Executive Summary

Q2 2025 delivered double‑digit EPS growth with comparable EPS at $3.32, above both prior year ($3.00) and S&P Global consensus ($3.10), while total revenue of $3.19B modestly exceeded Street expectations; strength in Supply Chain Solutions (SCS) offset used vehicle wholesale headwinds . Values retrieved from S&P Global*
Guidance was recalibrated: FY25 comparable EPS range narrowed (lower top end to $12.85–$13.30), while free cash flow was raised by ~$500M to $0.9–$1.0B, and net operating cash flow lifted to ~$2.8B; Q3 comparable EPS guided to $3.45–$3.65 .
Management emphasized resilient contractual portfolio (over 90% operating revenue multi‑year), secular outsourcing tailwinds, and transformed earnings profile; SCS posted nine consecutive quarters of earnings growth and segment margins at the high end of targets .
Key stock narrative catalysts: significant FCF upgrade (bonus depreciation reinstatement), dividend hike to $0.91 (+12%), SCS outperformance, and signs of tractor pricing stabilization with expected higher retail sales mix in H2 .

What Went Well and What Went Wrong

What Went Well
- SCS posted record earnings: operating revenue +3% and EBT +16% YoY; segment EBT margin 9.7% at the high end of the long‑term target, supported by omnichannel retail network optimization and new business . “SCS delivered another quarter of record earnings” .
- Contractual portfolio resilience: company‑wide operating revenue +2% YoY; ChoiceLease pricing and maintenance savings supported FMS contractual earnings despite market pressure . “Over 90% of our operating revenue is generated by multi‑year contracts” .
- Capital returns and FCF: FY25 free cash flow increased by ~$500M to $0.9–$1.0B; dividend raised to $0.91 (+12% QoQ), reflecting higher profitability and improved returns .
What Went Wrong
- Used vehicle sales headwinds: increased wholesale of aged inventory drove lower gains and a loss in Q2 on UVS, with tractor/truck pricing −17% YoY; retail mix fell to ~50% vs 65% prior year .
- Rental demand remained weak: power‑fleet utilization 70% (below mid‑70s target) despite a smaller fleet; rental sequential uplift lagged historical trends .
- Contractual sales hesitancy: lease and dedicated pipelines were solid but conversions delayed amid macro uncertainty and tariff questions; Q3 guidance sets “goalposts” for rental seasonality and UVS pricing outcomes .

Financial Results

Metric	Q4 2024	Q1 2025	Q2 2025
Total Revenue ($USD Billions)	$3.189	$3.131	$3.189
Operating Revenue (non‑GAAP) ($USD Billions)	$2.617	$2.557	$2.610
GAAP Diluted EPS ($USD)	$3.11	$2.29	$3.15
Comparable EPS (non‑GAAP) ($USD)	$3.45	$2.46	$3.32
Comparable EBITDA ($USD Millions)	$720	$671	$729

Segment performance and margins

Segment Metric	Q2 2024	Q1 2025	Q2 2025
FMS EBT ($USD Millions)	$133	$94	$126
FMS EBT / Operating Revenue (%)	10.4%	7.5%	9.7%
SCS EBT ($USD Millions)	$85	$87	$99
SCS EBT / Operating Revenue (%)	8.6%	8.7%	9.7%
DTS EBT ($USD Millions)	$37	$27	$37
DTS EBT / Operating Revenue (%)	7.6%	5.9%	7.9%

KPIs

KPI	Q4 2024	Q1 2025	Q2 2025
Rental Utilization – Power Units (%)	73%	66%	70%
Avg Rental Fleet (Units)	35,000	34,900	34,300
Used Vehicles Sold (Units)	4,700	5,100	6,200
UVS Inventory (Units, end of period)	9,000	9,500	9,600
UVS Pricing YoY – Tractors (%)	−13%	−16%	−17%
UVS Pricing YoY – Trucks (%)	−12%	−17%	−17%

Guidance Changes

Metric	Period	Previous Guidance	Current Guidance	Change
Comparable EPS (non‑GAAP)	FY 2025	$12.85–$13.60	$12.85–$13.30	Lowered (top end)
Adjusted ROE	FY 2025	16.5%–17.5%	17%	Maintained midpoint
Net Cash from Operating Activities	FY 2025	~$2.5B	$2.8B	Raised
Free Cash Flow	FY 2025	$375–$475M	$900M–$1,000M	Raised significantly
Capital Expenditures	FY 2025	~$2.6B	$2.3B	Lowered
Debt‑to‑Equity	FY 2025	~250%	230%	Lowered
Lease Capital Spending	FY 2025	$2.1B	$1.8B	Lowered
Comparable EPS (non‑GAAP)	Q3 2025	N/A	$3.45–$3.65	New
Comparable EPS (non‑GAAP)	Q2 2025	$3.00–$3.25	Actual $3.32	Beat
Quarterly Dividend/Share	Ongoing	$0.81 (prior)	$0.91	Raised 12%

