Third Quarter 2026
Filed Oct 28, 2026McGrath Announces Results for Third Quarter 2026
Total revenues increased 7% to $274.6 million, income from operations increased 11% to $73.9 million, and Adjusted EBITDA increased 10% to $106.5 million. Growth at TRS-RenTelco and Mobile Modular rental operations was partly offset by lower Mobile Modular new-equipment sales and continued Portable Storage weakness.
Key metrics
shortened, hover for the filing’s print| Metric | Value | q/q | y/y |
|---|---|---|---|
| Total revenues, three months ended September 30GAAP | $274.6M | – | 7% |
| Rental revenues, three months ended September 30GAAP | $139.1M | – | – |
| Rental related services revenues, three months ended September 30GAAP | $50.42M | – | – |
| Rental operations revenues, three months ended September 30GAAP | $189.5M | – | 6% |
| Sales revenues, three months ended September 30GAAP | $82.90M | – | 9% |
| Other revenues, three months ended September 30GAAP | $2.23M | – | – |
| Total costs of revenues, three months ended September 30GAAP | $143.7M | – | – |
| Gross profit, three months ended September 30GAAP | $130.9M | – | – |
| Selling and administrative expenses, three months ended September 30GAAP | $56.94M | – | – |
| Income from operations, three months ended September 30GAAP | $73.94M | – | 11% |
| Interest expense, three months ended September 30GAAP | $7.96M | – | – |
| Income before provision for income taxes, three months ended September 30GAAP | $65.97M | – | – |
| Provision for income taxes, three months ended September 30GAAP | $17.16M | – | – |
| Net income, three months ended September 30GAAP | $48.80M | – | – |
| Basic earnings per share, three months ended September 30GAAP | $2.00 | – | – |
| Diluted earnings per share, three months ended September 30GAAP | $2.00 | – | – |
| Adjusted EBITDA, three months ended September 30non-GAAP | $106.5M | – | 10% |
| Adjusted EBITDA margin, three months ended September 30non-GAAP | 39 % | – | – |
| Net cash provided by operating activities, three months ended September 30GAAP | $72.28M | – | – |
| Total revenues, nine months ended September 30GAAP | $694.3M | – | – |
| Rental operations revenues, nine months ended September 30GAAP | $524.2M | – | – |
| Sales revenues, nine months ended September 30GAAP | $163.3M | – | – |
| Gross profit, nine months ended September 30GAAP | $335.7M | – | – |
| Income from operations, nine months ended September 30GAAP | $170.6M | – | – |
| Net income, nine months ended September 30GAAP | $109.5M | – | – |
| Diluted earnings per share, nine months ended September 30GAAP | $4.46 | – | – |
| Adjusted EBITDA, nine months ended September 30non-GAAP | $263.4M | – | – |
| Adjusted EBITDA margin, nine months ended September 30non-GAAP | 38 % | – | – |
| Net cash provided by operating activities, nine months ended September 30GAAP | $178.0M | – | – |
| Purchases of rental equipment, nine months ended September 30GAAP | −$218.7M | – | – |
| Net cash used in investing activities, nine months ended September 30GAAP | −$203.5M | – | – |
| Net cash provided by (used in) financing activities, nine months ended September 30GAAP | $26.30M | – | – |
| Mobile Modular Adjusted EBITDA, three months ended September 30non-GAAP | $62.64M | – | decrease of $1.9 million, or 3% |
| Portable Storage Adjusted EBITDA, three months ended September 30non-GAAP | $7.38M | – | decrease of $1.9 million, or 20% |
| TRS-RenTelco Adjusted EBITDA, three months ended September 30non-GAAP | $25.74M | – | 27% |
| Mobile Modular rental revenues, three months ended September 30GAAP | $86.90M | – | 4% |
| Portable Storage rental revenues, three months ended September 30GAAP | $16.77M | – | decreased 3% |
| TRS-RenTelco rental revenues, three months ended September 30GAAP | $35.39M | – | 26% |
Segments
| Segment | Revenue | q/q | y/y |
|---|---|---|---|
| Mobile ModularRental revenues increased 4% to $86.9 million, supported by continued growth from the commercial customer base, large commercial projects and regional expansion efforts. Sales revenues decreased 10% to $47.1 million, primarily due to lower new equipment sales. | $179.9M | – | – |
| Portable StorageRental revenues decreased 3% $16.8 million as market demand conditions remained soft. Higher equipment preparation, trucking and sales-coverage costs continued to pressure margins. | $23.67M | – | – |
| TRS-RenTelcoRental revenues increased 26% to $35.4 million. Demand remained robust and the business benefited from projects supporting buildout of new data centers. | $45.31M | – | – |
| EnviroplexSales revenues were $25,699 (in thousands). | $25.70M | – | – |
Amounts quoted below without a unit are in thousands, as in the filing’s tables. Per-share figures are as printed.
For the remainder of 2026 outlook
- Revenue$945 to $960 million
- NoteAdjusted EBITDA: $365 to $373 million
- NoteGross rental equipment capital expenditures: $270 to $290 million
Capital returns
- Dividend rate of $0.495 per share for the third quarter 2026.
- Cash dividends declared per share for the nine months ended September 30, 2026: $1.485.
- Repurchase of common stock for the nine months ended September 30, 2026: $(34,223) (in thousands).
- Payment of dividends for the nine months ended September 30, 2026: $(36,766) (in thousands).
What drove it
- Companywide revenue growth was primarily driven by higher rental operations, reflecting progress at Mobile Modular and TRS-RenTelco.
- TRS-RenTelco benefited from projects supporting buildout of new data centers.
- The Company made additional investments in new rental fleet at Mobile Modular and TRS-RenTelco.
