United Rentals (URI) 28 Jul 222022 Q2 Earnings call transcript

Good morning and welcome to the United Rentals Investor Conference Call. Please be advised that this call is being recorded.

Before we begin note that the company's press release comments made on today's call and responses to your questions contain forward-looking statements. The company's business and operations are subject to a variety of risks and uncertainties, many of which are beyond its control and consequently actual results may differ materially from those projected. A summary of these uncertainties is included in the safe harbor statement contained in the company's press release.

XX, description the and Form the company's the ended complete please possible XX-K SEC. more as year to well refer annual December a of filings other these risks for to For subsequent as with XXXX report on

that new no revisions You note reflect commitment order or or release filings any to forward-looking circumstances in www.unitedrentals.com. these no statements or to has access expectations. the company's update Rentals can at subsequent events, obligation to in website information on Please United and makes changes publicly

press You the non-GAAP should to see also company's most release cash and note to and from as to reconciliation measure. such the Please call that flow, to the non-GAAP the the references EBITDA. investor EPS, financial of measure EBITDA company's comparable adjusted recent include presentation free each financial adjusted today's GAAP terms refer back

Matt and turn Financial and United may for President Chief Flannery, begin. today over call the I Officer; Executive Mr. Officer. Mr. to Rentals Flannery Speaking Flannery. you Chief Graziano, will is; Jessica now

in our Thanks executed strong and we you, performance release. everyone. joining quarter, our measure. the start Thank very a robust yesterday's And morning, with environment. as the a second from good I'll call. well main operator extremely demand delivered takeaways In for team result, by any

faster adjusted a grew second of to almost record billion. EBITDA to the $X.X up quarter revenue above rental a XX% well expectations by $X.X Our and year-over-year increased top record billion, XX% than line,

demonstrated cost discipline. also good We

our which XXX-basis The tailwinds the flow-through of in importantly in more record demand could revenue favorable fleet productivity than strong points capital quarter margin created year our return XX%. This EBITDA growth start better to XX.X%. we remained of point see of included three the a XX.X%. and on continued in XX%. that adjusted a you rental which The the XXX fuel macroenvironment invested momentum. about saw basis And to improvement we to Our expanded to at delivered a contributed

unique place In off increasingly where one. all-electric and area And service job keeping combination equipment customers well see trend solutions, outpacing and the share superior a we customer it recordable and place And May, job reason, with continue also is core that prioritize a continue Customers safety by in to positioning to our the equipment in we of of We rate as delivered vans below our announced value to team scale, including alive we're our in one-stop Ford, technology the Customers on and our sustainability. is secular toward well. owning an lastly, QX F-XXX care we're addition, growth And this And we from Lightning our is site confident as over initial trucks site. and shop. renting as the from safety pickups. is XXX industry value agreement on customers. both share In to take our key market renting is a our overtime. markets shift being that gaining productive. our on lot One a about industry. and move will another this purchase

Responsibility progress to greener Report ESG developments. areas operations. Now of toward add comprehensive good different proud many of Annual making partnership Corporate we're our XXXX stewardship with covering moving We're environmental impact. social we and released while example how we're our rental this a more with continuing data including the solutions is along fleet, XXth in sustainable recent Yesterday, to of

like you'd on You it can to find our it. if website download

list reliability. is in a on response. high about and It's got their care bar strongly we've very customers thing Another high

and with challenge being it opportunity. and next caliber trained and our helps that deliver like of United Our That's And at part to of service the that to earns our an culture retention love is our they big a recruitment. arrow customers. a team employees

which Our solid a in at than net market. gain tight a headcount the labor end ago a was X% June is of higher year

we're something which Now our gives standing out EBITDA to have target and every repeat confidence flow. behind I revenue, outlook fortunate guidance I'll said cash a team our for we updated we includes free adjusted before, that us It released world-class put and there total in strategy. yesterday the raised

we're remains positive the equipment Index, year, signs coming including out of captured contractor QX, market the ABI, We equipment these margins get will we visibility recovery second demand on sentiment. the sales. indicators spoke the of Momentum are all And robust. used Dodge And quarter, customer to through they're I dynamics today. the lot view. record plenty used still rent. support this of rates have In all strong of external true to backlogs all and activity and a the Virtually and create seeing and of favorable to the balance the on of There are

