URI - Earnings call transcript Q1 2024

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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 results may differ materially from those projected.

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

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

You website at can www.unitedrentals.com. access these filings on company's the

forward-looking no statements United in Rentals order circumstances any has commitment makes to that and release events, update note new Please revisions expectations. reflect obligation to in to subsequent information publicly or no or changes or

You non-GAAP should that terms press adjusted adjusted company's to free today's as and release flow, cash and also note such EPS, references call include EBITDA the EBITDA.

back see the presentations financial the investor financial comparable non-GAAP each of the from to recent to the measure most measure. GAAP company's Please refer reconciliation to

will and over Executive Speaking Chief may Financial today and Flannery, Mr. President for begin. I Chief turn Flannery, you United is Grace, Ted Mr. Matt Flannery. now the Officer; Rentals Officer. to call

Matthew Flannery

call. and Thank our for joining everyone. Thanks operator, good morning, you,

As as you pleased customer-first and XXXX saw all productivity, our a off the and with of executed and with unwavering margins across fleet expected, results growth, I'm safety. an playing and through yesterday strong start the on to lens afternoon, out is putting focus

and for meeting customers, to with finding key we're doubling Coming and to our being just doing. the best year, success our would opportunities be into partner knew relationships needs we the down on what them. their the deepen And that's we're

the and technology we product offering our in include customer continue improve experience. invest to we solutions matting to example, broadened For to

open on our starts. plan Additionally, cold more we're executing to

I'll very then mind, of its our with driving UR another Today, our to Yak, example the this critically, focus a give discuss followed is as and be quarter while will first confident recap finally, my recent efficiency. demonstrate strategy, The culture year And by which, we're our true of a differentiator. a all growth. I'll of what's team of our commitment for recent start in and just remain to optimism continues And we maintaining our doing results of our work, on acquisition at operational this X profitable year.

So let's highlights start from first the with the some of quarter.

by of And and Our first revenue another X% within record. to grew grew revenue quarter XX.X%. increased total X%. productivity to a $X.X record. quarter and grew translating to increased finally, Fleet X% first EBITDA quarter this, And XX% adjusted first a margin billion, billion, rental record a year-over-year a by EPS by $X.X healthy $X.XX, adjusted of by

turn activity. customer let's to Now

And By We saw particular new generation, utilities and quarters, manufacturing, areas with see and we led continue many growth discussed several construction both to we downstream. in Specialty, And data we and non-res by lines to strength double-digit Specialty including vertical, same within the across infrastructure. projects markets all our both across GenRen we've last power automotive of see centers, of growth business. businesses. our across the continue growth and across delivered end industrial numerous

quarter our Additionally, expectation. In this used OEC. $XXX turn, of we us remains record quarter and to in amount million consistent with the sell is a strong, first market the spent rental allowing on CapEx,

in As quarter. the a flow result, cash million free was $XXX

a a is funding cash while cycle, Our critical growth generate simultaneously strong flow ability differentiator. throughout to free

enables engineered strong cash profitability coupled of consistently combination flow us our create flexibility free generate efficiency, to the operations, our and into with The long-term and capital we've value.

turning capital allocation. Now to

buybacks cold growth, in Yak sheet. $XXX acquisition, And leverage and also remaining maintaining and comfortably also via all targeted funding after to our goal is our XX range. shareholders including dividend, returned we million #X share a within the Our while starts, balance organic supporting while completing growth the strong quarter

Speaking I Through platform, some process. Yak, This more the responsive thoughts to while capabilities any protection for or we've shareholders. customers, roadways our generating of safely initial and enabling attractive need those returns one-stop example added soft be our to acquisition for more integration move with work. we is Yak our to access and you M&A you provides started heavy that now uneven of where us surface want share And shop even not at familiar, our of to strategy operate Yak, a surfaces, also to for textbook temporary equipment. site

is for here. XXXX, closed growth our we've market. team, with the in even the purchase plenty spend we our we as still lot Yak excited And with of Finance to its bring has General network. Since time Yak of their potential deal, leader similar a this into we're more and a room in of capability

updated to Turning outlook. our

thus we As expected. out as opportunities look of is we year growth. to for And far, the the remain rest XXXX, optimistic the playing about

