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RE

RUSH ENTERPRISES INC \TX\ (RUSHA)·Q3 2025 Earnings Summary

Executive Summary

  • Q3 revenue $1.881B and diluted EPS $0.83; both exceeded Wall Street consensus ($1.779B revenue*, $0.815 EPS*), with resilience in aftermarket (+1.5% YoY to $642.7M) and leasing offsetting weakness in new heavy-duty and medium-duty sales .
  • Net income fell to $66.7M (vs $79.1M YoY) on elevated SG&A tied to increased legal reserves and insurance retentions; absorption ratio was 129.3% (vs 132.6% YoY) .
  • New U.S. Class 8 sales down 11% YoY (company units 3,120) amid depressed freight rates, overcapacity, tariff and emissions uncertainty; vocational demand remained stable; bus sales benefitted from the IC Bus franchise acquisition in Canada .
  • Capital returns continued: $0.19 dividend declared and $9.2M repurchased in Q3; cumulative repurchases now $130.6M of the $200M authorization .
  • Outlook cautious: aftermarket expected to face seasonal Q4 declines and ongoing industry headwinds; management sees potential recovery in 2H26 if capacity exits rebalance freight and policy clarity emerges .

What Went Well and What Went Wrong

What Went Well

  • Aftermarket revenue rose 1.5% YoY to $642.7M; absorption ratio remained strong at 129.3%, supported by technician recruiting/retention and expanding the aftermarket sales force .
  • Light-duty and bus sales showed encouraging signs, aided by the newly acquired IC Bus franchise in Canada and disciplined inventory programs like Ready-to-Roll .
  • Leasing and rental revenue increased 4.7% YoY to $93.3M, underscoring a less cyclical revenue stream and a modernized fleet that lowered operating costs .

What Went Wrong

  • New Class 8 unit sales fell 11% YoY (U.S. 3,120 units; 5.8% market share), and Class 4–7 industry demand was down 17.4% YoY; macro and regulatory uncertainty (tariffs, emissions) weighed on customers’ replacement decisions .
  • Net income decreased to $66.7M (vs $79.1M YoY); SG&A was higher than normal due to increased legal reserves and recent insurance retention changes .
  • Absorption ratio declined YoY (129.3% vs 132.6%), reflecting softer aftermarket conditions and lingering freight recession dynamics .

Financial Results

Core P&L vs Prior Periods and Estimates

MetricQ3 2024Q1 2025Q2 2025Q3 2025Street Consensus (Q3 2025)
Revenue ($USD Billions)$1.896 $1.851 $1.931 $1.881 $1.779*
Diluted EPS ($)$0.97 $0.73 $0.90 $0.83 $0.815*
Net Income ($USD Millions)$79.1 $60.3 $72.4 $66.7 N/A

Notes: Estimates marked with an asterisk are values retrieved from S&P Global.

Margins (last three quarters)

MetricQ1 2025Q2 2025Q3 2025
Net Income Margin %3.2591%*3.7518%*3.5458%*
EBIT Margin %4.9545%*5.7014%*5.3273%*
EBITDA Margin %8.2769%*8.9661%*8.7231%*

Notes: Values marked with an asterisk are retrieved from S&P Global.

Segment/Category Breakdown (Q3 YoY)

CategoryQ3 2024 ($USD Thousands)Q3 2025 ($USD Thousands)
New heavy-duty vehicles$677,882 $591,802
New medium-duty vehicles (incl. bus)$361,813 $393,831
New light-duty vehicles$33,510 $49,606
Used vehicles$81,285 $95,304
Other vehicles$8,765 $4,313
Parts & Service (Aftermarket)$633,045 $642,658
Lease & Rental$89,129 $93,304

KPIs

KPIQ1 2025Q2 2025Q3 2025
Absorption Ratio128.6% 135.5% 129.3%
Aftermarket Revenue ($USD Millions)$619.1 $636.3 $642.7
New heavy-duty trucks delivered (units)3,222 3,259 3,215
New medium-duty vehicles delivered (units)3,329 3,803 3,427
New light-duty vehicles delivered (units)470 703 858
Used commercial vehicles delivered (units)1,769 1,715 1,814

Guidance Changes

Management did not provide formal quantitative guidance ranges. The outlook was qualitative:

MetricPeriodPrevious Guidance (Q2 commentary)Current Guidance (Q3 commentary)Change
Aftermarket conditionsQ4 2025Expected stability with potential modest growth; signs of recovery across segments Expect continued challenges and typical seasonal Q4 decline; weak demand persists Lowered (qualitative)
New Class 8 demandLate 2025Economic/regulatory uncertainty to weigh; no meaningful near-term recovery; potential increase in orders late 2025 with clarity Very challenging end to 2025/start to 2026; cautious optimism for 2H26 recovery if capacity exits rebalance market and policy clarity emerges Lowered near term; cautious optimism longer term
Medium-duty demand2H 20253Q similar to 2Q; positive quoting; inventory right-sized Remain cautious; expect stability; inventory appropriate; steady quoting Maintained
Leasing & rental2025Maintain strong performance; record revenues in Q2 Maintain strength and stability through remainder of 2025 Maintained
DividendQ3/Q4 2025Increased to $0.19 in Q2 (5.6% over prior quarter) Declared $0.19 for Q3; payable Dec 12, 2025 Maintained

Earnings Call Themes & Trends

Transcript for Q3 2025 was not available; themes below are synthesized from management communications across Q1–Q3 press materials.

