UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

_______________________________

FORM 10-Q

_______________________________




☒			QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended ~~September~~March 3031, ~~2024~~2025




☐			TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to

Commission File Number: 001-38186

_______________________________

CUSTOM TRUCK ONE SOURCE, INC.

(Exact name of registrant as specified in its charter)

_______________________________


Delaware			84-2531628
(State or other jurisdiction of incorporation or organization)			(I.R.S. Employer Identification No.)

7701 Independence Ave

Kansas City, MO 64125

(Address of principal executive offices, including zip code)

(816) 241-4888

(Registrant’s telephone number, including area code)

_______________________________

Securities registered pursuant to Section 12(b) of the Act:



Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock, $0.0001 par value per share	CTOS	New York Stock Exchange

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No o

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No o

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer

Accelerated filer

☒

Non-accelerated filer

Smaller reporting company

☐

Emerging growth company

☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

The number of shares of common stock outstanding as of ~~October~~April 28, ~~2024~~2025 was ~~233~~226,~~432~~475,~~467~~766.

Custom Truck One Source, Inc. and Subsidiaries

TABLE OF CONTENTS

PART I

FINANCIAL INFORMATION

Page Number

Item 1.

Financial Statements

Unaudited Condensed Consolidated Statements of Operations and Comprehensive Income (Loss) for the Three and Nine Months Ended September 30, 2024 and 2023

Unaudited Condensed Consolidated Statements of Operations and Comprehensive Income (Loss) for the Three Months Ended March 31, 2025 and 2024

Unaudited Condensed Consolidated Balance Sheets as of September 30, 2024 and December 31, 2023

Unaudited Condensed Consolidated Balance Sheets as of March 31, 2025 and December 31, 2024

Unaudited Condensed Consolidated Statements of Cash Flows for the Nine Months Ended September 30, 2024 and 2023

Unaudited Condensed Consolidated Statements of Cash Flows for the Three Months Ended March 31, 2025 and 2024

Unaudited Condensed Consolidated Statements of Stockholders’ Equity for the Nine Months Ended September 30, 2024 and 2023

Unaudited Condensed Consolidated Statements of Stockholders’ Equity for the Three Months Ended March 31, 2025 and 2024

Notes to Unaudited Condensed Consolidated Financial Statements

Item 2.

Management's Discussion and Analysis of Financial Condition and Results of Operations

2018

Item 3.

Quantitative and Qualitative Disclosures About Market Risk

3227

Item 4.

Controls and Procedures

3328

PART II

OTHER INFORMATION

Item 1.

Legal Proceedings

3429

Item 1A.

Risk Factors

3429

Item 2.

Unregistered Sales of Equity Securities and Use of Proceeds

3530

Item 3.

Defaults Upon Senior Securities

3530

Item 4.

Mine Safety Disclosures

3530

Item 5.

Other Information

3530

Item 6.

Exhibits

3631

SIGNATURES

3732

PART I - FINANCIAL INFORMATION

Item 1. Financial Statements

Custom Truck One Source, Inc.

Condensed Consolidated Statements of Operations and Comprehensive Income (Loss) (unaudited)

Three Months Ended September 30,

Nine Months Ended September 30,

Three Months Ended March 31,

(in $000s, except per share data)

~~2024~~

~~2023~~

~~2024~~2025

~~2023~~2024

Revenue

Rental revenue

~~108,324~~

~~118,209~~

~~317~~116,~~492~~261

~~358~~106,~~666~~171

Equipment sales

~~305,476~~

~~283,079~~

~~863~~273,~~711~~863

~~886~~272,~~486~~602

Parts sales and services

~~33,420~~

~~33,065~~

~~100~~32,~~337~~108

9832,~~194~~534

Total revenue

~~447,220~~

~~434,353~~

1422,~~281,540~~232

1411,~~343,346~~307

Cost of Revenue

Cost of rental revenue

~~29,439~~

~~29,874~~

8830,~~559~~400

9129,~~754~~825

Depreciation of rental equipment

~~45,956~~

~~42,469~~

~~134~~50,~~285~~091

~~126~~43,~~415~~744

Cost of equipment sales

~~251,987~~

~~228,912~~

~~704~~228,~~105~~477

~~720~~220,~~303~~800

Cost of parts sales and services

~~28,009~~

~~25,942~~

8227,~~786~~728

7726,~~438~~229

Total cost of revenue

~~355,391~~

~~327,197~~

1336,~~009,735~~696

1320,~~015,910~~598

Gross Profit

~~91,829~~

~~107,156~~

~~271~~85,~~805~~536

~~327~~90,~~436~~709

Operating Expenses

Selling, general and administrative expenses

~~54,630~~

~~56,955~~

~~168~~59,~~322~~451

~~171~~57,~~974~~995

Amortization

~~6,696~~

~~6,698~~

196,~~966~~680

196,~~976~~578

Non-rental depreciation

~~3,472~~

~~2,602~~

93,~~752~~340

72,~~973~~920

Transaction expenses and other

~~3,994~~

~~2,890~~

143,~~684~~660

104,~~039~~846

Total operating expenses

~~68,792~~

~~69,145~~

~~212~~73,~~724~~131

~~209~~72,~~962~~339

Operating Income

~~23,037~~

~~38,011~~

5912,~~081~~405

~~117~~18,~~474~~370

Other Expense

Interest expense, net

~~43,875~~

~~34,144~~

~~124~~38,~~191~~913

9437,~~945~~915

Financing and other expense (income)

~~(2,818)~~

~~(5,745)~~

(91,~~399~~016)

(143,~~744~~262)

Total other expense

~~41,057~~

~~28,399~~

~~114~~37,~~792~~897

8034,~~201~~653

Income (Loss) Before Income Taxes

~~(18,020)~~

~~9,612~~

(5525,~~711~~492)

37(16,~~273~~283)

Income Tax Expense (Benefit)

~~(604)~~

~~432~~

~~518~~(7,701)

2(1,~~683~~948)

Net Income (Loss)

~~(17,416)~~

~~9,180~~

(5617,~~229~~791)

34(14,~~590~~335)

Other Comprehensive Income (Loss):

Unrealized foreign currency translation adjustments

~~1,310~~

~~(2,823)~~

~~(2,159)~~72

(~~259~~2,530)

Other Comprehensive Income (Loss)

~~1,310~~

~~(2,823)~~

~~(2,159)~~72

(~~259~~2,530)

Comprehensive Income (Loss)

~~(16,106)~~

~~6,357~~

(5817,~~388~~719)

34(16,~~331~~865)

Net Income (Loss) Per Share:

Basic

~~(0.07)~~

~~0.04~~

(0.2408)

(0.1406)

Diluted

~~(0.07)~~

~~0.04~~

(0.2408)

(0.1406)

Weighted-Average Common Shares Outstanding:

Basic

~~234,438~~

~~245,810~~

~~238~~228,~~162~~276

~~245~~240,~~987~~364

Diluted

~~234,438~~

~~246,594~~

~~238~~228,~~162~~276

~~246~~240,~~809~~364

See accompanying notes to unaudited condensed consolidated financial statements.

Custom Truck One Source, Inc.

Condensed Consolidated Balance Sheets (unaudited)

(in $000s, except share data)	~~September~~March 3031, ~~2024~~2025		December 31, ~~2023~~2024
Assets
Current Assets
Cash and cash equivalents	$	85,~~438~~380	$	103,~~309~~805
Accounts receivable, net	~~176~~202,~~037~~230		215,~~089~~873
Financing receivables, net	117,~~992~~963		308,~~845~~913
Inventory	1,~~200~~075,~~925~~635		~~985~~1,~~794~~049,304
Prepaid expenses and other	1329,~~573~~165		23,~~862~~557
Total current assets	1,~~410~~320,~~965~~373		1,~~265~~301,~~899~~452
Property and equipment, net	~~161~~129,~~023~~046		~~142~~130,~~115~~923
Rental equipment, net	~~975~~1,~~129~~033,813		~~916~~1,~~704~~001,651
Goodwill	~~705~~704,~~282~~804		704,~~011~~806
Intangible assets, net	~~259~~245,~~497~~710		~~277~~252,~~212~~393
Operating lease assets	5094,~~126~~269		3894,~~426~~696
Other assets	1714,~~918~~893		2316,~~430~~046
Total Assets	$	3,~~579~~542,~~940~~908	$	3,~~367~~501,~~797~~967
Liabilities and Stockholders' Equity
Current Liabilities
Accounts payable	$	88123,~~744~~590	$	~~117~~88,~~653~~487
Accrued expenses	5880,~~405~~724		7369,~~847~~349
Deferred revenue and customer deposits	2021,~~059~~021		2826,~~758~~250
Floor plan payables - trade	~~428~~334,~~756~~919		~~253~~330,~~197~~498
Floor plan payables - non-trade	~~493~~450,~~786~~247		~~409~~470,~~113~~830
Operating lease liabilities - current	7,~~225~~784		67,~~564~~445
Current maturities of long-term debt	15,~~458~~966		87,~~257~~842
Total current liabilities	1,~~098~~024,~~433~~251		~~897~~1,~~389~~000,701
Long-term debt, net	1,~~567~~593,~~103~~176		1,~~487~~519,~~136~~882
Operating lease liabilities - noncurrent	4488,~~258~~781		3288,~~714~~674
Deferred income taxes	3223,~~637~~281		3331,~~355~~401
Total long-term liabilities	1,~~643~~705,~~998~~238		1,~~553~~639,~~205~~957
Stockholders' Equity
Common stock — $0.0001 par value, 500,000,000 shares authorized; 251,411,684 and 249,903,120 shares issued; and 233,432,467 and 241,011,332 shares outstanding, at September 30, 2024 and December 31, 2023, respectively	25		25
Common stock — $0.0001 par value, 500,000,000 shares authorized; 252,037,835 and 251,908,970 shares issued; and 225,779,549 and 233,794,319 shares outstanding, at March 31, 2025 and December 31, 2024, respectively	25		25
Treasury stock, at cost — 17,979,217 and 8,891,788 shares at September 30, 2024 and December 31, 2023, respectively	(87,580)		(56,524)
Treasury stock, at cost — 26,258,286 and 18,114,651 shares at March 31, 2025 and December 31, 2024, respectively	(120,804)		(88,229)
Additional paid-in capital	1,~~547~~553,~~303~~189		1,~~537~~550,~~553~~785
Accumulated other comprehensive loss	(814,~~137~~672)		(514,~~978~~744)
Accumulated deficit	(~~614~~604,~~102~~319)		(~~557~~586,~~873~~528)
Total stockholders' equity	~~837~~813,~~509~~419		~~917~~861,~~203~~309
Total Liabilities and Stockholders' Equity	$	3,~~579~~542,~~940~~908	$	3,~~367~~501,~~797~~967

See accompanying notes to unaudited condensed consolidated financial statements.

Custom Truck One Source, Inc.

Condensed Consolidated Statements of Cash Flows (unaudited)

Nine Months Ended September 30,

Three Months Ended March 31,

(in $000s)

~~2024~~2025

~~2023~~2024

Operating Activities

Net income (loss)

(5617,~~229~~791)

34(14,~~590~~335)

Adjustments to reconcile net income (loss) to net cash flow from operating activities:

Depreciation and amortization

~~173~~62,~~271~~137

~~162~~56,~~084~~160

Amortization of debt issuance costs

41,~~627~~064

41,~~221~~431

Provision for losses on accounts receivable

92,~~541~~030

41,~~522~~882

Share-based compensation

82,~~748~~404

102,~~312~~730

Gain on sales and disposals of rental equipment

(349,~~702~~986)

(4811,~~392~~119)

Change in fair value of derivative and warrants

~~(527)~~—

(~~2,409~~527)

Deferred tax expense (benefit)

(~~718~~8,119)

1(2,~~959~~403)

Changes in assets and liabilities:

Accounts and financing receivables

129,~~980~~132

21,~~978~~064

Inventories

(~~213~~26,~~468~~306)

(~~290~~116,~~302~~823)

Prepaids, operating leases and other

11(4,~~390~~756)

6(1,~~143~~645)

Accounts payable

~~(27~~35,~~219)~~230

422,~~707~~769

Accrued expenses and other liabilities

~~(14~~11,~~628)~~405

3(5,~~620~~745)

Floor plan payables - trade, net

~~175~~4,~~559~~421

5854,~~295~~450

Customer deposits and deferred revenue

(85,~~691~~230)

(122,~~034~~264)

Net cash flow from operating activities

3955,~~934~~635

(214,~~706~~375)

Investing Activities

Acquisition of business, net of cash acquired

~~(6,015)~~—

—(1,410)

Purchases of rental equipment

(~~278~~111,~~507~~933)

(~~289~~75,~~984~~552)

Proceeds from sales and disposals of rental equipment

~~155~~44,~~788~~547

~~177~~60,~~623~~078

Purchase of non-rental property and cloud computing arrangements

(363,~~149~~920)

(3316,~~251~~527)

Net cash flow for investing activities

(~~164~~71,~~883~~306)

(~~145~~33,~~612~~411)

Financing Activities

Proceeds from debt

4,200

13,537

Borrowings under revolving credit facilities

72,575

35,000

Share-based payments

(1,451)

387

Repayments under revolving credit facilities

—

(35,000)

Borrowings under revolving credit facilities

168,069

111,057

Proceeds from debt, net issuance costs

—

4,200

Repayments under revolving credit facilities

(92,569)

(56,377)

Principal payments on long-term debt

(2,221)

(2,612)

Repayments of notes payable

(7,946)

(6,674)

Acquisition of inventory through floor plan payables - non-trade

125,450

162,781

Finance lease payments

—

(2,682)

Repayment of floor plan payables - non-trade

(146,033)

(112,102)

Repurchase of common stock

(2832,~~984~~575)

(196,~~936~~762)

Acquisition of inventory through floor plan payables - non-trade

490,195

571,062

Share-based payments

—

(10)

Repayment of floor plan payables - non-trade

(405,522)

(467,707)

Net cash flow from financing activities

17,196

45,495

Payment of debt issuance costs

(3,213)

(110)

Effect of exchange rate changes on cash and cash equivalents

(28)

Net cash flow from financing activities

122,779

142,557

Net Change in Cash and Cash Equivalents

1,575

(2,319)

Effect of exchange rate changes on cash and cash equivalents

299

194

Cash and Cash Equivalents at Beginning of Period

3,805

10,309

Net Change in Cash and Cash Equivalents

(1,871)

(5,567)

Cash and Cash Equivalents at End of Period

5,380

7,990

Cash and Cash Equivalents at Beginning of Period

10,309

14,360

Cash and Cash Equivalents at End of Period

8,438

8,793

Custom Truck One Source, Inc.

Condensed Consolidated Statements of Cash Flows (unaudited) — Continued

Nine Months Ended September 30,

Three Months Ended March 31,

(in $000s)

~~2024~~2025

~~2023~~2024

Supplemental Cash Flow Information

Interest paid

~~105~~26,~~202~~839

5123,~~142~~098

Income taxes paid

~~4,140~~—

12,~~897~~133

Non-Cash Investing and Financing Activities

Rental equipment and property and equipment purchases in accounts payable

~~439~~435

~~596~~953

Rental equipment sales in accounts receivable

~~111~~933

12,~~573~~210

See accompanying notes to unaudited condensed consolidated financial statements.

Custom Truck One Source, Inc.