Now at I'm to to going look demand ground level. at pivot the

in Our extremely both the and well segments, gen specialty quarter. performed rent

end regions double-digit ways, and stemming we of a key continuation across growth. about All activity what markets delivered revenue a company-wide, spoke from rental of QX regions, in it's our many verticals. diversified mix And broad-based in of

end by market. it at Looking

rental every construction was growth broadly almost was from up vertical Our year-over-year year-over-year, up infrastructure non-res XX% XX%. And and in revenue. showed more rental revenue

to terms and continuing accelerating and semiconductors beyond. is plants now to verticals require resurgence of will in and years back. in the manufacturing, vertical In variety large manufacturing project of billions for coming power the by with are challenges XXXX Companies projects the projects These With America, US already is and finalized and advantage hundreds along to and of to data wings. build there Canada, Washington we is the our in break to for the play benefit North dollars that's chain industrial distribution and sector sectors. and and funding driven with across they supply the automotive. With infrastructure for in of large It's in other more centers, a like also mega is in The projects part types, good infrastructure are tailwinds expect start ground seeing centers come, example, investing in us. in being parts certain equipment of evident a are customers. competitive world in of

XX%. General the projection XX%, of The this of year-end specialty year. that's and On by our mobile openings up whole excellent June, our Pro segment grew through the opened storage businesses. a by specialty as side, rental benefit had quarter in against higher XX another storage than XX a forma led XX original the power openings revenue a was about and from Finance. including target by strong cold revised We specialty slightly segment

landmark record year our So XXXX delivered as and be year. company another to be continues can to operationally. financially you quarter in, record expect for We a a both what see, we

and quarter cash expect Our And This leverage on a us sheet, the team's make in to discipline bolt-on explore This also generation. this a the acquisitions of a cost fleet flow-through cold date, investment our the in We'll to to are good navigating strong continue reflects of the suppliers flexibility tracking continue plan. CapEx we and million. year balance for have to over in fronts. $X is growth taking in year made of history challenging largest and we through many total starts the our to opportunistically low $XXX our us, billion and care gives robust consideration seven environment. benefit to of acquisitions. about spend We've act

capital, to quarter. allocations, are long-term create seeing us Lastly, authorization And repurchase all relentless is value. that's prudent we from capital that to this results. and expect leveraging to what These in complete we our execution know our key share shareholder you're the

I'd take the opportunity her Now past personally for thank many I contributions to before, seven like it her to hand over over years. this to Jessica,

in floor. opportunity leadership entire her As you with a been endeavor. and take know has I it's her Jess when search Jess, know, through all you've as got on speak Ted CFO I we Jess new with the a wish us our best process. leaving we team, And now will the to go to I pleasure for and all And stepped in that new say work be

to Matt, call definitely experience earnings for United incredible been our a Good accomplished not time has here Board, We've Team but and with your together, say, bittersweet an last I'm community. and thank my lot kind My just so investment the on amazing thank morning, and also United. you to our and Ted have working you. grateful be closely to so everyone publicly for words. with chance this It's

quarter, results my on we call, I'm such report record actually. to be great the look especially to able to results As last pleased

EBITDA that quarter. our and our It demand full we've Matt across our year increased later. end for revenue, cash guidance more the adjusted for strength on As for markets expectations flow in underpins and also the the shared, free has exceeded seen

quarter start $X.XX Let's look, second Within second at the up a was increased the year-over-year. closer XX%. with OER $XXX a or rental for Rental million XX.X% million record billion. $XXX about or revenue, quarter. That's revenue

a reduction Our Also $XXX which million $XX tailwind And a XX.X%, to revenue revenues year. be XX.X%, up drag. delivery a fleet $XXX about million. million, other in mainly due were And pass-through provided million revenue. estimate increased $XXX were from and which quarter million a about re-rent a was was by rental healthy productivity to OER $XX is average of the quarter which fleet about ancillary very second was in size charges. rental, within the the by rounding Fleet sales million last Used million up decline contributing XX% inflation, we $XX out from quarter. for in $XXX quarter finally higher XX%, increased or to fees the or X.X%

We're the we seeing in better to sales points. channel focusing sales manage improvement to profitable demand strong for continue market basis used this That year. margin capacity retail We XXX most and and delivered ensure serve points year-over-year adjusted represents and together adequate the healthy with robust just over improvement a basis have about those our XXXX help we're overall quarter. of used of pricing XX.X% a sequential to

for and billion or includes EBITDA. The dollar $XXX the quarter to change year-over-year record an million. of us increase from Adjusted $XXX was move rental. $X.XX million a XX.X% another Let's increase EBITDA for

