EQPT 10-K & 10-Q changes, risk factors and insider trading

RESULTS OF OPERATIONSOPERATIONS.

We are one of the largest and fastest-growing equipment rental providers in the U.S. based on revenue. As of MarchJune 31,30, 2026, we operated 371391 full-service branch locations, 9 standalone dealership sites, and 2730 building materials and hardware retail stores across 45 states, with a diversified managed fleet portfolio of more than 262,000280,000 pieces of equipment and approximately 357,000394,000 trackers operating on our T3 platform. As of MarchJune 31,30, 2026, we had 8,5029,203 employees who support us in solving industry inefficiencies by providing smart jobsite technology, as well as operating our equipment rental and retail and service centers.

Our rental fleet, including support vehicles and trailers, consists of equipment that we (i) own, (ii) lease as lessee under operating lease arrangements with third-party lessors such as an Original Equipment Manufacturer (“OEM”) and financial institutions, or (iii) lease as lessee under our OWN Program. As of MarchJune 31,30, 2026, 179,322189,961 pieces of equipment were owned by us; 848963 pieces of equipment were leased by us as a lessee under operating lease arrangements with third parties such as OEMs and financial institutions; and 82,48089,775 pieces of equipment were leased by us as lessee, and rented by us to our customers, under our OWN Program. Leased equipment refers to equipment subject to operating lease contracts with third parties such as OEMs and financial institutions in which we have contracted use of the equipment for a defined period. OWN Program equipment refers to equipment sold to OWN Program participants and subsequently leased back and operated by us under the OWN Program lease and revenue-sharing structure. Both leased and OWN Program equipment are part of our equipment under management.

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,multiple sources of capital, including institutional investors who purchase as a buying group through a collective vehicle and finance their equipment purchases through asset-backed securities (“ABS”). To satisfy this demand, thewe Company hashave organized for these investors sales of large packages of equipment and hashave conducted these sales on an episodic basis. Accordingly, period-over-period comparisons may not reflect underlying trends and fluctuations in our operating results and makesmake it difficult for us to predict our future operating results.

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 $716$1,147 million for the three months ended MarchJune 31,30, 2025 to $989$1,449 million for the three months ended MarchJune 31,30, 2026, or at an annuala growth rate of 38%.26.3%, and $1,864 million for the six months ended June 30, 2025 to $2,437 million for the six months ended June 30, 2026, or at a growth rate of 31%.

In line with customer demand and our growth strategy, we have increased the number of full-service equipment rental branch locations from 292324 as of MarchJune 31,30, 2025 to 371391 as of MarchJune 31,30, 2026, an increase of 7967 new full-service equipment rental branch locations. In conjunction with the opening of these new full-service equipment rental branch locations, we incurred $50$109 million and $55$116 million of new market startupstart-up costs during the threesix months ended MarchJune 31,30, 2026 and 2025, respectively.

We correspondingly increased our fleet size from 207,366218,035 units of equipment under management as of MarchJune 31,30, 2025 to 262,650280,699 as of MarchJune 31,30, 2026, reflecting the growth in original equipment cost (“OEC”) under management, which includes equipment we own and rent to customers, as well as equipment owned by third parties and leased by us, as lessee through our OWN Program, and re-rentedrented to our customers, from $7,013$7,360 million as of MarchJune 31,30, 2025 to $9,065$9,851 million as of MarchJune 31,30, 2026, or an increase of 29%.34%.

The growth in our business through geographic and fleet expansion has been partially achieved through the execution of our strategy to expand our OWN Program. Under the OWN Program, participants may purchase from us new or used (typically less than four years old) equipment which is fully enabled with T3. Concurrently, we enter into a lease arrangement with the participant whereby we are the lessee and this qualified equipment is placed on our T3 platform, to be rented to thirdour party users.customers. Rental revenue generated from equipment enrolled under the OWN Program is divided and shared between us and the owner of the equipment, and for the duration of the arrangement we manage the owner’s equipment utilizing the T3 platform.

