McGrath Announces Results for Fourth Quarter 2025 and Announces 35th Annual Dividend Increase

LIVERMORE, Calif.--( BUSINESS WIRE)--McGrath RentCorp (“McGrath” or the “Company”) (Nasdaq: MGRC), a leading business-to-business rental company in North America, today announced total revenues for the quarter ended December 31, 2025 of $256.8 million, an increase of 5% compared to the fourth quarter of 2024. The Company reported net income of $49.8 million, or $2.02 per diluted share, for the fourth quarter of 2025, compared to net income of $38.9 million, or $1.58 per diluted share, for the fourth quarter of 2024.

Total revenues for the full year ended December 31, 2025 increased to $944.2 million, an increase of 4%, from $910.9 million in 2024, with adjusted EBITDA increasing $10.7 million, or 3%, to $362.5 million. Net income for the year ended December 31, 2025 was $156.3 million, or $6.35 per diluted share, compared to $231.7 million, or $9.43 per diluted share, in 2024. Excluding the $180.0 million merger termination payment received from WillScot Mobile Mini in 2024 and $63.2 million in transaction costs incurred, net of provision for income taxes, the Company's reported full year 2025 net income increased $10.9 million, or 7%, and diluted earnings per share increased $0.43, or 7%.

The Company also announced that the board of directors declared a cash dividend of $0.495 per share for the upcoming quarter ending March 31, 2026, a quarterly increase of $0.01, or 2%, over the prior year period. The cash dividend will be payable on April 30, 2026 to all shareholders of record on April 16, 2026. This marks 35 consecutive years the Company has increased its annual dividend.

FOURTH QUARTER 2025 YEAR-OVER-YEAR COMPANY HIGHLIGHTS:

Joe Hanna, President and CEO of McGrath, made the following comments:

“We were pleased with our strong fourth quarter results. The 5% increase in companywide revenues and 14% increase in Adjusted EBITDA were driven by Mobile Modular and TRS-RenTelco.

Modular rental revenues increased 2% compared to last year, with growth driven by our commercial customer base. We continued to make progress with our long-term modular growth initiatives, Mobile Modular Plus and Site Related Services, and broadening our geographic coverage. Used equipment sales and Site Related Services contributed to higher gross profit for the quarter.

Portable Storage rental revenues grew 3%, benefiting from some incremental seasonal retail business. Commercial construction project activity remained soft, but we are hopeful that market demand conditions for this segment are showing signs of stabilization.

TRS-RenTelco had an impressive quarter, as improved market conditions supported rental revenue growth of 13% over last year and strong used equipment sales. Demand was robust throughout the quarter, with a very modest seasonal slowdown at year end.

I appreciate the deep commitment, engagement and execution from our McGrath team members to deliver solid results for the year despite challenging non-residential construction demand conditions faced by our Modular and Portable Storage businesses. These results demonstrate the resilience of our people and our strategy. I am encouraged by our start to 2026 and confident that our teams are very focused on building on last year’s progress.”

DIVISION HIGHLIGHTS:

All comparisons presented below are for the quarter ended December 31, 2025 to the quarter ended December 31, 2024 unless otherwise indicated.

MOBILE MODULAR

For the fourth quarter of 2025, the Company’s Mobile Modular division reported Adjusted EBITDA of $68.7 million, an increase of $7.7 million, or 13%, when compared to the same quarter in 2024.

PORTABLE STORAGE

For the fourth quarter of 2025, the Company’s Portable Storage division reported Adjusted EBITDA of $9.6 million, a decrease of $0.3 million, or 3%, when compared to the same quarter in 2024.

TRS-RENTELCO

For the fourth quarter of 2025, the Company’s TRS-RenTelco division reported Adjusted EBITDA of $23.1 million, an increase of 21%, when compared to the same quarter in 2024.

FINANCIAL OUTLOOK:

For the full-year 2026, the Company expects:

2026 Outlook

2025 Actual

Total revenue:

$945 to $995 million

$944 million

Adjusted EBITDA 1, 2:

$360 to $378 million

$362 million

Gross rental equipment capital expenditures:

$180 to $200 million

$143 million

Adjusted EBITDA is defined as net income before interest expense, provision for income taxes, depreciation, amortization, non-cash impairment costs, share-based compensation, transaction costs and non-operating transactions. A reconciliation of actual net income to Adjusted EBITDA and Adjusted EBITDA to net cash provided by operating activities can be found at the end of this release.

