Financial Data and Key Metrics Changes - Total rental revenue grew by 4.5% year over year to $3.9 billion, with rental revenue increasing by 6.2% to $3.4 billion, both setting second quarter records [6][16] - Adjusted EBITDA reached a second quarter record of $1.81 billion, translating to a margin of 45.9%, reflecting a 100 basis points compression [18][19] - Adjusted EPS was reported at $10.47 [20] Business Line Data and Key Metrics Changes - Specialty rental revenue grew by 14% year over year, with 21 cold starts opened in the second quarter [7] - Rental ancillary and re-rent revenue grew by approximately 10% year on year, contributing an additional $59 million [17] - The used equipment sales generated $600 million, with an adjusted margin of 48.3% and a recovery rate of 53% [17][18] Market Data and Key Metrics Changes - The construction end market saw significant growth in both infrastructure and non-residential construction, while the industrial end market showed strength in power, metals, minerals, and chemical processes [7] - The company expects to sell approximately $2.8 billion of fleet this year, with healthy demand for used equipment [8] Company Strategy and Development Direction - The company aims to drive profitable growth by partnering with customers and enhancing productivity through technology [12] - The utility vertical now accounts for over 10% of revenue, up from 4% less than ten years ago, indicating a strategic focus on this area [13] - The company continues to prioritize M&A as a core element of its strategy, seeking opportunities for attractive returns [11] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the remainder of the year, supported by strong customer demand and a positive Customer Confidence Index [5][6] - The updated guidance for total revenue growth is set at 4% to 5% for the year, with EBITDA margins expected to remain above 46% [11][22] - Management noted that the inflationary environment and investments in specialty and technology are expected to support future growth despite some margin compression [20][31] Other Important Information - The company generated free cash flow of $1.2 billion year to date, with expectations to reach between $2.4 billion and $2.6 billion for the full year [9][23] - The balance sheet remains strong with a net leverage of 1.8 times and total liquidity of $3 billion [21] Q&A Session Summary Question: Thoughts on price-cost dynamics and ancillary growth - Management indicated that ancillary growth has outpaced owned equipment revenue growth, impacting margins, but expects this to normalize in the second half of the year [26][34] Question: Free cash flow outlook and moving pieces for 2026 - Management confirmed that the new baseline for free cash flow is around $2.4 billion, influenced by tax reforms and operational efficiencies [42][44] Question: Used equipment recovery and market dynamics - Management noted that used equipment recovery has stabilized, with a recovery rate improving sequentially, indicating a balanced supply-demand dynamic [85][86] Question: CapEx guidance and market conditions - Management affirmed that CapEx guidance remains unchanged, with no expected price increases, and expressed confidence in the current market environment [93][94] Question: Visibility on growth drivers for 2026 - Management highlighted multiple growth paths, including large projects and M&A opportunities, while maintaining a positive outlook on market conditions [96][100]