Prepared remarks
Good morning, everyone, and welcome to the U-Haul Holding Company Third Quarter Fiscal 2026 Investor Conference Call. I will now hand the call over to Sebastien Reyes. Please proceed.
Good morning, and thank you for joining us today. Welcome to the U-Haul Holding Company Third Quarter 2026 Investor Call. Before we begin, I'd like to remind everyone that certain of the statements during this call, including, without limitation, statements regarding revenue, expenses, income and general growth of our business, may constitute forward-looking statements within the meaning of the safe harbor provisions of Section 27A of the Securities Act of 1933 as amended and Section 21E of the Securities Exchange Act of 1934 as amended. Forward-looking statements are inherently subject to risks and uncertainties, some of which cannot be predicted or quantified. Certain factors could cause actual results to differ materially from those projected. For a discussion of the risks and uncertainties that may affect the company's business and future operating results, please refer to the company's public SEC filings and Form 10-Q for the quarter ended December 31, 2025, which is on file with the U.S. Securities and Exchange Commission. I'll now turn the call over to Joe Shoen, Chairman of U-Haul Holding Company.
Good morning, everyone. As mentioned in the press release, our earnings are being negatively impacted by high acquisition costs of vans and pickups from the 2023 and 2024 model years. This issue has led to increased depreciation and a shift from original gains to current losses on the sale of these vehicles leaving our fleet. Additionally, the significant post-COVID price increases on internal combustion engine vehicles are affecting our box trucks, resulting in elevated depreciation. We had built up our internal combustion engine fleet anticipating a drop in availability of these units, but now we find ourselves with too many vehicles, and the rental market isn’t showing enough demand. We are working on a strategy to increase the number of U-Haul dealership locations, which will help us utilize some of this excess fleet to generate income. We will probably remain overstocked, so we need to focus on selling older, high-mileage trucks in the next year. In terms of self-storage, it seems we are maintaining a good position. For almost two years, we have been adding storage units at a faster rate than we are renting them out, which has created a surplus. We are implementing initiatives to improve our rental rates compared to last year, and we will monitor the results as we approach summer. We now have a considerable U-Box presence at over 700 locations across North America, contributing to both moving and storage services. This increases our capacity and the number of self-storage customers. We have over 200,000 U-Box containers in service, with over 100,000 currently rented out. We have slowed the addition of new U-Box warehouses since we are well established in most markets, although we still have gaps in locations like D.C., L.A., Boston, New York City, and the Bay Area. In Canada, we need to increase U-Box capacity in Vancouver Island and Edmonton as well. We have plans for projects in all these areas and I am committed to following through with these capital expenditures. We continue to invest significantly in digital tools to meet customer expectations as the industry leader, with most of these investments being expensed in the current period. Now, I’ll hand it back to Jason.
Thanks, Joe. Yesterday, we reported a loss of $37 million in the third quarter, in contrast to earnings of $67 million in the same quarter last year. This amounts to a loss of $0.18 per nonvoting share this quarter, compared to earnings of $0.35 per nonvoting share in the third quarter last year. Our adjusted EBITDA in the moving and storage segment fell by 11% to nearly $42 million for the quarter, reflecting a decrease in operating cash flows as well. We have included a reconciliation of adjusted EBITDA to GAAP earnings in our release and financial supplement. Depreciation and losses from the disposal of rental units continue to impact our earnings significantly. This third quarter, we recorded a $26 million loss from disposing of retired rental equipment, compared to a $4 million gain in the same quarter last year. The cargo vans we purchased over the previous two model years came at a higher cost, and the current market resale values have not matched that, resulting in this loss. We have also accelerated depreciation on the remaining units to reflect the current circumstances. Additionally, we have increased the box truck fleet size by nearly 11,000 units since December last year, contributing to depreciation expenses. The combined effect of fleet depreciation and disposal losses led to a $75 million increase in costs for this quarter compared to last year, which translates to approximately $0.24 per nonvoting share. More than three-quarters of this negative variance is tied to our cargo van fleet. Looking ahead, the cargo vans we plan to purchase for model year 2026 will be, on average, about 12% cheaper than last year's models and around 20% cheaper compared to two years ago. In the third quarter, our equipment rental revenues increased by $8 million, or just under 1%, compared to the previous year, primarily driven by the in-town segment. Between December 2024 and December 2025, we opened 65 new company-operated locations and gained 365 independent dealers. As Joe mentioned, these new locations should help us distribute a larger fleet and boost transactions. For January, our results