Information reconciling forward-looking Adjusted EBITDA to the comparable GAAP financial measures is unavailable to the Company without unreasonable effort because certain items required for such reconciliations are outside of the Company’s control and/or cannot be reasonably predicted, such as the provision for income taxes. Therefore, no reconciliation to the most comparable GAAP measures is provided. The Company provides Adjusted EBITDA guidance because it believes that Adjusted EBITDA, when viewed with the Company’s results under GAAP, provides useful information for the reasons noted in the reconciliation of actual Adjusted EBITDA to the most directly comparable GAAP measures at the end of this release.

ABOUT MCGRATH:

McGrath RentCorp (Nasdaq: MGRC) is a leading business-to-business rental company in North America with a strong record of profitable business growth. Founded in 1979, McGrath’s operations are centered on modular solutions through its Mobile Modular and Mobile Modular Portable Storage businesses. In addition, its TRS-RenTelco business offers electronic test equipment rental solutions. The Company’s rental product offerings and services are part of the circular supply economy, helping customers work more efficiently, and sustainably manage their environmental footprint. With over 45 years of experience, McGrath’s success is driven by a focus on exceptional customer experiences. This focus has underpinned the Company’s long-term financial success and supported 35 consecutive years of annual dividend increases to shareholders, a rare distinction among publicly listed companies.

McGrath is headquartered in Livermore, California. Additional information about McGrath and its businesses is available at mgrc.com and investors.mgrc.com.

You should read this press release in conjunction with the financial statements and notes thereto included in the Company’s latest Forms 10-K, 10-Q and other SEC filings. You can visit the Company’s web site at www.mgrc.com to access information on McGrath RentCorp, including the latest Forms 10-K, 10-Q and other SEC filings.

CONFERENCE CALL NOTE:

As previously announced in its press release of January 16, 2026, McGrath RentCorp will host a conference call at 5:00 p.m. Eastern Time (2:00 p.m. Pacific Time) on February 25, 2026 to discuss the fourth quarter 2025 results. To participate in the teleconference, dial 1-800-274-8461 (in the U.S.), or 1-203-518-9814 (outside the U.S.), or to listen only, access the simultaneous webcast at the investor relations section of the Company’s website at https://investors.mgrc.com/. A replay will be available for 7 days following the call by dialing 1-800-839-5152 (in the U.S.), or 1-402-220-2694 (outside the U.S.). In addition, a live audio webcast and replay of the call may be found in the investor relations section of the Company’s website at https://investors.mgrc.com/events-and-presentations.

FORWARD-LOOKING STATEMENTS:

This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. All statements, other than statements of historical facts, regarding McGrath RentCorp’s expectations, strategies, prospects or targets are forward-looking statements. These forward-looking statements also can be identified by the use of forward-looking terminology such as “anticipates,” “believes,” “continues,” “could,” “estimates,” “expects,” “intends,” “may,” “plan,” “predict,” “project,” or “will,” or the negative of these terms or other comparable terminology. In particular, the discussion under the heading “Financial Outlook” and Mr. Hanna’s comments about the commercial construction market project activity showing signs of stabilization and the team’s ability to build upon 2025’s progress, are forward looking.

These forward-looking statements are not guarantees of future performance and involve significant risks and uncertainties that could cause our actual results to differ materially from those projected including: our expectations around continued business momentum entering 2026; the continued impact of tariff actions and macroeconomic factors, including fiscal policy uncertainty, government budgetary constraints, or other political or regulatory developments; health of the education and commercial markets in our modular building division; competition within the modular business; the activity levels in the semiconductor and general purpose and communications test equipment markets at TRS-RenTelco; the activity levels in commercial construction projects and impact on Portable Storage segment; continued execution of our strategic performance improvement initiatives; our ability to successfully increase prices to offset cost increases; our ability to effectively manage our rental assets; and our ability to retain and attract talent and uncertainty associated with the Chief Executive Officer transition, as well as the other factors disclosed under “Risk Factors” in the Company’s 2025 Form 10-K and other SEC filings.

Forward-looking statements are made only as of the date hereof and are based on management’s reasonable assumptions, however these assumptions can be wrong or affected by known or unknown risks and uncertainties. No forward-looking statement can be guaranteed, and subsequent facts or circumstances may contradict, obviate, undermine or otherwise fail to support or substantiate such statements. Except as otherwise required by law, we assume no obligation to update any of the forward-looking statements contained in this press release.

