With a combined revenue of $21 trillion and $2.1 trillion in profits, the 2026 Fortune 500 is the definitive list of America's largest companies.

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The Fortune 500, in its 70th year in 2024, ranks the biggest U.S. companies by revenue.

The Fortune 500, in its 69th year in 2023, ranks the biggest U.S. companies by revenue.

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This year’s Fortune 500 marks the 67th running of the list.

F500-2021-352-United Rentals

The world's largest equipment rental company boasts a fleet of around 665,000 construction and industrial units.

This year's Fortune 500 marks the 66th running of the list.

F500-2020-340-United-Rentals

The Connecticut-based company provides rental equipment to construction and industrial sites in the U.S. and Canada.

Collectively, the ranked companies produced a three-year average shareholder return of 19%, vs. 11% for the S&P 500.

Fastest Growing Companies 2020 88. United Rentals

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This year's Fortune 500 marks the 65th running of the list.

This year's Fortune 500 marks the 64th running of the list.

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This year's Fortune 500 marks the 62nd running of the list.

This year's Fortune 500 marks the 61st running of the list. Wal-Mart claims the top spot again. See who made the list.

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Wal-Mart stayed on top as its sales crept closer to half-a-trillion dollars. Apple moved into the top five. And UnitedHealth Group continued its steady climb. 

Shale rules! That’s the lesson of the latest edition of our annual list of public companies with the most stellar three-year profit, revenue, and stock growth. 

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United Rentals is the largest equipment rental company in the world. It supplies rentals of over 4,700 different classes of equipment to construction companies, manufacturers, municipalities, homeowners, and government entities. The company offers a wide range of equipment from backhoes, forklifts, and power tools to pressure washers, air conditioners, and surface protection mats. Founded in 1997, the company operates in the United States, Canada, Europe, Australia, and New Zealand.

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United Rentals (URI): Company Profile, Stock Price, News, Rankings

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United Rentals

united rentals

Good morning, and welcome to the United Rentals Investor Conference Call. Please be advised that this call is being recorded. Before we begin, please note that the company's press release, comments made on today's call and responses to your questions contain forward looking statements. The company's business and operations are subject to a variety of risks and uncertainties, many of which are beyond its control and consequently actual results may differ materially from those projected.

A summary of these uncertainties is included in the Safe Harbor statement contained in the company's press release. For a more complete description of these and other possible risks, please refer to the company's annual report on Form 10 ks for the year ended 12/31/2024, as well as to subsequent filings with the SEC. You can access these filings on the company's website at www.unitedrentals.com. Please note that United Rentals has no obligation and makes no commitment to update or publicly release any revisions to forward looking statements in order to reflect new information or subsequent events, circumstances or changes in expectations. You should also note that the company's press release and today's call include references to non GAAP terms such as free cash flow, adjusted EPS, EBITDA and adjusted EBITDA.

Please refer to the back of the company's recent investor presentations to see the reconciliation from each non GAAP financial measure to the most comparable GAAP financial measure. Speaking today for United Rentals is Matt Flannery, President and Chief Executive Officer and Ted Grace, Chief Financial Officer. I will now turn the call over to Mr. Flannery. Please go ahead, sir.

Thank you, operator, and good morning, everyone. Thanks for joining our call. Yesterday afternoon, we were pleased to report our first quarter results, which reflected a solid start to the year. We saw growth across both our industrial and construction end markets. Demand for used equipment remains healthy and importantly, our customers continue to feel good about their own outlooks.

As you've heard me discuss before, a key element of our strategy is being the partner of choice for our customers. And thanks to the team's steadfast commitment to this, which always includes putting safety first, we delivered first quarter records across revenue and adjusted EBITDA. This is facilitated by our focus on operational excellence and innovation. And as you saw through our reaffirmed guidance, 2025 is on track to be another year of profitable growth, reinforced by the momentum we've carried into our busy season. Today, I'll review our first quarter results, followed by why we feel confident in our 2025 guidance.

And finally, I'll discuss how we think about managing the business for the long term success. And then Ted will discuss financials in detail before we open up the call to Q and A. So with that, let's start with the first quarter results. Our total revenue grew by 6.7% year over year to $3,700,000,000 and within this, rental revenue grew by 7.4% to $3,100,000,000 both first quarter records. Fleet productivity increased to 3.1% as reported and 1.9% pro form a for YAC, which we've now lapped.

