EquipmentShare.com Inc.
03/19/2026 | Press release | Distributed by Public on 03/19/2026 07:44
Annual Report for Fiscal Year Ending DECEMBER 31, 2025 (Form 10-K)
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 consolidated financial statements, including the notes thereto, included elsewhere in this 2025 Form 10-K.
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 elsewhere in this 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
December 31, 2025, we operated 352full-service branch locations, 9standalone dealership sites, and 24building
materials and hardware retail stores across 45states, with a diversified managed fleet portfolio of more than 252,000
pieces of equipment and approximately 349,000trackers operating on our T3 platform. As of December 31, 2025,
we had 8,206employees 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 OEMs and financial institutions, or (iii)
lease as lessee under our OWN Program. As of December 31, 2025, 170,704pieces of equipment were owned by us;
1,066pieces of equipment were leased by us as a lessee under operating lease arrangements with third parties such
as OEMs and financial institutions; and 80,482pieces 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
We believe that our performance and future success depend on a number of factors that present significant
opportunities for us but also pose risks and challenges, including those discussed below and in the section of this
2025 Form 10-K titled "Risk Factors."
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 ABS. To
satisfy this demand, the Company has organized for these investors sales of large packages of equipment and has
conducted these sales on an episodic basis. For example, two third-party OWN Program participants, who purchased
equipment, parts, supplies, and services, comprised 20%of our total revenue for the year ended December 31, 2025,
a separate third-party OWN Program participant, who purchased equipment, parts, supplies, and services, comprised
21% of our total revenue for the year ended December 31, 2024, and a separate third-party OWN Program
participant comprised 16% of our total revenue in the year ended December 31, 2023. Accordingly, period-over-
period comparisons may not reflect underlying trends and fluctuations in our operating results and makes it difficult
for us to predict our future operating results. For additional information on the risks associated with these
transactions and fluctuations in our operating results, see "Risk Factors-Risks Related to Our Business and Our
Industry-Our operating results fluctuate significantly and our past operating results may not be a good indication of
future performance" and "-Due to seasonality, especially in the construction industry, any occurrence that disrupts
rental activity during our peak periods could materially adversely affect our results of operations, liquidity, and cash
flows."
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 $3,764 millionfor the year ended December 31, 2024to $4,379 millionfor the
year ended December 31, 2025, or at an annual growth rate of 16%.
In line with customer demand and our growth strategy, we have increased the number of full-service equipment
rental branch locations from 190 as of December 31, 2023to 267as of December 31, 2024, an increase of 77 new
full-service equipment rental branch locations during 2024, and to 352as of December 31, 2025, an increase of 85
new full-service equipment rental branch locations during 2025. In conjunction with the opening of these new full-
service equipment rental branch locations, we incurred $252 millionand $197 millionof new market startup costs
during the years ended December 31, 2025 and 2024, respectively.
We correspondingly increased our fleet size from 159,597 units of equipment under management as of
December 31, 2023to 194,462as of December 31, 2024and to 252,252units as of December 31, 2025, reflecting
the growth in 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 re-rented to
customers, from $6,601 millionas of December 31, 2024to $8,780 millionas of December 31, 2025, or an increase
of 33%.
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, the
participant and we enter into a lease arrangement whereby we are the lessee and this qualified equipment is placed
on our T3 platform, to be rented to third party users. 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.
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. Participants in the OWN Program include institutional
investors and ABS entities, high-net-worth individuals, family offices, and other third parties.
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 taking on additional debt and increasing our debt costs. 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 $714 million, $420
million, and $209 millionfor the years ended December 31, 2025, 2024, and 2023, 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 the Company's management increased $2,179 million, or 33%, from $6,601 millionas of
December 31, 2024to $8,780 millionas of December 31, 2025. The total equipment rental fleet OEC enrolled in the
OWN Program grew by $1,505 million, or 44%, Company-owned equipment rental fleet OEC grew by $719
million, or 24%, and the equipment rental fleet OEC under operating leases decreased by $45 millionduring the
same period. During the year ended December 31, 2025, OWN Program payouts increased 70%compared to the
year ended December 31, 2024; of that increase, 72%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. Approximately $8 million, or 2%, partially offset the increase in OWN Program payouts during the year
ended December 31, 2025which was attributed to such changes in customer demand for specific types of rental
equipment and the mix of equipment rented to our customers.
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, RPPs 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 rental revenue, including from our OWN Program, we also generate revenue from rental
customers from the sale of 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.
This additional revenue source is included within equipment rental revenue and related services.
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, 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 software-as-a-service
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 startup costs are classified within
selling, general and administrative expenses.
Other Income (Expense)
Gain on Sale of Properties and Other Assets
Gain on the sale of properties and other assets primarily relate to properties in sale leaseback transactions with
other parties.
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, and other miscellaneous income.
Resultsof Operations
Fiscal Year Ended December 31, 2025Compared with Fiscal Year Ended December 31, 2024
|
Year Ended December 31,
|
|||||||
|
2025
|
2024
|
$ Change
|
% Change
|
||||
|
($ in millions)
|
|||||||
|
Revenues
|
|||||||
|
Equipment rental and related services ................
|
$2,437
|
$1,867
|
$570
|
31%
|
|||
|
Equipment sales ..................................................
|
1,541
|
1,676
|
(135)
|
(8)%
|
|||
|
Equipment parts and supplies and services .........
|
73%
|
||||||
|
Platform revenue:
|
|||||||
|
Telematics ......................................................
|
106%
|
||||||
|
Other ...............................................................
|
97%
|
||||||
|
Total revenue ....................................................
|
4,379
|
3,764
|
16%
|
||||
|
Cost of revenues
|
|||||||
|
Direct operating costs ..........................................
|
21%
|
||||||
|
OWN Program payouts .......................................
|
70%
|
||||||
|
Equipment sales ..................................................
|
1,237
|
1,400
|
(163)
|
(12)%
|
|||
|
Platform expense .................................................
|
127%
|
||||||
|
Depreciation and amortization ............................
|
6%
|
||||||
|
Total cost of revenues ......................................
|
3,140
|
2,818
|
11%
|
||||
|
Gross profit .......................................................
|
1,239
|
31%
|
|||||
|
Selling, general and administrative expenses .....
|
29%
|
||||||
|
Operating income .............................................
|
36%
|
||||||
|
Other income (expense):
|
|||||||
|
Gain on sale of properties and other assets .........
|
(19)
|
(95)%
|
|||||
|
Loss on debt extinguishment ...............................
|
(8)
|
-
|
(8)
|
-%
|
|||
|
Interest expense ...................................................
|
(285)
|
(261)
|
(24)
|
9%
|
|||
|
Other income, net ................................................
