United Rentals Q4 2024 Earnings Report

United Rentals EPS Results

• Actual EPS: $11.59
• Consensus EPS: $11.65
• Beat/Miss: Missed by -$0.06
• One Year Ago EPS: N/A

United Rentals Revenue Results

• Actual Revenue: N/A
• Expected Revenue: $3.94 billion
• Beat/Miss: N/A
• YoY Revenue Growth: N/A

United Rentals Announcement Details

• Quarter: Q4 2024
• Date: 1/29/2025
• Time: Before Market Opens
• Conference Call Date: Thursday, January 30, 2025
• Conference Call Time: 8:30AM ET

United Rentals (NYSE:URI) (NYSE:URI) is a leading global equipment rental company headquartered in Stamford, Connecticut. Established in 1997 through the consolidation of several regional rental firms, the company has grown to become the largest equipment rental provider in North America. It offers a comprehensive portfolio of rental equipment and services to a diverse customer base, including contractors, industrial firms, municipalities, and homeowners.

The company’s rental fleet spans over 4,000 classes of equipment, covering aerial work platforms, earthmoving machinery, forklifts, power and HVAC systems, pneumatic tools, and trench safety solutions. In addition to standard equipment rentals, United Rentals provides specialized services such as equipment maintenance, safety training, project planning support, and fleet management programs. Its UR Total Control fleet management solution enables customers to monitor equipment usage, optimize schedules, and reduce overall costs through telematics and digital reporting tools.

United Rentals operates more than 1,500 rental locations across the United States and Canada, with a growing presence in selected European markets. The company’s broad network of branches allows customers to access equipment and services quickly, supported by a national delivery capability that ensures prompt onsite delivery and pickup. Strategic acquisitions, including BlueLine Rental and NES Rentals, have further expanded its geographic reach and diversified service offerings.

Under the leadership of Chief Executive Officer Michael Kneeland, United Rentals emphasizes operational excellence, safety, and technological innovation. The executive team and board of directors maintain a strong commitment to sustainability initiatives, workforce development, and community engagement. Through ongoing investments in digital platforms and service quality, United Rentals continues to adapt to evolving industry demands and support customers’ project needs across multiple sectors.

United Rentals Q4 2024 Earnings Call Transcript

Key Takeaways

• United Rentals reported record Q4 results with total revenue up 9.8% to $4.1 billion, adjusted EBITDA of $1.9 billion (46% margin) and adjusted EPS of $11.59.
• Specialty rental revenue grew over 30% year-over-year (18% ex-acquisition) driven by strong same-store sales and 15 new “cold start” locations, with continued momentum in large projects.
• Record used-equipment sales of $850 million in Q4 and full-year CapEx of $3.7 billion generated free cash flow of nearly $2.1 billion (13% margin), enabling $1.9 billion returned to shareholders and a 10% dividend increase to $1.79 per share.
• For 2025 United Rentals forecasts another record year with total revenue of $15.6–$16.1 billion (3.3% growth), adjusted EBITDA of $7.2–$7.45 billion and free cash flow of $2.0–$2.2 billion, supported by mid-single-digit core rental growth.
• The pending H&E acquisition (~$5 billion) is expected to add capacity and accelerate growth, with buybacks paused pre-close and leverage targeted to fall to ~2× within 12 months of closing.

Presentation

[Operator]

Good morning, and welcome to the United Rentals Investor Conference Call. Please be advised that this call is being recorded. Before we begin, please note that the company's press release, comments made on today's call and responses to your questions contain forward looking statements. The company's business and operations are subject to a variety of risks and uncertainties, many of which are beyond its control. And consequently, actual results may differ materially from those projected.

[Operator]

A summary of these uncertainties is included in the Safe Harbor statement contained in the company's press release. For a more complete description of these and other possible risks, please refer to the company's annual report on Form 10 ks for the year ended December 31, 2024, as well as to subsequent filings with the SEC. You can access these filings on the company's website at www.unitedrentals.com. Please note that United Rentals has no obligation and makes no commitment to update or publicly release any revisions to forward looking statements in order to reflect new information or subsequent events, circumstances or changes in expectations. You should also note that the company's press release and today's call include references to non GAAP terms such as free cash flow, adjusted EPS, EBITDA and adjusted EBITDA.

[Operator]

Please refer to the back of the company's recent investor presentations to see the reconciliation from each non GAAP financial measure to the most comparable GAAP financial measure. Speaking today for United Rentals is Matt Flannery, President and Chief Executive Officer and Ted Grace, Chief Financial Officer. I will now turn the call over to Mr. Flannery. Mr. Flannery, you may begin.

[Matthew Flannery, President & CEO at United Rentals]

Thank you, operator, and good morning, everyone. Thanks for joining our call. We were pleased to report our solid Q4 results yesterday as the year culminated with record revenue, EBITDA and EPS. We again saw growth across our construction and industrial end markets as well as continued strong demand for used equipment. Our team doubled down on being the best partner of choice for our customers.