Adjusted EBITDA increased to a first quarter record of $1,700,000,000 translating to a margin of nearly 45%. And finally, adjusted EPS came in at $8.86 Now let's turn to customer activity. We continue to see growth in both our gen rent and specialty businesses. In fact, specialty rental revenue grew 22% year over year and 15% pro form a for YAC. We opened eight specialty cold starts in the first quarter and expect to open at least 50 this year.

By vertical, our construction end market saw solid growth across both infrastructure and non res construction, while our industrial end market saw particular strength within power and chemical process. We continue to see new projects kicking off with a few recent examples including data centers, pharmaceuticals, airports and industrial manufacturing facilities. Now turning to the used market, we sold over $740,000,000 of OEC, which was a first quarter record. The demand for used equipment remains healthy and we're on track to sell an estimated $2,800,000,000 of fleet this year. We spent over 700,000,000 on rental CapEx in the quarter in response to solid customer demand.

As you'd expect, growth continues to be led by large projects where all elements of our strategy position us to be the partner of choice. We drove free cash flow of nearly 1,100,000,000 setting us up for another year of strong cash generation, which we view as a hallmark of the company. The combination of our industry leading profitability, capital efficiency, and the flexibility of our business model enables us to generate meaningful free cash flow throughout the cycle, and in turn, allocate that capital in ways that allow us to create long term shareholder value. Finally, capital allocation. Priority number one for us is funding growth while maintaining a healthy balance sheet.

After the organic growth we supported in the quarter, we returned nearly $370,000,000 to shareholders through a combination of share buybacks and our dividend. Our leverage of 1.7 times remained towards the lower end of our targeted range, leaving plenty of dry powders to support both inorganic growth and to return excess capital to our shareholders. And to this point, following the completion of our prior share repurchase authorization last month, I'm pleased to share that our board has approved a new $1,500,000,000 program as Ted will discuss shortly. Now let's turn to the rest of 2025. As evidenced by our reiterated guidance, our expectations for the year are unchanged.

The year is off to a start we anticipated, while feedback from the field continues to be optimistic, particularly for large projects. The momentum we're carrying into our busy season, along with backlogs and our customer confidence index are all supportive of our outlook. I'll note, we've not seen a change in customer outlooks for the balance of 2025. But with all that said, we understand the recent concerns around the macro uncertainty. And if things change, we feel confident in our ability to react to best support both our customers and our stakeholders.

And as we think about the long term, our strategy is built on how we can competitively differentiate ourselves and outpace the market. When we listen to the voice of the customer, we gain additional conviction that our one stop shop offering is critically important. The power of cross selling, let's just take our long established relationships and accelerate our growth by meeting our customer demands with both our Generate and Specialty products. And when we layer on our technology offerings, we're able to provide our customers a truly unique experience. And while we've had Specialty as part of our business mix for many years, we believe this growth engine has a lot of runway ahead, supported by both geographic white space and additional products and adjacencies that we can add to our portfolio to continue to better serve our customers.

To bring this to light, we have a large national account customer with a long standing relationship, primarily with our GenRent team. And as we dug into how we could better serve the customer's needs, we learned we had the opportunity to be a better partner. This included not just providing additional products, but also innovating together, such as feeding information directly into their own internal tracking systems. And through our partnership, we learn more about the customer's requirements and added specialty products to fit the bill. Well, to make a long story short, over just two years, we've increased their spend with us by 12 times by becoming an enterprise of solutions, and specialty has increased from 10% of their spend with us to 40%.

This example is another strong proof point of our go to market strategy. In closing, we remain focused on being the best partner to our customers. We're on track for another year of profitable growth and we believe the longer term outlook we see combined with our business model, strategy, capital discipline and our competitive advantages will allow us to generate compelling shareholder returns. And with that, I'll hand the call over to Ted, and then we'll take your questions. Ted, over to you.

