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CALL PARTICIPANTS
Chair & Chief Executive Officer — Robert Sanchez
Executive Vice President & Chief Financial Officer — Christyne McGarvey
Executive Vice President & Chief Marketing Officer — John Diez
President of Fleet Management Solutions — Tom Havens
President of Supply Chain Solutions — Steve Sensing
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RISKS
Christyne McGarvey stated that used vehicle sales results “were negatively impacted by the decisions we made to exit some aged inventory by utilizing our wholesale channels” in Q2 2025.
Management described “Rental results for Q2 2025 reflect market conditions that remain weak.” and noted that utilization remains below their target range.
Robert Sanchez said, “the prolonged freight downturn and economic uncertainty continue to cause some customers and prospects in lease and dedicated to delay decisions,” which creates near-term contractual sales headwinds.
Christyne McGarvey acknowledged that “operating revenue decreased 3% due to lower fleet count reflecting the prolonged freight downturn,” indicating persistent volume pressure in the dedicated segment.
TAKEAWAYS
Comparable EPS: $3.32 in comparable earnings per share from continuing operations for Q2 2025, up 11% year over year in the second quarter, driven by higher contractual earnings and share repurchases.
Operating Revenue: $2.6 billion in operating revenue for Q2 2025, up 2% year over year in the second quarter, primarily reflecting growth in SCS and FMS contractual revenue.
Return on Equity: 17%, in line with prior guidance and supported by higher contractual earnings.
Free Cash Flow (YTD): Free cash flow was $461 million year-to-date through Q2 2025. Year-to-date free cash flow increased to $461 million from $71 million in the prior year, attributed to lower working capital needs and reduced capex.
FMS Segment Revenue: Up 1% on 2% ChoiceLease growth in Q2 2025. FMS pretax earnings were $126 million in Q2 2025, down year over year, as increased lease pricing and maintenance cost savings were offset by weaker used vehicle sales.
Used Vehicle Pricing: Year over year in Q2 2025, used tractor and truck prices declined 17%; Sequentially in the second quarter, tractor pricing increased 3% while truck pricing decreased 10%.
Retail Sales Mix: 50% of used vehicles were sold through retail channels in Q2 2025, down from 65% in the prior year, as wholesale activity increased in Q2 2025 to address aged inventory.
Rental Power Fleet Utilization: 70%, up from 69% in the prior year on a 7% smaller fleet; pricing was up 4% year over year in the second quarter, but still below the company’s target utilization range.
SCS Segment Growth: Operating revenue was up 3% in Q2 2025 on new business, higher customer volumes, and improved omnichannel retail network performance; segment EBT rose 16% from the prior year, and operating margins reached segment targets in Q2 2025.
DTS Segment Performance: Operating revenue declined 3% in Q2 2025, but while EBT increased 1% year over year, reflecting acquisition synergies and prior year integration costs, despite lower fleet count.
Capital Spending Revision: Full-year 2025 lease capex forecast was lowered by $300 million to $1.8 billion; rental capex will remain at $300 million for FY2025; and the ending rental fleet is projected to decline 12% by year-end 2025.
Dividend Growth & Share Repurchase: Quarterly dividend raised 12% annually; $330 million has been returned to shareholders year-to-date in 2025; since 2021 through the second quarter of 2025, 21% of shares have been repurchased and the dividend has increased 57% since 2021.
Free Cash Flow Forecast: Raised by $500 million to $900 million–$1 billion for 2025 free cash flow, due to lower capital expenditures and an estimated $200 million benefit from permanent tax bonus depreciation.
Updated EPS Guidance (2025): Comparable EPS is projected at $12.85–$13.30 for the full year 2025 (prior year $12.00); Q3 2025 comparable EPS is forecasted at $3.45–$3.65.
Contractual Revenue Stability: Over 90% of operating revenue is generated by multiyear contracts, supporting earnings stability through cycle.
SUMMARY
Management emphasized the structural shift toward asset-light contractual businesses, expecting 60% of 2025 revenue from supply chain and dedicated services versus 44% in 2018, and outlined approximately $150 million in annual pretax earnings benefits from ongoing strategic initiatives. Guidance for Q3 and Q4 2025 assumes muted sequential improvement in used vehicle sales pricing, with future gains tied to a reduced wholesale mix and an anticipated modest fourth-quarter pricing uptick, while contractual segments continue to contribute the majority of incremental earnings. Balance sheet capacity remains strong, with a $14 billion capital deployment pool expected over a three-year period,—with half earmarked for growth investments and the remainder for share repurchases and acquisitions,—with priority placed on organic expansion and targeted M&A rather than distressed assets.
