U-Haul (NYSE:UHAL) Q3 2026 Earnings call February 05, 2026 10:00 AM ET Company ParticipantsJason Berg - CFOJeffrey Kauffman - PartnerJoe Shoen - ChairmanSamuel Shoen - CEOSebastien Reyes - Head of Investor RelationsConference Call ParticipantsJames Wilen - AnalystSteven Ralston - AnalystSteven Ramsey - Senior Equity AnalystOperatorGood morning, ladies and gentlemen, and welcome to U-Haul Holding Company third quarter fiscal 2026 investor conference call. At this time, all lines are in a listen-only mode. Fo ...

Core Insights - Cartrack has partnered with Schmitz Cargobull to enhance its mobility solutions by integrating TrailerConnect® telematics data into its platform, providing transport operators with real-time visibility and control over fleet operations [1] Company Overview - Cartrack is a leading global mobility solutions provider and a subsidiary of Karooooo Limited, listed on NASDAQ under the ticker KARO [1] - Schmitz Cargobull is recognized as Europe's premier manufacturer of semi-trailers and is noted for its innovations in digital trailer connectivity [1]

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Motive Technologies Inc. filed publicly for an initial public offering, with the artificial intelligence-enabled fleet management software firm disclosing both growing revenue and net losses. https://t.co/iCx5RVa8J0 ...

Summary of Karoooo's Conference Call Company Overview - **Company Name**: Karoooo - **Business Model**: Operates Cartrack, a SaaS platform focusing on telematics, fleet management, AI, vision, and logistics - **Subscribers**: 2.5 million across 24 countries - **Recent Performance**: 20% subscription revenue growth and 29% operating profit growth in the last quarter [5][12][30] Market Position and Competition - **Geographic Focus**: - **South Africa**: Largest market, generating approximately 70% of revenue, with 1.85 million subscribers - **Asia**: Fastest-growing segment, competing with smaller companies - **Europe**: Operations in Portugal, Poland, and Spain, competing against Geotab and Powerfleet - **Market Share**: 40% market share in South Africa despite entering the market 10 years after competitors [6][10][12] Growth Opportunities - **South Africa**: - Significant growth potential with a vehicle pool of approximately 13 million - New product launch: Cartrack Tag for asset monitoring, contributing to upsell opportunities [10][11][12] - **Asia**: - Plans to increase sales headcount by 70% to drive subscription revenue growth into the mid- to high 20s percentage range [13][16] - **Cross-Selling Initiatives**: Focus on selling new products (Tag and video solutions) to existing customers to enhance long-term business health [18][24] Financial Performance - **Recent Growth Metrics**: - Q2 subscription revenue growth: 20% - Subscriber growth: 15% - ARPU growth: 4% [24][27] - **Future Guidance**: - Subscription revenue growth guidance for FY 2026: 16%-21% - Expected ARPU growth in South Africa: up to 10% year-over-year [17][27] Challenges and Considerations - **Subscriber Growth Deceleration**: Noted a 150 basis points deceleration in subscriber growth, attributed to resource allocation towards selling new products rather than macroeconomic factors [9][49] - **Margin Concerns**: Operating profit margin decreased by 50 basis points year-over-year, but the company views this as a trade-off for accelerated growth [30][34] - **Investment in Sales Capacity**: Increased sales and marketing expenses by 34% in Q2 to support growth initiatives [30][31] Strategic Focus - **Innovation and Customer Retention**: Emphasis on continuous innovation to meet customer needs and maintain strong retention rates [51] - **Autonomous Vehicles**: Viewed as an opportunity rather than a disruption, with plans to integrate related solutions into the platform [48] Additional Insights - **Cultural Aspect**: The unique spelling of "Karoooo" reflects the founder's vision and the company's culture of innovation and disruption [54][56]

