EquipmentShare.com Inc.
08/13/2026 | Press release | Distributed by Public on 08/13/2026 06:45
Quarterly Report for Quarter Ending June 30, 2026 (Form 10-Q)
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS.
You should read the following discussion of our financial condition and results of operations in conjunction
with our unaudited condensed consolidated financial statements, including the notes thereto, included elsewhere in
this Form 10-Q. In addition to historical information, the following discussion and analysis contains forward-
looking statements that reflect our plans, estimates, and beliefs. Our actual results and the timing of events could
differ materially from those anticipated in the forward-looking statements. Factors that could cause or contribute to
these differences include those discussed below and under Part I, Item 1A, "Risk Factors" in our 2025 Form 10-K
particularly in the "Risk Factors" and "Cautionary Note Regarding Forward-Looking Statements" sections.
Overview
We are a leading tech-enabled construction solutions provider dedicated to enabling job sites to run more
productively and safely. Through our rental service and retail centers, we offer our customers a comprehensive
portfolio of equipment asset management solutions enabled through our T3 platform, which we believe is the
leading sensor-to-cloud fleet management tool in the commercial construction industry and which provides value-
added services to our customers by managing people, assets, and materials in real time.
We are one of the largest and fastest-growing equipment rental providers in the U.S. based on revenue. As of
June 30, 2026, we operated 391 full-service branch locations, 9 standalone dealership sites, and 30 building
materials and hardware retail stores across 45 states, with a diversified managed fleet portfolio of more than 280,000
pieces of equipment and approximately 394,000 trackers operating on our T3 platform. As of June 30, 2026, we had
9,203 employees who support us in solving industry inefficiencies by providing smart jobsite technology, as well as
operating our equipment rental and retail and service centers.
Our rental fleet, including support vehicles and trailers, consists of equipment that we (i) own, (ii) lease as
lessee under operating lease arrangements with third-party lessors such as an Original Equipment Manufacturer
("OEM") and financial institutions, or (iii) lease as lessee under our OWN Program. As of June 30, 2026, 189,961
pieces of equipment were owned by us; 963 pieces of equipment were leased by us as a lessee under operating lease
arrangements with third parties such as OEMs and financial institutions; and 89,775 pieces of equipment were
leased by us as lessee, and rented by us to our customers, under our OWN Program. Leased equipment refers to
equipment subject to operating lease contracts with third parties such as OEMs and financial institutions in which
we have contracted use of the equipment for a defined period. OWN Program equipment refers to equipment sold to
OWN Program participants and subsequently leased back and operated by us under the OWN Program lease and
revenue-sharing structure. Both leased and OWN Program equipment are part of our equipment under management.
Our Business Activities and Operating Environment
We are engaged principally in the business of renting equipment that is managed by and fully enabled with our
T3 platform. This includes equipment that we own, lease, or is rented from third parties through our OWN Program.
Ancillary to our principal business of equipment rental and related services, we also sell used rental equipment, sell
new equipment and consumables, and offer certain services and support to our customers.
We operate our business through the following reportable segments: (i) Equipment Rental and Services
Operations, comprised of recurring activity performed at our full-service branch locations, such as equipment rentals
and related services (including allocated telematics revenue related to rental customer access to the T3 platform),
and sales of parts, supplies and maintenance services to construction contractors and others, and (ii) Equipment
Sales, comprised of sales by us of new or used equipment made at any of our branch locations and dealership sites,
including equipment sales to participants in the OWN Program. All other business activities include telematics SaaS
subscriptions, software applications, and related telematics devices purchased by customers for their owned fleet, as
well as building materials and hardware supplies.
Key Factors Affecting Our Performance
Demand for Construction Equipment. Our business is primarily impacted by the demand in the U.S. for
construction equipment for use in non-residential, infrastructure, governmental, industrial, and residential
construction, demolition, maintenance, energy operations, and other construction activities. Demand levels for heavy
construction equipment are particularly dependent on the expected level of major infrastructure construction and
repair projects, which is a function of expected economic growth and government spending.
We expect to benefit if tariffs lead to onshoring of manufacturing and result in construction of new facilities, but
our results will be negatively affected if construction of energy transition infrastructure is reduced due to lower
subsidies or other factors.
Seasonality and Weather Conditions. The rental of construction equipment is seasonal, which causes our
quarterly results and our available cash flow to fluctuate during the year. Our customers generally purchase and rent
equipment in preparation for, or in conjunction with, their busy season, which is typically late spring to November.
However, weather conditions impact the timing of our customers' busy season, which may cause greater than
expected fluctuations in our quarterly financial results year over year. Seasonal weather trends, particularly severe
wet or dry conditions, can have a significant impact on regional construction market performance by affecting the
ability to undertake construction projects. In addition, numerous external factors such as credit markets, government
subsidies and tariffs, commodity prices, and other circumstances may disrupt normal rental and/or purchasing
practices and sentiment, further contributing to the fluctuations.
Moreover, because equipment sale transactions with OWN Program participants occur unevenly throughout the
year, depending on demand, period-over-period comparisons may not reflect underlying trends. These transactions
may also result in a higher percentage of our revenue being attributable to an OWN Program participant for the
period during which one or more equipment sale transactions with such party occurred. The OWN Program has
consistently attracted strong demand across multiple sources of capital, including institutional investors who
purchase as a buying group through a collective vehicle and finance their equipment purchases through asset-backed
securities ("ABS"). To satisfy this demand, we have organized for these investors sales of large packages of
equipment and have conducted these sales on an episodic basis. Accordingly, period-over-period comparisons may
not reflect underlying trends and fluctuations in our operating results and make it difficult for us to predict our future
operating results.
Costs of Equipment and Inflation. Significant changes in the purchase price or residual values of equipment or
interest rates can have a significant effect on our profitability depending on our ability to adjust pricing for these
changes. Inflationary pressures and other factors have led to increases in the prices of some equipment and products
that we purchase, and in the costs of our operations, which may be partially offset by increases in the prices we
charge our customers. A sizeable portion of the equipment we lease as lessee through our OWN Program is owned
by third parties who have financed equipment purchases through the issuance of ABS, and a reduction in residual
values could trigger liquidation events for these OWN Program participants and may require them to sell their
construction equipment, which may cause a disruption in our ability to lease and re-rent the construction equipment
to our customers.
Our profitability is dependent upon a number of other factors, including the volume, mix, and pricing of rental
transactions, and the utilization of equipment.
Our business requires significant expenditures for equipment, and we require substantial liquidity and/or access
to capital to finance such expenditures. See "-Liquidity and Capital Resources" below.
Geographic and Fleet Expansion
Our geographic expansion of full-service equipment rental branch locations, and the corresponding increase in
total equipment rental fleet size as we supply new branch locations, is one of the primary factors affecting our
results. The additional branch locations and rental fleet, combined with equipment sales, were the primary drivers
for total revenue increasing from $1,147 million for the three months ended June 30, 2025 to $1,449 million for the
three months ended June 30, 2026, or at a growth rate of 26.3%, and $1,864 million for the six months ended
June 30, 2025 to $2,437 million for the six months ended June 30, 2026, or at a growth rate of 31%.
In line with customer demand and our growth strategy, we have increased the number of full-service equipment
rental branch locations from 324 as of June 30, 2025 to 391 as of June 30, 2026, an increase of 67 new full-service
equipment rental branch locations. In conjunction with the opening of these new full-service equipment rental
branch locations, we incurred $109 million and $116 million of new market start-up costs during the six months
ended June 30, 2026 and 2025, respectively.
We correspondingly increased our fleet size from 218,035 units of equipment under management as of
June 30, 2025 to 280,699 as of June 30, 2026, reflecting the growth in original equipment cost ("OEC") under
management, which includes equipment we own and rent to customers, as well as equipment owned by third parties
and leased by us, as lessee through our OWN Program, and rented to our customers, from $7,360 million as of
June 30, 2025 to $9,851 million as of June 30, 2026, or an increase of 34%.
Expansion of OWN Program
The growth in our business through geographic and fleet expansion has been partially achieved through the
execution of our strategy to expand our OWN Program. Under the OWN Program, participants may purchase from
us new or used (typically less than four years old) equipment which is fully enabled with T3. Concurrently, we enter
into a lease arrangement with the participant whereby we are the lessee and this qualified equipment is placed on our
T3 platform, to be rented to our customers. Rental revenue generated from equipment enrolled under the OWN
Program is divided and shared between us and the owner of the equipment, and for the duration of the arrangement
we manage the owner's equipment utilizing the T3 platform.
Participants in the OWN Program include institutional investors and ABS entities, family offices, high net
worth individuals, and other third parties. Since 2024, OEC under management increased by $3.7 billion due to
growth of the OWN Program. Institutional investors and ABS entities, family offices, and high net worth individuals
represented 45%, 29%, and 26%, respectively, of the increase in OEC under management. OWN Program
transactions provide an attractive cost of capital. For the six months ended June 30, 2026, we estimate that OWN
Program transactions represented a cost of capital of approximately 7.0%, as compared to our 7.2% weighted
average cost of debt for the same time period.
Amounts we pay to OWN Program participants to lease their equipment are presented as OWN Program
payouts within cost of revenues. At the end of the sharing period under the OWN Program, we may assist the owner
with remarketing services if the equipment is to be sold in the market as used construction equipment. We also offer
several add-on services to the owner of the equipment.
Revenue earned from equipment that is in the OWN Program has no depreciation expense or interest expense
for us because we do not own, and therefore do not finance, such equipment. Thus, we have been able to implement
this portion of our managed fleet growth without incurring additional debt. When rental equipment is enrolled in the
OWN Program, rather than purchased and owned by us, we incur lease expense in the form of OWN Program
payouts, which are recorded as cost of revenues, instead of depreciation expense and interest expense associated
with rental equipment that is purchased. OWN Program payouts were $234 million and $173 million for the three
months ended June 30, 2026 and 2025, respectively, $451 million and $328 million for the six months ended
June 30, 2026 and 2025, respectively. This expansion increases cost of revenues (before depreciation expense) and
decreases depreciation expense and interest expense, which affects gross profit (before depreciation expense),
EBITDA (which we define and calculate as net income before interest expense, income taxes, depreciation expense
and amortization expense, and non-cash stock compensation expense), and EBITDA margins. We expect to further
increase our usage of the OWN Program, which will increase OWN Program payouts in cost of revenues and reduce
gross profit (before depreciation) and EBITDA margins, as compared to rental equipment that is purchased and
placed in our rental fleet. In addition, OWN Program payouts plus depreciation have grown at a faster rate than the
growth of revenue. Total equipment rental fleet OEC under our management increased $2,491 million, or 34%, from
$7,360 million as of June 30, 2025 to $9,851 million as of June 30, 2026. The total equipment rental fleet OEC
enrolled in the OWN Program grew by $1,627 million, or 42%, Company-owned equipment rental fleet OEC grew
by $929 million, or 28%, and the equipment rental fleet OEC under operating leases decreased by $65 million
during the same period. During the six months ended June 30, 2026, OWN Program payouts increased 38%
compared to the six months ended June 30, 2025; of that increase, 41% was attributed to the growth of the average
equipment rental fleet OEC enrolled in the OWN Program. Because the OWN Program payouts are variable and
primarily based on the amount of rental revenue generated by the applicable equipment during the period, changes in
demand from our customers for specific types of rental equipment affects the amount of equipment rental and
related services revenue generated.
Components of Revenues and Expenses
Our revenues are primarily derived from the rental or sale of construction equipment, as well as related parts,
supplies and services, and consist of:
•Equipment rental and related services (includes revenue associated with the rental of equipment including
ancillary revenue from equipment delivery and pickup, rental protection plans, and fueling charges);
•Sales of new or used rental equipment and sales of new equipment, including revenue from equipment sales
subsequently listed on our marketplace under the OWN Program;
•Sales of equipment parts, supplies, and services (primarily relating to warranty services and maintenance
and repair services provided to customers); and
•Sales that we call "platform revenue," which includes telematics software-as-a-service and related hardware
revenues, as well as the sale of building materials, small tools and construction supplies at our retail
locations.
