Short answer
MCGRATH RENTCORP (MGRC) filed its fiscal 2025 10-K annual report with the SEC on Feb 25, 2026. It reported revenue of $944M (+3.7% year over year) and net income of $156M.
- Top risk flagged: Environmental liability risk from California operations with potential soil or groundwater contamination exposure, possibly requiring costly remediation under complex and changing laws
FY2025 key financial metrics · XBRL
- Revenue
- $944M
- +3.7% YoY
- Net income
- $156M
- −32.5% YoY
- Operating margin
- 25.8%
- −1.0 pp YoY
- Gross margin
- 48.2%
- +0.4 pp YoY
- EPS (diluted)
- $6.35
- −32.7% YoY
- ROE
- 12.6%
- −8.0 pp YoY
- Operating cash flow
- $256M
- −31.7% YoY
Source: XBRL data from the MCGRATH RENTCORP (MGRC) FY2025 10-K on SEC EDGAR. USD.
MCGRATH RENTCORP FY2025 10-K analysis
AI summary of each section, grounded in the filing text
Business Overview
- Core business: Rental and sale of modular space and portable storage solutions across multiple specialized segments
- New emphasis: Increased pre-tax income contribution from Enviroplex (6% in 2025 vs 3% in 2024), indicating growing segment importance
- Strategic shift: Terminated merger with WillScot Mobile Mini in 2024 resulted in $180M gain and $63.2M transaction cost; focus returned to organic growth
- Quantitative highlights: Consolidated revenues up 4% to $944.2M in 2025; net income rose 7% to $156.3M excluding merger effects; adjusted EBITDA up 3% to $362.5M
- Noteworthy fact: Interest expense decreased by $16.6M in 2025 due to 23% reduction in average debt and 15% lower interest rates, improving financial leverage
Management Discussion & Analysis
- Operating cash flow $255.7M in 2025 down from $374.4M in 2024 due to nonrecurring WillScot merger termination gain ($86M) and working capital changes
- Adjusted free cash flow $152.4M in 2025 vs $106.8M in 2024, reflecting improved cash generation from operations and lower rental equipment purchases
- No common stock repurchases during 2025-2023; dividends paid $47.9M in 2025, up from $46.8M in 2024
- Capital expenditures: rental equipment purchase $142.6M in 2025 vs $191.2M in 2024; property, plant and equipment $44.4M in 2025
- Management expects liquidity adequate for working capital and capex through 2026 via operating cash flow, equipment sales, and borrowing capacity; no anticipated covenant breaches but risk if financial deterioration occurs
Risk Factors
- Environmental liability risk from California operations with potential soil or groundwater contamination exposure, possibly requiring costly remediation under complex and changing laws
- CEO transition risk with new CEO appointed April 2026, possibly causing operational disruption or impacting investor and employee confidence
- Supply chain risk due to lack of long-term purchase contracts with third-party suppliers, exposing to supplier failure or shortages affecting product availability
- Cybersecurity risk from increasing frequency and sophistication of attacks, despite 2021 immaterial ransomware incident, with potential financial and reputational harm
- Goodwill and intangible assets impairment risk, totaling $379.1M as of Dec 2025, vulnerable to negative industry trends or underperformance
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