Earnings call transcript Q1 2023

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Operator

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 differ materially from those projected.

A summary of these uncertainties is included in the safe harbor statement contained in the company's press release.

XX, description the and Form the company's the ended complete please possible XX-K SEC. more as year to well refer annual December a of filings other these risks, for to For subsequent as with XXXX, report on

that new no revisions You note reflect commitment order or or release filings any to forward-looking circumstances in www.unitedrentals.com. these no statements or to has access expectations. the company's update Rentals can at subsequent events, obligation to in website information on Please United and makes changes publicly

press You the non-GAAP should to see also company's most release cash and note to and from as to reconciliation measure. such the Please call that flow, to the non-GAAP the the references EBITDA. investor EPS, financial of measure EBITDA company's comparable adjusted recent include presentations free each financial adjusted today's GAAP terms refer back

Matt and Financial and United for President Chief Flannery, today Officer; Executive Officer. Rentals Speaking Chief Grace, is Ted

now turn I Mr. the to will call over Flannery.

Flannery, may begin. Mr. you

Matt Flannery

Thank for say our XXXX. with track, one. the is months we're did this delivering can and always, start, on joining the is in to we'd rate in you, raising that we integration another our we and The full pleased And record I'm job you told which plan recordable below is see customers. our everyone. results year Ahern team executing in financial a XXXX, that pleased we night. year shared continue Thanks morning, safely for of after last very our as doing our great X you ago, bar call. that that strong and the And to good operator, off performance a

end substantial strength solid confidence margin significant and This of us for full generation. our expansion markets and the execution free growth, year XXXX guidance continued give the reaffirm cash to our

revenue quarter record our The return capital And increased our into billion. XX.X%, Within digging by grew $X.X XX% records. rental set both quarter first to while first XX.X%. first to this, $X.X watermark new XX% at quarter EBITDA billion, to increased expanded invested a results. a revenue high start by on Total Let's margins by finally, XX%.

quarter, the last strategy. million it. we've in that positioned with year, local we the well acquisitions year-to-date, complement two closed CapEx. the invested nicely customers gross And first that see we're During fourth Combined first and the our demand took $XXX of quarter we our to support actions quarter during

we Key growth and Looking the more manufacturing closely demand. in at of construction, the all same, double-digit board, including industrial quarter power. first saw Geographically, across verticals saw our by much nonres the led regions. of growth

delivered revenue specialty business another quarter and all team. up strong of business, storage XX% growth excellent led with by rental across mobile our Our year-on-year lines

how for this on recovery and revenue need XX% specialty, track and new our on opened are year. feeling sales Within in but their six year-on-year, locations were strong, And sales of positive XXXX. XX of rates for to we due the demand starts see and another customers were not outlook we back normalized in only holding Used level volumes equipped. the quarter, another up the indication provides margins largely are after with about positive cold around the

allocation. to Turning capital

value. company as of profitable our driving this focus growth of maximizing view excess hallmark We means Our a and remains on a returning cash good to shareholders. and a

million by our of During over to flow generation. shareholders, and the we balance $XXX sheet quarter, free returned cash strength our the supported

a carrying positive season, regarding in continued for see variety encouraged combined into busy the industry reasons 'XX of by the balance we're optimism we with Looking our beyond. Near ahead, we're and of business term, momentum our indicators.

as activity And measurements internal external this growth to XXXX. strength well point in confidence both the continue towards customer backlogs. by of customer off, and is as current First of underpinned

Additionally, ABI right guidance. Momentum Dodge in as And reaffirmed full to Index nonres year up was factors these well, and growth over XXXX XX% direction. the increased Together, our year-over-year. continues the inquiries March points the component support construction in where starts XX% the forward-looking

to we in several term, remain economic Longer significant view we industry for environment. in confident our our tailwinds as capitalize ability on that resilient multiyear any

also is airports, in a to across types, well It early, the undertake our bridges customers as support remains highway. First advanced continue they ramp Act. and funded project Reduction Inflation projects from infrastructure across by the to a road infrastructure. of manufacturing energy including bill but see we variety and spending federal We're clean and positioned

see is we over private drive energy very for and leverage $X hold well and or indicate spend project services, led advantages and that network for prepared the our Combined of reports power. across our our strong serve by the tailwinds decade. of our and manufacturing, investments on potential trillion shareholders. the the of Within these the in positioned size continue Whether team value to products to over next and U.S. our We're customers competitive to construction, projects. autos, semiconductors through depth these creation our breadth

