McGrath RentCorp ("McGrath" or the "Company") (NASDAQ:MGRC), a leading business-to-business rental company in North America, today announced total revenues for the quarter ended June 30, 2025 of $235.6 million, an increase of 11% compared to the second quarter of 2024. The Company reported net income of $36.0 million, or $1.46 per diluted share, for the second quarter of 2025, compared to net income of $20.6 million, or $0.84 per diluted share, for the second quarter of 2024.

SECOND QUARTER 2025 YEAR-OVER-YEAR COMPANY HIGHLIGHTS:

Rental operations revenues increased 5% to $163.5 million.
Sales revenues increased 28% to $69.8 million.
Total revenues increased 11% to $235.6 million.
Income from operations increased 5% to $57.2 million.
Adjusted EBITDA¹ increased 3% to $86.5 million.
Dividend rate of $0.485 per share for the second quarter 2025. On an annualized basis, this dividend represents a 1.7% yield on the July 23, 2025 close price of $115.05 per share.

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

"We were pleased with our second quarter results. The 11% increase in companywide revenues was driven by higher rental operations and sales revenues.

Modular rental revenues increased 5% compared to last year, with growth across both commercial and education customer bases, despite softer market demand conditions than a year ago. Given current utilization levels, we reduced new equipment capital spending and focused on preparing available fleet to satisfy new shipments which increased operating expenses for the quarter. Our modular services offerings contributed to growth, and our Enviroplex business had a strong quarter of new modular sales in the education market.

Demand conditions in Portable Storage showed some improvement compared to the first quarter, with rental revenues growing 5% sequentially, though down 5% from a year ago. Lower commercial construction project activity continued to make demand conditions challenging.

TRS-RenTelco had a strong quarter, with rental revenues up 7% over last year. Consistent with the first quarter, improvement in market demand conditions was broad-based across customer segments.

We were pleased with our execution in the second quarter and encouraged by several positive signs in the overall demand environment, despite some ongoing economic uncertainty. Overall, our outlook is incrementally more positive as we enter the second half of the year, and we remain focused on disciplined operational execution to make the most of the market opportunities."

DIVISION HIGHLIGHTS:

All comparisons presented below are for the quarter ended June 30, 2025 to the quarter ended June 30, 2024 unless otherwise indicated.

MOBILE MODULAR

For the second quarter of 2025, the Company's Mobile Modular division reported Adjusted EBITDA of $53.1 million, a decrease of $0.3 million, when compared to the same quarter in 2024.

Rental revenues increased 5% to $81.9 million, depreciation expense increased 7% to $10.7 million, and other direct costs increased 13% to $24.0 million, which resulted in an increase in gross profit on rental revenues of 1% to $47.2 million.
Rental related services revenues increased 11% to $32.2 million, primarily attributable to higher delivery and pick-up activities and higher site related services, with associated gross profit increasing 29% to $11.7 million.
Sales revenues increased 13% to $40.5 million, due to higher new and used equipment sales. Gross margin on sales was 32% in 2025, compared to 38% in 2024, resulting in a 6% decrease in gross profit on sales revenues to $12.9 million. The reduction in gross margin on sales was primarily attributed to a higher mix of new versus used sales during the quarter.
Selling and administrative expenses increased $3.5 million to $36.8 million, primarily due to a $1.7 million increase in employees' salaries and benefit costs, $0.9 million higher allocated corporate expenses and $0.7 million higher marketing and administrative expenses.

PORTABLE STORAGE

For the second quarter of 2025, the Company's Portable Storage division reported Adjusted EBITDA of $9.8 million, a decrease of $1.2 million, or 11%, when compared to the same quarter in 2024.

Rental revenues decreased 5% to $16.9 million, depreciation expense increased 4% to $1.0 million, and other direct costs increased 26% to $1.9 million, which resulted in a decrease in gross profit on rental revenues of 9% to $14.0 million.
Rental related services revenues were $4.4 million and gross profit on rental related services revenues was $0.1 million, which was down from $0.2 million in the second quarter of 2024.
Sales revenues increased $0.4 million to $1.7 million, primarily from higher used equipment sales. Gross margin on sales was 39% in 2025, compared to 43% in 2024, resulting in a $0.1 million increase in gross profit on sales revenues to $0.7 million.
Selling and administrative expenses increased $0.1 million to $7.5 million in 2025, as compared to 2024.