Our expenses primarily consist of:
•Direct operating costs (primarily costs incurred at our rental branch locations that collectively support our
Equipment Rental and Services Operations segment, including, but not limited to, wages and related
benefits, service costs in connection with our rental equipment, site operating costs, pickup and delivery
expenses in connection with rental equipment, maintenance, fuel, parts, and supplies);
•OWN Program payouts;
•Equipment sales cost of revenues;
•Platform expense;
•Depreciation and amortization expense relating to equipment used in operations and capitalized software;
•Selling, general and administrative expenses; and
•Interest expense.
Our revenues and expenses are described in more detail below.
Revenues
Equipment Rental and Related Services
Our core service is the rental of equipment to customers on a daily, weekly, and monthly basis, enabled by our
T3 platform. The equipment we rent includes company-owned equipment, equipment we lease as a lessee, and
equipment that is leased from other parties in the OWN Program and re-rented to customers. We generate rental
revenue from equipment that is in our OWN Program by leasing equipment from owners on a month-to-month or
longer basis and then renting that equipment to our customers. Under nearly all of our OWN Program contracts, we
have control over the equipment and the equipment owner is not able to redeploy or retrieve the equipment while
under rent. Depending on the terms and conditions, we present rental revenue that we generate and OWN Program
payouts that we incur on OWN Program contracts either on a gross basis or a net basis.
In addition to equipment rental revenue, including from our OWN Program, we also generate revenue from
rental customers from the sale of rental protection plan ("RPP") services designed to protect them from potential
damage or loss to the equipment they rent, environmental fees assessed on the rental asset and fuel recovery fees that
we charge to our customers.
Equipment Sales
We have established a retail process to sell new and used equipment as a recurring part of our business. In
addition, we sell equipment assets to third parties, including third parties who have financed equipment purchases
through the issuance of ABS, and allow the customer to place the equipment in our OWN Program to be rented to
our customers. We sell new and used equipment through a variety of channels, including retail sales to customers
and other third parties, sales to wholesalers, brokered sales, and auctions. We generate revenue from the sale of new
and used equipment, which we present net of sales and other tax amounts collected from customers and remitted to
government authorities. When we act as agent in connection with the sale of new equipment to, for example, a
contractor or an OWN Program participant, among other reasons, we present revenue from the sale of such
equipment net in our consolidated statements of net income. When we are the principal in the transaction, we present
revenue from the sale of equipment on a gross basis, with sales revenue included in equipment sales revenue and the
related cost of revenues included in equipment sales cost of revenues in our consolidated statements of net income.
Equipment Parts and Supplies and Services
As an integral part of our Equipment Rental and Services Operations, we sell equipment parts and supplies and
provide maintenance, and repair services to customers, as well as the owners of equipment who are participants in
our OWN Program. Revenue generated from the sale of equipment parts and supplies is presented net of sales and
other tax amounts collected from customers and remitted to government authorities. We also generate revenue from
the provision of ad hoc and preventative maintenance, and repair services to our customers, as well as warranty
repairs. We provide warranty repair services on behalf of OEMs in order to fulfill the warranty extended by OEMs
to their customers. Revenue that we generate from warranty repair services represents compensation for the service
performed by us and is presented on a gross basis.
Platform Revenue
Platform revenue is comprised of revenue from telematics services and the sale of custom electronic
components, including telematics tracker devices and cloud-based access control keypads, and revenue from
building materials and hardware supplies. Revenue from telematics is generated through monthly subscriptions to
our T3 platform and its full suite of capabilities, which we provide to our customers as a SaaS subscription. In
addition, our equipment rental arrangements also provide customers with access to our T3 platform and we allocate
a portion of the transaction consideration from equipment rentals to telematics revenue. Our T3 platform provides
customers with access to proprietary digital tools to help manage their jobsites more productively and safely and
enables customers to streamline maintenance and prevent theft, and equipment misuse. Our T3 platform also enables
equipment owners with subscriptions to place their equipment on our OWN Program to be rented to our customers.
Revenue from building materials and hardware supplies is derived from the sale of such materials and supplies at
our retail stores.
Cost of Revenues
Direct Operating Costs
Direct operating costs include the costs that we incur at our rental branch locations that collectively support our
Equipment Rental and Services Operations segment, including, but not limited to, wages and related benefits,
service costs in connection with our rental equipment, site operating costs, pickup and delivery expenses in
connection with rental equipment, maintenance, fuel, parts, and supplies.
OWN Program Payouts
Amounts we pay to OWN Program participants, as a variable lease expense for their share of rental revenue
generated by us from equipment enrolled under the OWN Program, are presented as OWN Program payouts within
cost of revenues.
Equipment Sales
Equipment sales cost of revenues includes our OEC, less accumulated depreciation, related to equipment that
we sell when we act as the principal in the transaction.
Platform Expense
Platform expense primarily represents (1) costs relating to the telematics services provided to customers,
including the cost of tracker devices and cloud-based access control keypads installed on equipment owned by our
customers, and other custom electronic components; (2) the cost of building supplies, materials and hardware sold to
customers; and (3) other operating costs for our retail stores.
Depreciation and Amortization
Depreciation and amortization includes non-cash expenses relating to the depreciation of our rental equipment
in the fleet and the amortization of capitalized costs relating to the development of our T3 platform.
Depreciation of rental equipment includes depreciation of various classes of our construction equipment,
delivery vehicles, trailers, and installed telematics tracker devices. We estimate that we may hold the asset in its
rental fleet for a period of five to ten years to generate rental revenue, after which it will be sold or otherwise
disposed of to another party. We also estimate the residual value of the equipment at the time of expected disposal.
Depreciation expense is calculated using a straight-line method and recorded over the estimated holding period.
The total capitalized cost of our T3 platform includes direct costs that result in additional functionality of our
software, including payroll and related costs for employees directly associated with the development project.
Capitalized software is amortized over an estimated useful life of five years.
Selling, General and Administrative Expenses
Selling, general and administrative expenses primarily include costs associated with operating leases, costs
incurred by us in connection with marketing of manufacturers' equipment, net of reimbursements we receive from
such manufacturers for such costs, payroll costs, insurance costs, legal costs, marketing and travel costs, technology
costs, and certification and training costs. In addition, depreciation of our buildings and improvements, including
leasehold improvements, furniture, fixtures, office equipment, and capitalized start-up costs are classified within
selling, general and administrative expenses.
Other Income (Expense)
Interest Expense
Interest expense primarily represents interest on our outstanding debt. Any interest or penalties incurred relating
to income tax filings, if any, are also reported within interest expense.
Other Income, Net
Other income, net includes gains and losses on investments in equity securities, realized gains on available-for-
sale debt securities, fees relating to properties assigned to other parties, construction development fees earned for
managing construction activities at properties owned by other parties, gain on sale of properties and other assets, and
other miscellaneous income.
Results of Operations
Three Months Ended June 30, 2026 Compared with Three Months Ended June 30, 2025
|
Three Months Ended June 30,
|
|||||||
|
2026
|
2025
|
$ Change
|
% Change
|
||||
|
($ in millions)
|
|||||||
|
Revenues
|
|||||||
|
Equipment rental and related services ................
|
$815
|
$577
|
$238
|
41%
|
|||
|
Equipment sales ..................................................
|
1%
|
||||||
|
Equipment parts and supplies and services .........
|
26%
|
||||||
|
Platform revenue:
|
|||||||
|
Telematics ......................................................
|
240%
|
||||||
|
Other ...............................................................
|
142%
|
||||||
|
Total revenue ....................................................
|
1,449
|
1,147
|
26%
|
||||
|
Cost of revenues
|
|||||||
|
Direct operating costs ..........................................
|
53%
|
||||||
|
OWN Program payouts .......................................
|
35%
|
||||||
|
Equipment sales cost of revenues .......................
|
(17)
|
(4)%
|
|||||
|
Platform expense .................................................
|
218%
|
||||||
|
Depreciation and amortization ............................
|
26%
|
||||||
|
Total cost of revenues ......................................
|
1,038
|
22%
|
|||||
|
Gross profit .......................................................
|
40%
|
||||||
|
Selling, general and administrative expenses .....
|
38%
|
||||||
|
Operating income ..............................................
|
47%
|
||||||
|
Other income (expense):
|
|||||||
|
Interest expense ...................................................
|
(73)
|
(69)
|
(4)
|
6%
|
|||
|
Other income, net ................................................
|
50%
|
||||||
|
Total other expense, net ...................................
|
(61)
|
(61)
|
-
|
-%
|
|||
|
Income before income taxes ...............................
|
1000%
|
||||||
|
Provision for (benefit from) income taxes ..........
|
(13)
|
(208)%
|
|||||
|
Net income .........................................................
|
$19
|
$16
|
$3
|
19%
|
|||
Total revenue. Our revenue was $1,449 million for the three months ended June 30, 2026, compared to $1,147
million for the three months ended June 30, 2025, an increase of $302 million, or 26%. Our four sources of revenues
over the period are further discussed below:
Equipment rental and related services. Equipment rental and related services revenue accounted for 56% of our
revenue for the three months ended June 30, 2026, compared to 50% of our revenue for the three months ended
June 30, 2025. Our equipment rental revenue and related services was $815 million for the three months ended
June 30, 2026, compared to $577 million for the three months ended June 30, 2025, an increase of $238 million, or
41%. Approximately $196 million of the increase in equipment rental and related services revenue is driven by an
increase in construction demand in the U.S., our strategy to increase our geographical presence, and value afforded
to our customers from our T3 platform. Accordingly, we increased the number of our full-service equipment rental
branch locations from 324 as of June 30, 2025 to 391 as of June 30, 2026. In addition, we grew our fleet OEC under
management from $7,360 million as of June 30, 2025 to $9,851 million as of June 30, 2026, and increased the size
of our fleet from 218,035 units to 280,699 units of equipment under management as of June 30, 2025 and 2026,
respectively. Changes in the mix of equipment rented and price changes increased equipment rental and related
services revenue by $42 million.
Equipment sales. Equipment sales revenue accounted for 33% of our revenue for the three months ended
June 30, 2026, compared to 42% of our revenue for the three months ended June 30, 2025. Equipment sales revenue
was $483 million for the three months ended June 30, 2026, compared to $478 million for the three months ended
June 30, 2025, an increase of $5 million, or 1%. The change was primarily due to our disciplined and selective
equipment sales into the OWN Program, resulting in an increase of $11 million in sales of construction equipment to
existing and new participants in our OWN Program, partially offset by a decrease of $6 million in the sale of new
and used equipment to contractors and other end users. As we increase the size of our OWN Program, transactions
with OWN Program participants may result in a higher percentage of our revenue being attributable to an OWN
Program participant for the period during which one or more equipment sale transactions with such party occurred.
We have experienced strong interest from participants in the OWN Program for construction equipment enabled by
T3, as owners get real-time data on usage, health, and performance of the machines rented exclusively by
EquipmentShare and re-rented to our customers. The OWN Program has allowed us to scale the fleet OEC under our
management in order to meet customer demand for construction equipment enabled by T3.
Equipment parts and supplies and services. Equipment parts and supplies and services revenue accounted for
6% of our revenue for the three months ended June 30, 2026, compared to 6% for the three months ended June 30,
2025. Equipment parts and supplies and services revenue was $88 million for the three months ended June 30, 2026,
compared to $70 million for the three months ended June 30, 2025, an increase of $18 million, or 26%. This increase
was primarily due to our expansion into new markets, resulting in additional full-service branch locations added to
our nationwide network, which increased from 324 locations as of June 30, 2025 to 391 locations as of June 30,
2026. Equipment parts and supplies and services revenue increased $13 million from mature branch locations
primarily attributed to the expansion of our product and service offering in mature branch locations, and $5 million
from new branch locations open less than 24 months as a result of the addition of 67 full-service branch locations.
