EquipmentShare.com Inc: Form 10-K for the period ended Dec 31, 2025

Overview

EquipmentShare is a vertically integrated platform that combines proprietary technology, a connected

equipment fleet, and a nationwide footprint to serve the construction industry. More than a rental company,

EquipmentShare delivers jobsite visibility and control through its cloud-based platform (“T3”), which integrates

embedded telematics hardware, software applications, and real-time data to support both customers and internal

operations. The T3 platform is original equipment manufacturer (“OEM”)-agnostic and gives us and our rental

customers the ability to track mixed fleets, maximize utilization, reduce unplanned downtime, streamline

maintenance, and improve jobsite security and operator accountability.

We utilize our proprietary T3 platform in our equipment rental and service operations to manage construction

equipment that is owned by the Company, as well as construction equipment that is leased from third party

participants in the Company’s “OWN Program.” Under the OWN Program, participants may purchase from the

Company new or used (typically less than four years old) equipment which is fully enabled with T3. Concurrently,

the participant and the Company enter into a lease agreement whereby 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 the Company and the owner of the equipment, and for the duration of the

arrangement we manage the owner’s equipment utilizing the T3 platform. 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.

In addition to equipment rentals, we also offer complementary products and services, such as equipment parts,

supplies, services, and select jobsite support offerings. These products and services are integrated with the T3

platform to support broader jobsite needs as part of our equipment rental and services operations. We offer new and

used equipment for sale to customers. Separately, we offer telematics software-as-a-service (“SaaS”) subscriptions,

supported by embedded telematics hardware to customers who use the digital tools to monitor fleet performance,

manage maintenance, and oversee jobsite activity through a single platform. We develop and enhances these tools

and services with input from customers. We also retail building materials and hardware supplies to customers.

As of December 31, 2025, the Company had 352 full-service branches, 9 dealership sites, and 24 building

materials and hardware retail stores located across 45 states in the U.S. Our full-service, technology-enabled model

supports multiple customer touchpoints and allows it to operate a high-quality, diversified rental fleet. Our branch

network also serves as an effective distribution channel for fleet disposition and supports related activities including

new and used equipment sales, parts, supplies and services. We are an authorized dealer for JLG, Takeuchi, Skyjack,

Genie, and other major brands of construction and aerial equipment, and we offer equipment rentals, parts, and

services.

Competition

The equipment rental industry in the U.S. is large, fragmented, and highly competitive. As of December 31,

2024, there were more than 9,640 equipment rental providers operating in the U.S., ranging from large national and

regional operators to small, independently owned businesses. According to internal estimates based on market data,

the five largest rental providers accounted for approximately 36% of North American construction equipment rental

revenue in 2024, with the remaining share divided among hundreds of local and specialized firms.

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We compete with a wide range of market participants. These include national and regional rental operators with

substantial financial and fleet resources; independently owned providers that serve local markets or niche

geographies; equipment dealerships that also offer rentals alongside new and used equipment sales; and software or

telematics vendors focused on construction asset tracking. While many of these companies compete on fleet

availability, price, or regional density, few have made meaningful investments in technology infrastructure or

integrated jobsite management solutions.

We believe that competition in our industry is primarily shaped by a provider’s ability to deliver availability,

pricing, service responsiveness, delivery speed, and technology integration, particularly for customers managing

complex or distributed projects. EquipmentShare competes by offering a vertically integrated platform that

combines physical scale, digital control, and capital efficiency. Our proprietary T3 software platform is embedded

across our rental fleet and operations, enabling real-time visibility into equipment location, health, and usage,

predictive maintenance, remote access control, and automated service and dispatch workflows.

Customers

We serve a broad base of customers from local contractors to national construction and industrial firms from our

352 rental branches, 9 dealership sites, and 24 building materials and hardware retail store locations across 45 states.

Our focus remains on industrial and non-residential sectors such as infrastructure, manufacturing, and energy, which

accounted for 87% of rental revenue for the year ended December 31, 2025.

We are well established in key growth corridors in the United States (the “U.S.”) across the Gulf Coast,

Southwest, Midwest, and Southeast, with ongoing expansion into underpenetrated regions like the Northeast and

West Coast. Many site launches are initiated by national and regional customers seeking consistent access to fleet,

service, and T3 capabilities across markets.

Our top five rental customers accounted for only 3.8% of equipment rental and related services revenue during

the year ended December 31, 2025, reflecting a highly diversified base. Our T3 platform is embedded in every rental

and enables real-time visibility, access control, and utilization insights and underscores our ability to drive deeper

customer relationships and recurring spend.

Fleet Sourcing and Equipment Financing

We source our equipment rental fleet from which we support and generate our equipment rental revenue

through a combination of equipment that we purchase and own, equipment owned by OWN Program participants

and leased by us to be re-rented to our customers in exchange for a share of the rental revenue, and equipment

owned by financial institutions and leased by us.

Our primary corporate financing vehicle is our senior secured asset-based lending facility which provides

working capital and supports fleet purchases. We also have outstanding second lien secured notes that offer long-

term capital to fund growth and operations. In addition, we utilize equipment-specific financing arrangements,

including finance leases and secured loans with third-party lenders such as banks and specialty finance providers.

We also use OEM floorplan financing to purchase equipment, primarily for resale at our dealership locations.

These arrangements are generally secured by the underlying equipment and offered by manufacturers or their

captive finance affiliates.

A significant portion of our rental fleet is deployed through the OWN Program, a capital-efficient arrangement

in which third-party investors purchase equipment from us. We operate and service the equipment on our rental

platform to be rented to third party customers, while maintaining full control of pricing, customer relationships, and

operations. OWN Program participants receive a share of rental revenue, generated from the rental of their

equipment, and, in certain arrangements, we retain the right to purchase the equipment at an independently appraised

value at the end of the program term. As of December 31, 2025, equipment enrolled under the OWN Program with

original equipment cost (“OEC”) of approximately $4.9 billion represented approximately 56% of our total rental

fleet.

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Fleet Composition

As of December 31, 2025, our equipment rental fleet from which we generate our equipment rental revenue

consisted of approximately 252,252 units with an OEC of $8.8 billion. Our equipment rental fleet is comprised of

equipment that we own, equipment that is leased from OWN Program participants, and equipment under operating

leases with financial institutions. As of December 31, 2025, the average age of the fleet was 31 months, which we

believe is among the youngest in the industry. A younger fleet supports greater reliability, higher uptime, and lower

lifecycle maintenance costs.

The fleet includes a broad range of equipment categories such as telehandlers, excavators, compact track

loaders, boom lifts, dozers, scissor lifts, generators, and other project-critical assets. It is sourced from leading

OEMs and diversified across asset classes to support a wide range of end markets, including commercial, industrial,

and infrastructure construction.

We structure our fleet to reflect the needs of our customers’ jobsites. By investing in the types of equipment our

customers rely on, we seek to provide comprehensive coverage across their workflows and serve as a full-service

partner. Our fleet strategy is informed by real-time insights into customer demand, utilization patterns, and regional

activity surfaced through our T3 platform.

We actively monitor performance and rebalance our fleet based on asset-level utilization, service requirements,

and shifting regional demand. T3 enables us to redeploy underutilized equipment across markets and allocate new

investment toward high-performing asset classes. In recent years, we have expanded our mix of specialty equipment

to meet growing demand for advanced solutions on complex jobsites, while maintaining a strong foundation in core

rental categories.

Original Equipment Manufacturer Suppliers

We source our rental and resale equipment from a broad range of leading OEMs, including JLG, JCB, John

Deere, Komatsu, Hitachi, CASE, Takeuchi, Cummins, Genie, and Toyota. Our fleet spans all major rental

equipment categories and includes both general and specialty assets suited to large-scale commercial, industrial, and

infrastructure projects.

As a result of our scale and consistent fleet investment, we are one of the largest equipment purchasers in the

industry, as evidenced by our equipment spend of $1.8 billion in 2025. We believe our buying power is comparable

to the largest rental providers, enabling us to secure competitive pricing, priority allocation of high-demand assets,

and consistent delivery across equipment cycles. This purchasing scale provides us with a meaningful advantage in

maintaining fleet availability, cost efficiency, and equipment quality across our growing national footprint.

We maintain close relationships with our OEM partners and coordinate regularly on forecasting, delivery

logistics, and product support. In many cases, OEMs install T3-compatible tracking devices at the point of

manufacture, allowing for seamless integration into our platform and faster deployment. We are committed to

strong, long-term partnerships with our OEM suppliers as we continue to scale our fleet and expand our presence

across the U.S.

Sales and Marketing

We maintain dedicated sales teams aligned to each of our core revenue streams: equipment rental and related

services, equipment sales, equipment parts and supplies and services, telematics and sales of building materials and

hardware supplies. This structure enables us to tailor engagement strategies based on customer type and product

offering. Our rental sales team serves a broad range of customers, including national, regional, and local contractors.

Sales activity is supported by data and insights from our T3 platform, which allows our teams to anticipate

equipment needs, recommend solutions, and respond to shifting project requirements.

Our commercial model is designed to support customers in managing fleet deployment, logistics, and

operational workflows across complex and distributed jobsites. In addition to rental, we employ specialized teams

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for equipment sales and T3 software subscriptions. Sales representatives receive regular technical training, including

from OEM partners, to maintain product fluency.

We support our sales efforts with targeted marketing across digital, trade, and local channels to drive brand

awareness and customer acquisition.

Product Warranties

Product warranties for new equipment sales and parts are typically provided by our OEM partners. The term

and scope of these warranties vary greatly by supplier and by product. The OEMs pay us for repairs we perform to

equipment under warranty in our territories.

Seasonality

The demand for our construction rental equipment tends to be lower in the winter months, and equipment rental

performance will generally correlate to the levels of current construction activities, so the severity of weather

conditions can have an impact. Our business, especially in the construction industry, has historically experienced

lower levels of business (including lower demand and utilization) from December until late spring, particularly in

the northernmost states where we operate, and heightened activity during the third quarter and the fourth quarter

until December. The effect of seasonality on our results of operations has increased gradually as we have continued

our expansion in the northern U.S.

However, given our geographic concentration in more southern regions of the U.S., seasonality is not as

pronounced in our business as compared to some of our national and regional competitors.

Information Technology

Our operations depend on a combination of proprietary systems and third-party infrastructure. T3, our internally

developed platform, integrates embedded hardware, cloud software, and data analytics to manage fleet operations,

customer workflows, and service delivery. It is designed and maintained by our in-house engineering and product

teams. T3 also underpins internal workflows related to dispatch, service coordination, and fleet management.

We use third-party service providers for a range of IT functions, including cloud hosting, data processing, and

geospatial visualization. Our T3 platform is designed to be interoperable with a wide range of customer-owned

equipment, OEM systems, and mobile operating environments, enabling deployment across mixed fleets and

devices.

We license software, technologies, and intellectual property from external vendors, and incorporate open-source

software into aspects of our platform. We maintain internal controls to manage compliance with open-source

licensing obligations and to safeguard our proprietary source code.

As our platform and customer base grow, we continue to invest in the scalability, reliability, and security of our

systems, including internal processes for monitoring risk related to third-party providers and technology

dependencies.

Human Capital

Employees

As of December 31, 2025, we employed 8,206 individuals across our 385 operating locations. Our headcount

has grown in line with the expansion of our rental footprint and platform services. We believe our relationships with

employees are positive and we have not experienced any work stoppages.

A portion of our workforce is subject to collective bargaining agreements. As of December 31, 2025, 28

locations were covered by such agreements, representing approximately 2.8% of our employees.

We continue to invest in workforce development to support our growth and operational capabilities. Employee

levels may vary based on business activity, market expansion, or seasonal factors.

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Health and Safety

The health and safety of our employees is a core operational focus. We maintain safety protocols and training

programs designed to support compliance with applicable laws and to promote safe practices across our branches

and jobsites. Our management team regularly reviews safety performance, and safety metrics are included in the

evaluation of site and operational leadership. We continue to invest in systems, equipment, and training in an effort

to reduce risk and support a safe working environment as our operations scale.

Talent Development and Employee Training

We provide training programs to support employee development, operational readiness, and safety. Our training

includes onboarding for new hires, OEM-led equipment instruction, and role-specific learning across rental

operations, service, and platform sales. As our footprint has expanded, we have continued to invest in field training

resources and internal systems to support consistent execution across branches. In addition, we offer ongoing

development opportunities for technical, sales, and leadership roles to support career growth and organizational

scalability.

Compensation and Benefits

We are committed to providing competitive compensation and benefits programs for our employees, as we

believe competitive compensation arrangements are core to an engaged and productive employee base. We believe

our compensation programs align individual compensation with individual and team contributions to both our

culture and our performance results.

Environmental and Safety Regulations

Our facilities and operations are subject to numerous national, state and local regulations governing

environmental protection and occupational health and safety matters. These laws govern such issues as wastewater,

storm water, solid and hazardous wastes and materials, air quality and matters of workplace safety.

For example, the U.S. Comprehensive Environmental Response, Compensation and Liability Act of 1980

(“CERCLA”) and comparable state laws impose joint and several liability for the investigation, remediation and

monitoring of contamination of hazardous substances that have been released into the environment without regard to

fault or the legality of the original conduct on certain classes of persons that contributed to the release. Such liability

may extend to current owners and operators of a facility, past owners and operators at the time the hazardous wastes

were disposed, generators and parties that arranged for disposal or transport of the hazardous substances, and

transporters of hazardous waste. The scope and types of hazardous substances regulated under CERCLA may be

revised from time to time and we continue to monitor these and other regulatory developments.

Our business, results of operations and financial condition are subject to numerous risks and uncertainties. In

connection with any investment decision with respect to our securities, you should carefully consider the following

risk factors, as well as the other information contained in this report and our other filings with the SEC. Additional

risks and uncertainties not presently known to us or that we currently deem immaterial may also impair our business

operations. Should any of these risks materialize, our business, results of operations, financial condition and future

prospects could be negatively impacted, which in turn could affect the trading value of our securities.

Risk Factors Summary

The following is a summary of the Risk Factors disclosure in this Item 1A. This summary does not address all of the

risks that we face. Additional discussion of the risks summarized in this risk factor summary, and other risks that we

face, can be found below and should be carefully considered, together with other information in this 2025 Form 10-

K and our other filings with the SEC, before making an investment decision regarding our securities.

• The construction equipment rental industry is highly competitive, and competitive pressures could lead to a

decrease in our market share or in the prices that we can charge;

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• Our dependence on relationships with certain suppliers to obtain equipment for our business;
• Our innovative capital-light fleet growth model, the OWN Program, subjects us to a number of risks, many

of which are beyond our control;

• Our suppliers of new equipment may appoint additional distributors, sell directly to our customers or

unilaterally terminate our distribution agreements with them, any of which could have a material adverse

effect on our equipment sales due to a loss of such sales;

• Our ability to effectively manage our workforce and operations, which have grown substantially since our

inception, and we expect will continue to do so in the future;

• We may not be able to facilitate our growth strategy by identifying and opening attractive new branch

locations, which could limit our revenues and profitability;

• We may encounter substantial competition or other difficulties in our efforts to expand our operations;
• A decline in construction and industrial activities, a downturn in the economy in general or other

macroeconomic or environmental factors could lead to decreased demand for our equipment, depressed

equipment rental rates and lower equipment sales prices;

• Disruptions in our supply chain could result in adverse effects on our results of operations and financial

performance;

• Our ability to collect on contracts with customers;
• Conditions that adversely affect related parties with which we have entered into equipment sale and rental

arrangements;

• Our reliance upon communications networks and centralized information technology systems and the

concentration of our systems which creates or increases risks for us, such as the risk of the misuse or theft

of information, including personal information;

• Our cloud-based platform (“T3”) is highly technical, and any prolonged undetected errors could adversely

affect our business;

• Our reliance on third parties maintaining open marketplaces to distribute our T3 platform and to provide the

software we use in certain of our products and offerings;

• The dependence of our business upon the interoperability of our T3 platform across devices, operating

systems, and third-party applications that we do not control;

• Trends in oil and natural gas prices, which could adversely affect the level of exploration, development and

production activity of certain of our customers and the demand for our services, and products;

• Risks related to heightened inflation, recessionary conditions, and financial and capital market disruptions

that may adversely impact business conditions, the availability of credit and access to capital;

• Fluctuations in fuel costs or reduced supplies of fuel, which could harm our business; and
• Our exposure to a variety of claims and losses arising from our operations, which our insurance may not

cover all or any portion of such claims.

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Risks Related to Our Business and Our Industry

The construction equipment rental industry is highly competitive, and competitive pressures could lead to a

decrease in our market share or in the prices that we can charge.

The construction equipment rental industry is highly fragmented and competitive. Our competitors include

small, independent businesses with one or two rental locations, and regional and national competitors with

significant financial resources, and equipment vendors and dealers that both sell and rent equipment directly to

customers. We currently face competitive pressure, and may in the future encounter increased competition from

existing or new competitors.

We believe that price is an important competitive factor in the construction equipment rental industry. The

availability of information on the internet has enabled consumers to more easily compare the rates and services

offered by different rental companies. If we were to increase our pricing, our competitors, some of whom may have

greater resources and better access to capital or lower fixed operating costs, may seek to compete aggressively on the

basis of pricing. In addition, our competitors may reduce prices in order to attempt to gain a competitive advantage,

capture market share or compensate for a decline in rental activity. To the extent we do not match or remain within a

reasonable competitive margin of our competitors’ pricing or if competitive pressures lead us to match any of our

competitors’ downward pricing, our revenues, margins, and results of operations could be materially adversely

affected.

We believe one of our advantages over our competitors is our T3 platform, which has allowed us to reach a

broad selection of customers and potential customers, predict regional and local demand, and identify equipment

supply opportunities from third-party equipment suppliers. Our competitors have responded to our success by

investing in and developing their own proprietary technology platforms. Significant competition may require us to

increase spending on our T3 platform and related expenses in order to maintain a competitive edge, which may

adversely affect our margins and results of operations.

In addition, the success of our business depends partially on our ability to remain competitive by identifying and

responding promptly to evolving trends in equipment rental preferences, expectations and needs while also

managing appropriate equipment in our branches and maintaining an excellent customer experience. Although our

T3 platform assists us in predicting such trends, it is difficult to consistently predict the equipment and services our

current and future customers will demand. If we are not able to continue to successfully identify and provide the

appropriate equipment to meet our customers’ needs and expectations, we may not be able to retain or increase our

customer base, which may lead to a decrease in our market share.

We are dependent on our relationships with certain suppliers to obtain equipment for our business.

We are dependent on certain suppliers for access to the equipment and other products we offer and use

throughout our network. We have key relationships with national OEMs and other major brands of construction

equipment. During the year ended December 31, 2025, our top ten vendors accounted for 65% of our total

equipment purchases. We could be at risk of losing preferential access to equipment from OEMs if we reduce our

equipment purchases from these manufacturers. If we are unable to purchase the necessary amounts, our relationship

with these suppliers may suffer and we could lose our ability to timely receive important equipment required for our

business, which could harm our competitive position and may negatively affect our results of operations and cash

flows.

We have experienced, and we may in the future experience, a lack of access to and delays in receipt of

equipment and products from suppliers. For example, global supply chains have been susceptible to stress due to

weather conditions, natural disasters, health or similar issues, political and military actions, and economic

conditions, which delayed manufacturers’ ability to deliver equipment ordered by our customers. Unavailability of,

and delays in obtaining, equipment and products may result from a number of factors affecting our suppliers

including capacity constraints, transport bottlenecks, labor shortages or disputes, supplier product quality issues,

suppliers’ impaired financial condition, and suppliers’ allocations to other purchasers. These risks are typically

increased in a weak economic environment, when there are disruptions or delays in the availability of

manufacturers’ supply chains, or when demand increases coming out of an economic downturn. Such disruptions

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could result in our inability to effectively meet our customers’ needs, impair our ability to execute our growth plans

and result in a material adverse effect on our results of operations, financial condition, and cash flows. In addition,

the prices of the equipment and products we use have significantly increased as a result of supply chain issues and

may again increase. The availability of parts or other supply chain disruptions could cause the price of the

construction equipment we purchase for our rental fleet to increase in the future. If that occurs, there is a risk that we

may not be able to pass on these costs to our customers, which could have a material adverse effect on our results of

operations, margins, and/or cash flows.