would million to we million SG&A million last that part some also in EBITDA million. And $XX of million OER $XXX contributed was and $XX non-rental and XX.X%. $XX of due to as SG&A XXX adjusted on benefit very acquisitions flow-through EBITDA of of basis XX.X%, of XX%. quarter tailwind EBITDA reflects revenue. have provided been through It second higher margin came sales business in by of flow-through headwind were of performance called adjusted $X benefit, business strong to and And cost saw continue the reflects year-over-year onetime from large the Adjusted the Now contributed expected, quarter, a costs commissions we the to the $XX a normalize. excluding out in was up a up Used delivery fuel. healthy part to in we've certain actions in in in of used higher at costs income driven year. in from The also Other areas year-on-year million. impact with ancillary inflation certain lines points in other sales discretionary the strong pass excellent better-than-expected growth like taken rental. core across

of team Our costs across areas job a the did managing business. also great other

benefit, we been Let's which $X.XX, our tax $X.XX a adjust includes benefit. quarter or a if at pleased EPS have shift still quarter. that XX% for But even last EPS, versus record from this would us up year. EPS for one-time another adjusted to $X.XX note to record about this I'm was that's

million Gross $XXX million, net equipment quarter. first for used in last from CapEx were in half was second the $XXX sales year. resulting at CapEx $XXX Net second a up which the of $XXX the year million XX%. $XXX the million CapEx Looking was or rental to similar Proceeds CapEx. of of healthy million quarter is

of also Now free basis XX-month as of strong and year, levels the sequentially XX points $X flow. a under our ROIC points just flow balance billion year-over-year. grow quarter average on business. ROIC to generated run very weighted on the to trailing CapEx up few million share cash second half of basis above turning basis. continues while capital XX.X% XXX high Free and for well our sheet. and we be to to all That's continuing continues comments first invest cost $XXX a cash at I'll our the in in to record a

my on especially team on shape. of back time proud I work It As is I balance am our the done look has in here, sheet. the fantastic

fully sequentially majority of of our took over $X.X very also spent positioning remains Our million second of billion to leverage the be end That's our with from XXXX. million billion long-term level of the to capacity the in of strong execution XX, the ratio in facilities share and million We and repurchasing from the notably X.X the I I'd the quarter didn't the quarter in finish The ABL share the to our both with acquiring $XXX a count. on flat this $XXX our at mention $XXX leaned the capital within last mention maturity expect lowest With times. of the Liquidity June was isn't second remiss X.X% quarter, Through if we bolster coming little our thing that a shares and down billion. third purchase, $X.X roughly AR just And of note until during program vast we've allocation bit ABL authorization, XX I'll at the history next points we end of quarter. quarter at program. repurchase at that in left further extending including number upsizing a $X And actions we'll second current into XXXX. than a improved terms. our diluted our more quarter. relates basis

midpoint growth Let's at look which $XX.X expected increase year for shared release in Total last XX.X%. we is press of full night. about to of million our in $XX.X or updated $XXX forward talk range guidance billion now billion the our and an of the revenue implying XXXX,

is robust demand across see end by our markets. increase geographies broadly we this supported that earlier, and mentioned to I continue As our

expect and that higher We to revenue the on profitability strong. flow-through remain

the full about full billion of EBITDA guidance. robust previous and implies Our $X.XX of XX%. range flow-through from adjusted is adjusted EBITDA now in to year XXX increase million our $X.X midpoint This up basis billion, a $XXX year margin point

source is We expect CapEx Our still range net for $X gross unchanged. of CapEx. and billion to about gross

guidance will than originally the to consistent though $X.XX free And to support even higher used for the $XXX billion. of original market That's with from our midpoint this has equipment expect We profit fleet million year strength less guidance, sell also our full and used look year. now proceeds we'll planned. the as cash $X.XX billion expect at flow generate we increased mainly deliver the between operating we finally,

Q&A. asked I've baton, to Ted in the pass I jump on as Now

your open Operator, let's So get questions. please to line. the

question from first ISI. Our comes Instructions] Raso [Operator Certainly from David Evercore

open. is line Your

Hi. the time Thanks for Jess. congratulations and

big results picture, numbers dive pretty needless of mean I can sort just a into -- Regarding were we lot but of to the say solid.

where about it how me. just you're So they And backlog financing, years. are seem, speak comp, I'm have you may here numbers the if curious, today project to hearing can from look for it many when guess suggesting in the be? this think they still you've another your it maybe And that bill of backlog the where business do it you you in contractors versus really infrastructure solid time growth could obviously last something have with trying XXXX. year? I you Matt comfort just or they doing history whatever backlog was of Just committed this development it XXXX are you these they your indulge at underpinning in if that year when that this been to be this

