McGrath Announces Results for Third Quarter 2026

Lower Modular new equipment sales reduced revenue expectations, while planned rental fleet investment increased.

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LIVERMORE, Calif.--(BUSINESS WIRE)-- McGrath RentCorp (“McGrath” or the “Company”) (Nasdaq: MGRC), a leading business-to-business rental company in North America, today announced total revenues for the quarter ended September 30, 2026 of $274.6 million, an increase of 7% compared to the third quarter of 2025. The Company reported net income of $48.8 million, or $2.00 per diluted share, for the third quarter of 2026, compared to net income of $42.3 million, or $1.72 per diluted share, for the third quarter of 2025. The increases in net income and earnings per diluted share for the quarter were primarily attributed to higher gross profit on rental operations and sales revenues when compared to the third quarter of 2025.

THIRD QUARTER 2026 YEAR-OVER-YEAR COMPANY HIGHLIGHTS:

• Rental operations revenues increased 6% to $189.5 million.
• Sales revenues increased 9% to $82.9 million.
• Total revenues increased 7% to $274.6 million.
• Income from operations increased 11% to $73.9 million.
• Adjusted EBITDA¹ increased 10% to $106.5 million.
• Dividend rate of $0.495 per share for the third quarter 2026. On an annualized basis, this dividend represents a 1.7% yield on the October 27, 2026 close price of $119.56 per share.

Phil Hawkins, President and CEO of McGrath, made the following comments:

“We were pleased with our third quarter results. The 7% increase in companywide revenues was primarily driven by higher rental operations, reflecting steady progress at Mobile Modular and TRS-RenTelco.

Modular rental revenues increased 4% compared to last year, with continued growth from our commercial customer base. Consistent with the first half of this year, we experienced positive business momentum during the quarter, particularly with large commercial projects and progress with our regional expansion efforts. We responded to this momentum with additional capital investments in new rental fleet.

Portable Storage rental revenues decreased 3% as market demand conditions remained soft. Consistent with the first half of this year, higher costs for equipment preparation, trucking and sales coverage continued to pressure margins in the quarter.

TRS had another impressive quarter with rental revenues increasing 26%. Demand remained robust throughout the quarter, and the business continued to benefit from projects supporting buildout of new data centers. We made additional investments in rental fleet to support the strong market conditions and positive outlook for the business.

Our updated outlook for the year reflects continued positive rental operations momentum and investment at Mobile Modular and TRS, partly offset by lower Modular new equipment sales. We are focused on disciplined operational execution and capitalizing on our rental operations momentum through the remainder of the year.”

DIVISION HIGHLIGHTS:

All comparisons presented below are for the quarter ended September 30, 2026 to the quarter ended September 30, 2025 unless otherwise indicated.

MOBILE MODULAR

For the third quarter of 2026, the Company’s Mobile Modular division reported Adjusted EBITDA of $62.6 million, a decrease of $1.9 million, or 3%, when compared to the same quarter in 2025.

• Rental revenues increased 4% to $86.9 million, depreciation expense increased 11% to $12.0 million and other direct costs increased 7% to $25.9 million, which resulted in an increase in gross profit on rental revenues of 2% to $49.0 million.
• Rental related services revenues was comparable to the prior year at $44.6 million, primarily attributable to higher delivery and dismantle revenues, partly offset by lower site related service revenues, with associated gross profit increasing 7% to $15.7 million.
• Sales revenues decreased 10% to $47.1 million, primarily due to lower new equipment sales. Lower sales revenues and a comparable gross margin on sales of 36% in 2026, resulted in a 10% decrease in gross profit on sales revenues to $16.8 million.
• Selling and administrative expenses increased 8% to $38.3 million, when compared to the prior year.

PORTABLE STORAGE

For the third quarter of 2026, the Company’s Portable Storage division reported Adjusted EBITDA of $7.4 million, a decrease of $1.9 million, or 20%, when compared to the same quarter in 2025.

• Rental revenues decreased 3% $16.8 million, depreciation expense increased 5% to $1.1 million, and other direct costs increased 1% to $2.2 million, which resulted in a decrease in gross profit on rental revenues of 4% to $13.4 million.
• Rental related services revenues increased 5% to $4.4 million, primarily attributable to higher delivery and return delivery activities. Gross margin on rental related services was negative 25% compared to negative 13% in 2025, primarily due to higher trucking related costs, resulting in a $0.6 million higher gross loss of $1.1 million.
• Sales revenues decreased 16% to $2.3 million. Gross margin on sales decreased 3% to 37%, compared to 40% in 2025, resulting in a $0.2 million decrease in gross profit on sales revenues to $0.8 million.
• Selling and administrative expenses increased 5% to $8.3 million, when compared to the prior year.

