EquipmentShare.com Inc

1. BUSINESS

EquipmentShare.com Inc and subsidiaries (“EquipmentShare” or the “Company”) was organized in 2014 and

commenced operations on January 1, 2015. Effective June 30, 2025, EquipmentShare.com Inc changed its

jurisdiction of incorporation from the state of Delaware to the state of Texas.

The Company 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 the Company and its rental customers the

ability to track mixed fleets, maximize utilization, reduce unplanned downtime, streamline maintenance, and

improve jobsite security and operator accountability.

The Company utilizes its proprietary T3 platform in its 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 the Company’s 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 the Company manages the owner’s equipment utilizing the T3 platform. At the

end of the sharing period under the OWN Program, the Company may assist the owner with remarketing services if

the equipment is to be sold in the market as used construction equipment. The Company also offers several add-on

services to the owner of the equipment.

In addition to equipment rentals, the Company also offers 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 the Company’s equipment rental and services

operations. The Company offers new and used equipment for sale to customers. Separately, the Company offers

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. The Company develops and enhances these tools and services with input from customers. The

Company also retails building materials and hardware supplies to customers.

As of March 31, 2026, the Company had 371 full-service branches,9 dealership sites, and 27 building materials

and hardware retail stores located across 45 states in the U.S. The Company’s full-service, technology-enabled

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

Company’s 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. The Company is an authorized

dealer for JLG, Takeuchi, Skyjack, Genie, and other major brands of construction and aerial equipment, and offers

equipment rentals, parts, and services.

Initial Public Offering

On January 26, 2026, the Company completed its initial public offering (“IPO”) of 30.5 million shares of the

Company’s Class A common stock at a price of$24.50, resulting in gross proceeds of$747 million and net proceeds

of$706 million after deducting underwriting discounts and commissions. In connection with the IPO, the Company

capitalized$14 million of equity issuance costs. The Company intends to use the net proceeds of the offering for

general corporate purposes.

Immediately prior to the completion of the IPO, the Company’s certificate of formation, bylaws, and investors’

rights agreement were amended and restated, resulting in, among other things, all shares of the Company’s common

stock, including shares of common stock issued upon the automatic conversion of the Company’s preferred stock

(other than shares of perpetual preferred stock which remain outstanding) being reclassified into shares of Class A

common stock, and immediately thereafter all shares of Class A common stock then held by the Company’s Chief

Executive Officer or President (the “Founders”) were exchanged into an equivalent number of shares of Class B

common stock. Additionally, shares of Class A common stock will be issuable upon exercise or vesting of all

outstanding options and restricted stock units, as applicable, except that Class B shares will be issuable upon

exercise or vesting of options and restricted stock units held by the Founders and upon vesting of performance stock

units (“PSUs”) granted to the Founders (see IPO Founders Awards below).

Concurrent with the IPO, all outstanding shares of the Company’s convertible preferred stock were

automatically converted into 142 million shares of Class A common stock. Following the completion of the IPO, the

Company had 3,500 million of authorized shares of Class A common stock and approximately 215 million shares of

Class A common stock issued and outstanding, along with 200 million of authorized shares of Class B common

stock and approximately 38 million shares of Class B common stock issued and outstanding.

Following the completion of the IPO, the Class B common stock (which is held by the Founders who have

agreed to vote together as a group) represented more than 80% of the total voting power of the outstanding common

stock and, as a result, the Company is considered to be a “controlled company” within the meaning of Nasdaq

corporate governance standards.

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Basis of Presentation: The accompanying unaudited condensed consolidated financial statements have been

prepared in accordance with generally accepted accounting principles (“U.S. GAAP”) for interim financial

information. Accordingly, certain information and footnote disclosures required by U.S. GAAP for complete

financial statements have been condensed or omitted in accordance with Securities and Exchange Commission

(“SEC”) rules and regulations. In the opinion of the Company, the accompanying unaudited condensed consolidated

financial statements contain all adjustments, consisting of only normal recurring adjustments, necessary for a fair

statement of its financial position as of March 31, 2026, and its results of operations, changes in perpetual preferred

stock and equity, and cash flows, for the three months ended March 31, 2026 and 2025. Interim results of operations

are not necessarily indicative of the results of the full year.

These unaudited condensed consolidated financial statements should be read in conjunction with the Company’s

Annual Report on Form 10-K for the year ended December 31, 2025 (the “2025 Form 10-K”). The Company’s

significant accounting policies are described in Note 2 of the Company’s Audited Consolidated Financial Statements

as of and for the year ended December 31, 2025. There have been no significant changes to those accounting

policies in the Company’s preparation of the accompanying condensed consolidated financial statements as of and

for the three months ended March 31, 2026.

Use of estimates: Management used estimates and assumptions in preparing these financial statements in

accordance with U.S. GAAP. Those estimates and assumptions affect the reported amounts of assets and liabilities,

the disclosures of contingent assets and liabilities, and the reported revenues and expenses. As future events and

their effects cannot be determined with precision, actual results could differ from the estimates that were used.

Recently Adopted Accounting Pronouncements

Measurement of Credit Losses for Accounts Receivable and Contract Assets: In July 2025, the FASB issued

ASU 2025-05, which provides optional guidance relating to the estimation of expected credit losses on current

accounts receivable and current contract assets. This guidance permits entities to apply a practical expedient when

estimating credit losses that assumes that current conditions as of the balance sheet date do not change for the

remaining life of the asset. Effective January 1, 2026, the Company began applying the practical expedient when

estimating credit losses on a prospective basis. The adoption of this guidance did not have a material impact on the

Company’s consolidated financial statements and related disclosures.

