Custom Truck (NYSE: CTOS) raises 2026 EBITDA outlook after strong Q1
Filing Impact
Filing Sentiment
Form Type
8-K
Rhea-AI Filing Summary
Custom Truck One Source reported strong first-quarter 2026 results and raised its full-year Adjusted EBITDA guidance. Revenue reached $461.6 million, up 9.3% year over year, with record first-quarter sales driven mainly by rental and equipment demand.
Adjusted EBITDA was $98.0 million, a 33.4% increase versus the prior-year quarter, while the net loss narrowed to $4.1 million from $17.8 million. The SER rental segment delivered higher utilization of 81.4% and Adjusted EBITDA of $105.5 million, and the STEM segment more than doubled Adjusted EBITDA to $32.7 million.
For 2026, the company now expects Adjusted EBITDA of $415–$440 million, up from a prior range of $410–$435 million, on revenue of $2,005–$2,120 million. Net leverage improved to 4.02x on net debt of $1.64 billion, with management targeting further deleveraging and at least $50 million of levered free cash flow in 2026.
Positive
- Stronger profitability and guidance: Q1 2026 Adjusted EBITDA rose 33.4% to $98.0 million and full‑year 2026 Adjusted EBITDA guidance increased to a $415–$440 million range, signaling confidence in ongoing earnings growth.
Negative
- None.
Insights
Q1 shows strong rental-driven growth, margin expansion and a modestly higher 2026 EBITDA outlook.
Custom Truck One Source delivered record Q1 2026 revenue of $461.6 million, up 9.3%, with Adjusted EBITDA rising 33.4% to $98.0 million. Growth was led by the SER rental segment, where higher utilization of 81.4% and larger fleet drove better economics.
The new segment structure highlights strong rental profitability: SER Adjusted EBITDA reached $105.5 million, while STEM Adjusted EBITDA increased to $32.7 million from $13.1 million. Consolidated Adjusted Gross Profit also improved to $159.3 million, up 17.4%, supporting margin expansion despite a still‑negative GAAP net result.
Management nudged 2026 Adjusted EBITDA guidance to $415–$440 million and kept revenue at $2,005–$2,120 million, implying ongoing operating leverage. Net leverage improved to 4.02x LTM Adjusted EBITDA, and the company targets levered free cash flow above $50 million in 2026, with a goal of reducing net leverage below three times by 2027.
8-K Event Classification
3 items: 2.02, 7.01, 9.01
3 items
Item 2.02
Results of Operations and Financial Condition
Financial
Disclosure of earnings results, typically an earnings press release or preliminary financials.
Item 7.01
Regulation FD Disclosure
Disclosure
Material non-public information disclosed under Regulation Fair Disclosure, often investor presentations or guidance.
Item 9.01
Financial Statements and Exhibits
Exhibits
Financial statements, pro forma financial information, and exhibit attachments filed with this report.
Key Figures
Q1 2026 Revenue: $461.6 million
Q1 2026 Adjusted EBITDA: $98.0 million
Q1 2026 Net Income (Loss): ($4.1 million)
+5 more
8 metrics
Q1 2026 Revenue
$461.6 million
Three months ended March 31, 2026; up 9.3% year over year
Q1 2026 Adjusted EBITDA
$98.0 million
Three months ended March 31, 2026; up 33.4% year over year
Q1 2026 Net Income (Loss)
($4.1 million)
Three months ended March 31, 2026; improved from ($17.8 million) in 2025
2026 Revenue Outlook
$2,005–$2,120 million
Full-year 2026 consolidated revenue guidance
2026 Adjusted EBITDA Outlook
$415–$440 million
Full-year 2026 Adjusted EBITDA guidance range
Net Debt
$1,638.9 million
As of March 31, 2026; used in net leverage calculation
Net Leverage Ratio
4.02x
Net debt divided by LTM Adjusted EBITDA as of March 31, 2026
Rental Fleet Utilization
81.4%
Average utilization in Q1 2026 for rental fleet
Key Terms
Adjusted EBITDA, Original equipment cost, net leverage ratio, levered free cash flow, +2 more
6 terms
Adjusted EBITDA financial
"Adjusted EBITDA of $98.0 million, an increase of $24.6 million, or 33.4%"
Adjusted EBITDA is a way companies measure how much money they make from their core operations, like running a business, by removing certain costs or income that aren’t part of regular business activities. It helps investors see how well a company is doing without distractions from unusual expenses or gains, making it easier to compare companies or track performance over time.
Original equipment cost financial
"We ended the quarter with total OEC of $1.66 billion, the highest in our history"
Original equipment cost is the initial price paid to produce or buy a piece of machinery, device, or component as supplied by the original manufacturer, before any aftermarket changes, upgrades, or refurbishment. For investors it matters because that upfront cost affects a company’s production margins, capital spending, depreciation schedules and the estimated expense of replacing or maintaining assets—much like knowing the purchase price of a new car helps predict future insurance, repair and resale value.
net leverage ratio financial
"net debt was $1,638.9 million and our net leverage ratio was 4.02x"
The net leverage ratio measures how much debt a company has compared to its available assets or earnings, after accounting for its cash and liquid assets. It helps investors understand how heavily a company relies on borrowed money to finance its operations and growth. A higher ratio indicates greater financial risk, while a lower ratio suggests a more cautious approach to borrowing.
levered free cash flow financial
"Levered free cash flow2, 4 is expected to exceed $50 million for 2026"
Levered free cash flow is the cash a company has left after paying all operating costs, taxes, interest and required debt repayments — essentially the money truly available to shareholders. For investors it matters because it shows whether a business can afford dividends, share buybacks, reinvestment or can weather a downturn after meeting its loan obligations; think of it like a household’s leftover money once the mortgage and other mandatory bills are paid.
sales order backlog financial
"Sales order backlog (e) (as of period end) | $ | 411,311"
Sales order backlog is the total value of confirmed customer orders a company has received but not yet fulfilled or shipped, like a queue of tasks waiting to be completed. It matters to investors because a growing backlog signals future revenue and demand, while a shrinking or aging backlog can indicate weakening sales or delivery delays; however, it can also mask risks such as cancellations, pricing pressure, or production bottlenecks.
sales-type lease financial
"impact of sales-type lease accounting for certain leases containing RPOs"
A sales-type lease is a contract where the party that owns an asset (the lessor) effectively sells it to a customer but keeps the right to receive lease payments, recording the transaction as a sale up front and then recognizing interest income over time. Think of it like a store that sells you a car on finance: the store books the sale immediately but still collects payments and interest, so profits and the asset’s removal from the balance sheet occur sooner. For investors this changes when revenue and profit show up, alters reported assets and liabilities, and affects measures like return on equity and cash flow timing.
Earnings Snapshot
Revenue: $461.6 million · Guidance included
Q1 2026
Revenue
$461.6 million
+9.3% YoY
Net income (loss)
($4.1 million)
improved from ($17.8 million) YoY
Adjusted EBITDA
$98.0 million
+33.4% YoY
Guidance
For 2026, revenue is guided to $2,005–$2,120 million and Adjusted EBITDA to $415–$440 million, with levered free cash flow expected to exceed $50 million.