highlight from their by area, Before doing Journal, XXX, are just that XXX the long our wrap team had this us doing about efforts And the by also for Top made recognizes which generating we things while stakeholders strong Wall all and where right Management wins that the some including the doing right their recognized good. companies United quarter. I companies in talk recent to performance recognizing the in well their list, up, Street shareholders. for significant doing heard achievements Team for you've continues well be I of other first want to And

and has us as we XXXX to positioned. well to about up, it our feel sum beyond long-term good continue strategy So

flow. options know value. cash And there our while customers executing strength of And creating demonstrated, our manage sheet capabilities. business team to support the us gives them our Our we've how this balance the multiple model durability and we're is unmatched know we our with to the leveraging consistently of as and of flexibility for

a of want Q&A hand and financial and it will I session both person XX, virtually May in-depth our City, hope join York we'll initiatives strategy, that Ted, held I performance to and Investor be key on The Lastly, we'll quickly provide highlight to review over in an that which hosting Day an during follow. us. be event we you in to New with can before

With that, review hand to our over Ted take results, we'll call then to I'll the your and questions. financial

Over Ted. to you,

Ted Grace

Thanks, everyone. good Matt, morning, and

unmatched results our press that As well for importantly, our position Matt framed first you quarter saw year. opportunity and team's our the and think serve we good our market consistent knowledge feel strong full strategy, we capabilities. I that our XXXX are well we that team were see, expectations things beyond, continue given produced And them to with both in again consistently in execution excellent to customers' about us here with and release, our the saying

except into I'll quarter The as out the quick figures include are discussing Ahern's adjusted stand-alone in reported, forma, results instances before numbers. where jump be One note a call XXXX them first to the I'll are period. in few I year as pro which ago

said, that $XXX increase a quarter of with an XX% at billion. or $X.XX That's record So was million revenue year-over-year. first rental

OER revenue, Within XX.X%. million or increased rental $XXX by

another fleet or $XX increased by of XX.X%, partially million by was usual productivity size $XX offset our adding providing fleet million. million. as and reported, X.X% average increased benefit This $XXX fleet by X% Our a inflation

million or additional were by within or XX.X%, revenues pro up rental, healthy higher million X.X%. a $X provided a I'll on rental note a $XX and by Also forma fleet re-rent revenue an robust increased XX.X%, X.X%. basis, and is ancillary that productivity

the to retail fleet XX% XXXX. million normalized increased by $XXX increased to XX.X%, XXX sales First used basis much quarter strong throughout points to used of more a we holding return continued pricing. after Adjusted by on margins as supported by volume

from in reflecting Moving million another an $X dollar a and $X.X exceeded first million. of $XXX quarter includes Ancillary the $XX contributed Adjusted increase million $XXX record, EBITDA or rental, within billion, change OER XX%. added re-rent EBITDA. which was million million. down to $XXX increase The quarter

about increased to the non-rental another businesses rental, due and higher adjusted other normalization lines to $XX million. while million primarily $XXX EBITDA, sales discretionary added of costs. continued certain Outside commissions by SG&A of million of contributed $X used

basis revenue. percentage a declined points sales, to SG&A of As by XXX total year-on-year of however, XX.X%

quarter profitability. Looking first at

than and on record. That's almost and increased pro basis forma basis or Our And EPS XX.X%. as-reported on was to of XX% XX%. better basis share basis. quarter adjusted adjusted a record basis first XX% a first another XX an EBITDA $X.XX increase as-reported per points XXX pro finally, of a points on basis an on flow-through a forma This margin quarter X, translates year-over-year to

fund looking XX XXX for a cash with story That's all points at growth. Turning was free million the We or rental another at the $XXX see on in and million to cash capital an an and coming million, basis. basis was cash invested significant up that trailing and positions average XXXX. I'll while -- in record -- a capital. $XXX flow year-on-year. Gross points quarter cost at XX.X% growth This set free weighted us our CapEx year-over-year XXX XX.X%, good net new above to we XX-month rental of was current continuing in basis flow add CapEx $XXX LTM well increase basis margin represents sequentially Free was CapEx. points million. of CapEx and return net on

the to Turning balance sheet.

