Core Insights - Ryder System is focusing on a balanced growth strategy that emphasizes asset-light supply chain and dedicated businesses, generating over 90% of revenue from its contractual portfolio [2][7] - The company is investing in technology, particularly AI, to enhance its proprietary tools and customer-facing technology [1][7] - Ryder's leadership transition is set for March 31, with John Diez succeeding Robert Sanchez as CEO [3][7] Financial Performance - In Q4, Ryder reported comparable EPS of $3.59, a 4% increase year-over-year, on revenue of $2.6 billion, with a return on equity of 17% [6][8] - Year-to-date free cash flow reached $946 million, significantly up from $133 million the previous year, attributed to reduced capital expenditures and lower working capital needs [9][14] - Ryder's Fleet Management Solutions segment faced challenges with a 1% decline in operating revenue, while used vehicle sales showed mixed results with a 1% increase in used tractor pricing but a 9% decline in used truck pricing [9][10] 2026 Outlook - Ryder forecasts approximately 3% revenue growth and EPS in the range of $13.45 to $14.45 for 2026, with expected free cash flow of $700 to $800 million [5][15] - The company anticipates a modest decline in U.S. Class 8 production and does not expect significant improvements in freight market conditions [15][16] - Ryder's capital deployment capacity is projected at around $14 billion over three years, with about $5 billion available for flexible buybacks and acquisitions after accounting for replacements and dividends [13][14] Segment Performance - Supply Chain Solutions saw a 3% increase in operating revenue, but segment earnings fell 8% due to lost business and production shutdowns [18] - Dedicated Transportation Solutions experienced a 4% decrease in operating revenue, although EBT increased due to lower bad debt and acquisition synergies [18] - The company expects gradual improvement in used vehicle sales pricing through 2026, with retail pricing pressure anticipated in the first quarter [19][20] Strategic Initiatives - Ryder's management emphasized initiatives-driven earnings growth, with a focus on executing actions within their control [23] - The company is addressing automotive-related disruptions, including microchip shortages and production retooling, which are expected to normalize in the latter half of the year [22]

Revenue Breakdown - Ryder's Fleet Management Solutions (FMS) accounted for 38% of consolidated revenue in 2025[24] - Supply Chain Solutions (SCS) contributed 43% to consolidated revenue, with 722 customer accounts and 319 warehouses as of December 31, 2025[43] - ChoiceLease revenue represented 60% of total FMS revenue in 2025[29] - Commercial rental revenue accounted for 16% of total FMS revenue in 2025[30] - SelectCare revenue made up 12% of total FMS revenue in 2025[32] - In 2025, distribution management and value-added services accounted for approximately 36% of SCS total revenue[46] - Dedicated transportation services contributed approximately 28% to SCS total revenue in 2025[47] - Transportation management solutions represented 12% of SCS total revenue, with $9.8 billion in freight moves executed on behalf of customers[48] - E-commerce and last mile services accounted for 18% of SCS total revenue in 2025[49] - Contract manufacturing and packaging services made up 6% of SCS total revenue in 2025[50] - Fuel services revenue accounted for 12% of the total revenue in the Fleet Management Services (FMS) segment during 2025[34] Market Overview - The U.S. logistics spending was approximately $1.5 trillion, with $234 billion outsourced, indicating a growing market for logistics services[41] - The U.S. commercial fleet market is estimated to include approximately 11 million vehicles, with 1 million leased or rented from third parties like Ryder[23] - The outsourced U.S. dedicated market is estimated at $31 billion, with an addressable market of approximately $500 billion[54] Company Operations - Ryder operates 789 locations across 49 states, the District of Columbia, Puerto Rico, and seven Canadian provinces as of December 31, 2025[25] - As of December 31, 2025, the company had 141,700 vehicles and 11,700 customers in its ChoiceLease segment, with 31,600 commercial rental vehicles and 27,200 commercial rental customers[33] - The used vehicle inventory stood at 9,500 vehicles as of December 31, 2025, slightly above the long-term target range of 7,000 to 9,000[37] Strategic Focus - Ryder's strategy focuses on operational excellence, customer-centric innovation, and improving full-cycle returns[19] - The company aims to leverage trends favoring outsourcing logistics and transportation services to drive growth[20] - Ryder's balanced growth strategy includes creating value through operational excellence and investing in customer-centric innovation[27] - The company aims to grow earnings from its contractual lease, dedicated, and supply chain businesses[20] - The company aims to optimize asset utilization and management, particularly regarding its rental fleet and used vehicle operations[42] - The company aims to increase market