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): April 27, 2026
(Exact Name of Registrant as Specified in its Charter)
| (State or Other Jurisdiction of Incorporation) | (Commission File Number) | (IRS Employer Identification No.) | ||||||||||||||||||
| (Address of principal executive offices) | (Zip code) | |||||||||||||||||||
(816 ) 241-4888
(Registrant’s telephone number, including area code)
Not Applicable
(Former Name or Former Address, if Changed Since Last Report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
| Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) | ||||||||
| Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17CFR 240.14a-12) | ||||||||
| Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) | ||||||||
| Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) | ||||||||
Securities registered pursuant to Section 12(b) of the Act:
| Title of Each Class | Trading Symbol(s) | Name of Exchange on Which Registered | ||||||||||||
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company ☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Item 2.02. Results of Operations and Financial Condition.
On April 27, 2026, Custom Truck One Source, Inc. (the "Company") issued a press release announcing its financial results for the quarter ended March 31, 2026. The press release is being furnished as Exhibit 99.1 to this Current Report on Form 8-K and is incorporated herein by reference.
The information in this Item 2.02, including Exhibit 99.1, shall be deemed "furnished" and not "filed" for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), or otherwise subject to the liabilities of that section, and shall not be deemed to be incorporated by reference into any of the Company's filings under the Securities Act of 1933, as amended (the "Securities Act"), or the Exchange Act, whether made before or after the date hereof and regardless of any general incorporation language in such filings, except to the extent expressly set forth by specific reference in such a filing.
Item 7.01. Regulation FD Disclosure.
On April 27, 2026, the Company posted an updated investor presentation on its website at www.customtruck.com.
The information in this Item 7.01 shall be deemed "furnished" and not "filed" for purposes of Section 18 of the Exchange Act, or otherwise subject to the liabilities of that section, and shall not be deemed to be incorporated by reference into any of the Company's filings under the Securities Act or the Exchange Act, whether made before or after the date hereof and regardless of any general incorporation language in such filings, except to the extent expressly set forth by specific reference in such a filing.
Item 9.01. Financial Statements and Exhibits.
(d) Exhibits.
| Exhibit No. | Description | |||||||
99.1 | Press release of Custom Truck One Source, Inc. | |||||||
| 104 | Cover Page Interactive Data File (embedded within the Inline XBRL document and contained in Exhibit 101) | |||||||
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| Date: | April 27, 2026 | Custom Truck One Source, Inc. | ||||||
| /s/ Christopher J. Eperjesy | ||||||||
| Christopher J. Eperjesy Chief Financial Officer | ||||||||
EXHIBIT 99.1
Custom Truck One Source, Inc. Reports First Quarter 2026 Results and Increases Adjusted EBITDA 2026 Guidance
KANSAS CITY, Mo. April 27, 2026 – (BUSINESS WIRE) – Custom Truck One Source, Inc. (NYSE: CTOS), a leading provider of specialty equipment to the electric utility, telecom, rail, forestry, waste management and other infrastructure-related end markets, today reported financial results for the three months ended March 31, 2026.
CTOS First-Quarter Highlights
•Record first quarter revenue of $461.6 million, an increase of $39.4 million, or 9.3%, compared to the first quarter of 2025
•Increased Average OEC on rent by $141.4 million, or 11.8%, compared to the first quarter of 2025
•Gross profit of $103.1 million, an increase of $17.5 million, or 20.5%, compared to the first quarter of 2025
•Adjusted Gross Profit of $159.3 million, an increase of $23.6 million, or 17.4%, compared to the first quarter of 2025
•Net loss of $4.1 million, an improvement of $13.7 million, or 76.9%, compared to the first quarter of 2025
•Adjusted EBITDA of $98.0 million, an increase of $24.6 million, or 33.4%, compared to the first quarter of 2025
•Given strong conditions in the transmission and distribution (“T&D”) end markets, increasing 2026 full year Adjusted EBITDA1 guidance range from $410M - $435M to $415M - $440M
“In the first quarter, we achieved record first-quarter revenue and delivered substantial year-over-year growth in revenue and Adjusted EBITDA of 9% and 33%, respectively. The sustained performance in our core T&D markets continues to be the primary driver of performance within our SER segment and for the Company as a whole. For the quarter, our rental fleet achieved average utilization of 81.4%, up 370 basis points versus the first quarter of last year. We ended the quarter with total OEC of $1.66 billion, the highest in our history, which should support our expected growth within SER in 2026,” said Ryan McMonagle, Chief Executive Officer of CTOS. “Our STEM segment also had a strong quarter, delivering revenue of $268 million, which excludes $95 million of sales to our SER segment. Our strong performance in the quarter allowed us to make substantial progress in reducing our net leverage, down almost 30 basis points versus the end of the previous quarter. We continue to be optimistic about the remainder of 2026, as CTOS remains well-positioned to benefit from secular tailwinds driven by data center investments, electrification, utility grid upgrades and infrastructure investment. For 2026, we remain focused on Adjusted EBITDA growth, working capital management, free cash flow generation and continued deleveraging.” McMonagle added.
Summary Actual Consolidated Financial Results
| Three Months Ended March 31, | Three Months Ended December 31, 2025 | |||||||||||||||||||
| (in $000s) | 2026 | 2025 | ||||||||||||||||||
| Rental revenue | $ | 137,215 | $ | 116,261 | $ | 141,981 | ||||||||||||||
| Equipment sales | 292,634 | 273,863 | 353,925 | |||||||||||||||||
| Parts sales and services | 31,773 | 32,108 | 32,278 | |||||||||||||||||
| Total revenue | 461,622 | 422,232 | 528,184 | |||||||||||||||||
| Gross Profit | $ | 103,063 | $ | 85,536 | $ | 123,061 | ||||||||||||||
Adjusted Gross Profit1 | $ | 159,260 | $ | 135,627 | $ | 179,823 | ||||||||||||||
| Net Income (Loss) | $ | (4,102) | $ | (17,791) | $ | 20,875 | ||||||||||||||
Adjusted EBITDA1 | $ | 97,986 | $ | 73,426 | $ | 120,741 | ||||||||||||||
1 - Each of Adjusted Gross Profit and Adjusted EBITDA is a non-GAAP measure. Further information and reconciliations for our non-GAAP measures to the most directly comparable financial measure under United States generally accepted accounting principles (“GAAP”) are included at the end of this press release. CTOS is unable to present a quantitative reconciliation of its forward-looking Adjusted EBITDA for the year ending December 31, 2026 to its most directly comparable GAAP financial measure due to the high variability and difficulty in predicting certain items that affect Adjusted EBITDA including, but not limited to, customer buyout requests on rentals with rental purchase options and income tax expense. Adjusted EBITDA should not be used to predict Net income (loss) as the difference between the measures are variable and unpredictable.
Summary Actual Financial Results by Segment
Beginning January 1, 2026, CTOS is reporting our results under two reportable segments: (1) Specialty Equipment Rentals (“SER”) and (2) Specialty Truck Equipment and Manufacturing (“STEM”). The new SER segment consists of our historical Equipment Rental Solutions (“ERS”) segment (except for certain used sales to be accounted for by STEM) and a portion of our historical Aftermarket Parts and Services (“APS”) segment, and the new STEM segment will consist of our historical Truck and Equipment Sales (“TES”) segment, certain used sales that previously were accounted for by ERS and a portion of our historical APS segment. We are also reflecting intercompany activity between the two segments, which is ultimately eliminated in consolidation. This new segment reporting reflects how CTOS’s business is managed and how resources are allocated in 2026 and utilizes Adjusted EBITDA as the segments’ profit measure. Segment Adjusted EBITDA is defined as segment operating income or loss before depreciation and amortization, further excluding the effects of purchase accounting adjustments and the impact of sales-type lease accounting for certain leases containing rental purchase options (or “RPOs”).