Condensed Consolidated Statements of Stockholders' Equity (unaudited)

			Common Stock		Treasury Stock		Additional Paid-in Capital		Accumulated Other Comprehensive Loss		Accumulated Deficit		Total Stockholders' Equity
	Shares
(in $000s, except share data)	Common	Treasury
Balance, December 31, 2024	251,908,970	(18,114,651)	$	25	$	(88,229)	$	1,550,785	$	(14,744)	$	(586,528)	$	861,309
Net income (loss)	—	—	—		—		—		—		(17,791)		(17,791)
Other comprehensive income (loss)	—	—	—		—		—		72		—		72
Common stock repurchases	—	(8,143,635)	—		(32,575)		—		—		—		(32,575)
Share-based payments	128,865	—	—		—		2,404		—		—		2,404
Balance, March 31, 2025	252,037,835	(26,258,286)	$	25	$	(120,804)	$	1,553,189	$	(14,672)	$	(604,319)	$	813,419
			Common Stock		Treasury Stock		Additional Paid-in Capital		Accumulated Other Comprehensive Loss		Accumulated Deficit		Total Stockholders' Equity
	Shares
(in $000s, except share data)	Common	Treasury
Balance, December 31, 2023	249,903,120	(8,891,788)	$	25	$	(56,524)	$	1,537,553	$	(5,978)	$	(557,873)	$	917,203
Net income (loss)	—	—	—		—		—		—		(14,335)		(14,335)
Other comprehensive income (loss)	—	—	—		—		—		(2,530)		—		(2,530)
Common stock repurchases	—	(1,040,585)	—		(6,381)		—		—		—		(6,381)
Share-based payments	171,990	(9,885)	—		(53)		2,774		—		—		2,721
Balance, March 31, 2024	250,075,110	(9,942,258)	25$	25	~~(62,958)~~$	(62,958)	~~1,540,327~~$	1,540,327	~~(8,508)~~$	(8,508)	~~(572,208)~~$	(572,208)	~~896,678~~$	896,678
Net income (loss)	—	—	—		—		—		—		(24,478)		(24,478)
Other comprehensive income (loss)	—	—	—		—		—		(939)		—		(939)
Common stock repurchases	—	(3,589,436)	—		(16,736)		—		—		—		(16,736)
Share-based payments	1,336,574	(408,262)	—		(2,400)		4,557		—		—		2,157
Balance, June 30, 2024	251,411,684	(13,939,956)	25		(82,094)		1,544,884		(9,447)		(596,686)		856,682
Net income (loss)	—	—	—		—		—		—		(17,416)		(17,416)
Other comprehensive income (loss)	—	—	—		—		—		1,310		—		1,310
Common stock repurchases	—	(1,260,827)	—		(5,486)		—		—		—		(5,486)
Earnout share forfeitures	—	(2,778,434)	—		—		—		—		—		—
Share-based payments	—	—	—		—		2,419		—		—		2,419
Balance, September 30, 2024	251,411,684	(17,979,217)	$	25	$	(87,580)	$	1,547,303	$	(8,137)	$	(614,102)	$	837,509
			Common Stock		Treasury Stock		Additional Paid-in Capital		Accumulated Other Comprehensive Loss		Accumulated Deficit		Total Stockholders' Equity
	Shares
(in $000s, except share data)	Common	Treasury
Balance, December 31, 2022	248,311,104	(2,241,069)	$	25	$	(15,537)	$	1,521,487	$	(8,947)	$	(608,585)	$	888,443
Net income (loss)	—	—	—		—		—		—		13,800		13,800
Other comprehensive income (loss)	—	—	—		—		—		342		—		342
Common stock repurchases	—	(174,744)	—		(1,122)		—		—		—		(1,122)
Share-based payments	130,484	(11,582)	—		(77)		3,451		—		—		3,374
Balance, March 31, 2023	248,441,588	(2,427,395)	25		(16,736)		1,524,938		(8,605)		(594,785)		904,837
Net income (loss)	—	—	—		—		—		—		11,610		11,610
Other comprehensive income (loss)	—	—	—		—		—		2,222		—		2,222
Common stock repurchases	—	(505,142)	—		(3,205)		—		—		—		(3,205)
Share-based payments	919,763	(221,233)	—		(1,497)		5,505		—		—		4,008
Balance, June 30, 2023	249,361,351	(3,153,770)	25		(21,438)		1,530,443		(6,383)		(583,175)		919,472
Net income (loss)	—	—	—		—		—		—		9,180		9,180
Other comprehensive income (loss)	—	—	—		—		—		(2,823)		—		(2,823)
Common stock repurchases	—	(2,466,609)	—		(15,754)		—		—		—		(15,754)
Share-based payments	176,963	(10,264)	—		(64)		3,380		—		—		3,316
Balance, September 30, 2023	249,538,314	(5,630,643)	$	25	$	(37,256)	$	1,533,823	$	(9,206)	$	(573,995)	$	913,391

See accompanying notes to unaudited condensed consolidated financial statements.

Custom Truck One Source, Inc.

Notes to Unaudited Condensed Consolidated Financial Statements

Note 1: Business and Organization

Organization

Custom Truck One Source, Inc., a Delaware corporation, and its wholly owned subsidiaries (“we,” “our,” “us,” or “the Company”) are engaged in the business of providing a range of products and services to customers through rentals and sales of specialty equipment, rentals and sales of aftermarket parts and services related to the specialty equipment, and repair, maintenance and customization services related to that equipment.

We are a specialty equipment provider to the electric utility transmission and distribution, telecommunications, rail, forestry, waste management and other infrastructure-related industries in North America. Our core business relates to our new equipment inventory and rental fleet of specialty equipment that is utilized by service providers in infrastructure development and improvement work. We offer our specialized equipment to a diverse customer base, including utilities and contractors, for the maintenance, repair, upgrade, and installation of critical infrastructure assets, including distribution and transmission electric lines, telecommunications networks and rail systems, as well as for lighting and signage. We rent, produce, sell and service a broad range of new and used equipment, including bucket trucks, digger derricks, dump trucks, cranes, service trucks, and heavy-haul trailers. We manage the business in three reporting segments: Equipment Rental Solutions (“ERS”), Truck and Equipment Sales (“TES”) and Aftermarket Parts and Services (“APS”).

Basis of Presentation

Our accompanying condensed consolidated financial statements have been prepared in accordance with United States generally accepted accounting principles (“GAAP”). Our condensed consolidated financial statements include the accounts of all wholly-owned subsidiaries. All intercompany accounts and transactions have been eliminated in consolidation. The preparation of financial statements in accordance with GAAP requires that these Unaudited Condensed Consolidated Financial Statements and most of the disclosures in these Notes be presented on a historical basis, as of or for the current interim period ended or comparable prior period.

The accompanying interim statements of the Company have been prepared in accordance with GAAP for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X, and the Condensed Consolidated Balance Sheet at December 31, ~~2023~~2024 has been derived from the audited consolidated financial statements of Custom Truck One Source, Inc. at that date. Accordingly, these interim financial statements do not include all of the information and footnotes required by GAAP for complete financial statements. In the opinion of management, all adjustments, consisting of normal recurring adjustments and disclosures necessary for a fair statement of these interim statements, have been included. The results reported in these interim statements are not necessarily indicative of the results that may be reported for the entire year or for any other periods. These interim statements should be read in conjunction with the Custom Truck One Source, Inc. audited consolidated financial statements included in the Custom Truck One Source, Inc. Annual Report on Form 10-K for the year ended December 31, ~~2023~~2024.

Use of Estimates

The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from those estimates.

Recently ~~Issued~~Adopted Accounting Standards

Income Taxes

In December 2023, the Financial Accounting Standards Board (the “FASB”) issued Accounting Standards Update No. 2023-09, Income Taxes—Improvements to Income Tax Disclosures (Topic 740) (“ASU 2023-09”), which expands income tax disclosure requirements to include additional information related to the rate reconciliation of our effective tax rates to statutory rates as well as additional disaggregation of taxes paid. The amendments in the ASU also remove disclosures related to certain unrecognized tax benefits and deferred taxes. ASU 2023-09 is effective for fiscal years beginning after December 15, 2024. The amendments may be applied prospectively or retrospectively,. ~~and~~The ~~early~~Company ~~adoption~~adopted isASU ~~permitted.~~2023-09 Weon ~~are~~January ~~currently~~1, ~~assessing~~2025 and will include the ~~impact~~newly ofrequired disclosures in the ~~requirements~~notes onto our ~~condensed~~ consolidated financial statements ~~and~~in ~~disclosures~~our Annual Report on Form 10-K for the fiscal year ending December 31, 2025.

~~Segment~~Recently ~~Reporting~~Issued Accounting Standards

InIncome November 2023, the FASB issued Accounting Standards Update No. 2023-07, Segment Reporting—Improvements to Reportable Segment Disclosures (Topic 280) (“ASU 2023-07”), which expands reportable segment disclosure requirements, primarily through enhanced disclosures about significant segment expenses. The guidance is effective for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024, with retrospective application required and early adoption permitted. We are currently assessing the impact of the requirements on our condensed consolidated financial statements and disclosures.Statement

In November 2024, the FASB issued Accounting Standards Update No. 2024-03, Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses (“ASU 2024-03”), which requires additional disclosures in the notes to financial statements, disaggregating specific expense categories within relevant income statement captions. ASU 2024-03 is effective for fiscal years beginning after December 15, 2026, and interim periods within fiscal years beginning after December 15, 2027. Early adoption is permitted. We are currently assessing the impact of the requirements on our condensed consolidated financial statements and disclosures.

Note 2: Revenue

Revenue Disaggregation

Geographic Areas

The Company had total revenue in the following geographic areas:

Three Months Ended September 30,

Nine Months Ended September 30,

Three Months Ended March 31,

(in $000s)

~~2024~~2025

~~2023~~2024

~~2024~~

~~2023~~

United States

~~435~~413,~~919~~552

~~424~~397,~~513~~697

~~1,247,682~~

~~1,305,292~~

Canada

118,~~301~~680

913,~~840~~610

~~33,858~~

~~38,054~~

Total Revenue

~~447~~422,~~220~~232

~~434~~411,~~353~~307

~~1,281,540~~

~~1,343,346~~

Major Product Lines and Services

Equipment leasing and equipment sales are the core businesses of the Company, with leasing complemented by the sale of rental units from the rental fleet. The Company’s revenue by major product and service line for the three ~~and nine~~ months ended ~~September~~March 3031, ~~2024~~2025 and ~~2023~~2024 are presented in the table below.


	Three Months Ended March 31,						Three Months Ended March 31,
	2025						2024
(in $000s)	Topic 842		Topic 606		Total		Topic 842		Topic 606		Total
Rental:
Rental	$	110,285	$	—	$	110,285	$	101,510	$	—	$	101,510
Shipping and handling	—		5,976		5,976		—		4,661		4,661
Total rental revenue	110,285		5,976		116,261		101,510		4,661		106,171
Sales and services:
Equipment sales	2,161		271,702		273,863		3,018		269,584		272,602
Parts and services	2,673		29,435		32,108		3,244		29,290		32,534
Total sales and services	4,834		301,137		305,971		6,262		298,874		305,136
Total revenue	$	115,119	$	307,113	$	422,232	$	107,772	$	303,535	$	411,307

	Three Months Ended September 30,						Three Months Ended September 30,
	2024						2023
(in $000s)	Topic 842		Topic 606		Total		Topic 842		Topic 606		Total
Rental:
Rental	$	103,703	$	—	$	103,703	$	112,373	$	—	$	112,373
Shipping and handling	—		4,621		4,621		—		5,836		5,836
Total rental revenue	103,703		4,621		108,324		112,373		5,836		118,209
Sales and services:
Equipment sales	3,701		301,775		305,476		12,760		270,319		283,079
Parts and services	2,300		31,120		33,420		4,216		28,849		33,065
Total sales and services	6,001		332,895		338,896		16,976		299,168		316,144
Total revenue	$	109,704	$	337,516	$	447,220	$	129,349	$	305,004	$	434,353
	Nine Months Ended September 30,						Nine Months Ended September 30,
	2024						2023
(in $000s)	Topic 842		Topic 606		Total		Topic 842		Topic 606		Total
Rental:
Rental	$	303,418	$	—	$	303,418	$	339,896	$	—	$	339,896
Shipping and handling	—		14,074		14,074		—		18,770		18,770
Total rental revenue	303,418		14,074		317,492		339,896		18,770		358,666
Sales and services:
Equipment sales	8,273		855,438		863,711		56,535		829,951		886,486
Parts and services	8,170		92,167		100,337		15,969		82,225		98,194
Total sales and services	16,443		947,605		964,048		72,504		912,176		984,680
Total revenue	$	319,861	$	961,679	$	1,281,540	$	412,400	$	930,946	$	1,343,346

Rental revenue is primarily comprised of revenues from rental agreements and freight charges billed to customers. Equipment sales recognized pursuant to sales-type leases are recorded within equipment sales revenue. Charges to customers for damaged rental equipment are recorded within parts and services revenue.

Receivables, Contract Assets and Liabilities

As of ~~September~~March 3031, ~~2024~~2025 and December 31, ~~2023~~2024, the Company had net receivables related to contracts with customers of $81107.5 million and $~~112~~119.19 million, respectively. As of ~~September~~March 3031, ~~2024~~2025 and December 31, ~~2023~~2024, the Company had net receivables related to rental contracts and other of $94.38 million and $~~103~~95.09 million, respectively.

The Company manages credit risk associated with its accounts receivable at the customer level. Because the same customers generate the revenues that are accounted for under both Topic 606 and Topic 842, the discussions below address how credit risk and the Company's allowance for credit losses impact the Company's total revenues.

The Company’s allowance for credit losses reflects its estimate of the amount of receivables that it will be unable to collect. The estimated losses are based upon a review of outstanding receivables, the related aging, including specific accounts if deemed necessary, and on the Company’s historical collection experience. The estimated losses are calculated using the loss rate method based upon a review of outstanding receivables, related aging, and historical collection experience. The Company's estimates reflect changing circumstances, including changes in the economy or in the particular circumstances of individual customers, and, as a result, the Company may be required to increase or decrease its allowance.

Accounts receivable, net consisted of the following:

(in $000s)	~~September~~March 3031, ~~2024~~2025		December 31, ~~2023~~2024
Accounts receivable	$	~~194~~219,~~022~~283	$	~~232~~233,~~592~~688
Less: allowance for doubtful accounts	(17,~~985~~053)		(17,~~503~~815)
Accounts receivable, net	$	~~176~~202,~~037~~230	$	215,~~089~~873

For the ~~nine~~three months ended ~~September~~March 3031, ~~2024~~2025 and ~~2023~~2024, the Company wrote-off $82.48 million and $92.60 million, respectively, of receivables, net of recoveries.

10When customers are billed for rentals in advance of the rental period, the Company defers recognition of revenue. As of March 31, 2025 and December 31, 2024, the Company had approximately $5.0 million and $4.8 million, respectively, of deferred rental revenue. Additionally, the Company collects deposits from customers for orders placed for equipment and rentals. The Company had approximately $16.0 million and $21.5 million in deposits as of March 31, 2025 and December 31, 2024, respectively. Of the $21.5 million deposit liability balance as of December 31, 2024, $18.2 million was recorded as revenue during the three months ended March 31, 2025 due to performance obligations being satisfied. The Company’s remaining performance obligations on its equipment deposit liabilities have original expected durations of one year or less.

When customers are billed for rentals in advance of the rental period, the Company defers recognition of revenue. As of both September 30, 2024 and December 31, 2023, the Company had approximately $2.8 million of deferred rental revenue. Additionally, the Company collects deposits from customers for orders placed for equipment and rentals. The Company had approximately $17.3 million and $25.9 million in deposits as of September 30, 2024 and December 31, 2023, respectively. All of the $25.9 million deposit liability balance as of December 31, 2023, was recorded as revenue during the nine months ended September 30, 2024 due to performance obligations being satisfied. The Company’s remaining performance obligations on its equipment deposit liabilities have original expected durations of one year or less.

The Company does not have material contract assets, and as such, did not recognize any material impairments of any contract assets.

Note 3: Sales-Type Leases

Revenue from rental agreements qualifying as sales-type leases was as follows:

Three Months Ended September 30,

Nine Months Ended September 30,

Three Months Ended March 31,

(in $000s)

~~2024~~

~~2023~~

~~2024~~2025

~~2023~~2024

Equipment sales

~~3,701~~

~~12,760~~

82,~~273~~161

563,~~535~~018

Cost of equipment sales

~~4,111~~

~~11,714~~

81,~~162~~839

542,~~354~~822

Gross margin

~~(410)~~

~~1,046~~

~~111~~322

~~2,181~~196

As these transactions remained under rental contracts, $31.79 million and $75.14 million for the three months ended ~~September~~March 3031, ~~2024~~2025 and ~~2023, respectively, and $14.6 million and $22.2 million for the nine months ended September 30,~~ 2024 ~~and 2023~~, respectively, were billed under the contracts as rentals. Interest income from financing receivables was $21.80 million and $42.57 million for the three months ended ~~September~~March 3031, ~~2024~~2025 and ~~2023, respectively, and $8.8 million and $12.3 million for the nine months ended September 30,~~ 2024 ~~and 2023~~, respectively.

Note 4: Inventory

Whole goods inventory is comprised of chassis, attachments (i.e., boom cranes, aerial lifts, digger derricks, dump bodies, etc.) and the in-process costs incurred in the final assembly of those units. As part of the business model, the Company sells unassembled individual whole goods and whole goods with varying levels of customization direct to consumers or dealers. Whole goods inventory also includes new equipment purchased specifically for resale to customers. Inventory consisted of the following:

(in $000s)	~~September~~March 3031, ~~2024~~2025		December 31, ~~2023~~2024
Whole goods	$	1942,~~068,328~~756	$	~~846~~913,~~170~~571
Aftermarket parts and services inventory	132,~~597~~879		~~139~~135,~~624~~733
Inventory	$	1,~~200~~075,~~925~~635	$	~~985~~1,~~794~~049,304

Note 5: Floor Plan Financing

Floor plan payables represent financing arrangements to facilitate the Company’s purchase of new and used trucks, cranes, and construction equipment inventory. All floor plan payables are collateralized by the inventory financed. These payables become due and payable upon the sale, transfer, or reclassification of each unit of inventory. Certain floor plan arrangements require the Company ~~to satisfy various financial ratios consistent with those under the ABL Facility (as defined below). As of September 30, 2024, the Company was in compliance with these covenants.~~

to satisfy various financial ratios consistent with those under the ABL Facility (as defined below). As of March 31, 2025, the Company was in compliance with these covenants.