share by providing specialized services across various industries, including retail, agriculture, and energy[64] Workforce and Safety - The company employs 51,600 total employees in North America, including 12,700 professional drivers and 4,600 technicians[72] - The company has a robust talent and succession planning process to support the development of its workforce[69] - The safety organization oversees safety policies and training, with a focus on minimizing safety events and ensuring compliance[73] - The company emphasizes safety through a comprehensive safety culture, with ongoing training for professional drivers, technicians, and warehouse associates[73] - The company has established safety policies and procedures that require all employees to incorporate safe processes in their operations[75] - The company is committed to compliance with various regulations, including those related to safety, emissions, and data privacy[67] - The company offers comprehensive health, welfare, and retirement programs to invest in employee well-being[70] Technology and Innovation - The company is developing innovative customer-centric technology, such as RyderShare™, to enhance service offerings[64] - The company focuses on network optimization and continuous improvement to enhance operational efficiency[64] - The company leverages its FMS sales team to encourage private fleet operators to outsource transportation needs[64]

Financial Data and Key Metrics Changes - In 2025, Ryder achieved comparable earnings per share of $1,292, more than double the $595 reported in 2018, with a return on equity (ROE) of 17%, up from 13% in 2018 [12][25] - Operating cash flow increased to $2.6 billion in 2025, up more than 50% from $1.7 billion in 2018 [12][21] - For the fourth quarter, operating revenue was $2.6 billion, consistent with the prior year, while comparable earnings per share from continuing operations were $3.59, up 4% from the previous year [15][25] Business Line Data and Key Metrics Changes - Fleet Management Solutions (FMS) operating revenue decreased by 1%, with pre-tax earnings down to $136 million due to weaker market conditions [16][19] - Supply Chain Solutions (SCS) operating revenue increased by 3%, but earnings decreased by 8% due to lost business and production shutdowns in automotive [18][19] - Dedicated Transportation Solutions (DTS) operating revenue decreased by 4%, but EBT was above the prior year due to lower bad debt and acquisition synergies [19][25] Market Data and Key Metrics Changes - The U.S. economic growth is expected to be modest in 2026, with no significant change in freight market conditions anticipated [24][25] - U.S. Class 8 production is forecasted to decline by 4% in 2026, impacting the overall market dynamics [24] Company Strategy and Development Direction - Ryder's balanced growth strategy has been transformative, reducing reliance on used vehicle proceeds and focusing on asset-light supply chain and dedicated businesses [8][10] - The company is investing in customer-centric technology and AI to enhance operational efficiency and customer service [9][10] - Ryder aims to achieve higher returns by focusing on profitable growth opportunities and strategic investments [22][25] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's ability to deliver earnings growth and increased returns in 2026, driven by strategic initiatives and a strong contractual portfolio [24][25] - The company anticipates that the earnings power of its contractual businesses will offset near-term headwinds in transactional parts of the business [31][34] Other Important Information - Ryder has generated $3 billion in free cash flow since 2021 and has repurchased 24% of shares outstanding while increasing the quarterly dividend by 57% [14][23] - The company expects to generate approximately $10.5 billion from operating cash flow and used vehicle sales proceeds over the next three years, creating $3.5 billion of incremental debt capacity [21][22] Q&A Session Summary Question: Variability in Earnings Guidance for 2026 - The largest variability in earnings guidance is tied to the transactional business, particularly maintenance and omnichannel optimization initiatives [38][40] Question: Used Vehicle Sales Expectations - Used vehicle sales are expected to improve gradually throughout the year, with Q1 consistent with Q4 levels [45][46] Question: Impact of Market Conditions on Rental Business - The company has not seen meaningful improvement in rental and used vehicle sales, with guidance not reflecting significant market recovery [64][66] Question: Benefits of Baton Technology - Baton is expected to optimize fleet operations and enhance customer solutions through AI technology [67][68] Question: Flex Operating Structure in Dedicated Business - The flex operating structure is anticipated to optimize back-office resources and improve driver allocation, potentially offsetting margin headwinds [86][87]