Accounting Pronouncements Issued, Not Yet Adopted

Disaggregation of Income Statement Expenses: In November 2024, the FASB issued ASU 2024-03, which is

intended to improve the disclosures about a public entity's expenses and address requests from investors for more

detailed information about the types of expenses in commonly presented expense captions. The guidance is effective

for fiscal years beginning after December 15, 2026, and interim periods within fiscal years beginning after

December 15, 2027. Early adoption is permitted for annual financial statements that have not yet been issued or

made available for issuance. ASU 2024-03 should be applied on a prospective basis, but retrospective application is

permitted. The Company is currently evaluating the potential impact of adopting this new guidance on its

consolidated financial statements and related disclosures.

Improvements to the Accounting for Internal-Use Software: In September 2025, the FASB issued ASU

2025-06, which amends the guidance in ASC 350-40, Intangibles - Goodwill and Other - Internal-Use Software. The

amendments modernize the recognition and disclosure framework for internal-use software costs, removing the

previous “development stage” model and introducing a more judgment-based approach. ASU 2025-06 is effective

for fiscal years beginning after December 15, 2027, with early adoption permitted. The Company is currently

evaluating the potential impact of ASU 2025-06 on its consolidated financial statements and related disclosures.

Interim Reporting - Narrow Scope Improvements: In December 2025, the FASB issued ASU 2025-11, which

clarifies interim disclosure requirements and the applicability of ASC 270, Interim Reporting. The objective of the

amendment is to provide further clarity about the current interim disclosure requirements. ASU 2025-11 is effective

for interim reporting periods within annual reporting periods beginning after December 15, 2027, with early

adoption permitted. The Company is currently evaluating the potential impact of ASU 2025-11 on its interim

reporting requirements in the future.

Codification Improvements: In December 2025, the FASB issued ASU 2025-12, which updates U.S. GAAP for

a broad range of topics arising from technical corrections, unintended application of the codification, clarifications,

and other minor improvements. The guidance is effective for fiscal years beginning after December 15, 2026, and

interim reporting periods within those annual reporting periods, with early adoption permitted. The Company is

currently evaluating the potential impact of ASU 2025-11 on its consolidated financial statements and related

disclosures.

3. ACCOUNTS RECEIVABLE, NET

Accounts receivable, net, consist of the following (In millions):

4. INVENTORY

Inventories consist of the following (In millions):

5. RENTAL EQUIPMENT, NET

Rental equipment, net, consist of the following (In millions):

The Company recognized depreciation expense of$82 million and$67 million for the three months ended

March 31, 2026 and 2025, respectively, included within depreciation and amortization as a component of cost of

revenues on the condensed consolidated statements of operations.

6. PROPERTY AND OTHER FIXED ASSETS, NET

Property and other fixed assets, net, consist of the following (In millions):

The Company recognized depreciation expense of$14 million and $9 million, for the three months ended

March 31, 2026 and 2025, respectively, included in selling, general and administrative expenses on the condensed

consolidated statements of operations.

7. CAPITALIZED SOFTWARE, NET

Capitalized software, net, consists of the following (In millions):

The Company recognized amortization expense of$7 million and$4 million for the three months ended

March 31, 2026 and 2025, respectively, included within depreciation and amortization as a component of cost of

revenues on the condensed consolidated statements of operations.

8. ACCRUED LIABILITIES

Accrued liabilities consist of the following (In millions):

9. LONG-TERM DEBT AND LINES OF CREDIT

The Company had the following outstanding amounts of long-term debt (In millions):

ABL Credit Facility

During 2021, the Company entered into an asset-based lending facility (the “ABL Facility”). On November 26,

2025, the Company refinanced existing borrowings under the ABL Facility by entering into a new senior secured

asset-based revolving credit facility (the “ABL Credit Facility”). The ABL Credit Facility has a 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 bear interest at a rate (at the Company’s election) equal to either (i) the

Secured Overnight Financing Rate (“SOFR”) plus a spread between 112.5 to 137.5 basis points or (ii) the greatest of

(a)0%, (b) the Federal Funds Rate in effect on such day plus 50 basis points, (c) the SOFR for a one month tenor in

effect on such day (to the extent ascertainable), plus 100 basis points, and (d) the Prime Rate plus (y) a spread

between 12.5 basis points and 37.5 basis points. In connection with the refinancing, the Company expensed$8

million of previously capitalized debt issuance costs relating to certain lenders under the ABL Facility who exited

the syndicate, and included in loss on debt extinguishment on the consolidated statements of net income.

Additionally, in connection with the refinancing, the Company capitalized$9 million of debt issuance costs.

The ABL Credit Facility contains negative covenants that permit, subject to certain defined conditions, the

Company to, among other things, (i) incur additional indebtedness or engage in certain other types of financing

transactions, (ii) allow certain liens to attach to assets, (iii) repurchase, or pay dividends, or make certain other

restricted payments on, capital stock and certain other securities, subject to applicable caps, (iv) prepay certain

indebtedness and (v) make certain acquisitions and investments. Under the ABL Credit Facility, there is one

financial covenant that will only apply in the future if excess availability under the ABL Credit Facility falls below

the greater of 10 percent of the maximum borrowing amount under the ABL Credit Facility or$175 million. As of

March 31, 2026, availability under the ABL Credit Facility exceeded this threshold and, as a result, the financial

covenant was not applicable.

As of March 31, 2026, the Company had$999 million outstanding under the ABL Credit Facility bearing

interest at the SOFR of 4.80%, included in long-term debt on the condensed consolidated balance sheets.