The amounts owed under floor plan payables are summarized as follows:

(in $000s)	~~September~~March 3031, ~~2024~~2025		December 31, ~~2023~~2024
Trade:
Daimler Truck Financial	$	~~237~~176,~~938~~105	$	~~181~~166,~~480~~409
PACCAR Financial Services	~~148~~134,~~859~~316		71129,~~717~~899
Ford Motor Credit Company, LLC	4124,~~959~~498		—34,190
Trade floor plan payables	$	~~428~~334,~~756~~919	$	~~253~~330,~~197~~498
Non-trade:
PNC Equipment Finance, LLC	$	~~493~~450,~~786~~247	$	~~409~~470,~~113~~830
Non-trade floor plan payables	$	~~493~~450,~~786~~247	$	~~409~~470,~~113~~830

11Interest on outstanding floor plan payable balances is due and payable monthly. Floor plan interest expense was $13.3 million and $12.9 million for the three months ended March 31, 2025, and 2024, respectively.

Interest on outstanding floor plan payable balances is due and payable monthly. Floor plan interest expense was $16.7 million and $45.0 million for the three and nine months ended September 30, 2024, respectively, and $10.1 million and $25.0 million for the same periods in 2023.

Trade Floor Plan Financing:

Daimler Truck Financial

The Company is party to the Wholesale Financing Agreement with Daimler Truck Financial (the “Daimler Facility”), which ~~bears~~bore interest at a rate of U.S. Prime Rate plus 0.80% after an initial interest free period of up to 150 days. On January 1, 2025, the interest rate was updated to U.S. Prime Rate plus 0.00%. The total borrowing capacity under the Daimler Facility is $225.0 million, however, from time to time, Daimler extends credit to the Company in excess of this amount. The Daimler agreement is evergreen and is subject to termination by either party through written notice.

PACCAR

The Company has an Inventory Financing Agreement with PACCAR Financial Corp that provides the Company with a line of credit of $~~150~~175.0 million to finance inventory purchases of new Peterbilt and/or Kenworth trucks, tractors, and chassis. Amounts borrowed against this line of credit incur interest at a rate of U.S. Prime Rate minus 0.71%. The PACCAR agreement extends automatically each April and is subject to termination by either party through written notice. ~~In October 2024, the revolving credit facility limit was increased to $175.0 million.~~

Ford Motor Credit Company, LLC

On April 2, 2024, the Company entered into the Master Loan and Security Agreement with Ford Motor Credit Company, LLC (the “FMCC Facility”), which allows the Company to enter into individual loan supplements which bear interest based on the bank prime loan rate as reported by the Federal Reserve Board for the Friday preceding the last Monday of a given month. The total borrowing capacity under the FMCC Facility as of ~~September~~March 3031, ~~2024~~2025 was $42.0 million. The FMCC agreement is evergreen and is subject to termination by either party through written notice.

References to the U.S. Prime Rate in the foregoing agreements represent the rate as published in The Wall Street Journal.

Non-Trade Floor Plan Financing:

PNC Equipment Finance, LLC

The Company has an Inventory Loan, Guaranty and Security Agreement (the “Loan Agreement”) with PNC Equipment Finance, LLC. The Loan Agreement, as of ~~September~~March 3031, ~~2024~~2025, provides the Company with a $~~500~~520.0 million revolving credit facility, which matures on August 25, 2025 and bears interest at a three-month term secured overnight financing rate (“SOFR”) plus 3.00%.

Note 6: Rental Equipment

Rental equipment, net consisted of the following:

(in $000s)	~~September~~March 3031, ~~2024~~2025		December 31, ~~2023~~2024
Rental equipment	$	1,~~491~~563,~~918~~800	$	1,~~405~~522,~~532~~710
Less: accumulated depreciation	(~~516~~529,~~789~~987)		(~~488~~521,~~828~~059)
Rental equipment, net	$	~~975~~1,~~129~~033,813	$	~~916~~1,~~704~~001,651

Note 7: ~~Goodwill~~Long-Term Debt

We recognize goodwill when the purchase price of an acquired business exceeds the fair value of net assets acquired. Goodwill is not amortized for financial reporting purposes. Goodwill is impaired when its carrying value exceeds its implied fair value. We perform our goodwill impairment analysis annually on October 1 or more frequently if an event or circumstance (such as a significant adverse change in the business climate, operating performance metrics, or legal factors) indicates that an impairment may have occurred. If the fair value of the reporting unit exceeds its carrying value, goodwill of the reporting unit is not considered impaired. If the carrying value of the reporting unit exceeds its fair value, then there is an indication impairment may exist.

During the quarter ended June 30, 2024, we identified factors indicating goodwill may be impaired related to two of our reporting units, ERS and APS. These factors were decreased utilization levels driven by continuing transmission project declines and delays. To derive the fair value of each reporting unit, we utilized the income approach, specifically the discounted cash flow method, as well as the market approach, which included analysis of comparable publicly-traded companies, to determine the fair value of the reporting

units. The income method approach calculates fair value by estimating the after-tax cash flows attributable to a reporting unit and then discounting these after-tax cash flows to a present value using a risk-adjusted discount rate. The market approach analyzed how the market values of comparable publicly-traded companies’ operating metrics, such as sales and earnings, compare to each of the respective metrics of the reporting units. These methodologies are consistent with how we estimate the fair value of reporting units during the annual goodwill impairment test. Inputs used to calculate fair value of our reporting units are considered “Level 3” inputs of the fair value hierarchy and include the following:

•Our projections were based on management's assessment of macroeconomic variables, industry trends and market opportunities, as well as our strategic objectives and future growth plans. Revenue growth rates assumed from approximately 5% to 7% for 2025 and from approximately 3% to 8% for 2026 and beyond.

•The discount rate used to measure the present value of the projected future cash flows is set using a weighted-average cost of capital method that considers market and industry data, as well as our specific risk factors that are likely to be considered by a market participant. The weighted-average cost of capital is our estimate of the overall after-tax rate of return required by equity and debt holders of a business enterprise. The discount rates applied to the reporting units ranged from 10.0% to 10.5%.

As a result of our fair value calculations, we determined that the fair value of the reporting units exceeded their carrying values. Accordingly, goodwill related to the reporting units was not considered impaired. During the quarter ended September 30, 2024, we continued to evaluate whether factors indicate goodwill of any of our reporting units may be impaired, and we concluded another interim test was not necessary as we did not identify any triggering factors that could indicate goodwill impairment.

Note 8: Long-Term Debt

Debt obligations and associated interest rates consisted of the following:

(in $000s)

September 30, 2024

December 31, 2023

September 30, 2024

December 31, 2023

(in $000s, except interest rate data)

March 31, 2025

December 31, 2024

March 31, 2025

December 31, 2024

ABL Facility

~~627~~655,~~900~~475

~~552~~582,~~400~~900

76.04%

7.71%

2029 Secured Notes

920,000

5.5%

2023 Credit Facility

17,~~733~~559

1317,~~800~~648

5.8%

Other notes payable

2324,~~920~~970

3127,~~599~~102

3.1%-37.50%

3.1%-7.90%

Total debt outstanding

1,~~589~~618,~~553~~004

1,~~517~~547,~~799~~650

Deferred financing fees

(2018,~~992~~862)

(2219,~~406~~926)

Total debt net of deferred financing fees

1,568,561

1,495,393

Total debt, net of deferred financing fees

1,599,142

1,527,724

Less: current maturities

(15,~~458~~966)

(87,~~257~~842)

Long-term debt

1,~~567~~593,~~103~~176

1,~~487~~519,~~136~~882

As of September 30, 2024, borrowing availability under the ABL Facility was $319.0 million, and outstanding standby letters of credit were $3.1 million.

ABL Facility

OnThe ~~August 9, 2024, the~~ Company and certain of its direct and indirect subsidiaries ~~entered~~are ~~into~~party ~~an amendment~~ to ~~its~~an asset-based revolving credit agreement (the “ABL ~~Amendment,” and the credit agreement as amended, supplemented or modified, including by the ABL Amendment, the “ABL~~ Credit Agreement”), toconsisting ~~increase~~of ~~the~~a ~~borrowing~~$950.0 million ~~capacity under its~~ first lien senior secured asset-based revolving credit facility (the “ABL Facility”) ~~from $750.0 million to $950.0 million~~, ~~and~~which ~~extend~~matures ~~the~~on ~~maturity date of the agreement from April 1, 2026 to~~ August 9, 2029, or, if earlier, the date that is 91 days prior to the maturity date of the Company’s existing senior notes or any debt that refinances such existing notes. ~~Additionally,~~Borrowings under the ABL ~~Amendment~~Facility ~~changes~~bear ~~the~~interest at a floating rate, ~~provisions~~which, ~~for~~at ~~Canadian~~the Company’s election, could be (a) in the case of U.S. dollar denominated loans, ~~from~~either (i) SOFR plus an applicable margin or (ii) the base rate plus an applicable margin; or (b) in the case of Canadian dollar ~~offered~~denominated ~~rate~~loans, to the term Canadian Overnight Repo Rate Average (the “CORRA” rate), ~~and~~plus ~~adds~~an aapplicable ~~leverage~~margin. ~~based~~The ~~step-down~~applicable tomargin ~~the~~varies ~~pricing grid otherwise~~ based on Average Availability (as defined in the ABL Credit Agreement) from (a) with respect to base rate loans, 0. 50% to 1.00% and (b) with respect to SOFR loans and CORRA rate loans, 1.50% to 2.00%.

~~Borrowings~~Note ~~under~~8: ~~the~~Earnings ~~ABL Facility bear interest at a floating rate, which, at the Company’s election, could be~~ (aLoss) inPer the case of U.S. dollar denominated loans, either (i) SOFR plus an applicable margin or (ii) the base rate plus an applicable margin; or (b) in the case of Canadian dollar denominated loans, the CORRA rate plus an applicable margin. The applicable margin varies based on Average Availability (as defined in the ABL Credit Agreement) from (a) with respect to base rate loans, 0.50% to 1.00% and (b) with respect to SOFR loans and CORRA rate loans, 1.50% to 2.00%.Share

13Basic earnings (loss) per share is computed by dividing net earnings (loss) by the weighted-average number of shares of common stock outstanding. Diluted earnings (loss) per share includes the effects of potentially dilutive shares of common stock, if dilutive. Potentially dilutive effects include the exercise of warrants, contingently issuable shares, and share-based compensation. On July 31, 2024, all of the Company’s stock purchase warrants expired and were unexercised. Our potentially dilutive shares aggregated 5.5 million and 31.4 million for the three months ended March 31, 2025 and 2024, respectively, and were not included in the computation of diluted earnings (loss) per share because the impact would have been anti-dilutive.

~~2023~~The ~~Credit~~following ~~Facility~~tables set forth the computation of basic and dilutive earnings (loss) per share:

On January 13, 2023, the Company entered into a new credit agreement allowing for borrowings of up to $18.0 million (the “2023 Credit Facility”). Proceeds from the credit agreement were used to finance a portion of the Company’s acquisition of real property from a related party in December 2022. A portion of the loan proceeds has been used to finance improvements to the property. In connection with entering into the agreement, the Company received net proceeds of $13.7 million. During the first quarter of 2024, the Company drew down an additional $4.2 million, as certain required construction milestones were met. Borrowings bear interest at a fixed rate of 5.75% per annum and are required to be repaid monthly in an amount of approximately $0.1 million with a balloon payment due on the maturity date of January 13, 2028. Borrowings are secured by the real property and improvements.


	Three Months Ended March 31, 2025					Three Months Ended March 31, 2024
(in $000s, except per share data)	Net Income (Loss)		Weighted Average Shares	Per Share Amount		Net Income (Loss)		Weighted Average Shares	Per Share Amount
Basic earnings (loss) per share	$	(17,791)	228,276	$	(0.08)	$	(14,335)	240,364	$	(0.06)
Dilutive common share equivalents	—		—	—		—		—	—
Diluted earnings (loss) per share	$	(17,791)	228,276	$	(0.08)	$	(14,335)	240,364	$	(0.06)

~~Note 9: Earnings (Loss) Per Share~~12

~~Basic~~Note earnings (loss) per share is computed by dividing net earnings (loss) by the weighted-average number of shares of common stock outstanding. Diluted earnings (loss) per share includes the effects of potentially dilutive shares of common stock, if dilutive. Potentially dilutive effects include the exercise of warrants, contingently issuable shares, or share-based compensation. Our potentially dilutive shares aggregated 9.8: million and 24.8 million for the three and nine months ended September 30, 2024, respectively, and 29.1 million and 29.0 million for the same periods in 2023, and were not included in the computation of diluted earnings (loss) per share because the impact would have been anti-dilutive.Equity

The following tables set forth the computation of basic and dilutive earnings per share:

	Three Months Ended September 30, 2024					Three Months Ended September 30, 2023
(in $000s, except per share data)	Net Income (loss)		Weighted Average Shares	Per Share Amount		Net Income		Weighted Average Shares	Per Share Amount
Basic earnings (loss) per share	$	(17,416)	234,438	$	(0.07)	$	9,180	245,810	$	0.04
Dilutive common share equivalents	—		—	—		—		784	—
Diluted earnings (loss) per share	$	(17,416)	234,438	$	(0.07)	$	9,180	246,594	$	0.04
	Nine Months Ended September 30, 2024					Nine Months Ended September 30, 2023
(in $000s, except per share data)	Net Income (loss)		Weighted Average Shares	Per Share Amount		Net Income		Weighted Average Shares	Per Share Amount
Basic earnings (loss) per share	$	(56,229)	238,162	$	(0.24)	$	34,590	245,987	$	0.14
Dilutive common share equivalents	—		—	—		—		822	—
Diluted earnings (loss) per share	$	(56,229)	238,162	$	(0.24)	$	34,590	246,809	$	0.14

Note 10: Equity

Preferred Stock

As of both ~~September~~March 3031, ~~2024~~2025 and December 31, ~~2023~~2024, we were authorized to issue 10,000,000 shares of preferred stock with a par value of $0.0001 per share, with such designation, rights and preferences as may be determined from time to time by our board of directors. As of both ~~September~~March 3031, ~~2024~~2025 and December 31, ~~2023~~2024, there were no shares of preferred stock issued or outstanding.

Common Stock

As of both ~~September~~March 3031, ~~2024~~2025 and December 31, ~~2023~~2024, we were authorized to issue 500,000,000 shares of common stock with a par value of $0.0001 per share.

On August 2, 2022, the Company’s Board of Directors authorized a stock repurchase program, allowing for the repurchase of up to $30 million of the Company’s shares of common stock, which authorization was further increased by $25 million of shares on September 14, 2023, and increased again by $25 million of shares on March 11, 2024, upon exhaustion of prior authorization. Under the repurchase program, repurchases can be made from time to time using a variety of methods, which may include open market purchases, privately negotiated transactions, or otherwise, all in accordance with the rules of the Securities and Exchange Commission and other applicable legal requirements. The specific timing, price and size of purchases will depend on prevailing stock prices, general economic and market conditions, and other considerations. The repurchase program does not obligate the Company to acquire any particular amount of its common stock, and the repurchase program may be suspended or discontinued at any time at the Company’s discretion. At March 31, 2025, $1.9 million was available under the stock repurchase program.

During the three and nine months ended September 30, 2024, the Company repurchased approximately 1.3 million and 5.9 million shares of its common stock, respectively, which are held in treasury, for a total cost of $5.5 million and $28.6 million, including commission fees. During the three and nine months ended September 30, 2023, the Company repurchased approximately 2.5 million and 3.1 million shares of common stock, respectively, for a total cost of $15.8 million and $20.1 million. At September 30, 2024, $1.9 million was available under the stock repurchase program.

Contingently Issuable and Earnout Shares

Contingently Issuable Shares

NESCO Holdings, LP is a Delaware limited partnership holding shares of our common stock. NESCO Holdings, LP is owned and controlled by Energy Capital Partners, and, as of September 30, 2024, had the right to receive 1,651,798 shares of common stock if during the seven-year period ending July 31, 2026, the trading price of common stock exceeds $19.00 per share for any 20 trading days during a 30 consecutive trading day period or if a sale transaction of the Company occurs in which the consideration paid per share to holders of common stock exceeds $19.00 per share.

Earnout Shares

Pursuant to the Stockholders’ Agreement dated July 31, 2019 (as amended and restated from time to time, the “Stockholders’ Agreement”), certain stockholders agreed to restrictions on approximately 3,100,000 of their shares of the Company’s ~~Common~~common ~~Stock~~stock (the “Earnout Shares”). The Earnout Shares shall be automatically forfeited by the holders thereof to the Company for no consideration with respect to (i) 2.8 million shares unless the trading price of the ~~Common~~common ~~Stock~~stock equals or exceeds certain price targets by July 31 2024 (the “Minimum and Second Target Earnout Shares”), which Minimum and Second Target Earnout Shares were forfeited on July 31, 2024; and (ii) 0.3 million shares unless the trading price of the ~~Common~~common ~~Stock~~stock equals or exceeds $19.00 per share for any period of 20 trading days out of 30 consecutive trading days to and including July 31, 2026 (the “Maximum Target Earnout Shares”). ~~On July 31, 2024, the price targets for the Minimum and Second Target Earnout Shares were not met, and such shares were forfeited by the respective holders pursuant to the Stockholders’ Agreement.~~

~~Note~~Energy ~~11:~~Capital ~~Fair~~Partners ~~Value~~Stock ~~Measurements~~Repurchase

On January 30, 2025, the Company purchased 8,143,635 shares of the Company’s common stock from affiliates of ECP (“Repurchase from ECP”), at a purchase price of $4.00 per share, which represents an approximately 23% discount from the price of $5.19 per share of common stock at the close of trading on January 29, 2025, for an aggregate purchase price of $32.6 million. The transaction was approved by the Company’s Board of Directors and the Audit Committee of the Board of Directors and the purchased shares are held in treasury.

