All right. Good afternoon, everyone. Going to go ahead and get started here with the first session after lunch. My name is Brady Lierz. I'm an analyst on the transportation research team here at Stephens. Pleased to be joined this afternoon by Greenbrier. Here from the company is CFO Michael Donfris and VP of Financial Operations Justin Roberts. Thank you both for joining us this afternoon.
Thank you.
Thank you for hosting.
As a reminder for those of you in the room, formatted this discussion is a fireside chat. I'll kick us off with some questions, but welcome those in the audience here to raise your hand and ask a question if you have them. Maybe, Michael, if we could, there may be some in the audience that are less familiar with Greenbrier. Could you just take a few minutes and give us a brief overview of the business, just kind of your different segments and where you fit into the broader transportation ecosystem?
Sure, sure. Thank you so much. Thanks for coming to this fireside chat. Really glad to be here today. A little bit about Greenbrier. Greenbrier is an international supplier of equipment and services for global freight and transportation markets. What does that mean? For us, what that means is we have freight car manufacturing. We do that in a number of places in the world. We also have maintenance services and maintenance of rail cars. We also do leasing. We do fleet management for leasing companies. We have a wheels business and a parts business. It is really in an ecosphere of the rail industry. We are pretty excited about that. Talking about kind of some of the excitement, you think about our strategic targets that we set out in 2023.
It was really around three things that we wanted to have a lot of success on. One was growing our recurring revenue, which really means investing in our leasing business and growing that to a level that was twice the amount of revenue that we had back in 2023. We're on a very strong trajectory of that as we continue to build it. We exited the year at about $170 million in revenue in our leasing business. Really nice big bet there. Also, we focus on aggregate gross margins. For us, we wanted to be in the mid-teens on aggregate gross margins. We exited the year in our fourth quarter at just under 19% aggregate gross margin. Really, really nice results there. Of course, returns are so important for our business and so important for our shareholders.
We focused on return on invested capital. We wanted to be above our weighted average cost of capital, but more importantly, into this 10%-14% range. We exited the year at about 12%, just under 12%. Really hitting all of those key targets for us. We ended up the year at about $3.2 billion in revenue, just a little bit over that. From a record perspective, it was a record year for earnings per share for the company and EBITDA. Really strong finish to the year. As I know, many of you will have questions as we think about the market we're entering into. As CFO, I look at liquidity. We had our 10th highest quarter, basically, 10 quarters as we go forward with the highest liquidity going into this period of time.
You combine really strong performance against our strategic targets, hitting very strong EPS and EBITDA metrics records for the company, if you will, and a strong liquidity position. We're really excited about kind of the future for Greenbrier and, of course, the transportation market.
I think kind of related to what you were saying there, you had some targets that you set out of your 2023 investor day. Could you kind of talk through what the strategic changes you are making to the business? Maybe compare, I guess, quote unquote, "Old Greenbrier" to what you're planning on.
Yeah. It's a really good question. For us, we have been originating Greenbrier has been originating leases for years and years and years. What that means is when somebody wants a new railcar, they'll either say, "I want a new railcar," or, "I want to get into a leased situation with a railcar." Up until recently, we would then basically do the lease, and then we would end up not carrying the lease on our books. From going into the leasing business for us, we ended up just bundling and putting them into our fleet and building those on our balance sheet. That was a pretty strategic change for the company. If you look at our debt structure for our company, we have recourse debt that is basically towards our manufacturing and core, basically that part of the business.
As we've built up our leasing business, we have non-recourse debt. We're starting to really kind of show that separately. That was a strategic move for the company. It's worked out really well for us around kind of normalizing the volatility of rail manufacturing and building that base business with our expertise in the industry. The other area that we really focused on was how do we increase our margins? You look across the manufacturing company that's very, very good at manufacturing, and you start looking at different opportunities. One of the ones that became apparent to us is we could do more of the manufacturing part of the business inside the company as opposed to relying on a lot of outsourced manufacturing.