|
69%
|
||||||
|
Total other expense, net ...................................
|
(243)
|
(212)
|
(31)
|
15%
|
|||
|
Income before income taxes ...............................
|
800%
|
||||||
|
Provision for income taxes ..................................
|
367%
|
||||||
|
Net income ........................................................
|
$40
|
$3
|
$37
|
1233%
|
|||
Total revenue.Our revenue was $4,379 millionfor the year ended December 31, 2025, compared to $3,764
millionfor the yearended December 31, 2024, an increase of $615 million, or 16%. Our four sources of revenues
over the period are further discussed below:
Equipment rental revenue and related services.Equipment rental revenue and related services accounted for
56%of our revenue for the year ended December 31, 2025, compared to 50%of our revenue for the year ended
December 31, 2024. Our equipment rental revenue and related services was $2,437 millionfor the year ended
December 31, 2025, compared to $1,867 millionfor the year ended December 31, 2024, an increase of $570 million,
or 31%. Approximately $616 millionof the increase in equipment rental revenue and related services is driven by
construction demand in the U.S., our strategy to increase our geographical presence, and value afforded our
customers from our T3 technology platform. Accordingly, we increased the number of our full-service equipment
rental branch locations from 267as of December 31, 2024to 352as of December 31, 2025.In addition, we grew our
fleet OEC under management from $6,601 millionas of December 31, 2024to $8,780 millionas of December 31,
2025, and increased the size of our fleet from 194,462units to 252,252units of equipment under management as of
December 31, 2024and 2025, respectively. Changes in the mix of equipment rented and price changes aligned with
inflation partially offset the increase in equipment rental and related services revenue by $46 million.
Equipment sales revenue.Equipment sales revenue accounted for 35%of our revenue for the year ended
December 31, 2025, compared to 45%of our revenue for the year ended December 31, 2024. Equipment sales
revenue was $1,541 millionfor the year ended December 31, 2025, compared to $1,676 millionfor the year ended
December 31, 2024, a decrease of $135 million, or 8%. The change was primarily due toour disciplined and
selective equipment sales into the OWN Program, resulting ina decrease of $178 millionin sales of construction
equipment to existing and new participants in our OWN Program, including equipment sales to third parties who
have financed equipment purchases through the issuance of ABS, partially offset by an increase of $43 millionin 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. In a single transaction, one third-party OWN Program participant comprised $447 millionof our total
equipment sales revenue for the year ended December 31, 2025and, in a single transaction, one third-party OWN
Program participant comprised $778 million of our total equipment sales revenue for the year ended December 31,
2024. 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, supplies, and services.Equipment parts, supplies, and services revenue accounted for 6%of
our revenue for the year ended December 31, 2025, compared to 4%for the year ended December 31, 2024.
Equipment parts, supplies, and services revenue was $272 millionfor the year ended December 31, 2025, compared
to $157 millionfor the year ended December 31, 2024, an increase of $115 million, or 73%. 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 267locations as of December 31, 2024to 352locations as of
December 31, 2025. Equipment parts, supplies, and services revenue increased $73 millionfrom mature branch
locations primarily attributed to the expansion of our product and service offering in mature branch locations, and
$42 millionfrom new branch locations open less than 24 months as a result of the addition of 85full-service branch
locations.
Platform revenue.Platform revenue accounted for 3%of our revenue for the year ended December 31, 2025,
compared to 2%of our revenue for the year ended December 31, 2024. Platform revenue from telematics was $66
millionfor the year ended December 31, 2025, compared to $32 millionfor the year ended December 31, 2024, an
increase of $34 million, or 106%. 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 The Morey Corporation ("Morey") (for additional information on our acquisition of
Morey, see Note 22 to our consolidated financial statements included herein). Platform revenue from the sale of
construction materials, building supplies, and hardware across our building materials and hardware retail stores was
$63 millionfor the year ended December 31, 2025, compared to $32 millionfor the year ended December 31, 2024,
an increase of $31 millionprimarily attributable to the addition of 9building materials and hardware retail stores.
Cost of revenues.Cost of revenues was $3,140 millionfor the year ended December 31, 2025, compared to
$2,818 millionfor the year ended December 31, 2024, an increase of $322 million, or 11%.
Direct operating costs.Direct operating costs were $799 millionfor the year ended December 31, 2025,
compared to $663 millionfor the year ended December 31, 2024, an increase of $136 million, or 21%. The increase
in direct operating costs is primarily due to the organic expansion of our footprint through the addition of 85full-
service branch locations, which increased from 267locations as of December 31, 2024to 352locations as of
December 31, 2025, partially offset by a decrease in equipment operating lease expense of $59 milliondue to the
termination of certain equipment operating lease agreements. The additional operating locations drove increases in
wages and related benefits of $91 million, and logistics, maintenance, and other site operating costs of $104 million.
OWN Program payouts.OWN Program payouts were $714 millionfor the year ended December 31, 2025
compared to $420 millionfor the year ended December 31, 2024, an increase of $294 million, or 70%.
Approximately $302 millionof the increase is attributed to the growth of the average fleet OEC under management
enrolled in the OWN Program,which grew from $2,292 millionin 2024to $3,944 millionin 2025, or 72%. 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 $1,237 millionfor the year ended
December 31, 2025, compared to $1,400 millionfor the year ended December 31, 2024, a decrease of $163 million,
or 12%. This decrease was primarily due to lower equipment sales to existing and new participants in the OWN
Program resulting in a decrease in equipment sales cost of revenues of $204 million, partially offset by an increase
of $41 millionin 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 267as of December 31,
2024to 352as of December 31, 2025, also contributed to the increase in equipment sales cost of revenues.
Platform expense.Platform expense was $68 millionfor the year ended December 31, 2025, compared to $30
millionfor the year ended December 31, 2024, an increase of $38 millionprimarily attributed to the addition of 9
hardware retail stores and the acquisition of Morey in September 2025, a business that designs, manufactures, and
sells custom electronic components, including telematics tracker devices and cloud-based access control keypads.
Depreciation and amortization.Depreciation and amortization accounted for 10%of our cost of revenues for
the year ended December 31, 2025, compared to 11%of our cost of revenues for the year ended December 31, 2024.
Depreciation and amortization was $322 millionfor the year ended December 31, 2025, compared to $305 million
for the year ended December 31, 2024, an increase of $17 million, or 6%. 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 $9.8 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 $942 million
for the year ended December 31, 2025, compared to $728 millionfor the year ended December 31, 2024, an increase
of $214 million, or 29%. 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 606
additional staff resulting in an increase of $111 millionin 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 $58 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 $22 millionand other miscellaneous administrative expenses by $23
million.