TRS-RENTELCO

For the second quarter of 2025, the Company's TRS-RenTelco division reported Adjusted EBITDA of $19.3 million, an increase of $1.3 million, or 7%, when compared to the same quarter in 2024.

Rental revenues increased 7% to $27.1 million, depreciation expense decreased 14%, and other direct costs increased 9%, resulting in a 32% increase in gross profit on rental revenues to $11.9 million. The rental revenue increase was primarily due to the strengthening of end markets, resulting in higher average rental equipment on rent compared to the prior year.
Sales revenues increased 32% to $7.7 million and gross margin on sales was 47% in 2025, compared to 54% in 2024, resulting in a 16% increase in gross profit on sales revenues to $3.6 million.
Selling and administrative expenses increased $0.7 million to $7.3 million in 2025, as compared to the same period in 2024.

FINANCIAL OUTLOOK:

Based upon the Company's year-to-date results and current outlook for the remainder of the year, the Company is updating its financial outlook. For the full-year 2025, the Company currently expects:

		Previous	Current
•	Total revenue:	$920 to $960 million	$925 to $960 million
•	Adjusted EBITDA^{1, 2}:	$343 to $355 million	$347 to $356 million
•	Gross rental equipment capital expenditures:	$115 to $125 million	$115 to $125 million

1.		Adjusted EBITDA is defined as net income before interest expense, provision for income taxes, depreciation, amortization, non-cash impairment costs, share-based compensation, transaction costs and non-operating transactions. A reconciliation of actual net income to Adjusted EBITDA and net cash provided by operating activities to Adjusted EBITDA can be found at the end of this release.
2.		Information reconciling forward-looking Adjusted EBITDA to the comparable GAAP financial measures is unavailable to the Company without unreasonable effort because certain items required for such reconciliations are outside of the Company's control and/or cannot be reasonably predicted, such as the provision for income taxes. Therefore, no reconciliation to the most comparable GAAP measures is provided. The Company provides Adjusted EBITDA guidance because it believes that Adjusted EBITDA, when viewed with the Company's results under GAAP, provides useful information for the reasons noted in the reconciliation of actual Adjusted EBITDA to the most directly comparable GAAP measures at the end of this release.

ABOUT MCGRATH:

McGrath RentCorp (NASDAQ:MGRC) is a leading business-to-business rental company in North America with a strong record of profitable business growth. Founded in 1979, McGrath's operations are centered on modular solutions through its Mobile Modular and Mobile Modular Portable Storage businesses. In addition, its TRS-RenTelco business offers electronic test equipment rental solutions. The Company's rental product offerings and services are part of the circular supply economy, helping customers work more efficiently, and sustainably manage their environmental footprint. With over 40 years of experience, McGrath's success is driven by a focus on exceptional customer experiences. This focus has underpinned the Company's long-term financial success and supported over 30 consecutive years of annual dividend increases to shareholders, a rare distinction among publicly listed companies.

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

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

CONFERENCE CALL NOTE:

McGrath RentCorp will host a conference call at 5:00 p.m. Eastern Time (2:00 p.m. Pacific Time) on July 24, 2025 to discuss the second quarter 2025 results. To participate in the teleconference, dial 1-800-245-3047 (in the U.S.), or 1-203-518-9765 (outside the U.S.), or to listen only, access the simultaneous webcast at the investor relations section of the Company's website at https://investors.mgrc.com/. A replay will be available for 7 days following the call by dialing 1-800-839-5630 (in the U.S.), or 1-402-220-2557 (outside the U.S.). In addition, a live audio webcast and replay of the call may be found in the investor relations section of the Company's website at https://investors.mgrc.com/events-and-presentations.

FORWARD-LOOKING STATEMENTS:

This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. All statements, other than statements of historical facts, regarding McGrath RentCorp's expectations, strategies, prospects or targets are forward-looking statements. These forward-looking statements also can be identified by the use of forward-looking terminology such as "anticipates," "believes," "continues," "could," "estimates," "expects," "intends," "may," "plan," "predict," "project," or "will," or the negative of these terms or other comparable terminology. In particular, the discussion under the heading "Financial Outlook" is forward looking.

