10-Q · April 29, 2026
McGrath RentCorp's Q1 2026 results indicate slight revenue growth but declining profitability, with revenue increasing 2% year-over-year to $198.5 million. However, net income diminished by 4% to $27.0 million and…
Earnings analysis · 10-Q
MGRC earnings analysis
Filed July 29, 2026 · Our reading of the company's report
The latest report
McGrath RentCorp reported Q2 revenue of $221.1 million, down 6% year over year, and diluted EPS of $1.39, down 5%, as weaker Mobile Modular sales and an Enviroplex sales decline outweighed rental growth and a strong…
Read full summary
McGrath RentCorp reported Q2 revenue of $221.1 million, down 6% year over year, and diluted EPS of $1.39, down 5%, as weaker Mobile Modular sales and an Enviroplex sales decline outweighed rental growth and a strong TRS-RenTelco quarter. Gross margin was 48.8% and operating margin was 23.3%; both improved sequentially versus Q1, but Q2 gross profit declined $2.8 million year over year and selling and administrative expense rose $2.9 million. Cash generation remained solid at $105.7 million for the first half, though $118.4 million of investing outflows reflect materially higher rental-equipment investment.
Gross and operating margin
How much of each revenue dollar the business keeps.
One point per quarterly or annual filing. Both margins are shares of that report's revenue.
From revenue to operating profit
Where each $100 of revenue went in this report.
Cost of sales, operating expenses, and what remained. Figures are rounded to whole dollars.
Where revenue came from
The business segments reported by the company.
Shares of the segments disclosed in this filing, largest first.
How we read each report
Our analysis across the last few reports.
Our model's reading of each filing, not the share price or the market's reaction. Annual and quarterly reports each occupy one position.
Reported figures
- Earnings per share
- $1.39
What stood out
-
Core rental revenue remained resilient
Q2 rental operations revenue grew despite the consolidated decline: Mobile Modular rental operations rose $3.9 million to $118.0 million, while TRS-RenTelco rental operations increased $5.1 million to $33.1 million.
-
TRS-RenTelco delivered strong growth
TRS-RenTelco was the clear growth driver, with revenue up $6.1 million (17%) to $42.6 million, gross profit up $5.8 million (35%) to $22.2 million, and pre-tax income up $4.8 million (60%) to $12.8 million.
-
Sequential profitability rebounded
Sequential earnings and margins improved: Q2 revenue of $221.1 million was up from $199 million in Q1, diluted EPS of $1.39 rose from $1.10, and operating margin increased to 23.3% from 21.9%.
-
Operating cash flow remained solid
Operating cash flow was $105.7 million for the first six months of 2026, only $4.0 million below the prior-year period's $109.7 million, despite six-month net income declining $3.5 million to $60.7 million.
-
Liquidity and covenant capacity are sound
Liquidity headroom remains substantial: $399.9 million was outstanding under credit facilities at June 30, leaving $325.1 million of borrowing capacity; leverage was 1.65x versus the 2.75x covenant maximum.
-
Capital returns continued
The board raised the quarterly cash dividend 2% year over year to $0.495 per share, while the company repurchased 250,000 shares for $27.2 million during the first half.
What to watch
-
Revenue and EPS declined and missed estimates
Q2 revenue fell $14.5 million (6%) year over year to $221.1 million and diluted EPS declined $0.07 (5%) to $1.39; both were below consensus estimates of $236.7 million and $1.46, respectively.
-
Modular and classroom sales weakened
Mobile Modular sales revenue declined $9.3 million (23%) to $31.2 million, while Enviroplex sales revenue was $15.3 million lower year over year; these declines drove lower consolidated sales activity.
-
Portable Storage margins remain pressured
Portable Storage profitability deteriorated despite $23.5 million of quarterly revenue: pre-tax income fell $2.2 million (34%) to $4.4 million, and rental-related-service margin was negative 18% because of higher trucking costs.
-
Elevated capex raises funding needs
Investment outpaced operating cash generation in the first half: operating cash flow was $105.7 million while net investing cash use was $118.4 million, including $73.8 million more rental-equipment purchases than the prior-year period.
-
New Middle East conflict and logistics risk
The only material risk-factor update cites the February 2026 Iran conflict and Strait of Hormuz closure. Management warns that petroleum-driven logistics costs, supply-chain disruption, inflation and energy-price volatility could adversely affect results; Portable Storage service margin was already negative 18% in Q2.
Management's outlook
The 10-Q does not provide explicit quantitative revenue or EPS guidance. MD&A cites volatile interest rates, inflation, tariffs/trade policies, geopolitical conditions and foreign-exchange fluctuations as factors that could delay customer projects and hinder planning.
Earlier filings 4
10-K · February 25, 2026
McGrath RentCorp (MGRC) reports stable operating performance in 2025 with total revenues of $944.235 million and operating income of $243.623 million, while 2025 net income of $156.308 million and diluted EPS of $6.35…
10-Q · July 24, 2025
McGrath RentCorp reported Q2 consolidated revenue of $235.6M (up 11% y/y) and diluted EPS of $1.46 (vs $0.84 y/y), driven by stronger rental and sales margins at Mobile Modular, TRS‑RenTelco and Enviroplex and lower…
10-K · February 19, 2025
McGrath RentCorp reported a strong 2024 with total revenues of $910,942,000 and operating income of $244,264,000, driven by its relocatable modular, portable storage and electronic test equipment businesses. The company…
This is our reading of a public filing, not the filing itself. Analysis can contain errors; check the source document for full context.