McGrath RentCorp Rises Above Challenges to Deliver Strong Q4 Results
McGrath RentCorp, a leading provider of modular and portable storage solutions, has reported strong fourth quarter 2024 results, despite navigating some tough market demand conditions. The company's total revenues increased by 10% and adjusted EBITDA grew by 5% compared to the same period in 2023.
Joe Hanna, Chief Executive Officer of McGrath RentCorp, expressed his satisfaction with the performance, which was driven by continued progress from the company's modular strategic growth initiatives. Mobile Modular had a strong quarter, with rental revenues growing 8% and sales revenues increasing by 32%. Both the commercial business and education rentals also experienced growth during the quarter.
The company's commercial wins were geographically broad-based and included various market verticals such as government and technology. Its Education business benefited from modernization and growth projects, encompassing both public and private school customers. However, utilization dipped year-over-year to 75.1%, reflecting some delays and softness in the demand environment.
Despite this, rental revenue gains from pricing optimization and growth in Mobile Modular Plus services more than offset lower units on rent for the quarter. Mobile Modular's strong sales growth reflects further progress with the company's new modular sales initiative, providing additional value to customers and benefiting from increasing interest in new modular units as an attractive solution for construction projects.
The Portable Storage business experienced a decline in rental revenues by 15%, primarily due to less activity in commercial construction driven by high interest rates. TRS-RenTelco's rental revenues also declined by 9%, reflecting the industry-wide slowdown in test and measurement equipment markets. However, the rental revenues for TRS held relatively steady throughout 2024.
For the full year, McGrath RentCorp reported a 10% growth in both revenue and adjusted EBITDA, driven by a strong focus on execution and solid progress with modular growth initiatives for additional services and new equipment sales. Joe Hanna expressed his appreciation to all team members for their consistent desire to provide an exceptional customer experience.
Looking ahead, the company is well-positioned for future growth and success. With its resilient performance in 2024, McGrath RentCorp has demonstrated its ability to navigate challenges and deliver strong results. As the company continues to execute on its strategies and focus on long-term health, investors can expect a promising outlook for 2025.
