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Custom Truck One Source cuts 2026 cash flow outlook

Custom Truck One Source, Inc. (CTOS) reported third-quarter 2026 revenue of $495.2 million, up 2.7% year over year, and raised full-year 2026 Adjusted EBITDA and Specialty Equipment Rentals (SER) revenue guidance.

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Form Type
8-K

Rhea-AI Filing Summary

Custom Truck One Source, Inc. (CTOS) reported third-quarter 2026 revenue of $495.2 million, up 2.7% year over year, and raised full-year 2026 Adjusted EBITDA and Specialty Equipment Rentals (SER) revenue guidance.

Quarterly net income was $2.3 million versus a $5.8 million loss a year earlier; Adjusted EBITDA, a non-GAAP measure, was $110.9 million, up 15.6%, and gross profit was $113.3 million, up 12.4%. Rental revenue rose 20.1%, average OEC on rent reached $1.39 billion, fleet utilization was 81.5%, and the net leverage ratio was 3.70x as of September 30, 2026.

2026 Adjusted EBITDA guidance increased to $447.5 million to $460 million, and SER revenue guidance to $870 million to $890 million. Net rental fleet investment is expected to be approximately $210 million to $230 million; levered free cash flow is now expected to be slightly positive, versus prior guidance of more than $50 million, reflecting higher fleet investment and working capital associated with growth. More than $20 million of third-party STEM deliveries shifted to the fourth quarter and are expected to be delivered then; the larger earnings contribution from fleet additions is expected in 2027.

4 points · 1 major

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1 major · 1 point

Hollow bars mark forward-looking points. How the balance works

Positive

  • Major point. Forward-looking: it has not happened yet and may not happen.2026 Adjusted EBITDA guidance rose to $447.5 million–$460 million.
  • Moderate pointAdjusted EBITDA rose 15.6% to $110.9 million in Q3 2026.
  • Moderate pointNet income reached $2.3 million, versus a $5.8 million prior-year loss.
  • Moderate pointNet leverage fell to 3.70x from 4.53x year over year.

Negative

  • Major point. Forward-looking: it has not happened yet and may not happen.2026 levered free cash flow: >$50 million prior; slightly positive now.

Filing Explained

This Form 8-K furnishes third-quarter results and an updated investor presentation; beyond the results already summarized, CTOS reports $234.3 million available under its senior secured credit facility and a further $288.0 million of suppressed availability that it says it could access by upsizing the facility.

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, or exhibit attachments filed with this report.
Revenue $495.2 million Third quarter 2026; up 2.7% year over year
Rental revenue growth 20.1% Third quarter 2026 year over year
Net income $2.3 million Third quarter 2026; compared with a $5.8 million loss in 2025
Adjusted EBITDA $110.9 million Third quarter 2026; up 15.6% year over year
SER segment revenue guidance $870 million to $890 million Full-year 2026 revised guidance
Adjusted EBITDA guidance $447.5 million to $460 million Full-year 2026 revised guidance
Net rental fleet investment Approximately $210 million to $230 million 2026 expected investment
Prior levered free cash flow guidance More than $50 million Prior 2026 guidance; revised outlook is slightly positive
Adjusted EBITDA financial
"Adjusted EBITDA is a non-GAAP performance measure"
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.
OEC on rent financial
"record average OEC on rent of $1.39 billion"
Fleet utilization financial
"Fleet utilization of 81.5%"
Fleet utilization measures how much of a company’s vehicles, ships, or aircraft are actively working and earning revenue compared with the total available capacity over a given time. It matters to investors because higher utilization usually means the company is turning expensive assets into income efficiently—like a taxi that’s on fares more often rather than sitting idle—while low utilization can signal wasted capital, higher unit costs, and weaker profit potential.
Net leverage ratio financial
"net leverage ratio was 3.70x at September 30, 2026"
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 Flow is defined as net cash provided"
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.
Revenue $495.2 million +2.7% year over year
Net income $2.3 million Compared with a $5.8 million loss in the third quarter of 2025
Adjusted EBITDA $110.9 million +15.6% year over year
Gross profit $113.3 million +12.4% year over year
Guidance

Raised 2026 Adjusted EBITDA guidance to $447.5 million to $460 million and SER segment revenue guidance to $870 million to $890 million; net rental fleet investment is expected to be approximately $210 million to $230 million.

FAQ

AI-generated questions and answers. How Rhea-AI works. Not financial advice.

What were CTOS's third-quarter 2026 results?
CTOS reported revenue of $495.2 million, net income of $2.3 million and Adjusted EBITDA of $110.9 million for the quarter ended September 30, 2026. Revenue increased 2.7% and Adjusted EBITDA increased 15.6% from the third quarter of 2025; the prior-year quarter had a net loss of $5.8 million.

