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RE

RUSH ENTERPRISES INC \TX\ (RUSHA)·Q1 2025 Earnings Summary

Executive Summary

  • Q1 2025 was resilient in a difficult freight backdrop: revenue $1.85B (-1.1% y/y), diluted EPS $0.73 (vs $0.88 y/y), with aftermarket down y/y but slightly above Q4; absorption ratio remained strong at 128.6% .
  • Results modestly beat S&P Global consensus: EPS $0.73 vs $0.72*, revenue $1.851B vs $1.826B*; note limited coverage (1 estimate for both) [Q1 2025 estimates from S&P Global*].
  • Mix was supported by vocational and public sector strength; medium-duty outperformed industry, while Class 8 OTR demand and used demand remained soft; management expects slight sequential improvement in Q2 Class 8 and aftermarket, with visibility in H2 constrained by tariff and emissions policy uncertainty .
  • Capital returns: $0.18 dividend declared (payable Jun 12), $30.9M repurchases in Q1; on May 29, the buyback authorization was increased by $50M to $200M total, signaling confidence in cash generation .

Values marked with * retrieved from S&P Global.

What Went Well and What Went Wrong

What Went Well

  • Medium-duty sales resilience and outperformance aided mix; “Ready to Roll” inventory program helped steady Class 4–7 despite industry contraction .
  • Aftermarket remained a profit anchor: absorption ratio 128.6% (vs 130.1% y/y), with sequential revenue improvement vs Q4 and continued strength in public sector/vocational/leasing segments .
  • Strategic/capital allocation: dividend maintained at $0.18; $30.9M repurchased in Q1; subsequent authorization raised to $200M (from $150M) on May 29, underscoring balance sheet strength and FCF confidence .

What Went Wrong

  • Class 8 OTR demand softened significantly due to freight recession, tariff and emissions uncertainty; industry-wide elevated inventory pressured pricing .
  • Aftermarket revenue declined 4.6% y/y due to fewer working days, rollover of 2024 campaigns, and weaker winter-storm-related work; miles driven remain weak, limiting maintenance demand .
  • Used truck demand/pricing remained soft; utilization in rental dipped slightly y/y; management emphasized limited visibility, particularly in H2 given policy resets under review .

Financial Results

Headline P&L vs prior quarters (oldest → newest)

MetricQ3 2024Q4 2024Q1 2025
Revenue ($USD Millions)$1,896.1 $2,009.6 $1,850.8
Diluted EPS ($)$0.97 $0.91 $0.73
Gross Profit ($USD Millions)$379.0 $370.1 $357.8
Gross Margin (%)20.0% 18.4% 19.3%
Operating Income ($USD Millions)$120.8 $112.2 $91.9
Operating Margin (%)6.4% 5.6% 5.0%
Net Income Attributable ($USD Millions)$79.1 $74.8 $60.3
Net Margin (%)4.2% 3.7% 3.3%

Q1 2025 vs S&P Global consensus

MetricActualConsensus*Surprise
Revenue ($USD Millions)$1,850.8 $1,826.2*+$24.6
Diluted EPS ($)$0.73 $0.72*+$0.01
# of Estimates—1 (Rev), 1 (EPS)*—

Values marked with * retrieved from S&P Global.

Revenue by category (Q1 2025 vs Q1 2024)

Category ($USD Millions)Q1 2024Q1 2025
New & Used Vehicle Sales$1,123.3 $1,130.8
Aftermarket (Parts/Service/Collision)$649.2 $619.1
Lease & Rental$87.9 $90.3
Finance & Insurance$5.4 $5.2
Other$6.2 $5.5
Total Revenue$1,872.0 $1,850.8

Vehicle sales mix (revenue)

Vehicle Sales Revenue ($USD Thousands)Q1 2024Q1 2025
New Heavy-Duty$666,339 $625,796
New Medium-Duty (incl. bus)$333,634 $378,358
New Light-Duty$27,471 $29,273
Used Vehicles$88,009 $90,812
Other Vehicles$7,866 $6,531

KPIs and volumes

KPIQ1 2024Q1 2025
Aftermarket Revenue ($USD Millions)$649.2 $619.1
Absorption Ratio130.1% 128.6%
New Class 8 Trucks Delivered (Total)3,494 3,222
New Class 4–7 Vehicles Delivered3,331 3,329
New Light-Duty Vehicles Delivered456 470
Used Vehicles Sold1,818 1,769
Lease & Rental Revenue ($USD Millions)$87.9 $90.3
PacLease/Idealease Franchises—60; ~10,100 trucks in fleet

Non-GAAP snapshot (LTM through Mar-31-2025): Adjusted Net (Cash) Debt $(225.1)M; Adjusted EBITDA $450.2M .