MCGRATH RENTCORP

CONSOLIDATED STATEMENTS OF INCOME (AUDITED)

Three Months Ended

December 31,

Twelve Months Ended

December 31,

(in thousands, except per share amounts)

2025

2024

2025

2024

Revenues

Rental

129,332

124,220

503,918

489,929

Rental related services

40,701

36,858

161,722

148,498

Rental operations

170,033

161,078

665,640

638,427

Sales

84,437

80,298

269,196

262,290

Other

2,290

2,370

9,399

10,225

Total revenues

256,760

243,746

944,235

910,942

Costs and Expenses

Direct costs of rental operations:

Depreciation of rental equipment

22,138

21,755

86,937

88,267

Rental related services

26,814

25,204

112,026

103,419

Other

26,830

24,931

118,309

109,116

Total direct costs of rental operations

75,782

71,890

317,272

300,802

Costs of sales

52,409

57,099

171,987

174,725

Total costs of revenues

128,191

128,989

489,259

475,527

Gross profit

128,569

114,757

454,976

435,415

Expenses:

Selling and administrative expenses

54,401

51,669

211,353

200,432

Other income, net

—

(9,281

)

Income from operations

74,168

63,088

243,623

244,264

Interest expense

6,492

8,858

30,622

47,241

Foreign currency exchange (gain) loss

(26

)

270

(80

)

215

Gain on merger termination from WillScot Mobile Mini

—

(180,000

)

WillScot Mobile Mini transaction costs

—

2,002

—

63,159

Income from continuing operations before provision for income taxes

67,702

51,958

213,081

313,649

Provision for income taxes from continuing operations

17,873

13,009

56,773

81,922

Net income

49,829

38,949

156,308

231,727

Earnings per share:

Basic

2.02

1.59

6.35

9.44

Diluted

2.02

1.58

6.35

9.43

Shares used in per share calculation:

Basic

24,612

24,551

24,602

24,541

Diluted

24,647

24,587

24,633

24,570

Cash dividends declared per share

0.485

0.475

1.94

1.90

MCGRATH RENTCORP

CONSOLIDATED BALANCE SHEETS

(AUDITED)

December 31,

(in thousands)

2025

2024

Assets

Cash

295

807

Accounts receivable, net of allowance for credit losses of $2,866 at December 31, 2025 and 2024

231,865

219,342

Rental equipment, at cost:

Relocatable modular buildings

1,485,794

1,414,367

Portable storage containers

245,141

240,846

Electronic test equipment

337,100

343,982

2,068,035

1,999,195

Less: accumulated depreciation

(647,137

)

(611,536

)

Rental equipment, net

1,420,898

1,387,659

Property, plant and equipment, net

233,492

197,439

Inventories

8,027

14,304

Prepaid expenses and other assets

83,351

80,477

Intangible assets, net

46,605

54,332

Goodwill

332,584

323,224

Total assets

2,357,117

2,277,584

Liabilities and Shareholders' Equity

Liabilities:

Notes payable

514,924

590,208

Accounts payable

66,233

60,082

Accrued liabilities

114,764

113,961

Deferred income

110,593

109,836

Deferred income taxes, net

313,580

280,129

Total liabilities

1,120,094

1,154,216

Shareholders’ equity:

Common stock, no par value - Authorized 40,000 shares

Issued and outstanding - 24,612 shares as of December 31, 2025 and 24,551 shares as of December 31, 2024

121,785

116,253

Retained earnings

1,115,238

1,007,115

Total shareholders’ equity

1,237,023

1,123,368

Total liabilities and shareholders’ equity

2,357,117

2,277,584

MCGRATH RENTCORP

CONSOLIDATED STATEMENTS OF CASH FLOWS

(AUDITED)

Twelve Months Ended

December 31,

(in thousands)

2025

2024

Cash Flows from Operating Activities:

Net income

156,308

231,727

Adjustments to reconcile net income to net cash provided by operating activities:

Depreciation and amortization

107,069

107,455

Deferred income taxes (benefits)

33,451

38,574

Provision for credit losses

1,726

1,890

Share-based compensation

11,225

9,502

Gain on sale of property, plant and equipment

—

(9,281

)