David. Sure

year-end expect a there'll the carryover or productivity, momentum XXXX that's larger into we'll but what process But dive go which positive fleet be. good size. whole great XXXX fall, be on we'll expect some then obviously, whether be do to effect, through clear, to planning So everybody, we into this and as the our deeper carry to update a at we fleet XXXX

have your structurally additionally remains some XXXX. to for just consistent point and the going CCI we'll consistent pretty have about momentum high on our into six level changed. hasn't a that it at And where quarters backlog, customers been So our

mega to us. my any So mentioned expectation. going customers' in deceleration I seeing be are long for And prepared in we're not kind remarks, as term of additionally, our projects

work mentioned. tailwinds ground of infrastructure So, a couple funding believe we're resurgence. and now And and activated dollars a haven't the our be seen I billions, a rental and that we what for billions we they're for yet breaking more out of going manufacturing revenue, talking meaning funded is Shovel-ready to there. lot potential

call play the are those into So tailwinds into going I XXXX.

larger it momentum going XXXX. is tailwinds macro in And think to our to Some we the structural XXXX. that have of that for we and of carrying we're are into then, be areas some that yet enjoy

projects and now be those influence vertical overall a incremental strong. it. two historically account fleet row at than Because time worse just is in just of for or it hearing just different Obviously, owned more like possible. we're quarters that calibrate trying now be you right? average that been you're drop-through better or what probably it's over so returns? the much to seems looks the down XX% on right have to XX. the that it's I'm it be has going should that a ancillary our now But the about the national to but getting were a margins, running is little going drags wouldn't bit the thought it thought Right that more the been have how re-rent Anything EBITDA you've you're to on it

also think So to mix how about to really different the cost margins here. just thoughtful coming if trying incremental from got fixed absorption the to how show XXXX I'm great. in is calibrate But I've a be to

And a longevity major positive off. the for some rental of a on projects large-scale better we kind have national the the is consistency bit pricing largest offset customers actually but Operationally, Admittedly see efficiency account the us. of our for little may some No. they even real and large project. of

big duration. or sizes a to based profile So project margin the change I on don't expect see

that So the I your of question. think was basis

Okay. very it. for Thank appreciate the much time. you I

Thanks, David.

And from Tim our next comes from Citigroup. Thein question

line is Your open.

again Thank you. and congrats Good morning Jess.

Thank you.

hand to keys leaving in such Ted with over -- you of nice good to Pretty balance sheet the shape. the

So...

Thank you, Tim. Thank you.

Yeah. Matt. And I on of that continuing actually kind was just

come are quarter, year. -- strong the outlined potentially and the sits Just that just into third the likely heading you Does are terms where priorities capital in how that in where maybe I There's how either you the in M&A. beyond view an accelerating on sheet terms XXXX year few just -- for the into potentially of mentioned buybacks? a you maybe thinking the thinking the of about thoughts dividend another you as you're what How picture? given M&A the balance repo updated Just returns. into mean thinking about

Sure our capital allocation Tim. all I'll categorize this prioritization. as

leverage a us So, finish as excess was the to in live for that will in if a And you we'll have. cash authorization advance still depicted, great accurately of billion our we our and opportunity $X that range. not the quarter we just bottom below bottom utilize

won't opportunities we're as still ours while well disperse we'll indicative robust We prioritization shape organically it's comfortably a as that can as an business on can prepared -- the this cash of We're everybody October. lot way go Board, this out whether M&A. and balance or we balance and shareholders. done and which in the great fortunate there's -- excess to excess bigger not as is the can our opportunities. any like smart our is So And growth maybe support a first the that's absolutely through our options shape about as update but think ahead our And for can that of sheet do of I way. get in either in year as do cash some then or for to remarks free have foremost, If we in in organic cash we that a return Jess And make as of first flow. we we operating we've in below very range and we deals The do the soon that's those is to it. not pointed replacement to a no our not sheet is to statement and it is an strategy concern business or strategy. that magic I'd little two usage

it. Got

quick then And Okay. Matt follow-up. maybe a just

ending sense? we fleet kind Just out from the units selling a about than strength much from just should thought a how net to the fleet versus standpoint, fleet CapEx makes a think -- playing perspective is think -- larger than of given in unit the how just about how -- the -- how you're is is? you we really Is it can fewer do the fleet how what recovery values extent the value from given or composition the the we the assuming that you're

with off, when XXXX. XX% first around over range at up So, year billion of fleet year-end $XX approximation end somewhere in we'll the be we

