Ryder System Q1 Earnings Call Highlights

Key Points

• Ryder beat internal expectations in Q1 as stronger-than-anticipated used vehicle sales drove comparable EPS of $2.54 (up 3%), and management raised full-year comparable EPS guidance to $14.05–$14.80 with Q2 guidance of $3.50–$3.75.
• Fleet Management showed used-vehicle strength (tractor prices +6% YoY, truck prices -5% YoY), sold 4,600 units with inventory ~9,500, and rental utilization improved to ~68% even as Ryder plans an average rental fleet decline of ~11% in 2026.
• Capital deployment and cash outlook: Ryder forecasts $1.9B lease capex and ~$2.4B total capex for 2026, free cash flow of $700–$800M, expects ~$500M of used-vehicle sale proceeds, returned $272M to shareholders this quarter, and continues a discretionary 2M-share repurchase program with leverage near target (269%).

Ryder System NYSE: R reported first-quarter 2026 results that management said exceeded internal expectations, driven largely by stronger-than-anticipated used vehicle sales in its Fleet Management Solutions business. On the company’s earnings call, Chief Executive Officer John J. Diez said the quarter reflected “the strength of our contractual portfolio and resiliency of our transformed model” during what he described as a still-challenging freight environment.

First-quarter results and key drivers

Executive Vice President and Chief Financial Officer Cristina Gallo-Aquino said total operating revenue was $2.6 billion, in line with the prior year, as contractual growth in Supply Chain was offset by lower revenue in Dedicated. Comparable earnings per share from continuing operations were $2.54, up 3% from the prior year, which Gallo-Aquino attributed to benefits from share repurchases, partially offset by lower earnings.

Gallo-Aquino said the earnings decline reflected lower Supply Chain performance versus a “robust prior year,” partially offset by a lower tax rate driven by discrete stock-based compensation tax benefits. Return on equity was 17%, in line with the prior year. Free cash flow rose to $273 million from $259 million, reflecting reduced capital expenditures, partially offset by higher working capital needs.

Diez highlighted that the company delivered its sixth consecutive quarter of comparable EPS growth, and said the company remains on track to deliver $70 million of incremental benefits during 2026 from strategic initiatives that are part of a $170 million multi-year program launched in 2024.

Segment performance: Fleet Management, Supply Chain, and Dedicated

Fleet Management Solutions (FMS): Gallo-Aquino said operating revenue was consistent with the prior year and earnings before taxes (EBT) were $99 million, up year over year, reflecting execution on strategic initiatives. She said used vehicle results improved year over year and were better than expected.

In rental, demand was below the prior year, but management pointed to more typical seasonality returning. Gallo-Aquino said lower rental activity was partially offset by higher pricing, with rental power fleet pricing up 3% year over year. Rental utilization was 68%, up from 66% a year earlier, on an average fleet that was 13% smaller. FMS EBT margin was 7.9%, up from the prior year but below the company’s “long-term target of low teens over the cycle.”

On used vehicle trends, Gallo-Aquino said year-over-year used tractor pricing increased 6% and truck pricing declined 5%. Sequentially, tractor pricing fell 3% and truck pricing fell 4%, which she said reflected a lower retail mix, even as retail pricing remained stable. The company sold 4,600 used vehicles, up 1,000 units sequentially but down versus the prior year, though truck volumes (the largest inventory class) were up year over year. Used vehicle inventory totaled 9,500 vehicles, “slightly above” Ryder’s targeted range, and pricing remained above residual value estimates used for depreciation.

Supply Chain Solutions (SCS): Gallo-Aquino said operating revenue increased 3%, driven by new business in omnichannel retail, partially offset by lost business and lower volumes in automotive. EBT fell 17% year over year due to lower automotive results and, to a lesser extent, productivity impacts from ramping new business. She said comparisons were difficult due to record first-quarter performance last year. Supply Chain EBT margin was 7%, which she described as at the segment’s long-term target of “high single digits.”

In Q&A, President of Supply Chain Solutions and Dedicated Transportation Solutions Steve Sensing said the segment continues to see a “healthy pipeline” and noted that last year’s sales were about 80% expansion with existing customers and 20% new names. He said the majority of recent sales activity has come from omnichannel retail, with pipeline activity also in consumer packaged goods, transactional businesses (co-pack/co-man), and e-commerce, while last-mile is “a little slower than normal.” On margin dynamics, Sensing said last year’s first quarter included an 8.7% margin, calling it “a record quarter,” and noted the segment faced lost business in automotive where a customer shifted from dedicated service to truckload. He also said automotive volumes remain challenged as OEMs retool and balance EV and ICE production, expecting that to normalize more in the back half of the year.

Dedicated: Gallo-Aquino said operating revenue declined 5% due to lower fleet count amid the prolonged freight downturn. EBT was below the prior year, reflecting lower operating revenue, partially offset by strategic initiatives. Dedicated EBT margin was 5.2%, below the segment’s long-term high single-digit target.