were trending positively before a significant weather event affected much of the country, slowing our progress over the past week and a half. Our capital expenditures for new rental equipment in the first nine months of this year reached $1.748 billion, which is a $162 million increase compared to the same period last year. Over the last 12 months, our gross fleet spending was approximately $2.025 billion, reducing to $1.331 billion after accounting for equipment sales, with around $670 million of that gross spend being growth-related. Early estimates for the next fiscal year suggest a drop in new truck purchases by over $500 million. Storage revenues rose by $18 million, or 8%, this quarter. Average revenue per foot across our portfolio improved by just under 7%, while same-store revenue per occupied foot increased by 5%, reflecting our rate increases. Our pricing strategy remains straightforward, focusing on avoiding large introductory discounts. Same-store occupancy fell by 490 basis points to just over 87%. As mentioned in our last earnings call, we initiated a system-wide effort in July to increase available units at existing facilities by addressing delinquent units. This action did not impact revenue, as we only record storage revenue upon collection, but it did affect our reported occupancy rate. Of the almost 5% drop in same-store occupancy, nearly 4% was due to the removal of delinquent units. Year-over-year net tenant move-ins have been slower compared to recent years, but we've seen some improvement relative to last year when adjusted for delinquent units. In the first nine months of fiscal 2026, we invested $770 million in real estate acquisitions and developing new self-storage and U-Box warehouse spaces, which is a $444 million decrease from the same period in fiscal 2025. In the third quarter, we opened 16 new storage locations, adding about 1.5 million net rentable square feet. Our active development pipeline now consists of 106 projects expected to yield around 5.7 million new net rentable square feet. Regarding storage operating expenses, these rose by $66 million in the third quarter. As a percentage of revenue, this marked a setback from the previous quarter's progress. Personnel costs increased by $16 million, and fleet maintenance and repair costs were up $13 million. The most significant rise was in self-insurance liability costs, which increased by $38 million, primarily due to reserve strengthening, reflecting an overall increase of nearly $79 million since March 2025. In December, our property and casualty insurance company paid a $100 million dividend to U-Haul Holding Company's parent, allowing us to reallocate capital among our subsidiaries. This $100 million is now available for general U-Haul corporate use. As of December 2025, our cash and available loan facilities in the moving and storage segment totaled $1.475 billion. I want to remind everyone that we have a supplemental financial information exhibit available on our investor website. With that, I will turn the call back to Jenny while Joe, Sam Shoen, and I are here to answer any questions.
Questions and answers
Your first question is from Steven Ralston from Zacks.
Taking into account that seasonally, this is the second weakest quarter of the year, there appear to be some pressures in the one-way market for self-moving equipment and in the U-Box program. Could you discuss that? Also, does this suggest that the U-Box market tracks the one-way rental market?
I'll start on that. I mentioned this at the last conference call. Over the decades, we've observed that when consumers feel anxious, they tend to shorten the distance of their transactions. Instead of relocating to Denver, for example, they might move to a suburb of their current town. They still move for various underlying reasons, but the distances are shorter. This sometimes converts a long-distance move into a local one. Regarding U-Box, we've experienced our greatest success with long-distance transactions. So, to the extent that U-Box follows U-Haul, it may mirror that trend but possibly to a more pronounced degree in terms of percentage of business.
Right. Yes, Steven, that's a great question. I think this is getting to kind of what you're asking. U-Box operates in almost primarily in what U-Move considers the long zones. So for rental trucks, what might be 20% of our one-way business in the long zones, for U-Box might be 80%. And so I think the question you asked was does U-Box track the one-way moving market, certainly in that way it does. And then, of course, as we have distribution as we're using rate to control distribution, now we're pricing U-Haul trucks in a certain way and our customers are seeing that and getting to incorporate that into their choice. So I think the short answer to your question is yes.
You've mentioned the depreciation line a lot, and I think I'm not quite understanding it. Could you explain it? Depreciation has increased significantly, but from the second fiscal quarter to the third, it actually decreased. What is going on with the accounting for that?
So this is Jason. A couple of things going on. First, the depreciation of the box truck fleet is dynamic, meaning that every time a truck reaches its one-year anniversary, the depreciation rate decreases. In the first year after purchasing a box truck, we record 16% of the cost as depreciation. In the second year, it's 13%, and this rate continues to decline. If we take no further action, the depreciation on the box truck fleet will gradually keep decreasing. The second part involves our pickup and cargo van fleet, which is smaller.