when about we So think we'll larger we have fleet seen a value the really tremendous increase. haven't fleet. of And a that

year on that haven't about be demand. that look early our need that. to a kind changed the when what hearing needs be productivity executed the think like had a for to of the that offset a for sure what talking our which they about picks our hair already and up to month plug we're is capacity driving the and in of fleet that to now to they're for next of And fleet question we've than I going I year will about And try productivity. earlier chain to what our this year out We usual lot think back inflation are half we've this forecast if that fill going we're can supply as of going over strong know even kind noise I opportunity OEMs

great to just the which track future. us to for of billion ahead is us on their also we're committed way the we're working that off planning they're know they've not this news, year ballgame tails but our $X get which the OEMs. with So only I on

in have aggregate XXXX. we in good us so and working we than expect the some really they're the job And and vendor same a is others. I hard that are for know But doing doing base better

time. Okay. Thanks the for

Thanks Tim.

comes Rob from Melius And Wertheimer question from Research. our next

Your open. line is

good and morning Thanks everybody.

Rob. Hey

-- utilization. up. earlier is just more quarter talk And assume And new I records. it than touched this rates up asking it on I on you obviously know the like like time productivity. to you I time Matt rental not guess like So, this hitting But but seem level the and I'm feels rate fleet does to going there's performance coming is for

one is unlock and And an is For there's there. more taking less operational that for wondering roughly where or shift it if turnover if just aren't learned two, just it's little to accurate? productivity up, and keep is it a you've how and something? a that bit rent market off people a or I'm top sustainable super-hot that's change

our somewhere to expectations. And pleased necessity a short, certainly time in productivity In aside Yes. is I of be was mother mix exceeded fleet whether that's rate So, mid-single or the we'd be never yes, that components and invention it so digits be of April here. all I and wrong kidding yes in productivity. in the all But guided Rob, three right? fleet

So I'd outdid I have that's robust that publicly the of were this surprising most pleased the last me the time because year see year. hot was why you in it one we back half been But the repeated it. if had so said team to we in was and fleet productivity.

surprised of was was that. one not saying largest value the I'm the not that three. that numerically the So,

to most it. surprising had get high over a to the you give As but going was because know we me not bar it I'm real to numbers

about the strong that I fleet really talk would that's qualitatively how we So, productivity drove.

levels? if have to there that, of you sustainability learned comments the on new ways then you could? of how new you Any to pushing it And got there getting

Yes.

that a because about years, we our right, has our we out embedding us far know that's back all the starting productivity, for many as and that the been advantage and XX lot you The actors. given borne operations over branch the technology really As and data visited throughout industry an as years, in that see talk you it. many, efficiency of we've

of to actually but that and of the part technology, that. utilization the enjoyed of improved also upon is always the embedded have that it's time is we And gap network, part by we've density positive. scale, we've So, network and that that

me we interesting And new team So, we optimal point, tell Admittedly the do it's and set some level part being still more this we happening. At surprised not think of sustainable. are? a it's year, to is that's but timing? I all think ever sustainable. what that responsive sure is still the where as don't we're Do the we metrics as us make want get the point heights that

So, we're very pleased.

Thank you.

Operator, next question?

All right.

question Fisher next comes Steven Our from UBS. from

Your line is open.

morning. Hey, Good thanks.

Just and them, call as follow-up you M&A maybe M&A, wanted the smart to on Matt.

bunch seeing Just desire guess, of are prospects You're doing a color bolt-ons, Thanks. that because to sense do doing I there bolt-ons? deals? the a bolt-ons, to how bolt-ons. general, little deals you And Are larger in from more you it the there are of the please. to related larger for harder are get kind sellers? increased things you're targeting via done? Is more something makes specific

and has a And pipeline Steve. of that always not had and we've Thanks, pretty Sure. robust M&A, diverse changed.

you fact, low levels. people it going call there's the their they little where of them probably ones, may few businesses have And there have smaller from COVID, as weren't a increased of at some before As in but specifically bolt-ons, a bit, to those repaired sold have sell COVID. the just people a out now, fully that matter even would

way that stool that pipeline. and to transom it's of we've which over on had all the I our financial. in those and smart their more facility have teams on where opportunities But spot some the I'd whether capacity. really legs still market three put given working to smart say the last needed ones going the execution there business fit that or M&A, we're And categorize market. people be that's our matter to was is saw have that's on repaired And deals about, back people some get So, capacity just big our it's And you because what local just It's talked a when themselves right? check and fleet of are right? have a the

them both pipeline So and willing we the But big the got final seller get deals. to we're have to working leg. a and small on terms agreeable over

