Alta Equipment Group Q2 2026 Earnings Report

Alta Equipment Group EPS Results

• Actual EPS: -$0.25
• Consensus EPS: -$0.21
• Beat/Miss: Missed by -$0.04
• One Year Ago EPS: N/A

Alta Equipment Group Revenue Results

• Actual Revenue: $475.50 million
• Expected Revenue: $488.71 million
• Beat/Miss: Missed by -$13.21 million
• YoY Revenue Growth: N/A

Alta Equipment Group Announcement Details

• Quarter: Q2 2026
• Date: 8/6/2026
• Time: After Market Closes
• Conference Call Date: Thursday, August 6, 2026
• Conference Call Time: 5:00PM ET

Alta Equipment Group (NYSE:ALTG), Inc. (NYSE: ALTG) is a North American distributor of material handling and logistics equipment. The company offers a broad lineup of forklifts, lift trucks, aerial work platforms, tow motors, pallet jacks and related attachments, serving manufacturing, warehousing, distribution and industrial facilities. Through its network of branch locations, Alta Equipment provides customers with new and used sales, short- and long-term rentals, and integrated fleet management solutions designed to support operational efficiency.

In addition to equipment sales, Alta Equipment supports customers with comprehensive after-sales services. This includes preventative maintenance agreements, on-site repair, equipment inspections, operator training programs and genuine OEM parts distribution. By combining these support services under one platform, the company aims to reduce downtime and help clients manage total cost of ownership for their fleets.

Founded in 2021 through the combination of established regional equipment dealerships, Alta Equipment Group has grown to serve markets across the United States and Canada. The company has pursued a disciplined acquisition strategy to expand its geographic footprint and complement its core equipment offerings. Today, Alta Equipment operates more than 90 service centers, leveraging local expertise alongside centralized operational systems.

Alta Equipment’s leadership team brings decades of experience in material handling and commercial distribution. The executive group focuses on driving organic growth, integrating recent acquisitions and investing in digital tools to streamline order processing, asset tracking and customer service. As businesses increasingly rely on automated and mechanized solutions, Alta Equipment Group positions itself as a full-service partner for end-to-end equipment lifecycle management.

Alta Equipment Group Q2 2026 Earnings Call Transcript

Key Takeaways

• Positive Sentiment: Second-quarter results improved sharply sequentially: Revenue rose approximately $65 million from Q1 to $475.5 million, while adjusted EBITDA increased to $48.6 million from $28.1 million; EBITDA margin expanded to 10.2%.
• Positive Sentiment: Demand indicators strengthened, particularly in material handling. First-half bookings in Alta’s markets increased 12.3% year over year, and material handling backlog reached approximately $143 million, providing visibility into second-half deliveries.
• Positive Sentiment: Equipment margins and Ecoverse profitability recovered. New and used equipment gross margins rose to 15.3% as discounting moderated and used values improved, while Ecoverse adjusted EBITDA increased to $2.8 million as tariff-related pressures subsided.
• Positive Sentiment: Capital efficiency continued to improve: Average assets declined 11% in material handling and 8% in construction, lifting trailing twelve-month EBITDA returns on assets to 16% and 11.4%, respectively; liquidity remained approximately $225 million with net leverage near 4.7x.
• Negative Sentiment: Management narrowed the 2026 adjusted EBITDA guidance range to $167.5 million–$172.5 million from $167.5 million–$177.5 million, citing delivery timing and the possibility that some material handling backlog slips into 2027; it reaffirmed free cash flow before rent-to-sell decisioning of $100 million–$110 million.

Presentation

[Operator]

Good afternoon, thank you for attending today's Alta Equipment Group's second quarter 2026 earnings conference call. My name is Melissa, and I will be your moderator for today's call. I will now turn the call over to Jason Dammeyer, Vice President of Accounting and Reporting. Please proceed.

[Jason Dammeyer, VP of Accounting and Reporting at Alta Equipment Group]

Thank you, Melissa. Good afternoon, everyone, thank you for joining us today. A press release detailing Alta's second quarter 2026 financial results was issued this afternoon and is posted on our website, along with a presentation designed to assist you in understanding the company's results. On the call with me today are Ryan Greenawalt, our Chairman and CEO, and Tony Colucci, our Chief Financial Officer. For today's call, management will first provide a review of our second quarter 2026 financial results. We will begin with some prepared remarks before we open the call for your questions. Please proceed to slide two. Before we get started, I'd like to remind everyone that this conference call may contain certain forward-looking statements, including statements about future financial results, our business strategy and financial outlook, achievements of the company, and other non-historical statements as described in our press release.

