McGrath Announces Results for Second Quarter 2025

McGrath RentCorp ("McGrath" or the "Company") (NASDAQ:MGRC), a leading business-to-business rental company in North America, today announced total revenues for the quarter ended June 30, 2025 of $235.6 million, an increase of 11% compared to the second quarter of 2024. The Company reported net income of $36.0 million, or $1.46 per diluted share, for the second quarter of 2025, compared to net income of $20.6 million, or $0.84 per diluted share, for the second quarter of 2024.

SECOND QUARTER 2025 YEAR-OVER-YEAR COMPANY HIGHLIGHTS:

• Rental operations revenues increased 5% to $163.5 million.
• Sales revenues increased 28% to $69.8 million.
• Total revenues increased 11% to $235.6 million.
• Income from operations increased 5% to $57.2 million.
• Adjusted EBITDA¹ increased 3% to $86.5 million.
• Dividend rate of $0.485 per share for the second quarter 2025. On an annualized basis, this dividend represents a 1.7% yield on the July 23, 2025 close price of $115.05 per share.

Joe Hanna, President and CEO of McGrath, made the following comments:

"We were pleased with our second quarter results. The 11% increase in companywide revenues was driven by higher rental operations and sales revenues.

Modular rental revenues increased 5% compared to last year, with growth across both commercial and education customer bases, despite softer market demand conditions than a year ago. Given current utilization levels, we reduced new equipment capital spending and focused on preparing available fleet to satisfy new shipments which increased operating expenses for the quarter. Our modular services offerings contributed to growth, and our Enviroplex business had a strong quarter of new modular sales in the education market.

Demand conditions in Portable Storage showed some improvement compared to the first quarter, with rental revenues growing 5% sequentially, though down 5% from a year ago. Lower commercial construction project activity continued to make demand conditions challenging.

TRS-RenTelco had a strong quarter, with rental revenues up 7% over last year. Consistent with the first quarter, improvement in market demand conditions was broad-based across customer segments.

We were pleased with our execution in the second quarter and encouraged by several positive signs in the overall demand environment, despite some ongoing economic uncertainty. Overall, our outlook is incrementally more positive as we enter the second half of the year, and we remain focused on disciplined operational execution to make the most of the market opportunities."

DIVISION HIGHLIGHTS:

All comparisons presented below are for the quarter ended June 30, 2025 to the quarter ended June 30, 2024 unless otherwise indicated.

MOBILE MODULAR

For the second quarter of 2025, the Company's Mobile Modular division reported Adjusted EBITDA of $53.1 million, a decrease of $0.3 million, when compared to the same quarter in 2024.

• Rental revenues increased 5% to $81.9 million, depreciation expense increased 7% to $10.7 million, and other direct costs increased 13% to $24.0 million, which resulted in an increase in gross profit on rental revenues of 1% to $47.2 million.
• Rental related services revenues increased 11% to $32.2 million, primarily attributable to higher delivery and pick-up activities and higher site related services, with associated gross profit increasing 29% to $11.7 million.
• Sales revenues increased 13% to $40.5 million, due to higher new and used equipment sales. Gross margin on sales was 32% in 2025, compared to 38% in 2024, resulting in a 6% decrease in gross profit on sales revenues to $12.9 million. The reduction in gross margin on sales was primarily attributed to a higher mix of new versus used sales during the quarter.
• Selling and administrative expenses increased $3.5 million to $36.8 million, primarily due to a $1.7 million increase in employees' salaries and benefit costs, $0.9 million higher allocated corporate expenses and $0.7 million higher marketing and administrative expenses.

PORTABLE STORAGE

For the second quarter of 2025, the Company's Portable Storage division reported Adjusted EBITDA of $9.8 million, a decrease of $1.2 million, or 11%, when compared to the same quarter in 2024.

• Rental revenues decreased 5% to $16.9 million, depreciation expense increased 4% to $1.0 million, and other direct costs increased 26% to $1.9 million, which resulted in a decrease in gross profit on rental revenues of 9% to $14.0 million.
• Rental related services revenues were $4.4 million and gross profit on rental related services revenues was $0.1 million, which was down from $0.2 million in the second quarter of 2024.
• Sales revenues increased $0.4 million to $1.7 million, primarily from higher used equipment sales. Gross margin on sales was 39% in 2025, compared to 43% in 2024, resulting in a $0.1 million increase in gross profit on sales revenues to $0.7 million.
• Selling and administrative expenses increased $0.1 million to $7.5 million in 2025, as compared to 2024.

