McGrath RentCorp Rides Modest Growth Amid Economic Uncertainty
McGrath RentCorp, a leading provider of modular buildings and equipment rentals, has reported a modest 4% increase in total company revenues for its first quarter of 2025. The growth was driven by continued progress from the company's strategic initiatives as well as some recovery at TRS-RenTelco.
In a conference call on April 24, 2025, Joseph Hanna, Chief Executive Officer of McGrath RentCorp, highlighted the positive trends in the quarter. "We continue to win education business in both public and private schools across all our geographies," he said. Mobile Modular's rental revenues grew 3%, with commercial and education rentals showing positive results.
The company's modular strategic growth initiatives remain a key driver of its performance, with new rental bookings below the prior year due to softer construction market conditions. However, the Architecture Billings Index data and other macro indicators continue to indicate some weakness in construction-related demand.
TRS-RenTelco saw rental revenues grow slightly, with an encouraging start to the year marked by broad-based improvement across multiple equipment categories. The company's rental pipeline is up from the prior year, and utilization improved substantially to end the quarter at 65%, up from 59% in the fourth quarter.
Regarding the impact of tariffs on the business, Hanna stated that the company expects it to be a limited headwind in 2025. "We own our fleet, so the investments generating our revenue are substantially made," he explained. Cost increases for materials subject to tariffs are not significant cost drivers, and the company has purchased ahead to mitigate exposure.
The CEO emphasized that demand conditions across all business segments will be a key driver of performance in 2025. "We have good activity levels in the field related to current projects," he noted, highlighting the positive outlook for the year despite economic uncertainty.
Overall, McGrath RentCorp's first quarter results demonstrate the company's ability to adapt and grow in a challenging economic environment. As it continues to navigate the complexities of tariffs and construction market fluctuations, investors will be watching closely for further updates on its performance in 2025."