Thanks, Matt. Good morning, everyone. As Matt just shared, 2025 is off to a good start with first quarter records across total revenue, rental revenue and EBITDA, which combined with the momentum we're carrying into our busy season and encouraging customer sentiment, is enabling us to reaffirm our full year guidance. So with that said, let's jump into the numbers. First quarter rental revenue was a record at $3,150,000,000 That's a year on year increase of $216,000,000 or 7.4%, supported again by growth from large projects and key verticals.

Within this, OER increased by $118,000,000 or 4.9%, driven by 3.3% growth in our average fleet size and fleet productivity of 3.1%, partially offset by assumed fleet inflation of 1.5. Also within rental, ancillary and re rent grew by 1915%, respectively, adding a combined $98,000,000 of revenue. This outsized growth relative to OER was primarily driven by specialty, where delivery represents a bigger portion of revenue from our matting business and where our other specialty businesses support customers with value added services like fueling and installation as part of our one stop shop strategy. Turning to our used results. As Matt mentioned, we took advantage of strong demand to sell a first quarter record amount of OEC, generating $377,000,000 of proceeds at an adjusted margin of 47.2% and a 51% recovery rate.

Moving to EBITDA. As I mentioned, adjusted EBITDA was a first quarter record at $1,670,000,000 translating to an increase of $84,000,000 or 5%. Within this, rental gross profit contributed $89,000,000 This was partially offset by used where the continuing normalization of the market drove a 13% decline in used gross profit dollars, translating to a $26,000,000 headwind to adjusted EBITDA. SG and A increased by $47,000,000 year over year, including $12,000,000 of H and E related merger costs. Excluding these costs, our growth in SG and A was roughly in line with growth in rental revenue.

And finally, the EBITDA contribution from other non rental lines of businesses increased $68,000,000 primarily due to the $64,000,000 breakup fee we received from the termination of the H and E deal. Looking at profitability, our first quarter adjusted EBITDA margin was 44.9%, implying 60 basis points of compression. Notably, and as our press release highlighted, this includes a $52,000,000 net benefit related to the breakup fee, which is the $64,000,000 less the $12,000,000 of related SG and A costs. Although it doesn't impact EBITDA, we also absorbed roughly $13,000,000 of bridge financing fees related to the deal that are included in our net interest expense. Taken together, our first quarter results included a net pretax benefit of $39,000,000 Bringing this back to margins, excluding the H and E benefit and the impact of used sales, our EBITDA margin compressed 150 basis points year over year.

Similar to last quarter, I thought it'd be helpful to talk through a few of the key factors here ahead of Q and A. Now, of course, margins in any given quarter will fluctuate with normal variability. But at a high level, several of the dynamics in Q1 were consistent with what we talked about in January. First, ancillary revenue again significantly outpaced our core rental growth. These are core elements of our service offering, particularly within specialty that come at a lower margin than our core rental business but have attractive returns as they don't employ much capital.

As importantly, they provide a unique aspect to customer service that both differentiates United Rentals and helps drive deeper customer engagement. So from this perspective, we view this as good business, but it does have a dilutive impact on margins that we'd estimate at about 50 basis points in Q1 or about a third of the 150 basis point decline. Secondly, first quarter delivery costs were up driven by a few dynamics, including our growth in matting and the increased dispersion of growth across our footprint. A byproduct of the latter is the greater need to reposition fleet in support of high time utilization. Said differently, these are choices we make between costs and capital efficiency with the idea of supporting returns.

For the quarter, these additional repositioning costs impacted our margin by about 30 basis points. And finally, given where we sit in the current cycle, our OER growth remains relatively low in a still fairly inflationary environment. At the same time, we continue to make long term strategic investments in important areas like specialty cold starts and technology, both of which enable us to be the partner of choice to customers and provide attractive returns. The combination of these factors and normal variability in our costs accounted for the balance of the decline, so call it about 70 basis points. Importantly, these are all contemplated within the ranges provided in our guidance.

And lastly, on the P and L side of things, our adjusted earnings per share was $8.86 including a $0.45 benefit from H and E. Shifting to CapEx. First quarter gross rental CapEx was $7.00 $7,000,000 in line with normal seasonality. Moving to returns and free cash flow. Our return on invested capital of 12.6% remained well above our weighted average cost of capital, while free cash flow totaled a robust $1,080,000,000 Our balance sheet remains quite strong with net leverage of 1.7 times at the end of the quarter and total liquidity of over $3,300,000,000 I'll note, this was after returning $368,000,000 to shareholders in the first quarter, including $118,000,000 via dividend and $250,000,000 via repurchases.