TRS-RENTELCO

For the third quarter of 2026, the Company’s TRS-RenTelco division reported Adjusted EBITDA of $25.7 million, an increase of 27% when compared to the same quarter in 2025.

• Rental revenues increased 26% to $35.4 million, depreciation expense increased 15% and other direct costs increased 14%, resulting in a 42% increase in gross profit on rental revenues to $17.2 million.
• Sales revenues increased 7% to $7.9 million. Gross margin on sales in 2026 was 56%, unchanged from 2025, resulting in an increase in gross profit on sales revenues of 8% to $4.5 million.
• Selling and administrative expenses increased 15% to $8.2 million, when compared to the prior year.

FINANCIAL OUTLOOK:

Based upon the Company's year-to-date results and current outlook for the remainder of the year, the Company is updating its financial outlook. Total revenues is decreasing as a result of lower Mobile Modular new equipment sales. Adjusted EBITDA range has narrowed with no change to mid-point expectations. Gross rental equipment capital expenditures are increasing to support rental operations momentum at Mobile Modular and TRS-RenTelco. For the remainder of 2026, the Company currently expects:

	Previous	Current
Total revenue:	$955 to $985 million	$945 to $960 million
Adjusted EBITDA1, 2:	$363 to $375 million	$365 to $373 million
Gross rental equipment capital expenditures:	$200 to $220 million	$270 to $290 million

1.		Adjusted EBITDA is defined as net income before interest expense, provision for income taxes, depreciation, amortization, non-cash impairment costs, share-based compensation, transaction costs and non-operating transactions. A reconciliation of actual net income to Adjusted EBITDA and Adjusted EBITDA to net cash provided by operating activities can be found at the end of this release.
2.		Information reconciling forward-looking Adjusted EBITDA to the comparable GAAP financial measures is unavailable to the Company without unreasonable effort because certain items required for such reconciliations are outside of the Company’s control and/or cannot be reasonably predicted, such as the provision for income taxes. Therefore, no reconciliation to the most comparable GAAP measures is provided. The Company provides Adjusted EBITDA guidance because it believes that Adjusted EBITDA, when viewed with the Company’s results under GAAP, provides useful information for the reasons noted in the reconciliation of actual Adjusted EBITDA to the most directly comparable GAAP measures at the end of this release.

ABOUT MCGRATH:

McGrath RentCorp (Nasdaq: MGRC) is a leading business-to-business rental company in North America with a strong record of profitable business growth. Founded in 1979, McGrath’s operations are centered on modular solutions through its Mobile Modular and Mobile Modular Portable Storage businesses. In addition, its TRS-RenTelco business offers electronic test equipment rental solutions. The Company’s rental product offerings and services are part of the circular supply economy, helping customers work more efficiently, and sustainably manage their environmental footprint. With over 40 years of experience, McGrath’s success is driven by a focus on exceptional customer experiences. This focus has underpinned the Company’s long-term financial success and supported over 35 consecutive years of annual dividend increases to shareholders, a rare distinction among publicly listed companies.

McGrath is headquartered in Livermore, California. Additional information about McGrath and its businesses is available at mgrc.com and investors.mgrc.com.

You should read this press release in conjunction with the financial statements and notes thereto included in the Company’s latest Forms 10-K, 10-Q and other SEC filings. You can visit the Company’s web site at www.mgrc.com to access information on McGrath RentCorp, including the latest Forms 10-K, 10-Q and other SEC filings.

CONFERENCE CALL NOTE:

As previously announced in its press release of October 1, 2026, McGrath RentCorp will host a conference call at 5:00 p.m. Eastern Time (2:00 p.m. Pacific Time) on October 28, 2026 to discuss the third quarter 2026 results. To participate in the teleconference, dial 1-800-274-8461 (in the U.S.), or 1-203-518-9814 (outside the U.S.), or to listen only, access the simultaneous webcast at the investor relations section of the Company’s website at https://investors.mgrc.com/. A replay will be available for 7 days following the call by dialing 1-800-723-5759 (in the U.S.), or 1-402-220-2662 (outside the U.S.). In addition, a live audio webcast and replay of the call may be found in the investor relations section of the Company’s website at https://investors.mgrc.com/events-and-presentations.

