Sunbelt Rentals Holdings, Inc.
06/23/2026 | Press release | Distributed by Public on 06/23/2026 14:05
Annual Report for Fiscal Year Ending April 30, 2026 (Form 10-K)
Management's Discussion and Analysis of Financial Condition and Results of Operations.
We have historically conducted our business through Ashtead Group plc, and therefore, our consolidated financial statements included in this Form 10-K prior to the U.S Listing present the consolidated results of operations of Ashtead Group plc and its subsidiaries. For the periods presented, Ashtead Group plc is the accounting predecessor. Sunbelt Rentals Holdings, Inc. (the "Registrant") was incorporated on February 12, 2025 and became the parent holding company of the Group upon completion of the Scheme of Arrangement on February 27, 2026. Prior to the Scheme of Arrangement, the Registrant was a company with no assets, liabilities, contingencies or commitments, and it conducted no operations prior to the date of the Scheme of Arrangement.
We have omitted discussions comparing results for the fiscal year ended April 30, 2025 and the fiscal year ended April 30, 2024, as such disclosures were included in our Registration Statement on Form 10.
Overview
We believe we are one of the largest international equipment rental companies by rental revenue, with a network of 1,611 stores across North America and the United Kingdom as of April 30, 2026. We conduct our equipment rental operations under the name "Sunbelt Rentals." We believe that Sunbelt Rentals is the second largest equipment rental business in North America and the largest equipment rental company in the United Kingdom, in each case, by rental revenue. In the year ended April 30, 2026, we generated revenue of $11,154 million, operating income of $2,181 million and adjusted operating profit of $2,500 million. See "-Key Financial Metrics-Non-GAAP Financial Measures" below for a definition and reconciliation of adjusted operating profit to the most directly comparable U.S. GAAP measure.
Our rental equipment fleet comprises an extensive range of construction, industrial and general equipment designed to meet broad, general-purpose job site needs, such as mobile elevating work platforms, skid steers, forklifts, excavators, lighting equipment and small general tools. This core equipment range is complemented by Specialty business lines, including power and HVAC, climate control, scaffold services, flooring solutions, pump solutions, trench safety, industrial tool, film and television, temporary structures, ground protection, temporary fencing, and temporary walls.
Our customers range in size and scale from multinational businesses to well-established local contractors and individual do-it-yourselfers, and include construction and industrial customers, service, repair and facility management businesses, emergency response organizations, event organizers, as well as government entities, such as municipalities and specialist contractors.
We organize and manage our operations based on both geography and the nature of our products and services. We operate in two primary geographic regions, consisting of our North American activities and assets and our U.K. activities and assets. Within North America, we further manage our business through two operational groupings, General Tool and Specialty, which reflect differences in product and service offerings, as well as our internal management structure. Accordingly, we report our results through three operational segments:
•North America - General Tool, which encompasses a broad selection of general construction and industrial equipment available to customers primarily in the United States and Canada. In addition, unless specified herein or otherwise clear from the context, references to this segment also include our limited operations in the Bahamas;
•North America - Specialty, which includes our product groups with comparatively low rental penetration in predominantly non-construction markets, available to customers in the United States and Canada; and
•United Kingdom, which delivers a comprehensive range of General Tool and Specialty products and services to customers primarily located across the United Kingdom. In addition, unless specified herein or otherwise clear from the context, references to this segment also include our limited operations in Ireland, Germany and the Netherlands.
In the year ended April 30, 2026, 58% of our revenue was attributable to the North America - General Tool segment, 33% of our revenue was attributable to the North America - Specialty segment and 9% of our revenue was attributable to the United Kingdom segment.
Key Factors Affecting Our Result of Operations
The results of our operations have been, and will continue to be, affected by many factors, some of which are beyond our control. This section sets out certain key factors we believe have affected our results of operations in the period under review and could affect our results of operations in the future.
Seasonality and Cyclicality
Our revenue and operating results remain significantly dependent on activity in the commercial construction industry in the United States, Canada and the United Kingdom. Commercial construction activity tends to increase in the summer and during extended periods of mild weather and to decrease in the winter. This results in changes in demand for our rental equipment. In addition, the commercial construction industries in the United States, Canada and the United Kingdom are cyclical industries with activity levels that tend to increase in line with GDP growth and decline during an economic downturn. We may also experience increased demand for certain equipment categories in connection with storm response and recovery efforts following natural disasters (such as hurricanes), which can affect period-to-period results. The seasonality and cyclicality of the equipment rental industry results in variable demand for our products and therefore, our revenue and operating results may fluctuate from period to period.
Fleet Rotation and Depreciation
Due to the nature of our business, our cash flows are countercyclical. This means that in times of improving markets, we invest more in our rental fleet (both to replace existing fleet and to grow the overall fleet size), typically resulting in improved earnings but lower cash flow generation from operations in times of rapid growth. As we increase our fleet size, this also results in higher depreciation costs. On the contrary, in less robust or declining markets, we invest less in our rental fleet and, as a result, typically generate stronger cash flow from operations as the cycle matures and the growth slows. To maintain a balanced fleet, we may also adjust the sale of used equipment as a result of end market conditions, thus enhancing or negatively affecting revenue from such disposals.
Currency Translation Exposure
Currency risk is predominantly translation risk, as there are no significant transactions in the ordinary course of business that take place between foreign affiliates. Although our reporting currency is the U.S. dollar, we derived 15% of our revenue for the year ended April 30, 2026 from companies that have non-U.S. dollar currencies, primarily British pounds and Canadian dollars. Consequently, any change in exchange rates between the U.S. dollar and the British pound or the Canadian dollar exposes us to translation risk and may significantly affect our consolidated results of operations and balance sheet (see also "-Quantitative and Qualitative Disclosures about Market Risk-Currency Risk" below).
Global Economic Conditions
Our operations are impacted by global economic conditions, including inflation, tariffs, interest rate fluctuations and supply chain constraints, and we take actions to modify our plans to address such economic conditions. To date, the impact from supply chain disruptions has been limited, but we may experience more severe supply chain disruptions in the future. Interest rates on our variable debt instruments have decreased in recent years. The most significant cost increases that are passed on to customers are for fuel and delivery, but there are other costs for which the pass through to customers is less direct, such as repairs and maintenance, and labor. Tariffs could result in the costs we incur being more than anticipated. The impact of inflation, tariffs and interest rate fluctuations may be significant in the future. We continue to assess the economic environment in which we operate and take appropriate actions to address the economic challenges we face.
Components of Results of Operations
Revenues
Our revenues are derived primarily from renting equipment to customers. Ancillary to our principal equipment rental business, we also generate revenue from the sale of used rental equipment, the sale of new equipment, merchandise and consumables, and the provision of certain services to support our customers. Sales and other tax amounts collected from customers and remitted to government authorities are accounted for on a net basis and, therefore, excluded from revenue.
Equipment rentals primarily includes (i) revenue generated from renting equipment to customers, including re-rent revenue generated from renting specific pieces of equipment from third-parties and then re-renting that equipment to our customers, (ii) fees for loss damage waiver, which allow customers to limit the risk of financial loss in the event our equipment is damaged or lost, and (iii) delivery and collection revenue, which relates to the fees charged to our customers for equipment delivery and collection of rental equipment.