These forward-looking statements are not guarantees of future performance and involve significant risks and uncertainties that could cause our actual results to differ materially from those projected including: the impact of the recent tariff actions and other economic factors; health of the education and commercial markets in our modular building division; competition within the modular business; the activity levels in the semiconductor and general purpose and communications test equipment markets at TRS-RenTelco; the activity levels in commercial construction projects and impact on Portable Storage segment; continued execution of our strategic performance improvement initiatives; our ability to successfully increase prices to offset cost increases; and our ability to effectively manage our rental assets, as well as the other factors disclosed under "Risk Factors" in the Company's 2024 Form 10-K and other SEC filings.

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

MCGRATH RENTCORP CONDENSED CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)
	Three Months Ended June 30,					Six Months Ended June 30,
(in thousands, except per share amounts)	2025			2024		2025			2024
Revenues
Rental	$	125,985		$	121,176	$	246,098		$	241,508
Rental related services		37,483			34,358		71,399			63,938
Rental operations		163,468			155,534		317,497			305,446
Sales		69,775			54,414		108,701			89,483
Other		2,373			2,663		4,834			5,509
Total revenues		235,616			212,611		431,032			400,438
Costs and Expenses
Direct costs of rental operations:
Depreciation of rental equipment		21,426			22,165		42,931			44,531
Rental related services		25,477			24,990		49,790			45,776
Other		31,519			27,920		59,171			56,930
Total direct costs of rental operations		78,422			75,075		151,892			147,237
Costs of sales		46,480			34,121		71,990			56,518
Total costs of revenues		124,902			109,196		223,882			203,755
Gross profit		110,714			103,415		207,150			196,683
Expenses:
Selling and administrative expenses		53,543			49,003		104,412			99,467
Other income, net		—			—		—			(9,281	)
Income from operations		57,171			54,412		102,738			106,497
Interest expense		7,795			13,037		15,954			25,741
Foreign currency exchange (gain) loss		(81	)		31		(86	)		163
WillScot Mobile Mini transaction costs (Note 1)		—			12,367		—			21,721
Income before provision for income taxes		49,457			28,977		86,870			58,872
Provision for income taxes		13,484			8,359		22,689			15,406
Net income		35,973			20,618		64,181			43,466
Earnings per share:
Basic	$	1.46		$	0.84	$	2.61		$	1.77
Diluted	$	1.46		$	0.84	$	2.61		$	1.77
Shares used in per share calculation:
Basic		24,611			24,549		24,592			24,531
Diluted		24,618			24,560		24,620			24,562
Cash dividends declared per share	$	0.485		$	0.475	$	0.970		$	0.950

MCGRATH RENTCORP CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED)
	June 30,			December 31,
(in thousands)	2025			2024
Assets
Cash	$	1,469		$	807
Accounts receivable, net of allowance for credit losses of $2,866 at June 30, 2025 and at December 31, 2024		233,801			219,342
Rental equipment, at cost:
Relocatable modular buildings		1,443,314			1,414,367
Portable storage containers		244,261			240,846
Electronic test equipment		333,171			343,982
		2,020,746			1,999,195
Less: accumulated depreciation		(627,064	)		(611,536	)
Rental equipment, net		1,393,682			1,387,659
Property, plant and equipment, net		215,720			197,439
Inventories		12,297			14,304
Prepaid expenses and other assets		85,748			80,477
Intangible assets, net		51,919			54,332
Goodwill		332,373			323,224
Total assets	$	2,327,009		$	2,277,584
Liabilities and Shareholders' Equity
Liabilities:
Notes payable	$	572,525		$	590,208
Accounts payable		54,864			60,082
Accrued liabilities		118,177			113,961
Deferred income		125,389			109,836
Deferred income taxes, net		292,893			280,129
Total liabilities		1,163,848			1,154,216
Shareholders' equity:
Common stock, no par value - Authorized 40,000 shares
Issued and outstanding - 24,612 shares as of June 30, 2025 and 24,551 shares as of December 31, 2024		115,891			116,253
Retained earnings		1,047,270			1,007,115
Total shareholders' equity		1,163,161			1,123,368
Total liabilities and shareholders' equity	$	2,327,009		$	2,277,584

