Ryder System announced a leadership transition on Friday. CEO Robert Sanchez will retire at the close of the first quarter, handing the reins over to Chief Operating Officer John Diez. Following his retirement, Sanchez will transition to the role of executive chairman. “Robert has led the development and execution of Ryder’s balanced growth strategy to derisk the business, improve returns, and accelerate the growth of our supply chain and dedicated businesses that has transformed the company’s return prof ...

PresentationWell, good afternoon, everyone. It's now my pleasure to introduce Ryder's CFO, Cristina Gallo-Aquino. We look forward to hearing about Ryder's ongoing plan execution, which we think sets the company up well for long-term growth with opportunities across Supply Chain and Dedicated, all things that are contributing to an earnings floor that's greater than prior period's peak.Cristina Gallo-AquinoCFO, EVP & Principal Accounting Officer Yes. I just wanted to briefly introduce Ryder for those of you ...

Ryder System (NYSE:R) 2025 Conference Summary Company Overview - Ryder System is an outsourced logistics and transportation solutions provider, primarily operating in North America with a focus on three main segments: Fleet Management Solutions, Dedicated Transportation Solutions, and Supply Chain Solutions. The company has a revenue of $13 billion and has been in operation for 90 years [3][4]. Strategic Transformation - Since 2018, Ryder has implemented a balanced growth strategy focusing on de-risking the business model, improving margins, and shifting towards an asset-light model. This includes pricing residuals conservatively, targeting higher returns, and revamping maintenance operations, resulting in significant cost savings [4][5][6]. - The company has invested approximately $1.1 billion in acquisitions over the past five years to enhance supply chain capabilities and scale [6][7]. Financial Performance - Ryder's earnings have doubled compared to 2018, even during a freight market downturn, with a return on equity of 18% compared to 13% in 2018 [7][8]. Freight Environment Assessment - The freight market has experienced four consecutive years of downturn, but recent trends indicate stabilization. Key metrics such as rental demand and used vehicle pricing have shown signs of stability, although no significant recovery is anticipated in the near term [8][10][11]. - Industrial production, housing starts, and consumer confidence are critical indicators being monitored, with no immediate signs of improvement [11][12]. Future Cost Initiatives - Ryder aims to achieve an additional $150 million in savings through operational excellence, customer-centric technology, and optimizing its omnichannel network. This includes a focus on maintenance cost initiatives and synergies from recent acquisitions [13][14][15]. Rental Fleet Utilization - Current rental fleet utilization is around 70%, with a target of mid-70s%. The company is prepared to capitalize on increased demand by quickly expanding its fleet when utilization improves [16][17]. Used Vehicle Pricing Outlook - Used vehicle pricing is expected to rebound due to lower OEM production levels and increasing costs of new vehicles. The company anticipates improvements in used vehicle pricing by late 2026 [18][19]. Driver Market Dynamics - A tightening driver market is beneficial for Ryder's dedicated business, as it encourages companies to outsource transportation needs. Ryder's focus on private fleets reduces exposure to broader driver market pressures [21][22][23]. Pricing Strategy - Ryder has maintained disciplined pricing strategies, which have been supported by rational competition in the market. The company expects to retain pricing discipline despite market softness [24][25][26]. Dedicated Transportation Opportunities - Ryder differentiates its dedicated services through specialized solutions and strong customer relationships, with a significant portion of dedicated sales coming from existing fleet management customers [27][30][31]. Supply Chain Growth Areas - The company sees significant growth potential in warehouse management and e-commerce, with a strong sales pipeline expected to translate into revenue growth starting in 2026 [32][34][35]. Reshoring and Nearshoring - Ryder is well-positioned to benefit from reshoring and nearshoring trends, particularly in the U.S. and Mexico, as companies seek to bring supply chains closer to home [38][39]. Technology and AI Investments - Ryder has invested in customer-centric technology and AI to enhance operational efficiency and customer service. This includes tools for fleet management and supply chain visibility [41][42][43][45]. M&A Strategy - The company continues to seek M&A opportunities that enhance scale and capabilities, particularly in supply chain logistics. Ryder is interested in tuck-in acquisitions similar to Cardinal and exploring opportunities in healthcare logistics [49][51]. Conclusion - Ryder is optimistic about its strategic initiatives and the potential for future growth, particularly as market conditions improve. The company is focused on achieving its cost-saving targets and enhancing its resilience in the logistics sector [53].