Note 10: Fair Value Measurements

The FASB accounting standards provide a comprehensive framework for measuring fair value and sets forth a definition of fair value and establishes a hierarchy prioritizing the inputs to valuation techniques, giving the highest priority to quoted prices in active markets for identical assets and liabilities and the lowest priority to unobservable value inputs.

The following table sets forth the carrying values (exclusive of deferred financing fees) and fair values of our financial liabilities:

	Carrying Value		Fair Value
(in $000s)			Level 1		Level 2		Level 3
September 30, 2024
March 31, 2025
ABL Facility	$	~~627~~655,~~900~~475	$	—	$	~~627~~655,~~900~~475	$	—
2029 Secured Notes	920,000		—		~~841~~848,~~800~~700		—
2023 Credit Facility	17,~~733~~559		—		17,~~733~~559		—
Other notes payable	2324,~~920~~971		—		2324,~~920~~971		—
December 31, 2023
December 31, 2024
ABL Facility	$	~~552~~582,~~400~~900	$	—	$	~~552~~582,~~400~~900	$	—
2029 Secured Notes	920,000		—		~~846~~859,~~400~~050		—
2023 Credit Facility	1317,~~800~~648		—		1317,~~800~~733		—
Other notes payable	3127,~~599~~102		—		3127,~~599~~102		—

15The carrying amounts of the ABL Facility, 2023 Credit Facility and other notes payable approximated fair value as of March 31, 2025 and December 31, 2024 based upon terms and conditions available to the Company at those dates in comparison to the terms and conditions of its outstanding debt. The estimated fair value of the 2029 Secured Notes is calculated using Level 2 inputs, based on bid prices obtained from brokers.

~~The~~Note ~~carrying~~11: ~~amounts~~Income of the ABL Facility, 2023 Credit Facility and other notes payable approximated fair value as of September 30, 2024 and December 31, 2023 based upon terms and conditions available to the Company at those dates in comparison to the terms and conditions of its outstanding debt. The estimated fair value of the 2029 Secured Notes is calculated using Level 2 inputs, based on bid prices obtained from brokers.Taxes

~~Note~~For interim periods, we estimate our annual effective tax rate, exclusive of discrete items, which is derived primarily by our estimate of our valuation allowance as of the end of our fiscal year. The Company’s effective tax rate for the three months ended March 31, 2025 and 2024 differs from the U.S. federal statutory tax rate due to the recording of valuation allowances. We recorded an income tax benefit of $7.7 million for the three months ended March 31, 2025 resulting in an effective tax rate of 30.2% compared to an income tax benefit of $1.9 million for the comparable prior year period, at an effective tax rate of 12:.0%. ~~Income~~The ~~Taxes~~increase in the effective tax rate for the three months ended March 31, 2025 compared to same period in 2024, was primarily due to the impact of permanent adjustments partially offset by the valuation allowance.

For interim periods, we estimate our annual effective tax rate, exclusive of discrete items, which is derived primarily by our estimate of our valuation allowance as of the end of our fiscal year. The Company’s effective tax rate for the nine months ended September 30, 2024 and 2023 differs from the U.S. federal statutory tax rate due to the recording of valuation allowances. We recorded an income tax expense of $0.5 million for the nine months ended September 30, 2024 resulting in an effective tax rate of (0.9)% compared to an income tax expense of $2.7 million for the comparable prior year period, at an effective tax rate of 7.2%. The decrease in the effective tax rate for the nine months ended September 30, 2024 compared to same period in 2023, was primarily due to state and local income tax updates enacted during the current period.

The Organization for Economic Cooperation and Development (“OECD”) has issued “Pillar Two” model rules introducing a new global minimum tax of 15% effective on January 1, 2024. While the US has not adopted the Pillar Two rules, effective June 20, 2024, Canada has enacted legislation formally adopting Pillar Two. As currently designed, Pillar Two will ultimately apply to our worldwide operations. Considering we do not have material operations in jurisdictions with tax rates lower than the Pillar Two minimum, these rules are not expected to materially increase our global tax liability. We will continue to monitor US and global legislative activities related to Pillar Two.

Note 1312: Commitments and Contingencies

We record a liability when we believe that it is both probable that a liability has been incurred and the amount can be reasonably estimated. Significant judgment is required to determine both probability and the estimated amount. We review these provisions at least quarterly and adjust these provisions to reflect the impact of negotiations, settlements, rulings, advice of legal counsel, and updated information.

Legal Matters

In the normal course of business, there are various claims in process, matters in litigation, and other contingencies. At this time, no claims of these types, certain of which are covered by insurance policies, have had a material effect on the Company. Certain jurisdictions in which the Company operates do not allow insurance recoveries related to punitive damages. For matters pertaining to the pre-acquisition activities of Custom Truck One Source, L.P. (“Custom Truck LP”), the sellers of Custom Truck LP have agreed to indemnify the Company for losses arising out of the breach of pre-closing covenants in the purchase agreement and certain indemnified tax matters discussed below, with recourse limited to $10.0 million and $5.0 million escrow accounts, respectively.

From time to time, the Company is audited by state and local taxing authorities. These audits typically focus on the Company’s withholding of state-specific sales tax and rental-related taxes.

Custom Truck LP’s withholdings of federal excise taxes for each of the four quarterly periods during 2015 are currently under audit by the IRS. The IRS issued an assessment on October 28, 2020 in an aggregate amount of $2.4 million for the 2015 periods, alleging that certain types of sold equipment are not eligible for the Mobile Machinery Exemption set forth in the Internal Revenue Code (the “Code”). An appeal was filed on January 28, 2021. Based on management’s understanding of the facts and circumstances, including the relevant provisions of the Code, and historical precedent, including previous successful appeals of similar assessments in prior years, management does not believe the likelihood of a loss resulting from the IRS assessment to be probable at this time.

certain types of sold equipment are not eligible for the Mobile Machinery Exemption set forth in the Internal Revenue Code (the “Code”). An appeal was filed on January 28, 2021. Based on management’s understanding of the facts and circumstances, including the relevant provisions of the Code, and historical precedent, including previous successful appeals of similar assessments in prior years, management does not believe the likelihood of a loss resulting from the IRS assessment to be probable at this time.

While it is not possible to predict the outcome of the foregoing matters with certainty, it is the opinion of management that the final outcome of these matters will not have a material effect on the Company’s consolidated financial condition, results of operations and cash flows.

Purchase Commitments

We enter into purchase agreements with manufacturers and suppliers of equipment for our rental fleet and inventory. All of these agreements are cancellable within a specified notification period to the supplier.

16Note 13: Related Parties

Note 14: Related Parties

The Company has transactions with related parties as summarized below.

Rentals and Sales — The Company rents and sells equipment and provides services to R&M Equipment Rental, a business partially owned by members of the Company’s management. The Company also rents equipment and purchases inventory from R&M Equipment Rental.

Other — The Company has purchased products and aircraft charter services from entities owned by members of the Company’s management and their immediate families. ~~Charter~~Product purchases and charter services payments related to these transactions are immaterial. ~~Air~~Expenses for products and air travel ~~expenses~~services are recorded in selling, general, and administrative expenses.

Management Fees — The Company is obligated under a Corporate Advisory Services Agreement with Platinum, under which management fees are payable to Platinum quarterly. The management fees are recorded in transaction expenses and other in the Company’s Condensed Consolidated Statements of Operations and Comprehensive Income (Loss).

Energy Capital Partners Stock Repurchase — On January 30, 2025, the Company purchased 8,143,635 shares of Common Stock from affiliates of ECP, at a purchase price of $4.00 per share, which represents an approximately 23% discount from the price of $5.19 per share of Common Stock at the close of trading on January 29, 2025, for an aggregate purchase price of $32.6 million. The transaction was approved by the Company’s Board of Directors and the Audit Committee of the Board of Directors and the purchased shares are held in treasury.

A summary of the transactions with the foregoing related parties included in the Condensed Consolidated Statements of Operations and Comprehensive Income (Loss) is as follows:

Three Months Ended September 30,

Nine Months Ended September 30,

Three Months Ended March 31,

(in $000s)

~~2024~~2025

~~2023~~2024

~~2024~~

~~2023~~

Total revenues from transactions with related parties

64,~~341~~672

43,~~728~~677

~~17,945~~

~~23,231~~

Expenses incurred from transactions with related parties included in cost of revenue

~~287~~110

~~239~~466

~~1,039~~

~~1,091~~

Expenses incurred from transactions with related parties included in operating expenses

~~693~~559

1,~~391~~273

~~2,093~~

~~4,154~~

Amounts receivable from/payable to related parties included in the Condensed Consolidated Balance Sheets are as follows:

(in $000s)	~~September~~March 3031, ~~2024~~2025		December 31, ~~2023~~2024
Accounts receivable from related parties	$	1,~~499~~866	$	~~695~~3,688
Accounts payable to related parties	$	~~115~~220	$	~~140~~211

Note 1514: Segments

Our operations are primarily organized and managed by operating segment. Operating segment performance and resource allocations are primarily based on gross profit. ~~Intersegment~~Gross ~~sales~~profit aids the Chief Operating Decision Maker (“CODM”) in managing the inventory levels and ~~any~~rental ~~related~~fleet, ~~profits~~entering into significant revenue contracts, expanding into new markets or launching new products, making capital expenditures, designing and implementing key marketing strategies, personnel changes, and approving operating budgets. Significant expense categories that are ~~eliminated~~regularly inreviewed ~~consolidation~~by the operating segments’ CODM are disclosed below. The CODM for all segments is the Company’s Chief Executive Officer. We manage the business in three reporting segments: Equipment Rental Solutions (“ERS”), ~~Truck and Equipment Sales (“TES”) and Aftermarket Parts and Services (“APS”).~~

1715

Truck and Equipment Sales (“TES”) and Aftermarket Parts and Services (“APS”). Transactions between our segments consist of equipment produced by TES that is sold to ERS for inclusion in its fleet of rental equipment. Additionally, TES and APS provide repair and maintenance services to ERS for maintenance of its rental fleet. Transactions between segments are at cost and intersegment sales and purchases are eliminated in consolidation.

The Company’s segment results are presented in the tables below:

Three Months Ended September 30,

Three Months Ended March 31,

2024

2025

(in $000s)

ERS

TES

APS

Total

Revenue:

Rental

~~105~~112,~~317~~965

—

3,~~007~~296

~~108~~116,~~324~~261

Equipment sales

4541,~~574~~383

~~259~~232,~~902~~480

—

~~305~~273,~~476~~863

Parts and services

—

3332,~~420~~108

Total revenue

~~150~~154,~~891~~348

~~259~~232,~~902~~480

3635,~~427~~404

~~447~~422,~~220~~232

Cost of revenue:

Rentals/parts and services

2930,~~415~~388

—

2827,~~033~~740

5758,~~448~~128

Equipment sales

3331,~~975~~007

~~218~~197,~~012~~470

—

~~251~~228,~~987~~477

Depreciation of rental equipment

4449,~~964~~324

—

~~992~~767

4550,~~956~~091

Total cost of revenue

~~108~~110,~~354~~719

~~218~~197,~~012~~470

2928,~~025~~507

~~355~~336,~~391~~696

Gross profit

4243,~~537~~629

4135,~~890~~010

76,~~402~~897

9185,~~829~~536

Three Months Ended September 30,

Three Months Ended March 31,

2023

2024

(in $000s)

ERS

TES

APS

Total

Revenue:

Rental

~~114~~103,~~929~~288

—

32,~~280~~883

~~118~~106,~~209~~171

Equipment sales

5232,~~175~~740

~~230~~239,~~904~~862

—

~~283~~272,~~079~~602

Parts and services

—

3332,~~065~~534

Total revenue

~~167~~136,~~104~~028

~~230~~239,~~904~~862

3635,~~345~~417

~~434~~411,~~353~~307

Cost of revenue:

Rentals/parts and services

29,~~613~~800

—

26,~~203~~254

5556,~~816~~054

Equipment sales

3724,~~828~~098

~~191~~196,~~084~~702

—

~~228~~220,~~912~~800

Depreciation of rental equipment

4142,~~652~~697

—

~~817~~1,047

4243,~~469~~744

Total cost of revenue

~~109~~96,~~093~~595

~~191~~196,~~084~~702

27,~~020~~301

~~327~~320,~~197~~598

Gross profit

5839,~~011~~433

3943,~~820~~160

98,~~325~~116

~~107~~90,~~156~~709

18Total assets by operating segment are not disclosed herein because asset by operating segment data is not reviewed by the CODM to assess performance and allocate resources.

	Nine Months Ended September 30,
	2024
(in $000s)	ERS		TES		APS		Total
Revenue:
Rental	$	309,304	$	—	$	8,188	$	317,492
Equipment sales	116,026		747,685		—		863,711
Parts and services	—		—		100,337		100,337
Total revenue	425,330		747,685		108,525		1,281,540
Cost of revenue:
Rentals/parts and services	88,496		—		82,849		171,345
Equipment sales	83,865		620,240		—		704,105
Depreciation of rental equipment	131,242		—		3,043		134,285
Total cost of revenue	303,603		620,240		85,892		1,009,735
Gross profit	$	121,727	$	127,445	$	22,633	$	271,805
	Nine Months Ended September 30,
	2023
(in $000s)	ERS		TES		APS		Total
Revenue:
Rental	$	346,545	$	—	$	12,121	$	358,666
Equipment sales	195,005		691,481		—		886,486
Parts and services	—		—		98,194		98,194
Total revenue	541,550		691,481		110,315		1,343,346
Cost of revenue:
Rentals/parts and services	90,014		—		79,178		169,192
Equipment sales	148,711		571,592		—		720,303
Depreciation of rental equipment	123,969		—		2,446		126,415
Total cost of revenue	362,694		571,592		81,624		1,015,910
Gross profit	$	178,856	$	119,889	$	28,691	$	327,436

Total assets by operating segment are not disclosed herein because asset by operating segment data is not reviewed by the chief operating decision-maker (“CODM”) to assess performance and allocate resources.

Gross profit is the primary operating result whereby our segments are evaluated for performance and resource allocation. The following table presents a reconciliation of consolidated gross profit to consolidated income (loss) before income taxes:

	Three Months Ended September 30,				Nine Months Ended September 30,
(in $000s)	2024		2023		2024		2023
Gross profit	$	91,829	$	107,156	$	271,805	$	327,436
Selling, general and administrative expenses	54,630		56,955		168,322		171,974
Amortization	6,696		6,698		19,966		19,976
Non-rental depreciation	3,472		2,602		9,752		7,973
Transaction expenses and other	3,994		2,890		14,684		10,039
Interest expense, net	43,875		34,144		124,191		94,945
Financing and other expense (income)	(2,818)		(5,745)		(9,399)		(14,744)
Income (loss) before income taxes	$	(18,020)	$	9,612	$	(55,711)	$	37,273


	Three Months Ended March 31,
(in $000s)	2025		2024
Gross profit	$	85,536	$	90,709
Selling, general and administrative expenses	59,451		57,995
Amortization	6,680		6,578
Non-rental depreciation	3,340		2,920
Transaction expenses and other	3,660		4,846


Interest expense, net	38,913		37,915
Financing and other expense (income)	(1,016)		(3,262)
Income (loss) before income taxes	$	(25,492)	$	(16,283)

The following table presents total assets by country:

(in $000s)	~~September~~March 3031, ~~2024~~2025		December 31, ~~2023~~2024
Assets:
United States	$	3,~~457~~436,~~031~~633	$	3,~~243~~385,~~619~~786
Canada	~~122~~106,~~909~~275		~~124~~116,~~178~~181
Total Assets	$	3,~~579~~542,~~940~~908	$	3,~~367~~501,~~797~~967

1917

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

Forward-Looking Statements

Any statements made in this report that are not statements of historical fact, including statements about our beliefs and expectations, are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, as amended, and should be evaluated as such. These statements often include words such as “~~anticipate~~estimates,” “~~expect~~projected,” “~~suggest~~expects,” “~~plan~~anticipates,” “~~believe~~forecasts,” “~~intend~~suggests,” “~~estimate~~plans,” “~~target~~targets,” “~~project~~intends,” “~~should~~believes,” “~~could~~seeks,” “~~would~~may,” “~~may~~will,” “~~will~~should,” “~~forecast~~future,” “propose,” “could,” “would,” and other similar expressions. We base these forward-looking statements or projections on our current expectations, plans and assumptions that we have made in light of our experience in the industry, as well as our perceptions of historical trends, current conditions, expected future developments and other factors we believe are appropriate under the circumstances and at such time. As you read and consider this report, you should understand that these statements are not guarantees of performance or results and are subject to and involve risks, uncertainties and assumptions. You should not place undue reliance on these forward-looking statements or projections. Below is a summary of risk factors applicable to us that may materially affect such forward-looking statements and projections:

