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RYDER SYSTEM INC

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Business Summary

Ryder System, Inc. operates in the outsourced logistics and transportation services industry throughout North America, offering port-to-door solutions that integrate every step of the supply chain, including international inbound flows and cross-border logistics, fleet and transportation management, warehousing, manufacturing support and multi-channel final delivery. The U.S. commercial fleet market is estimated to include approximately 11 million vehicles, of which 1 million are being leased or rented from third parties like Ryder . Logistics spending in the U.S. in the key target markets in which the company operates was approximately $1.5 trillion, of which $234 billion was outsourced . The outsourced U.S. dedicated market was estimated to be $31 billion from an addressable market of approximately $500 billion .

The company operates in highly competitive markets and competes with finance lessors, truck and trailer manufacturers, independent dealers, managed maintenance providers, and other third-party logistics and transportation service providers. Competitive factors include service quality, price, technology, service offerings, geographic coverage, equipment, maintenance options, and service reliability and quality. The company differentiates itself by offering the most comprehensive port-to-door solutions and transportation services in North America, leveraging its FMS vehicles and maintenance services and integrating services with its SCS business to create a more comprehensive transportation solution.

Ryder generates revenue through three business segments: Fleet Management Solutions (FMS), which provides full service leasing, commercial rental and vehicle maintenance services; Supply Chain Solutions (SCS), which provides fully integrated logistics solutions; and Dedicated Transportation Solutions (DTS), which provides turnkey transportation solutions including dedicated vehicles, professional drivers, management and administrative support. Revenue is generated through contractual arrangements with customers, including long-term full service leases, commercial rentals, maintenance services, fuel services, logistics management, transportation management, brokerage, e-commerce and last mile delivery, and contract manufacturing and packaging. The company's customer base reflects a variety of industries including omnichannel retail, automotive, consumer packaged goods, and industrial and other sectors.

Fleet Management Solutions (FMS) provides a variety of fleet solutions including contract terms with full service leasing (ChoiceLease), as well as leasing with flexible maintenance options; commercial vehicle rental; maintenance services (SelectCare); digital and technology support services; comprehensive fuel services; and used vehicle sales. During 2025, ChoiceLease revenue accounted for 60% of FMS total revenue, commercial rental revenue accounted for 16%, SelectCare revenue accounted for 12%, and fuel services revenue accounted for 12%. As of December 31, 2025, FMS had 789 operating locations in 49 states, the District of Columbia, Puerto Rico and seven Canadian provinces, with 141,700 ChoiceLease vehicles, 31,600 commercial rental vehicles, and 44,100 SelectCare vehicles. FMS total revenue for 2025 was $5.845 billion , and FMS EBT was $501 million .

Supply Chain Solutions (SCS) provides a broad range of logistics management services organized by industry verticals: omnichannel retail (which includes retail, technology, last mile and e-commerce); automotive; consumer packaged goods (CPG); and industrial and other (which includes healthcare). Product offerings include distribution management, dedicated transportation, transportation management and brokerage, e-commerce and last mile, and contract manufacturing and contract packaging. During 2025, distribution management and value-added services accounted for approximately 36% of SCS total revenue, dedicated transportation services accounted for approximately 28%, transportation management solutions accounted for 12%, e-commerce and last mile services accounted for 18%, and contract manufacturing and contract packaging and other services accounted for 6%. As of December 31, 2025, SCS had 722 customer accounts, 319 warehouses, and 105 million square feet of warehousing space. SCS total revenue for 2025 was $5.459 billion , and SCS EBT was $355 million . Dedicated Transportation Solutions (DTS) provides specialized dedicated transportation services including vehicles, professional drivers, and engineering and other services. As of December 31, 2025, DTS had 210 customer accounts in the U.S. DTS total revenue for 2025 was $2.343 billion , and DTS EBT was $140 million .

