Financial Data and Key Metrics Changes - For the full year of 2025, originations grew by 27%, leading to revenue growth of nearly 20%, and Adjusted EPS growth of 42% [9][11] - Fourth quarter revenue increased by 15% year-over-year to $839 million, with total company originations rising 32% to $2.3 billion [10][21] - The consolidated net charge-off ratio for the fourth quarter was 8.3%, down from the previous year, indicating improved credit performance [12][24] Business Line Data and Key Metrics Changes - Small business revenue grew by 34% year-over-year to $383 million, while consumer revenue increased by 3% to $446 million [11][22] - Small business originations rose 48% year-over-year to $1.6 billion, marking the eighth consecutive quarter of year-over-year growth of 20% or more [14][22] - Consumer originations grew by 2% year-over-year to $613 million, with a notable acceleration in December [23] Market Data and Key Metrics Changes - The unemployment rate decreased to 4.4% in December, with real wage growth positive at 3.8% year-over-year [12] - Small businesses expressed optimism about future growth, with 94% projecting growth over the next 12 months [15] - The NFIB Small Business Optimism Index rose to 99.5 in December, indicating a favorable outlook for small businesses [16] Company Strategy and Development Direction - The company plans to close the acquisition of Grasshopper Bank, which is expected to simplify regulatory structures and expand market access [7][18] - The focus for 2026 includes generating sustainable and profitable growth while enhancing shareholder value [17][19] - The company aims to leverage its diversified product offerings and technology to navigate varying operating environments [17][34] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's ability to deliver consistent performance despite macroeconomic challenges [9][17] - The outlook for 2026 anticipates continued growth in originations and revenue, with expectations of adjusted EPS growth of at least 20% [33] - Management highlighted the importance of adapting to market demands and maintaining strong credit performance [12][17] Other Important Information - The company ended the fourth quarter with approximately $1.1 billion in liquidity, providing financial flexibility for strategic objectives [29] - Marketing expenses for the fourth quarter were 23% of total revenue, reflecting a strategic investment to capture demand [11][26] - The effective tax rate for the fourth quarter was 20%, with expectations for a normalized annual rate in the mid-20% range [30] Q&A Session Summary Question: Can you discuss the consumer business growth and impacts from tax season? - Management noted that consumer growth accelerated in December, with expectations for larger tax refunds potentially benefiting credit performance [35][38] Question: What changes are anticipated in the core portfolio prior to closing the Grasshopper acquisition? - Management indicated that operations would continue as usual until the transaction closes, with a focus on expanding the product set post-acquisition [39][42] Question: What is the expected mix of origination growth between consumer and small business? - Management expects a balanced growth approach, with a slight tilt towards small business due to strong demand [45][46] Question: Any changes in underwriting or industry focus for small businesses? - Management confirmed ongoing adjustments in credit underwriting, with stable performance across small business sectors [48][50] Question: What are the regulatory capital ratios post-Grasshopper acquisition? - Management expects to maintain a Tangible Capital Ratio around 17%-18%, with opportunities for capital return post-acquisition [53][56] Question: How might potential rate caps on credit cards affect the company? - Management views potential rate caps as a positive, as they could reduce availability for underserved consumers, positioning the company as an alternative [78][80]

