Ryder Reports First Quarter 2025 Results

Execution on Strategic Initiatives Drives Contractual Earnings Growth

First Quarter 2025 Highlights

• GAAP EPS from continuing operations of $2.29, up 21% from prior year
• Comparable EPS (non-GAAP) from continuing operations of $2.46, up 15% from prior year, reflecting higher contractual earnings in all segments, partially offset by weaker market conditions in rental and used vehicle sales
• Total revenue of $3.1 billion, up 1%
• Operating revenue (non-GAAP) of $2.6 billion, up 2%, reflecting prior year acquisition and contractual revenue growth in Supply Chain Solutions (SCS) and Fleet Management Solutions (FMS), partially offset by lower commercial rental revenue

Full-Year 2025 Forecast

• Adjusted return on equity (ROE) (non-GAAP) of 16.5% - 17.5%
• Comparable EPS (non-GAAP) of $12.85 - $13.60
• Operating revenue (non-GAAP) expected to increase 1%
• Net cash provided by operating activities from continuing operations of $2.5 billion and free cash flow (non-GAAP) of positive $375 - $475 million

Ryder System, Inc. (NYSE:R) reported results for the three months ended March 31 as follows:

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Ryder is a leader in supply chain, dedicated transportation, and fleet management solutions.

Total and operating revenue for the three months ended March 31 were as follows:

CEO Comment

"I'm proud of the Ryder team for delivering double-digit earnings growth in the first quarter," says Ryder Chairman and CEO Robert Sanchez. "This marks the second consecutive quarter with year-over-year earnings growth driven by the strength of our contractual businesses. We remain on track to achieve expected benefits in 2025 from strategic initiatives that are well underway. These benefits include our lease pricing initiative, savings from our multi-year maintenance initiative, realization of acquisition synergies, and optimization of our omnichannel retail network. Our ability to generate ROE of 17% in the current environment continues to demonstrate consistent execution and the resilience of our transformed business model.

"SCS delivered record first-quarter earnings, reflecting the execution of strategic initiatives and new business. This marks the eighth consecutive quarter of earnings growth in SCS. DTS also delivered higher earnings reflecting acquisition synergies and continued strong performance of our legacy dedicated business. In FMS, contractual earnings growth driven by initiatives partially offset weaker market conditions in rental and used vehicle sales.

"The earnings power of our contractual businesses continues to increase our capital deployment capacity, enabling us to invest in profitable growth and strategic initiatives, while also returning capital to shareholders through buybacks and increased dividends.

"I remain confident that our transformed and cycle-tested business model will continue to outperform prior cycles while delivering higher highs and higher lows."

First Quarter 2025 Segment Review

Fleet Management Solutions: Contractual Earnings Growth Offset by Weaker Market Conditions in Rental and Used Vehicle Sales

• FMS total revenue decreased 1% and operating revenue increased 1%
  • Total revenue reflects lower fuel costs passed through to customers
  • Operating revenue reflects higher ChoiceLease revenue, partially offset by lower rental demand
    
    

• FMS EBT of $94 million, decreased 6%
  • Higher ChoiceLease performance driven by pricing and maintenance cost initiatives
  • Weaker rental demand and lower used vehicle gains
  • Rental power-fleet utilization was 66%, consistent with prior year, on a 5% smaller average power fleet
  • Used truck and tractor pricing declined 17% and 16%, respectively, from prior year, and declined 8% for trucks and 7% for tractors, sequentially from fourth quarter of 2024

Supply Chain Solutions: Robust Earnings Growth Reflects Continued Strong Operating Performance

• SCS total revenue and operating revenue increased 2% and 3%, respectively
  • Total revenue primarily reflects increased operating revenue
  • Increase in operating revenue driven by new business and higher customer volumes
    
    

• SCS EBT of $87 million, up 35%
  • EBT growth primarily reflects improved operating performance from strategic initiatives and new business

Dedicated Transportation Solutions: Higher Earnings Reflect Acquisition Synergies and Prior Year Integration Costs

• DTS total revenue increased 7% and operating revenue grew 8%
  • Increase due to prior year acquisition completed February 2024
    
    

• DTS EBT of $27 million, up 50%
  • Increase due to acquisition synergies as well as prior year integration costs
  • Results continue to benefit from strong performance of legacy business

Corporate Financial Information

Unallocated Central Support Services (CSS)

Unallocated CSS costs increased to $20 million from $14 million in the prior year, primarily due to lower performance on investments.

