UHAL Q3 Deep Dive: Depreciation Pressures Weigh on Profit as Dealer Expansion Ramps Up

Core Insights - U-Haul reported Q3 CY2025 revenue of $1.72 billion, reflecting a 3.7% year-on-year growth, meeting Wall Street expectations, but GAAP profit of $0.49 per share fell 24.6% short of analyst estimates [1][6] Financial Performance - Revenue: $1.72 billion vs analyst estimates of $1.73 billion, representing a 3.7% year-on-year growth [6] - EPS (GAAP): $0.49 vs analyst expectations of $0.65, a 24.6% miss [6] - Adjusted EBITDA: $523.9 million vs analyst estimates of $569.5 million, with a margin of 30.5%, an 8% miss [6] - Operating Margin: 12.9%, down from 18.4% in the same quarter last year [6] - Market Capitalization: $9.61 billion [6] Operational Challenges - Increased depreciation expenses and losses on equipment sales significantly impacted profit, attributed to high purchase prices of trucks now facing lower resale values [3][7] - Management highlighted the need for fleet refreshes, with Chairman Edward Shoen noting the high costs associated with acquiring new trucks [3][7] Strategic Initiatives - U-Haul is expanding its dealer network, surpassing 25,000 independent dealer locations, which is expected to enhance inventory deployment and support growth in moving transactions [7] - The company is focusing on growing its U-Box and self-storage businesses, which are viewed as future profit drivers despite high competition in the storage sector [4][8] Future Outlook - Management anticipates continued near-term pressure from depreciation and residual values but sees potential benefits from lower new vehicle prices as the market resets [4] - Efforts to control repair and maintenance costs are underway, with plans to stabilize margins in the coming quarters [8]