That's year helpful. the it's you to just for all more And mean, then, sounds kind there. confidence going demand I out would this guidance on deliver? raise can on your to it CapEx gross the CapEx that strength? have what Is front, is like of it it see Or suppliers more near-term side?

really auctions capacity make and don't pulled business. forward Yes, auction we've lot But demand fact, normal to of or to fill raise in broker from environment, that's suppliers form. fill not help to would matter we see have And CapEx. any extra already would the had In the year, OEMs I sales XXX use our a any have some not real And you be didn't sales see, using and another Jess or those they plan even a used that the -- normal pull are of would some then issue in since to our lever have. CapEx out do challenges We There's all that us way numbers. we're as a the working increased any alluded probably we QX. it used latter. the our and as QX. of supply a original don't And pull-forward And -- forward seen to around know into more you we sold demand think CapEx. we opportunity are you shape -- trade-in I'm have a less the support stuck hard We to in the why that to X.X we're sure and pull to going trade-in. -- have and

Perfect. Thanks.

Thanks, Steve.

Thank you.

from our Wells Fargo. from question And comes next Weber Seth

Your line open. is

well. congrats and Jess morning, Good as Hey.

Seth. you, Thank

a was pleasure the might I sorry, it. talk half cadence mean CapEx but getting on is second of quarter assume of just any quarter third through cadence out Yeah. the this constraints -- just obviously meaningfully can frame your have work year, up the there I'm It CapEx? you for suppliers getting addressed you. of I talking might to and have way stuff versus some fourth the just missed the are the third gross quarter that? you to But but the door. quarter Matt, I with from about is second

it as sure. in we will hasn't plans. and really -- It had stated changed Yes, our be April,

do we up we're about X.X do there. -- X.X right XXX say, another let's for QX. in in to And you that. the then we X.X end on I'm that we think year, then, which to about track we're quarter. expect in QX where about on We XXX fourth do about And range, depending this and And leaves sorry,

QX to room as mid point we vendors So, the all And the don't or to have which opportunity. at We season, stated and in that expect rental of everybody. a wiggle changed the is -- expectations that that lot There's increase haven't our not not year. QX. change to this and we've for accelerate do just I earlier, of changes updated the

Right.

pricing, just And Thanks. of that which lot then, very talk be some helpful. a I mean called benefit concerns That's around capturing. Okay. see, you there's to obviously prices -- And equipment inconsistent the -- we with channel that out But lot are used just sale know guys mix very, benefit. you you seems the prices used margins mix can to just of on I strong.

So of Thanks. there pricing market confidence the are to those over? you your people as foreseeable stay out in concerns rolling pricing can dots for around help just to connect in the future versus high I don't the equipment used know that some

Seth in saw Yes. I'll that strong one. is Look you this Ted. the quarter results. take really itself

high were basis, we pricing sequential not we are digits. So certainly seeing On single a headwinds. up

So our something it's in not an on, it's but we've eye keeping own seen certainly we'd something results. be

contrary, that a engine retail the And we've That's -- is way unique compared the great the channel. part the rest selling you a built We're Yes. seeing see primarily right? to that of in strength of we're industry. quite

going we're driving on because strong -- So pricing. not retail year-on-year But within we're retail to stop seeing that, even great that's pricing.

channel. people heard but experience a not the that's retail bit our little rollover. that it we've So in or about about Maybe talk auction we're in driven, recently seeing

Right.

guys. Thank And good helpful. luck. again, Very Jess, Okay. you,

Thank you. Thank very you much.

question Jerry from And Revich comes our Goldman next from Sachs.

is line Your open.

behalf Clay of Jerry. This is morning. Yes. on Hi. Williams Good

Good morning.

talk of how if eased? supply and containers you is General Finance about Thanks. performing Can has the availability

Performing thing, well. Clay. Sure very

job of helped. chain wanted and on in The to they're and a that for quite size time of containers to has double we some But taken the supply team team ahead And prepared for up. toughest schedule. the announced recall, really get that we great things have the doing. to job time the was the call I doing such we ironically, remarks, that as we're years and that had said advantage. the wanted them, great pricing full you And deal the was and five out specifically initially If is that we my them probably you business when next for a remedy heard bought a that growth when has

the that growing to that around of and buying organically executing it schedule. the platform So deal we we're ahead had excited is thesis and see

just branches? business of And you you Can across so there. what quickly enabled has ahead scale a follow-up that about Yes. plan your talk to

organically our where with them. that product with right, supply we we're able why network, network, small and could mix, at were wanted for reason most and we paid these we the a relationship grow to And Our customers. our of we And that so it it. knew that that to big for platform customers, existing looked big enough could we our so the relationships that then that was also was products support that pay with, adding we multiple deep a had but now enough,

and strategy a it's from the win-win support. really been perspective a customer So

Thanks.