and $XXX And XXXX. including XX via of with X.Xx, reduction the was basis dividends of repurchases. ratio March this Notably, a returning sequentially to both the $XXX maturities shareholders million year-over-year. the $X.XX long-term Our at no after note through million our share $XXX liquidity end at all the billion leverage quarter quarter, of end million in until improved to exceeded and point representing

our our we we company. record metrics. night we markets what year saw Looking for our diverse XXXX you last see be across a all customers, the forward, from remain reaffirmed will Based confident across on that the guidance and hear we momentum that

midpoint is the used implying implied year billion total Just approximately of and to $XX.X guidance XX%. Within $XX.X is to revenue, our remind at revenue review, of full at range forma you billion, expected total that growth XX% growth of billion. I'll pro $X.X in

an flow $X.XX points think it, to $X.X implies through On adjusted mid-XXs. EBITDA midpoint, and flat flow-through about margins roughly billion Our pro around way billion. guidance however, imply of The EBITDA appropriate basis, and year to in on remains margin at full the range think we this is a our EBITDA the basis, -- as-reported adjusted basis which forma expansion XX%. about XX of continues to

CapEx CapEx $X.XX our net On the guidance fleet to remains billion, $X.XX billion to gross $X.X of billion $X with side, billion.

And free is billion, dividends, to is guidance cash bolt-on which M&A. finally, repurchases before $X.XX $X.X our billion and

for that, the to with turn Q&A. operator over call let So the me

line. please Operator, the open

Operator

Our first comes Research. Instructions] Melius Wertheimer with question [Operator from Rob

Rob Wertheimer

lots in supply/demand into to through the look all dynamic basically start differential, question as proposals overview. first and move you're well of just year? of to activity And to the the and or mega other you on what supported a demand. does you continue gave balance everything through? continue versus Does does if on aside and as Are my we customers. ground loans? on it about look And Are good leave year? look sort I But funding supply-demand your flow pricing from it the the guess, project the we seeing you of and is surveys think you So any just go years we the through Dodge give seeing seeing quoting pretty tight hearing by

Matt Flannery

one the we've portion, and opening start I'll remain quarter, show of growth growth demand be and all through what businesses our our the comments, comp continued but to broad-based verticals business cover and of all the I we momentum units year, coming And and actually in quarter whether it's in first business. geographically correct. of now off our that's it quite seeing was There's specialist recovery one now. was a a double-digit technically that a been that little the from of the the last in the So with Disaster every positive down while for discussed where X% quarter. that in be bit, XXX% demand

remain lines. all demand. So geographies, product the verticals, all strong all -- very basically, strong the the

see we tack good end our along about the I not components partly it, dynamics by constructive that to We environment, mean we good We the being of supply-demand feel the for reaffirm by the good industry So be broad-based for very think of with feel mega the demand. it continued the we market feel of that. driven discipline. but about when about in the about. feel a overall, about to I I guidance demand strength we're And just projects, constructive good because get driven the going able partly talked rates. about to and

Rob Wertheimer

coming So largely any versus I'll on other that balance? explained that's just rate Or responsive. stop that then cost or indication gross by of Ahern pretty there. is rent is And And gen margins, factors? in

Ted Grace

I'll is be Yes, just at clear, That that the bought Rob, the lower And those a that we one. to Ahern. business fact margins, of have line take you is margins. that look reflects in of it When was Ted. this the impact knew with indication we that expectations.

As effect see. you we integrate it, the that's

Operator

comes David next with ISI. from Raso Our Evercore question

David Raso

the people, I magnitude implications particularly think drag but and I get can you the of the of trying rate think you But Ahern, the to a the you improvement know just reported to productivity or would of a around surprise, for the is going I'm year, a most whatever that the productivity an of about numbers brought acquisition sense drag that improve mix comp tell can Ahern forward, reported was dragging it. able, and harder. us the they're the And gets on And why numbers? the you'd for rest that much? the bit have Ahern smaller

I the comp course, of rate then know offset, have harder. though, And the you gets

year reported all to I that to figure have through the the reported sub figure we're of just X, to by productivity year. out it we I slow flat is down going report. as trying productivity But think end now numbers, number be trying out, the of case a we're on the the whole year, been in to would the base think X? had just Because

Matt Flannery

Yes.

