United Rentals, Inc. (URI)

United Rentals, Inc. Q1 2025 Financial Report

Report Date: April 30, 2025
Period Covered: Quarterly period ended March 31, 2025
Form Type: 10-Q

Executive Summary

United Rentals reported first-quarter 2025 net income of $518 million ($0.79 diluted EPS), down 4.4% year-over-year, on revenue of $3.719 billion (+6.7%). Total debt fell 3.6% to $12.922 billion. Adjusted EBITDA was $1.671 billion (44.9% margin).

Profit & Debt Analysis

• Net Income: $518 million vs. $542 million in Q1 2024 (–4.4%)
• Diluted EPS: $0.79 vs. $0.80
• Total Debt: $12.922 billion vs. $13.406 billion at Dec 2024 (–3.6%)
• Adjusted EBITDA: $1.671 billion vs. $1.587 billion (+5.3%)
• Free Cash Flow: $1.082 billion vs. $0.869 billion (+24.5%)

Reasons for Change

• Lower net income driven by normalization in used equipment pricing, higher SG&A (including fees related to a terminated acquisition), and increased interest expense (bridge financing fees).
• Equipment rental gross margins compressed by ~1.8 pp due to higher depreciation (fleet age mix), inflationary costs (fuel, delivery), and a growing share of lower-margin specialty and ancillary revenues.
• Debt reduction achieved through strong operating cash flow and disciplined capex, partially offset by share repurchases and dividends.

Pros and Cons

Pros:

• Market leadership with $212 billion fleet oec and 1,697 locations.
• Strong liquidity ($3.345 billion) and covenant compliance.
• Robust free cash flow generation and disciplined capital allocation (dividends and buybacks).
• Continued expansion of specialty services and technology-enabled offerings (TotalControl®).

Cons:

• Margin pressure from fleet depreciation, inflation, and used equipment market normalization.
• Elevated interest expense from recent financings and higher rates.
• Exposure to cyclical end markets (construction, industrial).
• Integration and execution risk from acquisitions and divestitures.

Revenue by Segment (Q1 2025):

• General Rental: $2,573 million (69%) • Equipment Rental: $2,099 million
  • Sale of Rental Equipment: $330 million
• Specialty Rental: $1,146 million (31%) • Equipment Rental: $1,046 million
  • Sale of Rental Equipment: $47 million

Total Revenue Mix:

• Equipment Rental: $3,145 million (85%)
• Sale of Rental Equipment: $377 million (10%)
• Other (New Equipment, Contractor Supplies, Service): $197 million (5%)

Equipment Rental Gross Profit by Segment:

• General Rental: $679 million (26.4% gross margin)
• Specialty Rental: $451 million (43.3% gross margin)

EBITDA Reconciliation (Q1 2025):

• Net Income: $518 million
• • Depreciation & Amortization: $751 million
• • Interest Expense (net): $184 million
• • Provision for Income Taxes: $170 million = EBITDA: $1,623 million
• • Restructuring, Stock Comp, Fleet Mark-up: $48 million = Adjusted EBITDA: $1,671 million

United Rentals remains on a stable growth trajectory, leveraging its scale and technology investments to deepen customer relationships and cross-sell specialty services. Financial health is strong, with robust free cash flow and a steadily declining debt load. Key opportunities include further margin recovery in the used equipment market, expansion of higher-margin specialty offerings, and accretive acquisitions. Challenges persist around margin headwinds from depreciation, inflationary costs, and interest rates, as well as cyclical demand. Overall, United Rentals is well-positioned to sustain leadership in the equipment rental sector and deliver durable shareholder returns, provided it navigates macroeconomic and industry-specific cycles effectively.