[Matthew Flannery, President & CEO at United Rentals]

Our diligence on safety, coupled with unmatched service, technology and operational excellence translated into the results we reported. Importantly, all of this sets the foundation for our future growth. Today, I'll discuss our 4th quarter results followed by our expectations for 2025 and finally, recap why we are excited about the H and E acquisition we announced a few weeks ago. And then Ted will discuss the financials in detail before we open up the call for Q and A, which we will keep focused on United Rentals as a standalone company. Our plan remains to update the investment community on the combined companies after the transaction closes, which is still expected by the end of our first quarter.

[Matthew Flannery, President & CEO at United Rentals]

So with that, let's start with the 4th quarter results. Our total revenue grew 9.8% year over year to almost $4,100,000,000 And within this, rental revenue grew by 9.7 percent to $3,400,000,000 both 4th quarter records. Fleet productivity increased by 4.3% as reported and 2% ex YAC. Adjusted EBITDA increased to a 4th quarter record of $1,900,000,000 translating to a margin of over 46%. And finally, adjusted EPS grew year over year to $11.59 another 4th quarter record.

[Matthew Flannery, President & CEO at United Rentals]

Now let's turn to customer activity. We saw growth in both our GenRent and Specialty businesses. Specialty rental revenue impressively grew more than 30% year over year and even without YAC, a strong 18%. These results were driven by rental revenue across all businesses with a combination of solid same store sales growth and an additional 15 cold starts putting us at 72 for the full year. And as a reminder, these specialty cold starts are a key element to accelerating our growth in this high return segment.

[Matthew Flannery, President & CEO at United Rentals]

By vertical, we continue to see similar trends to the rest of last year with non residential growth helping to fuel construction and industrial growth driven by manufacturing and power. And we saw new projects across data centers, chip manufacturing, sports stadiums and power to name a few. Now turning to the used market, which continues to exhibit strong demand. We sold over $850,000,000 of OEC in the quarter, which was a record for any quarter in our history. The depth and health of demand in the used market is allowing us to rotate our existing fleet to ensure we can serve our customers' needs efficiently.

[Matthew Flannery, President & CEO at United Rentals]

This is evident through our full year CapEx of over $3,700,000,000 And as a result, we drove free cash flow of nearly $2,100,000,000 which translated to a very healthy free cash flow margin of over 13%. 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 create long term shareholder value. To that end, we returned over $1,900,000,000 to shareholders last year through a combination of share buybacks and our dividend. And while we've paused our share repurchase plan ahead of the H and E closing, I'm pleased to announce we'll be raising our quarterly dividend by 10% year over year to $1.79 per share. Now let's turn to 2025, which we expect to be another year of growth, again led by large project growth.

[Matthew Flannery, President & CEO at United Rentals]

Customer optimism, backlogs and feedback from our field team combined with the demand we're carrying into the New Year all support our guidance. This was reinforced at our annual management meeting, which we held earlier this month in Houston, Texas. We discussed how a key element of our culture is the quality of people who work for United Rentals. And this was on full display in Houston as over 2,600 team members came together to focus and engage on being the partners of choice for our customers through our differentiated value proposition. Finally, I'd like to reiterate what I said 2 weeks ago when we announced our intent to acquire H and E.

[Matthew Flannery, President & CEO at United Rentals]

We're very excited to combine 2 complementary businesses. The transaction checks all three boxes we require when evaluating M and A, strategic, financial and cultural. Growing the core is a key component of our strategy and I'm really thrilled to have the opportunity to add high quality capacity, meaning people, fleet and real estate to the United Rentals team. This will allow us to better serve customer demand over the long term. It will also accelerate our growth, all while generating compelling returns for our shareholders.

[Matthew Flannery, President & CEO at United Rentals]

It's really a win win outcome. Things remain on track for a Q1 close and there are no further updates to provide you today. In closing and building upon what I just discussed with our latest acquisition announcement, we remain focused on being the best rental company in in the industry. Our unique value offering, industry leading technology and our go to market approach combined with our capital discipline give me confidence that we're well positioned for both customers and shareholders for the long term. We continue to progress towards our 20 28 aspirational financial goals, which we laid out in May of 'twenty 3 and look forward to delivering on these results as we continue to execute our strategy.

[Matthew Flannery, President & CEO at United Rentals]

With that, I'll hand the call over to Ted, and then we'll take your questions. Ted, over to you.