Thank you.

And question KeyBanc. Newman Ken our comes from next from

open. is line Your

guys. morning, good Hey,

Good morning.

within part the consumer-facing, a customer us more a your bit any behavior. I then, of just or concerns you're in remind sales of as lot customers consumer-facing not end around entertainment maybe are from what inflation I terms was commercial curious, know much just that's in it seeing segment. about smaller be obviously, how that hearing talk there's And whether you're little your business, from but just a whether ramps. much or changes probably of been markets

customer the sure. mix. Ken, so of or call guess, parts probably you The I'll direct which, it our XX% for -- and small. that first I between look private at non-res, is take consumer-facing part public if of Yes. our of really it, business or are

might component a number commercial, And of don't strong be kind but certainly that of years. it think very that malls a assault significant. strip frankly, retail the and under it's like of been businesses market have of fraction hasn't within for Obviously, Some we been e-commerce. from

kind things have of more auto PGA think quite could that strong, racing the Some that entertainment. But events be might like events, things that of sporting we sort. focus so aspects there of and been on live consumer-facing be

So indirect is and pretty direct I'd the is part the first very the answer piece small of small. even say, piece question? that Does the

I around second It just yes. ahead. -- does, was the think part then, go And

Yes.

-- is part customers As the I building customer think tight mean here, are And behavior, actually market demand, I robust for would because building Ken, repeat tight are far partnerships. environment a about always we I as on that. was, second -- relying the which environment we're loyalty, the supply say really so demand in customers our

that be got to one-stop we through we would tight selling anything, but value of to that So to one-stop -- our a able for has done relationship has relationship appreciation we if a a opportunity think customers. make I shop team in We've these bring customers bolsters and being challenge, we job and environment. the sure it's come say, improved. the our And meeting and those shop the great

I for that mid-single-digit a quickly, had guided just bit number. fleet think, then, I clarify. just you Got my real know little fact, guys productivity to And in talked follow-up, it. you to

single that of – to your into given given thinking in in here embedded so guide? back half commentary about all fleet quarter, the the digits high productivity to the your of kind should on the midpoint far Just we you've start in what's get the

me to absolutely. Ken, You it beat

embedded. – that's I So what's

the for full imply midpoint If we'll single-digit we and year fleet productivity that high end up. where a you that's use would think

Got Thanks the for it. time.

you. Thank

our question Oppenheimer. Schneeberger And open. your from Scott, comes next from is Scott line

Congrats much. roles. on congratulations in the the Jess quarter. very best Thanks and wishes Ted new And and

Thank you.

I – quite welcome. a XXXX. the it was a in well. great year first very And to would strong be segue like You're and The you're question clearly to guess, year ending year going which my be this last looks that

XXXX about carryover the think we into as can fleet carrying? impact? next exiting and year magnitude we Just productivity and what we how Thanks. think So on about thoughts XXXX, enter going any should

good the other Scott, quantification Well, in metrics. as just rate. yes, know, of are reporting. whole is be what not fleet I'll qualitatively, The But driving peers giving industry job productivity a our seeing consistent painfully doing you including you're

alone. as certainly quantify the not we're numbers control. metric really on there'll will far And hard carryover. time sure said team fleet productivity some the to like and – their I'm in carryover team So be as driving that, and naturally, the a I some rate we be And it, works I'll the although, will going as on there sound give on challenge. but although, just year mix broken don't this positive making the a every under comps record, time be

exceed our So to expectations expect there'll to that well productivity. We still be X.X% opportunity we that of think fleet moderate. that for initial

And to with the speak first how appreciate that's in this labor internalizing half a you Thanks. Jess, on And that trended And commentary you lessons where market could expense? third tough you're learned the using party you inflationary I Matt. forward? have are and been Thanks, also, versus managing just in in delivery all go maybe any in transportation how how I response. fuel qualitative new Great. on that? pressures managing guess, If how the environment any the

Yeah. Scott, Ted. is this

script line you that Jess in – So standpoint, in certainly, our in be if results running quarter, XXs. financials. items first can in be half – both had of been it probably, considerably our upward see kind that the margin embedded the ancillary entire ancillary that in line from at you you item can out the certainly would would positive a it see, and her it second called look and And call it's it's the call from contribution first

minimum isolated as delivery. has a done great and with of margin. we've But protect fuel fuel certainly, the in that team that a the a all able only very item see through point to I reminder, able you that making So and pickup component entire of effectively. makes to job been ancillary line to help at customers component passing we've the to manage that of the that would And be been piece? that that think Does sure a it

Yeah. over. Thanks. I'll That's great. turn it

Thank you.