Capital Expenditures, Cash Flow, and Leverage

First quarter capital expenditures decreased to $536 million in 2025 compared to $716 million in 2024, reflecting reduced investments in ChoiceLease.

First quarter net cash provided by operating activities from continuing operations was $651 million compared to $526 million in 2024, primarily reflecting lower working capital needs. Free cash flow (non-GAAP) of $259 million compared to $13 million in 2024, primarily reflects reduced capital expenditures.

Debt-to-equity as of March 31, 2025 was 259%, compared to 250% at year-end 2024, and is at the bottom end of the company's long-term target of 250% to 300%.

Outlook

"Our revised 2025 forecast assumes a more muted economic environment primarily impacting demand for our transactional rental business," says Ryder Chief Financial Officer Cristina Gallo-Aquino. "We have also increased our free cash flow forecast to reflect lower capital spending. We expect the execution of our initiatives and the strength of our contractual businesses to continue to drive earnings growth this year."

Supplemental Company Information

Business Description

Ryder System, Inc. is a leading supply chain, dedicated transportation, and fleet management solutions company. Ryder's stock (NYSE:R) is a component of the Dow Jones Transportation Average and the S&P MidCap 400^® index. The company's financial performance is reported in the following three, inter-related business segments:

• Supply Chain Solutions – Ryder's SCS business segment optimizes logistics networks to make them more responsive and able to be leveraged as a competitive advantage. Globally-recognized brands in the automotive, consumer goods, food and beverage, healthcare, industrial, oil and gas, technology, and retail industries rely on Ryder's leading-edge technologies and world-class logistics engineers to help them deliver the goods that consumers use every day.
• Dedicated Transportation Solutions – Ryder's DTS business segment combines the best of Ryder's leasing and maintenance capabilities with the safest and most professional drivers in the industry. With a dedicated transportation solution, Ryder helps customers increase their competitive position, reduce risk, and integrate their transportation needs with their overall supply chain.
• Fleet Management Solutions – Ryder's FMS business segment provides a broad range of services to help businesses of all sizes, across virtually every industry, deliver for their customers. From leasing, maintenance, and fueling, to rental and used vehicle sales, customers rely on Ryder's expertise to help them lower their costs, redirect capital to other parts of their business, and focus on what they do best – so they can grow.

For more information on Ryder System, Inc., visit investors.ryder.com and ryder.com.

Note: Regarding Forward-Looking Statements

Certain statements and information included in this news release are "forward-looking statements" under the Federal Private Securities Litigation Reform Act of 1995, including: our forecast; our outlook; our expectations regarding market conditions, such as rental demand and weakening used vehicle sales and rental; our expectations regarding the freight cycle, including timing and the impact of the freight cycle on our businesses; our expectations regarding total and operating revenue, earnings per share, comparable earnings per share, adjusted ROE, earnings before income tax, net cash from operating activities from continuing operations, debt-to-equity, capital expenditures, operating cash flow and free cash flow, and the causes of change; our ability to execute our balanced growth strategy; the impact of inflationary pressures; our expectations regarding commercial rental demand and utilization and used vehicle sales volume and pricing; our expectations regarding long-term profitable growth and secular growth trends; our expectations regarding used vehicle inventory and fleet size; our ability to outperform prior cycles; our ability to support organic growth, including growing our contractual lease, dedicated, and supply chain businesses at targeted returns; our expectations regarding strategic investments and acquisitions, including the acquisitions of Cardinal Logistics; our expectations with respect to our actions to increase returns and create long-term value; and our expectations regarding our ability to return capital to shareholders, including through share repurchases and dividends. Our forward-looking statements also include our estimates of the impact of residual value estimates on earnings and depreciation expense that is based in part on our current assessment of the residual values and useful lives of revenue-earning equipment based on multi-year trends and our outlook for the expected near- and long-term used vehicle market. A variety of factors, many of which are outside of our control, could cause residual value estimates to differ from actual used vehicle sales pricing, such as changes in supply and demand of used vehicles; volatility in market conditions; changes in vehicle technology; competitor pricing; regulatory requirements, including changes to tariffs; driver shortages; customer requirements and preferences; and changes in underlying assumption factors.

