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.

Fortune 500

Almost $20 trillion in revenue—and a record-breaking $1.87 trillion in profits. Introducing the 2025 Fortune 500, the definitive list of the biggest companies in America.

Industries included in the sector are advertising, diversified outsourcing services, and financial data services.

Fortune Sector Leaders: Business Services

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.

This year’s Fortune 500 marks the 68th running of the list.

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

100 Fastest-Growing Companies

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

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

This year's Fortune 500 marks the 63rd running of the list.

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.

This year's Fastest-Growing Companies marks the 19th running of the list. In our annual list of public companies with the most stellar three-year profit, revenue, and stock growth, Facebook makes its first appearance.

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, everyone, 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-K for the year ended December 31, 2025, as well as the 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 presentation 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. As you know, in 2025, we again committed to doubling down on being our customers' partner of choice. This translates to working hand-in-hand with our customers to provide an unmatched experience across our one-stop shop of Gen Rent and Specialty products, coupled with industry-leading technology and a world-class team. Ultimately, this all culminates in our value proposition, which not only improves the customer's productivity and efficiency, but also positions us to outperform the market. I'm pleased that our team's steadfast dedication to this commitment, in addition to an unwavering focus on safety and operational excellence, resulted in another year of record revenue and EBITDA, as you saw in our results reported yesterday afternoon.

Today, I'll start with a recap of our fourth quarter and full year 2025 results, followed by our expectations for 2026, which we expect to be another year of profitable growth. I'll keep my remarks brief before Ted reviews the financials in detail, and then we'll open the lines for Q&A. So let's start with the quarter's results. Our total revenue grew by 2.8% year-over-year to $4.2 billion. Within this, rental revenue grew by 4.6% to $3.6 billion, both fourth quarter records. Fleet productivity increased by 0.5%, contributing to OER growth of 3.5%. Adjusted EBITDA came in at $1.9 billion, resulting in a margin of 45.2%. And finally, adjusted EPS came in at $11.09.

Now, let's turn to customer activity. We again saw growth across both our Gen Rent and Specialty businesses in the quarter. Specialty continues to exhibit healthy and broad-based growth. We remain focused on expanding our Specialty footprint and capitalizing on the geographic white space available. In 2025, we opened an additional 60 cold starts, including 13 in the fourth quarter. Importantly, we remain confident that the combination of geographic expansion, the power of cross-sell, and the addition of new products to our portfolio will enable us to continue growing our Specialty business at a double-digit rate for the foreseeable future, while also expanding our competitive moats and providing attractive returns. By vertical, our construction end market saw growth across both infrastructure and non-residential construction, while our industrial end market saw particular strength within power.

Similar to last quarter, data centers and power were drivers of growth, but certainly not the only ones. Our project pipeline is larger than ever, and we saw new projects kick off across healthcare, pharmaceuticals, and infrastructure, to name a few. Now, turning to the used market, we sold $769 million of OEC in the fourth quarter at a 50% recovery rate. For the full year, we sold slightly less OEC than we originally forecast, as we held on to some high-time used assets to meet demand. Importantly, the demand for used equipment remains healthy. For the full year, we spent nearly $4.2 billion on a combination of maintenance and growth rental CapEx, which resulted in a free cash flow generation of $2.2 billion for a free cash flow margin of 14%.

I'll say it again, as I do every quarter: 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. In 2025, specifically, we allocated capital as we always do, first by funding organic growth and then complementing this with inorganic growth. We then return our remaining cash to shareholders.... In 2025, we returned nearly $2.4 billion of excess cash flow to shareholders through a combination of our share buybacks and our dividend. Looking forward, I'm pleased to share that we plan to repurchase $1.5 billion of shares in 2026 and to increase our quarterly dividend by 10%, reflecting our third consecutive annual increase since introducing our dividend in 2023.