Financial Data and Key Metrics Changes - For the full year of 2025, originations grew 27%, leading to revenue growth of nearly 20%, and Adjusted EPS growth of 42% [10][22] - Fourth quarter revenue increased 15% year-over-year to $839 million, with adjusted EPS rising 33% to $3.46 per diluted share [12][34] - The consolidated net charge-off ratio for the fourth quarter was 8.3%, down from the previous year [13][26] Business Line Data and Key Metrics Changes - Small business revenue grew 34% year-over-year to $383 million, while consumer revenue increased 3% to $446 million [12][23] - Fourth quarter originations for small business increased 48% year-over-year to $1.6 billion, marking the eighth consecutive quarter of year-over-year growth of 20% or more [14][23] - Consumer originations grew 2% year-over-year to $613 million, with a notable acceleration in December [25][40] Market Data and Key Metrics Changes - The unemployment rate in the U.S. decreased to 4.4% in December, indicating a stable labor market [13] - The NFIB Small Business Optimism Index rose to 99.5 in December, reflecting positive sentiment among small business owners [16] Company Strategy and Development Direction - The company plans to close the acquisition of Grasshopper Bank, which is expected to enhance its operational model and expand market access [19][20] - The focus for 2026 includes generating sustainable and profitable growth while driving long-term shareholder value [18][36] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's ability to navigate varying operating environments, citing strong credit performance and a resilient business model [18][37] - The outlook for 2026 anticipates a 15% increase in originations, with adjusted EPS growth of at least 20% [36] Other Important Information - The company ended the fourth quarter with approximately $1.1 billion of liquidity, providing financial flexibility [32] - Marketing expenses for the fourth quarter were 23% of total revenue, reflecting a strategic investment to capture demand [12][28] Q&A Session Summary Question: Can you discuss the consumer business growth and impacts from the upcoming tax season? - Management noted that consumer growth accelerated in December, with expectations for larger tax refunds potentially benefiting credit performance [40][42] Question: What changes are anticipated in the mix between consumer and small business originations? - Management expects a balanced growth approach, with small business continuing to grow at strong rates while consumer growth stabilizes [50][51] Question: How will the regulatory capital ratios change post-acquisition of Grasshopper Bank? - Management indicated that they expect to maintain a Tangible Capital Ratio around 17%-18% and will focus on investing in new opportunities post-acquisition [62][63] Question: What is the outlook for small business health and growth sustainability? - Management highlighted the stability of the small business credit profile and positive sentiment among small business owners, expecting continued strong growth [84]

Core Insights - Ryder System has achieved its third consecutive quarter of double-digit earnings per share growth, indicating the effectiveness of its transformation strategy amid a prolonged freight market downturn [1][3] - The company reported comparable earnings per share of $3.32, an 11% increase year over year, with revenue reaching $2.6 billion, up 2% from the previous year [2] Financial Performance - The transformation strategy has led to asset-light supply chain and dedicated transportation services now accounting for a majority of Ryder's revenue, moving away from traditional fleet management [3] - Ryder's full-year earnings forecast has been adjusted to $12.85 to $13.30 per share, down from the previous range of $12.85 to $13.60, reflecting strong contractual earnings performance but muted recovery in used vehicle sales [7] Strategic Initiatives - The company has adopted a "balanced growth strategy" that focuses on businesses generating stable cash flows across economic cycles, with over 90% of operating revenue derived from multiyear contracts [4] - Ryder's business model is designed to de-risk operations and enhance return profiles, with a resilient contractual portfolio driving performance [5] Market Outlook - Looking ahead, Ryder anticipates benefiting from long-term trends favoring the outsourcing of transportation and logistics, as well as increased industrial manufacturing in the United States [6] - The company acknowledges near-term headwinds in contractual sales due to macroeconomic uncertainty, which has led some customers to delay decisions [8]

Business Transformation and Financial Performance - Ryder's transformative actions have led to significantly higher earnings and an improved return profile, outperforming prior cycles[10] - The company expects post-transformation returns (2025F) to be well above pre-transformation peak returns (2018)[17] - A multi-year maintenance cost savings initiative aims for $50 million in savings[20] - Synergies from the Cardinal acquisition are expected to yield $40-60 million by 2026[20] Market Position and Growth Strategy - Ryder is a leader in North American logistics and transportation outsourcing, with significant growth opportunities from secular trends and large addressable markets[10] - The company's balanced growth strategy focuses on accelerating growth in higher-return Supply Chain Solutions (SCS) and Dedicated Transportation Solutions (DTS), with moderate growth and increased returns in Fleet Management Solutions (FMS)[14] - Ryder redeployed approximately 8,800 vehicles in 2024[29] Revenue and Cash Flow - Approximately 90% of Ryder's operating revenue is contractual, providing multi-year recurring operating cash flow[41] - The company forecasts free cash flow of $0.5 billion for 2025[48] - Ryder's total revenue for 2024 was $12.6 billion[24] Financial Targets - Ryder targets high single-digit operating revenue growth over the long term[59] - The company's long-term leverage goal is a debt-to-equity ratio between 2.5x and 3.0x[59]