly basis associated with automotive. Mix plays a really important element as it relates to year-on-year changes. We are the largest provider in the United States for managed expedite, and that is also levered to the automotive market. We had a $10 million year-on-year headwind with almost an 80% flow through to EBITDA. You think about the market recovery when all of that recovers. Long way of saying, you think about scale that Drew talked about earlier now that we are the number three brokerage in North America. When we are at normalized cross-cycle earnings, right, we should be at least a mid-single digit EBITDA type margin business. You think about the stability of LTL. You think about the ability to add more freight under management, the ability to go ahead and continue to enjoy the benefits that we are seeing on gaining share within last mile with healthier margins. There's a lot of torque as it relates to earnings from where we are. Thanks, Jared. How are you all contemplating the near and long-term impacts from tariff news? I know it's pretty unpredictable right now, but what are some considerations for you? I think if you see that there's air pocket, is what people are calling it right now, that comes in from the cancellations that you've seen on containers and the blank sailings that have occurred over the last 30 days, if that persists, the first thing that you do is you pull down purchased transportation. Capacity will loosen up based off of the demand that's there. You pull down purchased transportation and have the ability to expand margins at that part in the cycle. If you think about this longer term and you do see more businesses shift to the U.S., you see more businesses shift to North America, that's a phenomenal thing for our business. Our business is predominantly driven by intra-U.S. shipments. We've got a little bit of cross-border on both the northern and the southern border. If you think about industrial manufacturing, automotive, all of that coming to where it is near shore within the U.S., that's a dream scenario for us. RXO has expanded cross-border capabilities. Please discuss the company's strategic positioning, potential to garner incremental new business, and how meaningful this business can become over time. We built this business on automotive. Jared touched on this earlier. If you think of automotive shipments going across both the northern and the southern border in brokerage, it's roughly 5%-6% of our overall volume of business that goes cross-border. It's been growing over the last couple of years. We've built the lanes and the capacity off of automotive, but we've been able to take that into other verticals like industrial manufacturing and home building are two that we've been able to expand, especially on the southern border of opportunities. We've got a facility in Laredo that allows us to put things through, and we can cross-dock for customers at that point and still get it there to them in the same amount of time. We're doing customs brokerage on the southern border as well, which again makes us a one-stop shop for customers as they're coming in to do business in that area. For us, we think that we have the model to be able to grow this significantly with the market. Thanks, Drew. Got a little bit, we got some time left. Just a reminder to the audience, please feel free to send in some questions. I have a few more in the prepared chat, but just a reminder now. Let's go next, guys, to technology. That's been a primary focus since we started covering this business over 10 years ago when it was still under XPO's umbrella. We witnessed early days of RXO's Freight Optimizer technology. It remains a backbone of the organization. From an RXO's led, the digital evolution in the industry has garnered an early mover advantage. Please speak to RXO's opportunity and potential to maintain its digital differentiation and perhaps some of the things you're doing with technology as you integrate Coyote. Yeah, absolutely, Scott. I think that's a great segue as you think about just the integration of Coyote and how it's accelerating our technology roadmap. As you mentioned, we've led the industry in AI and machine learning over a decade ago. RXO has been benefiting from having all of that data into our systems, getting smarter every day. Having that early start has been really helpful. You think about the freight under management within our managed transportation business, over $3 billion of freight under management combined now with the larger scale of RXO plus Coyote. That's a lot of data that we get to work with. As part of the after we closed the acquisition and we got more details on their tech roadmap, and one of the added benefits was that their tech roadmap, actually our tech roadmap and some of the technology that they had aligned, whereby if you think about the mix of carriers that legacy Coyote had as an example, larger carriers, private fleets, legacy RXO, more owner-operators, smaller fleets. They had a really nice technology on some of their digital coverage capabilities on the carrier side. We have been very eyes wide open in terms of best of both worlds type approach with the integration. We are taking and we have taken a lot of the legacy Coyote tech and integrated it into what you described, Freight Optimizer, our proprietary technology transportation management system. I want to hit on this. We hit this yesterday after earnings, but last week was one of the most significant technology milestones of the integration. We have now migrated all legacy Coyote carrier reps onto Freight Optimizer. This is really important because now legacy Coyote can go ahead and cover legacy RXO freight and vice versa. What we have done was legacy Coyote's existing TMS was called Bazooka. That is in the process of getting sunset as the year progresses. Carrier reps are now already on Freight Optimizer. We are seeing some early wins. I think importantly, by getting them onto Freight Optimizer, that is closely linked to, and there was a necessary step to unlocking the synergy potential associated with cost of purchase transportation. When you think about the rationale of the deal and the investment thesis of the acquisition, one of it was linked to we've got this huge pool of transportation dollars across the businesses, $4 billion last year, over $4 billion. If