8-K: U-Haul Q2 Earnings Plunge Amid Higher Fleet Costs

U-Haul Holding Company reported a significant drop in second-quarter net earnings to $105.6 million, down from $186.8 million year-over-year, despite revenue growth across key segments.

Summary

• Net earnings available to common shareholders for the second quarter ended September 30, 2025, were $105.6 million, a decrease from $186.8 million in the same period last year.
• Earnings per share for Non-Voting Shares (UHAL.B) fell to $0.54, compared to $0.96 for the second quarter of fiscal 2025.
• Consolidated revenue increased to $1,719.9 million for the quarter, up from $1,658.1 million in the prior year.
• Moving and Storage earnings from operations decreased by $83.3 million to $197.4 million.
• The decrease in earnings was primarily driven by increased losses from the disposal of retired rental equipment ($56.1 million increase) and higher fleet depreciation expense ($50.6 million increase).
• Moving and Storage EBITDA increased by $31.6 million to $542.6 million for the quarter.
• Self-storage revenues grew by $21.8 million, or 9.7%, year-over-year, with 23 new locations and 1.6 million net rentable square feet added.
• Self-moving equipment rental revenues increased by $23.1 million, or 2.1%, with higher revenue per transaction in both In-Town and One-Way markets.
• Other revenue for Moving and Storage, including the U-Box product, increased by $12.0 million or 7.4%.
• Same store self-storage occupancy decreased by 3.5% to 90.5%, while revenue per foot increased by 4.0%.
• Total debt increased to $7,732.5 million as of September 30, 2025, from $6,794.5 million a year prior, with net debt to adjusted EBITDA rising to 4.1x from 3.5x.

Sentiment

Score: 4

Explanation: While revenue growth in key segments like self-storage and U-Box is positive, the significant decline in net earnings and EPS due to increased fleet depreciation and disposal losses is a major concern. The rise in total debt and net debt to EBITDA also indicates increased leverage. Management's acknowledgment that these issues were 'anticipated' suggests a degree of control, but the magnitude of the profit drop is still negative. The 'green mandates' comment offers a potential future positive, but current results are weak.

Positives

• Consolidated revenue increased by $61.8 million to $1,719.9 million for the quarter, demonstrating top-line growth.
• Self-storage revenues grew by 9.7% ($21.8 million) year-over-year, indicating strong demand in this segment.
• The company added 23 new self-storage locations and 1.6 million net rentable square feet during the quarter, expanding its footprint.
• Self-moving equipment rental revenues increased by 2.1% ($23.1 million), with higher revenue per transaction.
• Moving and Storage EBITDA increased by $31.6 million to $542.6 million, suggesting operational efficiency improvements before non-cash charges.
• Cash and credit availability at the Moving and Storage segment increased to $1,376.0 million from $1,347.5 million at March 31, 2025.
• Management noted that Federal Agencies are 'jettisoning impossible green mandates,' which is positive for future truck rental operations.

Negatives

• Net earnings available to common shareholders decreased significantly to $105.6 million from $186.8 million in the prior year's quarter, a 43.5% decline.
• Earnings per share for Non-Voting Shares (UHAL.B) dropped to $0.54 from $0.96, a 43.75% decrease.
• Moving and Storage earnings from operations decreased by $83.3 million, indicating pressure on core profitability.
• Increased losses from the disposal of retired rental equipment accounted for a $56.1 million decrease in earnings.
• Fleet depreciation expense increased by $50.6 million, impacting profitability.
• Fleet maintenance and repair costs increased by $10.4 million.
• Same store self-storage occupancy decreased by 3.5% to 90.5%, despite revenue per foot increasing.
• Total debt increased by $938.0 million year-over-year, and net debt to adjusted EBITDA rose from 3.5x to 4.1x.

Risks

• Actual results may differ materially from anticipated outcomes due to various risks and uncertainties.
• The company refers to its Form 10-Q for the quarter ended September 30, 2025, for a brief discussion of risks and uncertainties that may affect its business and future operating results.

Future Outlook

Management anticipates continued increases in fleet depreciation expense and losses on the sale of retired equipment. However, they also expressed confidence in the future of truck rentals, citing the 'jettisoning impossible green mandates' by Federal Agencies.

Management Comments

• "As anticipated, the increase in fleet depreciation expense and losses on the sale of retired equipment continued into this quarter."
• "Revenues for our major product lines are up year-over-year however, profits are down two years running."
• "The better news is Federal Agencies are jettisoning impossible green mandates. U-Haul will be renting trucks for the foreseeable future."

Industry Context

U-Haul's results reflect a mixed environment. While the self-storage and U-Box segments show robust growth, indicating strong demand for flexible storage and moving solutions, the core truck rental business is facing significant cost pressures from fleet management. The commentary on 'green mandates' suggests a potential easing of regulatory burdens that could impact fleet investment and operational costs in the long term, potentially offering a competitive advantage or cost relief compared to peers facing stricter environmental regulations.

Comparison to Industry Standards

• The self-storage segment's 9.7% revenue growth and expansion of 1.6 million net rentable square feet are strong indicators, potentially outperforming some competitors in a fragmented market, though specific peer comparisons are not provided in the filing.
• The decline in same-store occupancy for self-storage to 90.5% from 94.0% in the prior year, while still high, suggests some softening in demand or increased competition compared to previous periods, which could be a trend across the broader self-storage industry.
• The increase in fleet depreciation and losses on equipment disposal highlights challenges common to asset-heavy rental businesses, particularly in a market with fluctuating used vehicle values and evolving fleet replacement strategies. Without specific competitor data, it's difficult to benchmark the severity of these impacts.

Stakeholder Impact

• Shareholders: Experience a significant decrease in earnings per share, potentially impacting stock valuation and future dividend growth, despite a declared dividend for non-voting shares.
• Employees: No direct impact mentioned, but overall company performance can influence future compensation and job security.
• Customers: Continued expansion of self-storage locations and U-Box offerings suggests improved service availability and options.
• Creditors: Increased total debt and net debt to adjusted EBITDA ratio may indicate higher financial risk, though the company maintains substantial cash and credit availability.

Next Steps

• U-Haul Holding Company will hold its investor call for the second quarter of fiscal 2026 on Thursday, November 6, 2025, at 8 a.m. Arizona Time (10 a.m. Eastern).

Key Dates

Recommendation

The filing presents a mixed picture. While U-Haul demonstrated solid revenue growth in its self-storage and self-moving equipment rental segments, the substantial decline in net earnings and EPS is a significant concern. This profit erosion is primarily driven by anticipated increases in fleet depreciation and losses on equipment disposal, which are structural issues for an asset-heavy business. The rising debt levels and net debt to EBITDA ratio also warrant caution. However, the company's strategic expansion in self-storage and U-Box, coupled with management's positive outlook regarding the easing of 'green mandates,' suggests potential long-term resilience. For existing investors, holding the stock to monitor the effectiveness of cost management and the continued growth of higher-margin segments seems prudent. New investors might find the current profit decline and increased leverage a deterrent, suggesting a 'wait and see' approach until there's clearer evidence of profit stabilization or recovery.

Keywords

U-Haul, UHAL, Earnings, Financial Results, Self-Storage, Moving Equipment Rental, Fleet Depreciation, EBITDA, Q2 Fiscal 2026, SEC Filing