Sunbelt Rentals Hldgs In Gb Shrs — Income Statement, Cash Flows & Balance Sheet
Is Sunbelt Rentals profitable?
Sunbelt Rentals grew revenue modestly, but profits declined as costs rose faster than the top line.
| Metric | FY2024 | FY2025 | FY2026 | Change (FY25→FY26) |
|---|---|---|---|---|
| Total revenues ($M) | $10,859 | $10,791 | $11,154 | +3.4% |
| Gross profit ($M) | $4,477 | $4,320 | $4,290 | -0.7% |
| Gross margin | 41.2% | 40.0% | 38.5% | -1.5 pts |
| Net income ($M) | $1,572 | $1,553 | $1,325 | -14.7% |
| Net margin | 14.5% | 14.4% | 11.9% | -2.5 pts |
Revenue edged higher, but costs — particularly staffing and operating expenses — climbed more quickly, squeezing margins at every level. Net income fell meaningfully year-over-year, partly due to a UK restructuring charge of $44 million and elevated SG&A, which jumped from $1.39B to $1.65B.
A one-time UK restructuring distorts the profit picture somewhat, but underlying margins are genuinely compressing.
| Item | FY2026 |
|---|---|
| Restructuring charges ($M) | $44 |
| SG&A ($M) | $1,651 |
| SG&A as % of revenue | 14.8% |
| Prior year SG&A as % of revenue | 12.8% |
Stripping out restructuring costs would recover some of the apparent profit decline, but SG&A was elevated even before those charges — suggesting ongoing cost pressure rather than a purely one-off issue.
Where does Sunbelt Rentals' revenue come from?
North America dominates, with the Specialty segment growing fastest.
| Segment | FY2025 Revenue ($M) | FY2026 Revenue ($M) | Change |
|---|---|---|---|
| NA – General Tool | $6,397 | $6,507 | +1.7% |
| NA – Specialty | $3,487 | $3,715 | +6.5% |
| United Kingdom | $907 | $932 | +2.8% |
The Specialty segment — covering Power & HVAC, Scaffolding, Pumps, and Film & TV — is the clear growth engine, outpacing General Tool by a wide margin. The UK, despite restructuring efforts, still grew slightly and contributes roughly one-twelfth of total revenue.
Profitability is heavily skewed toward North America; the UK segment is barely breaking even.
| Segment | FY2025 Adj. Operating Profit ($M) | FY2026 Adj. Operating Profit ($M) | Change |
|---|---|---|---|
| NA – General Tool | $2,093 | $1,932 | -7.7% |
| NA – Specialty | $1,138 | $1,176 | +3.3% |
| United Kingdom | $73 | $59 | -19.2% |
The UK segment's contribution shrank sharply, and the filing explicitly flags that UK goodwill could be impaired if conditions worsen further — worth watching.
Does Sunbelt Rentals generate cash?
Sunbelt Rentals is a strong cash generator, though operating cash flow dipped slightly.
| Metric | FY2024 | FY2025 | FY2026 | Change (FY25→FY26) |
|---|---|---|---|---|
| Operating cash flow ($M) | $3,664 | $3,844 | $3,784 | -1.6% |
| Capex — rental equipment ($M) | $3,759 | $2,251 | $1,842 | -18.2% |
| Free cash flow (approx.) ($M) | -$95 | $1,593 | $1,942 | +21.9% |
The company pulled back significantly on fleet investment this year, which boosted free cash flow (operating cash minus equipment purchases) even as net income fell. This signals a deliberate shift from aggressive fleet expansion to harvesting returns from existing assets.
Sunbelt returned substantial capital to shareholders through buybacks and dividends.
| Return of Capital | FY2024 | FY2025 | FY2026 |
|---|---|---|---|
| Dividends paid ($M) | $436 | $544 | $464 |
| Share repurchases ($M) | $108 | $437 | $1,426 |
| Total ($M) | $544 | $981 | $1,890 |
The scale of buybacks accelerated dramatically, funded in part by the reduction in capital spending — a deliberate reallocation rather than a sign of financial stress.
How strong is Sunbelt Rentals' balance sheet?
Debt is substantial but manageable, with no near-term maturity cliff beyond a single bond.
| Metric | FY2025 | FY2026 | Change |
|---|---|---|---|
| Total debt ($M) | $7,500 | $7,583 | +1.1% |
| Short-term debt ($M) | $0 | $550 | — |
| Long-term debt ($M) | $7,500 | $7,033 | -6.2% |
| ABL facility available ($M) | ~$3,616 | ~$3,540 | -2.1% |
The $550M short-term balance is a bond maturing in August 2026 — routine, and well within the company's liquidity. The revolving credit facility has over $3.5B of headroom, giving Sunbelt significant financial flexibility.
The asset base is large and largely composed of depreciating rental equipment — a feature of the industry.
| Asset | FY2025 ($M) | FY2026 ($M) | Change |
|---|---|---|---|
| Rental equipment, net ($M) | $11,340 | $11,224 | -1.0% |
| Goodwill ($M) | $3,348 | $3,476 | +3.8% |
| Total assets ($M) | $21,970 | $22,268 | +1.4% |
Net rental equipment — the core productive asset — edged down as the company slowed new purchases, while goodwill grew modestly from bolt-on acquisitions. The UK goodwill balance warrants attention given the restructuring underway there.