FORWARD-LOOKING STATEMENTS:

This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. All statements, other than statements of historical facts, regarding McGrath RentCorp’s expectations, strategies, prospects or targets are forward-looking statements. These forward-looking statements also can be identified by the use of forward-looking terminology such as “anticipates,” “believes,” “continues,” “could,” “estimates,” “expects,” “intends,” “may,” “plan,” “predict,” “project,” or “will,” or the negative of these terms or other comparable terminology. In particular, the discussion under the heading “Financial Outlook” and Mr. Hawkins' comments about the Company's updated outlook for the year reflecting continued positive rental operations momentum at Mobile Modular and TRS, partly offset by lower Modular new equipment sales, are forward looking. ​

These forward-looking statements are not guarantees of future performance and involve significant risks and uncertainties that could cause our actual results to differ materially from those projected including: the continued impact of tariff actions and macroeconomic factors, including fiscal policy uncertainty, government budgetary constraints, other political, geopolitical or regulatory developments; fuel costs; health of the education and commercial markets in our modular building division; competition within the modular business; the activity levels in the semiconductor and general purpose and communications test equipment markets at TRS-RenTelco; the activity levels in commercial construction projects and impact on Portable Storage segment; continued execution of our strategic performance improvement initiatives; our ability to successfully increase prices to offset cost increases; our ability to effectively manage our rental assets; and our ability to retain and attract talent and uncertainty associated with the Chief Executive Officer transition; as well as the other factors disclosed under “Risk Factors” in the Company’s 2025 Form 10-K and other SEC filings.

Forward-looking statements are made only as of the date hereof and are based on management’s reasonable assumptions, however these assumptions can be wrong or affected by known or unknown risks and uncertainties. No forward-looking statement can be guaranteed, and subsequent facts or circumstances may contradict, obviate, undermine or otherwise fail to support or substantiate such statements. Except as otherwise required by law, we assume no obligation to update any of the forward-looking statements contained in this press release.

MCGRATH RENTCORP
CONDENSED CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)
		Three Months Ended September 30,								Nine Months Ended September 30,
(in thousands, except per share amounts)		2026				2025				2026				2025
Revenues
Rental		$	139,057			$	128,488			$	397,598			$	374,586
Rental related services			50,418				49,622				126,608				121,021
Rental operations			189,475				178,110				524,206				495,607
Sales			82,898				76,058				163,288				184,759
Other			2,233				2,275				6,766				7,109
Total revenues			274,606				256,443				694,260				687,475
Costs and Expenses
Direct costs of rental operations:
Depreciation of rental equipment			24,534				21,868				70,477				64,799
Rental related services			36,229				35,422				89,722				85,212
Other			34,931				32,308				101,537				91,479
Total direct costs of rental operations			95,694				89,598				261,736				241,490
Costs of sales			48,038				47,588				96,853				119,578
Total costs of revenues			143,732				137,186				358,589				361,068
Gross profit			130,874				119,257				335,671				326,407
Expenses:
Selling and administrative expenses			56,935				52,540				166,859				156,952
Other income, net			—				—				(1,814	)			—
Income from operations			73,939				66,717				170,626				169,455
Interest expense			7,965				8,177				21,578				24,130
Foreign currency exchange loss (gain)			6				32				77				(54	)
Income before provision for income taxes			65,968				58,508				148,971				145,379
Provision for income taxes			17,165				16,211				39,463				38,900
Net income			48,803				42,297				109,508				106,479
Earnings per share:
Basic		$	2.00			$	1.72			$	4.47			$	4.33
Diluted		$	2.00			$	1.72			$	4.46			$	4.32
Shares used in per share calculation:
Basic			24,413				24,612				24,502				24,598
Diluted			24,451				24,644				24,536				24,628
Cash dividends declared per share		$	0.495			$	0.485			$	1.485			$	1.455