Now, let's turn to our 2026 guidance, which implies total revenue growth ex used of over 6%. This is supported by customer sentiment indicators, solid backlogs, and most importantly, feedback from our field teams. In many ways, we expect the construct of demand in 2026 to be similar to last year, with large projects and dispersed geographic demand driving most of our growth. We'll remain focused on capital efficiency, but repositioning costs will likely remain elevated. Having said this, we're very aware of the importance of profitability and margins. Our guidance, which implies flat margins at the midpoint, ex the benefit of the H&E termination fee last year, embeds cost actions we're proactively taking to improve our efficiency and support profitability. We all know yesterday's touchdowns don't win tomorrow's games.

Our culture of always wanting to do more and never being satisfied with the status quo is in our DNA. This was on full display a few weeks ago when we held our annual management meeting in St. Louis. We brought together almost 3,000 team members to both celebrate our wins and to find new ways to be an even better partner to our customers as we look to outperform the end market, while having an even greater focus on efficiency and profitability. We have an incredible team at United Rentals, with a culture that is unmatched in our industry. This is a real differentiator and gives me confidence we can take our momentum and continue to build the best-in-class company. I'm proud to say that the team walked away from the meetings energized and ready to deliver on the expectations our guidance reflects.

In closing, I'm excited for what lies ahead for United Rentals. Our team puts customers at the center of everything we do, which positions us well in both the short and long term to capitalize on the opportunities ahead of us and to continue to outpace the industry. Our strategy, business model, competitive advantages, and capital discipline allow us to generate compelling shareholder returns for the long term. With that, I'll hand the call over to Ted, and then we'll take your questions. Ted, over to you.

Thanks, Matt, and good morning, everyone. As Matt just shared, we were pleased with a number of our achievements in 2025, including full-year records for total revenue, rental revenue, and EBITDA, strong free cash flow, and attractive returns as we navigated through some of the unique dynamics woven into the current demand backdrop. Looking more closely at the fourth quarter, we were pleased with our core results, which were partially offset by shortfall in used volumes and some choppiness in our matting business, which I'm sure we'll talk more about this morning. So with that said, let's dive into the numbers. Rental revenue increased $159 million year-over-year, or 4.6%, to a fourth quarter record of $3.58 billion, supported again by growth from large projects and key verticals.

Within this, OER increased by $97 million, or 3.5%, driven by 4.5% growth in our average fleet size and fleet productivity of 0.5%, partially offset by some fleet inflation of 1.5%. Also within rental revenue, ancillary and re-rent grew by over 9%, adding a combined $62 million as ancillary growth continued to outpace OER. Moving to used, we generated $386 million of proceeds at an adjusted margin of 47.2% and a 50% recovery rate on $769 million of OEC sold. This brought our full year OEC sold to $2.73 billion, up slightly from 2024, but a bit below our guidance of $2.8 billion, as we held on to high-time-use fleet in certain categories.

Taking a step back, at this point, we think the used market has normalized, coming off the extremes we saw in 2022 and 2023, and we do expect 2026 to see healthy demand. Importantly, though, we're at recovery rates that will continue to support strong unit economics across the life cycle of our fleet. Turning to EBITDA, adjusted EBITDA came in at $1.901 billion, with a $33 million increase in our rental gross profit dollars, more than offset by a $39 million decline in used gross profits, due primarily to the shortfall in volumes that I mentioned. On a dollar basis, SG&A, ex comp, was flat year-over-year, translating to a 20 basis point improvement as a percentage of revenue, while other non-rental lines of businesses added $7 million.

Looking at profitability, on an as-reported basis, our fourth quarter adjusted EBITDA margin was 45.2%, implying 120 basis points of compression, or 110 basis points, excluding the impact of used. We continued to see the same market and margin dynamics play out in the fourth quarter that we experienced all year. From a cost perspective, the biggest of these was, again, elevated delivery expense, driven largely by fleet repositioning costs, which we'd estimate provided roughly 70 basis points of headwind in the quarter. Beyond that, growth in ancillary is roughly another 20 basis points of headwind, while we also continued to manage through above-trend inflation in a few notable areas, including facilities and insurance. As you heard from Matt, we expect the demand construct in 2026 to look similar to 2025.