Financial Data and Key Metrics Changes - The company reported operating revenue of $2.6 billion in Q3 2025, up 1% from the prior year, primarily due to contractual revenue growth in Supply Chain Solutions (SCS) and Fleet Management Solutions (FMS) [12] - Comparable EPS from continuing operations increased to $3.57, up 4% from $3.44 in the prior year, reflecting higher contractual earnings and benefits from share repurchases [13] - Return on equity (ROE) was 17%, up from the prior year, driven by higher contractual earnings and share repurchases, partially offset by lower rental demand and used vehicle sales [13] - Year-to-date free cash flow increased to $496 million from $218 million in the prior year due to reduced capital expenditures and lower income tax payments [13] Business Line Data and Key Metrics Changes - Fleet Management Solutions operating revenue was in line with the prior year, with pre-tax earnings of $146 million, reflecting higher ChoiceLease performance but lower used vehicle sales and rental results [14] - Supply Chain operating revenue increased by 4%, driven by new business in omnichannel retail, although earnings decreased by 8% due to e-commerce network performance and higher medical costs [16] - Dedicated operating revenue decreased by 6% due to lower fleet count, but earnings before tax (EBT) remained in line with the prior year, reflecting acquisition synergies [17] Market Data and Key Metrics Changes - The company expects 60% of 2025 revenue to come from asset-light businesses, up from 44% in 2018, indicating a shift in revenue mix towards supply chain and dedicated services [10] - The company anticipates a free cash flow forecast of $900 million to $1 billion for 2025, reflecting lower year-over-year capital spending [9][23] Company Strategy and Development Direction - The company remains focused on creating value through operational excellence and investment in customer-centric technology, aiming for earnings growth driven by resilient contractual businesses and strategic initiatives [6] - A new discretionary share repurchase program was authorized, reflecting the company's commitment to disciplined capital allocation [8] - The company expects to realize approximately $100 million in benefits from strategic initiatives by year-end 2025, benefiting all three business segments [25] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's ability to outperform prior cycles, citing a strong performance from the transformed business model and the execution of the balanced growth strategy [11] - The company anticipates continued earnings growth in 2025, driven by contractual earnings and strategic initiatives, despite headwinds from the freight market [22] - Management noted that the prolonged freight downturn and economic uncertainty are causing some customers to delay decisions, but robust sales and pipeline activity in SCS are encouraging [22][26] Other Important Information - The company has repurchased approximately 22% of its shares outstanding since 2021 and increased the quarterly dividend by 57% [8] - The company expects to generate approximately $10.5 billion from operating cash flow and used vehicle sales proceeds over a three-year period, creating $3.5 billion of incremental debt capacity [20] Q&A Session Summary Question: Impact of CDL regulations on the business model - Management indicated that tighter driver markets could benefit the dedicated business as companies seek help in driver recruitment, with minimal impact expected on the lease side [30][31] Question: Drivers of earnings growth for 2026 - Management expects contractual earnings growth and benefits from strategic initiatives to drive earnings growth, with strong performance anticipated in supply chain solutions [33][34] Question: Used vehicle pricing and tariffs - Management noted uncertainty regarding the impact of truck tariffs on pricing but suggested that higher new truck prices could eventually benefit used truck values [41][42] Question: Supply chain performance and headwinds - Management acknowledged temporary headwinds in supply chain performance due to higher medical costs and lower e-commerce volumes but remains optimistic about future growth [52][53] Question: SelectCare performance volatility - Management views the recent lower activity in SelectCare as temporary, expecting a return to normal levels in the fourth quarter [57] Question: Non-domicile CDL role and timing of impacts - Management indicated that the impact of CDL regulations would unfold over time, with expectations of increased demand for dedicated services as the driver market tightens [62]

