Thank you, operator, and good morning, everyone. Today, we're reviewing our first quarter 2026 results with comments on operations and our financials, including our view of the industry and our strategic outlook.

The prepared remarks will be followed by Q&A. Let me remind you that today's call will include forward-looking statements.

These statements are based on the environment as we see it today and are subject to risks and uncertainties that could cause actual results to differ materially from our expectations and projections. These risks and uncertainties include, but are not limited to, the factors identified in the press release, our Form 10-Q, and in our most recent annual report on Form 10-K, as well as other filings with the SEC.

In addition, we'll be discussing non-GAAP information that we believe is useful in evaluating the company's operating performance. Reconciliations for these non-GAAP measures to the closest GAAP equivalent can be found in the conference call materials.

Finally, please mark your calendars to join our second quarter management meetings at the Bank of America Industrials Conference in New York on May 12th, the KeyBanc Industrials and Basic Materials Conference in Boston on May 27th, and the Wells Fargo Industrials Conference in Chicago on June 9th. This morning, I'm joined by Larry Silber, Chief Executive Officer; Aaron Birnbaum, President; and Mark Humphrey, Senior Vice President and Chief Financial Officer.

I'll now turn the call over to Larry.

Thank you, Leslie, and good morning, everyone. I'm pleased to report that with the completion of our branch optimization program, the integration of H&E Equipment Services, the largest acquisition in our industry, is now complete.

Integration was an enormous undertaking, and I could not be prouder of this team. The strength of our culture is what gives me confidence in what comes next.

For the third consecutive year, Herc Rentals has earned the Great Place to Work Certification based on independent employee survey results. What makes this recognition especially meaningful this year is the context.

Large acquisitions are disruptive by nature. We brought approximately 2,500 new employees into the Herc family: people facing new systems, new processes, and a new way of doing things.

Based on the survey's feedback, our new colleagues recognized our strong culture through change management support, peer mentoring, and the extensive training and tools they received throughout the integration. Now, they recognize the opportunity in front of them.

With integration behind us, our focus shifts fully and decisively to leveraging our new scale to drive growth and efficiencies through execution. We have a larger platform, a stronger team, and a broader set of capabilities than at any point in our history.

The work ahead is about unlocking the full potential of our platform: winning more business, serving customers better, and delivering stronger returns for our shareholders. Now turning to slide number 5, with a 30% larger branch network, we are optimizing fleet mix by market, driving network density, and capturing the operating efficiencies that come with scale.

Fleet efficiency, employee productivity, and margin improvement are the goals. Second, we are enhancing our fleet mix, and specialty solutions is a standout area of focus.

Double-digit specialty revenue growth in the quarter reflects targeted fleet investments, 25% more specialty locations, and strong demand from mega projects, cross-selling, and the continued structural shift from equipment ownership to rental. Third, we are advancing our industry-leading digital capabilities through ProControl by Herc Rentals.

Advanced technology features, from fleet utilization insights and equipment location tracking to our patented mobile access controls and remote operation, gives customers the tools to run safer, more efficient job sites. Our e-commerce platform continues to gain traction, delivering a seamless omnichannel experience with 24/7 self-service and personalized interactions.

E-commerce revenue reached an all-time record high in the first quarter, a clear signal that our customers value the flexibility to do business with us however and whenever it works best for them. As always, we lead through continuous improvement with our E3 operating systems, built on a foundation of standardized processes, superior customer experiences, and a relentless focus on execution across our expanded network.

Finally, as prudent stewards of capital, we invest responsibly. We took on incremental debt to acquire H&E, a deliberate decision to accelerate our scale and long-term earnings power.

We expect to return to the top of our targeted 2 to 3 times leverage ratio by year-end 2027. Our path to deleveraging is clear.

As we capture the full run rate of our synergy targets, EBITDA grows, free cash flow builds, and leverage comes down. Now, let me turn it over to Aaron to talk about our operational performance.

Aaron?

Thanks, Larry, and good morning, everyone. With the integration behind us and our foundation set, this is a moment our team has been working toward.

Investments we've made in people, fleet, systems, and culture are now fully in place. What you'll see from our operations team in 2026 is a relentless focus on putting all of it to work.