Financial Data and Key Metrics Changes - For Q3 2025, equipment rental revenue increased approximately 30% year-over-year, driven by the acquisition of H&E Equipment Services Inc. and strong contributions from mega projects and specialty solutions [23] - Adjusted EBITDA rose 24% compared to the previous year's third quarter, benefiting from higher equipment rental revenue and used equipment sales [23] - Net income for the third quarter included $38 million of transaction costs related to the acquisition, with adjusted net income at $74 million [25] Business Line Data and Key Metrics Changes - Local accounts represented 52% of rental revenue, down from 53% a year ago on a pro forma basis, while national accounts continue to show robust private funding for large-scale projects [14] - The company is focusing on optimizing its fleet management and has made significant progress in disposing of underutilized and aged equipment [19][20] Market Data and Key Metrics Changes - The industrial spending forecast indicates strong capital and maintenance spending through the end of the decade, with non-residential construction starts in 2025 estimated at $467 billion, a 4% increase year-over-year [16] - The mega project pipeline is projected to exceed $650 billion for 2025, indicating significant growth opportunities in the construction sector [16][17] Company Strategy and Development Direction - The company is prioritizing the integration of H&E Equipment Services Inc. and has paused other M&A initiatives to focus on achieving cost and revenue synergies [10] - Plans include consolidating general rental branches and expanding specialty equipment locations, aiming for a 25% increase in specialty network next year [9][11] Management's Comments on Operating Environment and Future Outlook - Management noted that while local market growth is limited due to high interest rates, robust activity in mega projects continues to drive demand [4][14] - The company remains confident in its ability to deliver full value from the acquisition and achieve long-term growth strategies [10][12] Other Important Information - The company completed a full systems integration in just 90 days, significantly faster than the typical timeline for similar-sized companies [6] - The integration allows for real-time visibility into performance metrics and operational KPIs, enhancing decision-making capabilities [7][8] Q&A Session Summary Question: What is the status of the fleet right-sizing process? - The heavy lifting was completed in Q3, with more work expected in Q4, aiming to close this part of the process by the end of the year [31][33] Question: How does the mix of national accounts impact margins? - Management does not expect significant margin dilution from national accounts or mega projects, as these projects typically involve minimal movement and higher volumes of specialty products [35][36] Question: Can you clarify the consolidation of general rental locations? - The strategy involves opening specialty businesses within general rental branches rather than closing them, with plans for 50 new specialty locations [38] Question: Are there updates on cost and revenue synergies? - Cost synergy targets are evolving, with ongoing efficiency reviews now that the companies are on the same platform [40] Question: How is customer attrition being managed post-acquisition? - Customer attrition has stabilized, and efforts are being made to engage with former H&E Equipment Services Inc. customers to regain business [44][61]

Core Insights - Hertz Global reported a significant operational turnaround, achieving positive Adjusted Corporate EBITDA for the first time in nearly two years, with results surpassing consensus expectations [1][5][6] - Despite improvements, the company remains overall loss-making, with GAAP revenue declining year-over-year [1][6] Financial Performance - Non-GAAP loss per share was $0.34, better than the estimated loss of $0.41, while GAAP revenue was $2,185 million, exceeding analyst estimates of $2,156.98 million but down 7.1% from $2,353 million in Q2 2024 [1][2] - Adjusted Corporate EBITDA was $1 million, a significant improvement from a loss of $460 million in the previous year [2][6] - Net loss (GAAP) narrowed from $865 million in Q2 2024 to $294 million in Q2 2025, with adjusted net loss shrinking 76% year-over-year [6] Operational Highlights - Vehicle utilization increased to 83%, up 3 percentage points from the prior year, despite a 6% drop in fleet size [2][8] - Depreciation per unit per month decreased by 57.8% to $251, well below the target of $300, supported by a younger fleet [2][7] - Direct operating expenses fell 3% year-over-year, and customer satisfaction improved, as indicated by an 11-point rise in the Net Promoter Score [9] Strategic Focus - The company is concentrating on fleet management, cost discipline, and technological upgrades, including partnerships with ride-share services and investments in digital tools [4][10] - Management plans to maintain tight fleet levels while focusing on improving utilization and margins rather than expanding volume [12] Future Outlook - Management anticipates a "sizable profit" and positive net income in the next quarter, with a target of achieving positive EBITDA over $1 billion by fiscal 2027 [12][13] - The company has secured vehicle purchases at pre-tariff prices, mitigating risks from rising vehicle costs [12]

