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    R
    Earnings call· Jun 2026(Q2 FY26)

    RYDER SYSTEM INC R

    Jul 23, 2026 Source

    Executive summary

    Ryder System Q2 FY26 — Strong Comparable EPS Growth Driven by Strategic Execution and Improving Used Vehicle Market

    Ryder System delivered its seventh consecutive quarter of comparable EPS growth, driven by consistent execution of strategic initiatives and improving used vehicle sales market conditions. The company's transformed business model, with a higher mix of asset-light businesses, continues to demonstrate resilience and is well-positioned to benefit from an eventual freight cycle upturn. Management raised its full-year comparable EPS forecast, reflecting an improved outlook for used vehicle sales, while navigating challenges in Supply Chain and Dedicated segments.

    Highlights

    5

    • Comparable EPS increased 12% to $3.73, marking the seventh consecutive quarter of growth.

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

    • Used vehicle sales results were higher year-over-year, with retail pricing for trucks up 7% and tractors up 3% sequentially.

    • Commercial rental utilization returned to target levels of 75% on a 15% smaller average fleet.

    • Full-year 2026 comparable EPS forecast was raised to $14.40-$14.80, reflecting an improved used vehicle sales outlook.

    Concerns

    4

    • Supply Chain Solutions EBT decreased 7% year-over-year due to lower automotive results and slower new business ramp-up.

    • Dedicated Transportation Solutions operating revenue decreased 3% due to lower fleet count and adverse development of prior year insurance claims.

    • Rental demand remained below prior year levels and historical seasonal trends, despite utilization returning to target.

    • Some new business onboarding in Supply Chain Solutions was pushed from 2026 to 2027, partially offsetting the improved used vehicle sales outlook.

    Guidance & targets

    22
    CategoryTargetConfidence
    Full-year 2026 Comparable EPS
    $14.40 to $14.80
    high materiality
    High
    Full-year 2026 Return on Equity
    18%
    medium materiality
    High
    Full-year 2026 Free Cash Flow
    $700 million to $800 million
    medium materiality
    High
    Full-year 2026 Lease Capital Spending
    $1.9 billion
    medium materiality
    High
    Full-year 2026 Rental Capital Spending
    $200 million
    medium materiality
    High
    Full-year 2026 Average Rental Fleet
    down 11%
    medium materiality
    High
    Full-year 2026 Capital Expenditures
    $2.4 billion
    medium materiality
    High
    Full-year 2026 Proceeds from Sale of Used Vehicles
    $500 million
    medium materiality
    High
    Full-year 2026 Net Capital Expenditures
    $1.9 billion
    medium materiality
    High
    Full-year 2026 Used Vehicle Sales Gains
    approximately $40 million
    medium materiality
    High
    Third Quarter Comparable EPS
    $4 to $4.20
    high materiality
    High
    2026 Incremental Benefits from Strategic Initiatives
    $70 million
    medium materiality
    High
    2026 Upturn Benefits
    approximately $20 million
    medium materiality
    High
    Next Cycle Peak Potential Benefit
    $250 million
    high materiality
    Medium
    Long-term Leverage Target
    2.5x and 3x
    medium materiality
    High
    3-year Operating Cash Flow and Used Vehicle Sales Proceeds
    approximately $10.5 billion
    high materiality
    High
    3-year Incremental Debt Capacity
    $3.5 billion
    high materiality
    High
    3-year Available for Capital Deployment
    $14 billion
    high materiality
    High
    3-year Deployment for Replacement of Lease and Rental Vehicles and Dividends
    approximately $9.5 billion
    high materiality
    High
    3-year Flexible Deployment Capacity
    $4.5 billion
    high materiality
    High
    Flexible Deployment Split (Growth CapEx)
    about half
    medium materiality
    High
    Flexible Deployment Split (Discretionary Share Repurchases and Strategic Acquisitions)
    the remaining half
    medium materiality
    High

