McGrath Announces Results for Third Quarter 2025

THIRD QUARTER 2025 YEAR-OVER-YEAR COMPANY HIGHLIGHTS:

• Rental operations revenues increased 4% to $178.1 million.
• Sales revenues decreased 18% to $76.1 million.
• Total revenues decreased 4% to $256.4 million.
• Income from operations decreased 11% to $66.7 million.
• Payment on merger termination from WillScot Mobile Mini in the third quarter of 2024 provided for $180 million in proceeds received by the Company, partly offset by $39.4 million in transaction costs and an increase in provision for income taxes, resulted in a $103.5 million net income contribution during the third quarter 2024, or $4.21 per diluted share.
• Adjusted EBITDA¹ decreased 7% to $96.5 million.
• Dividend rate of $0.485 per share for the third quarter 2025. On an annualized basis, this dividend represents a 1.6% yield on the October 22, 2025 close price of $122.20 per share.

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

“We delivered solid third quarter results, with rental revenue growth in each of our operating segments, despite some challenging market demand conditions. Sales revenues for the quarter were lower than a year ago, but cumulatively higher year to date reflecting a more balanced contribution by quarter than last year.

Modular rental revenues increased 2% compared to last year, with growth from our commercial customer base. Given current utilization levels, we reduced rental equipment capital spending and focused on preparing available fleet to satisfy new shipments which increased operating expenses for the quarter.

Portable Storage rental revenues grew 1%, which was its first year over year growth since the first quarter of 2024. We are encouraged that market conditions for this segment are showing signs of stabilization despite soft commercial construction project activity.

TRS-RenTelco had a strong quarter, with rental revenues up 9% over last year. Consistent with the second quarter, improvement in market demand conditions was broad-based across customer segments.

I am pleased with our year-to-date progress. We have delivered business growth, lowered our capital spending to align with market conditions, increased contributions from our modular services offerings, and broadened our geographic sales coverage. We have good momentum entering the fourth quarter and we remain focused on delivering a strong finish to the year."

DIVISION HIGHLIGHTS:

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

MOBILE MODULAR

For the third quarter of 2025, the Company’s Mobile Modular division reported Adjusted EBITDA of $64.6 million, a decrease of $6.8 million, or 10%, when compared to the same quarter in 2024.

• Rental revenues increased 2% to $83.2 million, depreciation expense increased 7% to $10.8 million, and other direct costs increased 18% to $24.2 million, which resulted in a decrease in gross profit on rental revenues of 5% to $48.2 million. The increase in other direct costs was primarily due to higher labor and material costs incurred during 2025 to prepare equipment to meet customer rental demand.
• Rental related services revenues increased 5% to $44.5 million, primarily attributable to higher site related services when compared to 2024, with associated gross profit decreasing 2% to $14.7 million.
• Sales revenues decreased 21% to $52.3 million, due to lower new equipment sales. Gross margin on sales was 36% in 2025, compared to 34% in 2024, resulting in a 16% decrease in gross profit on sales revenues to $18.8 million. The higher gross margin on sales was primarily attributed to a higher mix of used versus new sales during the quarter.
• Selling and administrative expenses increased $1.4 million to $35.4 million, primarily due to $1.2 million higher allocated corporate expenses when compared to 2024.

PORTABLE STORAGE

For the third quarter of 2025, the Company’s Portable Storage division reported Adjusted EBITDA of $9.2 million, a decrease of $1.6 million, or 14%, when compared to the same quarter in 2024.

• Rental revenues increased 1% to $17.3 million, depreciation expense increased 5% to $1.1 million, and other direct costs increased 65% to $2.2 million, which resulted in a decrease in gross profit on rental revenues of 4% to $14.0 million.
• Rental related services revenues decreased 5% to $4.2 million and the division reported a gross loss on rental related services revenues of $0.6 million, compared to gross profit of $0.1 million in the third quarter of 2024.
• Sales revenues increased $1.3 million to $2.7 million, primarily from higher used equipment sales. Gross margin on sales was 40% in 2025, compared to 36% in 2024, resulting in a $0.6 million increase in gross profit on sales revenues to $1.1 million.
• Selling and administrative expenses increased $1.1 million to $7.9 million in 2025, primarily due to a $0.5 million increase in employee salaries and benefits and $0.3 million higher allocated corporate expenses when compared to 2024.

TRS-RENTELCO

For the third quarter of 2025, the Company’s TRS-RenTelco division reported Adjusted EBITDA of $20.2 million, an increase of $1.3 million, or 7%, when compared to the same quarter in 2024.

• Rental revenues increased 9% to $28.0 million, depreciation expense decreased 8%, and other direct costs increased 10%, resulting in a 28% increase in gross profit on rental revenues to $12.1 million. The rental revenue increase was primarily due to the continued strengthening of end markets, resulting in higher average rental equipment on rent compared to the prior year.
• Sales revenues decreased 3% to $7.3 million and gross margin on sales was 56% in 2025, compared to 52% in 2024, resulting in a 5% increase in gross profit on sales revenues to $4.1 million.
• Selling and administrative expenses increased $0.5 million to $7.1 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 October 23, 2025 to discuss the third 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 1-800-723-0394 (in the U.S.), or 1-402-220-2649 (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: our expectations around continued business momentum entering the fourth quarter and our ability to deliver a strong finish to the year; the impact of the recent tariff actions and macroeconomic factors, including fiscal policy uncertainty, government budgetary constraints, or other political or regulatory developments; 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.