we can buy better relative to market as an organization, there can be significant drop-through as it relates to the P&L. The team moves incredibly quickly. They did an unbelievable job. That was complete as of May 1st. Excellent. Thanks, Jared. Let's talk. Let's move away from brokerage. Talk about RXO's other complementary services. Yeah, there's managed transportation, freight forwarding, and last mile logistics. I want to talk about their contribution to the RXO portfolio, maybe some quantification of mix, but also a little bit of backdrop on what each is and how it fits within the portfolio. Thanks. Yeah. Let's start with last mile. If you look at last mile, it's more than $1 billion in revenue. It's doing around 11 million home deliveries a year. I mentioned earlier, for big and bulky goods, if you think washer and dryer, refrigerators, stoves, going in and out of a home, being able to do the installation, we're the leader in that space, and we have been forever. We also are doing furniture, fitness equipment within that, and looking at some other verticals right now as we speak to be able to continue to grow and diversify it. For us, when you think about large companies who are doing home deliveries, they start their conversation with RXO because with most of them, we've got a long-standing history. Our top customers have been with us for over 15 years on average. We have a history of creating results for them. The most important thing to the customer is we are the last experience that their end consumer has. We are the brand representation for them as we are going into somebody's home. For a customer, that experience is so important. We do it really, really well. We protect the customers with how well the service is there. The second thing that I would say is for us, when you think of who you are talking to at a customer on last mile, the level of decision makers change because of that end consumer experience. We are talking to the CEOs, the chief supply chain officers, the CFOs in the room. It allows us to create layers of relationship. There's not as much operational synergies at this point with last mile and our other lines of business, but the sales and commercial synergies are real. For us, whenever you're in there and you're in there to talk about brand representation, there's not a moment that passes that we don't talk about the other services that we can provide to our customers in there. It is very good for us from a cross-sell ability into our other lines of business. That business has got a lot of momentum. We talked about it growing 24% on a year-over-year basis in terms of stops. That was because existing customers are awarding us new markets, markets that we did not operate in before, and we're bringing on new customers. The other line of business is managed transportation. We talked earlier about how customers outsource a portion or all of their business to us. We have been growing that business significantly with adding on new customers. If you look right now, it is a little bit more than $3 billion of overall freight under management that we are managing on behalf of our customers. Our pipeline is robust right now. It is sitting at around $1.5 billion. We have got a lot of things that will close out through the end of the year and be able to help us as we close the year and go into 2026. For managed transportation, when you think about being able to take all of the data, help customers make better decisions, use our engineers, use our RXO Connect platform to help customers optimize their freight better, give them complete visibility of what is going on, it has been a win for us to be able to go in there for customers. Something that, again, I think that when you look at all of our lines of business, we have got a long runway for growth. We are in the early innings of where we are and just continuing to build out a larger, more scaled platform. Scale in this business matters. When you think about being able to take all of your costs and spread them out across more shipments, what that does is that lowers your cost to serve. For every dollar that we're able to lower our cost to serve in truck brokerage, it's more than $1 million of EBITDA on an annualized basis to us. Excellent. Thanks, Drew. Great answer. Very comprehensive. For those in the audience, again, please feel free to send in questions. This will be as far as the formal fireside chat. My last question is going to be RXO, gentlemen, operates an asset-weighted business model. Please discuss the return on invested capital profile. Thanks. Yeah, absolutely. I think that speaks to the strategic nature of the business model. Scott, if you look historically, our brokerage business has generated 30%-40%+ return on invested capital. I mean, let's put that in context. We just doubled the size of our truck brokerage business with the acquisition of Coyote as now the number three player in North America. We gave you some color yesterday after earnings that next year's capital expenditure profile will be about $45 million-$55 million. Think about the capital expenditure profile of legacy RXO. Pre-Coyote was about $50 million, right? Flattish to up slightly CapEx in the context of doubling the size of our brokerage business. That is an incredible return on invested capital. I think it speaks to the power of scale, the power of the unit economics, and what that means as it relates to future return on invested capital. It is a business that is highly scalable and I think speaks to the free cash flow characteristics of the business long term. Great. Thanks, Jared. Just following up, you mentioned you had an update on CapEx yesterday on the earnings call. Could you just talk through that a little bit? Obviously, we've had a prolonged cycle with downturn, and you've been looking at areas of management. Could you speak to the capital expenditures and what the strategic focus is there? Thanks. Yeah, absolutely. The prior CapEx outlook for 2025 was $75 million-85 million. We reduced that by about $10 million at the midpoint to $65 million-75 million for 2025. The reality is we're always looking to be more efficient in spend. We found the ability to continue to do that with no impact to growth. Think about the ability to go ahead and continue to invest in high ROIC type projects. About two-thirds of our CapEx