Platform revenue. Platform revenue accounted for 4% of our revenue for the three months ended June 30, 2026,
compared to 2% of our revenue for the three months ended June 30, 2025. Platform revenue from telematics was
$34 million for the three months ended June 30, 2026, compared to $10 million for the three months ended June 30,
2025, an increase of $24 million or 240%. This increase was primarily due to an increase in revenues related to the
sale of custom electronic components following our September 2025 acquisition of the controlling interests in The
Morey Corporation ("Morey"), a business that designs, manufactures, and sells custom electronic components,
including telematics tracker devices and cloud-based access control keypads. Platform revenue from the sale of
construction materials, building supplies, and hardware across our building materials and hardware retail stores was
$29 million for the three months ended June 30, 2026, compared to $12 million for the three months ended June 30,
2025, an increase of $17 million primarily attributable to the addition of 14 building materials and hardware retail
stores.
Cost of revenues. Cost of revenues was $1,038 million for the three months ended June 30, 2026, compared to
$854 million for the three months ended June 30, 2025, an increase of $184 million, or 22%. Our sources of cost of
revenues over the period are further discussed below:
Direct operating costs. Direct operating costs were $277 million for the three months ended June 30, 2026,
compared to $181 million for the three months ended June 30, 2025, an increase of $96 million, or 53%. The
increase in direct operating costs is primarily due to the expansion of our footprint through the addition of 67 full-
service branch locations, which increased from 324 locations as of June 30, 2025 to 391 locations as of June 30,
2026. The additional operating locations drove increases in wages and related benefits of $20 million, and logistics,
maintenance, and other site operating costs of $76 million.
OWN Program payouts. OWN Program payouts were $234 million for the three months ended June 30, 2026
compared to $173 million for the three months ended June 30, 2025, an increase of $61 million, or 35%.
Approximately $69 million of the increase is attributed to the growth of the average fleet OEC under management
enrolled in the OWN Program, which grew from $3,732 million in 2025 to $5,238 million in 2026, or 40%. Changes
in demand for specific types of rental equipment and the mix of equipment rented partially offset the increase in
OWN program payouts by $8 million.
Equipment sales cost of revenues. Equipment sales cost of revenues was $394 million for the three months
ended June 30, 2026, compared to $411 million for the three months ended June 30, 2025, a decrease of $17 million,
or 4%. This decrease was primarily due to a $14 million reduction in equipment sales cost of revenues associated
with sales to existing and new participants in the OWN Program and a $3 million decrease in equipment sales cost
of revenues resulting from lower equipment sales to contractors and other end users.
Platform expense. Platform expense was $35 million for the three months ended June 30, 2026, compared to
$11 million for the three months ended June 30, 2025, an increase of $24 million or 218%. This increase was
primarily attributed to the addition of 14 hardware retail stores and the acquisition of Morey in September 2025.
Depreciation and amortization. Depreciation and amortization accounted for 9% of our cost of revenues for the
three months ended June 30, 2026, compared to 9% of our cost of revenues for the three months ended June 30,
2025. Depreciation and amortization was $98 million for the three months ended June 30, 2026, compared to $78
million for the three months ended June 30, 2025, an increase of $20 million, or 26%. This increase was primarily
due to an increase in depreciable equipment expense on rental equipment due to an increase in average cost of
owned equipment in our rental equipment, and a $2 million increase in amortization expense on capitalized software
due to an increase in average capitalized costs related to the continued development of our T3 platform.
Selling, general and administrative expenses. Selling, general and administrative expenses were $317 million
for the three months ended June 30, 2026, compared to $229 million for the three months ended June 30, 2025, an
increase of $88 million, or 38%. The increases in selling, general and administrative expenses were primarily
attributed to our expansion of full-service branch locations and growth strategy. To support our expansion, we hired
592 additional staff resulting in an increase of $33 million in selling, general and administrative expense associated
with higher payroll, benefits and travel costs. Our expansion of full-service locations also resulted in higher facilities
and non-rental vehicles lease expense and associated costs of $11 million. The growth of our business and expansion
of our full-service branch locations also increased administrative costs such as insurance, legal, professional
expenses and non-income based taxes by $3 million and other miscellaneous administrative expenses by $17
million. Additionally, increased stock-based compensation expense of $24 million was recorded primarily for the
IPO Founders Awards for the three months ended June 30, 2026.
Interest expense. Interest expense was $73 million for the three months ended June 30, 2026, compared to $69
million for the three months ended June 30, 2025, an increase of $4 million, or 6%. This increase was primarily due
to an increase in average outstanding debt balances to fund our expansion strategy including purchases of
construction equipment for our fleet, partially offset by lower average interest rates under our asset-based revolving
credit facilities.
Total other expense, net. Total other expense, net was $61 million for the three months ended June 30, 2026,
compared to $61 million for the three months ended June 30, 2025. The increase in interest expense of $4 million for
the three months ended June 30, 2026, compared to the three months ended June 30, 2025, was the result of our
higher average outstanding borrowing for the three months ended June 30, 2026, offset by higher miscellaneous
income of $4 million due to interest and dividend income and unrealized net gains, on various investments held in
equity securities.
Provision for (benefit from) income taxes. The provision for income taxes was $14 million for the three months
ended June 30, 2026, compared to a benefit from income taxes of $13 million for the three months ended June 30,
2025, an increase in income tax expense of $27 million, or (208)%. The change in income tax expense is primarily
due to an increase in operating income to $94 million for the three months ended June 30, 2026, as compared to
operating income of $64 million for the three months ended June 30, 2025, applying the estimated annual effective
tax rate for each period that reflects the expected full-year income and related tax expense. Differences between
applicable federal and state statutory tax rates and the effective income tax rates for the income tax benefit recorded
by us are primarily due to nondeductible expenses and the Texas franchise tax, offset by research and development
tax credits.
Net Income. Net income increased by $3 million to $19 million for the three months ended June 30, 2026, as
compared to net income of $16 million for the three months ended June 30, 2025, due to $30 million of higher
operating income, partially offset by $27 million of higher income tax provision.
Six Months Ended June 30, 2026 Compared with Six Months Ended June 30, 2025
|
Six Months Ended June 30,
|
|||||||
|
2026
|
2025
|
$ Change
|
% Change
|
||||
|
($ in millions)
|
|||||||
|
Revenues
|
|||||||
|
Equipment rental and related services ................
|
$1,498
|
$1,072
|
$426
|
40%
|
|||
|
Equipment sales ..................................................
|
6%
|
||||||
|
Equipment parts and supplies and services .........
|
29%
|
||||||
|
Platform revenue:
|
|||||||
|
Telematics ......................................................
|
225%
|
||||||
|
Other ...............................................................
|
140%
|
||||||
|
Total revenue ....................................................
|
2,437
|
1,864
|
31%
|
||||
|
Cost of revenues
|
|||||||
|
Direct operating costs ..........................................
|
41%
|
||||||
|
OWN Program payouts .......................................
|
38%
|
||||||
|
Equipment sales cost of revenues .......................
|
3%
|
||||||
|
Platform expense .................................................
|
232%
|
||||||
|
Depreciation and amortization ............................
|
27%
|
||||||
|
Total cost of revenues ......................................
|
1,740
|
1,372
|
27%
|
||||
|
Gross profit .......................................................
|
42%
|
||||||
|
Selling, general and administrative expenses .....
|
37%
|
||||||
|
Operating income ..............................................
|
77%
|
||||||
|
Other income (expense):
|
|||||||
|
Interest expense ...................................................
|
(143)
|
(131)
|
(12)
|
9%
|
|||
|
Other income, net ................................................
|
43%
|
||||||
|
Total other expense, net ...................................
|
(123)
|
(117)
|
(6)
|
5%
|
|||
|
Loss before income taxes ....................................
|
(29)
|
(64)
|
(55)%
|
||||
|
Provision for (benefit from) income taxes ..........
|
(19)
|
(32)
|
(41)%
|
||||
|
Net income (loss) ................................................
|
$(10)
|
$(32)
|
$22
|
(69)%
|
|||
Total revenue. Our revenue was $2,437 million for the six months ended June 30, 2026, compared to $1,864
million for the six months ended June 30, 2025, an increase of $573 million, or 31%. Our four sources of revenues
over the period are further discussed below:
Equipment rental and related services. Equipment rental and related services revenue accounted for 61% of our
revenue for the six months ended June 30, 2026, compared to 58% of our revenue for the six months ended June 30,
2025. Our equipment rental and related services revenue was $1,498 million for the six months ended June 30, 2026,
compared to $1,072 million for the six months ended June 30, 2025, an increase of $426 million, or 40%.
Approximately $364 million of the increase in equipment rental and related services revenue is driven by an increase
in construction demand in the U.S., our strategy to increase our geographical presence, and value afforded our
customers from our T3 platform. Accordingly, we increased the number of our full-service equipment rental branch
locations from 324 as of June 30, 2025 to 391 as of June 30, 2026. In addition, we grew our fleet OEC under
management from $7,360 million as of June 30, 2025 to $9,851 million as of June 30, 2026, and increased the size
of our fleet from 218,035 units to 280,699 units of equipment under management as of June 30, 2025 and 2026,
respectively. Changes in the mix of equipment rented and price changes increased equipment rental and related
services revenue by $62 million.
Equipment sales. Equipment sales revenue accounted for 27% of our revenue for the six months ended June 30,
2026, compared to 34% of our revenue for the six months ended June 30, 2025. Equipment sales revenue was $661
million for the six months ended June 30, 2026, compared to $624 million for the six months ended June 30, 2025,
an increase of $37 million, or 6%. The change was primarily due to an increase of $18 million in sales of
construction equipment to existing and new participants in our OWN Program, including third parties who have
financed equipment purchases through the issuance of ABS, and an increase of $19 million in the sale of new and
used equipment to contractors and other end users. As we increase the size of our OWN Program, transactions with
OWN Program participants may result in a higher percentage of our revenue being attributable to an OWN Program
participant for the period during which one or more equipment sale transactions with such party occurred. We have
experienced strong interest from participants in the OWN Program for construction equipment enabled by T3, as
owners get real-time data on usage, health, and performance of the machines rented exclusively by EquipmentShare
and re-rented to our customers. The OWN Program has allowed us to scale the fleet OEC under our management in
order to meet customer demand for construction equipment enabled by T3.
Equipment parts and supplies and services. Equipment parts and supplies and services revenue accounted for
7% of our revenue for the six months ended June 30, 2026, compared to 7% for the six months ended June 30, 2025.
Equipment parts and supplies and services revenue was $165 million for the six months ended June 30, 2026,
compared to $128 million for the six months ended June 30, 2025, an increase of $37 million, or 29%. This increase
was primarily due to our expansion into new markets, resulting in additional full-service branch locations added to
our nationwide network, which increased from 324 locations as of June 30, 2025 to 391 locations as of June 30,
2026. Equipment parts and supplies and services revenue increased $17 million from mature branch locations
primarily attributed to the expansion of our product and service offering in mature branch locations, and $20 million
from new branch locations open less than 24 months as a result of the addition of 67 full-service branch locations.
Platform revenue. Platform revenue accounted for 5% of our revenue for the six months ended June 30, 2026,
compared to 2% of our revenue for the six months ended June 30, 2025. Platform revenue from telematics was $65
million for the six months ended June 30, 2026, compared to $20 million for the six months ended June 30, 2025, an
increase of $45 million, or 225%. This increase was primarily due to an increase in monthly subscriptions sold for
the T3 telematics services, an increase in equipment rented that is fully enabled with T3 telematics services, and an
increase in revenues related to the sale of custom electronic components following our September 2025 acquisition
of the controlling interests in Morey. Platform revenue from the sale of construction materials, building supplies,
and hardware across our building materials and hardware retail stores was $48 million for the six months ended
June 30, 2026, compared to $20 million for the six months ended June 30, 2025, an increase of $28 million primarily
attributable to the addition of 14 building materials and hardware retail stores.
Cost of revenues. Cost of revenues was $1,740 million for the six months ended June 30, 2026, compared to
$1,372 million for the six months ended June 30, 2025, an increase of $368 million, or 27%.