Financial Data and Key Metrics Changes - Ryder reported operating revenue of $2.6 billion in Q3 2025, up 1% from the prior year, primarily due to contractual revenue growth in Supply Chain Solutions (SCS) and Fleet Management Solutions (FMS) [13] - Comparable earnings per share from continuing operations were $3.57, up 4% from $3.44 in the prior year, reflecting higher contractual earnings and benefits from share repurchases [13] - Return on equity (ROE) was 17%, up from the prior year, driven by higher contractual earnings and share repurchases, partially offset by lower rental demand and used vehicle sales [14] - Year-to-date free cash flow increased to $496 million from $218 million in the prior year due to reduced capital expenditures and lower income tax payments [14] Business Line Data and Key Metrics Changes - Fleet Management Solutions operating revenue was in line with the prior year, with pretax earnings of $146 million, up year-over-year due to higher ChoiceLease performance, offset by lower used vehicle sales and rental results [14][15] - Supply Chain operating revenue increased 4%, driven by new business in omni-channel retail, but earnings decreased 8% due to e-commerce network performance and higher medical costs [19] - Dedicated operating revenue decreased 6% due to lower fleet count, but earnings before tax (EBT) was in line with the prior year, reflecting acquisition synergies [20] Market Data and Key Metrics Changes - The company noted that 93% of its revenue is generated in the U.S., positioning it well to benefit from increased domestic industrial manufacturing [6] - Rental demand was lower than historical seasonal trends, with rental utilization on the power fleet at 70%, down from 71% in the prior year [15] - Used vehicle pricing saw a year-over-year decline of 6% for tractors and 15% for trucks, although sequential pricing for trucks increased by 7% [16] Company Strategy and Development Direction - Ryder is focused on creating value through operational excellence and investment in customer-centric technology, aiming for earnings growth driven by resilient contractual businesses and strategic initiatives [5][6] - The company expects its transformed business model to deliver ROE in the low to mid-20s when market conditions improve, with over 90% of operating revenue generated by multiyear contracts [7] - A new discretionary $2 billion share repurchase program was authorized, reflecting the company's commitment to disciplined capital allocation [9] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's ability to outperform prior cycles, citing a strong foundation from its transformed business model [8] - The outlook for 2025 includes a comparable EPS forecast of $12.85 to $13.05, driven by higher contractual earnings and benefits from strategic initiatives [29] - Management acknowledged ongoing headwinds from the freight market downturn but remains optimistic about robust sales and pipeline activity in SCS [29][30] Other Important Information - The company has returned $457 million to shareholders in 2025 through share repurchases and dividends, with a 57% increase in the quarterly dividend since 2021 [9] - The forecast for free cash flow remains unchanged at $900 million to $1 billion, reflecting lower capital expenditures and an estimated annual benefit of $200 million from tax bonus depreciation [10][30] Q&A Session Summary Question: Impact of CDL regulations on the business model - Management indicated that tighter driver markets could benefit the dedicated business as companies seek assistance in driver recruitment, with minimal impact expected on the lease side [38][40] Question: Drivers of earnings growth for next year - Management expects contractual earnings growth and strong performance in supply chain to drive revenue and earnings growth, despite muted sales in lease and dedicated due to freight market softness [42][45] Question: Used vehicle pricing and tariffs - Management noted that any price increases would likely be passed through to lease rates, and higher new truck pricing could eventually support used truck prices [52][56] Question: Supply Chain Solutions headwinds - Management acknowledged temporary headwinds in e-commerce network performance but remains optimistic about future growth and margin targets [65][66] Question: Bonus depreciation impact - The bonus depreciation is expected to provide a cash tax benefit of approximately $200 million annually, with no significant impact on operating margins [84][86]

