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    URI
    Earnings call· Mar 2026(Q1 FY26)

    UNITED RENTALS Q1 FY26 earnings call URI

    Apr 23, 2026 Source

    Executive summary

    United Rentals Q1 FY26 — Record Revenue, EBITDA, and EPS with Raised Full-Year Guidance

    United Rentals delivered a strong first quarter, achieving record revenue, EBITDA, and EPS, driven by robust demand in large projects and specialty businesses. The company raised its full-year guidance, signaling confidence in sustained momentum and effective cost management. Strategic capital allocation, including significant shareholder returns, underscores a resilient business model focused on long-term value creation.

    Highlights

    5

    • Total revenue grew 7% year-over-year to nearly $4 billion, a first-quarter record.

    • Rental revenue increased 8.7% year-over-year to $3.4 billion, also a first-quarter record.

    • Adjusted EBITDA reached $1.8 billion, with a margin of 44.1%, improving 60 basis points year-over-year (excluding H&E benefit).

    • Adjusted EPS rose 10% year-over-year to $9.71, marking another first-quarter record.

    • Full-year 2026 guidance was raised for total revenue ($16.9B-$17.4B) and adjusted EBITDA ($7.625B-$7.875B), reflecting strong momentum and customer sentiment.

    Concerns

    2

    • Restructuring charges of $45 million were recorded in Q1, primarily for facility consolidation and headcount reductions.

    • Used gross profits declined $12 million year-over-year, partially offsetting rental gross profit gains.

    Guidance & targets

    9
    CategoryTargetConfidence
    Full-year 2026 Total Revenue
    $16.9 billion to $17.4 billion
    high materiality
    High
    Full-year 2026 Used Sales
    around $1.45 billion
    medium materiality
    High
    Full-year 2026 Adjusted EBITDA
    $7.625 billion to $7.875 billion
    high materiality
    High
    Full-year 2026 Gross CapEx
    $4.4 billion to $4.8 billion
    medium materiality
    High
    Full-year 2026 Net CapEx
    $2.95 billion to $3.35 billion
    medium materiality
    High
    Full-year 2026 Free Cash Flow
    $2.15 billion to $2.45 billion
    high materiality
    High
    Full-year 2026 Share Repurchases
    $1.5 billion
    high materiality
    High
    Full-year 2026 Total Capital Returned to Shareholders
    roughly $2 billion
    high materiality
    High
    Full-year 2026 EBITDA Margin
    flat margins
    medium materiality
    Medium

    Segment performance

    4
    SegmentRevenueYoYQoQMargin
    Total Company
    First quarter record for total revenue.
    		$4 billion7%——
    Rental Revenue
    First quarter record for rental revenue. OER growth driven by fleet size and productivity, partially offset by inflation. Ancillary growth continues to outpace OER.
    OER increase: $163 millionOER growth: 6.5%Average fleet size growth: 5.7%Fleet productivity: 2.3%Assumed fleet inflation: 1.5%Ancillary and re-rent growth: 18%Ancillary and re-rent added: $111 million
    		$3.4 billion8.7%——
    Specialty Business
    Saw growth across all lines of business within specialty. Repositioning drag on margins improved to ~30 basis points from 150-200 basis points last year.
    Cold starts opened: 17
    		—14%——
    General Rental
    Strong performance, with rental gross margin up 150 basis points year-on-year.
    		—6%——

    Operational metrics

    19
    Adjusted EBITDA
    $1.8 billion
    Q1 FY26

    First quarter record. EBITDA increased $140 million to $1.76 billion excluding $52 million H&E benefit.

    Adjusted EPS
    $9.71up 10% YoY
    Q1 FY26

    Another first quarter record.

    Used Equipment Proceeds
    $350 million
    Q1 FY26

    Generated from $680 million of OEC sold.

    Rental Gross Profit Increase
    $160 million
    Q1 FY26

    Primary driver of EBITDA increase.

    Used Gross Profit Decline
    $12 million
    Q1 FY26

    Partially offset rental gross profit increase.

    SG&A Increase
    $16 millionYoY ex H&E
    Q1 FY26

    Declined as a percentage of revenue.

    Restructuring Charges
    $45 million
    Q1 FY26

    Approximately two-thirds related to real estate, one-third to headcount. Full year expected $55-$65 million.

    Restructuring Benefit
    $10 million
    Q1 FY26

    Estimated benefit from restructuring initiatives. Full year estimated $45-$50 million.

    Net Leverage
    1.9x
    Q1 FY26

    Remains comfortably within targeted range.

    Total Liquidity
    $3.4 billion
    Q1 FY26

    As of end of March.

    Capital Returned to Shareholders
    $500 million
    Q1 FY26

    Consistent with capital allocation framework.

    Rental Revenue Increase
    $274 millionYoY
    Q1 FY26

    Representing 8.7% year-over-year growth.

    OER Increase
    $163 millionYoY
    Q1 FY26

    Representing 6.5% year-over-year growth.

    Average Fleet Size Growth
    5.7%
    Q1 FY26

    Contributed to OER growth.

