Ryder System (NYSE:R) executives emphasized “initiatives-based” earnings growth heading into 2026, pointing to multi-year pricing and cost actions that management said are helping the company outperform prior freight cycles despite continued weakness in transactional markets such as rental and used vehicle sales.
Leadership transition and strategy update
Chairman and CEO Robert Sanchez opened the call by reviewing Ryder’s CEO succession plan. Sanchez said he will retire effective March 31, with President and COO John Diez assuming the CEO role. Sanchez will remain on the board as executive chair.
Management also discussed technology investments, including embedding AI into proprietary tools such as RyderShare and Ryder Guide, and the role of Baton, a Ryder technology lab, in building “an AI-enabled software and data platform” for next-generation customer-facing technology.
Fourth-quarter results and segment performance
Chief Financial Officer Cristina Gallo-Aquino said fourth-quarter operating revenue of $2.6 billion was in line with the prior year, as contractual growth in Supply Chain Solutions (SCS) was offset by lower revenue in Dedicated Transportation Solutions (DTS) and Fleet Management Solutions (FMS). Comparable earnings per share from continuing operations were $3.59, up 4% year over year, which she attributed to share repurchases. Return on equity was 17%.
Ryder reported year-to-date free cash flow of $946 million, up from $133 million in the prior year. Gallo-Aquino cited reduced capital expenditures, lower income tax payments tied to the permanent reinstatement of tax bonus depreciation, and lower working capital needs.
- Fleet Management Solutions: Operating revenue declined 1% as lower rental demand was partially offset by higher ChoiceLease revenue. Pre-tax earnings were $136 million, down from the prior year due to weaker rental and used vehicle sales conditions. Rental power fleet pricing rose 5% year over year, while power fleet utilization was 72% (down from 73%) on an average fleet 8% smaller. FMS EBT margin was 10.5%, below Ryder’s long-term target of “low teens over the cycle.”
- Used vehicle sales: Used tractor pricing increased 1% year over year while used truck pricing declined 9%. On a sequential basis, pricing increased for both tractors and trucks, which management said benefited from a higher retail mix. Retail represented 69% of fourth-quarter sales volume, up from 54% in the third quarter. Ryder sold 3,600 used vehicles in the quarter, and ending used inventory of 9,500 vehicles was “slightly above” the targeted range. Management said used vehicle pricing remained above residual value estimates used for depreciation.
- Supply Chain Solutions: Operating revenue increased 3% on new business and omnichannel retail volumes. Segment earnings fell 8% year over year as lost business and extended automotive production shutdowns more than offset revenue growth. SCS EBT margin was 8%, at the segment’s long-term target of “high single digits.”
- Dedicated Transportation Solutions: Operating revenue decreased 4% due to lower fleet count amid the prolonged freight downturn. EBT increased versus the prior year, aided by lower bad debt and acquisition synergies, partially offset by lower revenue. DTS EBT margin was 8.9%, in line with the segment’s high single-digit target.
Capital spending, cash generation, and shareholder returns
Gallo-Aquino said 2025 lease capital spending was $1.5 billion, down from the prior year due to lower lease sales activity. Ryder forecasts 2026 lease spending of $1.9 billion, reflecting higher replacement activity, and expects the ending lease fleet to “modestly decline” in 2026.
Rental capital spending was $300 million in 2025 and is forecast at $100 million in 2026 as Ryder plans lower replacement activity. Ryder expects the rental fleet to decrease 7% at year-end, with the average rental fleet down 13%. Trucks represented about 60% of the rental fleet at year-end 2025.
For 2026, Ryder forecast approximately $2.4 billion of total capital expenditures and about $500 million in proceeds from used vehicle sales, with net capital expenditures expected to be about $1.9 billion.
Management also outlined what it called significant capital deployment capacity. Over a three-year period, Ryder expects to generate about $10.5 billion from operating cash flow and used vehicle sales proceeds, creating about $3.5 billion of incremental debt capacity and “$14 billion available for capital deployment.” After an estimated $9 billion for vehicle replacements and dividends, management said about $5 billion would remain for flexible deployment, split roughly between growth capex and discretionary buybacks and acquisitions.
Since 2021, Sanchez said Ryder generated $3 billion in free cash flow, repurchased 24% of shares outstanding, and increased the quarterly dividend by 57%. Gallo-Aquino noted the company raised its quarterly dividend 12% in 2025 and approved its 198th consecutive dividend payment.
2026 outlook: modest growth, continued freight weakness assumed
Diez said Ryder’s 2026 outlook assumes modest U.S. economic growth, “no meaningful change” in freight market conditions, and a 4% decline in U.S. Class 8 production. Ryder forecast operating revenue growth of about 3% in 2026 and guided comparable EPS to a range of $13.45 to $14.45, versus $12.92 in 2025. At the high end, the company expects about 12% EPS growth driven by $70 million of strategic initiative benefits.
Ryder expects return on equity to rise to 17% to 18% in 2026 and free cash flow of $700 million to $800 million, down from 2025 primarily due to higher lease replacement capex.
Diez said the company’s guidance does not assume a significant freight market pickup, noting Ryder has “not seen evidence” of a turn in its business yet. During Q&A, management reiterated that Ryder typically sees a lag—Diez cited about six months—between improving spot conditions and any meaningful improvement in rental demand.
Key drivers and sensitivities discussed on the call
Executives described the largest variability in the 2026 EPS range as tied to transactional businesses (rental and used vehicle sales) and, within strategic initiatives, execution in maintenance and omnichannel optimization.
On used vehicle sales, management said it expects a gradual improvement through 2026, with the first quarter “consistent” with fourth-quarter conditions. Tom Havens said Ryder expects retail pricing pressure into the first quarter, with improvement beginning in the second quarter and beyond, resulting in full-year gains that look “kind of flat” year over year. Ryder’s full-year forecast assumes used vehicle prices “begin to modestly improve” in the second half of 2026 and remain above depreciation residuals.
On rental, Havens said January utilization dropped to 66% from 74% in December, which he characterized as typical seasonality but “down a little bit worse than our historical seasonal trends.” He said Ryder’s non-lease rental customer demand was down slightly year over year, while the bigger pressure has come from lease customers needing fewer “lease extras” as they downsize fleets.
In supply chain, Sanchez said SCS delivered record sales in 2025, with benefits expected to layer in more meaningfully beginning in the middle of 2026. Steve Sensing added that about 80% of SCS sales in 2025 were expansion sales, which he said reflected execution and customer confidence across verticals and service offerings.
Management also addressed automotive-related disruption in SCS, citing extended production shutdowns. Sensing referenced a “microchip shortage” affecting some customers and said OEMs are undergoing retooling as they convert away from EV vehicles to more ICE vehicles, with expectations for normalization in the back half of the year.
Closing the call, Sanchez said Ryder expects 2026 to be another year of initiatives-driven earnings growth, with any market improvement representing potential upside, while the company remains focused on executing the actions within its control.
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.
