United Rentals, Inc.

Good morning, everyone, and welcome to the United Rental 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. 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-K for the year ended December 31, 2025, as well as the 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. Please refer to the back of the company's recent investor presentation 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. Please go ahead, sir.

Thank you, Operator, and good morning, everyone. Thanks for joining our call. As you know, in 2025, we again committed to doubling down on being our customer's partner of choice. This translates to working hand-in-hand with our customers to provide an unmatched experience across our one-stop shop of Genrent and specialty products, coupled with industry-leading technology and a world-class team. Ultimately, this all culminates in our value proposition, which not only improves the customer's productivity and efficiency, but also positions us to outperform the market. I'm pleased that our team's steadfast dedication to this commitment, in addition to an unwavering focus on safety and operational excellence, resulted in another year of record revenue and EBITDA, as you saw in our results reported yesterday afternoon. Today, I'll start with a recap of our fourth quarter and full year 2025 results, followed by our expectations for 2026, which we expect to be another year of profitable growth. I'll keep my remarks brief before Ted reviews the financials in detail, and then we'll open the lines for Q&A. So let's start with the quarter's results. Our total revenue grew by 2.8% year over year to $4.2 billion. Within this, rental revenue grew by 4.6% to $3.6 billion, both fourth quarter records. Fleet productivity increased by half a percent contributing to OER growth of 3.5%. Adjusted EBITDA came in at $1.9 billion, resulting in a margin of 45.2%. And finally, adjusted EPS came in at $11.09. Now, let's turn to customer activity. We again saw growth across both our GenRent and specialty businesses in the quarter. Specialty continues to exhibit healthy and broad-based growth. We remain focused on expanding our specialty footprint and capitalizing on the geographic white space available. In 2025, we opened an additional 60 cold starts, including 13 in the fourth quarter. Importantly, we remain confident that the combination of geographic expansion, the power of cross-sell, and the addition of new products to our portfolio will enable us to continue growing our specialty business at a double-digit rate for the foreseeable future, while also expanding our competitive moats and providing attractive returns. By vertical, our construction end market saw growth across both infrastructure and non-residential construction, while our industrial end market saw particular strength within power. Similar to last quarter, data centers in power were drivers of growth, but certainly not the only ones. Our project pipeline is larger than ever, and we saw new projects kick off across healthcare, pharmaceuticals, and infrastructure, to name a few. Now, turning to the used market, we sold $769 million of OEC in the fourth quarter at a 50% recovery rate. For the full year, we sold slightly less OEC than we originally forecast as we held onto some high-time used assets to meet demand. Importantly, the demand for used equipment remains healthy. For the full year, we spent nearly $4.2 billion on a combination of maintenance and growth rental capbacks, which resulted in a free cash flow generation of $2.2 billion for a free cash flow margin of 14%. I'll say it again as I do every quarter. 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. In 2025 specifically, we allocated capital as we always do, first by funding organic growth, and then complementing this with inorganic growth. We then return our remaining cash to shareholders. In 2025, we return nearly $2.4 billion of excess cash flow to shareholders through a combination of our share buybacks and our dividends. Looking forward, I'm pleased to share that we plan to repurchase $1.5 billion of shares in 2026 and to increase our quarterly dividend by 10%, reflecting our third consecutive annual increase since introducing our dividend in 2023. Now let's turn to our 2026 guidance, which implies total revenue growth ex-use of over 6%. This is supported by customer sentiment indicators, solid backlogs, and most importantly, feedback from our field teams. In many ways, we expect the construct of demand in 26 to be similar to last year, with large projects and dispersed geographic demand driving most of our growth. We'll remain focused on capital efficiency, but repositioning costs will likely remain elevated. Having said this, we're very aware of the importance of profitability and margins. Our guidance, which implies flat margins at the midpoint, X the benefit of the H&E termination fee last year, embeds cost actions we're proactively taking to improve our efficiency and support profitability. We all know yesterday's touchdowns don't win tomorrow's games. Our culture of always wanting to do more and never being satisfied with the status quo is in our DNA. This was on full display a few weeks ago when we held our annual management meeting in St. Louis. We brought together almost 3,000 team members to both celebrate our wins and to find new ways to be an even better partner to our customers as we look to outperform the end market while having an even greater focus on efficiency and profitability. We have an incredible team at United Rentals with a culture that is unmatched in our industry. This is a real differentiator and gives me confidence we can take our momentum and continue to build the best-in-class company. I'm proud to say that the team walked away from the meetings energized and ready to deliver on the expectations our guidance reflects. In closing, I'm excited for what lies ahead for United Reynolds. Our team puts customers at the center of everything we do, which positions us well in both the short and long term to capitalize on the opportunities ahead of us and to continue to outpace the industry. Our strategy, business model, Competitive advantages and capital discipline allow us to generate compelling shareholder returns for the long term. With that, I'll hand the call over to Ted, and then we'll take your questions.

Ted, over to you.