Interest expense, net.Interest expense, net, was $285 millionfor the year ended December 31, 2025, compared
to $261 millionfor the year ended December 31, 2024, an increase of $24 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 $243 millionfor the year ended December 31, 2025,
compared to $212 millionfor the year ended December 31, 2024, an increase of $31 million, or 15%. This increase
was primarily due to higher interest expense of $24 millionfor the year ended December 31, 2025, compared to the
year ended December 31, 2024, resulting from our higher average outstanding borrowings, debt extinguishment
costs of $8million for the year ended December 31, 2025, and lower gain on sale of properties and other assets of
$19 million, partially offset by higher miscellaneous income of $20 milliondue to interest and dividend income and
unrealized net gains, on various investments held in equity securities.
Provision for income taxes.The provision for income taxes was $14 millionfor the year ended December 31,
2025, compared to $3 millionfor the year ended December 31, 2024, an increase of $11 million, or 367%. The
change was attributed to an increase in pretax net income of $48 millionfor the year ended December 31, 2025,
compared to the year ended December 31, 2024.
Net income.Net income increased by $37 millionto $40 millionfor the year ended December 31, 2025, as
compared to net income of $3 millionfor the year ended December 31, 2024, due to $79 millionof higher operating
income, partially offset by $31 millionof higher total other expense, net and $11 millionof higher income tax
expense.
Results of Operations
Fiscal Year Ended December 31, 2024Compared with Fiscal Year Ended December 31, 2023
|
Year Ended December 31,
|
|||||||
|
2024
|
2023
|
$ Change
|
% Change
|
||||
|
($ in millions)
|
|||||||
|
Revenues
|
|||||||
|
Equipment rental and related services ................
|
$1,867
|
$1,511
|
$356
|
24%
|
|||
|
Equipment sales ..................................................
|
1,676
|
91%
|
|||||
|
Equipment parts and supplies and services .........
|
39%
|
||||||
|
Platform revenue:
|
|||||||
|
Telematics ......................................................
|
52%
|
||||||
|
Other ...............................................................
|
(1)
|
(3)%
|
|||||
|
Total revenue ....................................................
|
3,764
|
2,557
|
1,207
|
47%
|
|||
|
Cost of revenues
|
|||||||
|
Direct operating costs ..........................................
|
21%
|
||||||
|
OWN Program payouts .......................................
|
101%
|
||||||
|
Equipment sales ..................................................
|
1,400
|
92%
|
|||||
|
Platform expense .................................................
|
3%
|
||||||
|
Depreciation and amortization ............................
|
7%
|
||||||
|
Total cost of revenues ......................................
|
2,818
|
1,798
|
1,020
|
57%
|
|||
|
Gross profit .......................................................
|
25%
|
||||||
|
Selling, general and administrative expenses .....
|
43%
|
||||||
|
Operating income .............................................
|
(32)
|
(13)%
|
|||||
|
Other income (expense):
|
|||||||
|
Gain on sale of properties and other assets .........
|
100%
|
||||||
|
Loss on debt extinguishment ...............................
|
-
|
(30)
|
(100)%
|
||||
|
Interest expense ...................................................
|
(261)
|
(213)
|
(48)
|
23%
|
|||
|
Other income, net ................................................
|
625%
|
||||||
|
Total other expense, net ...................................
|
(212)
|
(229)
|
(7)%
|
||||
|
Income before income taxes ...............................
|
(15)
|
(71)%
|
|||||
|
Provision for income taxes ..................................
|
(1)
|
(25)%
|
|||||
|
Net income ........................................................
|
$3
|
$17
|
$(14)
|
(82)%
|
|||
Total revenue.Our revenue was $3,763 million for the year ended December 31, 2024, compared to $2,556
million for the year ended December 31, 2023, an increase of $1,207 million, or 47%. Our four sources of revenues
over the period are further discussed below:
Equipment rental revenue and related services.Equipment rental revenue and related services accounted for
50% of our revenue for the year ended December 31, 2024, compared to 59% of our revenue for the year ended
December 31, 2023. Our equipment rental revenue and related services was $1,867 million for the year ended
December 31, 2024, compared to $1,511 million for the year ended December 31, 2023, an increase of $356 million,
or 24%. Approximately $328 million of the increase in equipment rental revenue and related services is attributed to
the growth of our fleet OEC under our management from $5,423 million as of December 31, 2023 to $6,601 million
as of December 31, 2024, and the corresponding increase in our fleet size from 159,597 units to 194,462 units of
equipment under management as of December 31, 2023 and 2024, respectively, with a stable demand environment.
Fleet OEC under management includes equipment we own and lease as lessee, as well as equipment owned by third
parties and leased by us as lessee through our OWN Program, that we rent to customers from our full-service
equipment rental branch locations, which increased from 190 as of December 31, 2023 to 267 as of December 31,
2024. Changes in the mix of equipment rented, along with price changes aligned with inflation, contributed
approximately $28 million of the increase in equipment rental and related services revenue.
Equipment sales revenue.Equipment sales revenue accounted for 45% of our revenue for the year ended
December 31, 2024, compared to 34% of our revenue for the year ended December 31, 2023. Equipment sales
revenue was $1,676 million for the year ended December 31, 2024, compared to $879 million for the year ended
December 31, 2023, an increase of $797 million, or 91%. The change was primarily due to an increase of $768
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 $29 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. In a single transaction, one third-party OWN Program participant comprised $778 million of our total
equipment sales revenue for the year ended December 31, 2024 and, in separate transactions, two groups of OWN
Program participants comprised $616 million of our total equipment sales revenue for the year ended December 31,
2023. 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, supplies, and services.Equipment parts, supplies, and services revenue accounted for 4% of
our revenue for the year ended December 31, 2024, compared to 4% for the year ended December 31, 2023.
Equipment parts, supplies, and services revenue was $157 million for the year ended December 31, 2024, compared
to $113 million for the year ended December 31, 2023, an increase of $44 million, or 39%. 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 190 locations as of December 31, 2023 to 267 locations as of December
31, 2024. Equipment parts, supplies, and services revenue increased $25 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 77 full-service branch locations.
Platform revenue.Platform revenue accounted for 2% of our revenue for the year ended December 31, 2024,
compared to 2% of our revenue for the year ended December 31, 2023. Platform revenue from telematics was $32
million for the year ended December 31, 2024, compared to $21 million for the year ended December 31, 2023, an
increase of $11 million, or 52%. This increase was primarily due to an increase in monthly subscriptions sold for the
T3 telematics services, as well as an increase in equipment rented that is fully enabled with T3 telematics services.
Platform revenue from the sale of construction materials, building supplies, and hardware across our building
materials and hardware retail stores was $32 million for the year ended December 31, 2024, compared to $33
million for the year ended December 31, 2023, a decrease of $1 million primarily attributable to a change in mix in
product sales from our 16 building materials and hardware retail stores.