We expect that most of our growth will again be led by large projects. At the same time, our strategy to provide products and services to our customers is likely to drive our growth in ancillary revenues. With that said, our entire team is working hard to mitigate the headwinds this presents to overall margins. As strategically, we continue to believe that providing our customers with these additional services is an important competitive advantage and helps drive higher OER growth. Shifting to CapEx, fourth quarter gross rental CapEx was $429 million, bringing our full year total to $4.19 billion. Moving to returns, our return on invested capital of 11.7% remained comfortably above our weighted average cost of capital.

Turning to free cash flow, we generated $2.18 billion, translating to a healthy free cash flow margin of 13.5%. Our balance sheet remains very strong, with net leverage of 1.9 times at the end of December and total liquidity of over $3.3 billion. This was after returning $2.4 billion to shareholders during the year, including $464 million via dividends and $1.9 billion through repurchases. Combined, this equated to a little better than $37 per share. Now, let's shift to the updated guidance we shared last night, which reflects our confidence in delivering another year of solid results. Total revenue is expected in the range of $16.8 billion-$17.3 billion, implying full year growth of 5.9% at midpoint.

Within this, I'll note that we're guiding used sales to roughly $1.45 billion on OEC sold of around $2.8 billion, implying total revenue growth ex used of 6.2% at midpoint. Our Adjusted EBITDA range is $7.575 billion-$7.825 billion. Excluding the H&E benefit in 2025, this implies Adjusted EBITDA margins of flat at midpoint year-on-year. Importantly, this guidance embeds actions we will be taking in 2026 to offset the cost dynamics I mentioned earlier and speaks to our focus on protecting margins as we work through some of the unique factors facing us until local markets rebound. From a cost perspective, we're better able to leverage the efficiencies that our network density will provide.

On the fleet side, our gross CapEx guidance is $4.3 billion-$4.7 billion, an increase from 2025 of approximately $300 million at midpoint. This reflects our confidence in the market in 2026 and beyond. Net CapEx is expected in a range of $2.85 billion-$3.25 billion. Now, within all this, we tag our 2026 maintenance CapEx at around $3.4 billion, implying growth CapEx of roughly $1.1 billion at midpoint. And finally, we're guiding to another year of strong free cash flow in the range of $2.15 billion-$2.45 billion. Shifting to capital allocation, as always, our priority is to fund profitable growth, whether it's organic or through M&A.

Following this, we focus on deploying surplus cash flow in ways that maximize shareholder returns. With that in mind, we are again increasing our quarterly dividend per share by 10% to $1.97, translating to an annualized dividend of $7.88. Additionally, we intend to repurchase $1.5 billion of common stock in 2026, supported in part through our new $5 billion share repurchase program that is intended to enable buybacks for the next several years. So in total, we intend to return roughly $2 billion to shareholders this year, equating to approximately $32 per share or a return of capital yield of about 3.5% based on our current share price. So with that, let me turn the call over to the operator for Q&A. Operator, please open the line.

Certainly, Mr. Grace. Thank you very much. Ladies and gentlemen, at this time, if you would like to ask a question, please press star one on your telephone now. If you find your question has been addressed, you may remove yourself from the queue by pressing star two. Additionally, we do ask that you please limit yourselves to one question and one follow-up. We'll go first this morning to Steven Fisher of UBS. Steven, your line is open. Please go ahead.

Thanks. Good morning. Wanted to just ask you, Matt, maybe a bigger picture question on ancillary services. Using the, I guess, the baseball innings analogy, where do you think you are on the evolution of this? Is this sort of like the second or third inning, where you have a much wider breadth of services left to offer here? Or are we more like kinda sixth to seventh inning, and it's a more targeted list? And I guess, what's the message around the ROIC on these additional sources of EBITDA and points of customer service?