It's a shorter life asset, right?
Yes, exactly. We hold it for a shorter period, and we adjust those depreciation rates from quarter to quarter based on what we observe in the resale market. Now that we have almost finished selling the model year '23 units, we are moving on to the '24. Therefore, that depreciation number is being adjusted each quarter.
Your next question is from Steven Ramsey from Thompson Research Group.
Maybe to start with, what did you think about from the high level for your business? You've continued to invest in growth in all areas of the business in the time of subdued activity. If you think about moving competitors against you in the traditional moving and U-Box space, have you seen capacity reductions from peers or another angle maybe is how you're expanding in the dealer space to position you to perform well now and perform much better on the other side of this?
I'll answer that. Yes, regarding both fleet and locations, I can't provide an exact number for how many outlets Penske or Budget operates. However, we gather various indicators from industry sources that lead us to believe both companies are reducing their fleet and outlet numbers. If there's an increase in demand or if we improve our understanding of customer needs, we'll be ready to meet that demand. It seems we've previously underestimated what our customers want, and if we can address that shortcoming, customers will engage with us more frequently, allowing us to expand our outlets, which aligns with our overall strategy. For context, Budget has approximately 3,000 outlets, and Penske has around 3,500, while we have over 24,000, giving us a significant advantage in customer accessibility. Determining how far to push that is more a matter of judgment than calculation. Additionally, our fleet isn't uniform; it's not just one number to consider. For example, when we say we have 100 box trucks, their sizes and ages play a crucial role in fleet management. We've been trying to catch up after significant supply chain disruptions caused by COVID and the shift towards electrification, which takes time to resolve. The pickup and van fleet might be adjusted within 24 months, but the box truck fleet presents an eight-year challenge. Occasionally, we find ourselves buying more trucks than needed due to specific size requirements or availability of certain models. Looking back to 2016, we had a well-tuned fleet that delivered great profitability, but the balance fell off. As we work on rebalancing the fleet, I wish I could provide a specific timeline for when that will happen. The push toward electrification has significantly impacted manufacturers, leading to steep price increases of 30% to 50% and challenges in securing the models and quantities we desire. This has resulted in age and size discrepancies in our trucks, which we're actively addressing. This past year, we likely acquired more vehicles than necessary to restore balance in our fleet. In the coming years, we'll ensure the right mix of vehicle ages to meet market demands. We're mindful of these adjustments, but it's ultimately a matter of judgment, not guarantees. I've been pleasantly surprised by how the administration has hindered the electrification momentum. We've seen significant write-offs from manufacturers like Mary Barra and Jim Farley, highlighting the level of disruption they're facing, which extends to dealers. However, we anticipate that the auto industry will eventually recover and provide the mix of vehicles that customers want, and they will respond positively to that. I hope this addresses your question, even if it's more detailed than expected.
No, that's helpful perspective. I appreciate that. I wanted to think about the expense management side of things? I know it's been a focus for you. Do you think this needs to be a more intensified effort over the next 6 to 12 months? Or would you say the structure is actually in a good place, but it's more waiting on volume to come back?
I've been focusing on managing our budgets like many organizations do. I'm working to get the right responses from different parts of the company and expect to see some results this calendar year and more into next year. Repair costs have been manageable, totaling around $800 million annually. We're evaluating repair expenses by model, year, and cents per mile, which allows us to forecast these costs well. We have a good grasp on repair management, but personnel costs pose a challenge. Many organizations are facing increasing living costs for their workforce, which will likely continue to rise over the next few years. Our goal is to exceed these costs, and we assess this on a location-by-location basis. We need to generate enough revenue to support the staffing levels required for our operating hours. We may need to adjust some hours in the coming year, as current revenue may not cover staff wages for the hours our stores are open. Each morning, we open about 2,400 stores, requiring staff present. There are additional days when multiple employees are needed, and they must be paid a living wage, creating pressure within our budget. In regions like the West Coast, states such as California, Oregon, and Washington have significantly raised minimum wages and have plans for automatic increases next year, affecting both salaried and hourly workers. This will put pressure on profitability in several of our stores. While we will meet payroll demands, we also need to increase productivity. Self-storage and U-Box services have provided some relief and expansion opportunities, although other locations face limitations due to their geographic size. For instance, in Los Angeles, some sites are just over half an acre, offering little flexibility, putting those under significant strain. I don't have an easy solution to these challenges, but we're very aware of them and actively working to address them.