The ABL Credit Facility provides available “borrowing capacity” (the maximum borrowing permitted,

assuming there is sufficient collateral as identified under the ABL Facility) and “net excess availability” (the amount

of additional debt the Company could borrow based on the existing borrowing base). As of March 31, 2026, the

Company had a borrowing base, as defined in the ABL Credit Facility, of$2,280 million. After outstanding

borrowings and letters of credit, the net excess availability at March 31, 2026, as defined in the ABL Credit Facility,

was$1,276 million, of which the Company could borrow up to$1,048 million without any additional repayment

conditions.

Other

Certain note agreements between the Company and various institutions contain restrictions and financial

covenants, including maintaining an adjusted fixed charge coverage ratio of 1.15 to 1.00 and a net funded debt to

adjusted EBITDA ratio of 6.00 to 1.00. As of March 31, 2026, the Company was in compliance with those

restrictions and financial covenants.

Asof March 31, 2026 the Company had$6 million of letters of credit outstanding with financial institutions

secured by line of credit availability. The letters of credit automatically renew annually unless the Company gives

notice to the financial institution to terminate the letter of credit.

10. LEASES

Leasing Activities – Lessee:

Lease arrangements with OWN Program participants: Under the OWN Program, the Company leases

equipment owned by participants. The Company accounts for these arrangements as a lease under FASB Accounting

Standards Codification (“ASC”) Topic 842, Leases (“Topic 842”) whereby the Company is the lessee.

Lease arrangements with other parties: The Company, as a lessee, also leases properties, vehicles, certain

equipment used in its operations from parties not participating in the OWN Program, and aircraft under various

operating and finance leases.

The leases are noncancellable and expire on various terms through 2040. There are no material payments for

leases that have not yet commenced.

The following table presents the components of the Company’s lease costs and the classification of such costs in

the condensed consolidated statements of operations (In millions):

11. COMMON STOCK AND EQUITY PLANS

Initial Public Offering

Concurrent with the IPO, all outstanding shares of the Company’s convertible preferred stock were

automatically converted into 142 million shares of Class A common stock. As of March 31, 2026, the Company had

3,500 million authorized shares of Class A common stock and approximately 215 million shares of Class A common

stock issued and outstanding, along with 200 million authorized shares of Class B common stock and approximately

38 million shares of Class B common stock issued and outstanding.

Employee Stock Purchase Plan

In connection with the IPO, the Company adopted the EquipmentShare.com 2025 Employee Stock Purchase

Plan (the “ESPP”). The maximum number of shares initially available for issuance under the ESPP is 2,316,263

shares of common stock and will be increased on the first day of each fiscal year for a period of up to 10 years

following the effective date of the ESPP in an amount equal to the least of (i)12,000,000 shares; (ii)1% of the total

number of shares of the Company’s Class A and Class B common stock outstanding as of the last completed fiscal

year; and (iii) such number of shares as determined by the Company’s Board of Directors (the “Board”) in its

discretion. The number of shares available at any time under the ESPP is subject to adjustment in the event of a

dividend or other distribution (other than an ordinary dividend or distribution), recapitalization, stock split, reverse

stock split, reorganization, merger, consolidation, split-up, spin-off, combination, repurchase or exchange of shares

or other securities of the Company, or other change in the Company’s structure affecting the shares occurs. The

number of shares which a participant may purchase in an offering under the ESPP may be reduced if the offering is

over-subscribed. The Company didnot grant any shares of common stock pursuant to the ESPP during the three

months ended March 31, 2026.

2025 Omnibus Incentive Plan

In connection with the IPO, the Company also adopted the EquipmentShare.com Inc 2025 Omnibus Incentive

Plan (the “2025 Plan”). Awards under the 2025 Plan include stock options, stock appreciation rights, restricted

stock, restricted stock units, performance awards, other cash-based awards and other stock-based awards

(collectively, the “Awards”). The total number of shares of the Company’s common stock initially authorized for

issuance under the 2025 Plan is 40,370,162 shares of common stock and this amount will be increased on January 1

of each year following the effective date of the 2025 Plan for a period of 10 years in an amount equal to the lesser of

(i)1% of outstanding shares on the last day of the immediately preceding fiscal year and (ii) such number of shares

as determined by the Compensation Committee of the Board in its sole discretion. The Awards granted pursuant to

the 2025 Plan will be issued with respect to shares of Class A common stock of the Company, other than the IPO

Founders Awards. As of March 31, 2026, there wereno options issued and outstanding under the 2025 Plan.

IPO Founders Awards

In connection with the IPO, the Board approved grants of PSUs to each of the Founders under the 2025 Plan

that could result in the issuance, to each of the Founders, of as few aszero shares of the Company’s Class B

common stock and up to 18,321,644 shares of Class B common stock. Each of the IPO Founders Awards was

granted on January 26, 2026 (the “Grant Date”) and is comprised of five tranches of PSUs as set forth in the table

below, the vesting of which are subject to service conditions and market conditions, including the Company

achieving specified stock price hurdles, as set forth in the table below and subject to anti-dilution adjustments,

during the performance period beginning on the first day following the expiration of the lock-up period set forth in

the Company’s agreement with its underwriters in connection with the IPO (or, with respect to tranche 1, beginning

on January 27, 2026) and ending on the earliest to occur of (i) the tenth anniversary of the Grant Date, (ii) a change

in control (as defined in the 2025 Plan) or (iii) the date on which the shares of the Company’s Class A common

stock are no longer traded on a securities exchange or market. Achievement of the applicable stock price hurdle for

any PSU tranche will occur on the date that the average closing price per share of the Company’s Class A common

stock during any 60 consecutive trading days during the performance period equaled or exceeded the applicable

stock price hurdle for such tranche, except that achievement of the stock price hurdle for tranche 1 occurred on

January 27, 2026, the date that the closing price per share of the Company’s Class A common stock during the

performance period equaled or exceeded the stock price hurdle for such tranche. Any PSUs for which the applicable

stock price hurdle is not achieved prior to the end of the performance period will be forfeited in their entirety.