- Higher gross profit on rental operations and sales revenues primarily drove the increases in net income and diluted earnings per share.
Concerns
- Mobile Modular sales revenues decreased 10% to $47.1 million, primarily due to lower new equipment sales.
- Portable Storage rental revenues decreased 3% $16.8 million as market demand conditions remained soft.
- Portable Storage gross margin on rental related services was negative 25% compared to negative 13% in 2025, primarily due to higher trucking related costs.
- Mobile Modular selling and administrative expenses increased 8% to $38.3 million, Portable Storage selling and administrative expenses increased 5% to $8.3 million, and TRS-RenTelco selling and administrative expenses increased 15% to $8.2 million.
- Total revenue guidance was reduced to $945 to $960 million from $955 to $985 million as a result of lower Mobile Modular new equipment sales.
What to watch
- Execution against the updated total revenue outlook of $945 to $960 million for the remainder of 2026.
- Mobile Modular commercial customer growth, large commercial projects and regional expansion efforts.
- TRS-RenTelco demand and rental-fleet investment supporting data-center buildout projects.
- Portable Storage market demand conditions, trucking-related costs and rental related services margins.
- Delivery of gross rental equipment capital expenditures of $270 to $290 million.
Balance sheet and cash flow
- Cash at September 30, 2026: $1,038 (in thousands), compared with $295 (in thousands) at December 31, 2025.
- Notes payable at September 30, 2026: $618,257 (in thousands), compared with $514,924 (in thousands) at December 31, 2025.
- Rental equipment, net at September 30, 2026: $1,557,142 (in thousands), compared with $1,420,898 (in thousands) at December 31, 2025.
- Total assets at September 30, 2026: $2,575,817 (in thousands), compared with $2,357,117 (in thousands) at December 31, 2025.
- Net cash provided by operating activities for the nine months ended September 30, 2026: $177,971 (in thousands), compared with $174,765 (in thousands).
- Purchases of rental equipment for the nine months ended September 30, 2026: $(218,745) (in thousands), compared with $(91,516) (in thousands).
- Net increase in cash for the nine months ended September 30, 2026: $743 (in thousands), compared with $6,449 (in thousands).
Analysis
McGrath reported third-quarter total revenues of $274,606 (in thousands), up 7% from $256,443 (in thousands). Rental operations revenues increased 6% to $189,475 (in thousands), while sales revenues increased 9% to $82,898 (in thousands). Income from operations rose 11% to $73,939 (in thousands), net income was $48,803 (in thousands), and diluted earnings per share was $2.00, compared with $1.72 in the prior-year quarter. Adjusted EBITDA increased 10% to $106,487 (in thousands), and Adjusted EBITDA margin was 39 % versus 38 %.
The operating mix reflected broad rental momentum but diverged sharply by division. Mobile Modular rental revenues increased 4% to $86.9 million, driven by commercial customers, large commercial projects and regional expansion efforts. Its sales revenues decreased 10% to $47.1 million because of lower new equipment sales. TRS-RenTelco was the strongest rental contributor, with rental revenues increasing 26% to $35.4 million and Adjusted EBITDA increasing 27% to $25.7 million, supported by data-center buildout projects. Portable Storage remained the principal weak point, with rental revenues decreasing 3% $16.8 million and Adjusted EBITDA decreasing 20% to $7.4 million.
Margins and costs showed both operating leverage and localized pressure. Consolidated gross profit was $130,874 (in thousands), compared with $119,257 (in thousands), while selling and administrative expenses were $56,935 (in thousands), compared with $52,540 (in thousands). At Portable Storage, gross margin on rental related services was negative 25% compared to negative 13% in 2025 because of higher trucking-related costs. Mobile Modular also faced higher selling and administrative expense, which increased 8% to $38.3 million, while its rental gross profit increased 2% to $49.0 million.
Capital deployment increased materially through the first nine months. Purchases of rental equipment were $(218,745) (in thousands), compared with $(91,516) (in thousands), and net cash provided by operating activities was $177,971 (in thousands). Notes payable were $618,257 (in thousands) at September 30, 2026, compared with $514,924 (in thousands) at December 31, 2025. The Company also repurchased $34,223 (in thousands) of common stock and paid $36,766 (in thousands) of dividends during the nine-month period.
The Company reduced total revenue guidance to $945 to $960 million from $955 to $985 million because of lower Mobile Modular new equipment sales. It narrowed Adjusted EBITDA guidance to $365 to $373 million from $363 to $375 million with no change to midpoint expectations, and increased gross rental equipment capital-expenditure guidance to $270 to $290 million from $200 to $220 million. The guide places emphasis on sustained Mobile Modular and TRS rental momentum, the return on additional fleet investments, and whether Portable Storage demand and service-cost pressure improve.
Management, verbatim
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.
Phil Hawkins, President and CEO
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.
Phil Hawkins, President and CEO
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.
Phil Hawkins, President and CEO
Not in the filing
stated, not guessed- Free cash flow was not reported.
- GAAP gross margin was not reported.
- Quarterly free cash flow was not reported.
- Forward guidance for gross margin, operating expenses and tax rate was not reported.
- Prior-quarter comparisons were not reported for the presented metrics.
- A separate prior earnings-release outlook section was not provided; therefore, vs_prior_guidance is empty.
Written by an AI language model from the company’s SEC earnings filing (Form 8-K Item 2.02, or Form 6-K for a foreign private issuer). Every figure is checked against the filing text, and a metric the filing does not print, or whose value, prior period and change do not add up, is dropped from the metrics. The model can still misread a table, in the metrics or in the text, so check a number in the filing before you rely on it. Consensus estimates, price targets and share-price reactions are not shown because they are not in the filing. AI-generated research, not investment advice.