Sunbelt Rentals Holdings Inc

For the first quarter ended July 31, 2026, Sunbelt reported total revenue of $3.1 billion, up 11.2%, and rental revenue of $2.9 billion, up 12.5%. Adjusted operating profit was $759 million, up 13.8%, with operating margin of 24.4% (+60 bps), and adjusted EBITDA was $1.3 billion, up 8.7%, with margin of 42.2% versus 43.2% last year. Adjusted EPS increased 20.4% to $1.18. By segment, North America General Tool revenue rose 5.7% to $1.7 billion, Specialty revenue rose 24.5% to $1.1 billion, and U.K. revenue was $240 million. The company also reported $85 million of used equipment sales, $556 million of depreciation expense, $107 million of interest expense, adjusted pretax profit of $652 million, and free cash flow of $70 million. For fiscal 2027, management raised guidance for total revenue growth to 6% to 9%, rental revenue growth to 7% to 10%, adjusted EBITDA to $4.92 billion to $5.12 billion, gross CapEx to $2.75 billion to $3.15 billion, and net rental CapEx to $2.4 billion to $2.8 billion. Management said full-year adjusted EBITDA margins are expected to be broadly consistent with the prior year.

Brendan Horgan framed the quarter as evidence that Sunbelt is taking share through broad-based execution, stronger pricing, improved recovery of fuel and delivery costs, and deeper customer relationships. He emphasized that Specialty and General Tool are increasingly being combined through the “Power of Sunbelt,” including modular solutions, and said the completed Aries integration and early cross-selling are creating meaningful growth opportunities. His tone was confident and upbeat, with repeated references to momentum, disciplined execution, and optimism for the balance of the year.

Alex Pease focused on the numbers behind the quarter and the guide raise. He cited $3.1 billion of total revenue, $2.9 billion of rental revenue, 24.4% operating margin, 42.2% EBITDA margin, $1.18 of adjusted EPS, $70 million of free cash flow, and 14.6% trailing-12-month ROI; he also noted net leverage of 1.8x and liquidity of about $3.8 billion. He said gross CapEx nearly doubled to $759 million and net rental CapEx rose 78% to $682 million, but described the added spend as aligned with committed customer demand and growth opportunities. He also highlighted the $1.2 billion unsecured senior notes issuance at 4.95% and 5.65%, saying the proceeds will support refinancing, CapEx, working capital, and other business opportunities.

Analysts focused heavily on margin mechanics, asking about fuel recovery, ancillary revenue mix, rate improvement, and whether the company could keep expanding operating profit margins even as EBITDA margins were guided flat year over year. Management said fuel recovery typically lags by about a quarter, ancillary revenue growth was a major margin driver, and rate momentum had improved through August but was not the main source of upside. Another theme was capital intensity and overfleeting risk: management said the additional CapEx is “opportunity CapEx,” concentrated in Specialty, greenfields, and mega projects, and argued that OEM capacity remains disciplined so the industry is not broadly overfleeting. Analysts also pressed on data centers, semis, and the World Cup; management said semis are only 3% of the mega-project universe, data centers are 13%, the World Cup was negligible to pricing, and the event was more important as an incremental revenue and ROI contributor than as a pricing driver.