We are executing with a larger network, a stronger bench, and a sharper sense of where the opportunities are. The work ahead is straightforward: win business, serve customers exceptionally well, and drive the performance this platform is built to deliver.

In everything we do, every efficiency we drive, every customer we serve, every dollar of performance we deliver starts with one non-negotiable: the safety of our people and our customers. From the job site training we provide to the safe, well-maintained equipment we put in their hands, safety is how we show up every day.

Let me start there. On slide 7, our major internal safety program focuses on perfect days.

We strive for 100% perfect days throughout the organization. In the first quarter, on a branch-by-branch measurement, all of our operations achieved over 96% of days as perfect.

Also notable, our total recordable incident rate remains better than the industry's benchmark of 1.0, reflecting our high standards and commitment to the safety of our people and our customers. Our safety foundation is what makes everything else possible.

On slide 8, you can see that what we're building on that foundation starts with one of our most important assets: our fleet. At $9.4 billion in original equipment cost, fleet is both our largest investment and our primary revenue growth engine.

We entered 2026 with pro forma fleet down nearly 2% by design. The integration priority was alignment: the right equipment in the right markets with the right mix.

We achieved that. By the end of the first quarter, average OEC was down approximately 1% on a pro forma basis versus last year, consistent with our focus on utilization improvement.

While fleet expenditures were up 78% on a pro forma basis, this reflects a return to normal seasonal buying levels after deliberately reduced purchases in early 2025, when we were preparing to bring in the acquired H&E fleet in the second quarter. Our Q1 '26 investments of $183 million are directed toward growth opportunities and supporting our new specialty locations as they ramp up and begin contributing to revenue synergies.

Fleet disposals at OEC were 20% higher year-over-year, reflecting lifecycle rotation and ongoing mix adjustments. For the $281 million of disposals in the first quarter, realized proceeds were 49% of OEC, up from 45% in Q1 2025, reflecting a healthy used equipment market across almost every category as well as our focus selling into the higher-return wholesale and retail channels.

As the first quarter is our seasonally slowest demand period. Having strong fleet alignment right now before the seasonal ramp is critical.

Disciplined fleet management and our sales teams executing with increasing effectiveness across the combined network drove sequential monthly improvement in time and dollar utilization and employee productivity throughout the quarter. As utilization tightens into the peak season, we expect that discipline to translate directly into revenue growth and further improvement in fleet efficiency in the second half of the year.

Turning to slide 9, we'll gain better visibility into seasonal trends over the next month or so. Today, the bifurcated markets remain relatively consistent with what we have seen over the past year.

In the local market, conditions remain stable overall. Government, infrastructure, MRO, and institutional construction demand are offsetting the still-moderate commercial sector, consistent with what we expected coming into the year.

On the national account side, large-scale project funding remains strong. Mega project activity is centered around manufacturing, LNG, renewables, and the continued surge in data center development.

We are winning our targeted 10% to 15% share of these opportunities, with new projects coming online and current projects still in ramp-up phase. Mega project activity was notably strong in the first quarter, with project ramp-ups accelerating earlier than is typical for our seasonally slowest period, activity that was built into the full-year guidance we provided just two months ago.

In the first quarter, local accounts represented 47% of rental revenue compared with 53% for national accounts. As we have said, our long-term target is 60% local and 40% national, a mix that provides for both growth and resiliency.

The national weighting we are seeing today reflects the strength of our national accounts and mega project activity. We expect the local mix to improve as the seasonal ramp builds and, eventually, as local demand recovers.

Turning to slide 10, diversification is an important strategy for fostering sustainable growth and navigating economic cycles. As Herc has diversified into new end markets, geographies, and products and services over the last decade, we have reduced our reliance on any single industry or customer.

We have become more resilient to downturns and more adaptable to emerging opportunities, from mega project development and the continued surge in data centers to technology advancements that support customer productivity and the secular shift from equipment ownership to rental. With our expanded scale, we are better positioned than at any point in our history to capitalize on this breadth of opportunity and to find growth even as individual markets ebb and flow.

