All right. We are at the last session of the day. Saving the best for last, Jared Weisfeld at RXO, Chief Strategy Officer. Thanks for being here and ending our first day of Deutsche Bank's Industrial Conference with me. I really appreciate it. I am Richa Harnain again, great research analyst at Deutsche Bank. Yeah, let us just get right into it, right? Let us do it. Appreciate you having me. Thanks for having me here today. Of course. I like to start with just understanding your perspective on the current environment. Your business in particular has found some momentum. You just talked to us about that a couple of days ago when you reported results. There is the market that does experience some seasonal softness right about now. Maybe again, just give us a lay of the land. Where is the market? Where is RXO? What do you worry the most about as you look ahead? What represents the biggest near-term opportunity for you to hit the high end of your outlook that you indicated you have line of sight to? Sure. Maybe just taking a step back in terms of how the year has progressed and I think speaks to the momentum that the company has been seeing. We started off the year, Q1 was about $6 million of Adjusted EBITDA, and that has ramped significantly throughout the year to $40 million in Q2. At the midpoint of our outlook for Q3, another $40 million, despite some seasonal softness from our last mile business with the brokerage business more than offsetting that weakness. I think that speaks to the fact we talked about late last year, our brokerage late-stage sales pipeline was up more than 50% year-over-year, really entering in 2026 with tremendous amount of momentum. We have capitalized on that momentum. When you look at our truckload brokerage volume in the business, we talked about our expectation of resuming outperformance versus the broader market as early as the middle of the year. We exceeded that goal, and we started resuming outperformance in the month of April. As you look at how the year has progressed, we ended up growing truckload volume by 2% year-over-year in Q2, 500 basis points above the market. We talked about an expectation for our truckload volume growth rate to accelerate into Q3, up about low to mid-single digits year-over-year in a market that still remains down. Cass freight index has been negative for every month on a year-on-year basis since January 2023. Really when you think about just the improved brokerage performance at RXO, it's not only about volume, it's about profitable growth, which is the investment basis of the company. We've had an increase in gross profit per load in Q2, about 2% year-over-year, despite the significant tightening in the market. In fact, on a sequential basis, it was up about 11% on truckload gross profit per load, which was the fastest growth rate in four years. That's growing again into Q3 because we continue to execute on the spot opportunities. Maybe it's sort of, I know I've been outlining a lot of how the year's progressed, but maybe to close that and we can follow up because I know I've said a lot. I think that's a good place to end in terms of the spot opportunities that the team is capitalizing on. Spot is now at about 50% of the mix in the month of July. We talked about on our earnings call last week, that was up in Q2. 1,500 basis points year-over-year continues to increase because RXO is proving to be the broker of choice for spots, projects, and mini bids at really accretive margins, and you're seeing that flow through the P&L. Just on that topic, do you worry about endurance of this given that spot market can tend to be fleeting, or how do you consider maybe converting more of this to contract business? The 50% spot now, right? Yeah. We don't look at the spot and contract business within the brokerage business in silos. We look at it holistically, and there's a strong interplay between the two businesses. You don't get the spot volume without the contract volume. You have to honor your contract freight if you want to capitalize on the spots. That's why we talked about on our earnings call last week, our tender rejections being better than industry. We're servicing that customer freight. When you're in an environment with double-digit tender rejections, right now, I think it's around 13%, 14%, went as high as, call it 17%, 18% in the month of June. That's a market that's conducive to spot opportunities, even though they're soft demand. I think that's a really important point because even though aggregate demand still remains pretty soft, there generally is no housing market right now, which I don't think is going to be a surprise to many people. But despite that, because so much capacity has come out and that capacity is structural in nature in terms of the removal of that based on recent enforcement actions from the government, you're now at a point where there's been capacity attrition in excess of that rate of demand. So you're seeing a spot market that's developed, and it's pretty broad-based in nature across many different verticals, and RXO's capitalizing on that. I think then the goal is you win that spot volume, and then eventually, as you think about converting that spot volume into longer-term contracts because you have the relationship, and you put something in place when you're dealing with large Fortune 100, Fortune 500 shippers, they want that predictability of the contract market. So we're able to go ahead and put that in at a fair margin and then capture a larger percentage of the volume on the contract market. Yeah. How does that work? So you're at 50% now. Do you want to start shifting a lot of that spot to contracts, and should we start to see your contract mix sort of increase over the next couple of quarters, or how will it look on sort of your reported metric? So it's going to be a function of where the market is, and I think that's the underlying premise, where ultimately if the market tightens from here, we're going to capitalize on the spot opportunities. If