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]

Core Insights - The article emphasizes a fundamental, valuation-driven investment approach focused on identifying businesses with potential for long-term growth and significant terminal value [1] Investment Philosophy - The investment strategy is centered around understanding core business economics, including competitive advantages, unit economics, reinvestment opportunities, and management quality [1] - The focus is on sectors that exhibit strong secular tailwinds, indicating a preference for industries poised for sustained growth [1] Professional Background - The investor has 10 years of self-education in the investment field and currently manages personal funds sourced from friends and family [1] - The motivation for sharing insights on Seeking Alpha is to provide valuable analysis and receive feedback from the investment community [1] Analytical Approach - The aim is to help readers concentrate on factors that drive long-term equity value, advocating for analysis that is both analytical and accessible [1]