Sunbelt Rentals Holdings, Inc.

Greetings and welcome to the Sunbelt Rentals First Quarter Fiscal Year 2027 Earnings Call. At this time, all participants are in listen-only mode. A question and answer session will follow the formal presentation. You may be placed into question queue at any time by pressing star 1 on your telephone keypad. We ask you please ask one question and one follow-up, then return to the queue. As a reminder, this conference is being recorded. If anyone should require operator assistance, please press star 0 on your telephone keypad. It's now my pleasure to turn the call over to Kevin Powers, Senior Vice President, Investor Relations. Kevin, please go ahead.

Thank you, Operator, and good morning, everyone. This morning, I'm joined by Brendan Horgan, our Chief Executive Officer, and Alex Pease, our Chief Financial Officer. Today, we will review our first core results for the period into July 31, 2026, discuss our operating and financial performance, and we will share industry perspectives and strategic outlook. We will then open the call for questions. Let me remind you that today's call will include forward-looking statements. These statements are based on the environment as we see it today and are subject to risks and uncertainties that could cause actual results to differ materially from our expectations and projections. These risks and uncertainties include, but are not limited to, the factors identified in the press release and AK filing, as well as other filings with the SEC. Today, we're reporting financial results on a U.S. GAAP basis. In addition, we will be discussing non-GAAP information that we believe is useful in evaluating the company's operating performance. Reconciliations to these non-GAAP measures to the closest GAAP equivalent can be found in the earnings release and the conference call materials. Before we start, I'll note that we'll be attending the Morgan Stanley Laguna Conference next week, and we hope to see some of you there. And now, I'd like to turn the call over to Brendan.

Great. Thanks, Kevin, and good morning, everyone. As you've now come to expect, we'll begin with an update on our safety performance before heading into the quarter one highlights. I'm proud to report that we continue to see world-class safety performance across the organization. In the quarter, we achieved a total recordable incident rate of 0.46 and a lost time rate of 0.14. Results like these do not happen overnight. They reflect the strength of our Engage for Life culture and our team's relentless focus on doing the right things the right way. I cannot thank our team members enough for their commitment to safety, dedication to our customers, and their drive to get better every day. Our culture of continuous improvement and disciplined execution remains a key differentiator for Sunbelt, and it continues to show up in our performance, especially reflected in our recent results. Now on to the quarter. We delivered record first quarter results in revenue, adjusted EBITDA, adjusted operating profit, and adjusted EPS. These results were supported by strong levels of demand across a broad range of end markets, including mega projects, energy, live events, industrial non-construction MRO, along with another quarter of stability and demand in our local non-residential construction markets. Notably, rental revenue growth was broad throughout our customer base, with strength across small and medium enterprises and outsized growth with our large and strategic customers. Growth that significantly outpaced the broader market, demonstrating the strength of our leading position and breadth of expertise and solutions. The momentum we're seeing across the business gives us confidence in the trajectory of the year ahead, and as a result of this, We are raising our fiscal 27 guidance for revenue, adjusted EBITDA, and CapEx. Alex will cover this and our financial performance in greater detail shortly, but first I'd like to highlight the quarter and the drivers that underpin our confidence in the business. Total revenue grew 11% and rental revenue increased 13%. As growth accelerated across North America General Tool and Specialty, which increased 7% and 25% respectively. Adjusted operating profit increased 14% with margins expanding to 24.4%, while adjusted EBITDA increased 9% at a margin of 42.2% compared with 43.2% last year. The adjusted EBITDA margin performance was consistent with our expectations, reflecting faster growth in ancillary revenues and in specialty. Although this mixed shift affects EBITDA margin, specialty generates structurally higher returns on investment than general tool, meaning each point of sales mix toward specialty will, over time, enhance our return on capital. Finally, adjusted EPS increased 20.4% to a first quarter record of $1.18, driven by higher operating profit and the benefit of our share repurchase program. These results reflect our disciplined investment, stronger pricing execution, improved recovery of fuel and delivery costs, and most importantly, our ability to deliver for our customers. That success is driven by the hard work, best-in-class execution, and customer-obsessed mindset of our team members. During the quarter, we continued to win across a broad range of opportunities. From serving as the sole rental provider on a leading hospital expansion in Rochester, Minnesota, to supporting one of Canada's largest data center developments in Saskatchewan, to summer cooling solutions for large distribution and warehouse operations, and of course, one of our most watched projects this summer, the 2026 FIFA World Cup. While these are only a few examples of our proven position as a partner of choice for the most complex projects, We're experiencing strong, broad-based customer activity, which continues to support higher fleet on rent levels, higher utilization, and strengthening rate momentum. As local activity remains stable, we're encouraged by the positive leading indicators, especially in two specific areas. First, when we look at the Dodge Momentum Index, it continues to show increased positive movement in planning activity, which historically moves into construction starts within 12 to 18 months. Second, industry supply and demand remains balanced, supported by strong utilization levels and improved pricing. Manufacturers have maintained capacity discipline, while fleet investment remains closely aligned with customer demand. As project activity expands, particularly across mega projects and energy demand, customer requirements become more complex, Providers with scale, fleet availability, and specialized expertise are best positioned to win. We believe these dynamics position Sunbelt to capture attractive growth opportunities across our markets. Against this backdrop, broad-based growth accelerated throughout general tool and specialty. General tool benefited from increased fleet on rent and activity across our local markets and strategic accounts. while specialty delivered strong growth, notably across power and HVAC, climate control, scaffolding, flooring, pump, ground protection, and temporary fencing. Within specialty, energy solutions remain a significant opportunity for Sunbelt. As power needs become increasingly complex, our customers are looking for partners who can deliver both equipment and expertise. Through our energy management as a service offering, We're helping customers manage these needs across the project lifecycle, positioning us exceptionally well to capture ongoing growth. What continues to differentiate Sunbelt is our ability to leverage the full breadth of our platform to serve customers in more meaningful ways. Through the power of Sunbelt, as we call it, we are increasingly bringing together our general tool and specialty offerings, which now include modular solutions capabilities. This enables us to support a broader range of customer needs, and the integrated approach deepens customer relationships, increases share of wallet, and creates new cross-selling opportunities throughout our current and future customer base. Importantly, our system integration of Aries into Sunbelt was complete in early August, which will help support future needs. As we integrate modular solutions into our offering, the immediate cross-selling opportunity is evident. Our teams are introducing modular solutions to existing Sunbelt customers, while former Aries customers are gaining access to a broader general tool and specialty portfolio. This early adoption reinforces our view that customers value multiple solutions through a single relationship. Looking ahead, we see meaningful opportunities to expand modular through greenfield openings, fleet investment, and continued integration across the power of Sunbelt. Modular Solutions is currently in just 14 of our top 50 Sunbelt markets, and we continue to expect to significantly scale the business in the coming years. With that, I'll turn it over to Alex for more detail on the quarter and updated outlook.