[William Grace, Executive VP & CFO at United Rentals]

Thanks, Matt, and good morning, everyone. As Matt just shared, we had a strong finish to the year setting both 4th quarter and full year records for total revenue, rental revenue, EBITDA and EPS, which supported the attractive returns and significant free cash flow we also generated in 2024. So with that said, let's jump into the numbers. 4th quarter rental revenue was a record at $3,420,000,000 That's a year on year increase of $303,000,000 or 9.7 percent, supported again by growth from large projects and key verticals. Within rental revenue, OER increased by $177,000,000 or 6.9%.

[William Grace, Executive VP & CFO at United Rentals]

Breaking this down, growth in our average fleet size contributed 4.1% to OER, while fleet productivity added another 4.3%, partially offset by assumed fleet inflation of 1.5%. Also within rental, ancillary and re rent grew by 22% 30%, respectively, adding a combined $126,000,000 to revenue, driven primarily by strong growth in specialty and hurricane related work in the quarter. Turning to our used results. As Matt mentioned, we took advantage of a strong market to sell a record amount of fleet in the 4th quarter, generating proceeds of $452,000,000 at an adjusted margin of 48.9 percent and a recovery rate of 53 percent on assets that were almost 8 years old on average. Moving to EBITDA, as I mentioned, adjusted EBITDA was a 4th quarter record at $1,900,000,000 translating to an increase of $91,000,000 or 5%.

[William Grace, Executive VP & CFO at United Rentals]

Within this, rental gross profit increased 7%, contributing an additional $136,000,000 year on year. This was partially offset by used where the ongoing normalization of the market drove a 9% decline in used gross profit dollars, translating to a $21,000,000 headwind to adjusted EBITDA in the quarter. SG and A increased by $36,000,000 year over year, which was in line with revenue growth, so good efficiency there. And finally, the EBITDA contribution from other non rental lines of businesses increased $12,000,000 driven largely by strong new equipment sales. Looking at profitability, our 4th quarter adjusted EBITDA margin was 46.4%, implying 210 basis points of compression.

[William Grace, Executive VP & CFO at United Rentals]

I'm sure we'll dig into this during Q and A, so I thought it might be helpful to frame some of the key factors here.

[William Grace, Executive VP & CFO at United Rentals]

The combination of used and stronger than expected new equipment sales were together about 80 basis points of year on year headwind. Said another way, excluding these two factors, our adjusted EBITDA margin would have been down about 130 basis points with flow through a little better than 33%. Closer to the core, as you just heard me highlight, we had higher growth in ancillary and re rent revenue that, as you know, come with lower margins. If we also adjust for these, our EBITDA margin would have been down about 60 basis points with implied flow through of roughly 40%. While this is modestly below our long term goal, it reflects our continued investment in key aspects of our strategy, including specialty, technology and capacity to support the long term growth of our business during what we view as a slower phase of the cycle.

[William Grace, Executive VP & CFO at United Rentals]

And lastly, our adjusted earnings per share was a 4th quarter record at $11.59 Shifting to CapEx, 4th quarter gross rental CapEx was $469,000,000 Moving to returns and free cash flow. Our return on invested capital of 13% remained well above our weighted average cost of capital, while full year free cash flow totaled a robust $2,060,000,000 Our balance sheet remains very strong with net leverage of 1.8 times at the end of December and total liquidity of over $2,800,000,000 I'll note, this was after returning a record of over $1,900,000,000 to shareholders in 2024, including $434,000,000 via dividend and $1,500,000,000 through repurchases that reduced our share count by over 2,100,000 shares. So to wrap up both the quarter and the full year, we were very pleased with the results our team achieved in 2024.

[William Grace, Executive VP & CFO at United Rentals]

Now let's look forward and talk about our 2025 guidance, which I'll remind you is standalone, meaning it does not include any contribution from H and E. As you've seen from the press release, we anticipate another record year. Total revenue is expected in the range of $15,600,000,000 to $16,100,000,000 implying full year growth of 3.3% at midpoint. Within total revenue, I'll note that our used sales guidance is implied roughly $1,450,000,000 or a mid single digit year on year decline on a percentage basis. This in turn implies a little faster growth within our core rental revenue, call it, mid single digit on a percentage basis.

[William Grace, Executive VP & CFO at United Rentals]

Within used, I'll add that we expect to sell around $2,800,000,000 of OEC, translating to recovery rate in the low-50s versus the mid-50s in 2024, but in line with pre pandemic norms. Our adjusted EBITDA range is $7,200,000,000 to $7,450,000,000 At the midpoint, excluding the impact of used, this implies flow through in the 40s and flattish adjusted EBITDA margins versus as reported flow through of around 30% and approximately 50 basis points of margin compression at the midpoint of guidance. On the fleet side, our gross CapEx guidance is $3,650,000,000 to $3,950,000,000 with net CapEx of $2,200,000,000 to $2,500,000,000 Within this, we peg our 2025 maintenance CapEx at around $3,300,000,000 implying growth CapEx of roughly $500,000,000 at midpoint. And finally, we are guiding to another year of strong free cash flow in the range of $2,000,000,000 to $2,200,000,000 Turning to capital allocation, one of the benefits of our balance sheet strategy and free cash generation are the flexibility they provide to invest in growth opportunities when they arise. As you know, we intend to capitalize on this through the pending acquisition of H and E, where we will invest almost $5,000,000,000 at targeted returns well above our cost of capital.