the market loosens and there's an opportunity to put some of that spot back into longer-term contracts at healthy margin, we're going to do that as well. So it really is going to be a function of the environment. There's no optimal percent contract versus spot mix. Over the long term, it really is going to be a function of where you are at any given point in the cycle. When markets are softer, you're going to want to lean into a larger contractual book of business. When markets are tighter like they are right now, you want to make sure that you're capitalizing on those spots, because the spot opportunities can be significantly accretive relative to gross profit per load, and helps offset the rise and increase of cost of purchased transportation that impacts the contract book of business. And you're still seeing a lot of good spot opportunities. Sounds like you intend to continue to see a lot of good spot market opportunities, even though we're hearing maybe there's less activity making its way into the spot market because shippers are accepting higher contract rates, and maybe shifting back into the contract market makes less activity in the spot. Is that something that's occurring, or? July is a good proof point where you have idiosyncratic differentiation at RXO, where seasonally July is a softer month. Despite tender rejections moving in in the month of July, despite freight rates coming in, RXO spot mix held steady at about 50%. So up slightly from where it was in June. So to have that kind of spot mix, I think speaks to the fact that we're staffed for growth, we're resourced, we have the technology able to capitalize on spot opportunities. We talked a lot about our spot quote agent, which has been rolled out throughout the year. So having a lot of these idiosyncratic drivers available to us to capitalize on those spot opportunities. I think it's certainly, you're seeing that play out in the results right now. Okay. Next, maybe we can talk about what I characterize as the elephant in the room when I speak with a peer of yours. Clearly the market remains somewhat hesitant right now. You talked about all the good results, but tepid response. Not just around your prospects, but a lot of broker prospects. One of the largest nuclear verdicts in the industry against another truck broker probably has much to do with that. To maybe help the market get comfortable with the risk, there's this concept of uncapped liability, now every accident in the past and future going to try and extract from brokers with deep pockets. So what's wrong with that line of thinking? I know you have some strong views there, so share them. I think to put things in perspective, let's look at how RXO is positioned right now. We have an extremely robust onboarding and vetting process from a carrier standpoint. We have what we believe to be extremely excellent safety record. When we look at just overall stats from the FMCSA, how RXO compares relative to those stats, we compare extremely favorably. We have a robust insurance program that is very comprehensive in nature. So we are insured from a coverage standpoint, basically in line to better than many asset-based carriers. So a robust tower program that is in place. We believe that we have adequate and sufficient insurance and that we are adequately reserved. I think we are entering in this post Montgomery world from a relative position of strength when we think about just how the business was built over time, which is very different than some of the small, medium, and even some of the larger brokers that are out there. If you think about the amount of insurance coverage that is available and that is running through our P&L. We view this as an opportunity for RXO to continue to take market share. When you are talking with shippers really care about the processes that are in place from a vetting standpoint, from a safety standpoint, from a compliance standpoint. Do you have the proper insurance? Because not many brokers have what I just described, I think there is absolutely a market share opportunity in the near term. We are already having those conversations with our shippers. I think you will start to see that manifest itself out throughout this bid season, and the medium to long term as well, where ultimately shippers want to make sure that they are dealing with reliable partners that are best in class. Mm-hmm. Just on the specific case, I guess, did it trouble you that the facts of the case, what could C.H. Robinson have done, right? They chose a very safe carrier per the satisfactory rating from the FMCSA and all of that. Just the fact that it seems like the facts were in their favor and yet they still faced this verdict. Does that challenge some of the Yeah. It's not our case. I'm not going to opine on a Right competitor's case. But I do believe that ultimately, there is sufficient state law in Texas to come to what we believe will be the right decision for industry. I think that's a really important point. This is not just a brokerage industry issue. This is a transportation industry issue where ultimately it's the national security of our supply chain. When you think about clearly $600 million nuclear verdicts are not sustainable for the entire transportation industry. As you think about working with the FMCSA and the DOT and with members of Congress to go ahead and make sure that ultimately, the right construct is put in place to make sure that there is the movement of goods on an interstate basis that is frictionless in nature to not interrupt commerce. I think that's a really, really important point. Okay. Well said. All right, so on the insurance side of things, you said your renewal is at the end of the year and you feel like you'll outperform the industry with respect to rate increases. Just maybe put some parameters around that. How much do you think the industry insurance rates will rise? How much do you think you could outperform? Yeah. We're still in conversations with our insurance brokers