As a result of that, we took a very competitively advantaged labor force and did a lot of the work inside. That has helped really drive margin. Also, when we look at the book of business that we have, we have a very strong market share in specialty kinds of railcars. Those specialty railcars did very, very well over the last few years as we were executing the strategy, growing our gross margin. A combination of focusing on cost reduction in areas where we could really take cost out of the picture and having the ability and the capability of making specialty railcars has really helped us out.
The last thing we did on aggregate gross margin is we looked across the footprint, our global footprint, and said, "We have a pretty good idea of what capacity we need in each area." There were some areas, especially Europe, where we had a little bit extra capacity than we really needed. In fiscal 2025, and as we finished the year of 2025, we ended up doing some facility rationalization. That is also helping our aggregate gross margin forward, as well as our operating margin, which some of it was in SG&A as we focused on overhead. Returns, as CFO, you're always kind of looking across where can you invest? What can you do to try to drive the performance of the business?
We have a pretty rigorous process as we look at different investments to determine which ones are the ones we really want to try to back. With the two things we talked about, recurring revenue and increasing aggregate gross margin, it was kind of a knockoff effect of improving our return on invested capital as well. Some of it is we're in a really good kind of a business model that's very well integrated. It's a little bit different in just thinking and then a lot more on just the execution of it.
I think kind of in a related or maybe a similar vein, one of the things I think Lorie has mentioned before is you guys are working to drive higher lows. Can you just talk about what that means and what strategically you have to do to get there, I guess, in context of a railcar manufacturing cycle that is inherently cyclical?
Yeah. It's a really good point. Lorie, our CEO, has really good visibility into the markets and really just all the things that we're working towards. One of the things that we look at in 2025, the market from a delivery, from an overall North American industry delivery standpoint, wasn't fantastic. It was a good market. It wasn't a great market. It was probably a little bit down. If you look at the earnings per share and the EBITDA that we delivered in this past fiscal year, it was a multiple of what we delivered just a few years ago in 2020 and 2021, just as a comparison. You look at that and the structural changes that we really made kind of coming through that, that was part of the conversation of higher lows through the cycles. That's what we're focused on.
As we get prepared to go into this next cycle for rail, and even the fact that 2025 was not a terrific railcar delivery year, we still had record performance. Some of it was on the strategy of growing our recurring revenue business. Leasing is one of those things where you make an investment on the balance sheet. It is non-recourse debt, but then you get the cash flow and the streams for a number of years forward. That is one of those things where it is not as cyclical and you can kind of carry it and you can manage it as you go forward. It is really a combination of those things.
You mentioned just the cycle and kind of demand 2025. Can you help us level set, I guess, how we got to where we are, what 2025, I guess, what's driving the weakness, specifically maybe just the less favorable demand environment?
Yeah. I mean, we're looking at it as a manufacturing lessor saying, "Hey, we had one of the best years ever in 2025." You start looking at the market. What you realize is that we have lessors who are using our railcars or buying railcars from us to basically lease out. You have shippers who are making big-time investments in their business to determine what they want for railcars as well. With a year of a little bit of uncertainty in the market in terms of where we're going to manufacture, if you're a shipper, or where demand is coming from, that has caused a little bit of a lull, I think, in orders.
That contributed to probably a weaker 2025 and continues to be something that as we look at 2026, we're trying to understand the implication of it. That's probably one of those things. The other thing that's been out there for a bit is that as tariffs have kind of hit the market, they don't impact our business directly. We have contracts where we can pass the steel pricing onto our customers. We've kind of protected ourselves from that. However, what that means is as steel prices rise, we pass that on to our customers. They're looking at it potentially as, "Geez, the cost of rail cars are rising.
Maybe I need to pause a bit and see where that's going. A combination of just a little bit of uncertainty and then maybe rising pricing has caused new cars to maybe not be as great of a volume as maybe we would have expected coming through.
Maybe we could take that a step further and just talk about 2026. I think industry forecasts are kind of at or slightly below replacement from what we can tell. Can you just talk about what you're seeing on the demand front? I think on your most recent call, you've mentioned some green shoots, but talk about what your customers are telling you. What are their key decisions that they're trying to make? I know it's obviously an interesting environment to be ordering rail cars, but.
Yeah. Justin, you want to take that one?
