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United Rentals' Q2 Earnings Miss Estimates, Revenues Up Y/Y
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Key Takeaways
URI reported Q2 adjusted EPS of $10.47, missing estimates and falling 21% year over year.
Quarterly revenues rose 4.5% year over year to $3.943B, driven by strength in rentals and end-market demand.
Specialty segment rental revenues grew 14% to a record $1.147B, despite margin pressure.
United Rentals, Inc. (URI - Free Report) reported second-quarter 2025 results, with earnings missing the Zacks Consensus Estimate and revenues beating the same. On a year-over-year basis, the top line increased, but the bottom line declined.
The company reported record second-quarter revenues and adjusted EBITDA, driven by strong demand across construction and industrial end-markets. This performance reflects continued momentum from the prior quarter. Growth in both general rentals and specialty segments supported the results. Customer optimism, healthy backlogs and seasonal activity contributed to the overall strength.
Going forward, United Rentals expects to see continued growth in large projects and strong performance in the specialty segment. Based on these trends, the company has raised its 2025 outlook. URI aims to maintain focus on execution through its market approach, technology offerings and disciplined capital allocation. Supported by projected free cash flow, the company increased its planned share repurchases for 2025 by $400 million to a total of $1.9 billion.
United Rentals’ Quarterly Highlights
Adjusted EPS of $10.47 missed the Zacks Consensus Estimate of $10.54 by 0.7%. The reported figure decreased 21% from the prior-year adjusted figure of $10.7 per share.
Total revenues were $3.943 billion in the quarter, beating the consensus mark of $3.909 billion by 0.9%. On a year-over-year basis, the top line grew 4.5%.
United Rentals, Inc. Price, Consensus and EPS Surprise
Equipment Rentals’ revenues increased 6.2% from the year-ago quarter to $3.415 billion, marking a record high for the second quarter. Fleet productivity inched up 3.3% year over year. Average original equipment at cost increased 3.6% year over year.
Used equipment sales (or sales of rental equipment) decreased 13.2% from a year ago to $317 million. This produced an adjusted gross margin of 48.3%, which contracted 350 basis points (bps). The decrease in the year-over-year adjusted gross margin primarily resulted from the ongoing normalization of the used equipment market, which includes pricing adjustments.
URI’s Segment Discussion
General Rentals: This segment registered 2.7% year-over-year growth in revenues to a second-quarter record of $2.268 billion. Rental gross margin contracted 120 bps year over year to 35.1%, indicating the impact of inflation and normal cost variability, including higher delivery, labor and certain other costs.
Specialty: Segmental revenues improved 14% year over year to a second-quarter record of $1.147 billion. Rental gross margin, however, contracted 220 bps year over year to 45.8%, indicating higher depreciation expense related to growth in the company's matting business.
URI’s Margins
The company’s total equipment rentals’ gross margin contracted 130 bps year over year to 38.7%.
Adjusted EBITDA for the reported period grew 2.3% year over year to $1.81 billion. Our estimate for the metric was $1.79 billion. However, the adjusted EBITDA margin contracted 100 bps to 45.9%. This decline primarily stemmed from a decreased rental and used equipment sales gross margin.
Balance Sheet of URI
United Rentals had cash and cash equivalents of $548 million as of June 30, 2025, up from $457 million at 2024-end. Total liquidity was $2.996 billion at the second-quarter end. Long-term debt at the second quarter of 2025-end was $12.1 billion, down from $12.23 billion at 2024-end.
As of June 30, 2025, the net leverage ratio was 1.8x, which was flat compared with Dec. 31, 2024. Return on invested capital was 12.4% for the trailing 12 months ended on June 30, 2025.
During the first six months of 2025, net cash from operating activities improved 20% year over year to $2.753 billion. Free cash flow grew 12.5% year over year to $1.198 billion for the said period.
During the first six months of 2025, the company returned $902 million to its shareholders, including $667 million through share repurchases and $235 million in dividends.
URI’s 2025 Guidance Raised
Total revenues are now expected to be in the range of $15.8-$16.1 billion compared with $15.6-$16.1 billion expected earlier. The new expectation indicates quite an improvement from $15.345 billion reported in 2024.
Adjusted EBITDA is now projected to be between $7.3 billion and $7.45 billion compared with $7.2 billion to $7.45 billion projected earlier. The guidance indicates an increase from $7.160 billion reported in 2024.
Net rental capital expenditure is still anticipated to be in the range of $2.2-$2.5 billion (after gross purchases of $3.65 billion to $3.95 billion) compared with $2.235 billion after gross purchases of $3.756 billion in 2024.
Net cash provided by operating activities is now anticipated to be in the range of $4.9-$5.5 billion, depicting an increase from the prior expectation of $4.5-$5.1 billion.
