United Rentals Q3 2025: Revenue Grows, but Profit Margins Squeeze

United Rentals (NYSE: URI), the world's largest equipment rental company, serves as a critical partner to construction and industrial clients across North America. In its latest third-quarter 2025 report filed with the SEC, the company's financial statements reveal a dynamic of solid top-line growth met by the pressures of a challenging cost environment. While revenues are climbing, profitability is feeling the squeeze.

To visualize how United Rentals generates its income, the following chart breaks down its revenues and costs for the third quarter of 2025.

Growth Fueled by Specialty Rentals

United Rentals posted a healthy 5.9% increase in total revenue for the third quarter, reaching $4.2 billion compared to $4.0 billion in the same period last year. This growth was largely propelled by its Specialty segment—which includes trench safety, power, and fluid solutions—where revenue jumped a robust 12.5% to $1.4 billion. The larger General Rentals segment, the company's traditional backbone, saw more modest growth of 3.0%, bringing in $2.8 billion.

The core equipment rental business, which accounts for the majority of revenue, grew 5.8% to $3.7 billion. This increase was driven by a combination of having more equipment available for rent and improving fleet productivity—a key metric indicating how effectively the company is generating revenue from its assets.

The Margin Squeeze

A more telling story, however, lies in the company's profitability. Despite the strong top-line performance, gross profit was nearly flat at $1.67 billion. This caused the company's total gross margin to compress, falling to 39.4% from 41.3% a year ago.

This pressure was evident across the business, but particularly in the high-growth Specialty segment. Its equipment rental gross margin, while still very strong, dropped significantly from 50.0% in Q3 2024 to 45.1% in Q3 2025. The data indicates that costs—particularly for labor, maintenance, and equipment depreciation—are rising faster than revenues. For the nine months ended September 30, the company's spending on new rental equipment was substantial, hitting nearly $3.6 billion.

Flat Profit, Rising EPS

The impact of these rising costs trickled down to the bottom line. Net income for the quarter was $701 million, a slight dip from the $708 million earned in the prior year.

Interestingly, despite the flat profit, diluted earnings per share (EPS) actually rose to $10.91 from $10.70. This was made possible by the company's aggressive share repurchase program. United Rentals bought back $622 million of its own stock during the quarter, reducing the number of shares outstanding and thereby boosting the earnings attributable to each remaining share.

In conclusion, United Rentals is navigating a complex environment. It is successfully expanding its revenue base, especially in the promising Specialty segment. However, like many industrial companies, it faces the challenge of rising costs that are eroding margins. The company's use of share buybacks provides a lift to EPS, but investors will be closely watching whether United Rentals can restore its margin strength while continuing its impressive growth.