The opportunity across end markets isn't just broad; it's deep. Turning to slide 11, let's look at what the data tells us about the forward pipeline driving demand across our customer base.

Here, you can see that despite the uncertainty in the broader markets, whether around interest rates, trade policy, or general economic sentiment, the fundamental drivers of our business remain intact. Industrial spending and non-residential construction starts continue to show meaningful opportunity for growth, built on a foundation of mega project development and infrastructure investment.

Of course, there is some overlap across these four data sets. No matter how you look at it, for companies with the safety record, scale, product breadth, technology, and capabilities to serve customers at the local, regional, and national level, the opportunity for growth remains significant.

We believe Herc is well positioned to capture it. Turning to slide 12, this is where we are in our near-term journey.

I want to be clear: against our 2026 plan, we are exactly where we expected to be. The integration work is behind us.

What we have now is a 30% larger business, more fleet, more locations, more specialty capabilities, and a larger, maturing sales force. That's the foundation.

The first half of 2026 is about converting that foundation into performance: tightening utilization as we move into the seasonal peak and sharpening sales effectiveness across the combined network. We have seen that start to play out.

First, fleet efficiency: after working through the integration and fleet optimization process, we saw sequential improvement and approach supply and demand alignment through the quarter, something we have been building toward since last summer's acquisition. That's not a small thing.

While mega project demand provided a tailwind even in our seasonally slowest first quarter, we are still early in the ramp of our specialty locations and sales force maturation, which is why Q1 played out right in line with our plans. It tells us that as we move into the seasonally stronger second quarter, we have the right fleet in the right markets ready to work.

Continuing on that improvement plan in Q2 is what gives us confidence in the utilization trajectory in the back half. Second, our specialty locations: our branch optimization program added 25% more specialty locations opening in Q4 2025 and Q1 2026.

These locations are now staffed, fleeted, and gaining momentum. New locations take time to mature, and that maturation curve is playing out as we modeled.

By Q3 and Q4, those locations will more meaningfully contribute to revenue and margin growth. If we get the first half right, then the second half follows: revenue growth accelerates, our fixed cost base works in our favor, and margin improvement becomes increasingly visible.

That's the progression we have mapped out. First half builds the foundation, second half delivers the growth, and it's also the flywheel into 2027: higher revenue, expanding margins, and increasingly apparent deleveraging as synergy capture compounds.

That's the path, and we're on it. Now, Mark will walk you through the details.

Mark?

Thanks, Aaron, and good morning, everyone. I'm starting on slide 14 with a summary of our key financial metrics.

For the first quarter on a GAAP basis, equipment rental revenue was up approximately 33% year-over-year, driven by the acquisition of H&E. On a pro forma basis, rental revenue declined 3%, representing a meaningful sequential improvement from the fourth quarter.

To put that into context, the acquired business was experiencing revenue pressure prior to close, a trend we've been actively working to reverse through fleet optimization, sales force training, and network alignment. While mega project tailwinds and specialty execution benefited us in Q1, the inflection of the combined platform into revenue growth is a second half event, consistent with our plan.

Adjusted EBITDA increased 33% compared with last year's first quarter, benefiting from the higher equipment rental revenue as well as 31% more used equipment sales. Adjusted EBITDA on a pro forma basis was down approximately 5%.

The increase in used equipment sales, which have a lower margin than the rental business, impacted the adjusted EBITDA margin. Also affecting margin was the static demand in the local market and the impact from the lower-margin acquired business.

REBITDA, which excludes used equipment sales, was up 30% during the first quarter. REBITDA margin was 40%, impacted year-over-year by the lower-margin acquired business.

The path to margin improvement is clear: rental revenue synergy contributions in the second half, a shift toward a higher-margin product mix, full realization of cost synergies, and improved variable cost management at scale. We expect margins to continue to improve from here, especially as those drivers take hold in Q3 and Q4.

Our net loss in the first quarter included $5 million of transaction costs, primarily related to the H&E acquisition. On an adjusted basis, net income was $7 million.

