Skip to content
    R
    Earnings call· Mar 2026(Q1 FY26)

    RYDER SYSTEM Q1 FY26 earnings call R

    Apr 23, 2026 Source

    Executive summary

    Ryder System Q1 FY26 — Strong Q1 Results Driven by Used Vehicle Sales and Contractual Performance

    Ryder System delivered solid Q1 FY26 results, exceeding expectations, primarily driven by better-than-expected used vehicle sales and strong contractual performance across its segments. The company's transformed business model, with over 90% of revenue from long-term contracts, continues to demonstrate resilience in a challenging freight environment. Management raised its full-year comparable EPS forecast, reflecting the strong start and modest market improvements, while maintaining its ROE and free cash flow outlook.

    Highlights

    5

    • Comparable EPS increased 3% to $2.54, marking the sixth consecutive quarter of growth.

    • Return on equity (ROE) was solid at 17%, in line with expectations.

    • Used vehicle sales results were higher year-over-year for the first time since Q3 2022.

    • Supply Chain Solutions generated record sales in Q1, continuing momentum from prior year.

    • Contractual sales activity in Fleet Management Solutions and Dedicated Transportation Solutions were above prior year and ahead of expectations.

    Concerns

    5

    • Total company operating revenue was flat year-over-year at $2.6 billion.

    • Supply Chain Solutions EBT decreased 17% year-over-year due to lower automotive results and new business ramp-up.

    • Dedicated Transportation Solutions operating revenue decreased 5% due to the prolonged freight downturn.

    • Used vehicle inventory of 9,500 vehicles is slightly above the targeted range.

    • Rental demand remained below prior year levels.

    Guidance & targets

    17
    CategoryTargetConfidence
    Full-year 2026 Comparable EPS
    $14.05 to $14.80
    high materiality
    High
    Full-year 2026 Return on Equity
    17% to 18%
    high materiality
    High
    Full-year 2026 Free Cash Flow
    $700 million to $800 million
    high materiality
    High
    Second quarter 2026 Comparable EPS
    $3.50 to $3.75
    high materiality
    High
    Incremental Benefits from Strategic Initiatives
    $70 million
    medium materiality
    High
    Potential Pretax Earnings Benefit from Cycle Upturn
    $250 million
    high materiality
    Medium
    Upturn Benefits Realized
    $10 million
    medium materiality
    High
    Full-year 2026 Lease Capital Spending
    $1.9 billion
    medium materiality
    High
    Full-year 2026 Rental Capital Spending
    approximately $100 million
    medium materiality
    High
    Ending Rental Fleet Decrease
    3%
    medium materiality
    High
    Average Rental Fleet Decrease
    11%
    medium materiality
    High
    Full-year 2026 Total Capital Expenditures
    approximately $2.4 billion
    high materiality
    High
    Full-year 2026 Used Vehicle Sales Proceeds
    $500 million
    medium materiality
    High
    Full-year 2026 Net Capital Expenditures
    approximately $1.9 billion
    high materiality
    High
    Full-year 2026 Used Vehicle Sales Gains
    up about $10 million
    medium materiality
    High
    Dedicated EBT Margin
    high single digits
    medium materiality
    High
    Supply Chain Solutions Growth
    near low double-digit target levels
    medium materiality
    High

    Segment performance

    3
    SegmentRevenueYoYQoQMargin
    Fleet Management Solutions
    EBT was up versus prior year due to continued execution on strategic initiatives. Used vehicle results showed year-over-year improvement and better-than-expected performance. Rental demand remained below prior year, but sequential seasonal decline was in line with historical trends. EBT as a percent of operating revenue was below the long-term target of low teens.
    EBT as % of operating revenue: 7.9% (up from prior year)Rental utilization on power fleet: 68% (up from 66% prior year)Average rental fleet: 13% smaller YoYRental power fleet pricing: Up 3% YoYUsed tractor pricing: Up 6% YoYUsed truck pricing: Down 5% YoYUsed tractor pricing sequentially: Down 3%Used truck pricing sequentially: Down 4%Retail sales mix (Q1): 61% (down from 69% in Q4, up from 56% prior year)Used vehicles sold: 4,600 units (up 1,000 units sequentially, down vs prior year)Used vehicle inventory: 9,500 vehicles (slightly above targeted range)
    		Consistent with prior year——$99 million EBT
    Supply Chain Solutions
    Revenue growth was driven by new business in omnichannel retail, partially offset by lost business and lower volumes in automotive. EBT decrease was due to lower automotive results and productivity of new business ramping up. Year-over-year comparisons were challenging due to record Q1 performance in the prior year.
    EBT as % of operating revenue: 7% (at segment's long-term target of high single digits)
    		Increased 3%3%—Decreased 17% EBT
    Dedicated Transportation Solutions
    Revenue decrease was due to lower fleet count reflecting the prolonged freight downturn. EBT was below prior year, partially offset by strategic initiatives.
    EBT as % of operating revenue: Single-digit target
    		Decreased 5%-5%—Below prior year EBT