[Jason Dammeyer, VP of Accounting and Reporting at Alta Equipment Group]

These forward-looking statements are subject to both known and unknown risks, uncertainties, and assumptions, including those related to Alta's growth, market opportunities, and general economic and business conditions. We have based these forward-looking statements largely on our current expectations and projections about future events and financial trends that we believe may affect our business, financial condition, and results of operations. Although we believe these expectations are reasonable, we undertake no obligation to revise any statement to reflect changes that occur after this call. Descriptions of these and other risks that could cause actual results to differ materially from these forward-looking statements are discussed in our reports filed with the SEC, including our press release that was issued today. During this call, we may present both GAAP and non-GAAP financial measures.

[Jason Dammeyer, VP of Accounting and Reporting at Alta Equipment Group]

A reconciliation of GAAP to non-GAAP measures is included in today's press release and can be found on our website at investors.altaequipment.com. I will now turn the call over to Ryan.

[Ryan Greenawalt, Chairman and CEO at Alta Equipment Group]

Thank you, Jason, and good afternoon, everyone. I appreciate you joining us to review Alta Equipment Group's second quarter 2026 results. My comments will focus on our markets, booking and delivery trends, and progress on our strategic initiatives. Tony will cover the financials, capital structure, and our updated guidance. The central takeaway is that the momentum we discussed in Q1 became more visible in the second quarter. Revenue improved by approximately $65 million from the first quarter, with sequential growth across all three segments. Order activity is improving, deliveries are recovering, dealer inventory pressures are receding, and our operating initiatives are gaining traction. We believe improving industry indicators and stronger activity in our own markets represent a positive inflection point for Alta. The broader backdrop is becoming more supportive. Industrial spending remains elevated.

[Ryan Greenawalt, Chairman and CEO at Alta Equipment Group]

Federal infrastructure funding continues to flow into state and local project pipelines, transportation budgets in our largest construction equipment markets remain strong. The U.S. manufacturing PMI stayed in expansion territory through the quarter and strengthened further in July, a constructive leading signal for lift truck demand. Non-residential demand from energy infrastructure and onshoring continues to build, Volvo recently raised its 2026 North American market forecast by 5%. Tariff-related disruption has stabilized, benefiting master distribution and overall pricing. Material handling remains the clearest leading indicator of improving demand. As shown on slide seven, industry bookings in our areas of responsibility increased 12.3% in the first half versus a year ago, second quarter bookings held near the strong first quarter pace, up 4.9% from prior year quarter. This is not a one-month spike.

[Ryan Greenawalt, Chairman and CEO at Alta Equipment Group]

The improvement has been sustained across the first half, a trend Hyster-Yale also noted on their earnings call this week. The recovery is broad-based across regions and verticals, including food and beverage, manufacturing, building materials, energy, defense, distribution, and logistics. Those bookings are building backlog is what gives us confidence in the second half. Our material handling backlog now stands at approximately $143 million, its highest level since 2023. In this business, bookings convert to backlog converts to revenue over the following quarters. Today's order book provides meaningful visibility into second-half invoicing. As slide eight shows, our current booking pace points to a meaningful recovery in 2026, with volumes moving toward long-term regional norms. Two structural drivers support the trend. First, fleet age.

[Ryan Greenawalt, Chairman and CEO at Alta Equipment Group]

Many operators deferred replacement over the last two years, as four and five-year-old fleets become more costly to maintain, quoting activity increases, driving both equipment sales and the recurring parts and service revenues that follow each unit. Second, product breadth. Our OEM partners are introducing modular value-oriented configurations for lighter duty applications, allowing us to serve cost-conscious customers with fit-for-purpose equipment while preserving our premium offering where uptime and lifecycle support matter most. Our material handling share gains are being driven by three factors: stronger participation in the fast-growing warehousing segment, new products that allow us to recapture business previously lost to value-oriented brands, and PeakLogix's integration capabilities, which enable us to advise customers on and execute larger and more complex projects. Construction equipment entered the quarter with the delayed seasonal start, activity accelerated through the quarter, carrying the segment past its first quarter low point.

[Ryan Greenawalt, Chairman and CEO at Alta Equipment Group]

Market deliveries in our areas of responsibility increased 20.1% in the second quarter versus the prior year, and were up 7.5% for the first half. Florida was a notable area of strength, particularly in articulated haulers and quoting activity is benefiting from road and bridge work, municipal projects, energy infrastructure, and manufacturing investment. The competitive environment is healthier than a year ago. Dealer inventories have declined, OEM discounting has moderated, and used equipment values have improved from their 2025 lows, all supporting better equipment margins. Our rental fleet initiatives continue to progress. The goal is matching fleet investment to local demand, improving utilization and returns, and avoiding under-productive assets. Tony will detail the results.