MCGRATH RENTCORP
CONDENSED CONSOLIDATED BALANCE SHEETS
(UNAUDITED)
		September 30,				December 31,
(in thousands)		2026				2025
Assets
Cash		$	1,038			$	295
Accounts receivable, net of allowance for credit losses of $2,400 at September 30, 2026 and $2,866 at December 31, 2025			244,850				231,865
Rental equipment, at cost:
Relocatable modular buildings			1,607,898				1,485,794
Portable storage containers			245,917				245,141
Electronic test equipment			389,141				337,100
			2,242,956				2,068,035
Less: accumulated depreciation			(685,814	)			(647,137	)
Rental equipment, net			1,557,142				1,420,898
Property, plant and equipment, net			263,680				233,492
Inventories			9,589				8,027
Prepaid expenses and other assets			123,036				83,351
Intangible assets, net			39,120				46,605
Goodwill			337,362				332,584
Total assets		$	2,575,817			$	2,357,117
Liabilities and Shareholders' Equity
Liabilities:
Notes payable		$	618,257			$	514,924
Accounts payable			69,232				66,233
Accrued liabilities			133,903				114,764
Deferred income			145,148				110,593
Deferred income taxes, net			331,170				313,580
Total liabilities			1,297,710				1,120,094
Shareholders’ equity:
Common stock, no par value - Authorized 40,000 shares
Issued and outstanding - 24,364 shares as of September 30, 2026 and 24,612 shares as of December 31, 2025			122,626				121,785
Retained earnings			1,155,481				1,115,238
Total shareholders’ equity			1,278,107				1,237,023
Total liabilities and shareholders’ equity		$	2,575,817			$	2,357,117

MCGRATH RENTCORP
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
		Nine Months Ended September 30,
(in thousands)		2026				2025
Cash Flows from Operating Activities:
Net income		$	109,508			$	106,479
Adjustments to reconcile net income to net cash provided by
operating activities:
Depreciation and amortization			85,973				79,717
Deferred income taxes			15,645				22,918
Provision for credit losses			853				1,266
Share-based compensation			8,451				8,088
Gain on sale of property, plant and equipment			(1,814	)			—
Gain on sale of used rental equipment			(32,749	)			(30,188	)
Foreign currency exchange loss (gain)			77				(54	)
Amortization of debt issuance costs			6				204
Change in:
Accounts receivable			(13,692	)			(23,270	)
Inventories			(1,562	)			882
Prepaid expenses and other assets			(39,614	)			(1,884	)
Accounts payable			(5,348	)			(8,041	)
Accrued liabilities			17,682				(1,854	)
Deferred income			34,555				20,502
Net cash provided by operating activities			177,971				174,765
Cash Flows from Investing Activities:
Purchases of rental equipment			(218,745	)			(91,516	)
Purchases of property, plant and equipment			(37,969	)			(33,235	)
Cash paid for acquisition of businesses, net of cash received			(9,538	)			(21,947	)
Proceeds from sales of used rental equipment			59,969				58,647
Proceeds from sales of property, plant and equipment			2,750				—
Net cash used in investing activities			(203,533	)			(88,051	)
Cash Flows from Financing Activities:
Net borrowings (payments) under bank lines of credit			163,326				(40,612	)
Principal payment of term note agreement			—				(73,000	)
Borrowings under Series G senior notes			—				75,000
Principal payment of Series E senior notes			(60,000	)			—
Repurchase of common stock			(34,223	)			—
Taxes paid related to net share settlement of stock awards			(6,032	)			(5,693	)
Payment of dividends			(36,766	)			(35,960	)
Net cash provided by (used in) financing activities			26,305				(80,265	)
Net increase in cash			743				6,449
Cash balance, beginning of period			295				807
Cash balance, end of period		$	1,038			$	7,256
Supplemental Disclosure of Cash Flow Information:
Interest paid, during the period		$	23,419			$	24,869
Net income taxes paid, during the period		$	27,895			$	6,537
Dividends accrued during the period, not yet paid		$	12,617			$	12,535
Rental equipment acquisitions, not yet paid		$	19,889			$	8,459
Business acquisition payments withheld		$	1,110			$	1,815

