McGrath RentCorp reported higher third-quarter revenue and profit, with growth in rental operations and equipment sales lifting results from a year earlier. The company pointed to continued momentum in its Mobile Modular and TRS-RenTelco businesses, while Portable Storage remained under pressure and lower new-equipment sales weighed on Mobile Modular.
The company also said it is investing in rental equipment to support demand at Mobile Modular and TRS. Its updated outlook reflects that rental growth, partly offset by weaker Modular new-equipment sales; it did not provide specific revised forecast figures in the announcement.
Third-quarter results
- Revenue rose 7% to $274.6 million for the quarter ended September 30, 2026. Rental operations revenue increased 6% to $189.5 million, while sales revenue rose 9% to $82.9 million.
- Net income increased to $48.8 million, or $2.00 per diluted share, from $42.3 million, or $1.72 per share, a year earlier. McGrath attributed the improvement mainly to higher gross profit from rental operations and sales.
- Operating income rose 11% to $73.9 million. Adjusted EBITDA increased 10% to $106.5 million.
- McGrath reported a third-quarter dividend rate of $0.495 per share. At the October 27 closing share price of $119.56, that equates to a 1.7% annualized yield.
Business and segment trends
- Mobile Modular: Adjusted EBITDA fell 3% to $62.6 million. Rental revenue grew 4% to $86.9 million, but higher depreciation and direct costs limited rental gross-profit growth to 2%, at $49.0 million. Rental-related services revenue was roughly flat at $44.6 million, while gross profit from those services rose 7% to $15.7 million.
Sales revenue declined 10% to $47.1 million, mainly because of lower new-equipment sales. With the sales gross margin holding at 36%, gross profit on sales also fell 10%, to $16.8 million. Selling and administrative expenses rose 8% to $38.3 million.
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Portable Storage: Adjusted EBITDA decreased 20% to $7.4 million. Rental revenue fell 3% to $16.8 million amid soft market demand. Higher depreciation and direct costs contributed to a 4% decline in rental gross profit, to $13.4 million. Management also cited higher equipment-preparation, trucking and sales-coverage costs as pressures on margins.
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TRS-RenTelco: Rental revenue increased 26%, with demand described as robust. McGrath said data-center construction projects continued to support the business and that it added rental equipment to serve demand.
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Modular rentals: Management reported 4% growth, driven by continued demand from commercial customers, including large projects and regional expansion. The company said it made additional fleet investments in response.
What changes for investors
The quarter’s results show rental growth across Mobile Modular and especially TRS, alongside a weaker Portable Storage market and reduced new-equipment sales at Mobile Modular. McGrath’s stated outlook keeps rental operations momentum and related investment at the center of its near-term plans, while identifying lower Modular equipment sales as an offset.