Robert Sanchez said, “We are always looking for acquisition opportunities. And, and then, obviously, as we get into the freight up cycle, we’re going to be investing organically in vehicles not only for lease but for rental,” referencing disciplined capital plans tied to cycle recovery.
Christyne McGarvey affirmed the truck and tractor residual values position, stating, “there would be no impact or clearly not a material impact on our results if that were to continue,” noting that inventory risk remains well managed.
Tom Havens cited a 75% year-over-year revenue increase in the TORQ mobile maintenance business, without specifying the exact period, highlighting new growth avenues in retail maintenance, though this initiative is still at an early stage.
Steve Sensing credited disciplined contract pricing and continuous improvement in omnichannel execution as underpinnings for supply chain segment margin outperformance despite softer revenue growth.
Pipeline strength in contractual sales is described as “record level” as of Q2 2025, but management acknowledged continued customer hesitance due to macroeconomic and tariff uncertainties, with minimal improvement assumed in forward guidance for Q3 and Q4 2025.
INDUSTRY GLOSSARY
ChoiceLease: Ryder System, Inc.’s full-service truck leasing product offering maintenance, fleet support, and administrative solutions bundled with vehicle leases.
DTS: Dedicated Transportation Solutions, the business segment providing dedicated contract carriage, drivers, and related logistics support services.
SCS: Supply Chain Solutions, the segment providing warehousing, distribution management, and transportation services for Ryder System, Inc. customers.
TORQ: Ryder System, Inc.’s on-demand, retail mobile maintenance platform allowing fleet maintenance on a pay-as-you-go basis outside multiyear contract structures.
EBT: Earnings before taxes, a segment-level profitability measure directly cited by Ryder System, Inc. management.
Full Conference Call Transcript
Robert Sanchez: Good morning, everyone, and thanks for joining us. I’m proud of the Ryder System, Inc. team for delivering our third consecutive quarter of double-digit earnings per share growth. Second quarter results were above our expectations, driven by outperformance in our supply chain segment. This benefit was partially offset by increased used vehicle wholesale volumes to manage aged inventory levels. The business continues to outperform prior cycles, driven by our resilient contractual portfolio that reflects the actions we’ve taken under our balanced growth strategy to de-risk the business, increase the return profile, and accelerate growth in our asset-light supply chain and dedicated businesses. I’ll begin today’s call by providing you a strategic update.
Christyne will then take you through our second quarter results, and John will review capital expenditures that are increasing capital deployment capacity. I’ll then review our updated outlook for 2025 and discuss how we expect to leverage the momentum of our transformed business model. Let’s begin on slide four. Turning to slide four, the structurally higher earnings profile of our transformed business model and execution on our strategic initiatives continue to drive earnings growth. We remain on track to realize the benefits from the strategic initiatives outlined during the February Earnings Call. These benefits are the key drivers of the year-over-year earnings growth we are expecting. Long-term secular trends that favor transportation and logistics outsourcing remain strong.
The value that our solutions bring to our customers remains compelling. We are also well-positioned to benefit from increased industrial manufacturing in the US as 93% of our revenue is generated here. We delivered a return on equity of 17% for the trailing twelve-month period, which is in line with our expectations during a freight cycle downturn and continues to demonstrate the resilience of our transformed business model. Earnings growth from our high-performing contractual portfolio reflects our value proposition as well as our pricing discipline. Over 90% of our operating revenue is generated by multiyear contracts. We expect our transformed and cycle-tested business model to continue to outperform prior cycles.
In addition to increasing the return profile of our business, the earnings power of our contractual portfolio continues to provide us with increased capital deployment capacity, which we expect to use to support profitable growth and return capital to shareholders. Earlier this month, we announced a 12% annualized increase to our quarterly dividend, reflecting higher profitability and improved returns over the cycle. In 2025, we returned $330 million to shareholders by repurchasing approximately 1.7 million shares and paying our dividend. Since 2021, we have repurchased approximately 21% of our shares outstanding and increased the quarterly dividend by 57%.