Direct operating costs. Direct operating costs were $498 million for the six months ended June 30, 2026,
compared to $353 million for the six months ended June 30, 2025, an increase of $145 million, or 41%. The increase
in direct operating costs is primarily due to the expansion of our footprint through the addition of 67 full-service
branch locations, which increased from 324 locations as of June 30, 2025 to 391 locations as of June 30, 2026. The
additional operating locations drove increases in wages and related benefits of $43 million, and logistics,
maintenance, and other site operating costs of $103 million.
OWN Program payouts. OWN Program payouts were $451 million for the six months ended June 30, 2026
compared to $328 million for the six months ended June 30, 2025, an increase of $123 million, or 38%.
Approximately $134 million of the increase is attributed to the growth of the average fleet OEC under management
enrolled in the OWN Program, which grew from $3,631 million in 2025 to $5,109 million in 2026, or 41%. Changes
in demand for specific types of rental equipment and the mix of equipment rented partially offset the increase in
OWN program payouts by $11 million.
Equipment sales cost of revenues. Equipment sales cost of revenues was $540 million for the six months ended
June 30, 2026, compared to $524 million for the six months ended June 30, 2025, an increase of $16 million, or 3%.
This increase was primarily due to an increase of $20 million in equipment sales to contractors and other end users
primarily due to our ability to reach a greater customer base through our expansion of full-service branch locations,
which increased from 324 as of June 30, 2025 to 391 as of June 30, 2026, partially offset by a decrease of $4 million
in equipment sales cost of revenues for sales to existing and new participants in the OWN Program.
Platform expense. Platform expense was $63 million for the six months ended June 30, 2026, compared to $19
million for the six months ended June 30, 2025, an increase of $44 million or 232%. This increase was primarily
attributed to the addition of 14 hardware retail stores and the acquisition of Morey in September 2025.
Depreciation and amortization. Depreciation and amortization accounted for 11% of our cost of revenues for
the six months ended June 30, 2026, compared to 11% of our cost of revenues for the six months ended June 30,
2025. Depreciation and amortization was $188 million for the six months ended June 30, 2026, compared to $148
million for the six months ended June 30, 2025, an increase of $40 million, or 27%. This increase was primarily due
to an increase in depreciable equipment expense on rental equipment due to an increase in average cost of owned
equipment in our rental equipment, and a $5 million increase in amortization expense on capitalized software due to
an increase in average capitalized costs related to the continued development of our T3 platform.
Selling, general and administrative expenses. Selling, general and administrative expenses were $603 million
for the six months ended June 30, 2026, compared to $439 million for the six months ended June 30, 2025, an
increase of $164 million, or 37%. The increases in selling, general and administrative expenses were primarily
attributed to our expansion of full-service branch locations and growth strategy. To support our expansion, we hired
592 additional staff resulting in an increase of $60 million in selling, general and administrative expense associated
with higher payroll, benefits and travel costs. Our expansion of full-service locations also resulted in higher facilities
and non-rental vehicles lease expense and associated costs of $22 million. The growth of our business and expansion
of our full-service branch locations also increased administrative costs such as insurance, legal, professional
expenses and non-income based taxes by $10 million and other miscellaneous administrative expenses by $29
million. Additionally, increased stock-based compensation expense of $43 million was recorded primarily for the
IPO Founders Awards for the six months ended June 30, 2026.
Interest expense. Interest expense was $143 million for the six months ended June 30, 2026, compared to $131
million for the six months ended June 30, 2025, an increase of $12 million, or 9%. This increase was primarily due
to an increase in average outstanding debt balances to fund our expansion strategy including purchases of
construction equipment for our fleet, partially offset by lower average interest rates under our asset-based revolving
credit facilities.
Total other expense, net. Total other expense, net was $123 million for the six months ended June 30, 2026,
compared to $117 million for the six months ended June 30, 2025, an increase of $6 million, or 5%. This increase
was primarily due to higher interest expense of $12 million for the six months ended June 30, 2026, compared to the
six months ended June 30, 2025, resulting from our higher average outstanding borrowing for the six months ended
June 30, 2026, partially offset by higher miscellaneous income of $6 million due to interest and dividend income and
unrealized net gains, on various investments held in equity securities.
Provision for (benefit from) income taxes. The benefit for income taxes was $19 million for the six months
ended June 30, 2026, compared to $32 million for the six months ended June 30, 2025, a decrease of $13 million, or
41%. The change in the benefit from income taxes is primarily due to an increase in operating income to $94 million
for the six months ended June 30, 2026, as compared to operating income of $53 million for the six months ended
June 30, 2025, applying the estimated annual effective tax rate for each period that reflects the expected full-year
income and related tax expense. Differences between applicable federal and state statutory tax rates and the effective
income tax rates for the income tax benefit recorded by us are primarily due to nondeductible expenses and the
Texas franchise tax, offset by research and development tax credits.
Net income (loss). Net loss decreased by $22 million to a net loss of $10 million for the six months ended
June 30, 2026, as compared to net loss of $32 million for the six months ended June 30, 2025, due to $41 million of
higher operating income, partially offset by $6 million of higher total other expense, net and $13 million of lower
income tax benefit.
Key Performance Metrics
We regularly review a number of financial measurements and operating metrics to evaluate our operating
performance, measure our growth and make strategic investment decisions. In addition to traditional U.S. generally
accepted accounting principles ("U.S. GAAP") performance measures, such as total revenue and net income, we use
supplemental performance operating metrics such as OEC Under Management, and the non-GAAP financial
measure EBITDA.
Non-GAAP Financial Measure
We refer in this Form 10-Q to EBITDA, a non-GAAP financial measure that is not prepared in accordance with
U.S. GAAP. This non-GAAP financial measure should be considered supplemental to and is not a substitute for
financial information prepared in accordance with U.S. GAAP. Our use of the term EBITDA may vary from the use
of similar terms by other companies in our industry and accordingly may not be comparable to similarly titled
measures used by other companies.
EBITDA. EBITDA is a key metric used by management and our Board to assess our financial performance. We
define EBITDA as net income before interest expense, income taxes, depreciation and amortization and non-cash
stock compensation expense, which we believe, when excluded, provide investors with a useful representation of our
ongoing operations and performance. Certain items excluded from EBITDA are significant components in
understanding and assessing a company's financial performance, such as a company's cost of capital and tax
structure, as well as the historic costs of depreciable assets, none of which are reflected in EBITDA. Our
presentation of EBITDA should not be construed as an indication that results will be unaffected by the items
excluded from EBITDA.
The table below reconciles net income to EBITDA for each of the periods indicated:
|
Three Months Ended June 30,
|
Six Months Ended June 30,
|
||||||
|
2026
|
2025
|
2026
|
2025
|
||||
|
(In millions)
|
|||||||
|
Net income (loss) ..............................
|
$19
|
$16
|
$(10)
|
$(32)
|
|||
|
Provision for (benefit from) income
taxes ..................................................
|
(13)
|
(19)
|
(32)
|
||||
|
Depreciation and amortization
expense ..............................................
|
|||||||
|
Interest expense .................................
|
|||||||
|
Non-cash stock compensation
expense(1) ...........................................
|
|||||||
|
EBITDA ..........................................
|
$245
|
$161
|
$375
|
$236
|
|||
__________________
(1)Represents non-cash compensation expense for stock option and other stock-based awards.
Other Key Financial Metrics
Equipment Rental Segment Adjusted EBITDA and Equipment Rental Segment Adjusted EBITDA Margin.
Equipment Rental Segment Adjusted EBITDA and Equipment Rental Segment Adjusted EBITDA Margin are key
performance metrics used by management and our Board to assess the financial performance of our Equipment
Rental and Services Operations segment. Equipment Rental Segment Adjusted EBITDA is the profitability measure
used by management to evaluate our Equipment Rental and Services Operations segment, disclosed in accordance
with the requirements of ASC Topic 280, Segment Reporting, ("Topic 280"). Equipment Rental Segment Adjusted
EBITDA Margin is Equipment Rental Segment Adjusted EBITDA divided by Equipment Rental and Services
Operations Segment total revenues.
The below table presents our Equipment Rental Segment Adjusted EBITDA and Equipment Rental Segment
Adjusted EBITDA Margin for each of the periods indicated.
|
Three Months Ended June 30,
|
Six Months Ended June 30,
|
||||||
|
2026
|
2025
|
2026
|
2025
|
||||
|
(In millions)
|
|||||||
|
Equipment Rental Segment
Adjusted EBITDA(1) ............
|
$389
|
$275
|
$713
|
$483
|
|||
|
Equipment Rental Segment
Adjusted EBITDA
Margin ..............................
|
43%
|
42%
|
43%
|
40%
|
|||
__________________
(1)Equipment Rental Segment Adjusted EBITDA includes direct operating costs (excluding equipment and vehicle operating lease expense)
and selling, general, and administrative expenses (excluding depreciation expense related to our property and other fixed assets). Equipment
and vehicle operating lease expense was $6 million and $6 million for the three months ended June 30, 2026 and 2025, respectively, and
$12 million and $12 million for the six months ended June 30, 2026 and 2025, respectively. Depreciation expense related to our property
and other fixed assets was $14 million and $10 million for the three months ended June 30, 2026 and 2025, respectively, and $27 million
and $19 million for the six months ended June 30, 2026 and 2025, respectively. Equipment Rental Segment Adjusted EBITDA also
excludes operating expenses related to OWN Program payouts, depreciation expense on rental equipment, and amortization expense on
capitalized software and intangible assets. OWN Program payouts, depreciation expense on rental equipment, and amortization expense on
capitalized software and intangible assets was $234 million, $91 million, and $8 million, respectively, for the three months ended June 30,
2026, and $451 million, $173 million, and $16 million, respectively, for the six months ended June 30, 2026, and $173 million, $72 million,
and $5 million, respectively, for the three months ended June 30, 2025, and $328 million, $139 million, and $9 million, respectively, for the
six months ended June 30, 2025. For additional information, see Note 18. Segments in this Form 10-Q, for the three and six months ended
June 30, 2026.
OEC Under Management. A substantial portion of our overall value is in our rental fleet equipment, including
support vehicles and trailers. The OEC of our owned rental equipment at June 30, 2026 and June 30, 2025 was
$4,235 million and $3,306 million, respectively, or approximately 43% and 45%, respectively, of total equipment
rental OEC under our management. At June 30, 2026, the appraised value of the rental equipment owned by OWN
Program participants was $4,090 million. Our broader managed equipment rental fleet from which we support and
generate our equipment rental revenue as of June 30, 2026 consisted of 280,699 units having an OEC of $9,851
million and an average age of 31 months, and as of June 30, 2025 consisted of 218,035 units having an OEC of
$7,360 million and an average age of 30 months.