any given year generally is tech-related. One callout for 2025 is that it includes a couple of things. One, it includes $10 million or so of legacy Coyote tech-related spend associated with the integration, etc., that'll drop off heading into 2026. Also includes $10 million-$15 million of strategic real estate spend, which we talked about the quarter prior where we have investments as it relates to in Charlotte, North Carolina, where we've got multiple brokerage offices that it was time to go ahead and spend some strategic CapEx in the area. Between those two, those will come down pretty significantly heading into 2026. Those will be tailwinds to the CapEx and free cash flow profile where 2026 CapEx will be about $45 million-$55 million. Excellent. Thanks. All right. Let's go to the audience questions. Again, folks, we have a little more than five minutes left. I'm going to jump in here. Load-to-truck ratio, could you please talk about it as a predictive indicator? Load-to-truck ratio really tells you about what's going on with capacity overall. I think right now it's sitting around 5-6 to 1. Typically, for us, whenever we start getting spot loads is whenever it gets in that close to double digits and high single digits. When you think of it starting to hit 7%-8%, you start seeing spot loads come into your network at that point. Your spot loads, what you'll see happen is your contractual gross profit per load in a tighter market will go down, but the spot load gross profit per load will go up. It more than offsets what's happening in the contractual side. The other, it wasn't what the question was, but I do want to give another indicator to watch. It is tender rejections. Tender rejections is what you want to see hit double digits to hit that same spot market tightness of capacity that we're talking about. Great. Thanks, Drew. Another one. Automotive expedite. Please explain what you do and how big is automotive as a percent mix of the business. Then there is another part of just compare and contrast now versus a year ago. Yeah. If you look, our automotive business in brokerage is down 25% on a year-over-year basis. Jared talked about it, automotive as a whole to the company being a $10 million margin headwind for us right now. If you look at the business, it is down significantly on a year-over-year basis. The business is made up of expedite shipments. If you think of something that is going into a plant right as it comes up or right before it goes down or is keeping a plant from going down, they are just-in-time shipments. The stakes of this are high. Service has to be 100%. Because of that, typically, it carries a higher gross profit per load to our brokerage business. Automotive in our brokerage business can be anywhere from high single digits to low double-digit percent of our overall volume. As some of our more lucrative contracts, because the stakes are so high with what we're doing on the automotive side. Right now, it's a headwind for us, but we also know that the automotive market is cyclical, and as it comes back, it's going to be a really good tailwind for us. Thanks, Drew. Oh, and I think just the mix, I guess that was a part of it too. Automotive mix, not necessarily the year-over-year, but mix automotive. I guess if you could just speak to maybe industrial and other as far as the mix of the overall business and maybe how that's transformed over time. Yeah. Automotive has always been in that what I said earlier. In brokerage, it's always been in the high single digits, low double digits percent of our overall volume. It's something that goes up and down depending on what you're seeing in the expedite market. When you look at our managed transportation business, a lot of the FOM, freight under management, does come from the automotive sector where we are the leader in ground expedite shipments. Thanks. We kind of covered this earlier when we were talking complementary services, but a question on cross-selling. What is the opportunity? What has been your progress and experience, particularly with Coyote now? The cool thing with Coyote is some of their largest customers right now are already customers, and this was from their brokerage, already now customers in the last mile segment. That has been great to see. I'm not talking about where they come over as a $5 million customer in last mile. I'm talking about customers that have come over, and they're giving you $10 million, $15 million, $20 million of freight. The last mile typically is a bigger chunk of business than a small win. That has been great to see. The other place that we're seeing it in Coyote is still in the pipeline, but they had relationships with a lot of the large customers, but they didn't have the ability to really be able to sell managed transportation. They didn't have the platform to be able to sell that. Now, from a lot of customers that they've had deep relationships with, they've given great service to for a long time, we've got the platform to be able to go in there and talk about managed transportation. A lot of those are in the pipeline that we discussed earlier. Great. Thanks. I think this is good. Let me just check. I think this is our last. Okay. Good. We're coming up on time. Last one's on price, guys. Truck brokerage contract rates. Please discuss the renewal cycle and your confidence in what you expect to see this year. Any other comments on rates, yeah, basically rates for the year? We said coming into the year that we expected rates to be up, low to mid single digits. If you look at Q1, they were up 4%. When you look at the awards that we've got, when you look at the conversations that we've got with customers, we're confident in that low to mid single digit outlook for contract rates, excluding line haul, excluding fuel for the remainder of the year. I think probably more of the unknown with the rest of the year is what happens with overall demand. If demand tightens, you could see rates go up significantly because of the spot rate side. Great. Thanks, guys. We're coming up on time, and that's everything that I have in the queue. I think we should go ahead and wrap it there. Excellent job. Audience, thank you for your attentiveness and the questions. Drew and Jared, really appreciate the time and the insight. Thank you for having us, Scott. Thanks, Scott. Thanks, guys. Thanks all.