Okay. That's helpful. And then last one for me. You've talked some about U-Box in the major markets that you are building out. Can you clarify if construction is going on in those markets for warehouse capacity? And then secondly, can you talk about U-Box usage both moving and storage in large metros that you already have established warehouse presence? Trying to think about the potential upside in the big cities once it's built out.
I'll address that question and let Sam add to it. In the metropolitan areas I mentioned, we own property, and we're currently between land use and construction at these locations. Each one is quite a story in itself. For example, in Washington D.C., we've had the steel building ready for 2 years, but due to COVID and city bureaucracies, our progress has been significantly delayed. We had expected to break ground 2 years ago after ordering and receiving the building, yet we still haven't started. Our efforts are ongoing, but the process is complex. In all those metropolitan areas, we do own the property. Take Vancouver Island, for instance; it's clear that without substantial warehouse capacity, we won't be able to support any U-Box business. Therefore, we need to establish solid warehouse capacity there. Meanwhile, we've made impressive progress throughout the Maritimes, up through Ottawa, down to Montreal, and across the Greater Ontario area between Toronto and Detroit, giving us an adequate footprint. I believe the business will thrive as a result. Sam?
Sure. I'll provide more insight. We are particularly excited about Metros for U-Box because Joe designed our product and strategy specifically for the container size that performs well in metro areas where space is a challenge. For instance, our container size can easily fit in an apartment parking spot, which is something many competitors cannot offer. Many metro areas have restrictions on where containers can be placed, often requiring permits or prohibiting placement on streets. Our delivery method using a trailer for the container allows it to be parked legally anywhere there is a valid parking spot. These features set our product apart from the competition and were intentional choices. We expect these aspects to continue yielding positive results in metro areas, especially since there is a demand for smaller-sized containers. Delivering the right-sized product to our customers is our focus, giving us a competitive edge.
Steven, this is Jason. I just want to make sure that there isn't any misunderstanding. In these markets, our customers already have access to the U-Box product. We're just looking to improve their access to it. It's not that we aren't in those markets.
Your next question is from Jeff Kauffman from Vertical Research Partners.
I just had a question more for Jason. You talked about we're almost through the 2023 cargo van cohort and starting to work on the '24s. Can you give us an idea of how many vehicles we have left to kind of get caught up to the current market and maybe the differential between your average acquisition costs and where you're depreciating the '24s versus what that spread looks like for the '23s?
Sure. I can provide some overall figures. For the 2024 models, we likely have around 6,000 left, and these were more expensive than the 2023 models. Additionally, we have nearly 19,000 of the 2025 models, which were about $3,000 cheaper than the 2024s. We are now in the process of phasing out the 2024 models, which we have been addressing with increased depreciation. This ties back to the earlier question about depreciation increases as we aim to minimize any loss when we sell these models. We will see how effective we are in the next 12 months in achieving that.
Is your impression that we have accurately assessed the '24 model years at this stage, or do you anticipate that there will still be some deferred losses when it comes to selling them?
I think it would be fair to expect a loss on sale for those units. I don't know if we're fully there yet.
Let me address that. When you set up your financial plans, you make estimates about sales, but those estimates can become inaccurate as the market changes. Recently, automakers have shifted away from electrification and reorganized their supply chains, resulting in new vehicle prices being lower than last year’s, while still maintaining their profit margins. This change impacts resale values negatively. Historically, we haven't experienced a market where new prices persistently undercut old prices for the past 15 years. We realized our estimates weren’t accurate about a year to a year and a half ago, with the expectation that we had finally moved past these challenges. However, another wave of market changes occurred. While we are acquiring vehicles at lower prices, it may lead to lower retail or wholesale prices than we anticipated for the trucks we've introduced. My team is alert to this situation, and we plan to adjust depreciation rates accordingly to minimize losses at sale. It's crucial for our marketing team to account for this depreciation in their strategies, which complicates holding them accountable for potential losses. Although there’s some uncertainty, I believe we might have reached the lowest point in this downturn. If GMC decides to lower prices again to improve margins, it could create further challenges. They’ve dealt with pressures that have led to financial losses, and while we’ve managed to handle it somewhat better, it still impacts us. We are committed to maintaining the fleet value on our books below market value, as it helps mitigate potential issues. However, we have overestimated resale values for our pickup and van fleet for two consecutive years. It’s crucial that we approach this carefully, ensuring that our depreciation rates are reasonable without being excessively low or high, as both extremes can disrupt our rental teams’ ability to meet goals. Overall, the company has struggled with accurate resale value estimations for the last couple of years, which can impact motivation until we can stabilize the situation.