Sure, Steve. It would be hard for me to characterize, 'cause I don't know what other products or services we'll add in the future, right? It depends on, 'cause we need to do them at scale, so it depends on finding, if we're gonna add additional services to the portfolio, which usually come along with products, right? New products that we're offering, you know, when or how fast that's gonna happen. But I will say that our goal overall is to continue to have as many solutions for the customer as possible. We're a big believer in a one-stop shop. We know that our partners want someone that can do as much for them as possible to consolidate their vendor base and to have, you know-

... strong services throughout the network are what they need, and that's gonna be our driver. As far as the ROI on these, just one thing to remember, although these may be margin dilutive, most of these services, if not all, are not capital intense. So, you know, these net-net on a cash perspective, these are profitable. They just dilute margins. We're not doing work for free, but at the same time, it's very much connected to the fleet that we rent. So it's important that the more we separate ourselves by doing these extra services for the customer is a big, important part of our strategy.

Very helpful. Then maybe just on M&A and the pipeline. It looked like you did some smaller deals in the fourth quarter after a quiet few quarters. Can you just talk about, you know, kind of what you added in the quarter? Then just curious how active the pipeline is. You know, did you continue any activity here in the first quarter? And what's sort of the range of size of deals you'd consider here? Are there any sort of chunkier deals that you could still do?

Yeah, so on the latter part of your question, the pipeline's pretty robust, and there's some chunky deals in there, right? Specifically, when we're looking at opportunities in specialty. But the deals that we did at the end of the year here in 2025 were three small deals, to your point. We did one trench deal. We did a portable sanitation deal, a very small one, to help fill out the footprint. And we bought an aerial company in Australia to fill out that product offering, which will help those folks continue to serve more... have more solutions for their customers there. But no impact, not a large impact, numerically, but strategically, they all tie in.

As far as what we're gonna do in 2026, we worked a very robust pipeline this year, and we didn't get - we got three over the transom at the end. It's really more about finding the right fit, finding the right partner, and at the end of the day, the math's gotta work. So we're pretty picky there, but there's plenty of opportunity. It just, it's gotta fit for us strategically and financially.

Thank you. We'll go next now to Jerry Revich of Wells Fargo. Jerry, please go ahead. Your line is open.

Hi, good morning, everyone. Ted, I'm wondering if you wouldn't mind unpacking the comments you made within Specialty. You mentioned there's some variance in the portfolio on matting. Can you just talk about the growth trajectory for the businesses? Which ones are tracking better, and any additional color you want to provide on matting would be helpful. Thank you.

Yeah. Yeah, absolutely. Thanks for the question. So, we saw, you know, broad-based strength in matting in specialty again. Matting was affected in the quarter by a pushout of really one particular project that we'd expected would benefit the fourth quarter. It's a large pipeline project that has simply been pushed out. So we've got the matting contract. We know we're gonna be on it, and the pipeline itself is moving forward. But that was certainly something that we had not expected, and that's just the nature of some of the large projects they do, I'd say, in their specific verticals that can move. Otherwise, every vertical was up in specialty. Very pleased with the results.

And going forward, just as you think about matting, on a pro forma basis, that business was up 30% for us in 2025. It was up 55% as reported. When we bought Yak, we said our goal was to double the business within five years, and we're very happy to report that we're ahead of plan, and we've been very happy with the business. It's going to be a little lumpier, right? And they can have just the effect of timing shifts, and that's really what you saw in the fourth quarter.

But, as I said, we've been super pleased with the acquisition and the growth, the returns that that's providing, and we're really optimistic with the outlook there, both within their kind of core products or end markets, pipelines and, transmission lines, but also as we extend that, those products into other verticals. Matt, would you add anything?

No, well said. The team's doing a good job, just a little lumpier than what you folks are used to seeing from us.