[Ryan Greenawalt, Chairman and CEO at Alta Equipment Group]

Product support remains one of the most important differentiators in Alta's dealership model, with 85 locations, approximately 1,100 factory-trained technicians, and more than 1,000 field service vehicles creating recurring revenue streams that pure-play rental models do not replicate. Through our Customer Value Mapping initiative, we are aligning capacity with customers who value uptime and lifecycle support while improving rate realization and service productivity. Our strategic vision for 2028 focuses on generating more value from the platform we have built. Since our IPO, we have completed 17 acquisitions and grown from 43 to 85 locations. The next phase centers on organic growth, operating consistency, and disciplined capital allocation, gaining share in attractive markets, scaling PeakLogix and Ecoverse, improving product support productivity, increasing inventory and fleet returns, and using technology to drive efficiency and accountability.

[Ryan Greenawalt, Chairman and CEO at Alta Equipment Group]

As we enter the second half, demand indicators remain constructive, led by material handling bookings and backlog, construction equipment project activity, and healthier channel conditions. We are maintaining a measured outlook, and Tony will discuss our revised guidance. The second quarter does not complete the recovery, but it provides clear evidence that one is underway and that our operating model is responding as expected. I want to thank our approximately 2,600 employees for their commitment to our customers. Their expertise is the foundation of Alta's value proposition. With that, I'll turn the call over to Tony.

[Tony Colucci, CFO at Alta Equipment Group]

Thanks, Ryan. Good evening, everyone, and thank you for your interest in Alta Equipment Group and our second quarter 2026 financial results. Before getting into the quarter, I'd like to thank our employees, customers, OEM partners, and shareholders for their continued support. We entered 2026 facing a number of challenges, including the pull-forward buying activity that benefited late 2025, difficult winter conditions, and softer equipment markets. While Q1 was challenging, our second quarter performance and the trending KPIs suggest all of those headwinds are behind us as the second quarter reflected a return to more normalized operating conditions and showcased the fundamental earnings power of our dealership model. My remarks today will focus on three areas. First, I'll report our second quarter financial performance and discuss the significant improvement we saw versus the first quarter, along with the key drivers behind our results.

[Tony Colucci, CFO at Alta Equipment Group]

Second, I'll discuss capital efficiency, which remains an important priority as we continue to optimize inventory levels, rental fleet investment, and improve returns on capital. Lastly, I'll provide perspective on our outlook for the balance of the year and discuss the indicators that continue to give us confidence in our ability to deliver within our previously communicated guidance. As always, I'll be referencing slides from our earnings presentation throughout today's call. I encourage investors to review our earnings presentation as well as our 10-Q, both of which are available on our investor relations website at altg.com. With that, let me begin with our financial performance for the quarter, which corresponds with slides 12 through 22 of the earnings presentation. For the quarter, Alta generated revenue of $475.5 million and adjusted EBITDA of $48.6 million.

[Tony Colucci, CFO at Alta Equipment Group]

Nominal gross profit increased year-over-year, total gross margins expanded approximately 70 basis points to 26.1%, while EBITDA margins increased to 10.2%. While revenue remained modestly below prior year levels, the more important takeaway is the sequential improvement versus Q1, the results were encouraging. Revenue increased by approximately $65 million compared to the first quarter, while adjusted EBITDA increased by approximately $20.5 million, from $28.1 million in Q1 to $48.6 million in Q2. EBITDA margins expanded 340 basis points sequentially. While some of that increase reflects normal seasonality as construction and rental activity improve entering the summer months, it also reflects the strengthening equipment market conditions, improved equipment margins, and solid execution across our operating businesses. One area I'd specifically highlight is equipment margin performance.

[Tony Colucci, CFO at Alta Equipment Group]

Company-wide new and used equipment gross margins increased to 15.3% during the quarter, representing a meaningful improvement both year-over-year and sequentially. We believe this is an important indicator of more balanced supply and demand dynamics across the competitive landscape. From a segment perspective, first, material handling, which we were particularly pleased with, generated $19 million of adjusted EBITDA in the quarter, an increase of approximately 13% from the prior year, despite lower revenue. Strong service execution, sustained booking momentum, and improved operating efficiency all contributed to this segment's performance. Construction equipment generated $30.6 million of adjusted EBITDA, a notable $16.7 million sequential improvement. Equipment margins improved, utilization trends strengthened throughout the quarter, the business benefited from the expected seasonal recovery following a slow start to the year. Within master distribution, Ecoverse delivered one of its strongest quarters since acquisition.