MCGRATH RENTCORP
BUSINESS SEGMENT DATA (unaudited)
Three months ended September 30, 2026
(dollar amounts in thousands)		Mobile Modular				Portable Storage				TRS-RenTelco				Enviroplex				Consolidated
Revenues
Rental		$	86,901			$	16,769			$	35,387			$	—			$	139,057
Rental related services			44,648				4,416				1,354				—				50,418
Rental operations			131,549				21,185				36,741				—				189,475
Sales			47,053				2,267				7,879				25,699				82,898
Other			1,323				218				692				—				2,233
Total revenues			179,925				23,670				45,312				25,699				274,606
Costs and Expenses
Direct costs of rental operations:
Depreciation			11,962				1,104				11,468				—				24,534
Rental related services			28,923				5,524				1,782				—				36,229
Other			25,945				2,222				6,764				—				34,931
Total direct costs of rental operations			66,830				8,850				20,014				—				95,694
Costs of sales			30,210				1,425				3,428				12,975				48,038
Total costs of revenues			97,040				10,275				23,442				12,975				143,732
Gross Profit (Loss)
Rental			48,994				13,443				17,155				—				79,592
Rental related services			15,725				(1,108	)			(428	)			—				14,189
Rental operations			64,719				12,335				16,727				—				93,781
Sales			16,843				842				4,451				12,724				34,860
Other			1,323				218				692				—				2,233
Total gross profit			82,885				13,395				21,870				12,724				130,874
Selling and administrative expenses			38,320				8,328				8,194				2,093				56,935
Income from operations		$	44,565			$	5,067			$	13,676			$	10,631				73,939
Interest expense																			(7,965	)
Foreign currency exchange loss																			(6	)
Provision for income taxes																			(17,165	)
Net income																		$	48,803
Other Information:
Adjusted EBITDA 1		$	62,637			$	7,375			$	25,739			$	10,736			$	106,487
Average rental equipment 2		$	1,458,867			$	242,827			$	366,209
Average monthly total yield 3			1.99	%			2.30	%			3.22	%
Average utilization 4			70.2	%			59.1	%			69.9	%
Average monthly rental rate 5			2.83	%			3.89	%			4.61	%

1.		Adjusted EBITDA is defined as net income before interest expense, provision for income taxes, depreciation, amortization, non-cash impairment costs, share-based compensation, other income, net and non-operating transactions.
2.		Average rental equipment represents the cost of rental equipment, excluding new equipment inventory and accessory equipment.
3.		Average monthly total yield is calculated by dividing the averages of monthly rental revenues by the cost of rental equipment for the period.
4.		Average utilization is calculated by dividing the average month end costs of rental equipment on rent by the average month end total costs of rental equipment.
5.		Average monthly rental rate is calculated by dividing the averages of monthly rental revenues by the cost of rental equipment on rent for the period.

MCGRATH RENTCORP
BUSINESS SEGMENT DATA (unaudited)
Three months ended September 30, 2025
(dollar amounts in thousands)		Mobile Modular				Portable Storage				TRS-RenTelco				Enviroplex				Consolidated
Revenues
Rental		$	83,168			$	17,293			$	28,027			$	—			$	128,488
Rental related services			44,544				4,187				891				—				49,622
Rental operations			127,712				21,480				28,918				—				178,110
Sales			52,334				2,693				7,347				13,684				76,058
Other			1,422				229				624				—				2,275
Total revenues			181,468				24,402				36,889				13,684				256,443
Costs and Expenses
Direct costs of rental operations:
Depreciation			10,810				1,056				10,002				—				21,868
Rental related services			29,809				4,739				874				—				35,422
Other			24,199				2,191				5,918				—				32,308
Total direct costs of rental operations			64,818				7,986				16,794				—				89,598
Costs of sales			33,558				1,629				3,231				9,170				47,588
Total costs of revenues			98,376				9,615				20,025				9,170				137,186
Gross Profit (Loss)
Rental			48,159				14,046				12,107				—				74,312
Rental related services			14,735				(552	)			17				—				14,200
Rental operations			62,894				13,494				12,124				—				88,512
Sales			18,776				1,064				4,116				4,514				28,470
Other			1,422				229				624				—				2,275
Total gross profit			83,092				14,787				16,864				4,514				119,257
Selling and administrative expenses			35,389				7,912				7,113				2,126				52,540
Income from operations		$	47,703			$	6,875			$	9,751			$	2,388				66,717
Interest expense																			(8,177	)
Foreign currency exchange loss																			(32	)
Provision for income taxes																			(16,211	)
Net income																		$	42,297
Other Information:
Adjusted EBITDA 1		$	64,573			$	9,245			$	20,212			$	2,496			$	96,526
Average rental equipment 2		$	1,328,245			$	237,227			$	333,045
Average monthly total yield 3			2.09	%			2.43	%			2.81	%
Average utilization 4			72.6	%			61.4	%			64.8	%
Average monthly rental rate 5			2.88	%			3.96	%			4.33	%

1.		Adjusted EBITDA is defined as net income before interest expense, provision for income taxes, depreciation, amortization, non-cash impairment costs, share-based compensation, other income, net and non-operating transactions.
2.		Average rental equipment represents the cost of rental equipment, excluding new equipment inventory and accessory equipment.
3.		Average monthly total yield is calculated by dividing the averages of monthly rental revenues by the cost of rental equipment for the period.
4.		Average utilization is calculated by dividing the average month end costs of rental equipment on rent by the average month end total costs of rental equipment.
5.		Average monthly rental rate is calculated by dividing the averages of monthly rental revenues by the cost of rental equipment on rent for the period.