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 onincurring additional debt and increasing our debt costs.debt. When rental equipment is enrolled in the OWN Program, rather than purchased and owned by us, we incur lease expense in the form of OWN Program payouts, which are recorded as cost of revenues, instead of depreciation expense and interest expense associated with rental equipment that is purchased. OWN Program payouts were $217$234 million and $154$173 million for the three months ended MarchJune 31,30, 2026 and 2025, respectively, $451 million and $328 million for the six months ended June 30, 2026 and 2025, respectively. This expansion increases cost of revenues (before depreciation expense) and decreases depreciation expense and interest expense, which affects gross profit (before depreciation expense), EBITDA (which we define and calculate as net income before interest expense, income taxes, depreciation expense and amortization expense, and non-cash stock compensation expense), and EBITDA margins. We expect to further increase our usage of the OWN Program, which will increase OWN Program payouts in cost of revenues and reduce gross profit (before depreciation) and EBITDA margins, as compared to rental equipment that is purchased and placed in our rental fleet. In addition, OWN Program payouts plus depreciation have grown at a faster rate than the growth of revenue. Total equipment rental fleet OEC under the Company’sour management increased $2,052$2,491 million, or 29%,34%, from $7,013$7,360 million as of MarchJune 31,30, 2025 to $9,065$9,851 million as of MarchJune 31,30, 2026. The total equipment rental fleet OEC enrolled in the OWN Program grew by $1,414$1,627 million, or 39%,42%, Company-owned equipment rental fleet OEC grew by $717$929 million, or 22%,28%, and the equipment rental fleet OEC under operating leases decreased by $79$65 million during the same period. During the threesix months ended MarchJune 31,30, 2026, OWN Program payouts increased 41%38% compared to the threesix months ended MarchJune 31,30, 2025; of that increase, 41% was attributed to the growth of the average equipment rental fleet OEC enrolled in the OWN Program. Because the OWN Program payouts are variable and primarily based on the amount of rental revenue generated by the applicable equipment during the period, changes in demand from our customers for specific types of rental equipment affects the amount of equipment rental and related services revenue generated.

Equipment Parts,Parts Supplies,and Supplies and Services

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 startupstart-up costs are classified within selling, general and administrative expenses.

Other income, net includes gains and losses on investments in equity securities, realized gains on available-for-sale debt securities, fees relating to properties assigned to other parties, construction development fees earned for managing construction activities at properties owned by other parties, gain on sale of properties and other assets, and other miscellaneous income.

Three Months Ended MarchJune 31,30, 2026 Compared with Three Months Ended MarchJune 31,30, 2025

Total revenue. Our revenue was $989$1,449 million for the three months ended MarchJune 31,30, 2026, compared to $716$1,147 million for the three months ended MarchJune 31,30, 2025, an increase of $273$302 million, or 38%.26%. Our four sources of revenues over the period are further discussed below:

Equipment rental revenue and related services. Equipment rental revenue and related services revenue accounted for 69%56% of our revenue for the three months ended MarchJune 31,30, 2026, compared to 69%50% of our revenue for the three months ended MarchJune 31,30, 2025. Our equipment rental revenue and related services was $683$815 million for the three months ended MarchJune 31,30, 2026, compared to $495$577 million for the three months ended MarchJune 31,30, 2025, an increase of $188$238 million, or 38%.41%. Approximately $144$196 million of the increase in equipment rental revenue and related services revenue is driven by an increase in construction demand in the U.S., our strategy to increase our geographical presence, and value afforded to our customers from our T3 technology platform. Accordingly, we increased the number of our full-service equipment rental branch locations from 292324 as of MarchJune 31,30, 2025 to 371391 as of MarchJune 31,30, 2026. In addition, we grew our fleet OEC under management from $7,013$7,360 million as of MarchJune 31,30, 2025 to $9,065$9,851 million as of MarchJune 31,30, 2026, and increased the size of our fleet from 207,366218,035 units to 262,650280,699 units of equipment under management as of MarchJune 31,30, 2025 and 2026, respectively. Changes in the mix of equipment rented and price changes increased in equipment rental and related services revenue by $44$42 million.