help let So you with. me

right? there. that putting comparing So first base taking forma, in the urging will base puts the start we're that Ahern manage everybody of base off, asset we look pro I That business. the how year by that the base, into how to. at That's we're the It's

will points. base point year call between in that gap So That forma reported, believe not continue. of, that X and disconnect as it, pro let's having creates about we

explain it -- just I'll to I'll And try simply.

revenue of If that report of the When adding you and effect. the you that reported like is $X.XX report about gap amount forma of base the the XX% rent roll for every on dilutive we and what they our it's had X% revenue it, somewhere into experience, -- was think that XX%, year, more dollar, we're that going Ahern capital think about the on on it amount to generated about between which that's dollar. be as that to in And we we pro what rest year. the

-- it baseline. So into because that's baseline just that add change baseline the the is happened. It's of what already we not

that Now will in our in up those any improvement productivity. show can fleet our improvement get on we assets, that

in know stores. As by overall scramble, that business. our the you time, fleets egg We consolidate this all

go-to-market. single one have We

So that, we statements all were customer that consolidate overlapping.

forma be continue in as that we'll that's So going to on the all and to reported pro improvement report basis.

Does enough, that David? you gap explain well that for

David Raso

think position getting. fleet, you'd the fleet they but quarter, would you the off throughout one inefficient wide year. for be able maybe idea gap be some rates maybe does sell the has were that that the the to It to

umbrella, under better Now your rates? get you'd

Ted Grace

be would added that [Indiscernible]. But in back

David Raso

of of XX% it's not acquisition. XX% it's So immaterial, fleet but now, fleet. a About not the your About right? massive

that you idea is think the interesting would when the first challenge in be modeling less? year a be of a that I improve throughout the you'd close was the drag, to big fine. it to of the able But bit acquisition able gap quarter won't coming think make

Ted Grace

gap. of So but at Over crude assets, about dollar better calculation We XX% certainly, mean, takes time, it we narrow we when look talked think idea they'll owner that be the you being will a of we of was time, and that it right? don't part at of opportunity, -- the forever. certainly, kind is the I right?

that's intent them acquisition over Our but is time, of to something it get closer And will appropriate to time. so. every take sort

Matt Flannery

Yes.

in real It So a to show where get right? pro improvements forma, as cross-selling going we bit as will get debt, create create we'll to all little better start not up all see will will better asset time that's better, we that of XX%. mover the the we other going only performance. our XX% in to get needle on The improvement base, our it's be your be overall right, in but to own mixed point, that

walk and through but exactly it's between for going for, not the balance So to somewhere to the but can be is X% be in we math, it's year the going X.X% expectation. of our

David Raso

[Indiscernible]

Matt Flannery

Yes, sure.

David Raso

I ask just trying XXXX to was bit. a of going to little kind what think about

sense projects By no are trying suppliers am -- people starting about the hit of of aspect orders hear what taking 'XX went suppliers when just them. thoughts You to ground to you're having CapEx a to through but the 'XX. year, for I curious a business I'm from get means asking kind XX some for guidance, that your of hearing you your have multiyear beyond for

color in you're now think give about of kind working earlier on right you us the of we industry. Can heard historically with kind XX a which conversations, to haven't what of X-year kind little sitting on projects, when order willingness you

figure how 'XX they trying think . I were out think about just to beyond to

Matt Flannery

Yes. We think supply will chain next get year. the better that

we don't as need pull as did. we'll think So forward to we much

we extra extra in another XXX QX. QX. XXX, probably let's in say, remember, You in And brought

that needed for feel So do year. we to this that still we

end we'll sure conversations with normalized third for type change slots. peak this would the to of see to that back making we'd lot the revisit the season about quarter started than vendors. talk fourth year. expecting maybe What the to next think if we we of a But not this more We're slippage that have and get year throughout quarter, in securing we're

supply numbers us hard to talking do a down, trying will far along. we're to to don't them put today. have we all as in for the that feel be Now as chain to position But

David Raso

us too. side projects, thinking as how multiyear though demand tell about Anything about please Or can On go ahead. you are it? well, we the

Matt Flannery

a electric last of mean lot plants to a I of I month just -- was be going was -- Yes. myself, to there's car equipment. a are of these require projects at couple going at couple multiyear I projects where

even we do only manifest. these be and going multiyear lot not think as started and a the spend starts, think going the So infrastructure We to has to opening the really remarks, to in projects reporting projects. are mega we is in a it the of in see don't be but IRA multiyear said expect, we I

future all that's So tailwinds.