Okay, super. Thank you for the color. And then can I ask, in general rental, we're seeing really strong demand for earth-moving equipment, but aerials are really lagging. Is that a function of the large projects and data centers being less aerials intensive? And curious if you're seeing, based on your customer checks, an inflection in starts in retail and office, that could be interesting as we head through 2026. Curious what you're seeing on those fronts.

Yeah, we're actually not experiencing that, Jerry. We've been pretty strong in our aerial usage and growth, and really, the whole project product portfolio has been strong. So we're not seeing a delineation there, a separation between the dirt and the aerial. Maybe on the OEM side, there's some stuff going on that you're referring to, but we're not seeing it in our customers' demand needs.

And then, Jerry, in terms of your question about kind of office and retail, I can't... I mean, there's, there are projects that kind of come across the transom. I don't think we've seen any inflection. I would say, overall, the outlook for commercial is probably gonna be relatively muted, and it's other areas of the non-res that are really gonna drive- the continue to drive what we think will be strong growth.

Thank you. We go next now to Angel Castillo with Morgan Stanley. Angel, your line is open. Please go ahead.

Hi, good morning, guys. This is Oliver on for Angel today. I was just curious on fleet productivity. Can you guys talk about, you know, what drove the year-over-year improvement this quarter? And if it's possible, at a high level, what your outlook implies directionally for those factors, you know, rate and time for 2026?

Sure, Oliver. So when we look at the 0.5 Fleet Productivity in Q4, there's a couple of things that I knew we'd need to handhold here because some things that aren't as apparent to you guys. So qualitatively, when we think about the construct of that, our full year Fleet Productivity was 2.2%. We're very pleased with that. That shows that we're outpacing the inflation, and just in the most simple terms, we're growing our rent revenue faster than we're growing our fleet. That's really what we're measuring here. In Q4, we had some impact. So if I think about the 2.0 that we had in Q3, which was more like a full year number versus the 0.5 in Q4, when I look at the factors, rate was positive.

As a matter of fact, almost on top of each other, of the benefit that we had from rate in Q3 versus Q4, in this were exactly the same. Time was a slightly less positive than we had in Q3, so that was a little bit of the drag. The big number here, and why we're talking about it, is mix. So just the matting choppiness that Ted talked about, which is all bulk, that's why it shows up in mix. Those aren't serialized assets for those mats. That alone changed from Q3 to Q4, was worth a point of fleet productivity. So that's the big mover there. We usually, frankly, wouldn't talk about an individual business segment, but we understand that this is unique and such a needle mover that we wanted to talk about it.

Once again, pleased with the matting business, but that lumpiness, and because it's all bulk, had a big negative mix impact on our fleet productivity. Otherwise, we would look much more similar to our full year and our Q3 numbers.

Got it. Understood. That's really helpful. And then maybe just one more, switching gears on competitive dynamics. I mean, we were just curious, you know, if you've seen or heard any changes on the ground in terms of, you know, having a competitor recently IPO, whether that's, you know, potentially a positive or negative impact for you guys, now and also longer term?

Yeah. So a little bit different, right? As you can imagine, between Wall Street and Main Street here, that change of where they get their funding doesn't really change anything on the street. We think the supply-demand dynamics are good. We think that's why you had asked earlier about what's implied. That's why in our guidance, that's why we still expect to have positive fleet productivity next year. We, you know, we understand the competitive nature of the industry, but we think the important part of it, and probably being public will help that even more. We think the most important part of it is that the industry needs to continue to be disciplined because we've all absorbed price increases on fleet for the past few years. So the importance of the components of fleet productivity are still important.

Getting good utilization, getting strong rate improvement, these are all things that are musts for the, for the rental industry, and certainly something that, we are focused on, and we believe the industry is as well.

Thank you. We go next now to Jamie Cook with Truist. Jamie, your line is open. Please go ahead.