Our centralization of equipment and non-equipment purchases has resulted in us depending on, and being

exposed to, the credit risk of a group of key suppliers, including OEM manufacturers, telematics device

manufacturers and software engineers and developers for the telematics services we provide to customers through

our T3 platform. We cannot predict the impact on our suppliers of the economic environment and other

developments in their respective businesses. Insolvency, financial difficulties or other factors may result in our

suppliers not being able to fulfill the terms of their agreements with us. Such factors may render suppliers unwilling

to extend contracts that provide favorable terms to us, or may force them to seek to renegotiate existing contracts

with us. The termination of our relationship with any of our key suppliers could have a material adverse effect on

our business, financial condition, or results of operations in the event that we are unable to obtain adequate

equipment or supplies from other sources in a timely manner, at a reasonable cost or at all.

Our OWN Program subjects us to a number of risks, many of which are beyond our control.

We sell equipment to third parties, including high net worth individuals, family offices, and other third parties

who have financed equipment purchases through the issuance of asset-backed securities (“ABS”). The terms of the

ABS include credit enhancement provisions that require the obligors under such ABS to provide cash or additional

equipment collateral in the event the appraised values for the equipment used as collateral decrease below specified

amounts. If such obligors cannot post additional collateral to secure the under collateralized asset-backed financing,

they may be required to liquidate some or all of the equipment used as collateral for their asset-backed financing

arrangements. Similar liquidation events could result in the related equipment being unavailable for use under our

OWN Program and we would be required to use cash to purchase, or otherwise finance our purchase of, replacement

equipment.

Moreover, the asset-backed financing capacity of OWN Program participants could be decreased as a result of

risks and contingencies beyond our control, including: (i) the acceptance by and/or demand from credit markets of

the structures and structural risks associated with the asset-backed financing arrangements of OWN Program

participants; (ii) the credit ratings provided by credit rating agencies for the asset-backed indebtedness of OWN

Program participants; (iii) third parties requiring changes in the terms and structure of asset-backed financing

arrangements held by OWN Program participants, including increased credit enhancement or required cash

collateral and/or other liquid reserves; (iv) the insolvency or deterioration of the financial condition of one or more

of the obligors under ABS; (v) changes in laws or regulations that negatively affect any of these asset-backed

financing arrangements; or (vi) the overall credit condition of OWN Program participants. A decrease in the asset-

backed financing capacity of OWN Program participants could similarly lead to a loss of equipment available for

our OWN Program and, in turn, our ability to rent the equipment to our customers.

Relatedly, we may be vulnerable to heightened risks in case of a decline in the market value of used equipment.

A decrease in market prices for used equipment could lead to a decrease in the prices we can charge our customers

for sales of used equipment. At the same time, it could decrease the appraised values for the equipment used as

collateral for the asset-backed financing arrangements of OWN Program participants (resulting in a contractual

obligation for obligors under ABS to add additional collateral) and negatively affect the credit ratings of the asset-

backed indebtedness of OWN Program participants (resulting in a decrease in the asset-backed financing capacity of

OWN Program participants), either of which would result in a loss of equipment available for our OWN Program

and increase our resulting need for replacement equipment. Any suspension or delay in our ability to maintain

sufficient levels of equipment under our OWN Program to meet customer demands in a timely manner, at a

reasonable cost or at all, could have a material adverse effect on our business, financial condition, or results of

operations.

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Our suppliers of new equipment may appoint additional distributors, sell directly to our customers or unilaterally

terminate our distribution agreements with them, any of which could have a material adverse effect on our

equipment sales.

We are a distributor of new equipment and parts supplied by national OEMs. Under our distribution agreements

with these OEMs, manufacturers retain the right to appoint additional dealers and sell directly to customers

including national accounts and government agencies. We have both written and oral distribution agreements with

OEMs. Under our oral agreements with the OEMs, we operate under our established course of dealing with the

supplier and are subject to the applicable state laws regarding such relationships. If OEMs decide to cut us out of the

sales process, they may appoint additional distributors, elect to sell to customers directly or unilaterally terminate

their distribution agreements with us at any time without cause. Additionally, we may unilaterally decide, or

mutually agree, to terminate our distribution agreements with certain OEMs. Any such actions could have a material

adverse effect on our business, financial condition, and results of operations.

Our workforce and operations have grown substantially since our inception, and we expect that they will

continue to do so in the future. If we are unable to effectively manage that growth, our financial performance,

and future prospects will be adversely affected.

We have experienced rapid growth since our inception in 2015. This expansion increases the complexity of our

business and has placed, and we expect will continue to place, significant strain on our management, personnel,

operations, systems, technical performance, financial resources, and internal financial control and reporting

functions. There is a risk that we may not be able to manage our growth effectively, which could damage our

reputation and negatively affect our operating results.

Effectively managing our growth will require us to continue to hire, train, and manage qualified employees and

staff, including engineers, operations personnel, financial and accounting staff, and sales and marketing staff, and to

improve and maintain our technology. If our new hires perform poorly, if we are unsuccessful in hiring, training,

managing, and integrating these new employees and staff, or if we are not successful in retaining our existing

employees and staff, our business may be harmed. Properly managing our growth will require us to establish

consistent policies across regions and functions, and a failure to do so could harm our business.

Our failure to upgrade our technology or network infrastructure effectively to support our growth could result in

unanticipated system disruptions. To manage the growth of our operations and personnel and improve the

technology that supports our business operations, as well as our financial and management systems, disclosure

controls and procedures, and internal control over financial reporting, we will be required to commit substantial

financial, operational, and technical resources. In particular, we will need to continue to scale our transaction

processing and reporting, operational, and financial systems, procedures, and controls. For example, due to our

significant growth, we may face challenges in timely and appropriately designing controls in response to evolving

risks of material misstatement. Our current and planned personnel, systems, procedures, and controls may not be

adequate to support our future operations. In addition, the requirements of being a public company may further

strain our resources. For additional information, see “—The requirements of being a public company may strain our

resources and distract our management, which could make it difficult to manage our business.”

If we are unable to expand our operations and hire additional qualified personnel in an efficient manner, our

growth plans, and existing business may be adversely affected. If our operational technology is insufficient to

reliably service our customers, T3 platform user satisfaction will be adversely affected and may cause our customers

to switch to our competitors’ platforms, which would adversely affect our business, financial condition, and

operating results.

As we continue to grow, we will need to continue to evaluate our operational, financial, and management

controls as well as our reporting systems, and procedures to support the growth of our organizational structure. This

will require capital and management resources. If we are unable to effectively manage the growth of our business,

the quality of our T3 platform may suffer, and we may be unable to address competitive challenges, which would

adversely affect our overall business, operations, and financial condition.

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We may not be able to facilitate our growth strategy by identifying and opening attractive new branch locations,

which could limit our revenues and profitability.

An element of our growth strategy is to selectively identify, source, and open full-service equipment rental

branch locations in order to meet customer demand for construction equipment enabled by our T3 platform. The

success of this element of our growth strategy partially depends on identifying strategic branch locations and we

continue to add new sites to our existing footprints.

We may be unable to identify and secure attractive new branch locations or to successfully open any such

locations. Opening a new branch location involves significant costs and risks associated with entering new markets,

and we may face significant competition, which may limit our ability to expand our operations. Further, the

development or expansion of branch locations depends upon receipt of required permits and other governmental

authorizations, and there is no assurance that we will obtain these required items.

We may not have sufficient labor, real estate, management, financial, and other resources to successfully open

and operate new branch locations. Any significant diversion of management’s attention or any major difficulties

encountered in the new locations that we open in the future could have a material adverse effect on our business,

financial condition, or results of operations, which could decrease our profitability and make it more difficult for us

to grow our business. Furthermore, general economic conditions or unfavorable global capital and credit markets

could affect the timing and extent to which we open new branch locations, which could limit our revenues and

profitability.

We may encounter substantial competition or other difficulties in our efforts to expand our operations.

A key element of our growth strategy has been to expand by opening new branches, expanding our geographic

footprint, and better servicing our existing customers and potential new customers. Opening new branches requires

large, upfront investments of capital, and uncertainty about when investment costs will be recovered, if ever. New

branches may require additional capital contributions over a sustained period of time, and there can be no assurance

that sufficient numbers of customers will be attracted to a new branch to make it successful. A branch may prove

unsuccessful due to a number of factors, including market conditions, competition, or our failure to assess the

relevant market and rental demand in that market, and there are costs associated with closing an unsuccessful

branch. The success of our growth strategy depends in part on identifying sites for new branches at attractive prices.

Zoning restrictions could prevent us from being able to open new branches at sites we have identified. We may also

encounter substantial competition in our efforts to acquire new sites or in any efforts we may make to acquire other

equipment rental companies, which may limit the number of acquisition opportunities and lead to higher acquisition

costs. Further, we may not have the financial resources necessary to open all of the new branches that we plan to

open, or to complete any acquisitions we may identify in the future, and we may not have the ability to obtain the

necessary funds on satisfactory terms or at all.

In the past when we have opened new branches, we have attracted talented salespeople who have terminated

their employment with other rental companies. Based on our experience, we believe that it is industry practice for

equipment rental companies to seek non-competition agreements where legally permissible when they hire

salespeople. This practice may hinder our ability to attract talented salespeople to work at new branches, which

could prevent us from opening new branches at sites we identify or result in our failure to realize the expected

benefits from any new branch we open and have a material adverse effect on our business, financial condition, and

results of operations.

A decline in construction and industrial activities, a downturn in the economy in general or other

macroeconomic or environmental factors could lead to decreased demand for our equipment, depressed

equipment rental rates, and lower equipment sales prices.

Our rental equipment is used by our customers in a wide variety of industries, including contractors in

residential and commercial construction and restoration, remediation and environmental services and facility

maintenance; general industrial, including manufacturing, power, battery production, solar energy and agriculture;

infrastructure; and other industries, including commercial and retail services, facility maintenance and recreation.

Many of these industries are cyclical in nature. The demand for our rental equipment is directly affected by the level

15

of economic activity in these industries, which means that when these industries experience a decline in activity,

there is typically a corresponding decline in the demand for our rental equipment. A decline in the demand for our

rental equipment caused by a decline in economic activity in one or more of the industries our rental equipment is

used in could materially adversely affect our results of operations.

The equipment that we lease as lessor or sell to our customers is principally used in connection with

construction and industrial activities in the U.S. A downturn in construction or industrial activities in the U.S. or

global economy in general, may cause a decrease in the demand for our equipment or depress rental rates and the

sales prices for our equipment.

Construction and industrial activities and demand for our equipment has been and may in the future be

negatively affected, either temporarily or in the long term, by:

• a reduction in spending levels by our customers;
• changes in the level of consumer and business confidence;
• unfavorable credit markets affecting end-user access to capital, including the ability of OWN Program

participants to raise capital necessary to purchase equipment from us and to be managed on their behalf by

us for the purpose of re-renting such equipment to our customers;

• adverse changes in federal, state and local government infrastructure spending;
• an increase in the cost of construction materials, as a result of inflation, tariffs, trade wars, or other factors;
• shifts in international trade relations, legislation, and regulations, including those related to economic

tariffs, taxation and importation;

• increased competition;
• a significant increase in the cost of new construction equipment, resulting in higher rental rates;
• adverse weather conditions or natural disasters, the severity and frequency of which may be increased by

climate change and may affect a particular region where we have operations;

• new and more stringent regulations relating to environmental, health and safety matters;
• a decrease in the level of exploration, development, production activity, and capital spending by oil and

natural gas companies;

• a prolonged shutdown of the U.S. federal, state or local governments;
• further increases in interest rates;
• supply chain disruptions;
• a less attractive investment environment for owners of construction equipment;
• public health crises and epidemics;
• terrorism or hostilities involving the U.S.;
• geopolitical conflicts, such as Russia’s invasion of Ukraine, the conflicts in the Middle East and

geopolitical tensions involving China, and the resultant sanctions and other measures imposed in response;

or

• other unforeseen or catastrophic events.

16

A weakness or deterioration in the construction and industrial sectors or a decrease in demand for our

equipment caused by these or other factors may result in lower utilization, reduced rental rates or a decrease in the

residual value realized on the disposition of our rental fleet. Moreover, certain of these factors could affect our OWN

Program participants, which could have an adverse effect on our business. For additional information, see “—Our

OWN Program subjects us to a number of risks, many of which are beyond our control.” A marginal decline in

customer demand for or utilization of our equipment in a given period could have a significant impact on our results

of operations for that period. Any of these developments could have a material adverse effect on our results of

operations, financial condition, and cash flows.

Disruptions in our supply chain could result in adverse effects on our results of operations and financial

performance.

In our equipment rental and services operations, supply chain disruptions have in the past and could in the

future impact our ability to obtain equipment and other supplies for our business from our key suppliers on

acceptable terms or at all. We may experience supply chain disruptions in the future or supplier inability to

manufacture or deliver equipment or parts, especially if our relationships with suppliers deteriorate. Any suspension

or delay in our suppliers’ ability to provide us adequate equipment or supplies, or in our ability to procure equipment

or supplies from other sources in a timely manner, at a reasonable cost or at all, could impair our ability to meet

customer demand and therefore could have a material adverse effect on our business, financial condition, or results

of operations.

In our telematics platform, we are dependent upon a limited number of manufacturers with whom we contract to

manufacture, test, and assemble certain products conforming to our specifications, and of other manufacturers from

whom we directly purchase products for a number of our critical components. Our current reliance on a limited

group of contract manufacturers and suppliers involves risks, including the potential inability to obtain products or

components to meet customers’ delivery requirements, reduced control over pricing and delivery schedules and

discontinuation of or increased prices for certain components. Technology hardware has experienced supply chain

disruptions as a result of global events and their impact and the uncertainties around economic tariffs, including on

our suppliers and on international trade in general, leading to shortfalls in available components that we need to

make products as well as increased costs to obtain components, to make products, and to transport components and

products and we could in the future experience extended delivery times for certain components of our hardware

products and increased transport costs. These disruptions may have an adverse effect on our ability to meet customer

demand and could result in delays in shipping products to customers and dealers. The severity of the disruptions is

continuously changing so that the impact on our ability to meet demand for particular products varies over time,

which creates uncertainties in forecasting our financial results and could have an adverse effect on our results of

operations, financial condition, and cash flows.

If we are unable to collect on contracts with customers, our operating results would be adversely affected.

Under the terms of most of our rental contracts, our customers are required to make monthly rental payments in

arrears. Some of our customers may develop liquidity issues and ultimately may not be able to fulfill the terms of

their rental agreements with us on time or at all. If we are unable to collect on our contracts with customers or

manage our customer credit risk adequately, or if a large number of customers encounter financial difficulties at the

same time, our credit losses could increase above historical levels and our operating results would be adversely

affected. Further, a worsening of economic conditions may result in increased delinquencies and credit losses. There

is also a risk that equipment supplied through the OWN Program could be removed from our platform if participants

were to default on their equipment financing to the extent that a secured lender which provided financing for such

equipment decides not to continue in the OWN Program. See “—We face risks related to heightened inflation,

recessionary conditions, and financial and capital market disruptions that may adversely impact business conditions,

the availability of credit and access to capital.” Additionally, there is a risk that collecting or attempting to collect on

delinquent accounts could lead to legal disputes. See “—Litigation could have a material adverse impact on our

results of operations and financial condition.”

17

We have entered into equipment sale and rental arrangements with related parties and our financial condition

and results of operations could be impacted by conditions that adversely affect such related parties.

We have entered into equipment sale and rental arrangements with related parties, including entities owned or

controlled by the Company’s Chief Executive Officer and/or President (collectively, the “Co-Founders”) through the

OWN Program. See “Certain Relationships and Related Transactions, and Director Independence.” We recognized

revenue from equipment sales through the OWN Program to entities owned or controlled by the Co-Founders of $79

million, $277 million and $80 million for the years ended December 31, 2025, 2024 and 2023, respectively. These

sales represented 5%, 17%, and 9% of equipment sales revenues for the years ended December 31, 2025, 2024, and

2023, respectively. Equipment sold to related parties that has been entered into our OWN Program is under

arrangements with month-to-month terms, or 60-month terms to 75-month terms, and is part of our managed fleet

that is available for rent to our customers. Accordingly, OWN Program payouts, including principal and agent

transactions, were made by us to entities owned or controlled by the Co-Founders under the OWN Program of $46

million, $74 million and $56 million for the years ended December 31, 2025, 2024 and 2023, respectively, as a part

of the revenue sharing arrangements under the OWN Program. OWN Program payouts to entities owned or

controlled by the Co-Founders pursuant to such arrangements represented 6%, 16%, and 22% of total OWN

Program payouts for the years ended December 31, 2025, 2024, and 2023, respectively. The corresponding average

equipment OEC enrolled in the OWN Program owned by these entities represented approximately 3%, 13% and

22% of the total corresponding equipment rental fleet that the Company leases (as lessee) under the OWN Program

as of December 31, 2025, 2024, and 2023, respectively.

Any conditions that adversely impact these related parties, or their relationships with the Company, could affect

their ability or willingness to continue to purchase additional items of equipment for participation in the OWN

Program in the future, and thus could have a material adverse effect on our business, financial condition, results of

operations, and prospects. Although we have adopted policies and procedures that are designed to identify, review

and approve related party transactions, including a review of the transaction terms as compared to those that could

be obtained from unaffiliated parties, there can be no assurance that these procedures will be effective in all cases or

that the transactions ultimately will be on arm’s-length terms. For information on related party transactions, please

see Note 20 to the Company’s consolidated financial statements for the year ended December 31, 2025 included

elsewhere in this 2025 Form 10-K and “Certain Relationships and Related Transactions, and Director

Independence.”

Our business is heavily reliant upon communications networks and centralized IT systems and the concentration

of our systems creates or increases risks for us, including the risk of the misuse or theft of information, including

personal information, which could harm our brand, reputation or competitive position, and give rise to material

liabilities.

We rely heavily on communication networks, cloud services, and IT systems to process rental and sales

transactions, manage our pricing, manage our equipment fleet, manage our financing arrangements, pay suppliers

and other third parties, collect from our customers, account for our activities and otherwise conduct our business and

report our financial results. Some of our major IT systems, accounting functions, and cloud services are centralized

in several locations. We own and manage some of these IT systems but also rely on third parties for a range of IT

systems and related products and services, including but not limited to cloud computing services. Our T3 platform is

reliant on certain telecommunication systems, including cell phone communications, 5G, Bluetooth, and GPS

technology. Any disruption, termination or substandard provision of these services, whether as the result of

computer or telecommunications issues (including operational failures, server malfunctions, software bugs, software

or hardware failures, loss of data or other IT assets, ransomware or other computer malware), personnel misconduct

or error, localized conditions (such as a power outage, fire or explosion) or events or circumstances of broader

geographic impact (such as an earthquake, storm, flood, fires, other natural disaster, epidemic, strike, act of war,

civil unrest or terrorist act), could materially adversely affect our business by disrupting normal operations. Such IT

systems, including our servers, are additionally vulnerable to numerous and evolving cybersecurity risks that

threaten the confidentiality, integrity, and availability of our IT systems and sensitive, confidential and personal

information, including through physical or electronic break-ins, cybersecurity breaches from inadvertent or

intentional actions by our employees, third-party service providers, contractors, consultants, business partners, and/

or other third parties, or cyberattacks or similar incidents (including, but not limited to, business e-mail compromise,

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malicious code, denial of service attacks, credential stuffing, credential harvesting, supply-chain attacks, social

engineering/phishing attacks or ransomware attacks, which, in particular, are becoming increasingly prevalent, and

as a result of bugs, misconfigurations or exploited vulnerabilities in software or hardware, including commercial

software that is integrated into our (or our service providers’) IT systems, products or services) which, if successful,

could have a materially adverse effect on our ability to operate our business and could lead to interruptions in our

operations, loss of sensitive information and income, reputational harm, and diversion of funds.