MCGRATH RENTCORP CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
	Six Months Ended June 30,
(in thousands)	2025			2024
Cash Flows from Operating Activities:
Net income	$	64,181		$	43,466
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization		52,739			54,131
Deferred income taxes		12,764			11,592
Provision for credit losses		826			873
Share-based compensation		5,322			4,556
Gain on sale of property, plant and equipment		—			(9,281	)
Gain on sale of used rental equipment		(16,674	)		(15,537	)
Foreign currency exchange (gain) loss		(86	)		163
Amortization of debt issuance costs		45			4
Change in:
Accounts receivable		(15,285	)		9,116
Inventories		2,007			(12,788	)
Prepaid expenses and other assets		(5,270	)		5,817
Accounts payable		(8,402	)		23,155
Accrued liabilities		2,403			166
Deferred income		15,124			23,196
Net cash provided by operating activities		109,694			138,629
Cash Flows from Investing Activities:
Purchases of rental equipment		(50,230	)		(145,345	)
Purchases of property, plant and equipment		(21,621	)		(30,125	)
Cash paid for acquisition of businesses		(21,947	)		—
Proceeds from sales of used rental equipment		32,200			29,334
Proceeds from sales of property, plant and equipment		—			12,251
Net cash used in investing activities		(61,598	)		(133,885	)
Cash Flows from Financing Activities:
Net payments under bank lines of credit		(17,730	)		(43,708	)
Borrowings under term note agreement		—			75,000
Taxes paid related to net share settlement of stock awards		(5,684	)		(4,082	)
Payment of dividends		(24,020	)		(23,435	)
Net cash (used in) provided by financing activities		(47,434	)		3,775
Net increase in cash		662			8,519
Cash balance, beginning of period		807			877
Cash balance, end of period	$	1,469		$	9,396
Supplemental Disclosure of Cash Flow Information:
Interest paid, during the period	$	15,982		$	26,394
Net income taxes paid (refunded), during the period	$	5,786		$	(4,599	)
Dividends accrued during the period, not yet paid	$	12,443		$	12,150
Rental equipment acquisitions, not yet paid	$	8,658		$	7,634
Business acquisition payments withheld	$	1,815		$	—

MCGRATH RENTCORP
BUSINESS SEGMENT DATA (unaudited)
Three months ended June 30, 2025
(dollar amounts in thousands)	Mobile Modular			PortableStorage			TRS-RenTelco			Enviroplex		Consolidated
Revenues
Rental	$	81,909		$	16,939		$	27,137		$	—	$	125,985
Rental related services		32,172			4,394			917			—		37,483
Rental operations		114,081			21,333			28,054			—		163,468
Sales		40,484			1,712			7,713			19,866		69,775
Other		1,423			301			649			—		2,373
Total revenues		155,988			23,346			36,416			19,866		235,616

Costs and Expenses
Direct costs of rental operations:
Depreciation		10,741			1,038			9,647			—		21,426
Rental related services		20,450			4,304			723			—		25,477
Other		23,990			1,918			5,611			—		31,519
Total direct costs of rental operations		55,181			7,260			15,981			—		78,422
Costs of sales		27,581			1,048			4,072			13,779		46,480
Total costs of revenues		82,762			8,308			20,053			13,779		124,902

Gross Profit
Rental		47,178			13,983			11,879			—		73,040
Rental related services		11,722			90			194			—		12,006
Rental operations		58,900			14,073			12,073			—		85,046
Sales		12,903			664			3,641			6,087		23,295
Other		1,423			301			649			—		2,373
Total gross profit		73,226			15,038			16,363			6,087		110,714
Selling and administrative expenses		36,777			7,547			7,320			1,899		53,543
Income from operations	$	36,449		$	7,491		$	9,043		$	4,188		57,171
Interest expense													7,795
Foreign currency exchange gain													(81	)
Provision for income taxes													13,484
Net income												$	35,973

