EquipmentShare Q4 and Full Year 2025 Earnings Call - Tech-Enabled Organic Growth Drives 34% Rental Revenue Gain and 54% Mature Site Margin

Jennifer, Conference Call Moderator: Good morning. Thank you for attending today’s EquipmentShare Q4 and full year 2025 financial results conference call. My name is Jennifer, and I’ll be your moderator today. All lines will be muted during the presentation portion of the call, with an opportunity for questions and answers at the end. If you would like to ask a question, press star one on your telephone keypad. I would now like to pass the conference over to Rhett Butler, Vice President of Investor Relations with EquipmentShare. Rhett, please proceed.

Rhett Butler, Vice President of Investor Relations, EquipmentShare: Good morning, and welcome to the EquipmentShare fourth quarter and full year 2025 financial results conference call. Joining me today are Jabbok Schlacks, Co-founder and Chief Executive Officer, Willy Schlacks, Co-founder and President, David Marquardt, Chief Financial Officer and Chief Accounting Officer, and Mark Wopata, EVP of Finance and Chief Data Officer. Yesterday, we issued our earnings press release and posted an earnings presentation on our investor relations website at ir.equipmentshare.com. We encourage you to review the presentation, which provides additional detail on our financial results. Please be advised this call is being recorded. Before we begin, I’d like to remind everyone that the company’s earnings press release, earnings presentation, comments made on today’s call, and responses to your questions may contain forward-looking statements within the meaning of applicable securities laws.

These statements are based on current expectations and assumptions and are subject to a variety of risks and uncertainties that could cause actual results to differ materially from those projected. Please refer to our earnings press release, our earnings presentation, and our SEC filings for a discussion of these risks and uncertainties. You can access all of these documents and filings on our investor relations website. Please note that EquipmentShare has no obligation to update or revise forward-looking statements that have been made to reflect events or circumstances that arise after the date made or to reflect the occurrence of unanticipated events. We will also reference certain non-GAAP financial measures. Non-GAAP financial measures should not be used as substitute for the corresponding GAAP measures. Reconciliations to the most directly comparable GAAP measures are included in our earnings press release. With that, I’ll turn the call over to Jabbok Schlacks.

Jabbok Schlacks, Co-founder and Chief Executive Officer, EquipmentShare: Thank you, Rhett. We’re pleased to report strong fourth quarter and full year 2025 results as we continue executing against our operational and financial objectives. Our top priority is solving problems for customers, problems we experienced firsthand on the job site as contractors for decades before starting EquipmentShare, and we built the company around that focus. Driven by our differentiated tech-empowered offering, a strong demand environment in the end markets we serve, and a relentless focus on execution, 2025 was a banner year for EquipmentShare. I’ll start with a quick financial summary before we step back and talk about what’s driving the business. Full year 2025 highlights include rental segment revenue was $2.7 billion, up 34% year-over-year. We added 95 locations for a total of 385 locations at the end of 2025.

Adjusted core EBITDA was $1.7 billion, up 32% year-over-year. Mature site rental segment adjusted EBITDA margin was 54%, in line with our target of over 50%. Mature site return on invested capital was 16.5%. Our year-end results focused on growth, margins, and ROIC set us up well for 2026. We continue to see strong customer demand and a significant opportunity to keep addressing industry pain points. At the midpoint of our 2026 outlook, we expect rental segment revenue to grow approximately 27% year-over-year, supported by our differentiated offering and a constructive industry backdrop. We continue to invest in organic growth because locations opened in response to customer demand have consistently generated strong returns and attractive unit economics as they mature.

In 2025, we incurred $252 million of one-time new market startup cost to support new site openings. Those costs are concentrated in the first 12 months of a location, but we believe they create a long-term earnings generating asset within our network. As those sites ramp and mature, we expect them to contribute meaningfully to earnings and cash flow. We believe that is a highly efficient use of capital and a key driver of long-term value creation. To understand our performance, it helps to start with how the industry is changing and what customers now require from a rental partner. The equipment rental industry is a great industry, and it forms the backbone of what gets built in this country, but it’s also a fragmented industry. Page 10 of the presentation frames both the size of the opportunity and the continued fragmentation of the rental market.