Free cash flow (excluding the impact of merger and restructuring-related payments) is expected to be in the range of $2.4-$2.6 billion. The guidance indicates an increase from the prior expectation of $2-$2.2 billion.
URI Stock’s Zacks Rank
Currently, United Rentals carries a Zacks Rank #4 (Sell).
D.R. Horton, Inc. (DHI - Free Report) delivered third-quarter fiscal 2025 results (ended June 30, 2025). Both earnings and total revenues beat the Zacks Consensus Estimate, though both metrics declined year over year.
D.R. Horton has updated its full-year outlook, now projecting consolidated revenues between $33.7 billion and $34.2 billion, slightly narrowing its prior guidance of $33.3 billion to $34.8 billion. This revised range is down from $36.8 billion reported in fiscal 2024. D.R. Horton also expects to close between 85,000 and 85,500 homes in fiscal 2025, down from its earlier estimate of 85,000 to 87,000 and lower than 89,690 homes closed in the prior fiscal year.
KB Home (KBH - Free Report) reported second-quarter fiscal 2025 results last month. The quarter’s earnings and total revenues beat the Zacks Consensus Estimate. However, both metrics decreased on a year-over-year basis, reflecting ongoing weakness in the housing market. Persistently high mortgage rates continue to weigh on affordability, dampening buyer activity.
In response to market uncertainty and a reduced level of net orders at quarter-end, KB Home revised its fiscal 2025 outlook downward. KB Home now projects housing revenues between $6.30 billion and $6.50 billion, down from its previous guidance of $6.6 billion to $7 billion.
Lennar Corporation (LEN - Free Report) reported mixed results for the second quarter of fiscal 2025, wherein its adjusted earnings missed the Zacks Consensus Estimate and total revenues beat the same. Year over year, both metrics tumbled, reflecting the softness in the housing market due to ongoing affordability challenges and a decline in consumer confidence. To counter the affordability issues, Lennar’s initiative of lowering ASP adversely impacted the revenue growth during the quarter.
For the third quarter of fiscal 2025, Lennar expects deliveries to be in the range of 22,000-23,000 homes, depicting growth from 21,516 homes delivered in the year-ago period. Lennar expects the ASP of the delivered homes to be in the range of $380,000-$385,000 compared with $422,000 reported a year ago. The gross margin on home sales is expected to be about 18%, down from 22.5% reported a year ago.
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United Rentals' Q2 Earnings Miss Estimates, Revenues Up Y/Y
Key Takeaways
United Rentals, Inc. (URI - Free Report) reported second-quarter 2025 results, with earnings missing the Zacks Consensus Estimate and revenues beating the same. On a year-over-year basis, the top line increased, but the bottom line declined.
The company reported record second-quarter revenues and adjusted EBITDA, driven by strong demand across construction and industrial end-markets. This performance reflects continued momentum from the prior quarter. Growth in both general rentals and specialty segments supported the results. Customer optimism, healthy backlogs and seasonal activity contributed to the overall strength.
Going forward, United Rentals expects to see continued growth in large projects and strong performance in the specialty segment. Based on these trends, the company has raised its 2025 outlook. URI aims to maintain focus on execution through its market approach, technology offerings and disciplined capital allocation. Supported by projected free cash flow, the company increased its planned share repurchases for 2025 by $400 million to a total of $1.9 billion.
United Rentals’ Quarterly Highlights
Adjusted EPS of $10.47 missed the Zacks Consensus Estimate of $10.54 by 0.7%. The reported figure decreased 21% from the prior-year adjusted figure of $10.7 per share.
Total revenues were $3.943 billion in the quarter, beating the consensus mark of $3.909 billion by 0.9%. On a year-over-year basis, the top line grew 4.5%.
United Rentals, Inc. Price, Consensus and EPS Surprise
United Rentals, Inc. price-consensus-eps-surprise-chart | United Rentals, Inc. Quote
Equipment Rentals’ revenues increased 6.2% from the year-ago quarter to $3.415 billion, marking a record high for the second quarter. Fleet productivity inched up 3.3% year over year. Average original equipment at cost increased 3.6% year over year.
Used equipment sales (or sales of rental equipment) decreased 13.2% from a year ago to $317 million. This produced an adjusted gross margin of 48.3%, which contracted 350 basis points (bps). The decrease in the year-over-year adjusted gross margin primarily resulted from the ongoing normalization of the used equipment market, which includes pricing adjustments.
URI’s Segment Discussion
General Rentals: This segment registered 2.7% year-over-year growth in revenues to a second-quarter record of $2.268 billion. Rental gross margin contracted 120 bps year over year to 35.1%, indicating the impact of inflation and normal cost variability, including higher delivery, labor and certain other costs.
