COMMON STOCK AND EQUITY PLANS |
6 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Jun. 30, 2026 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Share-Based Payment Arrangement [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
| COMMON STOCK AND EQUITY PLANS | COMMON STOCK AND EQUITY PLANS Initial Public Offering Concurrent with the IPO, all outstanding shares of the Company’s convertible preferred stock were automatically converted into 142 million shares of Class A common stock. As of June 30, 2026, the Company had 3,500 million authorized shares of Class A common stock and approximately 215 million shares of Class A common stock issued and outstanding, along with 200 million authorized shares of Class B common stock and approximately 38 million shares of Class B common stock issued and outstanding. Employee Stock Purchase Plan In connection with the IPO, the Company adopted the EquipmentShare.com 2025 Employee Stock Purchase Plan (the “ESPP”). The maximum number of shares initially available for issuance under the ESPP is 2,316,263 shares of common stock and will be increased on the first day of each fiscal year for a period of up to 10 years following the effective date of the ESPP in an amount equal to the least of (i) 12,000,000 shares; (ii) 1% of the total number of shares of the Company’s Class A and Class B common stock outstanding as of the last completed fiscal year; and (iii) such number of shares as determined by the Company’s Board of Directors (the “Board”) in its discretion. The number of shares available at any time under the ESPP is subject to adjustment in the event of a dividend or other distribution (other than an ordinary dividend or distribution), recapitalization, stock split, reverse stock split, reorganization, merger, consolidation, split-up, spin-off, combination, repurchase or exchange of shares or other securities of the Company, or other change in the Company’s structure affecting the shares occurs. The number of shares which a participant may purchase in an offering under the ESPP may be reduced if the offering is over-subscribed. The Company did not grant any shares of common stock pursuant to the ESPP during the six months ended June 30, 2026. 2025 Omnibus Incentive Plan In connection with the IPO, the Company also adopted the EquipmentShare.com Inc 2025 Omnibus Incentive Plan (the “2025 Plan”). Awards under the 2025 Plan include stock options, stock appreciation rights, RSUs, PSUs, other cash-based awards and other stock-based awards (collectively, the “Awards”). The total number of shares of the Company’s common stock initially authorized for issuance under the 2025 Plan is 40,370,162 shares of common stock and this amount will be increased on January 1 of each year following the effective date of the 2025 Plan for a period of 10 years in an amount equal to the lesser of (i) 1% of outstanding shares on the last day of the immediately preceding fiscal year and (ii) such number of shares as determined by the Compensation Committee of the Board in its sole discretion. The Awards granted pursuant to the 2025 Plan will be issued with respect to shares of Class A common stock of the Company, other than the IPO Founders Awards. RSUs During the three months ended June 30, 2026, the Company granted 708,450 RSUs under the 2025 Plan with a grant date price per unit of $20.01 (fair value of $14 million) to certain service providers who are not Section 16 officers. The Company records stock-based compensation expense on a straight-line recognition method over the requisite service period for the entire award. Each RSU represents the right to receive one share of Class A common stock at a future date. The RSUs vest equally over four years, the first 25% of the RSU award vests after one year from grant date, and the remaining 75% of the RSU award vests on a quarterly basis thereafter. These RSUs will be settled within 60 days of vesting. From these RSU awards, 4,830 RSUs vested, and 1,000 RSUs were forfeited. Stock-based compensation expense was $0.5 million for the RSUs during both the three and six months ended June 30, 2026. As of June 30, 2026, the Company had a total of 702,620 unvested RSUs outstanding and the total pretax compensation cost not yet recognized was $14 million. The weighted average period over which this compensation cost is expected to be recognized is 3.6 years. IPO Founders Awards In connection with the IPO, the Board approved grants of PSUs to each of the Founders under the 2025 Plan that could result in the issuance, to each of the Founders, of as few as zero shares of the Company’s Class B common stock and up to 18,321,644 shares of Class B common stock. Each of the IPO Founders Awards was granted on January 26, 2026 (the “Grant Date”) and is comprised of five tranches of PSUs as set forth in the table below, the vesting of which are subject to service conditions and market conditions, including the Company achieving specified stock price hurdles, as set forth in the table below and subject to anti-dilution adjustments, during the performance period beginning on the first day following the expiration of the lock-up period set forth in the Company’s agreement with its underwriters in connection with the IPO (or, with respect to tranche 1, beginning on January 27, 2026) and ending on the earliest to occur of (i) the tenth anniversary of the Grant Date, (ii) a change in control (as defined in the 2025 Plan) or (iii) the date on which the shares of the Company’s Class A common stock are no longer traded on a securities exchange or market. Achievement of the applicable stock price hurdle for any PSU tranche will occur on the date that the average closing price per share of the Company’s Class A common stock during any 60 consecutive trading days during the performance period equaled or exceeded the applicable stock price hurdle for such tranche, except that achievement of the stock price hurdle for tranche 1 occurred on January 27, 2026, the date that the closing price per share of the Company’s Class A common stock during the performance period equaled or exceeded the stock price hurdle for such tranche. Any PSUs for which the applicable stock price hurdle is not achieved prior to the end of the performance period will be forfeited in their entirety.