Sure. I mean, on the customer front, what we're hearing is customers have been kind of sitting on the sideline for the last 9 to 12 months, waiting to see who's going to win the election, get through the inauguration, and then kind of figure out what all the noise is around tariffs and the uncertainty driving that. Here we are, mid-November, and there's still not a ton of visibility or certainty there. Our customers have kind of just realized that it's time to kind of move on. This is going to be reality potentially for the next few years. They're interested in growth, running their business a little more actively now.
A year ago, customers would say, "I've got some time before I need to order cars." You fast forward 11 months, and they do not have as much time as they used to. They realize that in a long lead-time business, they are needing to order cars heading into calendar 2026. We are seeing increases in conversion from kind of inquiries in our sales pipeline to actual orders. I am not going to use the word robust or anything like that. We are not ready for that yet, but we are seeing some improvement. For us, that is certain kinds of car types that we spoke about on our earnings call a couple of weeks ago. It is not broad-based, but it has been very kind of gratifying to start to see that manifest.
Maybe just to follow up on that, what's the current lead time if a customer comes to you and says they want a railcar? And what are we talking about in terms of lead times?
Yeah. It really depends. It'll be car type specific. It could be anywhere from, I'd say, three to six months typically.
Okay. The average age of the fleet in North America is still very old. I think it's over 20 years or so. What's your kind of view on replacement demand over the next several years? Just given your backlog and your visibility into 2026, just kind of tell us what you're thinking.
Yeah. Yeah. As you think about it, we think replacement in North America, there's about 1.6 million railcars in North America. When you kind of look at how that plays out, we think replacement is anywhere between 35,000 and 45,000 railcars a year. Looking at a 2026 where maybe the number is going to fall below 26,000 railcars in the most recent projection based on what happened in the third quarter, you look at that and you say, "Gee whiz, how long can it be below replacement level?" Some of the math that goes into that is cars that are being destroyed, right? When you think about it, there are so many cars in storage that are not being used.
Many of those cars can't be used because they're not ready or they're not in a position to be turned back in. You kind of do the math and you're saying there can't be that many years where it's less than that 35,000. From an exciting level standpoint, there could be a big wave coming back where folks are looking at it saying, "Geez, I want to grow. I need rail cars. What's my best opportunity?" As you talk to some of the companies that are heavily in leasing, they'll talk about that there's not maybe a lot of cars available. They're getting pricing in the marketplace as a result of it. I think it's a convergence of these things that could really drive a lot of growth as it kind of moves forward.
Maybe just taking a step back, if we can rewind in time, I think the last couple of years, the industry in general has seemed more balanced and kind of less speculative. Could you help maybe those in the room that are not as familiar or do not know the history, could you give us kind of a look back of how we have gotten to this point and kind of how that is impacting Greenbrier's results and your outlook?
Yeah. I would say there have been different builders in the space in North America. That's primarily a North America question, but it's a little bit in Europe as well. What you see over time is the builders were kind of ready to take advantage of significant ups and downs. We've seen over time in deliveries, we've seen over time that manufacturers have taken some of their capacity out. From our standpoint, we have the same amount of locations, but what we've done for manufacturing for the most part is we've looked at how we can manufacture more effectively. I think that's happening in the industry. There's also been some consolidation. We've done some footprint work in Europe to take capacity out.
I think it's been a little bit of rationalizing capacity over a number of years and then looking at the business saying, "We want to size our business for basically replacement and then have enough dry powder, if you will, or excess capacity to take advantage of when there are spikes in demand.
The lease fleet, obviously, as you talked about earlier, has been kind of an area of strategic growth for you in recent years. Can you just talk about why you're looking to grow the lease fleet? I mean, you talked about recurring revenue, but can you maybe expand on how that enables the other parts of your business. Just help us walk us through that.
Yeah. It's a really good question. If you look at opportunities for growth, we're such a strong manufacturer of railcars. We have so much good information about what it takes to manufacture cars. It just fits really well within understanding the connection between what it takes to have a successful car manufactured to what basically makes a car successful in a leasing fleet. That knowledge has helped us understand what kind of railcars we want in our lease fleet, what we want the concentration to look like, and what the credits for those leasing companies should look like for us. It's kind of a natural progression, but we've taken some of our knowledge of the industry to make that even more successful.