Financial Data and Key Metrics Changes - In 2025, Ryder's comparable earnings per share were $1,292, more than double the $595 in 2018, with a return on equity (ROE) of 17%, up from 13% in 2018 [12][25] - Operating cash flow increased to $2.6 billion in 2025, up more than 50% from 2018 [12][21] - Fourth quarter operating revenue was $2.6 billion, in line with the prior year, with comparable earnings per share from continuing operations at $3.59, up 4% from the prior year [15][25] Business Line Data and Key Metrics Changes - Fleet Management Solutions (FMS) operating revenue decreased by 1%, with pre-tax earnings down to $136 million due to weaker market conditions [16] - Supply Chain operating revenue increased by 3%, but earnings decreased by 8% due to lost business and customer production shutdowns [18] - Dedicated operating revenue decreased by 4%, but EBT was above the prior year due to lower bad debt and acquisition synergies [19] Market Data and Key Metrics Changes - The U.S. economic growth is expected to be modest in 2026, with no significant change in freight market conditions anticipated [24] - U.S. Class 8 production is forecasted to decline by 4% in 2026 [24] - Rental demand was below the prior year, with rental utilization on the power fleet at 72%, down from 73% [16] Company Strategy and Development Direction - Ryder's balanced growth strategy focuses on operational excellence, customer-centric innovation, and profitable growth, with a significant shift towards asset-light supply chain and dedicated businesses [8][10] - The company aims to optimize its omnichannel retail warehouse network and enhance proprietary technologies through AI [9][10] - Ryder's capital allocation priorities include investing in organic growth, strategic investments, and returning capital to shareholders [22][23] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's ability to deliver increasing value to customers and shareholders despite current market challenges [24][36] - The outlook for 2026 includes expected operating revenue growth of approximately 3% and a comparable EPS increase of 12% at the high end of the forecast range [24][25] - Management noted that the earnings power of the contractual portfolio is expected to drive higher operating cash flow and incremental debt capacity [21][22] Other Important Information - Ryder has generated $3 billion in free cash flow since 2021 and has repurchased 24% of shares outstanding [14][22] - The company expects to realize another $70 million in incremental benefits from strategic initiatives in 2026, bringing the total expected annual benefit to $170 million [13][31] Q&A Session Summary Question: Variability in EPS guidance for 2026 - Management indicated that the largest variability lies within the transactional business, particularly related to maintenance and omnichannel optimization [38][40] Question: Used vehicle sales expectations - Management expects Q1 to be consistent with Q4, with gradual improvement anticipated as the year progresses [45][46] Question: Impact of market conditions on rental and used vehicle sales - Management noted that while there are signs of capacity exiting the market, the impact on used vehicle pricing for Ryder is expected to be minimal [52][53] Question: Flex operating structure benefits - Management highlighted that the flex model is expected to optimize back-office resources and reduce driver dwell time, potentially offsetting margin headwinds in the dedicated business [86] Question: Performance of Supply Chain division - Management reported a record sales year in 2025 for the Supply Chain division, with expectations for continued growth driven by new business [54][56]

Financial Data and Key Metrics Changes - In 2025, Ryder achieved comparable earnings per share of $1,292, more than double the $595 reported in 2018, with a return on equity (ROE) of 17%, up from 13% in 2018 [11][12] - Operating cash flow increased to $2.6 billion in 2025, up more than 50% from $1.7 billion in 2018 [11][12] - For the fourth quarter, operating revenue was $2.6 billion, consistent with the prior year, while comparable earnings per share from continuing operations were $3.59, up 4% from the previous year [13] Business Line Data and Key Metrics Changes - Fleet Management Solutions (FMS) operating revenue decreased by 1%, with pre-tax earnings down to $136 million due to weaker market conditions [14] - Supply Chain Solutions (SCS) operating revenue increased by 3%, but earnings decreased by 8% due to lost business and customer production shutdowns [16] - Dedicated Transportation Solutions (DTS) saw a 4% decrease in operating revenue, but EBT was above the prior year due to lower bad debt and acquisition synergies [17] Market Data and Key Metrics Changes - The U.S. economic growth is expected to be modest in 2026, with no significant change in freight market conditions anticipated [22] - Class 8 production is forecasted to decline by 4% in 2026, impacting overall market dynamics [22] - Rental demand remains weak, with utilization rates dropping to 66% in January from 74% in December [54] Company Strategy and Development Direction - Ryder's balanced growth strategy focuses on operational excellence, customer-centric innovation, and profitable growth, with a significant shift towards asset-light supply chain and