MCGRATH RENTCORP
BUSINESS SEGMENT DATA (unaudited)
Nine months ended September 30, 2026
(dollar amounts in thousands)		Mobile Modular				Portable Storage				TRS-RenTelco				Enviroplex				Consolidated
Revenues
Rental		$	251,518			$	49,909			$	96,171			$	—			$	397,598
Rental related services			110,202				12,799				3,607				—				126,608
Rental operations			361,720				62,708				99,778				—				524,206
Sales			99,127				5,724				24,618				33,819				163,288
Other			3,905				686				2,175				—				6,766
Total revenues			464,752				69,118				126,571				33,819				694,260
Costs and Expenses
Direct costs of rental operations:
Depreciation			35,329				3,300				31,848				—				70,477
Rental related services			70,792				15,469				3,461				—				89,722
Other			75,968				6,595				18,974				—				101,537
Total direct costs of rental operations			182,089				25,364				54,283				—				261,736
Costs of sales			64,596				3,575				9,990				18,692				96,853
Total costs of revenues			246,685				28,939				64,273				18,692				358,589
Gross Profit (Loss)
Rental			140,221				40,014				45,349				—				225,584
Rental related services			39,410				(2,670	)			146				—				36,886
Rental operations			179,631				37,344				45,495				—				262,470
Sales			34,531				2,149				14,628				15,127				66,435
Other			3,905				686				2,175				—				6,766
Total gross profit			218,067				40,179				62,298				15,127				335,671
Selling and administrative expenses			110,932				25,190				24,447				6,290				166,859
Income from operations		$	107,135			$	14,989			$	37,851			$	8,837				168,812
Interest expense																			(21,578	)
Foreign currency exchange loss																			(77	)
Other income, net 6																			1,814
Provision for income taxes																			(39,463	)
Net income																		$	109,508
Other Information:
Adjusted EBITDA 1		$	160,567			$	22,101			$	71,583			$	9,160			$	263,411
Average rental equipment 2		$	1,422,229			$	242,832			$	349,022
Average monthly total yield 3			1.96	%			2.28	%			3.06	%
Average utilization 4			70.1	%			58.7	%			68.0	%
Average monthly rental rate 5			2.80	%			3.89	%			4.50	%

1.		Adjusted EBITDA is defined as net income before interest expense, provision for income taxes, depreciation, amortization, non-cash impairment costs, share-based compensation, other income, net and non-operating transactions.
2.		Average rental equipment represents the cost of rental equipment, excluding new equipment inventory and accessory equipment.
3.		Average monthly total yield is calculated by dividing the averages of monthly rental revenues by the cost of rental equipment for the period.
4.		Average utilization is calculated by dividing the average month end costs of rental equipment on rent by the average month end total costs of rental equipment.
5.		Average monthly rental rate is calculated by dividing the averages of monthly rental revenues by the cost of rental equipment on rent for the period.
6.		During the nine months ended September 30, 2026, the Company sold a corporate property which resulted in a net gain on sale of $1,814, excluding taxes.

