McGrath RentCorp's Q4 2024: A Tale of Diverging Segments

McGrath RentCorp (MGRC) reported strong Q4 2024 results, with total revenues reaching $243.7 million, up 10% year-over-year. Net income from continuing operations was $38.9 million, or $1.58 per diluted share, compared to $32.0 million in Q4 2023. The company's board declared a quarterly dividend payable on April 30, 2025, representing a 1.6% yield based on the February 18, 2025 closing price.

By division, Mobile Modular showed strong performance with 8% rental revenue growth, while Portable Storage and TRS-RenTelco faced challenges with rental revenue declines of 15% and 9% respectively. The company's 34th consecutive annual dividend increase, raising the quarterly dividend by 2% to $0.485 per share, reflects sustainable free cash flow generation and disciplined capital management.



Mobile Modular emerged as the standout performer, with 8% rental revenue growth and a robust 13% increase in Adjusted EBITDA to $61.0 million. The division's success in pricing optimization and value-added services demonstrates effective execution in a strong market. Portable Storage's 15% rental revenue decline reflects broader commercial construction slowdown, suggesting potential cyclical headwinds that may persist into 2025. TRS-RenTelco's 9% rental revenue decrease indicates continued end-market weakness, though proactive fleet size management shows disciplined capital allocation.



McGrath RentCorp's Q4 2024 performance reveals a tale of diverging business segments, with Mobile Modular driving growth while Portable Storage and TRS-RenTelco face headwinds. The company's strategic focus on modular growth initiatives, proactive fleet management, and pricing optimization strategies have helped it adapt to varying market conditions and maintain profitability. As the company looks ahead, investors should monitor the progress of these initiatives and the potential for continued growth in the modular segment.