Key Highlights

  • Diluted EPS of USD 2.00 rose from USD 1.72 and topped the USD 1.89 consensus estimate for the quarter.
  • Total revenues grew 7% to USD 274.6 million, while adjusted EBITDA climbed 10% to USD 106.5 million.
  • TRS-RenTelco rental revenues jumped 26% and fleet utilization closed the quarter at 71.9%, the highest in two decades.
  • Gross rental equipment capital spending is now guided to USD 270 million to USD 290 million for 2026.

McGrath RentCorp (NASDAQ:MGRC) reported third-quarter 2026 GAAP diluted earnings per share of USD 2.00, up from USD 1.72 a year earlier and above a consensus estimate of USD 1.89. Total revenues rose 7% to USD 274.6 million, edging past a consensus estimate of USD 273.25 million. Net income increased to USD 48.8 million from USD 42.3 million.

Rental operations revenue reached USD 189.5 million, up 6%, with rental revenue alone at USD 139.1 million versus USD 128.5 million. Gross profit expanded to USD 130.9 million from USD 119.3 million, and income from operations rose to USD 73.9 million from USD 66.7 million. Selling and administrative expenses climbed USD 4.4 million to USD 56.9 million, mainly on spending tied to the modular geographic expansion effort.

Segment Mix: TRS Accelerates While Storage Lags

TRS-RenTelco delivered total revenues of USD 45 million, up 23%, and adjusted EBITDA of USD 26 million, up 27%. Rental margin widened to 48% from 43%, and average utilization reached 69.9% against 64.8% a year ago. CEO Philip Hawkins pointed to AI infrastructure and data center build-outs as a source of demand that runs from semiconductor research through to field verification of installed equipment.

Mobile Modular revenues slipped 1% to USD 180 million as new equipment sales fell USD 5.3 million to USD 47.1 million, which management tied to longer project completion timelines. Rental revenue grew 4%, monthly revenue per unit on rent rose 8% to USD 932, and utilization averaged 70.2%. Portable Storage revenues fell 3% to USD 24 million with utilization at 59.1%, while Enviroplex sales rose to USD 25.7 million from USD 13.7 million.

Guidance and Capital Deployment

The company now projects 2026 total revenue of USD 945 million to USD 960 million and adjusted EBITDA of USD 365 million to USD 373 million, a narrower EBITDA band with an unchanged midpoint. Lower new modular equipment sales are the reason the revenue outlook was trimmed. Gross rental equipment capital expenditures are guided to USD 270 million to USD 290 million, with most of the increase from the February plan, which had a USD 190 million midpoint, directed at TRS.

Year-to-date rental equipment purchases totaled USD 219 million versus USD 92 million in the prior year. Operating cash flow was USD 178 million, and the company paid USD 37 million in dividends and completed USD 34 million of share repurchases. Net borrowings stood at USD 618 million, equal to funded debt of 1.68 times trailing adjusted EBITDA.

Data Points Behind the Next Report

Four readings frame the next update. TRS utilization ended September at 71.9%, and management described mid-60% levels as a healthy operating range. Mobile Modular utilization of 70.2% compares with 72.6% a year earlier and 70.1% in the second quarter, while the gap between revenue per unit on rent and new shipments remains 36%. Lower fourth-quarter new modular sales are already built into the USD 945 million to USD 960 million revenue range, and the company is scheduled to report fourth-quarter results in late February.