On slide 15, you can see we generated $94 million of free cash flow for the first quarter. Our current pro forma leverage ratio is 3.96 times, which is in line with our expectations as H&E's stronger 2025 quarters roll out of the trailing 12-month calculation.

The ratio will remain relatively consistent through the year before improving meaningfully at year-end, when revenue synergies drive EBITDA growth in Q3 and Q4, and capital expenditures, which ramp in Q2 and Q3 to support the seasonal peak and new specialty locations, begin to provide greater EBITDA contribution. Leverage improvement is a year-end story, and we're managing to it deliberately.

We still expect to return to the top of our target range of 2 to 3 times by year-end 2027 as revenue and cost synergies drive higher EBITDA flow-through. Turning to slide 16, we are affirming our full-year 2026 guidance across all metrics.

Q1 came in as expected. Rental revenue growth of 33% on an actual basis reflects the contribution of the combined platform.

Adjusted EBITDA margin held at 39.3%, consistent with last year despite the integration work that was still underway. The operational proof points Aaron walked you through — sequential monthly improvement in fleet efficiency and dollar utilization, specialty location maturation, sales force momentum — are the leading indicators that give us confidence in the back-half acceleration embedded in our guide.

On synergies, cost synergies are running ahead of expectations, and we remain on track to secure an incremental $90 million this year to fully realize the $125 million target by year-end. Revenue synergies are back-half weighted, and the $100 million to $120 million incremental target for 2026 is intact.

The guide assumes the business performs as Aaron described: first half sets the foundation, second half delivers the growth. Q1 is consistent with that plan.

Now, let's open it up for questions. Operator?

Hi, thanks. Good morning, everybody.

Your slide 11 puts together a bunch of the different kind of ways to look at the end market, and there's others that are conflicting, let's say. If you look at the top right, that mega projects chart is a lot of money kind of flowing down the pike.

What I'd like to ask is whether that step-up in '25, whether you saw that in customer conversations, etc., whether you see it today, because an extra $300 billion of starts or whatever in a $900 billion market is a lot. I want a ground truth, the data that are sometimes ambiguous.

Rob, it's Aaron. I'll take that one.

It's really both. When you build relationships with large general contractors, our national accounts, they guide you to what's coming down the pipeline.

Often, you bid on a project and they let you know that you've been awarded it, and it's going to start. Or they've negotiated a contract, and they want to bring you in as their trusted supplier.

That's one mechanism. There's a lot of data around it.

Dodge provides a lot of preview into what's coming. Now, the pipeline of planned projects is pretty deep.

I think we've mentioned it's in the trillions of dollars. It's really when they change from planning to starts is when that data starts hitting this slide that we showed you there.

If you just look at 2026, April, May, June, July, August, September, you can see a lot more starts happening all across the board. Infrastructure, wastewater or bridges, roads, but also these big mega projects that you see coming out.

A lot of renewables, you see, obviously, a lot of data center activity, and other projects. You get it from both ways.

You can use both data sets to kind of guide your fleet planning and where your year is going to go.

To you, that feels like better times ahead in the back half as these things ramp? That timeline feels right?

Yeah.

As you can see, there's more starts happening. Now, they don't always start when they say they're going to start, right?

Sometimes, you've heard us talk that sometimes they start 6 months late. It is building.

Once these projects do start, they usually last for two or three years, as you know. They're already in our plan as we go through Q1 into Q2, and then the balance of the year.

We like where it is right now, that it's exactly the way we kind of planned out our year.

Thank you.

Thank you. Good morning, thanks for taking my question.

Where I would like to start is with maybe a bit of a spotlight on your dollar utilization. At least to me, it's looking like this metric came in a little bit better than what we normally see sequentially from a seasonal standpoint.

I'm wondering if you can comment on that. Is it an indication of sort of activity itself and better fleet utilization, or just the fact that maybe in Q4 we had a relatively easy comparison?

Related to all of this, how would you advise us to think about the remainder of the year? How do we think about the seasonal ramp into Q2 and Q3 from here on out?

Great question. I think, quite honestly, Mig, I would take the revenue conversation, the dollar U conversation, and the margin conversation all in the same direction.