We regularly possess, store, process, generate, and handle non-public information about individuals and

businesses, including both credit and debit card information and other sensitive, confidential and personal

information. In addition, our customers regularly transmit confidential information to us via the Internet and through

other electronic means. Our facilities and systems and those of our third-party service providers may contain defects

in design or manufacture or other problems that could compromise information security, and are also subject to the

risk of human error. Unauthorized parties also may attempt to gain access to our systems or facilities, or those of

third parties with whom we do business, and these attacks are increasing in their frequency, sophistication, and

intensity and come from a variety of sources, including, but not limited to, traditional computer “hackers,” organized

criminal threat actors, and nation-state-supported actors (including nation-state actors). Such threats may see their

frequency increased and effectiveness enhanced by the use of artificial intelligence (“AI”). As a result, we may be

unable to detect, investigate, remediate or recover from future attacks or incidents, or to avoid a material adverse

impact to our IT systems, sensitive, confidential and personal information or business. Further, during times of war

and other major conflicts, we, the third parties upon which we rely, and our customers may be vulnerable to a

heightened risk of these attacks, including retaliatory cyberattacks, that could materially disrupt our systems and

operations.

Any of the aforementioned threats could cause a cybersecurity breach or other interruption that could result in

unauthorized, unlawful, or accidental acquisition, modification, destruction, loss, alteration, encryption, disclosure

of, or access to our sensitive, confidential and personal information or our IT systems, or those of the third parties

upon whom we rely. A cybersecurity breach or other interruption could disrupt our ability (and that of third parties

upon whom we rely) to provide products and services needed to operate successfully.

We may be unable in the future to detect vulnerabilities in our IT systems and networks because many of the

techniques used to obtain unauthorized access, including malware and other malicious software programs, are

difficult to detect or anticipate until launched against a target and we may be unable to prevent, contain or detect

cyberattacks, cyberterrorism, cybersecurity breaches or other compromises or implement adequate preventative

measures. It is possible that we or our third-party vendors may experience cybersecurity breaches that remain

undetected for an extended period. Even when a cybersecurity breach is detected, the full extent of the breach may

not be determined immediately. While we have implemented security measures to protect our IT and data security

infrastructure, our efforts to address these problems may not be successful. There can also be no assurance that our

cybersecurity risk management program and processes, including our policies, controls or procedures, will be fully

implemented, complied with or effective in protecting our IT systems and sensitive, confidential and personal

information. Cyberattacks are becoming increasingly more difficult to anticipate and prevent due to their rapidly

evolving nature and, as a result, the technology we use to protect our systems from being breached or compromised

could become outdated due to advances in computer capabilities or other technological developments. Moreover, if

our IT systems become damaged or otherwise cease to function properly, we may have to make significant

investments to repair or replace them. Due to applicable laws and regulations or contractual obligations, we may be

held responsible for cyberattacks or other similar incidents attributed to our service providers as they relate to the

information we share with them. We have acquired and may continue to acquire companies with cybersecurity

vulnerabilities and unsophisticated security measures, which exposes us to significant cybersecurity, operational,

and financial risks. Remote and hybrid working arrangements at our company (and at many third-party providers)

also increase cybersecurity risks due to the challenges associated with managing remote computing assets and

security vulnerabilities that are present in many non-corporate and home networks.

We and certain of our third-party providers regularly experience cyberattacks and other incidents, and we expect

such attacks and incidents to continue in varying degrees. While to date no incidents have had a material impact on

our operations or financial results, we cannot guarantee that material incidents will not occur in the future. Any

adverse impact to the availability, integrity or confidentiality of our IT systems or sensitive, confidential and

19

personal information, including a compromise of our security systems resulting in unauthorized access to personal

information about our customers, distributors or employees could adversely affect our corporate reputation as well

as our operations, business and financial condition, and could result in litigation (such as class actions), regulatory

investigations or enforcement actions against us, or the imposition of fines and penalties, or significant incident

response, system restoration or remediation and future compliance costs. Cybersecurity breaches can create system

disruptions, shutdowns or unauthorized disclosure of confidential information, which could result in financial

damage or loss. We cannot assure you that our insurance coverage will be adequate or sufficient to protect us from

or to mitigate liabilities arising out of our privacy and security practices, that such coverage will continue to be

available on commercially reasonable terms or at all, or that such coverage will pay future claims. Most states have

enacted laws requiring companies to notify individuals and often state authorities of cybersecurity breaches

involving their personal information. These mandatory disclosures regarding a cybersecurity breach often lead to

widespread negative publicity, which would harm our reputation and brand, and may cause our customers to lose

confidence in the effectiveness of our data security measures. As a result, a cybersecurity breach could cause the loss

of customers and could also require that we invest significant additional resources related to our information security

systems. For more information on laws requiring notification in the event of a cybersecurity breach, please see “—

We are subject to various laws, regulations and other requirements regarding our processing of personal information,

and compliance with such laws and regulations is costly and time consuming. Any actual or perceived failure to

comply with new or existing laws, regulations and other requirements relating to the privacy, security and

processing of personal information could adversely affect our business, prospects, financial condition, and results of

operations.”

In addition, we outsource a portion of our IT services to third-party service providers to process sensitive,

confidential and personal information in a variety of contexts, including cloud-based infrastructure, data center

facilities, and other functions. We may also rely on third-party service providers to provide other products and

services. The services provided by these third parties are subject to the same risk of outages, other failures and

cybersecurity breaches described above and, as a result, we are susceptible to disruptions, failures and breaches of

the systems maintained by our outsourced providers, which we do not control. Our third-party IT system service

providers face risks relating to cybersecurity similar to ours, and, while we generally perform cybersecurity

diligence on our key service providers, because we do not directly control any of such parties’ information security

operations, we cannot ensure the cybersecurity measures they take will be sufficient to protect any information we

share with them. Our ability to monitor these third parties’ information security practices is limited, and these third

parties may not have adequate information security measures in place. Any disruption, failure, breach or poor

performance of any of these systems could lead to lower revenues, increased costs or other material adverse effects

on our business and results of operations. While we may be entitled to damages if our third-party service providers

fail to satisfy their privacy or security-related obligations to us, any award may be insufficient to cover our damages,

or we may be unable to recover such award. In addition, our contracts with third-party service providers and

suppliers contain, and may in the future continue to contain, limitations on such providers’ liability to us, and there

can be no assurance that the thresholds contained in such limitations are sufficient to protect us in the event we have

claims against the providers related to our security and data privacy obligations or other financial losses. Supply-

chain attacks have increased in frequency and severity, and we cannot guarantee that third parties’ infrastructure in

our supply chain or our third-party partners’ supply chains have not been compromised. Future or past business

transactions (such as acquisitions or integrations) may also expose us to additional cybersecurity risks and

vulnerabilities, as our systems could be negatively affected by vulnerabilities present in acquired or integrated

entities’ systems and technologies, any of which could materially and adversely affect our business, financial

condition, and results of operations.

We depend on third-party technology, including cellular and GPS networks, and any disruption, failure or

increase in costs could impede the functionality of our solutions.

Our proprietary T3 technology, which we use to provide telematics services to our customers, is reliant on

cellular and GPS networks, which allow us to obtain location data and transmit it to our T3 platform. Increases in the

fees charged by cellular carriers for data transmission or changes in the cellular networks, such as a cellular carrier

discontinuing support of the network currently used by our in-vehicle devices, requiring retrofitting of our in-vehicle

devices, could increase our costs and impact our profitability. Changes to cellular network technologies or frequency

20

bands used for connectivity represent an ongoing risk that could affect the compatibility and useful life of our

telematics devices. Although we take steps to ensure our technology is compatible with evolving cellular standards,

failure to effectively manage these transitions could adversely impact our business, financial condition, and

operating results. Cellular carriers could in the future discontinue support for our currently utilized cellular

technologies. Also, while we have included the ability to store GPS data in our devices in case of temporary cellular

network connectivity failure, widespread disruptions or extended failures of the cellular networks would adversely

affect our solutions’ functionality and utility, and harm our financial results. GPS is a satellite-based navigation and

positioning system consisting of a network of orbiting satellites. These satellites and their ground support systems

are complex electronic systems, subject to electronic and mechanical failures and possible sabotage and it is not

certain that the U.S. government will remain committed to the operation and maintenance of GPS satellites in the

future. In addition, technologies that rely on GPS depend on the use of radio frequency bands and any modification

of the permitted uses of these bands may adversely affect the functionality of GPS and, in turn, our solutions. The

satellites and their ground control and monitoring stations are maintained and operated by the U.S. Department of

War, which does not currently charge users for access to the satellite signals and does not impose on the ability to

access location data. We cannot assure you that it will not do so in the future. Any disruption, failure, increase in

costs or regulatory hurdles could impede the functionality and/or cost of our solutions, which could adversely affect

our business. The communication systems that we use to host and transmit data may be subject to security incidents,

which may also subject the Company to regulatory enforcement and client pressures.

Failure to maintain, upgrade or replace our IT systems could materially adversely affect us.

Our business continues to demand the use of sophisticated systems and technologies, including digital tools,

SaaS offerings, and cloud computing. As a result, we devote significant time and expense in maintaining, upgrading

and replacing our systems and technologies in order to meet customers’ demands and expectations. These types of

activities subject us to additional costs and inherent risks associated with maintaining, upgrading and replacing these

systems and technologies, including impairment of our ability to manage our business, loss of customer confidence

and business, potential disruption of our internal control structure, substantial capital expenditures, additional

administration and operating expenses, demands on management time, training our employees to operate the

systems, and other risks and costs of delays or difficulties in transitioning to, or integrating, new systems and

technologies into our current business. We rely on certain third-party software providers to maintain and periodically

upgrade many of these systems and technologies so that they can continue to support our business. Further, some of

the software programs supporting our business are licensed to us by independent software developers. The inability

of these developers or us to continue to maintain and upgrade our systems and technologies would disrupt or reduce

the efficiency of our operations if we were unable to convert to alternate systems in an efficient and timely manner

or at a reasonable cost.

In addition, costs and potential problems and interruptions associated with the implementation of new or

upgraded systems and technologies, maintenance or adequate support of outdated or other existing systems and

technologies could disrupt or reduce the efficiency of our business operations and could have an adverse effect on

our operations if not anticipated and appropriately mitigated. Our competitive position may be adversely affected if

we are unable to maintain, upgrade or replace systems and technologies that allow us to manage our business in a

competitive manner. We also may not achieve the benefits that we anticipate from an upgraded or replaced system

and technology. Additionally, any failure of a system or technology could impede our ability to timely collect and

report financial results in accordance with applicable laws and regulations.

We may fail to respond adequately to changes in technology and customer demands or experience difficulties that

delay our adoption of such changes.

In recent years, our industry has been characterized by changes in technology and customer demands. Our

ability to continually improve our current processes and customer-facing tools in response to changes in technology

or in customer expectations is essential in maintaining our competitive position and maintaining current levels of

customer satisfaction. We may experience technical or other difficulties that could delay or prevent the development

or implementation of new technologies. We also may not achieve the benefits that we anticipate from new

technologies we develop or implement. The effects of these risks may, individually or in the aggregate, materially

adversely affect our results of operations, liquidity and cash flows.

21

We may be unable to adequately manage our inventory, which could adversely affect our operating results.

To ensure adequate inventory supply, we must forecast inventory needs and expenses and place orders

sufficiently in advance with suppliers. These forecasts are based on estimates of future demand for products and

services. Failure to accurately forecast our needs may result in unmet market demand, parts shortages, increased

costs, or excess inventory. Our ability to accurately forecast demand could be affected by many factors, including

changes in customer demand for our products and services, changes in demand for the products and services of

competitors, unanticipated changes in general market conditions, and the weakening of economic conditions or

customer confidence in future economic conditions. If the forecasts used to manage inventory are not accurate, we

may experience excess inventory levels, shortage of available products, or reduced efficiencies which would have a

material adverse effect on our business, financial condition, and results of operation.

Our success depends on our ability to attract and retain key management, sales and trades talent, while

supporting the onboarding and career development of our team members.

Our ability to successfully execute on our business plan depends upon the contributions of our senior

management team as well as other key talent including our dedicated sales force and trades talent such as

Commercial Driver’s License drivers and technicians. In recent years, we have experienced increasing competition

for available talent in the North American workforce as reflected by the low unemployment rate and shortages of

available industry trades talent. As a result, we could experience inefficiencies or a lack of business continuity due to

employee turnover, new employees’ lack of historical knowledge and lack of familiarity with the business processes,

operating requirements, policies and procedures, and key information technologies and related infrastructure used in

our day-to-day operations and financial reporting. We may also experience additional costs as new employees learn

their roles and gain necessary experience, in addition to the cost of hiring new individuals. It is important to our

success that newly hired team members quickly adapt to and excel in their new roles. If they are unable to do so, our

business and financial results could be materially adversely affected. Further, if we cannot meet our needs for IT

developers, software engineers, or research and development staff, we may not be able to fulfill our technology

initiatives while continuing to provide maintenance on existing systems. In particular, our T3 platform is supported

by a team of over 300 field-oriented software engineers and product managers. These are high-demand roles, and in

the past we have experienced difficulty hiring sufficient technical talent to meet all of our development priorities. A

sustained shortage in skilled engineering personnel could impair our ability to enhance and scale the T3 platform,

which could negatively affect our growth and competitiveness.

If we were to lose the services of members of our senior management team or other key talent, such as our

advanced IT staff, whether due to death, disability, resignation or termination of employment, our ability to

successfully implement our business strategy, financial plans, marketing, and other objectives could be significantly

impaired. In addition, if we are unable to attract and retain qualified key talent, we may not be able to effectively and

efficiently manage our business and execute our business plan.

In addition, we must continue to identify, hire, train, and retain key personnel who maintain relationships with

our customers and who provide technical skills required for our growth, and we compete with other companies for a

limited pool of talent. The failure to recruit and retain necessary key personnel could cause disruption, harm our

business, and hamper our ability to grow.

Our operating results fluctuate significantly and our past operating results may not be a good indication of future

performance.

Our results of operations have varied, and could in the future, vary significantly from period to period as a result

of various factors, some of which are outside of our control. Comparing our results of operations on a period-to-

period basis may not be meaningful, and our past results should not be relied upon as an indication of our future

performance. For example, 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. Individual participants who

purchase this equipment are unlikely to purchase in the future and so such sales may not recur unless there is

22

continued demand for the OWN Program. These transactions, and the related revenue, also occur unevenly

throughout the year depending on demand and our results of operations for certain periods have been materially

impacted by these transactions. As a result of the episodic nature of equipment sales to OWN Program participants,

period-over-period comparisons may not reflect underlying trends and fluctuations in our operating results, which

makes it difficult for us to predict our future operating results. Moreover, we have no commitments from any party,

including any OWN Program participants, to purchase future equipment and if there is no continued demand for our

equipment, our equipment sales revenue will decline. Unanticipated fluctuations in our operating results could result

in a decline in our stock price.

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.

Significant components of our expenses are fixed in the short-term, including real estate taxes, tangible property

taxes, rent for our properties, rent for certain equipment assets that do not have variable rental payment

arrangements, insurance, utilities, maintenance, and other facility-related expenses, the costs of operating our IT

systems, and certain staffing costs. Seasonal changes in our revenues do not alter those fixed expenses, typically

resulting in higher profitability in periods when our revenues are higher, and lower profitability in periods when our

revenues are lower. Our business, especially in the construction industry, has historically experienced lower levels of

business (including lower demand and utilization) from December until late spring, particularly in the northernmost

states where we operate, and heightened activity during our third quarter and our fourth quarter until December. As a

result, our quarterly operating results may fluctuate significantly. The effect of seasonality on our results of

operations has increased gradually as we have continued our expansion in the northern U.S. Any occurrence that

disrupts rental activity in any of the regions where we operate, including adverse weather conditions, such as

prolonged periods of cold, rain, blizzards, floods, fires, hurricanes or other severe weather patterns, could have an

adverse effect on our business results of operations, liquidity, and cash flows.

Our T3 platform is highly technical, and any prolonged undetected errors could adversely affect our business.

Our T3 platform is a complex system composed of many interoperating components and incorporates software

that is highly complex. Our business is dependent upon our ability to prevent prolonged system interruption.

Although we utilize widely adopted software libraries and install software releases after employing quality assurance

measures and addressing identified issues, our software, including open source software that is incorporated into our

code, may now or in the future contain undetected errors, bugs, or vulnerabilities. Some errors in our software code

may only be discovered after the code has been released. Bugs in our software, third-party software including open

source software that is incorporated into our code, misconfigurations of our systems, and unintended interactions

between systems could cause prolonged downtime that could impact the availability of our service to platform users,

and impact our reputation. Any errors, bugs, or vulnerabilities discovered in our code or systems after release that

results in a prolonged interruption or a negative experience for our customers or the equipment suppliers that we

connect them with, could negatively affect our business or result in negative publicity, unfavorable media coverage

and damage to our reputation, which could adversely affect our business and financial results.

We rely on third parties maintaining open marketplaces to distribute our T3 platform and to provide the software

we use in certain of our products and offerings.

Our T3 platform is dependent on third parties maintaining open marketplaces, including the Apple App Store

and Google Play, which make our applications available for download by our customers. We cannot assure you that

the marketplaces through which we distribute our T3 platform will maintain their current structures or that such

marketplaces will not charge us fees or impose other conditions to list our applications for download in the future.

Each platform provider has broad discretion to change and interpret its terms of service and other policies with

respect to us and other developers, and those changes may be unfavorable to us. For example, any such changes may

limit, eliminate or otherwise interfere with our products, our ability to distribute our app through their stores, our

ability to update our mobile app, including to make available bug fixes or other feature updates or upgrades, the

features we provide, the manner in which we market our in-app products, our ability to access native functionality or

other aspects of mobile devices, and our ability to access information about our customer that they collect. A

platform provider may also add fees associated with access to and use of its platform, alter how we are able to

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advertise on the platform, prevent our mobile app from being offered on their platform, change how the personal

information of its users is made available to app developers on the platform, or limit the use of personal information

for advertising purposes.

We rely on third-party services, including cloud computing infrastructure and mapping data. Any disruption of

or interference with our use of such services could adversely affect our business, financial condition, and results of

operations. If such third parties cease to provide access to the third-party services that we use, do not provide access

to such services on terms that we believe to be attractive or reasonable, or do not provide us with access to the most

current version of such services, we may be required to seek comparable services from other sources, which may be

more expensive than or inferior to the software that we use, or may not be available at all, any of which would

adversely affect our business.

Our business depends upon the interoperability of our T3 platform across devices, operating systems, and third-

party applications that we do not control.

An important feature of our T3 platform is its broad interoperability with a range of devices, operating systems,

and third-party applications. Our T3 platform is accessible from the web and from devices running various operating

systems, such as iOS and Android, and is operated through third-party applications. We depend on the accessibility

of our T3 platform across these third-party devices, operating systems, and applications, none of which we control,

in order for our customers to be able to install and utilize our T3 platform. Moreover, third-party devices and

operating systems are constantly evolving, and we may not be able to develop our T3 platform in a way that

maintains the compatibility of our T3 platform with such devices and operating systems. The loss of interoperability

of our T3 platform across devices, operating systems, and applications, whether due to actions of third parties or

otherwise, may prevent our customers from being able to access and utilize our T3 platform, which may adversely

affect our business and operations.

Our rental fleet is subject to residual value risk upon disposition and may not sell at the prices we expect.