Cost of revenues. Cost of revenues was $2,818 million for the year ended December 31, 2024, compared to
$1,798 million for the year ended December 31, 2023, an increase of $1,020 million, or 57%.
Direct operating costs.Direct operating costs were $663 million for the year ended December 31, 2024,
compared to $546 million for the year ended December 31, 2023, an increase of $117 million, or 22%. The increase
in direct operating costs is primarily due to the organic expansion of our footprint through the addition of 77 full-
service branch locations, which increased from 190 locations as of December 31, 2023 to 267 locations as of
December 31, 2024, partially offset by a decrease in equipment operating lease expense of $26 million due to the
termination of certain equipment operating lease agreements. The additional operating locations drove increases in
wages and related benefits of $57 million, and logistics, maintenance, and other site operating costs of $86 million.
OWN Program payouts. OWN Program payouts were $420 million for the year ended December 31, 2024
compared to $209 million for the year ended December 31, 2023, an increase of $211 million, or 101%.
Approximately $184 million of the increase is attributed to the growth of the average fleet OEC under management
enrolled in the OWN Program, which grew from $1,854 million in 2023 to $3,437 million in 2024, or 85%. Changes
in demand for specific types of rental equipment and the mix of equipment rented contributed approximately $27
million to the increase in OWN Program payouts.
Equipment sales cost of revenues.Equipment sales cost of revenues was $1,400 million for the year ended
December 31, 2024, compared to $728 million for the year ended December 31, 2023, an increase of $672 million,
or 92%. This increase was primarily due to higher equipment sales to existing and new participants in the OWN
Program resulting in an increase in equipment sales cost of revenues of $652 million. An increase of $21 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 190 as of December 31, 2023 to 267 as
of December 31, 2024, also contributed to the increase in equipment sales cost of revenues.
Platform expense.Platform expense was $30 million for the year ended December 31, 2024, compared to $29
million for the year ended December 31, 2023, an increase of $1 million primarily attributable to a change in mix of
the construction materials, building supplies and hardware sold to customers from our 16 building materials and
hardware retail stores.
Depreciation and amortization.Depreciation and amortization accounted for 11% of our cost of revenues for
the year ended December 31, 2024, compared to 16% of our cost of revenues for the year ended December 31, 2023.
Depreciation and amortization was $305 million for the year ended December 31, 2024, compared to $286 million
for the year ended December 31, 2023, an increase of $19 million, or 7%. This increase was primarily due to an
increase in depreciable equipment resulting from an increase in the size of our fleet, as the OEC of our owned rental
equipment grew from $3,004 million as of December 31, 2023 to $3,021 million as of December 31, 2024.
Selling, general and administrative expenses.Selling, general and administrative expenses were $728 million
for the year ended December 31, 2024, compared to $508 million for the year ended December 31, 2023, an increase
of $220 million, or 43%. The increases in selling, general & administrative expenses were primarily attributed to our
expansion of full-service branch locations, which increased from 190 as of December 31, 2023 to 267 as of
December 31, 2024, and include increases of $100 million related to higher payroll, benefits and travel due to hiring
627 additional staff allocated to selling, general and administrative expense to support our additional locations and
the overall growth of our business. The additional full-service locations due to our site expansion also drove
increases in facilities and non-rental vehicles lease expense and associated costs of $53 million. The growth of our
business and expansion of our full-service branch locations also resulted in an increase in administrative costs such
as insurance, legal, professional expenses and non-income based taxes, which increased by $27 million, and other
miscellaneous administrative expenses, which increased by $39 million.
Interest expense, net. Interest expense, net, was $261 million for the year ended December 31, 2024, compared
to $213 million for the year ended December 31, 2023, an increase of $48 million, or 23%. 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, as well as higher weighted average interest rates on our indebtedness.
Total other expense, net.Total other expense, net, was $213 million for the year ended December 31, 2024,
compared to $228 million for the year ended December 31, 2023, a decrease of $16 million, or 7%. This decrease
was primarily due to lower debt extinguishment costs of $30 million due to a one-time extinguishment of certain
term loan debt during 2023, higher gain on sale of properties and other assets of $9 million attributed to our
expansion of full-service branch locations and the associated increase in the number of properties sold and leased
back for our equipment rental and services operations, and higher miscellaneous income of $25 million due to
interest and dividend income and unrealized net gains on various investments held in equity securities. These
increases were partially offset by higher interest expense of $48 million for the year ended December 31, 2024,
compared to the year ended December 31, 2023, resulting from our higher average outstanding borrowings,
particularly senior secured second lien notes, during 2024 as compared to 2023.
Provision for income taxes.The provision for income taxes was $3 million for the year ended December 31,
2024, compared to $4 million for the year ended December 31, 2023, a decrease of $2 million, or 36%. The change
was attributed to a decrease in pretax net income of $17 million for the year ended December 31, 2024, compared to
the year ended December 31, 2023.
Net income.Net income decreased by $15 million, or 86%, to $2 million for the year ended December 31, 2024,
compared to net income of $17 million for the year ended December 31, 2023, due to $32 million of lower operating
income primarily attributed to an increase in costs relating to the organic expansion of our footprint through the
addition of 77 full-service branch locations, which increased from 190 locations as of December 31, 2023 to 267
locations as of December 31, 2024, partially offset by $16 million of lower total other expense, net and $2 million of
lower income tax expense.
KeyPerformance 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 ("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 2025 Form 10-K to EBITDA, a non-GAAP financial measure that is not prepared in accordance
with GAAP. This non-GAAP financial measure should be considered supplemental to and is not a substitute for
financial information prepared in accordance with 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. The non-GAAP financial measure used in this 2025 Form 10-K has not been
reviewed or audited by our independent registered public accounting firm.
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:
|
Year Ended December 31,
|
|||||
|
2025
|
2024
|
2023
|
|||
|
(in millions)
|
|||||
|
Net income .....................................................................................
|
$40
|
$3
|
$17
|
||
|
Provision for income taxes .............................................................
|
|||||
|
Depreciation and amortization expense .........................................
|
|||||
|
Interest expense ..............................................................................
|
|||||
|
Non-cash stock compensation expense(1) .......................................
|
|||||
|
EBITDA ........................................................................................
|
$708
|
$603
|
$532
|
||
__________________
(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 Accounting Standards Codification ("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.
|
Year Ended December 31,
|
|||||
|
2025
|
2024
|
2023
|
|||
|
(in millions)
|
|||||
|
Equipment Rental Segment Adjusted EBITDA(1) ..........................
|
$1,139
|
$816
|
$756
|
||
|
Equipment Rental Segment Adjusted EBITDA Margin ................
|
42%
|
40%
|
46%
|
||
__________________
(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 $26 million, $85 million, and $111 millionfor the years ended December 31, 2025, 2024, and
2023, respectively. Depreciation expense related to our property and other fixed assets was $42 million, $27 million, and $9 millionfor the
years ended December 31, 2025, 2024, and 2023, 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. These excluded expenses are significant: OWN Program payouts, depreciation expense on rental equipment, and
amortization expense on capitalized software and intangible assets was $714 million, $300 million, and $23 million, respectively, for the
year ended December 31, 2025, $420 million, $293 million, and $12 million, respectively, for the year ended December 31, 2024, and $209
million, $280 million, and $6 million, respectively, for the year ended December 31, 2023. For additional information, see Note 24 to our
audited consolidated financial statements for the year ended December 31, 2025.