As Aaron mentioned, right, we saw fleet efficiency gains in the first quarter, which then sort of built through the dollar utilization. It improved sequentially as we walked our way through the quarter.

We spent the last 10 months optimizing our fleet and optimizing branches, putting new specialty locations in. I would tell you that first quarter sort of plays the way that we thought it was going to play.

As you roll that forward, there's an inflection point inside of Q2. Once we hit that inflection point inside of Q2, then I think you'll see dollar U, revenue, and margin expansion as we work our way through the back half of the year.

Maybe my follow-up on this, and I appreciate the sort of directional commentary, but if I'm thinking about normal seasonality here,

right,

is there reason to think, based on everything that you're going on operationally, that the improvement in dollar utilization can actually exceed that normal seasonality? Maybe you can put a finer point on how you think about the time utilization component of it, right?

Efficiency in your asset base relative to what's happening with maybe pricing or rates more broadly in the market.

I think that sort of normal isn't really this year. The reality is that we had a hole to climb out of, entering this year, sort of down 9 as we exited 4Q.

There's a big efficiency play that we needed to see collectively as a business before investing growth CapEx into the business in the May, June, July timeframe. I would tell you it's playing out the way that we thought it would.

Now granted, it's early. May and June will be a much larger tell to sort of how the rest and the balance of the year plays out.

I think we're not necessarily looking at this as normal or abnormal. We just know where we have to go to get the fleet back to a healthy and efficient level.

Great. Thank you.

Hi. Good morning, everyone.

Larry, good morning. I'm wondering if we could just talk about overall pricing that you're seeing in the market.

Seems we've had oversupply of [aerials in particular?] .

Pricing has been pretty tough. Can we just talk about, are we optimistic that pricing can outpace inflation this year?

As positively surprised by the realization in used values for you folks this quarter, it sounds like supply/demand is improving. Can we just unpack that, please?

I'll unpack it to the level that I can. We don't comment specifically on price.

I would say that we are encouraged by the fundamentals that we're seeing in the industry. The fleet-in and fleet-on dynamics are good, particularly as we sort of exit Q1.

I think that the market is being both rational and constructive. We look forward to taking advantage of such marketplace.

Super. I appreciate it.

Then just to shift gears a little bit here, in terms of the performance of legacy H&E branches versus Herc, obviously, the legacy Herc pricing and time U, based on historical stats, has been significantly higher. Has that gap closed at all?

Where are we in the process of driving the H&E branch performance towards legacy Herc performance today versus 12 months ago versus where we see it 12 to 18 months out?

I think thankfully, Jerry, I can't really answer that question for you. That was part of this integration, was to integrate this business in such that there is no longer an H&E or Herc, right?

I think if I could still answer that question, then I would say we probably haven't done our job. I think collectively, Q1 sort of played out the way that we planned Q1 to play out.

That's probably about as deep as I can go in terms of insights between H&E and Herc.

Super. Lastly, I know you said in your prepared remarks that the quarter dollar U was in line with your expectations.

It was better than I think a lot of us had modeled. When we saw the industry data, it looked like pricing accelerated in March, and it looks like time U inflected as well.

I know you don't want to provide a ton of color, but can you just comment on demand cadence over the course of the quarter and any other color you're willing to share on that point?

I think, from our vantage point, right, we are anticipating, Jerry, an inflection point sometime inside of Q2. Then I think from that point forward, you should see growth/improvement depending upon which line item you're looking at: dollar utilization improvement, revenue growth, and margin expansion as you sort of inflect out of Q2 and into the back half of the year.

Thank you.

Welcome.

Great, thank you. You had mentioned that pro forma fleet is down a little bit, and by design.

Would love to hear you unpack that a little bit and then just how you're thinking about pro forma fleet growth for the full year and maybe bifurcating between GenRent and specialty?

We walked into the year, as Aaron said, almost 2 points down fleet on a pro forma basis. I think as you exit Q1, you're still down a point, give or take.

That again was part of the plan. I think as you start then taking sort of the guided CapEx from a gross perspective and the guided sort of dispositions, you can sort of play that through.

I would tell you that the expectation is we'll probably load 65% of that gross CapEx number into the business in between the back half of Q2 and Q3. That should give you sort of the meaningful data points that you need to model.