    Operational metrics

    17
    Total Operating Revenue
    $2.6 billionin line with prior year
    Q1 FY26

    Contractual revenue growth in supply chain was offset by lower revenue in Dedicated.

    Comparable EPS from Continuing Operations
    $2.54up 3% from prior year
    Q1 FY26

    Reflecting benefits from share repurchases, partially offset by lower earnings due to lower supply chain performance compared to a robust prior year, partially offset by a lower tax rate.

    Return on Equity
    17%in line with prior year
    Q1 FY26

    Primary financial metric, in line with expectations given freight cycle.

    Lease Capital Spending
    $314 millionbelow prior year
    Q1 FY26

    Reflecting the timing of replacement activity.

    Rental Capital Spending
    $37 millionbelow prior year
    Q1 FY26

    As expected.

    Rental Fleet Composition
    60%
    Quarter end

    Trucks represented approximately 60% of our rental fleet, a shift towards trucks as they historically benefited from stable demand and pricing.

    Incremental Debt Capacity
    $3.5 billion
    3-year period

    Resulting from improved cash generation, leading to $14 billion available for capital deployment.

    Available for Flexible Deployment
    $4.5 billionapproximately 60% of quarter end market cap
    3-year period

    Remaining capacity after vehicle replacement and dividends.

    Capital Returned to Shareholders
    $272 million
    Q1 FY26

    Aligned with capital allocation priorities.

    Leverage
    269%
    Quarter end

    In target range of 2.5x to 3x, balance sheet remains strong.

    Strategic Initiatives Benefits Realized
    $100 million
    Through year-end 2025

    Part of a $170 million multiyear program launched in 2024.

    Active Truck Utilization
    above 95%since 2021
    3 consecutive months

    Indicator that capacity is coming out of the broad market.

    FMS Strategic Initiative Benefit Split
    50%
    Q1 FY26

    About 50% of the benefit from strategic initiatives in FMS was from price and 50% from maintenance initiatives.

    Rental Utilization
    67%
    January

    Start of Q1 utilization trend.

    Rental Utilization
    79%
    February

    Mid-Q1 utilization trend.

    Rental Utilization
    slightly above 70%
    March

    End of Q1 utilization trend.

    Rental Utilization
    270 bps bettervs last year
    April

    Continuing the trend seen in Q1.

    Industry KPIs

    1
    MetricValueDetails
    Fuel surcharge diesel price—

    Risks & headwinds

    8
    Challenging freight environmentQ1 FY26

    Comparable EPS for the quarter was up 3%... in a challenging freight environment.

    Mitigation: Strength of contractual portfolio and resiliency of transformed model.

    Geopolitical and macroeconomic factorsOngoing

    continue to influence the pace and durability of the recovery.

    Mitigation: Focus on profitable growth opportunities and higher-return segments.

    Lower automotive results in Supply ChainQ1 FY26

    Earnings before taxes decreased 17% from prior year due to lower automotive results

    Mitigation: Optimizing omnichannel retail warehouse network, continuous improvement efforts, better aligning warehouse footprint with demand.

    Productivity of new business ramping up in Supply ChainQ1 FY26

    to a lesser extent, productivity of new business ramping up.

    Mitigation: Focus on continuous improvement and innovation to expand with customers.

    Lower fleet count in DedicatedQ1 FY26

    operating revenue decreased 5% due to lower fleet count reflecting the prolonged freight downturn.

    Mitigation: Strategic initiatives, Flex operating structure, and expectation of increased demand with a tighter driver market.

    Used vehicle inventory slightly above targetQuarter end

    Used vehicle inventory of 9,500 vehicles is slightly above our targeted inventory range.

    Mitigation: Expectation of higher used vehicle sales results and structural changes in the marketplace providing upward momentum.

    Rental demand below prior yearQ1 FY26

    In rental, demand remained below prior year

    Mitigation: Encouraged by sequential seasonal decline in line with historical trends, managing rental fleet well below peak levels, ability to increase fleet if market conditions improve.