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 December 31, 2025and December 31,
2024was $3,740 millionand $3,021 million, respectively, or approximately 43%and 46%, respectively, of total
equipment rental OEC under our management. At December 31, 2025, the appraised value of the rental equipment
owned by OWN Program participants was $4,069 million. Our broader managed equipment rental fleet from which
we support and generate our equipment rental revenue as of December 31, 2025consisted of 252,252units having
an OEC of $8,780 millionand an average age of 31months, and as of December 31, 2024consisted of 194,462units
having an OEC of $6,601 millionand an average age of 29months.
Fleet Composition. Our equipment rental fleet from which we support and generate our equipment rental
revenue is summarized in the tables below:
|
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 re-
locate 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 December 31, 2025and 2024, 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, and 15%of our rental fleet consists of specialty equipment,
which includes advanced solutions, industrial tooling, and other non-core rental equipment.
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 to our audited consolidated financial statements for
the year ended December 31, 2025.
BusinessSegments
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 24 to our audited
consolidated financial statements for the year ended December 31, 2025.
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 352full-service branch locations and 9dealership sites
as of December 31, 2025, 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 years ended December 31, 2025,
2024, and 2023(in millions):
|
Year Ended December 31, 2025
|
|||||||
|
Equipment
Rental and
Services
Operations
|
Equipment
Sales
|
All Other
|
Total
|
||||
|
Equipment rental, parts, supplies, and services ...........
|
$2,709
|
$-
|
$-
|
$2,709
|
|||
|
Equipment sales ...........................................................
|
-
|
1,541
|
-
|
1,541
|
|||
|
Telematics ...................................................................
|
-
|
||||||
|
Sales of building materials, small tools, and
hardware supplies ....................................................
|
-
|
-
|
|||||
|
Total revenues ...........................................................
|
$2,724
|
$1,541
|
$114
|
$4,379
|
|||
|
Significant expenses:
|
|||||||
|
Segment cost of revenues .......................................
|
1,237
|
||||||
|
Segment selling, general and administrative
expenses ..............................................................
|
|||||||
|
Segment Adjusted EBITDA(1) .................................
|
$1,139
|
$276
|
$(13)
|
||||
|
Year Ended December 31, 2024
|
|||||||
|
Equipment
Rental and
Services
Operations
|
Equipment
Sales
|
All Other
|
Total
|
||||
|
Equipment rental, parts, supplies, and services ...........
|
$2,024
|
$-
|
$-
|
$2,024
|
|||
|
Equipment sales ...........................................................
|
-
|
1,676
|
-
|
1,676
|
|||
|
Telematics ...................................................................
|
-
|
||||||
|
Sales of building materials, small tools, and
hardware supplies ....................................................
|
-
|
-
|
|||||
|
Total revenues ............................................................
|
$2,035
|
$1,676
|
$53
|
$3,764
|
|||
|
Significant expenses: ...................................................
|
|||||||
|
Segment cost of revenues .......................................
|
1,400
|
||||||
|
Segment selling, general and administrative
expenses ..............................................................
|
|||||||
|
Segment Adjusted EBITDA(1) ..................................
|
$816
|
$247
|
$(8)
|
||||
|
Year Ended December 31, 2023
|
|||||||
|
Equipment
Rental and
Services
Operations
|
Equipment
Sales
|
All Other
|
Total
|
||||
|
Equipment rental, parts, supplies and services ............
|
$1,624
|
$-
|
$-
|
$1,624
|
|||
|
Equipment sales ...........................................................
|
-
|
-
|
|||||
|
Telematics ...................................................................
|
-
|
||||||
|
Sales of building materials, small tools, and
hardware supplies ....................................................
|
-
|
-
|
|||||
|
Total revenues ...........................................................
|
$1,632
|
$879
|
$46
|
$2,557
|
|||
|
Significant expenses:
|
|||||||
|
Segment cost of revenues .......................................
|
|||||||
|
Segment selling, general and administrative
expenses ..............................................................
|
|||||||
|
Segment Adjusted EBITDA(1) .................................
|
$756
|
$123
|
$(14)
|
||||
__________________
(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 $26 million, $85 million, and $111 millionfor the years ended December 31,
2025, 2024, and 2023, 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 $714 million, $300 million, and $23 million, respectively, for the year ended December 31,
2025, $420 million, $293 million, and $12 million, respectively, for the year ended December 31, 2024, and $209 million, $280 million,
and $6 million, respectively, for the year ended December 31, 2023. 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
$42 million, $27 million, and $9 millionfor the years ended December 31, 2025, 2024, and 2023, respectively. For additional information,
see Note 24 to our audited consolidated financial statements for the year ended December 31, 2025.
Fiscal Year Ended December 31, 2025Compared with Fiscal Year Ended December 31, 2024
Equipment Rental and Services Operations.Revenue for our Equipment Rental and Services Operations
segment was $2,724 millionfor the year ended December 31, 2025, compared to $2,035 millionfor the year ended
December 31, 2024, an increase of $689million, or 34%. Approximately $616million of the increase is attributed to
the growth in fleet OEC under our management from $6,601 millionas of December 31, 2024to $8,780 millionas
of December 31, 2025, and the corresponding increase in our fleet size from 194,462units to 252,252units of
equipment under our managementas of December 31, 2024and 2025, 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 267as of December 31, 2024, to 352as of December 31, 2025.
Revenue from sales of equipment parts, supplies, and services from mature branch locations and new branch
locations open less than 24 months contributed $73 millionand $42 million, respectively, to the increase in segment
total revenues. Changes in the mix of equipment rented and price changes aligned with inflation partially offset the
increase in equipment rental and related services revenue by $46 million.