The fair value of the IPO Founders Awards was estimated as of the Grant Date using Monte Carlo simulations

with thefollowing assumptions:

The Company historically has not paid dividends on common stock and has no plans to issue dividends in the

foreseeable future. The expected volatility assumption used to estimate the Grant Date fair value of each tranche of

the award was based on theaverage historical volatility of comparable entities with publicly traded shares. The risk-

free rate for the requisite service period for each tranche was based on the U.S. Treasury yield curve as of the Grant

Date.

The Grant Date fair value of the IPO Founders Awards was $624 million. Stock-based compensation expense of

$17 million was recorded for the IPO Founders Awards during the three months ended March 31, 2026, and is

included in selling, general and administrative expenses in the condensed consolidated statements of operations. As

of March 31, 2026, the unrecognized stock-based compensation expense yet to be recognized over the vesting period

was $73 million in 2026, $98 million in 2027, $98 million in 2028, $98 million in 2029, $52 million in 2030, and

$189 million thereafter. The weighted average remaining life was 7.5 years as of March 31, 2026.

2016 Equity Incentive Plan

During 2016, the Company created the 2016 Equity Incentive Plan (“2016 Plan”), which allows for the issuance

of options to purchase shares of EquipmentShare common stock. The employees eligible to participate in the plan

are determined by the plan’s committee. Options are issued with an exercise price equal to the fair value of the

Company’s common stock and with vesting conditions as determined by the plan’s committee. Option awards with

time-based vesting conditions generally range from 12 to 48 months. Option awards with service, performance, and/

or market conditions, as defined, vest when those milestones are achieved (the “milestone-based awards”). Options

are generally forfeited upon termination or when performance or market conditions are not met, and forfeitures are

accounted for as they occur.

Stock Options

As of March 31, 2026, the Company has a total of 22,525,256 options authorized. There were 9,723,781 options

issued and outstanding 5,474,473 options were exercised or cancelled and not returned to the pool as of March 31,

2026, and 7,327,002 options available for issuance transferred to the 2025 Plan.

Stock-based compensation expense of$1 million and$1 million was recorded for vested time-based options

during the three months ended March 31, 2026 and 2025, respectively, and is included in selling, general and

administrative expenses in the condensed consolidated statements of operations. As of March 31, 2026, the

unrecognized stock-based compensation expense yet to be recognized over the vesting period was$6 million. The

weighted average remaining life of the outstanding stock options was 1.6 years as of March 31, 2026.

No milestone-based awards were granted during the three months ended March 31, 2026 or 2025. No stock

compensation expense for milestone-based option awards was recognized during 2025 or 2026. The Company had

320,000 unvested milestone-based option awards granted in 2022 outstanding as of March 31, 2026. If the 2022

award milestones, as defined, are not achieved by January 31, 2032, then these unvested options will be forfeited.

The Company hasnot recognized stock compensation expense for these unvested stock options granted during 2022

as of March 31, 2026 because, for accounting measurement purposes, it is not highly probable that the performance

conditions will be achieved. The estimated unrecognized stock-based compensation expense to be recognized if and

when the performance conditions are considered highly probable of being achieved could be up to$0.4 million for

the 2022 awards as of March 31, 2026. The average remaining life of the outstanding milestone-based stock option

awards was 5.8 years for the 2022 awards as of March 31, 2026.

RSUs

The Company issued performance-based restricted stock units (“RSUs”) under the 2016 Plan with two-tiered

vesting conditions which include a service requirement and a liquidity event requirement. The service condition of

the RSUs will be met provided the participant is in continuous service over the defined period of time generally 12

to 48 months. The liquidity event requirement was satisfied on the effective date of the IPO. RSUs shall be settled

no later than March 15 of the calendar year following the calendar year in which each vesting event occurs. Upon

the consummation of the IPO, the performance-based vesting conditions for outstanding RSUs was satisfied. As a

result, the RSUs that had satisfied the service-based condition date had vested. For the three months ended March

31, 2026, the Company recognized$2 million of stock-based compensation expense attributable to RSUs. No stock-

based compensation expense attributable to RSUs was recognized for the three months ended March 31, 2025, as the

performance-based vesting condition had not been satisfied at that time. As of March 31, 2026, the unrecognized

stock-based compensation expense yet to be recognized over the vesting period was$3 million. The weighted

average remaining life of the outstanding RSUs was 1.2 years as of March 31, 2026.

12. REVENUE RECOGNITION

The Company recognizes revenue in accordance with two accounting standards: (1) Topic 842, which addresses

lease accounting, and (2) Topic 606, which addresses revenue from contracts with customers.

The following table disaggregates the Company’s revenue based on type and the applicable accounting standard

(In millions):

(1)For the three months ended March 31, 2026 and 2025, equipment sales to OWN Program participants were$102 million and$95 million,

respectively. For the three months ended March 31, 2026 and 2025, equipment sales to contractors and other end users were$77 million and

$50 million, respectively.

The Company's Equipment Rental and Services Operations segment revenue (see Note 18) is comprised of

equipment rental and related services and equipment parts, supplies, and services revenue presented in the table

above.

The disaggregation of the Company's revenue from contracts to customers as reflected above, coupled with the

reportable segment disclosures (see Note 18), depicts how the nature, amount, timing and uncertainty of the

Company's revenue and cash flows are affected by economic factors.

Equipment rental sublease income was$351 million and$245 million for the three months ended March 31,

2026 and 2025, respectively.

