McGrath Rentp(MGRC) - 2025 Q3 - Quarterly Results

Financial Performance - Total revenues for Q3 2025 were $256.4 million, a decrease of 4% compared to Q3 2024[1] - Net income for Q3 2025 was $42.3 million, or $1.72 per diluted share, down from $149.3 million, or $6.08 per diluted share in Q3 2024[1] - Total revenues for the three months ended September 30, 2025, were $256,443,000, a decrease of 3.9% compared to $266,758,000 in the same period of 2024[23] - Net income for the three months ended September 30, 2025, was $42,297,000, down 71.7% from $149,317,000 in the same period of 2024[23] - Basic earnings per share for the three months ended September 30, 2025, were $1.72, compared to $6.08 in 2024, indicating a decline of 71.7%[23] - Total revenues for the nine months ended September 30, 2025, reached $687,475,000, an increase from $667,196,000 in the same period of 2024, representing a growth of approximately 3.9%[36] - Net income for the nine months ended September 30, 2025, was $106,479,000, compared to $192,778,000 in the same period of 2024, indicating a decrease of about 44.8%[36] Revenue Breakdown - Rental operations revenues increased 4% to $178.1 million, while sales revenues decreased 18% to $76.1 million[6] - Modular rental revenues grew 2%, and Portable Storage rental revenues increased 1%, marking its first year-over-year growth since Q1 2024[4][5] - TRS-RenTelco reported a 9% increase in rental revenues compared to last year[5] Adjusted EBITDA - Adjusted EBITDA decreased 7% to $96.5 million for Q3 2025[6] - Adjusted EBITDA for Q3 2025 was $96.526 million, up from $103.983 million in Q3 2024, indicating a decline of 7.1%[28][32] - Adjusted EBITDA for the nine months ended September 30, 2025, was $257,567,000, slightly down from $259,723,000 in the same period of 2024, reflecting a decrease of approximately 0.8%[36] - Adjusted EBITDA margin for the twelve months ended September 30, 2025, was 39%, consistent with the previous year, demonstrating effective cost management[47] Cash Flow and Expenses - Cash balance at the end of the period was $7,256,000, significantly up from $807,000 at the beginning of the period[25] - The company reported a net cash provided by operating activities of $174,765,000 for the nine months ended September 30, 2025, down from $337,596,000 in 2024[27] - Net cash provided by operating activities for the three months ended September 30, 2025, was $65,071,000, compared to $198,967,000 in 2024, showing a decline in cash flow[49] - Interest expense for the three months ended September 30, 2025, was $8,177,000, down from $12,641,000 in the same period of 2024[23] - Interest expense for the nine months ended September 30, 2025, totaled $24,130,000, an increase from $12,642,000 in 2024, indicating rising borrowing costs[47] Capital Expenditures and Outlook - The company updated its full-year 2025 revenue outlook to $935 to $955 million, from a previous range of $925 to $960 million[13] - The company expects Adjusted EBITDA for the full year 2025 to be between $350 to $357 million[13] - Gross rental equipment capital expenditures are projected to be $120 to $125 million for the full year 2025[13] Operational Metrics - Average rental equipment cost increased to $1.328 billion in Q3 2025 from $1.241 billion in Q3 2024, representing a 7% increase[28][32] - Average monthly total yield for Q3 2025 was 2.09%, down from 2.19% in Q3 2024, indicating a decrease in rental revenue efficiency[28][32] - Average utilization rate for Q3 2025 was 72.6%, compared to 77.1% in Q3 2024, showing a decline in equipment usage[28][32] - Total direct costs of rental operations for Q3 2025 were $89.598 million, an increase from $81.672 million in Q3 2024, reflecting rising operational costs[28][32] - Selling and administrative expenses for Q3 2025 totaled $52.540 million, compared to $49.296 million in Q3 2024, indicating a rise in administrative costs[28][32] Foreign Currency and Other Gains - The company reported a foreign currency exchange loss of $32, contrasting with a gain of $216 in Q3 2024, highlighting increased currency volatility impacts[28][32] - The company reported a gain on merger termination from WillScot Mobile Mini of $(180,000,000), which was excluded from Adjusted EBITDA as a non-operating transaction[47] - The company experienced a gain on the sale of used rental equipment amounting to $30,188,000 for the nine months ended September 30, 2025, compared to $25,185,000 in 2024, reflecting improved asset management[49] Tax and Compensation - The provision for income taxes for the three months ended September 30, 2025, was $16,211,000, down from $53,502,000 in 2024, suggesting a favorable tax environment[47] - Share-based compensation for the nine months ended September 30, 2025, was $8,088,000, compared to $6,949,000 in 2024, indicating an increase in employee compensation costs[47]