What did CTOS raise its 2026 guidance to?
CTOS raised full-year 2026 Adjusted EBITDA guidance to $447.5 million to $460 million and SER segment revenue guidance to $870 million to $890 million. It also increased expected net rental fleet investment to approximately $210 million to $230 million, with the larger earnings contribution from fleet additions expected in 2027.

Why did CTOS revise its 2026 levered free cash flow outlook?
2026 levered free cash flow is now expected to be slightly positive, versus prior guidance of more than $50 million. CTOS attributed the change to higher net rental fleet investment and working capital associated with growth, describing it as a reallocation of 2026 cash flow toward rental fleet growth.

Why did more than $20 million of CTOS deliveries shift out of the third quarter?
More than $20 million of third-party STEM deliveries shifted out of the third quarter following a hailstorm at the Kansas City facility and a vendor warranty recall. CTOS said the units remained in backlog and were expected to be delivered in the fourth quarter.

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Available on EDGAR Accepted by SEC EDGAR
FALSE000170968200017096822026-10-262026-10-26

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): October 26, 2026
CUSTOM TRUCK ONE SOURCE, INC.
(Exact Name of Registrant as Specified in its Charter)
Delaware001-3818684-2531628
(State or Other Jurisdiction
of Incorporation)		(Commission
File Number)		(IRS Employer
Identification No.)
7701 Independence Avenue
Kansas City, Missouri
64125
(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 ClassTrading Symbol(s)Name of Exchange on Which Registered
Common Stock, $0.0001 par valueCTOSNew York Stock Exchange
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 October 26, 2026, Custom Truck One Source, Inc. (the "Company") issued a press release announcing its financial results for the quarter ended September 30, 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 October 26, 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.
104Cover 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:
October 26, 2026
Custom Truck One Source, Inc.
/s/ Christopher J. Eperjesy
Christopher J. Eperjesy
Chief Financial Officer




ctoslogojpg.jpg                                     

EXHIBIT 99.1

Custom Truck One Source, Inc. Reports Record Third Quarter 2026 Results and Increases Full Year 2026 Adjusted EBITDA and SER Revenue Guidance

Company Continues to Benefit from Grid Modernization, Electrification, Data Center, and Infrastructure Growth Through Disciplined Execution Focused on Profitable Growth and Deleveraging
KANSAS CITY, Mo. October 26, 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 and nine months ended September 30, 2026.
CTOS Third-Quarter Highlights
•Revenue of $495.2 million, an increase of $13.2 million, or 2.7%, compared to the third quarter of 2025, with rental revenue up 20.1%; more than $20.0 million of third-party STEM deliveries shifted into the fourth quarter
•Record average OEC on rent of $1.39 billion, up $132.2 million, or 10.5%, compared to the third quarter of 2025, with fleet utilization of 81.5% and OEC on rent yield of 39.4%
•Gross profit of $113.3 million, an increase of $12.5 million, or 12.4%, compared to the third quarter of 2025
•Adjusted Gross Profit of $170.2 million, an increase of $14.7 million, or 9.4%, compared to the third quarter of 2025
•Net income of $2.3 million, an improvement of $8.1 million, compared to the third quarter of 2025
•Adjusted EBITDA of $110.9 million, an increase of $15.0 million, or 15.6%, compared to the third quarter of 2025; Adjusted EBITDA margin expanded approximately 250 basis points to 22.4%
•SER segment Adjusted EBITDA of $121.9 million, an increase of 22.5% compared to the third quarter of 2025, with segment Adjusted EBITDA margin expanding to 54.6% from 52.4%
•Reduced net leverage ratio to 3.70x, compared to 4.31x at year-end 2025 and 4.53x at the end of the third quarter 2025, even as ending fleet OEC grew $143.0 million year-over-year to a record $1.76 billion
•Raising 2026 SER segment revenue guidance to $870 million to $890 million, from $850 million to $875 million, on continued strength in transmission and distribution (“T&D”) end markets
•Raising CTOS Adjusted EBITDA1 guidance range to $447.5 million to $460 million, from $437.5 million to $455 million, the third increase this year and representing 17% to 20% growth over 2025
•Raising 2026 net rental fleet investment to $210 million to $230 million to capture visible, high-return transmission rental demand; 2026 levered free cashflow is now expected to be slightly positive, with the earnings benefit of the incremental fleet weighted to 2027

“In the third quarter, record demand across our core T&D markets drove 16% year-over-year Adjusted EBITDA growth and 24% growth year to date, and we are raising our full-year Adjusted EBITDA outlook for the third time this year. Our SER segment continued to benefit from strong utility end-market demand, with our rental fleet generating a record quarterly average OEC on rent of nearly $1.4 billion and average utilization of 81.5%. We also ended the quarter with record total OEC of $1.76 billion, providing strong visibility into continued SER growth through the fourth quarter and into 2027,” said Ryan McMonagle, Chief Executive Officer of CTOS. “In STEM, orders grew 22% year-over-year and backlog reached $342 million, and the third-party deliveries that shifted out of the quarter are scheduled to ship in the fourth quarter. Our earnings growth also drove a further meaningful reduction in net leverage, to 3.70x. As we look to the remainder of 2026 and beyond, CTOS is well positioned to participate in powerful secular trends, including utility grid upgrades and transmission expansion, electrification, data center-driven load growth, and infrastructure spending. We remain disciplined in executing our strategy, with a focus on profitable growth, strategic capital deployment, free cash flow generation, and continued deleveraging. Increasing our investment in the rental fleet reflects that discipline as we put capital behind visible, long-duration transmission demand at attractive returns, with the larger earnings benefit arriving in 2027.”