Equipment rentals revenue is recognized on a straight-line basis over the period of the rental contract. These lease contracts are operating leases under ASC 842. As a rental contract can extend across financial reporting periods, we record accrued revenue (unbilled rental revenue) and deferred revenue at the beginning and end of each reporting period so that equipment rentals revenue is stated appropriately in the financial statements. Receivables from unbilled equipment rentals revenue are included in "Prepaid expenses and other current assets" and deferred equipment rentals revenue is included in "Accrued expenses and other liabilities" in the consolidated balance sheet. Provisions for discounts, rebates to customers and other adjustments are provided for in the period the related equipment rentals revenue is recorded.
Delivery and collection revenue is recognized when the delivery or collection, respectively, has occurred and the performance obligation is therefore fulfilled.
Sales of rental equipment comprises our revenue from the sale of used rental equipment, which is recognized when control of the asset transfers to the customer, which is typically when the asset is picked up by, or delivered to, the customer and when significant risks and rewards of ownership have passed to the customer. Revenue from the sale of rental equipment in connection with trade-in arrangements with certain manufacturers from whom we purchase new equipment is accounted for at the lower of transaction value or fair value based on independent appraisals. If the trade-in price of a unit of equipment exceeds the fair market value of that unit, the excess is accounted for as a reduction of the cost of the related purchase of new rental equipment.
Sales of new rental equipment, merchandise and consumables comprises our revenue from the sale of new rental equipment, parts, and supplies, which is recognized in the same manner as the sale of used rental equipment, as well as revenue earned from equipment management and similar services for rental customers, which is recognized as the services are provided. The types of new equipment that we sell vary by location and include a variety of tools and supplies, small equipment, safety supplies and consumables.
Cost of Revenues
Our cost of revenues is comprised of the costs incurred in connection with the rental and sale of our products and services, including depreciation of rental equipment.
Cost of equipment rentals, excluding depreciation comprises the costs associated with the rental of our equipment, such as staff costs at our stores, including salaries and related benefits and retirement costs; delivery and fuel costs; spare equipment costs; repair and maintenance costs; insurance costs; warranty claim costs; cost of consumables; variable lease costs and short-term lease costs associated with renting equipment from third-parties and then re-renting that equipment to our customers; and rent and utilities related to the local store facilities in which we operate.
Depreciation of rental equipment comprises the depreciation costs for our rental fleet. Rental equipment is recorded at cost and depreciated over the estimated useful life of the equipment to its residual value using the straight-line method.
Cost of rental equipment sales comprises the costs associated with the sale of our used equipment, including the net book value of the rental assets sold and associated sales costs, such as auction fees.
Cost of sales of new equipment, merchandise and consumables comprises the costs associated with the sale of new equipment, merchandise and consumables and related services, including the cost of merchandise and new equipment.
Selling, General and Administrative Expenses
Selling, general and administrative expenses comprise operating costs that are not directly related to our revenue generating activities. These costs primarily include sales commissions; staff costs for management and support staff, including salaries and related benefits and retirement costs; legal and professional fees; restructuring costs related to the Redomiciliation and U.S. Listing; bad debt charges; advertising expenses; technology licensing costs; and administrative overhead expenses.
Non-rental Depreciation and Amortization
Non-rental depreciation and amortization includes depreciation expenses related to property and equipment, including land and buildings, motor vehicles, and office and workshop equipment, as well as amortization of intangible assets, including customer lists and contracts, and amortization of finance lease right-of-use assets.
Interest Expense, Net
Interest expense, net comprises the difference between interest receivable on funds invested and interest payable on borrowings and lease liabilities.
Other (Income) Expense, Net
Other (income) expense, net comprises gains/losses from disposals of non-rental assets, changes due to foreign currency exchanges, gains/losses from the remeasurement of equity investments and various other miscellaneous non-operating expenses.
Provision for Income Taxes
Provision for income taxes consists of an estimate of U.S. federal and state, Canadian, U.K. and foreign income taxes based on enacted U.S. federal and state, Canadian, U.K. and foreign tax rates, as adjusted for allowable credits, deductions, uncertain tax positions, changes in the valuation of our deferred tax assets and liabilities, and changes in tax laws. We continue to maintain a valuation allowance related to specific net deferred tax assets where it is not more likely than not that the deferred tax assets will be realized.
Results of Operations
The table below summarizes our consolidated results of operations for the periods indicated.
| Year Ended April 30, | |||||||||||||||||
| (In millions) | 2026 | 2025 | 2024 | ||||||||||||||
| Revenues: | |||||||||||||||||
|
Equipment rentals
|
$ | 10,320 | $ | 9,980 |
$
|
9,630
|
|||||||||||
|
Sales of rental equipment
|
451 | 467 |
859
|
||||||||||||||
|
Sales of new equipment, merchandise and consumables
|
383 | 344 |
370
|
||||||||||||||
| Total revenues | 11,154 | 10,791 | 10,859 | ||||||||||||||
|
Cost of revenues:
|
|||||||||||||||||
|
Cost of equipment rentals, excluding depreciation
|
4,394 | 4,069 |
3,874
|
||||||||||||||
|
Depreciation of rental equipment
|
1,851 | 1,815 |
1,653
|
||||||||||||||
|
Cost of rental equipment sales
|
386 | 386 |
636
|
||||||||||||||
|
Cost of sales of new equipment, merchandise and consumables
|
233 | 201 |
219
|
||||||||||||||
| Total cost of revenues | 6,864 | 6,471 | 6,382 | ||||||||||||||
| Gross profit | 4,290 | 4,320 | 4,477 | ||||||||||||||
|
Selling, general and administrative expenses
|
1,651 | 1,385 |
1,572
|
||||||||||||||
|
Non-rental depreciation and amortization
|
458 | 436 |
394
|
||||||||||||||
| Operating income | 2,181 | 2,499 | 2,511 | ||||||||||||||
|
Interest expense, net
|
387 | 425 |
428
|
||||||||||||||
|
Other (income) expense, net
|
(7) | 4 |
(11)
|
||||||||||||||
| Income before provision for income taxes | 1,801 | 2,070 | 2,094 | ||||||||||||||
|
Provision for income taxes
|
476 | 517 |
522
|
||||||||||||||
| Net income | $ | 1,325 | $ | 1,553 | $ | 1,572 | |||||||||||
Revenues
Equipment rentals. Total equipment rentals revenue increased by $340 million, or 3%, to $10,320 million in the year ended April 30, 2026, from $9,980 million in the year ended April 30, 2025, representing 93% and 93% of total revenues in the year ended April 30, 2026 and April 30, 2025, respectively. The increase in total equipment rentals revenue arose due to increases in rental volume in both of our North American segments, despite the effects of hurricane response efforts which contributed $90 million to $100 million in the year ended April 30, 2025, and did not recur in the fiscal year ended April 30, 2026. As of April 30, 2026, our dollar utilization was 55%, compared to 54% as of April 30, 2025. The average OEC of our rental fleet increased by 3% in the year ended April 30, 2026, compared to the year ended April 30, 2025. See "-Key Financial Metrics-Key Performance Indicators" below for a definition and further information on dollar utilization.
On a segment basis, equipment rentals revenue attributable to the North America - General Tool, North America - Specialty and United Kingdom segments represented 58%, 34% and 8%, respectively, of total equipment rentals revenue in the year ended April 30, 2026, compared to 59%, 33% and 8%, respectively, in the year ended April 30, 2025.