•increases in labor costs, changes in U.S. trade policy including tariffs, our inability to obtain raw materials, component parts and/or finished goods in a timely and cost-effective manner, and our inability to manage our rental equipment in an effective manner;

•competition in the equipment dealership and rental industries;

•our sales order backlog may not be indicative of the level of our future revenues;

•increases in unionization rate in our workforce;

•our inability to ~~recruit~~attract and retain ~~the~~key ~~experienced~~ personnel, including ~~skilled~~our ~~technicians,~~management weand ~~need~~skilled ~~to compete in our industries~~technicians;

•our inability to attract and retain highly skilled personnel and our inability to retain or plan for succession of our senior management;

•material disruptions to our operation and manufacturing locations as a result of public health concerns, equipment failures, natural disasters, work stoppages, power outages or other reasons;

•~~potential~~any ~~impairment~~further ~~charges~~increase in the cost of new equipment that we purchase for use in our rental fleet or for sale as inventory; and aging or obsolescence of our existing equipment, and the fluctuations of market value thereof;

•any further increase in the cost of new equipment that we purchase for use in our rental fleet or for sale as inventory;

•aging or obsolescence of our existing equipment, and the fluctuations of market value thereof;

•disruptions in our supply chain;

•our business may be impacted by government spending;

•we may experience losses in excess of our recorded reserves for receivables;

•uncertainty relating to macroeconomic conditions, unfavorable conditions in the capital and credit markets and our customers’ inability to obtain additional capital as required;

•increases in price of fuel or freight;

•regulatory technological advancement, or other changes in our core end-markets may affect our customers’ spending;

•~~difficulty~~our instrategic ~~integrating~~initiatives ~~acquired~~including ~~businesses~~acquisitions and ~~fully~~divestitures ~~realizing~~may ~~the~~not ~~anticipated~~be ~~benefits~~successful and ~~cost~~may ~~savings~~divert ofour ~~the~~management’s ~~acquired~~attention ~~businesses,~~away asfrom ~~well~~operations ~~as additional transaction~~ and ~~transition~~could ~~costs~~create ~~that~~general wecustomer ~~will continue to incur following acquisitions~~uncertainty;

•the interest of our majority stockholder, which may not be consistent with the other stockholders;

•volatility of our common stock market price;

•our significant indebtedness, which may adversely affect our financial position, limit our available cash and our access to additional capital, prevent us from growing our business and increase our risk of default;

•our inability to generate cash, which could lead to a default;

•significant operating and financial restrictions imposed by our debt agreements;

•changes in interest rates, which could increase our debt service obligations on the variable rate indebtedness and decrease our net income and cash flows;

•disruptions or security compromises affecting our information technology systems or those of our critical services providers could adversely affect our operating results by subjecting us to liability, and limiting our ability to effectively monitor and control our operations, adjust to changing market conditions, or implement strategic initiatives;

•we are subject to complex laws and regulations, including environmental and safety regulations that can adversely affect cost, manner or feasibility of doing business;

•~~material~~we ~~weakness~~are insubject ~~our~~to ~~internal~~a ~~control~~series ~~over~~of ~~financial~~risks ~~reporting~~related ~~which,~~to ifclimate ~~not~~change; ~~remediated~~and increased attention to, ~~could~~and ~~result~~evolving inexpectations ~~material~~for, ~~misstatements~~sustainability inand ~~our~~environmental, ~~financial~~social ~~statements;~~and governance initiatives.

~~•we~~These cautionary statements should not be construed by you to be exhaustive and are ~~subject~~made only as of the date of this report. We undertake no obligation to update or revise any forward-looking statements, whether as a ~~series~~result of ~~risks~~new ~~related~~information, tofuture ~~climate~~events ~~change;~~or otherwise, unless required by law. See “Risk Factors” in Part I, Item 1A of the Annual Report for the year ended December 31, 2024 and in Part II, Item 1A of this report, for additional risks.

~~•increased attention to, and evolving expectations for, sustainability and environmental, social and governance initiatives.~~18

These cautionary statements should not be construed by you to be exhaustive and are made only as of the date of this report. We undertake no obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, unless required by law. See “Risk Factors” in Part I, Item 1A of the Annual Report for the year ended December 31, 2023 and in Part II, Item 1A of this report, for additional risks.

Financial and Performance Measures

Financial Measures

Revenue — As a full-service equipment provider, we generate revenue through renting, selling, assembling, upfitting, and servicing new and used heavy-duty trucks and cranes, as well as the sale of related parts. We also sell and rent specialized tools on an individual basis and in kits. Rental revenue is primarily comprised of revenues from rental agreements and freight charges billed to customers. The Company records changes in estimated collectability directly against rental revenue. Equipment sales revenue reflects the value of vocational trucks and other equipment sold to customers as well as upfit services. Parts and service revenue is derived from maintenance and repair services, ~~light upfit services,~~ and parts, tools and accessories sold directly to customers. Rental revenue excludes active rental contracts which qualify to be accounted for as sales-type leases.

Cost of rental revenue — Cost of rental revenue reflects repairs and maintenance costs of rental equipment, parts costs, labor and other overheads related to maintaining the rental fleet, and freight associated with the shipping of rental equipment.

Depreciation of rental equipment — Depreciation of rental equipment is comprised of depreciation expense on the rental fleet. We allocate the cost of rental equipment generally over the rentable life of the equipment. The depreciation allocation is based upon estimated lives ranging from five to seven years. The cost of equipment is depreciated to an estimated residual value using the straight-line method.

Cost of equipment sales — Cost of equipment sales reflects production and inventory costs associated with new units sold, parts costs, labor and other overheads related to production, and freight associated with the shipping and receiving of equipment and parts. Cost of equipment sales also includes the net book value of rental units sold, including active rental contracts which qualify to be accounted for as sales-type leases.

Selling, general and administrative expenses — Selling, general and administrative expenses include sales compensation, fleet licensing fees and corporate expenses, including salaries, stock-based compensation expense, insurance, advertising costs, professional services, fees earned on customer arranged financing, gains or losses resulting from insurance settlements, and information technology costs.

Amortization and non-rental depreciation — Amortization expense relates to intangible assets such as customer lists, trade names, etc. Non-rental depreciation expense reflects the depreciation of property and equipment that is not part of the rental fleet.

Transaction expenses and other — Transaction expenses and other include ~~expenses~~costs ~~directly~~ related to ~~the~~acquisitions ~~acquisition~~ of businesses.; ~~These~~costs ~~expenses~~associated ~~generally~~with ~~are~~closed ~~comprised~~operations; ofcosts ~~travel~~associated ~~and~~with ~~out-of-pocket~~restructuring ~~expenses~~ and ~~legal,~~business ~~accounting~~optimization ~~and~~activities ~~valuation~~(inclusive orof ~~appraisal~~systems ~~fees~~establishment ~~incurred~~costs); inemployee ~~connection~~retention ~~with pre-~~ and/or ~~post-closure~~severance ~~activities.~~costs; Wecosts ~~also~~related ~~include~~to ~~costs~~start-up/preopenings and ~~expenses~~openings ~~associated~~of ~~with~~locations; ~~post-acquisition~~reconfiguration ~~integration~~or ~~activities~~consolidation ~~related~~of tofacilities ~~the~~and ~~acquired~~equipment ~~businesses~~conversion costs.

Financing and other expense (income) — Financing and other expense (income) reflects the financing expense (income) associated with lease agreements qualifying to be accounted for as a sales-type lease, foreign currency gains and losses related to our Canadian operations, as well as other miscellaneous gains or losses from non-operating activities. Also included in financing and other expense (income) are the unrealized remeasurement gains and losses related to derivative financial instruments.

operations, as well as other miscellaneous gains or losses from non-operating activities. Also included in financing and other expense (income) are the unrealized remeasurement gains and losses related to derivative financial instruments.

Interest expense — Interest expense consists of contractual interest expense on outstanding debt obligations, floorplan financing facilities, amortization of deferred financing costs and other related financing expenses.

Income Tax Expense (Benefit) — We have net operating loss carryforward and disallowed interest deduction carryforward assets, which are generally available to be used to offset taxable income generated in future years. Due to limitations on the use of these carryforwards under U.S. federal and state income tax regulations, we record valuation allowances to reduce the carryforward assets to amounts that we estimate will be realized. Accordingly, income tax expense or benefit generally is comprised of changes to these valuation allowance estimates and does not reflect taxes on current period income (or tax benefit on current period losses). For these reasons, our effective tax rate differs from the federal statutory tax rate.

Operating Metrics

We consider the following key operational metrics, which are consistent with those defined by the American Rental Association, when evaluating our performance and making day-to-day operating decisions:

Ending OEC — Ending original equipment cost (“OEC”) is the original equipment cost of units at the end of the measurement period. OEC represents the original equipment cost, and excludes the effect of adjustments to rental equipment fleet acquired in business combinations. OEC is the basis for calculating certain of the measures set forth below. Additionally, the pricing of our rental contracts and equipment sales prices for our equipment is based upon OEC, and we measure a rate of return from our rentals and sales using OEC. OEC is a widely used industry metric to compare fleet dollar value independent of depreciation.

Average OEC on rent — Average OEC on rent is calculated as the weighted-average OEC on rent during the stated period.

Fleet utilization — Fleet utilization is defined as the total number of days the rental equipment was rented during a specified period of time divided by the total number of days available during the same period and weighted based on OEC. Utilization is a measure of fleet efficiency expressed as a percentage of time the fleet is on rent and is considered to be an important indicator of the revenue generating capacity of the fleet.

OEC on rent yield — OEC on rent yield (“ORY”) is a measure of return realized by our rental fleet during a period. ORY is calculated as rental revenue (excluding freight recovery and ancillary fees) during the stated period divided by the average OEC on rent for the same period. For periods less than 12 months, ORY is adjusted to an annualized basis.

Sales order backlog — Sales order backlog consists of purchase orders received for customized and stock equipment. Sales order backlog should not be considered an accurate measure of future net sales.

Operating Segments

We operate in three reportable operating segments: Equipment Rental Solutions, Truck and Equipment Sales and Aftermarket Parts and Services.

Equipment Rental Solutions (“ERS”) Segment — We own a broad range of new and used specialty equipment, including truck-mounted aerial lifts, cranes, service trucks, dump trucks, trailers, digger derricks and other machinery and equipment. As of ~~September~~March 3031, ~~2024~~2025, this equipment (the “rental fleet”) is comprised of approximately 10,~~200~~300 units. The majority of our rental fleet can be used across a variety of end-markets, which coincides with the needs of many of our customers who operate in multiple end-markets. As is customary for equipment rental companies, we sell used equipment out of our rental fleet to end user customers. These sales are often made in response to specific customer requests. These sales offer customers an opportunity to buy well-maintained equipment with long remaining useful lives and enable us to effectively manage the age and mix of our rental fleet to match current market demand. We also employ rental purchase options (“RPOs”) on a select basis, which provide a buyout option with an established purchase price that decreases over time as rental revenue is collected. Customers are given credit against such purchase price for a portion of the amounts paid over the life of the rental, allowing customers the flexibility of a rental with the option to purchase at any time at a known price. Activities in our ERS segment consist of the rental and sale from the rental fleet of the foregoing products.

Truck and Equipment Sales (“TES”) Segment — We offer a broad variety of new equipment for sale to be used across our end-markets, which can be modified to meet our customers’ specific needs. We believe that our integrated production capabilities and extensive knowledge gained over a long history of selling equipment have established us as a trusted partner for customers seeking tailored solutions with short lead times. In support of these activities, we primarily employ a direct-to-customer sales model, leveraging our dedicated sales force of industry and product managers, who are focused on driving national and local sales. We also opportunistically engage in the sale of used equipment purchased from third parties or received via trade-ins from new equipment sales customers. In the majority of these cases, we will sell used equipment directly to customers, rather than relying on auctions. Activities in our TES segment consist of the production and sale of new and used specialty equipment and vocational trucks, which includes equipment from leading original equipment manufacturers (“OEMs”) across our end-markets, as well as our Load KingTM brand.

2220

opportunistically engage in the sale of used equipment purchased from third parties or received via trade-ins from new equipment sales customers. In the majority of these cases, we will sell used equipment directly to customers, rather than relying on auctions. Activities in our TES segment consist of the production and sale of new and used specialty equipment and vocational trucks, which includes equipment from leading original equipment manufacturers (“OEMs”) across our end-markets, as well as our Load KingTM brand.

Aftermarket Parts and Services (“APS”) Segment — The APS segment includes the sale of specialized aftermarket parts, including captive parts related to our Load KingTM brand, used in the maintenance and repair of the equipment we sell and rent. Specialized tools, including stringing blocks, insulated hot stick, and rigging equipment, are sold or rented to our customers on an individual basis or in packaged specialty kits. We also provide truck and equipment maintenance and repair services, which are executed throughout our nationwide branch network and fleet of mobile technicians supported by our 24/7 call center based in Kansas City, Missouri.

Results of Operations

Three ~~and nine~~ months ended ~~September~~March 3031, ~~2024~~2025, compared to the same ~~periods~~period in ~~2023~~2024

Condensed Consolidated Results of Operations

Three Months Ended

(in $000s)

~~September~~March 3031, ~~2024~~2025

% of revenue

~~September~~March 3031, ~~2023~~2024

% of revenue

$ Change

% change

~~June~~December 3031, 2024

% of revenue

Rental revenue

~~108~~116,~~324~~261

2427.25%

~~118~~106,~~209~~171

2725.28%

(910,~~885)~~090

(89.4)5%

~~102~~125,~~997~~461

24.31%

Equipment sales

~~305~~273,~~476~~863

6864.39%

~~283~~272,~~079~~602

6566.23%

221,~~397~~261

70.95%

~~285~~359,~~633~~325

6769.50%

Parts sales and services

3332,~~420~~108

7.56%

3332,~~065~~534

7.69%

~~355~~(426)

(1.13)%

3435,~~383~~954

86.19%

Total revenue

~~447~~422,~~220~~232

100.0%

~~434~~411,~~353~~307

100.0%

1210,~~867~~925

32.07%

~~423~~520,~~013~~740

100.0%

Cost of revenue, excluding rental equipment depreciation

~~309~~286,~~435~~605

6967.29%

~~284~~276,~~728~~854

6567.63%

249,~~707~~751

83.75%

~~289~~353,~~161~~107

6867.48%

Depreciation of rental equipment

4550,~~956~~091

1011.39%

4243,~~469~~744

910.86%

36,~~487~~347

814.25%

4449,~~585~~168

109.54%

Gross profit

9185,~~829~~536

20.53%

~~107~~90,~~156~~709

2422.71%

(155,~~327~~173)

(145.37)%

89118,~~267~~465

2122.17%

Operating expenses

6873,~~792~~131

6972,~~145~~339

~~(353)~~792

(01.5)1%

7151,~~593~~183

Operating income

2312,~~037~~405

3818,~~011~~370

(145,~~974~~965)

(3932.45)%

1767,~~674~~282

Total other expense

4137,~~057~~897

2834,~~399~~653

123,~~658~~244

449.64%

3940,~~082~~758

Income (loss) before income taxes

(1825,~~020~~492)

9(16,~~612~~283)

(279,~~632~~209)

~~(287~~56.5)6%

~~(21~~26,~~408)~~524

Income tax expense (benefit)

(~~604~~7,701)

~~432~~(1,948)

(15,~~036~~753)

~~(239~~295.8)3%

3(1,~~070~~050)

Net income (loss)

(17,~~416~~791)

9(14,~~180~~335)

(263,~~596~~456)

~~(289~~24.7)1%

~~(24~~27,~~478)~~574

	Nine Months Ended September 30,
(in $000s)	2024		% of revenue		2023		% of revenue	$ Change		% of change
Rental revenue	$	317,492	24.8	%	$	358,666	26.7%	$	(41,174)	(11.5)	%
Equipment sales	863,711		67.4	%	886,486		66.0%	(22,775)		(2.6)	%
Parts sales and services	100,337		7.8	%	98,194		7.3%	2,143		2.2	%
Total revenue	1,281,540		100.0	%	1,343,346		100.0%	(61,806)		(4.6)	%
Cost of revenue, excluding rental equipment depreciation	875,450		68.3	%	889,495		66.2%	(14,045)		(1.6)	%
Depreciation of rental equipment	134,285		10.5	%	126,415		9.4%	7,870		6.2	%
Gross profit	271,805		21.2	%	327,436		24.4%	(55,631)		(17.0)	%
Operating expenses	212,724				209,962			2,762		1.3	%
Operating income	59,081				117,474			(58,393)		(49.7)	%
Total other expense	114,792				80,201			34,591		43.1	%
Income (loss) before income taxes	(55,711)				37,273			(92,984)		(249.5)	%
Income tax expense	518				2,683			(2,165)		(80.7)	%
Net income (loss)	$	(56,229)			$	34,590		$	(90,819)	(262.6)	%

Total Revenue - The increase in total revenue for the three months ended March 31, 2025, compared to the same period in 2024 is a result of higher rental revenue driven by higher average OEC on rent.

