Executive Summary

Q2 delivered sequential recovery with revenue $481.2M (+13.8% q/q) but modest y/y decline; GAAP diluted EPS was $(0.21). Revenue beat S&P Global consensus by ~$2.6M (~0.5%); S&P “Primary EPS” beat by ~$0.13 (less negative than expected). Management emphasized seasonal construction strength, service margin gains, and SG&A discipline . S&P estimates marked with “*” below.
Guidance: FY25 Adjusted EBITDA range trimmed at the top to $171.5–$181.5M (from $171.5–$186.5M), citing tariff pressure at Ecoverse (Master Distribution) and lingering softness in Material Handling product support/rental in Midwest/Canada .
Mix/operations: Service gross profit percentage improved to 59.8% (+40 bps y/y); SG&A down $12.2M y/y; Adjusted EBITDA rose to $48.5M (+$14.9M q/q; slightly below prior year’s $50.3M) .
Capital allocation: Repurchased 1,145,604 shares for $6.5M at $5.64 average in Q2 under the $30M program; common dividend suspended after May payout to prioritize buybacks; preferred dividends maintained .
Catalysts/investor focus: Seasonal construction demand, “One Big Beautiful Bill” year-end tax incentives, tariff path/stability, service margin momentum, and buyback pace; tariff pressure recovery at Ecoverse and utilization gains in rental fleet are key watch items .

What Went Well and What Went Wrong

What Went Well
- Service and cost execution: Service gross profit percentage rose to 59.8% (+40 bps y/y); SG&A reduced by $12.2M y/y, supporting profitability and leverage .
- Construction strength: Construction Equipment revenue reached $300.7M (+$5.8M y/y) on strong heavy earthmoving demand; new and used equipment sales drove most of the increase (+$21.5M y/y) .
- Capital returns: Repurchased ~1.15M shares ($6.5M) at $5.64, executing opportunistically under the $30M authorization . “We remained committed to executing on our $30 million buyback program when we observe a disparity between the Company’s stock price and our view on the intrinsic value of the business.” — CEO .
What Went Wrong
- Material Handling softness: Revenue declined to $160.7M from $175.6M on tariff-related hesitancy and regional weakness in the Midwest/Canada; product support and rental were notably softer y/y .
- Tariffs pressure Ecoverse: As a direct importer, Ecoverse (Master Distribution) saw margin pressure from tariffs on European imports; management is pursuing pricing and OEM risk-sharing mitigations .
- Rental headwinds/utilization: Rental revenue fell y/y (13.8%); fleet rightsizing continues, with physical utilization still in the low 60s and a target in the high 60s (room to improve) .

Financial Results

Core P&L and KPIs (chronological order, oldest → newest)

Metric	Q4 2024	Q1 2025	Q2 2025
Revenue ($M)	$498.1*	$423.0	$481.2
GAAP Diluted EPS ($)	$(0.46)*	$(0.65)	$(0.21)
S&P Primary EPS actual ($)	$(0.46)*	$(0.4975)*	$(0.0727)*
Adjusted pre‑tax EPS ($)	—	$(0.48)	$(0.11)
Adjusted EBITDA ($M)	—	$33.6	$48.5
Service Gross Profit %	—	60.1%	59.8%

Beat/Miss vs S&P Global consensus (EPS uses S&P “Primary EPS”)

Metric	Q4 2024 Consensus*	Q4 2024 Actual	Beat/Miss	Q1 2025 Consensus*	Q1 2025 Actual	Beat/Miss	Q2 2025 Consensus*	Q2 2025 Actual	Beat/Miss
Revenue ($M)	485.5*	498.1*	Beat	436.1*	423.0	Miss	478.6*	481.2	Beat
Primary EPS ($)	(0.327)*	(0.46)*	Miss	(0.6225)*	(0.4975)*	Beat	(0.255)*	(0.0727)*	Beat

Segment and mix details (Q2 2025)

Segment/Mix	Q2 2025	YoY Commentary
Construction Equipment revenue ($M)	$300.7	+$5.8M y/y; heavy earthmoving strength and share gains
Material Handling revenue ($M)	$160.7	Down from $175.6M y/y on Midwest/Canada softness and tariff hesitancy
Master Distribution revenue ($M)	$20.9	+25% y/y; dealer engagement rising, but tariffs pressuring margins
New & used equipment sales ($M)	$265.6	+5.6% y/y; drove Construction/Master y/y uplift
Rental revenues ($M)	$46.3	(13.8%) y/y; rightsizing rent-to-rent fleet continues

Additional KPIs and balance sheet

KPI	Q2 2025	Notes
SG&A ($M)	$102.3	Down $12.2M y/y; fixed-cost discipline maintained
Gross Profit ($M)	$122.3	Down y/y amid mix/rental headwinds
Rental fleet original equipment cost	—	Reduced nearly $50M y/y to improve utilization/ROIC
Liquidity (cash + revolver availability)	—	~ $280M at 6/30 per CFO
Share repurchases	1,145,604 shares; $6.5M at $5.64 avg	Executed under $30M authorization

Note: “*” denotes values retrieved from S&P Global.