Summary Actual Consolidated Financial Results
Three Months Ended September 30,Nine Months Ended September 30,Three Months Ended June 30, 2026
(in $000s)2026202520262025
Rental revenue$152,696 $127,142 $434,971 $364,217 $145,060 
Equipment sales309,597 320,583 985,790 950,558 383,559 
Parts sales and services32,931 34,333 99,531 100,998 34,827 
Total revenue495,224 482,058 1,520,292 1,415,773 563,446 
Gross Profit$113,280 $100,753 $340,317 $288,831 $123,974 
Adjusted Gross Profit1
$170,198 $155,528 $510,359 $447,704 $180,901 
Net Income (Loss)$2,305 $(5,756)$8,602 $(51,927)$10,399 
Adjusted EBITDA1
$110,942 $95,963 $325,682 $262,817 $116,754 
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 consists 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 September 30,Nine Months Ended September 30,Three Months Ended June 30, 2026
(in $000s)2026202520262025
Revenue from external customers:
Rental$152,696 $127,142 $434,971 $364,217 $145,060 
Equipment sales39,446 34,565 128,882 104,081 51,659 
Parts sales and services19,891 21,182 60,762 64,500 22,100 
Total revenue from external customers212,033 182,889 624,615 532,798 218,819 
Intersegment sales8,121 3,864 19,024 31,190 4,113 
Rental AR Provision(1)
668 2,426 5,234 6,629 2,390 
Sales type lease adjustment(2)
2,528 667 313 3,103 (4,318)
Total segment revenue223,350 189,846 649,186 573,720 221,004 
Segment Expenses:
Cost of rental, excluding depreciation32,507 30,133 97,797 90,265 34,542 
Cost of equipment sales, net of purchase accounting, sales-type leases and depreciation(3)
29,892 23,519 89,248 67,404 30,884 
Cost of parts and services, excluding depreciation17,395 18,013 53,277 56,983 17,914 
Cost of intersegment sales7,432 3,864 17,270 31,190 3,728 
Rental AR provision(1)
668 2,426 5,234 6,629 2,390 
Total segment cost of revenue87,894 77,955 262,826 252,471 89,458 
Selling, general and administrative expenses13,600 12,426 41,808 42,900 14,347 
Total segment expenses101,494 90,381 304,634 295,371 103,805 
Segment Adjusted EBITDA$121,856 $99,465 $344,552 $278,349 $117,199 
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 (“CODM”).
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 September 30,Nine Months Ended September 30,Three Months Ended June 30, 2026
(in $000s)2026202520262025
Revenue from external customers:
Equipment sales$270,151 $286,018 $856,908 $846,477 $331,900 
Parts sales and services13,040 13,151 38,769 36,498 12,727 
Total revenue from external customers283,191 299,169 895,677 882,975 344,627 
Intersegment sales158,967 108,975 347,570 301,363 93,153 
Total Segment Revenue442,158 408,144 1,243,247 1,184,338 437,780 
Segment Expenses:
Cost of equipment sales, net of purchase accounting and depreciation(1)
232,761 240,732 727,221 711,723 281,235 
Cost of parts and services, excluding depreciation10,894 9,390 29,539 25,468 9,551 
Cost of intersegment sales133,779 108,975 292,560 301,363 78,596 
Total segment cost of revenue377,434 359,097 1,049,320 1,038,554 369,382 
Selling, general and administrative expenses17,269 17,598 54,891 50,114 20,042 
Floor plan interest expense10,819 13,785 32,477 40,846 11,139 
Total segment expenses405,522 390,480 1,136,688 1,129,514 400,563 
Segment Adjusted EBITDA$36,636 $17,664 $106,559 $54,824 $37,217 
1-Excludes the non-cash impact of purchase accounting.


