Sep 9, 2026 earnings call — Raised guidance after record quarter
Raised fiscal '27 adjusted EBITDA guidance to between $4.92 billion and $5.12 billion.
Revenue $3.1B (est $3.0B) · EPS $1.18 (est $0.99)
Key quotes
"We delivered record first quarter results in revenue, adjusted EBITDA, adjusted operating profit and adjusted EPS."
"Modular solutions is currently in just 14 of our top 50 Sunbelt markets, and we continue to expect to significantly scale the business in the coming years."
"On fleet investment, we're raising gross capital expenditure guidance to between $2.75 billion to $3.15 billion and raising net rental capital expenditure guidance to between $2.4 billion and $2.8 billion."
Analyst Q&A 9
fuel surcharges recovery
Q (Robert Wertheimer · Melius): When do you typically recover fuel cost and is it easy to recover now? Also, is revenue flow-through healthy given inflation or investments?
A: Management described three ways they charge for fueling: at rental return, larger on-site fueling services tied to packages and live events, and for delivery and pickup of rental assets. They said margins on fueling vary by product and scale but are generally high ROI, and that these margins are flowing through incrementally to adjusted operating income.
"But nonetheless, we are seeing that progress as you've seen that sequentially, as you pointed out, that we are seeing all this actually flow through positive incrementally to adjusted operating income." — Brendan Horgan (CEO)
margin drivers and CapEx uses
Q (Annelies Vermeulen · Morgan Stanley): How much of the operating margin improvement is from lower depreciation, better utilization, fuel pass-through, or mix? Will margins keep improving? Also, where is the extra CapEx going and are you worried about industry overfleeting?
A: They said Specialty growth will outpace General Tool, creating a favorable mix, and higher ancillary growth explained much of the margin (75% this quarter). Fuel surcharges typically take about a quarter to flow through; operational efficiency actions are already generating benefits; and the increased CapEx is opportunity CapEx for Specialty same-store branches, greenfield openings and mega projects, with OEMs showing discipline and limited excess manufacturing capacity.
"this CapEx that was deployed in the quarter and the CapEx that we have guided here today, the increase in the balance of the year CapEx, this is very much opportunity CapEx." — Brendan Horgan (CEO)
rental rate and utilization
Q (Jerry Revich · Wells Fargo): How big is rental rate improvement and how does time utilization compare to prior cycle highs? Also, how much upside from semis and electronics CapEx ramping?
A: They said rate momentum has improved through the year and supply and demand is tight, supporting a constructive rate environment; they would not give specific monthly basis-point figures. Time utilization is in the top 2 or 3 years historically, helped by larger fleet quantities providing availability, and the mega project pipeline is diverse with semiconductor at only a small share of the mega-project universe.
"Semiconductor, which was your specific question, is only 3%." — Alexander Pease (CFO)
small/medium customer growth and Aries updates
Q (Kyle Menges · Citigroup): What drove growth in small and medium customers and what could drive upside to your stable outlook? Also, early learnings from the Aries acquisition and plans for greenfields versus M&A?
A: They measure local nonres stability using a synthetic starts-versus-completions model and said May 2025 through today shows 16 months of flat or positive activity, with internal indicators like quotes and reservations pointing positive. On Aries, they added 30 locations in the quarter (17 Aries and 13 greenfield overall), have a large lead funnel and said they have 669 leads tracked with an overall value of $24 million, systems integrations completed as of August 1 and they expect meaningful cross-selling growth.
"What we've seen now from May of 2025 through today is 16 months of flat or positive." — Brendan Horgan (CEO)
supplier capacity and data center outlook
Q (Kenneth Newman · KeyBanc): Are Specialty suppliers able to flex up production if demand accelerates, and how do you weigh adding fleet versus letting utilization and rates improve? Also, what are you seeing for data center activity and moratorium impacts?
A: They said primary OEMs prioritize allocations and for certain high-demand SKUs—telehandlers, ultra-booms, and power generation 300 kW and above—there is little spare capacity, which gives Sunbelt preferred access but little flex beyond that. For data centers, they are seeing increased starts and a filling pipeline; moratoriums exist in some localities but many starts occurred before moratoriums, and energy-related opportunities are a strong driver.
"it is fair to say for certain high-demand SKUs, so whether that be telehandlers, ultra-booms, power generation in the certainly 300 kW and above environment, there's not a whole heck of a lot of spare capacity out there." — Brendan Horgan (CEO)
reason for rate gains and margin outlook
Q (Tami Zakaria · JPMorgan): Is the rate improvement from your pricing programs or industry-wide, and should we expect the usual seasonal sequential EBITDA margin improvement for Q2?
A: They said pricing gains are from discipline across the company and industry plus existing dynamic pricing systems; they have a new dynamic pricing pilot but have not yet attributed gains to it. On margins, they expect margin progress through the year, have not built much rate momentum into the guide (so rate upside is possible), and remain committed to delivering the 200 basis points of margin improvement discussed at Capital Markets Day.
"And yes, of course, we have this new next level customer dynamic pricing pilot that we've talked very widely about." — Brendan Horgan (CEO)
rates vs volumes and depreciation timing
Q (Suhasini Varanasi · Goldman Sachs): How much of the quarter's revenue growth came from rates versus volumes, and did the World Cup affect rates? Also, how should we think about depreciation phasing given higher CapEx guidance?
A: They declined to break out exact contributions of rates versus time utilization, saying both had strength and August trading looked strong. The World Cup impact on pricing was negligible; rental revenue grew 12.5% while depreciation grew 2.5% in the quarter, and they expect depreciation to grow from that 2.5% level as they progress through the year across both Specialty and General Tool.
"The World Cup would be negligible in terms of impact on pricing, whether it be in the quarter or certainly for the year." — Brendan Horgan (CEO)
time utilization outlook and power rentals
Q (Neil Tyler · Rothschild & Company Redburn): Will time utilization stay broadly stable or move up toward prior peaks, and does scale allow a higher long-term utilization peak? Also, is your power business providing bridging power and how long do such rentals last?
A: They expect time utilization to be more stable through the year rather than showing significant upside, noting General Tool and Specialty should be evaluated separately and that Specialty typically has lower time utilization though it showed about a 300 basis point dollar-utilization improvement this quarter. For power, they are serving multiple roles—commissioning, bridge power, live events and behind-the-meter electrification—with commissioning rentals typically running 8 to 12 months and a wide range of durations depending on the use case.
"I would say really more stable as we go through the year rather than significant upside from a time utilization." — Brendan Horgan (CEO)
World Cup split and pricing discipline
Q (Allen Wells · Jefferies): How was the FIFA World Cup revenue split between General rent and Specialty, did it drop through to margin in each division, and is rate discipline returning across competitors?
A: They said World Cup revenue was heavily Specialty-weighted (about 75-25 or 80-20 Specialty to General Tool) and that the World Cup revenues were incremental to adjusted operating income margins and accretive on ROI. On pricing, they see broad industry discipline supporting pricing and noted some competitors may price differently but that has not impeded Sunbelt's ability to advance pricing.
"And look, as you would have seen in the print, it was incremental to operating -- adjusted operating income margins." — Brendan Horgan (CEO)