During 2025, the company returned a total of $664 million of capital to shareholders through share repurchases of $519 million and cash dividends of $145 million . In February 2025, the company issued an unsecured medium-term note with aggregate principal amount of $300 million, bearing annual interest of 5.00%, and maturing on March 15, 2030 . In May 2025, the company issued an unsecured medium-term note with aggregate principal amount of $300 million, bearing annual interest of 4.85%, and maturing on June 15, 2030 . In November 2025, the company issued an unsecured medium-term note with aggregate principal amount of $300 million, bearing annual interest of 4.30%, and maturing on December 1, 2030 . In April 2025, the company amended and restated its corporate revolving credit facility, increasing the committed borrowing capacity to $1.6 billion, expiring in April 2030 . In September 2025, the company amended its trade receivables financing facility to permit an increase in borrowing capacity of up to $200 million for a maximum borrowing of $500 million, subject to lender approval . As of December 31, 2025, the company had 51,600 total employees in North America .

Total revenue for 2025 was $12.665 billion , consistent with the prior year. Operating revenue (a non-GAAP measure excluding fuel and subcontracted transportation) was $10.406 billion , up 1% from the prior year. Earnings from continuing operations before income taxes (EBT) were $685 million , compared to $661 million in the prior year. Comparable EBT (a non-GAAP measure) was $730 million , compared to $715 million in the prior year. Earnings from continuing operations were $501 million , compared to $489 million in the prior year. Diluted EPS from continuing operations was $11.99 , up 8% from $11.06 in the prior year. Comparable EPS (a non-GAAP measure) from continuing operations was $12.92 , up 8% from $12.00 in the prior year. Net cash provided by operating activities from continuing operations was $2.594 billion , and free cash flow (a non-GAAP measure) was $946 million .

Business Outlook

Management expects net cash provided by operating activities from continuing operations to increase to approximately $2.7 billion in 2026 . Free cash flow (a non-GAAP measure) is expected to decrease to approximately $800 million, reflecting higher investments in the ChoiceLease fleet, partially offset by higher cash generated . Gross capital expenditures are expected to increase to approximately $2.4 billion in 2026, reflecting higher investments in the lease fleet . Total 2026 required contributions to the company's pension plans are estimated to be approximately $10 million . The present value of estimated global pension contributions that will be required over the next 5 years totals approximately $24 million (pre-tax) . The company expects 2026 defined benefit pension expense to decrease to $35 million .

In FMS and DTS, management expects contractual sales trends to improve as freight markets normalize. The company is well positioned for growth in SCS as it achieved record sales in 2025. The company continues to benefit from favorable long-term secular trends in logistics and transportation solutions, including demand for supply chain resiliency, e-commerce fulfillment, final mile delivery of big and bulky goods, and onshoring and nearshoring of manufacturing and supply chain operations. The company's balanced growth strategy focuses on de-risking and optimizing the business model, enhancing returns and free cash flow, and driving long-term profitable growth, including by moving clients to outsource their logistics and transportation needs.

The company's strategy is driven by three priorities: (i) create value through operational excellence, (ii) invest in customer-centric innovation, and (iii) further improve full-cycle returns and generate profitable growth. The company seeks to execute its strategy by leveraging secular trends that favor outsourcing logistics and transportation services, offering market leading end-to-end supply chain solutions in North America, growing earnings from contractual lease, dedicated and supply chain businesses, continuously improving productivity and processes, investing in customer-centric innovations, attracting, developing and retaining the best talent, and executing disciplined capital allocation priorities including organic growth, targeted acquisitions and strategic investments, and returning capital to shareholders.

In 2026, the company's long-term expected rate of return assumption (net of fees) for its primary U.S. pension plan will be 5.90% . The company expects to amortize $31 million of net actuarial loss as a component of pension expense in 2026 . Effective January 1, 2026, the company expects to reduce the estimated residual values for certain tractors based on its review, and these updates will not have a material impact to annual depreciation expense.

The company expects gross capital expenditures to increase to approximately $2.4 billion in 2026, reflecting higher investments in the lease fleet . The company expects net cash provided by operating activities from continuing operations to increase to approximately $2.7 billion in 2026 . The company expects free cash flow (a non-GAAP measure) to decrease to approximately $800 million reflecting higher investments in the ChoiceLease fleet, partially offset by higher cash generated .

