Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations.
The following discussion and analysis should be read in conjunction with the financial statements and related notes included elsewhere in this annual report. This discussion contains “forward-looking statements” reflecting Alta’s current expectations, estimates, and assumptions concerning events and financial trends that may affect our future operating results and financial position. Actual results and the timing of events may differ materially from those contained in these forward-looking statements due to a number of factors. Factors that could cause or contribute to such differences include, but are not limited to, economic and competitive conditions, regulatory changes, and other uncertainties, as well as those factors discussed below and elsewhere in this annual report, particularly in “Risk Factors” and “Cautionary Note Regarding Forward-Looking Statements,” all of which are difficult to predict. In light of these risks, uncertainties, and assumptions, the forward-looking events discussed may not occur. Alta assumes no obligation to update any of these forward-looking statements.
Equipment Industry Overview 2025
The North American construction equipment market continued to face cyclical softness throughout 2025, although signs of stabilization began to emerge late in the year. Dealer retail sales were subdued year over year, pressured by prolonged interest rate uncertainty, cautious customer sentiment, permitting delays, and pricing instability associated with tariffs across the dealer channel. Privately funded non-residential activity remained weak, particularly among small and mid-sized contractors, while publicly funded infrastructure programs, supported by elevated levels of state-based DOT spending and the Infrastructure Investment and Jobs Act ("IIJA"), continued to provide a meaningful counterbalance against challenged privately funded non-residential activity. The operating environment was further pressured by continued tariff volatility, which contributed to higher material costs and delayed purchasing decisions across several end-market channels. Competitive pricing dynamics and margin compression persisted as OEMs and dealers worked through excess channel inventories, though late-year improvements in dealer purchasing intentions indicate emerging restocking behavior and a healthier demand backdrop heading into 2026. Major construction equipment OEMs have noted expectations for the 2026 North American construction equipment market ranging from a modest contraction to 7% growth.
The North American lift truck market entered a normalization phase in 2025 as the industry continued to work through the elevated backlogs accumulated during the 2021-2022 supply-chain dislocation. Industry bookings softened through the year as customers delayed fleet replacements in response to macroeconomic uncertainty, tariff-driven cost pressures, and reduced equipment utilization in certain manufacturing sectors. As backlogs declined, manufacturers adjusted production schedules accordingly. Despite these near-term headwinds, underlying fundamentals in core material‑handling sectors like food and beverage, retail distribution, and logistics remained constructive. Further, adoption of advanced power solutions, particularly lithium-ion platforms and early-stage automation technologies, also continued to expand across customer fleets. As excess channel inventories continue to be absorbed and customer engagement improving, the lift truck industry expects bookings to strengthen in the latter half of 2026, supporting a more constructive long-term outlook for this segment.
Equipment Inventory Availability, Rental Fleet Investment, and Product Support Trends
Following global supply-chain constraints that characterized 2021 and 2022, equipment availability improved meaningfully during 2023 and 2024, resulting in elevated dealer stock levels industrywide, particularly in the construction equipment segment. This trend continued into early 2025 as channel inventories remained above historical norms in several categories, a dynamic compounded by muted demand from privately funded non-residential contractors and cautious purchasing behavior stemming from tariff volatility and higher financing costs. Despite these broader market pressures and aggressive competitive discounting, we maintained disciplined inventory management and reduced new equipment inventory by $51.5 million year over year, improving asset efficiency and positioning us well entering 2026. Industry survey data indicates that while new equipment inventory levels remained elevated at the beginning of 2025, they trended down modestly throughout the year as OEMs adjusted production schedules and end-market demand began to stabilize.
With equipment availability improving during 2023, we strategically replenished and expanded our rental fleet at a time when utilization and pricing remained strong. During 2024 and into 2025, however, North American rental utilization rates moderated as supply increased across the rental channel and end-market activity softened in several construction-related sectors. In recognition of this trend, we undertook a targeted optimization initiative beginning in mid-2024, aimed at reducing identified excess primarily within our rent-to-sell categories and asset classes with substandard rental return characteristics. This action resulted in a $84.3 million reduction in rental fleet gross cost from June 30, 2024 through December 31, 2025, which included a sizeable divestiture of aerial rental fleet in our Illinois region resulting in a $4.3 million gain on sale. Aligning our rental fleet investment decisions with market demand, focusing on optimizing mix, improving turns, and prioritizing categories with the strongest utilization, margin, and resale performance has enhanced the overall quality of earnings and strengthened the asset profile of the Company. Rental rates remained to slightly in 2025, supported by a more rational competitive environment and visibility into 2026 project pipelines.
Demand for product support remained resilient in 2025 as customers continued to prioritize equipment uptime amid a more cautious capital investment environment. While overall product support revenues were essentially flat year over year, declining modestly by $0.5 million, from $548.2 million to $547.7 million, growth was tempered by lower equipment utilization across several key end markets, including automotive and manufacturing sectors, which influenced material handling product support activity. Despite this, demand for skilled technician labor continues to underpin a growth-oriented outlook. Elevated deliveries of new equipment in 2022 and 2023 helped to expand the installed base which will soon be entering mid-life service cycles, contributing to an expected lift in parts and service activity. At the same time, the material handling industry’s ongoing transition toward electric lift trucks, while reducing mechanical parts consumption per unit, has continued to shift the revenue mix toward labor-intensive service work based on software diagnostics. We expect this trend to persist as electrified and increasingly autonomous equipment requires advanced diagnostics, firmware management, and OEM-certified service capabilities. Additionally, electric lift trucks create incremental revenue opportunities in batteries, chargers and charging infrastructure, and power management solutions, partially mitigating the long-term decline in traditional parts intensity.
Business Description and Segments
For detailed description of our business and segments, refer to Part I, Item 1, Business, and Note 17, Segments, respectively.
Financial Statement Overview
Our revenues are primarily derived from the sale or rental of equipment and product support (e.g., parts and service) related activities, and consist of:
New equipment sales. We sell new heavy construction, material handling, and environmental processing equipment and are a leading regional distributor for nationally recognized equipment manufacturers. Our new equipment sales operation is a primary source of new customers for our rental, parts, and service business. The majority of our new equipment sales are predicated on exclusive distribution agreements we have with best-in-class OEMs. The sale of new equipment to customers, while profitable from a gross margin perspective, acts as a means of generating equipment field population and activity for our higher-margin aftermarket revenue streams, specifically service and parts. We also sell tangential products and services related to our equipment offerings which include, but are not limited to, automated equipment installation and warehouse management systems integration.
Used equipment sales. We sell used equipment which is typically equipment that has been taken in on trade from a customer that is purchasing new equipment, equipment coming off a third-party lease arrangement where we purchase the equipment from the finance company, or used equipment that is sourced for our customers in the open market by our used equipment specialists. Used equipment sales in our territories, like new equipment sales, generate parts and service business for the Company.
Parts sales. We sell replacement parts to customers and supply parts to our own rental fleet. Our in-house parts inventory is extensive such that we are able to provide timely service support to our customers. The majority of our parts inventory is made up of OEM replacement parts for those OEMs with which we have exclusive agreements to sell new equipment.
Service revenues. We provide maintenance and repair services for customer-owned equipment. In addition to repair and maintenance on an as needed or scheduled basis, we provide ongoing preventative maintenance services and warranty repairs for our customers. We have committed substantial resources to training our technical service employees and have a full-scale service infrastructure that we believe differentiates us from our competitors. Approximately 43% of our employees are skilled service technicians.
Rental revenues. We rent heavy construction, compact, aerial, material handling, and a variety of other types of equipment to our customers on a daily, weekly, and monthly basis. Our rental fleet, which is well-maintained, has an original acquisition cost (which we define as the cost originally paid to manufacturers plus any capitalized costs) of $529.8 million as of December 31, 2025. The original acquisition cost of our rental fleet excludes $3.1 million of assets associated with our guaranteed purchase obligations, which are assets that are not in our day-to-day operational control. In addition to being a core business, our rental business also creates cross-selling opportunities for us in our equipment sales and product support activities.
Rental equipment sales. We also sell rental equipment from our rental fleet. Rental equipment sales may occur at various stages in an equipment’s lifecycle, depending on customer demand and original purchase intentions of the equipment. Rental equipment purchased directly into the rental fleet tends to be rented for the majority of its useful life before being sold (which we refer as rent-to-rent equipment), and rental equipment purchased as new inventory then later transferred into the rental fleet tends to be rented until a retail opportunity presents itself (which we refer as rent-to-sell equipment). In our Material Handling segment, our rental equipment sales are primarily of rent-to-rent equipment and in our Construction Equipment segment, our rental equipment sales are primarily of rent-to-sell equipment. Selling lightly used construction equipment from our rental fleet allows us to meet customer demand for specific model years of equipment at various price points versus only offering brand new equipment to the market. Customers often have options to purchase equipment after or before rental agreements have matured. Rental equipment sales, like new and used equipment sales, generate customer-owned equipment field population within our territories that ultimately yield high-margin parts and service revenues for us.
Principal Costs and Expenses
Our cost of revenues are primarily related to the costs associated with the sale or rental of equipment and product support activities, which include direct labor costs for our skilled technicians. Our operating expenses consist principally of selling, general and administrative expenses, which primarily include personnel costs associated with our sales and administrative staff and expenses associated with the deployment of our service vehicle fleet and occupancy expenses. In addition, we have interest expense related to our floor plan payables, finance leases, line of credit, and senior secured second lien notes. These principal costs and expenses are described further below:
New equipment sales. Cost of new equipment sold primarily consists of the total acquisition costs of the new equipment we purchase from third parties and costs to inspect, prepare, and deliver to the customer.
Used equipment sales. Cost of used equipment sold primarily consists of the net book value, or cost, of used equipment we purchase from third parties or the trade-in value of used equipment that we obtain from customers in new equipment sales transactions combined with our inspection, preparation, and delivery costs to sell to the customer.
Parts sales. Cost of parts sales represents the average cost of parts used in the maintenance and repair of customer-owned equipment we service or parts sold directly to customers for their owned equipment (e.g., over-the-counter parts sales).
Services revenues. Cost of service revenues primarily represents the labor costs attributable to services provided for the maintenance and repair of customer-owned equipment. Training, paid time off, and other non-billable costs of maintaining our expert technicians are recorded in this line item in addition to the costs of direct customer-billable labor.
Rental revenues. Rental expense represents the costs associated with rental equipment, including, among other things, the cost of repairing and maintaining our rental equipment and other miscellaneous costs of owning rental equipment. Other rental expenses consist primarily of equipment support activities that we provide our customers in connection with renting equipment, such as freight services and damage waiver policies.
Rental depreciation. Depreciation of rental equipment represents the depreciation costs attributable to rental equipment. Estimated useful lives vary based upon the type and usage of equipment. See Note 2, Summary of Significant Accounting Policies, for information on our rental equipment depreciation methods.
Rental equipment sales. Cost of previously rented equipment sold consists of the net book value (e.g., net of accumulated depreciation) of rental equipment sold from our rental fleet.
Operating expenses. These costs are comprised of three main components: personnel, operational, and occupancy costs. Personnel costs are comprised of hourly and salaried wages for administrative employees, including incentive compensation, sale commissions, and employee benefits, such as medical benefits. Operational costs include marketing activities, costs associated with deploying and leasing our service vehicle fleet, insurance, IT, office and shop supplies, general corporate costs, depreciation on non-sales and rental-related assets, and intangible amortization. Occupancy costs are comprised of all expenses related to our facility infrastructure, including rent, utilities, property taxes, and building insurance.
Other expense, net. This section of the Consolidated Statements of Operations is mostly comprised of interest expense and other miscellaneous items that result in income or expense. Interest expense is driven by our floor plan facilities, line of credit, senior secured second lien notes, and finance lease arrangements.
Results of Operations
Years ended December 31, 2025 and 2024
Consolidated Results
Year Ended December 31,
Increase (Decrease)
2025 versus 2024
Revenues:
New and used equipment sales
Parts sales
Service revenues
Rental revenues
Rental equipment sales
Total revenues
Cost of revenues:
New and used equipment sales
Parts sales
Service revenues
Rental revenues
Rental depreciation
Rental equipment sales
Total cost of revenues
Gross profit
Selling, general and administrative expenses
Non-rental depreciation and amortization
Total operating expenses
Income from operations
Other (expense) income:
Interest expense, floor plan payable – new equipment
Interest expense – other
Other income
Loss on extinguishment of debt
Gain on divestitures
Total other expense, net
Loss before taxes
Income tax expense (benefit)
Net loss
Preferred stock dividends
Net loss available to common stockholders
Adjusted EBITDA (1)
NM - calculated change not meaningful
(1) Adjusted EBITDA is a non-GAAP measure. Refer to “Non-GAAP Financial Measures” for a definition of Adjusted EBITDA and below for a reconciliation of our Adjusted EBITDA to net loss, the most comparable U.S. GAAP measure.
Percent of Revenues
Year Ended December 31,
Revenues:
New and used equipment sales
Parts sales
Service revenues
Rental revenues
Rental equipment sales
Total revenues
Cost of revenues:
New and used equipment sales
Parts sales
Service revenues
Rental revenues
Rental depreciation
Rental equipment sales
Total cost of revenues
Gross profit
Non-GAAP Financial Measures:
Adjusted EBITDA
Adjusted EBITDA
Year Ended December 31,
Increase (Decrease)
2025 versus 2024
Net loss available to common stockholders
Depreciation and amortization
Interest expense
Income tax expense (benefit)
Transaction and consulting costs
Loss on debt extinguishment
Gain on divestitures
Share-based incentives
Other expenses
Preferred stock dividend
Loss on auction sale
Showroom-ready equipment interest expense
Adjusted EBITDA
NM - calculated change not meaningful
Organic Revenues
Organic Revenues
Year Ended December 31,
Increase (Decrease)
2025 versus 2024
Total revenues
Acquisition and divestitures revenues
Organic revenues:
New and used equipment sales
Parts sales
Service revenues
Rental revenues
Rental equipment sales
Total organic revenues
The above tables contain non-GAAP financial measures. A “non-GAAP financial measure” is defined as a numerical measure of a company’s financial performance that excludes or includes amounts in the most directly comparable measure calculated and presented in accordance with GAAP in the consolidated statements of operations, balance sheets or statements of cash flows of the company. We disclose non-GAAP financial measures, including Adjusted EBITDA and organic revenues and growth rates associated with organic revenues because we believe they are useful performance measures that assist in an effective evaluation of our operating performance. We believe such measures are useful for investors and others in understanding and evaluating our operating results in the same manner as our management. However, such measures are not financial measures calculated in accordance with U.S. GAAP and should not be considered as a substitute for, or in isolation from, net income (loss), revenues, or any other operating performance measures calculated in accordance with U.S. GAAP.
We define Adjusted EBITDA as net income (loss) before interest expense (not including floor plan interest paid on new equipment), income taxes, depreciation and amortization, adjustments for certain one-time, non-recurring or non-cash items, and items not necessarily indicative of our underlying operating performance. We exclude these items from net income (loss) in arriving at Adjusted EBITDA because these amounts are either non-cash, non-recurring or can vary substantially within the industry depending upon accounting methods and book values of assets, capital structures, and the method by which the assets were acquired.
We define organic revenue growth as revenue growth excluding the impact of acquisitions or divestitures that do not appear fully in both periods in the current and prior years. We believe organic revenue growth is a meaningful metric to investors as it provides a more consistent comparison of our revenues across reported periods as well as to industry peers.
Pursuant to the requirements of Regulation G, we have provided a reconciliation of Adjusted EBITDA and organic revenues to the most directly comparable U.S. GAAP financial measure in the tables above and organic revenues in the subsequent tables in management's discussion and analysis of our Material Handling and Construction Equipment segments. These measures are supplemental to, and should be used in conjunction with, the most comparable U.S. GAAP measures. Management uses these non-GAAP financial measures to monitor and evaluate financial results and trends.