Management believes this new presentation better reflects the positioning of CTOS’s strategies and operations portfolio and better reflects key economic drivers, capital intensity, and margin profiles of the respective new segments, as well as aligns our external reporting with how management allocates capital and evaluates performance. Prior period amounts have been recast to reflect the change to two reportable segments.
Specialty Equipment Rentals
| Three Months Ended | |||||||||||||||||
| (in $000s) | March 31, 2026 | March 31, 2025 | December 31, 2025 | ||||||||||||||
| Revenue from external customers: | |||||||||||||||||
| Rental | $ | 137,215 | $ | 116,261 | $ | 141,981 | |||||||||||
| Equipment sales | 37,777 | 29,855 | 55,773 | ||||||||||||||
| Parts sales and services | 18,771 | 20,965 | 20,982 | ||||||||||||||
| Total revenue from external customers | 193,763 | 167,081 | 218,736 | ||||||||||||||
| Intersegment sales | 6,790 | 11,600 | 10,489 | ||||||||||||||
Rental AR Provision(1) | 2,176 | 1,845 | 2,070 | ||||||||||||||
Sales type lease adjustment(2) | 2,103 | 1,257 | (853) | ||||||||||||||
| Total Segment Revenue | 204,832 | 181,783 | 230,442 | ||||||||||||||
| Segment Expenses: | |||||||||||||||||
| Cost of rental, excluding depreciation | 30,748 | 30,092 | 29,921 | ||||||||||||||
Cost of equipment sales, net of purchase accounting, sales-type leases and depreciation(3) | 28,472 | 17,926 | 35,407 | ||||||||||||||
| Cost of parts and services, excluding depreciation | 17,968 | 19,977 | 17,128 | ||||||||||||||
| Cost of intersegment sales | 6,110 | 11,600 | 10,489 | ||||||||||||||
Rental AR provision(1) | 2,176 | 1,845 | 2,070 | ||||||||||||||
| Total segment cost of revenue expenses | 85,474 | 81,440 | 95,015 | ||||||||||||||
| Selling, general and administrative expenses | 13,861 | 14,294 | 15,100 | ||||||||||||||
| Total segment expenses | 99,335 | 95,734 | 110,115 | ||||||||||||||
| Adjusted EBITDA | $ | 105,497 | $ | 86,049 | $ | 120,327 | |||||||||||
1-Specifically identifiable lease revenue receivables not deemed probable of collection are recorded as a reduction of rental revenue. This is classified as a segment expense for Segment Adjusted EBITDA reviewed by the chief operating decision maker.
2-Impact of sales-type lease accounting for certain leases containing RPOs: this impact is excluded from the measure of Adjusted EBITDA utilized by our CODM to allocate resources and to assess the performance of our segments as we believe continuing to reflect the transactions as an operating lease better reflects the economics of the transactions given our large portfolio of rental contracts.
3-Excludes the non-cash impact of purchase accounting, impact of sales-type lease accounting for certain leases containing RPOs, further excluding depreciation.
Specialty Truck Equipment & Manufacturing
| Three Months Ended | |||||||||||||||||
| (in $000s) | March 31, 2026 | March 31, 2025 | December 31, 2025 | ||||||||||||||
| Revenue from external customers: | |||||||||||||||||
| Equipment sales | $ | 254,857 | $ | 244,008 | $ | 298,153 | |||||||||||
| Parts sales and services | 13,002 | 11,143 | 11,296 | ||||||||||||||
| Total revenue from external customers | 267,859 | 255,151 | 309,449 | ||||||||||||||
| Intersegment sales | 95,450 | 94,789 | 89,033 | ||||||||||||||
| Total Segment Revenue | 363,309 | 349,940 | 398,482 | ||||||||||||||
| Segment Expenses: | |||||||||||||||||
Cost of equipment sales, net of purchase accounting and depreciation(1) | 213,225 | 205,449 | 249,900 | ||||||||||||||
| Cost of parts and services, excluding depreciation | 9,094 | 7,444 | 8,926 | ||||||||||||||
| Cost of intersegment sales | 80,185 | 94,789 | 89,033 | ||||||||||||||
| Total segment cost of revenue expenses | 302,504 | 307,682 | 347,859 | ||||||||||||||
| Selling, general and administrative expenses | 17,580 | 15,853 | 18,301 | ||||||||||||||
| Floorplan interest expense | 10,519 | 13,297 | 11,891 | ||||||||||||||
| Total segment expenses | 330,603 | 336,832 | 378,051 | ||||||||||||||
| Adjusted EBITDA | $ | 32,706 | $ | 13,108 | $ | 20,431 | |||||||||||
1-Excludes the non-cash impact of purchase accounting.
Consolidated Adjusted EBITDA
| Three Months Ended | |||||||||||||||||
| (in $000s) | March 31, 2026 | March 31, 2025 | December 31, 2025 | ||||||||||||||
| SER Adjusted EBITDA | $ | 105,497 | $ | 86,049 | $ | 120,327 | |||||||||||
| STEM Adjusted EBITDA | 32,706 | 13,108 | 20,431 | ||||||||||||||
| Eliminations Adjusted EBITDA | (15,945) | — | — | ||||||||||||||
| Segment Adjusted EBITDA | 122,258 | 99,157 | 140,758 | ||||||||||||||
| Reconciling Items: | |||||||||||||||||
| Corporate and non-allocated selling, general and administrative expenses | (24,272) | (25,731) | (20,017) | ||||||||||||||
| Adjusted EBITDA | $ | 97,986 | $ | 73,426 | $ | 120,741 | |||||||||||
See the Company’s Quarterly Report on Form 10-Q for the three months ended March 31, 2026 for a reconciliation of segment-level adjusted EBITDA to Consolidated income (loss) before income taxes.
Summary Combined Operating Metrics
| Three Months Ended March 31, | Three Months Ended December 31, 2025 | ||||||||||||||||
| (in $000s) | 2026 | 2025 | |||||||||||||||
Ending OEC(a) (as of period end) | $ | 1,655,414 | $ | 1,548,210 | $ | 1,637,115 | |||||||||||
Average OEC on rent(b) | $ | 1,343,712 | $ | 1,202,285 | $ | 1,377,027 | |||||||||||
Fleet utilization(c) | 81.4 | % | 77.7 | % | 83.6 | % | |||||||||||
OEC on rent yield(d) | 38.9 | % | 38.5 | % | 38.7 | % | |||||||||||
Sales order backlog(e) (as of period end) | $ | 411,311 | $ | 420,149 | $ | 335,265 | |||||||||||
(a) Ending OEC — Ending original equipment cost (“OEC”) is the original equipment cost of units at the end of the measurement period.
(b) Average OEC on rent — Average OEC on rent is calculated as the weighted-average OEC on rent during the stated period.
(c) Fleet utilization — total number of days the rental equipment was rented during a specified period of time divided by the total number of days available during the same period and weighted based on OEC.
(d) OEC on rent yield (“ORY”) — a measure of return realized by our rental fleet during a period. ORY is calculated as rental revenue (excluding freight recovery and ancillary fees) during the stated period divided by the Average OEC on rent for the same period. For periods of less than 12 months, the ORY is adjusted to an annualized basis.