Other Information
Adjusted EBITDA ¹	$	53,088		$	9,834		$	19,314		$	4,290	$	86,525
Average rental equipment ²	$	1,300,787		$	233,742		$	330,532
Average monthly total yield ³		2.10	%		2.42	%		2.74	%
Average utilization ⁴		73.7	%		61.1	%		64.8	%
Average monthly rental rate ⁵		2.85	%		3.95	%		4.22	%

1.		Adjusted EBITDA is defined as net income before interest expense, provision for income taxes, depreciation, amortization, non-cash impairment costs, share-based compensation, other income, net and non-operating transactions.
2.		Average rental equipment represents the cost of rental equipment, excluding new equipment inventory and accessory equipment.
3.		Average monthly total yield is calculated by dividing the averages of monthly rental revenues by the cost of rental equipment for the period.
4.		Average utilization is calculated by dividing the average month end costs of rental equipment on rent by the average month end total costs of rental equipment.
5.		Average monthly rental rate is calculated by dividing the averages of monthly rental revenues by the cost of rental equipment on rent for the period.

MCGRATH RENTCORP
BUSINESS SEGMENT DATA (unaudited)
Three months ended June 30, 2024
(dollar amounts in thousands)	Mobile Modular			Portable Storage			TRS-RenTelco			Enviroplex		Consolidated
Revenues
Rental	$	78,039		$	17,823		$	25,314		$	—	$	121,176
Rental related services		28,920			4,640			798			—		34,358
Rental operations		106,959			22,463			26,112			—		155,534
Sales		35,930			1,266			5,845			11,373		54,414
Other		1,657			293			713			—		2,663
Total revenues		144,546			24,022			32,670			11,373		212,611

Costs and Expenses
Direct costs of rental operations:
Depreciation		9,995			1,001			11,169			—		22,165
Rental related services		19,828			4,476			686			—		24,990
Other		21,265			1,527			5,128			—		27,920
Total direct costs of rental operations		51,088			7,004			16,983			—		75,075
Costs of sales		22,172			716			2,716			8,517		34,121
Total costs of revenues		73,260			7,720			19,699			8,517		109,196

Gross Profit
Rental		46,779			15,295			9,017			—		71,091
Rental related services		9,092			164			112			—		9,368
Rental operations		55,871			15,459			9,129			—		80,459
Sales		13,758			550			3,129			2,856		20,293
Other		1,657			293			713			—		2,663
Total gross profit		71,286			16,302			12,971			2,856		103,415
Selling and administrative expenses		33,239			7,465			6,585			1,714		49,003
Other income, net		—			—			—			—		—
Income from operations	$	38,047		$	8,837		$	6,386		$	1,142	$	54,412
Interest expense													13,037
Foreign currency exchange loss													31
WillScot Mobile Mini transaction costs ⁶													12,367
Provision for income taxes													8,359
Net income												$	20,618

Other Information
Adjusted EBITDA ¹	$	53,418		$	11,015		$	18,001		$	1,238	$	83,672
Average rental equipment ²	$	1,203,415		$	226,754		$	367,322
Average monthly total yield ³		2.16	%		2.62	%		2.28	%
Average utilization ⁴		78.4	%		66.1	%		56.5	%
Average monthly rental rate ⁵		2.76	%		3.96	%		4.07	%

1.		Adjusted EBITDA is defined as net income before interest expense, provision for income taxes, depreciation, amortization, non-cash impairment costs, share-based compensation, other income, net and non-operating transactions.
2.		Average rental equipment represents the cost of rental equipment, excluding new equipment inventory and accessory equipment.
3.		Average monthly total yield is calculated by dividing the averages of monthly rental revenues by the cost of rental equipment for the period.
4.		Average utilization is calculated by dividing the average month end costs of rental equipment on rent by the average month end total costs of rental equipment.
5.		Average monthly rental rate is calculated by dividing the averages of monthly rental revenues by the cost of rental equipment on rent for the period.
6.		During the year ended December 31, 2024, the Company determined that transaction costs incurred by the Company attributed to the terminated Merger Agreement were significant. Due to this determination, the Company reclassified $12.4 million in transaction costs from Selling and administrative expenses for the three months ended June 30, 2024, and reported such expenses separately as non-operating expense under the Corporate segment.

