Element Reports Fourth Quarter and Record 2025 Financial Results, Raises Common Dividend and Provides Full-Year 2026 Guidance

Feb 25 2026 01:06 GMT

Amounts in US$ unless otherwise noted

2025 net revenue reached a record of $1.2 billion, driving record adjusted diluted EPS² and adjusted diluted free cash flow ("FCF") per share²
Moderation in full-year expense^1,2 growth supported operating margin expansion to 56.2% and +2.1% operating leverage, underpinning adjusted return on equity² of 17.9% in 2025
Strong client demand reflected in record order volumes of $6.2 billion, a solid committed order pipeline, with vehicles under management ("VUM") increasing 3% year-over-year to 1.56 million
Advanced digital strategy through the acquisition of Car IQ, Inc. ("Car IQ"), a pioneer in vehicle-based payments, which closed on December 31^st, 2025
Repurchased 5.4 million common shares under its normal course issuer bid ("NCIB") in 2025 for total consideration of approximately $120 million
Raises common dividend by 15% from CAD$0.52 to CAD$0.60 per share annually
Introducing 2026 Financial Guidance, including targets of 8% to 10% net revenue growth, positive operating leverage, and strong growth across adjusted operating income², adjusted diluted EPS², and adjusted diluted free cash flow per share²

TORONTO , Feb. 24, 2026 /CNW/ - Element Fleet Management Corp. (TSX: EFN) ("Element" or the "Company"), the largest publicly traded, pure-play automotive fleet manager in the world, today announced financial and operating results for the three months ended December 31, 2025 and for full-year 2025. The following table presents Element's selected financial results.

	Q4 2025	Q3 2025	Q4 2024	QoQ	YoY	2025	2024	YoY
In US$ millions, except percentages and per share amount				%	%			%
Selected results - as reported
Net revenue	313.4	306.4	270.9	2 %	16 %	1,185.5	1,087.6	9 %
Pre-tax income	89.7	159.7	121.4	(44 %)	(26 %)	529.3	513.6	3 %
Pre-tax income margin	28.6 %	52.1 %	44.8 %	n/m	n/m	44.6 %	47.2 %	(3 %)
Earnings per share (EPS) [diluted]	($0.15)	$0.31	$0.23	(148 %)	(165 %)	$0.69	$0.95	(27 %)
Adjusted results^1,2
Adjusted net revenue²	313.4	306.4	270.9	2 %	16 %	1,185.5	1,087.6	9 %
Adjusted operating income (AOI)²	175.5	177.7	143.3	(1 %)	22 %	665.9	601.2	11 %
Adjusted operating margin²	56.0 %	58.0 %	52.9 %	(200 bps)	310 bps	56.2 %	55.3 %	90 bps
Adjusted EPS² [diluted]	$0.33	$0.33	$0.27	(1 %)	24 %	$1.24	$1.10	13 %
Other highlights:
Adjusted free cash flow per share²(FCF/sh) - diluted	$0.39	$0.42	$0.30	(7 %)	30 %	$1.57	$1.36	15 %
Originations	1,351	1,722	1,498	(22 %)	(10 %)	6,477	6,732	(4 %)
Vehicles under management	1.555	1.530	1.517	2 %	3 %	1.555	1.517	3 %
Adjusted ROE²	18.6 %	18.8 %	15.4 %	(20 bps)	320 bps	17.9 %	16.0 %	190 bps

One-time costs in 2025 totaled $70 million, of which $2 million and $4 million were incurred in Q3 and Q4 2025, respectively in connection with the development of new funding structures to optimize leverage, enhance returns, and expand funding capabilities, $52 million related to intangible asset impairment, $9 million related to costs associated with the Car IQ acquisition and $2 million in impairment charges for property-related assets in Q4 2025. In 2024, strategic project costs totaled $6 million, in connection to the leasing initiative in Ireland and $7 million in one-time costs related to the Autofleet acquisition. These costs for the quarterly periods in the above table were as follows: Q4 2025 ($68 million), Q3 2025 ($2 million) and nil in Q4 2024.

Adjusted results are non-GAAP or supplemental financial measures, which do not have any standard meaning prescribed by GAAP under IFRS and are therefore unlikely to be comparable to similar measures presented by other issuers. For further information, please see the "IFRS to Non-GAAP Reconciliations" section in this earnings release. The Company uses "Adjusted Results" because it believes that they provide useful information to investors regarding its performance and results of operations.