(e) Sales order backlog — purchase orders received for customized and stock equipment. Sales order backlog should not be considered an accurate measure of future net sales.
Management Commentary
The increase of 18% in rental revenue in the first quarter of 2026 compared to the first quarter of 2025 was the result of improved average fleet utilization (which increased to 81.4% compared to 77.7%) driven by increased rental volume, with average OEC on rent increasing by 12% year-over-year. Compared to the first quarter of 2025, SER rental equipment sales increased 26.5% in the first quarter of 2026 due to an increase in buyout activity of rental contracts with purchase options. SER adjusted EBITDA in the first quarter of 2026 increased 24% compared to the first quarter of 2025.
Equipment sales in our STEM segment increased 4.4% in the first quarter of 2026 compared to the first quarter of 2025 driven by demand for forestry vehicles. Adjusted EBITDA increased by $19.8 million in the first quarter of 2026 compared to the first quarter of 2025. Our STEM backlog was down 2% compared to the first quarter of 2025, and remains within our expected range of four to six months.
The decrease in net loss in the first quarter of 2026 compared to the first quarter of 2025 was primarily due to higher operating income as a result of higher rental revenue driven by higher average OEC on rent as well as strong new equipment sales.
Adjusted EBITDA for the first quarter of 2026 was $98.0 million, a 33.4% increase compared to the first quarter of 2025, which was largely driven by increased gross profit and lower interest expense on variable-rate floor plan liabilities from lower inventory levels.
As of March 31, 2026, cash and cash equivalents were $9.6 million, total debt outstanding was $1,648.5 million, net debt was $1,638.9 million and our net leverage ratio was 4.02x. Availability under the senior secured credit facility was $256.9 million as of March 31, 2026, and based on our borrowing base, we have an additional $191.6 million of suppressed availability that we can potentially utilize by upsizing our existing facility.
2026 Outlook
We are reaffirming our full year consolidated revenue for 2026 and increasing our Adjusted EBITDA1, 4 guidance to reflect our strong first quarter and continued momentum in the rental business.
Consolidated CTOS:
•Revenue is expected to increase 3% to 9% year-over-year, with Adjusted EBITDA1, 4 expected to increase 8% to 15%
•Net rental fleet investment (purchases less proceeds) for 2026 is expected to be approximately $150 million to $170 million, with mid-single digit net OEC growth, reflecting a meaningful reduction from over $250 million in 2025
•Inventory months on hand is expected to continue trending toward the targeted level of below six months, supporting working capital improvement; and
•Levered free cash flow2, 4 is expected to exceed $50 million for 2026 and net leverage ratio3, 4 is expected to be meaningfully below four times by the end of fiscal 2026; the longer-term target remains achieving a net leverage ratio3, 4 below three times in 2027.
Specialty Equipment Rentals (SER):
•The rental business continues to perform very strong with OEC on rent, utilization and gross margin all continuing to perform ahead of expectations in 2026
•Demand for equipment serving the utility transmission and distribution market remains very strong and at record levels, and further penetration of the vocational rental market is expected to provide incremental growth
•Average fleet age ended 2025 at just over 2.9 years, which positioned the Company to reduce rental fleet investment while continuing to pursue growth, with OEC expected to increase by a mid-single digit percentage in 2026. Average fleet age at the end of the first quarter was just under 3 years, aging slightly.
Specialty Truck Equipment & Manufacturing (STEM):
•Third-party new sales revenue is expected to increase 3% to 10% in 2026 compared to 2025, supported by continued customer demand, stable supply chain conditions and relationships with key customers, chassis suppliers and attachment suppliers
•Total STEM revenue is expected to be down modestly to flat year-over-year due solely to lower intercompany rental sales/capex
•Sales order backlog increased by over $55 million (nearly 20%) in the fourth quarter of 2025 and a further $76 million (nearly 23%) in the first quarter of 2026, currently sitting at 4.5 months LTM third-party new sales and remains within the targeted range of four to six months
“Looking ahead, our focus in 2026 is on disciplined execution – translating strong end-market demand into profitable growth, free cash flow generation, and further balance sheet improvement. Our rental business continues to perform very strong, driven by demand in our utility transmission and distribution markets, and we are seeing the benefit of that strength flow through to margins and Adjusted EBITDA1, 4. We expect to show flat revenue and single digit year-over-year Adjusted EBITDA1, 4 growth in the second quarter. With a younger, highly utilized fleet and improving working capital dynamics, we believe CTOS is positioned to drive higher returns on invested capital while maintaining financial flexibility as we invest selectively to support our customers’ long-term needs, and to translate that into meaningful free cash flow generation,” said Chris Eperjesy, Chief Financial Officer of CTOS.
| 2026 Consolidated Outlook | |||||||||||
| Revenue | $2,005 million | — | $2,120 million | ||||||||
Adjusted EBITDA1, 4 | $415 million | — | $440 million | ||||||||
2026 Revenue Outlook by Segment 5 | |||||||||||
| SER | $835 million | — | $870 million | ||||||||
| STEM | $1,580 million | — | $1,655 million | ||||||||
1 - Adjusted EBITDA is a non-GAAP performance measure that we use to monitor our results of operations, to measure performance against debt covenants and performance relative to competitors. Refer to the section below entitled “Non-GAAP Financial and Performance Measures” for further information about Adjusted EBITDA.
2 - Levered Free Cash Flow is defined as net cash provided by operating activities, less cash flow for investing activities, excluding acquisitions, plus acquisition of inventory through floor plan payables – non-trade less repayment of floor plan payables – non-trade, both of which are included in cash flow from financing activities in our Consolidated Statements of Cash Flows.
3 - Net leverage ratio is a non-GAAP performance measure used by management, and we believe it provides useful information to investors because it is an important measure to evaluate our debt levels and progress toward leverage targets, which is consistent with the manner our lenders and management use this measure. Refer to the section below entitled “Non-GAAP Financial and Performance Measures” for further information about net leverage ratio.
4 - CTOS is unable to present a quantitative reconciliation of its forward-looking Adjusted EBITDA, Levered Free Cash Flow, and Net Leverage Ratio for future periods to their respective most directly comparable GAAP financial measure due to the high variability and difficulty in predicting certain items that affect such GAAP measures including, but not limited to, customer buyout requests on rentals with rental purchase options and income tax expense. Adjusted EBITDA, Levered Free Cash Flow, and Net Leverage Ratio should not be used to predict their respective most directly comparable GAAP measure as the differences between the respective measures are variable and unpredictable.
5- Beginning January 1, 2026, transactions between segments are accounted for as if completed on an arm’s length basis using a cost-plus methodology.
CONFERENCE CALL INFORMATION
The Company has scheduled a conference call to discuss its first quarter 2026 results at 9:00 a.m. ET on April 28, 2026, via a live audio-only webcast. Both the webcast link and a presentation of financial information will be posted on the “Events & Presentations” page of investors.customtruck.com. A replay of the call will be available by accessing the same webcast link detailed above.
