United Continues Steady Growth, in Specialty, General and Large Projects, Flannery Says

In the fourth quarter of 2025, United Rentals continues to experience growth in both its general rental and its specialty businesses, and the company expects these trends to continue in 2026.

“Specialty continues to exhibit healthy and broad-based growth,” United Rentals CEO Matthew Flannery told a conference call for investors. “We remain focused on expanding our specialty footprint and capitalizing on the geographic white space available. In 2025, we opened an additional 60 cold starts, including 13 in the fourth quarter. We remain confident that the combination of geographic expansion, the power of cross-sell and the addition of new products to our portfolio will enable us to continue growing our specialty business at a double-digit rate for the foreseeable future.”

Looking at verticals, United’s construction end markets found growth across infrastructure and nonresidential construction, while its industrial end markets saw particular strength within power.

“Similar to last quarter, data centers and power were drivers of growth, but certainly not the only ones,” Flannery said. “Our project pipeline is larger than ever, and we saw new projects kick off across health care, pharmaceuticals and infrastructure to name a few.”

Looking at the used equipment market, United sold $769 million of original equipment cost in the fourth quarter at a 50-percent recovery rate, Flannery noted.

High time demand

“For the full year, we sold slightly less OEC that we originally forecast as we held on to some high time used assets to meet demand,” he said. “Importantly, the demand for used equipment remains healthy. For the full year, we spent nearly $4.2 billion on a combination of maintenance and growth rental CapEx, which resulted in a free cash flow generation of $2.2 billion for a free cash flow margin of 14 percent.”

Looking at 2026 guidance, United expects more than 6 percent growth. “This is supported by customer sentiment indicators, solid backlogs and most importantly, feedback from field teams. “In many ways, we expect the construct of demand in 2026 to be similar to last year with large projects and dispersed geographic demand driving most of our growth,” said Flannery.

United Rentals made a few smaller acquisitions in the fourth quarter and, Flannery said, the M&A pipeline remains robust.

“The deals we did at the end of the year were pretty small deals,” Flannery noted. “We did one trench deal. We did a portable sanitation deal, a small one to help fill out the footprint. We bought an aerial company in Australia to fill out that product offering and help those folks continue to have more solutions for their customers. Not a large impact numerically, but strategically they all tie in. As far as what we’re going to do in ’26, it’s really more about finding the right fit, finding the right partner. At the end of the day, the math has got to work. It’s got to fit for us strategically and financially.”

Flannery expects positive fleet productivity next year. “The industry needs to continue to be disciplined because we’ve all absorbed price increases on fleet for the past few years,” he said. “The importance of the components of fleet productivity are still important, getting good utilization, getting strong rate improvement. These are all things that are musts for the rental industry and certainly something that we are focused on, and we believe the industry is as well.”

Cold starts stay hot

Flannery said the company opened 60 cold starts in 2025. It originally planned for 50, but got a bit ahead of schedule. It plans about 40 more in 2026.

“”We don’t really look at these as we tell you about them as a calendar year,” Flannery said. “I wouldn’t read anything into the 40 versus the 60. The team got ahead in the pipeline, but there continues to be a pipeline of markets they want to enter. And where that number ends up has to do with where they find the right real estate and talent to open it up. Most of the cold starts are in the specialty offerings, filling in the white spaces, specifically for some of the new product lines.

“We believe that the construct of demand in 2026 is going to be similar to what it was in 2025, where the large projects and specialty are going to drive most of the growth. We think that plays into all of our product lines. That's the whole point about the one-stop shop offering is that's going to create growth for gen rent and specialty.

Nonres has been very resilient and strong. We feel really good about that. And the ones that are still dragging would be the residential, which is not a big part of our portfolio and a little bit of petrochem, whereas I think you see the rig count in Q4, if I believe my memory is correct, was down 8 percent.  And the ones that are still dragging would be the residential, which is not a big part of our portfolio and a little bit of petrochem, whereas I think you see the rig count in Q4 down 8 percent.

“And with most of the growth, as I said in my opening remarks, coming from the big projects. That pipeline is as big as it's ever been in my 35 years. So, it's going to be more of the projects, and this does not contemplate a big rebound in the local markets. But to be fair, not a deterioration as well. We think steady as she goes in the local market.”

William Grace, executive vice president and chief financial officer, added that the company will continue to spend on its own technology, likely increasing in 2026 compared to 2025. “Like a lot of companies, we're investing in a lot of different opportunities and initiatives,” Grace said. “Some I would describe as more elective and some are critical. So, we continue to try to leverage more and more technology to drive greater operating efficiency. We've got a number of projects that would be designed to help with fleet efficiency, frankly, with repositioning costs and delivery costs. There's other things that are mandatory like cyber and protection.”