Revenues: Consolidated revenues decreased by $40.7 million to $1,835.9 million for the year ended December 31, 2025 as compared to 2024 as modest gains in new and used equipment sales and service revenues were more than offset by declines experienced within the rental departments of the business. Rental revenues and rental equipment sales declined organically by 10.2% and 21.0%, respectively, representative of a smaller average rental fleet consistent with the Company's ongoing fleet optimization initiatives and lower utilization levels. Across the equipment sales portfolio, performance varied by segment. The Construction Equipment segment delivered year-to-date growth in new and used equipment sales, supported by improved deliveries, competitive OEM programs, and steady demand across key end markets, particularly publicly-funded infrastructure, road building, and aggregate mining. In contrast, the Material Handling segment experienced lower equipment sales, driven by reduced unit deliveries and a modest contraction in market size and share in select geographies as customers continued to delay fleet replacements amid macro uncertainty and tariff-driven cost pressures. Product support revenues remained comparatively stable at the consolidated level. The Material Handling segment experienced amid softer parts and service activity due to lower customer fleet utilization, reduced billable headcount, and demand in automotive and general manufacturing end markets. By comparison, the Construction Equipment segment maintained steady product support activity, supported by consistent customer demand and field execution. Importantly, technician productivity remained high across the enterprise throughout the period and headcount management ensured that our workforce remained aligned with service demand.
Gross profit (GP):
Year Ended December 31,
Increase (Decrease)
2025 versus 2024
Consolidated
New and used equipment sales
Parts sales
Service revenues
Rental revenues
Rental equipment sales
Consolidated gross profit
Consolidated gross profit decreased by 40 basis points to 25.9% in the year ended December 31, 2025 compared to 26.3% over the same period in 2024 as margin compression in new and used equipment and rental operations offset gains in parts and service. New and used equipment sales margins decreased 100 basis points to 14.1%, impacted by a less favorable sales mix, heightened competitive pricing conditions stemming from industry oversupply, and rising input costs, including tariff-related increases that were not fully recoverable through pricing actions. Parts gross profit margins increased by 120 basis points from the prior year, reflecting disciplined pricing execution, partially offset by the impact of broad-based tariff increases. Service gross profit margins improved in the year ended December 31, 2025 when compared to the prior year, increasing 110 basis points, supported by stronger labor rate realization, technician efficiency gains, and improved warranty labor recoveries, aligning with ongoing initiatives across both major segments to enhance billable time, reduce non-productive hours, and optimize service . Rental revenues gross profit margin decreased 150 basis points for the year, primarily reflecting the influence of depreciation costs on a reduced revenues base following the Company's fleet optimization efforts, by lower utilization levels across several markets. While rental operations experienced lower utilization, strategic disposals of assets contributed to a 60 basis point compression in rental equipment sales margins. These actions were designed to asset and support a more disciplined and rental strategy heading into 2026.
Operating expenses: Consolidated operating expenses decreased by 5.0% to $451.4 million for the year ended December 31, 2025 compared to the prior year, primarily due to cost savings initiatives implemented in the second half of 2024 and early 2025. These initiatives included workforce optimization measures that resulted in improved efficiency and reduced personnel-related costs. Further savings were achieved through changes to the Company’s self-insured healthcare program. The sustained reduction in operating expenses reflects disciplined execution and ongoing focus on cost control across the enterprise.
Other expense, net: Consolidated other expense, net for the year ended December 31, 2025 was $82.0 million compared to $84.9 million for the year ended December 31, 2024. The decrease is attributed to the impact of one-time events, specifically the gain on divestitures in 2025 and debt extinguishment losses in 2024 related to refinancing activities, all of which were partially offset by changes in interest expense year over year.
Income tax expense (benefit): The Company recorded an income tax expense of $21.5 million and benefit of $4.2 million for the years ended December 31, 2025 and 2024, respectively. The income tax expense in the current year was primarily due to the One Big Beautiful Bill Act ("OBBBA") enacted into law during the third quarter. Before OBBBA was enacted, interest expense limitation rules positioned the Company in a taxable income situation prior to the application of its net operating losses ( “ NOLs”), the use of which were limited and unable to shield the entirety of the Company’s taxable income. This resulted in cash taxes paid in recent years which reduced available cash liquidity. As the Company was using its NOLs, there was no need to recognize a valuation allowance against the NOL deferred tax assets ("DTAs"). For the Company, the enactment of the OBBBA legislative changes resulted in a taxable loss position on a trailing 12-quarter recast basis, prior to the application of its NOLs, primarily as a result of the change to the interest expense limitation rules. Thus, future usage of the Company’s NOLs to shield taxable income was no longer more likely than not and a full valuation allowance those NOL DTAs was deemed appropriate, to the significant increase in deferred income tax expense in 2025. Going forward, given the change to the interest expense and the Company now being in a taxable situation, cash taxes paid by the Company will be reduced, a to available cash liquidity in the future. The income tax in 2024 was primarily due to pre-tax partially offset by the valuation allowance recorded a portion of the DTA relating to the U.S. interest expense carryforwards created by the provisions of the Tax Cuts and Jobs Act of 2018 ("TCJA").
Material Handling Results
Year Ended December 31,
Increase (Decrease)
2025 versus 2024
Revenues:
New and used equipment sales
Parts sales
Service revenues
Rental revenues
Rental equipment sales
Total revenues
Cost of revenues:
New and used equipment sales
Parts sales
Service revenues
Rental revenues
Rental depreciation
Rental equipment sales
Total cost of revenues
Gross profit
Selling, general and administrative expenses
Non-rental depreciation and amortization
Total operating expenses
Income from operations
Other (expense) income:
Interest expense, floor plan payable – new equipment
Interest expense – other
Other income
Gain on divestitures
Total other expense, net
Income before taxes
Segment adjusted EBITDA
Percent of Revenues
Year Ended December 31,
Revenues:
New and used equipment sales
Parts sales
Service revenues
Rental revenues
Rental equipment sales
Total revenues
Cost of revenues:
New and used equipment sales
Parts sales
Service revenues
Rental revenues
Rental depreciation
Rental equipment sales
Total cost of revenues
Gross profit
Non-GAAP Financial Measure: Organic Revenues
Organic Revenues
Year Ended December 31,
Increase (Decrease)
2025 versus 2024
Total revenues
Acquisition and divestiture revenues
Organic revenues:
New and used equipment sales
Parts sales
Service revenues
Rental revenues
Rental equipment sales
Total organic revenues
Revenues: Material Handling segment revenues decreased by $33.1 million to $654.3 million for the year ended December 31, 2025 as compared to the same period last year. Organic revenues declined $34.4 million, or 5.0% for the year ended December 31, 2025, reflecting a demand environment consistent with the broader lift-truck industry's 2025 performance, in which customers delayed fleet replacements and reduced capital commitments amid macro uncertainty and tariff-related cost pressures. Organic new and used equipment sales decreased by 7.7% driven by softer industry bookings throughout 2025 as customers continued to defer capital expenditures, extended replacement cycles, and moderated utilization levels across several end markets, most prominently experienced in automotive and manufacturing sectors. The trends experienced in 2025 aligned with broader market behaviors, as the industry’s continued absorption of backlogs originating from the 2021-2022 supply-chain disruptions tempered quoting velocity and order intake overall. Product support revenues declined $8.8 million organically, with a $5.6 million reduction in parts sales and a $3.2 million decrease in service revenues. While overall product support held relatively resilient, softer activity in key customer verticals such as automotive and general manufacturing contributed to the business carrying a lower billable technician headcount year over year. Rental revenues decreased 9.1% organically for the year ended December 31, 2025 as compared to last year reflecting a lower average volume of fleet on rent in select markets, mainly in our Midwest and Canada regions. In contrast, rental equipment sales increased $9.3 million organically, or 88.6%, supported by targeted disposals of assets and matching customer demand for cost used equipment alternatives. The increase in rental equipment sales aligns with the Company's 2024-2025 fleet optimization initiatives aimed at reducing excess rental fleet and overall asset .
Gross profit (GP):
Year Ended December 31,
Increase (Decrease)
2025 versus 2024
New and used equipment sales
Parts sales
Service revenues
Rental revenues
Rental equipment sales
Segment gross profit
Material Handling gross profit for the year ended December 31, 2025 increased 60 basis points to 33.0% compared to the same period in 2024. New and used equipment gross margins improved partly due to the absence of the prior-year fourth-quarter auction disposition activity that had compressed used equipment margins, along with reduced pressure on used equipment pricing. Although used equipment margins improved, overall margin performance was tempered somewhat by sales-mix variances and tariff-related cost pressures concentrated in the new equipment category, where margins held relatively stable due to the ability to pass through much of these upstream costs. Parts gross margins improved slightly on disciplined pricing execution and are in line with expectations. Service margins aligned with expectations and improved by 50 basis points for the year ended December 31, 2025, supported by selective effective labor rate increases, though partially offset by modest unfavorable quote variances. Rental revenues gross margins declined 270 basis points primarily due to the influence of fixed depreciation costs on a lower revenues base, occurring most acutely in our Midwest region. Offsetting these impacts, rental equipment sales margins , supported by the strategic disposal of aging assets and demand for competitively priced used equipment.
Operating expenses: Operating expenses decreased by $3.9 million to $190.2 million for the year ended December 31, 2025 as compared to the prior year, primarily due to cost savings initiatives implemented in the second half of 2024 and early 2025. These initiatives included workforce optimization measures that resulted in reduced personnel-related costs, including expenses associated with the Company’s self-insured health plan. Further contributing to the year-over-year reduction was a decline in fuel costs, which provided meaningful benefit given the scale of our field-based technician workforce.
Other expense, net: Other expenses increased by $0.7 million to $24.3 million for the year ended December 31, 2025 as compared to the same period last year mainly reflecting higher interest expense resulting from increased debt levels and a higher effective interest rate following our 2024 debt refinancing, partially offset by a gain on divestiture from the sale of the Dock and Door division of our business in the New York and Boston regions.
Construction Equipment Results
Year Ended December 31,
Increase (Decrease)
2025 versus 2024
Revenues:
New and used equipment sales
Parts sales
Service revenues
Rental revenues
Rental equipment sales
Total revenues
Cost of revenues:
New and used equipment sales
Parts sales
Service revenues
Rental revenues
Rental depreciation
Rental equipment sales
Total cost of revenues
Gross profit
Selling, general and administrative expenses
Non-rental depreciation and amortization
Total operating expenses
Income from operations
Other (expense) income:
Interest expense, floor plan payable – new equipment
Interest expense – other
Other income
Gain on divestitures
Total other expense, net
Loss before taxes
Segment adjusted EBITDA
Percent of Revenues
Year Ended December 31,
Revenues:
New and used equipment sales
Parts sales
Service revenues
Rental revenues
Rental equipment sales
Total revenues
Cost of revenues:
New and used equipment sales
Parts sales
Service revenues
Rental revenues
Rental depreciation
Rental equipment sales
Total cost of revenues
Gross profit
Non-GAAP Financial Measure: Organic Revenues
Organic Revenues
Year Ended December 31,
Increase (Decrease)
2025 versus 2024
Total revenues
Divestiture revenues
Organic revenues:
New and used equipment sales
Parts sales
Service revenues
Rental revenues
Rental equipment sales
Total organic revenues
Revenues: Construction Equipment segment revenues decreased by 1.3% to $1,116.7 million for the year ended December 31, 2025 versus prior year. Organically, the segment revenues decreased 1.0% for the year ended December 31, 2025 as compared to the same period last year. Organic new and used equipment sales increased $36.1 million, or 6.3%, with most of the growth occurring in the second and fourth quarters. This performance was supported by competitive OEM promotional programs, increased customer purchasing activity tied to OBBBA legislation that enhanced bonus depreciation benefits on equipment acquisitions, and steady demand across key end markets, such as road building and aggregate mining. Product support revenues, consisting of parts and service, increased 1.2% organically, aided by improved pricing and continued technician efficiency improvements in several regions. Rental revenues decreased 10.1%, on an organic basis for the year ended December 31, 2025 as compared to the prior year driven by a lower average rental fleet size between the comparable periods and reduced fleet utilization in select markets. The year-over-year decline is a byproduct of the Company’s strategic repositioning of its rent-to-sell fleet to better align with current market conditions and focus on higher return asset categories. Rental equipment sales decreased for the year ended December 31, 2025 by $38.3 million due to the significant sales activity in 2024 to lower levels of rent-to-sell fleet available for retail disposition during the current year, the aforementioned strategic repositioning of the segments rent-to-sell fleet, and reduced throughput of lightly used, rent-to-sell heavy equipment to our customer base in 2025.
Gross profit (GP):
Year Ended December 31,
Increase (Decrease)
2025 versus 2024
New and used equipment sales
Parts sales
Service revenues
Rental revenues
Rental equipment sales
Segment gross profit
Construction Equipment gross profit decreased by 70 basis points to 21.8% from 22.5% for the year ended December 31, 2025 as compared to 2024 driven primarily by lower margins on equipment sales. New and used equipment sales margins decreased by 120 basis points to 11.2%, reflecting a less favorable product mix and heightened pricing competitiveness across the industry as OEMs and dealers worked through elevated channel inventories for much of the year. These dynamics were consistent with broader market conditions as the industry sought to normalize inventory levels. Rental equipment sales gross margin for the year ended December 31, 2025 decreased by 230 basis points, reflecting the Company's deliberate reduction of underutilized rent-to-sell assets as part of its strategy to dispose of underperforming equipment, optimize fleet mix, and enhance long-term returns and asset efficiency. Parts sales margins improved by 170 basis points for the year ended December 31, 2025, remaining within expected ranges, supported by continued pricing discipline. Service gross margins increased by 200 basis points due to improved labor rate realization, technician , and warranty recovery, a result consistent with ongoing initiatives to increase billable hours, manage non‑productive time, and warranty recovery processes across the network. Rental revenues gross margin for the year ended December 31, 2025 decreased by 100 basis points compared to the same period last year a result of a reduced amount of fleet on rent.
Operating expenses: Construction Equipment operating expenses decreased by $17.5 million to $227.3 million for the year ended December 31, 2025 as compared to 2024, reflecting the full impact of cost savings initiatives implemented during the second half of 2024 and early 2025. These initiatives included workforce optimization measures that resulted in improved efficiency and reduced personnel-related costs, including expenses associated with the Company’s self-insured health plan. Additional expense savings were realized through more efficient advertising and promotional activities as well as greater discipline in managing customer relationship-related costs.
Other expense, net: Construction Equipment other expense, net decreased by $1.5 million to $44.6 million for the year ended December 31, 2025 as compared to the same period in 2024. The variance was driven by the gain on the divestiture of substantially all our aerial fleet rental business in the greater Chicago area and was partially offset by increased interest expense due to higher nominal levels of debt and the increase in our effective interest rate associated with the debt refinancing in 2024.
Master Distribution Results
Year Ended December 31,
Increase (Decrease)
2025 versus 2024
Revenues:
New and used equipment sales
Parts sales
Service revenues
Rental revenues
Total revenues
Cost of revenues:
New and used equipment sales
Parts sales
Service revenues
Rental revenues
Rental depreciation
Total cost of revenues
Gross profit
Selling, general and administrative expenses
Non-rental depreciation and amortization
Total operating expenses
Income (loss) from operations
Other expense:
Interest expense, floor plan payable – new equipment
Interest expense – other
Other expense
Total other expense, net
Loss before taxes
Segment adjusted EBITDA
NM - calculated change not meaningful
Percent of Revenues
Year Ended December 31,
Revenues:
New and used equipment sales
Parts sales
Service revenues
Rental revenues
Total revenues
Cost of revenues:
New and used equipment sales
Parts sales
Service revenues
Rental revenues
Rental depreciation
Total cost of revenues
Gross profit
Revenues: Master Distribution segment revenues for the year ended December 31, 2025 were $67.3 million, an increase of $8.1 million from the prior year same period. The majority of this growth came from new and used equipment sales, which rose by $7.6 million, as normalized dealer inventories and a more seasonally-aligned delivery cadence improved purchasing behavior across the segments sub-dealer network in the first half of the year. Parts sales were improved for the year ended December 31, 2025 as pricing actions beginning in the second quarter offset tariff-driven cost increases. The business segment continues to actively pursue pricing and sourcing strategies to support long-term profitability given its direct exposure to European OEMs which are subject to U.S. tariffs.