Your next question is from Jamie Wilen from Wilen Management.
Joe, you've always mentioned that fleet utilization was your prime objective in managing the business. How did you arrive at only reducing the fleet expenditures in the coming year by $0.5 billion and as you look forward, are you going to spend $0.5 billion less in future years as well?
Now I'll start with the year we're finishing up, which is fiscal '26. In fiscal '26, we saw a significantly increased fleet expense aimed at rebalancing. If we don't invest in new trucks, four years down the line, we won't have the necessary trucks available at the required mileage and cost. This creates imbalances in the entire fleet, impacting future purchases. In the recently concluded year, we acquired around 10,000 new 10-foot trucks, which was considerably more than just replacing old ones. We have to consider many factors, and for the upcoming year, we plan to drastically reduce those purchases because we feel confident in our strategy. Regarding my 20-foot trucks, a substantial portion of the fleet is 8 to 10 years old, which affects performance compared to newer models. Therefore, I'm purchasing more than just replacements to address the older trucks in our fleet. Ideally, we would purchase trucks based on their lifespan to maintain a balanced fleet each year, but availability has been a challenge, especially with the supply chain disruptions we've faced over the past five years. We're currently on allocation, meaning we can only buy a limited number of trucks, a situation we haven't experienced since the Korean War. This put us in a tricky spot, leading to significant purchases when trucks became available. Moving forward, we're looking to reduce orders and reevaluate sales, as the challenges lie in both purchasing and selling. For my 20-foot trucks, there's a large amount coming through, about 12,000 units, which we can't realistically resell in less than three years. If we pause buys for three years, we end up with another problem to tackle later. Thus, we plan to make modest purchases to facilitate sales and find a balance, specifically looking into how many 20-foot trucks we can successfully sell in the resale market this year.
On the self...
Go ahead, I'm sorry.
I'd say on the self-storage side, as far as capacity utilization there, is there any thought of slowing the pace of development to a more modest level?
It has slowed significantly. I believe Jason estimates it is down by $400 million. These numbers are somewhat soft. However, we have intentionally slowed it down. Establishing a new self-storage facility typically takes about three years. If we delay the process, the effects won't be noticeable until three years from now. Conversely, if we try to accelerate the pace, we still won't see results for three years. Therefore, we need to approach this carefully from both sides. Despite the slowdown, I plan to move forward with what I consider strategic initiatives. The U-Box warehouse projects, for instance, are strategic investments that would be unwise not to pursue. However, this will require a substantial amount of funding, which I am keeping a close eye on. As for self-storage, we are currently being more opportunistic. We pursue projects in markets where we have an advantage or in areas that are somewhat distressed. Recently, we acquired a location in Olive Branch, Mississippi. While it may not be significant to you, we already operate a store there and have now added a second one. We purchased it for considerably less than three-fourths of the construction cost. I believe Olive Branch will perform well over the next decade, even if it isn't on your radar. I viewed this opportunity favorably and decided to proceed.
You have done a great job of building value, but you haven't done as well at creating value for shareholders. If I were on the Board, pardon me?
I'm with you on that.
Okay. If I were a Board member, here's what I would suggest to you to help crystallize a bit more of that value. We all know how undervalued self-storage is relative to the rest of the world. And we'd like to help the investment community as well as analysts recognize a bit of that. What I would suggest us doing is selling a territory of well-occupied facilities that don't have U-Box storage in there because I don't want to eliminate the competitive advantage we have with the rest of the world in U-Box. But I would take an area where we have stabilized occupancies over 80% like a Tennessee or New Jersey and hopefully, no U-Box storage or not much. And I would want to sell that to one of the publicly held REITs, which could crystallize value for how much we have value if we have created there and recycle the proceeds. If we get $1 billion or $2 billion, use half of them to buy back stock, the rest to pay down debt. We'll build new facilities. But it would help crystallize what we built and hopefully not impact the growth of the core business there. What do you think of that?