Fleet Composition. Our equipment rental fleet from which we support and generate our equipment rental
revenue is summarized in the tables below:
|
June 30, 2026
|
|||||||
|
% of
|
OEC
|
% of
|
|||||
|
Units
|
Total
|
(In millions)
|
Total
|
||||
|
EquipmentShare Owned ...............................
|
189,961
|
68%
|
$4,235
|
43%
|
|||
|
OWN Program ..............................................
|
89,775
|
32%
|
5,533
|
56%
|
|||
|
Operating Lease ............................................
|
-%
|
1%
|
|||||
|
Total ............................................................
|
280,699
|
100%
|
$9,851
|
100%
|
|||
|
June 30, 2025
|
|||||||
|
% of
|
OEC
|
% of
|
|||||
|
Units
|
Total
|
(In millions)
|
Total
|
||||
|
EquipmentShare Owned ...............................
|
150,061
|
69%
|
$3,306
|
45%
|
|||
|
OWN Program ..............................................
|
66,213
|
30%
|
3,906
|
53%
|
|||
|
Operating Lease ............................................
|
1,761
|
1%
|
2%
|
||||
|
Total ............................................................
|
218,035
|
100%
|
$7,360
|
100%
|
|||
|
December 31, 2025
|
|||||||
|
% of
|
OEC
|
% of
|
|||||
|
Units
|
Total
|
(In millions)
|
Total
|
||||
|
EquipmentShare Owned ...............................
|
170,704
|
68%
|
$3,740
|
43%
|
|||
|
OWN Program ..............................................
|
80,482
|
32%
|
4,942
|
56%
|
|||
|
Operating Lease ............................................
|
1,066
|
-%
|
1%
|
||||
|
Total .............................................................
|
252,252
|
100%
|
$8,780
|
100%
|
|||
|
December 31, 2024
|
|||||||
|
% of
|
OEC
|
% of
|
|||||
|
Units
|
Total
|
(In millions)
|
Total
|
||||
|
EquipmentShare Owned ...............................
|
134,394
|
69%
|
$3,021
|
46%
|
|||
|
OWN Program ..............................................
|
58,360
|
30%
|
3,437
|
52%
|
|||
|
Operating Lease ............................................
|
1,708
|
1%
|
2%
|
||||
|
Total .............................................................
|
194,462
|
100%
|
$6,601
|
100%
|
|||
The diversity of equipment in our rental fleet is monitored and carefully balanced to give us the ability to
relocate equipment across regions to support increased regional industrial or construction activity and enhance our
overall utilization. For example, certain categories of our equipment supporting industrial construction can
efficiently be re-located to infrastructure projects. As of June 30, 2026 and December 31, 2025, 84% and 85% of our
rental fleet consists of general rental construction equipment, which includes our core rental equipment of boom
lifts, telehandlers, earth moving, scissor lifts, and excavators, respectively, and 16% and 15% of our rental fleet
consists of specialty equipment, which includes advanced solutions, industrial tooling, and other non-core rental
equipment, respectively.
The rental equipment mix among our general rental and specialty equipment categories was largely consistent in
each year as a percentage of total units available for rent and as a percentage of OEC.
For the net book value of our rental equipment, see Note 5. Rental Equipment, Net in this Form 10-Q, for the
six months ended June 30, 2026.
Business Segments
We operate our business through the following reportable segments: (i) Equipment Rental and Services
Operations, comprised of recurring activity performed at our full-service branch locations, such as equipment rentals
and related services (including allocated telematics revenue related to rental customer access to the T3 platform),
and sales of parts, supplies and maintenance services to construction contractors and others, and (ii) Equipment
Sales, comprised of sales by us of new or used equipment made at any of our branch locations and dealership sites,
including equipment sales to participants in the OWN Program. All other business activities include telematics SaaS
subscriptions, software applications, and related telematics devices purchased by customers for their owned fleet, as
well as building materials and hardware supplies. These segments are based upon how we allocate resources and
assess performance. For additional information about our business segments, see Note 18. Segments in this Form
10-Q, for the three and six months ended June 30, 2026.
Equipment Rental and Services Operations
Our core service is the rental of equipment to customers on a daily, weekly, and monthly basis, enabled by our
T3 platform. The equipment we rent includes (i) company-owned equipment, (ii) equipment that is leased to us
under month-to-month or longer-term arrangements from participants in our OWN Program, and (iii) equipment
owned by other third parties and leased to us under operating leases. We generate rental revenue by renting
equipment owned by us or owned by others and re-renting the equipment to our customers.
In addition to equipment rental revenue, we also generate revenue from the sale of RPP services designed to
protect our customers from potential damage or loss to the equipment during the rental period, environmental fees
assessed on the rental asset, and fuel recovery fees that we charge to our rental customers.
As an integral part of our Equipment Rental and Services Operations segment, we sell equipment parts and
supplies and provide maintenance and repair services to customers, as well as the owners of equipment who are
participants in our OWN Program. We generate revenue from the provision of ad hoc and preventative maintenance
and repair services to our customers. We also provide warranty repair services on behalf of OEMs in order to fulfill
the warranty extended by the OEMs to customers. Revenue that we generate from warranty repair services
represents compensation for the service performed by us.
Our principal costs and expenses associated with the Equipment Rental and Services Operations segment
include (i) segment direct operating costs incurred across our 391 full-service branch locations and 9 dealership sites
as of June 30, 2026, excluding operating expenses related to OWN Program payouts and equipment and vehicle
operating lease expense; and (ii) segment selling, general and administrative expenses, excluding depreciation
expense related to the property and other fixed assets. Direct operating costs include the costs incurred at our rental
branch locations that collectively support our Equipment Rental and Services Operations segment, including, but not
limited to, wages and related benefits, service costs in connection with our rental equipment, site operating costs,
pickup and delivery expenses in connection with rental equipment, maintenance, fuel, parts, and supplies.
Equipment Sales
Through our Equipment Sales segment, we manage retail processes to sell new and used equipment. We sell
used equipment assets to participants in our OWN Program, including third parties who have financed equipment
purchases through the issuance of ABS. We also sell new and used equipment to others through a variety of
channels, including retail sales, wholesalers, brokered sales, and auctions. Our principal costs and expenses
associated with the Equipment Sales segment include the OEC, or purchase cost, of the equipment that we sell when
we act as the principal in the transaction. When we act as the agent in the transaction, the purchase cost of the
equipment that we sell is presented net of the equipment sales revenue.
All Other
All other business activities, which include telematics SaaS subscriptions, software applications, and the design,
manufacture, and sale of custom electronic components, including telematics devices and cloud-based access control
keypads purchased by customers for their owned fleet, as well as building materials and hardware supplies, are
included in "All Other."
The following tables present information about our reportable segments for the three months ended June 30,
2026 and 2025 (in millions):
|
Three Months Ended June 30, 2026
|
|||||||
|
Equipment
Rental and
Services
Operations
|
Equipment
Sales
|
All Other
|
Total
|
||||
|
Equipment rental, parts, supplies, and services ...........
|
$903
|
$-
|
$-
|
$903
|
|||
|
Equipment sales ...........................................................
|
-
|
-
|
|||||
|
Telematics ...................................................................
|
-
|
||||||
|
Sales of building materials, small tools, and
hardware supplies ....................................................
|
-
|
-
|
|||||
|
Total revenues ...........................................................
|
$908
|
$483
|
$58
|
$1,449
|
|||
|
Significant expenses:
|
|||||||
|
Segment cost of revenues .......................................
|
|||||||
|
Segment selling, general and administrative
expenses ..............................................................
|
|||||||
|
Segment Adjusted EBITDA(1) .................................
|
$389
|
$82
|
$1
|
||||
|
Three Months Ended June 30, 2025
|
|||||||
|
Equipment
Rental and
Services
Operations
|
Equipment
Sales
|
All Other
|
Total
|
||||
|
Equipment rental, parts, supplies, and services ...........
|
$647
|
$-
|
$-
|
$647
|
|||
|
Equipment sales ...........................................................
|
-
|
-
|
|||||
|
Telematics ...................................................................
|
-
|
||||||
|
Sales of building materials, small tools, and
hardware supplies ....................................................
|
-
|
-
|
|||||
|
Total revenues ............................................................
|
$651
|
$478
|
$18
|
$1,147
|
|||
|
Significant expenses: ...................................................
|
|||||||
|
Segment cost of revenues .......................................
|
|||||||
|
Segment selling, general and administrative
expenses ..............................................................
|
|||||||
|
Segment Adjusted EBITDA(1) ..................................
|
$275
|
$60
|
$(5)
|
||||
__________________
(1)Segment Adjusted EBITDA includes cost of revenues and selling, general, and administrative expenses for each segment. Cost of revenues
for the Equipment Rental and Services Operations segment includes direct operating costs, excluding equipment and vehicle operating lease
expense. Equipment and vehicle operating lease expense was $6 million and $6 million for the three months ended June 30, 2026 and 2025
respectively. Cost of revenues for the Equipment Sales segment includes the cost of equipment sales. Cost of revenues for all other activities
includes platform expenses. Segment Adjusted EBITDA also excludes operating expenses related to OWN Program payouts, depreciation
expense on rental equipment, and amortization expense on capitalized software and intangible assets. These excluded expenses are
significant: OWN Program payouts, depreciation expense on rental equipment, and amortization expense on capitalized software and
intangible assets was $234 million, $91 million, and $8 million, respectively, for the three months ended June 30, 2026, $173 million, $72
million, and $5 million, respectively, for the three months ended June 30, 2025. Selling, general and administrative expenses for each
segment exclude depreciation expense related to our property and other fixed assets. Depreciation expense related to our property and other
fixed assets was $14 million and $10 million for the three months ended June 30, 2026 and 2025, respectively. For additional information,
see Note 18. Segments in this Form 10-Q, for the three and six months ended June 30, 2026.
Three Months Ended June 30, 2026 Compared with Three Months Ended June 30, 2025
Equipment Rental and Services Operations. Revenue for our Equipment Rental and Services Operations
segment was $908 million for the three months ended June 30, 2026, compared to $651 million for the three months
ended June 30, 2025, an increase of $257 million, or 39%. Approximately $196 million of the increase is attributed
to the growth in fleet OEC under our management from $7,360 million as of June 30, 2025 to $9,851 million as of
June 30, 2026, and the corresponding increase in our fleet size from 218,035 units to 280,699 units of equipment
under our management as of June 30, 2025 and 2026, respectively. The increase in fleet OEC under our
management, connected to our T3 platform, drove an increase in equipment rental revenue, primarily from national
and regional customers. Fleet OEC under our management includes equipment we own and lease, as well as
equipment owned by third parties and leased through our OWN Program that we rent to customers from our full-
service branch locations, which also increased from 324 as of June 30, 2025, to 391 as of June 30, 2026. Revenue
from sales of equipment parts and supplies and services from mature branch locations and new branch locations
open less than 24 months contributed $13 million and $5 million, respectively, to the increase in equipment rental
and related services revenue and changes in the mix of equipment rented and price changes increased equipment
rental and related services revenue by $42 million.
Segment Adjusted EBITDA for our Equipment Rental and Services Operations segment was $389 million for
the three months ended June 30, 2026, compared to $275 million for the three months ended June 30, 2025, an
increase of $114 million, or 41%. The increase in Segment Adjusted EBITDA was primarily due an increase in
segment total revenues of $257 million from equipment rentals and the sale of parts, supplies and services, attributed
to our organic growth initiatives, including the maturation of our existing sites and incremental growth sites, and an
increase in equipment rental fleet OEC under our management, from $7,360 million as of June 30, 2025 to $9,851
million as of June 30, 2026, and the corresponding increase in our fleet size from 218,035 units to 280,699 units of
equipment under our management as of June 30, 2025 and 2026, respectively, driven by OWN Program demand.
The increase in segment total revenues was offset by increases of $96 million in segment cost of revenues and $47
million in segment selling, general and administrative expenses.
Equipment Sales. Revenue for our Equipment Sales segment was $483 million for the three months ended June
30, 2026, compared to $478 million for the three months ended June 30, 2025, an increase of $5 million, or 1%. The
increase was primarily due to increased sales of construction equipment, primarily to existing and new participants
in the OWN Program, as presented in the following table (in millions):
|
Three Months Ended June 30,
|
|||||||
|
2026
|
2025
|
$ Change
|
% Change
|
||||
|
Equipment sales to OWN Program participants(1) .......
|
$428
|
$417
|
$11
|
3%
|
|||
|
Other equipment sales .................................................
|
(6)
|
(10)%
|
|||||
|
Total revenues - equipment sales ................................
|
$483
|
$478
|
$5
|
1%
|
|||
|
Cost of equipment sold to OWN Program
participants ...............................................................
|
$346
|
$360
|
$(14)
|
(4)%
|
|||
|
Cost of other equipment sales .....................................
|
(3)
|
(6)%
|
|||||
|
Total cost of revenues - equipment sales .....................
|
$394
|
$411
|
$(17)
|
(4)%
|
|||
__________________
(1)For the three months ended June 30, 2026 and 2025, equipment sales to OWN Program participants included net revenue of $32 million and
$17 million, respectively, recognized on an agent basis, with overall transaction values of $195 million and $143 million, respectively.