Segment Adjusted EBITDA for our Equipment Rental and Services Operations segment was $1,139 millionfor
the year ended December 31, 2025, compared to $816 millionfor the year ended December 31, 2024, an increase of
$323 million, or 40%. The increase in Segment Adjusted EBITDA was primarily due an increase in segment total
revenues of $689 millionfrom 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 $6,601 millionas of December 31, 2024to
$8,780 millionas of December 31, 2025, and the corresponding increase in our fleet size from 194,462units to
252,252units of equipment under our management as of December 31, 2024and 2025, respectively, driven by
OWN Program demand. The increase in segment total revenues was offset by increases of $195 millionin segment
cost of revenues and $171 millionin segment selling, general and administrative expenses.
Equipment Sales.Revenue for our Equipment Sales segment was $1,541 millionfor the year ended
December 31, 2025, compared to $1,676 millionfor the year ended December 31, 2024, a decrease of $135 million,
or 8%. The decrease was primarily due to decreased sales of construction equipment, primarily to existing and new
participants in the OWN Program, as presented in the following table (in millions):
|
Year Ended December 31,
|
|||||||
|
2025
|
2024
|
$ Change
|
% Change
|
||||
|
Equipment sales to OWN Program participants(1) .......
|
$1,296
|
$1,474
|
$(178)
|
(12)%
|
|||
|
Other equipment sales .................................................
|
21%
|
||||||
|
Total revenues - equipment sales ................................
|
$1,541
|
$1,676
|
$(135)
|
(8)%
|
|||
|
Cost of equipment sold to OWN Program
participants ...............................................................
|
$1,033
|
$1,237
|
$(204)
|
(16)%
|
|||
|
Cost of other equipment sales .....................................
|
25%
|
||||||
|
Total cost of revenues - equipment sales .....................
|
$1,237
|
$1,400
|
$(163)
|
(12)%
|
|||
__________________
(1)For the years ended December 31, 2025 and 2024, equipment sales to OWN Program participants included net revenue of $107 million and
$64 million, respectively, recognized on an agent basis, with overall transaction values of$747 millionand $352 million, respectively.
The decrease in equipment sales of $135 millionis primarily attributed to lower sales of $178 millionin
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 $55million, primarily attributed
to our site expansion, and was offset by a decrease of $12 millionof new equipment sold to customers from our
dealership locations.
Segment Adjusted EBITDA for our Equipment Sales segment was $276 millionfor the year ended
December 31, 2025, compared to $247 millionfor the year ended December 31, 2024, an increase of $29million, or
12%. The increase in Segment Adjusted EBITDA was primarily attributed to higher gross margins on equipment
sales.
All Other.Revenue for all other activities was $114 millionfor the year ended December 31, 2025, compared to
$53 millionfor the year ended December 31, 2024, an increase of $61 million, or 115%. This increase was primarily
due to an increase of $30 millionin telematics SaaS subscriptions, applications, and related telematics devices, as
well as an increase of $31 millionin sales of building materials, small tools, and hardware supplies due to our
expansion of 9hardware stores during the year ended December 31, 2025. Segment loss for our all other activities
was $13 millionfor the year ended December 31, 2025, compared to $8 millionfor the year ended December 31,
2024, an increase of $5 million, or 63%, primarily due to the increase of $28 millionin 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, partially offset by
higher revenue as previously discussed.
Fiscal Year Ended December 31, 2024 Compared with Fiscal Year Ended December 31, 2023
Equipment Rental and Services Operations. Revenue for our Equipment Rental and Services Operations
segment was $2,035 million for the year ended December 31, 2024, compared to $1,632 million for the year ended
December 31, 2023, an increase of $403 million, or 25%. Approximately $331 million of the increase is attributed to
the growth in fleet OEC under our management from $5,423 million as of December 31, 2023 to $6,601 million as
of December 31, 2024, and the corresponding increase in our fleet size from 159,597 units to 194,462 units of
equipment under our management as of December 31, 2023 and 2024, 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 190 as of December 31, 2023, to 267 as of December 31, 2024.
Revenue from sales of equipment parts, supplies, and services from mature branch locations and new branch
locations open less than 24 months contributed $25 million and $20 million, respectively, to the increase in segment
total revenues. Changes in the mix of equipment rented, along with price changes aligned with inflation, contributed
approximately $28 million of the increase in equipment rental, parts, supplies and services revenue from 2023 to
2024.
Segment Adjusted EBITDA for our Equipment Rental and Services Operations segment was $816 million for
the year ended December 31, 2024, compared to $756 million for the year ended December 31, 2023, an increase of
$59 million, or 8%. The increase in Segment Adjusted EBITDA was primarily due to an increase in segment total
revenues of $403 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 $5,423 million as of December 31, 2023 to
$6,601 million as of December 31, 2024, and the corresponding increase in our fleet size from 159,597 units to
194,462 units of equipment under our management as of December 31, 2023 and 2024, respectively, driven by
OWN Program demand. The increase in segment total revenues was offset by increases of $143 million in segment
cost of revenues and $200 million in segment selling, general and administrative expenses.
Equipment Sales.Revenue for our Equipment Sales segment was $1,676 million for the year ended December
31, 2024, compared to $879 million for the year ended December 31, 2023, an increase of $797 million, or 91%.
This increase was primarily due to increased sales of construction equipment to existing and new participants in the
OWN Program, as presented in the following table (in millions):
|
Year Ended December 31,
|
|||||||
|
2024
|
2023
|
$ Change
|
% Change
|
||||
|
Equipment sales to OWN Program participants(1) .......
|
$1,474
|
$706
|
$768
|
109%
|
|||
|
Other equipment sales .................................................
|
17%
|
||||||
|
Total revenues - equipment sales ................................
|
$1,676
|
$879
|
$797
|
91%
|
|||
|
Cost of equipment sold to OWN Program
participants ...............................................................
|
1,237
|
111%
|
|||||
|
Cost of other equipment sales .....................................
|
14%
|
||||||
|
Total cost of revenues - equipment sales .....................
|
$1,400
|
$728
|
$672
|
92%
|
|||
__________________
(1)For the years ended December 31, 2024 and 2023, equipment sales to OWN Program participants included net revenue of $64 million and
$29 million, respectively, recognized on an agent basis, with overall transaction values of $352 million and $315 million, respectively.
The increase in equipment sales of $797 million is primarily attributed to higher sales of $768 million in
construction equipment to existing and new participants in our OWN Program. In addition, sales of new and used
equipment from our full service branch locations to contractors and other end users increased $47 million, primarily
attributed to our site expansion, and was offset by a decrease of $19 million of new equipment sold to customers
from our dealership locations.
Segment Adjusted EBITDA for our Equipment Sales segment was $247 million for the year ended December
31, 2024, compared to $124 million for the year ended December 31, 2023, an increase of $124 million, or 100%.
The increase in Segment Adjusted EBITDA was primarily attributed to the expansion of the OWN Program to
support our organic growth initiatives.