Ted, I to you add? have don't anything know if

Ted Grace

this But certainly, in think conference example, I think that infrastructure we an at degree. to when talked infrastructure, run spend. still $XXX to We're David, at Yes, is we that about some right, intended year your produce phase. of about billion a about ramp as legislation rate,

So a But XXXX, anything just tailwind provides to to so XXXX. going not we're obviously, close to right, that numbers. get in dimensionalize that in

of If half got you $XXX total a spend the billion in construction an in context $XX the U.S. When you that thought of that's billion you of that incremental to get market in nonres that infrastructure XXXX, just you IRA, LNG about get the And to right? key this run and an semis is X rate, auto, second XXXX, kind half thought tailwinds. we of logic you across as get annualized of

certainly, the want because to how to and that half will how to of about the determine critical back will positioned. obviously at have 'XX to dictating, think Coming the CapEx those we the visibility fleet this year will question, are, trajectory the tailwinds So in think be those the level, CapEx we high about we a back imply

David? that add? Does help, you'd Is there anything

David Raso

appreciate that. circle any I'll back if I further questions. Yes.

Operator

Our Fisher next with Steven question comes UBS. from

Steven Fisher

back to just to minute. come margins the wanted a for I

quarter, that model those the year-over-year we had from gross that other the still for is gross margin you are onetime-ish as year-over-year rental drag? In drags margins the those say the we reported So drags? rest a how of year, in would Ahern words,

Ted Grace

a if we Yes, when it their the you they a business, just bought will as in And them, an be. had EBITDA look at margin on reminder, mid-XXs. basis, LTM reported

below below that. So would synergized, considerably were that's even we obviously, they be where

points. forma gross you lasts them. lap On will down XXX look reported a And up we really a kind was basis, in So the was it in XX basis the of specifically if it rental Steve. at be an that that that effect dimensionalizes Ahern the you until pro gen that -- of be margin in see what That effect perspective, To impact that year-on-year, gross really where put rent And will as is we margin. XXXX. segment lasting progress quarter. through the

answer does of the help that kind question? So

Steven Fisher

that But of over course kind smaller does. the it a kind Yes, does year? of get XXX? that's XXX Or the of steady

Ted Grace

delta about lower big talking the this fact coming mean aside you in But I synergies to in, as one margin -- the that's consider. that isolation. certainly get thing we're the from So it's

Steven Fisher

were guess but Ahern anything drags were answered other have outside margins of So then, else? any lower there -- you I utilization there before, and on gross may this like or

Ted Grace

-- it, mean isolate No. there's flows mean, I and cost. it's always the to if you I ebbs

other pro So gen year-on-year -- see as only explained where right? there but let's from, The margin, are is but adjustments, example, that market you if really point a basis pro on you majority gross that number. down to rent value ago accounting can in fleet, down period the the forma of herd, pro say, look XXX it's the go that Ahern includes at an year would XXX XXX fair the That forma forma.

get facilities the and shorter-term fleet the we we Another, get explains expenses their difference. call integrated, shape as onetime as it, really that

Steven Fisher

about seasonality one loaded of equipment would we typical used just of right the suggest more be quick sales? now, used still would say sell likely the prices think front-end end to follow-up. the back then good because And cadence Would you the but it's more you should How year. at are

about that of the cadence we year? So rest how the for do think

Matt Flannery

of are right, to cadence think primarily as fourth We quarter couple up last retail. being the the a Yes, opposed open been historically, as quarter usually the and think larger, we channels with your normalized largest return we'll When normally, right. observation to is other you about where first the cadence, fourth years more we've

QX as makes in right? it X, the off back rent, your in three little then a bit again ramping and and four, utilization fleet sense. period. less It about up think and lower So comes two

opportunity easier. you have when the fleet sell it's a So the to little

Operator

Jamie Our next Suisse. Cook comes Credit with question from

Jamie Cook

two guess questions. just follow-up I

back Just as back expect do we integrate of sort to on in we expect Can you normalized margin get Ahern? more incremental the margin by to the XXXX again, mid-XXs? Ted, when that

Is question. then any just seeing talking And just about? I of visibility follow-up of know customers they or difference strength side the type some there customer are everywhere. the the my might as of in into the more larger projects because you're infrastructure customer broad-based these you're of customer? sort larger stronger Maybe have size So anything on well?

