[Management View]
Ryder's management emphasized the structural shift towards asset-light contractual businesses, expecting 60% of 2025 revenue from supply chain and dedicated services. They outlined approximately $150 million in annual pretax earnings benefits from ongoing strategic initiatives.

[Outlook]
Ryder updated its full-year 2025 EPS guidance to $12.85–$13.30, reflecting higher contractual earnings. The company plans to leverage its transformed business model for growth, focusing on organic expansion and targeted M&A.

[Financial Performance]
Ryder reported a 2% YoY increase in operating revenue to $2.6 billion for Q2 2025, driven by growth in SCS and FMS contractual revenue. Comparable EPS rose 11% YoY to $3.32. Free cash flow increased significantly to $461 million YTD.

[Q&A Highlights]
Question 1: Are you confident in deploying the dry powder on the balance sheet now, or will you wait for the up cycle?
Answer: Ryder feels confident about its dry powder, with repurchase programs in place and a focus on acquisition opportunities. They plan to invest organically in vehicles for lease and rental as the freight cycle improves.

Question 2: How are you thinking about truck values in the back half of the year given the cycle uncertainty?
Answer: Ryder expects a steady increase in tractor pricing, especially in Q4, despite a more muted increase than initially expected. Retail tractor pricing was up 10%, indicating positive trends.

Question 3: Why did sales go to losses in Q2, and why do they return to gains in Q3?
Answer: Losses were due to increased wholesaling of aged inventory, costing about $10 million. Ryder expects gains to return as wholesaling activity decreases.

Question 4: How does the bonus depreciation impact customer behavior and leasing activity?
Answer: Bonus depreciation historically increases business spending, benefiting Ryder by stimulating the economy and encouraging leasing and investment in additional equipment.

Question 5: What are the early assumptions for Q4, particularly in FMS and leasing?
Answer: Ryder expects historical sequential trends in rental and a modest increase in used vehicle pricing. The low end of guidance assumes flat pricing and no seasonal pickup.

Question 6: How are you thinking about margin cadence across segments in the back half of the year?
Answer: Ryder expects margin growth in FMS due to pricing and maintenance initiatives, while supply chain and dedicated segments are at target margins. FMS margins are expected to improve as the market recovers.

Question 7: What underpins the sequential increase in used truck markets?
Answer: The increase is driven by demand for high-quality vehicles and low sleeper inventory, indicating a move towards equilibrium in the market.

Question 8: Why hasn't outsourced maintenance grown, and what is the outlook?
Answer: Ryder is focusing on retail mobile maintenance through its TORQ product, which is growing but still in the early stages. They see potential in retail maintenance over contractual agreements.

Question 9: How does the bonus depreciation structurally improve free cash flow conversion?
Answer: The reinstatement of tax bonus depreciation provides a cash benefit expected to continue for several years, improving free cash flow conversion.

[Sentiment Analysis]
Analysts showed interest in Ryder's strategic initiatives and market positioning, with a focus on capital deployment and market recovery. Management maintained a confident tone, emphasizing resilience and growth potential.

[Quarterly Comparison]
| Metric | Q2 2025 | Q2 2024 |
|-------------------------|---------|---------|
| Operating Revenue | $2.6B | $2.55B |
| Comparable EPS | $3.32 | $3.00 |
| Free Cash Flow (YTD) | $461M | $71M |
| FMS Segment Revenue | +1% | N/A |
| Used Vehicle Pricing | -17% YoY| N/A |

[Risks and Concerns]
Management highlighted risks from prolonged freight downturns and economic uncertainty, impacting customer decision-making in lease and dedicated segments. Used vehicle sales were negatively impacted by aged inventory wholesaling.

[Final Takeaway]
Ryder's Q2 2025 performance reflects strategic shifts towards asset-light businesses and resilience in contractual revenue. Despite market challenges, the company is well-positioned for growth, supported by strong free cash flow and strategic initiatives. Management remains focused on leveraging its transformed business model to navigate market dynamics and capitalize on future opportunities.