23Cost of Revenue, Excluding Rental Equipment Depreciation - The increase in cost of revenue, excluding rental equipment depreciation for the three months ended March 31, 2025, compared to the same period in 2024, was driven primarily by the increase in equipment sales volume during the quarter.

~~Total~~Depreciation ~~Revenue~~of Rental Equipment - ~~The~~Depreciation ~~increase~~of inour ~~total~~rental ~~revenue~~equipment ~~for~~increased in the three months ended ~~September~~March 3031, ~~2024~~2025, compared to the same period in ~~2023~~2024, isas a result of higher ~~volumes~~rental ~~of new~~ equipment ~~sales due to the robust demand for our products in the forestry and utility end-markets, partially offset by decreased rental revenue due to lower utilization and a decline in average OEC on rent~~levels.

~~The~~Operating ~~decrease~~Expenses in- ~~total~~Operating ~~revenue~~expenses ~~for~~increased in the ~~nine~~three months ended ~~September~~March 3031, ~~2024~~2025, compared to the same period in ~~2023 was the result of lower rental revenue as described above~~2024, asprimarily ~~well~~ as ~~lower~~a ~~volume~~result of ~~used~~an ~~equipment~~increase ~~sales.~~in ~~The~~general ~~Company continues to be impacted by factors affecting its customers, including their supply chain constraints, environmental, regulatory~~ and ~~customer~~administrative ~~financing~~expenses ~~factors~~due ~~that have impacted the timing of transmission job starts. These delays contributed~~ to ~~both~~increased ~~lower rental revenue and rental asset sales during the year~~compensation.

~~Cost~~Total ofOther ~~Revenue,~~Expense ~~Excluding Rental Equipment Depreciation~~ - ~~The~~Other ~~increase~~expense inincreased ~~cost of revenue, excluding rental equipment depreciation~~ for the three months ended ~~September~~March 3031, ~~2024~~2025, compared to the same period in ~~2023~~2024, ~~was driven~~ primarily bydue to the increase in ~~equipment~~interest ~~sales~~expense ~~volume~~from ~~during~~variable ~~the~~rate ~~quarter~~debt and floor plan financing liabilities.

~~The~~Income ~~decrease~~Tax inExpense ~~cost~~(Benefit) of- ~~revenue,~~Income ~~excluding~~tax ~~rental~~benefit ~~equipment depreciation~~ for the ~~nine~~three months ended ~~September~~March 3031, ~~2024~~2025 was $7.7 million, ~~compared~~resulting toin an effective tax rate of 30.2%. Income tax benefit for the ~~same~~three ~~period~~months inended ~~2023~~March 31, 2024 was ~~driven~~$1.9 ~~primarily~~million, byat ~~the~~an ~~decrease~~effective tax rate of 12.0%. The changes in ~~equipment~~the ~~sales~~effective ~~volume~~tax ~~during~~rates were primarily due to the ~~nine~~impact ~~months~~of ~~ended~~permanent ~~September~~adjustments ~~30,~~partially ~~2024~~offset by the valuation allowance.

~~Depreciation~~Net ofIncome ~~Rental~~(loss) ~~Equipment~~ - ~~Depreciation~~Net ofloss ~~our rental equipment~~ increased infor the three ~~and nine~~ months ended ~~September~~March 3031, ~~2024~~2025, compared to the same ~~periods~~period in ~~2023~~2024, asdue ato ~~result~~decreased of gross profit and higher ~~rental~~interest ~~equipment~~expense ~~levels~~on variable-rate debt and variable-rate floor plan liabilities.

Operating Expenses - Operating expenses remained flat for the three months ended September 30, 2024, compared to the same period in 2023. Operating expenses increased in the nine months ended September 30, 2024, compared to the same period in 2023, primarily as a result of an increase in general and administrative expenses due to increased headcount and wages, increased insurance due to higher inventory levels and rental assets, and additional expense associated with various information technology projects. 21

Total Other Expense - Other expense increased for the three and nine months ended September 30, 2024, compared to the same periods in 2023, primarily due to the increase in interest expense from variable rate debt and floor plan financing liabilities.

Income Tax Expense (Benefit) - Income tax expense (benefit) for the three and nine months ended September 30, 2024 was $(0.6) million and $0.5 million, respectively, resulting in an effective tax rate of 3.4% and (0.9)%. Income tax expense for the three and nine months ended September 30, 2023 was $0.4 million and $2.7 million, respectively, at an effective tax rate of 4.5% and 7.2%. The changes in the effective tax rates were primarily due to state and local income tax updates enacted during the current periods.

Net Income (loss) - The change in net income to a net loss for the three and nine months ended September 30, 2024, compared to the same periods in 2023, was primarily the result of decreased gross profit and higher interest expense on variable-rate debt and variable-rate floor plan liabilities.

Operating Metrics

We principally evaluate operational performance based on the following metrics: ending OEC, average OEC on rent, fleet utilization, and OEC on rent yield. We also report sales order backlog related to our customers’ orders for new vocational heavy duty trucks as an indicator of the demand environment for our products. The table below presents these key measures.

	Three Months Ended
(in $000s)	~~September~~March 3031, ~~2024~~2025			~~September~~March 3031, ~~2023~~2024			Change			% Change		~~June~~December 3031, 2024			% Change
Ending OEC	$	1,~~493~~548,~~799~~210		$	1,~~465~~452,~~989~~856		$	2795,~~810~~354		16.96	%	$	1,~~457~~515,~~955~~461		2.52	%
Average OEC on rent	$	1,~~082~~202,~~679~~285		$	1,~~155~~065,~~598~~695		$	~~(72~~136,~~919)~~590		(612.3)8	%	$	1,~~044~~211,~~683~~082		3(0.67)	%
Fleet utilization	7377.27		%	7873.93		%	(54.7)4		%	(76.2)0	%	7178.79		%	2.(1.5)	%
OEC on rent yield	38.45		%	40.85		%	(2.40)		%	(54.9)	%	4038.06		%	(4.0.3)	%
Sales order backlog	$	~~395~~420,~~603~~149		$	~~779~~537,~~295~~292		$	(~~383~~117,~~692~~143)		(4921.28)	%	$	~~478~~368,~~244~~779		~~(17~~13.3)9	%

	Nine Months Ended September 30,
(in $000s)	2024			2023			Change			% Change
Ending OEC	$	1,493,799		$	1,465,989		$	27,810		1.9	%
Average OEC on rent	$	1,064,188		$	1,191,293		$	(127,105)		(10.7)	%
Fleet utilization	72.7		%	81.3		%	(8.6)		%	(10.6)	%
OEC on rent yield	39.2		%	39.8		%	(0.6)		%	(1.5)	%
Sales order backlog	$	395,603		$	779,295		$	(383,692)		(49.2)	%

Operating Results by Segment

Equipment Rental Solutions (ERS) Segment

	Three Months Ended
(in $000s)	~~September~~March 3031, ~~2024~~2025		~~September~~March 3031, ~~2023~~2024		$ Change		% Change		~~June~~December 3031, 2024		~~% Change~~		% Change
Rental revenue	$	~~105~~112,~~317~~965	$	~~114~~103,~~929~~288	$	(9,~~612)~~677	(89.4)	%	$	~~100~~120,~~699~~863	~~4.6~~	%	(6.5)	%
Equipment sales	4541,~~574~~383		5232,~~175~~740		(68,~~601)~~643		~~(12~~26.7)4	%	3751,~~712~~612		~~20.8~~	%	(19.8)	%
Total revenue	~~150~~154,~~891~~348		~~167~~136,~~104~~028		~~(16~~18,~~213)~~320		(913.7)5	%	~~138~~172,~~411~~475		~~9.0~~	%	(10.5)	%
Cost of rental revenue	2930,~~415~~388		29,~~613~~800		~~(198)~~588		(02.7)0	%	2928,~~281~~294		~~0.5~~	%	7.4	%
Cost of equipment sales	3331,~~975~~007		3724,~~828~~098		(36,~~853)~~909		~~(10~~28.2)7	%	2539,~~792~~364		~~31.7~~	%	(21.2)	%
Depreciation of rental equipment	4449,~~964~~324		4142,~~652~~697		36,~~312~~627		815.05	%	4348,~~581~~266		~~3.2~~	%	2.2	%
Total cost of revenue	~~108~~110,~~354~~719		~~109~~96,~~093~~595		~~(739)~~14,124		(014.7)6	%	98115,~~654~~924		~~9.8~~	%	(4.5)	%
Gross profit	$	4243,~~537~~629	$	5839,~~011~~433	$	~~(15~~4,~~474)~~196	~~(26~~10.7)6	%	$	3956,~~757~~551	~~7.0~~	%	(22.9)	%

	Nine Months Ended September 30,
(in $000s)	2024		2023		$ Change		% Change
Rental revenue	$	309,304	$	346,545	$	(37,241)	(10.7)	%
Equipment sales	116,026		195,005		(78,979)		(40.5)	%
Total revenue	425,330		541,550		(116,220)		(21.5)	%
Cost of rental revenue	88,496		90,014		(1,518)		(1.7)	%
Cost of equipment sales	83,865		148,711		(64,846)		(43.6)	%
Depreciation of rental equipment	131,242		123,969		7,273		5.9	%
Total cost of revenue	303,603		362,694		(59,091)		(16.3)	%
Gross profit	$	121,727	$	178,856	$	(57,129)	(31.9)	%

Total Revenue - The increase in total revenue for the ERS segment for the three months ended March 31, 2025, compared to the same period in 2024, was due to an increase in rental revenue and rental equipment sales. Rental revenue increased as a result of higher fleet utilization of 4.4% driven by higher average OEC on rent. Used equipment sales increased as a result of the improved market demand for used equipment over new equipment due to the ongoing high-interest rate environment.

~~Total~~Cost of Revenue - The ~~decrease~~increase in total ~~revenue~~cost ~~for the ERS segment for the three and nine months ended September 30, 2024, compared to the same periods in 2023, was driven by a decrease in equipment sales due to fewer rental asset sales~~ of ~~used equipment, as well as a decrease in rental~~ revenue ~~as a result of a reduction in fleet utilization of 5.7% and 8.6%~~ for the three ~~and nine~~ months ended ~~September~~March 3031, ~~2024~~2025, ~~respectively,~~ compared to the same ~~periods~~period in 2023. Fleet utilization decreased due to a decline in demand in the utility market as a result of supply chain constraints, environmental, regulatory, and customer financing factors affecting the timing of transmission and distribution job starts. For the three and nine months ended September 30, 2024, ~~average~~was ~~OEC~~largely ondue ~~rent decreased 6.3% and 10.7%, respectively, compared~~ to the ~~same~~increase ~~periods~~ in ~~2023,~~rental ~~primarily~~equipment assales ~~a result of the lower utilization in the quarter~~volume.

~~Cost~~Depreciation ~~of Revenue~~ - ~~The~~Depreciation ~~decrease~~of inour ~~total~~rental ~~cost~~equipment ofincreased ~~revenue~~ for the three ~~and nine~~ months ended ~~September~~March 3031, ~~2024~~2025, compared to the same ~~periods~~period in ~~2023~~2024, ~~was~~as ~~largely~~a ~~due~~result toof ~~the~~higher ~~decrease in~~ rental equipment ~~sales volume~~levels.

~~Depreciation~~Gross Profit - ~~Depreciation~~The ofincrease ~~our~~in ~~rental~~gross ~~equipment~~profit ~~increased~~ for the three ~~and nine~~ months ended ~~September~~March 3031, ~~2024~~2025, compared to the same ~~periods~~period in ~~2023~~2024, aswas adue ~~result~~to ofthe ~~higher~~increase in rental revenues and equipment ~~levels~~sales for the period.

Gross Profit - The decrease in gross profit for the three and nine months ended September 30, 2024, compared to the same periods in 2023, was due to the decrease in rental revenues and equipment sales for the period. 22

Truck and Equipment Sales (TES) Segment

	Three Months Ended
(in $000s)	~~September~~March 3031, ~~2024~~2025		~~September~~March 3031, ~~2023~~2024		$ Change		% Change		~~June~~December 3031, 2024		% Change
Equipment sales	$	~~259~~232,~~902~~480	$	~~230~~239,~~904~~862	$	28(7,~~998~~382)	12(3.61)	%	$	~~247~~307,~~921~~713	4(24.84)	%
Cost of equipment sales	~~218~~197,~~012~~470		~~191~~196,~~084~~702		~~26,928~~768		140.14	%	~~205~~256,~~526~~738		6(23.1)	%
Gross profit	$	4135,~~890~~010	$	3943,~~820~~160	$	2(8,~~070~~150)	5(18.29)	%	$	4250,~~395~~975	(131.23)	%

	Nine Months Ended September 30,
(in $000s)	2024		2023		$ Change		% Change
Equipment sales	$	747,685	$	691,481	$	56,204	8.1	%
Cost of equipment sales	620,240		571,592		48,648		8.5	%
Gross profit	$	127,445	$	119,889	$	7,556	6.3	%

Equipment Sales - Equipment sales decreased for the three months ended March 31, 2025, compared to the same period in 2024. The decline in new equipment sales is driven by pricing pressures due to the ongoing high-interest rate environment and the mix of equipment sold.

Cost of Equipment Sales - ~~Equipment~~Cost of equipment sales increased for the three ~~and nine~~ months ended ~~September~~March 3031, ~~2024~~2025, compared to the same ~~periods~~period in ~~2023.~~2024, ~~The growth in sales was primarily a result of exiting 2023 with healthy inventory levels (~~due to the ~~improved~~increase ~~supply chain), as well as continued robust demand for our products~~ in ~~the~~equipment ~~forestry~~sales ~~and utility end-markets~~volume.

~~Cost~~Gross ofProfit ~~Equipment Sales~~ - ~~Cost~~The ofdecrease ~~equipment~~in ~~sales~~gross ~~increased~~profit for the three ~~and nine~~ months ended ~~September~~March 3031, ~~2024~~2025, compared to the same ~~periods~~period in ~~2023~~2024, was due to to the ~~increase~~pricing inpressures ~~equipment~~on new truck sales ~~volume~~as well as the mix of equipment sold.

Gross Profit - The increase in gross profit for the three and nine months ended September 30, 2024, compared to the same periods in 2023, was due to higher volume of equipment sales.

Aftermarket Parts and Services (APS) Segment

	Three Months Ended
(in $000s)	~~September~~March 3031, ~~2024~~2025		~~September~~March 3031, ~~2023~~2024		$ Change		% Change		~~June~~December 3031, 2024		% Change
Rental revenue	$	3,~~007~~296	$	32,~~280~~883	$	~~(273)~~413	(814.3)	%	$	24,~~298~~598	30(28.93)	%
Parts and services revenue	3332,~~420~~108		3332,~~065~~534		~~355~~(426)		(1.13)	%	3435,~~383~~954		(210.87)	%
Total revenue	3635,~~427~~404		3635,~~345~~417		82(13)		~~0.2~~—	%	3640,~~681~~552		(012.7)	%
Cost of revenue	2827,~~033~~740		26,~~203~~254		1,~~830~~486		75.07	%	28,~~562~~711		(13.94)	%
Depreciation of rental equipment	~~992~~767		~~817~~1,047		~~175~~(280)		21(26.47)	%	~~1,004~~902		(115.20)	%
Total cost of revenue	2928,~~025~~507		27,~~020~~301		21,~~005~~206		74.4	%	29,~~566~~613		(13.87)	%
Gross profit	$	76,~~402~~897	$	98,~~325~~116	$	(1,~~923~~219)	(2015.60)	%	$	710,~~115~~939	4(37.0)	%

	Nine Months Ended September 30,
(in $000s)	2024		2023		$ Change		% Change
Rental revenue	$	8,188	$	12,121	$	(3,933)	(32.4)	%
Parts and services revenue	100,337		98,194		2,143		2.2	%
Total revenue	108,525		110,315		(1,790)		(1.6)	%
Cost of revenue	82,849		79,178		3,671		4.6	%
Depreciation of rental equipment	3,043		2,446		597		24.4	%
Total cost of revenue	85,892		81,624		4,268		5.2	%
Gross profit	$	22,633	$	28,691	$	(6,058)	(21.1)	%

Total Revenue - Total revenue was flat for the three months ended March 31, 2025, compared to the same period in 2024.

~~Total~~Cost of Revenue - ~~Total~~Cost of revenue ~~remained~~increased ~~flat~~ for the three months ended ~~September~~March 3031, ~~2024~~2025, compared to the same period in ~~2023. Total revenue decreased for the nine months ended September 30,~~ 2024, ~~compared~~as toa ~~the~~result ~~same~~of ~~period~~higher incosts ~~2023, due to the decrease in rentals~~ of ~~tools and accessories tied to the decline in rental revenue in the ERS segment~~materials.

~~Cost~~Gross ofProfit ~~Revenue~~ - ~~Cost~~The ofdecrease ~~revenue~~in ~~increased~~gross profit for the three ~~and nine~~ months ended ~~September~~March 3031, ~~2024~~2025, compared to the same ~~periods~~period in ~~2023~~2024, aswas aprimarily ~~result~~driven ofby ~~higher~~the decrease in parts and services revenue with an increase in costs of materials driving gross profit down.

