Ryder System, Inc. (R)

Ryder System, Inc. Q1 2025 Financial Report

Report Date: 2025-04-30
Period Covered: Q1 2025 (three months ended March 31, 2025)
Form: 10-Q

Executive Summary

• Total Revenue: $3.131 billion, up 1.1% from $3.098 billion in Q1 2024.
• Net Earnings (Continuing Operations): $134 million vs. $114 million, +17.5%.
• Diluted EPS: $2.29 vs. $1.89.
• Debt Position: $7.765 billion, down 0.18% since year-end.
• Free Cash Flow: $259 million vs. $– (new measure) driven by $651 million operating cash flow less capital expenditures.

Profit and Debt Analysis

• Profit Growth Drivers:
  • Strong fleet management pricing and maintenance‐cost savings.
  • Contribution from prior‐year acquisition in dedicated transportation.
  • Favorable contract mix in supply chain solutions offsetting softer rental and used‐vehicle markets.
• Profit Headwinds:
  • Lower used‐vehicle sale proceeds and commercial rental utilization.
  • Higher interest expense from recent debt issuances.
• Debt Management:
  • Total debt decreased marginally to $7.765 billion (from $7.779 billion at 2024 YE).
  • Continued access to liquidity via $1.7 billion in revolving facilities.

Pros and Cons

• Pros:
  • Diversified revenue streams across Fleet Management, Supply Chain, and Dedicated Transportation.
  • Strong contractual and maintenance revenues provide stability.
  • Robust free cash flow generation and disciplined capital deployment.
• Cons:
  • Pressure on used‐vehicle resale values and rental demand in a softer freight environment.
  • Exposure to fuel‐price volatility (pass‐through model still affects working capital).
  • Rising financing costs as a result of higher interest‐rate environment.

Revenue by Service Category (Q1 2025):

• Service Revenue: $2.080 B
• Lease‐Related Maintenance & Rental: $0.945 B
• Fuel Service Revenue: $0.106 B

Revenue by Business Segment:

• Fleet Management Solutions: $1.447 B
• Supply Chain Solutions: $1.331 B
• Dedicated Transportation Solutions: $0.602 B
• Inter‐segment Eliminations: $(0.249 B)

Product‐Line Disaggregation:

• ChoiceLease (full‐service leasing): $0.867 B
• Commercial Rental: $0.219 B
• SelectCare (maintenance & repair): $0.174 B
• Fuel Service: $0.187 B

Industry End-Market Breakdown (Supply Chain):

• Omnichannel Retail: $0.434 B
• Automotive: $0.395 B
• Consumer Packaged Goods: $0.302 B
• Industrial: $0.200 B

Used-Vehicle Sales:

• Net gain/(loss): impacted by lower volumes and unit proceeds, down from prior year.

EBITDA (Q1 2025): $0.671 B (vs. $0.636 B)

Ryder enters the balance of 2025 with a solid liquidity position, diversified service offerings, and strong contractual backlogs underpinning rental and maintenance revenues. While near‐term headwinds persist in the used‐vehicle market and commercial rental utilization amid freight softness, the company’s long-term growth trajectory is supported by secular trends in outsourced supply chain and dedicated transportation. Key opportunities include further integration synergies from recent acquisitions and expansion of ChoiceLease margins. Risks center on residual‐value volatility, rising financing costs, and macroeconomic uncertainty affecting demand for rental and logistics services. Overall, Ryder’s financial health remains robust, with disciplined leverage targets and continued free cash flow generation providing flexibility for shareholder returns or strategic investments.