and our insurance carriers, so all of our partners. I'm not going to give an exact number. But I'll help put some things in perspective because I think there are a lot of numbers that are floating out there, and I think it's important to realize, to the earlier point that I made, that not all brokers are coming from the same starting point. If you've got a broker that exists in the industry, whether it's a small, medium or large broker, or a broker that's part of an asset-based carrier. In a pre-Montgomery world where you were protected by the FAAAA, that broker may or may not have had excess liability. You think about a lot of brokers re-evaluating their current position and what that liability may look like. They're going to face larger percent increases to go ahead and make sure that they are properly covered, they've got the right towers in place. They're going to face the larger percent increases that you're talking about. When we think about how we're entering in this renewal cycle, we feel very strongly that we're going to significantly outperform the industry. We're not going to give that range yet. When we get closer to renewal date and we're in a position to talk about it, we certainly will. But given what we've seen over the last couple of years, because of everything that we just talked about in terms of the safety record, the processes, the compliance, we've outperformed significantly over the last few years. Our expectation is that heading into 2027, we will outperform again. I do think that it's also an important point that if we do have overall industry costs increase, it should be transitory in nature from the standpoint of ultimately they will get passed along to shippers, and then eventually the end consumer, where ultimately, if the cost of doing business goes higher, we need to still earn a fair margin, and we're talking about essential goods and services that we're providing. I think that's the construct in which we're thinking about it. Okay. And what do you think with respect to Montgomery basically swinging the pendulum between asset base versus asset light. Brokers versus non. Do you think it actually increases the value proposition of brokers because it creates a layer of protection between the shipper and the carrier? Or do you think you are seeing shippers that want to work more direct with We're seeing the former in terms of shippers wanting to go ahead and work with brokerages, but importantly, work with brokerages that are of scale and have the resources and the vetting and the compliance that is necessary in a post Montgomery world. You think about conversations that we're having with Fortune 500, Fortune 1000 type shippers. RXO, what processes, what procedures do you have in place, what insurance do you have in place? Then we'll go ahead and ask them to go ahead and make sure that they should compare this relative to some of their other carriers in terms of what's in place. Generally what comes back is a market share gain opportunity for us because that shipper understands the value prop that we're offering, and they want to make sure that they are doing business with a trusted, vetted partner like RXO that has those robust processes in place. Absolutely, I think it's a market share gain opportunity, and you've seen that in the data, right? Brokerage penetration has gone up to the low 20%, and we think that there's headroom to go to 30% to 40% over time. I think the composition of that penetration is also likely to be in favor of the larger brokers, where the top 10 brokers now represent about half the market. We think that over the medium to long term, that could be the top five could the market as the industry continues to consolidate. Okay. All right. Let's shift gears a little bit and talk about just the general market. You're in the popular camp of capacity retrenchment we've seen across the industry being in early innings. Just maybe give us a little bit more there as to why you think that. Yeah. If you look at the amount of capacity that has come out in terms of the for-hire truckload market, there are policies and regulations that have been in place between English language proficiency, non-domiciled CDLs, CDL mills, ELDs, cabotage. By the way, it is across the executive branch, it is across legislative. It is obviously an impact from a judiciary standpoint post Montgomery. So there is all these pressures that are out there that have, in our estimate, taken out a significant amount of capacity. We believe that up to, call it, 25% of the for-hire truckload market may face. That is the amount of capacity that we are talking about to exit over time. That is a nontrivial amount of capacity. If you think about a for-hire truckload market, that is about 1.3 million to 1.4 million CDLs. The point is that it is structural in nature in terms of these capacity shifts, whereby that capacity is not going to come back. There will be a supply response at some point, but it will be higher quality supply that operates with unit economics that make more sense, as opposed to being 30%, 40%, 50% below market. So when you think about all that capacity coming out, we think we are probably close to maybe. I think the best way to frame it is that there is probably another halfway to go. So think about that for a second. We have had spot rates move up anywhere between 30% and 50% year-over-year with no real improvement in demand, with maybe half the amount of capacity coming out. There is still more to come. So you think about the implications to the industry, whereby any kind of improvement in demand. The housing market, like we just talked about, housing market can be 20% of the freight economy in good times. Yeah. You are seeing this kind of move higher in spot rates without housing, without big and bulky. I think this speaks to our view that gross profit per load for the industry, and certainly for RXO, is biased higher from a structural perspective, given how much the capacity has come out. Do you think it's