Gain on sale of used rental equipment

(44,191

)

(35,085

)

Foreign currency exchange (gain) loss

(80

)

215

Amortization of debt issuance costs

206

Change in:

Accounts receivable

(14,249

)

6,136

Inventories

6,277

1,121

Prepaid expenses and other assets

(2,873

)

6,887

Accounts payable

(330

)

11,836

Accrued liabilities

816

4,924

Deferred income

328

(1,592

)

Net cash provided by operating activities

255,683

374,375

Cash Flows from Investing Activities:

Purchases of rental equipment

(142,576

)

(191,231

)

Purchases of property, plant and equipment

(44,380

)

(40,228

)

Cash paid for acquisition of businesses

(23,785

)

—

Proceeds from sales of used rental equipment

83,629

68,453

Proceeds from sales of property, plant and equipment

—

12,251

Net cash used in investing activities

(127,112

)

(150,755

)

Cash Flows from Financing Activities:

Net payments under bank lines of credit

(77,490

)

(172,560

)

Principal payment of term note agreement

(73,000

)

—

Borrowings under Series G senior notes

75,000

—

Taxes paid related to net share settlement of stock awards

(5,693

)

(4,371

)

Payment of dividends

(47,900

)

(46,759

)

Net cash used in financing activities

(129,083

)

(223,690

)

Net decrease in cash

(512

)

(70

)

Cash balance, beginning of period

807

877

Cash balance, end of period

295

807

Supplemental Disclosure of Cash Flow Information:

Gain on merger termination, net of transaction costs, presented under net cash provided by operating activities

—

116,841

Interest paid, during the period

29,905

48,324

Net income taxes paid, during the period

10,116

36,524

Dividends accrued during the period, not yet paid

12,749

12,482

Rental equipment acquisitions, not yet paid

11,670

5,393

MCGRATH RENTCORP

BUSINESS SEGMENT DATA (unaudited)

Three months ended December 31, 2025

(dollar amounts in thousands)

Mobile

Modular

Portable

Storage

TRS-

RenTelco

Enviroplex

Consolidated

Revenues

Rental

83,347

17,286

28,699

—

129,332

Rental related services

35,471

4,241

989

—

40,701

Rental operations

118,818

21,527

29,688

—

170,033

Sales

55,359

2,131

10,310

16,637

84,437

Other

1,576

143

571

—

2,290

Total revenues

175,753

23,801

40,569

16,637

256,760

Costs and Expenses

Direct costs of rental operations:

Depreciation

11,101

1,071

9,966

—

22,138

Rental related services

21,263

4,787

764

—

26,814

Other

19,120

1,726

5,984

—

26,830

Total direct costs of rental operations

51,484

7,584

16,714

—

75,782

Costs of sales

36,575

1,333

3,709

10,792

52,409

Total costs of revenues

88,059

8,917

20,423

10,792

128,191

Gross Profit (Loss)

Rental

53,126

14,489

12,749

—

80,364

Rental related services

14,208

(546

)

225

—

13,887

Rental operations

67,334

13,943

12,974

—

94,251

Sales

18,784

798

6,601

5,845

32,028

Other

1,576

143

571

—

2,290

Total gross profit

87,694

14,884

20,146

5,845

128,569

Selling and administrative expenses

36,656

7,562

7,687

2,496

54,401

Income from operations

51,038

7,322

12,459

3,349

74,168

Interest expense

6,492

Foreign currency exchange loss

(25

)

Provision for income taxes

17,872

Net income

49,829

Other Information

Adjusted EBITDA 1

68,684

9,637

23,122

3,453

104,896

Average rental equipment 2

1,352,525

239,317

334,719

Average monthly total yield 3

2.05

2.41

2.86

Average utilization 4

71.3

61.2

64.5

Average monthly rental rate 5

2.88

3.94

4.43

Average rental equipment represents the cost of rental equipment, excluding new equipment inventory and accessory equipment.

Average monthly total yield is calculated by dividing the averages of monthly rental revenues by the cost of rental equipment for the period.

Average utilization is calculated by dividing the average month end costs of rental equipment on rent by the average month end total costs of rental equipment.

Average monthly rental rate is calculated by dividing the averages of monthly rental revenues by the cost of rental equipment on rent for the period.