Consolidated Adjusted EBITDA
Three Months Ended September 30,Nine Months Ended September 30,Three Months Ended June 30, 2026
(in $000s)2026202520262025
SER Adjusted EBITDA$121,856 $99,465 $344,552 $278,349 $117,199 
STEM Adjusted EBITDA36,636 17,664 106,559 54,824 37,217 
Eliminations Adjusted EBITDA(25,877)— (56,764)— (14,942)
Segment Adjusted EBITDA132,615 117,129 394,347 333,173 139,474 
Reconciling Items:
Corporate and non-allocated selling, general and administrative expenses(21,673)(21,166)(68,665)(70,356)(22,720)
Adjusted EBITDA$110,942 $95,963 $325,682 $262,817 $116,754 
See the Company’s Quarterly Report on Form 10-Q for the three months ended September 30, 2026 for a reconciliation of segment-level adjusted EBITDA to Consolidated income (loss) before income taxes.
Summary Combined Operating Metrics
Three Months Ended September 30,Nine Months Ended September 30,Three Months Ended June 30, 2026
(in $000s)2026202520262025
Ending OEC(a) (as of period end)
$1,764,963 $1,621,725 $1,764,963 $1,621,725 $1,679,255 
Average OEC on rent(b)
$1,394,661 $1,262,477 $1,368,297 $1,215,570 $1,365,689 
Fleet utilization(c)
81.5%79.3%81.5%78.0%81.6%
OEC on rent yield(d)
39.4%38.2%39.2%38.2%39.4%
Sales order backlog(e) (as of period end)
$341,920 $279,785 $341,920 $279,785 $322,470 
(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 20.1% in rental revenue in the third quarter of 2026 compared to the third quarter of 2025 was the result of improved average fleet utilization (which increased to 81.5% compared to 79.3%) driven by increased rental volume, with average OEC on rent increasing by 10.5% year-over-year and OEC on rent yield improving to 39.4%. Compared to the third quarter of 2025, SER rental equipment sales increased 14.1% in the third quarter of 2026 due to an increase in buyout activity of rental contracts with purchase options. SER adjusted EBITDA in the third quarter of 2026 increased 22.5% compared to the third quarter of 2025. SER segment Adjusted EBITDA margin expanded to 54.6% from 52.4% in the prior-year period, and adjusted rental gross margin reached 78.7%.
Total revenue in our STEM segment increased 8% in the third quarter of 2026 compared to the third quarter of 2025 driven by higher intercompany sales to SER to support increased rental activity. This increase was partially offset by a 5.5% decline in new equipment sales driven by lower third-party unit sales volume. Third-party sales were impacted by our strategic decision to prioritize our production for additional investment in the rental fleet to take advantage of current and anticipated rental demand. In addition, unit sales volume was adversely impacted by both a vendor recall, as well as unusual damage to some finished vehicle inventory caused by a hailstorm to our Kansas City location. While these events resulted in reduced sales of more than $20.0 million, we believe they represent only temporary timing issues and that the sales delayed by the vendor recall and hailstorm will be completed in the fourth quarter. Excluding these shifted deliveries, third-party STEM revenue would have exceeded the third quarter of 2025. STEM segment Adjusted EBITDA was $36.6 million in the third quarter of 2026; 2025 segment results reflect intersegment sales at no margin and are not directly comparable. Our STEM backlog increased 22% compared to the third quarter of 2025, and, at approximately 3.8 months of LTM third-party new sales, sits modestly below our targeted range of four to six months.


The increase in net income in the third quarter of 2026, compared to a loss in the third quarter of 2025, was primarily driven by higher operating income resulting from growth in rental revenue due to higher average OEC on rent, as well as lower interest expense.
Adjusted EBITDA for the third quarter of 2026 was $110.9 million, a 15.6% increase compared to the third quarter of 2025, which was largely driven by increased gross profit and lower floor plan interest expense resulting from lower inventory levels.
As of September 30, 2026, cash and cash equivalents were $14.6 million, total debt outstanding was $1,666.0 million, net debt was $1,651.5 million and our net leverage ratio was 3.70x. Availability under the senior secured credit facility was $234.3 million as of September 30, 2026, and based on our borrowing base, we have an additional $288.0 million of suppressed availability that we could access by upsizing our existing facility.