fair to say then that we could see this type of improvement in rates for at least this much, maybe even next year, if this sort of linear in terms of the capacity reduction we've been seeing? Depends on demand. All else equal, if supply continues to come out and demand remains static, then by definition that's inflationary to overall TL rates. I think where things get really exciting is when you think about just where demand levels are right now. They're sub 2019 levels. The freight economy, as we just talked about, has been in contractionary territory from a volume standpoint for the last three and a half years. Mortgage rates are sitting at 6.7%. You just think about over the, pick your time frame. When you do have a normalization of demand, you've got this upward bias, and it could be a material upward bias to freight rates and truckload gross profit per load. That would be on top of what we've already seen. I think the important point also is that from an RXO standpoint, we're not waiting for that. You're seeing truckload volume growth at RXO 500 basis points in excess of industry. You're seeing gross profit per load growth significantly in excess of industry because we're capitalizing on those spot opportunities. As we think about the normalized earnings power for the business, the fact that we're able to advance the ball on all of these KPIs in the context of what remains a muted demand environment, I think gives us even more confidence in terms of the upward torque and the upward leverage to the model that we have. Okay, nice. Maybe we can hone in on demand a little bit and where you have maybe more refined lens, I guess, on what's going on. Managed transport business, one of the biggest movers of big and bulky. You do have a great perspective on the housing market, but just generally what you're seeing there. Then it sounded like you were talking about some sort of green shoots, maybe expedited auto. I know there's a cop story there as well. Yeah. We saw some nice growth. Talk about maybe where you are seeing the green shoots, and aside from housing, what is maybe being a little bit more stuck in the mud. Sure. I will handle that across our relative lines of business. Within the brokerage business, we are seeing green shoots across many of our verticals, but I do think a lot of that is RXO specific as opposed to broader industry. Specifically food and beverage for us turned positive for the first time in two years. We talked about one of the most exciting opportunities with the acquisition of Coyote was to go ahead and acquire this huge install base of customers, stabilize the volume trends, and then start growing. We are doing that exactly right now. As we think about the upward torque to the model, food and beverage was a very big vertical for Legacy Coyote. Now having that exposure at RXO, even though food and beverage demand trends overall are still muted with GLP-1s, et cetera, we are seeing significant growth within food and beverage because we are recapturing share. I think food and beverage within brokerage, as well as automotive, to your point. There is a synergy between automotive within brokerage and our managed transportation business. Expedite volumes within our managed transportation business were up almost 30% year-over-year, in the second quarter. Still significantly below prior peak levels. To your point, we do have some favorable comps. We are also seeing some benefits on the expedite side because the overall truckload market itself is pretty tight. You are seeing customers turn to their reliable partners when they need to push that emergency button, and they need that expedite just-in-time type freight that carries higher gross profit per loads from RXO standpoint. We are seeing a nice improvement there. On the last mile side, and I think this is an important point, we are still seeing very muted trends within big and bulky. No doubt inextricably tied to the state of the housing market right now. And I think that dovetails to your first question, Richa, on the outlook that we provided for Q3. If you look last year, Q3 was down about 20% sequentially from an Adjusted EBITDA perspective across the company. This year, we are holding the line flat at the midpoint, despite the fact that we have got not only typical seasonality within our last mile business, because Q2 is the strongest quarter for last mile, but we have got incremental headwinds to the tune of $3 million-$5 million in last mile, attributable to just weaker and softer market conditions. So, I think that is one, it speaks to the underlying momentum of the brokerage business. Two, I think it speaks to just how weak big and bulky is right now. But with that said, we are still outperforming big and bulky. I think the industry is probably down low to mid-teens on stops, so we are definitely outperforming. Stops were up last quarter. Okay. And just in terms of your overall diversification, can you talk about that and are you at the optimal level? Do you still need to do some more work in terms of portfolio shaping? I know there is a whole LTL versus TL dynamics. We can get into that, but I am more curious right now on end market exposures. Yeah. I think that there is an opportunity organically and inorganically. When we think about from an organic standpoint, what have we been focused on with respect to diversification? We have been focused on, as you would expect, industrial manufacturing data center, as we think about building out that pipeline. We have seen some really nice growth within the high tech vertical example, high growth tech vertical as an example. And we are also seeing that in a modality standpoint as well. LTL, we talked about the pipeline being up nicely, and we are going to accelerate that growth rate within LTL by year-end relative to our Q3 volume growth, which was about low to mid-single digit growth. But LTL is still only low 20% of our mix. How do we think about getting, I think Drew and I have talked about how do we get LTL