North America - General Tool. Equipment rentals revenue attributable to the North America - General Tool segment increased by $124 million, or 2%, to $6,013 million in the year ended April 30, 2026, from $5,889 million in the year ended April 30, 2025. This increase was primarily attributable to volume growth, with a 3% increase in the average OEC, partially offset by a decrease in dollar utilization to 47% compared to 48% in the prior year, coupled with the effects of customer and product mix.
North America - Specialty. Equipment rentals revenue attributable to the North America - Specialty segment increased by $192 million, or 6%, to $3,505 million in the year ended April 30, 2026, from $3,313 million in the year ended April 30, 2025. This increase was primarily due to volume growth, with a 3% increase in the average OEC, coupled with an increase in dollar utilization to 75% compared to 73% in the prior year. We estimated that hurricane response efforts contributed $60 million to $70 million to North America - Specialty equipment rentals revenue in the year ended April 30, 2025, which did not recur in the year ended April 30, 2026.
United Kingdom. Equipment rentals revenue attributable to the United Kingdom segment increased by $24 million, or 3%, to $802 million in the year ended April 30, 2026, from $778 million in the year ended April 30, 2025. This increase was primarily due to favorable foreign exchange movements, with equipment rentals revenue in local currency (in British pounds) 2% lower compared to the year ended April 30, 2025.
Sales of rental equipment. Total revenues from the sale of rental equipment decreased by $16 million, or 3%, to $451 million in the year ended April 30, 2026, from $467 million in the year ended April 30, 2025, representing 4% of total revenues in each of the years ended April 30, 2026 and 2025. This decrease in sales of rental equipment reflects a lower volume of used equipment sales compared to the year ended April 30, 2025.
On a segment basis, revenues from the sale of rental equipment attributable to the North America - General Tool, North America - Specialty and United Kingdom segments represented 72%, 17% and 11%, respectively, of total revenues from the sale of rental equipment in the year ended April 30, 2026, compared to 72%, 17% and 11%, respectively, in the year ended April 30, 2025.
North America - General Tool. Revenues from the sale of rental equipment attributable to the North America - General Tool segment decreased by $14 million, or 4%, to $324 million in the year ended April 30, 2026, from $338 million in the year ended April 30, 2025.
North America - Specialty. Revenues from the sale of rental equipment attributable to the North America - Specialty segment decreased by $2 million, or 3%, to $77 million in the year ended April 30, 2026, from $79 million in the year ended April 30, 2025.
United Kingdom. Revenues from the sale of rental equipment attributable to the United Kingdom segment was $50 million in each of the years ended April 30, 2026 and 2025.
Sales of new equipment, merchandise and consumables. Total revenues from the sale of new equipment, merchandise, and consumables increased by $39 million, or 11%, to $383 million in the year ended April 30, 2026, from $344 million in the year ended April 30, 2025, representing 3% of total revenues in each of the years ended April 30, 2026 and 2025. This increase primarily arose in the North America - Specialty segment.
On a segment basis, revenues from the sale of new equipment, merchandise and consumables attributable to the North America - General Tool, North America - Specialty and United Kingdom segments represented 44%, 35% and 21%, respectively, of total revenues from the sale of new equipment, merchandise, and consumables in the year ended April 30, 2026, compared to 49%, 28% and 23%, respectively, in the year ended April 30, 2025.
North America - General Tool. Revenues from the sale of new equipment, merchandise and consumables attributable to the North America - General Tool segment was $170 million in each of the years ended April 30, 2026 and 2025.
North America - Specialty. Revenues from the sale of new equipment, merchandise and consumables attributable to the North America - Specialty segment increased by $38 million, or 40%, to $133 million in the year ended April 30, 2026, from $95 million in the year ended April 30, 2025.
United Kingdom. Revenues from the sale of new equipment, merchandise and consumables attributable to the United Kingdom segment increased by $1 million, or 1%, to $80 million in the year ended April 30, 2026, from $79 million in the year ended April 30, 2025.
Total revenues. For the reasons explained above, total revenues increased by $363 million, or 3%, to $11,154 million in the year ended April 30, 2026, from $10,791 million in the year ended April 30, 2025.
Cost of Revenues
Cost of equipment rentals, excluding depreciation. Cost of equipment rentals, excluding depreciation increased by $325 million, or 8%, to $4,394 million in the year ended April 30, 2026, from $4,069 million in the year ended April 30, 2025. This increase was primarily due to higher costs associated with repairs and maintenance of equipment and repositioning of rental fleet, in addition to an increase in staff costs.
Depreciation of rental equipment. Depreciation of rental equipment costs increased by $36 million, or 2%, to $1,851 million in the year ended April 30, 2026, from $1,815 million in the year ended April 30, 2025. This increase was primarily due to a larger fleet size and the continued impact of life cycle inflation on our fleet. Depreciation in the North America - General Tool segment (including non-rental depreciation) increased by $31 million, or 2%, to $1,415 million in the year ended April 30, 2026, from $1,384 million in the year ended April 30, 2025. Depreciation in the North America -
Specialty segment (including non-rental depreciation) increased by $6 million, or 1%, to $545 million in the year ended April 30, 2026, from $539 million in the year ended April 30, 2025. Depreciation in the United Kingdom segment (including non-rental depreciation) increased by $4 million, or 2%, to $175 million in the year ended April 30, 2026, from $171 million in the year ended April 30, 2025.
Cost of rental equipment sales. Cost of rental equipment sales was $386 million in each of the years ended April 30, 2026 and 2025. In the North America - General Tool segment, cost of rental equipment sales decreased by $7 million, or 3%, to $273 million in the year ended April 30, 2026, from $280 million in the year ended April 30, 2025. In the North America - Specialty segment, cost of rental equipment sales decreased by $2 million, or 3%, to $71 million in the year ended April 30, 2026, from $73 million in the year ended April 30, 2025. In the United Kingdom segment, cost of rental equipment sales increased to $38 million in the year ended April 30, 2026, compared with $33 million in the year ended April 30, 2025.
Cost of sales of new equipment, merchandise and consumables. Cost of sales of new equipment, merchandise and consumables increased by $32 million, or 16%, to $233 million in the year ended April 30, 2026, from $201 million in the year ended April 30, 2025. This primarily arose in the North America - Specialty segment, as discussed above.
Total cost of revenues. For the reasons explained above, total cost of revenues increased by $393 million, or 6%, to $6,864 million in the year ended April 30, 2026, from $6,471 million in the year ended April 30, 2025.
Selling, General and Administrative Expenses
Selling, general and administrative expenses increased by $266 million, or 19%, to $1,651 million in the year ended April 30, 2026, from $1,385 million in the year ended April 30, 2025. The year-to-date increase was driven primarily by higher stock-based compensation expense, which totaled $65 million in the fiscal year ended April 30, 2026, compared to income of $9 million in the prior year. In addition, the Company incurred $134 million of non-recurring costs related to restructuring and relisting activities during the year ended April 30, 2026, compared to $15 million in the year ended April 30, 2025.