The company is experiencing near-term revenue growth headwinds that reflect the extended freight downturn and overall economic uncertainty. Other unknown effects from inflationary cost pressures, regulatory uncertainty, labor interruptions, introduction of tariffs and taxes, and the continued higher interest rate environment may negatively impact demand for the company's business, financial results, and significant judgments and estimates. The company faces risks related to decreased customer demand for transportation and logistics services due to adverse economic conditions, competition or other factors, which has impacted and could in the future adversely impact its business and operating results.

The company faces risks related to disruptions in global supply chains, which have impacted and may continue to impact its business, results of operations and financial condition. The company also faces risks related to labor shortage challenges across all business segments, particularly its DTS and SCS segments, which have negatively impacted earnings. If labor shortages exist for an extended period of time, the company's earnings may be adversely impacted. The company also faces risks related to changes in laws and regulations, including tariffs, trade restrictions, and environmental regulations, which could increase costs or operating complexity.

Risk Factors

The company faces material risks from decreased customer demand for transportation and logistics services due to adverse economic conditions, competition or other factors, which has impacted and could in the future adversely impact its business and operating results, particularly in used vehicle sales, rental and contractual services. The company bears the risk that it will not be able to resell its used vehicles at a price at or above their residual value estimates, and a hypothetical 10% reduction in estimated residual values would increase depreciation expense over the remaining life of the fleet by approximately $340 million . The company is substantially self-insured for vehicle liability and workers' compensation claims, and a 5% adverse change in actuarial claim loss estimates would increase operating expense in 2026 by $25 million . As of December 31, 2025, the company had $7.6 billion of outstanding indebtedness , and its ability to raise capital may be materially reduced or borrowing costs may significantly increase if access to public investment-grade debt becomes limited or if funding costs increase due to the loss of an investment grade rating. The company also faces risks related to labor shortage challenges across all business segments, particularly its DTS and SCS segments, which have negatively impacted earnings.

Management Priorities

Management's message emphasizes the strength and resiliency of the transformed business model and consistent execution of strategic initiatives, which delivered earnings growth and helped mitigate the impact of weak market conditions on used vehicle sales and commercial rental demand in 2025. Management highlights that the continued execution of strategic initiatives focused on lease pricing, maintenance cost savings, acquisitions synergies and optimization of the Omnichannel network drove contractual earnings growth in all business segments. Management states that the company is well positioned for growth in SCS as it achieved record sales in 2025, and in FMS and DTS, contractual sales trends are expected to improve as freight markets normalize. Management's strategic priorities for the period ahead are: (i) create value through operational excellence, (ii) invest in customer-centric innovation, and (iii) further improve full-cycle returns and generate profitable growth. Management expects net cash provided by operating activities from continuing operations to increase to approximately $2.7 billion in 2026 , free cash flow (a non-GAAP measure) to decrease to approximately $800 million , and gross capital expenditures to increase to approximately $2.4 billion in 2026 .

