U-Haul Holding Q2 2027 Earnings Call Transcript

U-Haul Holding (NYSE:UHAL) reported second-quarter financial results on Thursday. The transcript from the company’s second-quarter earnings call has been provided below.

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View the webcast at https://events.q4inc.com/attendee/582921559

Summary

U-Haul Holding Company reported second quarter earnings of $137 million, up from $106 million in the same quarter last year, with earnings per share rising to $0.71 from $0.54.

Equipment rental revenue increased by $37 million, driven by gains in both In-Town and One-Way markets, and the company added 63 new locations and over 500 independent dealer locations.

Capital expenditures for new rental equipment decreased by $275 million compared to last year, with a projected decrease of over $500 million in net fleet investments by year-end.

Storage revenues rose by $16 million, a 6% increase, though same-store occupancy decreased by 110 basis points to 89.5%.

The company invested $432 million in real estate acquisitions and development, adding 10 new locations with a million net rentable square feet.

Moving and Storage operating expenses increased by $54 million, with freight and shipping costs rising by $24.5 million, impacting U-Box operations.

Fleet depreciation decreased by $4.5 million, and losses from equipment disposal decreased by $34 million.

Cash available from loan facilities totaled $1.335 billion, and share repurchases amounted to $78.3 million during the quarter.

Management expressed optimism due to steady revenue growth, lower spending and depreciation, and manageable personnel expenses despite challenges with freight costs.

Full Transcript

OPERATOR

Please go ahead.

Sebastian

Good morning and thank you for joining us today. Welcome to the U-Haul Holding second quarter fiscal 2027 investor call. Before we begin, I’d like to remind everyone that certain of the statements during this call, including without limitation statements regarding revenue, expenses, income, and general growth of our business, may constitute forward-looking statements within the meaning of the safe harbor provisions of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Forward-looking statements are inherently subject to risks and uncertainties, some of which cannot be predicted or quantified.

Certain factors could cause actual results to differ materially from those projected. For discussion of the risks and uncertainties that may affect the Company’s business and future operating results, please refer to the Company’s public SEC filings in Form 10-Q for the quarter ended September 30, 2026, which is on file with the U.S. Securities and Exchange Commission. I’ll now turn the call over to Jason Berg, Chief Financial Officer of U-Haul Holding Company.

Jason Berg (Chief Financial Officer)

Thanks, Sebastian. Good morning to everyone. I’m speaking to you today from our home office here in Phoenix, Arizona. Our CEO, Joe Schoen, is speaking at an industry event today and is unavailable for this call. Here in the office with me, in addition to Sebastian, are Sam Schoen and J.T. Taylor, the President of our U-Haul International subsidiary. Yesterday we reported second quarter earnings of $137 million compared to earnings of $106 million for the same quarter last year. In terms of earnings per share, that’s $0.71 per non-voting share this year compared to $0.54 last year. From here on out, all of my references in the prepared remarks are going to be for the second quarter of this year versus last year. Unless otherwise noted, earnings before interest, taxes, and depreciation, what we call adjusted EBITDA, at the Moving and Storage segment increased $5 million for the quarter to $548 million.

Included in our release and the financial supplement that we post on our website is a reconciliation of adjusted EBITDA to GAAP earnings. Starting off with equipment rental revenue for the quarter, it rose $37 million with gains in both our In-Town and One-Way markets. Within that, we saw In-Town transactions increase while revenue per transaction improved across both In-Town and One-Way. This was driven by more miles per transaction and higher revenue per mile by the end of September of this year versus last year. Between those two dates, we added 63 new company-operated locations, and we increased our independent dealer network by a net total of over 500 locations.

October revenue has trended a bit higher than what our second quarter results were. Capital expenditures for new rental equipment were $466 million. That’s a $275 million decrease compared to the same period last year, while proceeds from the sales of retired rental equipment went down by $21 million to a total of $198 million for the first six months of the fiscal year. We are down $223 million now on net fleet capex. We’re still projecting a decrease of a little over $500 million for net fleet investments by the end of the fiscal year.