MCGRATH RENTCORP

BUSINESS SEGMENT DATA (unaudited)

Three months ended December 31, 2024

(dollar amounts in thousands)

Mobile

Modular

Portable

Storage

TRS-

RenTelco

Enviroplex

Consolidated

Revenues

Rental

82,108

16,713

25,399

—

124,220

Rental related services

32,140

3,933

785

—

36,858

Rental operations

114,248

20,646

26,184

—

161,078

Sales

55,983

1,806

7,270

15,239

80,298

Other

1,598

211

561

—

2,370

Total revenues

171,829

22,663

34,015

15,239

243,746

Costs and Expenses

Direct costs of rental operations:

Depreciation

10,405

1,011

10,339

—

21,755

Rental related services

20,572

4,056

576

—

25,204

Other

18,534

1,493

4,904

—

24,931

Total direct costs of rental operations

49,511

6,560

15,819

—

71,890

Costs of sales

41,705

1,161

3,080

11,153

57,099

Total costs of revenues

91,216

7,721

18,899

11,153

128,989

Gross Profit (Loss)

Rental

53,169

14,209

10,156

—

77,534

Rental related services

11,568

(123

)

209

—

11,654

Rental operations

64,737

14,086

10,365

—

89,188

Sales

14,278

645

4,190

4,086

23,199

Other

1,598

211

561

—

2,370

Total gross profit

80,613

14,942

15,116

4,086

114,757

Selling and administrative expenses

35,789

7,133

6,550

2,197

51,669

Income from operations

44,824

7,809

8,566

1,889

63,088

Interest expense

8,858

Foreign currency exchange loss

270

WillScot Mobile Mini transaction costs

2,002

Provision for income taxes

13,009

Net income

38,949

Other Information

Adjusted EBITDA 1

60,994

9,922

19,099

1,987

92,002

Average rental equipment 2

1,270,068

231,332

349,018

Average monthly total yield 3

2.15

2.41

2.43

Average utilization 4

76.0

61.2

59.1

Average monthly rental rate 5

2.84

3.94

4.11

Average rental equipment represents the cost of rental equipment, excluding new equipment inventory and accessory equipment.

Average monthly total yield is calculated by dividing the averages of monthly rental revenues by the cost of rental equipment for the period.

Average utilization is calculated by dividing the average month end costs of rental equipment on rent by the average month end total costs of rental equipment.

Average monthly rental rate is calculated by dividing the averages of monthly rental revenues by the cost of rental equipment on rent for the period.

MCGRATH RENTCORP

BUSINESS SEGMENT DATA (unaudited)

Twelve months ended December 31, 2025

(dollar amounts in thousands)

Mobile

Modular

Portable

Storage

TRS-

RenTelco

Enviroplex

Consolidated

Revenues

Rental

326,919

67,593

109,406

—

503,918

Rental related services

141,662

16,453

3,607

—

161,722

Rental operations

468,581

84,046

113,013

—

665,640

Sales

170,668

7,779

33,349

57,400

269,196

Other

5,879

989

2,531

—

9,399

Total revenues

645,128

92,814

148,893

57,400

944,235

Costs and Expenses

Direct costs of rental operations:

Depreciation

43,206

4,196

39,535

—

86,937

Rental related services

91,262

17,763

3,001

—

112,026

Other

88,122

7,361

22,826

—

118,309

Total direct costs of rental operations

222,590

29,320

65,362

—

317,272

Costs of sales

113,058

4,842

15,283

38,804

171,987

Total costs of revenues

335,648

34,162

80,645

38,804

489,259

Gross Profit (Loss)

Rental

195,591

56,036

47,045

—

298,672

Rental related services

50,400

(1,310

)

606

—

49,696

Rental operations

245,991

54,726

47,651

—

348,368

Sales

57,610

2,937

18,066

18,596

97,209

Other

5,879

989

2,531

—

9,399

Total gross profit

309,480

58,652

68,248

18,596

454,976

Selling and administrative expenses

142,811

30,575

29,558

8,409

211,353

Income from operations

166,669

28,077

38,690

10,187

243,623

Interest expense

30,622

Foreign currency exchange loss

(80

)

Provision for income taxes

56,773

Net income

156,308

Other Information

Adjusted EBITDA 1

233,955

37,317

80,588

10,603

362,463

Average rental equipment 2

1,316,606

236,054

334,407

Average monthly total yield 3

2.07

2.39

2.73

Average utilization 4

73.0

60.8

63.8

Average monthly rental rate 5

2.83

3.92

4.27

Average rental equipment represents the cost of rental equipment, excluding new equipment inventory and accessory equipment.

