Kyle Menges

CFO reiterated the ambition to keep raising margins over time via technology pricing, parts growth, and limited competition in global power solutions.

CFO said demand keeps growing with no pausing, and new 95-liter orders now push out to the second half of 2028, consistent with extending industry lead times.

Rumsey confirmed fuel efficiency improvements expected with HELM platform. Revealed B Series medium-duty delayed to January 2028 due to late EPA rule changes. X15 and X10 still on track for 2027.

Rumsey said current B Series continues through 2027, allowing phased transition. Did not quantify specific financial impact of delay or discuss potential penalties.

Rumsey confirmed EPA 27 drives $10K-$15K content add per heavy-duty truck, majority in powertrain split between Engine and Components (especially aftertreatment). Also bringing efficiency, power, and digital solutions alongside regulatory compliance.

Smith highlighted e-mobility progress in bus applications moving from negative gross margins to stable. Electrolyzer demand 'dried up faster than anything I have seen in my career.'

Smith ruled out 8% Engine margins but acknowledged significant headwinds from volume, parts softness, and holiday seasonality. Not dramatically better but not collapse.

Rumsey confirmed X15 diesel launch pushed to end of 2026 (was earlier). All HELM platforms launching for 2027 regulation. $1B invested in U.S. engine plants.

Smith noted improved leverage metrics supporting more capital return. Quantified Big Beautiful Bill cash benefit at $125-250M (5-8% of operating cash flow) but tariff costs are multiples larger.

Rumsey described inventory pull-forward and dual sourcing as no-regrets actions taken. Further supply chain changes pending clarity on tariff direction.

Rumsey confirmed limited, not-unusual cancellations/push-outs that are being reallocated to other customers wanting earlier delivery. Not a broad trend.

Smith guided parts flat to up 5% with some pricing, growing at least in line with the economy.

Smith noted new product launches in 2025 limit R&D reduction this year, but post-2027 launches provide part of the margin expansion story.

Baney confirmed broadening demand across fleet sizes including TRP, and pointed to proprietary content supporting margin.

Feight was explicit that penalties are a pass-through with no margin effect.

Management confirmed expected price/cost favorability while acknowledging raw material volatility as a factor to monitor

Management expressed confidence in engine development programs and Cummins partnership but provided no specific performance metrics or timeline

Feight pushed back on overhang concern, noting pre-2027 inventory would have value. Too early to predict Q4 specifics; expects acceleration through year.

Baney cited market acceleration, trucks returning to service, and tariff favorability on parts as drivers of growth ramp through 2026.

Feight wants to move past tariff surcharges to normal pricing discussions. 232 stability allows integration of costs into standard truck pricing.

Industry inventory improving to 4 months from 4.2. PACCAR at 2.8 months. Expects Q4 capital allocation season to cement 2026 buying plans.

Feight shared medium-duty inventory: industry 6 months, PACCAR 4.5 months. Same 2027 factors could stimulate medium-duty market in 2026.

Feight confirmed Q2 cost impact mainly tariff-related. Schippers added other cost elements flat with good productivity and supplier cost programs.

Schippers noted pricing up ~2.5% supporting revenue growth even in soft volume environment.

Feight pointed to healthy inventory levels (2.3 months vs industry 3.1) and noted body builder trucks are spoken for, not speculative.

Feight noted market normalizing from a high base, with medium-duty share having grown from 14.5% to 18%. Expects strengthening in second half.

Matt confirmed local markets stabilized with low-single-digit growth and pointed to petrochem, industrial and residential as future upside.

Matt said local market stabilized, which is positive compared to prior negative trends. Major project pipeline and specialty growth continue as growth drivers, consistent with expectations.

Matt said product overlap with OEM dealer rental fleets is minimal. A handful do well locally/regionally but it doesn't rank high in URI's competitive analysis except in specific local markets.

Ted explained it's unusual to update guidance in Q1; more appropriate to capture it when tightening ranges in July. Matt noted they had flagged this plan on the April call.

Matt confirmed used recovery has stabilized, sequential improvement from 51% to 53%. Industry discipline in absorbing excess capacity rather than dumping is positive for supply/demand.

Matt said major project share of demand is similar to last year, possibly ticked up slightly. Project visibility extends beyond six months. Backlog supports balance of 2025.

Matt said too early for tariff impact on used values. Theoretically, higher new equipment pricing would umbrella used pricing, as seen post-COVID. Q1 demand driven by end market, not tariff speculation.

Matt said no pullback planned anywhere given strong utilization. Of ~$500M growth CapEx, specialty cold-starts get an overweighted share.

Ted said customer sentiment improved since the election on pro-growth expectations. Matt noted field teams feel good about the year, and they won't overreact to daily news cycles.

Menges asked about data-center backup redundancy and diesel genset lead times; Creed said gensets are extended into 2028 and most grid-connected data centers still use diesel backup.

Joe said not many new mines going in, but fleet age is elevated and customers are updating. Copper and gold strength is the primary driver. North America construction resilience also supports heavy construction in RI.

Creed said prime power creates services opportunity and is excited about the trend. Joule announcement part of capacity addition to serve demand. Solar seeing healthy ordering activity in both power generation and oil and gas from natural gas transmission. Able to keep up with current orders but lead times starting to extend particularly for larger Titan 250 and Titan 350 turbines. Prepared to act on capacity when needed.

Creed noted healthy order rates with backlog up particularly in large trucks and articulated trucks which have longer lead times. Not ready to discuss 2026 but backlog provides encouraging visibility. Bonfield said coal revenues are low single digits as percentage of total revenue and diminishing over time. Company does not disclose detailed exposure by commodity.

Creed said happy with merchandising results and better-than-expected sales to users not just in North America but also Africa Middle East and South America. Bonfield added no-tariff scenario assumes no H2 price increase with merchandising impact moderating in Q3 and neutral by Q4. Alternative tariff case assumes no price increases either with mitigation to come. Each segment will make appropriate pricing decisions independently.

Umpleby said customers continue to display capital discipline but encouraged that key commodities remain above investment thresholds. Product utilization high with low number of parked trucks and elevated fleet age. Autonomous solutions seeing strong customer acceptance. Data center buildouts positive for commodities like copper over time. Bonfield said marginally negative RI price impact in Q1 from merchandising programs mainly in heavy construction and aggregates.

NA earthmoving retail inflected positive for first time in 18 months. Orders up mid-teens YoY. Price moderation expected in Q4. Bonus depreciation potential upside.

Jepsen clarified the back-half weighting is driven by year-over-year comps, not assumed demand improvement. Large ag was down 10% H1/30% H2 in FY2024, making FY2025 H2 comps easier.