Ted Grace

Matt, the you take X the and Sure. second. take first I'll

Ted Grace

Sure.

So with forma, things Matt would forma view look Jamie, on in right at XX%. mid-XXs. in full that mentioned, flow-through, line quarter, We we pro the guidance as as first through year the the flow in pro

And but of or that the year. as remain expected flow-through certainly, so guidance, at guidance don't very quarterly is sequential we give beginning intact and kind of we confident the the

So first that. deviation as don't the any view from quarter we

of ebb they're at right of in the upper think cycle. the XX% through, an where targeting be flow and but flow. things, this through cycle. phase lower end flow many middle of course at in the and XX% growth in fairway there's the some talk you about the be of the band to point, the we talk some But like want to to going as is that And the we And we about and of -- across

guidance the with and yes, it's So consistent

Matt Flannery

we just so. reaffirmed that guidance Our

Ted Grace

Yes.

Matt Flannery

companies customer preplanning making ready these capabilities even healthy but today conversations larger a quarter throughout well wheelhouse, -- larger first last those the the why have and mega overall, the more of the resources more our up probably quarter needs then for feel trend projects. view skewed of And one is on We're little project of very side, people be as the the we're is in probably having. will. it's reasons we we're as to coming, as fourth going continue the are because this if of their conversations some we far you because big the kind and for from fare and sure demand of towards pull-through, have that because this bit year which And you to jobs. of to customers, size and we're But ramped having these that about fleet, the are really the more

So a our a is our little as big which of bit larger towards accounts, you more skewed part all know, business.

Operator

from Revich Jerry with will question next Goldman Sachs. come Our

Jerry Revich

pretty Slide in interesting. your deck slide XX is

it's So a have decade you range your the in level through if above decade about macro the next on XX% been that I'm that your different what's economic you just that now, the maintain above views confidence XX% environments. can talk from margins from And had past past maintain out of you year now. quarters obviously, a downturn, whether over from level performance the there, two could margins Can in years the now, you've from two of downturn? of wondering

Ted Grace

say ability and this is is the very confident of the we I'd gain. structural business a So guess about that what feel I

including you're take. of about critical the kind In of a terms reasons, it's for what in do to talking you the dimensionalize that downturn, dictate what actions downturn will business would multiple

had COVID X% during in decline of points in a look we performance we margin. revenue, compression, margin I at EBITDA rental of the had face think if basis the you XX

So in what that of do, seen hard we kind will scenario, you've on costs. can we lean

to I that the it, basis X,XXX is absolutely points is say what call we feel So very guess X,XXX I'd improvement, structural confident sustainable.

people, you would threshold what I this I of about where remind what at simply also because In margins, a it we've say of has the is of and done just actually harder lot. Matt a when understates giving would you talked done. look the to terms assumptive. that's get, business kind core

XXXX, since be XX% out acquisitions done we've But margin the if to in range. you to the were would back XX% our EBITDA

been to frankly. talked integrated we've strategically. returns margins Financially, we've shareholders, perspective the They've benefited always from But and them. dilutive benefits a the to have they've we've home runs businesses. delivered they when So been us as they've those about done

profitability I improvement up great it's and the chart, anything it at because you'd Jerry, does that Matt, even chart, when I has strong core you look bring think the a understate So add there? only that in business. been how

Matt Flannery

it thing said That's add. you . the would No, only I well.

Jerry Revich

on like you a total And you the looking on at? can conversation? that pipeline from based types specialty pull the for increase the just Can as Ted, I percent looks specialty structurally folks? talk part about meaningful of interesting businesses of here you're to opportunities of what M&A Any

Matt Flannery

not filling I but the we'll that after lean mean XX% filter organic and a an still out businesses model of new are and even for offering as coverage some the looking, might towards they Yes. our is creating but we product it, is first growth, scale opportunity. anything some need

look a pretty robust continue trends to pipeline. see, a financial one pipeline. make But not can We it that over get mean as the the you we're takes to doesn't get And sense. lot to working at to

don't believe we look. us. mic, is continue there's for have opportunity that M&A certainly nothing it's and a anything we a ours. importantly products real open on We M&A to we So believe would and discuss imminent, really the cross-selling and We but strength of do more integrating

work So that Jerry. pipeline, continue to we'll

Operator

question comes Seth with Fargo. next from Weber Our Wells

Seth Weber

back the How towards think to just the think I How bit on equipment, more margin between guess, talk about about little should shifting maybe I pick margin. some with the you, you maybe have off model we both competitive, do up impact more about and assume little maintenance interplay end hoping whatever. of bit less picking a bigger what there's -- about on a is but customers thinking gross was the up, longer-term these be contracts. I impact? how or less maybe your margin EBITDA dropping the you and you rate

longer-term you towards more customers, this about guys bigger are how thinking -- longer-term margins with projects? Just interplay