The market value of any given piece of rental equipment could be less than its depreciated value at the time it is

sold. The market value of used rental equipment depends on several factors, including:

• the market price for new equipment of a like kind;
• wear and tear on the equipment relative to its age and the performance of preventive maintenance;
• the time of year that it is sold (prices are generally higher during the construction season in the region

where the equipment is located);

• the supply of used equipment relative to the demand for used equipment, including as a result of changes in

economic conditions or conditions in the markets that we serve;

• inventory levels at OEMs;
• the existence and capacities of different sales outlets; and
• general economic conditions.

We cannot assure you that used equipment selling prices will not decline or that we will be able to sell our used

equipment at all. A sale of equipment below its net book value could adversely affect our results of operations,

liquidity, and cash flows. Accordingly, decisions to reduce the size of our rental fleet in the event of an economic

downturn or to respond to changes in rental demand would be subject to the risk of loss based on the residual value

of rental equipment.

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We incur maintenance and repair costs associated with our owned rental fleet, and if these increase, it could have

a material adverse effect on our financial condition, results of operations, liquidity, and cash flows in the event

these costs are greater than anticipated.

As our owned rental equipment ages, the cost of maintaining such equipment, if not replaced within a certain

period of time, and the risk of fleet equipment being out of service, generally increase. As of December 31, 2025,

the average age of our owned rental equipment fleet was approximately 31 months. Determining the optimal age at

disposition for our rental equipment is subjective and requires judgment and estimates by management. We have

made estimates regarding the relationship between the age of our rental equipment, the expected maintenance, and

repair costs, the availability of our fleet and the predicted market value of used equipment. It is possible that, in the

future, we may allow the average age of our rental equipment fleet to increase, which would increase our costs for

maintenance and repair and likely would negatively affect the market value of such equipment at the time of its

disposition. Many of these costs are unpredictable and vary based on events beyond our control, such as the price of

purchasing new equipment from manufacturers, the market value of used equipment, or the cost of purchasing

equipment parts inventories for maintenance and repairs that may be needed. Downtime for maintenance, repair,

renewals or upgrades, or low productivity due to other causes, could have a significant negative effect on our

operating results and financial condition. If maintenance and repair costs are higher than estimated or in-service

times or market values of used equipment are lower than estimated, we may not be able to pass along some or all of

such price increases for the cost of equipment and associated parts needed for repairs to our customers in a

competitive environment and our financial condition, results of operations, liquidity, and cash flows could be

materially adversely affected.

The cost of new equipment that we purchase or lease as lessee for use in our rental fleet may increase.

The cost of new equipment from manufacturers that we purchase or lease as lessee for use in our rental fleet

may increase as a result of increased raw material costs, including an increase in the cost of steel, which is a primary

material used in a majority of the equipment we use, labor shortages and supply chain disruptions or due to

increased regulatory requirements, such as those related to emissions or the effects of any tariffs imposed on

equipment manufacturers. These increases could materially impact our financial condition or results of operations in

future periods if we are not able to pass such cost increases through to our customers.

Certain of our operating leases, under which we lease equipment for use in our rental fleet, are short-term and

may not be renewed or, in certain cases, terminated by the relevant lessor.

We lease certain equipment as lessee for use in our rental fleet, excluding equipment enrolled in the OWN

Program, under a renewable month-to-month operating lease. While the relevant contracts contain safeguards

intended to minimize disruption to our rental customers in the event of non-renewal or termination, and include

renewal incentives for the lessor, the lessor’s right not to renew the lease may be exercised in its sole discretion and,

under certain circumstances, it may be entitled or required to terminate the lease, with little notice to us, as a result

of events or circumstances outside of our control. The equipment that we currently lease under such operating lease

arrangements, excluding equipment enrolled in the OWN Program, represented approximately 1% of our OEC under

management as of December 31, 2025. We may also enter into similar lease arrangements in the future. If any such

non-renewal or termination rights are exercised, it could cause substantial disruption to our operations and reduce

the size of our equipment rental fleet, which could materially adversely affect our customer relationships, results of

operations and prospects.

Trends in oil and natural gas prices could adversely affect the level of exploration, development and production

activity of certain of our customers and the demand for our services and products.

In some regions where we operate, demand for our services and products is sensitive to the level of exploration,

development and production activity of, and the corresponding capital spending by, oil and natural gas companies,

including national oil companies, regional exploration and production providers, and related service providers. The

level of exploration, development and production activity is directly affected by trends in oil and natural gas prices,

which historically have been volatile and are likely to continue to be volatile.

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Prices for oil and natural gas are subject to potentially large fluctuations in response to relatively minor changes

in the supply of and demand for oil and natural gas, market uncertainty, and a variety of other economic, political

and geopolitical factors that are beyond our control. Any prolonged reduction in oil and natural gas prices will

depress the immediate levels of exploration, development and production activity, which could have an adverse

effect on our business, results of operations and financial condition. Even the perception of longer-term lower oil

and natural gas prices by oil and natural gas companies and related service providers can similarly reduce or defer

major expenditures by these companies and service providers given the long- term nature of many large-scale

development projects. Additionally, the introduction of additional climate change regulations in the future, including

with respect to carbon taxes, could adversely affect the level of exploration, development and production activity of

certain of our customers and the demand for our services and products. Further, our results will be negatively

affected if construction of energy transition infrastructure is reduced due to lower subsidies or other factors.

Factors affecting the prices of oil and natural gas include:

• the level of supply and demand for oil and natural gas;
• the ability or willingness of the Organization of Petroleum Exporting Countries and the expanded alliance

collectively known as OPEC+ to set and maintain oil production levels;

• the level of oil production in the U.S. and by other non-OPEC+ countries;
• oil refining capacity and shifts in end-customer preferences toward fuel efficiency and the use of natural

gas;

• the cost of, and constraints associated with, producing, and delivering oil and natural gas;
• governmental regulations and other actions, including economic sanctions and policies of governments

regarding the exploration for and production and development of their oil and natural gas reserves;

• weather conditions, natural disasters, and health or similar issues, such as pandemics or epidemics;
• worldwide political and military actions, and economic conditions, including potential recessions; and
• increased demand for alternative energy and use of electric vehicles and increased regulatory, customer or

other stakeholder emphasis on decarbonization and public sentiment around alternatives to oil and gas.

We face risks related to heightened inflation, recessionary conditions, and financial and capital market

disruptions that may adversely impact business conditions, the availability of credit and access to capital.

Our financial results, operations and forecasts depend on general economic and geopolitical conditions, the

demand for our products and services, and the financial condition of our customers and suppliers. Economic

weakness has in the past resulted, and may result in the future, in reduced demand for products resulting in

decreased sales, margins and earnings for companies in the construction equipment rental industry. We have

incurred certain cost increases due to inflation, which to date, have not been material. However, there can be no

assurance that future inflationary pressures will not become more significant, or that we will continue to be able to

fully mitigate the impact of inflation through price increases, productivity initiatives and cost savings, which could

have an adverse effect on our results of operations. In addition, if the U.S. economy enters a recession, we may

experience rental and sales declines which could have an adverse effect on our business, operating results and

financial condition. Economic weakness may also lead us to impair assets, adjust our operating strategy, reduce

expenses in response to decreased revenues or margins, or take restructuring actions. We may not be able to

adequately adjust our cost structure in a timely fashion, which could have an adverse effect on our operating results

and financial condition.

Disruptions in capital and credit markets as a result of an economic downturn, economic uncertainty, the

imposition of trade tariffs and other counter measures, increases by the Federal Reserve of its benchmark interest

rate in the U.S., changing or increased regulation, reduced alternatives or failures of significant financial institutions

could adversely affect our customers’ ability to access capital, our access to liquidity needed for business in the

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future and our ability to raise capital when needed. Additionally, unfavorable market conditions may depress

demand for our products and services or make it difficult for our customers to obtain financing and credit on

reasonable terms. Unfavorable market conditions also may cause more of our customers to be unable to meet their

payment obligations to us, increasing delinquencies and credit losses. If we are unable to manage credit risk

adequately, or if a large number of customers experience financial difficulties at the same time, our credit losses

could increase above historical levels and our operating results would be adversely affected. Moreover, our suppliers

may be adversely impacted by unfavorable capital and credit markets, causing disruption or delay of product

availability. A disruption in the financial markets could impair our banking or other business partners, on whom we

rely for access to capital. In addition, changes in tax or interest rates in the U.S., whether due to recession, economic

disruptions or other reasons, could have an adverse effect on our operating results. These events could negatively

affect our business, financial position, results of operations, and cash flows.

Fluctuations in fuel costs or reduced supplies of fuel could harm our business.

We could be adversely affected by limitations on fuel supplies or significant increases in fuel prices, for

example, resulting from the imposition of tariffs or other trade measures, that could result in higher costs to us for

transporting equipment from one branch to another branch or one region to another region. A significant or

protracted disruption of fuel supplies or increase in fuel prices could have an adverse effect on our financial

condition and results of operations.

We are exposed to a variety of claims and losses arising from our operations, and our insurance may not cover all

or any portion of such claims.

We are exposed to a variety of claims arising from our operations, including claims by third parties for personal

injury, death or property damage allegedly arising from the operation of our equipment or acts or omissions of our

personnel and workers’ compensation claims. We are also exposed to risk of loss from damage to our equipment and

resulting business interruption. Our responsibility for such claims and losses is increased when we waive the

provisions in certain of our rental contracts that hold a renter responsible for damage or loss under an optional loss

or damage waiver that we offer. For example, when a rental protection plan (a “RPP”) is applied to any equipment

rented from us (either upon a customer’s purchase of the RPP or being automatically applied on the equipment in

lieu of a valid certificate of insurance), the customer will, subject to certain terms and conditions, only be held

responsible for the first $1,000 of any loss or damage to each piece of the rented equipment. Although we maintain

insurance customary for our business activities, including general liability, workers’ compensation, and vehicle

liability insurance coverage, covering such risks and in such amounts that we believe are commercially reasonable to

prevent losses from reasonably foreseeable events, our coverage may not be adequate to protect us against such

exposure. Events may occur that result in losses for which no insurance is available or which exceed the coverage

limits of the insurance that we maintain and risks may exist or arise for which insurance is not available on

commercially reasonable terms.

Moreover, in the event that insurance coverage does apply, we will bear a portion of the associated losses

through the application of deductibles and self-insured retention in the insurance policies. For a company of our size,

such deductibles or self-insured retention could be substantial. There is also no assurance that insurance policies of

these types will be available for purchase or renewal on commercially reasonable terms, or at all, or that the

premiums and deductibles under such policies will not substantially increase, including as a result of market

conditions in the insurance industry.

If we were to incur one or more liabilities that are significant, individually or in the aggregate, where we are not

fully insured, that we self-insure against or that our insurers dispute, it could have a material adverse effect on our

financial condition. Even with adequate insurance coverage, we still may experience a significant interruption to our

operations as a result of third-party claims or other losses arising from our operations. Furthermore, insurance

coverage may not continue to be available to us or, if available, may be at a significantly higher cost.

Litigation could have a material adverse impact on our results of operations and financial condition.

We are subject to litigation from time to time. The outcome of any litigation, regardless of its merits, is

inherently uncertain. Regardless of the merits of any claims that may be brought against us, pending or future

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litigation could result in a diversion of management’s attention and resources, and we may be required to incur

significant expenses defending against these claims. If we are unable to prevail in litigation, we could incur

substantial liabilities. While we have general liability insurance, it might not cover such claims, might not provide

sufficient payments to cover all the costs to resolve one or more such claims, and might not continue to be available

on terms acceptable to us (including premium increases or the imposition of large deductible or co-insurance

requirements), or at all. Where we can make a reasonable estimate of the liability relating to pending litigation and

determine that it is probable, we record a related liability. As additional information becomes available, we assess

the potential liability and revise estimates as appropriate. However, because of uncertainties relating to litigation, the

amount of our estimates could be wrong. Any adverse determination related to litigation, or even the burdens of

litigation or potential threat of liability, could require us to change our technology or our business practices, pay

monetary damages, or enter into royalty or licensing arrangements, which could materially adversely affect our

results of operations and cash flows, harm our reputation, or otherwise negatively affect our business. See “—Our

products and services may infringe or be alleged to infringe the intellectual property rights of others, which may

cause us to incur unexpected costs or prevent us from selling our products and services. Moreover, from time to time

we may hire employees previously employed by competitors, which may subject us to claims that such employees

have wrongfully divulged intellectual property or confidential information belonging to such competitors.”

Environmental, health, and safety laws and regulations and the costs of complying with them, or any change to

them impacting our markets, could materially adversely affect our financial position, results of operations, and

cash flows.

Our operations are subject to numerous national, state, and local laws and regulations governing environmental

protection and occupational health and safety matters. These laws govern such issues as wastewater, storm water,

solid and hazardous wastes and materials, air quality, and matters of workplace safety. Under certain of these laws

and regulations, we may be liable for, among other things, the cost of investigating, remediating and monitoring

contamination at our current or former sites as well as third-party sites, including sites to which we have sent

hazardous wastes for disposal or treatment. Liability under these laws and regulations may be imposed on a joint and

several basis and without regard to fault. Authorities could impose fines, suspend production, alter our

manufacturing processes, or stop, suspend or otherwise restrict our operations if we do not comply with these

regulations. We may also be subject to third-party claims, including claims for clean-up costs, personal injury or

property damage under these laws and regulations. We use hazardous materials to clean and maintain equipment,

dispose of solid and hazardous waste and wastewater from equipment washing, and store and dispense petroleum

products from storage tanks at certain of our locations. We also indemnify various parties for the costs associated

with remediating numerous hazardous substance storage, recycling or disposal sites in many states and, in some

instances, for natural resource damages. The amount of any such expense or related natural resource damages for

which we may be held responsible could be substantial. We cannot predict the potential financial impact on our

business if adverse environmental, health, or safety conditions are discovered, or environmental, health, and safety

requirements become more stringent. If we are required to incur environmental, health, or safety compliance or

remediation costs that are not currently anticipated by us, our financial position, results of operations, and cash flows

could be materially adversely affected, depending on the magnitude of the cost. Furthermore, any claims asserted

against us in the future may not be covered by insurance. Even if covered, the amount of insurance may be

inadequate to cover any adverse judgment. Fines and other sanctions imposed on us for environmental violations

and expenses we incur to remedy or comply with environmental regulations would decrease our cash reserves and

could harm our profitability. In addition, environmental, health and safety laws and regulations and the interpretation

and enforcement of such laws and regulations are subject to change. We may incur additional costs in complying

with new or more stringent or comprehensive environmental, health and safety regulations that are promulgated in

the future, including in relation to climate change regulations, which could materially affect our operating results.

Any future outbreak of disease or pandemic, and the measures taken in response thereto, may have an adverse

impact our business, results of operations, and financial condition.

Any future outbreak of disease or pandemic, and the actions public health authorities and governments take in

response, could result in significant reductions in the demand for our equipment and services, interruptions to our

supply chains and general economic volatility and uncertainty in U.S. and international financial markets. Any of

these consequences could adversely affect our business, results of operations, and financial condition and could

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adversely affect our access to capital markets and investment activity, negatively affecting the availability of capital,

the terms and conditions of financing arrangements, and the related costs of such financing.

Climate change and legal or regulatory responses thereto may have a material negative impact on our business

and results of operations.

There is increasing concern that a gradual increase in global average temperatures due to the concentration of

carbon dioxide and other greenhouse gases in the atmosphere will cause significant change in weather patterns

around the globe, increase the frequency and severity of natural disasters, and exacerbate water scarcity in regions

where we operate. Such climate effects may negatively affect our capability to provide and deliver equipment that

meets the safety and functional expectations of our customers as well as the health and safety of our employees.

Increased frequency or duration of extreme weather conditions could impact our business and the demand for our

equipment and services. In addition, in an effort to support their own sustainability initiatives, our customers may

require our rental equipment to meet certain standards, such as using renewable fuel or being powered by electricity.

If we are unable to rent or sell equipment that meets such standards or such other expectations of our customers, or if

we are unable to pass along to customers the increased costs of meeting such standards or expectations, our business

and results of operations could be materially adversely affected.

In addition, the legislative and regulatory authorities in the U.S. and internationally have considered and

adopted, and likely will continue to consider and adopt, numerous measures related to climate change and

greenhouse gas emissions, including greenhouse gas emissions disclosure requirements and other laws and

regulations affecting our end markets, such as oil, gas, and other natural resource extraction. For example, new

disclosure obligations related to greenhouse gas emissions, such as California’s Climate Corporate Data

Accountability Act, Climate-Related Financial Risk Act or the Voluntary Carbon Markets Disclosure Act, or other

disclosure regimes may become applicable to our operations and may increase our reporting obligations and our

costs. Such current and potential future laws and regulations could affect demand for our services and offerings,

increase the cost to operate our fleet, and materially adversely affect our business. Failure to comply with any

legislation or regulation could result in fines and civil or criminal sanctions, and any such legislation or regulation

may require us to implement operational changes that may require substantial expenditures or may otherwise

adversely impact our current operations. At the same time, the federal government and other regulatory authorities

have been considering and adopting initiatives to rollback restrictions on greenhouse gas emissions and regulations

targeting climate change, and may continue to do so. The impact of diverging regulatory developments relating to

climate change on our operations, our suppliers and the markets we serve is uncertain.

Climate change, diversity, equity, and inclusion, and other sustainability and corporate responsibility issues

have become an area of heightened focus and debate among certain stakeholders, including investors, customers,

employees, regulators, and the general public in the U.S. and abroad. In particular, companies face evolving rules,

regulations, and expectations with respect to their practices, disclosures, and performance in relation to these topics.

This may result in increased costs (including but not limited to increased costs related to compliance, stakeholder

engagement, and contracting), and impact our reputation or otherwise affect our business performance.

Further, some investors are placing a greater emphasis on sustainability and corporate responsibility issues

when evaluating investment opportunities. If we are unable to implement and operate our business consistent with

our sustainability and corporate responsibility objectives or provide sufficient disclosure about our sustainability and

corporate responsibility practices, some investors may not view us as an attractive investment, which could have a

negative effect on our financing resources and business. In addition, regulatory authorities, customers, investors and

other stakeholders may take conflicting approaches to sustainability and corporate responsibility issues. For

example, there is an increasing number of federal and state-level initiatives in the U.S. aimed at restricting or

otherwise discouraging sustainability and corporate responsibility-related initiatives, and these may conflict with

other regulatory requirements of other jurisdictions or our various stakeholders’ expectations. We may not be able to

meet these conflicting expectations and requirements with respect to sustainability and corporate responsibility,

which could result in adverse publicity, harm our reputation, lead to claims against us and affect our relationships

with our stakeholders, and subject us to legal and operational risks.

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Damage to our reputation could significantly harm our businesses, competitive position, and prospects for

growth.

Our ability to attract and retain investors, customers, and employees could be adversely affected by damage to

our reputation resulting from various sources, including sustainability and corporate responsibility related issues;

employee misconduct, litigation, or regulatory outcomes; failure to deliver minimum standards of service, and

quality; compliance failures; unethical behavior; unintended breach of confidential information; and the activities of

our customers and commercial partners. Our business may face increased scrutiny related to these items, including

from the investment community, and our failure to achieve progress in these areas on a timely basis, or at all, could

adversely affect our reputation, business, financial performance, and growth.

We may decide to pursue additional strategic transactions, which could be difficult to identify and implement, and

could disrupt our business or change our business profile significantly.