Non-rental Depreciation and Amortization
Non-rental depreciation and amortization increased by $22 million, or 5%, to $458 million in the year ended April 30, 2026, from $436 million in the year ended April 30, 2025. This increase reflects higher depreciation expenses on our non-rental assets, including our delivery vehicle fleet and property.
Interest Expense, Net
Interest expense, net decreased by $38 million, or 9%, to $387 million in the year ended April 30, 2026, from $425 million in the year ended April 30, 2025. This decrease was due to lower average interest rates during the year ended April 30, 2026, compared to the year ended April 30, 2025.
Other (Income) Expense, Net
Other (income) expense, net increased by $11 million, to income of $7 million in the year ended April 30, 2026, from an expense of $4 million in the year ended April 30, 2025.
Net Income
For the reasons explained above, net income decreased by $228 million, or 15%, to $1,325 million in the year ended April 30, 2026, from $1,553 million in the year ended April 30, 2025.
Liquidity and Capital Resources
Sources and Uses of Cash
Our primary existing sources of liquidity are (i) cash generated from operations, (ii) cash generated from sales of tangible fixed assets (primarily used rental equipment), and (iii) borrowings available under our ABL Facility.
We anticipate that our principal short-term (over the next 12 months) and long-term needs for cash relating to our operations will be to fund (i) payment of operating expenses, (ii) purchases of rental equipment and inventory items, (iii) servicing and repayment of debt, (iv) acquisitions, (v) payment of dividends, and (vi) share repurchases. We plan to fund such cash requirements through cash provided by operating activities and through borrowings available under our ABL Facility. However, we may also seek additional financing through, for example, the issuance of equity, debt securities and/or other borrowings.
As of April 30, 2026, we had cash and cash equivalents of $29 million (of which $2 million was held in Canadian dollars and $10 million in British pounds) and an available borrowing amount of $3,302 million under our ABL Facility. We believe that our existing sources of cash, both cash provided by operating activities and available through our ABL Facility, will be sufficient to support our liquidity and capital requirements over the next 12 months.
Cash Flows
The table below presents a summary of our cash flows for the periods indicated.
|
Year Ended April 30,
|
|||||||||||||||||
| (In millions) | 2026 | 2025 | 2024 | ||||||||||||||
| Cash provided by (used in): | |||||||||||||||||
|
Operating activities
|
$ | 3,784 | $ | 3,844 |
$
|
3,664
|
|||||||||||
|
Investing activities
|
(1,925)
|
(2,318)
|
(4,428)
|
||||||||||||||
|
Financing activities
|
(1,851)
|
(1,526)
|
755
|
||||||||||||||
|
Effect of exchange rate changes
|
-
|
-
|
- | ||||||||||||||
| Net change in cash and cash equivalents | $ | 8 | $ | - | $ | (9) | |||||||||||
Cash Flows from Operating Activities
Net cash inflow provided by operating activities decreased by $60 million, or 2%, to $3,784 million in the year ended April 30, 2026, from $3,844 million in the year ended April 30, 2025, primarily due to a decrease in net income. Refer to "Results of Operations - Net Income" above for factors impacting the decrease in net income and increase in accounts receivable.
Cash Flows from Investing Activities
Net cash outflow used in investing activities decreased by $393 million, or 17%, to $1,925 million in the year ended April 30, 2026, from $2,318 million in the year ended April 30, 2025, primarily due to a reduction in payments for purchases of rental equipment, which were $1,842 million in the year ended April 30, 2026 compared to $2,251 million in the year ended April 30, 2025.
Cash Flows from Financing Activities
Net cash outflow from financing activities increased by $325 million, or 21%, to $1,851 million in the year ended April 30, 2026, from $1,526 million in the year ended April 30, 2025, primarily attributable to $1,413 million spent on share repurchases under the buyback program launched in December 2024 and consummated in the year ended April 30, 2026. There were $342 million of comparable outflows in the year ended April 30, 2025. This is partially offset by net proceeds from debt of $39 million in the year ended April 30, 2026, compared to net payments of debt of $523 million in the year ended April 30, 2025.
Borrowings
The following section summarizes certain material provisions of our long-term debt facilities and current obligations.
| April 30, | |||||||||||
| (In millions) | 2026 | 2025 | |||||||||
|
Short-term debt and current maturities of long-term debt
|
$
|
550
|
$
|
-
|
|||||||
|
Long-term debt
|
7,033
|
7,500
|
|||||||||
|
Total debt
|
$
|
7,583
|
$
|
7,500
|
|||||||
Senior notes
The Company has issued $6.2 billion principal amount in various issuances of senior notes (collectively, the "senior notes"). As of April 30, 2026, one senior note is classified as a current liability, while the others are classified as non-current.
First priority senior secured credit facility (ABL Facility)
The Company maintains an asset-based senior secured revolving credit facility, with commitments of $4,750 million available until November 2029. The amount utilized as of April 30, 2026 was $1,426 million (including letters of credit totaling $5 million).
Other
The Company was in compliance with all debt covenants that were in effect as of April 30, 2026.
See Note 14, Debt to the Consolidated Financial Statements in Part II, Item 8 "Financial Statements and Supplementary Data" of this report for further details regarding the Company's debt.
There have been no significant changes to the Company's policies on accounting for, valuing or managing the risk of financial instruments during the year ended April 30, 2026.
Off-Balance Sheet Arrangements
We had no material off-balance sheet arrangements as of April 30, 2026.
Critical Accounting Policies and Estimates
We prepare our consolidated financial statements in accordance with GAAP. The preparation of the consolidated financial statements in conformity with GAAP requires management to make judgments, estimates and assumptions that affect the reported amounts in our consolidated financial statements. Our significant accounting policies are disclosed in Note 2 to our consolidated financial statements included elsewhere in this report.
The following critical accounting policies are important to the portrayal of our financial condition, as well as our results of operations, and require some of management's most subjective and complex judgments. The accounting for some of these matters involves the making of estimates based on current facts, circumstances and assumptions that, in management's judgment, could change in a manner that would materially affect management's future estimates with respect to such matters and, accordingly, could cause the Company's future reported financial condition and results of operations to differ materially from those that it is currently reporting based on management's current estimates.
Allowance for Credit Losses
We state accounts receivable net of allowances. The allowances for credit losses reflect the Company's estimate of the amount of receivables that it will be unable to collect based on historical write-off experience reflecting the level of uncollected receivables over the last year within each business, adjusted for factors that are specific to the receivables, the industry in which the Company operates and the economic environment. Adjustments to the loss allowances are recognized in the income statement. Accounts receivables are written off when recoverability is assessed as being remote while subsequent recoveries of amounts previously written off are credited to the income statement.
Useful Lives, Salvage Values and Impairment of Rental Equipment
Rental equipment and property and equipment are recorded at cost and depreciated over their estimated useful lives using the straight-line method. Most types of rental equipment are depreciated to a salvage value of 10% to 15% of cost, although the range of salvage values used varies between 0% to 35%. Rental equipment is depreciated regardless of whether it is out on rent.
The useful life of an asset is determined based on our estimate of the period over which the asset will generate revenues, and the salvage value is determined based on our estimate of the minimum value we will realize from the asset after such period. We review such periods periodically for reasonableness, and may be required to change these estimates based on changes in our industry or other changing circumstances. If these estimates change in the future, we may be required to recognize increased or decreased depreciation expense for these assets.
