Executive Summary / Key Takeaways

• U-Haul Holding Company is North America's largest DIY moving and storage operator, leveraging an integrated ecosystem of truck/trailer rentals, self-storage, U-Box, and related services across a vast network of company stores and independent dealers.
• Recent financial performance reflects significant strategic investments in fleet and real estate expansion, leading to increased depreciation and capital expenditures, while gains on equipment sales have decreased due to higher acquisition costs and lower resale values, impacting near-term earnings.
• The company is actively expanding its self-storage portfolio through acquisitions and development, adding capacity faster than it is currently being leased up, a deliberate long-term strategy management believes will yield substantial future revenue and leverage existing infrastructure.
• U-Box is a key growth driver, expanding rapidly in both moving transactions and storage capacity, leveraging U-Haul's network and technology to offer unique competitive advantages like self-delivery options and increased storage density.
• While facing competitive pressures in both moving and storage, U-Haul differentiates itself through its integrated service model, extensive geographic reach, and customer-focused technology, positioning it to capture market share from non-commercial alternatives and outperform peers focused solely on price.

The Foundation: An Integrated Ecosystem for the DIY Mover

U-Haul Holding Company stands as the dominant force in North America's do-it-yourself moving and storage market. Founded in 1945, the company has evolved from simple trailer rentals to a comprehensive, integrated ecosystem designed to serve the diverse needs of household and commercial movers. This ecosystem encompasses a vast network of nearly 2,400 company-operated retail stores and over 21,600 independent dealers, providing access to a wide range of services including truck and trailer rentals, self-storage units, portable U-Box containers, moving supplies, towing accessories, and propane.

The company's strategic objective is clear: to provide a "better and better product and service to more and more people at a lower and lower cost." This is pursued by offering convenient one-stop shopping across a broad geographic footprint. U-Haul's business model is deeply intertwined with the fundamental consumer needs for self-move and self-storage, needs that management expects to persist regardless of economic cycles.

The competitive landscape is intense across all segments. In truck rentals, U-Haul faces national rivals like Penske Truck Leasing and Avis Budget Group (CAR), as well as numerous regional and local players. Competition hinges on location convenience, equipment availability and quality, breadth of services, and total cost. The self-storage market is large and fragmented, with major competitors including Public Storage (PSA), CubeSmart (CUBE), and Extra Space Storage (EXR). Here, key competitive factors are location convenience, cleanliness, security, and price. U-Haul's integrated model, combining moving and storage services at many locations, provides a distinct advantage over competitors focused on a single service.

Technological Edge and Operational Strength

A critical component of U-Haul's strategy and competitive moat lies in its operational capabilities and technological differentiation. The company designs and manufactures its own distinctive orange and white trucks and trailers, incorporating proprietary features like the Lowest Deck for easier loading, widest loading ramps, Gentle Ride Suspension, and Moms Attic for fragile items. These features offer tangible benefits to DIY movers, enhancing ease of use, safety, and protection of belongings.

The uhaul.com website and U-Haul mobile app serve as central technological platforms, aggregating customers and independent service providers. This online marketplace facilitates the Moving Help program, connecting customers with labor for packing, loading, and cleaning, and the U-Haul Storage Affiliates program, integrating independent storage facilities into U-Haul's reservation system. The U-Haul Truck Share 24/7 system, supported by granted and pending patents, allows customers to rent equipment anytime via mobile device, enhancing convenience and reducing reliance on counter service. This focus on technology aims to increase service accessibility and efficiency for both consumers and businesses.

While U-Haul invests in technology, it also faces risks, particularly related to the evolving vehicle landscape. Regulatory pressures favoring electric and autonomous vehicles could necessitate costly infrastructure upgrades (like charging networks) and impact fleet acquisition, especially for one-way moves across North America. The company's repair and maintenance infrastructure, including fixed-site repair facilities and trained personnel, is crucial for maintaining its large fleet but may require adaptation for new vehicle technologies. Despite these challenges, U-Haul's established network and integrated digital platforms provide a significant operational advantage in reaching and serving customers.

Financial Performance: Investing for the Future

U-Haul's recent financial performance, particularly in fiscal year 2025, reflects a period of significant strategic investment and adaptation to market dynamics. Total consolidated revenue increased to $5.83 billion in FY25 from $5.63 billion in FY24. However, net earnings available to common stockholders decreased to $367.1 million in FY25 from $628.7 million in FY24.

This decline in earnings, despite revenue growth, is largely attributable to increased costs and expenses, notably within the Moving and Storage segment. Operating expenses rose, driven by increases in personnel, liability costs, property taxes, utilities, and building maintenance, although fleet repair and maintenance costs saw a decrease. A significant factor impacting profitability was the substantial increase in depreciation expense associated with the rental fleet ($971.9 million in FY25 vs $817.9 million in FY24). This was coupled with a sharp decrease in net gains from the disposal of rental equipment ($13.7 million in FY25 vs $154.0 million in FY24). Management attributes this to the higher cost of new truck additions and lower resale values for retired units, particularly smaller trucks and vans, reflecting the impact of automakers inflating ICE vehicle costs.