[Tony Colucci, CFO at Alta Equipment Group]

Revenue increased from $20.9 million-$22.8 million year-over-year, while adjusted EBITDA increased from $1.1 million- $2.8 million. Importantly, much of the tariff-related margin pressure that negatively impacted the business over the last year has now subsided. Revised OEM pricing arrangements and a more stable tariff environment both contributed to materially improved profitability. As a result, Ecoverse returned to the economic profile that underpinned our original acquisition thesis. Taken together, these results support what we discussed last quarter, namely, that many of the factors impacting first quarter performance were temporary in nature, the underlying business remains fundamentally healthy. Moving on to the second portion of my prepared remarks, I'd like to spend a few moments discussing capital efficiency. One of the most encouraging developments during the quarter continues to be the progress we've made on improving capital efficiency across the organization.

[Tony Colucci, CFO at Alta Equipment Group]

I direct investors to slide 16 of the earnings presentation, which highlights the tangible results of our inventory optimization and fleet rationalization initiatives. In material handling, average assets declined by approximately $52 million, or 11%, while the business maintained relatively consistent earnings performance. As a result, trailing 12-month adjusted EBITDA, a percentage of average assets, improved 120 basis points from 14.8%-16%. In the construction segment, average assets declined by approximately $77 million year-over-year, or 8%, while profitability remained resilient despite operating in a market that's still below historic levels. That resulted in a 60 basis point increase in return on assets from 10.8%-11.4%. We believe this demonstrates that Alta is becoming a more capital-efficient organization, generating comparable earnings while deploying less capital and ultimately improving returns.

[Tony Colucci, CFO at Alta Equipment Group]

Briefly, on the balance sheet for the quarter, as of June 30, total liquidity remains strong at approximately $225 million, and net leverage remains stable at roughly 4.7x. Importantly, our capital structure continues to provide flexibility as we have no meaningful debt maturities until 2029, a largely fixed rate debt profile, and ample liquidity to support the business going forward. Moving on to the final portion of my prepared remarks, I'd like to discuss our outlook for the remainder of 2026. We continue to believe that the assumptions underlying our previously communicated guidance remain intact. As shown on slide 19, we are narrowing our adjusted EBITDA guidance range from $167.5 million-$177.5 million, reducing the upper end of the range by $5 million while reaffirming our free cash flow before rent to sell decisioning range of $100 million-$110 million for the year.

[Tony Colucci, CFO at Alta Equipment Group]

Importantly, the adjustment to the upper bound is not being driven by a change in our view of underlying demand, as bookings trends remain supportive and backlog levels have materially increased year-over-year. Rather, the revised range reflects increased visibility into the timing of equipment deliveries and the conversion of the backlog into revenue during the second half of the year. Overall, there are several pillars supporting our confidence in the back half of 2026 when compared to 2025. First, material handling fundamentals continuing to improve. As Ryan mentioned, backlog has increased substantially year-over-year, providing for improved confidence into second half equipment deliveries. Second, construction equipment demand is growing across our core markets. Customer activity remains healthy, and infrastructure-related project activity continues to support equipment utilization and demand. Third, equipment margins continue to trend favorably.

[Tony Colucci, CFO at Alta Equipment Group]

The margin improvements we've discussed today are consistent with reduced competitive discounting, healthier used equipment market dynamics, and more balanced dealer inventories. Fourth, Ecoverse's tariff-related challenges appear to be behind us. The business returned to a more normalized profitability level during the quarter, and we believe those improvements are sustainable moving forward. Lastly, the organization continues to execute on productivity and operational efficiency initiatives across multiple departments. Our product support organizations remain focused on tech utilization, labor efficiency, pricing discipline, and customer profitability. While these initiatives may not always maximize revenue growth, they do improve overall dealership profitability and support stronger long-term returns. Taken together, supportive demand indicators, growing backlog, improving equipment margins, and continued operating discipline support our confidence in the business in the second half of 2026. In closing, the second quarter represented a step forward.

[Tony Colucci, CFO at Alta Equipment Group]

The business benefited from both the expected seasonal ramp and improving conditions across our end markets. Perhaps most importantly, we demonstrated that Alta can generate stable or improving profitability metrics on a significantly smaller asset base, which will translate into better returns on capital over the long run. Thank you for your time and continued interest in Alta Equipment Group. I'll now turn the call back over to the operator, and we'll be happy to take your questions.