to 40%, 50% of our mix. I think that is going to be a combination, longer term of organic and inorganic. And we think about our capital allocation philosophy the same way we have thought about it since day one of our spin, and it has been organic growth back into the business, share repo, and opportunistic M&A. And when we think about opportunistic M&A, it is going to be across the same channels we have always talked about in terms of LTL, managed transportation, different modes within brokerage where we will maybe subscale. But we also have a high bar, and ultimately, the organic path that we have ahead of us is so strong, and we are seeing some real momentum in the business right now. So it will be a combination of all three. Okay. Why the strong rationale to want to increase LTL exposure? Sure. What kind of brings the institution? Yeah. From an LTL standpoint, one, it is strong margins and it is stable cash flow. I think when we think about it increases the stickiness of the relationship with our customers. All three of those factors between strategic rationale and financial impact to the P&L, no doubt speaks to why we want to increase LTL as a percentage of our mix. I mean, for RXO, that business it is still pretty nascent. It only started five years ago. We are obviously owned by an LTL asset-based carrier when we spun out of XPO back in the fall of 2022, and that business, subsequent to the spin, has certainly grown very nicely. I think we are still early on our growth trajectory within that LTL business relative to some of our peers, and we have seen such momentum and the growth trajectory there is so significant. But it really comes back to strategic rationale, increasing the stickiness with our customers, and the more stable EBITDA combined with certainly accretive margins. When you think about inorganic growth prospects, are you seeing LTL sort of specific brokerages out there that could be interesting? There is always opportunities that are out there. I think, we will look at it across the vectors that we talked about between managed trans, LTL, SMB, reefer, flatbed, anything within brokerage that could add to our capabilities within RXO. Even though we are the third largest broker within North America, as we think about our two largest modes within brokerage, it really is truckload and LTL. Within truckload, it still is mostly dry van. We have a nice reefer business. We have got a nice flatbed business. But there is an opportunity to do more in both. I think we think about it in a pretty holistic perspective, but we also have a very high bar in terms of what must be true, right? We have been public for four years. We have done one acquisition. Yeah. I think we want to make sure that we've got the right scale and we're driving the right financial returns. Okay. On the inorganic side, should we be thinking more like tuck-in type opportunities, or would you be willing to do big scale M&A again if it was a good opportunity? Yeah, I think we're going to be opportunistic, and ultimately, it's not the size that we're focused on. It really is ultimately, does it drive strong shareholder returns? Is it materially accretive to normalized earnings? Does it make sense for our shippers? Culturally, does that make sense? If it could check all those boxes, then we'll certainly take a look. Okay. Shifting back to the organic side. You talked about being early innings on your agentic AI efforts. Sorry, it's been a long day. Tell us about what you mean by that. For sure. If you follow the journey over the last four years, you'll see the content that we've been putting out in terms of the tangible evidence associated with the investments that we've been making in AI are really starting to bear fruit. We're talking a lot about the products that we keep rolling out every 90 days when we report. It really has been a multi-year journey, and we're starting to see some really nice benefits. When we think about technology, it really is across our pillars between volume, margin, productivity, and service. Ultimately, for us to make an investment, we've got to check the box that we are unlocking value across those pillars. We're not going to go ahead and deploy CapEx for the sake of investing in tech if there's not a strong return associated with it. That's at the high level, how we think about it. The biggest use case that we've seen develop year to date has certainly been the rollout of our spot quote agent, where we're seeing, when we think about the deployment of that tool specifically, we've seen the cohort relative to those that early on had not adopted. Now it's widely adopted throughout the organization, an improvement in both volume and yield. When you just think about any of our customer reps not having to leave their user interface to go ahead and book a load, right? You don't have to go ahead and pull up seven different tabs and try and figure out, does that price make sense? Then go ahead and build a load where you can stay within one native environment because everything is automated through an agent, and the agent is doing the work for you. That has a nice effect in terms of increasing productivity. I think that's also a really important point in terms of how we think about leveraging the technology. We are not leveraging the tech to replace our people. We are leveraging the tech to make our people more productive. We want to go ahead and be able to grow volume by 50% and only grow headcount by a fraction of that amount because ultimately our people are doing more in terms of loads per person per day. I think that we've got a, what I believe, a differentiated approach in terms of a human-in-the-loop AI approach, where ultimately our view is it's the combination of the tech and the operators that really do provide the value prop and the ability to capture market share in a profitable way over the long term. It's decoupling the growth between headcount and volume growth over the long term, leveraging the tech investments that we're