Financial Data and Key Metrics Changes - Ryder reported operating revenue of $2.6 billion in Q3 2025, up 1% from the prior year, primarily due to growth in contractual revenue [11] - Comparable EPS from continuing operations increased to $3.57, up 4% from $3.44 in the prior year, reflecting higher contractual earnings and benefits from share repurchases [11] - Return on equity (ROE) was 17%, up from the prior year, driven by higher contractual earnings and share repurchases, partially offset by lower rental demand and used vehicle sales [11] - Year-to-date free cash flow increased to $496 million from $218 million in the prior year due to reduced capital expenditures and lower income tax payments [11] Business Line Data and Key Metrics Changes - Fleet Management Solutions (FMS) operating revenue was in line with the prior year, with pre-tax earnings of $146 million, reflecting higher ChoiceLease performance [12] - Supply Chain Solutions (SCS) operating revenue increased 4%, driven by new business in omnichannel retail, but earnings decreased 8% due to e-commerce network performance and higher medical costs [15] - Dedicated Transportation Solutions (DTS) operating revenue decreased 6% due to lower fleet count, but EBT was in line with the prior year, reflecting acquisition synergies [16] Market Data and Key Metrics Changes - 93% of Ryder's revenue is generated in the U.S., positioning the company to benefit from increased domestic industrial manufacturing [5] - The rental demand was lower than historical seasonal trends, with rental utilization on the power fleet at 70%, down from 71% the prior year [12] - Used vehicle pricing declined 6% for tractors and 15% for trucks year-over-year, reflecting ongoing weakness in market conditions [13] Company Strategy and Development Direction - Ryder's balanced growth strategy focuses on operational excellence and investment in customer-centric technology, aiming to improve full-cycle returns and unlock long-term shareholder value [5] - The company expects earnings growth in 2025 driven by resilient contractual businesses and strategic initiatives, with a forecasted ROE of 17% [22] - Ryder has authorized a new discretionary share repurchase program, reflecting a commitment to disciplined capital allocation [7] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's cycle-tested business model, which has demonstrated resiliency during the freight cycle downturn [6] - The company anticipates continued earnings growth from multi-year strategic initiatives, with expected annual pre-tax earnings benefits of approximately $150 million [24] - Management noted that while there are near-term headwinds in lease and dedicated sales due to market conditions, robust sales activity in SCS is encouraging [22] Other Important Information - Ryder's forecast for free cash flow remains unchanged at $900 million to $1 billion, reflecting lower capital spending and an annual cash flow benefit of approximately $200 million from tax bonus depreciation [8] - The company has repurchased approximately 22% of its shares outstanding since 2021 and increased the quarterly dividend by 57% [7] Q&A Session Summary Question: Impact of CDL regulations on business model - Management indicated that tighter driver markets could benefit the dedicated business as companies seek assistance in driver recruitment [30][32] Question: Drivers of earnings growth for 2026 - Management expects contractual earnings growth and benefits from strategic initiatives to drive earnings growth, with strong performance anticipated in supply chain solutions [34][35] Question: Challenges in used vehicle pricing - Management acknowledged challenges in used vehicle pricing but noted that higher new truck pricing could eventually support used truck values [39][40] Question: Supply chain performance and headwinds - Management highlighted that recent headwinds in supply chain performance were temporary and attributed to specific customer issues, with expectations for recovery [49][50] Question: Bonus depreciation impact on financials - Management clarified that the bonus depreciation will provide a cash tax benefit of approximately $200 million annually, with no significant impact on operating margins [61][62]

