McGrath Earnings Rise To $2.00 A Share, But Revenue Outlook For Rest Of 2026 Is Cut
The rental company trimmed its 2026 revenue range on weaker modular equipment sales and raised its fleet spending plan to $270 million to $290 million.
McGrath RentCorp, a business-to-business rental company with modular building, portable storage and test-equipment units, earned $48.8 million, or $2.00 a diluted share, in the third quarter, up from $42.3 million, or $1.72, a year earlier. It also lowered its revenue outlook for the rest of 2026 and lifted planned rental equipment spending, the company said Wednesday.
Revenue up 7%, profit up on rentals and sales
Revenue rose 7% to $274.6 million. Rental operations revenue climbed 6% to $189.5 million and sales revenue rose 9% to $82.9 million. Income from operations rose 11% to $73.9 million, and adjusted EBITDA (earnings before interest, taxes, depreciation, amortization and certain other items) rose 10% to $106.5 million.
The company attributed the higher profit mainly to better gross profit on rental operations and sales compared with a year earlier. CEO Phil Hawkins said the revenue gain was driven by higher rentals, reflecting "steady progress at Mobile Modular and TRS-RenTelco."
Test equipment surges, storage slips
TRS-RenTelco, which rents electronic test equipment, posted a 26% rise in rental revenue to $35.4 million, and its adjusted EBITDA rose 27% to $25.7 million. Hawkins said demand stayed "robust" and the unit continued to benefit from projects supporting the buildout of new data centers.
Mobile Modular, which rents relocatable buildings, saw rental revenue rise 4% to $86.9 million. Its sales revenue fell 10% to $47.1 million on lower new equipment sales, and its adjusted EBITDA slipped 3% to $62.6 million.
Portable Storage rental revenue fell 3% to $16.8 million as demand stayed soft, and the unit's adjusted EBITDA dropped 20% to $7.4 million. Hawkins cited higher costs for equipment preparation, trucking and sales coverage as pressure on margins.
Lower revenue range, bigger fleet budget
For the remainder of 2026, McGrath now expects total revenue of $945 million to $960 million, down from $955 million to $985 million, because of lower Mobile Modular new equipment sales. Its adjusted EBITDA range narrowed to $365 million to $373 million from $363 million to $375 million, with the midpoint unchanged.
Gross rental equipment capital spending is now expected at $270 million to $290 million, up from $200 million to $220 million, to support momentum at Mobile Modular and TRS-RenTelco. Over the first nine months, the company spent $218.7 million on rental equipment, against $91.5 million a year earlier, and notes payable stood at $618.3 million at September 30, up from $514.9 million at the end of 2025.
The company declared a dividend of $0.495 a share, a 1.7% annualized yield on the $119.56 close on October 27.
McGrath scheduled its third-quarter conference call for 5:00 p.m. Eastern on Wednesday.
Sources
- 8-K Filing — MCGRATH RENTCORP (MGRC) — SEC EDGAR
- Exhibit mgrc-ex99_1.htm — MCGRATH RENTCORP 8-K exhibit — SEC EDGAR
- McGrath: Q3 Earnings Snapshot – WTOP News — wtop.com
- McGrath Announces Results for Third Quarter 2026 — businesswire.com