As of April 30, 2026, we estimate that a one year increase or decrease in the useful lives of all of our rental equipment would cause our annual expenses related to depreciation of rental equipment to decrease or increase by $202 million and $251 million, respectively, and that a one year increase or decrease in the useful lives of all of our property and equipment would cause our annual non-rental depreciation and amortization expenses to decrease or increase by $42 million and $56 million, respectively. Similarly, if the estimated salvage value of all of our rental equipment were to increase or decrease by one percentage point, we estimate that our annual expenses related to depreciation of rental equipment would change by $21 million. If the expenses related to depreciation of rental equipment or to non-rental depreciation and amortization were to increase or decrease as a result of a hypothetical change in either useful lives or, in
the case of rental equipment, salvage values, in both cases this would typically result in a proportional increase or decrease in the gross profit we would recognize upon the ultimate disposal of the asset.
Furthermore, at each reporting date, management further assesses whether there are events or changes in circumstances that indicate that the rental equipment's carrying amount may not be recoverable. Management judgment is necessary in identifying impairment indicators, including the period over which assets have not been rented, the period any assets have been down for repair, the current market conditions and the level of return on investment generated from the assets.
Business Combinations
We have made multiple acquisitions in the past and during the periods presented in this report and may continue to make acquisitions in the future. The assets acquired and liabilities assumed are recorded based on their respective fair values at the date of acquisition. The consideration transferred in a business combination is the fair value at the acquisition date of the assets transferred and the liabilities assumed by the Company and includes the fair value of any contingent consideration arrangement. The estimated range of undiscounted payment in respect of the contingent consideration was zero to $33 million, zero to $23 million and zero to $37 million as of April 30, 2026, 2025 and 2024, respectively. Long-lived assets (principally rental equipment), goodwill and other intangible assets generally represent the largest components of the acquisition assets acquired. Rental equipment is valued utilizing either a cost or market approach, depending on the asset being valued and the availability of market data. Goodwill is calculated as the excess of the cost of the acquired business over the net of the fair value of the assets acquired and the liabilities assumed. The intangible assets that the Company has acquired are primarily customer relationships and non-compete agreements, which are valued based on an excess earnings or income approach based on projected cash flows and may be amortized over the useful life if they are determined to be finite-lived intangible assets.
Determining the fair value of the assets and liabilities acquired can be judgmental in nature and can involve the use of significant estimates and assumptions. The estimates and assumptions used in valuing acquired assets include, but are not limited to, the amount and timing of projected future cash flows, discount rates used to determine the present value of these cash flows and the useful lives of the assets. Although the Company's fair value estimates are based upon assumptions believed to be reasonable, these estimates and assumptions are inherently uncertain and subject to refinement. As a result, during the measurement period of one year from the acquisition date, the Company may record adjustments to the assets acquired and liabilities assumed with the corresponding offset to goodwill. Upon conclusion of the measurement period or final determination of fair values of the purchase price of an acquisition, whichever comes first, any subsequent adjustments are recorded in earnings on the income statement.
As part of an acquisition, the Company will also acquire other assets and assume liabilities. These other assets and liabilities typically include, but are not limited to, inventory, accounts receivable, accounts payable and other working capital items. Due to their short-term nature, the fair values of these other assets and liabilities generally approximate the book values on the acquired entities' balance sheets. Acquisition-related expenses are recognized separately from the business combination and expensed as selling, general and administrative expenses in the income statement as incurred.
Evaluation of Goodwill Impairment
We test the recoverability of goodwill on an annual basis and at interim periods when events or circumstances indicate that an impairment loss may have been incurred. The annual analysis is conducted in the fourth quarter each year.
When conducting the goodwill impairment test, we compare the fair value of our reporting units with the carrying value. The goodwill impairment test is conducted at the reporting unit level, which is the same as, or one level below, an operating segment for which discrete financial information is available and regularly reviewed by segment management. If the carrying value of the reporting unit is greater than its fair value, the Company recognizes an impairment charge for the amount equal to that excess, limited to the total amount of goodwill allocated to the reporting unit.
Prior to conducting an impairment test, we may first assess qualitative factors to determine whether it is more-likely-than-not that the fair value of a reporting unit is less than its carrying amount as a basis for determining whether it is necessary to perform the quantitative goodwill impairment test. If a quantitative impairment test is performed, the fair value of the reporting unit is estimated using a combination of an income approach on the present value of estimated future cash flows and a market approach based on published earnings multiples of comparable entities with similar operations and economic characteristics as well as acquisition multiples paid in recent transactions. As part of our income approach, we make several assumptions and estimates.
The following assumptions are significant to our income approach:
•Business projections: We make assumptions about levels of rental market activity, inflation and costs. These assumptions drive our budget and forecasting assumptions for pricing, rental demand and costs within our business, and feed into our budgeting and forecasting processes, which result in projected income statements, balance sheets and cash flow projections over a three-year horizon.
•Long-term growth rate and terminal value: Beyond the initial three-year period of business projections, we utilize an assumed long-term growth rate for a further seven years, representing the expected rate at which a reporting unit's cash flow is projected to grow. At the end of the ten-year period projected by the business projections and application of long-term growth rate, we calculate a terminal value based on relevant market multiples.
•Discount rates: Each reporting unit's estimated future cash flows are discounted at a rate that is consistent with a weighted-average cost of capital that is likely to be expected by a market participant.
As part of our market approach, we estimate fair value based on multiples paid in recent acquisitions of companies by ourselves and peer-group companies.
In connection with our goodwill impairment test that was conducted during the fiscal years ended April 30, 2026, 2025 and 2024, we bypassed the optional qualitative assessment for each reporting unit and quantitatively compared the fair values of our reporting units with their carrying values.
While we believe that our discounted cash flows are based upon reasonable and appropriate assumptions, which are weighted for their likely probability of occurrence, about our underlying business activities, many of the factors used in assessing the fair value are outside of the control of management. Accordingly, the underlying assumptions and estimates may change in the future, which could materially affect the estimate of the fair value of a reporting unit and, thus, the likelihood and amount of potential impairment.
There were no indicators of goodwill impairment during the fiscal years ended April 30, 2025 and 2024. During the fiscal year ended April 30, 2026, an impairment indicator was identified in the U.K. reporting unit as a result of the operational restructure of the United Kingdom segment. Accordingly, management undertook an interim quantitative goodwill impairment test for the U.K. reporting unit as of October 31, 2025, followed by an annual test as of March 31, 2026. No impairment was recognized as a result of these tests, but the fair value of the United Kingdom reporting unit was not substantially in excess of its carrying value and hence is sensitive to changes in key assumptions, including the discount rate, terminal value, projected revenue growth, EBITDA margin, and capital expenditure requirements. Future modest adverse changes in actual or forecasted operating results, market multiples, discount rates, capital expenditure requirements, or other market participant assumptions could result in the fair value of the U.K. reporting unit declining below its carrying value and could require the Company to recognize a goodwill impairment charge in a future period.
Income Taxes
We account for income taxes under the asset and liability method. Under this method, deferred tax assets and liabilities are recognized based upon the estimated future tax consequences attributable to differences between the financial statement carrying amount of existing assets and liabilities and their respective tax basis, as well as operating loss and tax credit carryforwards. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income tax expense (benefit) in the period the tax rates are enacted.