2026 Outlook
We are increasing our full year 2026 SER segment revenue and Adjusted EBITDA1, 4 guidance and raising our net rental fleet investment forecast to reflect record rental performance and sustained demand across our utility T&D end markets.
Consolidated CTOS:
•Revenue is expected to increase 8% to 13% year-over-year, with Adjusted EBITDA1, 4 expected to increase 17% to 20%.
•Net rental fleet investment (purchases less proceeds) for 2026 is expected to be approximately $210 million to $230 million, up from prior guidance of $170 million to $200 million to capture visible, high-return rental demand, while still reflecting a reduction from over $250 million in 2025.
•Inventory ended the third quarter at $1.016 billion, down $26 million from the second quarter. Year-end 2026 inventory months on hand is expected to be approximately flat with year-end 2025, as we prepare for the expected growth in 2027 and the build-up of chassis inventory under our pre-buy program ahead of 2027 emissions regulations.
•Levered free cash flow2, 4 for 2026 is now expected to be slightly positive, compared to prior guidance of more than $50 million, reflecting the increase in net rental fleet investment and the working capital associated with growth. This is a deliberate reallocation of 2026 cash flow toward rental fleet growth with visible, high returns; our underlying earnings outlook has strengthened, as reflected in the higher Adjusted EBITDA guidance. Net leverage ratio3, 4 was 3.70x at September 30, 2026, and is expected to be meaningfully below four times at 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 delivered record results in the quarter, with average OEC on rent of approximately $1.4 billion, average fleet utilization of 81.5% and OEC on rent yield of 39.4% all ahead of expectations. OEC on rent and utilization have continued to grow in the fourth quarter, surpassing $1.5 billion and 84%, respectively, in October.
•Demand for equipment serving the utility transmission and distribution market remains at record levels, led by unprecedented transmission demand, with OEC on rent up more than $132 million year-over-year in the third quarter; further penetration of the vocational rental market, where OEC on rent increased approximately $45 million year-over-year, is expected to provide incremental growth.
•In response to this demand, we are increasing 2026 gross rental fleet investment to approximately $400 million to $430 million, with the incremental investment concentrated in long-term transmission rentals and high-return specialty products. Given delivery timing, the revenue and earnings contribution from these additions will be modest in 2026, with the larger benefit expected in 2027. Average fleet age remained approximately three years at the end of the third quarter, and ending OEC is expected to increase by a mid-to-high single digit percentage in 2026.
Specialty Truck Equipment & Manufacturing (STEM):
•Third-party new sales revenue is expected to increase 3% to 10% in 2026 compared to 2025, with fourth quarter third-party new sales expected to increase at a mid-to-high-teens rate year-over-year as deliveries delayed in the third quarter are completed, supported by continued customer demand, improving product availability and lead times and relationships with key customers, chassis suppliers and attachment suppliers.
•Total STEM revenue is expected to be down marginally to up 3% year-over-year, with results now expected toward the upper end of the range as higher intersegment sales to support rental fleet growth supplement third-party growth.
•Sales order backlog ended the third quarter at $342 million, up 22% year-over-year and 6% sequentially, or approximately 3.8 months of LTM third-party new sales, modestly below the targeted range of four to six months. More than $20 million of third-party deliveries shifted out of the third quarter as a result of a hailstorm at our Kansas City facility and a vendor warranty recall; these units remain in backlog and are expected to be delivered in the fourth quarter. Third quarter orders increased 22% year-over-year, led by the utility, vacuum, refuse, rail and trailer markets, supporting revenue conversion in the fourth quarter and into 2027.



“Third quarter results reflect what we believe are the early stages of what could be a once-in-a-generation transmission demand super-cycle in our utility end markets. Average OEC on rent and total fleet OEC both set new records, utilization and yield remained at or near record levels, and OEC on rent has continued to climb, surpassing $1.5 billion in October. That visibility is why we are raising our net rental fleet investment outlook to $210 million to $230 million and increasing our full-year SER revenue and Adjusted EBITDA1, 4 guidance,” said Chris Eperjesy, Chief Financial Officer of CTOS. “In STEM, we prioritized production capacity for our own rental fleet, and more than $20 million of third-party deliveries shifted out of the quarter as a result of a hailstorm and a vendor recall. Those units remain in backlog and are expected to ship in the fourth quarter, and with orders up 22% year-over-year, we expect fourth quarter consolidated revenue and Adjusted EBITDA1, 4 to be up both year-over-year and sequentially. The incremental fleet investment moderates our 2026 levered free cash flow2, 4 expectations, but it is being deployed against visible, longer-term, high-return demand whose earnings contribution will largely arrive in 2027. We ended the quarter with net leverage3, 4 of 3.70x, down more than 0.8x year-over-year even as we grew the fleet by more than $140 million, and we remain on track to be meaningfully below four times at year-end and to reach our target of below three times in 2027. With LTM Adjusted EBITDA1, 4 now above $446 million, we currently expect another year of double-digit Adjusted EBITDA1, 4 growth in 2027.”