[Operator]

We will now begin the question and answer session. If you would like to ask a question, please press star one to raise your hand. To withdraw your question, press star one again. We ask that you pick up your handset when asking a question to allow for optimum sound quality. If you are muted locally, please remember to unmute your device. Please stand by while we compile the Q&A roster. Your first question comes from the line of Michael Shlisky with D.A. Davidson. Your line is now open. Please go ahead.

[Michael Shlisky, Analyst at D.A. Davidson]

Hello. Yes, hi. Good afternoon. Thanks for taking my questions here. I wanted to go back to some comments you made earlier. Hi there. Yeah. I want to go back to the comment you made earlier about some of the material handling modular products. I really appreciate it that this is a growing area, is there an offsetting service revenue headwind when you sell more modular compared to some of the original models?

[Tony Colucci, CFO at Alta Equipment Group]

Mike, I'll take that. No, we don't perceive it as a headwind. If anything, it's a positive because there'd be more commonality across the product lineup, that would potentially enhance parts turns.

[Michael Shlisky, Analyst at D.A. Davidson]

Okay. Turning to construction, I do appreciate that Volvo increased their outlook. Other large OEMs may have increased their outlook a bit more than perhaps Volvo did. I'd just be curious what, in Florida and your main markets, where it's been strong all along, I think. Do you feel like your share has been hanging in there in the first half, anything that could be changing here in the second half as far as construction market share?

[Tony Colucci, CFO at Alta Equipment Group]

Hey, Mike, this is Tony. I'll take that one. I think we've got the one slide in the deck that shows what our markets did from a delivery perspective in Q2 2026 relative to 2025, I think those markets were up something like 7%. We definitely saw that. They were down a little bit in Q1. Long and the short of it is, the number that Ryan mentioned and what Volvo's focused on, I believe, is North America. The one that we're focused on, obviously, is the one just for our AORs. They seem to be in alignment with one another, maybe ours being up a little bit. In terms of share, we don't call out market share specifically publicly, but I would think of us as just holding share in the current marketplace and over the first half.

[Michael Shlisky, Analyst at D.A. Davidson]

Okay. Maybe just lastly on rental fleet sizing. Again, with some of the upticks we're seeing in large projects, infrastructure, and other areas, are you thinking about potentially upsizing your fleet just a little bit to match that demand? Do you think what you've got now is pretty appropriate for the envelope of projects that your customers are facing?

[Tony Colucci, CFO at Alta Equipment Group]

Mike, this is Tony again. The way that we think about the rental fleet is laser-focused on hitting our utilization KPIs. At the moment, we're still not there. To the extent we see demand kind of staying where it is, specifically in the construction fleet. All of this commentary would be specific to our construction fleet. We intend to continue to pare it back a bit by year-end. The other thing that I would point out to you is that some of the data centers and projects that you are referencing are more akin to vertical construction, which would mean aerial equipment, which the larger rental houses compete in, and we do not. It's a much smaller piece of our portfolio in terms of the rental business, and that's all there on slide 17. We're certainly participating from a land clearing perspective.

[Tony Colucci, CFO at Alta Equipment Group]

We know of jobs that our customers are on where they need dump trucks and excavators. Those projects are a little bit shorter relative to call it the vertical construction of the building. The short answer is no, we don't see investing in rental fleet in the short run here.

[Michael Shlisky, Analyst at D.A. Davidson]

Okay. Fair enough. Thanks so much. I'll pass it along.

[Operator]

Your next question comes from the line of Steven Ramsey with Thompson Research Group. Your line is now open. Please go ahead.

[Steven Ramsey, Analyst at Thompson Research Group]

Good evening, everyone. Wanted to start with the color you shared around the marketplace being more balanced from a supply-demand standpoint, and leading to reduced discounting. Would you say that the market is in a healthy and optimal spot at this point, or it could keep trending in a healthier way potentially through the back half of the year?

[Tony Colucci, CFO at Alta Equipment Group]

Hey, Steven, this is Tony. Before I answer your question, I just wanted to point out, I misspoke on the question Mike had. Equipment deliveries in our construction markets were up 20%, as suggested on slide seven. I said 7%, which is the year-to-date number. Anyway. Yeah. All signs point to more normal supply-demand dynamics, which what we have believed all along would help support more normal margins in terms of discounting that we have to do to kind of hold share, specifically in the construction segment. I think there's still a little bit more room to run. We have, as we've suggested, really tried to optimize inventories, and by doing so, we've actually had to take some skinnier deals to offload the balance sheet a little bit.