Average monthly total yield is calculated by dividing the averages of monthly rental revenues by the cost of rental equipment for the period.

Average utilization is calculated by dividing the average month end costs of rental equipment on rent by the average month end total costs of rental equipment.

Average monthly rental rate is calculated by dividing the averages of monthly rental revenues by the cost of rental equipment on rent for the period.

MCGRATH RENTCORP

BUSINESS SEGMENT DATA (unaudited)

Twelve months ended December 31, 2024

(dollar amounts in thousands)

Mobile

Modular

Portable

Storage

TRS-

RenTelco

Enviroplex

Consolidated

Revenues

Rental

318,149

69,983

101,797

—

489,929

Rental related services

127,589

17,702

3,207

—

148,498

Rental operations

445,738

87,685

105,004

—

638,427

Sales

183,234

5,695

27,531

45,830

262,290

Other

6,394

1,117

2,714

—

10,225

Total revenues

635,366

94,497

135,249

45,830

910,942

Costs and Expenses

Direct costs of rental operations:

Depreciation

40,399

3,982

43,886

—

88,267

Rental related services

83,547

17,267

2,605

—

103,419

Other

83,023

5,816

20,277

—

109,116

Total direct costs of rental operations

206,969

27,065

66,768

—

300,802

Costs of sales

124,886

3,551

12,426

33,862

174,725

Total costs of revenues

331,855

30,616

79,194

33,862

475,527

Gross Profit

Rental

194,727

60,185

37,634

—

292,546

Rental related services

44,042

435

602

—

45,079

Rental operations

238,769

60,620

38,236

—

337,625

Sales

58,348

2,144

15,105

11,968

87,565

Other

6,394

1,117

2,714

10,225

Total gross profit

303,511

63,881

56,055

11,968

435,415

Selling and administrative expenses

136,670

29,197

27,000

7,565

200,432

Other income, net

(6,220

)

(1,319

)

(1,742

)

—

(9,281

)

Income from operations

173,061

36,003

30,797

4,403

244,264

Interest expense

47,241

Foreign currency exchange loss

215

Gain on merger termination from WillScot Mobile Mini

(180,000

)

WillScot Mobile Mini transaction costs

63,159

Provision for income taxes

81,922

Net income

231,727

Other Information

Adjusted EBITDA 1

229,160

43,255

74,525

4,785

351,725

Average rental equipment 2

1,221,900

227,600

362,558

Average monthly total yield 3

2.17

2.56

2.34

Average utilization 4

77.5

64.9

57.3

Average monthly rental rate 5

2.80

3.95

4.08

Average rental equipment represents the cost of rental equipment, excluding new equipment inventory and accessory equipment.

Average monthly total yield is calculated by dividing the averages of monthly rental revenues by the cost of rental equipment for the period.

Average utilization is calculated by dividing the average month end costs of rental equipment on rent by the average month end total costs of rental equipment.

Average monthly rental rate is calculated by dividing the averages of monthly rental revenues by the cost of rental equipment on rent for the period.

Reconciliation of Adjusted EBITDA to the most directly comparable GAAP measures

To supplement the Company’s financial data presented on a basis consistent with accounting principles generally accepted in the United States of America (“GAAP”), the Company presents “Adjusted EBITDA”, which is defined by the Company as net income before interest expense, provision for income taxes, depreciation, amortization, non-cash impairment costs, share-based compensation, transaction costs, gains on property sales and non-operating transactions. The gain on merger termination from WillScot Mobile Mini was considered a non-operating transaction and is excluded from Adjusted EBITDA. The Company presents Adjusted EBITDA as a financial measure as management believes it provides useful information to investors regarding the Company’s liquidity and financial condition and because management, as well as the Company’s lenders, use this measure in evaluating the performance of the Company.

Management uses Adjusted EBITDA as a supplement to GAAP measures to further evaluate period-to-period operating performance, compliance with financial covenants in the Company’s revolving lines of credit and senior notes and the Company’s ability to meet future capital expenditure and working capital requirements. Management believes the exclusion of non-cash charges and non-recurring transactions, including share-based compensation, transaction costs, gains on property sales and non-operating transactions, is useful in measuring the Company’s cash available for operations and performance of the Company. Because management finds Adjusted EBITDA useful, the Company believes its investors will also find Adjusted EBITDA useful in evaluating the Company’s performance.