"Element's performance in 2025 reflects consistent growth across the business and the continued execution of our strategy," said Laura Dottori-Attanasio, Chief Executive Officer of Element. "We saw strong client engagement across our markets and made meaningful progress advancing our technology platform capabilities, including the acquisition of Car IQ, while maintaining focus on both near-term results and long-term objectives."

Dottori-Attanasio continued, "During the year, we sharpened our strategic focus, delivered for our clients, and improved the scalability of the business. Throughout this progress, we remained focused on disciplined execution, reinforcing our commitment to delivering value for our shareholders and supporting sustainable growth."

Net revenue growth

The Company generated $1.2 billion in net revenue in 2025, an increase of $98 million or 9% from 2024 ("year-over-year"), supported by solid performance across all revenue categories.

In Q4 2025, net revenue increased by $43 million or 16% compared with Q4 2024, driven by strong syndication and net financing revenue. Net revenue grew by $7 million or 2% from Q3 2025 ("quarter-over-quarter") to $313 million, reflecting strength in services and syndication revenue.

Service revenue

Element's largely unlevered services revenue continues to underpin the Company's capital-light business model and long-term growth strategy, and remains a key component driving the improvement in return on equity.

In 2025, services revenue increased by $27 million, or 5% year-over-year to $623 million. This was driven by increased penetration and utilization rates of our service offerings from new and existing clients. As previously disclosed, Q1 2024 benefited from $7 million in certain items. Excluding this amount, 2025 services revenue would have been 6% higher than 2024.

Q4 2025 services revenue of $163 million increased by $1 million or 1% compared with Q4 2024, and increased by $7 million or 4% quarter-over-quarter, driven by ANZ, Autofleet, and VUM partly offset by rate and mix effects.

Net financing revenue

Net financing revenue in 2025 totaled $498 million, an increase of $49 million or 11% year-over-year.

In Q4 2025, net financing revenue grew $26 million or 25% year-over-year to $129 million, driven by higher net earning assets in the U.S. and Mexico, higher gains on sale ("GOS") in Mexico, as well as the continued execution of the Company's strategic leasing initiatives. The increase was further supported by funding efficiencies, which helped offset the higher financing costs associated with the preferred share redemptions (previously recorded below the AOI line) and the incremental debt related to the Autofleet acquisition in October 2024.

Net financing revenue modestly decreased by $1 million or 1% from Q3 2025, primarily reflecting higher provisions for credit losses related to client-specific credit activity and seasonally lower GOS in the fourth quarter. This was partly offset by lower funding costs associated with the Company's ongoing funding initiatives.

Syndication volume

The Company syndicated $2.4 billion in 2025 and $666 million in Q4 2025, representing year-over-year declines of $1.1 billion or 31%, and $369 million or 36%, respectively. Syndicated volumes in the prior year benefited from a $346 million bulk syndication of a Canadian lease portfolio at a lower average yield, undertaken to diversify funding sources.

Despite lower syndicated asset volumes year-over-year, syndication revenue in 2025 increased to $64 million, up $21 million or 50%. In Q4 2025, syndication revenue totaled $21 million, an increase of $15 million compared with Q4 2024. This growth primarily reflects a more favourable client mix, the reinstatement of 100% bonus depreciation in July 2025, and the absence of the lower-yielding Bulk Sale completed in the prior year.

On a quarter-over-quarter basis, syndication revenue was up by $1 million or 5%, driven by a $34 million or 5% increase in syndicated assets from Q3 2025.

Adjusted operating expenses

Adjusted operating expenses of $520 million in 2025 increased by $33 million or 7% year-over-year, driven by strategic investments to support future growth and operational scalability, including technology modernization and product expansion initiatives, along with higher professional and software costs.

In Q4 2025, adjusted operating expenses were $138 million, representing an increase of $10 million or 8% compared with Q4 2024, and an increase of $9 million or 7% compared with Q3 2025. These increases reflect the same strategic investment drivers as the full-year.

Adjusted operating income and adjusted operating margins

AOI reached $666 million in 2025, an increase of $65 million or 11% year-over-year, resulting in a margin of 56.2%. AOI in Q4 2025 rose to $176 million, up $32 million or 22% compared with Q4 2024, with a margin of 56.0%. The year-over-year improvements were supported by higher revenues.