MCGRATH RENTCORP
BUSINESS SEGMENT DATA (unaudited)
Nine months ended September 30, 2025
(dollar amounts in thousands)		Mobile Modular				Portable Storage				TRS-RenTelco				Enviroplex				Consolidated
Revenues
Rental		$	243,572			$	50,307			$	80,707			$	—			$	374,586
Rental related services			106,191				12,212				2,618				—				121,021
Rental operations			349,763				62,519				83,325				—				495,607
Sales			115,308				5,649				23,039				40,763				184,759
Other			4,303				846				1,960				—				7,109
Total revenues			469,374				69,014				108,324				40,763				687,475
Costs and Expenses
Direct costs of rental operations:
Depreciation			32,105				3,125				29,569				—				64,799
Rental related services			69,999				12,976				2,237				—				85,212
Other			69,001				5,636				16,842				—				91,479
Total direct costs of rental operations			171,105				21,737				48,648				—				241,490
Costs of sales			76,483				3,509				11,574				28,012				119,578
Total costs of revenues			247,588				25,246				60,222				28,012				361,068
Gross Profit (Loss)
Rental			142,466				41,546				34,296				—				218,308
Rental related services			36,192				(764	)			381				—				35,809
Rental operations			178,658				40,782				34,677				—				254,117
Sales			38,825				2,140				11,465				12,751				65,181
Other			4,303				846				1,960				—				7,109
Total gross profit			221,786				43,768				48,102				12,751				326,407
Selling and administrative expenses			106,154				23,014				21,871				5,913				156,952
Income from operations		$	115,632			$	20,754			$	26,231			$	6,838				169,455
Interest expense																			(24,130	)
Foreign currency exchange gain																			54
Provision for income taxes																			(38,900	)
Net income																		$	106,479
Other Information:
Adjusted EBITDA 1		$	165,290			$	27,666			$	57,463			$	7,148			$	257,567
Average rental equipment 2		$	1,304,716			$	234,957			$	334,389
Average monthly total yield 3			2.07	%			2.38	%			2.68	%
Average utilization 4			73.6	%			60.8	%			63.5	%
Average monthly rental rate 5			2.82	%			3.91	%			4.22	%

1.		Adjusted EBITDA is defined as net income before interest expense, provision for income taxes, depreciation, amortization, non-cash impairment costs, share-based compensation, other income, net and non-operating transactions.
2.		Average rental equipment represents the cost of rental equipment, excluding new equipment inventory and accessory equipment.
3.		Average monthly total yield is calculated by dividing the averages of monthly rental revenues by the cost of rental equipment for the period.
4.		Average utilization is calculated by dividing the average month end costs of rental equipment on rent by the average month end total costs of rental equipment.
5.		Average monthly rental rate is calculated by dividing the averages of monthly rental revenues by the cost of rental equipment on rent for the period.

Reconciliation of Adjusted EBITDA to the most directly comparable GAAP measures

To supplement the Company’s financial data presented on a basis consistent with accounting principles generally accepted in the United States of America (“GAAP”), the Company presents “Adjusted EBITDA”, which is defined by the Company as net income before interest expense, provision for income taxes, depreciation, amortization, non-cash impairment costs, share-based compensation, transaction costs, gains on property sales and non-operating transactions. The Company presents Adjusted EBITDA as a financial measure as management believes it provides useful information to investors regarding the Company’s liquidity and financial condition and because management, as well as the Company’s lenders, use this measure in evaluating the performance of the Company.

Management uses Adjusted EBITDA as a supplement to GAAP measures to further evaluate period-to-period operating performance, compliance with financial covenants in the Company’s revolving lines of credit and senior notes and the Company’s ability to meet future capital expenditure and working capital requirements. Management believes the exclusion of non-cash charges and non-recurring transactions, including share-based compensation, transaction costs and gains on property sales is useful in measuring the Company’s cash available for operations and performance of the Company. Because management finds Adjusted EBITDA useful, the Company believes its investors will also find Adjusted EBITDA useful in evaluating the Company’s performance.

Adjusted EBITDA should not be considered in isolation or as a substitute for net income, cash flows, or other consolidated income or cash flow data prepared in accordance with GAAP or as a measure of the Company’s profitability or liquidity. Adjusted EBITDA is not in accordance with or an alternative for GAAP and may be different from non−GAAP measures used by other companies. Unlike EBITDA, which may be used by other companies or investors, Adjusted EBITDA does not include share-based compensation charges, transaction costs, gains on property sales and non-operating transactions. The Company believes that Adjusted EBITDA is of limited use in that it does not reflect all of the amounts associated with the Company’s results of operations as determined in accordance with GAAP and does not accurately reflect real cash flow. In addition, other companies may not use Adjusted EBITDA or may use other non-GAAP measures, limiting the usefulness of Adjusted EBITDA for purposes of comparison. The Company’s presentation of Adjusted EBITDA should not be construed as an inference that the Company will not incur expenses that are the same as or similar to the adjustments in this presentation. Therefore, Adjusted EBITDA should only be used to evaluate the Company’s results of operations in conjunction with the corresponding GAAP measures. The Company compensates for the limitations of Adjusted EBITDA by relying upon GAAP results to gain a complete picture of the Company’s performance. Because Adjusted EBITDA is a non-GAAP financial measure, as defined by the SEC, the Company includes in the tables below reconciliations of Adjusted EBITDA to the most directly comparable financial measures calculated and presented in accordance with GAAP.