Today, the largest players only represent a minority of the total market, which creates a long runway for share gains for companies that can deliver at scale and solve increasingly complex job site needs. Job sites are getting larger, faster moving, and more operationally demanding, particularly across mega projects like data centers, advanced manufacturing, energy, and infrastructure. Page 22 shows the scale of the active and planned mega project opportunity already within our serviceable footprint. At the high end of the market, scale is a differentiator. There are only a small number of companies globally that can deploy 3,000+ machines to a job site quickly and reliably.

Page 23 is a good illustration of what that looks like on a complex mega project. At that scale, customers need a partner that can bring coordination, visibility, control, safety, and uptime day after day across thousands of assets, people, and workflows. Increasingly, we believe that customers also want that from a more integrated partner across the job site. Not just equipment, but service, technology, and specialty solutions. We saw that reflected in 2025 when our specialty division scaled 34% year-over-year, and revenue from T3 and our materials business grew over 100%. That true tech-integrated one-stop-shop offering is what is driving our market share gains. When you see our 30%+ organic year-over-year revenue growth in a low single-digit industry, it raises the obvious question: What’s driving it? For us, it’s not acquisition-driven. It’s customer-driven.

We believe customers are consolidating spend with us because we deliver a differentiated solution on the job site. The way we do that is through an integrated model that combines three things. First, physical distribution at scale. Delivering, servicing, and supporting equipment and job site solutions across a broad national footprint. T3 is a major differentiator, but this is still a job site business. You have to deliver equipment and service at scale. Second, we bring operator-grade experience. As contractors, we’ve lived these job sites for decades, and we’ve built the teams, processes, and technology designed for the real constraints in the field. Third, our proprietary technology platform, T3. It’s deeply integrated into how customers run their job sites every day, and it also powers how we run our own operations at EquipmentShare. We built and own the full sensor to server technology stack.

Because we operate end-to-end, we’re capturing a unique proprietary data set across equipment, people, service, workflows, and job site operations. That combination, physical distribution, job site expertise, and a proprietary operating system built on a decade of real job site data, make up the structural advantage that are driving our performance. You can see the value showing up in customer behavior. Customers that meaningfully engage with our technology platform spend dramatically more with us. In fact, as you can see on page 30 of the presentation, national customers that are highly engaged with T3 spend roughly 6 times more in rental than rental customers who don’t use T3. When we talk about which customers see the most value on T3, it’s customers running large, complex job sites across multiple locations where downtime, safety incidents, and lack of visibility can translate into huge inefficiencies.

That retention and expansion is a key reason our growth is both organic and durable. When we open a new location, more than 75% of first-year revenue comes from existing customers already renting from us in other markets. That dynamic is illustrated on page 20 of the presentation. You can see it in our results. Industry-leading organic growth, leading mature site margins, and strong returns on capital. We pair that growth with discipline. We expand sites in response to customer demand and manage the business against those key metrics I mentioned, growth, margins, and ROIC. With that as context, I’ll turn the call over to Willy to talk more about T3 and the connected job site. Mark will then walk through our unit economics and the OWN Program, and Dave will take you through the financial results, balance sheet, and capital allocation in more detail. Willy, over to you.

Willy Schlacks, Co-founder and President, EquipmentShare: Thank you, Jabbok. Many of you are already familiar with T3, our proprietary technology platform, and the differentiated value it creates for both our customers and our operations. At its core, T3 connects the job site from sensor to server environment and creates this unified data across people, machines, and job sites. There’s really two sides of that platform. First, it powers how we operate. That connectivity gives us operational intelligence, remote monitoring, predictive maintenance, preventative alerts, real-time visibility across our fleet, and it helps us run the business more efficiently and deliver better uptime for our customers. Second, that same connected data set powers the insights customers get. It helps them answer basic questions quickly, like what’s on the job? Where is it? How is it being utilized? It helps identify opportunities to improve productivity across machine categories and across the job site holistically.