View Source Annual Report on SEC.gov ↗

References

  1. [1] Item 1, Business — Industry and Operations
  2. [2] Item 1, Business — Supply Chain Solutions
  3. [3] Item 1, Business — Dedicated Transportation Solutions
  4. [4] Item 7, MD&A — Full Year Operating Results by Business Segment
  5. [5] Item 7, MD&A — Full Year Operating Results by Business Segment
  6. [6] Item 7, MD&A — Full Year Operating Results by Business Segment
  7. [7] Item 7, MD&A — Full Year Operating Results by Business Segment
  8. [8] Item 7, MD&A — Full Year Operating Results by Business Segment
  9. [9] Item 7, MD&A — Full Year Operating Results by Business Segment
  10. [10] Item 7, MD&A — Share Repurchase Programs and Cash Dividends
  11. [11] Item 7, MD&A — Financing and Other Funding Transactions
  12. [12] Item 7, MD&A — Financing and Other Funding Transactions
  13. [13] Item 7, MD&A — Financing and Other Funding Transactions
  14. [14] Item 7, MD&A — Financing and Other Funding Transactions
  15. [15] Item 7, MD&A — Financing and Other Funding Transactions
  16. [16] Item 1, Business — Human Capital
  17. [17] Item 7, MD&A — Results Summary
  18. [18] Item 7, MD&A — Results Summary
  19. [19] Item 7, MD&A — Results Summary
  20. [20] Item 7, MD&A — Results Summary
  21. [21] Item 7, MD&A — Results Summary
  22. [22] Item 7, MD&A — Results Summary
  23. [23] Item 7, MD&A — Results Summary
  24. [24] Item 7, MD&A — Results Summary
  25. [25] Item 7, MD&A — Results Summary
  26. [26] Item 7, MD&A — Results Summary
  27. [27] Item 7, MD&A — Results Summary
  28. [28] Item 7, MD&A — Results Summary
  29. [29] Item 7, MD&A — Cash Flows
  30. [30] Item 7, MD&A — Cash Flows
  31. [31] Item 7, MD&A — Cash Flows
  32. [32] Item 7, MD&A — Cash Flows
  33. [33] Item 7, MD&A — Purchase Obligations
  34. [34] Item 7, MD&A — Pension Information
  35. [35] Item 7, MD&A — Pension Information
  36. [36] Item 7, MD&A — Pension Information
  37. [37] Item 7, MD&A — Pension Assumptions
  38. [38] Item 7, MD&A — Pension Assumptions
  39. [39] Item 7, MD&A — Purchase Obligations
  40. [40] Item 7, MD&A — Cash Flows
  41. [41] Item 7, MD&A — Cash Flows
  42. [42] Item 7, MD&A — Critical Accounting Estimates, Vehicle Residual Values
  43. [43] Item 7, MD&A — Critical Accounting Estimates, Self-Insurance Obligations
  44. [44] Item 7, MD&A — Results Summary
  45. [45] Item 7, MD&A — Cash Flows
  46. [46] Item 7, MD&A — Cash Flows
  47. [47] Item 7, MD&A — Purchase Obligations
  48. [48] Item 8, Consolidated Statements of Earnings
  49. [49] Item 8, Consolidated Statements of Earnings
  50. [50] Item 8, Consolidated Statements of Earnings
  51. [51] Item 8, Consolidated Statements of Earnings
  52. [52] Item 8, Consolidated Statements of Earnings
  53. [53] Item 8, Consolidated Statements of Earnings
  54. [54] Item 8, Consolidated Statements of Earnings
  55. [55] Item 8, Consolidated Statements of Earnings
  56. [56] Item 7, MD&A — Lease & Related Maintenance and Rental
  57. [57] Item 7, MD&A — Lease & Related Maintenance and Rental
  58. [58] Item 7, MD&A — Provision for Income Taxes
  59. [59] Item 7, MD&A — Provision for Income Taxes
  60. [60] Item 8, Consolidated Statements of Cash Flows
  61. [61] Item 8, Consolidated Statements of Cash Flows
  62. [62] Item 7, MD&A — Cash Flows
  63. [63] Item 7, MD&A — Cash Flows
  64. [64] Item 8, Consolidated Balance Sheets
  65. [65] Item 8, Consolidated Balance Sheets
  66. [66] Item 8, Consolidated Balance Sheets
  67. [67] Item 8, Consolidated Balance Sheets
  68. [68] Item 7, MD&A — Results Summary
  69. [69] Item 7, MD&A — Results Summary
  70. [70] Item 7, MD&A — Results Summary
  71. [71] Item 7, MD&A — Used Vehicle Sales, net
  72. [72] Item 7, MD&A — Used Vehicle Sales, net
  73. [73] Item 7, MD&A — Interest Expense
  74. [74] Item 7, MD&A — Interest Expense
  75. [75] Item 7, MD&A — Full Year Operating Results by Business Segment
  76. [76] Item 7, MD&A — Full Year Operating Results by Business Segment
  77. [77] Item 7, MD&A — Full Year Operating Results by Business Segment
  78. [78] Item 7, MD&A — Full Year Operating Results by Business Segment
  79. [79] Item 7, MD&A — Full Year Operating Results by Business Segment
  80. [80] Item 7, MD&A — Full Year Operating Results by Business Segment

Analysis on 6/8/2026