    Potential for trucks flooding market from carrier exitsFuture

    risk to use vehicle sales as trucks potentially flood the market from these carriers exiting?

    Mitigation: Ryder's used truck inventory mix (60% trucks, 40% tractors with CAPS) is well-calibrated and less exposed to over-the-road/sleeper class pressures.

    What to watch in Q2 FY26

    5

    Used Vehicle Sales Performance

    Next quarter and balance of year
    Current$10 million upturn benefit in FY26
    TargetContinued upward momentum in pricing and volumes

    Why it matters

    Used vehicle sales were a key driver of Q1 outperformance and a significant component of potential cycle upturn benefits.

    There may be opportunities with used vehicle sales to continue moving up. Obviously, we're seeing capacity continue to exit the market. We have also seen that -- we do expect later on this year that we're going to see significant increases on new equipment, which will provide support for higher used vehicle sales pricing.

    Q&A highlights

    8

    Why is only $10 million of the $250 million potential upturn benefit included in the 2026 forecast, given current momentum? Is there conservatism?

    John Diez explained that the $10 million primarily comes from better-than-expected used vehicle sales. The larger portion of the $250 million potential benefit is tied to rental recovery, which has not yet shown breakout performance to warrant a higher forecast. He noted that capacity is exiting the market and new equipment costs will rise, supporting used vehicle sales, but they need more development to gain confidence.

    “Clearly, a big component of the $250 million is attributed to rental and another component attributed to used vehicle sales. There may be opportunities with used vehicle sales to continue moving up. ... On the rental side, which is a big component of that $250 million, I would say it's probably as big, if not bigger, than the used vehicle opportunity. We continue to see rental kind of get to normalized levels. We saw a seasonal trend in the current quarter. Nothing for us to get excited about.”

    asked by Unknown Analyst · answered by John Diez

    2 min read5 chapters

    Detailed Narrative

    01

    Balanced Growth Strategy & Transformed Model

    Ryder's balanced growth strategy focuses on operational excellence, customer-centric innovation, and profitable growth, with over 90% of revenue from long-term contracts. The company has derisked its portfolio by reducing reliance on used vehicle proceeds and accelerating growth in asset-light supply chain and dedicated businesses, resulting in a more resilient business mix. This transformed model is expected to deliver meaningfully higher earnings and returns in 2026 compared to the 2018 peak freight cycle, with expected revenue mix shifting to 60% from asset-light businesses.

    02

    Port-to-Door Logistics Offering

    Ryder offers scaled port-to-door logistics and transportation solutions, providing end-to-end control from North American ports to final delivery. These solutions integrate warehousing, fulfillment, cross-border services, lease and maintenance, transportation logistics, contract packaging, and last-mile delivery. The offering leverages powerful technology, including AI in RyderShare and RyderGyde, and supply chain experts to provide real-time visibility, flexibility, and speed, aiming to perfect customer supply chains.

    03

    Strategic Initiatives & Earnings Growth Drivers

    The company is on track to deliver $70 million in incremental benefits from strategic initiatives in 2026, part of a $170 million multiyear program launched in 2024. These initiatives, which represent structural changes not dependent on a cycle upturn, include multiyear lease pricing and maintenance cost savings in Fleet Management, margin improvement actions in Dedicated related to its Flex operating structure, and optimizing the omnichannel retail warehouse network in Supply Chain. These are key drivers for expected earnings growth in 2026.

    04

    Freight Cycle Conditions & Market Outlook

    Freight cycle conditions in Q1 FY26 were better than expected, with used vehicle sales results improving year-over-year and retail pricing stable sequentially. Commercial rental demand's sequential decline was in line with historical seasonal trends for the first time in three years, though overall rental activity remains below prior year. Contractual sales activity improved across FMS, Dedicated, and Supply Chain, with Supply Chain achieving record sales. Management noted that market conditions remain below normalized levels, with geopolitical and macroeconomic factors influencing the pace of recovery.

    05

    Capital Deployment & Allocation

    Ryder expects to generate approximately $10.5 billion from operating cash flow and used vehicle sales proceeds over a three-year period, creating $3.5 billion of incremental debt capacity for a total of $14 billion available for capital deployment. After deploying $9.5 billion for vehicle replacement and dividends, approximately $4.5 billion (60% of quarter-end market cap) is available for flexible deployment, split between growth CapEx and discretionary share repurchases/strategic acquisitions. The company returned $272 million to shareholders through buybacks and dividends in Q1, maintaining a strong balance sheet with 269% leverage.

    AI-generated summary of the company’s earnings call. Not investment advice.