Armac Locação Logística e Serviços (ARML3) Q1 2026 earnings summary

Executive summary

• Gross revenue for Q1 2026 reached R$488.5 million, up 4.4% year-over-year, with strong performance in business units with long-term contracts and successful M&A integrations, but rental revenue declined due to seasonality and contract adjustments.

• Adjusted EBITDA for Q1 2026 was R$213.5 million, up 38.3% year-over-year, driven by operational efficiency and R$42.0 million in bargain purchase gains from acquisitions.

• Two major M&A transactions (Engelog and Braslift) were closed and integrated, strengthening the agro-industrial and forklift units, with SAP and governance structures implemented.

• The company is leveraging its strong capital structure and liquidity (over R$1 billion in cash) to pursue growth opportunities, including fleet renewal, market consolidation, and expansion of pre-owned equipment stores.

• Efforts are underway to diversify the client base and regions, reduce seasonality impacts, and streamline rental processes with technology and AI.

Financial highlights

• Gross revenue for Q1 2026 was R$488.5 million, up 4.4% year-over-year; gross rental revenue was R$378.3 million, down 6.3% year-over-year due to contract portfolio adjustments and seasonality.

• Revenue from asset sales reached R$110.2 million, up 73.2% year-over-year, driven by sales of older, fully depreciated assets.

• Adjusted EBITDA was R$213.5 million, up 38.3% year-over-year, with margin improving to 47.9%.

• Free cash flow for shareholders was R$28 million after operational and financial activities; cash flow after renewal CAPEX was R$8.9 million.

• Net income was R$13.3 million, up 6.3% year-over-year, but down 55.2% sequentially from 4Q25.

Outlook and guidance

• Management expects to continue reducing leverage, aiming for a ratio below 2x EBITDA, with organic revenue growth projected in the low double digits for 2026 and EBITDA margins expected to exceed 50%.

• CapEx will remain focused on fleet renewal and selective expansion, with positive dynamics anticipated for the next two years.

• Expansion of pre-owned equipment stores to at least 30 units by year-end, targeting annual used-asset sales capacity above R$1.0 billion.

• Management highlights risks and uncertainties that could impact future results, including market and economic volatility.