0001628280-26-034842
SEC filingRevenue grew 38% to $989M driven by fleet expansion and new branches; net loss narrowed 40% as operating income turned positive.
For the three months ended March 31, 2026, total revenue rose 38% year-over-year to $989 million, driven by robust demand across all segments. Equipment rental and related services, the largest revenue contributor at 69% of total, increased 38% to $683 million, reflecting a 29% expansion in fleet OEC under management and the addition of 79 new full-service branch locations. Equipment sales grew 23% to $179 million, with sales to OWN Program participants up 7% and other end-user sales up 54%. Equipment parts, supplies, and services revenue rose 33% to $77 million, aided by new branch openings. Platform revenue—comprising telematics and building materials—more than tripled to $50 million, benefiting from the acquisition of The Morey Corporation and retail store expansion.
Gross profit increased 44% to $287 million, with gross margin improving 110 basis points to 29.0%. The margin expansion was driven by higher rental utilization and mix shift, partially offset by increased OWN Program payouts (up 41% to $217 million), which carry lower margins but require no capital outlay. Depreciation and amortization rose 27% to $89 million in line with fleet growth. Selling, general and administrative expenses increased 36% to $286 million, including $17 million in IPO Founders Awards stock compensation and costs to support 570 new hires and 79 new branches. As a result, operating income turned positive at $1 million versus a loss of $10 million in the prior year. Net loss narrowed 40% to $29 million, aided by a $13 million increase in income tax benefit.
Equipment Rental and Services Operations: Revenue reached $764 million, up 37% YoY, fueled by fleet growth and branch network expansion. Segment Adjusted EBITDA surged 55% to $323 million, with margin widening from 38% to 42% as operating leverage improved. Key drivers included $144 million from increased fleet OEC and $44 million from favorable mix and pricing, partially offset by $51 million in higher direct operating costs.
Equipment Sales: Revenue increased 23% to $179 million, with sales to OWN Program participants flat at $102 million (+7%) and other sales up 54% to $77 million. Segment Adjusted EBITDA rose 4% to $26 million, with margin benefiting from better gross margins on retail sales.
All Other: Revenue more than doubled to $46 million, led by a 210% jump in telematics revenue to $31 million (driven by subscriptions and hardware sales from Morey) and a 138% increase in building materials to $19 million. Segment loss improved by $2 million to -$2 million as higher gross profit offset increased SG&A.
Management highlighted continued geographic expansion, expecting to further increase branch count and fleet size. The OWN Program is expected to grow, increasing variable costs but reducing capital intensity. Liquidity stood at $1.6 billion ($329 million cash + $1.3 billion ABL availability), and the company targets maintaining at least $500 million in liquidity. No formal quantitative guidance was provided, but the narrative suggests confidence in sustaining revenue growth through fleet expansion and technology differentiation, tempered by potential tariff impacts and seasonal fluctuations. Key risks include residual value declines in OWN Program equipment and the episodic nature of large equipment sales.
Cash and cash equivalents increased $23M to $329M, aided by $706M net proceeds from the January 2026 IPO. Total net debt (including original issue discounts and issuance costs) decreased $190M to $3,082M, as the company used IPO proceeds to repay $582M of borrowings (primarily ABL facility) while issuing $381M of new debt. Marketable securities (short-term investments) held steady at $145M. Shareholders' equity surged from $528M to $1,201M, driven by IPO proceeds and conversion of convertible preferred stock.
The Notes disclose no explicit purchase commitments for raw materials or capacity. However, the company has significant lease obligations: operating leases of $75M (current) and $681M (non-current), finance leases of $18M (current) and $183M (non-current), and financing obligations of $9M (current) and $75M (non-current). OWN Program payouts, a variable cost based on shared rental revenue, totaled $217M in Q1 2026.
No share buybacks or dividends were declared or paid. Debt reduction was a priority: $582M repaid vs. $381M borrowed, net -$190M. Capital expenditures were substantial: $328M for rental equipment, $48M for property and fixed assets, and $9M for capitalized software, totaling $385M (38.9% of revenue). The company used IPO proceeds and cash flow from operations (though operating cash flow was -$200M) to fund capex and debt paydown.
Equipment Rental and Services Operations is the largest segment, contributing $764M (77.2%) of total revenue, with Segment Adjusted EBITDA of $323M (42.3% margin on segment revenue). Equipment Sales generated $179M (18.1%) with $26M adjusted EBITDA (14.5% margin). All Other contributed $46M (4.7%) with a -$2M adjusted EBITDA loss. The company operates exclusively in the U.S., with 371 full-service branches, 9 dealership sites, and 27 building materials stores across 45 states.