ABOUT CTOS
CTOS is one of the largest providers of specialty equipment, parts, tools, accessories and services to the electric utility transmission and distribution, telecommunications, and rail markets in North America, with a differentiated “one-stop-shop” business model. CTOS offers its specialized equipment to a diverse customer base for the maintenance, repair, upgrade, and installation of critical infrastructure assets, including electric lines, telecommunications networks, and rail systems. The Company's coast-to-coast rental fleet of more than 10,350 units includes aerial devices, boom trucks, cranes, digger derricks, pressure drills, stringing gear, hi-rail equipment, repair parts, tools, and accessories. For more information, please visit customtruck.com.
Investors and others should note that we announce material financial and operational information to our investors using our investor relations website (investors.customtruck.com) in addition to press releases, SEC filings and public conference calls. The information we post through our investor relations website may be deemed material. Accordingly, investors should monitor our investor relations website in addition to following our press releases, SEC filings and public conference calls.
FORWARD-LOOKING STATEMENTS
This press release includes “forward-looking statements” within the meaning of the “safe harbor” provisions of the United States Private Securities Litigation Reform Act of 1995, as amended, and within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended, and Section 27A of the Securities Act of 1933, as amended. When used in this press release, the words “estimates,” “projected,” “expects,” “anticipates,” “forecasts,” “suggests,” “plans,” “targets,” “intends,” “believes,” “seeks,” “may,” “will,” “should,” “future,” “propose,” “could,” “would,” and variations of these words or similar expressions (or the negative versions of such words or expressions) are intended to identify forward-looking statements. These forward-looking statements are not guarantees of future performance, conditions or results, and involve a number of known and unknown risks, uncertainties, assumptions and other important factors, many of which are outside the Company's management’s control, that could cause actual results or outcomes to differ materially from those discussed in this press release. This press release is based on certain assumptions that the Company's management has made in light of its experience in the industry, as well as the Company’s perceptions of historical
trends, current conditions, expected future developments and other factors the Company believes are appropriate in these circumstances and at such time. As you read and consider this press release, you should understand that these statements are not guarantees of performance or results. Many factors could affect the Company’s actual performance and results and could cause actual results to differ materially from those expressed in this press release. Important factors, among others, that may affect actual results or outcomes include: increases in labor costs, changes in U.S. trade policy including tariffs, our inability to obtain raw materials, component parts and/or finished goods in a timely and cost-effective manner, and our inability to manage our rental equipment in an effective manner; competition in the equipment dealership and rental industries; our sales order backlog may not be indicative of the level of our future revenues; increases in unionization rate in our workforce; our inability to attract and retain key personnel, including our management and skilled technicians; material disruptions to our operation and manufacturing locations as a result of public health concerns, equipment failures, natural disasters, work stoppages, power outages or other reasons; any further increase in the cost of new equipment that we purchase for use in our rental fleet or for sale as inventory aging or obsolescence of our existing equipment, and the fluctuations of market value thereof; disruptions in our supply chain; our business may be impacted by government spending; we may experience losses in excess of our recorded reserves for receivables; uncertainty relating to macroeconomic conditions, unfavorable conditions in the capital and credit markets and our customers’ inability to obtain additional capital as required; increases in price of fuel or freight; regulatory, technological advancement, or other changes in our core end-markets may affect our customers’ spending; our strategic initiatives including acquisitions and divestitures may not be successful and may divert our management’s attention away from operations and could create general customer uncertainty; the interest of our majority stockholder, which may not be consistent with the other stockholders; volatility of our common stock market price; our significant indebtedness, which may adversely affect our financial position, limit our available cash and our access to additional capital, prevent us from growing our business and increase our risk of default; our inability to generate cash, which could lead to a default; significant operating and financial restrictions imposed by our debt agreements; changes in interest rates, which could increase our debt service obligations on the variable rate indebtedness and decrease our net income and cash flows; disruptions or security compromises affecting our information technology systems or those of our critical services providers could adversely affect our operating results by subjecting us to liability, and limiting our ability to effectively monitor and control our operations, adjust to changing market conditions, or implement strategic initiatives; we are subject to complex laws and regulations, including environmental and safety regulations that can adversely affect cost, manner or feasibility of doing business; we are subject to a series of risks related to climate change; and increased attention to, and evolving expectations for, sustainability and environmental, social and governance initiatives. For a more complete description of these and other possible risks and uncertainties, please refer to the Company's Annual Report on Form 10-K for the year ended December 31, 2025, and its subsequent reports filed with the Securities and Exchange Commission. All forward-looking statements attributable to the Company or persons acting on its behalf are expressly qualified in their entirety by the foregoing cautionary statements.
INVESTOR CONTACT
Brian Perman, Vice President, Investor Relations
investors@customtruck.com
CUSTOM TRUCK ONE SOURCE, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(unaudited)
| Three Months Ended March 31, | Three Months Ended December 31, 2025 | ||||||||||||||||
| (in $000s except per share data) | 2026 | 2025 | |||||||||||||||
| Revenue | |||||||||||||||||
| Rental revenue | $ | 137,215 | $ | 116,261 | $ | 141,981 | |||||||||||
| Equipment sales | 292,634 | 273,863 | 353,925 | ||||||||||||||
| Parts sales and services | 31,773 | 32,108 | 32,278 | ||||||||||||||
| Total revenue | 461,622 | 422,232 | 528,184 | ||||||||||||||
| Cost of Revenue | |||||||||||||||||
| Cost of rental revenue | 31,065 | 30,400 | 30,228 | ||||||||||||||
| Depreciation of rental equipment | 56,197 | 50,091 | 56,762 | ||||||||||||||
| Cost of equipment sales | 243,918 | 228,477 | 291,772 | ||||||||||||||
| Cost of parts sales and services | 27,379 | 27,728 | 26,361 | ||||||||||||||
| Total cost of revenue | 358,559 | 336,696 | 405,123 | ||||||||||||||
| Gross Profit | 103,063 | 85,536 | 123,061 | ||||||||||||||
| Operating Expenses | |||||||||||||||||