making, and I think that's really showing in the P&L. On this spot quote agent in particular, I know it's early, but any signs on how it's improved loads per person per day or any sort of quantitative metrics you can share? Yeah, I think we talked about last week was a 5x improvement sequentially in terms of the output of that tool from Q1 to Q2. I still think we are early days in terms of the development of the features. The best thing about AI is if you're innovating appropriately, you're always in the first inning. As we look at the tech roadmap and features we're bolting on to that AI spot quote agent as an example where right now we're at the point where you are leveraging that tool and the rep internally doesn't have to leave that user interface. At what point do you want to take that one step further and have the agent start to deal with a lot of the emails that are coming in in a more automated fashion? But I think we're going to be thoughtful on the deployment of that because we don't want to commoditize ourselves, and we want to be thoughtful in terms of making sure that we still own the customer relationship. And at the end of the day, we're dealing with operators that have been doing this for so many years and have such deep domain expertise. We want to make sure that they've got the ability to share that value with the shipper, and it's not just completely AI, right? So it's that combination of tech and people that we've talked about. And by the way, it's across all aspects of the business. It's not just brokerage. We talked about in the quarter how we rolled out incremental automation opportunities with managed transportation. Yeah Optimization within last mile. So a continuous state of improvement. Yeah, that makes sense. That sounds like you're going to be emphasis on you say that's more of a plan going future as a standard is probably entering freight upcycle. How much volume do you anticipate to add before? Yeah, we could absorb a 15%. The question was how much can we handle today in terms of incremental volume growth? We can absorb at least 15% increase in volume today without adding any real headcount. I think the question is going to be the sustainability of that volume growth, where ultimately, if our view is volume grows by 15%, then we're going to grow from there, we'll have to make some additional investments, and we're going to want to make some additional investments. I think that's why we're proving right now that we are resourced to handle the spot market that's available, and we're seeing that on our results. The short answer is, overnight, we can handle a 15% increase in volume for sure. And, just on tech in general, you talked about you're implementing a lot of this across the institution. It doesn't surprise me. It's always been kind of part of your DNA. Just in terms of what's coming down the pike, what you're excited about, the pipeline of new initiatives that you're exploring. Can you talk about that? Yeah. We tend not to talk about sort of what's coming down from a competitive intelligence standpoint. Right. I think we're more of the camp of we'll talk to you after it's been rolled out with some good proof points in terms of what we're seeing throughout the organization. But I can certainly answer it from the standpoint of everything that we're looking to roll out really is in the concept of making our people more productive, empowering them, optimizing the workflow across the organization, and that AI spot quote agent's a great example in terms of staying native within one particular user interface and really going ahead and ensuring that they're becoming more productive. How do we put tools out there that can focus our people on having more strategic relationships with our shippers as opposed to the mundane tasks? I think that there's also a huge opportunity in the back office as well. We've talked a lot about incremental productivity enhancements that we can have for our customer reps and our carrier reps, but how can we improve order to cash, as an example? How do we improve the back-end billing? How do we think about ways to just automate the processes from a back office standpoint? I think that speaks to the scalability of the business model, where we're growing volume by 30%, 40%, 50%, and you have the opportunity to not only decouple headcount growth from volume growth on the front office, but how do we actually continue to automate the back end as well, where you can drive some real nice operating leverage. As a reminder, every dollar of incremental gross profit within brokerage can have upwards to almost $0.80 on the dollar flowing from gross profit down to Adjusted EBITDA. Driving that higher throughput in terms of contribution margin is certainly our North Star. Okay. All right, let's get into normalized earnings. You talked about how you're nowhere close to what you think you can accomplish in terms of normal. For next year, I think consensus is estimating $240 million, give or take, which is 80% above 2026. Maybe give us the optimistic view on what can make you exceed that outlook, and longer term, how could you continue to grow beyond that level? Sure. As you know, we only give guidance one quarter at a time, so I'm not going to comment on a 2027 framework. But what I can tell you is sort of reiterate what I said and what Drew said, and Jamie last week on how we think about normalized earnings. This is a business with significant operating leverage, as we talked about in the opening. We went from doing $6 million a quarter to $40 million a quarter within 90 days. You think about fast-forwarding that through in terms of truckload volume growth, where ultimately we are now returning to growth for the first time in a year and a half in terms of our truckload business. We are nowhere close to normalized level from an industry standpoint. We are just scratching the surface in terms of the Legacy Coyote customer base as well as a ton of opportunity within the Legacy RXO customer base as we