Ryder Reports Second Quarter 2025 Results

Earnings Growth Driven by Resilient Contractual Portfolio and Strategic Initiatives;

2025 Free Cash Flow Forecast Increased by $500 Million

Second Quarter 2025 Highlights

• GAAP EPS from continuing operations of $3.15, up 11% from prior year
• Comparable EPS (non-GAAP) from continuing operations of $3.32, up 11% from prior year, reflecting higher contractual earnings and share repurchases
• Total revenue of $3.2 billion, consistent with prior year
• Operating revenue (non-GAAP) of $2.6 billion, up 2%, reflecting contractual revenue growth in Supply Chain Solutions (SCS) and Fleet Management Solutions (FMS)

Full-Year 2025 Outlook

• Adjusted return on equity (ROE) (non-GAAP) of 17%
• Comparable EPS (non-GAAP) of $12.85 - $13.30
• Operating revenue (non-GAAP) increase of 1%
• Net cash provided by operating activities from continuing operations of $2.8 billion and free cash flow (non-GAAP) of $900 million - $1 billion, up $500 million

Ryder System, Inc. (NYSE:R) reported results for the three months ended June 30 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 June 30 were as follows:

CEO Comment

"The Ryder team delivered our third consecutive quarter of double-digit growth in earnings per share," says Ryder Chairman and CEO Robert Sanchez. "Earnings in the second quarter were above our expectations driven by better supply chain performance, partially offset by additional used vehicle wholesale volumes. We remain on track to achieve expected benefits in 2025 from our lease pricing and multi-year maintenance cost-saving initiatives, 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 another quarter of record earnings, marking nine consecutive quarters of earnings growth. Execution of strategic initiatives and new business were the key drivers of strong SCS performance. DTS earnings were up slightly as acquisition benefits and solid operating performance were offset by lower fleet count, reflecting the prolonged freight market downturn. In FMS, contractual earnings growth, driven by our initiatives, partially offset weaker market conditions in used vehicle sales.

"Our strong capital deployment capacity continues to increase, enabling us to invest in profitable growth and strategic initiatives while also returning capital to shareholders. We recently announced a 12% annualized increase to our quarterly dividend, reflecting higher profitability and improved returns over the cycle. We also continued to execute on our share repurchase programs and have reduced our share count by 21% since 2021.

"Long-term secular growth trends remain intact for all of our businesses. Ryder is well positioned to benefit from the eventual freight cycle upturn in our transactional rental and used vehicle sales offerings, as well as in our contractual businesses as we continue to support customers navigating a dynamic market. We are confident that the structurally higher earnings profile of our transformed business model will continue to outperform prior cycles."

Second Quarter 2025 Segment Review

Fleet Management Solutions: Contractual Earnings Growth Partially Offset Weaker Market Conditions in Used Vehicle Sales

• FMS total revenue decreased 1% and operating revenue increased 1%
  • Total revenue reflects lower fuel costs passed through to customers and fewer gallons sold
  • Operating revenue reflects higher ChoiceLease revenue
• FMS EBT of $126 million, decreased 6%
  • Higher ChoiceLease performance driven by pricing and maintenance cost-saving initiatives
  • Lower used vehicle sales results reflect weaker market conditions and higher wholesale volumes to manage aged inventory levels
  • Used tractor and truck pricing both declined 17% from prior year; tractor pricing increased 3% while truck pricing declined 10% sequentially from first quarter of 2025
  • Rental power-fleet utilization was 70%, up from 69% in the prior year, on a 7% smaller average active power fleet

Supply Chain Solutions: Double-Digit 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 as well as higher customer volumes and pricing
• SCS EBT of $99 million, up 16%
  • EBT growth primarily reflects operating revenue growth and improved performance from optimization of omnichannel retail network

Dedicated Transportation Solutions: Earnings Include Acquisition Synergies Offset by Lower Fleet Count Reflecting Freight Market Conditions

• DTS total revenue and operating revenue decreased 5% and 3%, respectively
  • Primarily due to lower fleet count reflecting prolonged freight market downturn
• DTS EBT of $37 million, up 1%
  • Due to acquisition synergies and prior year integration costs, partially offset by lower operating revenue

Corporate Financial Information

Tax Rate

Our effective income tax rate from continuing operations was 28.3%, as compared to 29.1% in the prior year, and our comparable effective income tax rate (a non-GAAP measure) from continuing operations was 28.0%, as compared to 29.0%. The decrease in the tax rates was primarily due to a reduction in U.S. tax on foreign earnings.

Capital Expenditures, Cash Flow, and Leverage

Second quarter capital expenditures decreased to $1.2 billion in 2025 compared to $1.3 billion in 2024, primarily reflecting reduced investments in ChoiceLease.

Second quarter net cash provided by operating activities from continuing operations was $1.4 billion compared to $1.1 billion in 2024, primarily reflecting lower income tax payments and timing of vendor payments. Free cash flow (non-GAAP) of $461 million compared to $71 million in 2024, primarily reflects higher cash provided by operating activities and reduced capital expenditures.

Debt-to-equity as of June 30, 2025 was 251% 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

"We continue to expect earnings growth in 2025 reflecting ongoing execution on our initiatives and the strength of our contractual businesses," says Ryder Chief Financial Officer Cristina Gallo-Aquino. "Our 2025 free cash flow forecast has been increased by approximately $500 million to reflect lower capital spending and the permanent reinstatement of tax bonus depreciation. The top end of our revised earnings forecast range primarily reflects a more muted second-half recovery for used vehicle sales and contractual sales headwinds from ongoing macroeconomic uncertainty."

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 expectations regarding: our forecast; our outlook; market conditions, such as expectations regarding macroeconomic uncertainty, rental demand and utilization, and used vehicle sales volume and pricing; the freight cycle, including the impact of the prolonged downturn and cycle timing and recovery on our businesses; total and operating revenue, EPS, comparable EPS, adjusted ROE, earnings before income tax, net cash provided by operating activities from continuing operations, free cash flow, debt-to-equity, capital expenditures, and the causes of change; our ability to continue executing on our transformed business model; our ability to outperform prior cycles; pricing and maintenance cost savings initiatives; long-term growth opportunities and secular growth trends; used vehicle inventory and fleet size; our ability to profitably grow business; our ability to support organic growth; growth and continued strong earnings performance in our contractual businesses; strategic investments and acquisitions, including acquisition synergies; the omnichannel retail network; our capital deployment capacity; our actions to increase returns and create long-term value; and 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 taxes or 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 and uncertainty regarding financial, economic and market conditions in the U.S. and worldwide; supply chain and labor challenges and vehicle production constraints, including original equipment manufacturer (OEM) delays; the effect of geopolitical events; our ability to adapt to changing market conditions, including lower than expected contractual sales, decreases in 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 taxes, tariffs, trade restrictions or trade agreements, including the impact to our customers and partners; 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; 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 to the most comparable GAAP measure. 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 most recent 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 https://investors.ryder.com.

CONFERENCE CALL AND WEBCAST INFORMATION

Ryder's earnings conference call and webcast is scheduled for July 24, 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.