[Tony Colucci, CFO at Alta Equipment Group]

We think we still got some tailwinds in our own numbers through the back half here from an equipment margin perspective. I think from a macro environment, we've found that balance. What I'd say pricing-wise, I think pricing still has a little bit of room to run as well. Some of the larger players in the construction space that you're well aware of, I think are showing price realization year-over-year of 5% in the second quarter in terms of what the OEMs are charging their dealers. As their costs have gone up, tariffs have been impacted. It's been a while, but we're finally seeing less discounting coming out of some of the bigger houses. I would expect that to continue and prices to continue to improve just overall. Much more balanced than we've been over the last two years.

[Steven Ramsey, Analyst at Thompson Research Group]

Okay. That's great to hear. One thing I wanted to clarify in the guidance, the part of caution around deliveries. Can you talk a bit more about where that caution or conservatism is coming from, if it's a certain product set or a certain customer group?

[Tony Colucci, CFO at Alta Equipment Group]

It would simply be on the, some of this is, as Ryan mentioned, the material handling backlog is getting to record levels from a nominal dollar basis. We're still not there from just a unit perspective. It's really just timing with Hyster-Yale, with their production capabilities and the ability to deliver, and whether or not some of the demand sneaks into 2027, Mike, sorry, Steven, versus 2026. It's not a specific customer base, it's not really a product line per se, but it would be more on the material handling side, particularly Hyster-Yale. It's not that we are saying that there is risk that we know of. We're just being mindful that the level of volume coming through could leak into 2027.

[Steven Ramsey, Analyst at Thompson Research Group]

Okay. That's helpful. Thank you.

[Operator]

Your next question comes from the line of Liam Burke with B. Riley Securities. Your line is now open. Please go ahead.

[Liam Burke, Analyst at B. Riley Securities]

Thank you. Good evening, Ryan. Good evening, Tony.

[Tony Colucci, CFO at Alta Equipment Group]

Hey, Liam.

[Liam Burke, Analyst at B. Riley Securities]

Tony, you were talking in your prepared comments about reducing the higher end of the guidance, basically because you have better visibility. I'm looking at the two major businesses. Materials handling with the order flow gives you a pretty good sense as to what the second half is, understanding that you talked about orders slipping into 2027. On the construction side, what are you seeing that gives you more visibility on the second half activity?

[Tony Colucci, CFO at Alta Equipment Group]

I think it's just general momentum, Liam. As investors and some of the analysts are aware, the material handling purchaser and that cycle is about six months from when we get a booking, place an order with Hyster-Yale, all the way through our ability to invoice, just as a rule of thumb. It could be less or it could be more. We have great confidence that we're all going to perform, we will outperform the back half of 2025 here in 2026 because of that. Again, the timing issue is really what we're very bullish on demand. It's a timing issue that impacted the top end of the guide. On the construction side, as you mentioned, it's more momentum. Q2 deliveries were above Q2 2026 were 20% above Q2 2025 in our marketplace. We still see a lot of quoting activity.

[Tony Colucci, CFO at Alta Equipment Group]

DOT budgets are now in and are effectively holding pretty flat against what were peak levels seen in 2025. There's lots of work to be done here in the back half. Our rental fleet in the construction side is out with no sign of things are still going out on jobs versus coming back. All of those things give us confidence in the back half of the year on the construction side, as well as some cost takeout things that we were able to execute toward the end of Q2 that we expect to see in the second half as well.

[Liam Burke, Analyst at B. Riley Securities]

Just to follow on the construction cost reduction. You had a step up in gross margins on new and used equipment sales. Do you expect that momentum to continue in the second half as volumes improve?

[Tony Colucci, CFO at Alta Equipment Group]

In a word, we don't expect it to retreat, and we would probably expect a little bit more juice on gross margins in the second half.

[Liam Burke, Analyst at B. Riley Securities]

Great. Thank you, Tony.

[Tony Colucci, CFO at Alta Equipment Group]

Thanks, Liam.

[Operator]

Your next question comes from the line of Steve Hansen with Raymond James. Your line is now open. Please go ahead.

[Steve Hansen, Analyst at Raymond James]

Yeah, guys, thanks for the time. Appreciate it. I just wanted to ask one of the earlier questions a different way, just around the guidance. Any reason you didn't decide to take the lower end of the guidance up, perhaps just given all the optimistic commentary here and the outlook so far? Thanks.