Core Insights - Ryder System reported total revenue of $3.17 billion, showing a slight increase from $3.168 billion a year ago, while non-GAAP earnings per share rose to $3.57 from $3.44 [1] Revenue Performance - Dedicated Transportation Solutions (DTS) experienced a 10% decline in revenue to $570 million, reflecting challenges in the trucking market [2] - DTS revenue decreased sequentially from $606 million in the second quarter, which was down from $635 million in the same quarter of 2024 [3] - Fleet Management Solutions saw a minor revenue drop of $5 million year-on-year, but earnings before taxes increased by 11% to $146 million [5] - Supply Chain Solutions achieved the highest revenue growth among the divisions, with a 5% increase to $1.38 billion, although earnings before taxes fell by 8% to $86 million [6] Operational Insights - Ryder's CEO noted that benefits from strong operating performance and acquisition synergies in DTS were offset by fleet reductions due to weaker freight market conditions [4] - Used vehicle pricing for tractors and trucks decreased by 6% and 15%, respectively, compared to the second quarter of 2024, although tractor pricing remained unchanged sequentially and truck pricing increased by 7% [7] Cost Management - Fuel expenses decreased significantly from $116 million a year ago to $94 million in the second quarter of 2025, providing a positive impact on Ryder's financials [8] - The company adjusted its fiscal non-GAAP EPS forecast to a range of $12.85-$13.05, slightly down from the previous range of $12.85-$13.30, while most other forecast numbers remained unchanged [8]

Financial Data and Key Metrics Changes - Ryder reported operating revenue of $2.6 billion for Q2 2025, an increase of 2% from the prior year, primarily driven by contractual revenue growth in Supply Chain Solutions (SCS) and Fleet Management Solutions (FMS) [13] - Comparable earnings per share from continuing operations were $3.32, up 11% from $3 in the prior year, reflecting higher contractual earnings and share repurchases [13] - Return on equity (ROE) was 17%, up from the prior year, primarily due to higher contractual earnings [14] - Year-to-date free cash flow increased to $461 million from $71 million in the prior year, reflecting lower working capital needs and reduced capital expenditures [14] Business Line Data and Key Metrics Changes - **Fleet Management Solutions (FMS)**: Operating revenue increased by 1%, driven by ChoiceLease revenue, which was up 2%. However, pretax earnings decreased to $126 million due to weaker freight market conditions [15] - **Supply Chain Solutions (SCS)**: Operating revenue increased by 3%, with earnings up 16% from the prior year, reflecting new business and improved performance from initiatives to optimize the omnichannel retail network [21] - **Dedicated Transportation Solutions (DTS)**: Operating revenue decreased by 3% due to lower fleet count, but earnings before tax (EBT) increased by 1% year-over-year, reflecting acquisition synergies [22] Market Data and Key Metrics Changes - The U.S. market remains a significant focus, generating 93% of Ryder's revenue, with expectations of benefiting from increased industrial manufacturing [6] - Used vehicle sales results were negatively impacted by increased wholesale volumes, with used tractor and truck pricing declining by 17% year-over-year [18] - Rental utilization on the power fleet was 70%, up from 69% in the prior year, although still below the target range [16] Company Strategy and Development Direction - Ryder's balanced growth strategy aims to derisk the business, increase return profiles, and accelerate growth in asset-light supply chain and dedicated businesses [4] - The company expects to continue leveraging its transformed business model to outperform prior cycles, with a focus on organic growth, strategic acquisitions, and innovative technology [11] - Ryder announced a 12% annualized increase to its quarterly dividend, reflecting higher profitability and improved returns [9] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the resilience of the transformed business model, expecting to generate higher earnings and returns even in a freight cycle downturn [7] - The company anticipates a more muted recovery in used vehicle sales and ongoing challenges in the rental market due to economic uncertainty [29] - Management remains optimistic about robust sales and pipeline activity in SCS, despite near-term headwinds in lease and dedicated businesses [29] Other Important Information - Ryder increased its 2025 forecast for free cash flow to a range of $900 million to $1 billion, reflecting lower expected capital spending and the reinstatement of tax bonus depreciation [10] - The company has repurchased approximately 21% of its shares outstanding since 2021 and increased the quarterly dividend by 57% [9] Q&A Session Summary Question: Confidence in deploying dry powder on the balance sheet - Management feels confident about deploying capital for share repurchase programs and acquisitions, with plans to invest organically as the freight market improves [40][41] Question: Used vehicle pricing expectations - Management expects a steady increase in tractor pricing, with retail pricing up 10%, although the overall increase may be more muted than initially expected [43][44] Question: Reasons for losses on sales in Q2 and recovery in Q3 - Losses were driven by increased wholesaling of aged inventory, which is not expected to continue at the same level, allowing for a return to gains in Q3 [47][48] Question: Impact of OEM delays on capital expenditures - Management anticipates that OEM delays will reverse in 2026, leading to increased capital spending as the freight market stabilizes [62][64] Question: Maintenance growth outlook - Management is focusing on mobile maintenance initiatives and retail maintenance offerings, which are expected to grow despite historical stagnation [96][99]

