Equipment rental company United Rentals (NYSE:URI) reported Q3 CY2025 results exceeding the market’s revenue expectations, with sales up 5.9% year on year to $4.23 billion. The company expects the full year’s revenue to be around $16.1 billion, close to analysts’ estimates. Its non-GAAP profit of $11.70 per share was 4.9% below analysts’ consensus estimates.
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United Rentals (URI) Q3 CY2025 Highlights:
- Revenue: $4.23 billion vs analyst estimates of $4.16 billion (5.9% year-on-year growth, 1.6% beat)
- Adjusted EPS: $11.70 vs analyst expectations of $12.30 (4.9% miss)
- Adjusted EBITDA: $1.95 billion vs analyst estimates of $1.96 billion (46% margin, 0.6% miss)
- The company slightly lifted its revenue guidance for the full year to $16.1 billion at the midpoint from $15.95 billion
- EBITDA guidance for the full year is $7.38 billion at the midpoint, in line with analyst expectations
- Operating Margin: 26.3%, down from 28.1% in the same quarter last year
- Free Cash Flow was -$6 million, down from $146 million in the same quarter last year
- Market Capitalization: $64.49 billion
Matthew Flannery, chief executive officer of United Rentals, said, “Our third-quarter results were again supported by our unrelenting focus on being the partner of choice to our customers as we serve their needs across both construction and industrial end-markets. Our team did an outstanding job as we continued to lean into growth across both our general rentals and specialty businesses, and our updated guidance reflects the momentum we expect to carry through the rest of the year.”
Company Overview
Owning the largest rental fleet in the world, United Rentals (NYSE:URI) provides equipment rental and related services to construction, industrial, and infrastructure industries.
Revenue Growth
Reviewing a company’s long-term sales performance reveals insights into its quality. Any business can have short-term success, but a top-tier one grows for years. Thankfully, United Rentals’s 12.9% annualized revenue growth over the last five years was excellent. Its growth beat the average industrials company and shows its offerings resonate with customers, a helpful starting point for our analysis.
We at StockStory place the most emphasis on long-term growth, but within industrials, a half-decade historical view may miss cycles, industry trends, or a company capitalizing on catalysts such as a new contract win or a successful product line. United Rentals’s recent performance shows its demand has slowed significantly as its annualized revenue growth of 7.2% over the last two years was well below its five-year trend. 
This quarter, United Rentals reported year-on-year revenue growth of 5.9%, and its $4.23 billion of revenue exceeded Wall Street’s estimates by 1.6%.
Looking ahead, sell-side analysts expect revenue to grow 3.7% over the next 12 months, a deceleration versus the last two years. This projection is underwhelming and indicates its products and services will face some demand challenges. At least the company is tracking well in other measures of financial health.
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Operating Margin
United Rentals has been a well-oiled machine over the last five years. It demonstrated elite profitability for an industrials business, boasting an average operating margin of 25.8%. This result isn’t surprising as its high gross margin gives it a favorable starting point.
Looking at the trend in its profitability, United Rentals’s operating margin rose by 2.9 percentage points over the last five years, as its sales growth gave it operating leverage.
This quarter, United Rentals generated an operating margin profit margin of 26.3%, down 1.8 percentage points year on year. Since United Rentals’s gross margin decreased more than its operating margin, we can assume its recent inefficiencies were driven more by weaker leverage on its cost of sales rather than increased marketing, R&D, and administrative overhead expenses.
Earnings Per Share
We track the long-term change in earnings per share (EPS) for the same reason as long-term revenue growth. Compared to revenue, however, EPS highlights whether a company’s growth is profitable.
United Rentals’s EPS grew at an astounding 18.8% compounded annual growth rate over the last five years, higher than its 12.9% annualized revenue growth. This tells us the company became more profitable on a per-share basis as it expanded.
We can take a deeper look into United Rentals’s earnings to better understand the drivers of its performance. As we mentioned earlier, United Rentals’s operating margin declined this quarter but expanded by 2.9 percentage points over the last five years. Its share count also shrank by 11.2%, and these factors together are positive signs for shareholders because improving profitability and share buybacks turbocharge EPS growth relative to revenue growth. 
Like with revenue, we analyze EPS over a more recent period because it can provide insight into an emerging theme or development for the business.
For United Rentals, its two-year annual EPS growth of 4.1% was lower than its five-year trend. This wasn’t great, but at least the company was successful in other measures of financial health.
In Q3, United Rentals reported adjusted EPS of $11.70, down from $11.80 in the same quarter last year. This print missed analysts’ estimates, but we care more about long-term adjusted EPS growth than short-term movements. Over the next 12 months, Wall Street expects United Rentals’s full-year EPS of $42.62 to grow 10%.
Key Takeaways from United Rentals’s Q3 Results
It was encouraging to see United Rentals beat analysts’ revenue expectations this quarter. We were also glad its full-year EBITDA guidance was in line with Wall Street’s estimates. On the other hand, its EPS missed and its EBITDA fell slightly short of Wall Street’s estimates. Overall, this was a softer quarter. The stock traded down 3.8% to $954.01 immediately after reporting.
Is United Rentals an attractive investment opportunity at the current price? What happened in the latest quarter matters, but not as much as longer-term business quality and valuation, when deciding whether to invest in this stock. We cover that in our actionable full research report which you can read here, it’s free for active Edge members.