If you look at our aggregate gross margin in our leasing business, if you look at the age of our lease fleet, if you look at kind of metrics of how well that lease fleet's being managed, you'll see that some of the knowledge we have and some of the knowledge we've been able to bring to bear has put us in a really strong position to be a strong lessor in this space.
I think it would be helpful if you could help us figure out where kind of we are in the lease fleet today, the size of your lease fleet, and kind of what you've said publicly about where you want the lease fleet to go over the next couple of years.
Sure. Sure. We've got just under 17,000 cars in our lease fleet. We're definitely on a growth phase for that. We are looking in my guide that I gave for the following the quarterly results, we're continuing to look at how we can build that lease fleet. We haven't said yet how big we want it to go, but it's one of those things where we're opportunistically looking at it. When I think about capital allocation and as CFO, you're always looking at where are you going to invest? I've got a lot of liquidity. The lease fleet is one of those areas that I'm very excited about and where I want to put my bets in because I have a very strong return and I understand the business pretty well. It fits in really well with the rest of the company.
I see it as a strategic bet for us. I see it's something that we're going to continue to grow as we continue to grow as a company.
We were talking to a large lessor yesterday just about the general trend in the industry of percentage of lease versus owned over time. Could you help us understand when you talk to customers, what's driving the different decisions? Why are they maybe leasing or owning today and kind of where you see that going over time and how that impacts your strategic decision to grow that?
Sure. In my background, being in very large manufacturing companies and then getting into the rail industry now for almost 10 years, I've seen a lot of it and I've seen a lot of the analysis that goes on there. Most companies that are very, very large are going to do a lease versus buy. They're going to try to understand what makes sense for them based on their investment to either buy or lease. Some other companies are just going to say, "You know what? From what I'm buying, I want someone else to completely take care of that for me." I don't want to get heavily involved in understanding to maintain it or to repair it. I want to do a full-service lease.
What you find is the companies that can provide that end-to-end support for someone who wants a rail car are the ones that I think succeed really well. That is why, as we have developed our strategy for Greenbrier, we want to be that supplier of rail cars. It does not matter if you want to buy or lease. They can come to us and say, "I'm interested in getting more capacity in my rail fleet or a rail fleet. How should I do that?" As a business partner, we can describe that for them. "Hey, you can lease it. You can do a full-service lease, or you can buy it, and we can help manage it for you because we have a managing service as well." It is not one of those things that one size fits everyone.
I think it's the ability to provide the service effectively that probably differentiates us.
Recently, a large railcar lessor announced a pretty sizable acquisition. Can you just talk about the industry structure in leasing as it stands today? I mean, do you think we'll continue to see further consolidation? What role could Greenbrier play in that consolidation?
Yeah. We do not speculate on the industry. We are really excited for just news in the industry and the things that that means. When I look at it, it could open up different opportunities as we look across our landscape. As I mentioned, from a capital allocation standpoint, we are always interested. We are always looking at things. It is hard to say. I mean, it is hard to say what could happen over time. I would say, though, if you look at the industry dynamics and how ownership has changed in rail, more railcars are now, as a percent in North America, being owned by lessors. I mean, it does not surprise me that there is more of a focus there. There is growth in shippers. There is less growth in class ones owning railcars.
It could mean that there could be more in that space, and it could continue to grow. From a consolidation standpoint, who knows?
Yeah. You mentioned recurring revenue earlier in our conversation. It's been a big focus for Greenbrier in recent years. I think you mentioned it's grown, I think, 50% in two years. Could you talk about what's driving that growth? I mean, the lease fleet is part of it, but are there other avenues for Greenbrier to generate that kind of recurring revenue? Just talk about what your goals are.
Yeah. What some folks really don't really know about Greenbrier is we've been originating leases for years and years and years. Part of this is just a decision to keep those leases on our balance sheet. That was a pretty easy, once the financial structures were in place, once we had the non-recourse debt finalized, that was a pretty easy thing to do. One of the things that, as being kind of the market in North America, and I'm primarily talking about North America here, as you look at that, because when someone wants a railcar, they're, for the most part, coming to us or just a few in the industry, you have a lot of visibility around who's going to need railcars, how they want to either buy them or finance them.