The Company's deferred tax assets are reduced by a valuation allowance if, based on the weight of available evidence, it is more likely than not (a likelihood of more than 50%) that some portion or all of the deferred tax assets will not be realized. We evaluate the realizability of deferred tax assets for each of the jurisdictions in which we operate by assessing all positive and negative evidence. This includes historical operating results, known or planned operating developments, the period of time over which certain temporary differences will reverse, consideration of the reversal of certain deferred tax liabilities, tax law carry back capability in the particular country, and prudent and feasible tax planning strategies. After evaluation of these factors, if the deferred tax assets are expected to be realized within the tax carryforward period allowed for that specific jurisdiction, we would conclude that no valuation allowance would be required. To the extent that the deferred tax assets exceed the amount that is expected to be realized within the tax carryforward period for a particular jurisdiction, the Company establishes a valuation allowance.
We have historically considered the undistributed earnings of foreign subsidiaries to be indefinitely reinvested, and accordingly, no taxes have been provided on such earnings. We regularly review our cash position and determination of indefinite reinvestment of foreign earnings. If it is determined that all or a portion of such foreign earnings would be repatriated, we may be subject to additional foreign withholding taxes and U.S. state income taxes.
We are subject to ongoing tax examinations and assessments in various jurisdictions, and accruals for tax contingencies are established based on the probable outcomes of such examinations. We recognize benefits from tax positions only if it is more likely than not that the tax position will be sustained on examination by the taxing authorities, based on the technical merits of the positions. The tax benefits recognized in the combined financial statements from such positions are measured as the largest amount of tax benefit that is greater than 50% likely of being realized upon settlement. Judgment is required in evaluating tax positions and determining unrecognized tax benefits, which could increase or decrease our effective tax rate as well as impact our operating results. We regularly re-evaluate the technical merits of our tax positions and may recognize the benefit of a tax position in certain circumstances, including when: (1) a tax examination is completed; (2) applicable tax laws change, including through a tax case ruling or legislative guidance; or (3) the applicable statute of limitations expires.
Segment Information
Our reportable operating segments are: (i) North America - General Tool, (ii) North America - Specialty, and (iii) the United Kingdom (see "Segment Information" under Item 8 "Financial Statements and Supplementary Data" for further information). This division reflects the basis upon which we review the performance and allocate resources to the business.
The Company manages debt, its lease portfolio, and taxation centrally, rather than by operating segments. Accordingly, segmental costs are stated excluding the impact of ASC 842 lease accounting in relation to the Company's property leases, and before interest and taxation, which are reported as central cost items. There are no material sales between the operating segments.
Our Chief Operating Decision Maker (the "CODM"), is the primary individual in control of resource allocation between the segments. Segment performance and resource allocation are evaluated based on adjusted segment operating profit. The most significant allocation determinations made by the CODM using adjusted segment operating profit relate to purchases of rental equipment. These determinations are generally made throughout the year.
In addition to segment results, we also report capital expenditure and assets by operating segment. Capital expenditure represents additions to rental equipment, property and equipment, and includes additions through the acquisition of businesses. Operating segment assets exclude corporate assets, such as cash and cash equivalents, corporate facilities, other intangible assets, and tax assets.
The table below presents selected financial information by reportable segment.
| (In millions) |
North America - General Tool |
North America - Specialty |
United Kingdom |
||||||||||||||
|
Year ended April 30, 2026
|
|||||||||||||||||
|
Equipment rentals
|
$
|
6,013
|
$
|
3,505
|
$
|
802
|
|||||||||||
|
Sales of rental equipment
|
324
|
77
|
50
|
||||||||||||||
|
Sales of new equipment, merchandise and consumables
|
170
|
133
|
80
|
||||||||||||||
| Total revenues | 6,507 | 3,715 | 932 | ||||||||||||||
|
Cost of rental equipment sales
|
(273)
|
(71)
|
(38)
|
||||||||||||||
|
Staff costs(1)
|
(1,325)
|
(716)
|
(267)
|
||||||||||||||
|
Depreciation
|
(1,415)
|
(545)
|
(175)
|
||||||||||||||
|
Other segment items(2)
|
(1,562)
|
(1,207)
|
(393)
|
||||||||||||||
| Adjusted segment operating profit | $ | 1,932 | $ | 1,176 | $ | 59 | |||||||||||
|
Year ended April 30, 2025
|
|||||||||||||||||
|
Equipment rentals
|
$
|
5,889
|
$
|
3,313
|
$
|
778
|
|||||||||||
|
Sales of rental equipment
|
338
|
79
|
50
|
||||||||||||||
|
Sales of new equipment, merchandise and consumables
|
170
|
95
|
79
|
||||||||||||||
| Total revenues | 6,397 | 3,487 | 907 | ||||||||||||||
|
Cost of rental equipment sales
|
(280)
|
(73)
|
(33)
|
||||||||||||||
|
Staff costs(1)
|
(1,224)
|
(677)
|
(258)
|
||||||||||||||
|
Depreciation
|
(1,384)
|
(539)
|
(171)
|
||||||||||||||
|
Other segment items(2)
|
(1,416)
|
(1,060)
|
(372)
|
||||||||||||||
| Adjusted segment operating profit | $ | 2,093 | $ | 1,138 | $ | 73 | |||||||||||
| (In millions) |
North America - General Tool |
North America - Specialty |
United Kingdom |
||||||||||||||
|
Year ended April 30, 2024
|
|||||||||||||||||
|
Equipment rentals
|
$
|
5,826
|
$
|
3,062
|
$
|
742
|
|||||||||||
|
Sales of rental equipment
|
721
|
73
|
65
|
||||||||||||||
|
Sales of new equipment, merchandise and consumables
|
174
|
115
|
81
|
||||||||||||||
| Total revenues | 6,721 | 3,250 | 888 | ||||||||||||||
|
Cost of rental equipment sales
|
(530)
|
(66)
|
(40)
|
||||||||||||||
|
Staff costs(1)
|
(1,199)
|
(696)
|
(267)
|
||||||||||||||
|
Depreciation
|
(1,259)
|
(470)
|
(164)
|
||||||||||||||
|
Other segment items(2)
|
(1,339)
|
(1,054)
|
(364)
|
||||||||||||||
| Adjusted segment operating profit | $ | 2,394 | $ | 964 | $ | 53 | |||||||||||
(1)Staff costs comprise salaries and related benefits and retirement costs.
(2)Other segment items consist of spares, vehicle, facility and other miscellaneous costs.
Adjusted segment operating profit
North America - General Tool. In the North America - General Tool segment, equipment rentals revenue increased $124 million, or 2%, in the fiscal year ended April 30, 2026, driven primarily through volume growth with average original equipment cost increasing 3%, offset modestly by dollar utilization decreasing to 47%, from 48% in the fiscal year ended April 30, 2025. This increase in equipment rentals revenue was offset by increases in certain variable costs of the business. Staff costs increased by $101 million, or 8%, and other variable costs such as internal rental repairs and costs to reposition our fleet to maximize utilization increased as the business worked to maximize its fleet available to rent. Adjusted segment operating profit decreased by $161 million, or 8%, to $1,932 million in the year ended April 30, 2026, from $2,093 million in the year ended April 30, 2025.