MCGRATH RENTCORP
BUSINESS SEGMENT DATA (unaudited)
Six months ended June 30, 2025
(dollar amounts in thousands)	Mobile Modular			Portable Storage			TRS-RenTelco			Enviroplex		Consolidated
Revenues
Rental	$	160,404		$	33,014		$	52,680		$	—	$	246,098
Rental related services		61,647			8,025			1,727			—		71,399
Rental operations		222,051			41,039			54,407			—		317,497
Sales		62,974			2,956			15,692			27,079		108,701
Other		2,881			617			1,336			—		4,834
Total revenues		287,906			44,612			71,435			27,079		431,032

Costs and Expenses
Direct costs of rental operations:
Depreciation		21,294			2,070			19,567			—		42,931
Rental related services		40,190			8,237			1,363			—		49,790
Other		44,802			3,445			10,924			—		59,171
Total direct costs of rental operations		106,286			13,752			31,854			—		151,892
Costs of sales		42,926			1,879			8,343			18,842		71,990
Total costs of revenues		149,212			15,631			40,197			18,842		223,882

Gross Profit
Rental		94,308			27,499			22,189			—		143,996
Rental related services		21,457			(212	)		364			—		21,609
Rental operations		115,765			27,287			22,553			—		165,605
Sales		20,048			1,077			7,349			8,237		36,711
Other		2,881			617			1,336			—		4,834
Total gross profit		138,694			28,981			31,238			8,237		207,150
Selling and administrative expenses		70,765			15,101			14,758			3,788		104,412
Other income, net		—			—			—			—		—
Income from operations	$	67,929		$	13,880		$	16,480		$	4,449		102,738
Interest expense													15,954
Foreign currency exchange gain													(86	)
Provision for income taxes													22,689
Net income												$	64,181

Other Information
Adjusted EBITDA ¹	$	100,719		$	18,421		$	37,248		$	4,653	$	161,041
Average rental equipment ²	$	1,292,797		$	233,501		$	334,607
Average monthly total yield ³		2.07	%		2.36	%		2.62	%
Average utilization ⁴		74.2	%		60.6	%		63.0	%
Average monthly rental rate ⁵		2.79	%		3.89	%		4.17	%

1.		Adjusted EBITDA is defined as net income before interest expense, provision for income taxes, depreciation, amortization, non-cash impairment costs, share-based compensation, other income, net and non-operating transactions.
2.		Average rental equipment represents the cost of rental equipment, excluding new equipment inventory and accessory equipment.
3.		Average monthly total yield is calculated by dividing the averages of monthly rental revenues by the cost of rental equipment for the period.
4.		Average utilization is calculated by dividing the average month end costs of rental equipment on rent by the average month end total costs of rental equipment.
5.		Average monthly rental rate is calculated by dividing the averages of monthly rental revenues by the cost of rental equipment on rent for the period.

MCGRATH RENTCORP
BUSINESS SEGMENT DATA (unaudited)
Six months ended June 30, 2024
(dollar amounts in thousands)	Mobile Modular			Portable Storage			TRS-RenTelco			Enviroplex			Consolidated
Revenues
Rental	$	154,535		$	36,230		$	50,743		$	—		$	241,508
Rental related services		53,053			9,363			1,522			—			63,938
Rental operations		207,588			45,593			52,265			—			305,446
Sales		61,256			2,478			12,657			13,092			89,483
Other		3,287			711			1,511			—			5,509
Total revenues		272,131			48,782			66,433			13,092			400,438

Costs and Expenses
Direct costs of rental operations:
Depreciation		19,870			1,965			22,696			—			44,531
Rental related services		35,608			8,932			1,236			—			45,776
Other		43,938			2,995			9,997			—			56,930
Total direct costs of rental operations		99,416			13,892			33,929			—			147,237
Costs of sales		39,584			1,484			5,658			9,791			56,518
Total costs of revenues		139,000			15,377			39,587			9,791			203,755