Financial Data and Key Metrics Changes - In Q2 2025, Transocean reported contract drilling revenues of $988 million, aligning with guidance, with an average daily revenue of approximately $459,000 [20] - Operating and maintenance expenses were $899 million, below guidance due to lower costs from service delays and out-of-service projects [20] - Total liquidity at the end of the quarter was approximately $1.3 billion, including $377 million in unrestricted cash and $395 million in restricted cash [21] Business Line Data and Key Metrics Changes - The company expects contract drilling revenues for Q3 2025 to be between $1 billion and $1.02 billion, driven by increased in-service days and efficiency [21][22] - Full-year contract drilling revenues are now projected to be between $3.9 billion and $3.95 billion, reflecting potential variances in revenue efficiency [24] Market Data and Key Metrics Changes - The global active ultra-deepwater fleet is expected to approach utilization exceeding 90% by late 2026, leading to upward pressure on day rates [14] - Wood Mackenzie projects deepwater and ultra-deepwater development CapEx to rise from $64 billion in 2025 to $79 billion in 2027, a 23% increase [14] Company Strategy and Development Direction - Transocean is focused on delivering best-in-class services, managing its high-spec rig portfolio, and improving financial flexibility by reducing debt and costs [6][11] - The company plans to reduce cash costs by approximately $100 million annually in 2025 and 2026, with additional efficiency improvements expected [10][11] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the market recovering, with increased contracting activity anticipated in 2026 and beyond [12][28] - The company is committed to maintaining a disciplined approach to managing its balance sheet and maximizing cash flow to reduce debt [11][28] Other Important Information - Transocean removed four lower specification rigs from its fleet in Q2 2025, contributing to improved industry dynamics [19] - The company is actively pursuing opportunities in various regions, including Africa, the Mediterranean, and Asia, with expectations for increased demand [15][16] Q&A Session Summary Question: Expectations on leading edge day rates - Management noted that while day rates have moderated, they expect utilization to recover and rates to improve as contracting activity increases [33][39] Question: Future contracts for drillships in the Gulf of Mexico - Management is optimistic that the Proteus and Concorde drillships will remain in the Gulf of Mexico due to customer interest [42] Question: Proceeds from rigs slated for disposal - Management indicated that proceeds from rig disposals are expected to be around breakeven, with no significant assumptions beyond that included in liquidity forecasts [46][48] Question: Exploration activity and implications - Management highlighted an increase in exploration activity and noted that successful discoveries, like BP's Boomerang, could lead to increased industry activity and CapEx levels [70][72]

Financial Data and Key Metrics Changes - Total revenues for the second quarter were $615 million, a slight decrease from $621 million in the prior quarter, primarily due to the completion of a contract for Valaris DS-12 without follow-on work [28] - Adjusted EBITDA increased to $201 million from $181 million in the prior quarter, driven by a favorable arbitration outcome that provided a total benefit of $24 million [29] - Adjusted free cash flow for the quarter was $63 million, with cash and cash equivalents at $516 million, contributing to total liquidity of nearly $900 million [30][32] Business Line Data and Key Metrics Changes - The company added over $1 billion in new contract backlog, increasing total backlog to approximately $4.7 billion, the highest in a decade [5][34] - For floaters, $860 million was added to the backlog, while jackups contributed $145 million [16] - The jackup fleet maintained robust contract coverage, with over 70% of available days contracted for 2026 and 60% for 2027 [11] Market Data and Key Metrics Changes - Global marketed utilization for jackups ended the second quarter at 90%, driven by national oil companies prioritizing energy security [24] - The offshore drilling market is expected to see meaningful growth in deepwater project sanctioning in 2026 and 2027, with over 75% of deepwater spending expected to be sanctioned at breakeven prices below $50 per barrel [10][9] - The company is tracking more than 30 floater opportunities with planned start dates in 2026 or 2027, indicating a healthy pipeline for future contracts [10][18] Company Strategy and Development Direction - The company is focused on delivering operational performance, executing a commercial strategy, and maintaining disciplined cost and fleet management to drive long-term value for shareholders [4][12] - The strategy includes securing long-term contracts for high-specification assets and exploring short-term gap-fill opportunities as they arise [14][40] - The company plans to actively manage its fleet in response to market conditions, including retiring rigs when their economic benefit no longer justifies associated costs [14][15] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the offshore drilling market, noting that customers are prioritizing long-cycle offshore projects and that the demand for deepwater production remains strong [9][10] - The company anticipates additional contract awards across the industry in the coming months, supported by a healthy pipeline of opportunities [10][18] - Management highlighted a positive shift in customer sentiment, with increased confidence in contracting rigs and moving forward with developments [82] Other Important Information - The company completed the sale for recycling of three semisubmersibles, reflecting a proactive approach to fleet management [14] - The company expects total CapEx for the third quarter to be between $100 million and $110 million, including ongoing fleet maintenance and contract-specific upgrades [31][32] Q&A Session Summary Question: Can you provide more details on the shorter-term contracts for the drillships? - Management indicated that the average duration for shorter-term contracts varies and that they are well-positioned to service these opportunities with their high-spec fleet [38][39] Question: How many of the 30 planned floater opportunities have been pushed back? - Management clarified that while some opportunities have shifted, the pipeline remains robust with new work replenishing the opportunities [50][51] Question: What is the outlook for day rates on upcoming contracts? - Management expects day rates to remain stable in the low $400s for upcoming contracts, with potential for increases as utilization improves [58][62] Question: What are the expectations for Petrobras' rig count and tendering schedule? - Management expressed optimism about Petrobras maintaining a stable rig count and indicated that multiple tenders are expected, which could lead to increased contracting opportunities [70][73] Question: What is the company's approach to returning capital to shareholders? - Management remains committed to returning capital to shareholders and indicated that strong operational performance and upcoming rig sales will enhance flexibility for capital returns [88][89]