Equipment sales revenue.sales. Equipment sales revenue accounted for 18%33% of our revenue for the three months ended MarchJune 31,30, 2026, compared to 20%42% of our revenue for the three months ended MarchJune 31,30, 2025. Equipment sales revenue was $179$483 million for the three months ended MarchJune 31,30, 2026, compared to $145$478 million for the three months ended MarchJune 31,30, 2025, an increase of $34$5 million, or 23%.1%. The change was primarily due to our disciplined and selective equipment sales into the OWN Program, resulting in an increase of $7$11 million in sales of construction equipment to existing and new participants in our OWN Program, andpartially anoffset increaseby a decrease of $27$6 million in the sale of new and used equipment to contractors and other end users. As we increase the size of our OWN Program, transactions with OWN Program participants may result in a higher percentage of our revenue being attributable to an OWN Program participant for the period during which one or more equipment sale transactions with such party occurred.

Equipment parts,parts supplies,and supplies and services. Equipment parts,parts supplies,and supplies and services revenue accounted for 8%6% of our revenue for the three months ended MarchJune 31,30, 2026, compared to 8%6% for the three months ended MarchJune 31,30, 2025. Equipment parts,parts supplies,and supplies and services revenue was $77$88 million for the three months ended MarchJune 31,30, 2026, compared to $58$70 million for the three months ended MarchJune 31,30, 2025, an increase of $19$18 million, or 33%.26%. This increase was primarily due to our expansion into new markets, resulting in additional full-service branch locations added to our nationwide network, which increased from 292324 locations as of MarchJune 31,30, 2025 to 371391 locations as of MarchJune 31,30, 2026. Equipment parts,parts supplies,and supplies and services revenue increased $4$13 million from mature branch locations primarily attributed to the expansion of our product and service offering in mature branch locations, and $15$5 million from new branch locations open less than 24 months as a result of the addition of 7967 full-service branch locations.

Platform revenue. Platform revenue accounted for 5%4% of our revenue for the three months ended MarchJune 31,30, 2026, compared to 3%2% of our revenue for the three months ended MarchJune 31,30, 2025. Platform revenue from telematics was $31$34 million for the three months ended MarchJune 31,30, 2026, compared to $10 million for the three months ended MarchJune 31,30, 2025, an increase of $21$24 million,million or 210%.240%. 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”), a business that designs, manufactures, and sells custom electronic components, including telematics tracker devices and cloud-based access control keypads. Platform revenue from the sale of construction materials, building supplies, and hardware across our building materials and hardware retail stores was $19$29 million for the three months ended MarchJune 31,30, 2026, compared to $8$12 million for the three months ended MarchJune 31,30, 2025, an increase of $11$17 million primarily attributable to the addition of 1114 building materials and hardware retail stores.

Cost of revenues. Cost of revenues was $702$1,038 million for the three months ended MarchJune 31,30, 2026, compared to $516$854 million for the three months ended MarchJune 31,30, 2025, an increase of $186$184 million, or 36%.22%. Our sources of cost of revenues over the period are further discussed below:

Direct operating costs. Direct operating costs were $222$277 million for the three months ended MarchJune 31,30, 2026, compared to $171$181 million for the three months ended MarchJune 31,30, 2025, an increase of $51$96 million, or 30%.53%. The increase in direct operating costs is primarily due to the organic expansion of our footprint through the addition of 7967 full-service branch locations, which increased from 292324 locations as of MarchJune 31,30, 2025 to 371391 locations as of MarchJune 31,30, 2026, partially offset by a decrease in equipment operating lease expense of $1 million due to the termination of certain equipment operating lease agreements.2026. The additional operating locations drove increases in wages and related benefits of $23$20 million, and logistics, maintenance, and other site operating costs of $29$76 million.

BenefitOWN fromProgram incomepayouts. taxes.OWN TheProgram benefitpayouts forwere income taxes was $32$234 million for the three months ended MarchJune 31,30, 2026,2026 compared to $19$173 million for the three months ended MarchJune 31,30, 2025, an increase of $13$61 million, or 68%.35%.

NetPlatform loss.expense. NetPlatform lossexpense decreasedwas by $19 million to $29$35 million for the three months ended MarchJune 31,30, 2026, as compared to net loss of $48$11 million for the three months ended MarchJune 31,30, 2025, duean increase of $24 million or 218%. This increase was primarily attributed to $11the millionaddition of higher14 operatinghardware income,retail partiallystores offsetand bythe $5 millionacquisition of higherMorey totalin otherSeptember expense, net and $13 million of higher income tax benefit.2025.