Specialty Businesses, Big Projects, Upgraded Offerings Propel United Rentals Forward in 2025, CEO Flannery Says

In the second quarter, United Rentals saw growth across both its industrial and construction end markets, healthy demand for used equipment and ongoing optimism from the field, CEO Matthew Flannery told a conference call of investors last week. 

“We continue to see growth in both our GenRent and Specialty businesses,” Flannery said. “Specialty rental revenue grew 14 percent year over year, while opening 21 cold starts in the second quarter. We remain on track to open at least 50 this year.”

“We continue to see new projects kicking off with a few recent examples, including data centers, hospitals and airports,” Flannery said.

Flannery said the demand for used equipment remains healthy and the company is on track to sell approximately $2.8 billion of fleet this year. And in response to continued customer demand, Flannery said, United Rentals spent nearly $1.6 billion on rental capex in the quarter, in line with the company’s expectations. 

“Specialty and large projects continue to fuel growth, and we feel that we’re well positioned to serve these based on our go-to-market approach and our one-stop-shop value proposition,” he noted. “Subsequently, year to date, we’ve generated free cash flow of $1.2 billion with the expectation to now generate between $2.4 billion and $2.6 billion, for the full year, which includes the benefit from the recent changes in federal tax policy.

“Our ability to generate free cash flow remains a distinguishing feature of the company. The combination of our industry-leading profitability, capital efficiency and the flexibility of our business model enables us to generate meaningful free cash flow throughout the cycle and in turn allocate that capital in ways that allow us to create long-term shareholder value. In regards to capital allocation, our balance sheet is in excellent shape. This quarter, after funding organic growth, we returned $534 million to shareholders through a combination of share buybacks and our dividend. And for the full year, we now expect to return nearly $2.4 billion to shareholders.”

Looking at verticals, utilities
Flannery also spoke about United’s vertical strategy of utilities.
“The acquisition of Yak last year was the perfect opportunity to marry this strategy with an additional product,” he said. “The utility vertical is now north of 10 percent of our revenue versus 4 percent fewer than 10 years ago. Just recently, a large utility customer awarded us a five-year agreement because we took the time to work with operators across their business, functioning like we were part of their company. We offered a wide range of solutions the customer needed and through the power of cross sell, now rent them products across every specialty business we have. They are now asking how we can partner together, which is exactly where you want to be as a value-added service provider."

Flannery also talked about the company’s telematics services. “By utilizing the unique functionality of our telematics software, customers can realize meaningful savings across all their fleet needs,” he said. “Our capabilities also help customers reduce unauthorized equipment use subsequent fuel consumption and overage fees. Instances such as these, where we can help boost productivity and budget efficiency, make us a better partner to our customers and enable repeat business.”

For a more complete look at United Rentals’ second quarter results, visit: https://www.rermag.com/news-analysis/headline-news/article/55305258/equipment-rental-revenues-jump-62-percent-in-second-quarter-for-united-rentals