Gross profit (GP):
Year Ended December 31,
Increase (Decrease)
2025 versus 2024
New and used equipment sales
Parts sales
Service revenues
Rental revenues
Segment gross profit
NM - calculated change not meaningful
For the year ended December 31, 2025, gross profit margin on new and used equipment sales were 20.5%, down from the prior year and reflective of higher input costs generally related to the weakening of the U.S. dollar against the Euro and the influence of tariffs on imported goods. Parts sales gross profit margin were 41.9% for the year ended December 31, 2025, down 190 basis points compared to the same period last year, following broad-based increases in steel and aluminum tariffs partially offset by parts pricing actions and negotiations with major OEMs. These pricing actions, together with alternative sourcing initiatives, are expected to support margin stabilization in future periods.
Operating expenses: Master Distribution segment operating expenses were $11.8 million for the year ended December 31, 2025, down $4.7 million from 2024. The decrease primarily reflects non-recurring costs incurred in the prior year for non-cash contingent consideration expense associated with the earnout component of the acquisition of Ecoverse. Removing the impact of earn-out related expenses, operating expenses were relatively flat despite higher revenues in the current year.
Other expense, net: Master Distribution other expense was $6.5 million for the year ended December 31, 2025, an increase of $1.7 million over the prior year primarily attributed to higher interest costs on larger inventory balances and a higher effective interest rate given the debt refinance in 2024.
Liquidity and Capital Resources
Years ended December 31, 2025 and 2024 Cash Flows
Cash Flow from Operating Activities . Cash flows from operating activities include net loss adjusted for non-cash items and the effects of changes in working capital. For the year ended December 31, 2025, operating activities resulted in net cash provided by operations of $33.0 million. Our reported net loss of $80.3 million, when adjusted for non-cash income and expense items, primarily depreciation and amortization, the gain on sale of property and rental equipment, inventory and bad debt reserves, gain on divestitures, deferred income taxes, and stock-based compensation, provided net cash inflows of $57.3 million. Changes in working capital included $48.9 million of inventory purchased ($100.0 million of inventory was transferred into our rental fleet for replenishment purposes), and an $11.2 million decrease in accounts receivable. Cash flows from operating activities were favorably impacted by $98.2 million due to proceeds from the sale of rent-to-sell equipment and unfavorably impacted by $55.4 million in net outflows related to manufacturer floor plans, a $18.4 million decrease in accounts payable, accrued expenses, leases, and other operating liabilities, and an $11.0 million net change in prepaid expenses and other assets.
For the year ended December 31, 2024, operating activities resulted in net cash provided by operations of $57.0 million. Our reported net loss of $62.1 million, when adjusted for non-cash income and expense items, primarily depreciation and amortization, the gain on sale of property and rental equipment, inventory and bad debt reserves, loss on debt extinguishment, deferred income taxes, and stock-based compensation, provided net cash inflows of $63.5 million. Changes in working capital included $145.3 million of inventory purchased ($120.6 million was transferred into our rental fleet for replenishment purposes), and a $42.7 million decrease in accounts receivable. Cash flows from operating activities were favorably impacted by $126.1 million due to proceeds from the sale of rent-to-sell equipment and a $4.3 million net change in prepaid expenses and other assets and unfavorably impacted by a $26.5 million decrease in accounts payable, accrued expenses, leases, and other operating liabilities, and $7.8 million in net outflows related to manufacturer floor plans.
Cash Flow from Investing Activities . For the year ended December 31, 2025, our cash used in investing activities was $22.7 million. This was mainly due to $55.0 million purchases of rental equipment and non-rental property and equipment and intangibles, the acquisition of CEQ as discussed in Note 15, Business Combinations and Divestitures, and other investing activities partially offset by $20.9 million proceeds from the two divestitures discussed in Note 15, and $11.4 million proceeds from the sale of rent-to-rent equipment and non-rental property and equipment.
For the year ended December 31, 2024, our cash used in investing activities was $56.2 million. This was mainly due to $73.4 million purchases of rent-to-rent equipment, non-rental property and equipment, and other investing activities partially offset by $17.2 million proceeds from the sale of rent-to-rent equipment and non-rental property and equipment.
Cash Flow from Financing Activities. For the year ended December 31, 2025, cash used in financing activities was $5.3 million. This cash outflow was due to payments of $6.9 million for preferred and common stock dividends, net payments of $7.0 million related to non-manufacturer floor plans, $7.5 million for common stock repurchases, and $2.9 million related to other financing activities partially offset by $19.0 million of net proceeds from our line of credit, long-term borrowings, and finance lease obligations.
For the year ended December 31, 2024, cash used in financing activities was $17.9 million. This cash outflow was mainly due to the extinguishment of the Senior Secured Second Lien Notes due 2026 of $319.4 million combined with principal payments on long-term debt and finance lease obligations of $639.9 million and net payments related to non-manufacturer floor plans for the year of $12.8 million more than offsetting the $974.2 million of proceeds from long-term borrowings including the new $500.0 million Senior Secured Second Lien Notes due 2029. Additionally, there were cash outflows of $10.8 million for preferred and common stock dividends, $5.8 million for repurchases of common stock, and $1.5 million related to other financing activities.
Sources of Liquidity
Our principal sources of liquidity have been from cash provided by our service, parts and rental-related operations and the sales of new, used, and rental fleet equipment, proceeds from the issuance of debt, and borrowings available under our line of credit and floor plans. The Company also reported $18.6 million in cash as of December 31, 2025. For more information on our available borrowings under the revolving line of credit, senior secured second lien notes, and floor plans, please refer to Note 8, Floor Plans and Note 9, Long-term Debt. We consider the undistributed earnings of our foreign subsidiaries to be indefinitely reinvested as we do not anticipate the need to repatriate funds to the U.S. to satisfy domestic liquidity needs.
Cash Requirements Related to Operations
Our principal uses of cash have been to fund operating activities and working capital, including but not limited to new and used equipment inventories, purchases of rental fleet equipment and personal property, payments due under line of credit and floor plans, acquisitions, debt service requirements, stock repurchases, and preferred stock and common stock dividends. In the future, we may pursue additional strategic acquisitions and seek to open new start-up locations. We anticipate that the uses described above encompass the principal demands on our cash and availability under our line of credit and floor plans in the future.
The amount of our future capital expenditures will depend on a number of factors including general economic conditions, the state of our industry and the markets we serve, and our growth prospects. Our gross rental fleet capital expenditures for the period ended December 31, 2025 were approximately $141.8 million, including $100.0 million of transfers from new and used inventory to rent-to-sell rental fleet. This gross rental fleet capital expenditure was offset by sales proceeds of rental equipment of approximately $109.1 million for the period ended December 31, 2025 as our business model is to sell lightly used inventory to customers from our rental fleet to increase field population in our geographies. In response to changing economic conditions, we have the flexibility to modify our capital expenditures, especially as it relates to rental fleet.
To service our debt, we will require a significant amount of cash. Our ability to pay interest and principal on our indebtedness, will depend upon our future operating performance and the availability of borrowings under the line of credit and/or other debt and equity financing alternatives available to us, which will be affected by prevailing economic conditions and conditions in the global credit and capital markets, as well as financial, business, and other factors, some of which are beyond our control. Based on our current level of operations and given the current state of the capital markets, we believe our cash flows from operations, available cash, and available borrowings under the line of credit will be adequate to meet our liquidity needs for the foreseeable future. As of December 31, 2025, we had $424.4 million of available borrowings under the revolving line of credit and floor plans.
Critical Accounting Policies and Estimates
In the preparation of consolidated financial statements in conformity with accounting principles generally accepted in the United States of America (“U.S. GAAP”), we are required to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues, expenses, and the related disclosures. Our management reviews these estimates and assumptions on an ongoing basis. While we believe the estimates and judgments we use in preparing our consolidated financial statements are reasonable and appropriate, they are subject to future events and uncertainties regarding their outcome; therefore, actual results may materially differ from these estimates. If actual amounts are ultimately different from our estimates, the revisions are included in our results of operations for the period in which the actual amounts first become known. We consider the following items in the consolidated financial statements to require significant estimation or judgment. See Note 2 to our consolidated financial statements for a summary of our significant accounting policies.
Revenue Recognition
Refer to Note 2, Summary of Significant Accounting Policies, and Note 3, Revenue Recognition, herein for more information.
Impairment of Goodwill and Long-lived Asset s
Refer to Note 2, Summary of Significant Accounting Policies, herein for more information.
Useful Lives of Property and Equipment and Rental Fleet
We depreciate rental equipment and property and equipment over their estimated useful lives. The useful life of property and equipment is determined based on the classification grouping of the asset. The useful life of rental equipment is determined based on our estimate of the period the asset will generate revenues. The principal methods of depreciation used are straight-line basis over the estimated useful lives or percentage of rental revenues based on the unit of activity method. We periodically review the assumptions used in calculating rates of depreciation. We may be required to change these estimates based on changes in our industry or changes in other circumstances. If these estimates change in the future, we may be required to recognize increased or decreased depreciation expense for these assets. The amount of depreciation expense we record is highly dependent upon the estimated useful lives assigned to each category of equipment and the utilization of equipment where the unit of activity method is applied.
Generally, we assign the following useful lives to the below categories of Property and Equipment and Rental Fleet:
Estimated
Useful Life
Transportation equipment (autos and trucks)
2 – 5 years
Rental fleet
5 – 10 years
Machinery and equipment excluding rental fleet
3 – 20 years
Office equipment
5 – 7 years
Computer equipment
2 – 5 years
Leasehold improvements
3 – 15 years
The useful lives and methods of depreciation are reviewed at each financial year-end and adjusted prospectively, if appropriate.
Income Taxes
The Company operates in a number of geographic locations and is subject to foreign, U.S. federal, state, and local taxes applicable in each of the respective jurisdictions. These tax laws are complex and involve uncertainties in the application of our facts and circumstances that may be subject to interpretation. We account for income taxes under the asset and liability method, which requires the recognition of deferred tax assets and liabilities for the expected future tax consequences of events that have been included in the financial statements. Under this method, we determine deferred tax assets and liabilities on the basis of the differences between the financial statement and tax bases of assets and liabilities by using enacted tax rates in effect for the year in which the differences are expected to reverse. The effect of a change in tax rates on deferred tax assets and liabilities is recognized in income in the period that includes the enactment date.
As a part of our income tax provision, we must also evaluate the likelihood we will be able to realize our deferred tax assets which is dependent on our ability to generate sufficient taxable income in future years. Our deferred tax calculation requires management to make certain estimates about future operations. We recognize deferred tax assets to the extent that we believe that these assets are more likely than not (a likelihood of greater than 50%) to be realized. Deferred tax assets are reduced by a valuation allowance when, in the opinion of management, it is more likely than not that some portion or all of the deferred tax assets will not be realized. These estimates involve judgment. In making such a determination, we consider all available positive and negative evidence, including future reversals of existing taxable temporary differences, projected future taxable income, tax-planning strategies, and results of recent operations. Refer to Note 2, Summary of Significant Accounting Policies, and Note 12, Income Taxes, herein for more information.
Allowance for Credit Losses
The Company records trade accounts receivables at invoice amount less allowances for credit losses. These allowances reflect our estimate of the amount of our receivables we will be unable to collect based on historical write-off experience and, as applicable, current economic conditions and reasonable and supportable forecasts that affect collectability. Our estimate could change based on changing circumstances and qualitative factors not able to be fully captured in our loss forecast models, including changes in the economy or in the particular circumstances of individual customers. The aforementioned qualitative factors are subjective and require a degree of management judgment. Generally, the Company does not accrue interest on past due receivables. Certain accounts are turned over to collection agencies, while the Company places liens and pursues a variety of other collection strategies on others. The allowance for credit losses is charged with the write-off when deemed uncollectible by management. Write-offs of such receivables require management approval based on specified dollar thresholds.
Item 7A. Quantitative and Qualitat ive Disclosures About Market Risk.
Our exposure to market risks primarily consist of interest rate risk associated with our variable rate debt, fixed rate debt when refinancing, prices of certain commodities, and foreign currency exchange rate risks. From time to time, we employ financial instruments to manage the Company's exposure to changes in interest rates, diesel and unleaded fuel, and foreign currencies. See Note 14, Fair Value of Financial Instruments, for more information.
Interest rate risk: Our earnings may be affected by changes in interest rates on the asset-based revolving line of credit (“ABL Facility”) and Floor Plan Facilities. The interest rates applicable to any loans under the ABL Facility are based, at the option of the borrowers, on (i) a floating rate based on the Secured Overnight Financing Rate (“SOFR”) (for loans denominated in U.S. dollars) or Canadian Dollar Offered Rate (for loans denominated in Canadian dollars) plus an initial margin of 1.75% or (ii) CBFR (for loans denominated in U.S. dollars) or the Canadian Prime Rate (for loans denominated in Canadian dollars) less an initial margin of 0.75%, in each case, where margin is adjusted under the ABL Facility based on the quarterly average excess availability under the ABL Facility. The interest rates applicable to any loans under various Floor Plan Facilities (“Floor Plan Rates”) are based on a wide range of benchmark rates (including SOFR, Prime, Bloomberg Short-Term Bank Yield Index, and the Canadian Bankers' Acceptance Rate) plus an applicable margin. As of December 31, 2025, the lowest Floor Plan Rate was SOFR plus an initial margin of 2.75%, and the highest was SOFR plus a margin of 5.1145% per annum, excluding OEM subsidies on the Floor Plan Facilities.
At December 31, 2025 and 2024, we had $213.6 million and $182.9 million, respectively, outstanding borrowings under the ABL Facility. At December 31, 2025 and 2024, we had $313.6 million and $374.9 million, respectively, outstanding borrowings under the Floor Plan Facilities. As of December 31, 2025, based upon the amount of our variable rate debt outstanding, each one percentage point increase in the interest rates applicable to our variable rate debt would reduce our annual pre-tax earnings by $4.0 million. The amount of variable rate indebtedness outstanding may fluctuate significantly. See Note 8, Floor Plans, and Note 9, Long-Term Debt, in our consolidated financial statements for additional information concerning the terms of our variable rate debt.
We have a fixed rate on the Senior Secured Second Lien Notes (the “Notes”) of $500.0 million which are due in 2029. We do not have any exposure to changing interest rates as of December 31, 2025 on the Notes. For additional information concerning the terms of our fixed rate debt, see Note 9, Long-Term Debt.
Commodity price risk: The market prices of diesel and unleaded fuels are unpredictable and can fluctuate significantly. Due to the volume of fuel we purchase each year, a significant increase in the price of fuel could adversely affect our business and reduce our operating margins. To manage a portion of this risk, we enter into fixed price swap contracts to purchase gasoline and diesel fuel related to forecasted fuel purchases. For the purchases of unleaded and diesel fuel that we expect to purchase at market prices in the next 12 months, each $1.00 per gallon increase in the price of diesel and unleaded fuel, holding other variables constant, would not have a material impact on our pre-tax income when including the fixed price swap contracts.
Foreign currency exchange rate risk: Due to our international operations, a portion of our revenues, cost of revenues, and operating expenses are subject to foreign currency exchange rate risk. Changes in the exchange rate of the U.S. dollar versus the Canadian dollar and European currencies affect the translated value and relative level of revenues and net income that we report from one period to the next. Based upon balances and exchange rates as of December 31, 2025, holding other variables constant, we believe that a hypothetical 10% increase or decrease in all applicable foreign exchange rates would not have a material impact on our results of operations or cash flows.