| Selling, general and administrative expenses | 57,626 | 59,451 | 56,603 | ||||||||||||||
| Amortization | 6,686 | 6,680 | 6,682 | ||||||||||||||
| Non-rental depreciation | 3,390 | 3,340 | 3,368 | ||||||||||||||
| Transaction expenses and other | 3,892 | 3,660 | 4,430 | ||||||||||||||
| Total operating expenses | 71,594 | 73,131 | 71,083 | ||||||||||||||
| Operating Income | 31,469 | 12,405 | 51,978 | ||||||||||||||
| Other Expense | |||||||||||||||||
| Interest expense, net | 35,037 | 38,913 | 38,255 | ||||||||||||||
| Financing and other expense (income) | 237 | (1,016) | (1,285) | ||||||||||||||
| Total other expense | 35,274 | 37,897 | 36,970 | ||||||||||||||
| Income (Loss) Before Income Taxes | (3,805) | (25,492) | 15,008 | ||||||||||||||
| Income Tax Expense (Benefit) | 297 | (7,701) | (5,867) | ||||||||||||||
| Net Income (Loss) | $ | (4,102) | $ | (17,791) | $ | 20,875 | |||||||||||
| Net Income (Loss) Per Share | |||||||||||||||||
| Basic | $ | (0.02) | $ | (0.08) | $ | 0.09 | |||||||||||
| Diluted | $ | (0.02) | $ | (0.08) | $ | 0.09 | |||||||||||
CUSTOM TRUCK ONE SOURCE, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(unaudited)
| (in $000s) | March 31, 2026 | December 31, 2025 | |||||||||
| Assets | |||||||||||
| Current Assets | |||||||||||
| Cash and cash equivalents | $ | 9,608 | $ | 6,273 | |||||||
| Accounts receivable, net | 203,623 | 195,541 | |||||||||
| Financing receivables, net | 6,076 | 8,853 | |||||||||
| Inventory | 1,022,471 | 930,939 | |||||||||
| Prepaid expenses and other | 20,455 | 17,009 | |||||||||
| Total current assets | 1,262,233 | 1,158,615 | |||||||||
| Property and equipment, net | 150,491 | 142,526 | |||||||||
| Rental equipment, net | 1,088,517 | 1,086,678 | |||||||||
| Goodwill | 705,058 | 705,167 | |||||||||
| Intangible assets, net | 218,966 | 225,725 | |||||||||
| Operating lease assets | 110,897 | 110,921 | |||||||||
| Other assets | 11,144 | 11,822 | |||||||||
| Total Assets | $ | 3,547,306 | $ | 3,441,454 | |||||||
| Liabilities and Stockholders' Equity | |||||||||||
| Current Liabilities | |||||||||||
| Accounts payable | $ | 125,351 | $ | 88,366 | |||||||
| Accrued expenses | 77,372 | 69,228 | |||||||||
| Deferred revenue and customer deposits | 15,873 | 23,500 | |||||||||
| Floor plan payables - trade | 323,028 | 291,215 | |||||||||
| Floor plan payables - non-trade | 417,054 | 366,208 | |||||||||
| Operating lease liabilities - current | 8,999 | 8,955 | |||||||||
| Current maturities of long-term debt | 5,085 | 25,858 | |||||||||
| Total current liabilities | 972,762 | 873,330 | |||||||||
| Long-term debt, net | 1,628,943 | 1,619,352 | |||||||||
| Operating lease liabilities - noncurrent | 106,294 | 105,909 | |||||||||
| Deferred income taxes | 34,066 | 33,760 | |||||||||
| Total long-term liabilities | 1,769,303 | 1,759,021 | |||||||||
| Stockholders' Equity | |||||||||||
| Common stock | 25 | 25 | |||||||||
| Treasury stock, at cost | (122,602) | (122,602) | |||||||||
| Additional paid-in capital | 1,561,053 | 1,559,874 | |||||||||
| Accumulated other comprehensive loss | (11,553) | (10,614) | |||||||||
| Accumulated deficit | (621,682) | (617,580) | |||||||||
| Total stockholders' equity | 805,241 | 809,103 | |||||||||
| Total Liabilities and Stockholders' Equity | $ | 3,547,306 | $ | 3,441,454 | |||||||
CUSTOM TRUCK ONE SOURCE, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(unaudited)
| Three Months Ended March 31, | |||||||||||
| (in $000s) | 2026 | 2025 | |||||||||
| Operating Activities | |||||||||||
| Net loss | $ | (4,102) | $ | (17,791) | |||||||
| Adjustments to reconcile net income (loss) to net cash flow from operating activities: | |||||||||||
| Depreciation and amortization | 68,210 | 62,137 | |||||||||
| Amortization of debt issuance costs | 1,089 | 1,064 | |||||||||
| Provision for losses on accounts receivable | 2,445 | 2,030 | |||||||||
| Share-based compensation | 1,179 | 2,404 | |||||||||
| Gain on sales and disposals of rental equipment | (9,882) | (9,986) | |||||||||
| Deferred tax expense (benefit) | 388 | (8,119) | |||||||||
| Changes in assets and liabilities: | |||||||||||
| Accounts and financing receivables | (6,501) | 9,132 | |||||||||
| Inventories | (92,595) | (26,306) | |||||||||
| Prepaids, operating leases and other | (3,060) | (4,756) | |||||||||
| Accounts payable | 34,286 | 35,230 | |||||||||
| Accrued expenses and other liabilities | 8,145 | 11,405 | |||||||||
| Floor plan payables - trade, net | 31,813 | 4,421 | |||||||||
| Customer deposits and deferred revenue | (7,600) | (5,230) | |||||||||
| Net cash flow from operating activities | 23,815 | 55,635 | |||||||||
| Investing Activities | |||||||||||
| Purchases of rental equipment | (96,906) | (111,933) | |||||||||
| Proceeds from sales and disposals of rental equipment | 47,813 | 44,547 | |||||||||
| Purchase of non-rental property and cloud computing arrangements | (10,141) | (3,920) | |||||||||
| Net cash flow for investing activities | (59,234) | (71,306) | |||||||||
| Financing Activities | |||||||||||
| Borrowings under revolving credit facilities | 35,000 | 72,575 | |||||||||
| Repayments under revolving credit facilities | (45,000) | — | |||||||||
| Principal payments on long-term debt | (2,271) | (2,221) | |||||||||
| Acquisition of inventory through floor plan payables - non-trade | 135,751 | 125,450 | |||||||||
| Repayment of floor plan payables - non-trade | (84,905) | (146,033) | |||||||||
| Repurchase of common stock | — | (32,575) | |||||||||
| Net cash flow from financing activities | 38,575 | 17,196 | |||||||||
| Effect of exchange rate changes on cash and cash equivalents | 179 | 50 | |||||||||
| Net Change in Cash and Cash Equivalents | 3,335 | 1,575 | |||||||||
| Cash and Cash Equivalents at Beginning of Period | 6,273 | 3,805 | |||||||||
| Cash and Cash Equivalents at End of Period | $ | 9,608 | $ | 5,380 | |||||||
| Three Months Ended March 31, | |||||||||||
| (in $000s) | 2026 | 2025 | |||||||||
| Supplemental Cash Flow Information | |||||||||||
| Interest paid | $ | 22,128 | $ | 26,839 | |||||||
| Income taxes paid (refunds received), net | (235) | — | |||||||||
| Non-Cash Investing and Financing Activities | |||||||||||
| Property and equipment purchases in accounts payable | 3,718 | 435 | |||||||||
| Rental equipment sales in accounts receivable | 1,428 | 933 | |||||||||
CUSTOM TRUCK ONE SOURCE, INC.
NON-GAAP FINANCIAL AND PERFORMANCE MEASURES
In our press release and schedules, and on the related conference call, we report certain financial measures that are not required by, or presented in accordance with, United States generally accepted accounting principles (“GAAP”). We utilize these financial measures to manage our business on a day-to-day basis and some of these measures are commonly used in our industry to evaluate performance by excluding items considered to be non-recurring. We believe these non-GAAP measures provide investors expanded insight to assess performance, in addition to the standard GAAP-based financial measures. The press release schedules reconcile the most directly comparable GAAP measure to each non-GAAP measure that we refer to. Although management evaluates and presents these non-GAAP measures for the reasons described herein, please be aware that these non-GAAP measures have limitations and should not be considered in isolation or as a substitute for revenue, operating income/loss, net income/loss, earnings/loss per share or any other comparable measure prescribed by GAAP. In addition, we may calculate and/or present these non-GAAP financial measures differently than measures with the same or similar names that other companies report, and as a result, the non-GAAP measures we report may not be comparable to those reported by others.