dedicated businesses [6][9] - The company is investing in customer-centric technology, including AI enhancements to improve operational efficiencies and customer service [8][9] - Ryder aims to leverage its high-quality contractual portfolio, which generates over 90% of its revenue, to support strategic growth opportunities [9] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's ability to deliver increasing value to customers and shareholders despite current market challenges [22] - The outlook for 2026 includes expected operating revenue growth of approximately 3% and a comparable EPS increase of 12% at the high end of the forecast range [22][23] - Management noted that the earnings power of the contractual portfolio is expected to drive higher operating cash flow and support capital deployment capacity [19] Other Important Information - Ryder has generated $3 billion in free cash flow since 2021 and has repurchased 24% of shares outstanding while increasing the quarterly dividend by 57% [12] - The company expects to realize another $70 million in incremental benefits from strategic initiatives in 2026, bringing the total expected annual benefit to $170 million [12][29] - Ryder's balance sheet remains strong, with leverage at 250% at year-end, providing ample capacity for capital allocation priorities [21] Q&A Session Summary Question: Variability in EPS guidance for 2026 - Management indicated that the largest variability lies within the transactional business, particularly related to maintenance and omnichannel optimization initiatives [35][36] Question: Used vehicle sales expectations - Management expects a gradual improvement in used vehicle sales throughout the year, with Q1 consistent with Q4 levels [38][39] Question: Impact of market conditions on rental and used vehicle sales - Management noted that while there are signs of capacity exiting the market, they have not yet seen a meaningful improvement in rental and used vehicle sales [41][62] Question: Flex operating structure benefits - The flex operating structure is expected to optimize back-office resources and improve driver allocation, potentially offsetting margin headwinds in the dedicated business [59] Question: Performance of Supply Chain Solutions - Management highlighted a record sales year in 2025 for Supply Chain Solutions, with new business expected to layer in throughout 2026 [44][60]

Core Insights - Ryder reported revenue of $3.18 billion for the quarter ended December 2025, a decrease of 0.4% year-over-year, with EPS at $3.59 compared to $3.45 in the same quarter last year [1] - The revenue fell short of the Zacks Consensus Estimate of $3.25 billion, resulting in a surprise of -2.18%, while the EPS also missed the consensus estimate of $3.66 by -1.91% [1] Financial Performance Metrics - Ryder's shares have returned +11.2% over the past month, outperforming the Zacks S&P 500 composite, which saw a -0.3% change [3] - Rental Utilization for Commercial rental was reported at 72%, exceeding the average estimate of 71% [4] - Operating Revenue for Fleet Management Solutions was $1.3 billion, slightly below the average estimate of $1.31 billion, reflecting a year-over-year decline of -0.8% [4] - Operating Revenue for Dedicated Transportation Solutions was $452 million, compared to the estimated $459.04 million, marking a -4.2% change year-over-year [4] - Operating Revenue for Supply Chain Solutions was $1.04 billion, below the average estimate of $1.08 billion, but showing a +3% increase year-over-year [4] - Revenues for Fleet Management Solutions were $1.47 billion, slightly below the estimated $1.48 billion, indicating a -1.3% change year-over-year [4] - Revenues for Supply Chain Solutions were $1.38 billion, compared to the estimated $1.44 billion, reflecting a +3.1% year-over-year change [4] - Revenues from Fleet Management Solutions - SelectCare and other were $163 million, below the average estimate of $169.48 million, showing a -3.6% change year-over-year [4] - Revenues from Fleet Management Solutions - Commercial rental were $237 million, exceeding the estimated $230.25 million, but down -4.8% year-over-year [4] - Revenues from Fleet Management Solutions - ChoiceLease were $897 million, slightly below the estimated $905.34 million, with a +0.8% year-over-year change [4] - Revenues from Fleet Management Solutions - Fuel services were $169 million, below the average estimate of $176.51 million, reflecting a -4.5% change year-over-year [4] - Revenues from Dedicated Transportation Solutions were $565 million, compared to the estimated $591.3 million, marking an -8.1% change year-over-year [4]

Fourth Quarter 2025 Earnings Conference Call February 11, 2026 Safe Harbor and Non-GAAP Financial Measures Note Regarding Forward-Looking Statements: Certain statements and information included in this presentation are "forward-looking statements" under the Federal Private Securities Litigation Reform Act of 1995, including our expectations regarding: our forecast and outlook; market conditions, such as expectations regarding macroeconomic uncertainty, rental demand and utilization, and used vehicle sales v ...