[Tony Colucci, CFO at Alta Equipment Group]

Steve, I think it's just building in a little bit of a level of conservatism maybe into the guide. Really, when we think of the back half, the EBITDA is heavily weighted to the back half, something like $90 million or $100 million implied. What we were looking to do, one, is just sweep the range for the investor community. We felt like understanding that there could be some variability in deliveries and so on, we would take the top end down. We have great confidence in the low end at the moment.

[Steve Hansen, Analyst at Raymond James]

Okay, great. That's much appreciated. I just want to go back to your utilization or your asset optimization, sorry, comments earlier as well. How do you feel about the working capital build necessary to sort of support some of this growing order momentum that you see out there? Do you need to build a lot of working cap in the next sort of back half year? How do you feel about that?

[Tony Colucci, CFO at Alta Equipment Group]

No, if you think about it, Steve, most of these, the back half is going to be supported on equipment deliveries. All of that is typically floor planned at 100% loan to payable to value, if you would, for floor plan payable to value. There'll be a little bit of investment in AR, but that's a quick turnaround typically when you're selling equipment. That's a long way of saying no, we wouldn't expect working capital investment in the back half. In fact, as we start to see projects wrap up, typically our cash flows are, especially in the fourth quarter, collections come in and we end up getting working capital release in the back half. I'd expect to see the same this year.

[Steve Hansen, Analyst at Raymond James]

Okay, appreciate it. Just one last one, if I may, is just around the support side. With the broader backdrop improving as you described, any desire to start to reinvest in some of the product support team or pursue techs in a more aggressive fashion here? How do you feel about your support capabilities here moving into the new cycle?

[Tony Colucci, CFO at Alta Equipment Group]

What I would say, it's a tale of two segments probably, Steven. What we have been focused on over the last 12-18 months is technician retention, training, and then uptime or efficiency with technician heads versus adding technician heads. There are elements of the business where we need more techs in material handling, given some of the inflection that we talk about could be one of those areas in the Midwest specifically, where manufacturing and some of the automotive stuff is starting to ramp back up. We've been in the Midwest for 40 or 50 years now, and we've got all kinds of different ways to recruit and attract talent. That would be a place where we're more bullish. Then on the construction side, it's more about getting labor utilization up.

[Tony Colucci, CFO at Alta Equipment Group]

There are elements of the business where we would be looking to take on more heads. New England and the Northeast comes to mind. It's spotty. Right now, we always want to look for highly technical individuals. We're always kind of recruiting. We don't have any major plans at the moment. We don't need 100 mechanics or anything like that at the moment.

[Steve Hansen, Analyst at Raymond James]

Okay. Much appreciated. Thanks.

[Operator]

Your next question comes from the line of Ted Jackson with Northland Securities. Your line is now open. Please go ahead.

[Ted Jackson, Analyst at Northland Securities]

Thanks very much for the time, looking forward to the second half, guys. My first question on material handling. If you listened to the Hyster-Yale call yesterday, in one regard, they actually kind of trend their second half 2026 delivery outlook, not because of a demand issue. Clearly, the bookings are very strong. There was a change in the Section 232 tariffs that in response to that, they chose to delay some deliveries so they could shift their manufacturing from, say, Europe to the U.S. to avoid those tariffs. Did that obviously in conjunction with their customer base. When that happened, did that have any impact on your look for the second half and maybe gave you a view that some of the What am I trying to say?

[Ted Jackson, Analyst at Northland Securities]

That maybe the second half, some of the stuff that you thought you were going to be able to put revenue on the table in material handling maybe got pushed a little out, and some of it's going to come in second half 2027. Again, it's not a bookings issue. It's a smart move on their part because they're saving 15%-20% that they would have had to pay if they hadn't made this change. What I'm asking, did you see the impact from that?

[Tony Colucci, CFO at Alta Equipment Group]

Ted, there wasn't anything. In general, what I would say is the movement, and what we were discussing about the guidance in the back half for material handling, is generally correlated to just general execution risk in terms of the cadence of bookings, producing from Hyster-Yale perspective all the way through kind of end market, our shops, prep and delivery, and then invoicing. Just general execution risk that we were thinking about. I'm not familiar specifically with what the tariff issue was and the repatriating of the manufacturing. That was not a specific element. I don't think that that would impact us one way or the other in terms of just the general execution risk that we always have when we start to see backlog jump like this.

[Ted Jackson, Analyst at Northland Securities]

Okay. It was something more of an interest to me. You made some commentary on utilization rates in the rental fleet, obviously that's an admirable goal to obviously drive them up, use them more, you make more money off them. Is there a target that you would share in terms of where you want it to settle in at? I think right now, when I looked at it and did my calculus, somewhere around the mid-30s was with the last quarter. When we look at that business, say, a year from now or whatever time frame you would think of, where do you want to get it?