I would add to what Mark said that as CapEx goes through the year, we'll still be over-indexed to our specialty fleet to feed our branch optimization, our shift to grow the specialty side, get it back closer to what it was pre-acquisition.

Helpful. Thank you.

I know you've expanded the specialty locations quite a bit and working on cross-selling, which, understandably, the cross-sells expected to be a bit back-half weighted. It'd just be helpful to hear about what the learning curve has been as you roll out specialty and more SKUs across the H&E network and just the visibility you feel like you have to actually hitting the revenue synergy targets as you get into the second half.

I would say that our revenue synergy for 2026, we're on the plan where we need to be as we exited Q1. As we look towards the rest of the year, where we expected to be for all of our revenue synergies as it relates to cross-selling.

Cross-selling with the specialty business is really a two-front exercise. You got a bigger sales force, you got to make them comfortable with asking those types of questions with their customers.

They don't have to be experts at the specialty products. We have experts on the sales side that support them, and that's where the cross-selling goes hand-in-hand.

When you have a large customer base and we did a large acquisition and those customers weren't used to specialty products to the extent that Herc Rentals had, so that's where the cross-selling goes on. Those tens of thousands of customers, introducing specialty solutions to them with the sales force that we onboarded from the H&E acquisition.

It's really two parts, but a lot of relationship building internally, and we've been doing it for 9 months and we like where we are right now and we feel real comfortable about what we're going to get done in this arena Q2, 3, and 4.

Great. Thank you.

Thank you.

Thanks, Kyle.

Hey, good morning, guys. Mark, maybe sorry if I missed this, but just going back to the cost synergies, I think you said that it was running ahead of schedule.

Can you just maybe help us quantify how much you were able to capture this quarter and just help us think about the revenue synergy capture progress for the rest of the year?

The intent of that comment was that the $125 million or the incremental $90 million will lay into 2026, which was ahead of the originally scheduled sort of synergy lay that was supposed to come in over a couple of years. That was the intent there, and I appreciate you asking that question.

It's relatively ratable. I would say it's slightly, slightly back-half loaded, but it's coming in reasonably ratably over the four quarters, Ken.

Understood. That's helpful.

Then for the follow-up, I think we've been hearing some rumblings on improving oil and gas markets here in the States. I know H&E used to play a much larger role in those end markets.

Curious if you could just maybe help us understand what the exposure to oil and gas is today with the H&E fleet and how you think about that opportunity and whether you're seeing that kind of pop up as potential starts opportunities in the next, call it 12 to 24 months?

A few points on that, Ken. First, our oil and gas mix of our business is less than 10%, all right, before the acquisition and after.

When you got $90-barrel oil, you're going to have some surge in the upstream and some surge in the downstream. The downstream guys actually produce and make more margin.

Since they had a big footprint along the Gulf, they had a lot of relationships with contractors that were industrial contractors. They might have worked in all facets of the industrial complex, not just oil and gas, but a lot of them in the chemical complex.

They didn't really have on-site downstream contracts. They weren't long-term contracts that we picked up with the acquisition.

Part of our business is still below 10%. However, we made relationships with a lot of healthy H&E contractors that work in that space, as I mentioned.

With $90 oil, there's probably going to be increased activity in the Permian Basin, in Texas, and down the ship channel. We're well-positioned for that, but our position in oil and gas didn't increase because of the acquisition.

We like to keep everything diversified, we like where we're at.

Got it. Thanks, guys.

Thank you.

Hi, good morning. Thank you so much, and congrats on the wonderful results.

First question on fuel costs that have been rising nationwide. Could you just remind us how you manage that risk in terms of your own costs and how you pass it on to customers, and whether there's any lag?

Also, was the hedging different for legacy Herc versus H&E? Any color would be helpful.

The price of oil, rising nearly 100 bucks, that's something that the business has to really focus on. We take the input of the price of fuel of three different ways.

One, into our internal vehicles, service vehicles that we use to conduct our business. Second way is refueling of rental equipment.

Then third way is the logistics of our delivery apparatus to deliver equipment and pick up equipment all day long. The first way is just our own assigned vehicles.