Core Insights - Ryder reported quarterly earnings of $3.59 per share, missing the Zacks Consensus Estimate of $3.66 per share, but showing an increase from $3.45 per share a year ago, resulting in an earnings surprise of -1.91% [1] - The company posted revenues of $3.18 billion for the quarter, missing the Zacks Consensus Estimate by 2.18%, and a slight decrease from $3.19 billion year-over-year [2] - Ryder's stock has increased by approximately 10.9% since the beginning of the year, outperforming the S&P 500's gain of 1.4% [3] Earnings Outlook - The company's earnings outlook is crucial for investors, including current consensus earnings expectations for upcoming quarters and any recent changes to these expectations [4] - The trend of estimate revisions for Ryder was favorable prior to the earnings release, resulting in a Zacks Rank 2 (Buy) for the stock, indicating expected outperformance in the near future [6] Future Estimates - The current consensus EPS estimate for the upcoming quarter is $2.77 on revenues of $3.19 billion, while for the current fiscal year, the estimate is $14.94 on revenues of $13.27 billion [7] - The outlook for the Transportation - Equipment and Leasing industry, where Ryder operates, is positive, with the industry ranking in the top 11% of over 250 Zacks industries, suggesting strong potential for stock performance [8]

Core Insights - Ryder's fourth quarter performance showed stability with no significant changes in revenue or profitability compared to the previous year [1] - The used tractor sales average price increased by 1% year-on-year, indicating a strengthening freight market [1] Segment Revenue Summary - Fleet Management Solutions (FMS) experienced a 1% decline in total revenue, reflecting a gradual decrease in its revenue share [2] - Supply Chain Solutions (SCS) reported a 3% increase in revenue, highlighting growth in Ryder's contract logistics segment [2] - Dedicated Transportation Solutions (DTS) saw an 8% decline in revenue, indicating vulnerability to a weak trucking market [2] Earnings Before Tax (EBT) Analysis - FMS reported a 10% decline in EBT, attributed to overall used vehicle sales performance, with comparable sales prices for non-tractor vehicles down 9% [3] - SCS experienced an 8% decrease in EBT, with revenue growth offset by automotive results [3] - DTS achieved a 19% increase in profitability despite revenue decline, due to lower bad debt and benefits from acquisition synergies [3] Full Year Performance and Forecast - For the full year, Ryder reported non-GAAP earnings per share of $12.92, an 8% increase from the previous year [4] - The company forecasts non-GAAP earnings for the next year to be between $13.45 and $14.45, with a projected 3% rise in operating revenue primarily from SCS [4] Management Commentary - The outgoing CEO noted that the fourth quarter results marked the fifth consecutive quarter of earnings-per-share growth, aligning with expectations [5] - SCS and DTS maintained high single-digit pre-tax earnings as a percentage of operating revenue, while FMS benefited from lease pricing and maintenance cost savings [5] Market Reaction - Initial stock market reactions to the earnings report were negative, with Ryder's stock down approximately 3.4% shortly after the earnings release [6] - Despite this, Ryder's stock has increased by about 34.7% over the past 12 months, benefiting from a strong logistics equity market [6]

Financial Performance - GAAP EPS from continuing operations for Q4 2025 was $3.25, up 5% from the prior year, while comparable EPS (non-GAAP) was $3.59, up 4%[3]. - Total revenue for Q4 2025 was $3.2 billion, consistent with the prior year, and operating revenue (non-GAAP) was $2.6 billion, also consistent with the prior year[3]. - Full-year 2025 total revenue reached $12.7 billion, with operating revenue (non-GAAP) of $10.4 billion, reflecting a 1% increase primarily from growth in Supply Chain Solutions (SCS) and Fleet Management Solutions (FMS)[3]. - Ryder's total revenue for Q4 2025 was $3,175 million, a slight decrease from $3,189 million in Q4 2024, while