Baird. from next Dobre our from comes Mig And question

Your line open. is

morning. Good of best you. Thank Congrats Jess Hi. you. luck to and

Mig. Thanks

kind billion especially another metrics about I'm in running revenue terms your the of year revenue. to If quarter guidance for we're the ask few all to surrounding already. assumes the quite looking here back implied fleet. guidance the at half in a second of at the try $X year-to-date, folks of hinted been the So of going of well And question have sort a that you've

are rate? you thinking about it more what the So generates you a Is to still? are of of it as time I'm wondering, there? some would revenue? sequential What fleet? how moving this moving maybe Is little pieces Is pieces it lift the

we're that right? implied the back have also second up more obviously customer in first we're in half as fleet is held to I would as you'll mean, used this I all have demand. sure we'll be certainly, certainly half see fleet sales certainly, – of idea the It's we've example. first fleet make to positive And Ted. the the it's above, half the to versus productivity. satiating Mig, the on the it's Yeah. rent that say expectation an going are

continuation QX well our that it base, know but or continue. momentum performing high don't the point that that business lift to see a lot from curve will the I admittedly So variables. matching very really up kind a QX would right? of we of a would off usually industry, kind is we of think your in seasonal of always It's that, and two that, one and I the to So pinpoint fact is

– QX? we baked knows And again, expect how to go going to to just as high your out? play with want to this. you there to asking where QX anticipated, going there should assumptions. to And relative was comment into I'm Who you of relative QX to QX? Is what's a be I it's sort make Is

than that our into enjoy, level, we driven usually the patterns but we by strong is normal more fleet less seasonal the thought used What's higher the is selling a partly Yes. little although baked mover assumptions bit productivity. needle bigger a at by fleet consider now

at if standard look is expect the the created we've year go off base. a off seasonality the But to higher we overall, curve base guidance in a you So implied and to. just this which higher

for this. came sorry kind I'm It's else has and been just up that. from that a stickler that to be screwed seasonality And everything with COVID of

me remind to to would as So, normal you maybe can that what like? the seasonality referring look you're

have numbers the top way my of to kind mean don't at historically of revenue look sequential those to Mig, would reasonable that head. the Yes. off were I But you I certainly, if normal think be a patterns, about seasonality.

And my question. final Okay. then

approaching terms for slots in kind firm Is as production CapEx discussion is to And about your it point? reasonable that context, demand curious pricing, I'm curious, discussions you it to Thank to just this are to of commit you. relative you around getting is or CapEx you're that OEMs at 'XX And 'XX? up a to You for to within be with partners. very obviously I'm optimistic people going sound how XXXX. of think your

Yes.

to partners, raw be build assets. simply these the get your of I'll time. the So, question. We're take I ready don't latter to the now. fair think all really -- our the costs their about part prepare right going to talking I what don't It's to slots be to know production material are they at

know focused of first we're take We'll expect partners the if to part the question. to production. don't get on I want you as Ted, win-wins usual. our So, with

repeat you Mig, Sorry. again? could it

Yes.

guys expecting wondering, up to sound obviously and be good about if this I'm CapEx really should 'XX point. You at be we

end we Look, of you guidance tone, our kind outlook 'XX. the feel I about of on of through think from it's the But certainly 'XX. get hear early to good ahead certainly looking can pretty

we on there. And In of be the the so in have we'll plan, more to working certainly an January. fourth we'll update and what translates come 'XX as get into -- certainly quarter, that terms to

Yes.

We've of fall do just got process ground-up finalize and year. work We're to a start in we give to clear, quarter. the we'll planning fourth from that. a do on be to Just lot that expect ready growth not this will XXXX whole details be to

Thanks for taking the question.

And to appears any I'd with the further closing that, it back it are turn like no for remarks. there speakers questions. to

ahead to Thank and or you Operator, joining thank end to go out talk And can everyone a in strong meantime, share the call. for have you, we more such October. we'll operator midyear the us. with reach comments. questions in your We're you and Ted when please any time and happy outlook again

Thank program. This participation. does conclude you for your today's

any may time. You disconnect at