Hey, good morning. This is actually Kevin Wilson on for Jamie. Wanted to ask about cold starts. I think you're expecting 40 specialty cold starts in 2026, which is, you know, healthy, but down a bit from the number you had in 2025 and 2024. Wonder if you'd speak to the strategy there, and just your strategy around the footprint over the medium term, you know, in the context of revenue growth coming from more geographically dispersed customer demand? Maybe where you're finding the strongest opportunities for organic growth, anything on the verticals within specialty you're targeting for those cold starts this year. Thanks.

All right, Kevin, so I'll take them one piece at a time here, and you'll have to remind me later if I forget. So the cold start specifically-

That's okay. The cold start specifically, we don't really look at these as—you know, we tell you about them on a calendar year, but I wouldn't read anything into the 40 versus 60. I think we originally targeted 50, for 2025, and the team got ahead in the pipeline. But there continues to be a pipeline of markets they want to enter, and where that number ends up has to do with where do they find the right real estate and talent to open it up. And most of this is continuing to expand our one-stop shop, right? So most of these cold starts are in specialty offerings, filling in the white space, specifically for some of the new product lines. So we feel, we feel really good about that.

As far as where's the organic growth coming from, and we think about... It's all the end markets we've talked about. We believe that the construct, as Ted had said earlier, of demand in 2026 is gonna be similar to what it was in 2025, where the large projects and specialty are gonna drive most of the growth. We think that plays into all of our product lines. That's the whole point about the one-stop shop offering, is that's gonna create growth for gen rent and specialty. And outside of that, in the verticals, it's the same stuff you guys would see. Power's still really strong. Non-res has been very resilient and strong. Even if you pull data centers out of non-res, it's still positive strong. So we feel really good about that.

The ones that are still dragging would be the residential, which is not a big part of our portfolio, and a little bit of petrochem, whereas I think you see the rig count Q4, if I believe my memory is correct, was down 8%. So outside of that, there's nothing specific I'd call out.

Thanks. That's helpful. And then, just to follow up on that, with the growth coming from large projects, I guess, like, what, what can you, what's embedded in the revenue guide in terms of local market demand? Can we still call that flattish, which is, I think, what you said last quarter, or just what's your level, level of visibility?

Yeah. Yeah, you're on it, Kevin. We still think that's, you know, it'll vary market by market, but overall, in generality, we'll call that flattish. And with most of the growth, as I said in my opening remarks, coming from the big projects, that pipeline is as big as it's ever been in my 35 years. So it's gonna be more of the projects and this does not contemplate a big rebound in the local markets. But to be fair, not a deterioration as well. We think steady as she goes in the local market.

Thank you. We'll go next now to Kyle Menges with Citigroup. Kyle, please go ahead. Your line is open.

Hi, good morning. This is Randy on for Kyle. You guys mentioned that you guys alluded to another strong year of growth in large projects. I mean, I'm just wondering, based on your recent conversation with customers and what you're seeing in the market, in your mind, what inning do you think we're in, in terms of this mega project spend? I mean, it sounds like it's gonna be strong this year, pretty strong this year, but more of a longer-term outlook would be super helpful in terms of how spend could go over the next couple of years.

Yeah, I'll start there, Randy. I'd say the outlook for these so-called mega projects, you know, is very healthy. It's, you know, certainly hard for us to judge what inning we're in, but we certainly don't think it's later innings. And we base this on a lot of things, but frankly, we've got a pretty, pretty broad assortment of drivers within large projects. So, you know, we've talked about infrastructure, we've talked about stuff within technology, we've talked about power, certainly data centers, but, you know, at this point, we're kind of following, call it 6, 7, or 8 tailwinds that we've been talking about for years. And when you aggregate the dollars that are expected to be invested in those areas, we think there's a very healthy amount of runway ahead of us.

Got it, that's helpful. And then, I guess, just in reference to some of the cost actions that you mentioned in your prepared remarks to offset some of the headwinds this year, can you just give us some color on some of those actions you're taking and what you might expect those to contribute to margins this year?