Adjusted EBITDA should not be considered in isolation or as a substitute for net income, cash flows, or other consolidated income or cash flow data prepared in accordance with GAAP or as a measure of the Company’s profitability or liquidity. Adjusted EBITDA is not in accordance with or an alternative for GAAP and may be different from non−GAAP measures used by other companies. Unlike EBITDA, which may be used by other companies or investors, Adjusted EBITDA does not include share-based compensation charges, transaction costs, gains on property sales and non-operating transactions. The Company believes that Adjusted EBITDA is of limited use in that it does not reflect all of the amounts associated with the Company’s results of operations as determined in accordance with GAAP and does not accurately reflect real cash flow. In addition, other companies may not use Adjusted EBITDA or may use other non-GAAP measures, limiting the usefulness of Adjusted EBITDA for purposes of comparison. The Company’s presentation of Adjusted EBITDA should not be construed as an inference that the Company will not incur expenses that are the same as or similar to the adjustments in this presentation. Therefore, Adjusted EBITDA should only be used to evaluate the Company’s results of operations in conjunction with the corresponding GAAP measures. The Company compensates for the limitations of Adjusted EBITDA by relying upon GAAP results to gain a complete picture of the Company’s performance. Because Adjusted EBITDA is a non-GAAP financial measure, as defined by the SEC, the Company includes in the tables below reconciliations of Adjusted EBITDA to the most directly comparable financial measures calculated and presented in accordance with GAAP.

Reconciliation of Net Income to Adjusted EBITDA

(dollar amounts in thousands)

Three Months Ended

December 31,

Twelve Months Ended

December 31,

2025

2024

2025

2024

Net income

49,829

38,949

156,308

231,727

Provision for income taxes

17,873

13,009

56,773

81,922

Interest expense

6,492

8,858

30,622

47,241

Depreciation and amortization

27,352

26,631

107,069

107,455

EBITDA

101,546

87,447

350,772

468,345

Share-based compensation

3,137

2,553

11,225

9,502

Transaction costs 3

213

2,002

466

63,159

Other income, net 4

—

(9,281

)

Gain on merger termination from WillScot Mobile Mini 5

—

(180,000

)

Adjusted EBITDA 1

104,896

92,002

362,463

351,725

Adjusted EBITDA margin 2

Reconciliation of Net Cash Provided by Operating Activities to Adjusted EBITDA

(dollar amounts in thousands)

Three Months Ended

December 31,

Twelve Months Ended

December 31,

2025

2024

2025

2024

Net cash provided by operating activities

80,918

36,779

255,683

374,375

Change in certain assets and liabilities:

Accounts receivable, net

(9,481

)

(5,187

)

12,523

(8,026

)

Inventories, prepaid expenses and other assets

(4,406

)

13,101

(3,404

)

(6,887

)

Accounts payable and accrued liabilities

(4,953

)

(24,690

)

13,903

(128,981

)

Deferred income

20,174

14,089

(328

)

1,592

Amortization of debt issuance costs

)

(60

)

(206

)

(66

)

Foreign currency exchange gain (loss)

(266

)

(215

)

Gain on sale of used rental equipment

14,003

9,900

44,191

35,085

Income taxes paid, net of refunds received

3,579

40,350

10,116

36,524

Interest paid

5,036

7,986

29,905

48,324

Adjusted EBITDA 1

104,896

92,002

362,463

351,725

Adjusted EBITDA is defined as net income before interest expense, provision for income taxes, depreciation, amortization, non-cash impairment costs, share-based compensation, other income, net and non-operating transactions. Adjusted EBITDA for the twelve months ended December 31, 2023, excludes the gain on sale of discontinued operations from the divestiture of Adler Tanks.

Adjusted EBITDA Margin is calculated as Adjusted EBITDA divided by total revenues for the period.

Transaction costs include acquisition and divestiture related legal and professional fees and other costs specific to these transactions.

Other income, net consists of net gains on property, plant and equipment sales that are infrequent in nature and excluded from Adjusted EBITDA.

The gain on merger termination from WillScot Mobile Mini was considered a non-operating transaction and is excluded from Adjusted EBITDA.