North America - Specialty. In the North America - Specialty segment, equipment rentals revenue increased $192 million, or 6%, in the year ended April 30, 2026, with average original equipment cost increasing 3%, coupled with dollar utilization increasing to 75% compared to 73% in the prior year. We estimated that equipment rentals revenue in the fiscal year ended April 30, 2025 related to the hurricane storm response was $60 million to $70 million . There were no comparable weather events in the fiscal year ended April 30, 2026. This increase in equipment rentals was offset by increases in certain variable costs of the business. Staff costs increased by $39 million, or 6%, and other variable costs such as internal rental repairs and costs to reposition our fleet to maximize utilization increased as the business worked to maximize its fleet available to rent. Adjusted segment operating profit increased by $38 million, or 3%, to $1,176 million in the year ended April 30, 2026, from $1,138 million in the fiscal year ended April 30, 2025.
United Kingdom. In the United Kingdom segment, adjusted segment operating profit decreased $14 million, or 19%, to $59 million in the year ended April 30, 2026, from $73 million in the year ended April 30, 2025. The decrease in adjusted segment operating profit arose primarily due to an increase in staff costs of 3% and an increase in depreciation of 2%.
Please see "Results of Operations" above for a further discussion of our segment results during the periods presented.
Key Financial Metrics
We use the following key performance indicators ("KPIs") and non-GAAP financial measures to analyze our business performance and financial position and to develop strategic plans, which we believe provide useful information to the market to aid in understanding and evaluating our results of operations and financial position in the same manner as our management team. Certain judgments and estimates are inherent in our process to calculate these metrics. Certain of these metrics are operating statistics that may not be derived from our consolidated financial statements. These metrics are presented for supplemental information purposes only, should not be considered a substitute for financial information presented in accordance with U.S. GAAP, and may differ from similarly titled metrics or measures presented by other companies. See "Non-GAAP Financial Measures" below for our definitions of these non-GAAP financial measures, information about how and why we use these non-GAAP financial measures and a reconciliation of each of these non-GAAP financial measures to its most directly comparable financial measure calculated in accordance with U.S. GAAP.
The following table sets forth a summary of the key financial metrics.
|
($ in millions, unless otherwise stated)
|
Year ended April 30,
|
||||||||||||||||
| 2026 | 2025 | 2024 | |||||||||||||||
|
Net income
|
$
|
1,325
|
$
|
1,553
|
$
|
1,572
|
|||||||||||
|
Net income margin
|
12
|
%
|
14
|
%
|
14
|
%
|
|||||||||||
|
EBITDA(1)
|
$
|
4,497
|
$
|
4,746
|
$
|
4,569
|
|||||||||||
|
EBITDA margin (1)
|
40
|
%
|
44
|
%
|
42
|
%
|
|||||||||||
|
Adjusted EBITDA(1)
|
$
|
4,677
|
$
|
4,752
|
$
|
4,661
|
|||||||||||
|
Adjusted EBITDA margin(1)
|
42
|
%
|
44
|
%
|
43
|
%
|
|||||||||||
|
Net cash provided by operating activities
|
$
|
3,784
|
$
|
3,844
|
$
|
3,664
|
|||||||||||
|
Free cash flow(1)
|
2,055
|
1,675
|
126
|
||||||||||||||
|
Operating income
|
2,181
|
2,499
|
2,511
|
||||||||||||||
|
Adjusted operating profit(1)
|
2,500
|
2,615
|
2,735
|
||||||||||||||
|
Dollar utilization
|
|||||||||||||||||
|
North America - General Tool
|
47
|
%
|
48
|
%
|
51
|
%
|
|||||||||||
|
North America - Specialty
|
75
|
%
|
73
|
%
|
74
|
%
|
|||||||||||
|
United Kingdom
|
53
|
%
|
53
|
%
|
53
|
%
|
|||||||||||
|
Original equipment cost
|
|||||||||||||||||
|
North America - General Tool
|
$
|
12,946
|
$
|
12,523
|
$
|
11,940
|
|||||||||||
|
North America - Specialty
|
4,828
|
4,523
|
4,406
|
||||||||||||||
|
United Kingdom
|
1,457
|
1,521
|
1,413
|
||||||||||||||
(1)Non-GAAP financial measure. See "Non-GAAP Financial Measures" below for definitions and reconciliations to the most directly comparable U.S. GAAP measure.
Key Performance Indicators
We use the KPIs "dollar utilization" and "original equipment cost" (or "OEC") to evaluate our business, measure our performance, identify trends and make business decisions. These measures are not directly comparable to, and should not be considered a substitute for, financial information presented in accordance with U.S. GAAP, and may differ from similarly titled metrics or measures presented by other companies.
Dollar utilization
We consider "dollar utilization" to be a KPI on a segment basis. Dollar utilization reflects the ratio of rental revenue earned from equipment compared with the original cost of equipment. Dollar utilization is calculated as (i) revenue from equipment rentals in each month during the preceding twelve-month period divided by (ii) average original equipment cost of our fleet measured during such period, in each case on a segment basis. Dollar utilization is influenced by various factors, including the average original equipment cost of our rental fleet, the level of physical utilization of our rental fleet, customer rental rates, ancillary rental revenues, inflation, as well as customer and product mix.
Management believes that dollar utilization provides useful information to investors and management to demonstrate how effectively we recover value from our rental assets. Management uses dollar utilization when reviewing operating performance on a segment basis and to help inform capital allocation decisions within the business.
Original equipment cost
We consider original equipment cost to be a KPI on a segment basis. OEC reflects the original cost of our equipment on rent.
Management believes that OEC, along with dollar utilization, provide useful information to investors and management to demonstrate the utilization of our rental equipment. Management uses OEC when reviewing operating performance on a segment basis and to help inform capital allocation decisions within the business.
Non-GAAP Financial Measures
The consolidated financial statements included elsewhere in this document have been prepared in accordance with U.S. GAAP. However, management believes that certain non-GAAP financial measures provide additional meaningful
financial information that may be relevant when assessing its ongoing performance. We use the non-GAAP financial measures "adjusted operating profit," "EBITDA," "adjusted EBITDA," "EBITDA margin," "adjusted EBITDA margin," and "free cash flow." These financial measures are not defined or recognized under U.S. GAAP and are presented because we believe that these measures provide both management and users of our consolidated financial statements with useful additional information when evaluating our operating and financial performance. However, these non-GAAP financial measures should not be considered in isolation or as a substitute for the financial information prepared and presented in accordance with U.S. GAAP. They should not be viewed as alternatives to operating income (loss), net income (loss), operating cash flows, or other measures of financial performance or liquidity presented in accordance with U.S. GAAP. Consequently, the methodology used for their calculation may not be consistent with that adopted by other companies and, therefore, the non-GAAP measures presented may not be comparable with those of other companies. Some of the limitations of non-GAAP measures are that: (i) they do not reflect our cash expenditures or future requirements for capital investments or contractual commitments; (ii) they do not reflect changes in, or cash requirements for, our working capital needs; and (iii) they do not reflect the significant interest expense or cash requirements necessary to service interest or principal payments on our debt.