    Segment performance

    4
    SegmentRevenueYoYQoQMargin
    Total Company
    Total company operating revenue increased 3% from prior year, reflecting contractual revenue growth in Supply Chain.
    		$2.7 billion3%——
    Fleet Management Solutions (FMS)
    Operating revenue increased, reflecting contractual revenue growth partially offset by lower rental demand. EBT was up 20% versus prior year, reflecting benefits from strategic initiatives on ChoiceLease results and strengthening used vehicle market conditions. EBT as a percent of operating revenue was 11.5%, below the long-term target of low teens. Rental utilization returned to targeted level of 75% on a 15% smaller average fleet. Used vehicle sales benefited from a higher retail mix.
    EBT as a percent of operating revenue: 11.5%Rental utilization: 75%Average rental fleet: down 15%Rental pricing: up 1% YoYUsed tractor pricing: up 3% YoYUsed truck pricing: up 6% YoYUsed vehicle sales volume: 5,100 unitsUsed vehicle inventory: 8,500 vehiclesRetail sales mix: 56%
    		Increased——$150 million EBT
    Supply Chain Solutions (SCS)
    Operating revenue increased 7%, driven by new business, partially offset by lost business in automotive. EBT decreased 7% from prior year due to lower automotive results and productivity of new business ramping up, partially offset by benefits from omnichannel retail network optimization. EBT as a percent of operating revenue was 8.4%, at the segment's long-term target of high single digits. Q2 last year EBT was 9.7%.
    EBT as a percent of operating revenue: 8.4%
    		Increased7%—Decreased 7% EBT
    Dedicated Transportation Solutions (DTS)
    Operating revenue decreased 3% due to lower fleet count, partially offset by higher pricing. EBT was below prior year, reflecting lower operating revenue and adverse development of prior year insurance claims, partially offset by benefits from strategic initiatives. EBT as a percent of operating revenue was 7.9%, at the segment's long-term high single-digit target.
    EBT as a percent of operating revenue: 7.9%
    		Decreased3% decrease—Below prior year EBT

    Operational metrics

    26
    Comparable EPS
    $3.73up 12% YoY
    Q2 FY26

    Seventh consecutive quarter of comparable EPS growth.

    Return on Equity
    17%in line with prior year
    Q2 FY26

    In line with expectations given where the company is in the freight cycle.

    Leverage
    259%
    Q2 FY26 quarter-end

    Within the target range of 2.5x and 3x.

    Strategic Initiatives Benefits
    $70 millionincremental
    FY26

    Part of a $170 million multiyear program launched in 2024; $100 million realized in 2024 and 2025.

    Upturn Benefits
    $20 millionup from $10 million prior forecast
    FY26

    Primarily from higher used vehicle sales results.

    Share Repurchase Program Authorization
    2 million
    Q2 FY26

    New discretionary program authorized, replacing a largely completed program.

    Quarterly Dividend Increase
    11%
    Q2 FY26

    Fourth consecutive year with a double-digit increase.

    Used Vehicle Sales Volume
    5,100up 500 units sequentially, down 1,100 units YoY
    Q2 FY26

    Largely reflecting prior year's elevated wholesaling activity.

    Used Vehicle Inventory
    8,500declined
    Q2 FY26

    Within targeted inventory range.

    Retail Sales Mix (Used Vehicles)
    56%down from 61% in Q1 FY26, up from 50% prior year
    Q2 FY26

    Reflecting a lower sequential retail sales mix but higher YoY.

    Rental Utilization (April)
    72%
    April FY26

    Start of Q2 utilization trend.

    Rental Utilization (June)
    78%
    June FY26

    End of Q2 utilization trend, highest for the quarter.

    Rental Utilization (Current)
    mid-70s
    Q3 FY26

    Current utilization running in the mid-70s.

    Rental Fleet Mix (Trucks)
    60%
    Q2 FY26

    Reflecting shift in spending towards trucks versus tractors in recent years.

    Revenue Mix (SCS & Dedicated)
    60%up from 44% in 2018
    FY26

    Expected revenue generated by asset-light businesses.

    Contractual Revenue
    Over 90%
    Q2 FY26

    Percentage of revenue generated by long-term contracts.

    2018 Revenue
    $8.4 billion
    FY18

    Revenue prior to the implementation of the balanced growth strategy.

    2018 Comparable EPS
    $5.95
    FY18

    Comparable EPS during peak freight cycle conditions in 2018.

    2018 Return on Equity
    13%
    FY18

    Return on equity generated during the 2018 cycle peak.

    Strategic Initiatives Benefits (2024-2025)
    $100 million
    2024-2025

    Benefits realized from multiyear strategic initiatives.

    3-year Incremental Debt Capacity
    $3.5 billion
    3-year period

    Created by momentum in earnings and cash flow.

    3-year Available for Capital Deployment
    $14 billion
    3-year period

    Total capital available for deployment.

    3-year Deployment for Replacement CapEx and Dividends
    $9.5 billion
    3-year period

    Estimated deployment for replacement of lease and rental vehicles and for dividends.

    3-year Flexible Deployment Capacity
    $4.5 billion
    3-year period

    Available for flexible deployment, equating to approximately 45% of quarter-end market cap.

    Lease and Rental Replacement CapEx
    $700 million
    YTD

    Funded year-to-date.

    Capital Returned to Shareholders
    $406 million
    YTD

    Returned through buybacks and dividends year-to-date.

    Risks & headwinds

    5
    Geopolitical and macroeconomic factorsOngoing

    Continue to influence the pace and durability of the recovery.