[William Grace, Executive VP & CFO at United Rentals]

As previously shared, we are pausing our buyback program ahead of H and E and we intend to utilize our free cash flow in 2025 to reduce our leverage from roughly 2.3 times on a pro form a basis to a goal of around 2 times within 12 months of close. Finally, consistent with our strategy to return excess capital to our shareholders, I am very pleased to reiterate that we are increasing our quarterly dividend by 10% to $1.79 per share, translating to an annualized dividend of $7.16 So with that, let me turn the call over to the operator for Q and A. Operator, please open the line.

[Operator]

The floor is now open for your questions. Our first question will come from Steven Fisher with UBS. Please go ahead. Your line is open.

[Steven Fisher, Managing Director & Equity Research Analyst at UBS Group]

Thank you and congratulations on a nice year. Maybe you can just touch upon the bigger than usual ancillary and re rent. What's the main activity driving that? Was that sort of more shifting of equipment around that you got fees on? And maybe what's the next the expectation for the next few quarters on that if you could even forecast it?

[Steven Fisher, Managing Director & Equity Research Analyst at UBS Group]

And I suppose the bigger picture question here is, what on the margin side, what would you have to see in order to get flow through back into the kind of 50% plus range?

[William Grace, Executive VP & CFO at United Rentals]

Sure. I'll start, Steve, and then Matt can jump in. So on ancillary and re rent, I think there are a couple of things. Certainly, the storm related opportunities were a big part of both, probably more so in re rent than ancillary, although there was definitely benefit in ancillary. And then within ancillary, the other thing we've talked about all year is some of the benefits we've had in specialty.

[William Grace, Executive VP & CFO at United Rentals]

So in terms of setting things up, breaking them down and those kinds of services that relate to some of the new businesses we're in, those obviously have seen kind of sharp growth in 2024 and that's contributed to that outperformance versus call it OER. Does that help on the first question?

[Steven Fisher, Managing Director & Equity Research Analyst at UBS Group]

Yes.

[William Grace, Executive VP & CFO at United Rentals]

On the second question, I think there are a couple of things. I mean, certainly relative growth rates matter. I think I made the comment just a couple of minutes ago that we think we're in the slower growth phase of the cycle. And the reason that's important is it drives relative fixed cost absorption. So as we get through 'twenty five and we do expect to accelerate thereafter, that obviously drives good absorption that helps drive better flow through.

[William Grace, Executive VP & CFO at United Rentals]

At the same time, in this environment, we've talked about making very intentional investments in things like cold starts and technology that have been marginal drags. We think those have been excellent investments with great ROI. That's why we've called them out and been pretty clear that we don't want to forego those opportunities just for the sake of an arbitrary flow through goal. So, Matt, anything you'd add there?

[Matthew Flannery, President & CEO at United Rentals]

No. I just we still always drive towards holding strong margins and Ted could take you through it. But within this guide, right, ex used sales, we expect to have margins, right, similar to year over year comps.

[William Grace, Executive VP & CFO at United Rentals]

Yes. And that's a good point. Just I'm not sure you asked it specifically. But if you in my comments, I made the point that if you back out used flow through would be in the mid-40s and we'd have flat margins, which we view as very good performance in this environment.

[William Grace, Executive VP & CFO at United Rentals]

I'll remind people, as much as inflation has subsided, it's certainly not going backwards. So we still have a decent amount of inflation we're absorbing. So to deliver these kinds of results does take hard work.

[Steven Fisher, Managing Director & Equity Research Analyst at UBS Group]

Great. That's helpful. And then just maybe on the pipeline of large projects, I'm curious how that looks today relative to a year ago? What do you see as the differences in the large project landscape this year versus last year?

[Matthew Flannery, President & CEO at United Rentals]

Yes. I'd call it very similar with the addition of that we're carrying in demand from projects that are ongoing. So when you add that to some of the newer projects that are planned to come out of the ground, we feel good about this segment and certainly feel good about our alignment to serve in that part of the business. So I would call it overall really the whole demand environment very similar to what we experienced in 2024 and our guide, right? So we feel good about the year going forward.

[Steven Fisher, Managing Director & Equity Research Analyst at UBS Group]

Terrific. Thank you very much.

[Matthew Flannery, President & CEO at United Rentals]

Thanks.

[Operator]

Thank you. Our next question will come from Blake Greenhall with Bank of America. Please go ahead. Your line is open.

