Sunbelt Rentals Holdings reported record fiscal first-quarter 2027 revenue of $3.115 billion, up 11.2% year over year, prompting the equipment rental company to raise its full-year revenue, rental revenue and adjusted EBITDA guidance.
Rental revenue increased 12.5% to a record $2.927 billion, with North America General Tool rental revenue increasing 7.4% and North America Specialty rental revenue jumping 25.3%.
Operating income increased 15.9% to $691 million, with operating margin expanding to 22.2% from 21.3%. Adjusted operating profit increased 13.8% to $759 million, while adjusted operating margin expanded 60 basis points to 24.4%.
Net income increased 17.4% to $438 million, diluted EPS rose 23% to $1.07, and adjusted EPS increased 20.4% to $1.18.
Adjusted EBITDA increased 8.7% to $1.315 billion, with an adjusted EBITDA margin of 42.2%.
Sunbelt estimated that work related to the FIFA World Cup contributed approximately 250 basis points to rental revenue growth during the quarter. The acquisition of Reliant Asset Management, which operates under the Aries brand and closed May 1, contributed approximately another 100 basis points.
North America General Tool rental revenue reached $1.648 billion, while Specialty rental revenue increased to $1.07 billion. Specialty dollar utilization rose to 77% from 74%.
UK rental revenue declined 1.4% to $209 million, although dollar utilization increased to 54% from 53%.
Demand was supported by mega projects, energy, live events, industrial activity and non-construction maintenance, repair and operations, as well as stable demand in local non-residential construction markets.
Sunbelt opened 13 greenfield locations during the quarter and invested $669 million in two bolt-on acquisitions, including the Aries transaction.
Cash flow from operations totaled $840 million, while free cash flow was $70 million after capital expenditures. Sunbelt repurchased $56 million of shares and paid $307 million in dividends.
The company ended July with 1,638 rental stores, compared with 1,569 a year earlier, and had 26,613 employees.
Sunbelt raised expected fiscal 2027 total revenue growth to 6% to 9%, compared with 4.5% to 7.5% previously, and increased rental revenue growth guidance to 7% to 10%, from 5% to 8%.
Adjusted EBITDA is now expected to range from $4.92 billion to $5.12 billion, compared with the previous $4.85 billion to $5.05 billion forecast.
The board also declared a $0.30 quarterly dividend, payable October 2 to shareholders of record September 18. This represents the company’s first quarterly cash dividend under its move from its previous semiannual UK distribution framework to a U.S.-style quarterly model.
KEY QUOTE:
“I am proud of the team’s efforts in driving strong execution across all aspects of the business which delivered record first quarter results,” said Brendan Horgan, Chief Executive Officer. “Our obsession with the success of our customers, strong value proposition, differentiated technology platform and leading scale drove strong growth in the quarter as reflected in a 25% increase in rental revenues within our North America Specialty segment and 7% growth within our North America General Tool segment.”
“Our performance was underpinned by disciplined execution and strong demand across a diverse range of end markets, including mega projects, energy, live events, industrial, and non-construction MRO, complemented by another quarter of stability and demand in our local non-residential construction markets. Growth in the quarter was geographically broad, spanning our General Tool segment as well as our Specialty business lines. Notably, rental revenue growth was present throughout our small and medium-sized customer base, with outsized growth from our large and strategic customers demonstrating the strength of our leading position, and breadth of expertise and solutions. This performance reflects the dedication, best-in-class execution and customer-obsessed mindset of our team members.”
Horgan added, “As we look toward the balance of fiscal 2027, we are seeing strong momentum throughout top-line and bottom-line performance. The upward revision to our guidance signals our confidence in the underlying supply and demand landscape, the durability of our structural growth, and the strength of our through-the-cycle free cash flow platform. We believe Sunbelt is well positioned for a year of strong performance.”
Brendan Horgan, Chief Executive Officer of Sunbelt Rentals Holdings
