Sunbelt U.S. rental revenue rises 6% to $2.2B

Sunbelt Rentals’ rental revenue in the United States grew as volume and rates remained strong in the first quarter of its fiscal 2025. 

Growth opportunities for London-based parent company Ashtead Group are strong as is the outlook for construction megaprojects, Ashtead Chief Executive Brendan Horgan said during the company’s earnings call today.  

Megaprojects, defined as projects taking longer than three years to complete, are forecast to increase 34.3% to $759 billion over the next three years, according to the earnings presentation. 

“There is an ongoing softening within the local run-of-the-mill … commercial construction space as the effects of a prolonged higher interest rate environment weigh on local and regional developers,” Horgan said during the presentation. 

Sunbelt added 33 locations, including 22 greenfields and 11 acquisitions, in the quarter ended July 31, according to the presentation. As the company adds locations and increases density in some areas, management has reduced headcount for roles such as technicians, with quarterly headcount down 7%, Horgan said. 

“As we progress and have more locations, once upon a time we would have needed two field service techs per location, and when all of a sudden, you have 14 locations in one market, you do not need 28 field service techs, you might be able to do it with 16 field service techs,” he said.  

The rental industry topped $41 billion in volume in 2023, up 15.8% YoY, according to the Rental Equipment Register 100, a list of the top 100 rental companies. The top 10 rental companies, which include Fort Mill, S.C.-based Sunbelt Rentals, totaled $31.1 billion in 2023, up 16.3% YoY.

BY THE NUMBERS: Rising rental rates continue to grow revenue for Sunbelt in Q1. 

During Q1 of its fiscal 2025, Sunbelt Rentals reported: 

• Global total revenue grew to $2.8 billion, up 2.2% YoY; 

• U.S. total revenue inched up to $2.3 billion, up 1% YoY;  

• Global rental revenue increased to $2.5 billion, up 6.9% YoY; 

• U.S. rental revenue rose to $2.2 billion, up 6.2% YoY; 

• Global used equipment sales finished at $121.6 million, down 45.7% YoY; 

• U.S. used equipment sales landed at $100 million, down 50.1% YoY; 

• Last-12-month U.S. dollar utilization fell to 57%, down 300 basis points YoY. 

MARKET REACTION: Shares of Ashtead Group (OTCMKTS: ASHTY) were down tktk from market open to $tktk as of market close today. Ashtead Group has a market capitalization of $tktk billion. 

Following the company’s Q1 performance, Ashtead Group maintained the following rental revenue guidance for its fiscal 2025, according to the earnings presentation: 

• U.S. rental revenue guidance of 4% to 7% growth YoY; 

• Canada rental revenue guidance of 15% to 19% growth YoY; and 

• Global rental revenue guidance of 5% to 8% growth YoY. 

While a potential slowdown in areas like local construction could impede business for smaller rental houses, the megaprojects and infrastructure projects market contribute to guidance remaining stable for Sunbelt, Horgan said. 

“The key to it is megaprojects will make up a larger proportion of our revenues, as we do progress through this year,” he said. “As we go into next year, I think we see quite a few more of these coming online, but that’s all baked into what we are given, from a guidance standpoint.” 

Sunbelt holds the second-highest market share in the equipment rental market at 11%, according to the American Rental Association and S&P Global Market Intelligence’s market sizing. United Rentals sits in first at 15%, while the rest of the 10 largest rental companies combined represent 12% market share. 

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