All of our forward-looking statements should be evaluated by considering the many risks and uncertainties inherent in our business that could cause actual results and events to differ materially from those in the forward-looking statements. Important factors that could cause such differences include: changes in general economic and financial conditions in the U.S. and worldwide; supply chain and labor challenges and vehicle production constraints, including original equipment manufacturer delays; the effect of geopolitical events; our ability to adapt to changing market conditions, including lower than expected contractual sales, decreases in commercial rental demand or utilization, poor acceptance of rental pricing, declining market demand for or excess supply of used vehicles impacting current or estimated pricing, and our anticipated proportion of retail versus wholesale sales; declining customer demand for our services; higher than expected maintenance costs; lower than expected benefits from our cost-savings initiatives; our ability to effectively and efficiently integrate acquisitions into our business; lower than expected benefits from our sales, marketing, and new product initiatives; setbacks in the economic market or in our ability to retain profitable customer accounts; impact of changing laws and regulations, such as tariffs, trade restrictions or trade agreements; difficulty in obtaining adequate profit margins for our services; inability to maintain current pricing levels due to, for example, economic conditions, business interruptions, expenditures, labor disputes, and extreme weather or other natural occurrences; competition from other service providers; changes in technology and new entrants; professional driver and technician shortages resulting in higher procurement costs and turnover rates; impact of supply chain disruptions; higher than expected bad debt reserves or write-offs; decrease in credit ratings; increased debt costs; adequacy of accounting estimates; our ability to effectively and efficiently integrate acquisitions into our business; higher than expected reserves and accruals particularly with respect to pension, taxes, insurance, and revenue; impact of changes in our residual value estimates and accounting policies, including our depreciation policy; unanticipated changes in fuel and alternative energy prices; unanticipated currency exchange rate fluctuations; fluctuations in inflation or interest rates; our ability to manage our cost structure; and the risks described in our filings with the Securities and Exchange Commission (SEC). The risks included here are not exhaustive. New risks emerge from time to time, and it is not possible for management to predict all such risk factors or to assess the impact of such risks on our business. Accordingly, we undertake no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events, or otherwise.

Note: Regarding Non-GAAP Financial Measures

This news release includes certain non-GAAP financial measures as defined under SEC rules. Refer to Appendix - Non-GAAP Financial Measure Reconciliations at the end of the tables following this press release for reconciliations of the most comparable GAAP measure to the non-GAAP financial measure and the reasons why management believes the measure is important to investors. Additional information regarding non-GAAP financial measures as required by Regulation G and Item 10(e) of Regulation S-K can be found in our Form 10-K, Form 10-Q, and Form 8-K filed with the SEC as of the date of this release, which are available at investors.ryder.com.

CONFERENCE CALL AND WEBCAST INFORMATION

Ryder's earnings conference call and webcast is scheduled for April 23, 2025 at 11:00 a.m. ET. To join, click here.

LIVE AUDIO VIA PHONE

WEBCAST REPLAY

An audio replay including the slide presentation will be available within four hours following the call. Click here, then select Financials/Quarterly Results and the date.

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