Sunbelt Rentals (SUNB) Q4 2026: Revenue Growth Amid Profit Decline — Cautiously Optimistic

Sunbelt Rentals Holdings, Inc. (NYSE: SUNB) reported its fiscal fourth quarter and full-year results for 2026, revealing a mixed performance. The company achieved total revenue of $2,754 million, representing an 8.9% increase compared to $2,529 million in the same quarter last year. However, net income fell to $226 million, down 31.3% from $329 million in Q4 2025, leading to earnings per share (EPS) of $0.55, a decline of 27.6% year-over-year.

This quarter's results reflect a strong revenue growth trajectory, driven primarily by an 8.0% increase in rental revenue. However, the significant drop in net income and EPS raises concerns for shareholders. The decline in profitability can be attributed to higher non-recurring costs related to restructuring and stock compensation expenses, which overshadowed the revenue gains.

Key Financial Metrics:

• Total Revenue: $2,754 million (up 8.9% YoY)
• Rental Revenue: $2,520 million (up 8.0% YoY)
• Net Income: $226 million (down 31.3% YoY)
• Earnings Per Share (EPS): $0.55 (down 27.6% YoY)
• Adjusted EBITDA: $1,067 million (down 1.3% YoY)
• Adjusted EPS: $0.74 (down 8.6% YoY)

Analyst Opinion

This quarter presents a mixed bag for shareholders. While revenue growth is commendable, the sharp decline in net income and EPS is disappointing. The company’s ability to manage costs effectively will be crucial moving forward. The announcement of a final dividend payment of $0.75 per share, leading to a full-year dividend of $1.125, reflects a commitment to returning value to shareholders, albeit with a 4% increase over the prior year. The transition to a quarterly dividend in fiscal 2027 is a positive step, indicating confidence in future cash flows.

Shareholder Returns and Future Guidance

In fiscal 2026, Sunbelt Rentals returned a total of $1,877 million to shareholders, comprising $1,413 million in share buybacks and $464 million in dividends. The company has also announced the acquisition of Reliant Asset Management for $650 million, which is expected to be accretive to EPS in the first year. This acquisition aligns with Sunbelt's strategy to expand its Specialty offerings and enhance its market position.

Looking ahead, Sunbelt Rentals has provided guidance for fiscal 2027, projecting total revenue growth of 4.5% to 7.5% and rental revenue growth of 5% to 8%. Adjusted EBITDA is expected to range between $4.85 billion and $5.05 billion, indicating a positive outlook despite the challenges faced in the previous year.

Forward Catalysts

Investors should closely monitor the integration of Reliant Asset Management and its impact on revenue and profitability. Additionally, the transition to a quarterly dividend and the company's ability to manage costs effectively will be critical in determining shareholder value in the upcoming quarters. The anticipated growth in rental revenue and adjusted EBITDA will also be key indicators of the company's performance as it navigates through fiscal 2027.

In summary, while Sunbelt Rentals has demonstrated robust revenue growth, the decline in profitability raises caution. The strategic acquisition and commitment to returning capital to shareholders provide a foundation for potential recovery and growth in the coming year.

Note: All amounts are in millions.

Sunbelt Rentals Holdings, Inc. - Condensed Consolidated Statement of Income	Three Months Ended	Year Ended
April 30, 2026	$2,754	$11,154
April 30, 2025	$2,529	$10,791
Y/Y	+8.9%	+3.4%

Sunbelt Rentals Holdings, Inc. - Condensed Consolidated Balance Sheets	April 30, 2026	April 30, 2025
ASSETS
Cash and cash equivalents	$29	$21
Accounts receivable, net of allowance for credit losses of $105 and $102, respectively	$1,669	$1,481
Inventory	$180	$147
Prepaid expenses and other assets	$354	$372
Total current assets	$2,232	$2,021
Rental equipment, net	$11,224	$11,340
Property and equipment, net	$2,063	$2,038
Goodwill	$3,476	$3,348
Other intangible assets, net	$338	$433
Operating lease right-of-use assets	$2,664	$2,523
Other long-term assets	$271	$267
Total non-current assets	$20,036	$19,949
Total assets	$22,268	$21,970
LIABILITIES AND STOCKHOLDERS’ EQUITY
Short-term debt and current maturities of long-term debt	$550	$0
Accounts payable	$472	$302
Accrued expenses and other liabilities	$1,167	$991
Operating lease liabilities	$287	$266
Total current liabilities	$2,476	$1,559
Long-term debt	$7,033	$7,500
Deferred taxes	$2,394	$2,288
Non-current portion of operating lease liabilities	$2,577	$2,434
Other long-term liabilities	$379	$390
Total non-current liabilities	$12,383	$12,612
Total liabilities	$14,859	$14,171
Stockholders’ equity:
Common stock – £0.10 ($0.18) par value, 451,354,833 and 430,708,216 shares issued and outstanding, respectively, as of April 30, 2025	$0	$82
Common stock – $0.01 par value, 413,965,587 and 410,272,086 shares issued and outstanding, respectively, as of April 30, 2026	$4	$0
Additional paid-in capital	$204	$46
Retained earnings	$7,646	$9,103
Treasury stock at cost – 3,693,501 and 20,111,957 shares as of April 30, 2026 and April 30, 2025, respectively	-$259	-$1,171
Common stock held by the ESOT – 0 and 534,660 shares as of April 30, 2026 and April 30, 2025, respectively	$0	-$35
Accumulated other comprehensive loss	-$186	-$226
Total stockholders’ equity	$7,409	$7,799
Total liabilities and stockholders’ equity	$22,268	$21,970

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