01—Abstract
Summary
Summary of the 10-Q filed July 28, 2021. Cited figures are marked; the original filing is the authoritative source.
United Rentals, Inc. (URI) reported a strong second quarter for 2021, with total revenues increasing 17.9% year-over-year to $2.287 billiona.
This growth was primarily driven by a significant rebound in equipment rentals, up 18.8%, reflecting improved fleet productivity and a recovery from the pandemic's impact in the prior year. Net income saw a substantial rise of 38.2% to $293 millionb, resulting in diluted earnings per share of $4.02. The company also completed the significant acquisition of General Finance Corporation in May 2021 for $1.032 billion, expanding its presence in Australia and New Zealand and adding mobile storage and modular office solutions.
While this acquisition incurred merger-related costs, it is expected to enhance cross-selling opportunities and differentiate URI's service offerings. Despite increased SG&A expenses and a higher effective tax rate, the company demonstrated robust operational performance and maintained strong liquidity.
02—Key points
Key Highlights
- Total revenues increased by 17.9% to $2.287 billion for the three months ended June 30, 2021, compared to the prior year.
- Net income significantly grew by 38.2% to $293 million, with diluted EPS reaching $4.02.
- Completed the acquisition of General Finance Corporation for $1.032 billion, expanding geographic reach and service offerings.
- Equipment rentals, the company's largest revenue source, increased by 18.8% driven by improved fleet productivity.
- Adjusted EBITDA increased by 11.1% to $999 million, although the adjusted EBITDA margin decreased slightly.
- The company maintained strong liquidity with $2.826 billion available at the end of the quarter.
- Capital expenditures significantly increased to $1.261 billion for the six months ended June 30, 2021, reflecting investment in fleet.
03—One dollar
Follow one dollar
Of each $1.00 of revenue in Q2 FY2021, United Rentals, Inc. kept $0.13.
- Revenue$2.29B100.0%
- Cost of revenue−$1.41B61.7%
- Gross profit$875.0M38.3%
- Operating costs−$394.0M17.2%
- Operating income$481.0M21.0%
- Interest, other & tax−$188.0M8.2%
- Net income$293.0M12.8%
04—Financials
Financial Highlights
Figures from 10-QQ2 FY2021filed July 28, 2021Financial Statements
Q2 FY2021 against Q2 FY2020
| Line item | Q2 FY2021Q2 FY2020 | Change |
|---|---|---|
| Revenue | $2.29B$1.94B | +17.9% |
| Cost of Revenue | $1.41B$1.24B | +14.1% |
| Gross Profit | $875.00M$701.00M | +24.8% |
| SG&A Expenses | $301.00M$222.00M | +35.6% |
| Operating Income | $481.00M$381.00M | +26.2% |
| Net Income | $293.00M$212.00M | +38.2% |
| EPS (Basic) | $4.03$2.94 | +37.1% |
| EPS (Diluted) | $4.02$2.93 | +37.2% |
| Shares Outstanding (Basic) | 72.45M72.16M | +0.4% |
| Shares Outstanding (Diluted) | 72.72M72.28M | +0.6% |
05—Questions
Frequently Asked Questions
What was the primary driver of United Rentals' revenue growth in Q2 2021?
The primary driver was a significant increase in equipment rentals, which rose by 18.8% year-over-year. This was attributed to improved fleet productivity and a recovery in demand as the impact of the COVID-19 pandemic lessened compared to the prior year.
How has the acquisition of General Finance Corporation impacted the company?
The acquisition, completed in May 2021 for $1.032 billion, expanded United Rentals' presence into Australia and New Zealand. It also added mobile storage and modular office solutions to its offerings, expected to create cross-selling opportunities and enhance its position as a one-stop-shop for customers. The acquisition contributed $24 million in revenue during the quarter.
What is the company's outlook on capital expenditures and fleet investment?
United Rentals significantly increased its capital expenditures to $1.261 billion for the first six months of 2021, compared to $455 million in the same period of 2020. This reflects a strategy to invest in its rental fleet, with expectations for net rental capital expenditures in 2021 to be consistent with pre-COVID-19 levels.
How did the company's profitability metrics perform in Q2 2021?
Net income increased substantially by 38.2% to $293 million. While Adjusted EBITDA also grew by 11.1% to $999 million, the Adjusted EBITDA margin saw a slight decrease due to higher SG&A expenses and lower equipment rental margins (excluding depreciation).
06—Continue