think about One RXO and targeting the right verticals to go ahead and accelerate growth. There is significant opportunity on truckload volume growth. Truckload gross profit per load to the earlier comment that we made today. We have an upward bias in terms of truck gross profit per load over the long term, moving higher based on how much capacity has come out and is not coming back. As we think about the incremental torque to the model, I think RXO will certainly be operating at a higher structural gross profit per load. Then you layer on managed transportation in terms of the incremental freight under management coming into the funnel. Our pipeline there continues to remain very robust. We talked about how in the quarter we were awarded another $100 million of freight under management, another $100 million in the month of July. We remain optimistic into the back half of the year as well. Then you add last mile onto it, where right now the profitability is very depressed because the housing market is very soft right now. You think about a normalized market with a better housing economy, better big and bulky, that has improved utilization rates for our RXO hubs. Then we talked about the middle mile, where we have made significant investments over the last six to 12 months on not only helping our shippers with the last mile delivery, but what about going in and out of the hub? You put all of that together, we are talking about at least mid-single digit type EBITDA margins, but it is not just slapping a 5%, 6% EBITDA margin on consensus revenue, right? Keep in mind that you need to think about the revenue number. You need to gross that up for normalized volume and normalized rates. You are talking about what would be a much larger revenue number in the context of a 5%, 6% type EBITDA margin. Yeah. At peak, we should be running past high single, low double digits. Okay. Helpful. All right. Go ahead. Yeah. I was thinking for last year today has all come across by how much work there is and the difference the demand space that's going to have. I would just what if demand doesn't hit that? Do you guys still maintain confidence that the volumes For sure. The question was, can we continue to maintain torque and can we grow volumes without an improvement in demand? I think the answer is unequivocally yes, and we're showing that right now. I think it's such an important point in terms of we're not waiting for a recovery to occur, where ultimately if when there is a demand recovery, and it will happen, no doubt about it, you'll see an improvement in truckload volumes, you'll see an improvement in truckload rates and an improvement in gross profit per load. But I think the key point is we've got such momentum in the business that we're growing despite what is still a soft rate market. We outperform the market by 500 basis points on volume in Q2 with gross profit per load up year-over-year. You'll see volume growth again in Q3 with gross profit per load up at even faster rate in Q3 on a year-on-year basis despite soft demand. It really is capitalizing on that momentum. We believe that we've got the best value proposition that's out there, the best mousetrap, the best technology, staying close to our customers, capitalizing on that volume, capitalizing on the spot opportunities, really driving significant operating leverage despite soft demand. Then when demand does eventually return, you'll see even further acceleration in our earnings stream and free cash flow growth. Jared, you said 11% was your AGP per load improvement quarter-over-quarter in Q2. Is that Sequentially from Q1 to Q2, gross profit per load moved up by 11%, which was the fastest growth rate in four years, and it's increasing again into Q3. Yeah. Is that increase going to look similar? We haven't quantified the increase, but it'll be a nice increase from Q2 to Q3, and it's a function of a few things. One, we continue to put contract rate increases throughout the network to reflect the tighter market environment. We continue to capitalize on spot opportunities as well, which carries a higher gross profit per load. We think about those impacts to overall gross profit per load will build on the momentum that we had from Q2. Just to point out, our gross profit per load went up by almost 40% from January to July. I also think it's important to realize that even though we've had this significant move higher in gross profit per load, if you were to look at where our peak gross profit per load was, call it four years ago, from Q2 levels, we'd probably have to go up by another 100% to hit those levels. Just to help put things in perspective in terms of how much torque there still is left in the model. That's to the prior peak? To prior peak, 100% move higher. What about to prior mid-cycle? Yeah. I think we talked about on the call how we're still below, but we're approaching sort of that five-year average. But I think it's also important to realize that we are biased higher in terms of where we are going to be punching over the long term because of all the capacity that has structurally been removed. We think that the normalized gross profit per load is structurally moving higher. Mm-hmm. And just in terms of your contract business, repricing all of that. Where are you on that front? Have you touched basically every contract in the context of this improved cycle? Yeah. As you can imagine, in this cycle, you want to stay close to your customers, and you want to be strategic and thoughtful in terms of how those conversations are progressing. It really depends on the customer that you're talking about. Right now, you're at that point in the calendar year where you're in between prior bid season and the next bid season, which will launch probably in 2-3 months. So the cohort of repricings is just not that large. But I think what we talked about, to give you some context, in after Q1 earnings, we talked about how in the month of April, contracts were getting priced at that low to mid double