Financial Data and Key Metrics Changes - Total revenues for the second quarter were $615 million, a slight decrease from $621 million in the prior quarter, primarily due to the completion of a contract for Valaris DS-12 without follow-on work [29] - Adjusted EBITDA increased to $201 million from $181 million in the prior quarter, driven by a favorable arbitration outcome that provided a total benefit of $24 million [30] - Adjusted free cash flow for the quarter was $63 million, with cash and cash equivalents at $516 million, contributing to total liquidity of nearly $900 million [31][32] Business Line Data and Key Metrics Changes - The company added over $1 billion in new contract backlog, increasing total backlog to approximately $4.7 billion, the highest in a decade [5][17] - For floaters, approximately $860 million was added to the backlog, while jackups contributed $145 million [17] - The jackup fleet maintained robust contract coverage, with over 70% of available days contracted for 2026 and 60% for 2027 [11] Market Data and Key Metrics Changes - The offshore drilling market shows strong long-term fundamentals, with a healthy pipeline of more than 30 floater opportunities planned for 2026 or 2027 [10][20] - Global jackup utilization remained resilient at 90%, driven by national oil companies prioritizing energy security [11][25] - The majority of deepwater spending expected to be sanctioned in the next three years is tied to programs with breakeven prices below $50 per barrel, compared to a five-year forward price above $65 per barrel [10] Company Strategy and Development Direction - The company focuses on delivering operational excellence, executing a commercial strategy, and maintaining disciplined cost and fleet management to drive long-term shareholder value [4][12] - The strategy includes securing long-term contracts for high-specification assets and exploring short-term gap-fill opportunities [13][44] - The company is actively managing its fleet in response to market conditions, including retiring rigs when their economic benefit no longer justifies associated costs [13][15] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the offshore production's role in meeting global energy needs, particularly in deepwater projects [9] - There is an expectation of meaningful growth in deepwater project sanctioning in 2026 and 2027, with customers prioritizing long-cycle offshore developments [10] - Management noted a more positive outlook from customers regarding contracting and development programs compared to six months ago [82] Other Important Information - The company completed the sale for recycling of three semisubmersibles, reflecting the challenged global market for this asset class [13][14] - The company remains committed to returning capital to shareholders, with strong operational performance providing flexibility for capital returns [88][90] Q&A Session Summary Question: Insights on short-term contracts for drillships - Management indicated that average duration for short-term contracts varies and that they are well-positioned to service these opportunities across different locations [41][42] Question: Update on planned floater opportunities - Management clarified that the pipeline remains about 30 opportunities, replenished with new work, and expressed confidence in continued contract awards [52][54] Question: Thoughts on day rates for upcoming contracts - Management expects day rates to follow utilization trends, with seventh-generation rigs leading the recovery and potentially exiting 2026 with utilization above 90% [65] Question: Timing for reactivating cold stacked drillships - Management emphasized a focus on securing contracts for active rigs before considering reactivation of cold stacked units, with good opportunities for DS-12 in 2026 [68] Question: Petrobras tendering schedule - Management expressed optimism about Petrobras maintaining a stable rig count and the potential for multiple rigs to be contracted in upcoming tenders [72][76]