    Labor Absorption
    50 bps
    Q1 FY26

    Achieved despite ongoing labor inflation.

    Delivery Cost Improvement
    10-15 bpsas % of revenue YoY
    Q1 FY26

    Improvement in delivery costs as a percentage of revenue.

    Specialty Repositioning Drag
    30 bpsvs 150-200 bps last year
    Q1 FY26

    Significant improvement in managing repositioning costs within specialty.

    M&A Revenue Contribution
    1%
    FY26

    Estimated contribution from acquisitions made over the last year and Q1.

    Number of Branch Closures
    couple of dozen
    Q1 FY26

    Surgical closures of overlapping facilities, no revenue impact expected.

    Industry KPIs

    10
    MetricValueDetails
    Daily sales rate2.3%%
    Fleet productivity2.3%%
    Rental CAPEX fleet$874 millionUSD
    Used equipment sales$680 millionUSD
    End market growth mix—
    ROIC capital intensity11.8%%
    Time dollar utilizationhigh levels
    Price realization vs costpositive rate
    Ancillary specialty growth18%%
    Contract vs spot large customer mix—

    Deals & partnerships

    1
    Multiple unnamed companiesacquisition$400 million

    Four small deals closed in Q1 FY26, with two larger ones completed in the first week of January and already embedded in guidance. Primarily focused on specialty and tuck-ins for general rental.

    Risks & headwinds

    3
    Fuel Cost InflationOngoing

    Majority of exposure is pass-through; internal consumption hedged.

    Mitigation: Utilizing delivery calculator for pass-through costs and active hedging program for internally consumed diesel.

    Repositioning CostsQ2 and Q3 FY26 (busy season)

    Specialty repositioning drag reduced to ~30 bps in Q1 FY26 (from 150-200 bps last year).

    Mitigation: New processes in place for more efficient fleet movement; other cost actions to mitigate impact; continued focus on capital efficiency.

    General InflationFY26

    Labor, real estate, and insurance costs are inflationary.

    Mitigation: Effective labor management (50 bps absorption in Q1), restructuring charges for real estate, and built-in plans for other inflationary items.

    Q&A highlights

    7

    Analyst noted Q1 margins were up 60 bps YoY with ~ $10M in savings, implying underlying margin improvement. Asked why full-year guidance implies margins down 20 bps YoY and incrementals only 42.5%, questioning if Q1 was an anomaly.

    Management stated they are pleased with Q1 execution but need to sustain it through the busy season. They highlighted broad-based contributions to improvement from labor, delivery, and R&M. They cautioned against anchoring to the midpoint of guidance, reiterating the goal of flat full-year margins.

    “if you look at the results, it was really kind of all 3 big areas of costs that provided leverage: labor, delivery and R&M. So we feel like there's a broad-based kind of contribution to the improvement. But again, we've got to sustain that through the busy season.”

    asked by David Raso · answered by William Grace

    2 min read5 chapters

    Detailed Narrative

    01

    Strong Demand Across End Markets

    United Rentals experienced healthy growth across both general rental and specialty businesses, with specialty growing 14% year-over-year. Key verticals driving this growth included non-residential construction, infrastructure, power, and mining & minerals. Power, in particular, continued to post double-digit growth. The company noted a wide variety of new projects kicking off, spanning healthcare, infrastructure, industrial manufacturing, and data centers, indicating broad-based demand.

    02

    Cost Management and Efficiency Initiatives

    The company implemented significant cost management initiatives, including $45 million in restructuring charges during Q1, primarily related to consolidating overlapping facilities and headcount reductions. These efforts contributed to a 60 basis point improvement in adjusted EBITDA margin year-over-year (excluding H&E benefit). Management highlighted effective control over variable costs, particularly labor and outside hauling, with a goal to achieve flat full-year EBITDA margins.

    03

    Capital Allocation Strategy

    United Rentals maintained a disciplined capital allocation framework, prioritizing a healthy balance sheet with net leverage at 1.9x. After supporting organic and inorganic growth, the company returned $500 million to shareholders in Q1 through $125 million in dividends and $375 million in share repurchases. The full-year plan includes repurchasing $1.5 billion in shares, totaling approximately $2 billion in capital returns to shareholders.

    04

    M&A and Strategic Growth

    The company spent approximately $400 million on four small acquisitions in Q1, with two larger deals closed in early January already embedded in guidance. These acquisitions contributed about 1% to revenue growth. Management indicated a consistent M&A pipeline, with a strategic focus on specialty businesses and tuck-in acquisitions in general rental to fill needs and add capacity in growing markets, leveraging ample dry powder.

    05

    Fleet Management and Productivity

    Fleet productivity of 2.3% contributed to OER growth, exceeding the assumed 1.5% fleet inflation bogey. The company plans to increase gross CapEx by $100 million to a range of $4.4 billion to $4.8 billion for the full year, reflecting stronger demand. This CapEx is spread across replacement and growth, with a focus on specialty and general rental equipment for major project support. The ability to flex fleet growth with suppliers is a key part of their strategy.

    AI-generated summary of the company’s earnings call. Not investment advice.