Executive Summary

Q3 2025 revenue was $439.3M, up 8.4% YoY; diluted EPS was $2.25 vs $2.43 YoY; non-GAAP diluted EPS (ex Tax Adjustments and Other Items) was $2.10 .
Against Wall Street consensus, revenue modestly beat ($439.3M vs $435.8M), while EPS missed (Primary EPS consensus $2.32 vs actual diluted EPS $2.25); prior two quarters were modest beats on both revenue and EPS (S&P Global) — see tables below.
Management reiterated full-year 2025 EPS guidance of $8.50–$8.90; the Q4 uplift is expected to be driven primarily by strong secondary-market remarketing income .
Operational highlights: Rail North America utilization remained high at 98.9% with LPI renewal rate change +22.8%; Engine Leasing delivered strong performance (segment profit $60.4M) aided by RRPF and wholly owned portfolio investments; GRE utilization was 93.7% amid macro headwinds; Rail India at 100% utilization .

What Went Well and What Went Wrong

What Went Well

Engine Leasing outperformed: segment profit rose to $60.4M (vs $37.5M YoY) driven by RRPF strength and seven engines acquired ($147M) for the wholly owned portfolio; RRPF investments surpassed $1B YTD .
Commercial execution in Rail North America: renewal success rate reached 87.1%, LPI renewal rate change +22.8%, average renewal term 60 months; management emphasized healthy lease rates and a balanced supply side .
Guidance reaffirmed: Full-year EPS guidance maintained at $8.50–$8.90 (ex Tax Adjustments and Other Items), with management citing a strong pipeline for secondary-market sales to support Q4 .

What Went Wrong

Segment profit compression in Rail North America: Q3 segment profit declined to $70.7M from $102.4M YoY due to lower gains on dispositions and higher interest and maintenance expenses despite higher revenue .
GRE macro pressure: Rail Europe utilization fell to 93.7% (95.9% YoY), reflecting weaker GDP and cautious customer fleet planning; renewal rates increased but demand tempered for certain car types .
Maintenance cost mix: Higher-than-expected outsourcing to third-party shops increased costs in North America as internal shop capacity was filled; management expects longer-term cost control by shifting more work in-house .

Financial Results

Consolidated Results vs Prior Quarters and Estimates

Metric	Q1 2025	Q2 2025	Q3 2025
Revenue ($USD Millions)	$421.6	$430.5	$439.3
Diluted EPS ($)	$2.15	$2.06	$2.25
Net Income ($USD Millions)	$78.6	$75.5	$82.2
S&P Global Revenue Consensus ($USD Millions)	$417.1*	$427.1*	$435.8*
S&P Global Primary EPS Consensus Mean ($)	$2.09*	$2.01*	$2.32*
EBIT Margin %	32.12%*	32.08%*	30.05%*

Values with an asterisk (*) retrieved from S&P Global.

Year-over-Year (Q3 2025 vs Q3 2024)

Metric	Q3 2024	Q3 2025
Revenue ($USD Millions)	$405.4	$439.3
Diluted EPS ($)	$2.43	$2.25
Net Income ($USD Millions)	$89.0	$82.2
Non-GAAP Diluted EPS (ex items) ($)	$2.50	$2.10

Segment Breakdown (Segment Profit)

Segment Profit ($USD Millions)	Q1 2025	Q2 2025	Q3 2025
Rail North America	$88.8	$96.6	$70.7
Rail International	$25.7	$32.2	$34.4
Engine Leasing	$38.6	$27.3	$60.4
Other	$7.0	$5.1	$12.6

Segment Revenues (Q3 2025)

Segment Revenues ($USD Millions)	Q3 2025
Rail North America	$296.5
Rail International	$99.4
Engine Leasing	$32.9
Other	$10.5
Total	$439.3

KPIs and Operating Metrics

KPI	Q1 2025	Q2 2025	Q3 2025
Rail North America Utilization (%)	99.2	99.2	98.9
LPI Avg Renewal Lease Rate Change (%)	24.5	24.2	22.8
Renewal Success Rate (%)	85.1	84.2	87.1
GRE Utilization (%)	95.1	93.3	93.7
Rail India Utilization (%)	99.6	99.6	100.0
Investment Volume ($USD Millions)	$296.3	$219.0	$361.7

Note: Management referenced “over $60M” Q3 remarketing income and ~“$81M” YTD; the 8‑K shows Q3 net gains on disposition of owned assets at $17.2M and YTD at $82.4M (consolidated). We flag this discrepancy for follow‑up .

