United Rentals Beats Q2 Revenue Forecast

Key Points

• - GAAP revenue was $3.94 billion for Q2 2025, beating analyst expectations by 1.3%.

• - Adjusted earnings per share of $10.47 for Q2 2025 was slightly below expectations.

• - The company raised its full-year 2025 outlook and declared a quarterly dividend increase to $1.79 per share.

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United Rentals (NYSE:URI), a leading provider of equipment rental services in North America, reported its second quarter 2025 results on July 23, 2025. The company reported GAAP revenue of $3.94 billion for Q2 2025, exceeding Wall Street forecasts of $3.89 billion. Adjusted earnings per share (non-GAAP) were $10.47 for Q2 2025, just below the forecasted $10.51, reflecting pressure from rising costs and changes in product mix. Despite the slight miss on non-GAAP earnings, management raised full-year 2025 guidance for revenue and cash flows, signaling optimism about continued end-market demand. Overall, this was a solid quarter for United Rentals, highlighted by ongoing growth in specialty rental services and a larger dividend payout.

Source: Analyst estimates provided by FactSet. Management expectations based on management's guidance, as provided in Q1 2025 earnings report.

About the Business and Key Success Factors

United Rentals operates the largest equipment rental network in North America, serving construction, industrial, and specialty end markets. The company owns a vast fleet of equipment, which it rents to contractors and homeowners for short- or long-term projects. Its offerings include everything from construction machinery to specialized tools and modular units.

Success for United Rentals depends on maximizing the use of its equipment (known as utilization), managing costs, and adapting its offerings through specialty products and customer services. In recent years, key focus areas have been boosting fleet productivity, making strategic acquisitions, and expanding high-growth specialty rental segments, such as matting (ground protection flooring), modular storage, and power/HVAC rentals. Strong relationships with large customers through national account programs also play a major role in driving repeat business and supporting stable revenues.

Review of the Quarter: Growth, Margin Trends, and Strategic Shifts

United Rentals’ second quarter showed mixed results across top- and bottom-line metrics. exceeding expectations by over $50 million. Rental revenue rose 6.2% year over year, driven by a 14.0% increase in specialty rentals to $1.147 billion. General rentals, the company’s core equipment business, grew 2.7% to $2.27 billion.

Despite strong sales performance, both net income (GAAP) and diluted earnings per share (GAAP) slipped slightly from the prior-year period. The company cited margin compression as a main factor, caused by rising costs for labor, delivery, and benefits, as well as increased repositioning of fleet equipment to meet shifting demand. Adjusted EBITDA reached a record second-quarter level of $1.81 billion, yet the adjusted EBITDA margin contracted to 45.9%, down 1.0 percentage point from the prior year. Net income margin (GAAP) fell to 15.8%, reflecting the impact of both higher costs and a less robust used equipment resale market.

The specialty rental segment remained a key growth contributor but faced margin pressure as well. Segment gross margin dropped by 2.2 percentage points to 45.8%, attributed to inflation, delivery and labor expenses, and higher depreciation from growing the matting business. Meanwhile, used equipment sales declined 13.2% year over year, with proceeds of $317 million and a lower GAAP gross margin, reflecting a return to more typical (less elevated) used equipment market conditions. Ancillary offerings, while boosting top-line results, generally carry lower profit percentages than the core rental business, further contributing to overall margin softness.

Capital management continued as a high priority this quarter. Total operating cash flow for the first six months climbed 20 % compared to the prior year, helped in part by a one-time $52 million benefit from a terminated merger transaction in Q1 2025. United Rentals returned $902 million to shareholders through share repurchases ($667 million) and dividends ($235 million) during the six months ended Q2 2025. The board expanded its share buyback program by $400 million in 2025. The company’s net leverage ratio remained at 1.8 times as of June 30, 2025, liquidity at quarter-end stood at $2.996 billion. The quarterly dividend was raised by 9.8% to $1.79 per share from $1.63 per share in Q2 2024, marking continued prioritization of shareholder returns.

Understanding Product Families: Specialty and General Rentals

United Rentals divides its business mainly between general rentals and specialty rentals. General rentals focus on construction and industrial machinery such as earthmoving equipment, lifts, and loaders—items that cover basic job site needs. Specialty rentals include product lines like ground protection matting, modular/container units, power and HVAC (heating, ventilation, air conditioning) equipment, and fluid solutions. The specialty segment grew especially fast, led by high demand in matting, which is used to support large-scale infrastructure and construction projects.

Within the specialty segment, the company continues to open new specialty locations (called cold starts), supporting ongoing double-digit growth in specialty rental revenue, as evidenced by a 21.8% year-over-year increase in Q1 2025. Ancillary products—such as equipment delivery, installation, and fuel services—are designed to make United Rentals a one-stop solutions provider, deepening customer relationships but typically generating lower profit margins. Management reports that national accounts, or large customers with multi-site needs, accounted for 44% of equipment rental revenue for 2024.

Looking Ahead: Guidance and Key Trends to Watch

Management raised its full-year 2025 outlook following the quarter. Projected total revenue now stands at $15.8 billion to $16.1 billion for 2025, up $100 million at the midpoint, with adjusted EBITDA targeted between $7.3 billion and $7.45 billion for 2025. The company also increased free cash flow guidance by $400 million, now expecting $2.4 billion to $2.6 billion for 2025. While the better cash picture is supported by a breakup fee from the H&E Equipment Services deal, the increase reflects underlying confidence in specialty and ancillary revenue momentum.

Looking into the remainder of the year, investors should focus on trends in fleet productivity, continued growth and profitability in specialty rentals, and the impact of cost inflation on margins. Management also points to a robust pipeline of strategic acquisitions, mainly targeted at expanding specialty rental categories, and over six months of forward revenue backlog. The current payout marks the 2025 dividend at $1.79 per share, increased from the prior year. Shifts in used equipment values, economic conditions that influence construction markets, and ongoing cost management will be key areas to watch in coming quarters.

Revenue and net income presented using U.S. generally accepted accounting principles (GAAP) unless otherwise noted.

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