United Rentals, Inc. Q3 FY2025 earnings call

• Record revenue and adjusted EBITDA in Q3 due to hard work of nearly 28,000 employees. - Growth across General Rental and Specialty businesses, with Specialty seeing double-digit increases. - Strong performance in construction (infrastructure and nonresidential) and industrial (power) end markets. - Healthy demand for used equipment, with $619 million sold in Q3 at 54% recovery rate. - Spent nearly $1.5 billion in CapEx in Q3 and expects over $4 billion for the year. - Customer-centric model is key, with focus on being the partner of choice for customers.

Total revenue grew 5.9% year-over-year to $4.2 billion. Rental revenue was $3.7 billion, up 5.8% both at third quarter records. Specialty business had rental revenue up 11% year-over-year. Used equipment sales were $619 million with a 54% recovery rate. Year-to-date, United Rentals has opened 47 cold starts in the specialty segment. Fleet productivity increased 2%, contributing to OER growth of 4.7%. Adjusted EBITDA was over $1.9 billion, a third quarter record, with a margin of 46%, and adjusted EPS was $11.70.

• Total revenue guidance increased by $150 million at midpoint, range $16B-$16.2B, implying full year growth of ~5% at midpoint, ex used growth of 6% at midpoint. - Adjusted EBITDA guidance narrowed to $7.325B-$7.425B, midpoint $7.375B. - CapEx guidance raised by $300 million at midpoint to $4B-$4.2B. - Free cash flow guidance $2.1B-$2.3B.

• Fleet repositioning costs due to large projects and strong demand leading to higher delivery costs. - Impact of inflation on margins. - Uncertainties in market demand and M&A execution affecting financial performance.

Q: Regarding demand profile and CapEx pull forward, Matt Flannery responded it was not a pull forward from 2026, driven by higher win rate on large projects.

Q: On ancillary pricing and fleet productivity, Matthew Flannery discussed fleet productivity mix variability and Ted Grace touched on ancillary being a pass-through with some variability.

Q: On local market growth and rate cuts, Matt Flannery said local markets are flat currently and will depend on planning process feedback.

Q: On large projects and fleet repositioning, Matthew Flannery explained large projects are driving growth with fleet repositioning costs due to mobilizing to sites.

Q: On cold starts and 2026 plans, Matthew Flannery said 2026 plans are in planning process with teams to propose plans in next 6 weeks.

Q: On margin dynamics and ancillary, William Grace discussed core profitability and responsiveness to customers affecting margins.

Q: On OEM pricing and M&A appetite, Matthew Flannery said conversations with OEMs are positive and M&A is opportunistic focusing on cultural, strategic, and financial fit.