Revenue for lease arrangements with customers (Topic 842)

Equipment rental revenue: The Company is in the business of renting equipment that is owned by the Company

or rented from vendors, contractors, and others and then re-rented to the Company’s third-party customers. Such

arrangements are accounted for as operating leases with the Company as a lessor and governed by the standard

rental contract.

As a lessor of rental equipment to customers, revenue is recognized in the period earned on a straight-line basis

over the contract term, regardless of timing of billing to customers. A rental contract term can be daily, weekly, or

monthly (28 days), and is billed when the monthly rental charge is achieved, or at the completion of the rental

contract, whichever is sooner. From time to time, the Company provides an option for the lessee to purchase the

rented equipment at the end of the lease, however, the Company doesnot generate material revenue from sales of

equipment under such rental purchase option arrangements.

Equipment rental revenue includes revenue generated by the Company, as a sublessor, from equipment that is

owned by others who are participants in the Company’s OWN Program. Under the OWN Program, the owner’s

equipment is fully enabled with the Company’s T3 telematics and placed on the Company’s platform to be rented.

Rental revenue generated while the equipment is rented to the Company’s customers is shared between the

Company and the owner of the equipment. The Company may also provide other services under the OWN Program,

such as maintenance, insurance, and remarketing services. Rental revenue generated from the OWN Program is

divided between the Company and the owner of the equipment, and for the duration of the arrangement the

Company manages the owner’s equipment utilizing the T3 operating system.

Ancillary and other equipment rental revenues: Delivery fees charged are variable, based on the type of

equipment being delivered, the requested delivery time, the distance of the delivery and other relevant

considerations. Delivery occurs before the rental period begins and, therefore, delivery fees charged are recognized

over the monthly rental period.

Other equipment rental revenue is primarily comprised of (i) revenue generated from customers who purchase

rental insurance coverage to protect against potential damages or loss to the equipment rented and (ii) environmental

fees assessed on the rental asset. Rental insurance coverage revenue is recognized as revenue in the period earned on

a straight-line basis over the contract term, regardless of timing of billing to customers. Environmental fee revenue

is recognized in the period earned on a straight-line basis over the contract term.

Revenues from contracts with customers (Topic 606)

Pick-up services: Pick-up services are at the customer’s option after the lease has terminated, and control of the

assetno longer resides with the lessee. Accordingly, the Company recognizes revenue from pick-up services at the

point in time when the pick-up service has been provided, regardless of timing of billing to customers.

Fuel recovery fees: Similar to pick-up services, fuel recovery charges are at the customer’s option after the lease

has terminated, and control of the assetno longer resides with the lessee. Accordingly, fuel recovery fees, which are

included in other equipment rental, are recognized at the point in time when the customer elects the service and the

service has been provided by the Company.

Equipment sales (new and used) and equipment parts and supplies sales: The Company recognizes revenue on

sales of new equipment and used equipment, as well as revenue on sales of parts and supplies, at the point in time

when it has a contract in place and satisfies the performance obligation by transferring control of the product or

service to a customer. The amount of revenue recognized reflects the consideration the Company expects to be

entitled to in exchange for such products or services. The Company recognizes revenue on sales of new equipment,

used equipment, and parts and supplies when control has transferred to the customer, which is typically when the

asset is picked up, delivered to the customer, or when significant risks and rewards of ownership have passed to the

customer. In certain cases, the Company acts as the agent for the sale of new equipment, resulting in the new

equipment sales revenue being presented net of new equipment cost of revenues in the equipment sales revenue on

the accompanying condensed consolidated statements of operations. Otherwise, the Company presents new and used

equipment sales on a gross basis within equipment sales revenue and the related equipment sales cost of revenues on

the accompanying condensed consolidated statements of operations. As described above, the Company sells

equipment assets to other parties and may allow the purchaser of the equipment to place the equipment asset in the

OWN Program to be rented to the Company’s customers. Sales and other tax amounts collected from customers and

remitted to government authorities are accounted for on a net basis and excluded from revenue.

Service revenue: Service revenue is primarily comprised of (i) warranty services and (ii) maintenance services

and other miscellaneous services. Warranty services revenue represents compensation for the service work the

Company has performed on behalf of the OEM in order to fulfill the warranty extended by the OEM to the

customer. Warranty revenue and the related receivable are short-term in nature and revenue is recognized at the

point in time when the repair service has been provided by the Company. The Company acts as the principal in these

transactions and, therefore, warranty revenue earned and warranty expense incurred are presented on a gross basis

within revenues and cost of revenues in the accompanying condensed consolidated statements of operations.

Maintenance services and other miscellaneous services revenue represents compensation for maintenance work the

Company has performed for customers and is recognized at the point in time when the services are performed, or

under certain OWN Program arrangements, the Company has a stand-ready performance obligation to provide

maintenance services and revenue is recognized over the contract service period.

Telematics revenue: Telematics revenue includes (i) the sale of subscriptions to the Company’s telematics

services, which are recognized on a straight-line basis over the period corresponding to the telematics subscriptions

that are sold separately to customers; (ii) as an allocation of the transaction consideration from equipment rentals for

the non-lease component of the rental arrangements, which is recognized on a straight-line basis over time based on

the monthly period for equipment rentals; or (iii) the sale of custom electronic components, including telematics

tracker devices and cloud-based access control keypads.

Other: Other platform revenue includes sales of building materials and hardware supplies, which are recognized

at a point in time when the products are purchased and picked up by the customer from one of the Company’s store

locations.