All Other.Revenue for all other activities was $53 million for the year ended December 31, 2024, compared to
$45 million for the year ended December 31, 2023, an increase of $8 million, or 17%. This increase was primarily
due to an increase in telematics SaaS subscriptions, applications, and related telematics devices. Segment loss for
our all other activities was $8 million for the year ended December 31, 2024, compared to $15 million for the year
ended December 31, 2023, a decrease of $7 million, or 47%, primarily due to the increase in telematics SaaS
subscriptions revenue.
Liquidityand 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. Over the last three years, 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 December 31, 2025, our liquidity consisted of cash and cash equivalents of $306 millionand net excess
availability of $1,039 millionunder our ABL Credit Facility. See "-ABL Credit Facility-Borrowing Capacity"
below.
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. 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 who 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. See "Risk Factors-Our OWN Program subjects us to a number of risks, many of
which are beyond our control."
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:
|
Year Ended December 31,
|
|||||
|
2025
|
2024
|
2023
|
|||
|
(in millions)
|
|||||
|
Net cash provided by operating activities ......................................
|
$264
|
$282
|
$279
|
||
|
Net cash used in investing activities ...............................................
|
(980)
|
(419)
|
(614)
|
||
|
Net cash provided by financing activities ......................................
|
|||||
|
Net increase (decrease) in cash and cash equivalents ..............
|
$(101)
|
$91
|
$73
|
||
Net Cash Provided by Operating Activities
For the years ended December 31, 2025and 2024, net cash provided by our operating activities was $264
millionand $282 million, respectively, and was in each period primarily due to cash generated from the growth in
our business, increase in our rental fleet and corresponding growth in our revenues. These proceeds were offset
partially by an increase in cost of revenues of $322 million, selling, general and administrative expenses of $214
million, and interest expense of $24 millionfor the year ended December 31, 2025, ascompared to the year ended
December 31, 2024, and changes in working capital accounts.
For the years ended December 31, 2024 and 2023, net cash provided by our operating activities was $281
million and $279 million, respectively, and was in each period primarily due to cash generated from the growth in
our business, increase in our rental fleet and corresponding growth in our revenues. These proceeds were offset, in
part, by an increase in cost of revenues of $1,020 million, selling, general and administrative expenses of $220
million, and interest expense of $48 million for the year ended December 31, 2024, as compared to the year ended
December 31, 2023, and changes in working capital accounts.
Net Cash Used in Investing Activities
For the years ended December 31, 2025and 2024, net cash used in our investing activities was $980 millionand
$419 million, respectively, an increase of 134%, and was primarily due to a decrease in proceeds received from the
sale of rental equipment of $1,160 millionand $1,323 millionfor the years ended December 31, 2025and 2024, an
increase in by cash used for the purchases of rental equipment, which was $1,780 millionfor the year ended
December 31, 2025, and $1,586 millionfor the year ended December 31, 2024, and an increase in cash used for the
purchases of properties and other fixed assets which was $248 millionfor the year ended December 31, 2025, and
$195 millionfor the year ended December 31, 2024. For the years ended December 31, 2025and 2024, there were
also significant uses of cash for the development of our T3 platform, as well as investments in debt and equity
securities. These uses were offset partially by proceeds received from the sale of properties and other fixed assets of
$2 millionand $102 millionfor the year ended December 31, 2025and 2024, respectively.
For the years ended December 31, 2024 and 2023, net cash used in our investing activities was $419 million and
$614 million, respectively, a decrease of 32%, and was primarily due to an increase in proceeds received from the
sale of rental equipment of $1,323 million and $647 million for the years ended December 31, 2024 and 2023,
respectively, offset by cash used for the purchases of rental equipment, which was $1,586 million for the year ended
December 31, 2024, and $1,098 million for the year ended December 31, 2023, and cash used for the purchases of
properties and other fixed assets which was $195 million for the year ended December 31, 2024, and $185 million
for the year ended December 31, 2023. For the years ended December 31, 2024 and 2023, there were also significant
uses of cash for the development of our T3 platform, as well as investments in debt and equity securities. These uses
were offset, in part, by proceeds received from the sale of properties and other fixed assets of $102 million and $58
million for the year ended December 31, 2024 and 2023, respectively.
Net Cash Provided by Financing Activities
For the year ended December 31, 2025, net cash provided by financing activities was $615 million, compared to
$228 millionfor the year ended December 31, 2024, an increase of 170%. Net cash provided by financing activities
was positively impacted by net proceeds of $2,357million from the issuance of long-term debt for the year ended
December 31, 2025, and net proceeds of $2,436 millionfrom the issuance of long-term debt for the year ended
December 31, 2024. This was offset partially by using $1,679 millionin cash to repay long-term debt and finance
leases, as well as $19 millionin cash for financing obligations for the year ended December 31, 2025, and by using
$2,195million in cash to repay long-term debt and finance leases as well as $67 millionin cash for financing
obligations for the year ended December 31, 2024.
For the year ended December 31, 2024, net cash provided by financing activities was $228 million, compared to
$408 million for the year ended December 31, 2023, a decrease of 44%. Net cash provided by financing activities
was positively impacted by net proceeds of $2,436 million from the issuance of long-term debt for the year ended
December 31, 2024, and net proceeds of $1,595 million from the issuance of long-term debt, net proceeds of $103
million from the issuance of perpetual preferred, net proceeds of $44 million from the issuance of common stock
and net proceeds of $2 million from the issuance of convertible preferred stock for the year ended December 31,
2023. This was offset, in part, by using $2,195 million in cash to repay long-term debt and finance leases, as well as
$67 million in cash for financing obligations for the year ended December 31, 2024, and by using $1,339 million in
cash to repay long-term debt and finance leases as well as $24 million in cash for financing obligations for the year
ended December 31, 2023.
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.
|
Year Ended December 31,
|
|||||
|
2025
|
2024
|
2023
|
|||
|
(in millions)
|
|||||
|
Purchases of rental equipment ..................................................
|
$1,780
|
$1,586
|
$1,098
|
||
|
Proceeds from sale of rental equipment ....................................
|
(1,160)
|
(1,323)
|
(647)
|
||
|
Net rental equipment capital expenditure ...........................
|
$620
|
$263
|
$451
|
||
|
Investments in internally developed software(1) ........................
|
|||||
|
Net rental equipment & software expenditure ....................
|
$659
|
$301
|
$476
|
||
__________________
(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 $620 millionfor the year ended December 31, 2025, compared
to $263 millionfor the year ended December 31, 2024, an increase of 136%, as we continued to grow our fleet and
site locations in connection with our geographical expansion.