Adjusted EBITDA. Adjusted EBITDA is a non-GAAP performance measure that we use to monitor our results of operations, to measure performance against debt covenants and performance relative to competitors. We believe Adjusted EBITDA is a useful performance measure because it allows for an effective evaluation of operating performance, without regard to financing methods or capital structures. We exclude the items identified in the reconciliations of net income (loss) to Adjusted EBITDA because these amounts are either non-recurring or can vary substantially within the industry depending upon accounting methods and book values of assets, including the method by which the assets were acquired, and capital structures. Adjusted EBITDA should not be considered as an alternative to, or more meaningful than, net income (loss) determined in accordance with GAAP. Certain items excluded from Adjusted EBITDA are significant components in understanding and assessing a company’s financial performance, such as a company’s cost of capital and tax structure, as well as the historical costs of depreciable assets, none of which are reflected in Adjusted EBITDA. Our presentation of Adjusted EBITDA should not be construed as an indication that results will be unaffected by the items excluded from Adjusted EBITDA. Our computation of Adjusted EBITDA may not be identical to other similarly titled measures of other companies.
We define Adjusted EBITDA as net income or loss before interest expense (excluding interest on floorplan financing), income taxes, depreciation and amortization, share-based compensation, and other items that we do not view as indicative of ongoing performance. Our Adjusted EBITDA includes an adjustment to exclude the effects of purchase accounting adjustments when calculating the cost of inventory and used equipment sold. When inventory or equipment is purchased in connection with a business combination, the assets are revalued to their current fair values for accounting purposes. The consideration transferred (i.e., the purchase price) in a business combination is allocated to the fair values of the assets as of the acquisition date, with amortization or depreciation recorded thereafter following applicable accounting policies; however, this may not be indicative of the actual cost to acquire inventory or new equipment that is added to product inventory or the rental fleets apart from a business acquisition. We also include an adjustment to remove the impact of accounting for certain of our rental contracts with customers containing a rental purchase option that are accounted for under GAAP as a sales-type lease. We include this adjustment because we believe continuing to reflect the transactions as an operating lease better reflects the economics of the transactions given our large portfolio of rental contracts. These, and other, adjustments to GAAP net income or loss that are applied to derive Adjusted EBITDA are specified by our senior secured credit agreement and the indenture of our senior secured notes.
Adjusted Gross Profit. We present total gross profit excluding rental equipment depreciation (“Adjusted Gross Profit”) as a non-GAAP financial performance measure. This measure differs from the GAAP definition of gross profit, as we do not include the impact of depreciation expense, which represents non-cash expense. We use this measure to evaluate operating margins and the effectiveness of the cost of our rental fleet.
Net Debt. We present the non-GAAP financial measure “Net Debt,” which is total debt (the most comparable GAAP measure, calculated as current and long-term debt, excluding deferred financing fees, plus current and long-term finance lease obligations) minus cash and cash equivalents. We believe this non-GAAP measure is useful to investors to evaluate our financial position.
Net Leverage Ratio. Net leverage ratio is a non-GAAP performance measure used by management and we believe it provides useful information to investors because it is an important measure to evaluate our debt levels and progress toward leverage targets, which is consistent with the manner our lenders and management use this measure. We define net leverage ratio as net debt divided by Adjusted EBITDA for the previous twelve-month period (“last twelve months,” or “LTM”).
CUSTOM TRUCK ONE SOURCE, INC.
ADJUSTED EBITDA RECONCILIATION
(unaudited)
| Three Months Ended March 31, | Three Months Ended December 31, 2025 | ||||||||||||||||
| (in $000s) | 2026 | 2025 | |||||||||||||||
| Net income (loss) | $ | (4,102) | $ | (17,791) | $ | 20,875 | |||||||||||
| Interest expense | 24,518 | 25,616 | 26,364 | ||||||||||||||
| Income tax expense (benefit) | 297 | (7,701) | (5,867) | ||||||||||||||
| Depreciation and amortization | 68,274 | 62,511 | 69,013 | ||||||||||||||
| EBITDA | 88,987 | 62,635 | 110,385 | ||||||||||||||
| Adjustments: | |||||||||||||||||
Non-cash purchase accounting impact (1) | 3,232 | 4,181 | 3,967 | ||||||||||||||
Transaction and integration costs (2) | 3,892 | 3,660 | 4,430 | ||||||||||||||
Sales-type lease adjustment (3) | 696 | 546 | (253) | ||||||||||||||
Share-based payments (4) | 1,179 | 2,404 | 2,212 | ||||||||||||||
| Adjusted EBITDA | $ | 97,986 | $ | 73,426 | $ | 120,741 | |||||||||||
Adjusted EBITDA is defined as net income (loss), as adjusted for provision for income taxes, interest expense, net (excluding interest on floorplan financing), depreciation of rental equipment and non-rental depreciation and amortization, and further adjusted for the impact of the fair value mark-up of acquired rental fleet, business acquisition and merger-related costs, including integration, the impact of accounting for certain of our rental contracts with customers that are accounted for under GAAP as sales-type lease and stock compensation expense. This non-GAAP measure is subject to certain limitations.
(1) Represents the non-cash impact of purchase accounting, net of accumulated depreciation, on the cost of equipment and inventory sold. The equipment and inventory acquired received a purchase accounting step-up in basis, which is a non-cash adjustment to the equipment cost pursuant to our ABL Credit Agreement and Indenture.
(2) Represents transaction and other costs related to acquisitions of businesses; costs associated with closed operations; costs associated with restructuring and business optimization activities (inclusive of systems establishment costs); employee retention and/or severance costs; costs related to start-up/pre-openings and openings of locations; reconfiguration or consolidation of facilities or equipment conversion costs. These adjustments are presented as adjustments to net income (loss) pursuant to our ABL Credit Agreement and Indenture.
(3) Represents the impact of sales-type lease accounting for certain leases containing rental purchase options (or “RPOs”), as the application of sales-type lease accounting is not deemed to be representative of the ongoing cash flows of the underlying rental contracts. The adjustments are made pursuant to our ABL Credit Agreement and Indenture. The components of this adjustment are presented in the table below:
| Three Months Ended March 31, | Three Months Ended December 31, 2025 | ||||||||||||||||
| (in $000s) | 2026 | 2025 | |||||||||||||||
| Equipment sales | $ | 730 | $ | (2,161) | $ | (2,461) | |||||||||||
| Cost of equipment sales | (1,644) | 1,839 | 1,883 | ||||||||||||||
| Gross margin | (914) | (322) | (578) | ||||||||||||||
| Interest (income) expense | 237 | (1,012) | (1,374) | ||||||||||||||
| Rental invoiced | 1,373 | 1,880 | 1,699 | ||||||||||||||
| Sales-type lease adjustment | $ | 696 | $ | 546 | $ | (253) | |||||||||||
(4) Represents non-cash share-based compensation expense associated with the issuance of restricted stock units.