    Mitigation: Implied through asset management actions and strategic initiatives.

    Lower automotive results in Supply Chain SolutionsQ2 FY26, ongoing retooling in Q3/Q4.

    Contributed to 7% decrease in SCS EBT YoY.

    Mitigation: Optimization of omnichannel retail network partially offset impact. Expects volumes to bounce back.

    Productivity of new business ramping up in Supply Chain SolutionsQ2 FY26, extending into 2027.

    Put a drag on expectations, some projects pushed from 2026 to 2027.

    Mitigation: Continued focus on execution.

    Adverse development of prior year insurance claims in Dedicated Transportation SolutionsQ2 FY26

    Contributed to DTS EBT being below prior year.

    Tighter driver capacity in Dedicated Transportation SolutionsQ2 FY26, ongoing.

    Turnover has ticked up, number of days to find drivers has ticked up.

    Mitigation: Ryder's value proposition (specialized services, managing rising costs, insurance) resonates with customers seeking dedicated capacity.

    What to watch in Q3 FY26

    5

    Rental demand acceleration

    Next quarter / H2 FY26
    CurrentBelow prior year levels and historical seasonal trends, utilization at 75%.
    TargetSignificant acceleration in demand.

    Why it matters

    Rental demand acceleration is key for capitalizing on product line momentum and contributing to the $250M cycle upturn benefit.

    As far as rental on the rental fleet, as I mentioned, with regards to this cycle, it does feel a little bit different in that the recovery has been kind of a capacity-driven recovery. We typically see demand accelerate in rental first. I think we're still waiting for that to happen.

    Q&A highlights

    5

    How has Amazon's entry into the market affected Ryder's SCS sales, and is Amazon competing in dedicated site stand-ups or primarily retail warehousing?

    Ryder has not encountered Amazon as a direct competitor in any RFQs or opportunities. Ryder's SCS solutions are highly customized, typically involving single boxes dedicated to single customers and often combining multiple services. The SCS pipeline remains strong and growing.

    “As I think about our business, I have not seen us go up against them yet in any RFQs or any opportunities.”

    asked by Bascome Majors · answered by John Sensing

    2 min read6 chapters

    Detailed Narrative

    01

    Strategic Transformation and Outperformance

    Ryder's balanced growth strategy has de-risked the portfolio, enhanced returns, and shifted to a less capital-intensive business mix. This transformation has enabled the company to significantly outperform prior cycles, with 2026 expected comparable EPS more than double 2018's $5.95, and ROE at 18% compared to 13% in 2018, despite current market conditions. The company's revenue mix has shifted, with approximately 60% of 2026 expected revenue generated by asset-light Supply Chain and Dedicated businesses, up from 44% in 2018.

    02

    Technology and Operational Excellence

    The company is investing in customer-centric innovation, embedding Agentic AI in proprietary platforms like RyderShare and RyderGyde to enhance capabilities. AI is also being leveraged across the company, including FMS Customer Service and Roadside Assistance, to improve customer experience and effectiveness. Additionally, Ryder continues to deploy automation and robotics in its warehouses to drive operating efficiencies and maintain operational excellence.

    03

    Contractual Business Resilience

    Over 90% of Ryder's revenue is generated by long-term contracts, establishing a high-quality contractual base that has proven to be a key driver of business model resilience throughout the cycle. This focus on profitably growing contractual relationships across Fleet Management, Dedicated, and Supply Chain segments supports stable earnings and cash flow, enabling the company to leverage its end-to-end capabilities.

    04

    Used Vehicle Market Improvement

    Market conditions for used vehicle sales are showing improvement, contributing to higher results. Retail pricing improved sequentially for both trucks, up 7%, and tractors, up 3%. Used vehicle inventory declined to 8,500 vehicles, falling within the targeted range. The company expects continued improvement in the second half of the year, with used vehicle sales gains now forecast at approximately $40 million for FY26, up from a prior forecast of $32 million.

    05

    Capital Deployment Strategy

    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. This results in $14 billion available for capital deployment, with $4.5 billion allocated for flexible deployment. This flexible capital is split between growth CapEx and discretionary share repurchases/strategic acquisitions, aligning with the company's capital allocation priorities focused on profitable growth and shareholder returns.

    06

    Rental Fleet Management and Market Conditions

    Commercial rental utilization returned to target levels of 75% in Q2, driven by planned asset management actions and a 15% smaller average fleet. While demand remains below prior year levels and historical seasonal trends, it showed the strongest sequential increase in four years. Ryder maintains flexibility to modestly increase rental capacity by deploying off-lease or dedicated fleet vehicles to rental in the short term, and increasing rental capital spending in the long term for 2027 benefits, as market conditions improve.

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