guidance of on of we are in continue is updated daily strong the shareholder times normal our supporting us gives our while confidence guidance, what our expectations emergency. addition Our our ahead. with ability while focused And team reflects strong to team's it's belief unchanged. remains in deliver of our Yak opportunities tangible actions, confidence to in our Customer which the bolster underlying the on that field value examples further will and our operations while indicators a customers deliver these

all deck, the operations. -- news site of response collapse one-stop through is helping equipment. Yak, example more, hands work. we're Rentals good mobile our March customers our at sanitation well where both and This the was this provide In on of Bridge example unmatched our Baltimore storage, had with a including and through our back fencing, needed business the as been response and which the for devastating on completed, to included aerial we United also perfect in dirt assets, mats to as Key acquisition true just of emergency power, light And broad XX. what's a This our support of offering able can range immediate the A operations. the to fashion, they portable ensure their on towers, focus and ongoing urging model, and differentiated efficiently were of support safely shop we provide own the

also It's true culture people testament to our United a and for the Rentals. work that

large a value. compelling So positions to strategy by strong we're to see. built drive well-proven both on company excited us particularly we a growth, immediate in summary, the that opportunities, continue shareholder flow longer-term We've and with outlook and profitable the resilient cash free projects,

questions. we'll to over you. the I'll Ted, over with hand and And that, your call then to Ted, take

William Grace

everyone. morning, good and Matt, Thanks,

CapEx with strategy, the a demand start we quarter to records focused As off on our and returns, to shareholders. flow growth, M&A EBITDA is XXXX earnings excess solid both rental see EPS. as investment our to first you execution highlighted, updated and capital this cash Matt profitable supported guidance. year and supports revenue, free healthy our strong and Consistent allocating the embedded remain drive while strong across also Combined, growth returning cash in

let's that, jump the with So numbers. into

of as million, and size and partially supported and million fleet by productivity large Also inflation fleet $XXX contributed added increase revenue offset XX.X%. tailwinds that's Within been $XXX market First X.X%, rental a a verticals. key year-on-year of in was X% assumed quarter while in X.X%. $X.XX or as billion, projects within both revenues we've our increased by $XX were the by revenue, well X.X%, or discussing record or average fleet rental, Within by higher million re-rent growth position X.X%. OER strong our this, ancillary rental approximately

first results Turning a healthy Supported in expectations. by to demand Used were million at quarter Matt XX.X%. consistent adjusted of $XXX with our used results. the revenue highlighted, margin came strong at

margins the market few ongoing following created normalization for we've our issues extraordinary that by quarters, peaked the supply As the of used reflect talked XXXX. used in chain conditions about past the

the view we used which of to $X.XX than a the perspective, equated as versus proceeds health dollar of recovery prior the OEC COVID. to an $X.XX better key our to on market, $X.XX indicator From

quarter very solid results another there. of So

of $XX rental, were $X.XX year-on-year or an adjusted a million sales quarter dollar increase million SG&A EBITDA, to of lines quarter used best first from million tailwind. of declined SG&A $X $XXX percent $X were includes as The headwinds at X.X%. of change was Outside EBITDA a a Moving and record XX.X%. $XX adjusted reflecting a million Notably, sales other new businesses to increase a setting non-rental EBITDA billion, at and while million, rental. respectively, XX points, of about first basis

first quarter at Looking profitability.

XX% And just adjusted use, of equating to however, in XX I adjusted the to our the healthy XX%, $X.XX. of basis dynamics, margins year-on-year, increased compressed XX flow-through increased implying excluding core basis was share XX.X%. discussed, flow-through EBITDA our per earnings quarter. these EBITDA Our margins consolidated points, XX% quarter finally, a reported margin first a of Due record points

$XXX a percentage our Shifting with million, from which to in of year perspective. expectations was CapEx. Gross full line was rental seasonality and CapEx historical both

Turning return which $XXX invested free while start on basis flow ROIC our off to cash million. well capital and to a flow, XX.X%, increased of remains capital free year-on-year average XX strong weighted cash points cost to above was at

quarter and maturities leverage to very while the have no net manageable And a long-term through $X.X XXXX under solid was Moving our thereafter liquidity reminder, the X.Xx we until end balance note distribution very a to XXXX. total continue billion. of just our was as ratio the sheet, at maturities a

lowest issued we that billion XXXX. XX-year notes August high-yield to XX-year fund [X.XX%] notes market the treasuries $X.X since with and The coupon a reception. issuers senior highlight to both credit the of the we're I'd of quarter, the the of at for in spread pleased Yak the very tightest Within unsecured market acquisition, representing all and coupon priced