On a quarter-over-quarter basis, AOI was down by $2 million or 1%, primarily due to higher expenses incurred in the quarter, as discussed in the adjusted operating expenses commentary above.

Q4 2025 Non-Recurring Items

To arrive at the Adjusted results, the Company adjusts for non-recurring items that have impacted the Reported results. Several non-recurring items impacted the Reported Q4 2025 results and are detailed below. Management believes that these non-recurring items did not have a material effect on the financial position of the Company, and that the Adjusted results are more indicative of the underlying business performance.

$132 million partial derecognition of deferred tax assets, a non-cash adjustment driven by an updated jurisdictional probability outlook, aligned with the Company's global funding and capital structure;
$52 million write-off of a legacy ordering platform, a non-cash adjustment resulting from the continued transition to the Autofleet technology platform;
$9 million of acquisition-related and restructuring costs incurred in connection with the Car IQ acquisition;
$5 million tax reserve update, reflecting a one-time reassessment of historical tax positions following recent audit activity;
$4 million in set-up costs associated with the development of new funding structures to optimize leverage, enhance returns, and expand new funding capabilities; and
$2 million in impairment charges, a non-cash item associated with the consolidation of the Company's Toronto and Mississauga office locations

Originations

The Company originated $6.5 billion of assets in 2025, a decrease of $0.3 billion or 4% from 2024. In Q4 2025, originations totaled $1.4 billion, down $147 million or 10% year-over-year, and $371 million or 22% quarter-over-quarter. The decline was driven by the cumulative impact of seasonal softness in client ordering during the summer months, in combination with later-year model availability and mix, resulting in extended delivery timelines for originations.

Despite lower originations, order volumes reached record levels of $6.2 billion in 2025 and $2.0 billion in Q4 2025, indicating strong underlying demand and positive momentum for future originations.

The table below sets out the geographic distribution of Element's originations for 2025 and 2024.

(in US$000's for stated values)	December 31, 2025		December 31, 2024
	$	%	$	%
United States and Canada	4,916,846	76.0 %	5,206,339	77.3 %
Mexico	1,142,858	17.6 %	1,035,249	15.4 %
Australia and New Zealand	417,134	6.4 %	489,960	7.3 %
Total	6,476,838	100.0 %	6,731,548	100.0 %

Adjusted free cash flow per share and returns to shareholders

On an adjusted basis, the Company generated $1.57 in diluted FCF per share in 2025, up $0.21 or 15% from $1.36 in 2024. In Q4 2025, diluted FCF per share was $0.39, up 30% year-over-year and down 7% quarter-over-quarter. The decline from Q3 2025 reflects timing, with pull forward of certain lease-related costs and a greater portion of sustaining capital investments incurred in the quarter. On a full-year basis, our total capital investment spend was $71 million, a decrease of 8% compared to the prior year.

During 2025, the Company returned $269 million of cash to shareholders through common share dividends ($149 million) and common share repurchases ($120 million).

Common dividend and share repurchases

On February 24, 2026, the Board of Directors (the "Board") authorized and declared a quarterly cash dividend of CAD$0.15 per common share of Element for the first quarter of 2026, representing a 15% increase to its common dividend (from CAD$0.52 to CAD$0.60 per share annually). The dividend will be payable on April 15, 2026 to shareholders of record as at the close of business on March 31, 2026.

The Company's common dividends are designated to be eligible dividends for purposes of section 89(1) of the Income Tax Act (Canada).

In furtherance of the Company's return of capital plan, Element renewed its normal course issuer bid (the "NCIB") for its common shares. Under the NCIB, the Company has approval from the TSX to purchase up to 39,930,568 common shares during the period from November 20, 2025, to November 19, 2026. The Company intends to remain active under its NCIB in 2026. The actual number of the Company's common shares, if any, that may be purchased under the NCIB, and the timing of any such purchases, will be determined by the Company, subject to applicable terms and limitations of the NCIB (including any automatic share purchase plan adopted in connection therewith). There cannot be any assurance as to how many common shares, if any, will ultimately be purchased pursuant to the NCIB. Any subsequent renewals of the NCIB will be in the discretion of the Company and subject to further TSX approval.