Net rental equipment capital expenditures were $263 million for the year ended December 31, 2024, compared
to $451 million for the year ended December 31, 2023, a decrease of 42%, 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, the Company refinanced existing borrowings under an asset-based lending facility
("ABL Facility") by entering into a new asset-based lending facility ("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 the
Company's election) equal to either (a) the Secured Overnight Financing Rate plus a spread between 112.5 to 137.5
basis points or (b) (x) the greatest of (i) 0.00%, (ii) the Federal Funds Rate in effect on such day plus 50 basis points,
(iii) the Secured Overnight Financing Rate for a one month tenor in effect on such day (to the extent ascertainable),
plus 100 basis points, and (iv) the Prime Rate plus (y) a spread between 12.5 basis points and 37.5 basis points.
Similar to the ABL Facility, 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 December 31, 2025, we calculated a Borrowing Base, as defined under the ABL Credit Facility, of $2,240
million. We determine "Net Excess Availability" as the amount of additional debt we could borrow based on the
existing borrowing base. As of December 31, 2025, we had Net Excess Availability of $1,039 million under the
ABL 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 December 31,
2025, we calculated Remaining Capacity of $1,549 millionand our "Availability Under Borrowing Base Limitation"
was $815 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 December 31, 2025, $6 millionof 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 December 31, 2025, the appropriate levels of liquidity have been
maintained; therefore this financial maintenance covenant is not applicable.Additional information on the terms of
our ABL Facility is included in Note 13 to our audited consolidated financial statements included elsewhere in this
2025 Form 10-K. Additional information on the terms of our ABL Credit Facility is included in Note 13 to our
consolidated financial statements included elsewhere in this 2025 Form 10-K.
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 2025 Form 10-K, 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, 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 years ended December 31, 2025, 2024, and 2023, new market start-up costs attributed to our
Equipment Rental and Services Operations segment were $252 million, $197 million, and $124 million,
respectively.
Notes
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 passuin 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) and our
2033 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 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 and our 2033 Notes.
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 2025 Form 10-K, 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 and our 2032 Notes.
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 2025 Form 10-K, 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.
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.
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. As of December 31, 2025, the maximum
potential dividend accumulated in arrears on our perpetual preferred was approximately $124million.
Contractual Obligations and Commitments
The following table summarizes our long-term contractual obligations and commitments as of December 31,
2025.
|
Payments Due by Period
|
|||||||||
|
Total
|
Less than
1 year
|
1 - 3
years
|
3 - 5
years
|
More than
5 years
|
|||||
|
(In millions)
|
|||||||||
|
Debt ...............................................................
|
$3,335
|
$4
|
$1,035
|
$1,196
|
$1,100
|
||||
|
Operating leases ............................................
|
1,059
|
||||||||
|
Finance leases ...............................................
|
|||||||||
|
Financing obligations (equipment) ...............
|
-
|
||||||||
|
Total contractual obligations ....................
|
$4,698
|
$161
|
$1,322
|
$1,463
|
$1,753
|
||||
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 discussion and analysis of financial condition and results of operations are based upon our consolidated
financial statements, which have been prepared in accordance with GAAP. The preparation of the consolidated
financial statements requires our management team to make estimates and judgments that affect the reported
amounts in our consolidated financial statements and accompanying notes.
Certain of our accounting policies involve a higher degree of judgment and complexity in their application or
selection. Management used estimates and assumptions in preparing these financial statements in accordance with
GAAP. Those estimates and assumptions affect the reported amounts of assets and liabilities, the disclosures of
contingent assets and liabilities, and the reported revenues, and expenses. As future events and their effects cannot
be determined with precision, actual results could differ from the estimates that were used.
For a discussion of all of our significant accounting policies, see Note 2 to our audited consolidated financial
statements included elsewhere in this 2025 Form 10-K. We believe that the following critical accounting policies
affect the most significant estimates and management judgments used in preparing the consolidated financial
statements.
Useful Lives and Salvage Values of Rental Equipment
Our principal assets are rental equipment, which represented 47%and 48%of our total assets as of
December 31, 2025, and 2024, respectively. Rental equipment is comprised of various classes of construction
equipment, delivery vehicles, trailers, and installed telematics tracker devices. Rental equipment is purchased with
the intention to rent the equipment as a long-term productive asset. Upon the equipment's first rental, the equipment
is considered to be placed into service and we begin to depreciate the asset over its estimated useful life to its
estimated residual value. Generally, when rental equipment is placed into service, we estimate the period that the
asset may be held in our rental fleet for the purpose of generating rental revenues, ranging from 5 to 10 years until
its sale or disposal to another party. We also estimate the residual value of the applicable rental equipment at the
expected time of sale or disposal, ranging from zero to 35% of the asset's OEC. The residual value for rental
equipment is affected by factors which include equipment age and amount of usage.
Depreciation rates are reviewed at least annually based on our ongoing assessment of present and estimated
future market conditions, their effect on residual values at the time of disposal and the estimated holding periods.
Market conditions for used equipment sales can also be affected by external factors such as the economy, natural
disasters, fuel prices, supply of similar used equipment, the market price for similar new equipment and incentives
offered by manufacturers of new equipment. These key factors are considered when estimating future residual value
and assessing depreciation rates. As a result of this ongoing assessment, we make periodic adjustments to
depreciation rates of rental equipment in response to changed market conditions and other factors. To the extent that
the useful lives of all of our rental equipment were to change by one year, we estimate that our annual depreciation
expense would decrease or increase by approximately $39 million or $50 million, respectively. If the estimated
salvage values of all of our rental equipment were to increase or decrease by one percentage point, we estimate that
our annual depreciation expense would change by approximately $6 million or $5 million, respectively. Any change
in depreciation expense as a result of a hypothetical change in either useful lives or salvage values would generally
result in a proportional increase or decrease in the gross profit we would recognize upon the ultimate sale of the
asset.
Property Sale and Leaseback Transactions
In connection with our organic growth initiatives, we have routinely sold property to third parties and
simultaneously entered into lease arrangements for the same property. Under these arrangements, we transfer legal
ownership of the property to the third party in exchange for consideration, and in connection with the lease we retain
the use of the property and make periodic lease payments. We evaluate the terms of the agreements to determine
whether a sale has occurred in the context of a sale and leaseback transaction. The evaluation includes assessing if
the customer obtains control of the property in accordance with Accounting Standards Codification Topic 606,
Revenue from Contracts with Customers, determining the classification of the lease, and identifying the existence of
a repurchase option, all of which may include judgments. These judgments can materially impact the recognition of
a financing obligation. Application of the lease classification criteria requires significant judgment, particularly
relating to the valuation of the property sold in the transaction. We measure the fair value of the property on the
basis of one or more of (1) the market approach, (2) the income approach, and (3) the cost approach.
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