Yeah. So we probably won't call it the contribution, but it's all embedded within the guidance. But what we're one of the areas you can imagine we're really focused on, is we've talked all year about these repositioning costs. While if large projects are gonna keep driving the growth, we're still gonna have those, but we've got a lot of actions in place. How can we mitigate those? How can we do it better? We can't eliminate them. It's part of driving great fleet efficiency and fleet productivity, is moving those assets to places where the work is. But we're gonna. We got more eyeballs on it, and we've put some more tools in place. And then just any other hard cost actions we could take to help the team. So we'll talk about that as we achieve them, as we go along.

You know, we feel good that we've got an action plan in place to protect our margins and to make sure, regardless how demand shows up, you know, as we said earlier, we believe in profitable growth, not growth for growth's sake, and we're gonna make sure the team's focused on protecting margin here in 2026.

Thank you. We'll go next now to Tim Thein with Raymond James. Tim, please go ahead. Your line is open.

All right, thank you. So, Tim on for Tim here. So,

Hey, the fleet productivity discussion earlier, I guess kind of another reminder of some of the challenges of interpreting that number from the outside. But just, maybe I missed it earlier, but in terms of the plan for 2026, just in terms of how you see the year playing out, it's still met the expectation that, you know, your ability or you have the ability to outgrow that assumed inflation? Is that within the targets for 2026?

Yeah. Yeah, embedded in that guidance is that expectation that we'll at least reach that one and a half hurdle. And where we end up in the guidance and where we end up on that will, that deconstruction revenue will be the answer. We might have some lumpiness, hopefully not as severe in Q1 still, with the mix, and that's why we don't really forecast this, because the mix is a wild card, right? That's the result of a lot of moving pieces there. So, but the most important pieces of it, rate and time, we still feel good about. We may not have a huge time improvement, but we're running at really high levels of time utilization.

So, you know, we'll stay tuned there, but we certainly continue to focus on rate, and mix will be what it'll be. We think at the end of the day, and embedded in this guidance, is that'll be positive fleet productivity to make sure we can offset that inflation.

Got it. Okay, and then just in terms of your plan on fleet loadings and just CapEx in 2026 from a timing standpoint, just given that, you know, you pulled forward a little bit more CapEx in the 4Q, does that impact the timing in terms of how you expect to land that fleet in 2026, or is it more of a normal cadence?

Yeah, I'd say more the normal cadence, Tim. I'd say, you know, in that 15%-20% range in Q1. In the middle quarters, it'll vary, depending on how fast we're getting deliveries and how good the team's doing, driving utilization, but we'll be in that 70-75 range, and then the balance in Q4. So pretty similar to what we've been doing.

We'll go next now to Ken Newman of KeyBanc Capital Markets. Ken, your line is open. Please go ahead.

Morning. Maybe to just start off, Ted, I think you mentioned in your prepared remarks, having to hold on to some high time unit equipment, which impacted your sales volumes this quarter. Could you give a little more color on that? And just, what exactly were those categories kind of reflecting?

Yeah, absolutely. So as you saw in our guidance, we initially expect, or what we've consistently said is, we expected to sell about $2.8 billion of OEC across the year, and we came in at about $2.73 billion. So you can see that shortfall really was in the fourth quarter, specifically.

... and we had, you know, a number of regions that just ran busier with certain high time assets. So, you know, you would think things that might reach high in the air. So it could be aerial products, telehandlers, things of that sort, would probably be the most notable categories. And so obviously, those things were on rent. We weren't gonna pull them from customers to sell them. And so that really kind of explains the deviation in terms of the used mix.

Got it. Okay. And then maybe just for my follow-up, just wanted to circle back to the margin guide. You know, it sounds like you expect some of these cost actions that you're implementing to help offset the ancillary and delivery mix as we go through the year. Just any help on how to think about the margin progression? Is that something that you expect to take place more materially in the back half? Or just, you know, is this gonna be something that you expect day one here in the first quarter?