The fair value of the IPO Founders Awards was estimated as of the Grant Date using Monte Carlo simulations with the following assumptions:
As of June 30, 2026, the market condition for Tranche 1 had been achieved. Accordingly, approximately 17.70% of the IPO Founder Awards (6,485,862 PSUs in the aggregate) had satisfied the applicable market condition and remain subject to the related service-based vesting requirement. The remaining 82.30% of the IPO Founder Awards continue to be subject to achievement of the applicable market conditions and service-based vesting requirements. The Company historically has not paid dividends on common stock and has no plans to issue dividends in the foreseeable future. The expected volatility assumption used to estimate the Grant Date fair value of each tranche of the award was based on the average historical volatility of comparable entities with publicly traded shares. The risk- free rate for the requisite service period for each tranche was based on the U.S. Treasury yield curve as of the Grant Date. The Grant Date fair value of the IPO Founders Awards was $624 million. Stock-based compensation expense of $24 million and $41 million, was recorded for the IPO Founders Awards during the three and six months ended June 30, 2026, respectively, and is included in selling, general and administrative expenses in the condensed consolidated statements of operations. As of June 30, 2026, the unrecognized stock-based compensation expense yet to be recognized over the vesting period was $49 million in 2026, $98 million in 2027, $98 million in 2028, $98 million in 2029, $52 million in 2030, and $189 million thereafter. The weighted average remaining life was 7.25 years as of June 30, 2026. 2016 Equity Incentive Plan During 2016, the Company created the 2016 Equity Incentive Plan (“2016 Plan”), which allows for the issuance of options to purchase shares of EquipmentShare common stock. The employees eligible to participate in the plan are determined by the plan’s committee. Options are issued with an exercise price equal to the fair value of the Company’s common stock and with vesting conditions as determined by the plan’s committee. Option awards with time-based vesting conditions generally range from 12 to 48 months. Option awards with service, performance, and/ or market conditions, as defined, vest when those milestones are achieved (the “milestone-based awards”). Options are generally forfeited upon termination or when performance or market conditions are not met, and forfeitures are accounted for as they occur. Stock Options As of June 30, 2026, the Company has a total of 22,525,256 options authorized. There were 9,049,367 options issued and outstanding. Stock-based compensation expense of $0.7 million and $1 million was recorded for vested time-based options during the three and six months ended June 30, 2026, respectively, and stock-based compensation expense of $1 million and $2 million was recorded for the three and six months ended June 30, 2025, respectively, and is included in selling, general and administrative expenses in the condensed consolidated statements of operations. As of June 30, 2026, the unrecognized stock-based compensation expense yet to be recognized over the vesting period was $5 million. The weighted average remaining life of the outstanding stock options was 1.4 years as of June 30, 2026. No milestone-based awards were granted during the three and six months ended June 30, 2026 or 2025. The Company recognized less than $0.1 million stock compensation expense for milestone-based option awards during each of the six months ended June 30, 2026 and 2025. It is not probable that the performance conditions will be achieved in the next 12 months. The Company had 320,000 unvested milestone-based option awards granted in 2022 outstanding as of June 30, 2026. If the 2022 award milestones, as defined, are not achieved by January 31, 2032, then these unvested options will be forfeited. The estimated unrecognized stock-based compensation expense to be recognized if and when the performance conditions are considered probable of being achieved could be up to $0.4 million for the 2022 awards as of June 30, 2026. The weighted average remaining life of the outstanding milestone- based stock option awards was 5.6 years for the 2022 awards as of June 30, 2026. RSUs During the six months ended June 30, 2026, the Company granted 149,698 RSUs under the 2016 Plan with a weighted average grant date price per unit of $22.78 (fair value of $3 million). From this grant, 8,105 RSUs vested, and 8,669 RSUs were forfeited. As of June 30, 2026, the Company had a total of 132,924 unvested RSUs outstanding and the total pretax compensation cost not yet recognized by the Company for unvested RSUs was $3 million. The weighted average period over which this compensation cost is expected to be recognized is 3.5 years. The Company issued performance-based RSUs under the 2016 Plan with two-tiered vesting conditions which include a service requirement and a liquidity event requirement. The service condition of the RSUs will be met provided the participant is in continuous service over the defined period of time generally 12 to 48 months. The liquidity event requirement was satisfied on the effective date of the IPO. RSUs shall be settled no later than March 15 of the calendar year following the calendar year in which each vesting event occurs. Upon the consummation of the IPO, the performance-based vesting conditions for outstanding RSUs was satisfied. As a result, the RSUs that had satisfied the service-based condition date became vested. For the three and six months ended June 30, 2026, the Company recognized $0.2 million and $3 million, respectively, of stock-based compensation expense attributable to RSUs. No stock-based compensation expense attributable to RSUs was recognized for the three and six months ended June 30, 2025, as the performance-based vesting condition had not been satisfied at that time.
|