Core Insights - Ryder reported revenue of $3.19 billion for the quarter ended June 2025, reflecting a year-over-year increase of 0.2% and surpassing the Zacks Consensus Estimate by 0.5% [1] - Earnings per share (EPS) for the quarter was $3.32, up from $3.00 in the same quarter last year, representing a surprise of 6.75% over the consensus estimate of $3.11 [1] Financial Performance Metrics - Commercial rental utilization was reported at 70%, exceeding the two-analyst average estimate of 68% [4] - Operating Revenue for Fleet Management Solutions was $1.29 billion, matching the average estimate and showing a year-over-year increase of 0.9% [4] - Operating Revenue for Dedicated Transportation Solutions was $470 million, slightly above the average estimate of $460.58 million, but down 3.1% year over year [4] - Operating Revenue for Supply Chain Solutions was $1.02 billion, aligning with the average estimate and reflecting a year-over-year increase of 3% [4] - Revenues for Fleet Management Solutions totaled $1.47 billion, consistent with the average estimate but down 0.7% year over year [4] - Revenues for Supply Chain Solutions reached $1.37 billion, slightly above the average estimate of $1.36 billion, marking a 1.9% year-over-year increase [4] - Revenues from Fleet Management Solutions - SelectCare and other amounted to $178 million, close to the average estimate, with a year-over-year increase of 1.1% [4] - Revenues from Eliminations were reported at -$250 million, better than the average estimate of -$261.4 million, but down 8.1% year over year [4] - Revenues from Fleet Management Solutions - Commercial rental were $239 million, exceeding the average estimate but down 2.1% year over year [4] - Revenues from Fleet Management Solutions - ChoiceLease were $871 million, slightly below the average estimate, with a year-over-year increase of 1.8% [4] - Revenues from Fleet Management Solutions - Fuel services were $179 million, below the average estimate, reflecting an 11.4% year-over-year decline [4] - Revenues from Dedicated Transportation Solutions were $606 million, slightly above the average estimate, but down 4.6% year over year [4] Stock Performance - Ryder's shares have returned +10.9% over the past month, outperforming the Zacks S&P 500 composite's +5.7% change [3] - The stock currently holds a Zacks Rank 3 (Hold), indicating expected performance in line with the broader market in the near term [3]

Core Viewpoint - Analysts forecast that Ryder will report quarterly earnings of $3.11 per share, reflecting a year-over-year increase of 3.7%, while revenues are expected to be $3.17 billion, showing a decrease of 0.3% compared to the previous year [1]. Earnings Projections - The consensus EPS estimate has been revised 0.3% lower over the last 30 days, indicating a reevaluation of initial estimates by analysts [2]. - Changes in earnings projections are crucial for predicting investor reactions, with empirical studies showing a strong correlation between earnings estimate trends and short-term stock price movements [3]. Revenue Estimates - Analysts project 'Operating Revenue- Fleet Management Solutions' at $1.29 billion, indicating a year-over-year change of +0.9% [5]. - The estimate for 'Operating Revenue- Dedicated Transportation Solutions' is $460.58 million, reflecting a year-over-year decrease of 5% [5]. - 'Operating Revenue- Supply Chain Solutions' is expected to reach $1.02 billion, showing a change of +3.3% from the previous year [6]. - The estimate for 'Revenues- Fleet Management Solutions' is $1.47 billion, indicating a year-over-year change of -0.6% [7]. - 'Revenues- Dedicated Transportation Solutions' is projected at $604.69 million, reflecting a decrease of 4.8% from the prior year [8]. - 'Revenues- Fleet Management Solutions- ChoiceLease' is expected to reach $880.92 million, indicating a year-over-year change of +2.9% [9]. Key Metrics - 'Commercial rental - Rental Utilization - Power Units' is estimated at 68.0%, down from 69.0% a year ago [10]. - Over the past month, Ryder shares have returned +9.8%, outperforming the Zacks S&P 500 composite's +5.9% change [10].