Specialty: Segmental revenues improved 14% year over year to a second-quarter record of $1.147 billion. Rental gross margin, however, contracted 220 bps year over year to 45.8%, indicating higher depreciation expense related to growth in the company's matting business.
URI’s Margins
The company’s total equipment rentals’ gross margin contracted 130 bps year over year to 38.7%.
Adjusted EBITDA for the reported period grew 2.3% year over year to $1.81 billion. Our estimate for the metric was $1.79 billion. However, the adjusted EBITDA margin contracted 100 bps to 45.9%. This decline primarily stemmed from a decreased rental and used equipment sales gross margin.
Balance Sheet of URI
United Rentals had cash and cash equivalents of $548 million as of June 30, 2025, up from $457 million at 2024-end. Total liquidity was $2.996 billion at the second-quarter end. Long-term debt at the second quarter of 2025-end was $12.1 billion, down from $12.23 billion at 2024-end.
As of June 30, 2025, the net leverage ratio was 1.8x, which was flat compared with Dec. 31, 2024. Return on invested capital was 12.4% for the trailing 12 months ended on June 30, 2025.
During the first six months of 2025, net cash from operating activities improved 20% year over year to $2.753 billion. Free cash flow grew 12.5% year over year to $1.198 billion for the said period.
During the first six months of 2025, the company returned $902 million to its shareholders, including $667 million through share repurchases and $235 million in dividends.
URI’s 2025 Guidance Raised
Total revenues are now expected to be in the range of $15.8-$16.1 billion compared with $15.6-$16.1 billion expected earlier. The new expectation indicates quite an improvement from $15.345 billion reported in 2024.
Adjusted EBITDA is now projected to be between $7.3 billion and $7.45 billion compared with $7.2 billion to $7.45 billion projected earlier. The guidance indicates an increase from $7.160 billion reported in 2024.
Net rental capital expenditure is still anticipated to be in the range of $2.2-$2.5 billion (after gross purchases of $3.65 billion to $3.95 billion) compared with $2.235 billion after gross purchases of $3.756 billion in 2024.
Net cash provided by operating activities is now anticipated to be in the range of $4.9-$5.5 billion, depicting an increase from the prior expectation of $4.5-$5.1 billion.
Free cash flow (excluding the impact of merger and restructuring-related payments) is expected to be in the range of $2.4-$2.6 billion. The guidance indicates an increase from the prior expectation of $2-$2.2 billion.
URI Stock’s Zacks Rank
Currently, United Rentals carries a Zacks Rank #4 (Sell).
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Other Recent Construction Releases
D.R. Horton, Inc. (DHI - Free Report) delivered third-quarter fiscal 2025 results (ended June 30, 2025). Both earnings and total revenues beat the Zacks Consensus Estimate, though both metrics declined year over year.
D.R. Horton has updated its full-year outlook, now projecting consolidated revenues between $33.7 billion and $34.2 billion, slightly narrowing its prior guidance of $33.3 billion to $34.8 billion. This revised range is down from $36.8 billion reported in fiscal 2024. D.R. Horton also expects to close between 85,000 and 85,500 homes in fiscal 2025, down from its earlier estimate of 85,000 to 87,000 and lower than 89,690 homes closed in the prior fiscal year.
KB Home (KBH - Free Report) reported second-quarter fiscal 2025 results last month. The quarter’s earnings and total revenues beat the Zacks Consensus Estimate. However, both metrics decreased on a year-over-year basis, reflecting ongoing weakness in the housing market. Persistently high mortgage rates continue to weigh on affordability, dampening buyer activity.
In response to market uncertainty and a reduced level of net orders at quarter-end, KB Home revised its fiscal 2025 outlook downward. KB Home now projects housing revenues between $6.30 billion and $6.50 billion, down from its previous guidance of $6.6 billion to $7 billion.
Lennar Corporation (LEN - Free Report) reported mixed results for the second quarter of fiscal 2025, wherein its adjusted earnings missed the Zacks Consensus Estimate and total revenues beat the same. Year over year, both metrics tumbled, reflecting the softness in the housing market due to ongoing affordability challenges and a decline in consumer confidence. To counter the affordability issues, Lennar’s initiative of lowering ASP adversely impacted the revenue growth during the quarter.
For the third quarter of fiscal 2025, Lennar expects deliveries to be in the range of 22,000-23,000 homes, depicting growth from 21,516 homes delivered in the year-ago period. Lennar expects the ASP of the delivered homes to be in the range of $380,000-$385,000 compared with $422,000 reported a year ago. The gross margin on home sales is expected to be about 18%, down from 22.5% reported a year ago.