RXO, Inc. (RXO) Cash Flow Statement

The positive OCF/NI ratio in 2026Q2 is misleading because it stems from a $25.9M positive D&A adjustment rather than operational cash generation. Over the trailing four quarters, cumulative net losses of -$105M were only partially offset by operating cash flow of $12M, indicating that earnings quality is poor and accruals are masking underlying cash burn. Investors should monitor whether the gap between net income and operating cash flow narrows as integration costs from Coyote subside.

The positive FCF in 2026Q2 is driven by a $17.0M positive capex adjustment, which appears to be a data anomaly or a reversal of prior accruals, not sustainable operational cash generation. Excluding that quarter, FCF has been consistently negative, averaging -$15M per quarter over the last five quarters. This suggests that RXO's asset-light model is not yet generating sufficient cash to cover its capital expenditures, let alone fund growth initiatives.

The low capital intensity is consistent with RXO's asset-light brokerage model, where the primary investments are in technology and working capital rather than physical assets. However, the consistent capex spend, even during periods of negative operating cash flow, indicates that management is prioritizing technology investments to support digital brokerage penetration. The depreciation and amortization of $26-33M per quarter exceeds capex, suggesting that the existing asset base is being depreciated faster than it is being replaced, which may indicate underinvestment in long-term growth.

The working capital line is the primary swing factor in RXO's operating cash flow, with changes ranging from -$31M to +$7M over the past eight quarters. This volatility reflects the timing of carrier payments and shipper collections, which is typical for a brokerage but amplified by the Coyote acquisition's integration. The low cash balance of $18M makes RXO highly sensitive to these swings, as a single quarter of adverse working capital could strain liquidity. Investors should monitor the cash conversion cycle closely, as any elongation in receivables could force reliance on credit facilities.

The $1.0B acquisition outflow in 2024Q3 corresponds to the Coyote Logistics purchase, which has yet to generate positive net income or operating cash flow. The absence of shareholder returns, combined with negative free cash flow, suggests that all available capital is being funneled into growth initiatives. This aggressive deployment strategy may pay off if the integration delivers the promised scale benefits, but the current cash burn and thin liquidity indicate a high-risk profile. Investors should monitor whether the acquisition begins to generate positive returns on invested capital in the coming quarters.