Looking forward, following the completion of our repurchase program last month, we are pleased to share that our Board approved a new $1,500,000,000 program supported by our continued strong free cash flow generation and healthy balance sheet. The new program will begin this quarter and is expected to be completed by the end of the first quarter of twenty twenty six. For the year, it is our intent to repurchase a total of $1,500,000,000 of common stock, including the shares we repurchased in the first quarter. At our current share price, this represents about 4% of our market capitalization. In total, we intend to return roughly $2,000,000,000 in cash to shareholders in 2025, equating to over $30 per share or a return of capital yield of better than 5%.

So to wrap up my prepared remarks, overall, another solid quarter that puts us in a position to reaffirm guidance on total revenue, EBITDA, CapEx and free cash flow. The balance sheet remains in great shape, providing strong optionality for the business, while our commitment to capital discipline keeps us positioned to support long term shareholder value. And with that, let me turn the call over to the operator for Q and A. Operator, please open the line.

Certainly. Thank you, Mr. We'll go first this morning to David Raso of Evercore ISI.

Hi, thank you for the time. I'll let others sort of dig into the margin questions. I was curious about two things, the implied revenue growth the rest of the year and how tariffs are impacting conversations with your customers. So first on the revenue growth, if you pull out the used equipment sales, the rest of the year, the sales guide is implying up about 3%. When you look at the CapEx and the used sales and the OEC you're looking to sell, it seems like the average fleet size growth is going to be 3%.

So it almost implies no meaningful help at all from fleet productivity. Is that conservatism or something else you're trying to signal, especially you noted in the first quarter, the timing was still fairly healthy that you're moving equipment around. So just curious how that dovetails into the fleet productivity guide? And then to follow-up on the tariff, how does the potential inflation from tariffs on new equipment sales, right? Meaning for an OEM raising price, does your customer then look at rental as a better alternative right now?

Or particularly, does it give you any umbrella to maybe raise rates or at least that conversations leaning that way versus maybe some negative of the inflation impacting the level of construction activity, be it lumber or whatever it may be impacting construction project decisions? Thank you.

Sure, David. This is Matt. I'll take the tariff part first and then both Ted and I can discuss the revenue back half revenue growth or back third, two thirds. When we think about the tariffs, first of all, our 2025 CapEx is fully negotiated and well over 80% of it already has POs and is should will not be impacted by tariffs in any way. In the future, to your point about what would happen if our partners did have to got significant tariffs and did have to make some changes in the future.

Well, couple of points to your to your comment, we probably have to pass it on like happened post COVID when when we all had to enjoy some some pretty healthy increases. And then secondly, you know, there'd be some decisions to make. There's we've got vendors a couple of vendors in every category equipment we buy, and there's not a product category that I could think of that doesn't have a non tariff impacted partner. So there'd be a way for us to manage through it and whatever we did have to absorb would be something the whole industry absorbed and to your point could be an umbrella coverage for maybe some increased productivity. Not our preference, but certainly something we have the ability to do.

From the growth perspective, Ted, you want to take?

Yes. The one thing I might add on tariffs and certainly anytime there's uncertainty that tends to favor rental over ownership and we never advocate for uncertainty, but we are in a period of time where there obviously is a couple of things that the macro is trying to struggle with. So I'd say at the margin that's also going to benefit rental even more than we think some of the other advantages we have over ownership. On the implied revenue side, I guess the one piece you didn't really weave into that question, David, was the impact of inflation. And so when we think about that OEC growth, that's in nominal terms.