[Blake Greenhalgh, Equity Research Associate at Bank of America Merrill Lynch]

Yes. First one would be just cadence of growth in 2025.

[Blake Greenhalgh, Equity Research Associate at Bank of America Merrill Lynch]

Are you guys baking anything that's more second half weighted?

[Matthew Flannery, President & CEO at United Rentals]

So we won't get into quarterly guidance. But if you just think about CapEx as a starting point, right, we expect to spend CapEx on a similar cadence, more historically normal cadence that we did in 2024. From there, there's nothing that I would call out, certainly not back weighted. We think it will flow with normal seasonality of our business and more importantly, our customers' demand, right?

[Blake Greenhalgh, Equity Research Associate at Bank of America Merrill Lynch]

Great. And then on power, there's been a lot of discussion this week about renewables, grid, data centers. Can you remind us how big that business is for you guys? And anything you're hearing for 25% that you want to talk about?

[William Grace, Executive VP & CFO at United Rentals]

Yes. So in its entirety, power is, call it, about 10% of our total revenue. Within that, solar and wind are a relatively small fraction. So those are not markets that move the needle terribly in our power business. So hopefully that helps give you some sense.

[Matthew Flannery, President & CEO at United Rentals]

Yes. Regardless of the political environment and all the pontificating of what's going to happen, there's a need for that grid to continue to be upgraded. There was long before chips and data centers and there's going to be going forward with or without the same level of chips and data centers. We're not concerned about this. This is a segment we focused on and we feel really good about.

[Operator]

Thank you. Our next question will come from Jerry Revich with Goldman Sachs. Please go ahead.

[Clay Williams, Vice President - Equity Research at Goldman Sachs]

Hi, this is Clay on for Jerry. First question here, what was the specialty organic growth in the quarter? And if you could talk to the color on the dispersion between the individual business lines within specialty, that would be great. Thanks.

[Matthew Flannery, President & CEO at United Rentals]

We don't really get into the individual business lines too much. I'll say specialty, as you saw, showed great growth of 30%. But as I said in my opening remarks, even ex YAC, 18%, and that would be the what we call organic growth. Admittedly, there's some cold starts in there. So that's inclusive of that.

[Matthew Flannery, President & CEO at United Rentals]

But really strong growth that we feel good about. And this has been going on for quite a few years, this double digit growth in specialty. And as we add new products, as we have in the last couple of years through acquisitions, getting further dispersion of that footprint is another big driver of growth. And we think that will continue on and we'll probably do another 50 plus cold starts in 2025 to add to that opportunity.

[Clay Williams, Vice President - Equity Research at Goldman Sachs]

Great. Super helpful. And then I guess just expanding on the options for 2025, I don't want to speak directly to the individual product lines, but I'm just curious if there's which ones are performing stronger relative to that average?

[Matthew Flannery, President & CEO at United Rentals]

Well, I wouldn't say performing stronger. They're all growing strong. I would say that you can think about where the growth is more pronounced, specifically in the cold starts, is the products that we've added over the last couple of years. So think about the General Finance acquisition and specifically here in the U. S.

[Matthew Flannery, President & CEO at United Rentals]

With Pac Van, we continue to exceed those goals that we had to double that business in 5 years. And cold starts will be a part of that as well, continue and expand their footprint. With YAK, our most recent new product line, they're ahead of schedule on our goals to double their business in 5 years. So they're really doing well and that's been a lot of organic growth. We haven't even broadly gotten to grow in the footprint.

[Matthew Flannery, President & CEO at United Rentals]

So that's future opportunity that we're going to do there. And our ROS business, right, our Reliable On-site business continues to grow organically and through cold starts. So those are the 3 I'd point out. But with all that being said, one of our most mature ones is power and they're growing tremendously by adding new products and just continuing to grow their footprint. So it's pretty much across the board, Clay.

[Clay Williams, Vice President - Equity Research at Goldman Sachs]

Thanks. I really appreciate the color.

[Matthew Flannery, President & CEO at United Rentals]

No worries. Thanks.

[Operator]

Thank you. Our next question will come from Tim Thein with Raymond James. Please go ahead.

[Tim Thein, Managing Director & Research Analyst at Raymond James Financial]

Good morning. Matt, maybe just on starting on fleet productivity, the target that outlined in terms of the ability to outrun inflation of 1.5%, I think still believe in that in terms of realistic target for 'twenty five? And then maybe as part of that, is there an area where maybe there's a better opportunity in terms of whether it's time or rate? And maybe just speak to that in terms of how you're thinking about just the broader fleet productivity set up for 2025?

[Matthew Flannery, President & CEO at United Rentals]

Yes.

[Matthew Flannery, President & CEO at United Rentals]

So we feel really good about the performance of the team. And as you know, we won't do it quantitatively, but qualitatively, we talked about back this time last year. If we were able to repeat 2023 time utilization, we'd feel really good. And we were able to do that. And so the team executed well.

