McGrath RentCorp Reports 6% Revenue Decline in Q2 2026

McGrath RentCorp reported a decrease in financial performance for the second quarter of 2026, with consolidated revenues falling 6% to $221.1 million compared to $235.6 million in the same period of 2025. Net income also declined by 6% to $33.7 million, resulting in earnings per diluted share of $1.39, down from $1.46. The decrease in revenue and net income was primarily attributed to lower gross profit across several segments, particularly in Enviroplex, Mobile Modular, and Portable Storage, although TRS-RenTelco experienced an increase in gross profit.

For the six months ended June 30, 2026, total revenues decreased 6% to $419.7 million, with net income declining 5% to $60.7 million. The earnings per diluted share for this period was $2.47, down from $2.61 in the prior year. The decline in net income was largely due to reduced gross profit on sales revenues and an increase in selling and administrative expenses, which rose by $5.5 million. However, the company benefited from a $2.3 million reduction in interest expenses and a $1.8 million gain from the sale of a corporate property.

Operationally, McGrath RentCorp completed the acquisition of a regional provider of modular space solutions for $11.3 million during the second quarter, which is expected to enhance its Mobile Modular operations in the Midwest. The company also reported a significant increase in rental equipment purchases, totaling $124 million for the first half of 2026, compared to $50.2 million in the same period of 2025, reflecting strong customer demand. The company’s employee headcount remained stable, with no significant changes reported.

In terms of segment performance, Mobile Modular generated $150.4 million in revenues, a decrease of 4% year-over-year, while TRS-RenTelco saw a 17% increase in revenues to $42.6 million. Portable Storage's revenues increased slightly by 1% to $23.5 million. The company’s rental operations accounted for approximately 80% of total revenues, with Mobile Modular, Portable Storage, and TRS-RenTelco contributing 69%, 12%, and 19%, respectively.

Looking ahead, McGrath RentCorp faces challenges from macroeconomic conditions, including inflation and geopolitical uncertainties, which could impact customer demand and project timelines. The company remains focused on maintaining its operational efficiency and leveraging its rental assets to navigate these challenges. The Board of Directors declared a quarterly cash dividend of $0.495 per share, reflecting a 2% increase from the previous year, indicating continued confidence in the company’s financial stability.