During 2025, the Company purchased 5,366,200 common shares for cancellation under its NCIB at a volume weighted average price of CAD $32.10. During Q4 2025, the Company purchased 1,294,600 common shares under its NCIB, for cancellation at a volume weighted average price of CAD $36.64. During January and up to February 23, 2026, the Company purchased 1,351,200 common shares under its latest NCIB, for cancellation at a volume weighted average of CAD $34.57.

Element applies trade date accounting in determining the date on which the share repurchase is reflected in the consolidated financial statements. Trade date accounting is the date on which the Company commits itself to purchase the shares.

Debt-to-capital leverage ratio

Commencing Q4 2024, the Company changed its banking covenants from a tangible leverage ratio ("TLR") to debt-to-capital, which the Company regards as a more meaningful measure of its leverage. At December 31, 2025, the Company's debt-to-capital ratio was 76.9% (December 31, 2024 74.1%), within the target range of 73% to 77%.

The Company remains committed to maintaining a strong investment grade balance sheet.

Acquisition of Car IQ

On December 31, 2025, the Company completed its acquisition of Car IQ, a leader in connected vehicle payments, for a purchase price of $80 million net of working capital adjustments. Car IQ provides innovative payment technology that enables fleets to automate transactions and improve connectivity across fleet operations.

This acquisition establishes the industry's first fleet management platform with embedded vehicle-initiated payments, marking an advancement in the Company's integrated digital and mobility strategy. The transaction is expected to open new opportunities to deepen the client experience through a more automated fleet management platform.

Car IQ's financial results have been consolidated with those of the Company and $9 million of acquisition-related and restructuring costs were incurred in the quarter.

Positioning Element for Long-Term Growth

In 2025, the Company made meaningful progress on advancing its strategic and innovation priorities, and strengthening its digital capabilities while maintaining focus on enhancing client experience. These efforts were supported by focused execution on the investments undertaken since 2024 to improve efficiency and scalability, which have continued to drive margin expansion and strengthen competitive positioning.

Notable achievements include:

Accelerating its digital and mobility strategy with the rollout of Element Mobility, enhancing how clients access fleet and related solutions through an integrated digital platform. As part of this effort, the Company deepened its ecosystem through strategic partnerships with Samsara and Motus, expanding telematics, real-time data visibility, and adding reimbursement solutions across a broader range of fleet use cases.
Acquiring Car IQ's connected vehicle payments technology, advancing digitization and automation across key service offerings. Over time, Car IQ's technology is expected to support broader adoption of automated, data-driven payment and reporting capabilities across the Company's global client base.
Launching Element ONE for drivers, a mobile application that streamlines driver and fleet manager interactions, digitizes and automates core workflows, and supports greater operational efficiency across the fleet lifecycle.
Remaining on track to deliver on communicated targets of $30 to $45 million in revenue, and $22 to $37 million in AOI on a run-rate basis by 2028, along with the planned 2.5-year payback period for the centralization of the Company's U.S. and Canadian leasing in Dublin.

Guidance

Full-Year 2025 Guidance

Element delivered full-year 2025 results within or above the high-end of its guidance ranges, with the exception of originations, as previously communicated. The following table highlights our full-year 2025 Guidance compared to the full-year 2025 results.

In US$, except per share amounts	Full-Year 2025 Guidance	Full-Year 2025 Actuals
Net revenue	$1.160 - $1.185 billion	$1.186 billion
YoY Growth	7-9%	9 %
Adjusted operating margin¹	55.5% - 56.5%	56.2 %
Adjusted operating income	$645 - $670 million	$666 million
YoY Growth	7-11%	11 %
Adjusted EPS [diluted]	$1.20 - $1.25	$1.24
YoY Growth	9-14%	13 %
Adjusted free cash flow per share	$1.48 - $1.53	$1.57
YoY Growth	7-11%	15 %
Originations	$6.9 - $7.1 billion	$6.5 billion
YoY Growth	3-5%	(4 %)

Certain year-over-year growth amounts shown in this table may not calculate exactly due to rounding.

Full-Year 2026 Guidance

The following table presents the Company's full-year 2026 Guidance, compared with full-year 2025 results.

