U-Haul Holding Company Q4 FY2025 earnings call

• Fleet adjustments: U-Haul has deflated three quarters of its pickup fleet as no path to profitability with a small specialized pickup fleet. Resale prices on vans and pickups are steady or improving.
• Storage performance: Storage is a bright spot where executed with precision, with average revenue per occupied foot up ~1.6% and average move-in rates up just over 4.5% in the same-store portfolio. Added 82 new storage locations and 6.5 million new net rentable square feet in fiscal 2025.
• EBITDA reconciliation: Key differences include fleet depreciation from increased fleet acquisitions, reduced gains on sales of retired pickups and cargo vans, and declining interest income at the Moving and Storage segment.
• Equipment rental: Fourth quarter equipment rental revenue had a $29 million increase, with one-way and in-town transactions and revenue per transaction up compared to prior year.

The Moving and Storage segment saw EBITDA increase by $5.6 million for the fourth quarter to $217.3 million, largely from revenue growth. Full year fiscal 2025 EBITDA increased by just under $52 million to $1,619.7 million. Equipment rental revenue had a $29 million increase (over 4%) in the fourth quarter, with just over $100 million increase for the fiscal year. Self-storage revenue was up $18 million (8%) in the fourth quarter and 8% or just under $67 million for the fiscal year. U-Box revenue was up just under $14 million, with growth in moving and storage transactions. Capital expenditures for new rental equipment in fiscal 2025 were $1,863 million, a $244 million increase from fiscal 2024, while proceeds from sales of retired rental equipment declined by $76 million to $652 million.

• Joe Shoen expects to see consumer optimism continuing, with customers showing willingness to engage in moving adventures and accepting rate increases when value is provided.
• U-Box growth is expected to continue at a higher rate than the truck share operation for many years to come, as the market is vast and not cannibalizing existing customer base.
• Real estate CapEx: Expectations are to calmly exploit the assets built, with U-Box having added capacity throughout North America and focus on leveraging those assets for positive leverage.

• Automaker emissions regulation: OEMs need relief from the administration to better serve customers with truck product, and disruptions in automaker supply chains and pricing have affected fleet costs.
• Tariffs and supply chain: Potential impact on input costs like steel and concrete, though current assessments don't see significant increases yet.
• Market uncertainties: Uncertainty in consumer behavior due to factors like tariffs and economic conditions affecting moving and storage demand.

Q: Steven Ralston asked about topline growth outlook and depreciation.

A: Joe Shoen said they're seeing consumer optimism, and depreciation on storage is like money in the bank, while equipment depreciation should match revenue over time as automakers normalize.

Q: Steven Ramsey asked about U-Box growth and real estate CapEx.

A: Jason Berg said U-Box moving transactions growing faster than storage containers, both in plus 20% range; Joe Shoen expects real estate CapEx to calmly exploit built assets.

Q: Andy Liu asked about tariffs impact on storage yields and valuation disconnect.

A: Jason Berg said they're providing more details to help value the stock, and Joe Shoen mentioned considering repurchasing shares but it's not a current proposal.

Q: James Wilen asked about insurance business and valuation.

A: Jason Berg explained operating profit decline in property and casualty due to marking common stock to market; Joe Shoen said selling insurance business to repurchase shares is a valid consideration.

Q: Stephen Farrell asked about fleet age and maintenance vs depreciation.

A: Joe Shoen said automakers are focusing back on core competency, expecting quality and pricing to improve, and depreciation will balance out as automakers get back on track.