That includes critical assets like generators and security systems, where connectivity matters for things like license safety and energy for that job site. Our vision continues to push towards a fully connected environment where the effort to gain insight becomes frictionless because the answers are essentially at your fingertips and everything is generating in real time. What’s particularly exciting today is what AI and large language models can do on top of the data we’ve been collecting for more than a decade. When we started this company, we never imagined tools this powerful. After years of building structured job site and machine datasets, a lot of that value is now getting unlocked with these models able to do the reasoning at scale and surface insights automatically. It’s really accelerated what can deliver value to our customers. A couple of important points about the platform itself.

First, T3 is OEM-agnostic. It integrates across equipment regardless of manufacturer or machine type. Second, it spans a full gradient of assets and categories from small inventory all the way up to large serialized machines, and the system flexes to generate the right insights at any level of that categorization. Increasingly, the platform has evolved beyond simply tracking inventory. It’s really designed to help customers manage job site resources more holistically, people, equipment, and everything you would consider in that full spectrum of a resource that you would see within a contractor at a job site. That becomes incredibly valuable the larger and more complex you have this chaotic environment, like a mega site or any type of large infrastructure job site.

We’re seeing strong demand for that capability across manufacturing, data centers, energy, and infrastructure projects where thousands of machines and workers are operating simultaneously, and the cost of downtime or lack of visibility within those environments is real. Finally, this connectivity doesn’t just create operational value, it also enables financial differentiation. Programs like the OWN Program that are powered by the transparency and control that T3 provides. With that, I’ll turn it over to Mark to give you a bit more insight into the OWN Program and the unit economics and update on that overall system.

Mark Wopata, EVP of Finance and Chief Data Officer, EquipmentShare: Thanks, Willie. We closed out 2025 with very strong unit economics, and our rental locations delivered the growth, margin, and return profile that places us at the top of the industry in those categories. I’ll walk through the site maturity curve and the economics that result as locations mature. Pages 18 through 20 of the presentation walk through the unit economics, maturity curve, and organic site ramp. Because we are a large-scale equipment rental provider uniquely focused on organic growth, understanding how a new site ramps to maturity and the unit economics produced through that process is critical to understanding our model. When we think about what drives success for a new location, it comes down to two things, creating demand through T3 and operational excellence.

We open locations in response to customer demand, and our more than 350 organic rental starts since founding, including 85 new rental locations in 2025, reflects a disciplined, repeatable organic growth playbook. When we open a new site, we typically invest about $2.5 million over the first 12 months, expensed through the P&L, which we report as new market startup costs. New sites generally follow this consistent ramp pattern. In year one, they ramp in revenue as we invest in people, property, and fleets. In year two, they generally break even. By month 24, they become what we call mature and begin contributing meaningfully to the company’s revenue, mature site margins, and ROIC.

These mature site economics are driven by strong fleet performance, operating leverage, and the benefits of our proprietary T3 technology platform, which helps us optimize equipment performance and redeploy assets efficiently across the network. We primarily evaluate the performance of our organic growth strategy using three key metrics, rental segment revenue growth, mature site rental segment Adjusted EBITDA margins, and mature site return on invested capital. As Jabbok mentioned at the top of the call, in 2025, rental segment revenue grew 34%, driven by strong customer demand. Our mature sites delivered 50%+ rental segment Adjusted EBITDA margins, reflecting the operating leverage embedded in the model as our locations scale.

In 2025, our mature site ROIC was 16.5%, which puts us solidly in our near-term target range and progressing toward a long-term target of over 20% ROIC per mature site as we continue building out a more complete job site platform. Importantly, a large portion of the network is already built. As those ramping sites mature, we expect them to contribute meaningfully in additional earnings and cash flow with limited incremental investment. We believe that site maturation should continue to support earnings growth and margin expansion over time, even if the pace of growth investment were to moderate. Moving to the OWN Program, which remains a core pillar of our strategy. Pages 35-40 of the presentation provide a useful overview of the OWN Program and how it fits into our model.