I understand the numbers involved, but I'm not fully sold on the proposal. There's an opportunity in every one of these that I work to secure, which makes me hesitant to sell. If the market improves, we might regret selling. However, I believe it's a reasonable idea to consider further. I will discuss it with Jason, who is skilled with the figures. Regarding the stock buyback, I have mixed feelings about it as well. We implemented the stock dividend and other initiatives to attract analysts and improve our market liquidity, but the results were minimal. I don't believe anyone on my team has extensive expertise in stocks; that’s not our focus. I was disappointed with the market's reaction to our efforts. We need to demonstrate our value, and one way to do that is by achieving 90% occupancy in our stores, which would make things easier. Currently, we're around 80% effective occupancy overall, though this varies by store, and it's affected by the opening of new locations. I believe the market has significant potential, but it’s not being handled properly, which is impacting customers. I want to show customers that we are not part of the problem. There are many new players in the industry who seem to treat storage solely as a source of profit, whereas I see it as something to nurture and care for. Their approach can be harsh on customers. We can stand out through our customer service, especially since many in the market now have prior experience in storage. I believe we have been doing better than our peers in maintaining rates and growing our customer base, even though I don't have any exclusive insights into their data. It appears they struggle to keep move-in rates higher than move-out rates, while we have been able to maintain a positive difference. I’m hopeful about filling more units, but I think we're close to our limits, with around 220,000 to 230,000 empty units, though Jason might have a more precise figure.
If you include the managed portfolio, so U-Haul-branded stores were about 290,000 rooms available.
Okay. So all of those are depending on either a liability or an opportunity. So as a shareholder, you're probably seeing a little bit as a liability because you're paying for them and get nothing for it. I think we're going to see significant progress in filling those rooms and that's how I have my teams wound up. At the same time that we've increased successfully, we've increased total customers every year in conventional self-storage. We've done the same thing. We've introduced something like 100,000 storage customers in the U-Box. So from the point of view of operating a facility, that manager is looking at a total storage customer base. So I'm not disgusted with our performance. But I think our performance has to be better because we've invested the money. But I think we're showing we're resonating with the customer as much or better than anybody else in the business.
I believe you have 2 customers here. One is the person who rents your storage facilities and truck rentals and the other customer are investors. And investors would love to see you harvest some of the value you've created where you've turned $1 into $4, but we can't see it. Whatever you can do in that respect would be a good thing for...
I got it...
There are no further questions at this time. I will now turn the call back over to Sebastien Reyes for closing remarks.
Thanks, Jenny. I have one question that I wanted to post here that came in during the call. U-Haul's profit margins, excluding depreciation have been in constant decline for the last decade. Please explain why margins have been so persistently weak since 2016, and please explain your plan to restore the profitability of this great company.
Well, this is Jason. I'll take that one. In 2016, we reached the peak of our EBITDA margin, which stood around 35% to 36%. Historically, our earnings have shown some cyclical behavior, influenced by how much we've expanded our organization over time. In the decade before 2016, our EBITDA margin averaged 25%, and in the ten years following 2016, it's averaged 33%. This indicates a structural improvement in our operations. We've also included a slide that illustrates this trend of increasing EBITDA margins, which coincides with our growth in the self-storage and U-Box markets. Since fiscal 2016, there have been both up and down years. During the COVID years, our margins returned to the mid-30% range, primarily due to revenue recognition without the corresponding expense recognition. For instance, we incurred repair and maintenance costs during the work-from-home phase when revenues were high. Current accounting rules do not allow us to account for anticipated maintenance based on current truck usage. We recognized revenue based on miles driven, but the related maintenance expenses came later. Additionally, our previous auditors did not agree with how we reserved for self-insurance liabilities, leading to a reduction of $88 million from our reserves to finalize their opinion. In hindsight, it would have been wiser to maintain those reserves, as they would have acted as a cushion. During COVID, increased transactions raised the incidence of potential claims. Now, as we deal with these past incidents, they are turning out to be more serious than initially anticipated. It's difficult to gauge what-ifs, but for this quarter, if we had experienced a normal revenue growth of 4% in U-Move without the need to strengthen reserves, we would be looking at an average EBITDA margin. I am hesitant to agree with the view that our expense management is structurally flawed; I believe the issues stem from revenue challenges and cyclical factors. We have been in an unprecedented growth period, expanding our fleet and self-storage capabilities, and I think we've effectively maintained our EBITDA margins during this phase. Overall, our target EBITDA margin over a 12-month period typically falls in the low 30% range, and we are currently underperforming in that regard this year.
Well, thanks again, everyone, for your participation. We look forward to speaking with you again after we report our year-end results in May. Thanks.
Thank you. Ladies and gentlemen, the conference has now ended. Thank you all for joining you. You may all disconnect your lines.