Reconciliation of Adjusted Gross Profit
(unaudited)
The following table presents the reconciliation of Adjusted Gross Profit:
| Three Months Ended March 31, | Three Months Ended December 31, 2025 | ||||||||||||||||
| (in $000s) | 2026 | 2025 | |||||||||||||||
| Revenue | |||||||||||||||||
| Rental revenue | $ | 137,215 | $ | 116,261 | $ | 141,981 | |||||||||||
| Equipment sales | 292,634 | 273,863 | 353,925 | ||||||||||||||
| Parts sales and services | 31,773 | 32,108 | 32,278 | ||||||||||||||
| Total revenue | 461,622 | 422,232 | 528,184 | ||||||||||||||
| Cost of Revenue | |||||||||||||||||
| Cost of rental revenue | 31,065 | 30,400 | 30,228 | ||||||||||||||
| Depreciation of rental equipment | 56,197 | 50,091 | 56,762 | ||||||||||||||
| Cost of equipment sales | 243,918 | 228,477 | 291,772 | ||||||||||||||
| Cost of parts sales and services | 27,379 | 27,728 | 26,361 | ||||||||||||||
| Total cost of revenue | 358,559 | 336,696 | 405,123 | ||||||||||||||
| Gross Profit | 103,063 | 85,536 | 123,061 | ||||||||||||||
| Add: depreciation of rental equipment | 56,197 | 50,091 | 56,762 | ||||||||||||||
| Adjusted Gross Profit | $ | 159,260 | $ | 135,627 | $ | 179,823 | |||||||||||
Reconciliation of SER Segment Adjusted Gross Profit and Adjusted Rental Gross Profit
(unaudited)
The following table presents the reconciliation of SER segment Adjusted Gross Profit:
| Three Months Ended March 31, | Three Months Ended December 31, 2025 | ||||||||||||||||
| (in $000s) | 2026 | 2025 | |||||||||||||||
| Revenue | |||||||||||||||||
| Rental revenue | $ | 137,215 | $ | 116,261 | $ | 141,981 | |||||||||||
| Equipment sales | 37,777 | 29,855 | 55,773 | ||||||||||||||
| Parts sales and services | 18,771 | 20,965 | 20,982 | ||||||||||||||
| Intersegment sales | 6,790 | 11,600 | 10,489 | ||||||||||||||
| Total revenue | 200,553 | 178,681 | 229,225 | ||||||||||||||
| Cost of Revenue | |||||||||||||||||
| Cost of rental revenue | 31,065 | 30,400 | 30,229 | ||||||||||||||
| Cost of equipment sales | 28,214 | 20,667 | 39,181 | ||||||||||||||
| Cost of parts and services | 18,019 | 20,103 | 17,194 | ||||||||||||||
| Depreciation of rental equipment | 56,197 | 50,091 | 56,761 | ||||||||||||||
| Intersegment cost of sales | 6,111 | 11,600 | 10,489 | ||||||||||||||
| Total cost of revenue | 139,606 | 132,861 | 153,854 | ||||||||||||||
| Gross profit | 60,947 | 45,820 | 75,371 | ||||||||||||||
| Add: depreciation of rental equipment | 56,197 | 50,091 | 56,761 | ||||||||||||||
| Adjusted Gross Profit | $ | 117,144 | $ | 95,911 | $ | 132,132 | |||||||||||
The following table presents the reconciliation of SER segment Adjusted Rental Gross Profit:
| Three Months Ended March 31, | Three Months Ended December 31, 2025 | ||||||||||||||||
| (in $000s) | 2026 | 2025 | |||||||||||||||
| Rental revenue | $ | 137,215 | $ | 116,261 | $ | 141,981 | |||||||||||
| Cost of rental revenue | 31,065 | 30,400 | 30,229 | ||||||||||||||
| Adjusted Rental Gross Profit | $ | 106,150 | $ | 85,861 | $ | 111,752 | |||||||||||
Reconciliation of Net Debt
(unaudited)
The following table presents the reconciliation of Net Debt:
| (in $000s) | March 31, 2026 | December 31, 2025 | |||||||||
| Current maturities of long-term debt | $ | 5,085 | $ | 25,858 | |||||||
| Long-term debt, net | 1,628,943 | 1,619,352 | |||||||||
| Deferred financing fees | 14,462 | 15,549 | |||||||||
| Less: cash and cash equivalents | (9,608) | (6,273) | |||||||||
| Net Debt | $ | 1,638,882 | $ | 1,654,486 | |||||||
Reconciliation of Net Leverage Ratio
(unaudited)
The following table presents the reconciliation of the Net Leverage Ratio:
| Twelve Months Ended | |||||||||||
| (in $000s) | March 31, 2026 | December 31, 2025 | |||||||||
| Net Debt (as of period end) | $ | 1,638,882 | $ | 1,654,486 | |||||||
Divided by: LTM Adjusted EBITDA (1) | $ | 408,118 | $ | 383,558 | |||||||
| Net Leverage Ratio | 4.02 | 4.31 | |||||||||
(1) The following tables presents the calculation of LTM Adjusted EBITDA for the periods ended March 31, 2026 and December 31, 2025:
| Current Year To Date Period | Less: Prior Year To Date Period | Add: Prior Fiscal Year | LTM Adjusted EBITDA | ||||||||||||||||||||
| (in $000s) | March 31, 2026 | March 31, 2025 | December 31, 2025 | March 31, 2026 | |||||||||||||||||||
| Net income (loss) | $ | (4,102) | $ | (17,791) | $ | (31,052) | $ | (17,363) | |||||||||||||||
| Interest expense | 24,518 | 25,616 | 104,882 | 103,784 | |||||||||||||||||||
| Income tax expense (benefit) | 297 | (7,701) | 2,922 | 10,920 | |||||||||||||||||||
| Depreciation and amortization | 68,274 | 62,511 | 264,998 | 270,761 | |||||||||||||||||||
| EBITDA | 88,987 | 62,635 | 341,750 | 368,102 | |||||||||||||||||||
| Adjustments: | |||||||||||||||||||||||
| Non-cash purchase accounting impact | 3,232 | 4,181 | 15,469 | 14,520 | |||||||||||||||||||
| Transaction and integration costs | 3,892 | 3,660 | 16,639 | 16,871 | |||||||||||||||||||
| Sales-type lease adjustment | 696 | 546 | 1,229 | 1,379 | |||||||||||||||||||
| Share-based payments | 1,179 | 2,404 | 8,471 | 7,246 | |||||||||||||||||||
| Adjusted EBITDA | $ | 97,986 | $ | 73,426 | $ | 383,558 | $ | 408,118 | |||||||||||||||
| | ||
FAQ
How did Custom Truck One Source (CTOS) perform in Q1 2026?
Custom Truck One Source reported Q1 2026 revenue of $461.6 million, up 9.3% year over year. Adjusted EBITDA grew 33.4% to $98.0 million, while the net loss narrowed to $4.1 million from $17.8 million a year earlier.
What 2026 guidance did Custom Truck One Source (CTOS) provide?
For 2026, Custom Truck One Source expects revenue of $2,005–$2,120 million and Adjusted EBITDA of $415–$440 million. The EBITDA range was raised from $410–$435 million, reflecting strong Q1 performance and momentum in its rental business.
How are CTOS’s SER and STEM segments performing in 2026?
In Q1 2026, the SER rental segment generated Adjusted EBITDA of $105.5 million with fleet utilization of 81.4%. The STEM segment delivered Adjusted EBITDA of $32.7 million, up sharply from $13.1 million in Q1 2025, aided by equipment demand.
What is Custom Truck One Source’s leverage and debt position?
As of March 31, 2026, Custom Truck One Source had net debt of $1,638.9 million and a net leverage ratio of 4.02x LTM Adjusted EBITDA. Management targets reducing net leverage meaningfully below four times by year-end 2026.
How strong is demand in Custom Truck One Source’s end markets?
CTOS highlighted very strong demand in utility transmission and distribution markets and solid demand in data center, electrification and infrastructure end markets. This supports high rental utilization, record fleet OEC of $1.66 billion, and a STEM sales backlog of $411.3 million.