Notably, Rentals any to the that marked most bond of also tenor. treasuries United the achieved and ever lowest importantly, spread transaction has for a probably

growth, continue the for was execution, capital view balance allocation of prudent this a factors, of reward and sheet driven further number we credit track record markets it smart to its While evidence by management. strong impressive that as company

include which XXXX. Looking of is million expected of to revenue that $XXX forward, guidance in the night approximately raised Yak, you year we EBITDA full acquisition to total and million our $XXX in adjusted contribute last saw

of terms growth revenue year to specifics implying of the our billion, updated the guidance full on just for range X% total raised we've In midpoint. $XX.XX at a over $XX.XX of outlook, billion to

We billion. our at $X.X used by billion Within sales total $XXX to range revenue, our I'll unchanged EBITDA that million adjusted billion. to raised $X.XX is guidance roughly $X.XX note

billion net guidance by On million $X.X $X.X side, gross raised we've our fleet CapEx $X.X to respectively. the to billion both and billion to and $X $XXX billion,

of And flow a per this capital shareholders yield to million us year, raised range return to billion our of to to $XX about is finally, X.X%. after $X.X translates This guidance roughly which funding $XX $X.XX billion or $X.XX of by enabling growth. billion free over we've cash a return share current to

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

Operator

[Operator will UBS. first Instructions] come question Steven from with Our Fisher

Steven Fisher

start related know you talk weather the the some CapEx year, I your just be guess it specialty that, that your your I for changes level project of or with any I low rent for was the mix to quarter. sort of maybe your either growth or the embedded keeping it there? CapEx? of GenRent end made line off it Can of of said Was you growth in or seemed you timing have CapEx. it wanted the on the any factors? range And around at expectations, changes factors target thinking in to kind on about but about other in any plan of to end low

Matthew Flannery

Steve. Sure,

word. feel So kind temper CapEx, outcome the quarter about CapEx, we no, of designed was for that from for actually, better our way It first to a lack original the guidance. any about don't wasn't certainly

we So include XXX about the It guidance. the just the deal. -- let's at of of XX% midpoint our for Yak not our that was upped

going -- to about we're probably get XX% back it's So normal cadence, from say about to we in anywhere QX. to XX% always

in between and us can to You in QX. the QX whatever then somewhere expect in balance to XX% somewhere XX% do XXs in QX,

cadence, supply the I back couple really how the opposed we and and last bring as points view to, that's to repaired, of pre-COVID the front-load it we about to years, QX no mostly we think longer call it, need that. chain in a, with what let's could in a capital

grow upped and As the far it, our the reaffirmed rest as year, the and considering we more invest to actually for guidance opportunity Yak. of

reaffirmed So all like the move our revenue pretty we're CapEx. the to needs. of Yak much the going with board and the we at feel Yak the addition don't down across guidance It's CapEx just

Steven Fisher

intensified. generation, lot given positive vertical. a Okay. then now. of any a you commentary around in, in of I power that the and us XXXX, this you're year theme Terrific. on been relative one I'm -- of curious generation if focus color projects give what in guess, know could just about a there's I'm on have in just power your to seeing direct curious, of that seeing And pipeline if in have quarters maybe your number has sense you you XXXX? for this a power that say, I the types you've included been generation

Matthew Flannery

something Well, first so that's that as this far focused this off, as XXXX. been vertical is we've back on building

So this of us. our And is for XX% anything it's over new business. now

a right, power, work and us. for a this segment So imagine, whether it's big alternative right? But traditional it's power, focus is whether can big you T&D generating,

data we the know Ted, on I specifically all top for transmission add. for don't the well that, focused centers all of playing growth, XXXX, have even in to you and needed for that's been the grid work we the and is space. if on. need here start opportunities this needs all really then a think one accelerating has before out and EV the tap We've tailwinds continue got while. the you the to anything building beyond for we're We that of this as this the electrify And when in space growth