Gross Profit
Rental		90,727			31,270			18,050			—			140,047
Rental related services		17,445			431			286			—			18,162
Rental operations		108,172			31,701			18,336			—			158,209
Sales		21,672			993			6,999			3,301			32,965
Other		3,287			711			1,511			—			5,509
Total gross profit		133,131			33,405			26,846			3,301			196,683
Selling and administrative expenses		66,854			15,275			13,823			3,515			99,467
Other income, net		(6,220	)		(1,319	)		(1,742	)		—			(9,281	)
Income (loss) from operations	$	72,499		$	19,450		$	14,765		$	(216	)		106,497
Interest expense														25,741
Foreign currency exchange loss														163
WillScot Mobile Mini transaction costs ⁶														21,721
Provision for income taxes														15,406
Net income													$	43,466

Other Information
Adjusted EBITDA ¹	$	96,745		$	22,538		$	36,481		$	(24	)	$	155,740
Average rental equipment ²	$	1,188,828		$	225,025		$	369,756
Average monthly total yield ³		2.17	%		2.68	%		2.27	%
Average utilization ⁴		78.6	%		67.8	%		56.4	%
Average monthly rental rate ⁵		2.76	%		3.96	%		4.05	%

1.		Adjusted EBITDA is defined as net income before interest expense, provision for income taxes, depreciation, amortization, non-cash impairment costs, share-based compensation, transaction costs and other income, net.
2.		Average rental equipment represents the cost of rental equipment, excluding new equipment inventory and accessory equipment.
3.		Average monthly total yield is calculated by dividing the averages of monthly rental revenues by the cost of rental equipment for the period.
4.		Average utilization is calculated by dividing the average month end costs of rental equipment on rent by the average month end total costs of rental equipment.
5.		Average monthly rental rate is calculated by dividing the averages of monthly rental revenues by the cost of rental equipment on rent for the period.
6.		During the year ended December 31, 2024, the Company determined that transaction costs incurred by the Company attributed to the terminated Merger Agreement were significant. Due to this determination, the Company reclassified $21.7 million in transaction costs from Selling and administrative expenses for the six months ended June 30, 2024, and reported such expenses separately as non-operating expense under the Corporate segment.

Reconciliation of Adjusted EBITDA to the most directly comparable GAAP measures

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

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

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

Reconciliation of Net Income to Adjusted EBITDA
(dollar amounts in thousands)	Three Months Ended June 30,						Six Months Ended June 30,						Twelve Months Ended June 30,
	2025			2024			2025			2024			2025			2024
Net income	$	35,973		$	20,618		$	64,182		$	43,466		$	252,448		$	115,848
Provision for income taxes		13,484			8,359			22,689			15,406			89,202			42,234
Interest expense		7,795			13,037			15,954			25,741			37,454			48,892
Depreciation and amortization		26,339			26,944			52,739			54,131			106,063			108,548
EBITDA		83,591			68,958			155,564			138,744			485,167			315,522
Share-based compensation		2,779			2,347			5,322			4,556			10,268			9,449
Transaction costs ³		155			12,367			155			21,721			41,593			23,306
Other income, net ⁴		—			—			—			(9,281	)		—			(12,899	)
Gain on merger termination from WillScot Mobile Mini ⁵		—			—			—			—			(180,000	)		—
Adjusted EBITDA ¹	$	86,525		$	83,672		$	161,041		$	155,740		$	357,028		$	335,378
Adjusted EBITDA margin ²		37	%		39	%		37	%		38	%		38	%		38	%

Reconciliation of Net Cash Provided by Operating Activities to Adjusted EBITDA

(dollar amounts in thousands)	Three Months Ended June 30,						Six Months Ended June 30,						Twelve Months Ended June 30,
	2025			2024			2025			2024			2025			2024
Net cash provided by operating activities	$	55,812		$	79,209		$	109,694		$	138,629		$	345,440		$	158,903
Change in certain assets and liabilities:
Accounts receivable, net		24,919			5,429			14,459			(9,989	)		16,422			25,438
Inventories, prepaid expenses and other assets		11,427			(519	)		3,263			6,971			2,193			15,005
Accounts payable and accrued liabilities		(20,522	)		(3,800	)		10,266			6,160			(137,663	)		2,942
Deferred income		(8,050	)		(11,928	)		(15,124	)		(23,196	)		9,664			(28,000	)
Amortization of debt issuance costs		(22	)		(2	)		(45	)		(4	)		(107	)