We closed out 2025 with over $4.9 billion of OEC in the OWN Program, compared to $3.4 billion in 2024. As a reminder, the OWN Program works as follows. EquipmentShare purchases new equipment at industry-leading prices from our top OEMs. That equipment enters our rental fleet and begins generating revenue. We then sell equipment into the OWN Program and enter into asset management and revenue sharing agreements with participants. The equipment is rented, serviced, and maintained just like our on-balance-sheet fleet. Rental revenues are then shared with participants and reflected as OWN Program payouts within cost of goods on the P&L. At the end of the term, we have the option, but not the obligation, to purchase the equipment at the appraised value or to help remarket it for sale.

We believe that the lifetime economics of the OWN Program are comparable to our on-balance-sheet fleet while allowing us to meet customer demand in a disciplined, capital-efficient way. Participants in the program include high-net-worth individuals, family offices, and institutional investors funded through both traditional lending and the ABS market. We believe these are durable, scalable sources of capital that support the growth of the program over time. The program’s success is powered by T3, which gives equipment owners real-time visibility into their asset location, utilization, and service history, improving transparency and reducing risk for OWN participants. We remain significantly oversubscribed in the program.

In the fourth quarter, we completed another ABS-funded Own transaction and executed additional transactions in our high-net-worth and family office channel for a total of $680 million of Own sales in the fourth quarter and $1.3 billion of Own sales for the full year. The appraised value of the Own program fleet as of year-end was $4.1 billion. Looking ahead, we continue to expect Own program OEC to remain at roughly half of our fleet under management over the medium to long-term, ±10%. We are anticipating 55%-60% of OEC in the Own program at the end of 2026. With that, I’ll turn the call over to Dave for a financial update.

David Marquardt, Chief Financial Officer and Chief Accounting Officer, EquipmentShare: Thanks, Mark. Customer demand continues to drive our organic growth and positive momentum, which is reflected in our fourth quarter and full year 2025 results. As we continue to expand our footprint into new markets and as more of our recently opened sites ramp up to maturity, we are well-positioned for continued market share gains and profitable growth. To summarize our results for the fourth quarter and fiscal year ended December 31, 2025, revenue from our rental segment for the fourth quarter grew over 35% year-over-year to $772 million. For the full year of 2025, rental segment revenue reached more than $2.7 billion, an increase of 34% versus the prior year. Rental segment revenue growth was due to significant customer demand, which drove continued expansion of our full-service branch footprint and an increase in our rental fleet.

Total consolidated revenue for the fourth quarter was more than $1.5 billion, roughly flat year-over-year. Fourth quarter total revenue reflects a 22% year-over-year decrease in equipment sales into the own program, which we execute opportunistically and selectively. We continue to see high market demand for the own program well in excess of our sourcing needs. For the full year 2025, total revenue was nearly $4.4 billion, up 16% year-over-year. Net income for the fourth quarter was $65 million as compared to $50 million in the fourth quarter of 2024, and for the full year 2025 was $40 million as compared to $3 million in the prior year.

Adjusted core EBITDA reflects our underlying operating performance by excluding items unique to our organic growth and fleet sourcing strategy, most notably OWN Program payouts and new market startup costs associated with our organic growth strategy. OWN Program payouts are unique to EquipmentShare and represent an alternative form of sourcing equipment for our rental fleet. New market startup costs reflect the upfront investments required to support our continued geographic expansion. We believe that adjusted core EBITDA is a key measure of our underlying financial performance because it provides a clear view of the earnings power of our core operations and enhances comparability with industry peers. For simplicity, adjusted core EBITDA is the sum of our segment adjusted EBITDA for the rental and sales business segments.