William Grace

all. No, you've it I captured think

Operator

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

Clay Williams

Clay Jerry. on is This for

months? your the the here? towards XX M&A you First question, M&A capital range expect deliver to pipeline update can over of us XX, that you from deployment next on What's

Matthew Flannery

Sure, Clay.

that do opportunistic But force to plans very actually budgets set the or where we nor that execute robust a network. be can lean products we growing ours need people we of introduce really do add think a to clear, That's M&A, towards right? actually even pipeline. we significantly So on, we have pipeline just M&A, we of us for things could set have I targets that belief regularly. here. be Yak, work that our just and to we better into don't we're a the could when them We owner saw a you we them new And like, by think feel

imminent than be anything find will strategic output, the would of all to don't that really as the But our act. have real that that we other getting meets to pipeline. would when continue we the pipeline. So in X well criteria work we we we partner, And gems financial the forecast right as the

need on pipeline, the a we or So meet. plan number have but that stay working tuned. budgeted We're don't a to we feel we

Clay Williams

opportunities the the access as talk life And business, business the see shorter get levels curious depreciation for versus the what you URI is a higher follow-up, product of the returns. path Yak the given to we about load base can of useful were to you and

Matthew Flannery

Sure.

deal, to the modeling, good can might lot us pay really take comfortably actually It asset. you the about the be the but this to of opportunities did really impact, of for a and before as So rates sensitivity have our doesn't even lot one that's meaningful modeling imagine, on not hurdle we of deal. we opportunity. life required the we a lengthening feel a clear And and for it

we the So we the this business. this X double really on . We years. size the can business returns like in think next of

that that significantly. we experience very the in is into with team. similar. a it this mobile finance storage And network, of We've is When what are did strong. general grow a our deal. very space leader The we took to lot margins able And we it got So strong. integrated were the really much like in we and this as team see on

good the it, feel returns. we including So about

William Grace

you I on very there, the cost look add deal. what achieved we general it's with holistically, returns deal cash-on-cash similar of well and Clay, attractive look would think is rate at if Matt to the mentioned, actually a as hurdle Yes, finance basis, That above might thing the our we capital.

teens. of mat level, comfortably But at think are the the unit those are If We'd I returns you of a economics the the cash-on-cash actually looking zero some you upper made attractive. very observations unit in even be into that right.

be the could other to of either mat do improve there that the And that. opportunities we could some them extend things or beyond think life

it's when rest perspective. nice fleet, of So the to from we the been portfolio compare that a very

Operator

Stanley question will from Stifel. next with come Elliott Our

Stanley Elliott

Can about little you category bit talk the a class.

if it a the the know nice I is don't one-stop that? would limiting expanding all You've opportunity larger estate it's job the anything maybe for much real years, like of what over done kind moved be of or shop. factor, workforce or this How an you and

Matthew Flannery

speaking about Stanley? if categories, you're So new

William Grace

understand of question? context be Yak, in that the just Stanley, we to sure Was

Stanley Elliott

just but along of anything a be you've you? Yes, just more had white would over be years, I several it that, of context kind lines or Yak, that to of solutions class in that continues the space number mobile category past guess, like a, seem the those it big for

Matthew Flannery

exactly. Yes,

anything view So definition, that's plant the customer. on to stay by with we the as continued of right? fixed anything And a doesn't us, we've an to project potential plant a us that for on right way upon So a for expand temporary or serve that. opportunity is,

this or So chillers trucks and to obvious coolers existing we continuing spot business, our could our is offering those offer what And right expand having flooring prop we it. more other shop one-stop GenRent we in business don't into the really our whatever that customer that or HVAC it the to don't of our we see that pickup be about towards problems or that focus been business, whether also customers. expand product partner, to that's needs. for some how the to solve for but on additions talk create the in the that products expectations competitive line can be those in that's we business or Even want put we've reasons, power without expanding this our we value publicly because we

William Grace

I mean, that of might market. guess mobile we've well way. Stanley. storage, shared, add huge a I That's years. our on goal doubling that business things We're I talked X in about a obviously we

talked as that assuming obviously, to plenty business, able customers. opportunity that that, to we're footprint So even space penetrate to the the still beyond of do grow we've the And existing there's business. white expand of about

Mats would be similar.