Yeah, to your point, it's something that'll progress. This isn't gonna be a light switch. And specifically when you think about some of the mitigation and repositioning costs, just by definition, more of that'll happen when we have more activity. So in our peak quarters of volume, is when the opportunity is. But then even some of the, some of the other costs that we're taking out, it'll, it'll build up along with when the costs are usually achieved, so to speak, or, or, or, or actually not achieved. So, we'll still have some noise here in Q1, and then as we work through the year, we believe we'll start to see the benefits of some of these actions.

We'll go next now to Steven Ramsey of Thompson Research Group. Steven, please go ahead. Your line is open.

Hi, good morning. Wanted to touch on the growth CapEx number of $1.1 billion, I believe you said, for the year. Maybe to remind us how that compared to 2025, and if the nature of the growth CapEx this year is similar to 2025.

Yeah, so if you look at what we did in 2025, total CapEx was call it, with rounding, $4.2 billion. Within that, there was probably something like $3.4 billion of what we would call maintenance. So that would imply something on the order of, you know, $800 million-$900 million of growth CapEx in the year. So I think in my comments, I mentioned there was an additional $300 million of growth CapEx. That'll really, you know, focus on two areas. One is continuing to drive the growth in Specialty, and then taking care of large projects where we- we're gonna need more fleet. Matt, anything you'd add there?

Okay, that's helpful. And then one other thing. Wanted to get some insights on the ancillary piece, and if you are intentionally trying to drive this revenue on the ground and incentivizing it with the sales force, or how much of that is a function of specialty having higher ancillary revenue that carries with it?

Yeah, no, this is much more of a response to what the customer's needs are. And for some of it, it's actually set up. So think about if we're doing set up for a job trailer or some kind of set up for a power or HVAC setup. So a lot of this stuff comes with products that we're supplying, and it's just the need that the customer has, where they'd like us to do it for them versus doing it themselves. So it's not, it's not really. It's not certainly not something that that's driven by the sales team. This is driven by the needs of the customer along with the products that we're serving them with.

Thank you. We'll go next now to Neil Tyler with Rothschild & Co, Redburn. Neil, your line is open. Please go ahead.

Yeah, thank you. Good morning. Morning, guys. I wanted to come back to the margin drag from the transportation costs and just sort of think about that bigger picture. Ted, I think you said it was 70 basis points in the fourth quarter. And it's really started to feature more significantly in the second half. So there's two parts to the question. Firstly, is there any aspect of these additional costs that reflects the change in the fleet, you know, being more specialized and so perhaps less fungible? I think you can probably be able to cover that one off quite quickly.

But the second part of the question is, in the context of what you assume for flattish, local, small project growth, if that proves a little conservative, in the back half of the year, particularly, you know, would we—should we expect the margin drag from transportation costs to disappear as a sort of natural effect of a pickup and a more broad-based acceleration in demand growth? Thank you.

Sure, Neil. So I'll take the first part first. From a fungibility of fleet, this is not a fleet composition dynamic. There may be some exceptions to that, right? Some specific assets that you might need to move for an LNG plant that's unique. But for the most part, 95%+ of our fleet is extremely fungible, and that's a big tenet of our business model and how we believe in. We don't really get into unique, one-off kind of serving one end market products because the lack of fungibility and then therefore productivity you can drive out of it. And your point about the local market's a great one, but I wouldn't call it conservative.

The way we see today, we do not expect there to be big growth in the local market. If that changes, we'll react as always. But when it does, that'll allow us to use the density of our network, right? Our entire cost structure to help drive growth, and it'll be more efficient, as opposed to having to reposition fleet and some of the stuff that comes with mobilizing to these large projects. So your thesis, we agree with 100%. We don't expect that local market repair. It's not embedded in our guidance for 2026.

United Rentals (URI) Q4 2025 Earnings Call Transcript

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