2026 Consolidated Outlook
Revenue$2,100 million—$2,200 million
Adjusted EBITDA1, 4
$447.5 million—$460 million
2026 Revenue Outlook by Segment 5
SER$870 million—$890 million
STEM$1,630 million—$1,700 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 third quarter 2026 results at 9:00 a.m. ET on October 27, 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 CUSTOM TRUCK ONE SOURCE
Custom Truck One Source is one of the largest providers of specialty equipment, parts, tools, accessories and services to the electric utility transmission and distribution, and infrastructure end markets in North America. The Company rents and sells 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 10,850 units includes aerial devices, boom trucks, cranes, digger derricks, vacuum trucks, pressure drills, stringing gear, hi-rail equipment, water trucks, dump trucks, 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, and 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 September 30,Nine Months Ended September 30,Three Months Ended June 30, 2026
(in $000s except per share data)2026202520262025
Revenue
Rental revenue$152,696 $127,142 $434,971 $364,217 $145,060 
Equipment sales309,597 320,583 985,790 950,558 383,559 
Parts sales and services32,931 34,333 99,531 100,998 34,827 
Total revenue495,224 482,058 1,520,292 1,415,773 563,446 
Cost of Revenue
Cost of rental revenue32,553 30,434 98,465 91,172 34,847 
Depreciation of rental equipment56,918 54,775 170,042 158,873 56,927 
Cost of equipment sales263,877 268,377 827,722 793,526 319,927 
Cost of parts sales and services28,596 27,719 83,746 83,371 27,771 
Total cost of revenue381,944 381,305 1,179,975 1,126,942 439,472 
Gross Profit113,280 100,753 340,317 288,831 123,974 
Operating Expenses
Selling, general and administrative expenses56,385 54,863 175,285 173,479 61,274 
Amortization6,679 6,683 20,048 20,274 6,683 
Non-rental depreciation3,666 3,332 10,460 9,904 3,404 
Transaction expenses and other8,471 3,246 18,361 12,209 5,998 
Total operating expenses75,201 68,124 224,154 215,866 77,359 
Operating Income 38,079 32,629 116,163 72,965 46,615 
Other Expense
Interest expense, net37,066 40,247 110,293 119,364 38,190 
Financing and other expense (income)(394)(874)(708)(3,261)(551)
Total other expense36,672 39,373 109,585 116,103 37,639 
Income (Loss) Before Income Taxes1,407 (6,744)6,578 (43,138)8,976 
Income Tax Expense (Benefit)(898)(988)(2,024)8,789 (1,423)
Net Income (Loss)$2,305 $(5,756)$8,602 $(51,927)$10,399 
Net Income (Loss) Per Share
Basic$0.01 $(0.03)$0.04 $(0.23)$0.05 
Diluted$0.01 $(0.03)$0.04 $(0.23)$0.05 



CUSTOM TRUCK ONE SOURCE, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(unaudited)


(in $000s) September 30, 2026December 31, 2025
Assets
Current Assets
Cash and cash equivalents$14,564 $6,273 
Accounts receivable, net 204,900 195,541 
Financing receivables, net7,581 8,853 
Inventory1,015,714 930,939 
Prepaid expenses and other14,923 17,009 
Total current assets1,257,682 1,158,615 
Property and equipment, net162,512 142,526 
Rental equipment, net1,141,509 1,086,678 
Goodwill704,885 705,167 
Intangible assets, net205,497 225,725 
Operating lease assets114,370 110,921 
Other assets9,890 11,822 
Total Assets$3,596,345 $3,441,454 
Liabilities and Stockholders' Equity
Current Liabilities
Accounts payable$123,341 $88,366 
Accrued expenses88,301 69,228 
Deferred revenue and customer deposits27,822 23,500 
Floor plan payables - trade359,320 291,215 
Floor plan payables - non-trade371,234 366,208 
Operating lease liabilities - current9,345 8,955 
Current maturities of long-term debt1,235 25,858 
Total current liabilities980,598 873,330 
Long-term debt, net1,652,562 1,619,352 
Operating lease liabilities - noncurrent110,253 105,909 
Deferred income taxes31,411 33,760 
Total long-term liabilities1,794,226 1,759,021 
Stockholders' Equity
Common stock25 25 
Treasury stock, at cost(124,971)(122,602)
Additional paid-in capital1,568,218 1,559,874 
Accumulated other comprehensive loss(12,773)(10,614)
Accumulated deficit(608,978)(617,580)
Total stockholders' equity821,521 809,103 
Total Liabilities and Stockholders' Equity$3,596,345 $3,441,454 


CUSTOM TRUCK ONE SOURCE, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(unaudited)
Nine Months Ended September 30,
(in $000s)20262025
Operating Activities
Net income (loss)$8,602 $(51,927)
Adjustments to reconcile net income (loss) to net cash flow from operating activities:
Depreciation and amortization206,105 195,010 
Amortization of debt issuance costs3,304 3,289 
Provision for losses on accounts receivable2,937 7,429 
Share-based compensation7,879 6,259 
Gain on sales and disposals of rental equipment(36,996)(32,177)
Deferred tax expense (benefit)(2,137)6,974 
Changes in assets and liabilities:
Accounts and financing receivables(3,951)28,929 
Inventories(83,378)15,753 
Prepaids, operating leases and other3,239 5,610 
Accounts payable34,513 17,582 
Accrued expenses and other liabilities19,071 22,205 
Floor plan payables - trade, net68,105 36,675 
Customer deposits and deferred revenue4,367 1,193 
Net cash flow from operating activities231,660 262,804 
Investing Activities
Purchases of rental equipment(352,578)(348,923)
Proceeds from sales and disposals of rental equipment153,819 138,749 
Purchase of non-rental property and cloud computing arrangements(34,155)(23,612)
Net cash flow for investing activities(232,914)(233,786)
Financing Activities
Borrowings under revolving credit facilities205,414 260,581 
Repayments under revolving credit facilities(193,393)(135,000)
Principal payments on long-term debt(6,739)(6,836)
Acquisition of inventory through floor plan payables - non-trade389,183 363,907 
Repayment of floor plan payables - non-trade(384,156)(468,321)
Repurchase of common stock— (32,575)
Share-based payments(1,903)(1,453)
Net cash flow from (for) financing activities8,406 (19,697)
Effect of exchange rate changes on cash and cash equivalents1,139 (68)
Net Change in Cash and Cash Equivalents8,291 9,253 
Cash and Cash Equivalents at Beginning of Period6,273 3,805 
Cash and Cash Equivalents at End of Period$14,564 $13,058 

