v3.26.1
Revenue Recognition
 3 Months Ended
Jul. 31, 2026
Revenue from Contract with Customer [Abstract]  
Revenue Recognition Revenue Recognition
Sunbelt is principally engaged in the business of renting equipment. Ancillary to Sunbelt’s principal equipment rental business, Sunbelt also sells used rental equipment, new equipment and merchandise and consumables and offers certain services to support its customers. Sunbelt’s rental transactions are accounted for under ASC Topic 842, Leases (“Topic 842”), while the sale of rental and new equipment, merchandise and consumables, along with certain services provided to customers, are recognized under ASC Topic 606, Revenue from Contracts with Customers (“Topic 606”). Sales and other tax amounts collected from customers and remitted to government authorities are accounted for on a net basis and, therefore, excluded from revenue.
Nature of goods and services
In the following table, revenue is summarized by type and by the applicable accounting standard.
Three Months Ended July 31,
20262025
(In millions)Topic 842Topic 606TotalTopic 842Topic 606Total
Revenues:
Equipment rentals
$
2,319 
$
— 
$
2,319 
$
2,100 
$
— 
$
2,100 
Other rental revenue:
Delivery and pick-up
— 
257 
257 
— 
230 
230 
Other
95 
256 
351 
90 
181 
271 
Total equipment rentals2,414 513 2,927 2,190 411 2,601 
Sales of rental equipment
— 
85 
85 
— 
103 
103 
Sales of new equipment, merchandise and consumables
— 
103 
103 
— 
97 
97 
Total revenues$2,414 $701 $3,115 $2,190 $611 $2,801 
Revenues by reportable segment are presented in Note 5 of the condensed consolidated financial statements, using the revenue captions reflected in our condensed consolidated statements of income.
Lease revenues (Topic 842):
Equipment rentals revenue
The Company offers a broad portfolio of equipment for rent. Equipment rentals revenue includes revenue generated from renting equipment to customers and is recognized on a straight-line basis over the length of the rental contract. These lease contracts are operating leases under Topic 842. As the rental contracts can extend across reporting periods, the Company records unbilled rental revenues and deferred revenues at the end of reporting periods to ensure rental revenues earned is appropriately stated for the periods presented. Receivables from unbilled rental revenue is included in “Prepaid expenses and other assets” was $182 million and $144 million as of July 31, 2026 and April 30, 2026, respectively. Deferred revenue is included in “Accrued expenses and other liabilities” in the condensed consolidated balance sheet and was $141 million and $99 million as of July 31, 2026 and April 30, 2026, respectively.
Also included in equipment rentals revenue is re-rent revenue, in which the Company will rent specific pieces of equipment from vendors and then re-rent that equipment to its customers. Provisions for discounts, rebates to customers and other adjustments are provided for in the period the related revenue is recorded.
Other
Other equipment rentals revenue is primarily comprised of fees for the Company’s loss damage waiver and environmental charges. Fees paid for the loss damage waiver allow customers to limit the risk of financial loss in the event the Company’s equipment is damaged or lost. Fees for the loss damage waiver and environmental recovery fees are recognized on a straight-line basis over the length of the rental contract.
Revenues from contracts with customers (Topic 606)
Delivery and pick-up
Rental delivery and collection revenue is recognized when the services are performed at the time of delivery or collection, respectively, and the performance obligation is therefore fulfilled.
Other rental revenue
Other equipment rentals revenues primarily include the consumption of fuel by our customers, erection and dismantling services provided and other ancillary services provided in connection with the rental equipment. The Company recognizes revenue as the services are provided.
Sales of rental equipment, new equipment, merchandise and consumables
Sales revenue is recognized when control of the asset transfers to the customer, which is typically when the asset is picked up by, or delivered to, the customer and when significant risks and rewards of ownership have passed to the customer. The Company routinely sells its used rental equipment in order to manage repair and maintenance costs, as well as the composition, age and size of its fleet. The Company disposes of used equipment through a variety of channels including retail sales to customers and other third parties, sales to wholesalers, brokered sales and auctions. Sales of rental equipment in connection with trade-in arrangements with certain manufacturers from whom the Company purchases new equipment is accounted for at the lower of transaction value or fair value based on independent appraisals. If the trade-in price of a unit of equipment exceeds the fair market value of that unit, the excess is accounted for as a reduction of the cost of the related purchase of new rental equipment.
The Company also sells new equipment, parts and supplies. The types of new equipment that the Company sells vary by location and include a variety of tools and supplies, small equipment, safety supplies and consumables. Also included in sales of new equipment, merchandise and consumables are other revenues earned from equipment management and similar services for rental customers. The Company recognizes the other revenue as the services are provided.
Contract Assets and Liabilities
The Company does not have material contract assets or contract liabilities associated with customer contracts. The Company's contracts with customers do not generally result in material amounts billed to customers in excess of recognizable revenue. The Company did not recognize material revenue during the three months ended July 31, 2026 or 2025 that was included in the contract liability balance as of the beginning of each period.
Performance Obligations
Most of the Company's revenue recognized under Topic 606 is recognized at a point-in-time, rather than over time. Accordingly, in any particular period, the Company does not generally recognize a significant amount of revenue from performance obligations satisfied in previous periods, and the amounts of such revenue recognized during the three months ended July 31, 2026 and 2025 was not material. The Company also does not expect to recognize material revenue in the future related to performance obligations that were unsatisfied as of July 31, 2026.
Payment terms
The Topic 606 revenues do not include material amounts of variable consideration. The credit periods offered to customers vary according to the credit risk profiles of, and the invoicing conventions established in, the Company’s markets. The contractual terms on invoices issued to customers vary between North America and the U.K., in that invoices issued in the U.K. are generally payable within 30-60 days whereas invoices issued in North America are generally payable within 30 days. The contracts do not include a significant financing component.
Contract estimates and judgments
The revenues accounted for under Topic 606 do not require significant estimates or judgments, primarily for the following reasons:
•The transaction price is generally fixed and stated on the Company’s contracts;
•As noted above, the Company’s contracts generally do not include multiple performance obligations, and accordingly do not generally require estimates of the standalone selling price for each performance obligation;
•The revenues do not include material amounts of variable consideration; and
•Most of the Company’s revenue is recognized as of a point-in-time and the timing of the satisfaction of the applicable performance obligations is readily determinable. As noted above, the Topic 606 revenue is generally recognized at the time of delivery to, or pick-up by, the customer.
The revenues accounted for under Topic 842 also do not require significant estimates or judgments.
Allowance for Credit Losses
As shown above, most of the Company's equipment rentals revenue is accounted for under Topic 842. The customers that are responsible for the remaining equipment rentals revenue that is accounted for under Topic 606 are generally the same customers that rent the Company's equipment. Concentration of credit risk with respect to the Company's accounts receivable is limited because a large number of geographically diverse customers makes up its customer base.
The Company manages credit risk associated with its accounts receivable at the customer level through credit approvals, credit limits and other monitoring procedures. The Company maintains allowances for credit losses that reflect the Company's estimate of the amount of receivables that the Company will be unable to collect based on its historical write-off experience and, as applicable, current conditions and reasonable and supportable forecasts that affect collectability.
The roll-forward of the allowance for credit losses is shown below.
Three Months Ended
July 31,
(In millions)20262025
Beginning balance$105 $102 
Amounts written off or recovered
(4)
(4)
Increase in allowance recognized
18 
15 
Ending balance$119 $113