Storage revenues are up $16 million. That’s about a 6% increase. Average revenue per occupied foot for our total portfolio, so I’m including both same-store and lease-up locations, improved by just under 3%. Some portion of this year-over-year improvement is going to dissipate now that we’re a full year past the cleanup of delinquent rooms. Our average new-customer rental rates have increased by about 2% year over year, while rates for customers leaving are still about 1% lower than what the move-in rates are.

Same-store occupancy decreased by 110 basis points to 89.5%. We’re seeing net move-in and move-out activity consistent but remains behind what our goal is. During the first six months of fiscal 2027, we invested $432 million in real estate acquisitions along with the development of self-storage and U-Box warehouse. That’s a $94 million decrease over the first six months of last year. Just in the second quarter we added 10 new locations with storage totaling a million net rentable square feet. We currently have approximately five and a half million new square feet being developed across 110 projects, and our pipeline of projects not yet started is about five and a half million square feet as well.

To put that in context, last year active development was about six and a half million square feet and the pipeline was 7.7. So we’re making progress in moderating the pipeline of new storage projects. The pace of our development spending is approaching, likely. Our Moving and Storage operating expenses increased $54 million compared to the same quarter last year. Our adjusted EBITDA margin went down by about 90 basis points, but we did have an improvement in our operating margin largely due to depreciation, personnel, and property taxes. Self-insurance liability costs increased by a combined just over $21 million. The issues that arose in the first quarter with freight and shipping costs continued into the second quarter, increasing by just under $24.5 million.

As an industry, I don’t see freight carriers lowering costs in the near term. Our U-Box team, which accounts for the largest portion of this variance, is working to make sure that our customer rates reflect the reality of the situation, as well as continuing to advance our load-share program that teams U-Box shipments with our One-Way truck rental customers. While we’re on U-Box, we saw the program return to revenue growth this quarter. We had an increase in the number of containers shipped as well as the number of containers in storage.

We had fleet depreciation reach an inflection point that we’ve been talking about for a while now. It decreased by $4.5 million in the quarter, while losses from the disposal of rental equipment decreased $34 million, resulting in a loss of $4.2 million for the quarter. The equipment that we sold had a lower cost, primarily from the additional depreciation that we’ve recognized over the last 12 months. While proceeds in the resale market have been resilient, the newer cargo vans that we’ve added to the rental fleet the last nine months have a lower initial cost and therefore we’re seeing lower depreciation charges.

As of September 30th this year, we had cash along with availability from existing loan facilities at the Moving and Storage segment of $1,335,000,000. Quick update on the share repurchase program: During the second quarter we repurchased 149,927 shares of voting common stock at a cost of $10.1 million and 1,095,478 shares of non-voting common stock at a cost of $68.2 million. As of today, the maximum amount that we can still repurchase is just under $224 million.

Given the volatility that we’re seeing in finance markets, we’re balancing our plan to maintain adequate liquidity with our belief that our common stock, and in particular the non-voting shares, continue to be undervalued. Before I hand the call back to our operator, I wanted to reiterate a couple of very important trends that gave me optimism in the quarter. First, revenue growth, while slower than we’d like to see, has been durable and steady. Second, the adjustments that we’ve made over the last year plus to slow our growth capex plans for both fleet and self-storage are showing tangible results in lower spending and depreciation. And finally, on the expense front, our largest expense, personnel, is in line with revenue growth.

We should also run a sizable positive variance on fleet liability costs over the second half of this year. And outside of the freight shipping costs, our other expenses really are not out of line. With that, I’d like to hand the call back to our operator, Connor, to begin the question and answer portion of the call. Are you there?

Disclaimer: This transcript is provided for informational purposes only. While we strive for accuracy, there may be errors or omissions in this automated transcription. For official company statements and financial information, please refer to the company’s SEC filings and official press releases. Corporate participants’ and analysts’ statements reflect their views as of the date of this call and are subject to change without notice.