Reconciliation of Net Income to Adjusted EBITDA
(dollar amounts in thousands)	Three Months Ended September 30,								Nine Months Ended September 30,								Twelve Months Ended September 30,
	2026				2025				2026				2025				2026				2025
Net income	$	48,803			$	42,297			$	109,508			$	106,479			$	159,336			$	145,428
Provision for income taxes		17,165				16,211				39,463				38,900				57,336				51,909
Interest expense		7,965				8,176				21,578				24,130				28,070				32,988
Depreciation and amortization		29,693				26,978				85,973				79,717				113,325				106,348
EBITDA		103,627				93,662				256,522				249,226				358,068				336,673
Share-based compensation		2,772				2,766				8,451				8,088				11,588				10,641
Transaction costs 3		88				98				252				253				465				2,255
Other income, net 4		—				—				(1,814	)			—				(1,814	)			—
Adjusted EBITDA 1	$	106,487			$	96,526			$	263,411			$	257,567			$	368,307			$	349,569
Adjusted EBITDA margin 2		39	%			38	%			38	%			37	%			39	%			38	%

Reconciliation of Net Cash Provided by Operating Activities to Adjusted EBITDA
(dollar amounts in thousands)	Three Months Ended September 30,								Nine Months Ended September 30,								Twelve Months Ended September 30,
	2026				2025				2026				2025				2026				2025
Net cash provided by operating activities	$	72,279			$	65,071			$	177,971			$	174,765			$	258,889			$	211,544
Change in certain assets and liabilities:
Accounts receivable, net		4,828				7,545				12,839				22,004				3,358				16,817
Inventories, prepaid expenses and other assets		447				(2,261	)			41,176				1,002				36,770				14,103
Accounts payable and accrued liabilities		784				8,588				(18,000	)			18,854				(22,951	)			(5,834	)
Deferred income		(4,834	)			(5,378	)			(34,555	)			(20,502	)			(14,381	)			(6,413	)
Amortization of debt issuance costs		(1	)			(159	)			(6	)			(204	)			(8	)			(264	)
Foreign currency exchange (loss) gain		(6	)			(32	)			(77	)			54				(51	)			(214	)
Gain on sale of used rental equipment		14,714				13,514				32,749				30,188				46,752				40,088
Income taxes paid, net of refunds received		8,115				751				27,895				6,537				31,474				46,887
Interest paid		10,161				8,887				23,419				24,869				28,455				32,855
Adjusted EBITDA 1	$	106,487			$	96,526			$	263,411			$	257,567			$	368,307			$	349,569

1.		Adjusted EBITDA is defined as net income before interest expense, provision for income taxes, depreciation, amortization, non-cash impairment costs, share-based compensation, other income, net and non-operating transactions.
2.		Adjusted EBITDA Margin is calculated as Adjusted EBITDA divided by total revenues for the period.
3.		Transaction costs include acquisition related legal and professional fees and other costs specific to these transactions.
4.		Other income, net, consists of net gains on property, plant and equipment sales that are infrequent in nature and excluded from Adjusted EBITDA.

 

View source version on businesswire.com: https://www.businesswire.com/news/home/20261028841032/en/

Keith E. Pratt
EVP & Chief Financial Officer
925-606-9200

Source: McGrath RentCorp

Key Terms

adjusted ebitda financial

Adjusted EBITDA is a way companies measure how much money they make from their core operations, like running a business, by removing certain costs or income that aren’t part of regular business activities. It helps investors see how well a company is doing without distractions from unusual expenses or gains, making it easier to compare companies or track performance over time.

share-based compensation financial

Share-based compensation is when a company pays employees, executives or directors with its own stock or rights to buy stock instead of, or in addition to, cash. Think of it like receiving store gift cards instead of extra paycheck — it can motivate staff to boost the company’s value, but it also increases the number of shares outstanding and can shrink each existing owner’s slice of profits and voting power. Investors watch it because it affects reported earnings, share count and the alignment between management and shareholders.

gaap financial

GAAP, or Generally Accepted Accounting Principles, are a set of standardized rules and guidelines that companies follow when preparing their financial statements. They ensure consistency, transparency, and comparability across different companies, making it easier for investors to understand and compare financial information accurately. This helps investors make informed decisions based on trustworthy and uniform financial reports.

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