United Rentals started the year with results that exceeded Wall Street’s expectations, as management credited strong demand from both industrial and construction markets and continued momentum in specialty rentals. CEO Matthew Flannery highlighted that "specialty rental revenue grew 22% year over year," driven by both new product offerings and expansion into additional markets. The company also set records in used equipment sales, which helped support overall revenue growth. However, management acknowledged that increased costs related to fleet repositioning and a shift in business mix contributed to a decline in operating margins compared to last year.
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United Rentals (URI) Q1 CY2025 Highlights:
- Revenue: $3.72 billion vs analyst estimates of $3.63 billion (6.7% year-on-year growth, 2.5% beat)
- Adjusted EPS: $8.86 vs analyst estimates of $8.81 (0.5% beat)
- Adjusted EBITDA: $1.67 billion vs analyst estimates of $1.61 billion (44.9% margin, 3.6% beat)
- The company reconfirmed its revenue guidance for the full year of $15.85 billion at the midpoint
- EBITDA guidance for the full year is $7.33 billion at the midpoint, in line with analyst expectations
- Operating Margin: 21.6%, down from 24.4% in the same quarter last year
- Organic Revenue rose 4.5% year on year, in line with the same quarter last year
- Market Capitalization: $50.96 billion
While we enjoy listening to the management's commentary, our favorite part of earnings calls are the analyst questions. Those are unscripted and can often highlight topics that management teams would rather avoid or topics where the answer is complicated. Here is what has caught our attention.
Our Top 5 Analyst Questions United Rentals’s Q1 Earnings Call
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David Raso (Evercore ISI) asked about implied revenue growth and the impact of tariffs on customer behavior. CEO Matthew Flannery stressed that most 2025 equipment purchases are locked in, and tariffs could benefit rentals if uncertainty persists.
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Robert Wertheimer (Melius Research) pressed for more detail on margin pressures from fleet repositioning and specialty mix. CFO Ted Grace clarified that increased repositioning costs and a higher share of ancillary services were key drivers, though these are partly transitory.
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Jamie Cook (Credit Suisse) questioned confidence in United Rentals’ through-cycle margin targets amid slower growth. Grace maintained that the company’s incremental margin expectations are unchanged, supported by cost flexibility and expected demand acceleration when macro conditions improve.
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Michael Feniger (Bank of America) explored the sustainability of specialty growth and how local market softness could affect broader results. Flannery underscored that specialty growth is broad-based across categories and not reliant on any single driver.
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Kyle Menges (Citi) inquired about backlog visibility and any early signs of tariffs affecting the used equipment market. Flannery stated that current demand visibility is higher than usual, and tariffs have not yet impacted used equipment values.
Catalysts in Upcoming Quarters
Looking forward, the StockStory team will watch (1) the pace of specialty segment expansion and how quickly new cold starts contribute to revenue, (2) whether margin pressures from business mix and fleet repositioning stabilize or persist, and (3) the conversion of major project backlogs into rental revenue as the year progresses. We will also monitor management’s capital allocation priorities and any impact from macroeconomic developments, such as tariffs or changes in construction activity.
United Rentals currently trades at $781.03, up from $588.45 just before the earnings. Is there an opportunity in the stock?See for yourself in our full research report (it’s free).
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