[Matthew Flannery, President & CEO at United Rentals]

And that's embedded in our expectations for 2025 and in this guidance. And then from there, you look at the other two variables, we still believe this is a constructive rate environment really out of necessity. When you think about the amount of fleet inflation that we've all absorbed, the whole industry has absorbed over the last couple of years, the industry needs to get price to continue to eat into that. So I think you've seen that and I think that will continue on. And then the variable is mix, which is really an output depending on, right, the amount of products that grow faster, what we do with different business lines and there's a whole bunch of things in there.

[Matthew Flannery, President & CEO at United Rentals]

You guys have gone over them before, but that will be the variable. And we do believe it will be positive, meaning we will be able to exceed that inflation. In its simplest form, fleet productivity is can you grow your rent revenue faster than you can grow your fleet growth. And that's embedded in our guidance that we will do that again this year.

[Tim Thein, Managing Director & Research Analyst at Raymond James Financial]

Got it. Okay.

[Tim Thein, Managing Director & Research Analyst at Raymond James Financial]

And then just with the impact of M and A, obviously, the company has grown a couple of 100,000,000 isn't what it used to be at United. But is there a way, Ted, just to think about that in terms of the contribution as to what we can expect from the deals done in the back half of the year? Presumably, that's driving some benefit. Any way to help us in terms of what that may translate from a revenue perspective in 2025 as you annualize that?

[William Grace, Executive VP & CFO at United Rentals]

So we don't get too specific breaking out, obviously, the smaller deals, but you would have seen there was something on the order of $300,000,000 of deals we did. Most hit late in the quarter, so there really wasn't much benefit in the 4th. In terms of rolling forward, it was a combination of gen rent and specialty. So you can think about what multiple you'd want to apply to EBITDA and figure out what kind of margin that would imply. It's not a huge part of the growth and it will contribute.

[William Grace, Executive VP & CFO at United Rentals]

These are nice deals, we're excited about them, but it's not going to be very impactful in the scheme of our guidance.

[Matthew Flannery, President & CEO at United Rentals]

More important, it's all embedded within our guidance.

[Operator]

You. Our next question will come from Kyle Mingus with Citigroup. Please go ahead.

[Analyst]

Hi, good morning. This is Randy on for Kyle. Looking at the guide with gross CapEx up a little in 2025, could you give some color on what areas you're growing OEC during the year and any areas you plan to pull back a little bit?

[Matthew Flannery, President & CEO at United Rentals]

Yes. So we're not really expecting to pull back on any, Randy. As we told you, we have really strong utilization of our fleet, we think the demand environment is going to remain similar. So no reason to pull back on anything. You could imagine when you think about our growth CapEx, we talked about specialty growth and specifically the cold starts.

[Matthew Flannery, President & CEO at United Rentals]

They'll get an overweighted amount of the growth CapEx, which just to take you through that math since we haven't talked about it yet, we plan to sell about $2,800,000,000 worth of OEC this year. The replacement on that, if you think about the stuff that we bought 8 years ago, it's about 20% more now, will be about $3,300,000,000 That leaves at the midpoint about $500,000,000 of growth CapEx. And you could imagine, as we think about it, more than its fair share of that will go to support our specialty growth.

[Analyst]

Got it. And then another quick one. Can you just give some color on what kind of changes you've seen in customer behavior and sentiment following the election and then maybe more recently on some of Trump's executive voters?

[Matthew Flannery, President & CEO at United Rentals]

So we I'll take the first part, Ted could take the second. We could we had strong customer sentiment and more importantly, our field team's been feeling good about the year all throughout 24. That's why we came out with the guide we did even though maybe there were winds blowing the other way from some folks. We see the same thing coming into this year. So our customers feel good about it.

[Matthew Flannery, President & CEO at United Rentals]

Our leadership team feels good about it. And we're really not going to overreact to the new cycle of the day. I think having that extra touches into the customer really gives us confidence to in our guide and what our plans are. Ted, you could touch on the other part if you'd like.

[William Grace, Executive VP & CFO at United Rentals]

Yes. In terms of any impact of executive orders, I mean, aside from people may have whiplash, I don't think there's been too much. I do think at the end of the day, you look at our customers, you look at their sentiment, I would say it's improved since the election. And I think that people's perception that you've got a government that's going to be pro growth, wanting to invest in America, they've been pretty clear about that.

[William Grace, Executive VP & CFO at United Rentals]

Certainly, our customers are well positioned to support that growth and we're well positioned to support them in that endeavor. So whether it's areas of infrastructure, on shoring, certainly power, energy, obviously, Stargate was a big announcement. There's a lot of different things that will continue and or be incremental that we think are going to be exciting opportunities in 'twenty five and beyond. So Matt, I don't know if you've shared any color?