We are kind of in a unique position to say, "How do I want to build this lease fleet? And how do I want to continue to kind of participate in the market?" There is also, which is very interesting about rail, a secondary market out there. As you continue to build out your lease fleet in these large leasing companies, as they build, they have railcars that do not fit their concentration, so they will put them in a secondary market. That means we have the opportunity to either do the same, move cars into a secondary market, and then take the cash from it, or we can go into the market and augment our growth in our lease fleet that way.
It's a combination, long answer to your question, but it's a combination of growing it from the leases that I originate and the ones I want to keep in my business, as well as go out in the market and buy some to continue to grow it. We're pretty excited about that.
You kind of started answering my next question, but the syndication market has been pretty strong. How does investor appetite for rail assets look today, just given the broad uncertainty? How does the syndication fit into your overall kind of balance sheet and liquidity strategy?
Sure. I think I'll answer some of that. I know, Justin, you may have some thoughts around syndication as well. It's a fascinating company. I've been here less than two years. When you think about syndication and that word, it's like, "What does that mean?" We're talking about a little bit of what it really means is I've originated a lease on a railcar, and I'm deciding to either put the lease in my lease fleet, or I can bundle it up as a financial instrument and sell it to a financial institution. That or bundling it up and selling it to a financial institution is what we're calling a syndication. It's another way to drive revenue and profit and cash flow for the business.
Because it has a lease attached to it, it's worth a little bit more than just a direct sale of a railcar. In addition, the syndication business typically means we manage those assets. I get a revenue stream and a cash flow stream for as long as that relationship exists. I get to possibly determine where the maintenance happens. If it's in one of my maintenance shops, I get to basically keep a relationship with the lessee of that railcar in case they want more railcars. It's really a knock-on benefit down the road of additional cash flow as it flows through. As you're looking at us, sometimes it can be a little bit lumpy quarter to quarter. That's why we don't guide, it's one of the reasons we don't guide quarter to quarter. We guide for the year.
It is one of those things that is just a great way to continue to generate revenue and profitability for the company. Just now.
I think the only thing I would add is I've never seen investor appetite stronger. It's all sizes, all kind of different structures, and they are hungry for railcar paper.
From a reality standpoint, it's a long-lived asset. You can pretty much understand the cash flows for a long period of time. You have a company like Greenbrier that's probably going to help you manage it over that period of time. It's another form of an investment that they can watch over a period of time. That's the attractiveness of it.
How do you decide whether you want to syndicate it or put it in your own lease fleet? I mean, can you talk through some of the maybe decisions they have there? I mean, you don't have to give us the whole thing, but.
Yeah. It's a number of things, right? We typically look at the concentration of our lease fleet and have targets around different car types. A lot of times, if we're over-concentrated in, say, a tank car or a covered hopper or something, we might look at that and go, "Okay, that would make a good candidate to put against a bunch of other leased assets and sell them off as a syndication." That's typically why we would do that. We want to provide railcars to all of our customers. You want the ability if someone comes to you and says, "I want to have a lease with you," and you're looking at your lease fleet and it's like, "Well, I got a lot of tank cars," and they want to buy tank cars.
It's like, "Great, I'll do that, but this gives me another avenue basically to take the revenue, take the profit, bundle it, and then have a long stream of benefit." It's probably as simple as that. I mean, it's not that calculated, if you know what I mean. It's more of just what's there, what are my requirements, and how do I want to build my lease fleet over time. It's really as simple as that. Justin, I know you've probably had that question a lot as well. Anything to add there?
No, I think you summed it up well.
Okay.
You've guided to investing, I think, up to $300 million annually in the lease fleet. What kind of determines whether you're at the high or the low end of that range? How do you balance, obviously, wanting to grow the lease fleet with just other capital priorities in the business?