Earnings Call Themes & Trends

Topic	Previous Mentions (Q4 2024, Q1 2025)	Current Period (Q2 2025)	Trend
Used vehicle pricing/mix	Q4: UVS pricing down double digits; gains pressured . Q1: wholesale of aged units; tractors showed sequential stabilization; retail pricing flattish; sleeper prices up .	Elevated wholesale of aged inventory drove Q2 UVS losses; tractors +3% sequential and +10% retail; retail mix 50% vs 65% prior year; expect less wholesale and mild price improvement in Q4 .	Improving for tractors; retail mix to rise in H2 .
Rental demand/utilization	Q4: 73% utilization; still below target . Q1: rental weak; lowered top‑end EPS due to rental .	Rental remains weak; utilization 70%; Q3 guide “goalposts” set for seasonal pickup vs flat scenarios .	Stabilizing but below target .
SCS omnichannel optimization	Q4: record earnings from improved productivity . Q1: EBT +35% YoY; margin 8.7% .	Ninth consecutive quarter of growth; EBT +16% YoY; margin 9.7% (high end of target) .	Positive momentum sustained .
Contract sales pipeline	Q1: macro uncertainty delaying decisions in lease/dedicated .	Continued delays in lease/dedicated; robust SCS pipeline and large customer decisions; lease pipeline at record level but conversion pushed out .	Mixed: positive for SCS, muted for lease/dedicated .
Bonus depreciation/FCF	(Not highlighted in Q4/Q1 outlook)	Permanent reinstatement of tax bonus depreciation adds ~$200M cash benefit; FY25 FCF lifted to $0.9–$1.0B .	Positive cash flow tailwind .
Maintenance initiatives/TORQ	(Limited prior)	Retail mobile maintenance (TORQ) revenue +75% YoY; ~200 techs; early‑stage but growing; SelectCare revenue/margins up sequentially .	Emerging growth vector .
Tariffs/macro visibility	Q1: uncertainty impacting pipelines; limited impact to US‑based auto .	Management expects tariff clarity to aid decisions; industrial manufacturing onshoring seen as tailwind (93% revenue in US) .	Gradual improvement hoped; near‑term uncertainty persists .

Management Commentary

“I’m proud of the Ryder team for delivering our third consecutive quarter of double‑digit earnings per share growth. Second quarter results were above our expectations, driven by outperformance in our Supply Chain segment” — Robert Sanchez, CEO .
“Operating revenue of $2.6 billion in the second quarter, up 2% from prior year… Comparable EPS were $3.32… The ROE benefit from share repurchases was offset by used vehicle sales and rental performance” — Cristina Gallo‑Aquino, CFO .
“We increased our 2025 forecast for free cash flow by approximately $500 million to a range of $900 million to $1,000 million due to lower expected capital spending and… bonus depreciation” — Robert Sanchez .
“We do not plan on executing this level of wholesale trades going forward… we expect used vehicle sales results to be in line with first quarter levels for the next two quarters” — Cristina Gallo‑Aquino .

Q&A Highlights

UVS losses and path back to gains: Losses driven by incremental wholesaling (~1,000 units, ~$10M impact); plan to reduce wholesale in H2 to restore gains levels seen in Q1 .
Q3/Q4 guideposts: High end assumes normal rental seasonality and modest UVS price improvement; low end assumes flat rental and continued UVS price declines; mild tractor pricing uplift most likely in Q4 .
Contract sales delays: Lease/dedicated decisions remain delayed despite strong pipelines; SCS decisions improving; upside more likely to materialize in 2026 timing .
Margin cadence: FMS margins expected to improve as rental/UVS recover; SCS margins continue to benefit from optimization; DTS at target margins with Cardinal synergies .
Maintenance/TORQ and M&A: TORQ retail mobile maintenance growing (+75% YoY) with ~200 techs; scouting tuck‑in acquisitions and well‑run targets in core verticals .

Estimates Context

Metric (Q2 2025)	S&P Global Consensus	Actual	Outcome
Primary EPS ($USD)	3.0954*	3.32	Beat
Revenue ($USD)	3,165,486,230*	3,189,000,000	Beat
EBITDA ($USD)	692,500,000*	729,000,000	Beat

Values retrieved from S&P Global*

Implications: Street under‑estimated SCS strength and the resilience of contractual earnings; estimates for H2 may move up modestly if tractor pricing stabilizes and retail mix rises, though rental seasonality and macro clarity remain key variables .

Key Takeaways for Investors

SCS strength remains the core earnings driver with margins at the high end of target; expect continued operational benefits from omnichannel optimization and new business .
UVS headwinds were tactical (aged wholesale) rather than structural; a higher retail mix and early tractor price stabilization suggest improving gains potential in Q4 .
Rental demand is the swing factor for near‑term EPS; management’s Q3 “goalposts” frame the risk/reward for traders around seasonal uplift vs. flat scenarios .
FY25 FCF upgrade ($0.9–$1.0B) and dividend increase to $0.91 support capital returns; balance sheet leverage at the low end of target provides dry powder for growth/M&A .
Guidance reset lowered the top end of EPS, but the cash flow and ROE trajectory remain strong; transformed contractual mix (>90% multi‑year) continues to derisk earnings across the cycle .
Watch for pipeline conversion timing (lease/dedicated) as tariff clarity improves; SCS pipeline already showing robust customer decisions .
Medium‑term thesis: as the freight cycle normalizes, FMS margins should trend back towards low‑teens with rental/UVS recovery, complementing asset‑light growth in SCS/DTS .

RYDER SYSTEM INC (R)·Q2 2025 Earnings Summary