Ite m 8. Financial Statements and Supplementary Data.
REPORT OF INDEPENDENT REGIST ERED PUBLIC ACCOUNTING FIRM
To the shareholders and the Board of Directors of Alta Equipment Group Inc.
Opinion on the Financial Statements
We have audited the accompanying consolidated balance sheets of Alta Equipment Group Inc. and subsidiaries (the "Company") as of December 31, 2025 and 2024, the related consolidated statements of operations, comprehensive (loss) income, stockholders' equity, and cash flows, for each of the three years in the period ended December 31, 2025, and the related notes and the schedule listed in the Index at Item 15 (collectively referred to as the "financial statements"). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2025 and 2024, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2025, in conformity with accounting principles generally accepted in the United States of America.
We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Company's internal control over financial reporting as of December 31, 2025, based on criteria established in Internal Control — Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission and our report dated February 26, 2026, expressed an unqualified opinion on the Company's internal control over financial reporting.
Basis for Opinion
These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on the Company's financial statements based on our audits. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.
Critical Audit Matter
The critical audit matter communicated below is a matter arising from the current-period audit of the financial statements that was communicated or required to be communicated to the audit committee and that (1) relates to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments. The communication of critical audit matters does not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.
Revenue Recognition — Refer to Notes 2 and 3 to the financial statements
Critical Audit Matter Description
The Company’s revenues from the sale of new and used equipment and rental equipment are recognized at the time of delivery to, or pick-up by, the customer, which is when the customer obtains control of the promised good. Revenues from the sale of parts are recognized at the time of pick-up by the customer for over-the-counter sales transactions. For parts that are shipped to a customer, revenues are recognized at the time of shipment. The Company recognizes periodic maintenance service revenues at the time such services are completed. The processing and recording of the Company’s revenue transactions involves a combination of automated and manual processes.
We identified the Company’s revenue recognition processes for new and used equipment sales, parts sales, service revenues, and rental equipment sales as a critical audit matter as the Company has a significant volume of revenue transactions throughout the year that rely on manual processes to generate accurate data to record revenue when the customer obtains control of the promised good or when services are completed. This required an increased extent of effort to audit these revenue transactions.
How the Critical Audit Matter Was Addressed in the Audit
Our audit procedures related to the Company’s revenue recognition for new and used equipment sales, parts sales, service revenues, and rental equipment sales included the following, among others:
We obtained an understanding of the nature of the revenue recognition process through inquiry with the Company personnel responsible for revenue recognition, walkthrough of individual transactions, and review of contracts with the customers.
We created data visualizations to evaluate trends in the transactional revenue data.
For a sample of new and used equipment sales, parts sales, and rental equipment sales transactions, we performed detail transaction testing to evaluate the accuracy and completeness of recorded revenue by agreeing the amounts recognized to source documents and testing the mathematical accuracy of the transactions.
For a sample of new and used equipment sales, parts sales, and rental equipment sales transactions, we performed detail transaction testing to evaluate the timing of when revenue was recorded by agreeing the timing of the amounts recognized to source documents.
We developed an independent expectation of new and used equipment sales, parts sales, and service revenues using analytical procedures and considering relevant current and historical information and compared our expectations to the recorded revenue.
/s/ Deloitte & Touche LLP
Detroit, Michigan
February 26, 2026
We have served as the Company's auditor since 2022.
ALTA EQUIPMENT GROUP INC. AND SUBSIDIARIES
CONSOLIDATED B ALANCE SHEETS
(in millions, except share and per share amounts)
December 31,
December 31,
ASSETS
Cash
Accounts receivable, net of allowances of $ 11.3 and $ 10.7 as of December 31, 2025 and December 31, 2024, respectively
Inventories, net
Prepaid expenses and other current assets
Total current assets
NON-CURRENT ASSETS
Property and equipment, net
Rental fleet, net
Operating lease right-of-use assets, net
Goodwill
Other intangible assets, net
Other assets
TOTAL ASSETS
LIABILITIES AND STOCKHOLDERS’ EQUITY
Floor plan payable – new equipment
Floor plan payable – used and rental equipment
Current portion of long-term debt
Accounts payable
Customer deposits
Accrued expenses
Current operating lease liabilities
Current deferred revenue
Other current liabilities
Total current liabilities
NON-CURRENT LIABILITIES
Line of credit, net
Long-term debt, net of current portion
Finance lease obligations, net of current portion
Deferred revenue, net of current portion
Long-term operating lease liabilities, net of current portion
Deferred tax liabilities
Other liabilities
TOTAL LIABILITIES
CONTINGENCIES - NOTE 11
STOCKHOLDERS’ EQUITY
Preferred stock, $ 0.0001 par value per share, 1,000,000 shares authorized, 1,200 shares issued and outstanding at both December 31, 2025 and December 31, 2024 ( 1,200,000 Depositary Shares representing a 1/1000th fractional interest in a share of 10 % Series A Cumulative Perpetual Preferred Stock)
Common stock, $ 0.0001 par value per share, 200,000,000 shares authorized; 32,153,525 and 32,762,135 shares issued and outstanding at December 31, 2025 and December 31, 2024, respectively
Additional paid-in capital
Treasury stock at cost, 2,904,614 and 1,587,702 shares of common stock held at December 31, 2025 and December 31, 2024, respectively
Accumulated deficit
Accumulated other comprehensive loss
TOTAL STOCKHOLDERS’ EQUITY
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY
The accompanying notes are an integral part of these consolidated financial statements.
ALTA EQUIPMENT GROUP INC. AND SUBSIDIARIES
CONSOLIDATED STA TEMENTS OF OPERATIONS
(in millions, except share and per share amounts)
Year Ended December 31,
Revenues:
New and used equipment sales
Parts sales
Service revenues
Rental revenues
Rental equipment sales
Total revenues
Cost of revenues:
New and used equipment sales
Parts sales
Service revenues
Rental revenues
Rental depreciation
Rental equipment sales
Total cost of revenues
Gross profit
Selling, general and administrative expenses
Non-rental depreciation and amortization
Total operating expenses
Income from operations
Other (expense) income:
Interest expense, floor plan payable – new equipment
Interest expense – other
Other income
Loss on extinguishment of debt
Gain on divestitures
Total other expense, net
(Loss) income before taxes
Income tax expense (benefit)
Net (loss) income
Preferred stock dividends
Net (loss) income available to common stockholders
Basic (loss) income per share
Diluted (loss) income per share
Basic weighted average common shares outstanding
Diluted weighted average common shares outstanding
The accompanying notes are an integral part of these consolidated financial statements.
ALTA EQUIPMENT GROUP INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF COMPREHENSIVE (LOSS) INCOME
(in millions)
Year Ended December 31,
Net (loss) income
Other comprehensive income (loss):
Foreign currency translation adjustments
Change in fair value of derivative, net of tax
Total other comprehensive income (loss) (1)
Comprehensive (loss) income
(1) There were no material reclassifications from Accumulated other comprehensive loss reflected in Total other comprehensive (loss) income for the years ended December 31, 2025, 2024 and 2023. There were no material taxes associated with Total other comprehensive (loss) income for the years ended December 31, 2025, 2024 and 2023 .
The accompanying notes are an integral part of these consolidated financial statements.
ALTA EQUIPMENT GROUP INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY
(in millions, except share and per share amounts)
Years Ended December 31, 2025, 2024 and 2023
Preferred Stock
Common Stock
Number
of Shares
Amount
Number of
Shares
Amount
Additional
Paid-in
Capital
Accumulated
Deficit
Treasury Stock
Accumulated Other Comprehensive Loss
Total
Stockholders'
Equity
Balance at December 31, 2022
Net income
Dividends on preferred stock, $ 2.50 per share
Dividends on common stock and dividend equivalent on stock-based compensation, $ 0.228 per share
Impact of adoption of new accounting standard
Stock-based compensation, including employee stock purchase plan
Foreign currency translation adjustments
Change in fair value of derivative, net of tax
Acquisition contingent consideration
Proceeds from stockholder short-swing profits
Balance at December 31, 2023
Net loss
Dividends on preferred stock, $ 2.50 per share
Dividends on common stock and dividend equivalent on stock-based compensation, $ 0.228 per share
Stock-based compensation, including employee stock purchase plan
Foreign currency translation adjustments
Change in fair value of derivative, net of tax
Acquisition contingent consideration
Repurchase of common stock
Balance at December 31, 2024
Net loss
Dividends on preferred stock, $ 2.50 per share
Dividends on common stock and dividend equivalent on stock-based compensation, $ 0.114 per share
Stock-based compensation including employee stock purchase plan
Acquisition contingent consideration
Foreign currency translation adjustments
Change in fair value of derivative, net of tax
Repurchase of common stock
Balance at December 31, 2025
The accompanying notes are an integral part of these consolidated financial statements.
ALTA EQUIPMENT GROUP INC. AND SUBSIDIARIES
CONSOLIDATED STATE MENTS OF CASH FLOWS
(in millions)
Year Ended December 31,
OPERATING ACTIVITIES
Net (loss) income
Adjustments to reconcile net (loss) income to net cash flows provided by operating activities
Depreciation and amortization
Amortization of debt discount and debt issuance costs
Gain on sale of property and rental equipment
Provision for inventory reserves
Provision for losses on accounts receivable
Gain on divestitures
Loss on debt extinguishment
Stock-based compensation expense
Changes in deferred income taxes
Other operating activities
Changes in assets and liabilities, net of acquisitions and divestitures:
Accounts receivable
Inventories
Proceeds from sale of rental equipment - rent-to-sell
Prepaid expenses and other assets
Manufacturers floor plans payable
Accounts payable, accrued expenses, leases, and other operating liabilities
Net cash provided by operating activities
INVESTING ACTIVITIES
Expenditures for rental equipment
Expenditures for property and equipment and intangibles
Proceeds from sale of property and equipment
Proceeds from sale of rental equipment - rent-to-rent
Acquisition of businesses, net of cash acquired
Proceeds from divestitures, net
Other investing activities
Net cash used in investing activities
FINANCING ACTIVITIES
Expenditures for debt issuance costs
Extinguishment of long-term debt
Proceeds from long-term borrowings
Principal payments on long-term debt and finance lease obligations
Proceeds from non-manufacturer floor plan payable
Payments on non-manufacturer floor plan payable
Preferred stock dividends paid
Common stock dividends declared and paid
Repurchases of common stock
Other financing activities
Net cash (used in) provided by financing activities
Effect of exchange rate changes on cash
NET CHANGE IN CASH
Cash, Beginning of year
Cash, End of period
Supplemental schedule of noncash investing and financing activities:
Noncash asset purchases:
Net transfer of assets from inventory to rental fleet
Common stock issued as consideration for business acquisition
Contingent and non-contingent consideration for business acquisitions
Supplemental disclosures of cash flow information
Cash paid for interest
The accompanying notes are an integral part of these consolidated financial statements.
ALTA EQUIPMENT GROUP INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements
(Dollars in millions, except per share data, unless otherwise indicated)
NOTE 1 — ORGANIZATION AND NATURE OF OPERATIONS
Nature of Operations
Alta Equipment Group Inc. and its subsidiaries (“Alta” or the “Company”) is engaged in the sale, service, and rental of material handling, construction, and environmental processing equipment in the states of Michigan, Illinois, Indiana, Ohio, Pennsylvania, New York, Virginia, Massachusetts, Maine, New Hampshire, Vermont, Rhode Island, Connecticut, Nevada, and Florida, as well as the Canadian provinces of Ontario, Maritime, and Quebec. Unless the context otherwise requires, the use of the terms “the Company”, “we”, “us”, and “our” in these notes to the consolidated financial statements refers to Alta Equipment Group Inc. and its consolidated subsidiaries.
Basis of Presentation
The accompanying consolidated financial statements include the consolidated accounts of the Company and its subsidiaries and have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”). In our opinion, all adjustments, consisting of all normal and recurring adjustments, considered necessary for a fair presentation of our financial position, results of operations, and cash flows for the periods presented have been included. All intercompany transactions and balances have been eliminated in the preparation of the consolidated financial statements.
NOTE 2 — SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Use of Estimates
The preparation of consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Estimates are based on assumptions that we believe are reasonable under the circumstances. Due to the inherent uncertainty involved with estimates, actual results may differ. Refer to Critical Accounting Policies and Estimates within Item 7 for more information on items in the consolidated financial statements we consider to require significant estimation or judgment.
Inventory Valuation
Inventories are stated at the lower of cost or net realizable value. Cost is determined by specific identification for equipment and a weighted-average method for parts. Net realizable value is the estimated selling price in the ordinary course of business less reasonably predictable costs of completion, disposal, and transportation. Included in new and used inventory is equipment that is currently on short-term lease to customers. The Company regularly transfers equipment from inventory into rental fleet based on management’s determination of the highest and best use of the equipment. This inventory is carried at the cost of the equipment less any accumulated depreciation.
Property and Equipment and Rental Fleet
Property and equipment are recorded at cost and depreciated over their estimated useful lives using the straight-line method.
The rent-to-sell portion of our rental equipment is comprised of transfers from inventory to rental fleet as part of our business model to respond to existing rental fleet mix and market demand for lightly used heavy construction equipment to ultimately be purchased out of dealer owned rental fleets. This equipment is initially purchased for sale and classified as inventory (operating activity) then subsequently transferred from Inventories, net to Rental fleet, net. The transfers are non-cash transactions disclosed in the Supplemental schedule of noncash investing and financing activities in our Consolidated Statements of Cash Flows. The rent-to-sell categories of equipment are depreciated on a percentage of rental revenues realized on the asset, or a unit of activity method of depreciation. The Company believes that the unit of activity method on these categories of equipment more appropriately matches depreciation expense to revenues versus a straight-line methodology, as asset utilization can vary month to month especially in our northern geographies where seasonality is a factor. The proceeds from the sale of rent-to-sell equipment are classified within operating activities in the Consolidated Statements of Cash Flows.
The Company's rental fleet is also comprised of equipment that is purchased and placed directly into our rental fleet where we expect to rent the asset for the majority of the equipment’s useful life, which we call rent-to-rent equipment (investing activity). Under this business model, the recovery of the asset cost is predominantly through rental income rather than through the sale of the equipment. Occasionally, the Company will sell rent-to-rent equipment when the market dictates or when the equipment no longer has utility as a rental asset (i.e. at the end of its useful life). In rent-to-rent product categories, where asset utilization is more stable, like in our Material Handling segment, we use a straight-line depreciation methodology, where estimated useful lives can range from five to ten years.
The Company capitalizes certain expenditures for equipment, leasehold improvements, and rental fleet. Expenditures for repairs, maintenance, and minor renewals are expensed as incurred. Expenditures for betterments and major renewals that significantly extend the useful life of the asset are capitalized in the period incurred. When equipment is sold or otherwise disposed of, the cost and related accumulated depreciation are removed from the Consolidated Balance Sheets, with any resulting gain or loss being reflected in income from operations.
Intangible Assets
Intangible assets with a finite life consist of customer and supplier relationships, non-compete agreements, tradenames, and software developed to be sold, leased, or marketed and are carried at cost less accumulated amortization. The estimated useful lives of the finite-lived intangible assets are as follows:
Estimated
Useful Life
Customer and supplier relationships
9 – 10 years
Other intangibles
2 – 5 years
Evaluation of Goodwill Impairment
Goodwill is tested for impairment annually or more frequently if an event or circumstance indicates that an impairment loss may have been incurred. Application of the goodwill impairment test requires judgment, including: the identification of reporting units; assignment of assets and liabilities to reporting units; assignment of goodwill to reporting units; and determination of the fair value of each reporting unit.