[Matthew Flannery, President & CEO at United Rentals]

No. I think you covered it well.

[Analyst]

Got it. That's helpful. Thank you, guys.

[Matthew Flannery, President & CEO at United Rentals]

You got it, Randy.

[Operator]

Thank you. Our next question will come from Angel Castillo with Morgan Stanley. Please go ahead.

[Analyst]

Hi, thanks. This is Brendan on for Angel. In your press release, right, just diving more into that customer optimism. So you noted that in your press release, we've talked about it here today on the call. Just curious how much of that's actually translating to greater activity today?

[Analyst]

And then in any areas where it hasn't resulted in an uptick in activity yet, can you describe maybe what customers are waiting for, whether it's greater certainty around interest rates, policy, labor availability or just anything else that you would like to call out, please?

[William Grace, Executive VP & CFO at United Rentals]

Yes, I'll do my best there. But to be clear, it's a sentiment based measurement, right? So it's not measuring kind of what they're doing today. What it asks them is on a forward 12 month basis, what are your expectations for your own growth? And from that standpoint, you've got an improvement in net responses, right?

[William Grace, Executive VP & CFO at United Rentals]

It's a diffusion based index. So it's certainly something that would support the guidance we've introduced. It's hard to say too much more because we don't get granular beyond that in that kind of survey.

[Analyst]

Okay. That's fine.

[William Grace, Executive VP & CFO at United Rentals]

But I guess the other thing is people feel good about, I think, just the broader environment. I mean, you're beyond the election. I think people are expecting more accommodative monetary policy out of the Fed that will be good for the economy. A lot of the things that people have been positive on remain on track. And so, that I guess it's the culmination of all those things coming together that drive the economy, but certainly feels like things are heading in a positive direction.

[Analyst]

Okay. Thank you. I guess dovetailing on that. So you noticed that rather noted that you have a similar pipeline for the new large projects. What does your guidance contemplate for the small kind of local markets that have been more interest rate challenged?

[Matthew Flannery, President & CEO at United Rentals]

Well, I would say generally, right, speaking generality similar. Some markets have more growth opportunities than others, no different than in 2024, whereas the previous years, we had talked so much about broad based. We're really selecting who we wanted to send the fleet to, not who didn't need it. So this the great thing about our model and really the rental model overall is the fungibility of these assets to move them not just from vertical but from geography. And that's what we're doing.

[Matthew Flannery, President & CEO at United Rentals]

And I think we do it pretty effectively, which is why we were able to keep those these high levels of time utilization over the past 2 years, and we expect to do the same this year.

[Analyst]

Great. Thank you.

[Matthew Flannery, President & CEO at United Rentals]

Thank you.

[Operator]

Thank you. Our next question will come from Ken Newman with KeyBanc Capital Markets. Please go ahead.

[Ken Newman, VP & Equity Research Analyst at KeyBanc Capital Markets]

Hey, morning guys.

[Matthew Flannery, President & CEO at United Rentals]

Hey, Ken. Hey,

[Ken Newman, VP & Equity Research Analyst at KeyBanc Capital Markets]

Ken. Hey, morning. I know you guys don't want to talk too deep on the segments in particular, but 2024 was a bit of a softer rental revenue growth year for GenRent. I'm curious if the guide assumes a similar growth profile in 2025. And I guess additionally on top of that, if there's any way to quantify what you think the impacts from mix are that's implied in the margin guide?

[Matthew Flannery, President & CEO at United Rentals]

So when we think about general rent for specialty growth, I mean you guys have seen the numbers and we talked about $25,000,000 being similar. So yes, at the outset, you could assume similar. The great news is we have flexibility within our let's call it $3,800,000 at the midpoint within that CapEx, not just the $500,000,000 of growth, but even the rest of it, the $3,300,000 modeled replacement. So we can move the appropriate assets to the appropriate markets to feed whatever growth there is. And that's really about all the color I can give you.

[Matthew Flannery, President & CEO at United Rentals]

Other than that, we will continue to feed the specialty footprint growth and cold start growth and really their double digit growth they've had for 10 years plus.

[William Grace, Executive VP & CFO at United Rentals]

I think on the second part of your question, Ken, I think from a mix standpoint, to Matt's point, 25% is likely to look similar to 24%. So I don't think we're looking for an appreciable shift in mix, if that helps answer the question.

[Ken Newman, VP & Equity Research Analyst at KeyBanc Capital Markets]

Yes, that's very helpful. And then maybe just dovetailing off the prior question here right before me. Is there a way to talk about the magnitude of demand between the national and the local accounts, particularly as I think about just the rate differential between those two? Obviously, I know you don't want to talk about fees, but they've had a little bit more challenges on the rate side. Curious if you're kind of seeing a similar dynamic?

