United Rentals Plans 50 Specialty Cold Starts in 2025, CEO Flannery Says
United Rentals’ total revenue grew 6.7 percent year over year to $3.7 billion, and rental revenue jumped 7.4 percent to $3.1 billion, both first quarter records. More importantly, the United Rentals’ leadership is optimistic about prospects for the rest of 2025.
“We continue to see growth in both our general rental and specialty businesses,” CEO Matthew Flannery told a conference call with investors last week. “In fact, specialty rental revenue grew 22 percent year over year and 15 percent pro forma for Yak. We opened eight specialty cold starts in the first quarter and expect to open at least 50 this year. By vertical, our construction end market saw solid growth across both infrastructure and non-res construction, while our industrial end market saw particular strength within power and chemical processing. We continue to see new projects kicking off with a few recent examples, including data centers, pharmaceuticals, airports and industrial manufacturing facilities.”
The company sold $740 million if original equipment cost in used equipment, a first quarter record for United.
“The demand for used equipment remains healthy and we’re on track to sell an estimated $2.8 billion of fleet this year,” Flannery said. “We spent over $700 million on rental Capex in the quarter in response to solid customer demand. Growth continues to be led by large projects where all elements of our strategy position us to be the partner of choice. We drove free cash flow of nearly $1.1 billion, setting us up for another year of strong cash generation, which we view as a hallmark 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.”
Great expectations
Flannery said the company’s expectations for the year are unchanged going forward after the first quarter.
“The year is off to a start we anticipated, while feedback from the field continues to be optimistic, particularly for large projects,” noted Flannery. “The momentum we're carrying into our busy season, along with backlogs and our customer Confidence Index are all supportive of our outlook. I'll note we've not seen a change in customer outlooks for the balance of 2025.”
“Within rental, ancillary and re-rent grew by 19 percent and 15 percent respectively, adding a combined $98 million of revenue,” added executive vice president and chief financial officer Ted Grace. “This outsized growth relative to OER was primarily driven by specialty where delivery represents a bigger portion of revenue from our matting business and where our other specialty businesses support customers with value-added services like fueling and installation as part of our one-stop shop strategy.”
Flannery and Grace were asked their thoughts about the potential impacts of tariffs on the rental economy.
“When we think about the tariffs, first of all our 2025 CapEx is fully negotiated and well over 80 percent of it already has POS and will not be impacted by tariffs in any way,” said Flannery. “in the future, to your point about what would happen if our partners did have to pay significant tariffs and did have to make some changes in the future? Well, a couple of points. We probably have to pass it on like happened post-COVID when we all had to [deal with] some pretty healthy increases.
“And then secondly, there’d be some decisions to make. We’ve got a couple of vendors in every category we buy and there’s not a product category I could think of that doesn’t have a non-tariff impacted partner. So there’d be a way for us to manage through it and whatever we did have to absorb would be something the whole industry absorbed.”
Grace added that the uncertainty could benefit rental in that customers are more likely to rent rather than purchase equipment in uncertain times.
For a more complete look at United Rentals’ first quarter numbers, go to: https://www.rermag.com/news-analysis/headline-news/article/55285407/united-rentals-hikes-rental-revenue-74-percent-in-first-quarter-of-2025