We estimate the fair value of our reporting units (which are our reportable segments) using a discounted cash flow methodology under an income approach, corroborated with the results of a market approach which analyzes the enterprise value (market capitalization plus interest-bearing liabilities) and operating metrics (e.g., earnings before interest, taxes, depreciation and amortization expenses) of companies engaged in the same or similar line of business that we deem comparable to our business and compare those metrics to those of the Company. We make judgments regarding the comparability of publicly traded companies engaged in similar businesses and base our judgments on factors such as size, growth rates, profitability, business model, and risk. We believe the combination of these valuation approaches yields the most appropriate evidence of fair value.
Inherent in our preparation of cash flow projections are assumptions and estimates derived from a review of our operating results, business plans, expected growth rates, cost of capital, and tax rates. We also make certain forecasts about future economic conditions, interest rates, and other market data. Many of the factors used in assessing fair value are outside the control of management, and these assumptions and estimates may change in future periods. Changes in assumptions or estimates could materially affect the estimate of the fair value of a reporting unit and therefore could affect the likelihood and amount of potential impairment.
Financial Accounting Standards Board (“FASB”) guidance permits entities to first assess qualitative factors to determine whether it is more likely than not that the fair value of a reporting unit is less than its carrying value as a basis for determining whether it is necessary to perform the quantitative analysis. While the Company does not believe a qualitative assessment would have triggered the required quantitative assessment, the Company bypassed the optional qualitative assessments for each reporting unit and performed quantitative assessments at October 1, 2025, 2024 and 2023. We review goodwill for impairment by comparing the fair value of each of our reporting units' net assets to their respective carrying value. If the carrying value of a reporting unit’s net assets is less than its fair value, we do not recognize an impairment. If the carrying value of a reporting unit’s net assets is greater than its fair value, we recognize a goodwill impairment for the amount of the excess of the net assets over the fair value, not to exceed the book value of goodwill.
Our annual goodwill impairment testing conducted as of October 1, 2025, 2024 and 2023 indicated that all our reporting units had estimated fair values which exceeded their respective carrying values. Based on the results of the tests, there was no goodwill impairment.
Evaluation of Long-lived Asset Impairment (excluding goodwill)
Our long-lived assets principally consist of rental equipment, leases, property and equipment, and other intangible assets excluding goodwill. We review our long-lived assets for impairment whenever events or changes in circumstances indicate that the carrying value of an asset may not be recoverable. In reviewing for impairment, we first complete a qualitative assessment at the lowest level of identifiable cash flows for our long-lived assets (excluding goodwill). If there are indicators of impairment from the qualitative assessment, a quantitative analysis is performed where the carrying value of such assets is compared to the undiscounted future pre-tax cash flows expected from the use of the assets and their eventual disposition. If such cash flows are not sufficient to support the asset’s (or asset group’s) recorded value, an impairment loss may be recognized if the estimated fair value of the asset (or asset group) is less than the respective carrying value. The determination of future cash flows as well as the estimated fair value of long-lived and intangible assets involves significant estimates and judgment on the part of management. Our estimates and assumptions may prove to be inaccurate due to factors such as changes in economic conditions, expected asset utilization levels, our business activity levels, or other changing circumstances. In support of our review for indicators of , we perform a review of our long-lived assets at the lowest level of identifiable cash flows to conclude whether indicators of exist associated with our long-lived assets, including our rental and non-rental equipment and right-of-use assets. Based on our most recently completed qualitative assessment in the fourth quarter 2025 , there were no indications of associated with our long-lived assets.
Business Combinations and Divestitures
We allocate the fair value of purchase consideration to the tangible and intangible assets acquired and liabilities assumed, based on their estimated fair values on the acquisition date. Management develops estimates based on assumptions as part of the purchase price allocation process to value the assets acquired and liabilities assumed as of the acquisition date. These estimates are inherently uncertain and are subject to refinement when additional information is obtained during the measurement period. As a result, during the purchase price measurement period, which may be up to one year from the acquisition date, the Company may record adjustments to the assets acquired and liabilities assumed, with the corresponding offset to goodwill. We recognize a bargain purchase gain on acquisitions within “Other (expense) income, net” in the Consolidated Statements of Operations if the net fair value of the identifiable assets acquired and the liabilities assumed is in excess of the fair value of the total purchase consideration and any noncontrolling interests. We recognize gain on divestitures within “Other (expense) income, net” in the Consolidated Statements of Operations if the transaction proceeds from the divestiture exceed the net identifiable assets and liabilities disposed of.
Revenue Recognition
Revenues are recognized when control of promised goods or services is transferred to customers in an amount that reflects the consideration the business expects to be entitled in exchange for those goods or services. Control is transferred when the customer has the ability to direct the use of and obtain the benefits from the goods and/or services. The Company’s revenues accounted for under Topic 606 - Revenues from Contracts with Customers (“Topic 606”) generally have the transaction price fixed and clearly stated in the customer contracts. Substantially all the Company’s sales agreements contain performance obligations satisfied at a point in time, rather than over time, when control is transferred to the customer, generally at the time of delivery to, or pick-up by, the customer. The revenues recognized over time are primarily project-based and maintenance contract revenues where revenue is recognized as the performance obligations are satisfied over time using the cost-to-cost input method, based on contract costs incurred to date to total estimated contract costs. For contracts with multiple performance obligations, the Company allocates sales prices to each distinct performance obligation based on the observable selling price and recognizes revenues as each distinct performance obligation is met.
Payment terms vary by the type and location of the customer and the products or services offered. Generally, the time between when revenue is recognized and payment is due is not significant. The Company does not evaluate whether the selling price includes a financing interest component for contracts that are less than a year or if payment is expected to be received less than a year after the good or service has been provided. Sales and other taxes collected from customers and remitted to government authorities are accounted for on a net basis and, therefore, are excluded from revenue. Shipping and handling costs are treated as fulfillment costs and are included in cost of revenues. The Company’s revenues do not include material amounts of variable consideration under Topic 606. Contracts with customers do not generally result in significant obligations associated with returns, refunds, or warranties.
See Note 3, Revenue Recognition, for more information.
Leases
The Company's leases are accounted for under Topic 842 - Leases (“Topic 842”).
The Company as Lessee:
We determine whether an arrangement is a lease at the inception of the arrangement based on the terms and conditions in the contract. A contract contains a lease if there is an identified asset, and we have the right to control the asset for a period of time in exchange for consideration.
Lease right-of-use (“ROU”) assets represent our right to use an individual asset for the lease term, and lease liabilities represent our obligation to make lease payments arising from the lease. Lease ROU assets and liabilities are recognized at the commencement date for leases with terms greater than 12 months and that meet our capitalization threshold based upon the present value of the remaining future minimum lease payments over the lease term. As most of our leases do not provide the lessor’s implicit rate, we use our incremental borrowing rate (“IBR”) at the commencement date in determining the present value of future lease payments by utilizing a fully collateralized rate for a fully amortizing loan with the same term as the lease. The Company applies the portfolio approach for the IBR on our leases based upon similar lease term and payments. The lease ROU asset also includes lease payments made in advance of lease commencement and excludes lease incentives. Operating lease expense for minimum lease payments is recognized on a straight-line basis over the lease term.
The Company has lease agreements with lease and non-lease components. For real estate leases and all equipment leases excluding vehicles, these components are accounted for as a single lease component. For vehicle leases, these components are accounted for separately.
Variable lease expenses include payments based upon changes in a rate or index, such as consumer price indexes, variable payments on non-lease components related to leases that we account for as a single lease component, and charges fluctuating based on the usage of the leased asset. Short-term lease expenses include leases with terms at lease commencement of 12 months or less and no purchase option is reasonably certain to be exercised, including leases with a duration of one month or less. Low-value lease expense includes leases with terms at lease commencement of greater than 12 months but do not meet our capitalization threshold, which is consistent with our property and equipment capitalization threshold. The Company’s lease agreements do not contain any material residual value guarantees or material restrictive covenants; however, there are certain lease agreements that include guaranteed purchase obligations.
A ROU asset is subject to the same impairment guidance as assets categorized as property and equipment. As such, any impairment loss on ROU assets is presented in the same manner as an impairment loss recognized on other long-lived assets. The Company reviewed our lease ROU assets for impairment and determined that none of the assets were impaired during the years ended December 31, 2025, 2024 and 2023.
Operating leases are included in “Operating lease right-of-use assets, net”, “Current operating lease liabilities” and “Long-term operating lease liabilities, net of current portion” on the Company’s Consolidated Balance Sheets. Finance leases are included in “Property and equipment, net”, “Current portion of long-term debt”, and “Finance lease obligations, net of current portion” on the Company’s Consolidated Balance Sheets.
See Note 10, Leases, related to the required lease disclosures.
The Company as Lessor:
See Note 3, Revenue Recognition, and Note 10, Leases, for more information.
Income Taxes
Alta Enterprises, LLC was historically a partnership for federal income tax purposes, with each partner being separately taxed on its share of taxable income (loss). The current income tax was calculated at the consolidated return level, (“Alta Equipment Group Inc. and Subsidiaries”), and the deferred impact of the interest in the lower tier partnership. In 2024, the Company reorganized its holding structure of Alta Enterprises, LLC effectively converting it from a partnership to a disregarded entity of Alta Equipment Group Inc. for federal income tax purposes.
The Company uses the guidance in Topic 740 - Income Taxes (“Topic 740”) to apply the asset and liability method of accounting for income taxes, under which deferred tax assets and liabilities are recognized for the future tax consequences of (i) temporary differences between the financial statement carrying values and the tax bases of existing assets and liabilities and (ii) operating loss and tax credit carryforwards. Deferred income tax assets and liabilities are based on enacted tax rates applicable to the future period when those temporary differences are expected to be recovered or settled. The effect of a change in tax rates on deferred tax assets and liabilities is recognized in income in the period the rate change is enacted. Deferred income tax assets are subject to valuation allowance considerations to recognize only amounts that are more likely than not to be ultimately realized.
In accordance with Topic 740, we review the likelihood that we will realize the benefit of deferred tax assets and estimate whether recoverability of our deferred tax assets is “more likely than not”. In determining whether a valuation allowance is needed, on a quarterly basis we evaluate historical operating results, the existence of cumulative losses in the most recent fiscal years, expectations for future pretax operating income within the carryback or carryforward periods provided for in the tax law for each applicable tax jurisdiction, the time period over which our temporary differences will reverse, and the implementation of feasible and prudent tax planning strategies. A cumulative loss in recent years is considered a significant piece of negative evidence that is difficult to overcome in assessing the need for a valuation allowance. See Note 12, Income Taxes, for more information.
Fair Value of Financial Instruments
Fair value is defined as the amount that would be received for selling an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Accounting standards establish a fair value hierarchy which requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. The FASB fair value measurement guidance established a fair value hierarchy that prioritizes the inputs used to measure fair value. We assess the inputs used to measure fair value using the three-tier hierarchy. The three broad levels of the fair value hierarchy are as follows:
Level 1 — Quoted prices (unadjusted) in active markets for identical assets or liabilities
Level 2 — Quoted prices for similar assets and liabilities in active markets or inputs that are observable for the asset or liability, either directly or indirectly
Level 3 — Unobservable inputs for which little or no market data exists, therefore requiring a company to develop its own assumptions
In instances where the determination of the fair value measurement is based on inputs from different levels of the fair value hierarchy, the level in the fair value hierarchy within which the entire fair value measurement falls is based on the lowest level input that is significant to the fair value measurement in its entirety.
The estimated fair values of derivative financial instruments are valued using widely accepted valuation techniques including discounted cash flow analysis on the expected cash flows of each derivative and quoted market prices for similar instruments from third parties. The fair value of interest rate caps is determined using the market-standard methodology of discounting the future expected cash receipts which would occur if floating interest rates rise above the strike rate of the caps. The floating interest rates used in the calculation of projected receipts on the caps are based on the period to maturity and an expectation of future interest rates derived from observable market interest rate curves and volatilities. The inputs used in the valuation of all our derivative contracts fall within Level 2 of the fair value hierarchy.
Translation of Foreign Currency
Assets and liabilities of our foreign subsidiaries that have a functional currency other than U.S. dollar are translated into U.S. dollars using exchange rates at the balance sheet date. Revenues and expenses are translated at average exchange rates effective during the year. Foreign currency translation gains and losses are included as a component of “Accumulated other comprehensive loss” within the Consolidated Balance Sheets.
New Accounting Pronouncements
New Accounting Pronouncements Adopted in 2025
Income Taxes
In the fourth quarter of 2025, we adopted Accounting Standards Update (“ASU”) No. 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures , which requires disaggregated income tax disclosures on the rate reconciliation and income taxes paid by jurisdiction, and applied the amendments prospectively. See Note 12, Income Taxes, for more information.
New Accounting Pronouncements Not Yet Adopted
In November 2024, the FASB issued ASU No. 2024-03, Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures (Subtopic 220-40). This guidance requires additional disclosure in the notes to the financial statements of specified information about certain statement of operations expense line items. The Company is required to adopt the guidance in the 2027 Annual Report on Form 10-K and in our interim periods during 2028, though early adoption is permitted. The Company is currently evaluating the impact of this guidance on our consolidated financial statements.
The Company believes all other recently issued accounting pronouncements from the FASB that the Company has not noted above will not have a material impact on our consolidated financial statements or do not apply to us.
NOTE 3 — REVENUE RECOGNITION
We recognize revenue in accordance with two different accounting standards: 1) Topic 606 and 2) Topic 842 .
Disaggregation of Revenues
The following table summarizes the Company’s disaggregated revenues as presented in the Consolidated Statements of Operations by revenue type and the applicable accounting standard.
Year Ended December 31, 2025
Year Ended December 31, 2024
Year Ended December 31, 2023
Topic 842
Topic 606
Total
Topic 842
Topic 606
Total
Topic 840
Topic 606
Total
Revenues:
New and used equipment sales
Parts sales
Service revenues
Rental revenues
Rental equipment sales
Total revenues
The Company believes that the disaggregation of revenues from contracts to customers as summarized above, together with the discussion below, depicts the nature, amount, timing, and uncertainty of our revenues and cash flows. See Note 17, Segments, for further information.
Leases revenues (Topic 842)
Rental revenues: Owned equipment rentals represent revenues from renting equipment. The Company accounts for these rental contracts as operating leases. The Company recognizes revenues from equipment rentals in the period earned, regardless of the timing of billing to customers. A rental contract includes rates for daily, weekly, or monthly use, and rental revenues are earned on a daily basis as rental contracts remain outstanding. Because the rental contracts can extend across multiple reporting periods, the Company records unbilled rental revenues and deferred rental revenues at the end of each reporting period. Unbilled rental revenues are included as a component of “Accounts receivable, net” on the Consolidated Balance Sheets. Rental equipment may also be purchased outright (“Rental equipment sales”) by our customers. Rental revenues and revenues attributable to rental equipment sales are recognized in “Rental revenues” and “Rental equipment sales” on the Consolidated Statements of Operations, respectively.
Revenues from contracts with customers (Topic 606)
Accounting for the different types of revenues pursuant to Topic 606 is discussed below. The Company’s revenues under Topic 606 are primarily recognized at a point in time rather than over time.
New and used equipment sales: With the exception of bill-and-hold arrangements and project-based revenues, the Company’s revenues from the sale of new and used equipment are recognized at the time of delivery to, or pick-up by, the customer, which is when the customer obtains control of the promised good(s). Under bill-and-hold arrangements, revenues are recognized when all configuration work is complete and the equipment has been set aside for final shipment, at which point the Company has determined control has been transferred. The bill-and-hold arrangements primarily apply to sales when physical shipment of heavy equipment to the customer is prohibited by law (e.g., frost laws) or requested by the customer due to their inability to arrange freight simultaneous to the satisfaction of the performance obligations. The customer equipment sold under a bill-and-hold arrangement is physically separated from Company inventory and that equipment cannot be used by the Company or sold to another customer. Revenues recognized from bill-and-hold agreements totaled $ 40.6 million, $ 29.4 million, and $ 27.7 million for the years ended December 31, 2025, 2024 and 2023, respectively. The Company does not offer material rights of return.