Gross Profit - The decrease in gross profit for the three and nine months ended September 30, 2024, compared to the same periods in 2023, was primarily driven by the decrease in tools and accessories rentals with an increase in costs of materials driving gross profit down.

Liquidity and Capital Resources

Our principal sources of liquidity include cash generated by operating activities and borrowings under revolving credit facilities as described below. We believe that our liquidity sources and operating cash flows are sufficient to address our operating, debt service and capital requirements, including investments in our rental fleet, over the next 12 months and beyond. As of ~~September~~March 3031, ~~2024~~2025, we had $85.4 million in cash and cash equivalents compared to $~~10.~~3.8 million as of December 31, ~~2023~~2024. As of ~~September~~March 3031, ~~2024~~2025 and December 31, ~~2023~~2024, we had $~~627~~655.95 million and $~~552~~582.49 million of outstanding borrowings under our ABL Facility, respectively. ~~During~~Availability ~~August~~under ~~2024,~~ the ABL Facility was ~~amended to, among other things, provide an additional~~ $~~200~~289.~~0 million of borrowing capacity and extend the maturity date to August~~ 9, ~~2029. Availability under the senior secured credit facility was $319.0~~ million as of ~~September~~March 3031, ~~2024~~2025, and based on our borrowing base, we have an additional $~~190~~161.94 million of suppressed availability that we can potentially utilize by upsizing our existing facility. For further information on the ABL Facility ~~amendment~~, see Note 87: Long-Term Debt in the Notes to the Unaudited Condensed Consolidated Financial Statements.

Loan Covenants and Compliance

The ABL Facility contains customary negative covenants for transactions of this type, including covenants that, among other things, limit Nesco Holdings II, Inc., our wholly owned subsidiary (the ~~Company~~“Borrower” with respect to the ABL Facility, or the “Issuer” with respect to the Indenture, defined below) and its restricted subsidiaries’ ability to: incur additional indebtedness; pay dividends, redeem stock, or make other distributions; repurchase, prepay or redeem subordinated indebtedness; make investments; create restrictions on the ability of ~~Company~~the Borrower’s restricted subsidiaries to pay dividends; create liens; transfer or sell assets; consolidate, merge, sell, or otherwise dispose of all or substantially all of the ~~Company~~Borrower’s assets; enter into certain transactions with the ~~Company~~Borrower’s affiliates; and designate subsidiaries as unrestricted subsidiaries, in each case subject to certain exceptions, as well as a restrictive covenant applicable to each Specified Floor Plan Company (as defined in the ABL Credit Agreement) limiting its ability to own certain assets and engage in certain lines of business. The covenants governing the payment of dividends and making other distributions are based upon a combination of fixed amounts, percentages of Adjusted EBITDA or upon multiple pro forma measures depending on the purpose of any such dividend payments or distributions the ~~Company~~Borrower and its restricted subsidiaries are permitted to make. Unlimited dividends under the ABL Facility may be permitted so long as, on a pro forma basis, “distribution conditions” (as defined in the ABL Credit Agreement governing the ABL Facility) are satisfied. As of ~~September~~March 3031, ~~2024~~2025, the Company’s distribution conditions were satisfied and, as a result, the Company determined there were no restrictions on distributions by the Borrower and its restricted subsidiaries by the ABL Credit Agreement.

The 5.50% senior secured second lien notes due 2029 (the “2029 Secured Notes”) were issued pursuant to anthe indenture governing our 2029 Secured Notes (the “Indenture”) which contains covenants that limit the ~~Company~~Issuer’s (and certain of its subsidiaries’) ability to, among other things: (i) incur additional debt or issue certain preferred stock; (ii) pay dividends, redeem stock, or make other distributions; (iii) make other restricted payments or investments; (iv) create liens on assets; (v) transfer or sell assets; (vi) create restrictions on payment of dividends or other amounts by the ~~Company~~Issuer’s ~~to its~~ restricted subsidiaries; (vii) engage in mergers or consolidations; (viii) engage in certain transactions with affiliates; or (ix) designate the ~~Company~~Issuer’s subsidiaries as unrestricted subsidiaries. The covenants governing the payment of dividends and making other distributions are based upon a combination of fixed amounts, percentages of Adjusted EBITDA or upon multiple pro forma measures depending on the purpose of any such dividend payments or distributions the ~~Company~~Issuer and its restricted subsidiaries are permitted to make. Unlimited dividends, under the Indenture, may be made so long as after giving effect to making the dividends, the Consolidated Total Debt Ratio would be no greater than 5.00 to 1.00 on a pro forma basis. As of ~~September~~March 3031, ~~2024~~2025, the Company’s Consolidated Total Debt Ratio was not greater than 5.00 to 1.00 and, as a result, the Company determined there were no restrictions on distributions by the Issuer and its restricted subsidiaries by the Indenture. For further information on the ABL Facility and Indenture, see Note 98: Long-Term Debt in the Notes to the Consolidated Financial Statements under Part II, Item 8 in the Company’s annual report on Form 10-K for the year ended December 31, ~~2023~~2024, filed on March 74, ~~2024~~2025.

The Company presents Adjusted EBITDA calculated in accordance with “Consolidated EBITDA” as that term is used in the ABL Credit Agreement and the Indenture. Adjusted EBITDA is defined as net income, as adjusted for provision for income taxes, interest expense, net, depreciation of rental equipment and non-rental depreciation and amortization, and further adjusted for the impact of the fair value mark-up of acquired rental fleet (the “non-cash purchase accounting impact”), business acquisition and merger-related costs, including integration, the impact of accounting for certain of our rental contracts with customers that are accounted for under GAAP as a sales-type lease and stock compensation expense.

The Company presents Net Leverage Ratio, which is equivalent to Consolidated Total Net Leverage Ratio in our ABL Credit Agreement and Consolidated Total Debt Ratio in the Indenture, is defined as Net Debt over Adjusted EBITDA for the previous twelve-month period (“last twelve months,” or “LTM”). Net debt is defined as total debt (calculated as current and long-term debt, excluding deferred financing fees, plus current and long-term finance lease obligations) minus cash and cash equivalents.

Our creditors utilize Adjusted EBITDA and Net Leverage Ratio to assess our compliance with the restrictive covenants in the ABL Credit Agreement and the Indenture. Neither Adjusted EBITDA or Net Leverage Ratio is calculated in accordance with GAAP and may not conform to the calculation of Adjusted EBITDA or Net Leverage Ratio used by other companies. Neither Adjusted EBITDA or Net leverage Ratio should be considered as a substitute for a measure of our financial performance or liquidity prepared in accordance with GAAP.

The following table provides the calculation of Adjusted EBITDA pursuant to the ABL Credit Agreement and the Indenture.

Three Months Ended

~~Nine Months Ended~~

Three Months Ended December 31, 2024

~~Three Months Ended June 30, 2024~~

(in $000s)

~~September~~March 3031, ~~2024~~2025

~~September~~March 3031, ~~2023~~2024

~~September 30, 2024~~

~~September 30, 2023~~

Net income (loss)

(17,~~416~~791)

9(14,~~180~~335)

~~(56,229)~~

~~34,590~~

~~(24~~27,~~478)~~574

Interest expense

2725,~~156~~616

2425,~~044~~015

~~79,174~~

~~69,982~~

2726,~~003~~721

Income tax expense (benefit)

(~~604~~7,701)

~~432~~(1,948)

~~518~~

~~2,683~~

3(1,~~070~~050)

Depreciation and amortization

5962,~~295~~511

5456,~~552~~161

~~173,253~~

~~162,083~~

5762,~~797~~554

EBITDA

6862,~~431~~635

8864,~~208~~893

~~196,716~~

~~269,338~~

63115,~~392~~799

Adjustments:

Non-cash purchase accounting impact (1)

4,~~066~~181

52,~~884~~960

~~12,286~~

~~13,552~~

54,~~260~~547

Transaction and integration costs (2)

3,~~994~~660

24,~~890~~846

~~14,684~~

~~10,039~~

53,~~844~~231

Sales-type lease adjustment (3)

~~1,295~~546

12,~~640~~474

~~5,730~~

~~7,736~~

(1,~~961~~171)

Share-based payments (4)

2,419

2,843

8,748

10,312

3,599

Gain on sale leaseback transaction (4)

—

(23,497)

Change in fair value of warrants (5)

—

(1,280)

(527)

(2,409)

—

Share-based payments (5)

2,404

2,730

3,111

Adjusted EBITDA

80,205

100,185

237,637

308,568

80,056

Change in fair value of derivative and warrants (6)

—

(527)

—

Adjusted EBITDA

73,426

77,376

102,020

(1) Represents the non-cash impact of purchase accounting, net of accumulated depreciation, on the cost of equipment and inventory sold. The equipment and inventory acquired received a purchase accounting step-up in basis, which is a non-cash adjustment to the equipment cost pursuant to our ABL Credit Agreement and Indenture.

(2) Represents transaction and ~~process~~other ~~improvement~~ costs related to acquisitions of businesses,; ~~including~~costs ~~post-acquisition~~associated ~~integration~~with ~~costs,~~closed ~~which~~operations; ~~are~~costs ~~recognized~~associated ~~within~~with ~~operating~~restructuring ~~expenses~~and inbusiness ~~our~~optimization ~~Condensed~~activities ~~Consolidated~~(inclusive ~~Statements~~ of ~~Operations~~systems ~~and~~establishment ~~Comprehensive Income (Loss~~costs).; ~~These~~employee ~~expenses~~retention ~~are~~and/or ~~comprised~~severance ofcosts; ~~professional~~costs ~~consultancy,~~related ~~legal,~~to ~~tax~~start-up/preopenings and ~~accounting~~openings ~~fees.~~of ~~Also~~locations; ~~included~~reconfiguration ~~are~~or ~~expenses~~consolidation ~~associated~~of ~~with~~facilities ~~the~~or ~~integration~~equipment ofconversion ~~acquired businesses~~costs. These ~~expenses~~adjustments are presented as adjustments to net income (loss) pursuant to our ABL Credit Agreement and Indenture.

(3) Represents the impact of sales-type lease accounting for certain leases containing RPOs, as the application of sales-type lease accounting is not deemed to be representative of the ongoing cash flows of the underlying rental contracts. The adjustments are made pursuant to our ABL Credit Agreement and Indenture. The components of this adjustment are presented in the table below.

Three Months Ended

~~Nine Months Ended~~

Three Months Ended December 31, 2024

~~Three Months Ended June 30, 2024~~

(in $000s)

~~September~~March 3031, ~~2024~~2025

~~September~~March 3031, ~~2023~~2024

~~September 30, 2024~~

~~September 30, 2023~~

Equipment sales

(32,~~701~~161)

(123,~~760~~018)

~~(8,273)~~

~~(56,535)~~

(1,~~554~~576)

Cost of equipment sales

41,~~111~~839

112,~~714~~822

~~8,162~~

~~54,354~~

1,~~229~~263

Gross margin

~~410~~(322)

(~~1,046~~196)

~~(111)~~

~~(2,181)~~

(~~325~~313)

Interest income

(21,~~766~~012)

(42,~~461~~742)

~~(8,791)~~

~~(12,295)~~

(32,~~283~~494)

Rental invoiced

31,~~651~~880

75,~~147~~412

~~14,632~~

~~22,212~~

51,~~569~~636

Sales-type lease adjustment

~~1,295~~546

12,~~640~~474

~~5,730~~

~~7,736~~

(1,~~961~~171)

(4) ~~Represents~~During ~~non-cash~~Q4 ~~share-based~~2024, ~~compensation~~the ~~expense~~Company ~~associated~~closed on a sale leaseback transaction with ~~the~~an ~~issuance~~unrelated third party. The Company sold eight properties with a combined net book value of ~~stock~~$29.0 ~~options~~million for gross proceeds of $53.8 million, which was reduced by transaction costs and ~~restricted~~other ~~stock~~fees ~~units~~of $1.3 million, for net cash proceeds of approximately $52.5 million. Additionally, $3.2 million from the proceeds were used to repay a note payable. The Company recognized a gain of $23.5 million on this transaction.

(5) Represents ~~the~~non-cash ~~charge~~share-based tocompensation ~~earnings~~expense ~~for~~associated with the ~~change~~issuance ~~in fair value~~ of ~~the~~restricted ~~liability~~stock ~~for warrants~~units.

28(6) Represents the charge to earnings for the change in fair value of the liability for warrants. On July 31, 2024, all of the Company’s stock purchase warrants expired and were unexercised.

The following table presents the calculation of Net Debt and Net Leverage Ratio:

(in $000s)

~~September~~March 3031, ~~2024~~2025

~~June~~December 3031, 2024

Current maturities of long-term debt

15,~~458~~966

37,~~779~~842

Long-term debt, net

1,~~567~~593,~~103~~176

1,~~528~~519,~~433~~882

Deferred financing fees

2018,~~992~~862

19,~~527~~926

Less: cash and cash equivalents

(85,~~438~~380)

(83,~~059~~805)

Net Debt

1,~~581~~612,~~115~~624

1,543,~~680~~845

Divided by: LTM Adjusted EBITDA (1)

~~355~~335,~~999~~707

~~375~~339,~~979~~657

Net Leverage Ratio

4.4480

4.1155

(1) The following tables present the calculation of LTM Adjusted EBITDA for the ~~periods~~period ended ~~September~~March 3031, ~~2024~~2025 and ~~June~~December 3031, 2024:

	Current Year To Date Period		Less: Prior Year To Date Period		Add: Prior Fiscal Year		LTM Adjusted EBITDA
(in $000s)	~~September~~March 3031, ~~2024~~2025		~~September~~March 3031, ~~2023~~2024		December 31, ~~2023~~2024		~~September~~March 3031, ~~2024~~2025
Net income (loss)	$	(5617,~~229~~791)	$	34(14,~~590~~335)	$	50(28,~~712~~655)	$	(4032,~~107~~111)
Interest expense	7925,~~174~~616		6925,~~982~~015		94105,~~694~~895		~~103~~106,~~886~~496
Income tax expense (benefit)	~~518~~(7,701)		2(1,~~683~~948)		~~7,364~~(532)		5(6,~~199~~285)
Depreciation and amortization	~~173~~62,~~253~~511		~~162~~56,~~083~~161		~~218~~235,~~993~~807		~~230~~242,~~163~~157
EBITDA	~~196~~62,~~716~~635		~~269~~64,~~338~~893		~~371~~312,~~763~~515		~~299~~310,~~141~~257
Adjustments:
Non-cash purchase accounting impact	124,~~286~~181		132,~~552~~960		1916,~~742~~833		18,~~476~~054
Transaction and integration costs	143,~~684~~660		104,~~039~~846		1417,~~143~~915		1816,~~788~~729
Sales-type lease adjustment	~~5,730~~546		72,~~736~~474		104,~~458~~559		82,~~452~~631
Share-based payments	8,748		10,312		13,309		11,745
Gain on sale leaseback transaction	—		—		(23,497)		(23,497)
Change in fair value of warrants	(527)		(2,409)		(2,485)		(603)
Share-based payments	2,404		2,730		11,859		11,533
Adjusted EBITDA	$	237,637	$	308,568	$	426,930	$	355,999
Change in fair value of warrants	—		(527)		(527)		—
Adjusted EBITDA	$	73,426	$	77,376	$	339,657	$	335,707

	Current Year To Date Period		Less: Prior Year To Date Period		Add: Prior Fiscal Year		LTM Adjusted EBITDA
(in $000s)	June 30, 2024		June 30, 2023		December 31, 2023		June 30, 2024
Net income (loss)	$	(38,813)	$	25,410	$	50,712	$	(13,511)
Interest expense	52,018		45,938		94,694		100,774
Income tax expense (benefit)	1,122		2,251		7,364		6,235
Depreciation and amortization	113,958		107,531		218,993		225,420
EBITDA	128,285		181,130		371,763		318,918
Adjustments:
Non-cash purchase accounting impact	8,220		7,668		19,742		20,294
Transaction and integration costs	10,690		7,149		14,143		17,684
Sales-type lease adjustment	4,435		6,096		10,458		8,797
Share-based payments	6,329		7,469		13,309		12,169
Change in fair value of warrants	(527)		(1,129)		(2,485)		(1,883)
Adjusted EBITDA	$	157,432	$	208,383	$	426,930	$	375,979

Historical Cash Flows

The following table summarizes our sources and uses of cash:

Nine Months Ended September 30,

Three Months Ended March 31,

(in $000s)

~~2024~~2025

~~2023~~2024

Net cash flow from operating activities

3955,~~934~~635

(214,~~706~~375)

Net cash flow for investing activities

(~~164~~71,~~883~~306)

(~~145~~33,~~612~~411)

Net cash flow from financing activities

~~122~~17,~~779~~196

~~142~~45,~~557~~495

Effect of exchange rate changes on cash and cash equivalents

~~299~~50

~~194~~(28)

Net change in cash and cash equivalents

(1,~~871)~~575

(52,~~567~~319)

As of ~~September~~March 3031, ~~2024~~2025, we had cash and cash equivalents of $85.4 million, aan ~~decrease~~increase of $1.96 million from December 31, ~~2023~~2024. Generally, we manage our cash flow by using any excess cash, after considering our working capital and capital expenditure needs, including paying down the outstanding balance under our ABL Facility, and availability under our credit facilities.