We have in the past acquired other companies and may in the future decide to grow through additional

acquisition of other companies or service lines of other businesses that either complement or expand our existing

business and we may consider the divestiture of some of our businesses. Any acquisitions or divestitures we may

seek to consummate will be subject to the negotiation of definitive agreements, satisfactory financing arrangements

and applicable governmental approvals and consents, including under applicable antitrust laws, such as the Hart-

Scott-Rodino Act. We cannot assure you that we will be able to identify suitable transactions and, even if we are

able to identify such transactions, that we will be able to consummate any such acquisitions or divestitures on

acceptable terms. We may not have the financial resources necessary to consummate any acquisitions or the ability

to obtain the necessary funds on satisfactory terms and any future acquisitions may result in significant transaction

expenses and risks associated with entering new markets. Any future acquisitions or divestitures we pursue may

involve a number of risks, including some or all of the following:

• the diversion of management’s attention and financial resources from our core business;
• the disruption of our ongoing business;
• inherent risk associated with entering a geographic area or line of business in which we have no or limited

experience;

• inaccurate assessment of undisclosed liabilities;
• potential known and unknown liabilities of the acquired or divested businesses for infringement,

misappropriation or other violation of intellectual property rights or other claims and lack of adequate

protections or potential related indemnities;

• the inability to integrate our acquisitions without substantial costs, delays or other problems;
• difficulty in assimilating the operations, products, technologies, and personnel of an acquired company, or

acquired assets, within our existing operations, including the consolidation of corporate and administrative

functions;

• operating inefficiencies that have a negative impact on profitability;
• the loss of key customers or employees of the acquired or divested business;
• the potential adverse effect on our existing business relationships with suppliers and other third parties;
• increasing demands on our operational systems;
• the integration of information systems and internal control over financial reporting;
• failure to achieve anticipated synergies or to receive an adequate return on the capital investment associated

with the acquired or divested business; and

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• possible adverse effects on our reported results of operations or financial position, particularly during the

first several reporting periods after an acquisition or divestiture is completed.

Any acquired entities or assets may not enhance our results of operations. Even if we are able to integrate future

acquired businesses with our operations successfully, we cannot assure you that we will realize the cost savings,

synergies or revenue enhancements that we may anticipate from such integration or that we will realize such benefits

within the expected time frame. Any acquisition also may cause us to assume liabilities, record goodwill and other

intangible assets that will be subject to impairment testing and potential impairment charges, incur potential

restructuring charges and increase working capital, and capital expenditure requirements.

If we were to undertake a substantial acquisition, the acquisition likely would need to be financed in part

through additional financing from banks, through public offerings or private placements of debt or equity securities

or with other arrangements. We cannot assure you that the necessary acquisition financing would be available to us

on acceptable terms if and when required, given our substantial indebtedness and restrictions in the terms of our

indebtedness that may limit the additional indebtedness that we may incur or the acquisitions that we may pursue,

which may make it difficult or impossible for us to obtain financing for acquisitions. In connection with these

acquisitions or investments, we could incur debt, interest expense, amortization expenses related to intangible assets,

assume liabilities, or issue stock that would dilute our current shareholders’ percentage of ownership.

A significant divestiture would, in the short term, result in loss of revenues and possibly earnings, and could

require the amendment or refinancing of our outstanding indebtedness or a portion thereof. Further, to the extent that

we agree to accept payment of all or a portion of the sale price over time, we will bear the risk that the portion of the

price that is not paid at closing may be uncollectible. In addition, in connection with any divestiture, we may agree

to retain obligations related to the business or assets sold and we may agree to indemnify the purchaser for

outstanding liabilities or with respect to the representations, warranties or covenants included in the definitive

agreement between the parties. These retained obligations and indemnification obligations could result in significant

costs and expenses.

We have a substantial amount of indebtedness, which could adversely affect our financial condition and ability to

operate our business.

As of December 31, 2025, we had approximately $3.3 billion of long-term debt outstanding, including

borrowings under an asset-based revolving credit facility, issuances of senior secured second lien notes, and notes

payable, and equipment financing lines of credit with various institutions. Our substantial indebtedness, combined

with our other financial obligations and contractual commitments, could have important consequences for our

business. For example, it could:

• make it more difficult for us to satisfy our obligations with respect to our indebtedness, and any failure to

comply with the obligations under any of our debt instruments, including restrictive covenants, could result

in an event of default under the agreements governing such indebtedness;

• require us to dedicate a substantial portion of our cash flow from operations to payments on our

indebtedness, thereby reducing funds available for working capital, capital expenditures, acquisitions,

business development, and other purposes;

• compromise our ability to capitalize on business opportunities and to react to competitive pressures, as

compared to our competitors, due to our high level of debt and the restrictive covenants in the credit

agreement that governs the asset-based lending facility (the “ABL Credit Facility,” which replaced our

prior asset-based lending facility (the “ABL Facility”) on November 26, 2025), and the indentures

governing our outstanding notes;

• limit our flexibility in planning for, or reacting to, changes in our business and the industries in which we

operate;

• limit our ability to borrow additional funds, or to dispose of assets to raise funds, if needed, for working

capital, capital expenditures, acquisitions, and other corporate purposes;

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• prevent us from raising the funds necessary to repurchase all the notes tendered to us upon the occurrence

of certain changes of control, which would constitute a default under the agreements governing such

indebtedness; and

• limit our ability to redeem, repurchase, decrease or otherwise acquire or retire for value any subordinated

indebtedness we may incur.

These restrictions could adversely affect our financial condition and limit our ability to successfully implement

our growth strategy.

Additionally, the agreements governing our indebtedness contain covenants that restrict our ability to, among

other things, incur additional indebtedness, make certain investments, enter into certain types of transactions with

affiliates, sell or acquire certain assets or merge with or into other companies, use assets as security in other

transactions, and maintain specified financial ratios or other financial metrics. A breach of one or more of these

covenants could result in adverse consequences that could negatively affect our business, results of operations, and

financial position. These consequences may include the acceleration of amounts outstanding under certain of our

credit facilities, triggering an obligation to redeem certain debt securities, termination of existing unused

commitments by our lenders, refusal by our lenders to extend further credit under one or more of the facilities or to

enter into new facilities. For additional information on the restrictive covenants in the credit agreement that governs

the ABL Credit Facility and the indentures governing our outstanding notes, see “Management’s Discussion and

Analysis of Financial Condition and Results of Operations—Liquidity and Capital Resources.”

In addition, we may need additional financing to support our business and pursue our growth strategy, including

for strategic acquisitions. Our ability to obtain additional financing, if and when required, will depend on investor

demand, our operating performance, the condition of the capital markets, and other factors. We cannot assure you

that additional financing will be available to us on favorable terms when required, or at all. If we raise additional

funds through the issuance of equity, equity-linked or debt securities, those securities may have rights, preferences

or privileges senior to those of our Class A common stock, and, in the case of equity and equity-linked securities,

our existing shareholders may experience dilution.

Interest rate fluctuations may have a material adverse effect on our business, results of operations, financial

condition, and cash flows.

Indebtedness under our ABL Credit Facility bears interest at variable rates and we may incur additional variable

interest rate indebtedness in the future. This exposes us to interest rate risk, and any interest rate swaps we enter into

in order to reduce interest rate volatility may not fully mitigate our interest rate risk. If interest rates were to increase,

our debt service obligations on the variable rate indebtedness would increase even if the amount borrowed remained

the same, and our net income and cash flows, including cash available for servicing our indebtedness, will

correspondingly decrease.

We rely on our cash flows from operations and financing activities to provide us with sufficient working capital to

operate our business and finance our growth strategies.

Historically, we have relied upon our cash flows from operations and financing activities to provide us with

adequate working capital to operate our business. Moreover, our growth rate depends, to a large degree, on the

availability of adequate capital to fund the expansion of our product offerings and market penetration, which in turn

will depend in large part on cash flow generated by our business and the availability of equity and debt capital. To

the extent we become more dependent upon our credit facilities to fund our operations, if our lenders reduce or

terminate our access to amounts under our credit facilities, we may not have sufficient capital to fund our working

capital needs or growth strategies and we may need to secure additional capital or financing to fund our working

capital requirements, to repay outstanding debt under our credit facilities and notes or to finance our growth

strategies. We can make no assurance that we will be successful in ensuring the availability of amounts under our

credit facilities when they are needed or in connection with raising additional capital and that any amount, if raised,

will be sufficient to meet our cash flow requirements. In the event we do not have available cash balances on hand

for funding future operations, and if we are not able to maintain our borrowing availability under our credit facilities

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at that time and/or raise additional capital when needed, we may be forced to sharply curtail our efforts to promote

the sale of our products or to curtail our operations.

We are making investments in new offerings and technologies, and expect to increase such investments in the

future. These new investments are inherently risky, and we may never realize any expected benefits from them.

We have made investments to develop new offerings and technologies, including the software underpinning our

telematics business, and we intend to continue investing significant resources in developing new technologies, tools,

features, services, products, and offerings. For example, we believe that our T3 platform will be an important part of

our offerings over the long term, and if we do not spend our development budget efficiently or effectively on

commercially successful and innovative technologies, we may not realize the expected benefits of our investments.

There can be no assurance that customer demand for such initiatives will exist or be sustained at the levels that

we anticipate, or that any of these initiatives will gain sufficient traction or market acceptance to generate sufficient

revenue to offset any new expenses or liabilities associated with these new investments. It is also possible that

products and offerings developed by others will render our products and offerings noncompetitive or obsolete. For

example, some of our competitors are making investments into developing their own technology platforms. Further,

our development efforts with respect to new products, offerings and technologies could distract management from

current operations, and will divert capital and other resources from our more established products, offerings and

technologies. Even if we are successful in developing new products, offerings or technologies, regulatory authorities

may subject us to new rules or restrictions in response to our innovations that could increase our expenses or prevent

us from successfully commercializing new products, offerings or technologies. If we do not realize the expected

benefits of our investments, our business, financial condition, operating results, and prospects may be harmed.

Our collective bargaining agreements and our relationship with our union-represented employees could disrupt

our ability to serve our customers, or lead to higher labor costs.

Certain of our employees are represented by unions and covered by collective bargaining agreements. Various

unions occasionally seek to organize certain of our nonunion employees. Union organizing efforts or collective

bargaining negotiations could potentially lead to work stoppages and slowdowns or strikes by certain of our

employees, which could adversely affect our ability to serve our customers. Further, settlement of actual or

threatened labor disputes or an increase in the number of our employees covered by collective bargaining

agreements could lead to higher labor costs or adversely affect our productivity and operational flexibility.

Our products and services may infringe or be alleged to infringe the intellectual property rights of others, which

may cause us to incur unexpected costs or prevent us from selling our products and services. Moreover, from time

to time we may hire employees previously employed by competitors, which may subject us to claims that such

employees have wrongfully divulged intellectual property or confidential information belonging to such

competitors.

Companies in technology-oriented industries face the threat of intellectual property infringement claims with

respect to the technology they employ, both from their competitors as well as other patent and trademark holders,

including “non-practicing entities,” seeking to profit from royalties generated from intellectual property litigation

and licensing. Many companies in these industries, including some of our competitors, have patent and other

intellectual property portfolios, which could make us a target for litigation as we may not be able to assert

counterclaims against parties that sue us for patent or other intellectual property infringement.

We have received and may in the future continue to receive notices that claim we have infringed,

misappropriated or otherwise violated third parties’ intellectual property rights. We have been involved in one patent

infringement lawsuit, which was decided in our favor in late 2021. As we face increasing competition and gain an

increasingly high profile, we could face additional patent and other intellectual property claims against us. There

may be intellectual property or other rights held by others, including issued or pending patents, that cover significant

aspects of our products and services, and we cannot assure you that we will not in the future be the subject of claims

with respect to alleged infringements or violations of third-party intellectual property rights or that we will not be

held to have infringed or violated such rights. Any intellectual property claim against us, regardless of merit, could

be time consuming and expensive to settle or litigate, could divert our management’s attention and other resources,

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and could hurt goodwill associated with our brand. These claims may also subject us to significant liability for

damages and may result in us having to stop using technology, content, branding, or business methods found to be in

violation of another party’s rights, including our T3 platform in the manner in which it is currently used within our

Company or made available to customers, or require us to modify our technologies to avoid infringement. Making

such modifications may not be commercially feasible, and regardless, may require us to incur significant time and

expense. Such claims, whether or not meritorious, may result in the expenditure of significant financial and

managerial resources, injunctions against us, payment of damages, ongoing royalty payments and significant

settlement payments, including to satisfy indemnification obligations, or may require us to enter into costly royalty

or licensing agreements, if available. Such results could have a materially adverse effect on our business and

financial performance. Further, certain adverse outcomes of such proceedings could adversely affect our ability to

compete effectively in existing or future businesses.

The outcome of any litigation is inherently uncertain, and there can be no assurances that favorable final

outcomes will be obtained in all cases. In addition, plaintiffs may seek, and we may become subject to, preliminary

or provisional rulings in the course of any such litigation, including preliminary injunctions requiring us to cease

some or all of our operations. We may decide to settle such lawsuits and disputes on terms that are unfavorable to

us. Similarly, if any litigation to which we are a party is resolved adversely, we may be subject to an unfavorable

judgment that may not be reversed upon appeal. The terms of such a settlement or judgment may require us to

modify or cease some or all of our operations or pay substantial amounts to the other party. In addition, we may

have to seek a license to continue practices found to be in violation of a third party’s rights. If we are required or

choose to enter into royalty or licensing arrangements, such arrangements may not be available on reasonable terms,

or at all, and if available may significantly increase our operating costs and expenses. As a result, we may be

required to develop or procure alternative non-infringing technology, content, branding, or business methods, which

could require significant effort and expense, and make us less competitive. If we cannot license or develop

alternative technology, content, branding, or business methods for any allegedly infringing aspect of our business,

we may be required to discontinue our use of the technology, including our T3 platform, or we may be prevented

from operating our business in certain jurisdictions, which may hinder our ability to compete effectively. An

unfavorable resolution of the disputes and litigation referred to above could adversely affect our business, financial

condition, and operating results.

We employ certain individuals who were previously employed at other construction rental and technology

companies, including our competitors or potential competitors. We have been, and may continue to be in the future,

subject to claims that our employees, consultants, collaborators, advisors or independent contractors have

inadvertently or intentionally used or disclosed confidential information of these third parties. Litigation has been,

and may continue to be, necessary to defend against these claims. For example, we are involved in litigation matters

across the U.S. alleging misappropriation of trade secrets. These claims are costly to defend against, may result in

significant costs if decided against us, may divert our resources or management’s time away from our operations,

and may have an adverse effect on our ability to operate and grow our business. Even if we are successful in

defending against such claims, the litigation will continue to result in meaningful legal costs and may be a

distraction to management and other employees. See “—Litigation could have a material adverse impact on our

results of operations and financial condition.”

We may not be able to adequately protect our intellectual property and other proprietary rights that are material

to our business.

We rely on a combination of patent, trademark, copyright, trade secret, and unfair competition laws, as well as

confidentiality and license agreements and other contractual provisions, to establish and protect our intellectual

property and other proprietary rights, both in the U.S. and in other jurisdictions. Because of the differences between

U.S. and foreign laws, our intellectual property rights may not receive the same degree of protection in foreign

countries as they would in the U.S. Our ability to compete effectively depends in part on the maintenance of our

intellectual property portfolio, and accordingly, our failure to obtain or maintain adequate protection of our

intellectual property rights for any reason could harm our business, financial condition, and results of operations.

We have applied for patents in the U.S. and other jurisdictions, some of which have been issued and some of

which are pending. We cannot guarantee that any of our pending applications will be approved or that our existing

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and future patent rights will be sufficiently broad to protect our proprietary technology, and any failure to obtain

such approvals or finding that our intellectual property rights are invalid or unenforceable could force us to, among

other things, re-design our affected products and services. Moreover, we may not file patent applications in all of the

jurisdictions where protection will ultimately be desirable. If we fail to timely file a patent application in a

jurisdiction, we may be precluded from doing so at a later date. The patents we own could be challenged, invalidated

or circumvented by others and may not be of sufficient scope or strength to provide us with any meaningful

protection or commercial advantage. In countries where we have not applied for patent protection or where effective

patent protection is not available to the same extent as in the U.S., we may be at greater risk that our proprietary

rights will be infringed or otherwise violated, or that our competitors will be able to commercialize technology that

is similar to our own. Even in jurisdictions where we own patents, we cannot assure you that competitors will not

infringe them, that we will detect any infringement, or that we will have adequate resources to enforce such patents

against any such infringement.

To protect our unregistered intellectual property, including our trade secrets and know-how, we rely in part on

trade secret laws and confidentiality and invention assignment agreements with our employees and independent

contractors. We also require other third parties who may have access to our proprietary technologies and information

to enter into non-disclosure agreements or to be bound by professional, fiduciary, or other contractual obligations

requiring the applicable third party to protect our trade secrets, proprietary know-how and other confidential

information. Such measures, however, provide only limited protection, and we cannot assure you that our

confidentiality and non-disclosure agreements will prevent unauthorized disclosure or use of our confidential

information, especially after our employees or third parties end their employment or engagement with us, or provide

us with an adequate remedy in the event of such disclosure. We cannot guarantee that we have entered into such

agreements with each party who has developed intellectual property on our behalf and each party that has or may

have had access to our confidential information, know-how or trade secrets, and such agreements may be

insufficient or breached. Enforcing a claim that a party illegally disclosed or misappropriated a trade secret or know-

how is difficult, expensive, and time-consuming, and the outcome is unpredictable. In addition, trade secrets and

know-how can be difficult to protect and some courts inside and outside the U.S. are less willing or unwilling to

protect trade secrets and know-how. Additionally, employees, independent contractors and other third parties may

make adverse ownership claims to our current and future intellectual property, and, to the extent that our employees,

independent contractors or other third parties with whom we do business use intellectual property owned by others

in their work for us, disputes may arise as to the rights in related or resulting know-how and inventions.

Furthermore, competitors or other third parties may independently discover our trade secrets, copy or reverse

engineer our products or portions thereof, or develop similar technology. While our proprietary software may be

protected under copyright law, we have chosen to primarily rely on trade secret protection to protect our proprietary

source code, including the code of our T3 platform.

We rely on our trademarks to distinguish our products and services from those of our competitors, and have

registered and applied to register some of these trademarks. We cannot assure you that our trademark applications

will be approved. Third parties may also oppose our trademark applications, seek to cancel our trademark

registrations, or otherwise challenge our use of the trademarks. In the event that our trademarks are successfully

challenged, we could be forced to rebrand our products and services, which could result in loss of brand recognition,

and could require us to devote resources to advertising and marketing new brands. Further, we cannot assure you

that competitors or other third parties will not infringe our trademarks or otherwise engage in unfair competition, or

that we will have adequate resources to enforce our trademarks.

If we fail to protect our intellectual property and other proprietary rights, or if such intellectual property and

proprietary rights are infringed, misappropriated or otherwise violated, our business, results of operations or

financial condition could be materially harmed.

In the future, we may need to take legal action to prevent third parties from infringing, misappropriating or

otherwise violating our intellectual property or from improperly accessing or using our technology. Protecting and

enforcing our intellectual property rights and defending their validity, enforceability and scope from counterattacks

could result in significant litigation costs and require significant time and attention from our technical and

management personnel, which could significantly harm our business. In addition, the outcome of litigation is

inherently uncertain, and we may not prevail in such proceedings. Proceedings may also result in our intellectual

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property rights being found invalid or unenforceable, which would prevent us from asserting them against third

parties in the future. An adverse outcome of any such proceeding may reduce our competitive advantage or

otherwise harm our financial condition and our business. In addition, a breakdown in our internal policies and

procedures may lead to an unintentional disclosure of our proprietary or confidential information, which could in

turn harm our business, financial condition, or results of operations. Some of our products rely on third-party

technologies including open source software, which could result in product incompatibilities or harm availability of

our products and services.

We license software, technologies, and intellectual property underlying some of our software from third parties.

The third-party licenses we rely upon may not continue to be available to us on commercially reasonable terms, or at

all, and the software and technologies may not be appropriately supported, maintained, or enhanced by the licensors.