The Moving and Storage segment remains the primary revenue and earnings driver, contributing $5.49 billion in revenue and $645.8 million in earnings from operations in FY25. Self-moving equipment rental revenues increased by $100.8 million in FY25, showing improvements in transactions and revenue per transaction in both in-town and one-way markets, signaling a potential trough and return to growth. Self-storage revenues grew by $66.8 million, benefiting from a 6.2% increase in average monthly occupied units and a 1.5% improvement in average revenue per occupied square foot across the portfolio. However, average occupancy rates declined as the company added new capacity faster than units were filled, a deliberate investment strategy.

The U-Box program, included in Other revenue, saw a significant increase of $39.4 million in FY25, with both moving and storage transactions growing. Management is actively expanding U-Box warehouse capacity, increasing covered storage space by nearly 25% over the last 12 months, viewing density and storage potential as key long-term opportunities.

Capital Allocation and Liquidity

U-Haul maintains a robust capital expenditure program focused on replenishing and expanding its rental fleet and significantly growing its owned self-storage portfolio. Net capital expenditures for Moving and Storage were $2.79 billion in FY25, up from $2.25 billion in FY24. Purchases of rental equipment totaled $1.86 billion, while investments in real estate acquisitions, construction, and renovations reached $1.51 billion.

These investments are funded through a combination of internally generated funds, debt financing, external lease financing, and borrowings against existing properties. As of March 31, 2025, the company had total debt outstanding of $7.23 billion and operating lease liabilities of $47 million.

Despite the significant investment pace, management believes the company has adequate liquidity, with $988.8 million in cash and cash equivalents and $475 million in available borrowing capacity under existing credit facilities as of March 31, 2025.

Net cash provided by operating activities was $1.45 billion in FY25, relatively flat year-over-year. The company's borrowing strategy aims to ladder maturities and fix interest rates, providing flexibility with no overall limits on company borrowings. The recent finalization of an IRS examination resulting in a $129 million refund further supports liquidity.

Competitive Dynamics and Strategic Positioning

U-Haul operates in highly competitive markets, but its integrated business model and extensive network provide distinct advantages. While competitors like Penske and Budget focus primarily on truck rentals, U-Haul offers a comprehensive suite of services, making it a one-stop shop for DIY movers. This integrated approach, combined with its vast network of locations (far exceeding those of its truck rental rivals), allows U-Haul to capture market share not just from direct competitors but also from individuals using owned or borrowed equipment.

In self-storage, U-Haul competes with large REITs like Public Storage and Extra Space Storage, as well as numerous smaller operators. While the industry has seen periods of overbuilding and aggressive discounting, U-Haul's strategy emphasizes customer service and value over simply being the cheapest option. Management believes this focus, coupled with the convenience of co-located moving services, allows them to outperform peers in attracting and retaining customers, even if it means adding capacity faster than it is immediately filled. The U-Box program, in particular, leverages U-Haul's network for delivery and its real estate for storage density, creating a competitive offering that rivals cannot easily replicate.

The company's investment in technology, such as Truck Share 24/7 and the online marketplace, further enhances its competitive position by improving accessibility and convenience. While competitors are also adopting technology, U-Haul's established digital platforms and integration with its physical network provide a scale advantage. However, U-Haul must continue to innovate and adapt, particularly regarding new vehicle technologies and evolving customer expectations for digital interactions, to maintain its edge.

Outlook and Risks

Management expresses optimism for the future, citing signs of increasing consumer confidence. The outlook for fiscal 2026 includes continued focus on increasing transaction volume and improving pricing/utilization in self-moving equipment rentals, maintaining a high level of investment in the rental fleet and real estate expansion, and continued growth in the U-Box program. While inflationary pressures may challenge operating margins, the company believes its strategic investments and focus on efficiency will support long-term profitability.

However, several risks could impact this outlook. Fluctuations in used truck prices and the cost/availability of new vehicles from a limited number of manufacturers remain significant concerns, directly affecting depreciation and gains on sale. Regulatory changes, particularly those related to electric vehicles, pose a long-term threat to the current business model. Competitive intensity, especially aggressive pricing in self-storage, could pressure occupancy and rental rates. Cybersecurity incidents are an ongoing risk, with the potential for material impact despite mitigation efforts. The company's significant leverage requires consistent cash flow generation to service debt obligations.

Conclusion

U-Haul Holding Company is executing a clear, long-term strategy centered on expanding its integrated do-it-yourself moving and storage ecosystem. Recent financial results reflect the substantial capital deployed to grow its fleet and real estate footprint, investments designed to capture future demand and leverage its extensive network. While this investment cycle, coupled with external factors like fluctuating equipment costs and competitive pressures, has impacted near-term earnings, the underlying business fundamentals remain strong.

The company's competitive advantages, rooted in its brand recognition, broad geographic coverage, integrated service offerings, and technological capabilities, position it favorably against more specialized rivals. The rapid growth of the U-Box program and the continued expansion of the self-storage portfolio highlight key areas of strategic focus for future value creation. For investors, U-Haul represents a play on the enduring consumer need for moving and storage solutions, underpinned by a management team committed to long-term growth and operational efficiency, navigating market complexities through strategic investment and a focus on customer value. The successful lease-up of new storage capacity and the normalization of fleet costs will be key indicators to monitor as the company progresses through its current investment cycle.