[Tony Colucci, CFO at Alta Equipment Group]

Ted, the way that we think about it is, if I do the math here, TTM rental revenue. Give me a minute. TTM rental revenue is $175. At the moment, or at the end of Q2, we're carrying $500 million of gross fleet. That's 35%. We would like that to get into the high 30s, or even touch 40, if we could get that metric there. It goes to what Mike was asking. We still are not where we want to be on our metrics, now we're improving and we've made a lot of progress, as I mentioned on the prepared remarks. If you wanted a benchmark, that's where we would want to be.

[Ted Jackson, Analyst at Northland Securities]

Okay. Third question. We don't talk too much about Ecoverse. Maybe I don't or think about it that much, you had a good quarter out of it. You do have, I view, Terex and part of their business is a comp for that. They had also seen some challenges within that world, in their quarterly call did express some pretty solid optimism with regards to the business as they thought through, I think they were really talking more about 2027. They just felt like the business itself was really on the turn and on the mend. Can you provide us a little update on what you're seeing within that market, and do you agree with that and what the drivers are?

[Tony Colucci, CFO at Alta Equipment Group]

Ted, from what I understand about Terex, is they're more into crushing and screening. They may have an environmental line or two, they wouldn't be competitive to some of the things that Ecoverse is doing, which is more of the environmental processing equipment. We've always seen tailwinds here in North America for this type of product. Given that we're an importer, just to remind everybody, we are the direct importer from Germany primarily, and Europe for a lot of this specialty equipment. There was just so much turmoil, I would say, over the last year, we've had to renegotiate pricing, reset pricing with customers. We believe the demand was always there. It was a margin issue and just a cost issue that we had to work through, which as I mentioned, we feel like is behind us.

[Tony Colucci, CFO at Alta Equipment Group]

That's to say, we always have felt good about the demand. We continue to feel good about demand for those products. Now we finally have our cost in line with the revenue that we're able to get in the marketplace to earn an appropriate margin.

[Ted Jackson, Analyst at Northland Securities]

Okay. My last question is around PeakLogix. You've got a product line now coming out of Hyster-Yale that's far more competitive in terms of obviously getting into the warehouse market. You have a warehouse automation solution. Is there a benefit to you for having both of those together? Is the better and more competitive product offering from Hyster-Yale help you sell PeakLogix? Does PeakLogix help you sell those better designed, better targeted lift trucks from Hyster-Yale into the market as well? What kind of synergies are there between those for you in a sales perspective?

[Ryan Greenawalt, Chairman and CEO at Alta Equipment Group]

This is Ryan. From the sales perspective, the leading part of the business, it's symbiotic. The same customers that are looking at trying to put more through their warehouse, that are using narrow-aisle equipment are the same ones that would be leveraging the expertise of our PeakLogix team. The analogy we use is if we sell the vehicle, now we can design and sell the track that the vehicle runs on.

[Ted Jackson, Analyst at Northland Securities]

The fact that now you have a better product and can sell more vehicles and be more competitive will help you sell more track? Is that a fair way to think about it?

[Ryan Greenawalt, Chairman and CEO at Alta Equipment Group]

Yeah. There are two product evolutions going on at Hyster-Yale. One is that they're making more competitive product for the warehousing segment, which is fast-growing and is more of a specialized piece of equipment where we haven't been as strong historically. The other is that they're providing multiple price points of their legacy product, the more traditional rider forklift, so that we can compete on the high end of the market where we've always been successful, but also in the value part of the market. I wouldn't characterize our warehouse product as low cost. It's full-featured product. It's a separate issue of them trying to drive a lower cost product offering for Class I and Class IV.

[Ted Jackson, Analyst at Northland Securities]

Okay. All right. Thanks for taking my questions.

[Ryan Greenawalt, Chairman and CEO at Alta Equipment Group]

Thanks, Ted.

[Tony Colucci, CFO at Alta Equipment Group]

Thanks, Ted.

[Operator]

There are no further questions at this time. This concludes today's call. Thank you for attending. You may now disconnect.

Participants

Executives

• Jason Dammeyer, VP of Accounting and Reporting
• Ryan Greenawalt, Chairman and CEO
• Tony Colucci, CFO

Analysts

• Michael Shlisky, Analyst at D.A. Davidson
• Steven Ramsey, Analyst at Thompson Research Group
• Liam Burke, Analyst at B. Riley Securities
• Steve Hansen, Analyst at Raymond James
• Ted Jackson, Analyst at Northland Securities