The increase in equipment sales of $5 million is primarily attributed to higher sales of $11 million in
construction equipment to existing and new participants in our OWN Program. Sales of new and used equipment
from our full service branch locations to contractors and other end users decreased by $6 million.
Segment Adjusted EBITDA for our Equipment Sales segment was $82 million for the three months ended June
30, 2026, compared to $60 million for the three months ended June 30, 2025, an increase of $22 million, or 37%.
The increase in Segment Adjusted EBITDA was primarily attributed to higher gross margins on equipment sales.
All Other. Revenue for all other activities was $58 million for the three months ended June 30, 2026, compared
to $18 million for the three months ended June 30, 2025, an increase of $40 million, or 222%. This increase was
primarily due to an increase of $23 million in telematics SaaS subscriptions, applications, and related telematics
devices, as well as an increase of $17 million in sales of building materials, small tools, and hardware supplies due
to our expansion of 14 hardware stores during the trailing twelve months. Segment earnings for our all other
activities was $1 million for the three months ended June 30, 2026, compared to Segment loss of $5 million for the
three months ended June 30, 2025, an increase of $6 million, or 120%, primarily due to the higher revenue as
previously discussed, partially offset by an increase of $10 million in selling, general and administrative expenses,
including employee compensation, technology costs, professional service fees, and insurance expenses which were
allocated to all other activities based on employee headcount.
The following tables present information about our reportable segments for the six months ended June 30, 2026
and 2025 (in millions):
|
Six Months Ended June 30, 2026
|
|||||||
|
Equipment
Rental and
Services
Operations
|
Equipment
Sales
|
All Other
|
Total
|
||||
|
Equipment rental, parts, supplies, and services ...........
|
$1,663
|
$-
|
$-
|
$1,663
|
|||
|
Equipment sales ...........................................................
|
-
|
-
|
|||||
|
Telematics ...................................................................
|
-
|
||||||
|
Sales of building materials, small tools, and
hardware supplies ....................................................
|
-
|
-
|
|||||
|
Total revenues ...........................................................
|
$1,672
|
$661
|
$104
|
$2,437
|
|||
|
Significant expenses:
|
|||||||
|
Segment cost of revenues .......................................
|
|||||||
|
Segment selling, general and administrative
expenses ..............................................................
|
|||||||
|
Segment Adjusted EBITDA(1) .................................
|
$713
|
$107
|
$(2)
|
||||
|
Six Months Ended June 30, 2025
|
|||||||
|
Equipment
Rental and
Services
Operations
|
Equipment
Sales
|
All Other
|
Total
|
||||
|
Equipment rental, parts, supplies, and services ...........
|
$1,200
|
$-
|
$-
|
$1,200
|
|||
|
Equipment sales ...........................................................
|
-
|
-
|
|||||
|
Telematics ...................................................................
|
-
|
||||||
|
Sales of building materials, small tools, and
hardware supplies ....................................................
|
-
|
-
|
|||||
|
Total revenues ............................................................
|
$1,207
|
$624
|
$33
|
$1,864
|
|||
|
Significant expenses: ...................................................
|
|||||||
|
Segment cost of revenues .......................................
|
|||||||
|
Segment selling, general and administrative
expenses ..............................................................
|
|||||||
|
Segment Adjusted EBITDA(1) ..................................
|
$483
|
$86
|
$(9)
|
||||
__________________
(1)Segment Adjusted EBITDA includes cost of revenues and selling, general, and administrative expenses for each segment. Cost of revenues
for the Equipment Rental and Services Operations segment includes direct operating costs, excluding equipment and vehicle operating lease
expense. Equipment and vehicle operating lease expense was $12 million and $12 million for the six months ended June 30, 2026 and 2025
respectively. Cost of revenues for the Equipment Sales segment includes the cost of equipment sales. Cost of revenues for all other activities
includes platform expenses. Segment Adjusted EBITDA also excludes operating expenses related to OWN Program payouts, depreciation
expense on rental equipment, and amortization expense on capitalized software and intangible assets. OWN Program payouts, depreciation
expense on rental equipment, and amortization expense on capitalized software and intangible assets was $451 million, $173 million, and
$16 million, respectively, for the six months ended June 30, 2026, $328 million, $139 million, and $9 million, respectively, for the six
months ended June 30, 2025. Selling, general and administrative expenses for each segment exclude depreciation expense related to our
property and other fixed assets. Depreciation expense related to our property and other fixed assets was $27 million and $19 million for the
six months ended June 30, 2026 and 2025, respectively. For additional information, see Note 18. Segments in this Form 10-Q, for the six
months ended June 30, 2026.
Six Months Ended June 30, 2026 Compared with Six Months Ended June 30, 2025
Equipment Rental and Services Operations. Revenue for our Equipment Rental and Services Operations
segment was $1,672 million for the six months ended June 30, 2026, compared to $1,207 million for the six months
ended June 30, 2025, an increase of $465 million, or 39%. Approximately $364 million of the increase is attributed
to the growth in fleet OEC under our management from $7,360 million as of June 30, 2025 to $9,851 million as of
June 30, 2026, and the corresponding increase in our fleet size from 218,035 units to 280,699 units of equipment
under our management as of June 30, 2025 and 2026, respectively. The increase in fleet OEC under our
management, connected to our T3 platform, drove an increase in equipment rental revenue, primarily from national
and regional customers. Fleet OEC under our management includes equipment we own and lease, as well as
equipment owned by third parties and leased through our OWN Program that we rent to customers from our full-
service branch locations, which also increased from 324 as of June 30, 2025, to 391 as of June 30, 2026. Revenue
from sales of equipment parts and supplies and services from mature branch locations and new branch locations
open less than 24 months contributed $17 million and $20 million, respectively, to the increase in equipment rental
and related services revenue and changes in the mix of equipment rented and price changes increased equipment
rental and related services revenue by $62 million.
Segment Adjusted EBITDA for our Equipment Rental and Services Operations segment was $713 million for
the six months ended June 30, 2026, compared to $483 million for the six months ended June 30, 2025, an increase
of $230 million, or 48%. The increase in Segment Adjusted EBITDA was primarily due an increase in segment total
revenues of $465 million from equipment rentals and the sale of parts, supplies and services, attributed to our
organic growth initiatives, including the maturation of our existing sites and incremental growth sites, and an
increase in equipment rental fleet OEC under our management, from $7,360 million as of June 30, 2025 to $9,851
million as of June 30, 2026, and the corresponding increase in our fleet size from 218,035 units to 280,699 units of
equipment under our management as of June 30, 2025 and 2026, respectively, driven by OWN Program demand.
The increase in segment total revenues was offset by increases of $145 million in segment cost of revenues and $90
million in segment selling, general and administrative expenses.
Equipment Sales. Revenue for our Equipment Sales segment was $661 million for the six months ended
June 30, 2026, compared to $624 million for the six months ended June 30, 2025, an increase of $37 million, or 6%.
The increase was primarily due to increased sales of construction equipment, primarily to contractors and other end
users and to existing and new participants in the OWN Program, as presented in the following table (in millions):
|
Six Months Ended June 30,
|
|||||||
|
2026
|
2025
|
$ Change
|
% Change
|
||||
|
Equipment sales to OWN Program participants(1) .......
|
$530
|
$512
|
$18
|
4%
|
|||
|
Other equipment sales .................................................
|
17%
|
||||||
|
Total revenues - equipment sales ................................
|
$661
|
$624
|
$37
|
6%
|
|||
|
Cost of equipment sold to OWN Program
participants ...............................................................
|
$428
|
$432
|
$(4)
|
(1)%
|
|||
|
Cost of other equipment sales .....................................
|
22%
|
||||||
|
Total cost of revenues - equipment sales .....................
|
$540
|
$524
|
$16
|
3%
|
|||
__________________
(1)For the six months ended June 30, 2026 and 2025, equipment sales to OWN Program participants included net revenue of $38 million and
$30 million, respectively, recognized on an agent basis, with overall transaction values of $236 million and $240 million, respectively.
The increase in equipment sales of $37 million is primarily attributed to higher sales of $18 million in
construction equipment to existing and new participants in our OWN Program. Sales of new and used equipment
from our full service branch locations to contractors and other end users increased $19 million, primarily attributed
to our site expansions.
Segment Adjusted EBITDA for our Equipment Sales segment was $107 million for the six months ended
June 30, 2026, compared to $86 million for the six months ended June 30, 2025, an increase of $21 million, or 24%.
The increase in Segment Adjusted EBITDA was primarily attributed to higher gross margins on equipment sales.
All Other. Revenue for all other activities was $104 million for the six months ended June 30, 2026, compared
to $33 million for the six months ended June 30, 2025, an increase of $71 million, or 215%. This increase was
primarily due to an increase of $43 million in telematics SaaS subscriptions, applications, and related telematics
devices, as well as an increase of $28 million in sales of building materials, small tools, and hardware supplies due
to our expansion of 14 hardware stores during the trailing twelve months. Segment loss for our all other activities
was $2 million for the six months ended June 30, 2026, compared to $9 million for the six months ended June 30,
2025, an increase of $7 million, or 78%, primarily due to the higher revenue as previously discussed, partially offset
by an increase of $20 million in selling, general and administrative expenses, including employee compensation,
technology costs, professional service fees, and insurance expenses which were allocated to all other activities based
on employee headcount.
Liquidity and Capital Resources
Overview
Our primary liquidity needs include funding our growth, payment of operating expenses, purchases of rental
equipment to be used in our operations, servicing of debt, and funding acquisitions.
Our future contractual obligations are further discussed in "-Contractual Obligations and Commitments"
below. Our primary sources of liquidity have been cash and cash equivalents, cash flows from our operations and
our ability to borrow under our existing ABL Credit Facility, other financing arrangements, including lines of credit,
and the issuances of perpetual preferred, common stock, and convertible preferred stock.
As of June 30, 2026, our liquidity consisted of cash and cash equivalents of $443 million and net excess
availability of $980 million under our ABL Credit Facility. See "-ABL Credit Facility-Borrowing Capacity"
below.
On July 1, 2026, we issued $1,350 million in an aggregate principal amount of 7.125% Senior Secured Second
Lien Notes due 2034 (defined below) and used proceeds primarily to repay outstanding borrowings under the ABL
Credit Facility, enhancing our liquidity.
Our strategy is to maintain enough liquidity from both cash from operations and our availability under our debt
facilities to maintain sufficient headroom to finance our growth, as well as mitigate the impact that any adverse
financial market conditions might have on our operations in the future. We believe that cash generated from
operations, together with amounts available under the ABL Credit Facility or other financing arrangements, will be
sufficient to meet working capital requirements, debt payments, and anticipated capital expenditures, as well as meet
other strategic uses of cash, if any, over the next twelve months and beyond. We aim to maintain at least
$500 million in liquidity at all times.
To the extent that current and anticipated future sources of liquidity are insufficient to fund our future business
activities and requirements, we may be required to seek additional equity or debt financing. The sale of additional
equity would result in additional dilution to shareholders. In addition, we continuously monitor the capital markets
and our capital structure, and, from time to time, we seek to refinance, amend or otherwise restructure our
outstanding debt on an opportunistic basis and can also choose to raise incremental liquidity as part of such
transactions. Such repurchases, refinancings, amendments, exchanges or other transactions, if any, will be upon such
terms and at such prices as we may determine, and will depend on prevailing market conditions, our liquidity
requirements, the availability of authorized share capital, contractual restrictions and other factors. The incurrence of
debt financing would result in debt service obligations and the instruments governing such debt could provide for
operating and financing covenants that may restrict our operations. There can be no assurances that we will be able
to raise additional capital on terms that are attractive to us or at all. The inability to raise capital would adversely
affect our ability to achieve our business objectives.
We sell equipment to third party OWN Program participants some of which have financed equipment purchases
through the issuance of ABS. Under the terms of the ABS, if the appraised value of the equipment declines below
specified amounts, these vehicles may require the third-party owner to liquidate some or all of their equipment,
which would make it unavailable to us and may require us to expend cash to obtain replacement equipment in order
to supply our customers with rental equipment.