Yeah. I touched a little bit about our recourse, non-recourse debt. If you look at our cash flow for our operating cash flow for our business, it was just under $300 million for this year. I mean, it was extremely strong 2025. I expect to have a very strong fiscal year 2026. You kind of look at that and you say, "How much can you afford to invest in your leasing business? I've got a lot of liquidity," as I mentioned as well. We also look at how much we want to invest for quick payback projects in our manufacturing business. I mentioned insourcing as a way to get aggregate gross margin. All of those things go into this investment thesis of saying, "I want to grow my lease fleet.
I want to grow my lease fleet because the returns are accretive to Greenbrier, and I'm looking for opportunities that help me basically fit that lens of investment. Is the $300 million? It's up to $300 million. We're guiding a little bit less this year. I think we're going to probably go after it even harder as we get to the back half of the year. It's more of just a target for us.
Maybe just a little bit on kind of the manufacturing side. Obviously, we've had forecasts move around a little bit. I think we talked about it earlier, 2026, a little bit below replacement. Could you just kind of talk about how you're balancing production with demand and how do you maintain that kind of flexibility while still protecting your profitability and your ability to obviously build more when demand improves?
Sure. Sure. As we look at our business, we're able to, because of our backlog, we're able to have pretty good visibility of the kinds of car types we want to manufacture or we are going to manufacture. What that means is for the production lines, you can make them set up so that the transition between one car type and another car type isn't as difficult as it could be. That helps you from basically managing how you're supplying the railcars to the market. The backlog is really, really important. The leasing business gives us visibility as well because we're not turning away business because we don't want to put it on our balance sheet or we don't think we have a syndication partner for it. A combination of those things help us kind of understand what we need to manufacture.
We have a really strong supply chain team. We have a lot of really strong team members that look across our entire footprint and say, "Where does it make sense to make these rail cars or to maintain these, do maintenance services on rail cars or make wheels or so forth?" We are always kind of balancing what the demand is versus what our capacity is. For us, we have the ability with some of the sites that we operate that if we do need to reduce production capacity, we have the ability to take one line out within a location or two lines out within a location. As the market comes back, we can basically bring those lines back.
It's a pretty fascinating business in that it's one of those things that you can kind of toggle up and toggle down based on what your demand requirements are.
Yeah. I think earlier you talked about your insourcing initiative. Could you just talk about where we are today? Maybe just give us some context of where you started and what kind of measurable cost or margin benefits you've seen and kind of how does that position you against other manufacturing companies in North America?
Sure. Our operations lead did a really nice job of just kind of thinking through and working just on strategy of where do we think this market is going. It was really a great opportunity to say some of the high-cost components are at a pretty far distance from where we're manufacturing, and the cost, the landed cost, is higher than we expected. It was really an idea of saying, "I've got very effective labor who are just wonderful team members that we could better leverage by bringing more of that business back into the location." That was kind of the concept of insourcing. Very kind of simple idea. In fact, in Europe, it's maybe a different model. It's more of an outsourcing model for the most part. What that allowed us to do is basically look at our manufacturing margin.
By the time we're done and we're just finishing up here, we expect to have about a $50 million improvement in aggregate gross margin dollars as we go forward. That was just a huge benefit for us.
Yeah. You recently issued guidance for your fiscal 2026. Could you just talk about the assumptions that are embedded in the high and the low end of your guidance?
Sure. Sure. As CFO, we do forecasts, and I've got a really strong finance planning and analysis finance team. We are looking at the year, looking at the market, looking at the business a little bit to determine what we think our best estimate for the year is. As we look at the guidance, that's kind of the middle of what that guidance is. For us, having a backlog, knowing when we're going to deliver some of those cars, you start with that really kind of helps us understand the revenue side of things. Having a business that's getting bigger and bigger and recurring revenue, we kind of know based on the leasing activity what we're going to have during the year.
For us, we're looking at a market based on our backlog that is still replacement level for that guidance. I wouldn't say it's necessarily tied into all of the forecasts because we know based on our backlog what we're going to make and deliver, and we have a pretty good idea of what orders are coming in. It's really a little bit of outward looking, but also inward looking around what we can do. Just looking at how we're going to load our manufacturing locations, kind of building that out. It is probably looking at a replacement level market, I would say, in Europe and in North America and continuing to see a lot of success in our Brazilian business.