[Matthew Flannery, President & CEO at United Rentals]

Yes. As you know, we don't get into the specific components of rate, time and mix. But we've had we've driven positively productivity. And that's really why we put them all together because it shows up in different ways with different products and with different customers. We've talked about do national accounts have do they leverage your spend?

[Matthew Flannery, President & CEO at United Rentals]

Of course, they do. But the truth is everybody. It's a competitive market out there and we participate actively in it and appropriately for each level. So there's nothing I'd call out specifically to any customer segment. It's just not something that's differentiated as many people think about on the outside.

[Ken Newman, VP & Equity Research Analyst at KeyBanc Capital Markets]

Understood. Very helpful, guys. Thanks.

[Matthew Flannery, President & CEO at United Rentals]

Thanks.

[Operator]

Thank you. Our next question will come from Scott Schneeberger with Oppenheimer. Please go ahead.

[Scott Schneeberger, Managing Director at Oppenheimer & Co. Inc.]

Thanks very much. Hey, guys. On infrastructure, Bill, and those funds flowing, we talked high level about large projects and I think that would be in both, but more large. What are you seeing there? Are you seeing those funds flow?

[Scott Schneeberger, Managing Director at Oppenheimer & Co. Inc.]

It sounds like you're expecting the same in 2025 as you were in 2024, but want to carve out that piece specifically out of away from mega projects, away from small local projects. Thanks.

[William Grace, Executive VP & CFO at United Rentals]

Yes, Scott, I'll take a crack at that. Certainly, we continue to see nice growth in infrastructure in terms of figuring out where the funding is coming from. That's a much more difficult process. I think if you look at some of the information that had been released right ahead of the change of administration, I think there was still something like $300,000,000,000 from IIJA that had yet to be allocated. So there's $200,000,000 that has been allocated.

[William Grace, Executive VP & CFO at United Rentals]

I think it's a fraction of that that's actually been spent. So we continue to feel really good about the opportunity that's underpinned by a lot of that spending that God knows the country needs the investment and it's certainly had bipartisan support. So our expectation that will continue to be a good area for us.

[Scott Schneeberger, Managing Director at Oppenheimer & Co. Inc.]

Thanks. Appreciate that. And just to the extent you can answer, what I assume you just made a large acquisition. There's going to be integration time on that. Should we not and you said what you want to do with leverage and everything and pause the stock buybacks.

[Scott Schneeberger, Managing Director at Oppenheimer & Co. Inc.]

Could we assume that there won't be any more sizable activity prior to the end of the year? And just maybe some commentary on what the pipeline look like for M and A? Obviously, when with H and E, but do you have a very still a very large and existing pipeline? And any additional thoughts on that? Thanks.

[Matthew Flannery, President & CEO at United Rentals]

Yes. I mean, we have a very strong team that's constantly working that pipeline. And I would say it's been consistent we strong, right, for a couple of years now. And as you see, we only execute on a few of them. You could imagine this is a pretty big deal.

[Matthew Flannery, President & CEO at United Rentals]

We'll have a lot to absorb here and that will be our focus. And as Ted mentioned, we're going to focus on getting that leverage back to the midpoint. So that will be the priority. If a nice deal tuck in comes in that's with a new product line, then we'll have to look at that and see how that fits into the overall strategy and would we want to do that. We'll always work the pipeline and then we'll make the appropriate decision that what makes sense for our business at that given time.

[Matthew Flannery, President & CEO at United Rentals]

And there certainly is a period here where we're going to absorb we're going to be focused on absorbing this large acquisition.

[Scott Schneeberger, Managing Director at Oppenheimer & Co. Inc.]

Okay. Thanks, Matt. Thanks, guys.

[Matthew Flannery, President & CEO at United Rentals]

Yes.

[Operator]

Thank you. And at this time, it appears we have no further questions in queue. I will now turn the call back to Matt Flannery for any additional or closing remarks.

[Matthew Flannery, President & CEO at United Rentals]

Well, thank you, operator, and everyone on the call, we appreciate your time. Glad you could join us today. Our Q4 investor deck has the latest and greatest updates. And as always, Elizabeth's available to answer your questions. So until we talk again in April, stay safe. Operator, you can now end the call.

Participants

Executives

• Matthew Flannery, President & CEO
• William Grace, Executive VP & CFO

Analysts

• Steven Fisher, Managing Director & Equity Research Analyst at UBS Group
• Blake Greenhalgh, Equity Research Associate at Bank of America Merrill Lynch
• Clay Williams, Vice President - Equity Research at Goldman Sachs
• Tim Thein, Managing Director & Research Analyst at Raymond James Financial
• Analyst
• Ken Newman, VP & Equity Research Analyst at KeyBanc Capital Markets
• Scott Schneeberger, Managing Director at Oppenheimer & Co. Inc.