EquipmentShare.com Q3 Earnings Call Highlights

Key Points

• Revenue climbed 55% to nearly $1.5 billion in Q3, while Adjusted Core EBITDA rose 40% to $594 million. Rental growth was supported by strong utilization, pricing and equipment deployment, and net income increased to $20 million from $6 million a year earlier.
• EquipmentShare reiterated its full-year outlook, whose midpoint calls for about $5.9 billion in revenue and $2.2 billion in Adjusted Core EBITDA, while raising its expected year-end managed fleet value to $11.5 billion. Management sees potential to exceed its forecast, though rental margins face costs from services, delivery and third-party equipment rentals.
• The company is expanding into power generation through a multi-year Cummins agreement that will bring its natural-gas generation fleet to nearly one gigawatt. Management also estimated its 408 existing full-service rental locations could generate about $4 billion in annual core EBITDA at maturity, under stated assumptions.

EquipmentShare.com NASDAQ: EQPT reported third-quarter revenue of nearly $1.5 billion, up 55% from a year earlier, as demand for construction equipment rentals drove fleet growth and higher margins.

The company reiterated its October full-year forecast and said it sees potential to exceed it, particularly through further margin expansion. Founder and Chief Executive Officer Jabbok Schlacks said demand from large projects in manufacturing, energy and infrastructure, along with projects being won for 2027, supports expectations for continued growth next year.

Rental segment revenue rose 49% to approximately $1.1 billion in the third quarter of 2026, while rental segment Adjusted Core EBITDA increased 52% to $491 million. The segment’s adjusted margin rose nearly 70 basis points from a year earlier to 44%, according to Chief Financial Officer and Chief Accounting Officer David Marquardt.

Net income was $20 million, compared with $6 million a year earlier. Adjusted net income was $46 million, up from $6 million. The company reported Adjusted Core EBITDA of $594 million, an increase of 40%.

Fleet growth meets strong demand

Fleet original equipment cost, or OEC, grew 32% year over year, while the company had $10.7 billion of fleet under management at quarter-end. Marquardt said strong fleet absorption, high utilization and positive pricing supported rental revenue growth.

EquipmentShare placed approximately $900 million of equipment on rent for the first time during the quarter, compared with about $550 million a year earlier. More than half of the newly deployed equipment went to locations over 24 months old, Jabbok Schlacks said.

The company operated 448 locations at quarter-end, including 408 full-service rental locations. Its mature rental locations generated a 54% rental segment Adjusted Core EBITDA margin on a trailing 12-month basis, the CEO said.

EquipmentShare’s sales segment generated $294 million in revenue, including $243 million from sales to participants in its OWN Program, which allows the company to manage equipment owned by program participants.

Margin pressures and outlook

Marquardt said approximately 380 basis points of selling, general and administrative expense leverage more than offset roughly 310 basis points of margin pressure from costs associated with serving customer demand.

Those pressures included ancillary services, fuel and delivery expenses, and re-renting equipment from other providers. Re-renting reduced the rental margin by approximately 108 basis points as EquipmentShare used third-party equipment to meet demand in categories where availability was tight.

Jabbok Schlacks said he expects some of the re-rental pressure to be temporary as the company replaces third-party equipment with its own fleet. Marquardt cautioned that the mix of services provided to large customers on major projects could continue to affect margins.

At the midpoint of its reiterated full-year guidance, EquipmentShare expects approximately $5.9 billion in total revenue and $2.2 billion in Adjusted Core EBITDA. Its outlook implies approximately $3.9 billion in rental segment revenue and $1.7 billion in rental segment Adjusted EBITDA, with a rental margin of about 43%.

The company also increased its expected year-end managed fleet OEC by $400 million to approximately $11.5 billion, while leaving the midpoints of its gross and net rental capital expenditure guidance unchanged. Marquardt said the additional fleet is expected to be sold directly into the OWN Program.

EquipmentShare ended the quarter with approximately $2.3 billion in available liquidity and net leverage of 3.4 times, down from 3.7 times a year earlier. Marquardt said the company expects leverage in the low three-times range at year-end.

Power investment and long-term targets

Advanced Solutions revenue more than doubled year over year, Jabbok Schlacks said, citing demand for cooling and power generation. EquipmentShare announced a multi-year agreement with Cummins to expand its natural gas generation fleet to nearly one gigawatt of capacity.

Schlacks said some impact from the Cummins agreement could begin in the latter part of the fourth quarter and continue through 2027, 2028 and 2029. The company works with multiple power partners and expects to make further announcements, he said.

Data centers account for a little over 10% of revenue, according to Schlacks, who said demand also extends across other end markets. He pointed to manufacturing, health care and infrastructure projects as sources of growth.

Management also outlined an illustrative mature-state model for its existing 408 full-service rental locations. Based on the performance of sites open more than four years, the company estimated those locations could generate approximately $4 billion in annual core EBITDA and $1.25 billion in annual free cash flow at maturity. The estimate excludes capital for location growth and assumes no additional locations or improvement in OWN Program economics or mature-site returns.

Separately, Schlacks said related parties no longer owned equipment in the OWN Program, down from less than $1 million at the end of the second quarter. EquipmentShare is working to eliminate its remaining property leases with those parties, he said.

About EquipmentShare.com (NASDAQ:EQPT)

EquipmentShare.com is a construction equipment rental and technology company serving contractors and other customers in the United States. Its offerings include heavy equipment, tools, aerial equipment and other machinery, along with equipment sales, parts and maintenance services.

The company also provides T3, a technology platform designed to help customers manage equipment, track assets and coordinate construction operations. By combining rentals with fleet and jobsite management tools, EquipmentShare aims to support customers' equipment needs both on and off the jobsite.

EquipmentShare was founded in 2015 by brothers Willy and Jabbok Schlacks and is headquartered in Columbia, Missouri.

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