total revenue for the year ended December 31, 2025, was $12,665 million, compared to $12,636 million in 2024[33]. - Comparable earnings from continuing operations for the year ended December 31, 2025, were $540 million, compared to $531 million in 2024, reflecting a year-over-year increase[53]. - The tax rate on continuing operations for the year ended December 31, 2025, was 26.0%, slightly higher than 25.7% in 2024[53]. Cash Flow and Capital Management - The company generated net cash from operating activities of $2.6 billion and free cash flow (non-GAAP) of $946 million in 2025, compared to $133 million in 2024[18]. - Ryder reported a free cash flow of $946 million for the year ended December 31, 2025, a significant increase from $133 million in 2024[37]. - Ryder returned $664 million to shareholders through buybacks and dividends in 2025, demonstrating a commitment to capital return[8]. - The forecast for total cash generated in 2026 is $3,200 million, with free cash flow projected at $800 million[60]. Revenue Growth and Forecast - Ryder expects total revenue growth of 1% and operating revenue growth (non-GAAP) of 3% for FY 2026, with GAAP EPS forecasted between $12.80 and $13.80[21]. - The operating revenue forecast for the year ending December 31, 2026, is $10,700 million, representing a 3% increase from $10,406 million in 2025[58]. - The forecasted comparable EPS from continuing operations for the full year 2026 is between $13.45 and $14.45[59]. Segment Performance - Fleet Management Solutions revenue decreased by 1% to $1,466 million in Q4 2025, while Supply Chain Solutions revenue increased by 3% to $1,382 million in the same period[39]. - Ryder's Dedicated Transportation Solutions segment saw an 8% revenue decline in Q4 2025, totaling $565 million, compared to $615 million in Q4 2024[39]. - FMS total revenue for Q4 2025 was $1,466 million, a decrease of 1% compared to Q4 2024, with annual revenue at $5,845 million, also down 1%[41]. - SCS total revenue increased by 3% to $1,382 million in Q4 2025, with annual revenue reaching $5,459 million, a 3% increase from 2024[41]. - DTS total revenue decreased by 8% to $565 million in Q4 2025, with annual revenue at $2,343 million, down 4% from the previous year[41]. Profitability Metrics - Return on equity (ROE) for FY 2025 was 17%, with expectations for 17% to 18% in FY 2026[3][21]. - The adjusted return on equity (ROE) for the year ended December 31, 2025, was 17%, up from 16% in 2024, reflecting improved profitability[37]. - Comparable EBITDA for Q4 2025 was $726 million, slightly up from $720 million in Q4 2024, while for the year, it increased to $2,867 million from $2,776 million[37]. - FMS segment earnings before income taxes decreased by 10% to $136 million in Q4 2025, with annual earnings at $501 million, down 3%[41]. - SCS segment earnings before income taxes decreased by 8% to $83 million in Q4 2025, while annual earnings increased by 7% to $355 million[41]. - DTS segment earnings before income taxes increased by 19% to $40 million in Q4 2025, with annual earnings at $140 million, up 12% from 2024[41]. Debt and Capital Expenditures - Capital expenditures decreased to $2.1 billion in 2025 from $2.7 billion in 2024, reflecting reduced investments in ChoiceLease and rental fleets[17]. - Debt-to-equity ratio as of December 31, 2025, was 250%, unchanged from the previous year and at the low end of the company's long-term target[19]. - The company's net cash provided by operating activities from continuing operations for the year ended December 31, 2025, was $2,594 million, an increase from $2,265 million in 2024[37]. - Ryder's total debt as of December 31, 2025, was $7,645 million, a decrease from $7,779 million in 2024, while shareholders' equity decreased to $3,052 million from $3,117 million[35]. - The effective interest rate remained stable at 5.2% for both Q4 2025 and 2024, indicating consistent borrowing costs[37]. Fleet Management - The average fleet count for ChoiceLease decreased by 2% to 141,700 units in Q4 2025, with a 1% decrease in the annual average fleet count[43].