Nine Months Ended September 30,
(in $000s)20262025
Supplemental Cash Flow Information
Interest paid$96,508 $104,109 
Income taxes paid, net359 697 
Non-Cash Investing and Financing Activities
Property and equipment purchases in accounts payable1,520 1,508 
Rental equipment sales in accounts receivable1,415 1,355 

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 September 30,Nine Months Ended September 30,Three Months Ended June 30, 2026
(in $000s)2026202520262025
Net income (loss) $2,305 $(5,756)$8,602 $(51,927)$10,399 
Interest expense26,247 26,462 77,816 78,518 27,051 
Income tax expense (benefit)(898)(988)(2,024)8,789 (1,423)
Depreciation and amortization69,068 67,048 206,312 195,985 68,970 
EBITDA96,722 86,766 290,706 231,365 104,997 
   Adjustments:
   Non-cash purchase accounting impact (1)
1,747 3,406 7,715 11,502 2,736 
   Transaction and integration costs (2)
8,471 3,246 18,361 12,209 5,998 
   Sales-type lease adjustment (3)
733 465 1,021 1,482 (408)
Share-based payments (4)
3,269 2,080 7,879 6,259 3,431 
Adjusted EBITDA$110,942 $95,963 $325,682 $262,817 $116,754 
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 September 30,Nine Months Ended September 30,Three Months Ended June 30, 2026
(in $000s)2026202520262025
Equipment sales $1,142 $(383)$(4,070)$(3,528)$(5,942)
Cost of equipment sales(1,400)118 1,417 2,906 4,461 
Gross margin(258)(265)(2,653)(622)(1,481)
Interest (income) expense(395)(872)(708)(3,206)(550)
Rental invoiced1,386 1,602 4,382 5,310 1,623 
Sales-type lease adjustment$733 $465 $1,021 $1,482 $(408)
(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 September 30,Nine Months Ended September 30,Three Months Ended June 30, 2026
(in $000s)2026202520262025
Revenue
Rental revenue$152,696 $127,142 $434,971 $364,217 $145,060 
Equipment sales309,597 320,583 985,790 950,558 383,559 
Parts sales and services32,931 34,333 99,531 100,998 34,827 
Total revenue495,224 482,058 1,520,292 1,415,773 563,446 
Cost of Revenue
Cost of rental revenue32,553 30,434 98,465 91,172 34,847 
Depreciation of rental equipment56,918 54,775 170,042 158,873 56,927 
Cost of equipment sales263,877 268,377 827,722 793,526 319,927 
Cost of parts sales and services28,596 27,719 83,746 83,371 27,771 
Total cost of revenue381,944 381,305 1,179,975 1,126,942 439,472 
Gross Profit113,280 100,753 340,317 288,831 123,974 
Add: depreciation of rental equipment56,918 54,775 170,042 158,873 56,927 
Adjusted Gross Profit$170,198 $155,528 $510,359 $447,704 $180,901 

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 September 30,Nine Months Ended September 30,Three Months Ended June 30, 2026
(in $000s)2026202520262025
Revenue
Rental revenue$152,696 $127,142 $434,971 $364,217 $145,060 
Equipment sales39,446 34,565 128,882 104,081 51,659 
Parts sales and services 19,891 21,182 60,762 64,500 22,100 
Intersegment sales8,121 3,864 19,024 31,190 4,113 
Total revenue220,154 186,753 643,639 563,988 222,932 
Cost of Revenue
Cost of rental revenue32,553 30,434 98,465 91,172 34,847 
Cost of equipment sales29,213 25,061 93,992 74,546 36,565 
Cost of parts and services 17,444 18,064 53,429 57,254 17,966 
Depreciation of rental equipment56,918 54,775 170,042 158,873 56,927 
Intersegment cost of sales7,432 3,864 17,270 31,190 3,728 
Total cost of revenue143,560 132,198 433,198 413,035 150,033 
Gross profit76,594 54,555 210,441 150,953 72,899 
Add: depreciation of rental equipment56,918 54,775 170,042 158,873 56,927 
Adjusted Gross Profit$133,512 $109,330 $380,483 $309,826 $129,826 