In US$, except per share amounts	Full-Year 2026 Guidance	Full-Year 2025 Actuals
Net revenue	$1.280 - $1.305 billion	$1.186 billion
YoY Growth	8%-10%
Adjusted operating margin¹	56.3% to 57.3%	56.2 %
Adjusted operating income	$720 - $745 million	$666 million
YoY Growth	8-12%
Adjusted EPS [diluted]	$1.40-$1.45	$1.24
YoY Growth	13%-17%
Adjusted free cash flow per share	$1.67-$1.72	$1.57
YoY Growth	6-10%
Originations	$6.5 - $6.9 billion	$6.5 billion
YoY Growth	0-7%

The above ranges are prior to any further material foreign exchange fluctuations, and any adverse impact related to changes in the trade agreements between the U.S., Mexico, and Canada.

Conference call and webcast

A conference call to discuss these results will be held on Wednesday, February 25, 2026 at 8:00 a.m. Eastern Time.

The conference call and webcast can be accessed as follows:

Webcast:	https://www.elementfleet.com/fourth quarter2025

Telephone:	Click here to join the call most efficiently, or dial one of the following numbers to speak with an operator:

	Canada/USA toll-free: 1-800-715-9871

	International: +1-647-932-3411

A taped recording of the conference call may be accessed through March 25, 2026 by dialing 1-800-770-2030 (Canada/U.S. Toll Free) or 1-647-362-9199 (International Toll) and entering the access code 1612454#.

IFRS to Non-GAAP Reconciliations, Non-GAAP Measures and Supplemental Information

The Company's audited consolidated financial statements have been prepared in accordance with IFRS as issued by the IASB and the accounting policies we adopted in accordance with IFRS. These audited consolidated financial statements reflect all adjustments that are, in the opinion of management, necessary to present fairly the Company's financial position as at December 31, 2025 and December 31, 2024, the results of operations, comprehensive income and cash flows for the three-month periods-ended December 31, 2025, September 30, 2025 and December 31, 2024.

Non-GAAP and IFRS key annualized operating ratios and per share information of the operations of the Company:

		As at and for the three-month period ended			As at and for the Year ended
(in U,S,$000's except ratios and per share amounts or unless otherwise noted)		December 31, 2025	September 30, 2025	December 31, 2024	December 31, 2025	December 31, 2024

Key annualized operating ratios

Leverage ratios
Financial leverage ratio	P₂/(P₂+R)	76.9 %	75.7 %	74.1 %	76.9 %	74.1 %
Average financial leverage ratio	Q/(Q+V)	75.6 %	76.0 %	75.0 %	75.8 %	74.7 %

Other key operating ratios
Allowance for credit losses as a % of total finance receivables before allowance	F/E	0.13 %	0.10 %	0.08 %	0.13 %	0.08 %
Adjusted operating income on average net earning assets	B/J	7.92 %	8.26 %	7.31 %	8.09 %	7.53 %
Adjusted operating income on average tangible total equity of Element	D/(V-L)	45.0 %	45.2 %	39.3 %	44.2 %	35.8 %

Per share information
Number of shares outstanding	W	399,250	400,519	404,502	399,250	404,502
Weighted average number of shares outstanding [basic]	X	399,883	401,029	404,578	401,509	396,880
Weighted average number of shares outstanding [diluted]	Y	399,883	401,267	404,726	401,691	404,164
Cumulative preferred share dividends during the period	Z	—	—	—	—	7,222
Other effects of dilution on an adjusted operating income basis	AA	—	—	—	—	2,412
Net (loss) income per share [basic]	(A-Z)/X	($0.15)	$0.31	$0.23	$0.70	$0.96
Net (loss) income per share [diluted]		($0.15)	$0.31	$0.23	$0.69	$0.95

Adjusted EPS [basic]	(D1)/X	$0.33	$0.33	$0.27	$1.24	$1.12
Adjusted EPS [diluted]	(D1+AA)/Y	$0.33	$0.33	$0.27	$1.24	$1.10

Management also uses a variety of both IFRS and non-GAAP and Supplemental Measures, and non-GAAP ratios to monitor and assess their operating performance. The Company uses these non-GAAP and Supplemental Financial Measures because they believe that they may provide useful information to investors regarding their performance and results of operations.

The following table provides a reconciliation of certain IFRS to non-GAAP measures related to the operations of the Company and other supplemental information.