EBITDA, EBITDA margin, adjusted EBITDA, and adjusted EBITDA margin
We use the non-GAAP measures "EBITDA," "EBITDA margin," "adjusted EBITDA," and "adjusted EBITDA margin" to evaluate our overall financial performance. The composition of these measures is not addressed or prescribed by U.S. GAAP. We define EBITDA as net income before provision for income taxes, interest expense, net, depreciation of rental equipment and non-rental depreciation and amortization. Adjusted EBITDA represents EBITDA before stock-based compensation expense, net and restructuring costs, which in the fiscal year ended April 30, 2025 relate to costs associated with the Redomiciliation and U.S. Listing and in the year ended April 30, 2026 relate to costs associated with the Redomiciliation and U.S. Listing and the operational restructure of the United Kingdom segment. These items are excluded from adjusted EBITDA to allow investors to make a more meaningful comparison between our core performance over different periods of time, as well as with those of similar companies. EBITDA margin is defined as EBITDA divided by total revenues. Adjusted EBITDA margin is defined as adjusted EBITDA divided by total revenues.
Management believes that EBITDA, EBITDA margin, adjusted EBITDA, and adjusted EBITDA margin, when viewed with the Company's results under U.S. GAAP and the accompanying reconciliations, provide useful information about our operating performance and period-over-period growth, and provide additional information that is useful for evaluating the operating performance of our core business without regard to potential distortions. Additionally, management believes that EBITDA and adjusted EBITDA help investors gain an understanding of the factors and trends affecting our ongoing cash earnings, from which capital investments are made and debt is serviced.
The table below presents a reconciliation of the non-GAAP measures EBITDA and adjusted EBITDA to net income, as well as the EBITDA margin and adjusted EBITDA margin to net income margin, which in each case represents in management's view, the most directly comparable U.S. GAAP measure, for the periods indicated.
| Year Ended April 30, | |||||||||||||||||
| ($ in millions, unless otherwise stated) | 2026 | 2025 | 2024 | ||||||||||||||
|
Net income
|
$ | 1,325 | $ | 1,553 | $ | 1,572 | |||||||||||
|
Provision for income taxes
|
476
|
517
|
522
|
||||||||||||||
|
Interest expense, net
|
387
|
425
|
428
|
||||||||||||||
|
Depreciation of rental equipment
|
1,851
|
1,815
|
1,653
|
||||||||||||||
|
Non-rental depreciation and amortization
|
458
|
436
|
394
|
||||||||||||||
| EBITDA | $ | 4,497 | $ | 4,746 | $ | 4,569 | |||||||||||
|
Stock based compensation expense, net
|
65
|
(9)
|
92
|
||||||||||||||
|
Restructuring costs:(1)
|
|||||||||||||||||
|
Staff costs
|
33
|
4
|
-
|
||||||||||||||
|
Other restructuring costs
|
82
|
11
|
-
|
||||||||||||||
| Adjusted EBITDA | $ | 4,677 | $ | 4,752 | $ | 4,661 | |||||||||||
|
Total revenues
|
$
|
11,154
|
$
|
10,791
|
$
|
10,859
|
|||||||||||
|
Net income margin(2)
|
12% | 14% | 14% | ||||||||||||||
| EBITDA margin | 40% | 44% | 42% | ||||||||||||||
| Adjusted EBITDA margin | 42% | 44% | 43% | ||||||||||||||
(1)Restructuring costs relate to staff and other costs incurred in relation to the Redomiciliation and U.S. Listing and, in the year ended April 30, 2026, the operational restructure of the United Kingdom segment.
(2)Net income margin is calculated as net income divided by total revenues.
Free cash flow
We use the non-GAAP measure "free cash flow" to reflect the cash retained by the Company prior to discretionary expenditure on acquisitions and returns to shareholders. The composition of these measures is not addressed or prescribed by U.S. GAAP. We define free cash flow as net cash provided by operating activities less net expenditure on rental and non-rental equipment (comprising payments for purchases of equipment less disposal proceeds received in relation to sales of equipment).
Management believes that free cash flow provides useful information to management and investors as an additional liquidity measure because it measures the amount of cash available, after net expenditures on rental and non-rental equipment, for activities such as making discretionary expenditures on acquisitions and providing returns to shareholders.
The table below presents a reconciliation of the non-GAAP measure free cash flow to net cash provided by operating activities, which represents, in management's view, the most directly comparable U.S. GAAP measure, for the periods indicated.
| Year Ended April 30, | |||||||||||||||||
| (In millions) | 2026 | 2025 | 2024 | ||||||||||||||
|
Net cash provided by operating activities
|
$ | 3,784 | $ | 3,844 | $ | 3,664 | |||||||||||
|
Payments for purchases of rental equipment
|
(1,842)
|
(2,251)
|
(3,759)
|
||||||||||||||
|
Payments for non-rental property and equipment
|
(352)
|
(441)
|
(659)
|
||||||||||||||
|
Proceeds from sales of rental equipment
|
424
|
462
|
832
|
||||||||||||||
|
Proceeds from disposal of non-rental property and equipment
|
41
|
61
|
48
|
||||||||||||||
| Free cash flow | $ | 2,055 | $ | 1,675 | $ | 126 | |||||||||||
Adjusted operating profit
We use the non-GAAP measure "adjusted operating profit" to evaluate the underlying profitability of our core operations. The composition of this measure is not addressed or prescribed by U.S. GAAP. We define adjusted operating profit as operating income after other income (expense), net, and before amortization of acquired intangibles, stock-based compensation expense, net, and restructuring costs, which in the year ended April 30, 2026 relate to costs associated with the Redomiciliation and U.S. Listing and the operational restructure of the United Kingdom segment.
Management believes that adjusted operating profit provides useful information to management and investors about the Company's underlying profitability without regard to non-core items that may not be indicative of our main business activities, thus allowing for a more meaningful comparison between our core performance over different periods of time, as well as those of other similar companies.
The table below presents a reconciliation of the non-GAAP measure adjusting operating profit to operating income, which represents, in management's view, the most directly comparable U.S. GAAP measure, for the periods indicated.
| Year Ended April 30, | |||||||||||||||||
| (In millions) | 2026 | 2025 | 2024 | ||||||||||||||
|
Operating income
|
$ | 2,181 | $ | 2,499 | $ | 2,511 | |||||||||||
|
Other income (expense), net
|
7
|
(4)
|
11
|
||||||||||||||
|
Amortization of acquired intangibles
|
113
|
114
|
121
|
||||||||||||||
|
Stock based compensation expense, net
|
65
|
(9)
|
92
|
||||||||||||||
|
Restructuring costs:(1)
|
|||||||||||||||||
|
Staff costs
|
33
|
4
|
-
|
||||||||||||||
|
Impairment
|
19
|
-
|
-
|
||||||||||||||
|
Other restructuring costs
|
82
|
11
|
-
|
||||||||||||||
|
Adjusted operating profit
|
$ | 2,500 | $ | 2,615 | $ | 2,735 | |||||||||||
(1)Restructuring costs relate to staff, impairment and other costs incurred in relation to the Redomiciliation and U.S. Listing and, in the year ended April 30, 2026, the operational restructure of the United Kingdom segment.
Sunbelt Rentals Holdings, Inc. published this content on June 23, 2026, and is solely responsible for the information contained herein. Distributed via EDGAR on June 23, 2026 at 20:05 UTC. If you believe the information included in the content is inaccurate or outdated and requires editing or removal, please contact us at [email protected]