Contract assets and liabilities

The Company doesnot have material contract assets or material contract liabilities associated with contracts

with customers. The Company’s contracts with customers donot result in material amounts billed to customers in

excess of recognizable revenue. The Company didnot recognize material revenues during the three months ended

March 31, 2026 or 2025 that were contract liabilities at the beginning of such periods.

13. INCOME TAXES

The benefit for income taxes was$32 millionand$19 million for the three months ended March 31, 2026 and

2025, respectively. Although the Company incurred a loss in the current interim period, it anticipates generating

taxable income for the full fiscal year. Accordingly, the estimated annual effective tax rate reflects the expected full-

year income and related expense. Differences between applicable federal and state statutory tax rates and the

effective income tax rates for the income tax benefit recorded by the Company are primarily due to nondeductible

expenses and the Texas franchise tax, offset by research and development tax credits.

14. RELATED PARTY TRANSACTIONS

Transactions with Investee

The Company has a 50.1% ownership interest in 10G, a joint venture arrangement accounted for under the

equity method. For the three months ended March 31, 2026, the Company recognized revenue from sales to 10G of

$8 million, which is included in telematics platform revenue on the condensed consolidated statements of

operations. At March 31, 2026 and December 31, 2025, the Company had amounts due from 10G of$4 million and

$2 million, respectively, which are included in accounts receivable on the condensed consolidated balance sheets,

and amounts owed to 10G of$0.3 million and$0.2 million, respectively, which are included in accounts payable on

the consolidated balance sheets.

The Company holds a 26.95% noncontrolling interest in Powers Group, Inc. (“Powers”), a third-party insurance

agency that provides customers with a range of personal and business insurance policies and related services. The

Company purchases insurance coverage through a wholly owned subsidiary of Powers, acting as an agent. For the

three months ended March 31, 2026 and 2025, the Company purchased insurance policies through this equity

method investee and recognized$3 million and$2 million of insurance expense in selling, general and

administrative expenses on the condensed consolidated statements of operations, respectively. At March 31, 2026

and December 31, 2025, the Company had$3 million and $2 million of prepaid insurance related to these policies,

respectively, which are included in prepaid costs on the condensed consolidated balance sheets.

The Company purchased telematics tracker devices from an equity method investee totaling approximately$4

million for the three months ended and March 31,2025. Design and development services paid to the same equity

method investee were$0.3 million for the three months ended March 31,2025, and included in selling, general and

administrative expenses on the condensed consolidated statements of operations.

Transactions with Entities Owned or Controlled bythe Founders

The Company has entered into various transactions with related party entities either owned or controlled by the

Company’s Chief Executive Officer or President.

Revenues

During the three months ended March 31, 2026 and 2025, the Company recognized the following revenues

from transactions with entities owned or controlled by the Founders:

•Approximately$1 million of equipment rental and related services revenues, including equipment rental

revenues whereby the Company acts as an agent in the rental arrangement during the three months ended

March 31, 2025. There wereno such amounts during the three months ended March 31, 2026..

•Equipment sales revenue of$102 million during the three months ended March 31, 2025. There wereno

such amounts during the three months ended March 31, 2026. A portion of the equipment sales for the three

months ended March 31, 2025, were agent OEM transactions and the related cost of the equipment sold of

$42 million is presented net of the associated equipment sales revenues for these periods on the

consolidated statements of operations. The equipment sold was subsequently listed on the Company’s

marketplace under the OWN Program.

•$0.1 million and$2 million, respectively, of equipment parts, supplies and services revenues; andzero and

$0.1 million, respectively, of T3 telematics services revenues relating to equipment enrolled under the

OWN Program.

In addition, the Company recognized$0.1 million andzero for the three months ended March 31, 2026 and

2025, respectively, in sales of building materials and hardware supplies to the Founders, which are included in other

platform revenues on the condensed consolidated statements of operations.

OWN Program payouts

OWN Program payouts to entities owned or controlled by the Founders were$0.3 million and$12 million for

the three months ended March 31, 2026 and 2025, respectively, included in cost of revenues on the condensed

consolidated statements of operations. At March 31, 2026 and December 31, 2025, there wereno accrued expenses

under the OWN Program due to entities owned or controlled by the Founders.

Assignment of property site purchase rights and construction developer fees

For the three months ended March 31, 2026 and 2025, the Company recognized$1 million and$2 million,

respectively, of other miscellaneous income for the assignment of new property site purchase rights and related

transaction services and$2 million and$1 million, respectively, for construction developer fees provided to entities

owned or controlled by the Founders. These amounts are included in other income, net on the condensed

consolidated statements of operations.

Accounts receivable and other current assets

At March 31, 2026 and December 31,2025, the Company had receivables due from entities owned or

controlled by the Founders related to the transactions described above in the amounts of$16 million and$19

million, respectively, which are included in accounts receivable or other current assets on the condensed

consolidated balance sheets.

Leases

The Company leases or has leased certain properties, facilities, vehicles, and aircraft for its operations under

various lease arrangements with entities owned or controlled by the Founders. Lease expenses associated with

various operating lease arrangements with entities owned or controlled by the Founders were$0.3 million and$2

million for the three months ended March 31, 2026 and 2025, respectively, which are included in direct operating

costs or selling, general and administrative expenses on the condensed consolidated statements of operations. At

March 31, 2026, the Company had operating lease right of use assets and operating lease liabilities under lease

arrangements with entities owned or controlled by the Founders of$7 million and$7 million, respectively. At

December 31, 2025, the Company had operating lease right of use assets and operating lease liabilities under lease

arrangements with entities owned or controlled by the Founders of$6 million and$6 million, respect ively.