Project-based revenues, as referred to herein, are contracts with customers where the Company provides design and build solutions related to automated equipment installation and warehouse management systems integration. These revenues are recognized as the performance obligations are satisfied over time using the cost-to-cost input method, based on contract costs incurred to date to total estimated contract costs. The Company recognizes deferred revenue with respect to project-based services. The Company recognized $ 67.2 million, $ 71.3 million and $ 66.9 million in project-based revenues for the years ended December 31, 2025, 2024 and 2023, respectively.
Parts sales: Revenues from the sale of parts are recognized at the time of pick-up by the customer for over-the-counter sales transactions and at the time services are completed for parts associated with periodic maintenance services. For parts that are shipped to a customer, the Company has elected to use a practical expedient of Topic 606 and treat such shipping activities as fulfillment costs, thereby recognizing revenues at the time of shipment, which is when the customer obtains control.
Service revenues: The Company records service revenues primarily from guaranteed maintenance contracts and periodic services with customers. The Company recognizes periodic maintenance service revenues at the time such services are completed. The Company recognizes guaranteed maintenance contract revenues over time based on an estimated rate at which the services are provided over the life of the contract, typically three to five years. Revenues recognized from guaranteed maintenance contracts totaled $ 21.4 million, $ 22.2 million and $ 24.0 million for the years ended December 31, 2025, 2024 and 2023, respectively. The Company also records service revenue from warranty contracts whereby the Company performs service on behalf of the OEM or third-party warranty provider.
Rental equipment sales: The Company also sells rental equipment from our rental fleet. These sales are recognized at the time of delivery to, or pick-up by, the customer, which is when the customer obtains control of the promised good(s). Rental equipment sales may occur at various stages in an equipment’s lifecycle, depending on customer demand and original purchase intentions of the equipment. Rent-to-rent equipment, for instance, is originally purchased directly into the rental fleet for the primary purpose of renting, as opposed to selling. Rental equipment sales of rent-to-rent equipment are therefore typically made toward the end of the useful life of the equipment. Rent-to-sell equipment, on the other hand, is originally purchased as new inventory stock but is subsequently transferred to the rental fleet and rented to customers based on rental fleet utilization levels and market conditions. Ultimately, rent-to-sell equipment primarily serves the numerous applications of our Construction Equipment segment customers and allows the Company to create different model years of equipment at varying price points to fulfill market demand for lower hour, lightly used construction equipment. Certain rental agreements contain a rental purchase option, whereby the customer has an option to purchase the rented equipment during the term of the rental agreement. In this case, revenues from the sale of rental equipment are recognized at the time the rental purchase option agreement has been approved and signed by both parties, as the equipment is already in the customer’s possession under the terms of the rental agreement, and therefore control has been transferred concurrently with the title.
Contract costs
The Company does not recognize assets associated with the incremental costs of obtaining a contract with a customer that the Company expects to recover (e.g., a sales commission). Most of the Company’s revenues are recognized at a point in time or over a period of one year or less, and the Company has used the practical expedient that allows us to recognize the incremental costs of obtaining a contract as an expense when incurred if the amortization period of the asset that the Company otherwise would have recognized is one year or less. The amount of the costs associated with the revenues recognized over a period of greater than one year is insignificant.
Receivables and contract assets and liabilities
With respect to our receivables, we believe the concentration of credit risk is limited because our customer base is comprised of a large number of geographically diverse customers that operate in a wide range of industries.
The Company has contract assets and contract liabilities associated with project-based contracts with customers.
Contract assets are fulfilled contractual obligations prior to receivables being recognizable for project-based revenues. Contract assets as of December 31, 2025 and 2024 were $ 3.7 million and $ 4.2 million, respectively.
Deferred revenue (contract liabilities) includes the unearned portion of project-based revenues, revenues related to guaranteed maintenance contracts for customers covering equipment previously purchased, and deferred revenue related to equipment rental agreements. Total deferred revenue as of December 31, 2025 and 2024 was $ 18.7 million and $ 17.3 million, respectively. The Company expects 73 % of total deferred revenues balance as of December 31, 2025 to be realized within the next year , 16 % in the following year , 8 % in the third year, and 3 % thereafter . A portion of the deferred revenue is recognized based upon usage of the equipment and therefore may vary from our current expectation. For the years ended December 31, 2025 and 2024, the Company recognized revenues of $ 12.6 million and $ 14.0 million, respectively, from the prior year ending deferred revenue balance.
NOTE 4 — RELATED PARTY TRANSACTIONS
Our CEO and CFO collectively own an indirect, non-controlling minority interest in OneH2, Inc. (“OneH2”), which they each acquired through various transactions that took place in early 2018 and prior. Our CEO is on the Board of Directors of OneH2. OneH2 is a privately held company that produces and delivers hydrogen fuel to end users and manufactures modular hydrogen plants and related equipment. The Company purchased $ 0.6 million, $ 1.6 million and $ 0.4 million of hydrogen fuel from OneH2 for the years ended December 31, 2025, 2024 and 2023, respectively. To date, the Company has paid OneH2 $ 5.3 million to build and commercialize a hydrogen production plant for the Company, which we expect to become operational in the first half of 2026.
NOTE 5 — INVENTORIES
Inventories, net, consisted of the following:
December 31,
December 31,
New equipment
Used equipment
Work in process
Parts
Gross inventory
Inventory reserves
Inventories, net
Direct labor of $ 1.3 million and $ 0.6 million incurred for open service orders were capitalized and included in work in process as of December 31, 2025 and 2024, respectively. The remaining work in process balances as of December 31, 2025 and 2024, primarily represent parts applied to open service orders.
Rental depreciation expense for new and used equipment inventory under short-term leases with purchase options was $ 13.6 million, $ 15.2 million and $ 12.4 million for the years ended December 31, 2025, 2024 and 2023 , respectively.
NOTE 6 — PROPERTY AND EQUIPMENT AND RENTAL FLEET
Property and equipment, net, consisted of the following:
December 31,
December 31,
Land
Buildings, equipment, and leasehold improvements:
Machinery and equipment
Autos and trucks
Buildings and leasehold improvements
Construction in progress
Finance lease right-of-use assets
Office equipment
Computer equipment
Total costs
Less: accumulated depreciation and amortization of property and equipment
Property and equipment, net
Total depreciation and amortization on property and equipment was $ 18.8 million , $ 18.5 million , and $ 13.7 million for the years ended December 31, 2025, 2024 and 2023, respectively.
Rental fleet, net, consisted of the following:
December 31,
December 31,
Rental fleet
Less: accumulated depreciation of rental fleet
Rental fleet, net
Total depreciation on rental fleet was $ 90.9 million , $ 100.7 million , and $ 97.6 million for the years ended December 31, 2025, 2024 and 2023 , respectively.
NOTE 7 — GOODWILL AND OTHER INTANGIBLE ASSETS
The following table summarizes the changes in the carrying value of goodwill in total and by reportable segment during the years ended December 31, 2025 and 2024:
Material
Handling
Construction
Equipment
Master Distribution
Total
Balance, December 31, 2023
Adjustments to purchase price allocations
Translation adjustments
Balance, December 31, 2024
Additions
Divestitures
Translation adjustments
Balance, December 31, 2025
The Company reviewed our goodwill for impairment and determined that none of the goodwill was impaired during the years ended December 31, 2025, 2024 and 2023. See Note 2, Summary of Significant Accounting Policies, for more information on the impairment testing.
Other intangible assets, net consisted of the following:
December 31, 2025
Weighted Average Remaining Life (in years)
Gross carrying
amount
Accumulated
amortization
Net carrying
amount
Customer and supplier relationships
Other intangibles
Total
December 31, 2024
Weighted Average Remaining Life (in years)
Gross carrying
amount
Accumulated
amortization
Net carrying
amount
Customer and supplier relationships
Other intangibles
Total
Amortization of intangible assets was $ 10.3 million, $ 10.1 million, and $ 8.9 million for the years ended December 31, 2025, 2024 and 2023, respectively.
The Company reviewed our finite-lived intangible assets for impairment and determined that none of the assets were impaired during the years ended December 31, 2025, 2024 and 2023. See Note 2, Summary of Significant Accounting Policies, for more information on the impairment testing.
As of December 31, 2025, estimated amortization expense for intangible assets for each of the next five years and thereafter was as follows:
Years ending December 31,
Amount
Thereafter
Total
NOTE 8 — FLOOR PLANS
Floor Plan — First Lien Lender
In April 2021, the Company entered into a Floor Plan First Lien Credit Agreement (“Floor Plan Credit Agreement”) by and among Alta Equipment Group, Inc. and the other credit parties named therein, and the lender JP Morgan Chase Bank, N.A., as Administrative Agent. Under the Floor Plan Credit Agreement, the Company has a first lien floor plan facility (the “First Lien Floor Plan Facility”) with our first lien lenders to primarily finance new inventory. On June 5, 2024, the Floor Plan Credit Agreement was amended to extend the maturity date to June 1, 2029 and increase the maximum borrowing capacity to $ 90.0 million. The interest cost for the First Lien Floor Plan Facility is SOFR plus an applicable margin. The First Lien Floor Plan Facility is collateralized by substantially all assets of the Company. As of December 31, 2025 and 2024, the Company had an outstanding balance on our First Lien Floor Plan Facility of $ 47.7 million and $ 54.7 million, respectively, excluding unamortized debt issuance costs. The effective interest rate at December 31, 2025 and 2024 was 6.7 % and 7.4 % , respectively. The Company routinely sells equipment that is financed under the First Lien Floor Plan Facility. When this occurs the payable under the First Lien Floor Plan Facility related to the financed equipment being sold becomes due to be paid.
OEM Captive Lenders and Suppliers’ Floor Plans
The Company has floor plan financing facilities with several OEM captive lenders and suppliers (the “OEM Floor Plan Facilities”, and together with the First Lien Floor Plan Facility, collectively the “Floor Plan Facilities”) for new and used inventory and rental equipment, each with borrowing capacities ranging from $ 0.1 million to $ 160.0 million. Primarily, the Company utilizes the OEM Floor Plan Facilities for purchases of new equipment inventories. Certain OEM Floor Plan Facilities provide for up to twelve-months interest only or deferred payment periods. In addition, certain OEM Floor Plan Facilities regularly provide for interest and principal free payment terms. The Company routinely sells equipment that is financed under OEM Floor Plan Facilities. When this occurs, the payable under the OEM Floor Plan Facilities related to the financed equipment being sold becomes due to be paid.
The OEM Floor Plan Facilities are secured by the equipment being financed, and contain certain operating company guarantees. The interest cost is SOFR plus an applicable margin. The effective rates as of December 31, 2025 ranged from 6.2 % to 11.8 % and 7.5 % to 10.5 % as of December 31, 2024. As of December 31, 2025 and 2024, the Company had an outstanding balance on the OEM Floor Plan Facilities of $ 265.9 million and $ 320.2 million, respectively.
The total aggregate amount of financing under the Floor Plan Facilities cannot exceed $ 544.5 million at any time, subject to limitations from the amount of the Company's collateralized assets, which increases 10 % annually effective December 31 st of each year. The total outstanding balance under the Floor Plan Facilities as of December 31, 2025 and 2024 was $ 313.6 million and $ 374.9 million, respectively, excluding unamortized debt issuance costs. For the years ended December 31, 2025, 2024 and 2023, the Company recognized interest expense associated with new equipment financed under our Floor Plan Facilities of $ 10.9 million, $ 12.1 million, and $ 8.4 million, respectively. The weighted average rate, excluding the favorable effect of interest-free periods, on the Company's Floor Plan Facilities was 6.7 % and 7.9 % as of December 31, 2025 and 2024 , respectively.
NOTE 9 — LONG-TERM DEBT
Line of Credit — First Lien Lender
In April 2021, the Company entered into a Sixth Amended and Restated ABL First Lien Credit Agreement (the “Amended and Restated ABL Credit Agreement”) by and among Alta Equipment Group Inc. and the other credit parties named therein, the lenders named therein, JP Morgan Chase Bank, N.A., as Administrative Agent, and the syndication agents and documentation agent named therein. Under the Amended and Restated ABL Credit Agreement, the Company has an ABL Facility with our first lien holder with advances on the line being supported by eligible accounts receivable, parts, and otherwise unencumbered new and used equipment inventory and rental equipment. On June 5, 2024, the Company amended the ABL Facility primarily to extend the maturity date and increase the facility size. The borrowing capacity on the ABL Facility, which expires June 1, 2029 , was increased to $ 520.0 million, which includes a $ 45.0 million Canadian-denominated sublimit facility. The ABL Facility is collateralized by substantially all assets of the Company, and the interest cost is SOFR plus an applicable margin on the CB Floating Rate, depending on borrowing levels. As of December 31, 2025 and 2024, the Company had an outstanding ABL Facility balance of $ 213.6 million and $ 182.9 million, respectively, excluding unamortized debt issuance costs. The effective interest rate was 5.4 % and 6.2 % at December 31, 2025 and 2024, respectively.
Maximum borrowings under the Floor Plan Facilities and ABL Facility are limited to $ 1,064.5 million unless certain other conditions are met. The total amount outstanding as of December 31, 2025 and 2024, was $ 527.2 million and $ 557.8 million, exclusive of debt issuance and deferred financing costs of $ 2.6 million and $ 3.5 million, respectively.
Senior Secured Second Lien Notes
On June 5, 2024, the Company completed a private offering of Senior Secured Second Lien Notes (the “Notes”), for the purposes of, among other things, repayment and refinancing of a portion of the Company’s prior existing debt, reducing variable interest rate exposure, providing liquidity for general corporate purposes, and for financing of future growth initiatives. The Company sold $ 500.0 million of Notes at the rate of 9.000 % per annum, which are due on June 1, 2029. Interest on the Notes is payable in cash on June 1 and December 1 of each year, commencing on December 1, 2024. The Notes were sold in a private placement in reliance on Rule 144A and Regulation S under the Securities Act of 1933, as amended, pursuant to a purchase agreement among the Company, the domestic subsidiaries of the Company (as guarantors), and J.P. Morgan Securities LLC, as representative of the initial purchasers.
The Notes are guaranteed by each of our existing and future domestic subsidiaries. The Notes and the guarantors thereof are secured, subject to certain exceptions and permitted liens, by second-priority liens on substantially all our assets and the assets of the guarantors that secure on a first-priority basis all of the indebtedness under our ABL Facility and the First Lien Floor Plan Facility and certain hedging and cash management obligations, including, but not limited to, equipment, fixtures, inventory, intangibles, and capital stock of our restricted subsidiaries now owned or acquired in the future by us or the guarantors.
As of December 31, 2025, outstanding borrowings under the Notes were $ 484.5 million, which included $ 15.5 million deferred financing costs and original issue discounts. The effective interest rate on the Notes, taking into account the original issue discount, is 10.1 % .
Extinguishment of Debt
In the second quarter of 2024, in connection with the issuance of the Notes, the Company extinguished our previously issued Senior Secured Second Lien Notes due April 15, 2026. The Company recorded a loss on the extinguishment of $ 6.7 million in the line item “Loss on extinguishment of debt” in our Consolidated Statements of Operations.
The Company’s long-term debt consists of the following:
December 31,
December 31,
Line of credit
Senior secured second lien notes
Unamortized debt issuance costs
Debt discount
Finance leases
Total debt and finance leases
Less: current maturities
Long-term debt and finance leases, net
As of December 31, 2025, the Company was in compliance with the financial covenants set forth in our debt agreements.
Long-term debt principal maturities, excluding finance leases which are disclosed in Note 10, Leases, were as follows:
Years ending December 31,
Amount
Thereafter
Total
Notes Payable – Non-Contingent Consideration
The following table sets forth the Company’s non-contingent consideration liabilities measured and recorded at the present value of cash payments, using a market participant discount rate and their presentation on the Consolidated Balance Sheets related to the Company's acquisitions of Ault, Ecoverse , and Peaklogix LLC.