TopicPrevious Mentions (Q1 & Q2)Current Period (Q3)Trend
Tariffs/macro uncertaintyCustomers cautious on orders; trade policy and emissions uncertainty cloud outlook Ongoing uncertainty with clarified tariffs starting Nov 1; still weighing on demand Persistent headwind
Freight recession/overcapacityDepressed freight rates; capacity exits among small carriers noted Depressed rates; overcapacity continues; accelerating capacity exits may rebalance market Gradual normalization possible
Aftermarket strategyTechnician recruiting, sales force expansion; stability/ modest growth expected Resilient; strategic initiatives offset weak demand; seasonal decline expected in Q4 Stable with seasonal softness
Product performance (HD/MD/LD)HD down; MD improved YoY/QoQ; LD rising; Ready-to-Roll differentiates HD demand weak; MD cautious but stable; LD improving; bus sales boosted by Canadian franchise Mixed: HD weaker, LD/Bus improving
Legal/regulatoryMonitoring emissions, trade policy impacts; insurance/operating costs managed SG&A higher due to legal reserves and insurance retentions Cost pressure
Regional trends (Canada)Canadian sales presence; growing MD share IC Bus franchise acquisition driving bus sales growth Positive contribution

Management Commentary

  • “Challenging market conditions... Freight rates remain depressed and overcapacity continues to weigh on the market... economic uncertainty and regulatory ambiguity remains... impacting our customers’ vehicle replacement decisions.” — W.M. “Rusty” Rush .
  • “Despite ongoing market challenges, our aftermarket products and services business remained resilient... technician recruiting and retention, expanding our aftermarket sales force... helped offset weak demand.” — W.M. “Rusty” Rush .
  • “Decline in new Class 8 truck sales was primarily driven by continued weak demand from large over-the-road fleet customers... uncertainty regarding tariffs and engine emissions regulations... demand from vocational customers remained stable.” — W.M. “Rusty” Rush .
  • “Bus sales [were] driven by a recent acquisition of an IC Bus franchise in Canada... Ready-to-Roll inventory program and disciplined inventory management continues to differentiate us.” — W.M. “Rusty” Rush .
  • “Leasing and rental... continued its strong performance... less cyclical than commercial vehicle sales... expect strength and stability through the remainder of 2025.” — W.M. “Rusty” Rush .

Q&A Highlights

  • Q3 2025 earnings call transcript was not available in the document set; no Q&A content to extract .
  • Conference call details were provided, but no transcript was furnished in available filings .

Estimates Context

  • Revenue: Actual $1.881B vs consensus $1.779B* — strong beat driven by aftermarket and leasing resilience despite HD/MD softness .
  • EPS: Actual $0.83 vs consensus $0.815* — modest beat; SG&A pressure from legal reserves and insurance retentions limited upside .
  • Estimate coverage was light (2 estimates for revenue and EPS); limited sell-side participation may amplify post-print revisions.

Notes: Estimates marked with an asterisk are values retrieved from S&P Global.

Key Takeaways for Investors

  • Mix shift toward aftermarket and leasing is cushioning cyclical sales headwinds; aftermarket revenue up 1.5% YoY and leasing up 4.7% YoY .
  • New Class 8 demand remains weak due to freight recession and policy uncertainty; watch for signs of capacity normalization and emissions/tariff clarity into 2026 .
  • SG&A headwinds (legal reserves/insurance) pressured earnings; monitor litigation developments and insurance cost trends for margin implications .
  • Bus and light-duty strength, aided by the IC Bus franchise acquisition in Canada and Ready-to-Roll inventory, provide diversification upside .
  • Capital allocation remains supportive: $0.19 dividend and ongoing buybacks ($9.2M in Q3; $130.6M cumulative of $200M) .
  • Near-term seasonal softness expected in Q4 aftermarket; conservative positioning on inventories and cost discipline likely to persist .
  • Street revisions likely move up modestly post-beat; thin estimate coverage (2 contributors)* suggests potential for outsized reaction to new datapoints*.

Estimates and certain margin values retrieved from S&P Global.