And so I think when you do the math, you'd see that adjusting for that, we'd want to make sure that we are contemplating the effect of inflation, which obviously ties back to fleet productivity. And in terms of just the growth rate, kind of what you saw in the first quarter versus what would be implied in the back three quarters. Obviously, we've now lapped YACC. So as people think about that relative there's relative growth rates, they just want to be mindful of that shift as well. And we could begin if you want to touch on any part of that?

the day, when you look at the size of the average OEC growth implied from a fairly normal cadence of what you're going to sell, the OEC being sold and of course the gross landed fleet per quarter. Just to level set a little bit, sounds like the fleet productivity, which is 1.9% in the first quarter ex YAC, right, pro form a, let's call it. The rest of the year, those fleet productivity numbers implied or at least level set, they're lower than the 1.9%. Is that fair? Like the first quarter

Not really. I'd say they're they're pretty they're I'd say it'd be pretty steady, David, is what our listen. We're not in the in the game of forecasting them because there's a big portion of it. This is an output of what our revenue construct looks like, specifically in mix. But generally, what's embedded in the guide, and especially if you're using the midpoint, is a continuation of that type of positive fleet productivity.

And that's what our expectation is, and that's what is embedded in the guidance.

Alright. That's very helpful. Thank you so much.

Thank you. We'll go next now to Rob Wertheimer at Melius.

Hi. Thank you. I'd like to dig into a couple of the margin drivers that you guys called out, which was helpful. And basically trying to figure out how temporary they are. Fleet repositioning, I wonder if you could kind of expand on what the dynamics were that led to that.

I think you said maybe broadening out of growth. Is that repositioning done and thus that kind of headwind fades? And maybe the same question just on mix, maybe that's within specialty, whether that reverts or whether you see continuation of that mix profitable ROIC but lower margin drag? Thanks.

Hey, Rob. I'll talk about the repositioning repositioning a little bit and Ted can touch on the mix. So just think about the past couple of years before 2024 when we had such broad based growth, we really didn't pull any equipment from any markets. Everybody had the opportunity to put the fleet they had to work and in some instances even more, right? So when we think about now where major projects are really driving a big part of our growth and the local markets vary depending on where you are.

Now instead of just sending new equipment to manage these new projects, right, which was a much more cost effective way because it's coming right from the manufacturer, we're relocating equipment, right? So we're staging equipment. We're bringing it in from other places to serve these large projects. So I think that fleet balancing is what we're referring to that's driving a little bit of extra cost when you think about what we were able to do historically. And then Ted on the mix?

Yes. Rob, in terms of thinking about specialty in the quarter itself, the mix certainly the ancillary grew there at a healthy pace relative to OER, still had very healthy OER growth. But we had an uptick in delivery and for a couple of different reasons, part of that would have been Yak and part of it would have been the repositioning of fleet just given the nature of projects ending and starting and just the greater dispersion in growth we've talked about all year. So that would have been about 150 basis points of the 600 basis point decline in gross margins. That will really depend on how the year itself plays out.

Elsewhere within that margin construct, we probably had about 50 basis points of impact from higher subcontract labor. Those are value added services we're providing to customers to really help them with their projects and alleviate pain points in their business processes. So that again is really driven by serving our customers. And there's another 30 basis points related to fuel services, again, of those ancillary services we do with the request of customers. So when you add that up, you'd be looking at the better part of two thirty basis points or so I think related to that mix.

Depreciation just to dimensionalize that, because that was another important part of that revenue bridge. That was about three thirty basis points of the 600 basis points in specialty gross margins, really all of which related to YAC.

Okay. That makes perfect sense. And then just as a minor follow-up, I know repositioning will continue as the market continues to shift, but would you say it's lumpy, the more you did in 1Q is the bulk of it? Or is that continuing on through the year? And I'll stop.

The honest answer is we're on top of it, but we're not sure. We certainly did a deep dive when we saw the drag on the margins and looked at and we we're pretty comfortable with the decisions the team made. But I would say, you know, this is really an output of where the demand shows up and where we have to put the fleet. We are on top of it. We've got a pretty good system to make sure we're making the right decisions and bidding out to third party haulers in an effective manner.

And if there is an anomaly, we'll report it out to you guys as it comes along.

Thank you. We go next now to Angel Castillo at Morgan Stanley.

Hi, good morning. Thanks for taking my question. Maybe just to kind of continue on that. Ted, was wondering if you could expand just on uncertainty of whether some of these headwinds may be persist or not. What does that imply in terms of your ability to deliver either on the low end or the high end of the guide?

Just any implications there would be helpful.

Yes. And I'm going to jump in here, Angel, just to be clear so that no one misconstrues my answer to Rob's last question. We're not implying that all these costs are going to persist or not. When you think about the ancillary, that's really an output of what the customer's needs are. It's a good decision.