doubling for set we think half the overlapped that in goal a for us. business. I about They country

strong built from there. to ahead aggressively not another space market the of is ROS there's the very white of in a that market country, certainly opportunity organically. a We've gone the we've lot a example and players the there's of growth us that given And grid. in again, a quickly So biggest one perspective, one of tremendous amount there. of from runway

of I and our growth. continue really of leverage we each lot opportunity fund to in continue a think these to businesses So there's think to model those verticals, fuel to

Stanley Elliott

question, second progression Perfect. kind talk that And you I just saw then Matt, kind or about of talk And anything a from any regional the a to have I on Could you went weather, you as but rather. like know the guess basis. impact about through? follow-up curious, did of don't I'm quarter

Matthew Flannery

Yes. haven't while. a wood, Knock we about to in talk on weather had

were that's and and geography. very call our There's addition think I of over Hurricane we that great an Yak pleased just part are diversification that others, impact, able both we the follow. all would why with Harvey -- But is business, you product the as There not markets nothing we're but of maybe we to by and something reaffirm above. that it's call we're our that -- Harvey. certainly, since even impacted the guidance out. really of This than more some out

any played and as out constraints, year So I wouldn't the Stanley. weather expected, out call

Stanley Elliott

the with start. Congratulations Perfect. great

Matthew Flannery

Thanks.

Operator

comes next from [Operator Newman Ken Markets. Capital with Instructions] KeyBanc question Our

Kenneth Newman

or was curious way any mix I anymore, those -- the drivers, productivity there's guys given of the you or just was my the a that this given utilization, just pretty move comp. comp First tough one us first on know individual last it's there movers question big don't question was I and but metric rates year. fleet pro quarter. if understand just forma quantify It that if impressive is tougher to the in whether in just help strong from

Matthew Flannery

Sure.

tell the don't it positive in component. individual we'd So played When your good year. you, frankly. And and we and replicate quarter metrics we we to as went came out play because that like little usually I have a you XXXX, the had out quite January, could we do time if out overall expected I out But talked that XXXX feel utilization we way. When to productivity would in said I I that. still tell won't in but further fleet us, certainly than that I'll we expect these qualitatively, to point, we think each about the quantitatively about that forecast in we for about, not

would help discipline call see then in neutral. that environment, our will that issues out played overcome So that rest it's from the that and time, that constructive as the believe hear inflationary And in it a think I that the rate have. to as still rate space the I any we're And public we of expected, pleased way. we industry, companies well, you'll that

a -- we will little we then in out little each year, communicate quarter, That that a the bit the we'll we and play had go that this and in improvement of the go rest as forward we'll more see from And forward. quarter. acquisition, as Yak specifically small in

Kenneth Newman

side, rental just there sequential that this function a it. that a and of the more step step does Got normalized kind to saw fleet on Or quarter of cadence down returning equipment the GenRent question is specific very back down? here anything more side. seasonality? was like drove there is just the just second decent the seem helpful. That's in or you on My It equipment moderation rental first

Matthew Flannery

we I growth. slower expect did Yes. mean

weren't -- customers some business, the large business that with to And business probably these using importantly, large specialty specialty and into the opportunity As could GenRent headroom the was cross-sell the imagine, much specialty of for a you more products. versus projects has those greater. the growth great

called of specialty great. in our which the one double-digit out So lines, segment product was specifically every growth we

just about The just we've put opportunity I than side, GenRent and as that that it, where in we January, expected, the the is, disbursement the was in we lot the And best would we places news a fleet in more we're those to win that the of we in those And large choices sure places, that's by productivity. well. the make driven we with Those drive make, going are to some we're right good got customers. projects fleet we good as say, talked are and the had needed fleet that historically. why able and

Operator

no would remarks. further queue, back questions turn with for Flannery the or And in additional Matt I to like call to any closing

Matthew Flannery

Thank on questions. always, you, investor as glad QX everyone everybody, it. Elizabeth And to is our with today. to join your could call, the operator. to appreciate And on our latest deck remind just its And we available site I'm updates. us is answer you

look I forward end July. now all in call. safe. to to Until So talking you stay you then, can the please Operator,

Operator

XXXX Rentals conclude United does Call. Earnings This Quarter First you. the Thank

time, your a disconnect this and line wonderful at have may You day.

United Rentals (URI) 25 Apr 242024 Q1 Earnings call transcript