Matt Flannery

Sure.

smaller going guidance, we're our of the because variability customers to and are we just bit get couple in a part a expecting balances lower that's not job all. rentals, just put of have relative see a your can point your going a largest whether out and over to be a we're pricing in pricing. $X come lot gross split cost or in serve. across rates, planning cost utilization to right? So its on whether is different And per can of that margin. logistics, I XXX and margin high -- little there yes, EBITDA jobs, it bit to a change made, it to at to spot margin But you lower to service the long-term in better everything little with $XXX serve, it you And the on meaningful any million project million As so not profile, if at

Seth Weber

I Ted press then there it addressed the you're you here. leverage year, going capital any would the towards obviously updated that? that end but is And you release to billion Matt, range, stock low to maybe, is $X any the share under of this there your on Is complete allocation as incremental thoughts in know that or the add buyback? is below your pressure message

Ted Grace

is thing have guess stock. we very I'd buyer a say I consistent consistently the been comfortable our of and

. So we at of philosophically. it's standpoint strategy, From feel very good point. the certainly our we're this something changing about not that contemplating that

cost averaging dollar of kind believer a been systematic consistently in execution. We've

obviously million one So you in is of in XX. the quarter, $XXX back which the saw buy us full year quarter exactly

been of in we or have historically not tactical. So leaned kind

effective think it to the look of strategy. it call when people well. studies us that most served And you execute is think, way buybacks, this the opportunistic. these We on frankly, most right Some we at

Operator

comes Markets. Our Ken next KeyBanc with question from Capital Newman

Ken Newman

maybe couple Most of a here. of been quick have questions just my ones asked, but

order this, missed ended I but about you talk could Ted, survey the if last? customer where versus up moving internal Sorry this

Ted Grace

it on we or very weeks the but customer in remains months. confidence, too of number in not that So encouraging get any say specific it, will deviation showing don't I last

So have tell that banks, small cetera. I question. certainly, some not you seen wondered about our manifest but et have in any itself with happened people can customer we've this And since issues confidence gotten that of obviously we what's mix. in the indicator yes, including

Ken Newman

of you you a And improve. driving return these through Day, some talked especially over you've that impacts then are when pull, think And number kind Investor is that Ahern? bit continuing of kind how margin of what know can for term? invested on the and your Maybe work about up the but capital on of as thoughts levers this broad on you more do conversation to any a I about little you longer

Ted Grace

often. talk as leadership that's about No, a something Yes. team we

We ways and targeting decompose drive we continue So think to you've XX% we margins. and about to of If that, that talk there improving to capital lot velocity. can the margins your it, got returns, to really, when a think different business. are flow-through. about but for do times We margins XX% naturally you as is accretive

to driving this, dollars. talked fleet task obviously, way about is velocity On but improve think turnover. Matt ourselves productivity, different are lot as capital we about we another That of side, higher a improving it there the capital to try ways

fully higher yes, over should continue we so margins and our is expectation higher to it that drive And returns time.

add? to anything Matt,

Matt Flannery

No, no.

Just expecting able our we're that. -- once you not to again be to guidance, not overcome look at

Ted Grace

Yes.

think answers question. I the that

Ken Newman

I can embedding just us Relative for on the end OEC what's did if you the this fleet one squeeze proceeds implied that just proceeds point to remind in. for full where of full And could up? kind that's it year, last of quarter guide for one sales Maybe year? the the

Ted Grace

the quarter, XX.X%. So for

million were of think $XXX sold OEC I we proceeds XXX.

of $X terms to continue to about guide, In full we of OEC. sell the billion expect year

to continue about $X.XX billion proceeds on translate to $X.X expect the We about so that to -- would dollar. generate