December 31,
December 31,
Location on Balance Sheet
Other current liabilities
Other liabilities
Total
See Note 14, Fair Value of Financial Instruments, for further information.
NOTE 10 — LEASES
The Company primarily has third-party operating and finance leases for branch facilities, corporate office, service vehicle fleet, and certain equipment. The Company has one immaterial operating lease with a related party. The Company’s leases have remaining lease terms that range from less than one year to leases that mature through December 2039 and contain provisions to renew the leases for additional terms of up to 20 years .
The Company leases and subleases certain lift trucks to customers under short and long-term operating lease agreements. The sublease income is included in “Rental revenues” on our Consolidated Statements of Operations. Sublease income below primarily includes subleases of facilities that are not included in “Rental revenues” due to being outside our normal business operations. The costs of the head lease for these subleases are included in Operating lease expense below.
At December 31, 2025 and 2024, assets recorded under finance leases, net of accumulated depreciation were $ 36.1 million and $ 43.6 million, respectively. The assets are depreciated over the lesser of their related lease terms or estimated useful lives.
The components of lease expense were as follows:
Year Ended December 31,
Operating lease expense
Short-term lease expense
Low-value lease expense
Variable lease expense
Finance lease expense:
Amortization of right-of-use assets
Interest on lease liabilities
Sublease income
Total lease expense
Additional information related to leases is presented in the table below:
Year Ended December 31,
Supplemental Cash Flows Information
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows for operating leases
Operating cash flows for finance leases
Financing cash flows for finance leases
Non-cash right-of-use assets obtained in exchange for lease obligations:
Operating leases
Finance leases
Weighted Average Remaining Lease Term (in years):
Operating leases
Finance leases
Weighted Average Discount Rate (in %):
Operating leases
Finance leases
Minimum future lease payments under non-cancellable operating and finance leases described above were as follows:
Years ending December 31,
Operating Leases
Finance Leases
Thereafter
Total future minimum lease payments
Less: imputed interest
Total
Balance Sheet Location
December 31, 2025
December 31, 2024
Current portion of long-term debt
Current operating lease liabilities
Finance lease obligations, net of current portion
Long-term operating lease liabilities, net of current portion
Total
As of December 31, 2025, the Company had additional leases, substantially all real estate, that have not yet commenced with undiscounted lease payments of $ 14.5 million. These leases are expected to commence in 2026 with lease terms up to 15 years.
The Company leases and subleases certain lift trucks to customers under long-term operating lease agreements which expire at various dates through 2030. Approximate minimum rentals receivable, none of which are recorded in our Consolidated Balance Sheets, under such leases for each of the next five years are as follows:
Years ending December 31,
Amount
Total
Sublease income recorded in “Rental revenues” in our Consolidated Statements of Operations for the years ended December 31, 2025, 2024 and 2023 was $ 4.6 million, $ 6.2 million, and $ 6.2 million, respectively.
For more information on our rental revenues as a lessor, please refer to Note 3, Revenue Recognition.
See Note 11, Contingencies, for more information on certain contracts where the Company guarantees the performance of the third-party lessee.
NOTE 11 — CONTINGENCIES
Guarantees
As of December 31, 2025 and 2024, the Company was party to certain contracts in which we guarantee the performance of agreements with various third-party financial institutions. In the event of a default by a third-party, the Company would be required to pay all or a portion of the remaining unpaid obligations as specified in the contract. The estimated exposure related to these guarantees was not material as of December 31, 2025 and 2024 . It is anticipated that the third parties will have the ability to repay the debt without the Company having to honor the guarantee; therefore, no amount has been accrued on the Consolidated Balance Sheets as of December 31, 2025 and 2024.
Legal Proceedings
During the years ended December 31, 2025 and 2024, various claims and lawsuits, incidental to the ordinary course of our business, were pending against the Company. In the opinion of management, after consultation with legal counsel, resolution of these matters, net of expected insurance proceeds, is not expected to have a material effect on the Company’s consolidated financial statements.
Contractual Obligations
The Company does not believe there are any off-balance sheet arrangements that have, or are reasonably likely to have, a material effect on the Company. As of December 31, 2025 and 2024 there was $ 13.5 million and $ 12.0 million , respectively, in outstanding letters of credit issued in the normal course of business. These letters of credit reduce our available borrowings under our ABL Facility.
NOTE 12 — INCOME TAXES
The income tax expense (benefit) were calculated based upon the following components of (loss) income before income taxes:
Year Ended December 31,
U.S. (loss) income
Foreign income (loss) - Canada
Total (loss) income before taxes
The income tax expense (benefit) consisted of the following:
Year Ended December 31,
Current
U.S. federal
U.S. state and local
Foreign - Canada
Deferred
U.S. federal
U.S. state and local
Foreign - Canada
Total income tax expense (benefit)
R econciliation of the income tax expense (benefit) and effective rate to the U.S. federal statutory rate:
Year Ended December 31,
Amount
Percent
Income tax benefit at statutory U.S. federal rate
Income tax expense at statutory U.S. state and local rates, net of federal income tax effect (1)(2)
Foreign tax effects - Canada
Foreign rate differential
Remeasurement of deferred items
Effect of cross-border tax laws
Changes in valuation allowances
Nontaxable or nondeductible items
Other
Total income tax expense
(1) Michigan, Illinois, and Florida, in aggregate, make up greater than 50% of the state and local taxes in 2025
(2) Category includes state and local jurisdictions valuation allowance changes
Year Ended December 31,
Income tax (benefit) expense at statutory U.S. federal rate
Income tax (benefit) expense at statutory U.S. states rate, net
Permanent differences:
Foreign rate differential
Valuation allowance
Other
Total income tax benefit
For the year ended December 31, 2025, the income tax expense was primarily attributable to an increase of the Company's valuation allowance. During the year ended December 31, 2024, the income tax benefit was primarily attributable to the Company's pre-tax losses partially offset by a valuation allowance against a portion of the deferred tax asset (“DTA”) relating to U.S. disallowed interest expense carryforwards created by the provisions of the TCJA.
During 2025, the OBBBA was enacted into law. Relevant key tax components of the OBBBA to the Company include extension of certain expiring tax provisions from the TCJA, the reinstatement of 100 % bonus depreciation on purchases of qualified business property, and changing the interest expense limitation from EBIT to EBITDA, allowing more interest to be deductible in a given year, resulting in lower cash taxes and improved cash liquidity. The Company factored the tax law change into its valuation allowance assessment, reassessing the realizability of its DTAs. In making that assessment, we consider both positive and negative evidence related to the likelihood of realization of the DTAs as well as the nature of the deferred tax attribute to determine, based on the weight of available evidence, whether it is more likely than not that some or all of the DTAs will not be realized. The Company's ability to realize its DTAs is dependent on generating sufficient future taxable income. In the current period, after consideration of the OBBBA, an adjusted cumulative pretax loss has been determined based on a 12-quarter look-back period and is considered significant negative evidence under Topic 740. Although on a forecasted future income planning basis, we believe the Company may be to utilize these DTAs, this factor is not enough to the overall cumulative indication. As a result, management concluded that it is no longer more likely than not that certain DTAs will be realized; therefore, a full valuation allowance those DTAs was deemed appropriate, to a $ 24.5 million increase in deferred income tax expense for the year ended December 31, 2025.
We regularly assess the need for a valuation allowance against our DTAs. The recognition of a valuation allowance is a significant estimate and a future change in judgment or circumstances could result in a material change to the valuation allowance and income tax expense. We will continue to monitor the need for a valuation allowance against our DTAs on a quarterly basis.
The effective tax rate for the years ended December 31, 2025, 2024 and 2023 was ( 36.6 )% , 6.3 % and ( 256.0 )% , respectively. The effective income tax rates for 2025 and 2024 were primarily the result of the items noted above. The effective tax rate in 2023 was primarily attributable to the release of the valuation allowance on certain U.S. federal and state DTAs.
The Company intends to indefinitely reinvest the undistributed earnings of our foreign subsidiaries and expects future U.S. cash generation to be sufficient to meet future U.S. cash needs. The undistributed earnings of foreign subsidiaries and related unrecognized deferred tax liability are not material as of December 31, 2025 and 2024. If the Company determines that all or a portion of such foreign earnings are no longer indefinitely reinvested, the Company may be subject to foreign withholding taxes and U.S. state income taxes, beyond the one-time transition tax.
The components of deferred tax assets and liabilities were as follows:
Year Ended December 31,
Deferred Tax Assets
Net operating loss carryforwards
Deferred revenue
Accounts receivable and inventories
Accrued liabilities
Lease liability
Interest limitation carryforward
Deferred payroll taxes and other
Gross deferred tax assets
Valuation allowance
Deferred tax assets
Deferred Tax Liabilities
Property and equipment
Goodwill & intangibles
Prepaid expenses
Lease right-of-use assets
Gross deferred tax liabilities
Deferred tax (liabilities) assets, net
For the years ended December 31, 2025 and 2024, the net change in the valuation allowance was an increase of $ 24.5 million and $ 12.4 million , respectively.
As of December 31, 2025 and 2024, the Company had U.S. federal net operating tax loss carryforwards of approximately $ 175.1 million and $ 160.9 million, respectively, primarily due to taking bonus depreciation. These federal net operating tax loss carryforwards may be carried forward indefinitely and are eligible to offset 80 % of future taxable income. As of December 31, 2025, the Company also had state net operating loss carryforwards of $ 174.7 million, with varying carryforward expiration periods ranging from 2041 to 2046 where limited. As of December 31, 2025 , the Company had no Canadian net operating loss carryforwards.
We include interest accrued on the underpayment of income taxes in “Interest expense – other” and penalties, if any, related to unrecognized tax benefits in “Selling, general and administrative expenses” in our Consolidated Statements of Operations. The amounts of such interest or penalties were not material in each of the years ended December 31, 2025, 2024 and 2023.
The cash income taxes paid (net of refunds received) by jurisdiction for 2025 are as follows:
Year Ended December 31,
U.S. federal
U.S. state and local:
Michigan
New York
Florida
Massachusetts
Other (1)
Foreign - Canada
Total Net Payments
(1) Represents aggregated individual state and local jurisdictions with net payments under 5 % of total
Cash income taxes paid (net of refunds received) for the years ended December 31, 2024 and 2023 were $ 3.7 million and $ 5.7 million, respectively.
The Company has open tax years from 2022 through 2025 for U.S. federal and Canadian income taxes. The Company also files tax returns in numerous states for which various tax years are subject to examination and currently involved in audits. Typically states remain open for three years from filing, with the majority of the open years being 2022 to 2025.
NOTE 13 — STOCK BASED COMPENSATION
The Company’s plan is to have broad-based, long-term compensation programs intended to attract and retain talented employees and align stockholder and employee interests. To this end, compensation for our senior leadership team includes equity awards in the form of restricted stock units (“RSUs”) and performance stock units (“PSUs” ). We calculate the fair value of the RSUs and PSUs based on the closing market price of our common stock on the date of grant. The compensation expense is recognized on a straight-line basis over the requisite service period of the award. The number of PSUs granted depends on the Company's achievement of target performance goals, which may range from 0 % to 200 % of the target award amount. The RSUs and PSUs vest ratably over three years including the one-year performance period for PSUs . Upon vesting, each stock award is exchangeable for one share of the Company's common stock, with accrued dividends.
The Company recognized total stock-based compensation expense for PSUs and RSUs of $ 3.4 million, $ 4.3 million, and $ 4.1 million for the years ended December 31, 2025, 2024 and 2023, respectively.
As of December 31, 2025, the total unrecognized compensation expense related to the unvested portion of the Company's RSUs was $ 1.9 million, which is expected to be recognized over a weighted average period of 0.9 years. As of December 31, 2025, the total unrecognized compensation expense related to the unvested portion of the Company's PSUs was $ 0.8 million, which is expected to be recognized over a weighted average period of 1.1 years.
The following table shows the number of stock awards that were granted, vested, forfeited, and issued during 2025:
Restricted Stock Units
Performance Stock Units
Number of units
Weighted average grant date fair value
Number of units
Weighted average grant date fair value
Unvested units as of December 31, 2024
Granted
Vested - issued
Vested - unissued
Forfeited
Unvested units as of December 31, 2025
Employee Stock Purchase Plan ( “ ESPP ” )
On June 8, 2023 the Company filed a Form S-8 to register 325,000 common stock shares reserved for the ESPP. The Company then opened enrollment for the first offering period that started July 1, 2023 and continued through December 31, 2023. There are two six-month offering periods each year starting January 1 and July 1, with the purchase date on the last business day of each offering
period. On June 17, 2025, the Company filed a Form S-8 to register an additional 670,731 common stock shares reserved for the ESPP.
Under the ESPP, eligible employees (as defined in the ESPP) can purchase the Company’s common stock through accumulated payroll deductions. Eligible employees may purchase the Company’s common stock at 85 % of the lower of the fair market value of the Company’s common stock on the first or last business day of each six-month offering period. Eligible employees may contribute up to 10 % of their eligible compensation. Under the ESPP, a participant may not accrue rights to purchase more than $ 25,000 worth of the Company’s common stock for each calendar year in which such right is outstanding.
Employees who elect to participate in the ESPP commence payroll withholdings that accumulate through the end of the respective period. Stock-based compensation expense is determined based on the grant-date fair value of the option or ability to purchase the shares at a discount and is recognized over the withholding period. The stock-based compensation expense related to the ESPP recognized during the years ended December 31, 2025 and 2024 was not material.
ESPP employee payroll contributions accrued as of December 31, 2025 and 2024 totaled $ 0.7 million and $ 0.9 million, respectively, and are included within “Accrued expenses” in the Consolidated Balance Sheets. Cash withheld via employee payroll deductions is presented within “Other financing activities” in the Consolidated Statements of Cash Flows.
NOTE 14 — FAIR VALUE OF FINANCIAL INSTRUMENTS
The carrying value of financial instruments reported in the accompanying Consolidated Balance Sheets for “Cash”, “Accounts receivable, net”, “Accounts payable”, “Accrued expenses” and “Other current liabilities” approximate fair value due to the immediate or short-term nature or maturity of these financial instruments.
Below is a description of the valuation methodologies used for assets and liabilities measured at fair value on a recurring basis:
Debt Instruments
The carrying value of the Company's debt instruments vary from their fair values. The fair values were determined by reference to transacted prices and quotes for these instruments and upon current borrowing rates with similar maturities, which are Level 2 fair value inputs. The estimated fair value, as well as the carrying value, of the Company's debt instruments are shown below:
December 31, 2025
December 31, 2024
Estimated aggregate fair value (1)
Aggregate carrying value (1)
(1) Total debt excluding the impact of unamortized debt discount and debt issuance costs.
Contingent Consideration
The contingent consideration liability represents the fair value of future earn-out obligations that the Company may be required to pay in conjunction with past acquisitions upon the achievement of certain performance milestones. The earn-outs are measured at fair value in each reporting period, based on Level 3 inputs, with any change to the fair value recorded in the Consolidated Statements of Operations.
The following table sets forth the Company’s contingent consideration liabilities measured and recorded at fair value and their presentation on the Consolidated Balance Sheets:
Level 3
Balance Sheet Location
December 31, 2025
December 31, 2024
Other liabilities
The following is a summary of changes to Level 3 instruments for the years ended December 31, 2025 and 2024:
Contingent Consideration
Balance, December 31, 2023
Changes in fair value
Balance, December 31, 2024
Changes in fair value
Balance, December 31, 2025
Derivative Financial Instruments
In the normal course of business, we are exposed to market risks associated with changes in foreign currency exchange rates, commodity prices, and interest rates. To manage a portion of these inherent risks, we may purchase certain types of derivative financial instruments based on management's judgment of the trade-off between risk, opportunity, and cost. We do not hold or issue derivative financial instruments for trading or speculative purposes. The impact of hedge ineffectiveness for those derivatives where hedge accounting is applied was not significant in any of the periods presented. The Company has determined the fair value of all our derivative contracts are based on Level 2 inputs such as quoted market prices for similar instruments from third parties and inputs other than quoted prices that are observable (forward curves, implied volatility, counterparty credit risks). The Company reviews counterparty credit risks at regular intervals and has not experienced any significant credit loss as a result of counterparty nonperformance in the past.