Some software licenses are subject to annual renewals at the discretion of the licensors. In some cases, if we were to

breach a provision of these license agreements, the licensor could terminate the agreement immediately. The loss of

licenses to, or inability to support, maintain, and enhance, any such third-party software or technology could result

in increased costs, or delays in software releases or updates, until such issues have been resolved. To resolve these

issues may require us to replace third-party software or technology used in our software, which could result in loss

of functionality, reliability or quality. This could have an adverse effect on our business, financial condition, and

results of operations.

We also incorporate open source software into some of our products and expect to use open source software in

the future. Although we monitor our use of open source software, the terms of many open source licenses have not

been interpreted by U.S. courts, and there is a risk that such licenses could be construed in a manner that could

impose unanticipated conditions or restrictions on our ability to market our products, sell our products or develop

new products, including requirements that we disclose our source code to licensees and other users, permit others to

create derivative works of our proprietary software, and preclude us from charging fees to our licensees and end-

users. In such event, we could be required to seek alternative licenses from third parties in order to continue offering

our products, to disclose and offer royalty-free licenses in connection with our own source code, to re-engineer our

products, or to discontinue certain services in the event re-engineering cannot be accomplished on a timely basis,

any of which could adversely affect our business. We also may face claims from third parties claiming ownership of,

or demanding the release or license of, what we believe to be open source software or derivative works that we

developed using such software, which could include our proprietary source code, or otherwise seeking to enforce the

terms of the applicable open source license. Public release of our proprietary source code could allow our

competitors to create similar products with less development time and effort.

Our use of third-party open source software may subject us to litigation or otherwise adversely affect our ability

to offer our products and offerings.

We use third-party open source software in connection with the development of our T3 platform. From time to

time, companies that use third-party open source software have faced claims challenging the use of such open source

software and their compliance with the terms of the applicable open source license. We may be subject to suits by

parties claiming ownership of what we believe to be open source software, or claiming non-compliance with the

applicable open source licensing terms. Some open source licenses require licensors of proprietary software

incorporating or otherwise using open source software who distribute the combined software or make it available

across a network, including on a SaaS basis, to make available all or part of such combined software in source code

form, or to make available modifications or derivative works to such open source software, which in some

circumstances could include valuable proprietary source code. While we employ practices designed to monitor our

compliance with the licenses of third-party open source software and protect our valuable proprietary source code,

we have not run a complete open source license review and may inadvertently use third-party open source software

in a manner that exposes us to claims of non-compliance with the applicable terms of such license, including claims

for infringement of intellectual property rights or for breach of contract. Furthermore, there is an increasing number

of open source software license types, many of which have not been tested in a court of law, resulting in a dearth of

guidance regarding the proper legal interpretation of such licenses. If we were to receive a claim of non-compliance

with the terms of any of our open source licenses, we may be required to publicly release certain portions of our

proprietary source code, purchase a costly license, expend substantial time and resources to re-engineer some or all

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of our software, or be restricted from using all or a portion of our source code or software on an interim or

permanent basis.

In addition, the use of third-party open source software typically exposes us to greater risks than the use of

third-party commercial software because open source licensors generally do not provide warranties or controls on

the functionality or origin of the software. Use of open source software may also present additional security risks

because the public availability of such software may make it easier for hackers and other third parties to determine

how to compromise our T3 platform. Additionally, because any software source code that we make available under

an open source license or that we contribute to existing open source projects becomes publicly available, our ability

to protect our intellectual property rights in such software source code may be limited or lost entirely, and we would

be unable to prevent our competitors or others from using such contributed software source code. Any of the

foregoing could be harmful to our business, financial condition, or operating results and could help our competitors

develop products and offerings that are similar to or better than ours.

Our use of AI could expose us to liability or adversely affect our business.

We use AI, which includes machine learning and similar tools and technologies, in connection with our

business, and intend to continue investing in this area. For example, we use third-party large language models in

features of our T3 platform. We expect that increased investment will be required in the future to continuously

improve our use of AI. As with many technological innovations, there are significant risks involved in developing,

maintaining, and deploying these technologies and there can be no assurance that such technologies will always

enhance our products or services or be beneficial to our business, including our efficiency or profitability.

We use third-party AI technologies, including third-party software and infrastructure. We cannot control the

availability or pricing of such third-party AI technologies, especially in a highly competitive environment, and we

may be unable to negotiate favorable economic terms with the applicable providers. If any such third-party AI

technologies become incompatible with our solutions or unavailable for use, or if the providers of such models

unfavorably change the terms on which their AI technologies are offered or terminate their relationship with us, our

solutions may become less appealing to our customers and our business will be harmed. In addition, to the extent

any third-party AI technologies are used as a hosted service, any disruption, outage, or loss of information through

such hosted services could disrupt our operations or solutions, damage our reputation, cause a loss of confidence in

our solutions, or result in legal claims or proceedings, for which we may be unable to recover damages from the

affected provider.

Use of third-party AI technologies presents other risks as well. For example, if the models underlying the AI

technologies we use are incorrectly designed or implemented; trained or reliant on incomplete, inadequate,

inaccurate, biased or otherwise poor quality data, or on data to which we do not have sufficient rights or in relation

to which we or the providers of such data have not implemented sufficient legal compliance measures; used without

sufficient oversight and governance to ensure their responsible use; or adversely impacted by unforeseen defects,

technical challenges, cybersecurity threats or material performance issues, the performance of our products, services

and business, as well as our reputation, could suffer or we could incur liability resulting from the violation of laws or

contracts to which we are a party or civil claims.

Our developers and software engineers use industry-standard tools, including tools provided by third parties, to

develop or assist in the development of our own software code. While use of such tools makes our development

process more efficient, AI technologies have sometimes generated content that is “substantially similar” to

proprietary or open source code on which the AI tool was trained. If the AI tools we use generate code that is too

similar to other proprietary code, or to software processes that are protected by patent, we could be subject to

intellectual property infringement claims. We may also not be able to anticipate and detect security vulnerabilities in

such AI generated software code. If our tools generate code that is too similar to open source code, we risk losing

protection of our own proprietary code that is commingled with such code. Finally, to the extent we use third-party

AI tools to develop software code, the terms of use of these tools may state that the third-party provider retains

rights in the generated code.

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Additionally, if any of our employees, contractors, consultants, vendors or service providers use any third-party

AI-powered software for other purposes in connection with our business or the services they provide to us, it may

lead to the inadvertent disclosure or incorporation of our confidential information into publicly available training

sets, which may impact our ability to realize the benefit of, or adequately maintain, protect, and enforce our

intellectual property or confidential information, harming our competitive position and business. Any output created

by us using AI tools may not be subject to copyright protection, which may adversely affect our intellectual property

rights in, or ability to commercialize or use, any such content. In the U.S., a number of civil lawsuits have been

initiated related to the foregoing and other concerns, any one of which may, among other things, require us to limit

the ways in which our AI systems are trained and may affect our ability to develop our AI-powered products and

solutions. To the extent that we do not have sufficient rights to use the data or other material or content used in or

produced by the AI tools used in our business, or if we experience cybersecurity incidents in connection with our use

or any third party’s use of AI, it could adversely affect our reputation and expose us to legal liability or regulatory

risk, including with respect to third-party intellectual property, privacy, data protection and cybersecurity, publicity,

contractual or other rights. Further, our competitors or other third parties may incorporate AI into their products

more quickly or more successfully than us, which could impair our ability to compete effectively.

The regulatory framework for AI and similar technologies, and automated decision making, is changing rapidly.

Many federal, state and foreign government bodies and agencies have introduced laws and regulations relating to AI.

In the U.S., the Trump administration has rescinded an executive order relating to the safe and secure development

of AI technologies that was previously implemented by the Biden administration. The Trump administration then

issued a new executive order that, among other things, requires certain agencies to develop and submit to the

president action plans to “sustain and enhance America’s global AI dominance,” and to specifically review and, if

possible, rescind rulemaking taken pursuant to the rescinded Biden executive order. Thus, the Trump administration

may continue to rescind other existing federal orders and administrative policies relating to AI technologies, or may

implement new executive orders and other rule making relating to AI technologies in the future. Any such changes

at the federal level could require us to expend significant resources to modify our products, services, or operations to

ensure compliance or remain competitive. U.S. legislation related to AI technologies has also been introduced at the

federal level and is advancing at the state level. For example, the California Privacy Protection Agency finalized

regulations under the CCPA regarding the use of automated decision-making. California has also enacted numerous

laws that further regulate use of AI technologies and provide consumers with additional protections around

companies’ use of AI technologies, such as requiring companies to disclose certain uses of generative AI. Other

states have also passed AI-focused legislation, such as Colorado’s Artificial Intelligence Act, which will require

developers and deployers of “high-risk” AI systems to implement certain safeguards against algorithmic

discrimination, and Utah’s Artificial Intelligence Policy Act, which establishes disclosure requirements and

accountability measures for the use of generative AI in certain consumer interactions. Such additional regulations

may impact our ability to develop, use, procure, and commercialize AI technologies in the future.

It is possible that new laws and regulations will be adopted in the U.S. and in non-U.S. jurisdictions, or that

existing laws and regulations may be interpreted in ways that would affect the operation of our products and

solutions and the way in which we use AI and similar technologies. Laws and regulations may be rescinded or

amended as new administrations take differing approaches to evolving AI technologies. As a result, implementation

standards and enforcement practices are likely to remain uncertain for the foreseeable future. We may not be able to

adequately anticipate or respond to these evolving laws and regulations, and we may need to expend additional

resources to adjust our offerings in certain jurisdictions if applicable legal frameworks are inconsistent across

jurisdictions. Moreover, because these technologies are themselves highly complex and rapidly developing, it is not

possible to predict all of the legal or regulatory risks that may arise relating to our use of such technologies. Further,

the cost to comply with such laws or regulations could be significant and would increase our operating expenses,

which could adversely affect our business, financial condition, and results of operations.

As the utilization of AI becomes more prevalent, we anticipate that it will continue to present new or

unanticipated ethical, reputational, technical, operational, legal, competitive, and regulatory issues, among others.

We expect that our incorporation of AI in our business will require additional resources, including the incurrence of

additional costs, to develop and maintain our products and solutions, and features to minimize potentially harmful or

unintended consequences, to comply with applicable and emerging laws and regulations, to maintain or extend our

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competitive position, and to address any ethical, reputational, technical, operational, legal, competitive or regulatory

issues which may arise as a result of any of the foregoing. As a result, the challenges presented with our use of AI

could adversely affect our business, financial condition, and results of operations.

We have operations throughout portions of the U.S., which exposes us to multiple state and local regulations, in

addition to federal law and requirements as a government contractor. Changes in applicable law, regulations,

executive orders, directives or requirements, or our material failure to comply with any of them, can increase our

costs and have other negative impacts on our business.

We have operations across the U.S., exposing us to a host of different state and local regulations, in addition to

federal law and regulatory, and contractual requirements. These laws and requirements address multiple aspects of

our operations, such as worker safety, environmental concerns, privacy, employee rights and more, and there are

often different and potentially conflicting requirements in different jurisdictions. These various government

regulations impact our operating costs, profit margins and our internal organization and operation of our business.

Furthermore, we have rental contracts with governmental entities and are subject to additional rules, regulations and

approvals applicable to government contractors. We are also subject to routine audits to assure our compliance with

these requirements. Our failure to comply with these regulations, rules and approvals could result in the imposition

of penalties and the loss of our government contracts and disqualification as a U.S. government contractor. As a

result, our revenues, profit and cash flow could be reduced. Changes in these requirements, or any material failure

by our branches to comply with them, could increase our costs, affect our reputation, limit our business, drain

management time and attention, and otherwise impact our operations in adverse ways. While rental contracts with

governmental entities are currently a de minimus amount of our business today, we expect they will increase over

time.

We are subject to various laws, regulations and other requirements regarding our processing of personal

information, and compliance with such laws and regulations is costly and time consuming. Any actual or

perceived failure to comply with new or existing laws, regulations and other requirements relating to the privacy,

security and processing of personal information could adversely affect our business, prospects, financial

condition, and results of operations.

Our collection, processing, distribution, and storage of personal information is subject to a variety of laws and

regulations, which could limit the way we market and provide our products and services. Compliance with these

data privacy and security requirements is rigorous and time-intensive and may increase our cost of doing business

and, despite these efforts, there is a risk that we fail to comply and may become subject to government enforcement

actions, fines and penalties, litigation and reputational harm, which could materially and adversely affect our

business, financial condition, and results of operations. In addition, the regulatory framework for the handling of

personal and confidential information is rapidly evolving and is likely to remain uncertain for the foreseeable future

as new privacy laws are being enacted globally and existing laws are being updated and strengthened.

Moreover, we may be considered a “user” of consumer reports provided by consumer reporting agencies under

the Fair Credit Reporting Act, as amended by the Fair and Accurate Credit Transactions Act (collectively, “FCRA”).

FCRA regulates and protects consumer information collected by CRAs and imposes specific obligations on “users”

of consumer reports. Such obligations may include notifying consumers when such reports are used to make an

adverse decision and, in the context of completing employee background checks, providing a notice containing

certain disclosures to the consumer and obtaining their consent. FCRA also grants consumers specific rights,

including the right to know what is in their file, ask for a credit score, dispute incomplete or inaccurate information,

limit prescreened offers of credit and insurance they receive based on their credit report, and obtain a security freeze.

States are introducing or enhancing data privacy and security laws, rules and regulations, which could increase

our compliance costs, and the risks associated with noncompliance. For example, the California Consumer Privacy

Act as amended by the California Privacy Rights Act (collectively, the “CCPA”) broadly defines personal

information and requires companies that process information of California residents to make new disclosures to

consumers about their data collection, use and sharing practices. The CCPA also gives California residents expanded

privacy rights and protections, such as affording them the right to opt out of certain data sharing with third parties,

right to access and request deletion and correction of their information and provides a new cause of action for certain

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data breaches. This private right of action has increased the likelihood of, and risks associated with, data breach

litigation. The law also prohibits covered businesses from discriminating against California residents (for example,

charging more for services) for exercising any of their CCPA rights. The CCPA provides for severe civil penalties

and statutory damages for violations. The enactment of the CCPA has prompted a wave of similar legislative

development in numerous U.S. states. For example, since the CCPA went into effect, general data privacy statutes

that share similarities with the CCPA are now in effect and enforceable in over a dozen states, and will soon be

enforceable in several other states as well. In addition, all 50 states have laws including obligations to provide

notification of cybersecurity breaches of computer databases that contain personal information to affected

individuals, state officers, and others. Aspects of the CCPA and other laws, and regulations relating to data

protection, privacy and information security, as well as their enforcement, remain unclear and we may be required to

modify our practices in an effort to comply with them. In addition, laws, regulations, and standards covering

marketing, advertising, and other activities conducted by email, mobile devices, and the internet are applicable to

our business. We have also received one or more claims of violation of the California Invasion of Privacy Act,

though none resulting in significant liability or expense.

We cannot yet fully determine the impact these or future laws, rules and regulations concerning data privacy

and security may have on our business or operations. These laws, rules and regulations may be inconsistent from one

jurisdiction to another, subject to differing interpretations and may be interpreted to conflict with our practices.

Additionally, we may be bound by contractual requirements applicable to our collection, use, processing and

disclosure of various types of data, including personal information, and may be bound by, or voluntarily comply

with, self-regulatory or other industry standards relating to these matters. Compliance with data privacy and security

laws, rules and regulations could require us to take on more onerous obligations in our contracts and restrict our

ability to collect, use, and disclose data. Because the interpretation and application of data protection laws,

regulations, standards, and other obligations are still uncertain, and often contradictory and in flux, it is possible that

the scope and requirements of these laws may be interpreted and applied in a manner that is inconsistent with our

practices and our efforts to comply with the evolving data protection rules may be unsuccessful. Failure or perceived

failure to comply with data privacy and security laws, rules and regulations could result in government enforcement

actions (which could include civil or criminal penalties), private litigation (including class actions) or adverse

publicity and could negatively affect our results of operations and business. Claims that we have violated

individuals’ privacy rights, failed to comply with data privacy and security laws, rules and regulations or breached

our contractual obligations, even if we are not found liable, could be expensive and time consuming to defend and

could result in adverse publicity that could increase our operation costs, impact our financial performance and

adversely affect enrollments.

The failure of financial institutions, including banks, and market intervention by banking regulators in response

to such events may have an adverse impact on our business.

The failure of banks and other financial institutions and market intervention by banking regulators with respect

to such events, including through the introduction of legislation or regulation, may adversely affect our access to

capital and have a negative impact on our operational and financial results. A failure of financial institutions may

also increase the possibility of a sustained deterioration of financial market liquidity and an increase in systemic risk

in the national and international banking industry. If a bank with which we hold deposits were to fail or become

distressed, we may incur financial losses where deposits are held in excess of Federal Deposit Insurance Corporation

limits, or other, insured limits, which may affect our ability to pursue key strategic initiatives, obtain funding or

continue operations. Further, if our commercial partners, insurers, customers, suppliers, or other parties on whom we

rely are affected by issues in the banking industry it may have an adverse impact on our operational and financial

performance.

The requirements of being a public company may strain our resources and distract our management, which

could make it difficult to manage our business.

We are required to comply with various regulatory and reporting requirements, including those required by the

SEC. Complying with these reporting and other regulatory requirements will be time-consuming and will result in

increased costs to us and could have a negative effect on our business, financial condition, and results of operations.

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As a public company, we are subject to the reporting requirements of the Exchange Act and requirements of the

Sarbanes-Oxley Act of 2002 (as amended, the “Sarbanes-Oxley Act”). These requirements may place a strain on our

systems and resources. The Exchange Act requires that we file annual, quarterly, and current reports with respect to

our business and financial condition. The Sarbanes-Oxley Act requires that we maintain effective disclosure controls

and procedures and internal controls over financial reporting. To maintain and improve the effectiveness of our

disclosure controls and procedures, we will need to commit significant resources, hire additional staff and provide

additional management oversight. We are implementing additional procedures and processes for the purpose of

addressing the standards and requirements applicable to public companies. Sustaining our growth also will require

us to commit additional management, operational, and financial resources to identify new professionals to join our

company and to maintain appropriate operational and financial systems to adequately support expansion. These

activities may divert management’s attention from other business concerns, which could have a material adverse

effect on our business, financial condition, and results of operations. Furthermore, because we have not operated as a

company with publicly traded common stock in the past, we might not be successful in implementing these

requirements.

Our ability to use our net operating losses and certain other tax attributes to offset future taxable income may be

subject to certain limitations.

As of December 31, 2025, we have accumulated federal net operating loss carryforwards (“NOLs”) of $1,555

million, of which $1,538 million have an indefinite carryforward period, while the remainder expire in 2037. We

have also accumulated, as of December 31, 2025, NOLs in various states, a portion of which will expire by 2043.

The deferred tax assets recorded associated with accumulated federal and state NOLs was $357 million as of

December 31, 2025. In addition, as of December 31, 2025, we have disallowed interest expense carryforwards under

Section 163(j) of the U.S. Internal Revenue Code of 1986, as amended (the “Code”) (“Section 163(j)

carryforwards”), of approximately $528 million ($111 million tax effected). Under the current tax law, federal NOLs

incurred in taxable years beginning after December 31, 2017, can be carried forward indefinitely, but the

deductibility of such federal NOLs in taxable years beginning after December 31, 2020 is limited to 80% of taxable

income. These federal and state NOLs may be available to offset income tax liabilities in the future. In addition, we

may generate additional NOLs in future years.

In general, under Section 382 of the Code (“Section 382”), a corporation that undergoes an “ownership change”

is subject to limitations on its ability to utilize its pre-change NOLs and Section 163(j) carryforwards to offset future

taxable income. For this purpose, an ownership change generally means a more than 50 percentage point change in

the ownership of a corporation by one or more shareholders or specified groups of shareholders, each of which owns

5% or more of the corporation (determined after the application of certain attribution and grouping rules) over a

three-year period. Although we do not believe that any of our NOLs or Section 163(j) carryforwards are currently

subject to limitation under Section 382, future changes in our stock ownership, and some of which may be outside of

our control, could result in an ownership change under Section 382, which could limit our ability to use our existing

or future NOLs and Section 163(j) carryforwards to offset future taxable income.

