Alta Equipment Group (NYSE:ALTG) reported higher third-quarter adjusted earnings despite a slight decline in revenue, as improved equipment, service and rental margins helped offset lower sales. The company also revised its full-year outlook, citing the timing of material handling equipment deliveries.
Revenue fell 1.2% from a year earlier to $417.4 million, while adjusted EBITDA rose 7.7% to $44.9 million. The adjusted EBITDA margin expanded approximately 90 basis points to 10.8%, and operating expenses declined by about $3 million, Chief Financial Officer Tony Colucci said on the company’s earnings call.
Alta revised its 2026 adjusted EBITDA guidance to $165 million to $170 million and its free cash flow before rent-to-sell decisioning guidance to $95 million to $105 million. The call did not specify the prior guidance ranges.
Colucci said the main reason for the adjusted EBITDA revision was that some material handling deliveries previously expected in the second half of 2026 are now likely to occur in early 2027. Management characterized the shift as a timing issue rather than a weakening in customer demand.
Material handling orders outpace deliveries
Material handling revenue was $151.6 million in the third quarter, with adjusted EBITDA of $15.4 million. Colucci said lower new equipment deliveries constrained the segment’s results, even as order activity strengthened.
Chairman and CEO Ryan Greenawalt said industry bookings in Alta’s territories increased approximately 67% in the quarter and 27% for the year to date. He attributed the improvement in part to customers beginning to replace aging fleets after deferring capital spending.
Colucci said the delivery timing reflects the process of working through a sharp increase in orders, including production schedules, equipment preparation and customers’ preferred delivery dates. Some customers want to receive large fleet orders all at once, he said. Alta has not seen cancellations of notable significance.
After equipment reaches a dealer from Hyster-Yale, final preparation and delivery generally take 30 to 45 days, Colucci said. That means equipment delivered to Alta late in the fourth quarter would likely become first-quarter revenue.
Asked about the possibility of material handling revenue growth of 20% in 2027, Colucci said such an increase was “not out of the realm of possibility,” given the industry’s history and a likely low point in 2026. He emphasized earlier in the call that management’s comments about 2027 were not formal guidance.
Material handling gross margin rose 160 basis points to 35% in the quarter. Service and rental gross margins also improved, while segment operating expenses fell $1.6 million, Colucci said.
Construction grows as rental fleet shrinks
Construction equipment revenue increased 5% year over year, and adjusted EBITDA rose 11.2%. Greenawalt said construction equipment deliveries in Alta’s territories were up approximately 5% year to date, supported by infrastructure, municipal, energy and industrial investment.
Colucci said the construction dealer channel’s inventory levels have largely normalized after a period of excess supply. He also sees some additional opportunity for Alta to improve construction equipment margins as the market stabilizes, although he described the potential gains as incremental.
Across the company, new and used equipment gross margin increased 60 basis points to 15.6%, while service gross margin rose 250 basis points to 61.5%. Rental revenue gross margin increased 200 basis points, helped by higher utilization.
Alta has been reducing its rental fleet and focusing investment on assets with stronger demand. Greenawalt said the company intends to maintain that discipline rather than add fleet speculatively to gain market share.
The rental fleet ended the quarter at $509 million in gross book value, and Alta remains on track to bring it below $500 million by year-end, Colucci said. He said the company may subsequently make modest additions in selected markets, including material handling in Toronto and Chicago and construction in Florida.
Cash flow and debt reduction remain priorities
Net cash provided by operating activities for the first nine months was $58.8 million, compared with approximately $1 million of cash used a year earlier. Cash flow after investing activities was $53 million, an improvement of approximately $73 million.
Inventory declined to $448 million from $473 million at year-end, and net debt fell approximately $20 million during the quarter. Alta had approximately $250 million in liquidity at Sept. 30. Colucci said debt reduction and balance sheet strength remain near-term capital allocation priorities.
Looking toward 2027, Greenawalt said Alta expects to grow technician headcount, though hiring decisions will vary by branch. Colucci said the company’s 2026 product support focus has been on technician efficiency and profitability rather than revenue growth, with the aim of returning to headcount and sales growth in 2027 and beyond.
About Alta Equipment Group (NYSE:ALTG)
Alta Equipment Group Inc. is an equipment dealership and rental company that provides machinery, parts, service and support to customers in the construction, industrial, manufacturing, warehousing and related sectors. The company operates through construction and material-handling businesses, serving contractors, businesses and public-sector organizations. Its construction equipment offerings include earthmoving machinery, aerial work platforms, cranes, compact equipment and other jobsite products.