The Company recognized variable lease expense, short-term rental expense, and other miscellaneous expenses,

which are included in direct operating costs or selling, general and administrative expenses on the condensed

consolidated statements of operations, of$1 million and$0.3 million for the years ended March 31, 2026 and 2025,

respectively, primarily relating to certain leases and short-term rentals from entities owned or controlled by the

Founders.

During the three months ended March 31, 2026 and 2025, the Company made payments of$1 million and$1

million under property finance lease arrangements with entities owned or controlled by the Co-Founders,

respectively. At March 31, 2026 and December 31,2025, the Company had finance lease liabilities under finance

lease arrangements with entities owned or controlled by the Founders of$32 million and$29 million, respectively.

Purchases of rental equipment, parts, supplies and other

During the three months ended March 31,2025, the Company purchased$1 million of equipment previously

enrolled in the OWN Program from entities owned or controlled by the Founders. The equipment purchased was

added to the Company’s rental fleet, and is included in rental equipment, net, on the condensed consolidated balance

sheets.

Purchases of property and other fixed assets

During the three months ended March 31, 2026 and 2025, entities owned or controlled by the Founders

provided construction services to the Company in the amounts of$0.4 million and$1 million, respectively, which

were capitalized to property and other fixed assets.

Accounts payable

At March 31, 2026 and December 312025, amounts due to entities owned or controlled by the Founders were

$0.4 million and$0.4 million, respectively, which are included in accounts payable on the condensed consolidated

balance sheets.

Cash equivalents

During the three months ended March 31,2025, the Company deposited$5 million into a money market

account at a financial institution in which the Founders have an ownership interest. As of March 31, 2026 and

December 31,2025, the Company had an aggregate of$21 million and$21 million, respectively, on deposit in a

money market account with this financial institution, which is included in cash and cash equivalents on the

condensed consolidated balance sheets. For the three months ended March 31, 2026 and 2025, the funds on deposit

earned$0.2 million and$0.1 million of interest income, respectively, which is included in other income, net on the

condensed consolidated statements of operations.

The Company does not provide any financial support or guarantee any debt of the related party entities involved

in the transactions described above.

15. FAIR VALUE MEASUREMENTS AND OTHER

The fair value measurements relating to cash equivalents and short-term investments (included in other current

assets) are categorized in the fair value hierarchy as follows (In millions):

The carrying amounts presented on the condensed consolidated balance sheets for accounts receivable, accounts

payable, and other liabilities approximate their fair values due to the short-term maturity of these financial

instruments.

The fair values of long-term debt, excluding the Company’s Notes, approximate their book values as of

March 31, 2026 and December 31,2025. The aggregate fair value of the Company’s Notes which are categorized in

Level 2 of the fair value hierarchy, is estimated based on observable inputs other than quoted prices in active

markets and approximated$2,212 millionand$2,237 million as of March 31, 2026 and December 31,2025,

respectively.

Investments in equity securities in which the Company does not have significant influence of$29 million and

$29 million as of March 31, 2026 and December 31,2025, respectively, are carried at cost under the measurement

alternative for equity investments that do not have readily determinable fair values. Investments in equity securities

in which the Company has significant influence, but not control, of$31 million and$30 million as of March 31,

2026 and December 31,2025, respectively, are carried under the equity method. These amounts are reported as

Investments in non-consolidated affiliates on the accompanying condensed consolidated balance sheets.

The Company recognized$1 million and$0.4 million of realized and unrealized gains on short-term

investments and investments in non-consolidated affiliates during the years ended March 31, 2026 and 2025,

respectively, which are included in other income, net on the condensed consolidated statements of operations.

The Company recognized$2 million and$2 million of interest income from interest bearing cash and money

market accounts during the years ended March 31, 2026 and 2025, respectively, which are included in other income,

net on the condensed consolidated statements of operations.

16. ACQUISITIONS

The Company accounts for business combinations using the acquisition method as defined in FASB ASC

Topic 805, Business Combinations. Management uses its best estimates and assumptions to value the assets acquired

and liabilities assumed at the acquisition date. Such estimates are inherently uncertain and may be subject to

refinement. As a result, during the measurement period of up to one year from the acquisition date, the Company

may record adjustments to the acquisition accounting, to the extent new information becomes available.

Building Materials and Hardware Retail Stores

During the three months ended March 31, 2026, the Company, through its wholly owned subsidiaries, entered

intotwo separate purchase agreements to acquire substantially all of the business operations ofthree building

supplies, lumber, and hardware retail stores for an aggregate purchase price of $1 million. No goodwill resulted from

these transactions. The purchase price was preliminarily allocated to the estimated fair value of net assets acquired

as of their respective acquisition dates of $1 million. Assuming the acquisition of these businesses were

consummated as of January 1, 2025, the pro forma effect on revenue and earnings are not material to the condensed

consolidated financial statements.

Carbide Tooling and Industrial Supply, Inc.

On January 21, 2026, the Company entered into purchase agreements to acquire substantially all of the assets

and business operations of an industrial supplier business known as Carbide Tooling and Industrial Supply, located

in Waller, Texas, for an aggregate purchase price of $6 million. The purchase price was preliminarily allocated to

the estimated fair value of net assets acquired of $5 million and $1 million to goodwill, respectively. The goodwill

relating to these acquisitions is expected to be deductible for income tax purposes over afifteen year period.

Assuming the acquisition of these businesses had occurred as of January 1, 2025, the pro forma effect on revenue

and earnings would not have been material to the condensed consolidated financial statements.

17. COMMITMENTS AND CONTINGENCIES

From time to time, the Company is involved in various claims and legal actions. These matters include, but are

not limited to, claims arising from the operation of rented equipment, workers' compensation claims, and alleged

breaches of obligations of certain employees to former employers. Management believes that such claims and legal

actions taken against the Company are without merit and the Company intends to vigorously defend itself in these

cases. Management is of the opinion that the ultimate resolution of any ongoing litigation and related matters,

individually or in the aggregate, will not have a material adverse effect on the Company’s condensed consolidated

financial position, results of operations, or cash flows.