There's not much we can do except buy better, right? Buy the gasoline at a favorable price point.

The second piece is we do charge a fee to our customers if we have to refill the equipment when they rent it. We give them the option, 'Hey, bring it back full, no charge.

Bring it back less than full, there is a charge.' We have a fee for that.

Then the logistics piece is the more complicated one, because you have a lot of transactions happening every day across the entire network. We recover that by the delivery fee we charge for picking up and delivering, and also there's a surcharge that's indexed that allows us to move with the price of oil per barrel as it moves through all cycles and all times and events macro, geopolitically.

Understood. That's very helpful.

A similar question regarding freight rates, which have also been rising. Again, could you remind us if that is a risk you hedge, if you have long-term contracts with third-party haulers or more real-time rates that you pay?

We have a robust long-haul process when we have to broker third-party freight. We have a robust process there.

We built out over the last three years, and we know that we get a favorable price point compared to the market any day of the week. Whether the price of oil is at $60 or $100 a barrel, $100 per barrel, we're getting a favorable price point.

As the price per barrel goes up, you just can't avoid those costs. You try to pass on as much as you possibly can, and try to anticipate how long it'll last for.

Understood. Thank you.

Thank you.

Morning, everyone.

Morning.

Morning, Steven.

From a high level, I was wondering if you could parse the specialty performance a bit. Clearly, it was strong.

Maybe if you could talk about specialty excluding mega projects and if it's outpacing the local markets, and maybe specialty on a same-store basis when you exclude the new branches, just different ways of the strength of specialty in the quarter and as you look forward.

Steven. We don't break it out in that kind of detail, nor would we.

Because then you get into sort of segmentation and we don't do that. Generally, the specialty business has been performing well.

We saw double-digit growth in the quarter. We expect to continue to see that as it services all facets of our business: the mega project business, our national accounts, and big industrial contracts, as well as the local market activity where we're penetrating on a greater basis as a result of our increased location count into that.

Specialty will continue to grow. We're excited about it, but we can't and won't break out individual areas.

Okay. Understood.

That's helpful. Then on disposals going through retail and wholesale, clearly a good story there.

Can you talk about maybe on an innings basis, or however it makes sense, where you expect to be in '26 versus the prior year and where do you hit maturity on that this year, or is that something beyond?

Maturity related to what, Steven? Just in terms of where the fleet sits as we exit the year?

More the fleet disposals that go through the higher-margin channels.

Oh, I got you. This has been a couple-year journey, right?

We've been trying to flex these retail, wholesale muscles. Q1 was a really good example of that.

It was approaching sort of 70% into the retail/wholesale channel. That's the sweet spot for us.

That's where we'd like to be. I think Q1, Q4 will be your heavy disposal quarters.

Q2 and Q3 will be a little more moderated. I would anticipate that that's in our control, and we'll probably sort of remain in or around there as we sort of walk through the year.

All righty. Thank you.

Thank you.

Good morning. Thank you.

Just wanted to ask you guys about the sort of different sort of flow-through dynamics in the second half associated with things like the ramp-up in mega projects, which might potentially, I guess, hold margins back a bit, and the specialty growth, because those two in combination seem to be contributing a larger proportion of your anticipated sort of demand upside in the back half. Can you sort of maybe help me think about how you're thinking about those factors playing through on margin overall and flow-through, and underlying that, what's happening?

Thank you.

Sure, Neil. I think, as I said earlier, right, we are anticipating margin expansion inside of Q3 and Q4.

If you sort of look back to where margin was last year, Q3 and Q4, it was in this 45%, 46% sort of range from a rental EBITDA perspective. Therefore, if I'm anticipating margin expansion, then that incremental margin will certainly be greater than last year's 45% or 46%.

Can't get too terribly pointed there, but we are anticipating margin expansion as sort of all of these initiatives come together and fuel revenue growth in the back half.

That's great. Thanks a lot.

Thank you for joining us on the call today. We look forward to updating you on our progress in the quarters to come.

Of course, if you have any questions, please don't hesitate to reach out to us. Have a great day.