On July 9, 2026, the Board approved a share repurchase program with authorization to purchase up to an
aggregate of $500 million of our Class A common stock with an expiration date of December 31, 2028. Repurchases
under the program may be made from time to time in the open market at prevailing market prices, in privately
negotiated transactions, in block trades and through other legally permissible means, with the amount and timing of
repurchases to be determined at our discretion, depending on market conditions and corporate needs. This program
does not obligate us to acquire any particular amount of Class A common stock and may be modified, suspended or
terminated at any time at the discretion of the Board.
Cash Flows
Significant factors driving our liquidity position include cash flows generated from operating and financing
activities, as well as investing activities. We have generated and expect to continue to generate positive cash flow
from our operations. Our ability to fund our capital needs will be affected by our ongoing ability to generate cash
from operations and access to capital markets.
The following table summarizes the change in cash and cash equivalents for the periods shown:
|
Six Months Ended June 30,
|
|||
|
2026
|
2025
|
||
|
(In millions)
|
|||
|
Net cash used in operating activities ..............................................
|
$(142)
|
$(127)
|
|
|
Net cash used in investing activities ...............................................
|
(730)
|
(450)
|
|
|
Net cash provided by financing activities ......................................
|
1,009
|
||
|
Net increase (decrease) in cash and cash equivalents ..............
|
$137
|
$(46)
|
|
Net Cash Used in Operating Activities
For the six months ended June 30, 2026 and 2025, net cash used in our operating activities was $142 million
and $127 million, respectively, and was in each period primarily due to the expansion of our business, increased
working capital corresponding to the growth in our revenues, and the timing of certain payments. Net cash used in
operating activities also reflects an increase in cost of revenues of $368 million, selling, general and administrative
expenses of $164 million, and interest expense of $12 million for the six months ended June 30, 2026, as compared
to the six months ended June 30, 2025, associated with the growth of our revenues and other changes in working
capital.
Net Cash Used in Investing Activities
For the six months ended June 30, 2026 and 2025, net cash used in our investing activities was $730 million and
$450 million, respectively, an increase of 62%, and was primarily due to an increase in cash used for the purchases
of rental equipment, which was $1,017 million for the six months ended June 30, 2026, and $799 million for the six
months ended June 30, 2025 and an increase in cash used for the purchases of properties and other fixed assets
which was $163 million for the six months ended June 30, 2026, and $116 million for the six months ended June 30,
2025.
Net Cash Provided by Financing Activities
For the six months ended June 30, 2026, net cash provided by financing activities was $1,009 million, compared
to $531 million for the six months ended June 30, 2025, an increase of 90%. Net cash provided by financing
activities was positively impacted by proceeds of $706 million from the issuance of Class A common stock upon the
initial public offering, net of underwriting discount and commissions, net proceeds of $1,332 million from the
issuance of long-term debt for the six months ended June 30, 2026, and net proceeds of $900 million from the
issuance of long-term debt for the six months ended June 30, 2025. This was offset partially by using $984 million
in cash to repay long-term debt and finance leases for the six months ended June 30, 2026 and $318 million in cash
to repay long-term debt and finance leases for the six months ended June 30, 2025.
Capital Expenditures
Our capital expenditures relate largely to purchases of rental equipment, with the remaining portion representing
purchases of and deposits on property and other fixed assets and investments in internally developed software
primarily associated with the development of our proprietary T3 platform and related software applications. We
offset capital expenditures related to our rental equipment fleet through our sales of rental equipment to contractors
and to OWN Program participants, including high net worth individuals, family offices, and other third parties who
have financed equipment purchases through the issuance of ABS.
The table below sets forth the capital expenditures related to our rental equipment fleet, net of proceeds from the
sale of rental equipment, and investments we are making to the T3 platform and other internally developed software
for each of the years presented.
|
Six Months Ended June 30,
|
|||
|
2026
|
2025
|
||
|
(In millions)
|
|||
|
Purchases of rental equipment ...........................................................
|
$1,017
|
$799
|
|
|
Proceeds from sale of rental equipment .............................................
|
(483)
|
(500)
|
|
|
Net rental equipment capital expenditure ....................................
|
$534
|
$299
|
|
|
Investments in internally developed software(1) .................................
|
|||
|
Net rental equipment & software expenditure .............................
|
$551
|
$319
|
|
__________________
(1)Represents expenditures in connection with developing and maintaining our information technology, including our T3 platform, as well as
related software applications that generate platform revenue.
Net rental equipment capital expenditures were $534 million for the six months ended June 30, 2026, compared
to $299 million for the six months ended June 30, 2025, an increase of 79%, as we continued to grow our fleet and
site locations in connection with our geographical expansion.
ABL Credit Facility
Borrowing Capacity
On November 26, 2025, we refinanced existing borrowings under an asset-based lending facility (the "ABL
Facility") by entering into a new asset-based lending facility (the "ABL Credit Facility"). The ABL Credit Facility
has a stated maturity date of November 26, 2030. The ABL Credit Facility provides available "borrowing
capacity" (the maximum borrowing permitted, assuming there is sufficient collateral as identified under the ABL
Credit Facility) up to $2.75 billion. Borrowings under the ABL Credit Facility will bear interest at a rate (at our
election) equal to either (i) the SOFR plus a spread between 112.5 to 137.5 basis points or (ii) the greatest of (a) 0%,
(b) the Federal Funds Rate in effect on such day plus 50 basis points, (c) the SOFR for a one month tenor in effect
on such day (to the extent ascertainable), plus 100 basis points, and (d) the Prime Rate plus (y) a spread between
12.5 basis points and 37.5 basis points.
The ABL Credit Facility provides for the majority of our borrowing capacity and availability. Creditors under
the ABL Credit Facility have a first-priority security interest in specific pools of assets identified as collateral
therein. Our ability to borrow under the ABL Credit Facility is a function of, among other things, the value of the
assets in the relevant collateral pool. We refer to the amount of debt we can borrow given a certain pool of assets as
the "Borrowing Base," which includes our accounts receivable, unbilled accounts receivable, eligible rental
equipment, eligible rolling stock and eligible inventory.
Under the ABL Credit Facility, we are required to maintain control agreements on deposit accounts where,
(x) proceeds of collateral from customers and other obligors or (y) proceeds of sales of the collateral, are deposited.
During a Cash Dominion Period (as defined below), all amounts in such deposit accounts are swept into a collection
account maintained with the ABL Credit Facility Agent and used to repay borrowings under the ABL Credit
Facility. A cash dominion period ("Cash Dominion Period") begins from the occurrence of (a) any specified event of
default or (b) specified availability being less than the greater of (i) 10% of the maximum borrowing amount and
(ii) $175 million, for five consecutive business days and ends when (a) no specified event of default exists and (b)
specified availability has been greater than the greater of (i) 10% of the maximum borrowing amount and (ii) $175
million, for twenty consecutive days.
As of June 30, 2026, we calculated a Borrowing Base, as defined under the ABL Credit Facility, of $2,540
million. We determine "Net Excess Availability" as the amount of additional debt we could borrow based on the
existing borrowing base. As of June 30, 2026, we had Net Excess Availability of $980 million under the ABL
Credit Facility. We determine "Remaining Capacity" as defined under the ABL Credit Facility as the maximum
principal amount of debt permitted to be outstanding under the facility (i.e., the amount of debt we could borrow
assuming we possessed sufficient assets as collateral) less the principal amount of debt then-outstanding under the
facility. We calculate "Availability Under Borrowing Base Limitation" as the lower of Remaining Capacity or the
Borrowing Base less the principal amount of debt then-outstanding under the ABL Credit Facility, or the amount of
debt we could borrow given the collateral we possess at such time, up to payment conditions. As of June 30, 2026,
we calculated Remaining Capacity of $1,190 million and our "Availability Under Borrowing Base Limitation" was
$726 million. Under the ABL Credit Facility, "Remaining Capacity" and "Availability Under Borrowing Base
Limitation" are calculated and defined in the same way as under the ABL Facility.
As of June 30, 2026, $6 million of standby letters of credit were issued and outstanding with a third-party
financial institution.
Covenants
Our ABL Credit Facility contains a number of covenants that, among other things, limit or restrict our ability to
dispose of assets, incur additional indebtedness, incur guarantee obligations, prepay certain indebtedness, make
certain restricted payments (including paying dividends, redeeming stock or making other distributions), create liens,
make investments, make acquisitions, engage in mergers, fundamentally change the nature of our business, or
engage in certain transactions with certain affiliates. Under the terms of our ABL Credit Facility, we are not subject
to ongoing financial maintenance covenants; however, under the ABL Credit Facility, failure to maintain certain
levels of liquidity will subject us to a contractually specified fixed charge coverage ratio of not less than 1:1 for the
four quarters most recently ended. As of June 30, 2026, the appropriate levels of liquidity have been maintained;
therefore this financial maintenance covenant is not applicable. Additional information on the terms of our ABL
Credit Facility is included in Note 9. Long-Term Debt and Lines of Credit in this Form 10-Q.
The ABL Credit Facility is secured on a first-priority basis by liens on substantially all of our and any
guarantor's assets, subject to permitted liens and certain exceptions. As of the date of this Form 10-Q, the ABL
Credit Facility is not guaranteed by any of our subsidiaries.
Certain of the restrictive covenants under the ABL Credit Facility utilize adjusted EBITDA, as defined in the
related credit agreement, as a primary component of the compliance metric governing our ability to undertake
certain actions otherwise proscribed by such covenants. The adjusted EBITDA metric is calculated under the ABL
Credit Facility as net income before the income tax provision, net financing charges, restructuring and impairment
costs, allocation for support functions and other costs, and intangible asset amortization and depreciation, and new
market start-up costs attributable to new locations less than twelve months old subject to a specified cap calculated
as a percentage of the adjusted EBITDA metric. For the three and six months ended June 30, 2026, new market
start-up costs attributed to our Equipment Rental and Services Operations segment were $60 million and $109
million, respectively. For the three and six months ended June 30, 2025, new market start-up costs attributed to our
Equipment Rental and Services Operations segment were $60 million and $116 million, respectively.
Senior Secured Second Lien Notes due 2028
On May 9, 2023, we issued $640,000,000 in aggregate principal amount of 9.000% Senior Secured Second Lien
Notes due 2028 (the "Initial 2028 Notes"). On September 21, 2023, we issued an additional $400,000,000 in
aggregate principal amount of 9.000% Senior Secured Second Lien Notes due 2028 (the "Additional 2028 Notes"
and together with the Initial 2028 Notes, the "2028 Notes"). The 2028 Notes were issued pursuant to the indenture,
dated as of May 9, 2023, between us and Citibank, N.A., as trustee and notes collateral agent (the "2028 Notes
Indenture"). The 2028 Notes bear interest at a rate of 9.00% per year and interest on the 2028 Notes is payable semi-
annually in arrears on May 15 and November 15 of each year. The 2028 Notes will mature on May 15, 2028. The
2028 Notes rank pari passu in right of payment to all of our and any guarantor's existing and future senior
indebtedness, including indebtedness under the ABL Credit Facility, our 2032 Notes (as defined below), our 2033
Notes (as defined below) and our 2034 Notes (as defined below).
The 2028 Notes and any related guarantees are secured on a second-priority basis by liens on substantially all of
our and any guarantor's assets that secure any first-priority lien obligations (including the ABL Credit Facility),
subject to permitted liens and certain exceptions. There are certain situations where all or a portion of such collateral
may be automatically released.
The 2028 Notes are not currently guaranteed by any of our subsidiaries and, in the future, will be jointly and
severally guaranteed on a senior secured second lien basis by each of our current and future subsidiaries to the extent
such subsidiary guarantees our ABL Credit Facility, subject to certain limitations and exceptions. We may redeem
some or all of the 2028 Notes at the redemption prices set forth in the 2028 Notes Indenture.