18. SEGMENT INFORMATION

The Company hastwo reportable segments: (1) Equipment Rental and Services Operations, and (2) Equipment

Sales. Equipment Rental and Services Operations are comprised of recurring activity performed at the Company's

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. Equipment Sales are comprised of sales by the Company of new or used

equipment made at any of the Company's branch locations and dealership sites, including equipment sales to

participants in the OWN Program. All other business activities, which 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, are included in “All Other.” The Company generates all of its revenue in

the U.S. and all long-lived assets are located in the U.S.

These segments are based upon revenue streams and how the chief operating decision maker (“CODM”) of the

Company allocates resources and assesses performance. The Company’s Chief Executive Officer is the CODM. The

CODM uses Segment Adjusted EBITDA to make resource allocation decisions and to assess the performance of

these segments. The CODM uses Segment Adjusted EBITDA to evaluate segment performance without regard to

potential distortions and to assess period-over-period growth. Excluding OWN Program payouts and equipment

operating lease expense from Equipment Rental and Services Operations Segment Adjusted EBITDA provides the

CODM with a more meaningful metric to compare operating performance to industry peers who donot source their

equipment fleet through lease arrangements. The most significant decisions made by the CODM relate to site

expansion, capital deployment, and employee hiring, among other things.

Significant expenses regularly provided to the CODM and reported in Segment Adjusted EBITDA include

segment cost of revenues and segment selling, general, and administrative expenses. Segment cost of revenues for

the Equipment Rental and Services Operations segment includes direct operating costs, excluding equipment and

vehicle operating lease expense. Segment cost of revenues for the Equipment Sales segment includes the cost of

equipment sales. Segment cost of revenues for All Other business 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. Segment selling, general and administrative

expenses exclude depreciation expense related to the Company’s property and other fixed assets, and during the first

quarter of 2026, on a prospective basis, segment selling, general and administrative expenses exclude stock-based

compensation expense, following a change in the information regularly reviewed by the CODM. There areno other

significant segment expenses.

The accounting policies of the reportable segments are consistent with those described in Note 2: Summary of

Significant Accounting Policies in the Company’s Audited Consolidated Financial Statements as of and for the year

ended December 31, 2025. Certain corporate selling, general and administrative expenses, including corporate

employee compensation, technology costs, professional service fees, and insurance expenses are deemed to be of an

operating nature and are allocated to each segment based primarily on segment employee headcount. There wereno

sales or transactions between segments for any of the periods presented. The Company retains various unattributed

assets at the general corporate level, which the Company refers to as “Shared Resources” in the table below. Assets

identified as Shared Resources primarily consist of cash, investments, property and other fixed assets and property

right of use assets. All other costs and assets are directly attributable to the segments. The Company doesnot

compile discrete financial information for segments other than the information presented below.

The following table presents information about reportable segments (In millions):

The following table reconciles total Segment Adjusted EBITDA to income before income taxes (In millions):

The following table presents information about identified assets by reportable segment (In millions):

The following table presents information about cash flows from investing activities by reportable segment (In

millions):

19. EARNINGS PER SHARE

Basic earnings per share is calculated using thetwo-class method as the Company’s convertible preferred stock

is considered a participating security because these shares participate in dividends on an as-converted basis with

common stock, and for the three months ended March 31, 2026, the Company has two classes of common stock,

which are referred to as Class A common stock and Class B common stock. On January 26, 2026, concurrent with

the IPO, all outstanding shares of the Company’s convertible preferred stock were converted into Class A common

stock and all shares of Class A common stock then held by the Founders were exchanged into an equivalent number

of shares of Class B common stock. Income and losses are shared pro-rata between the two classes of common

stock. Thetwo-class method requires an allocation of earnings to all classes of common stock and participating

securities. Basic earnings per share is calculated by dividing net income (loss) attributable to common shareholders

by the weighted average number of common shares outstanding for the period. The participating securities arenot

required to participate in the losses of the Company, and therefore during periods of loss there isno allocation

required under thetwo-class method between common and participating securities. The Company calculated diluted

earnings per share using the more dilutive of either thetwo-class, if-converted method or the treasury stock method.

For the three months ended March 31, 2026 and 2025 thetwo-class, if-converted method and the treasury stock

method yielded the same result. Diluted earnings per common share is computed by dividing net (loss) income

attributable to common shareholders by the weighted average number of common shares plus the effect of dilutive

potential common shares outstanding during the period.

The following table sets forth the computation of basic and diluted earnings per common share (In millions):

Employee stock options of 6,422,297 and 5,335,661 were excluded from the calculation of diluted earnings per

share for the three months ended March 31, 2026 and 2025, respectively, as a result of their anti-dilutive effect. In

addition, convertible preferred shares of 36,099,070 and 141,989,676, which are considered participating securities,

were excluded from the calculation of diluted earnings per share for the three months ended March 31, 2026 and

2025, respectively, as a result of their anti-dilutive effect. IPO Founders Awards of 4,836,914 were excluded from

the calculation of diluted earnings per share for the three months ended March 31, 2026, as a result of their anti-

dilutive effect.

20. SUBSEQUENT EVENTS

On April 15, 2026, the ABL Credit Facility was amended to, among other things, add certain defined terms and

clarifications with respect to the required timing of repayment of outstanding borrowings, when certain conditions

are met, following the receipt by the Company of net cash proceeds from equipment sales to OWN Program

participants.