Ryder System Q2 Earnings Call Highlights

Key Points

• Ryder posted its seventh straight quarter of comparable EPS growth, with Q2 2026 revenue up 3% to $2.7 billion and comparable EPS up 12% to $3.73. Management said the results were driven by contractual revenue, strategic initiatives, and stronger used vehicle sales.
• Fleet Management Solutions was the biggest earnings driver, as EBT rose 20% year over year to $150 million. Used tractor and truck pricing improved, rental utilization returned to the 75% target, and used vehicle inventory fell within Ryder’s target range.
• Ryder raised the low end of full-year EPS guidance to $14.40 from $14.05, citing a better outlook for used vehicle sales, while keeping free cash flow guidance unchanged at $700 million to $800 million. The company also boosted its dividend by 11% and authorized a new 2 million share repurchase program.

Ryder System NYSE: R reported its seventh consecutive quarter of comparable earnings-per-share growth, with management pointing to contractual revenue, strategic initiatives and improving used vehicle sales as the main contributors to second-quarter 2026 results.

Chief Executive Officer John Diez said Ryder’s “transformed model” continued to outperform prior cycles, supported by a shift toward less capital-intensive businesses and long-term customer contracts. He said more than 90% of Ryder’s revenue is generated through long-term contracts, which management views as a key factor in the company’s resilience during the freight cycle.

“The Ryder team delivered our seventh consecutive quarter of comparable EPS growth,” Diez said. “Solid results were primarily driven by consistent execution on our strategic initiatives. Improving market conditions and used vehicle sales also contributed to our higher results.”

For the quarter, Ryder posted total operating revenue of $2.7 billion, up 3% from the prior year. Comparable earnings per share from continuing operations were $3.73, up 12% year over year. Return on equity was 17%, in line with the prior year. Free cash flow rose to $684 million from $461 million, which Executive Vice President and Chief Financial Officer Cristy Gallo-Aquino attributed to lower capital expenditures.

Fleet Management Leads Earnings Growth

Fleet Management Solutions was the primary driver of higher earnings in the quarter. The segment’s operating revenue increased, reflecting contractual revenue growth, partially offset by lower rental demand. Earnings before taxes rose 20% from the prior year to $150 million.

Gallo-Aquino said the improvement reflected benefits from strategic initiatives in the ChoiceLease business, along with strengthening used vehicle market conditions. Fleet Management EBT as a percentage of operating revenue was 11.5%, up from a year earlier but still below Ryder’s long-term target of the low teens over the cycle.

Rental utilization returned to Ryder’s targeted level of 75% on a 15% smaller average fleet. Gallo-Aquino said demand remained below the prior year and historical seasonal trends, but the quarter represented the strongest sequential increase in four years. Rental pricing increased 1% from the prior year.

Used vehicle sales showed improvement as well. Year-over-year used tractor pricing increased 3%, while truck pricing rose 6%. Sequentially, overall pricing was stable, but retail pricing improved 7% for trucks and 3% for tractors. Ryder sold 5,100 used vehicles in the quarter, up 500 units sequentially but down 1,100 units from a year earlier, largely reflecting elevated wholesaling activity in the prior year. Used vehicle inventory declined to 8,500 vehicles, within Ryder’s target range.

Supply Chain and Dedicated Results Mixed

Supply Chain Solutions operating revenue increased 7%, driven by new business, partially offset by lost business in automotive. Segment earnings before taxes declined 7% year over year, which Ryder attributed to lower automotive results and, to a lesser extent, productivity issues tied to new business ramp-ups. Benefits from optimization of the company’s omni-channel retail network partially offset those pressures.

Supply Chain EBT as a percentage of operating revenue was 8.4%, which management said was at the segment’s long-term high-single-digit target. Gallo-Aquino noted that comparisons were challenging because the prior-year quarter included record results.

Dedicated Transportation Solutions operating revenue declined 3% due to a lower fleet count, partially offset by higher pricing. Earnings before taxes were lower than a year ago, reflecting reduced operating revenue and adverse development of prior-year insurance claims, partly offset by strategic initiative benefits. Dedicated EBT as a percentage of operating revenue was 7.9%, also at the segment’s long-term high-single-digit target.

Guidance Raised on Used Vehicle Outlook

Ryder raised the low end of its full-year 2026 comparable EPS forecast to $14.40 from $14.05, while keeping the high end at $14.80. Diez said the increase largely reflected an improved outlook and reduced downside in used vehicle sales. Ryder now expects used vehicle sales gains of about $40 million for the full year, up $10 million from its prior forecast.

That benefit is expected to be partially offset by the timing of new business onboarding in Supply Chain. Ryder also revised its 2026 return on equity forecast to 18%, compared with its prior range of 17% to 18%. The company maintained its free cash flow forecast of $700 million to $800 million. For the third quarter, Ryder forecast comparable EPS of $4.00 to $4.20, above the prior-year result of $3.57.

Diez said Ryder remains on track to deliver $70 million in incremental benefits from strategic initiatives in 2026. Those initiatives are part of a $170 million multi-year program launched in 2024 and include lease pricing, maintenance cost savings, Dedicated margin improvement actions and Supply Chain network optimization.

Management also said Ryder could benefit meaningfully from a freight cycle upturn. By the next cycle peak, Ryder estimates a potential $250 million benefit, primarily from rental and used vehicle sales recovery in Fleet Management, with additional benefits from higher omni-channel retail volumes.

Capital Spending and Shareholder Returns

Year-to-date lease capital spending was $605 million, below the prior year due to timing of replacement activity. Ryder expects full-year 2026 lease spending of $1.9 billion and rental spending of $200 million. Total capital expenditures are forecast at approximately $2.4 billion, with net capital expenditures expected to be about $1.9 billion after roughly $500 million in proceeds from used vehicle sales.

Gallo-Aquino said Ryder’s contractual base is generating higher earnings and cash flow, helping reduce leverage and create additional debt capacity. Over a three-year period, Ryder expects to generate about $10.5 billion from operating cash flow and used vehicle sales proceeds, creating approximately $14 billion available for capital deployment when incremental debt capacity is included.

The company estimates that about $9.5 billion will be used for lease and rental replacement vehicles and dividends, leaving around $4.5 billion for flexible deployment to support growth, acquisitions, investments and share repurchases. Ryder returned $406 million to shareholders through buybacks and dividends year to date. The board also authorized a new discretionary 2 million share repurchase program and approved an 11% increase to the quarterly dividend, marking the fourth consecutive year of a double-digit dividend increase.

Management Sees Strong Sales Pipelines

During the question-and-answer session, management said sales activity remained strong across the business. Diez said Fleet Management had seen two consecutive quarters of positive net sales, with fleet growth expected to improve toward the end of 2026 and into 2027. Tom Havens, President of Fleet Management Solutions, said the lag between sales and fleet additions reflects the time required to order and place vehicles into service.

In Dedicated, Diez said record pipelines reflected customer interest in outsourced capacity as the trucking market tightens. He cited rising costs, tighter driver capacity and higher insurance costs as trends supporting the Dedicated business.

Analysts also asked about competition in Supply Chain, including Amazon’s logistics offerings. Diez said Ryder had not seen an impact on its sales pipeline. Steve Sensing, President of Supply Chain Solutions and Dedicated Transportation Solutions, said Ryder had not yet encountered Amazon in requests for quotes and emphasized that Ryder’s Supply Chain solutions are typically customized, dedicated operations for individual customers.

Diez said freight market conditions are improving, but remain below normalized levels, with geopolitical and macroeconomic factors still affecting the pace and durability of recovery.

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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