The following table presents the reconciliation of SER segment Adjusted Rental Gross Profit:
Three Months Ended September 30,Nine Months Ended September 30,Three Months Ended June 30, 2026
(in $000s)2026202520262025
Rental revenue$152,696 $127,142 $434,971 $364,217 $145,060 
Cost of rental revenue32,553 30,434 98,465 91,172 34,847 
Adjusted Rental Gross Profit$120,143 $96,708 $336,506 $273,045 $110,213 

Reconciliation of Net Debt
(unaudited)
The following table presents the reconciliation of Net Debt:
(in $000s) September 30, 2026June 30, 2026December 31, 2025September 30, 2025
Current maturities of long-term debt$1,235 $3,209 $25,858 $20,892 
Long-term debt, net1,652,562 1,656,652 1,619,352 1,628,866 
Deferred financing fees12,246 13,353 15,549 16,638 
Less: cash and cash equivalents(14,564)(10,287)(6,273)(13,058)
Net Debt$1,651,479 $1,662,927 $1,654,486 $1,653,338 
Reconciliation of Net Leverage Ratio
(unaudited)
The following table presents the reconciliation of the Net Leverage Ratio:
Twelve Months Ended
(in $000s)September 30, 2026June 30, 2026December 31, 2025September 30, 2025
Net Debt (as of period end)$1,651,479 $1,662,927 $1,654,486 $1,653,338 
Divided by: LTM Adjusted EBITDA (1)
$446,423 $431,444 $383,558 $364,837 
Net Leverage Ratio3.70 3.85 4.31 4.53 

(1) The following tables present the calculation of LTM Adjusted EBITDA for the periods ended September 30, 2026, June 30, 2026, December 31, 2025 and September 30, 2025:
Current Year To Date PeriodLess: Prior Year To Date PeriodAdd: Prior Fiscal YearLTM Adjusted EBITDA
(in $000s)September 30, 2026September 30, 2025December 31, 2025September 30, 2026
Net income (loss)$8,602 $(51,927)$(31,052)$29,477 
Interest expense77,816 78,518 104,882 104,180 
Income tax expense (benefit)(2,024)8,789 2,922 (7,891)
Depreciation and amortization206,312 195,985 264,998 275,325 
EBITDA290,706 231,365 341,750 401,091 
Adjustments:
Non-cash purchase accounting impact 7,715 11,502 15,469 11,682 
Transaction and integration costs18,361 12,209 16,639 22,791 
Sales-type lease adjustment1,021 1,482 1,229 768 
Share-based payments7,879 6,259 8,471 10,091 
Adjusted EBITDA$325,682 $262,817 $383,558 $446,423 

Current Year To Date PeriodLess: Prior Year To Date PeriodAdd: Prior Fiscal YearLTM Adjusted EBITDA
(in $000s)June 30, 2026June 30, 2025December 31, 2025June 30, 2026
Net income (loss)$6,297 $(46,171)$(31,052)$21,416 
Interest expense51,569 52,056 104,882 104,395 
Income tax expense (benefit)(1,126)9,777 2,922 (7,981)
Depreciation and amortization137,244 128,937 264,998 273,305 
EBITDA193,984 144,599 341,750 391,135 
Adjustments:
Non-cash purchase accounting impact5,968 8,096 15,469 13,341 
Transaction and integration costs9,890 8,963 16,639 17,566 
Sales-type lease adjustment288 1,017 1,229 500 
Share-based payments4,610 4,179 8,471 8,902 
Adjusted EBITDA$214,740 $166,854 $383,558 $431,444 

Current Year To Date PeriodLess: Prior Year To Date PeriodAdd: Prior Fiscal YearLTM Adjusted EBITDA
(in $000s)September 30, 2025September 30, 2024December 31, 2024September 30, 2025
Net income (loss)$(51,927)$(56,229)$(28,655)$(24,353)
Interest expense78,518 79,174 105,895 105,239 
Income tax expense (benefit)8,789 518 (532)7,739 
Depreciation and amortization195,985 173,253 235,807 258,539 
EBITDA231,365 196,716 312,515 347,164 
Adjustments:— 
Non-cash purchase accounting impact 11,502 12,286 16,833 16,049 
Transaction and integration costs12,209 14,684 17,915 15,440 
Sales-type lease adjustment1,482 5,730 4,559 311 
Gain on sale leaseback transaction— — (23,497)(23,497)
Share-based payments6,259 8,748 11,859 9,370 
Change in fair value of warrants— (527)(527)— 
Adjusted EBITDA$262,817 $237,637 $339,657 $364,837 

Source: View Original Filing on SEC EDGAR

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