United Rentals, Inc. stock research
FY2024 Q2
United Rentals (URI) Gross Margin — Quarter Ended Jun 30, 2024
Current-quarter gross profit exceeded cost of revenue by a wide margin, while revenue net of cost is negative, resulting in a negative gross margin. Compared with the immediately preceding quarter, gross profit improved and cost of revenue increased, but the gross margin turned from positive to negative; compared with the same quarter one year earlier, gross profit improved, cost of revenue increased, and the negative gross margin narrowed.
Gross margin takeaway
Quarter ended Jun 30, 2024 · FY2024 Q2
Current-quarter gross profit exceeded cost of revenue by a wide margin, while revenue net of cost is negative, resulting in a negative gross margin. Compared with the immediately preceding quarter, gross profit improved and cost of revenue increased, but the gross margin turned from positive to negative; compared with the same quarter one year earlier, gross profit improved, cost of revenue increased, and the negative gross margin narrowed.
- Gross profit increased from both the prior quarter and the year-ago quarter, but cost of revenue also rose, while reported revenue remained negative, indicating that revenue netting or contra-revenue items are the primary factor in the negative margin. The strongest observable driver is the relationship between negative revenue and positive gross profit, which causes the margin to be negative.
- Sequentially, gross margin weakened significantly from the prior quarter's positive figure to a negative figure, though gross profit improved. Year over year, gross margin improved as the negative margin narrowed, with gross profit higher and cost of revenue higher.
Gross margin snapshot
The selected quarter's reported revenue, gross profit, direct costs, and margin comparisons.
Gross margin
-84.8%
Gross profit
$1.5B
Revenue
-$1.8B
Cost of revenue
$2.3B
Quarter-over-quarter change
-123.4 pts
Year-over-year change
+2.6 pts
Quarterly gross margin trend
A four-quarter view of the revenue and direct-cost bridge behind gross margin.
| Period | Revenue | Gross profit | Cost of revenue | Gross margin |
|---|---|---|---|---|
| Jun 30, 2023 | -$1.6B | $1.4B | $2.1B | -87.4% |
| Sep 30, 2023 | $842.0M | $1.6B | $2.2B | 188.2% |
| Mar 31, 2024 | $3.5B | $1.3B | $2.1B | 38.6% |
| Jun 30, 2024 | -$1.8B | $1.5B | $2.3B | -84.8% |
Quarterly comparisons
Compare the selected margin with the preceding quarter and the same fiscal quarter one year earlier.
Previous-quarter change
Mar 31, 2024
-123.4 pts
Year-over-year change
Jun 30, 2023
+2.6 pts
What the margin says
Filing-constrained interpretation of margin direction, comparisons, and what to monitor next.
Gross profit increased from both the prior quarter and the year-ago quarter, but cost of revenue also rose, while reported revenue remained negative, indicating that revenue netting or contra-revenue items are the primary factor in the negative margin. The strongest observable driver is the relationship between negative revenue and positive gross profit, which causes the margin to be negative.
Sequentially, gross margin weakened significantly from the prior quarter's positive figure to a negative figure, though gross profit improved. Year over year, gross margin improved as the negative margin narrowed, with gross profit higher and cost of revenue higher.
Monitor revenue netting or contra-revenue adjustments that keep reported revenue negative despite gross profit being positive.