Cash Flows from Operating Activities

Net cash from operating activities was $3955.96 million for the ~~nine~~three months ended ~~September~~March 3031, ~~2024~~2025, as compared to net cash used in operating activities of $214.74 million in the same period of ~~2023~~2024. The ~~cash~~change ~~provided~~year byover ~~operating~~year ~~activities~~is indriven ~~the~~by ~~current~~lower ~~period~~levels ~~is the result~~ of ~~the~~inventory ~~increase~~production in ~~floorplan~~2025 ~~trade~~compared ~~financing~~to ~~for inventory purchases~~2024.

Cash Flows for Investing Activities

Net cash used in investing activities was $~~164~~71.93 million for the ~~nine~~three months ended ~~September~~March 3031, ~~2024~~2025, as compared to $~~145~~33.64 million in the same period of ~~2023~~2024. The increase in cash used in investing activities was primarily due to ~~lower~~an ~~proceeds~~increase ~~from~~in ~~sales~~purchases ~~and disposals~~ of rental equipment of $2136.84 million.

Cash Flows from Financing Activities

Net cash provided by financing activities was $~~122~~17.82 million for the ~~nine~~three months ended ~~September~~March 3031, ~~2024~~2025, as compared to $~~142~~45.65 million in the same period of ~~2023~~2024. The decrease in cash provided by financing activities was primarily due to an increase in repurchases of common stock of $925.~~0 million and a decrease in proceeds, net of repayments, from floor plan financing and long-term debt arrangements of $5.~~8 million.

Critical Accounting Estimates

Our discussion and analysis of our financial condition, results of operations, liquidity and capital resources is based on our condensed consolidated financial statements, which have been prepared in accordance with GAAP. GAAP requires that we make estimates and judgments that affect the reported amount of assets, liabilities, revenue, expenses and the related disclosure of contingent assets and liabilities. We base these estimates on historical experience and on various other assumptions that we consider reasonable under the circumstances and reevaluate our estimates and judgments as appropriate. The actual results experienced by us may differ materially and adversely from our estimates. For a complete discussion of our significant critical accounting estimates, see the “Critical Accounting Estimates” section in Part II, Item 7 of our Annual Report on Form 10-K for the year ended December 31, 2023. Except as discussed below, there were no significant changes to our critical accounting estimates during the nine months ended September 30, 2024.

Goodwill and the Evaluation of Goodwill Impairment

Goodwill represents the excess of cost over the fair value of identifiable net assets of businesses acquired and goodwill is assigned to each of our reporting units, which are ERS, TES and APS. The following presents the amount of goodwill by reporting unit as of June 30, September 30, 2024 and December 31, 2023:

(in $000s)	September 30, 2024		June 30, 2024		December 31, 2023
ERS	$	498,611	$	498,549	$	498,808
TES	167,307		167,307		167,307
APS	39,364		39,364		37,896
Total	$	705,282	$	705,220	$	704,011

We perform our assessment of goodwill impairment utilizing either a qualitative or quantitative impairment test, and we perform our test at least annually. Our annual assessment date is October 1 and we perform impairment tests in interim periods (e.g., other than October 1) when factors are identified that could indicate goodwill of any of our reporting units may be impaired. Examples of such factors may include a significant adverse change in business climate, weakness in an industry in which our reporting units operate or recent significant cash or operating losses with expectations that those losses will continue. The qualitative and quantitative impairment tests are described further below.

Qualitative Impairment Test – The qualitative impairment test assesses company-specific, industry, market and general economic factors to determine whether it is more likely than not that the fair value of the reporting unit is less than its carrying amount. If we conclude that it is more likely than not that the fair value of the reporting unit is less than its carrying amount, or we elect not to use the qualitative impairment test, a quantitative impairment test is performed.

Quantitative Impairment Test – The quantitative impairment test involves a comparison of the estimated fair value of a reporting unit to its carrying amount with the fair value of a reporting being unit being estimated by using a discounted cash flow model (the “income approach”) that calculates fair value as the present value of expected cash flows of the reporting unit. Additionally, a market analysis is performed that encompasses an analysis of comparable publicly-traded companies (the “market approach”).

Determining the fair value of a reporting unit requires judgment and the use of significant estimates that include assumptions about the reporting unit’s future revenue (considering expectations about rental and sales volumes and prices as well as capital spending related to the end-markets we serve), profitability and cash flows, long-term growth rates, amount and timing of estimated capital expenditures, inflation rates, risk adjusted cost of capital, operational plans, and current and future economic conditions, among other assumptions. The fair value of each reporting unit is determined using a weighted combination of the income and market approaches. We believe that the estimates and assumptions used in our impairment assessments are reasonable and based on available market information. We use a discounted cash flow methodology for the income approach. Under the income approach, the discounted cash flow model determines fair value based on the present value of projected cash flows over a specified period and a residual value related to future cash flows beyond the projection period. Both values are discounted using a rate that reflects the best estimate of the risk adjusted cost of capital at each reporting unit.

During the quarterly period ended June 30, 2024, we identified factors indicating goodwill may be impaired related to two of our reporting units, ERS and APS. The following is a discussion of the estimates and assumptions from our June 30, 2024 interim impairment test for the ERS and APS reporting units:

•The risk adjusted cost of capital varies by reporting unit and was in the range of 10.0% to 10.5% and represents our estimate of the overall after-tax rate of return required by equity and debt holders of a business enterprise.

•Our projections were based on our assessment of macroeconomic variables, industry trends and market opportunities, as well as our strategic objectives and future growth plans. Revenue growth rates assumed ranged from approximately 5% to 7% for 2025 and from approximately 3% to 8% for 2026 and beyond.

As a result of completing our June 30, 2024, interim quantitative impairment test, we determined that the fair value of the ERS and APS reporting units exceeded their carrying values by 23% and 17%, respectively. While there is no “bright line” to determine whether or not a reporting unit’s fair value is substantially in excess of its carrying amount (“cushion”), significant adverse changes in business climate, weakness in an industry in which our reporting units operate (for example, electric utility T&D, telecom, rail and general infrastructure) or significant cash or operating losses and changes in expectations of profitability could reduce the amounts of cushion applicable to our reporting units and result in impairment of one or more of our reporting units’ goodwill. During the quarter ended September 30, 2024, we continued to evaluate whether factors indicate goodwill of any of our reporting units may be impaired and we did not identify any triggering factors that could indicate goodwill impairment. As a result, we concluded another interim test was not necessary.

Item 3. Quantitative and Qualitative Disclosures About Market Risk

Interest rate risk

We are subject to interest rate market risk in connection with our long-term debt. Our principal interest rate exposure relates to outstanding amounts under the ABL Credit Facility and our floor plan financing arrangements. Interest rate changes generally impact the amount of our interest payments and, therefore, our future net income and cash flows, assuming other factors are held constant. As of ~~September~~March 3031, ~~2024~~2025, we had $1,~~550~~440.46 million aggregate principal amount of variable rate debt, consisting of the balance outstanding under floor plan financing and the ABL Facility. Holding other variables constant, each one-eighth percentage point increase or decrease in the applicable interest rates would correspondingly change our interest expense under floor plan financing and the ABL Facility by approximately $1.98 million on an annual basis.

We, from time to time, may manage a portion of our risks from exposures to fluctuations in interest rates as part of our risk management program through the use of derivative financial instruments. The objective of controlling these risks is to limit the impact on earnings and cash flows caused by fluctuations in the interest rates of our variable-rate debt. We do not currently hedge our interest rate exposure.

Foreign currency exchange rate risk

During the ~~nine~~three months ended ~~September~~March 3031, ~~2024~~2025, we generated $338.97 million of revenues denominated in Canadian dollars. Each 100-basis point increase or decrease in the average Canadian dollar to U.S. dollar exchange rate for the year would have correspondingly changed our revenues by approximately $0.43 million on an annual basis. We do not currently hedge our exchange rate exposure.

3227

Item 4. Controls and Procedures

(a) Evaluation of Disclosure Controls and Procedures

AsIn ofaccordance ~~the~~with ~~end~~Securities ofExchange ~~the~~Act ~~period~~Rules ~~covered~~13a-15(e) byand ~~this Quarterly Report on Form 10~~15d-Q15(e), weour ~~carried~~management, ~~out~~under ~~an evaluation with~~ the ~~participation~~supervision of our Chief Executive Officer and Chief Financial Officer., ~~Based~~conducted onan ~~that~~evaluation ~~assessment,~~ the ~~Chief~~effectiveness ~~Executive~~of ~~Officer~~the design and ~~Chief~~operation ~~Financial~~of ~~Officer~~our ~~concluded~~disclosure controls and procedures as of ~~September~~March 3031, ~~2024,~~2025. ~~the~~Based ~~Company’s~~upon ~~disclosure~~that ~~controls~~evaluation, ~~and~~our ~~procedures~~Chief ~~were~~Executive ~~not~~Officer ~~effective~~and ~~because~~Chief ofFinancial ~~the~~Officer ~~material~~concluded ~~weakness~~that in our ~~internal~~disclosure ~~control~~controls ~~over~~and ~~financial~~procedures ~~reporting~~were ~~described~~effective ~~below~~as of March 31, 2025.

~~Inadequate~~(b) ~~Business~~Changes ~~Process~~to ~~Controls~~Internal Control Over Financial Reporting

OnThere ~~April~~have 1,been ~~2021,~~no wechanges ~~completed the acquisition of Custom Truck LP, which resulted~~ in aour ~~significant change in the Company’s~~ internal control over financial reporting. Wethat ~~are~~occurred induring the ~~process~~fiscal ofquarter ~~completing~~ended ~~the~~March 31, ~~integration~~2025 ofthat ~~policies,~~have ~~processes,~~materially ~~people~~affected, ~~technology~~or ~~and~~are ~~operations~~reasonably ~~for~~likely ~~the~~to ~~combined~~materially ~~company. As part of this integration~~affect, weour ~~identified deficiencies in the design and operating effectiveness of~~ internal ~~controls associated with the~~ control ~~activities~~over ~~component~~financial ~~of the Committee of Sponsoring Organizations of the Treadway Commission (“COSO”) framework~~reporting.

During the fourth quarter ended December 31, 2021, we identified control deficiencies related to all of our business process controls (automated and manual), including management review controls. These control deficiencies could result in misstatements potentially impacting all financial statement accounts and disclosures that may not be prevented or detected. 28

Accordingly, these deficiencies constituted a pervasive material weakness. The pervasive material weakness did not result in any identified misstatements to our consolidated financial statements, and there were no changes to previously released financial results.

(b) Status of Remediation of the Pervasive Material Weakness in Internal Control Over Financial Reporting

We have devoted and continue to devote substantial resources and effort to remediating the pervasive material weakness identified in fiscal year 2021.

Additionally, management is in the process of designing, implementing and monitoring all business process controls (automated and manual), including management review controls, that are relevant to all financial statement accounts and disclosures. This pervasive material weakness cannot be considered remediated until the applicable controls are designed and operating effectively for a sufficient period of time, as supported by management’s testing results.

Other than the ongoing remediation efforts described above, there were no changes to our internal control over financial reporting that occurred during the quarter ended September 30, 2024 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

PART II - OTHER INFORMATION

Item 1. Legal Proceedings

We may, at any given time, be named as a defendant in certain lawsuits, investigations and claims arising in the ordinary course of business. While the outcome of these potential lawsuits, investigations and claims cannot be predicted with certainty, we do not expect these matters to have a material adverse impact on our business, results of operations, cash flows or financial condition. In the opinion of management, there are no pending litigation, disputes or claims against the Company that, if decided adversely, would have a material adverse effect on its consolidated financial condition, cash flows or results of operations.

Item 1A. Risk Factors

No material changes occurred to the ~~indicated~~ risk factors as disclosed in our Annual Report on Form 10-K for the year ended December 31, ~~2023~~2024.

3429

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

Issuer Purchases of Equity Securities

On August 2, 2022, our Board of Directors authorized a stock repurchase program for up to $30 million of the Company’s shares of common stock, which authorization was further increased by $25 million of shares on September 14, 2023, and increased again ~~increased~~ by $25 million on March 11, 2024, upon exhaustion of prior authorization. The authorization does not have an expiration date. Repurchases under the program may be made in the open market, in privately negotiated transactions or otherwise, with the amount and timing of repurchases depending on market conditions and corporate needs.

The following table contains information regarding our purchases of our common stock during the three months ended ~~September~~March 3031, ~~2024~~2025:

ISSUER PURCHASES OF EQUITY SECURITIES
	Total Number of Shares Purchased	Average Price Paid per Share		Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs	Approximate Dollar Value of Shares that May Yet Be Purchased Under the Plans or Programs(in $000s)
July 1, 2024 - July 31, 2024	1,260,827	$	4.35	1,260,827	$	1,892
January 1, 2025 - January 31, 2025	8,143,635	$	4.00	—	$	1,892
August 1, 2024 - August 31, 2024	—	$	—	—	$	1,892
February 1, 2025 - February 28, 2025	—	—		—	$	1,892
September 1, 2024 - September 30, 2024	—	$	—	—	$	1,892
March 1, 2025 - March 31, 2025	—	—		—	$	1,892
Total	18,~~260~~143,~~827~~635	$	4.3500	~~1,260,827~~—

On January 30, 2025, the Company purchased 8,143,635 shares of the Company’s common stock, par value $0.0001 per share (the “Common Stock”), from affiliates of Energy Capital Partners, at a purchase price of $4.00 per share, which represents an approximately 23% discount from the price of $5.19 per share of Common Stock at the close of trading on January 29, 2025, for an aggregate purchase price of $32.6 million. The transaction was approved by the Company’s Board of Directors and the Audit Committee of the Board of Directors and the purchased shares are held in treasury.

Item 3. Defaults Upon Senior Securities

None.

Item 4. Mine Safety Disclosures

Not applicable.

Item 5. Other Information

~~None~~During the three months ended March 31, 2025, no director or officer of the Company adopted or terminated a “Rule 10b5-1 trading arrangement” or “non-Rule 10b5-1 trading arrangement” as each term is defined in Item 408 of Regulation S-K.

35On April 28, 2025, the Company entered into a cash retention award agreement (the “Retention Bonus Letters”) with each of Ryan McMonagle, Christopher Eperjesy, Joseph Ross, Thomas Rich and Paul Jolas. The Retention Bonus Letters entitle the executives to receive retention bonuses in the amount of $425,000, $195,000, $162,500, $162,500 and $139,750, respectively, upon the earlier of September 1, 2026 and the attainment of certain performance goals related to corporate milestones, subject to the executive’s continued employment through such date. The foregoing summary is qualified in its entirety by reference to the Retention Bonus Letters, which are attached hereto as Exhibits 10.1 through 10.5 and incorporated herein by reference.

Item 6. Exhibits

Exhibit No.

Description

10.1

Amendment No. 3 to Revolving Credit Agreement, dated as of August 9, 2024, by and among Capitol Investment Merger Sub 2, LLC, NESCO Holdings II, Inc., certain other credit parties party thereto, the lenders and other financial institutions party thereto and Bank of America, N.A., as administrative agent and collateral agent (Incorporated by reference to Exhibit 10.1 of the Company’s Current Report on Form 8-K filed on August 12, 2024).

10.1*+

Retention Bonus Letter Agreement, by and between Ryan McMonagle and Custom Truck One Source, Inc., dated April 28, 2025

10.2*+

Retention Bonus Letter Agreement, by and between Christopher Eperjesy and Custom Truck One Source, Inc., dated April 28, 2025

10.3*+

Retention Bonus Letter Agreement, by and between Joseph Ross and Custom Truck One Source, Inc., dated April 28, 2025

10.4*+

Retention Bonus Letter Agreement, by and between Thomas Rich and Custom Truck One Source, Inc., dated April 28, 2025

10.5*+

Retention Bonus Letter Agreement, by and between Paul Jolas and Custom Truck One Source, Inc., dated April 28, 2025

23.1*

Consent of Ernst & Young LLP

31.1*

Certification of Chief Executive Officer pursuant to Exchange Act Rules 13a-14(a)/15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

31.2*

Certification of Chief Financial Officer pursuant to Exchange Act Rules 13a-14(a)/15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

32**

Certification of Chief Executive Officer and Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

101.INS

XBRL Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document.

101.SCH

XBRL Taxonomy Extension Schema Document.

101.CAL

XBRL Taxonomy Extension Calculation Linkbase Document.

101.DEF

XBRL Taxonomy Extension Definition Linkbase Document.

101.LAB

XBRL Taxonomy Extension Label Linkbase Document.

101.PRE

XBRL Taxonomy Extension Presentation Linkbase.

104

Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101).

* Filed herewith.

**Furnished herewith.

36+ Management contract or compensatory plan.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

		CUSTOM TRUCK ONE SOURCE, INC.(Registrant)
Date:	~~October~~April 30, ~~2024~~2025	/s/ Ryan McMonagle
		Ryan McMonagle, Chief Executive Officer
Date:	~~October~~April 30, ~~2024~~2025	/s/ Christopher J. Eperjesy
		Christopher J. Eperjesy, Chief Financial Officer

Filing Compare · Custom Truck One Source, Inc.