Guidance Changes

Metric	Period	Previous Guidance	Current Guidance	Change
Adjusted EBITDA ($M)	FY 2025	$171.5–$186.5	$171.5–$181.5	Lowered top end (tariff impact at Ecoverse; Midwest/Canada MH softness)
Free Cash Flow before Rent‑to‑Sell Decisioning ($M)	FY 2025	—	$105–$115 (new metric)	Introduced
Common dividend	Ongoing	$0.057 per share quarterly; last paid 5/30/25	Suspended indefinitely after May payment	Lowered
Preferred dividend	Ongoing	—	$0.625 per depository share declared 7/2/25	Maintained
Share repurchase authorization	Ongoing	$20M	Increased to $30M; $10M 10b5-1 plan	Raised/activated

Earnings Call Themes & Trends

Topic	Previous Mentions (Q-2 and Q-1)	Current Period (Q2 2025)	Trend
Tariffs/trade policy	Q1: OEM surcharges 0–10% manageable; main concern is manufacturing sector and Canadian/Midwest exposure	Ecoverse margins pressured by EU tariffs; mitigation via pricing and OEM risk sharing; broader uncertainty persisted	Pressure elevated; mitigation in progress
Infrastructure/construction demand	Q1: Stable; Florida resilient; infrastructure projects underpin demand	Construction up y/y; heavy earthmoving strength; share gains; backlog healthy	Stable to positive
Material Handling bookings	Q1: Solid bookings; pipeline supportive for 2H	July bookings strong; fleets due for replenishment are renewing; hesitancy pockets persist	Stabilizing bookings; mixed macro
Rental fleet/utilization	Q1: Fleet optimization ongoing; rent-to-sell divestiture in IL	Physical utilization low 60s; target high 60s; rates generally stable	Gradual improvement expected
Cost discipline/service efficiency	Q1: Service GP +230 bps; SG&A -$7.9M y/y	Service GP +40 bps; SG&A -$12.2M y/y; focus on technician efficiency	Sustained execution
Capital allocation/buyback	Q1: Dividend suspended; buyback raised to $30M; 10b5-1 plan	1.15M shares repurchased in Q2; $17.7M capacity remaining in program	Ongoing repurchases
Tax incentives (“One Big Beautiful Bill”)	—	Year-end bonus depreciation/§179 could boost Q4 demand; likely incremental to top end of guide	Potential late-year tailwind

Management Commentary

“Our business… produced a notable sequential increase… Construction Equipment segment’s exposure to federal and state DOT infrastructure projects and the aggregate and mining industries continues to help provide our business with reliable demand… In our Material Handling business… market hesitancy related to tariffs and regional softness in the Midwest and Canada contributed to year-over-year declines… Ecoverse… experienced margin pressure… due to tariffs imposed on European imports.” — CEO .
“We reduced the original equipment cost of our rental fleet nearly $50 million from a year ago.” — CEO .
“We repurchased 1,145,604 shares… average price $5.64… totaling $6.5 million… We remained committed to executing on our $30 million buyback program…” — CEO .
“We now expect to report $171.5–$181.5 million of adjusted EBITDA for 2025… trimming of the top end… related to tariffs on our ECOVERSE business and… drag in… product support and rental… in the Midwest and in Canada.” — CFO .
“Free cash flow before rent‑to‑sell decisioning… expected… between $105–$115 million for fiscal year 2025.” — CFO .

Q&A Highlights

Tax incentives timing/segment impact: Benefits typically Q4-weighted; slightly more impactful to Construction; upside would help toward the top end of the range .
Material Handling hesitancy vs bookings: Bookings can be volatile; fleets up for renewal are being replenished; regional weakness tied to auto/manufacturing exposure persists .
SG&A outlook: Fixed cost base has “found a bottom” for the year; variable selling costs could rise with higher sales (commissions) .
Margins/competitive environment: Heavy equipment margins stabilizing; compact equipment margins more challenged given private non-res softness; rental rates “stable” .
Utilization: Physical utilization low 60s with a target in high 60s after rightsizing the fleet .

Estimates Context

Q2 2025 vs S&P Global consensus: Revenue $481.2M vs $478.6M* (beat); S&P “Primary EPS” actual $(0.0727)* vs $(0.255)* consensus (beat). Company-reported GAAP diluted EPS was $(0.21) .
Prior two quarters:
- Q1 2025: Revenue $423.0M vs $436.1M* (miss); S&P Primary EPS $(0.4975)* vs $(0.6225)* (beat) .
- Q4 2024: Revenue $498.1M* vs $485.5M* (beat); S&P Primary EPS $(0.46)* vs $(0.327)* (miss).
  Note: “*” denotes values retrieved from S&P Global.

Key Takeaways for Investors

Mix and execution offset macro: Service margin and SG&A discipline continue to protect earnings power even with MH softness and rental headwinds .
Construction remains the anchor: Infrastructure/DOT and aggregates/mining demand support equipment sales; backlog healthy heading into 2H .
Tariff path is pivotal: Stabilization or resolution of EU/US tariffs is key for Master Distribution margins; current mitigations underway but risk remains .
Year-end catalysts: Bonus depreciation/§179 could stimulate Q4 demand, potentially pushing results toward the top end of guidance .
Capital allocation supportive: Dividend suspended; buybacks active and opportunistic; ~$17.7M remaining capacity referenced intra-quarter .
Watch utilization and compact margins: Utilization recovery (low 60s → high 60s) and compact equipment margin stabilization are medium-term earnings levers .
Guidance credible but conservative on top end: Trim reflects Ecoverse tariffs and MH regional softness; upside could come from tax incentives and continued service/SG&A execution .

Note on non-GAAP: Adjusted EBITDA excludes items including gain on divestiture ($4.3M), preferred dividends, share-based compensation, and showroom-ready floorplan interest; see press release reconciliations for details .

Other relevant Q2 press releases:

Preferred Stock dividend declared ($0.625 per depositary share) on July 2, 2025 .
DARPA EMBER Phase 3 collaboration by Alta Resource Technologies (critical minerals/rare earth separation) announced Aug 6, 2025 (strategic/technology relevance; no immediate financial disclosure) .

Values marked with “*” were retrieved from S&P Global.

ALTA EQUIPMENT GROUP INC. (ALTG)·Q2 2025 Earnings Summary