Maybe if we could just take a step back. There's been a proposed merger in the rail industry. Maybe not specifically about that one, but obviously, Greenbrier has been through many rail consolidation, rail mergers over the past few decades. Could you just talk about how that affects the industry, how that affects demand for rail cars? Is it a positive, negative? Just walk us through how it affects Greenbrier.
Yeah. I think that I would say that if it's good for the overall freight rail space, then it's good for Greenbrier. Anything that has the opportunity to increase modal share is going to be a positive overall, even if there will be some kind of near-term potential headwinds around increased velocity, things like that. That's fine. We've been through this before, and I don't know, maybe we'll go through it again. Who knows?
Yeah, for us, it's really just taking a bigger picture look of really how can we continue to recover and then ideally grow share mostly from trucks that we've lost over the last decade.
Maybe with just the last few minutes here, Michael, if you could talk through capital allocation priorities. How do you balance dividends versus buybacks while also wanting to fund your lease fleet?
Yeah. It's a great question. Thanks for that. We're always looking at return. We're always trying to make sure that we get the highest return for our shareholders. The analysis of looking at what our manufacturing business needs and can give us quick paybacks. We look at net present value and payback period very closely. Those are typically those things that help us for the long haul, like insourcing. We're always going to look for those and prioritize those. As I look at our lease fleet, our returns have been pretty strong. That's another one of those things that we really, really try to focus on and say, "I don't want to constrain that if there's a good opportunity there." Acquisitions.
That's one of those things strategically, as we laid out some of the lens that we look at, growing recurring revenue, increasing aggregate gross margin, and getting strong returns for our shareholders. If there is an acquisition that fits that criteria and fits strategically with the company, and it may not be strategic first and fits that is probably a better way to think about it. We're also looking at those things too. It comes down to dividends. We're very bullish on our success so far. That gives us that ability to say we're really excited about the future and excited about the strategy we're executing. We're going to continue to do that. Buybacks, our board approved $100 million of spend. We did just about $30 million this past fiscal year.
We are going to continue to look opportunistically at the market and say we've had wonderful results. We are strong in so many markets. If there is an opportunity to buy shares, we are going to do that. Did that answer your question?
Yeah. Yeah, it did.
Good. Good.
Maybe just my last question here, kind of an open-ended one. What do you think investors most misunderstand about the Greenbrier story? What are you most looking to highlight here as we kind of look forward into 2026?
That's a terrific question. It's a company that's changed. We've made a really good bet in leasing. If you look at kind of how we're structured from a debt standpoint, we've had record EBITDA compared to a debt number that's 1.6, 1.7. If you really look at it, a lot of it is financing debt. It's non-recourse debt. It has nothing to do with the manufacturing business. Very small amount of our debt is related to that. I ask investors to take a deeper look at the company. Our manufacturing business has super strong margins and doesn't have a significant amount of debt. Our leasing business is like a financing business. It's like any other one. It's a debt finance kind of a business. That's pretty exciting. I do think the rail industry is one where it touches so many different things.
Getting an investment in a business that has the opportunity to affect so many things in North America makes it exciting for me to be CFO of the company and be part of this. It's also, I think, exciting to see that from an investor standpoint. Just looking at it and kind of understanding it. I guess, Justin, any other thoughts as you're?
I think the only thing I would say is that in this type of an environment, the conversations used to be, "Can you guys be profitable? Can you guys actually make money?" Now it's, "How much money are you guys going to make?" We got it to $425. I think from our perspective, this is just reflective of the changes we've made in the company, the way that we have taken cost out pretty relentlessly over the last two years. It is a pretty amazing change when you take a step back and think that, yeah, whether it's 25,000 cars built in North America, 30 or 35,000, seven, eight years ago, 45,000 felt like a trough. Now we're in a much different environment, but we are making probably more money than we ever have.
We're pretty proud of what we've accomplished, but we're also very excited about the future because we still have more room to run.
Awesome. Michael, Justin, thanks so much for being here, and thanks for your time this afternoon.
Definitely.
Thank you.
Thank you, everyone.