		As at and for the three-month period ended			As at and for the Year ended
(in US$000's except per share amounts or unless otherwise noted)		December 31, 2025	September 30, 2025	December 31, 2024	December 31, 2025	December 31, 2024
Reported results
Services income, net		162,864	156,170	161,461	622,852	595,540
Net financing revenue		129,471	130,208	103,453	498,317	449,130
Syndication revenue, net		21,088	20,012	5,976	64,341	42,890
Net revenue		313,423	306,390	270,890	1,185,510	1,087,560
Operating expenses		216,192	138,982	141,234	628,690	544,681
Operating income		97,231	167,408	129,656	556,820	542,879
Operating margin		31.0 %	54.6 %	47.9 %	47.0 %	49.9 %
Total expenses		223,689	146,726	149,463	656,191	574,003
Income before income taxes		89,734	159,664	121,427	529,319	513,557
Net (loss) income	A	(60,719)	125,232	92,057	279,129	387,137
EPS [basic]		($0.15)	$0.31	$0.23	$0.70	$0.96
EPS [diluted]		($0.15)	$0.31	$0.23	$0.69	$0.95
Adjusting items
Impact of adjusting items on operating expenses:
Strategic initiatives costs – Salaries, wages, and benefits		5,802	—	—	5,802	5,593
Strategic initiatives costs – General and administrative expenses		7,646	2,004	—	9,650	7,806
Strategic initiatives costs - Depreciation and Amortization		54,090	—	—	54,090	—
Amortization of convertible debenture discount		—	—	—	—	1,517
Share-based compensation		10,750	8,252	13,687	39,518	43,435
Total impact of adjusting items on operating expenses		78,288	10,256	13,687	109,060	58,351
Total pre-tax impact of adjusting items		78,288	10,256	13,687	109,060	58,351
Total after-tax impact of adjusting items		58,912	7,718	10,265	81,817	43,763
Total impact of adjusting items on EPS [basic]		$0.15	$0.02	$0.03	$0.20	$0.11
Total impact of adjusting items on EPS [diluted]		$0.15	$0.02	$0.03	$0.20	$0.11

		As at and for the three-month period ended			As at and for the Year ended
(in US$000's except per share amounts or unless otherwise noted)		December 31, 2025	September 30, 2025	December 31, 2024	December 31, 2025	December 31, 2024
Adjusted results
Adjusted net revenue		313,423	306,390	270,890	1,185,510	1,087,560
Adjusted operating expenses		137,904	128,726	127,547	519,630	486,330
Adjusted operating income		175,519	177,664	143,343	665,880	601,230
Adjusted operating margin		56.0 %	58.0 %	52.9 %	56.2 %	55.3 %
Provision for income taxes		150,453	34,432	29,370	250,190	126,420
Adjustments:
Pre-tax income		23,713	4,668	5,481	35,328	22,465
Partial derecognition of deferred tax assets		(131,740)	—	—	(131,740)	—
Foreign tax rate differential and other		1,015	4,880	985	12,599	1,474
Provision for taxes applicable to adjusted results	C	43,441	43,980	35,836	166,377	150,359
Adjusted net income		132,078	133,684	107,507	499,503	450,871
Adjusted EPS [basic]		$0.33	$0.33	$0.27	$1.24	$1.12
Adjusted EPS [diluted]		$0.33	$0.33	$0.27	$1.24	$1.10

The following table summarizes key statement of financial position amounts for the periods presented.

Selected statement of financial position amounts		As at and for the three-month period ended			As at and for the Year ended
(in US$000's unless otherwise noted)		December 31, 2025	September 30, 2025	December 31, 2024	December 31, 2025	December 31, 2024

Total Finance receivables, before allowance for credit losses	E	8,327,154	8,553,935	7,576,386	8,327,154	7,576,386
Allowance for credit losses	F	10,807	8,533	6,168	10,807	6,168
Net investment in finance receivable	G	6,019,063	6,053,540	4,968,294	6,019,063	4,968,294
Equipment under operating leases	H	2,836,154	2,736,904	2,435,430	2,836,154	2,435,430
Net earning assets	I=G+H	8,855,217	8,790,444	7,403,724	8,855,217	7,403,724
Average net earning assets	J	8,793,408	8,532,704	7,848,023	8,233,053	7,980,144
Goodwill and intangible assets	K	1,681,339	1,650,804	1,672,701	1,681,339	1,672,701
Average goodwill and intangible assets	L	1,659,045	1,653,981	1,675,336	1,659,322	1,607,766
Borrowings	M	9,706,963	9,502,222	8,463,789	9,706,963	8,463,789
Unsecured convertible debentures	N	—	—	—	—	—
Less: continuing involvement liability	O	(168,311)	(157,384)	(132,683)	(168,311)	(132,683)
Total debt	P=M+N-O	9,538,652	9,344,838	8,331,106	9,538,652	8,331,106
Cash and restricted funds	P₁	504,062	527,612	408,621	504,062	408,621
Total net debt	P₂ = P-P₁	9,034,590	8,817,226	7,922,485	9,034,590	7,922,485
Average debt	Q	8,725,152	8,954,986	8,313,527	8,724,209	8,473,105
Total shareholders' equity	R	2,720,267	2,828,592	2,774,315	2,720,267	2,774,315
Preferred shares	S	—	—	—	—	—
Common shareholders' equity	T=R-S	2,720,267	2,828,592	2,774,315	2,720,267	2,774,315
Average common shareholders' equity	U	2,823,219	2,826,512	2,768,504	2,789,288	2,770,044
Average total shareholders' equity	V	2,823,219	2,826,512	2,768,504	2,789,288	2,868,593