As and January, since January. we in are those about unchanged talked

year, lean we'll didn't we talk the but the wholesale, of lean and get means we that are them. will As into on volume efficient use, other capital, of in about not as on recycling on increasing Those lead specifically. you XXXX, we most channels

an And as sales, have more that we will Ahern also effect. introduce

versus Matt $X.XXX month-old strength, for lot equipment as end I speaks dollar, got We that very So right? kind XX%. on think speaks, -- in guess indicative the which first the I the said, XX% of frankly, of that's selling which what's quarter, what of I'd it, a contemplated in the to market. more equipment, we and this XX demand the think which say

if but some helps, the are of know perspectives those we'd don't I share. that So

Operator

Helpful. Yes.

with question Redburn. next comes from Our Tyler Neil

Neil Tyler

couple A please. me, from

projects understandably, estate. retail, the That's to at base tends nonresidential sort first end be the mix, market, physical that of even real the able is of question. comprise. frame to in just lodging slowdown Mix commercial and terms, in housed component thing customer to of the back those business, very your offices, the of market much might Firstly, and those eye how of storm. sorts broad in Are you current the

talk you practices sort a insight at -- little then more into some give in examples altering at bit all know or integration. you're how if that your it's And some company. I I of days, wondered the some detail commercial could if early how around Ahern and but

branch consolidation appreciated. gaps You you the the But talked like. some could fill in be would about if of and sort there, much that of very

Matt Flannery

some in Sure. to the part exposure I'll office. and of of that, take can with Ahern specifically the Ted and then backfill commercial

some into I consolidate support how in which on people We're and few the on one think, much. are about, going to instances, and deal to the everybody, XX working we're real areas Ahern fleet remarks, we talking of fleet, that. cold the one that isn't in And some foreshadow when real of capacity go-to-market. starts about. the it's means track estate got a of about all think right real I'll go-to-market the we're I integration, this track. We've capacity probably I'll prepared thinking and But on about that the remind repurposing in through most as estate was estate, And said with people. plans the the

of because stores real We're consolidating estate other have to utilizing had market we business. capacity So in grow one the a of help our still specialty some capacity to of even plenty consolidate that into. where we're

the So that through stuff go look opening work talked to we the fleet as and Ted's probably move about making that The that's real already, point we'll that perspective. about some towards channels. was fleet the of work we've and estate ours, from towards more other like continue out older year,

very has the well surprise. We And the people turnover with bit people, The be important positive we're level we're very, quite again, a to like that, expectation. our pleased final that and is remedied we hope that that and business part they'd that. real able organization stand-alone, side our we'd into had made of piece that exceeded the that's well, integrate which of more ours glad like always -- And in ours, look once higher really do with. to capacity, that that see they been that's have turnover

Ted Grace

other Yes, take and and Neil, the piece. I'll

track So just We Bureau's I'm to asking. in dimensionalize the as granularly going don't try to verticals it. Census use place put data. construction you're to as

data. easier to about context little it's of So talk in it a the government

be total defined $XXX of out XX% about nonres, X%. which market. vertical, is is be billion is the would about But which would on it of that And billion very as a a broad basis, if commercial, you look at what or $XX $XXX separate about billion office segment, about total

So that about XX%. would It's dimensionalize it.

et mentioned, runs that the from buildings, office gas gamut Now as et the entire grocery I stations, cetera, stores, cetera.

think important add other it's do to context I to that.

at manufacturing, $XXX look you is market, market, Power And public XX%. $XXX is is itself. total. That's a billion billion about XX% billion is If which manufacturing also of a XX%. $XXX the

the as total where that's at about are, when relatively think asking look areas lot compared economically insulated insulated is power, multiyear what where that's that -- drives areas about have you I you're to of public, people these when opportunity, over concerns, seeing lot -- some So that XX% we've and construction, of a is areas think I XX%. talked a we our kind it of, that of optimism call manufacturing, said, about

Operator

turn over I'll the remarks. time, for Flannery this back floor to closing Matt additional or At any

Matt Flannery

any to free thank reach if Thanks, in us. up it today. Day that joining our have want again I X late you to in any operator. wraps weeks with And please the meantime, forward look July. And for we for speaking and out to In to questions, time. about at all Ted feel Investor you everyone

call. Operator, you end can now the

Operator

We participation. concludes Thank call. This you. your today's appreciate

disconnect at any may time. You

United Rentals (URI) 27 Apr 232023 Q1 Earnings call transcript