TRS-RENTELCO

For the second quarter of 2025, the Company's TRS-RenTelco division reported Adjusted EBITDA of $19.3 million, an increase of $1.3 million, or 7%, when compared to the same quarter in 2024.

• Rental revenues increased 7% to $27.1 million, depreciation expense decreased 14%, and other direct costs increased 9%, resulting in a 32% increase in gross profit on rental revenues to $11.9 million. The rental revenue increase was primarily due to the strengthening of end markets, resulting in higher average rental equipment on rent compared to the prior year.
• Sales revenues increased 32% to $7.7 million and gross margin on sales was 47% in 2025, compared to 54% in 2024, resulting in a 16% increase in gross profit on sales revenues to $3.6 million.
• Selling and administrative expenses increased $0.7 million to $7.3 million in 2025, as compared to the same period in 2024.

FINANCIAL OUTLOOK:

Based upon the Company's year-to-date results and current outlook for the remainder of the year, the Company is updating its financial outlook. For the full-year 2025, the Company currently expects:

ABOUT MCGRATH:

McGrath RentCorp (NASDAQ:MGRC) is a leading business-to-business rental company in North America with a strong record of profitable business growth. Founded in 1979, McGrath's operations are centered on modular solutions through its Mobile Modular and Mobile Modular Portable Storage businesses. In addition, its TRS-RenTelco business offers electronic test equipment rental solutions. The Company's rental product offerings and services are part of the circular supply economy, helping customers work more efficiently, and sustainably manage their environmental footprint. With over 40 years of experience, McGrath's success is driven by a focus on exceptional customer experiences. This focus has underpinned the Company's long-term financial success and supported over 30 consecutive years of annual dividend increases to shareholders, a rare distinction among publicly listed companies.

McGrath is headquartered in Livermore, California. Additional information about McGrath and its businesses is available at mgrc.com and investors.mgrc.com.

You should read this press release in conjunction with the financial statements and notes thereto included in the Company's latest Forms 10-K, 10-Q and other SEC filings. You can visit the Company's web site at www.mgrc.com to access information on McGrath RentCorp, including the latest Forms 10-K, 10-Q and other SEC filings.

CONFERENCE CALL NOTE:

McGrath RentCorp will host a conference call at 5:00 p.m. Eastern Time (2:00 p.m. Pacific Time) on July 24, 2025 to discuss the second quarter 2025 results. To participate in the teleconference, dial 1-800-245-3047 (in the U.S.), or 1-203-518-9765 (outside the U.S.), or to listen only, access the simultaneous webcast at the investor relations section of the Company's website at https://investors.mgrc.com/. A replay will be available for 7 days following the call by dialing 1-800-839-5630 (in the U.S.), or 1-402-220-2557 (outside the U.S.). In addition, a live audio webcast and replay of the call may be found in the investor relations section of the Company's website at https://investors.mgrc.com/events-and-presentations.

FORWARD-LOOKING STATEMENTS:

This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. All statements, other than statements of historical facts, regarding McGrath RentCorp's expectations, strategies, prospects or targets are forward-looking statements. These forward-looking statements also can be identified by the use of forward-looking terminology such as "anticipates," "believes," "continues," "could," "estimates," "expects," "intends," "may," "plan," "predict," "project," or "will," or the negative of these terms or other comparable terminology. In particular, the discussion under the heading "Financial Outlook" is forward looking.

These forward-looking statements are not guarantees of future performance and involve significant risks and uncertainties that could cause our actual results to differ materially from those projected including: the impact of the recent tariff actions and other economic factors; health of the education and commercial markets in our modular building division; competition within the modular business; the activity levels in the semiconductor and general purpose and communications test equipment markets at TRS-RenTelco; the activity levels in commercial construction projects and impact on Portable Storage segment; continued execution of our strategic performance improvement initiatives; our ability to successfully increase prices to offset cost increases; and our ability to effectively manage our rental assets, as well as the other factors disclosed under "Risk Factors" in the Company's 2024 Form 10-K and other SEC filings.

Forward-looking statements are made only as of the date hereof and are based on management's reasonable assumptions, however these assumptions can be wrong or affected by known or unknown risks and uncertainties. No forward-looking statement can be guaranteed, and subsequent facts or circumstances may contradict, obviate, undermine or otherwise fail to support or substantiate such statements. Except as otherwise required by law, we assume no obligation to update any of the forward-looking statements contained in this press release.