digits. Now it's probably closer to 20%. So you're seeing a nice uplift on contract rates. I think the point there also is there's continued runway for growth into the back half of the year and into 2027 because ultimately, spot rates have moved up so significantly. So you'll see more of that pricing momentum, but you got to be very flexible with your customers, and it's that interplay between contract and spot that is so important, where ultimately you have to service the contract freight to win the spot. Right. Lastly, can you discuss maybe capital allocation priorities? Your free cash flow conversion target, it's 40%-60%, right? Is that a good rule of thumb for your range throughout the cycle, or should we think of higher or lower depending on where we are in the cycle, I mean, right now, I know you talked about higher working capital requirements. So yeah, help us think through where you'd fall in that. For sure. So through the life of a cycle, 40%-60% is a really good range to think about. Depending on where you are in the cycle it can vary dramatically. To your point, in Q2, we used working capital because we've got a DSO/DPO mismatch where ultimately we're going to pay our carriers faster than we receive from our shippers, and that's what we would expect at an early point, from a growth standpoint of where we are in the cycle. Based on our view in terms of Q3, we gave some commentary that we expect to have a really nice free cash flow quarter here in Q3. Yeah. Because we're going to have an unwind of some of that working capital usage in Q2. But ultimately, over the course of the cycle, 40%-60% is a really nice way to think about it. And that dovetails nicely with sort of that longer-term, normalized earnings question that you asked because we used to have, as an industry, multiyear cycles. You think about how much capacity has come out. We believe that we are firmly setting up for a multiyear recovery. Then you start thinking about the normalized EBITDA over multiple years, and you start stacking that up, and you think about what are the fixed costs that we have in terms of outflows any given year. It's about $50 million in CapEx, about $30 million in interest expense, and you've got that working capital in terms of good rule of thumb is over the cycle, every dollar of revenue growth yields a 7%-9% change in working cap. But you start doing the math. That's a lot of free cash flow generation. So free cash flow yields to the equity and the amount of free cash flow that we can generate over a multiyear cycle can be quite significant, which is why the business has had a high ROIC over time, and that creates a lot of opportunities to the first part of this question on capital allocation as we think about deploying it organically, as we think about share buyback, and as we think about inorganic as well. And what about leverage? How do you feel about your leverage position and- Sure opportunity to lower that? Absolutely. We were 4.1 on a net basis in Q2. We gave some forward-looking commentary on earnings last week that we expect our leverage to come down significantly by year-end. When you think about the cash flow generation that we'll have in Q3, which will obviously reduce our net debt balance, combined with the improvement in profitability of the business. Even if just following consensus estimates, you'll see that the leverage ratio will approach 3x by year-end. That's as per consensus. You roll that forward into Q1, where we'll drop off the $6 million from this year with a higher number. There's a significant reduction in leverage, just natural organically based on the improvement of the business. We've got a significant amount of liquidity between the asset-based lending facility that we have in place, as well as the accordion feature on that with another $200 million. We're at this point in the cycle right now where volume's growing, gross profit per load is increasing. We've got a ton of liquidity. Leverage is coming down significantly, and I think we're in a prime position to win and capitalize on the current environment. Firing on a lot of cylinders. Like the energy. Yes. Sure. Can you give some [inaudible], value level from that deal with regard to maybe cross-sell? Is it dense? I mean, is it comparative? Yeah. On the Coyote side, to your point, we've had significant success from a synergy standpoint. Total $70 million of cash synergies with respect to Coyote, $60 million of OpEx, $10 million CapEx for a total of $70 million. When we think about the business now fully integrated, where we're starting to see some real nice benefits, and we talked about this a little bit on the call last week, is on cost of purchased transportation. We talked about a more than 25% improvement in our buy rate relative to market with respect to how we are procuring some of our contract freight. I think that speaks to the significant density that Coyote had from a medium to large carrier perspective, as well as private fleets. They had access to a ton of capacity that was very different in nature relative to RXO. We're leveraging that capacity, creating more bids, more competition in the network for that freight that we have, is helping drive down our buy rates, or I should say improve our buy rates relative to market. We think that we still are in the relatively early innings in terms of the improved buy rates. The other benefit I'll touch on was what we talked about earlier in terms of really tapping into that Legacy Coyote customer base where we stabilize that volume and now we are increasing that in a pretty nice way relative to market, which helped drive our 500 basis point improvement relative to Cass last quarter. We're really starting to see a nice improvement in volume trends and benefit on the procurement side as well in terms of cost of purchased transportation. All right. I think we're out of time with that. Thank you. Great. Appreciate it. Thank you so much, Richa. Thanks for having me. Thanks. Good conversation. Thanks, everyone.