United Rentals, Inc. (URI) Earnings

Management highlights

### Core Q2 2026 Financial Results - All-time quarterly records set for total revenue, rental revenue, adjusted EBITDA, and adjusted EPS - Adjusted EBITDA hit just over $2 billion, with a margin of 46.6% (up 70 bps YoY on an as-reported basis; up 40 bps YoY on an underlying core basis after excluding one-time gains and outsized ancillary revenue growth) - Adjusted EPS came in at $12.76, up 22% YoY - Sold $624 million of used equipment (OEC) at a 53% recovery rate, on track to hit the full-year 2026 target of $2.8 billion in used fleet sales - Gross rental CapEx was $2.1 billion in Q2, bringing year-to-date gross CapEx to $2.9 billion (exceeding initial expectations, driven by stronger-than-anticipated customer demand) - Year-to-date free cash flow is $1.15 billion, with return on invested capital at 11.8%, comfortably above the company's weighted average cost of capital ### End Market & Customer Activity - Strength across end markets, with large projects driving growth: non-residential construction, infrastructure, hospitals, airports, LNG terminals, data centers, semiconductors, and power - Industrial end markets: power posted double-digit rental revenue growth, and metals/minerals grew at a healthy rate; local general rental markets stabilized and grew low single-digits YoY - All seven Specialty business lines posted double-digit growth, with smaller newer lines (mobile modular/storage, ROS) seeing the strongest percentage growth, and power/HVAC also posting robust growth on a larger base ### Capital Allocation & Balance Sheet - Net leverage remained 1.8x, well within the target range of 1.5x to 2.5x, with $3 billion in total liquidity - S&P raised the company's credit outlook to positive from stable, with a potential upgrade to investment grade within the next 12 months - Returned $998 million to shareholders year-to-date: $750 million via share repurchases and $248 million via dividends, on track to return ~$2 billion total for full-year 2026 ### Operational Efficiency - Restructuring and cost efficiency initiatives are on track to deliver 45-50 million yen in annual realized savings, already running at the target run rate in Q2, with restructuring charges in line with expectations

Guidance

- Management raised full-year 2026 guidance across all key metrics, driven by stronger-than-expected large project demand that outpaced prior revised expectations - Total revenue guidance increased by $500 million to a new range of $17.5 to $17.8 billion, implying full-year revenue growth ex-used equipment sales of over 10% at the midpoint (up from ~6% in original guidance) - Adjusted EBITDA guidance increased by $300 million to a range of $7.975 to $8.125 billion, maintaining the expectation of flat full-year margins YoY after adjusting for prior year non-core impacts - Gross rental CapEx guidance increased by $450 million to a range of $4.85 to $5.25 billion, resulting in a net CapEx range of $3.4 to $3.8 billion, to meet higher fleet demand driven by record time utilization - Free cash flow guidance is maintained at $2.15 to $2.45 billion, with higher CapEx offset by higher expected operating cash flow - Full-year 2026 share repurchase guidance is maintained at $1.5 billion, with total shareholder returns targeted at ~$2 billion for the year - No formal 2027 guidance provided, but management confirmed confidence that current demand tailwinds will carry into 2027, supporting continued growth

Segment performance

United Rentals operates two core product segments: General Rental (Gen Rent) and Specialty. In Q2 2026, total company revenue grew 12% year-over-year (YoY) to $4.4 billion, with total rental revenue growing almost 13% YoY to a record $3.8 billion. The Specialty segment posted exceptional rental revenue growth of 25% YoY, with growth across all seven of its business lines. General Rental grew in the high single-digits YoY, driven by strength in large non-residential construction and infrastructure projects. By revenue contribution, General Rental makes up approximately 75% of total rental revenue, while Specialty contributes approximately 25% as of Q2 2026.

Risks & headwinds

- Ancillary and re-rent revenue growth has outpaced core rental revenue growth significantly, which creates margin pressure due to the lower incremental margin profile of these lines, and forecasting variability for ancillary revenue remains high - Fuel price volatility creates incremental cost headwinds for delivery and transportation operations; 20-30 bps of incremental year-over-year cost headwind from higher fuel prices was recorded in Q2 2026 - Supplier fleet capacity constraints: while the company's advanced purchase order program allowed it to secure the incremental fleet for 2026 demand, the company noted it would not be able to source an additional $1 billion of fleet if needed today, due to broad industry capacity tightness across many product categories - Large project-focused demand creates higher than normal fleet repositioning costs, which remains a source of quarterly margin variability even after improved operational absorption - Actual results may differ materially from forward-looking projections due to a variety of unforeseen risks, as detailed in the company's SEC filings including the 2025 Form 10-K

Analyst Q&A

• Q: The Q2 core margins were down slightly YoY, but guidance implies second half margins will be up slightly YoY. What factors drive this swing, and will the gap between fast ancillary growth and slower core rental growth narrow to ease margin pressure? /

  A: Year-to-date, underlying core margins are already up 10 bps YoY, and the team expects this performance to continue in the second half. Q2 had outsized ancillary growth, which impacted the margin mix, but forecasting ancillary growth remains difficult. The team has executed well on cost actions to offset mix impacts, and is on track to hit the full-year target of flat core margins YoY after adjusting for non-recurring items. Management noted that fuel price volatility is the main driver of ongoing ancillary margin variability. (298 chars)

• Q: What is the balance between rate growth and CapEx expansion, and how persistent will transportation/repositioning cost variability be going forward? /

  A: Management confirmed that driving rental rate growth is a core priority to offset industry-wide inflation, and the team's strong performance on rate and fleet productivity earned approval for increased CapEx. While transportation/repositioning cost prediction remains challenged by large project timing dynamics, the team is ahead of plan on controlling costs for the three big core cost categories: labor, delivery, and repair & maintenance. Ongoing efficiency initiatives have allowed the company to absorb higher fuel and repositioning costs better than expected. (347 chars)

• Q: A potential upgrade to investment grade is on the table over the next 12 months. How will this impact the company's capital allocation strategy for M&A, buybacks, and growth? /

  A: Management confirmed the potential upgrade will not change the company's existing capital allocation strategy at all. The company has already screened as investment grade on credit metrics for years, and the only change will be access to lower debt spreads. The company still has plenty of balance sheet capacity to pursue M&A opportunities, increase share buybacks, and support organic growth even after moving to investment grade. Management noted there is no downside to the upgrade, so it will be pursued. (332 chars)

• Q: Supplier capacity is tight overall, and the company noted it could not source an extra $1 billion of fleet today. Which product categories see the most tightness, and how does this shape 2027 CapEx planning? /

  A: Capacity tightness is broad-based across most product categories driven by widespread large project demand, with high-utilization categories including aerial equipment and reach forks seeing particular tightness. The higher 2026 CapEx will create carryover fleet that supports 2027 growth, but it is too early to formalize 2027 CapEx guidance. Management expects 2027 will be another year of growth, with higher used fleet sales corresponding to the larger current fleet base, and will release formal guidance after completing its ground-up planning process. (361 chars)