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Class 8 new truck salesQ2 2025Challenging H1; improving later in 2025 Slight sequential improvement in Q2 due to fleet delivery timing Qualitatively raised (near-term)
Aftermarket revenueQ2 2025Weak early 2025, improving thereafter Slight sequential improvement in Q2 vs Q1 Qualitatively raised (near-term)
Rental utilizationQ2 2025—Expect improvement in rental utilization New qualitative
H2 demand visibility2H 2025Anticipated acceleration in H2 2025 “Primary blind spot” amid tariff/emissions uncertainty; customers pausing orders Lowered visibility
DividendQ1 2025$0.18/qtr (Q4 declared) $0.18 declared; payable Jun 12, 2025 Maintained
Share repurchase auth.2025$150M (adopted Dec 3, 2024) Increased to $200M on May 29, 2025 Raised by $50M

Earnings Call Themes & Trends

TopicQ3 2024 (10/30)Q4 2024 (2/18)Q1 2025 (5/1)Trend
Tariffs & emissions regsNoted competitive pricing; monitoring regs Monitoring proposed tariffs; EPA regs could drive pre-buy Largest uncertainty; relook of tariffs; 45-day clarity window on NOx; pre-buy less certain Uncertainty ↑
Freight/macroFreight recession persisted; slight sequential improvement in aftermarket Freight rates bottoming, slow improvement expected Freight recession continues; miles driven weak Weak but stabilizing sequentially
Class 8 demandWeak OTR; vocational/public strong Challenging H1; potential H2 accel Slight Q2 sequential uptick expected; H2 uncertain Near-term slight ↑, H2 unclear
Class 4–7Outperformed market; healthy demand Well-positioned; share gains expected Sales relatively steady; outperformed industry Resilient
AftermarketDown y/y; up vs Q2 Weak early 2025; improve thereafter Down y/y; up seq; slight Q2 improvement expected Sequential ↑
Used trucksMarket difficult; execution solid Stable valuations; cautious optimism Demand soft; pricing not yet impacted by tariffs Soft/stable
Leasing & rentalSlightly lower utilization Strong contributor; fleet refresh Leasing up; utilization to improve in Q2 Improving utilization
Capital returnsDividend $0.18 Dividend $0.18; new $150M buyback Dividend maintained; +$50M buyback increase (May 29) Shareholder returns ↑

Management Commentary

  • “New Class 8 truck demand softened significantly… our sales to vocational and public sector customers helped somewhat offset the sluggishness from our over-the-road customers.” — W.M. “Rusty” Rush .
  • “Our aftermarket revenue was down year-over-year, but up slightly compared to the fourth quarter of 2024… we anticipate a slight improvement in our aftermarket revenues compared to the first quarter.” .
  • “We expect to see a slight improvement in new Class 8 truck sales in the second quarter due to the timing of certain fleet deliveries… [but] our primary blind spot… is the second half of 2025” .
  • “By comparison, we were down 7.8% [Class 8], selling 3,222 new Class 8 trucks… I’m pleased that we outperformed the market.” .
  • “Miles driven is not really good… with less miles, probably needs less maintenance and less repair.” .

Q&A Highlights

  • Near-term outlook: Management expects only “slight” sequential improvements in Q2 Class 8 deliveries and aftermarket; avoids firm H2 views due to tariff/emissions uncertainty .
  • Aftermarket cadence: Weak January on weather; improved Feb–Mar; April solid but choppy (Easter timing); sequential growth targeted, not committing to y/y growth .
  • Policy uncertainty: Tariffs under re-review; low-NOx regulations likely “lower” than originally proposed; ~45 days to better clarity; pre-buy magnitude/timing less certain .
  • Credit conditions: Availability remains adequate for quality borrowers; little evidence of tightening beyond subprime .
  • Expense discipline: SG&A vigilance continues amid inflation; company aims to remain nimble with short planning windows .

Estimates Context

  • Q1 2025 results modestly topped S&P Global consensus: EPS $0.73 vs $0.72*, revenue $1,850.8M vs $1,826.2M*; coverage is thin (1 estimate for both), limiting inference strength for “beat/miss” [Q1 2025 estimates from S&P Global*].
  • Given management’s qualitative outlook (slight Q2 sequential improvement, H2 uncertainty), near-term estimate revisions may skew toward modest upward adjustments for Q2 volumes/aftermarket, while H2 trajectories likely remain conservative pending tariff/emissions clarity .

Values marked with * retrieved from S&P Global.

Key Takeaways for Investors

  • Mix resilience: Medium-duty and vocational/public sector demand plus strong absorption (128.6%) continue to cushion Class 8 OTR weakness .
  • Modest beat with low coverage: Q1 revenue/EPS slightly exceeded S&P Global consensus on limited estimates; near-term narrative remains execution over macro [Q1 2025 estimates from S&P Global*] .
  • Q2 setup: Management guides to slight sequential improvement in Class 8 and aftermarket; look for confirmation in order intake and aftermarket per-day trends through May/June .
  • Watch policy tape: Tariff re-reviews and impending NOx clarity (~45 days) are the biggest swing factors for H2 demand and pricing; pre-buy dynamics remain fluid .
  • Capital returns supportive: Dividend maintained; repurchases of $30.9M in Q1; authorization lifted to $200M on May 29—an incremental floor under the equity in volatile end markets .
  • Used and rental: Used remains soft but manageable; rental utilization expected to improve in Q2—monitor for incremental gross profit support as volumes stabilize .
  • Risk/reward: Near-term execution likely drives relative outperformance vs industry; sustained macro/tariff/emissions uncertainty caps multiple expansion until visibility improves .

Appendix: Source Documents

  • Q1 2025 8-K (Item 2.02) and EX-99.1 press release (financial tables and ops commentary) .
  • Q1 2025 earnings call transcript (prepared remarks and Q&A) .
  • Prior quarters for trend: Q4 2024 8-K (press release and tables) ; Q3 2024 8-K (press release and tables) .

Values marked with * retrieved from S&P Global.