Guidance Changes

Metric	Period	Previous Guidance	Current Guidance	Change
Diluted EPS (ex Tax Adjustments and Other Items)	FY 2025	$8.30–$8.70 (Q1)	$8.50–$8.90 (Q2 raised; Q3 reiterated)	Raised in Q2; Maintained in Q3
Dividend per Share	Q4 2025	$0.61 (Q3 level)	$0.61 declared for 12/31/2025 payment	Maintained

Earnings Call Themes & Trends

Topic	Previous Mentions (Q-2 & Q-1)	Current Period (Q3 2025)	Trend
Secondary-market remarketing	Active secondary market; Q1 ~$31M, Q2 ~$34M net gains	Management expects strong Q4 remarketing; emphasized demand and buyer depth	Strength sustained; pipeline supports Q4
Lease rates & utilization	LPI +24.5% (Q1), +24.2% (Q2); Utilization ~99%	LPI +22.8%, utilization 98.9%; rates healthy, slight sequential moderation	Slight moderation; still strong
Maintenance costs	Higher vs prior year; focus on in-house capability	Outsourcing increased due to mix/capacity; longer-term plan to shift in-house	Near-term cost pressure; long-term mitigation
Engine Leasing (RRPF & GEL)	Strong demand; steady profits	Segment profit up; investment >$1B YTD; 7 engines acquired	Strengthening
Europe macro	GRE utilization declined to 93.3% in Q2	GRE utilization 93.7%; cautious demand; DB Cargo ~6,000 car sale-leaseback announced	Cautious near term; strategic growth
Wells Fargo rail assets acquisition	Announced JV with Brookfield; targeting 1Q26 close	Still tracking 1Q26 or sooner; management clarified accretion vs pro forma	On track; synergy levers detailed

Management Commentary

“Fleet utilization was 98.9% at quarter end, and the renewal success rate reached 87.1%… LPI was +22.8% with an average renewal term of 60 months.” — Bob Lyons .
“Engine Leasing delivered strong third-quarter results… RRPF affiliates have invested over $1.0 billion year to date, and we invested approximately $147 million to acquire seven engines.” — Bob Lyons .
“We continue to expect 2025 full-year earnings to be in the range of $8.50–$8.90 per diluted share.” — Bob Lyons .
“The North American railcar market is holding up pretty well… rates across most car types flat to perhaps down very slightly.” — Paul Titterton .
“There will be synergies in other line items… longer term, we will look for opportunities to bring more [Wells Fargo] maintenance work in-house at GATX.” — Bob Lyons .

Q&A Highlights

Q4 drivers vs consensus gap: Management expects Q4 uplift primarily from strong remarketing income; overall environment tracking initial expectations .
Wells Fargo acquisition accretion: Clarified that pro forma filings are mechanical roll-ups lacking SG&A synergies and management fee; modest accretion expected under GATX ownership post-close .
Lease rate trajectory: Sequential rates broadly flat to slightly down; supply-side discipline and scrapping keep market balanced .
Maintenance expense mix: Higher outsourcing due to shop capacity/mix; plan to shift more work to internal shops longer term .
RRPF earnings composition: Q3 RRPF pre-tax earnings benefited from insurance recovery tied to previously impaired engines; management normalized disclosure (pre-tax $10.9M; $8.2M after tax) .

Estimates Context

Q3 2025: Revenue beat (Actual $439.3M vs S&P consensus $435.8M); EPS miss (Actual diluted $2.25 vs S&P Primary EPS consensus $2.32).
Q2 and Q1 2025: Modest beats on both revenue and EPS versus S&P consensus.

Metric	Q1 2025	Q2 2025	Q3 2025
Actual Revenue ($USD Millions)	$421.6	$430.5	$439.3
S&P Revenue Consensus ($USD Millions)	$417.1*	$427.1*	$435.8*
Actual Diluted EPS ($)	$2.15	$2.06	$2.25
S&P Primary EPS Consensus ($)	$2.09*	$2.01*	$2.32*
S&P Primary EPS – # of Estimates	3*	3*	4*
S&P Revenue – # of Estimates	3*	3*	4*