Diez told analysts Dedicated typically has seasonality, with the second and third quarters usually strongest, and said the company expects a “meaningful step-up of 200-300 basis points” in the middle of the year, with a typical pullback in the fourth quarter. He added Ryder expects the Dedicated segment to reach the high single-digit level for the full year.

Capital spending, cash flow, and capital deployment

Gallo-Aquino said first-quarter lease capital spending was $314 million, below the prior year due to timing, while first-quarter rental capital spending was $37 million, also below the prior year. For full-year 2026, Ryder forecast lease spending of $1.9 billion on higher replacement activity, rental capital spending of about $100 million on lower planned replacement activity, and total capital expenditures of roughly $2.4 billion.

Ryder now expects its ending rental fleet to decrease 3% during 2026 and its average rental fleet to be down 11%. Gallo-Aquino said the company may increase planned capex if improved market conditions persist. She also noted Ryder has shifted rental spending toward trucks, with trucks representing about 60% of the rental fleet at quarter-end.

Management reiterated expectations for about $500 million in used vehicle sale proceeds in 2026, in line with the prior year, and net capital expenditures of about $1.9 billion.

Gallo-Aquino also outlined Ryder’s view of multi-year capital deployment capacity, stating that over three years the company expects approximately $10.5 billion from operating cash flow and used vehicle proceeds, creating about $3.5 billion of incremental debt capacity and roughly $14 billion available for capital deployment. Over the same period, she said Ryder estimates about $9.5 billion will go toward lease and rental replacement and dividends, leaving around $4.5 billion for flexible deployment, which she said is “approximately 60% of our quarter-end market cap.”

During the quarter, she said Ryder funded about $400 million of lease and rental replacement capex and returned $272 million to shareholders through buybacks and dividends. Ryder is executing a discretionary 2 million share repurchase program authorized in the fourth quarter of 2025, and Gallo-Aquino said leverage was 269% at quarter-end, within its target range.

Outlook raised on used vehicle strength and contractual performance

Diez said Ryder raised its full-year 2026 comparable EPS forecast to $14.05 to $14.80, citing stronger-than-expected first-quarter performance, “a modest improvement in used vehicle market conditions,” and continued strong contractual performance. The company’s 2026 return on equity forecast remained unchanged at 17% to 18%, and free cash flow guidance stayed at $700 million to $800 million, which Diez said reflects higher replacement capital expenditures.

For the second quarter, Ryder forecast comparable EPS of $3.50 to $3.75, above the prior-year $3.32.

Diez emphasized that Ryder expects 2026 earnings growth to be driven primarily by the incremental $70 million in strategic initiative benefits expected in 2026, following $100 million realized through year-end 2025. He said these initiatives are structural and “not dependent on a cycle upturn.” He outlined focus areas by segment, including lease pricing and maintenance cost savings in Fleet Management, margin improvement actions related to Dedicated’s flex operating structure, and optimization of the omnichannel retail warehouse network in Supply Chain.

Diez also discussed potential upside from a freight cycle recovery, reiterating an estimated $250 million pre-tax earnings benefit by the next cycle peak, with most of the opportunity tied to rental and used vehicle sales in Fleet Management and additional benefits from higher omnichannel retail volumes. For 2026, he said Ryder expects to recognize about $10 million of upturn benefits, primarily from higher used vehicle sales results.

In response to questions about why only $10 million of the $250 million is reflected this year, Diez pointed to limited signs of sustained rental upside. He said used vehicle pricing stability arrived sooner than expected, but rental demand did not show “any breakout performance” in the first quarter that would justify forecasting more upside.

On pre-buy activity tied to expected higher new-equipment costs, Diez said Ryder does not have meaningful pre-buy activity in its guidance. He added that Ryder expects new equipment prices to increase later in the year and said the company believes those increases could be “meaningful,” mentioning a range of “10%-15%” as a minimum, though he said the company has not included that in forecasts given uncertainty. Fleet Management Solutions President Tom Havens said Ryder has discussed potential 2027 price increases with customers but has not seen “any large uptake” in pre-buy volumes.

Havens also detailed rental utilization trends, stating utilization was 67% in January, around 69%-70% in February, and slightly above 70% in March, and said utilization entering April remained about 270 basis points better than the prior year. He described one lever Ryder can use if demand improves: “stop sending trucks to the UTC, to our used truck center,” which would allow Ryder to immediately increase fleet availability while it places new vehicle orders.

About Ryder System NYSE: R

Ryder System, Inc is a leading provider of transportation and supply chain management solutions, serving commercial customers across a range of industries. The company's Fleet Management Solutions segment offers full-service leasing and rental of medium- and heavy-duty trucks, tractors and trailers, along with maintenance and repair services at its network of service locations. Its Supply Chain Solutions segment provides integrated, technology-driven offerings that span managed transportation, dedicated contract carriage, warehousing and distribution, and e-commerce fulfillment.

Founded in 1933 and headquartered in Miami, Florida, Ryder has grown from a regional truck leasing operation into a diversified, global logistics provider.

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