Changes in tax laws or tax rulings, or the examination of our tax positions, could materially affect our financial

condition and results of operations.

We are subject to various types of tax arising from normal business operations in the jurisdictions in which we

operate and transact. Any changes to local, domestic or international tax laws and regulations, or their interpretation

and application, including those with retroactive effect, could affect our tax obligations, profitability, and cash flows

in the future. In addition, tax rates in the various jurisdictions in which we operate may change significantly due to

political or economic factors beyond our control. Our existing corporate structure and intercompany arrangements

have been implemented in a manner we believe is in compliance with current prevailing tax laws. In addition, the

taxing authorities in the U.S. and other jurisdictions where we do business regularly examine income and other tax

returns and we expect that they may examine our income and other tax returns. The ultimate outcome of these

examinations cannot be predicted with certainty. We continuously monitor and assess proposed tax legislation that

could negatively affect our business.

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Risks Related to Our Class A Common Stock

The dual class structure of our common stock and the ownership of Class B common stock by our Co-Founders

will have the effect of concentrating voting control with our Co-Founders for the foreseeable future, which will

limit or preclude your ability to influence corporate matters.

In connection with the Company’s initial public offering completed on January 26, 2026, and the Company’s

amended and restated certificate of formation, bylaws, and investors’ rights agreement, our Class B common stock

has 20 votes per share and our Class A common stock has one vote per share. Holders of shares of our Class B

common stock will vote together with holders of our Class A common stock as a single class on all matters on which

shareholders are entitled to vote generally, except as otherwise set forth in our amended and restated certificate of

formation or as required by applicable law. Our Co-Founders will beneficially own all shares of Class B common

stock then outstanding. As a result, our Co-Founders hold approximately 85% of the total voting power of our

outstanding common stock. Our Co-Founders have agreed to vote together as a group. As a result, our Co-Founders

together control a majority of the total combined voting power of our outstanding common stock and therefore

control all matters submitted to the holders of our common stock for approval, including elections for directors,

mergers or acquisitions, asset sales and other significant transactions, so long as the Class B common stock remain

outstanding. This concentrated control will limit your ability to influence corporate matters for the foreseeable

future. For example, our Co-Founders control the amendments of our amended and restated certificate of formation

or bylaws, increases to the number of shares available for issuance under our equity incentive plans or adoption of

new equity incentive plans and approval of any merger or sale of assets for the foreseeable future, subject to the

terms of any preferred stock then outstanding. This control may materially adversely affect the market price of our

Class A common stock.

Further, the holders of our Class B common stock may cause us to make strategic decisions or pursue

acquisitions that could involve risks to you or which may not be aligned with your interests. The holders of our

Class B common stock are also entitled to a separate vote in the event we seek to amend our amended and restated

certificate of formation in a manner that adversely affects the holders of our Class B common stock.

Our dual class structure may depress the trading price or liquidity of our Class A common stock.

Our dual class structure may result in a lower or more volatile market price of our Class A common stock or in

adverse publicity or other adverse consequences. For example, certain index providers restrict inclusion of

companies with multiple class share structures in certain of their indexes. In addition, certain proxy advisory firms

oppose the use of dual or multiple class structures. As a result, the multiple series structure of our common stock

may prevent the inclusion of our Class A common stock in certain indices and may cause proxy advisory firms to

publish negative commentary about our corporate governance practices or otherwise seek to cause us to change our

capital structure, which could result in a less active trading market for our Class A common stock and adversely

affect the value of our Class A common stock. In addition, the difference in the voting rights of the various series of

our common stock could harm the value of our Class A common stock to the extent that any investor or potential

future purchaser of our Class A common stock ascribes value to the superior voting power of our Class B common

stock.

Our stock price may fluctuate significantly, and may decline regardless of our operating performance.

The trading price of our Class A common stock may be volatile and subject to wide price fluctuations in

response to various factors, including:

• market conditions in the broader stock market in general, or in our industry in particular;
• actual or anticipated fluctuations in our quarterly financial and operating results;
• introduction of new products and services by us or our competitors;
• failure of securities analysts to initiate or maintain coverage of us or the issuance of new or changed

securities analysts’ reports or recommendations;

42

• variance in our financial performance from estimates of securities analysts or the expectations of investors;
• investor perceptions of us and the industries in which we or our clients operate;
• sales of large blocks of our stock, including those by our existing investors;
• additions or departures of key personnel;
• regulatory developments;
• litigation and governmental investigations; and
• economic and political conditions or events.

These and other factors may cause the market price and demand for our Class A common stock to fluctuate

substantially, which may limit or prevent investors from readily selling their shares of Class A common stock and

may otherwise negatively affect the liquidity of our Class A common stock. In addition, in the past, when the market

price of a stock has been volatile, holders of that stock have instituted securities class action litigation against the

company that issued the stock. If any of our shareholders brought a lawsuit against us, we could incur substantial

costs defending the lawsuit. Such a lawsuit could also divert the time and attention of our management from our

business.

The trading market for our Class A common stock will also be influenced by the research and reports that

industry or securities analysts publish about us or our business. If one or more of these analysts cease coverage of

our company or fail to publish reports on us regularly, we could lose visibility in the financial markets, which in turn

could cause our stock price or trading volume to decline. Moreover, if one or more of the analysts who cover us

downgrade our stock, or if our results of operations do not meet their expectations, our stock price could decline.

Some provisions of Texas law and our amended and restated certificate of formation and amended and restated

bylaws may deter third parties from acquiring us.

Our amended and restated certificate of formation and amended and restated bylaws, among other things:

• provide for two classes of common stock with disparate voting power, the Class A common stock and the

Class B common stock that provide the holders thereof with the ability to control the outcome of matters

requiring shareholder approval, even though such holders own significantly less than a majority of the

shares of our outstanding common stock;

• authorize the issuance of “blank check” preferred stock that could be issued by the Company’s Board of

Directors (the “Board”) to prevent a takeover attempt;

• authorize the classification of our Board into separate classes of directors to be elected on a staggered basis

(except that prior to the date where each share of Class B common stock automatically converts

automatically into one share of Class A common stock (the “Sunset Date”), our Board will consist of a

single class of directors each serving one year terms);

• prohibit shareholders from calling special meetings of shareholders (except that prior to the Sunset Date,

special meetings of shareholders may be called by shareholders holding a majority of the combined voting

power of our then-outstanding common stock);

• prohibit shareholder action by written consent, thereby requiring all actions to be taken at a duly called

meeting of the shareholders (except that prior to the Sunset Date, shareholder actions may be taken by

written consent in lieu of a meeting);

• require the approval of holders of at least 75% of the total combined voting power of the outstanding shares

of our common stock to amend our amended and restated by-laws and certain provisions of our amended

and restated certificate of formation (except that prior to the Sunset Date, such amendments require only the

43

affirmative vote of a majority of the voting power of our outstanding shares of stock entitled to vote

thereon); and

• provide for notice procedures that shareholders must comply with in order to nominate candidates to our

Board or to propose matters to be acted upon at a shareholders’ meeting, which may discourage or deter a

potential acquirer from conducting a solicitation of proxies to elect the acquirer’s own slate of directors or

otherwise attempting to obtain control of us.

These provisions may prevent our shareholders from receiving the benefit from any premium to the market

price of our Class A common stock offered by a bidder in a takeover context. Even in the absence of a takeover

attempt, the existence of these provisions may adversely affect the prevailing market price of our Class A common

stock if the provisions are viewed as discouraging takeover attempts in the future.

Our amended and restated certificate of formation and amended and restated bylaws may also make it difficult

for shareholders to replace or remove our management. Furthermore, the existence of the foregoing provisions, as

well as the significant voting power that our Co-Founders hold, could limit the price that investors might be willing

to pay in the future for shares of our Class A common stock. These provisions may facilitate management and board

entrenchment that may delay, deter, render more difficult or prevent a change in our control, which may not be in

the best interests of our shareholders.

Texas law may delay or prevent a change in control, and may discourage bids for our Class A common stock at a

premium over its market price.

We are subject to the provisions of Sections 21.601 through 21.610 of the Texas Business Organizations Code

(“TBOC”). These provisions prohibit large shareholders, in particular a shareholder owning 20% or more of the

outstanding voting stock, from consummating a merger or combination with a corporation during the three-year

period following their corresponding acquisition of 20% or more of the outstanding voting stock unless this

shareholder receives board approval for the transaction or the share acquisition or 66 2/3% of the shares of voting

stock not owned by the shareholder approve the merger or transaction. These provisions of Texas law may have the

effect of delaying, deferring or preventing a change in control, and may discourage bids for our Class A common

stock at a premium over its market price. These provisions do not apply to our Co-Founders.

Our amended and restated certificate of formation provides that the Business Court in the First Business Court

Division of the State of Texas will be the exclusive forum for substantially all disputes between us and our

shareholders (excluding claims under the federal securities laws), which could limit our shareholders’ ability to

obtain a favorable judicial forum for disputes with us or our directors, officers, or employees.

Our amended and restated certificate of formation provides that, unless we consent in writing to the selection of

an alternative forum, the Business Court in the First Business Court Division of the State of Texas will be the

exclusive forum for the following types of actions or proceedings under Texas statutory or common law:

• any derivative action or proceeding brought on our behalf;
• any action asserting a claim of breach of a fiduciary duty owed by any of our directors, officers or other

employees, or shareholders to us or our shareholders;

• any action asserting a claim arising pursuant to any provision of the TBOC or our amended and restated

certificate of formation and amended and restated bylaws;

• any action asserting a claim governed by the internal affairs doctrine; and
• any action asserting an “internal entity claim” as defined in the TBOC.

Any person purchasing or otherwise acquiring or holding any interest in shares of our capital stock is deemed to

have received notice of and consented to the foregoing provisions. However, this provision would not apply to suits

brought to enforce a duty or liability created by the Securities Act or Exchange Act.

44

This choice of forum provision may limit a shareholder’s ability to bring a claim in a judicial forum that it finds

more favorable for disputes with us or with our directors, officers, other employees or agents, or our other

shareholders, may discourage such lawsuits against us and such other persons, and may result in increased costs for

a shareholder to bring a claim. Alternatively, if a court were to find this choice of forum provision inapplicable to, or

unenforceable in respect of, one or more of the specified types of actions or proceedings, we may incur additional

costs.

Texas law and our amended and restated certificate of formation include provisions that may limit shareholders’

ability to bring a cause of action against our directors or officers for certain acts or omissions in their capacity as

directors or officers of the Company.

The TBOC and our governing documents include certain provisions that may limit our shareholders’ ability to

bring certain derivative claims against our officers and directors. For example, the TBOC permits corporations to

request a court, at the start of a transaction (including related party transactions) or investigation of a derivative

claim, to judicially determine the independence and disinterestedness of directors on special committees reviewing

transactions or individuals on panels reviewing derivative claims. Future challenges to independence or

disinterestedness would require new facts.

In addition, Section 21.419 of the TBOC sets forth certain presumptions concerning compliance by directors

and officers with respect to their duties to a corporation, including the duty of care and duty of loyalty as those

duties pertain to transactions with interested persons. Specifically, in taking or declining to take any action on any

matters of a corporation’s business, Section 21.419 provides that a director or officer is presumed to have acted (i) in

good faith, (ii) on an informed basis, (iii) in furtherance of the interests of the corporation and (iv) in obedience to

the law and the corporation’s governing documents. These provisions are described as codifying the “business

judgment rule.” In order to succeed in a cause of action against a director or officer, the Company or a shareholder

must rebut one or more of the foregoing presumptions and prove the director or officer’s act or omission constituted

a breach of duty as a director or officer and that such breach involved fraud, intentional misconduct, an ultra vires

act or a knowing violation of law.

The TBOC contains provisions restricting our shareholders from inspecting certain corporate books and records

unless they have held our shares for six months or own 5% of our standing shares.

Section 21.419 applies to a corporation that has a class or series of voting shares listed on a national securities

exchange or includes within its organizational documents an affirmative election to be governed by such section. In

our amended and restated certificate of formation, we have affirmatively elected, in the manner provided under the

TBOC, to be governed by Section 21.419 and any successor provision thereto.

We are a “controlled company” within the meaning of Nasdaq’s corporate governance standards and, as a result,

we qualify for, and intend to rely on, exemptions from certain corporate governance requirements. You do not

have the same protections afforded to shareholders of companies that are subject to such requirements.

Our Co-Founders have agreed to vote together as a group and control a majority of the voting power of our

outstanding common stock. As a result, we are a “controlled company” within the meaning of the corporate

governance standards of Nasdaq. Under these rules, a company of which more than 50% of the voting power is held

by an individual, group or another company is a “controlled company” and may elect not to comply with certain

corporate governance requirements, including those that would otherwise require our Board to be composed of a

majority of independent directors or to establish a compensation committee and nominating committee comprised

entirely of independent directors. While the majority of our Board are independent directors and our compensation

committee is comprised entirely of independent directors, our nomination committee is not composed entirely of

independent directors. As such, you do not have the same protections afforded to shareholders of companies that are

subject to all of Nasdaq’s rules. Our status as a controlled company could make our Class A common stock less

attractive to some investors or otherwise harm our stock price.

45

We do not anticipate paying and may not be able to pay any cash dividends to common shareholders in the

foreseeable future.

We currently intend to retain our future earnings, if any, for the foreseeable future, to fund the development and

growth of our business. We do not intend to pay any dividends to holders of our common stock. In addition, so long

as 1,561,801 shares of our perpetual preferred remain outstanding, no dividend or distribution shall be declared or

paid on our common stock without the prior consent of holders of a majority of the then-outstanding shares of

perpetual preferred. Moreover, the terms of existing or future debt agreements may preclude us from paying

dividends to common shareholders. As a result, capital appreciation in the price of our Class A common stock, if

any, will be your only source of gain on an investment in our Class A common stock.

Additional stock issuances could result in significant dilution to our shareholders.

We expect to issue additional capital stock in the future that will result in dilution to all other shareholders. For

example, we have granted, and expect to continue to grant, equity awards to employees, directors, and consultants

under our equity incentive plans. Any issuances of common stock resulting from the exercise of outstanding stock

options would be dilutive to holders of our Class A common stock. We may also raise capital through equity

financings in the future. In addition, as part of our business strategy, we may acquire or make investments in

companies, products or technologies and issue equity securities to pay for any such acquisition or investment. The

amount of dilution as a result of any of these issuances could be substantial and cause the trading price of our Class

A common stock to decline.

We have 7,809,003 shares of our perpetual preferred stock and 5,951,709 shares of our perpetual-1 preferred

stock outstanding, and the holders of the perpetual preferred retain rights that could impact the value of our

Class A common stock and impact our business and operations.

As of December 31, 2025, 7,809,003 shares of our perpetual preferred stock and 5,951,709 of our perpetual-1

preferred stock are outstanding and retain rights that could impact the value of our Class A common stock and

impact our business and operations. In the event of our liquidation, dissolution, or winding up, the holders of our

perpetual preferred will be entitled to receive out of the net assets legally available for distribution to shareholders,

after the payment of all of our debts and other liabilities, prior and in preference to any distribution of any assets to

holders of our Class A common stock, an amount per share equal to the sum of: (i) $26.26, (ii) the amount of any

accumulated and unpaid dividends and (iii) if such voluntary or involuntary liquidation, dissolution or winding up

occurs prior to (x) in the case of our perpetual preferred stock, May 5, 2027 or (y) in the case of our perpetual-1

preferred stock, June 1, 2028, an additional amount, if any, equal to the aggregate cash dividends that would have

been paid on the liquidation amount of each applicable share of perpetual preferred from and after such liquidation

date through the end of the applicable period if 100% of the dividends were paid in cash at the applicable full

dividend rate for such series of perpetual preferred (collectively, the “Liquidation Preference”). Any time on or after

May 5, 2033 and 2034, the holders of perpetual preferred have a put right to require us to repurchase up to 50% and

100%, respectively, of their shares of perpetual preferred at a price per share equal to the applicable Liquidation

Preference. Further, so long as 1,561,801 shares of our perpetual preferred remain outstanding, no dividend or

distribution shall be declared or paid on our common stock and no common stock shall be, directly or indirectly,

purchased, redeemed or otherwise acquired for consideration by the Company or any of its subsidiaries, without the

prior consent of holders of a majority of the then-outstanding shares of perpetual preferred. The market price of our

Class A common stock could be materially adversely affected by the preference rights of the perpetual preferred. For

example, consent of the holders of the then outstanding shares of perpetual preferred is required for certain corporate

actions and any amendment, alteration or repeal of a provision in our certificate of formation or bylaws that would

materially adversely affect such holders.

Our internal controls over financial reporting may not be effective and our independent registered public

accounting firm may not be able to certify as to their effectiveness, which could have a significant and adverse

effect on our business and reputation.

As a public company, we are required to comply with SEC rules that implement Section 404 of the Sarbanes-

Oxley Act and to furnish a report by management on, among other things, the effectiveness of our internal control

46

over financial reporting beginning with our first annual report on Form 10-K. In addition, our independent registered

public accounting firm is required to attest to the effectiveness of our internal control over financial reporting in our

annual report required to be filed with the SEC beginning with our second annual report on Form 10-K.

When evaluating our internal controls over financial reporting, we may identify material weaknesses that we

may not be able to remediate in time to meet the applicable deadline imposed upon us for compliance with the

requirements of Section 404 of the Sarbanes-Oxley Act. In addition, if we fail to achieve and maintain the adequacy

of our internal controls, as such standards are modified, supplemented or amended from time to time, we may not be

able to ensure that we can conclude on an ongoing basis that we have effective internal controls over financial

reporting in accordance with Section 404 of the Sarbanes-Oxley Act. We cannot be certain as to the timing of

completion of our evaluation, testing and any remediation actions or the impact of the same on our operations. If we

are not able to implement the requirements of Section 404 of the Sarbanes-Oxley Act in a timely manner or with

adequate compliance, our independent registered public accounting firm may issue an adverse opinion on internal

controls over financial reporting, and we may be subject to sanctions or investigation by regulatory authorities, such

as the SEC, and may experience a loss of public and investor confidence and litigation from shareholders. As a

result, there could be a negative reaction in the financial markets due to a loss of confidence in the reliability of our

financial statements. In addition, we may be required to incur costs in improving our internal control system and the

hiring of additional personnel. Any such action could negatively affect our results of operations and cash flows.

47

Risk Management and Strategy

Our business involves the collection, storage, transmission, and processing of confidential and sensitive

information, and our operations depend on information technology systems, communications networks, and

technology applications, including those operated by third-party service providers. Accordingly, we face

cybersecurity threats on an ongoing basis. As of the date of this 2025 Form 10-K, we are not aware of any

cybersecurity incidents or threats that have materially affected or are reasonably likely to materially affect the

Company, including its business strategy, results of operations, financial condition, and cash flows.

We have implemented, and continue to develop, various information security processes and controls designed to

identify, assess, and manage material risks from cybersecurity threats, including a written cyber incident response

plan and vulnerability management procedures. Our technical and operational safeguards include vulnerability and

risk assessments, network security and access controls, encryption of certain data, and employee cybersecurity

awareness training. Our cybersecurity program references the National Institute of Standards and Technology

cybersecurity framework (“NIST”) in developing and maintaining our cybersecurity practices. The Company is in

the process of establishing an enterprise risk management framework, and cybersecurity risk is expected to be

incorporated into that framework as it continues to develop.

We work with third parties to assist us in our cybersecurity efforts. We maintain a vendor management process

designed to evaluate cybersecurity considerations associated with third-party service providers that access our

systems or data. Depending on the nature of the services provided and the sensitivity of the information involved,

this process may include reviewing the service provider’s cybersecurity controls and risk management practices.