Currency Derivative Contracts
From time to time we use foreign currency forward contracts to reduce the effects of fluctuations in exchange rates relating to foreign currencies for certain inventory purchases. The realized impact from these foreign currency forward contracts on our Consolidated Statements of Operations for the years ended December 31, 2025, 2024 and 2023 was not material.
Interest Rate Cap
We entered into an interest rate cap to protect cash flows from the risks associated with interest payments from interest rate increases on variable rate debt. The interest rate cap is a derivative instrument designated as a cash flow hedge under Topic 815 – Derivatives and Hedging . The premiums are recognized in the Consolidated Statements of Operations when paid from the effective date through the termination date. All changes in the fair value of the interest rate cap were deferred in Accumulated other comprehensive loss and subsequently recognized in earnings in the period when the derivative contract settled. The unrealized and realized impact on earnings of the interest rate cap for the years ended December 31, 2025, 2024 and 2023 are disclosed in the Consolidated Statements of Comprehensive (Loss) Income. The interest rate cap matured in December 2025.
Fuel Purchase Contracts
From time to time, we enter into fixed price swap contracts to purchase gasoline and diesel fuel to protect cash flows from the risks associated with fluctuations in fuel prices on a portion of anticipated future purchases. The fixed price swap contracts to purchase gasoline and diesel fuel are derivative instruments not designated as hedging instruments under Topic 815.
T he fuel swap contracts are in gallons with various maturity dates through February 2027 with a total notional value of $ 5.2 million as of December 31, 2025 :
The following table sets forth the location and fair values of the Company’s derivative financial instruments on the Consolidated Balance Sheets:
Asset Derivatives
Liability Derivatives
Derivatives designated as hedge
Balance Sheet location
December 31, 2025
December 31, 2024
Balance Sheet location
December 31, 2025
December 31, 2024
Interest rate cap - current portion
Prepaid expenses and other current assets
Other current liabilities
Derivatives not designated as hedge
Fuel swaps - current portion
Prepaid expenses and other current assets
Other current liabilities
Fuel swaps - long-term
Other assets
Other liabilities
NOTE 15 — BUSINESS COMBINATIONS AND DIVESTITURES
On March 14, 2025, the Company purchased the assets of Les Chariots Elevateurs Du Quebec Inc. (“CEQ”), a privately held Yale dealer with one branch in Quebec, Canada. The purchase price was $ 2.7 million, net of cash acquired. The acquisition is not material for the twelve months ended December 31, 2025; therefore, we did not include an opening balance sheet herein. CEQ is reported within our Material Handling segment. This acquisition was accounted for as a business combination and the fair values of assets acquired and liabilities assumed are finalized. Costs and expenses related to the acquisition have been expensed as incurred in operating expenses. See the Consolidated Statements of Cash Flows for the total cash outflow in “Acquisitions of businesses, net of cash acquired” for the cash flow impact of the acquisition.
On May 1, 2025, the Company’s Construction Equipment segment entered into a definitive agreement and closed on the divestiture of substantially all of its aerial fleet rental business in the Chicago, Illinois marketplace for $ 18.0 million cash at closing, subject to fees and closing costs, resulting in a gain on the divestiture of $ 4.3 million disclosed in the line item “Gain on divestitures” in our Consolidated Statements of Operations. The Company allocated the proceeds from the divesture to reduce its outstanding senior indebtedness.
On August 4, 2025, the Company's Material Handling segment entered into a definitive agreement on the divestiture of its Dock and Door business. The divestiture closed on August 29, 2025 for a sale price of $ 6.4 million, $ 3.1 million of which was paid in cash at close with the remainder of the cash consideration expected to be paid to the Company upon a working capital true-up and the collection of specific customer receivables. This resulted in a gain on divestiture of $ 0.3 million disclosed in the line item “Gain on divestitures” in our Consolidated Statements of Operations. The Company allocated the proceeds from the divesture to reduce its outstanding senior indebtedness.
See the Consolidated Statements of Cash Flows for the total cash inflow in “Proceeds from divestitures, net” and the gain on sale in “Gain on divestitures” for the cash flow impact of these divestitures.
NOTE 16 — UNION PENSION PLAN
The Company contributes to various multiemployer defined benefit pension plans under collective bargaining agreements that cover certain union represented employees. These multiemployer plans generally provide retirement benefits to participants based on their service to contributing employers. The benefits are paid from assets held in trust for that purpose. Plan trustees typically are responsible for determining the level of benefits to be provided to participants as well as the investment of the assets and plan administration. Trustees are appointed in equal number by employers and the unions that are parties to the relevant collective bargaining agreements.
Expense is recognized in connection with these plans as contributions are funded, in accordance with U.S. GAAP. The risks of participating in such plans are different from the risks of single-employer plans, in the following respects:
Assets contributed to a multiemployer plan by one employer may be used to provide benefits to employees of other participating employers;
If a participating employer ceases to contribute to the plan, the unfunded obligations of the plan may be borne by the remaining participating employers; and
If the Company ceases to have a continuing obligation to contribute to the multiemployer plan in which the Company had been a contributing employer, the Company may be required to pay to the plan an amount based on the underfunded status of the plan and on the history of the Company’s participation in the plan prior to the cessation of our obligation to contribute.
The Company’s participation in multiemployer plans for the annual periods ended December 31, 2025, 2024 and 2023 is outlined in the table below. For each plan that is individually significant to the Company, the following information is provided:
The “Pension Protection Act Zone Status” available is for plan years that ended in 2025 and 2024. The zone status is based on information provided to the Company and other participating employers by each plan and is certified by the plan’s actuary. This indicates the funded status of the plan with the status indicated by the colors of green, yellow and red with green being the most funded and red being the least funded.
The “FIP/RP Status Pending/Implemented” column indicates whether a Funding Improvement Plan, as required under the U.S. Internal Revenue Code (the “Code”) to be adopted by plans in the “yellow” zone, or a Rehabilitation Plan, as required under the Code to be adopted by plans in the “red” zone, is pending or has been implemented as of the end of the plan year.
The “Surcharge Imposed” column indicates whether a surcharge was paid during the most recent annual period presented for the Company’s contributions to any plan in the red zone in accordance with the requirements of the Code.
The last column lists the expiration dates of the collective bargaining agreements with the Company.
Certain plans have been aggregated in the All Other Multiemployer Pension Plans line in the following table, as the contributions to each of these plans are not individually material. None of our collective bargaining agreements require that a minimum contribution be made to these plans. There are no plans where the amount contributed by the Company represents more than 5 % of the total contributions to the plan for the years ended December 31, 2025, 2024 and 2023.
Multiple Employer Pension Plans:
Pension Fund
EIN
Pension Protection Act Zone Status & Plan Year- End
FIP/RP
Status
Contributions of Alta Equipment Group Inc. and Subsidiaries
Surcharge
Imposed
Expiration
Date of
Collective-
Bargaining
Agreement
Midwest Operating Engineers
Local Union No. 150 Pension Trust Fund
Green
Green
None
Operating Engineers Local
Union No. 324 Pension Fund
Red
Red
Implemented
Yes
All Other Multiemployer Pension Plans (1)
Various
(1) All Other Multiemployer Pension Plans includes 13 plans, none of which are individually significant when considering contributions to the plan, severity of the underfunded status, or other factors.
NOTE 17 — SEGMENTS
The Company has three operating segments which are also our reportable segments: Material Handling, Construction Equipment, and Master Distribution. All other business activities, including corporate, are included in “Corporate and Other” . The Company’s segments are determined based on management structure, which is organized based on types of products and services sold, as described in the following paragraphs. The operating results for each segment are reported separately to the Company’s CEO (our Chief Operating Decision Maker or “CODM” ) to make decisions regarding the allocation of resources, to assess the Company’s performance and to make strategic decisions . The primary profitability measurement used by the CEO to evaluate performance and allocate resources to the segments is Adjusted EBITDA. The Company's presentation of Adjusted EBITDA may not be comparable to similar measures used by other companies and is not necessarily indicative of the results of operations that would have occurred had each reportable segment been an independent, stand-alone entity during the periods presented.
The Material Handling segment is principally engaged in operations related to the sale, service, and rental of lift trucks and other material handling equipment in Michigan, Illinois, Indiana, New York (including New York City), Virginia and the New England region of the U.S. as well as Ontario and Quebec provinces of Canada.
The Construction Equipment segment is principally engaged in operations related to the sale, service, and rental of construction equipment in Michigan, Illinois, Indiana, Ohio, Pennsylvania, New York (excluding New York City), Florida and the New England region of the U.S. as well as Ontario, Maritime, and Quebec provinces of Canada.
The Master Distribution segment is principally engaged in large-scale environmental processing equipment distribution with sub dealers throughout the United States and Canada.
The Company retains various unallocated expense items at the general corporate level, which the Company refers to as “Corporate and Other” in the table below. Corporate and Other holds corporate debt and has minor transactional activity. Corporate and Other incurs expenses associated with compensation (including stock-based compensation) of our directors, corporate officers, and members of our shared-services team, consulting and legal fees related to acquisitions and capital raising activities, corporate governance, audit and tax preparation related fees and other compliance related matters, certain corporate development related expenses, interest expense associated with original issue discounts and deferred financing cost related to previous capital raises, and a portion of the Company’s income tax expense. There is also intercompany elimination activity presented within Corporate and Other.
The following tables summarize key financial information by reportable segment:
Year Ended December 31, 2025
Material
Handling
Construction
Equipment
Master Distribution
Corporate and Other
Total
Revenues:
New and used equipment sales
Parts sales
Service revenues
Rental revenues
Rental equipment sales
Total revenues
Cost of revenues:
New and used equipment sales
Parts sales
Service revenues
Rental revenues
Rental equipment sales
Selling, general and administrative expenses
Other segment items (1)
Segment adjusted EBITDA (2)
Depreciation and amortization
Interest expense
Other (1)
Loss before taxes
Total assets, end of period
Capital expenditures
Depreciation and amortization
Interest expense
Year Ended December 31, 2024
Material
Handling
Construction
Equipment
Master Distribution
Corporate and Other
Total
Revenues:
New and used equipment sales
Parts sales
Service revenues
Rental revenues
Rental equipment sales
Total revenues
Cost of revenues:
New and used equipment sales
Parts sales
Service revenues
Rental revenues
Rental equipment sales
Selling, general and administrative expenses
Other segment items (1)
Segment adjusted EBITDA (2)
Depreciation and amortization
Interest expense
Other (1)
Loss before taxes
Total assets, end of period
Capital expenditures
Depreciation and amortization
Interest expense
Year Ended December 31, 2023
Material
Handling
Construction
Equipment
Master Distribution
Corporate and Other
Total
Revenues:
New and used equipment sales
Parts sales
Service revenues
Rental revenues
Rental equipment sales
Total revenues
Cost of revenues:
New and used equipment sales
Parts sales
Service revenues
Rental revenues
Rental equipment sales
Selling, general and administrative expenses
Other segment items (1)
Segment adjusted EBITDA (2)
Depreciation and amortization
Interest expense
Other (1)
Income before taxes
Total assets, end of period
Capital expenditures
Depreciation and amortization
Interest expense
(1) Primarily includes other income (expense), certain one-time, non-recurring or non-cash items, and items not necessarily indicative of our underlying operating performance.
(2) See definition in Part II Item 7 under Non-GAAP Financial Measures .
NOTE 18 — EAR NINGS PER SHARE
Basic earnings per share (“EPS”) is calculated by dividing net income (loss) by the weighted average number of common shares outstanding during the period and includes vested, unissued RSUs and ESPP shares. Diluted EPS is calculated by dividing net income (loss) by the weighted average number of common shares outstanding, after giving effect to all potential dilutive common shares outstanding during the period. We include all common stock share equivalents granted under our stock-based compensation plan, including ESPP, which remain unvested and shares used as consideration in the Ault acquisition which remain unissued (“dilutive securities”), in the number of shares outstanding for our diluted EPS calculations using the treasury method.
Basic and diluted EPS were calculated as follows:
Year Ended December 31,
Basic net (loss) income per share
Net (loss) income available to common stockholders
Basic weighted average common shares outstanding
Basic net (loss) income per share of common stock
Diluted net (loss) income per share
Net (loss) income available to common stockholders
Basic weighted average common shares outstanding
Effect of dilutive securities:
Effect of dilutive securities
Diluted weighted average common shares outstanding
Diluted net (loss) income per share of common stock
Approximately 735,000 and 918,000 securities were excluded from the calculation of diluted loss per share for the years ended December 31, 2025 and 2024 , respectively, because the inclusion of such securities in the calculation would have been anti-dilutive.
Ite m 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure.
None.
It em 9A. Controls and Procedures.
Evaluation of Disclosure Controls and Procedures
We maintain disclosure controls and procedures (as defined in Rules 13a-15(e) or 15d-15(e) under the Exchange Act) that are designed to ensure that information required to be disclosed in the reports that we file or submit under the Exchange Act is recorded, processed, summarized, and reported within the time periods specified in the rules and forms of the SEC and to ensure that information required to be disclosed is accumulated and communicated to management, including our principal executive officer and our principal financial officer, to allow timely decisions regarding disclosure.
Our management, with the participation of the Chief Executive Officer and the Chief Financial Officer, has evaluated the effectiveness of our disclosure controls and procedures as of the end of the period covered by this Annual Report on Form 10-K. Based on this evaluation, our Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures were effective as of December 31, 2025.
Management’s Annual Report on Internal Control over Financial Reporting
Management is responsible for establishing and maintaining adequate internal control over financial reporting as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act, as amended. Our internal control over financial reporting includes controls and procedures designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external reporting purposes in accordance with U.S. GAAP. Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements.
The Company’s management conducted an evaluation of the effectiveness of our internal control over financial reporting as of December 31, 2025, based on the criteria established in the Internal Control – Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Based on this evaluation, the Company’s management concluded that our internal control over financial reporting was effective as of the end of the fiscal year covered by this Annual Report on Form 10-K.
The Company’s independent registered public accounting firm, Deloitte & Touche LLP, who audited the consolidated financial statements as of and for the year ended December 31, 2025 included in this Annual Report on Form 10-K has also audited the Company’s internal control over financial reporting as of December 31, 2025. Deloitte & Touche LLP’s report is included herein.
Changes in Internal Control over Financial Reporting
There were no changes in our internal control over financial reporting identified in connection with the evaluation required by Rule 13a-15(d) and 15d-15(d) of the Exchange Act that occurred during the fourth quarter of fiscal 2025 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
Report of Independent Registered Public Accounting Firm
To the shareholders and the Board of Directors of Alta Equipment Group Inc.
Opinion on Internal Control over Financial Reporting
We have audited the internal control over financial reporting of Alta Equipment Group Inc. and subsidiaries (the "Company") as of December 31, 2025, based on criteria established in Internal Control — Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). In our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of December 31, 2025, based on criteria established in Internal Control — Integrated Framework (2013) issued by COSO.
We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the consolidated financial statements as of and for the year ended December 31, 2025, of the Company and our report dated February 26, 2026, expressed an unqualified opinion on those financial statements.
Basis for Opinion
The Company's management is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting, included in the accompanying Management's Annual Report on Internal Control over Financial Reporting. Our responsibility is to express an opinion on the Company's internal control over financial reporting based on our audit. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects. Our audit included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, testing and evaluating the design and operating effectiveness of internal control based on the assessed risk, and performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion.
Definition and Limitations of Internal Control over Financial Reporting
A company's internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company's internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company's assets that could have a material effect on the financial statements.
Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.
/s/ Deloitte & Touche LLP
Detroit, Michigan
February 26, 2026