It's gonna bring us more EBITDA dollars. It's just if the revenue construct gets higher than the midpoint, the EBITDA might not move along with it at the same pace as our OER rental. So but it's still the right decision. Not doing it isn't an option. We're putting money in the tilt, so to speak, and taking care of our customer.

What I was speaking to Rob about was that, whatever it is, 10,000,000 to $15,000,000 of repositioning. We don't really know how much of that will repeat because it's going to be responsive to where the equipment needs are. Ted, please.

To the I'm sorry, to the last part your question, contemplated, this isn't a big enough number to move us anywhere within the guide. We feel very comfortable about reiterating the guidance.

Got it. That's helpful. Thank you. And maybe could you expand a little bit more on just the underlying demand trends? It sounds like your customers remain pretty optimistic here.

Just curious, how did you see utilization or general kind of overall demand kind of shift or change between January and February versus maybe March and more recently April and what you're seeing there?

Yes. We don't really talk about monthly sequential in any way, shape or form. But we've the year is playing out as expected. And we talked about it being very similar to 2024 when we came out with the guidance in January, and that's what we're seeing. We really we don't talk about whether we were big enough now and diverse enough that we don't have those type of issues to have to call out.

And I would say that the year is playing out in a standard seasonal growth pattern and gives us a lot of confidence that there will be the demand to meet our goals here, and that's why we reiterated our guidance.

Thank you. We go next now to Jamie Cook with Truist Securities.

Hi, good morning. I guess two questions. One, Ted, just for you, understanding the puts and takes of the margins in the quarter and the incremental margins in the quarter. I'm just wondering your confidence in the 50% to 60% through cycle incremental margin for United Rentals, just given where the incrementals have been. It seems aggressive, like the top line just had to grow to double digit rate in order for you to achieve that.

So just your confidence there, maybe we should start thinking about EBITDA growth versus incremental. So that's my first question. And then my second question, obviously, the cash flow is strong, increased authorization is a positive. But just what you're seeing on the M and A front with the H and E deal falling through, Wondering given the uncertainty in the market, is there opportunities for you guys to sort of be more opportunistic and your preference for specialty versus gen rent? Thanks.

Yes, Jamie, I'll take that first one. I think Matt will probably take the second. But nothing has changed in our view of our ability to drive margin expansion over the course of the cycle. One of the things we've talked about over really 2024 and now 2025 is the fact that we're in a relatively slower growth phase of the cycle that's still relatively inflationary. It's not our expectation that these kinds of conditions will last for a multiyear period.

Expectation is that the economy and our markets do obviously accelerate as you get more accommodative Fed and better interest rate policies that support overall economic growth. And as we get there, that obviously gives us the ability to leverage fixed costs more efficiently. And so nothing has changed from that perspective. The other thing that's just something we highlighted today was obviously this revenue construct and the impact we've had from providing more ancillary, which we view as a good thing. It has the effect on margins and flow through we've talked about, but it's very good business that supports customers and adds EBITDA dollars just not the same margin we would in our core business.

So we can if there's any follow-up on that side, let me know. Otherwise, I'll hand it over to Matt.

front, we had a pretty robust pipeline before the AT and E deal and that pipeline remains. So to the focus areas that we really like to hone in on, certainly it's adding any new products and services to our customer base. We've done very well with that when you think about YAC and general finance before that. So that's our primary focus. But adding more capacity within specialty, where we still have white space and penetration opportunities to support this double digit growth trend that we're on would be another area of focus.

And there's still a pretty good pipeline that the team's working through. We have plenty of dry powder, as we talked about earlier, at 1.7 times leverage and a strong balance sheet. We have the capability. So we certainly are still in the M and A game. We just have to find the right dance partner and make sure it meets our very high bar.

Thank you. We'll go next now to Michael Finiger of Bank of America.

Yes. Hey, guys. Thanks for taking my question. Just on the specialty growth, even ex M and A up 15%, just I know you touched on it earlier. Is there anything you can flesh out in terms of what's driving that in terms of end markets, product lines?

Is it gaining more customer share? Wallet, is it the cold starts? Just your confidence on that kind of double digit growth rate that we've kind of seen from specialty so far for the rest of this year?