Cybersecurity risk management is coordinated through management and is overseen by the Board as described

below.

Governance

Our Board of Directors has ultimate oversight responsibility for the Company’s strategy and risk management,

including material risks related to cybersecurity incidents and threats. The Audit Committee of the Board of

Directors (the “Audit Committee”) assists the Board in fulfilling its oversight responsibilities with respect to

cybersecurity and information technology risks.

Our executive officers are responsible for addressing and providing guidance to management to allow the

Company to address and mitigate material risks we face, including cybersecurity risks. Among other things,

management is responsible for hiring appropriate personnel, designing and implementing cybersecurity-related

processes, communicating priorities to relevant personnel, assessing cybersecurity incidents as they arise, and

assessing and managing material risks from cybersecurity threats.

Among members of management, cybersecurity matters are overseen by our Chief Data Officer, who reports to

our Chief Executive Officer, and has significant experience in information technology. The Company has

established a formal, management-level committee (the “Cyber Committee”) with a written charter to assist the

Company in ensuring that cybersecurity incidents are assessed, evaluated, escalated, and disclosed in a timely,

accurate, compliant, and coordinated manner in accordance with applicable regulatory requirements. The Cyber

Committee initially consists of the Chief Data Officer, General Counsel, Chief Financial Officer & Chief

Accounting Officer, and other members of management as determined by the Cyber Committee.

This Cyber Committee is responsible for evaluating cybersecurity incidents and determining materiality for

disclosure purposes, in coordination with appropriate members of senior management and legal counsel. The

Company’s incident response processes are designed to facilitate timely assessment, evaluation, escalation, and

48

disclosure of cybersecurity incidents in accordance with applicable regulatory requirements and to members of

management, and if applicable, to our Board, depending on the circumstances.

Management provides the Audit Committee and the Board with periodic updates regarding cybersecurity risks

and the Company’s cybersecurity program. In the event of a significant cybersecurity incident, management’s

processes are designed to provide timely escalation to the Audit Committee and the Board outside of the regular

reporting cycle.

As of February 28, 2026, we had 393 operating locations entirely in the U.S., including 360 full-service rental

branches, 24 building materials locations, and 9 dealership sites. We also operate a manufacturing facility located in

Moberly, Missouri, and a parts distribution facility located in Fulton, Missouri. Our principal executive offices are

located in Columbia, Missouri. As of December 31, 2025, we owned approximately 4% of the locations from which

we operate our equipment rental and services operations business, with the remainder being leased. Those leases are

typically triple net leases, where the Company is responsible for the ongoing expenses of the property, including real

estate taxes, insurance, and maintenance, in addition to paying rent and utilities. Our full-service rental branches are

located in industrial and commercial zones with access to highways. The typical full-service rental branch includes a

customer reception area, an equipment parts and maintenance service area, and storage land and facilities for

equipment.

A description of legal proceedings can be found in Note 23 to our consolidated financial statements, included in

this 2025 Form 10-K in Part II Item 8—Financial Statements and Supplementary Data, and is incorporated by

reference into this Item 3.

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 352 full-service branch locations, 9 standalone dealership sites, and 24 building

materials and hardware retail stores across 45 states, with a diversified managed fleet portfolio of more than 252,000

pieces of equipment and approximately 349,000 trackers operating on our T3 platform. As of December 31, 2025,

we had 8,206 employees who support us in solving industry inefficiencies by providing smart jobsite technology, as

well as operating our equipment rental and retail and service centers.

Our rental fleet, including support vehicles and trailers, consists of equipment that we (i) own, (ii) lease as

lessee under operating lease arrangements with third-party lessors such as OEMs and financial institutions, or (iii)

lease as lessee under our OWN Program. As of December 31, 2025, 170,704 pieces of equipment were owned by us;

1,066 pieces of equipment were leased by us as a lessee under operating lease arrangements with third parties such

as OEMs and financial institutions; and 80,482 pieces of equipment were leased by us as lessee, and rented by us to

our customers, under our OWN Program. Leased equipment refers to equipment subject to operating lease contracts

with third parties such as OEMs and financial institutions in which we have contracted use of the equipment for a

defined period. OWN Program equipment refers to equipment sold to OWN Program participants and subsequently

leased back and operated by us under the OWN Program lease and revenue-sharing structure. Both leased and OWN

Program equipment are part of our equipment under management.

Our Business Activities and Operating Environment

We are engaged principally in the business of renting equipment that is managed by and fully enabled with our

T3 platform. This includes equipment that we own, lease, or is rented from third parties through our OWN Program.

Ancillary to our principal business of equipment rental and related services, we also sell used rental equipment, sell

new equipment and consumables, and offer certain services and support to our customers.

We operate our business through the following reportable segments: (i) Equipment Rental and Services

Operations, comprised of recurring activity performed at our full-service branch locations, such as equipment rentals

and related services (including allocated telematics revenue related to rental customer access to the T3 platform),

and sales of parts, supplies and maintenance services to construction contractors and others, and (ii) Equipment

Sales, comprised of sales by us of new or used equipment made at any of our branch locations and dealership sites,

including equipment sales to participants in the OWN Program. All other business activities include telematics SaaS

subscriptions, software applications, and related telematics devices purchased by customers for their owned fleet, as

well as building materials and hardware supplies.

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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.

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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 million for the year ended December 31, 2024 to $4,379 million for 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, 2023 to 267 as of December 31, 2024, an increase of 77 new

full-service equipment rental branch locations during 2024, and to 352 as 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 million and $197 million of 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, 2023 to 194,462 as of December 31, 2024 and to 252,252 units 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 million as of December 31, 2024 to $8,780 million as 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 million for 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

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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 million as of

December 31, 2024 to $8,780 million as 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 million during 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, 2025 which 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.

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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.

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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.

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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.

Results of Operations

Fiscal Year Ended December 31, 2025 Compared with Fiscal Year Ended December 31, 2024

($ in millions)

Total revenue. Our revenue was $4,379 million for the year ended December 31, 2025, compared to $3,764

million for the year ended December 31, 2024, an increase of $615 million, or 16%. Our four sources of revenues

over the period are further discussed below:

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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 million for the year ended

December 31, 2025, compared to $1,867 million for the year ended December 31, 2024, an increase of $570 million,

or 31%. Approximately $616 million of 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 267 as of December 31, 2024 to 352 as of December 31, 2025. In addition, we grew our

fleet OEC under management from $6,601 million as of December 31, 2024 to $8,780 million as of December 31,

2025, and increased the size of our fleet from 194,462 units to 252,252 units of equipment under management as of

December 31, 2024 and 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 million for the year ended December 31, 2025, compared to $1,676 million for the year ended

December 31, 2024, a decrease of $135 million, or 8%. The change was primarily due to our disciplined and

selective equipment sales into the OWN Program, resulting in a decrease of $178 million in 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 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 $447 million of our total

equipment sales revenue for the year ended December 31, 2025 and, 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 million for the year ended December 31, 2025, compared

to $157 million for 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 267 locations as of December 31, 2024 to 352 locations as of

December 31, 2025. Equipment parts, supplies, and services revenue increased $73 million from mature branch

locations primarily attributed to the expansion of our product and service offering in mature branch locations, and

$42 million from new branch locations open less than 24 months as a result of the addition of 85 full-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

million for the year ended December 31, 2025, compared to $32 million for 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 million for the year ended December 31, 2025, compared to $32 million for the year ended December 31, 2024,

an increase of $31 million primarily attributable to the addition of 9 building materials and hardware retail stores.

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Cost of revenues. Cost of revenues was $3,140 million for the year ended December 31, 2025, compared to

$2,818 million for the year ended December 31, 2024, an increase of $322 million, or 11%.

Direct operating costs. Direct operating costs were $799 million for the year ended December 31, 2025,

compared to $663 million for 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 85 full-

service branch locations, which increased from 267 locations as of December 31, 2024 to 352 locations as of

December 31, 2025, partially offset by a decrease in equipment operating lease expense of $59 million due 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 million for the year ended December 31, 2025

compared to $420 million for the year ended December 31, 2024, an increase of $294 million, or 70%.

Approximately $302 million of the increase is attributed to the growth of the average fleet OEC under management

enrolled in the OWN Program, which grew from $2,292 million in 2024 to $3,944 million in 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 million for the year ended

December 31, 2025, compared to $1,400 million for 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 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 267 as of December 31,

2024 to 352 as of December 31, 2025, also contributed to the increase in equipment sales cost of revenues.

Platform expense. Platform expense was $68 million for the year ended December 31, 2025, compared to $30

million for the year ended December 31, 2024, an increase of $38 million primarily 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 million for 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 million for 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 million in selling, general and administrative expense associated

with higher payroll, benefits and travel costs. Our expansion of full-service locations also resulted in higher facilities

and non-rental vehicles lease expense and associated costs of $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 million and other miscellaneous administrative expenses by $23

million.

Interest expense, net. Interest expense, net, was $285 million for the year ended December 31, 2025, compared

to $261 million for 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.

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Total other expense, net. Total other expense, net, was $243 million for the year ended December 31, 2025,

compared to $212 million for the year ended December 31, 2024, an increase of $31 million, or 15%. This increase

was primarily due to higher interest expense of $24 million for 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 $8 million 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 million due 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 million for the year ended December 31,

2025, compared to $3 million for 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 million for the year ended December 31, 2025,

compared to the year ended December 31, 2024.

Net income. Net income increased by $37 million to $40 million for the year ended December 31, 2025, as

compared to net income of $3 million for the year ended December 31, 2024, due to $79 million of higher operating

income, partially offset by $31 million of higher total other expense, net and $11 million of higher income tax

expense.

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Results of Operations

Fiscal Year Ended December 31, 2024 Compared with Fiscal Year Ended December 31, 2023

($ in millions)

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

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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%.

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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

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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.

Key Performance Metrics

We regularly review a number of financial measurements and operating metrics to evaluate our operating

performance, measure our growth and make strategic investment decisions. In addition to traditional U.S. generally

accepted accounting principles (“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:

(in millions)

(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

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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.

(in millions)

(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 million for 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 million for 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, 2025 and December 31,

2024 was $3,740 million and $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, 2025 consisted of 252,252 units having

an OEC of $8,780 million and an average age of 31 months, and as of December 31, 2024 consisted of 194,462 units

having an OEC of $6,601 million and an average age of 29 months.

Fleet Composition. Our equipment rental fleet from which we support and generate our equipment rental

revenue is summarized in the tables below:

(in millions)

(in millions)

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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, 2025 and 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.

Business Segments

We operate our business through the following reportable segments: (i) Equipment Rental and Services

Operations, comprised of recurring activity performed at our full-service branch locations, such as equipment rentals

and related services (including allocated telematics revenue related to rental customer access to the T3 platform),

and sales of parts, supplies and maintenance services to construction contractors and others, and (ii) Equipment

Sales, comprised of sales by us of new or used equipment made at any of our branch locations and dealership sites,

including equipment sales to participants in the OWN Program. All other business activities include telematics SaaS

subscriptions, software applications, and related telematics devices purchased by customers for their owned fleet, as

well as building materials and hardware supplies. These segments are based upon how we allocate resources and

assess performance. For additional information about our business segments, see Note 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 352 full-service branch locations and 9 dealership 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.

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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):

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(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 million for 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 million for 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, 2025 Compared with Fiscal Year Ended December 31, 2024

Equipment Rental and Services Operations. Revenue for our Equipment Rental and Services Operations

segment was $2,724 million for the year ended December 31, 2025, compared to $2,035 million for the year ended

December 31, 2024, an increase of $689 million, or 34%. Approximately $616 million of the increase is attributed to

the growth in fleet OEC under our management from $6,601 million as of December 31, 2024 to $8,780 million as

of December 31, 2025, and the corresponding increase in our fleet size from 194,462 units to 252,252 units of

equipment under our management as of December 31, 2024 and 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 267 as of December 31, 2024, to 352 as 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 million and $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 million for

the year ended December 31, 2025, compared to $816 million for 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 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 $6,601 million as of December 31, 2024 to

$8,780 million as of December 31, 2025, and the corresponding increase in our fleet size from 194,462 units to

252,252 units of equipment under our management as of December 31, 2024 and 2025, respectively, driven by

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OWN Program demand. The increase in segment total revenues was offset by increases of $195 million in segment

cost of revenues and $171 million in segment selling, general and administrative expenses.

Equipment Sales. Revenue for our Equipment Sales segment was $1,541 million for the year ended

December 31, 2025, compared to $1,676 million for 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):

(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 million and $352 million, respectively.

The decrease in equipment sales of $135 million is primarily attributed to lower sales of $178 million in

construction equipment to existing and new participants in our OWN Program. Sales of new and used equipment

from our full service branch locations to contractors and other end users increased $55 million, primarily attributed

to our site expansion, and was offset by a decrease of $12 million of new equipment sold to customers from our

dealership locations.

Segment Adjusted EBITDA for our Equipment Sales segment was $276 million for the year ended

December 31, 2025, compared to $247 million for the year ended December 31, 2024, an increase of $29 million, 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 million for the year ended December 31, 2025, compared to

$53 million for the year ended December 31, 2024, an increase of $61 million, or 115%. This increase was primarily

due to an increase of $30 million in telematics SaaS subscriptions, applications, and related telematics devices, as

well as an increase of $31 million in sales of building materials, small tools, and hardware supplies due to our

expansion of 9 hardware stores during the year ended December 31, 2025. Segment loss for our all other activities

was $13 million for the year ended December 31, 2025, compared to $8 million for the year ended December 31,

2024, an increase of $5 million, or 63%, primarily due to the increase of $28 million in selling, general and

administrative expenses, including employee compensation, technology costs, professional service fees, and

insurance expenses which were allocated to all other activities based on employee headcount, 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.

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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

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):

(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.

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Liquidity and Capital Resources

Overview

Our primary liquidity needs include funding our growth, payment of operating expenses, purchases of rental

equipment to be used in our operations, servicing of debt, and funding acquisitions.

Our future contractual obligations are further discussed in “—Contractual Obligations and Commitments”

below. 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 million and net excess

availability of $1,039 million under 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:

(in millions)

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Net Cash Provided by Operating Activities

For the years ended December 31, 2025 and 2024, net cash provided by our operating activities was $264

million and $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 million for the year ended December 31, 2025, as compared 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, 2025 and 2024, net cash used in our investing activities was $980 million and

$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 million and $1,323 million for the years ended December 31, 2025 and 2024, an

increase in by cash used for the purchases of rental equipment, which was $1,780 million for the year ended

December 31, 2025, and $1,586 million for the year ended December 31, 2024, and an increase in cash used for the

purchases of properties and other fixed assets which was $248 million for the year ended December 31, 2025, and

$195 million for the year ended December 31, 2024. For the years ended December 31, 2025 and 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 million and $102 million for the year ended December 31, 2025 and 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 million for the year ended December 31, 2024, an increase of 170%. Net cash provided by financing activities

was positively impacted by net proceeds of $2,357 million from the issuance of long-term debt for the year ended

December 31, 2025, and net proceeds of $2,436 million from the issuance of long-term debt for the year ended

December 31, 2024. This was offset partially by using $1,679 million in cash to repay long-term debt and finance

leases, as well as $19 million in cash for financing obligations for the year ended December 31, 2025, and 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.

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

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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.

(in millions)

(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 million for the year ended December 31, 2025, compared

to $263 million for 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.

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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 million and 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 million of standby letters of credit were issued and outstanding with a third-party

financial institution.

Covenants

Our ABL Credit Facility contains a number of covenants that, among other things, limit or restrict our ability to

dispose of assets, incur additional indebtedness, incur guarantee obligations, prepay certain indebtedness, make

certain restricted payments (including paying dividends, redeeming stock or making other distributions), create liens,

make investments, make acquisitions, engage in mergers, fundamentally change the nature of our business, or

engage in certain transactions with certain affiliates. Under the terms of our ABL Credit Facility, we are not subject

to ongoing financial maintenance covenants; however, under the ABL Credit Facility, failure to maintain certain

levels of liquidity will subject us to a contractually specified fixed charge coverage ratio of not less than 1:1 for the

four quarters most recently ended. As of 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

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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 passu in right of payment to all of our and any guarantor’s existing and future senior

indebtedness, including indebtedness under the ABL Credit Facility, our 2032 Notes (as defined below) 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),

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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.

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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 $124 million.

Contractual Obligations and Commitments

The following table summarizes our long-term contractual obligations and commitments as of December 31,

(In millions)

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

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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.

We are exposed to a variety of market risks, primarily related to the effects of changes in interest rates

(including credit spreads) and fluctuations in fuel prices. We manage our exposure to these market risks through our

regular operating and financing activities and, when deemed appropriate, through the use of derivative financial

instruments. Derivative financial instruments are viewed as risk management tools and have not been used for

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speculative or trading purposes. In addition, derivative financial instruments are entered into with a major financial

institution in order to manage our exposure to counterparty nonperformance on such instruments.

Interest Rate Risk

We have assessed our exposure to changes in interest rates by analyzing the sensitivity to our earnings assuming

various changes in market interest rates. Assuming a hypothetical increase of one percentage point in interest rates

on our ABL Facility as of December 31, 2025, our pre-tax earnings would decrease by an estimated $7 million over

a 12-month period. We terminated certain interest rate swap agreements in connection with the entry into the ABL

Credit Facility.

Commodity Price Risk

The cost of logistics and transportation fluctuates in large part due to the price of oil and demand trends. Any

fluctuations in our transportation costs in excess of amounts we charge to customers, including the cost of delivery

and pick up of construction equipment, could harm our gross profits and margins. If we are unable to successfully

mitigate a significant portion of commodity price increases or fluctuations, our results of operations could be

harmed. A 10% increase in our transportation costs, if not recovered through higher charges to our customers, would

have resulted in a change to cost of revenues of approximately $15 million, $10 million, and $7 million for the years

ended December 31, 2025, 2024, and 2023, respectively.

Foreign Currency Risk

We employ a limited number of software engineers domiciled in the United Kingdom (the “UK”). As a result,

we have foreign currency risk exposure to exchange rate fluctuations, primarily with respect to payroll, employee

benefits, lease expense, and other costs incurred and paid in British Pounds. During the year ended December 31,

2025, the total costs incurred by our subsidiary in the UK was not material to our operating results. Based on the size

of our subsidiary in the UK, we do not believe that a 10% change in the British Pound exchange rate would have a

material impact on our earnings. We do not engage in purchasing forward exchange contracts for speculative

purposes.

79

Evaluation of Disclosure Controls and Procedures

Our disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) are

designed to ensure that information required to be disclosed by us in reports we file or submit under the Exchange

Act, as amended, is recorded, processed, summarized and reported within the appropriate time periods, and that such

information is accumulated and communicated to our management, including our Chief Executive Officer and Chief

Financial Officer, as appropriate, to allow timely discussions regarding required disclosure.

In designing and evaluating our disclosure controls and procedures, management recognizes that any disclosure

controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of

achieving the desired control objectives. In addition, the design of disclosure controls and procedures must reflect

the fact that there are resource constraints, and that management is required to apply its judgment in evaluating the

benefits of possible controls and procedures relative to their costs.

We, under the supervision of and with participation of our management, including our Chief Executive Officer

and Chief Financial Officer, have evaluated the effectiveness of our disclosure controls and procedures. Based on

that evaluation, our Chief Executive Officer and Chief Financial Officer concluded that the design and operation of

our disclosure controls and procedures were effective as of December 31, 2025.

Management’s Annual Report on Internal Control Over Financial Reporting

This 2025 Form 10-K does not include a report of management’s assessment regarding internal control over

financial reporting or an attestation report of our independent registered public accounting firm due to a transition

period established by rules of the SEC for newly public companies.

Changes in Internal Control Over Financial Reporting

There has been no change in our internal control over financial reporting during the fiscal quarter ended

December 31, 2025 that has materially affected, or is reasonably likely to materially affect, our internal control over

financial reporting.