Throughout this press release, management uses the following terms and ratios which do not have a standardized meaning under IFRS and are unlikely to be comparable to similar measures presented by other organizations. Non-GAAP measures are reported in addition to, and should not be considered alternatives to, measures of performance according to IFRS.

Adjusted operating expenses

Adjusted operating expenses are equal to salaries, wages and benefits, general and administrative expenses, and depreciation and amortization less adjusting items impacting operating expenses. The following table reconciles the Company's reported expenses to adjusted operating expenses.

	As at and for the three-month period ended			As at and for the Year ended
(in US$000's except per share amounts or unless otherwise noted)	December 31, 2025	September 30, 2025	December 31, 2024	December 31, 2025	December 31, 2024

Reported Expenses	223,689	146,726	149,463	656,191	574,003
Less:
Amortization of intangible assets from acquisitions	7,823	7,831	7,819	31,282	28,734
(Gain)/Loss on investments	(326)	(87)	410	(3,781)	588
Operating expenses	216,192	138,982	141,234	628,690	544,681
Less:
Amortization of convertible debenture discount	—	—	—	—	1,517
Share-based compensation	10,750	8,252	13,687	39,518	43,435
Strategic initiatives costs - Salaries, wages and benefits	5,802	—	—	5,802	5,593
Strategic initiatives costs - General and administrative expenses	7,646	2,004	—	9,650	7,806
Strategic initiatives costs - Depreciation and Amortization	54,090	—	—	54,090	—
Total adjustments	78,288	10,256	13,687	109,060	58,351
Adjusted operating expenses	137,904	128,726	127,547	519,630	486,330

Adjusted operating income or Pre-tax adjusted operating income

Adjusted operating income reflects net income or loss for the period adjusted for the amortization of debenture discount, share-based compensation, amortization of intangible assets from acquisitions, provision for or recovery of income taxes, loss or income on investments, and adjusting items from the table below.

The following tables reconciles income before taxes to adjusted operating income.

	As at and for the three-month period ended			As at and for the Year ended
(in US$000's except per share amounts or unless otherwise noted)	December 31, 2025	September 30, 2025	December 31, 2024	December 31, 2025	December 31, 2024

Income before income taxes	89,734	159,664	121,427	529,319	513,557
Adjustments:
Amortization of convertible debenture discount	—	—	—	—	1,517
Share-based compensation	10,750	8,252	13,687	39,518	43,435
Amortization of intangible assets from acquisition	7,823	7,831	7,819	31,282	28,734
(Gain)/Loss on investments	(326)	(87)	410	(3,781)	588
Adjusting Items:
Strategic initiatives costs - Salaries, wages and benefits	5,802	—	—	5,802	5,593
Strategic initiatives costs - General and administrative expenses	7,646	2,004	—	9,650	7,806
Strategic initiatives costs - Depreciation and Amortization	54,090	—	—	54,090	—
Total pre-tax impact of adjusting items	67,538	2,004	—	69,542	13,399
Adjusted operating income	175,519	177,664	143,343	665,880	601,230

Adjusted operating margin

Adjusted operating margin is the adjusted operating income before taxes for the period divided by the net revenue for the period.

After-tax adjusted operating income

After-tax adjusted operating income reflects the adjusted operating income after the application of the Company's effective tax rates.

Adjusted net income

Adjusted net income reflects reported net income less the after-tax impacts of adjusting items. The following table reconciles reported net income to adjusted net income.

