Record quarterly revenue was primarily propelled by the transmission and distribution (T&D) rental business, which saw utilization reach a three-year high of nearly 84%.

Management attributed the year-over-year decline in equipment sales (TES) to customers pulling forward capital expenditures into earlier 2025 to hedge against potential tariffs and price hikes.

The rental fleet's average age was reduced to 2.9 years, a strategic de-aging of over one year since 2022 that is now enabling a shift toward lower maintenance capital intensity.

A new partnership with HyAV was established to broaden the product portfolio in building supply, forestry, and rail, aiming to capture higher market share through more complete solutions.

The company is pivoting toward an aftermarket service expansion initiative to increase high-margin parts and service revenue from existing TES customers.

Management noted that while some customers deferred year-end deliveries into 2026, the 20% sequential growth in new sales backlog signals resilient underlying demand.

The company will transition to a two-segment reporting structure (SER and STEM) in Q1 2026 to better align financial transparency with internal resource allocation and industry peer comparisons.

Net rental investment is projected to decrease significantly to $150M-$170M in 2026, down from over $250M in 2025, as the young fleet age allows for natural aging without impacting performance.

Management expects to generate over $50M in levered free cash flow by reducing inventory months on hand toward a target of below six months.

Guidance assumes continued T&D strength and a potential rebound in vocational markets like infrastructure, which saw atypical seasonal slowdowns at the end of 2025.

The company targets reducing net leverage to meaningfully below 4x by the end of 2026, with a long-term goal of reaching 3x in 2027.

GAAP net income was impacted by the absence of a $23.5M sale-leaseback gain recorded in the prior year, though underlying profitability improved through disciplined SG&A.

Management flagged that the company did not fully realize the expected lift from accelerated depreciation provisions in recent federal tax legislation.

Inventory levels were reduced by over $100M in Q4 2025 to lower working capital needs and interest expenses on variable-rate floor plan liabilities.

The 2027 EPA emission mandate remains a point of observation, with management noting potential pre-buy activity in the broader market but no significant impact on their order book yet.

Our analysts just identified a stock with the potential to be the next Nvidia. Tell us how you invest and we'll show you why it's our #1 pick. Tap here.

Management clarified that while 84% utilization is a peak, they view the high-70s to low-80s as the sustainable 'sweet spot' for proper customer service.

The young fleet age (2.9 years) provides a buffer to age the fleet by 'months, not years' in 2026 without degrading gross margins or reliability.

Yields inflected positively due to price increases implemented at the end of 2025 and a shift toward higher-value transmission equipment mix.

Management expects to maintain rental adjusted gross margins in the mid-70% range due to high utilization and lower anticipated repair costs.

The first half of the year typically accounts for mid-to-high 40% of revenue, with the second half contributing the remainder.

Q1 2026 is expected to be strong, with top-line revenue growth in the mid-to-high single digits and double-digit EBITDA growth driven by rental momentum.

One stock. Nvidia-level potential. 30M+ investors trust Moby to find it first. Get the pick. Tap here.