Key financial results
- Overall: Total revenue grew 11% to $3.1 billion and rental revenue increased 13% to $2.9 billion, supported by strong demand across broad end markets.
Total revenue increased 11.2% to $3.1 billion
- EBITDA: Adjusted EBITDA increased 9% to $1.3 billion at a margin of 42.2% compared with 43.2% last year, with ancillary revenues growing at more than 2x rental revenue growth.
Adjusted EBITDA increased 8.7% to $1.3 billion
- Operating Profit: Adjusted operating profit increased 14% to $759 million with margins expanding to 24.4%, driven by SG&A expense leverage and reduced depreciation expense.
Adjusted operating profit increased 13.8% to $759 million
- EPS: Adjusted EPS increased 20.4% to a first quarter record of $1.18 per share, driven by higher operating profit and share repurchases.
Adjusted EPS increased 20.4% to $1.18 per share.
- Cash Flow: Free cash flow in the quarter was $70 million, reflecting higher capital expenditures and the timing of cash payments for equipment landings from the fourth quarter of 2026.
Free cash flow in the quarter was $70 million
Business segment results
- General Tool: North America General Tool total revenue increased 5.7% to $1.7 billion, with rental revenue up 7.4% and dollar utilization consistent with last year at 47%.
North America General Tool total revenue increased 5.7% to $1.7 billion.
- General Tool: General Tool adjusted EBITDA increased 3.2% at a margin of 51.5% compared to 52.8% last year.
Adjusted EBITDA increased 3.2% at a margin of 51.5%
- Specialty: North American Specialty total revenue increased 24.5% to $1.1 billion, with rental revenue growing 25.3% and dollar utilization up 300 basis points to 77%.
North American Specialty total revenue increased 24.5% to $1.1 billion.
- Specialty: Specialty adjusted EBITDA increased 19% at a margin of 45.8% compared to 48% last year, affected by relative growth of ancillary revenues.
Adjusted EBITDA increased 19% with a margin of 45.8%
- U.K.: U.K. total revenue was $240 million, with adjusted EBITDA of $61 million at a margin of 25.4% and dollar utilization improving to 54%.
U.K. total revenue was $240 million.
Capital allocation
- CapEx: Gross rental capital expenditures nearly doubled to $759 million and net rental capital expenditures increased 78% to $682 million to support customer project wins.
Gross rental capital expenditures nearly doubled to $759 million
- Balance Sheet: Net leverage was 1.8x at the end of July, staying within the long-term target range of 1 to 2x, with $3.8 billion of liquidity.
Net leverage was 1.8x at the end of July
- Debt: The company completed an offering of $1.2 billion in unsecured senior notes, consisting of a $450 million tranche at 4.95% and a $750 million tranche at 5.65%.
completed an offering of $1.2 billion in unsecured senior notes
- Shareholder Returns: The company returned $363 million to shareholders through share repurchases and dividends, and declared a first quarterly dividend of $0.30 per share under the U.S. framework.
returned $363 million to shareholders through share repurchases and dividends.
Industry trends and dynamics
- Supply and Demand: Industry supply and demand remains balanced with strong utilization levels, manufacturer capacity discipline, and closely aligned fleet investment.
industry supply and demand remains balanced, supported by strong utilization levels and improved pricing.
- Demand Indicators: The Dodge Momentum Index continues to show positive movement in planning activity, while local nonresidential construction markets remain stable.
Competitive landscape
- Market Position: Growth significantly outpaced the broader market, particularly among large and strategic customers, highlighting the strength of the company's leading position and breadth of solutions.
growth that significantly outpaced the broader market, demonstrating the strength of our leading position
- Advantages: Providers with scale, fleet availability, and specialized expertise are best positioned to win as project activity expands across mega projects and energy demand.
providers with scale, fleet availability and specialized expertise are best positioned to win.
Macroeconomic environment
- End Markets: Management noted strong demand across a broad range of end markets including mega projects, energy, live events, industrial nonconstruction MRO, and stable local nonresidential construction.
strong levels of demand across a broad range of end markets
- Metrics: Management did not give specific macroeconomic GDP or inflation growth figures on the call.
Growth opportunities and strategies
- Modular Solutions: The system integration of Aries into Sunbelt was completed in early August, enhancing cross-selling opportunities for modular solutions across 14 of the top 50 markets.
system integration of Aries into Sunbelt was complete in early August
- Energy: Energy solutions remain a significant opportunity through energy management as a service, helping customers manage complex power needs across the project lifecycle.
Energy Solutions remain a significant opportunity for Sunbelt.
- Expansion: The company opened 13 greenfield locations in the quarter and remains on track to open approximately 55 this year, alongside 2 acquisitions adding 17 specialty locations.
Financial guidance and outlook
- Revenue: Total revenue growth guidance was raised to between 6% and 9%, and rental revenue growth guidance was raised to between 7% and 10%.
raising our fiscal '27 guidance for revenue, adjusted EBITDA and CapEx.
- EBITDA: Adjusted EBITDA guidance was set between $4.92 billion and $5.12 billion, with full year margins expected to be broadly consistent with the prior year.
expect adjusted EBITDA of between $4.92 billion and $5.12 billion.
- CapEx: Gross capital expenditure guidance was raised to between $2.75 billion and $3.15 billion, and net rental capital expenditure guidance was raised to between $2.4 billion and $2.8 billion.
raising gross capital expenditure guidance to between $2.75 billion to $3.15 billion
Q1 FY2027 results
| Metric | Result | Change |
|---|---|---|
| Total revenue | $3.1 billion | 11.2% |
| Rental revenue | $2.9 billion | 12.5% |
| Adjusted operating profit | $759 million | 13.8% |
| Adjusted EBITDA | $1.3 billion | 8.7% |
| Adjusted EPS | $1.18 per share | 20.4% |
How management sounded
Balanced (+35 on our -100 to +100 scale). Management raised full-year guidance and expressed strong confidence driven by broad-based momentum, mega projects, and strong execution. Management sounded more upbeat than on 20% of the 302 calls we cover; most companies sound positive on their own calls, so the comparison says more than the label.
Read the analyst Q&A summary and guidance and outlook for this call.
What to watch before the next call
- The integration and cross-selling progress of the Aries acquisition.
- The trajectory of local nonresidential construction market stability.
- Rate momentum and supply-demand balance in the rental industry.
Earlier calls
- Q4 FY2026 (Jun 23, 2026), tone Balanced: Sunbelt Rentals reported record full-year revenues of $11.2 billion and free cash flow of $2.1 billion, driven by strength in specialty segments and mega projects.