After-tax adjusted operating income attributable to common shareholders

After-tax adjusted operating income attributable to common shareholders is computed as after-tax adjusted operating income less the cumulative preferred share dividends for the period.

	As at and for the three-month period ended			As at and for the Year ended
(in US$000's except per share amounts or unless otherwise noted)	December 31, 2025	September 30, 2025	December 31, 2024	December 31, 2025	December 31, 2024

Net (loss) income	(60,719)	125,232	92,057	279,129	387,137
Amortization of convertible debenture discount	—	—	—	—	1,517
Share-based compensation	10,750	8,252	13,687	39,518	43,435
Amortization of intangible assets from acquisition	7,823	7,831	7,819	31,282	28,734
(Gain)/Loss on investments	(326)	(87)	410	(3,781)	588
Strategic initiatives costs - Salaries, wages and benefits	5,802	—	—	5,802	5,593
Strategic initiatives costs - General and administrative expenses	7,646	2,004	—	9,650	7,806
Strategic initiatives costs - Depreciation and Amortization	54,090	—	—	54,090	—
Provision for income taxes	150,453	34,432	29,370	250,190	126,420
Provision for taxes applicable to adjusted results	(43,441)	(43,980)	(35,836)	(166,377)	(150,359)
Adjusted net income	132,078	133,684	107,507	499,503	450,871

About Element Fleet Management

Element Fleet Management (TSX: EFN) is the largest publicly traded pure-play automotive fleet manager in the world. As a Purpose-driven and client-centric company, we deliver value through scalable, sustainable, and technology-enabled fleet and mobility solutions. With operations across North America, Australia, New Zealand, Ireland, and a growing global footprint through our Mobility platform, we provide our clients with end-to-end fleet management solutions - from vehicle acquisition, maintenance, and risk management to route optimization, electric vehicle integration, and remarketing. At Element, we combine our fleet management expertise with advanced digital capabilities in order to unlock real-time data insights, dynamic planning tools, and advanced optimization that enhances the cost efficiency and vehicle productivity of our clients' fleets. For more information, visit: h ttps://www.elementfleet.com

This press release includes forward-looking statements regarding Element and its business. Such statements are based on management's current expectations and views of future events. In some cases the forward-looking statements can be identified by words or phrases such as "may", "will", "expect", "plan", "anticipate", "intend", "potential", "estimate", "believe" or the negative of these terms, or other similar expressions intended to identify forward-looking statements, including, among others, statements regarding Element's financial performance, including future cash flows, financial condition, operating performance, operating income, financial ratios, capital structure and capital expenditures; expectations regarding acquisitions and strategic initiatives and the benefits to be derived therefrom; expected enhancements to client experience; expectations regarding client and revenue retention trends; management of operating expenses; increases in efficiency; Element achieving its digital platform ambitions; the Element Mobility strategy enabling the Company to increase client and shareholder value and unlock new revenues streams; EV strategy and capabilities; global EV adoption rates; dividend policy and the payment of future dividends; the costs and benefits of strategic initiatives; creation of value for all stakeholders; expectations regarding syndication; growth prospects and expected revenue growth; level of workforce engagement; improvements to magnitude and quality of earnings; executive hiring and retention; focus and discipline in investing; balance sheet management and plans and expectations with respect to leverage ratios; Element's ability to achieve its sustainability objectives; and Element's proposed share purchases, including the number of common shares to be repurchased, the timing thereof and TSX acceptance of the NCIB and any renewal thereof. No forward-looking statement can be guaranteed. Forward-looking statements and information by their nature are based on assumptions and involve known and unknown risks, uncertainties and other factors which may cause Element's actual results, performance or achievements, or industry results, to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statement or information. Accordingly, readers should not place undue reliance on any forward-looking statements or information. Such risks and uncertainties include those regarding the fleet management, mobility and finance industries, economic factors, regulatory landscape and many other factors beyond the control of Element. A discussion of the material risks and assumptions associated with this outlook can be found in Element's annual MD&A, and Annual Information Form for the year ended December 31, 2025, each of which has been filed on SEDAR+ and can be accessed at www.sedarplus.ca. Except as required by applicable securities laws, forward-looking statements speak only as of the date on which they are made and Element undertakes no obligation to publicly update or revise any forward-looking statement, whether as a result of new information, future events, or otherwise.

SOURCE Element Fleet Management Inc.