The 2028 Notes Indenture contains certain covenants applicable to us and our restricted subsidiaries, including
limitations on: (1) liens; (2) indebtedness; (3) mergers, consolidations and acquisitions; (4) sales, transfers and other
dispositions of assets; (5) loans and other investments; (6) dividends and other distributions, stock repurchases and
redemptions and other restricted payments; (7) restrictions affecting subsidiaries; (8) transactions with affiliates; and
(9) designations of unrestricted subsidiaries. Each of these covenants is subject to a number of important exceptions
and qualifications. In addition, many of the restrictive covenants do not apply to us during any period when the 2028
Notes are rated investment grade by any two of Moody's Investors Service, Inc. ("Moody's"), Standard & Poor's
Investors Ratings Services ("S&P") and Fitch Ratings ("Fitch") or, in certain circumstances, another rating agency
selected by us, provided at such time no default under the 2028 Notes Indenture has occurred and is continuing. In
the case of an event of default, the principal amount of the 2028 Notes plus accrued and unpaid interest would be
accelerated.
Senior Secured Second Lien Notes due 2032
On April 16, 2024, we issued $600,000,000 in aggregate principal amount of 8.625% Senior Secured Second
Lien Notes due 2032 (the "2032 Notes"). The 2032 Notes were issued pursuant to the indenture, dated as of
April 16, 2024, between us and Citibank, N.A., as trustee and notes collateral agent (the "2032 Notes Indenture").
The 2032 Notes bear interest at a rate of 8.625% per year and interest on the 2032 Notes is payable semi-annually in
arrears on May 15 and November 15 of each year. The 2032 Notes will mature on May 15, 2032. The 2032 Notes
rank pari passu in right of payment to all of our and any guarantor's existing and future senior indebtedness,
including indebtedness under the ABL Credit Facility, our 2028 Notes, our 2033 Notes (as defined below) and our
2034 Notes (as defined below).
The 2032 Notes and any related guarantees are secured on a second-priority basis by liens on substantially all of
our and any guarantor's assets that secure any first-priority lien obligations (including the ABL Credit Facility),
subject to permitted liens and certain exceptions. There are certain situations where all or a portion of such collateral
may be automatically released.
As of the date of this Form 10-Q, the 2032 Notes are not guaranteed by any of our subsidiaries. Going forward,
the 2032 Notes will be jointly and severally guaranteed on a senior secured second lien basis by each of our current
and future subsidiaries to the extent such subsidiary guarantees our ABL Credit Facility, subject to certain
limitations and exceptions. We may redeem some or all of the 2032 Notes at the redemption prices set forth in the
2032 Notes Indenture.
The 2032 Notes Indenture contains certain covenants applicable to us and our restricted subsidiaries, including
limitations on: (1) liens; (2) indebtedness; (3) mergers, consolidations and acquisitions; (4) sales, transfers and other
dispositions of assets; (5) loans and other investments; (6) dividends and other distributions, stock repurchases and
redemptions and other restricted payments; (7) restrictions affecting subsidiaries; (8) transactions with affiliates; and
(9) designations of unrestricted subsidiaries. Each of these covenants is subject to a number of important exceptions
and qualifications. In addition, many of the restrictive covenants do not apply to us during any period when the 2032
Notes are rated investment grade by any two of Moody's, S&P, and Fitch or, in certain circumstances, another rating
agency selected by us, provided at such time no default under the 2032 Notes Indenture has occurred and is
continuing. In the case of an event of default, the principal amount of the 2032 Notes plus accrued and unpaid
interest would be accelerated.
Senior Secured Second Lien Notes due 2033
On September 13, 2024, we issued $500,000,000 in aggregate principal amount of 8.000% Senior Secured
Second Lien Notes due 2033 (the "2033 Notes"). The 2033 Notes were issued pursuant to the indenture, dated as of
September 13, 2024, between us and Citibank, N.A., as trustee and notes collateral agent (the "2033 Notes
Indenture"). The 2033 Notes bear interest at a rate of 8.000% per year and interest on the 2033 Notes is payable
semi-annually in arrears on March 15 and September 15 of each year. The 2033 Notes will mature on March 15,
2033. The 2033 Notes rank pari passu in right of payment to all of our and any guarantor's existing and future
senior indebtedness, including indebtedness under the ABL Credit Facility, our 2028 Notes, our 2032 Notes and our
2034 Notes (as defined below).
The 2033 Notes and any related guarantees are secured on a second-priority basis by liens on substantially all of
our and any guarantor's assets that secure any first-priority lien obligations (including the ABL Credit Facility),
subject to permitted liens and certain exceptions. There are certain situations where all or a portion of such collateral
may be automatically released.
As of the date of this Form 10-Q, the 2033 Notes are not guaranteed by any of our subsidiaries. Going forward,
the 2033 Notes will be jointly and severally guaranteed on a senior secured second lien basis by each of our current
and future subsidiaries to the extent such subsidiary guarantees our ABL Credit Facility, subject to certain
limitations and exceptions. We may redeem some or all of the 2033 Notes at the redemption prices set forth in the
2033 Notes Indenture.
The 2033 Notes Indenture contains certain covenants applicable to us and our restricted subsidiaries, including
limitations on: (1) liens; (2) indebtedness; (3) mergers, consolidations and acquisitions; (4) sales, transfers and other
dispositions of assets; (5) loans and other investments; (6) dividends and other distributions, stock repurchases and
redemptions and other restricted payments; (7) restrictions affecting subsidiaries; (8) transactions with affiliates; and
(9) designations of unrestricted subsidiaries. Each of these covenants is subject to a number of important exceptions
and qualifications. In addition, many of the restrictive covenants do not apply to us during any period when the 2033
Notes are rated investment grade by any two of Moody's, S&P, and Fitch or, in certain circumstances, another rating
agency selected by us, provided at such time no default under the 2033 Notes Indenture has occurred and is
continuing. In the case of an event of default, the principal amount of the 2033 Notes plus accrued and unpaid
interest would be accelerated.
Senior Secured Second Lien Notes due 2034
On July 1, 2026, we issued $1,350,000,000 in aggregate principal amount of 7.125% Senior Secured Second
Lien Notes due 2034 (the "2034 Notes"). The 2034 Notes were issued pursuant to the indenture, dated as of July 1,
2026, between us and Citibank, N.A., as trustee and notes collateral agent (the "2034 Notes Indenture"). The 2034
Notes bear interest at a rate of 7.125% per year and interest on the 2034 Notes is payable semi-annually in arrears on
July 1 and January 1 of each year. The 2034 Notes will mature on July 1, 2034. The 2034 Notes rank pari passu in
right of payment to all of our and any guarantor's existing and future senior indebtedness, including indebtedness
under the ABL Credit Facility, our 2028 Notes, our 2032 Notes and our 2033 Notes.
The 2034 Notes and any related guarantees are secured on a second-priority basis by liens on substantially all of
our and any guarantor's assets that secure any first-priority lien obligations (including the ABL Credit Facility),
subject to permitted liens and certain exceptions. There are certain situations where all or a portion of such collateral
may be automatically released.
The 2034 Notes are not currently guaranteed by any of our subsidiaries and, in the future, will be jointly and
severally guaranteed on a senior secured second lien basis by each of our current and future subsidiaries to the extent
such subsidiary guarantees our ABL Credit Facility, subject to certain limitations and exceptions. We may redeem
some or all of the 2034 Notes at the redemption prices set forth in the 2034 Notes Indenture.
The 2034 Notes Indenture contains certain covenants applicable to us and our restricted subsidiaries, including
limitations on: (1) liens; (2) indebtedness; (3) mergers, consolidations and acquisitions; (4) sales, transfers and other
dispositions of assets; (5) loans and other investments; (6) dividends and other distributions, stock repurchases and
redemptions and other restricted payments; (7) restrictions affecting subsidiaries; (8) transactions with affiliates; and
(9) designations of unrestricted subsidiaries. Each of these covenants is subject to a number of important exceptions
and qualifications. In addition, many of the restrictive covenants do not apply to us during any period when the 2034
Notes are rated investment grade by any two of Moody's, S&P and Fitch or, in certain circumstances, another rating
agency selected by us, provided at such time no default under the 2034 Notes Indenture has occurred and is
continuing. In the case of an event of default, the principal amount of the 2034 Notes plus accrued and unpaid
interest would be accelerated.
Certain of the restrictive covenants under the indentures governing our outstanding notes utilize consolidated
total assets as a primary component of the compliance metric governing our ability to undertake certain actions
otherwise proscribed by such covenants.
In addition, certain liens and restricted payments are permitted subject to leverage ratios which are calculated
based on an adjusted EBITDA metric. Such adjusted EBITDA metric is calculated under the indentures governing
our outstanding notes as net income before income tax provision, net financing charges, restructuring and
impairment costs, allocation for support functions and other costs, and intangible asset amortization and
depreciation, and new market start-up costs attributable to new locations less than twelve months old subject to a
specified cap calculated as a percentage of the adjusted EBITDA metric.
Amendments to the Indentures Governing the 2028 Notes and the 2032 Notes
On July 17, 2025, the indentures governing the 2028 Notes and the 2032 Notes were amended to conform
certain covenants and related definitions for these notes to the indenture governing the 2033 Notes. Among other
things, the amendments increased certain limits on debt incurrence to align with the 2033 Notes and aligned certain
aspects of the lien covenant to the same terms in the 2033 Notes Indenture. In connection with these amendments to
the indentures, we paid $5 million in fees and expenses.
Share Repurchase Program
On July 9, 2026, the Board approved a share repurchase program with authorization to purchase up to an
aggregate of $500 million of our Class A common stock with an expiration date of December 31, 2028.
Repurchases under the program may be made from time to time in the open market at prevailing market prices,
in privately negotiated transactions, in block trades and through other legally permissible means, with the amount
and timing of repurchases to be determined at our discretion, depending on market conditions and corporate needs.
Open market repurchases will be structured to occur in accordance with applicable federal securities laws, including
within the pricing and volume requirements of Rule 10b-18 under the Exchange Act. We may also, from time to
time, enter into Rule 10b5-1 plans to facilitate repurchases of our shares under this authorization. This program does
not obligate us to acquire any particular amount of Class A common stock and may be modified, suspended or
terminated at any time at the discretion of the Board.
Dividends
Dividends on our perpetual preferred accrue and accumulate daily in arrears on the then current accreted
liquidation preference of the outstanding perpetual preferred, whether or not declared, and, if not declared and paid,
will accrue at the applicable dividend rate and be compounded quarterly in arrears. Dividends on the perpetual
preferred will be payable, at our election, in cash at any time when, as and if declared by our Board or any duly
authorized committee of our Board, but only out of assets legally available. On June 7, 2026, the Board declared a
dividend to the holders of perpetual preferred stock in an aggregate amount of $37 million payable in cash. The
dividend was paid on June 26, 2026. As of June 30, 2026, the maximum potential dividend accumulated in arrears
on our perpetual preferred was approximately $139 million.
Contractual Obligations and Commitments
The following table summarizes our long-term contractual obligations and commitments as of June 30, 2026.
|
Payments Due by Period
|
|||||||||
|
Total
|
Less than
1 year
|
1 - 3
years
|
3 - 5
years
|
More than
5 years
|
|||||
|
(In millions)
|
|||||||||
|
Debt ...............................................................
|
$3,691
|
$2
|
$1,035
|
$1,554
|
$1,100
|
||||
|
Operating leases ............................................
|
1,113
|
||||||||
|
Finance leases ...............................................
|
|||||||||
|
Financing obligations (equipment) ...............
|
-
|
||||||||
|
Total contractual obligations ....................
|
$5,153
|
$107
|
$1,353
|
$1,855
|
$1,838
|
||||
Off-Balance Sheet Arrangements
We have no off-balance sheet arrangements that have a material current effect or are reasonably likely to have a
material future effect on our results of operations, financial condition, capital expenditures, liquidity or capital
resources.
Critical Accounting Policies and Estimates
Our critical accounting policies and estimates are described in "Management's Discussion and Analysis of
Financial Condition and Results of Operations" in our 2025 Form 10-K. There have been no material changes to our
critical accounting policies and estimates during the six months ended June 30, 2026.
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