Well, I think it's all of the above, right? So and when you think about the example I gave in the opening remarks about even with long standing relationships, we could as we continue to add more products and services to our portfolio, even with long standing relationships, we find we have opportunities. And also, they have to have the demand. So the kind of projects that specifically our larger customers tend to have are more complex and need more support. And we're there to meet that support.

I think that's driving a lot of specialty growth. But then also as we add these new products to our platform and the ability to scale them up is another big opportunity, and we still have white space there. And that would be dismissive of what's happened in one of our most established ones, which is Power. Our Power HV and AC team still grow double digits and one of our strongest growers in the company as they not only get more penetration, but add more products to their portfolio. So it's really across the board, which is why you hear the confidence in our voice, a double digit growth for specialty for the foreseeable future.

Great. And Matt, just to follow-up, just like, gen rent is still positive, but clearly in a slow growth phase right now. Just in terms of the cycle, how to think about it, do you have to go negative first before we see a reacceleration? Based on the conversations in the field, what would be that catalyst for a reacceleration? Is it more de escalation of tariffs?

Is it Fed rate cuts? Is it deregulation? I mean, you look back in 02/2009, obviously, that was a very severe recession. There was just a very long lag for non res to recover. Do you think that is the case this go around when we're kind of talking about maybe a reacceleration in some areas like the local markets or some areas that

Yeah. So we certainly don't think it needs to go negative. We feel like we're in the slow part of the cycle and we're not going negative. But to your point about the local market, we're much more highly penetrated in the local market with GenRent. And that's a bigger needle mover for them.

But they still have some of the opportunities that we have in large projects to help offset that. And I think although most of our growth is coming from specialty, I think our GenRent team is well positioned to as the market picks back up, as the local market repairs, whether that's driven by interest rates, just overall stronger economy, whatever, we're very well positioned. We've kept our capacity. We didn't overreact to the slower growth, which although maybe it drags on margins a little bit, it's the right long term decision. So we feel really good about where we're positioned.

We don't think we have to turn negative for an acceleration.

And Mike, I might just add from a vertical perspective, the two areas that have been most challenging there have been residential and residential related and kind of call it the oil patch. So I think those are verticals that people understand have had kind of unique challenges. But to the degree you saw those inflect, that would be a positive for the gen rent growth.

Thank you. We'll go next now to Tim Fine of Raymond James.

Great, thanks. Just wanted to circle back as a follow-up on earlier question on tariffs. And you covered it with respect to the CapEx impact from new equipment. But I was just curious from an OpEx perspective, to the extent we were to see parts pricing change or be impacted by tariffs. Is there protection there or how would we think about that?

I guess it's hypothetical at this point, but can you maybe just update us on that point?

Yeah. It's a fair point, Tim, but still all negotiated for '25. So we're locked in for '25. But it's it's no different than the fleet costs. We negotiate our parts and our our fleet costs with our partners annually.

And in '26, if if there's some stuff there, we're gonna have to make sure we're aligned with the folks that can either bypass having to push them on or or avoid them altogether. And and and that'll be part of our '26 negotiation, but nothing that we see in '25.

And then Matt, just you highlighted that as have several others, the strength of the larger national account business and how we've been dealing with this softness in the local account business, which is our market for some time, which is seems to be continuing. But I'm just curious if that A, is that creating any sort of a mix headwind for United? And I guess if so, it would could it be more pronounced in what is a seasonally softer quarter, just normally, lower activity in the first quarter? Is that more pronounced or none of the above? I'm just curious from a mix impact, is there any sort of headwind there?

Yes. I don't think there'll be any further headwind to your point about Q1 being a slower part of the year and not the part of the year we bring in the more CapEx, that could have some impact on that repositioning costs that we talked about. From an ancillary perspective, it's really mostly driven by the very high level of growth in specialty and the extra products and services we provide with that offering. So nothing that I think is going to change seasonally. It'll depend.

I think we'll continue to see the demand and therefore where we put our fleet to play out similar to '24. I guess the one difference would be as we continue to grow the YAC business, we continue to grow the specialty footprint through cold starts. I think that's driving some of the ancillary for all for good reasons, really for good cross sell growth.

United Rentals (URI) Q1 2025 Earnings Call Transcript

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