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KANSAS CITY, Mo.--(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 six months ended June 30, 2026.
CTOS Second-Quarter Highlights
“In the second quarter, we delivered record quarterly revenue and substantial year-over-year growth in revenue and Adjusted EBITDA of 10% and 25%, respectively. Sustained strength in our core T&D markets remains the primary driver of performance within our SER segment and for the Company as a whole. Our rental fleet achieved average utilization of 81.6% for the quarter, up 400 basis points from a year ago, and we ended the quarter with total OEC of $1.68 billion, the highest quarter-end level in our history, positioning us for continued SER growth through the balance of 2026,” said Ryan McMonagle, Chief Executive Officer of CTOS. “STEM also had a record quarter, with external customer revenue of $345 million and equipment sales of $332 million. The strength across both segments allowed us to continue making substantial progress in reducing our net leverage. We are optimistic about the second half of 2026, as CTOS remains well-positioned to benefit from secular tailwinds in data center investment, electrification, utility grid upgrades and infrastructure spending. 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 June 30, |
| Six Months Ended June 30, |
|
Three Months Ended
| ||||||||||||
(in $000s) |
| 2026 |
|
| 2025 |
|
|
| 2026 |
|
| 2025 |
|
| |||
Rental revenue | $ | 145,060 | $ | 120,814 | $ | 282,275 |
| $ | 237,075 |
|
| $ | 137,215 |
| |||
Equipment sales |
| 383,559 |
|
| 356,112 |
|
|
| 676,193 |
|
| 629,975 |
|
|
| 292,634 |
|
Parts sales and services |
| 34,827 |
|
| 34,557 |
|
|
| 66,600 |
|
| 66,665 |
|
|
| 31,773 |
|
Total revenue |
| 563,446 |
|
| 511,483 |
|
|
| 1,025,068 |
|
| 933,715 |
|
|
| 461,622 |
|
Gross Profit | $ | 123,974 |
| $ | 102,542 |
|
| $ | 227,037 |
| $ | 188,078 |
|
| $ | 103,063 |
|
Adjusted Gross Profit1 | $ | 180,901 |
| $ | 156,549 |
|
| $ | 340,161 |
| $ | 292,176 |
|
| $ | 159,260 |
|
Net Income (Loss) | $ | 10,399 |
| $ | (28,380 | ) |
| $ | 6,297 |
| $ | (46,171 | ) |
| $ | (4,102 | ) |
Adjusted EBITDA1 | $ | 116,754 |
| $ | 93,428 |
|
| $ | 214,740 |
| $ | 166,854 |
|
| $ | 97,986 |
|
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 |
| Six Months Ended |
|
Three Months
| |||||||||||
(in $000s) | June 30, 2026 |
| June 30, 2025 |
| June 30, 2026 |
| June 30, 2025 |
| ||||||||
Revenue from external customers: |
|
|
|
|
|
|
|
|
| |||||||
Rental | $ | 145,060 |
|
| $ | 120,814 |
| $ | 282,275 |
|
| $ | 237,075 |
| $ | 137,215 |
Equipment sales |
| 51,659 |
|
|
| 39,661 |
|
| 89,436 |
|
|
| 69,516 |
|
| 37,777 |
Parts sales and services |
| 22,100 |
|
|
| 22,353 |
|
| 40,871 |
|
|
| 43,318 |
|
| 18,771 |
Total revenue from external customers |
| 218,819 |
|
|
| 182,828 |
|
| 412,582 |
|
|
| 349,909 |
|
| 193,763 |
Intersegment sales |
| 4,113 |
|
|
| 15,726 |
|
| 10,903 |
|
|
| 27,326 |
|
| 6,790 |
Rental AR Provision(1) |
| 2,390 |
|
|
| 2,358 |
|
| 4,566 |
|
|
| 4,203 |
|
| 2,176 |
Sales type lease adjustment(2) |
| (4,318 | ) |
|
| 1,179 |
|
| (2,215 | ) |
|
| 2,436 |
|
| 2,103 |
Total segment revenue |
| 221,004 |
|
|
| 202,091 |
|
| 425,836 |
|
|
| 383,874 |
|
| 204,832 |
Segment Expenses: |
|
|
|
|
|
|
|
|
| |||||||
Cost of rental, excluding depreciation |
| 34,542 |
|
|
| 30,040 |
|
| 65,290 |
|
|
| 60,132 |
|
| 30,748 |
Cost of equipment sales, net of purchase accounting, sales-type leases and depreciation(3) |
| 30,884 |
|
|
| 25,959 |
|
| 59,356 |
|
|
| 43,885 |
|
| 28,472 |
Cost of parts and services, excluding depreciation |
| 17,914 |
|
|
| 18,993 |
|
| 35,882 |
|
|
| 38,970 |
|
| 17,968 |
Cost of intersegment sales |
| 3,728 |
|
|
| 15,726 |
|
| 9,838 |
|
|
| 27,326 |
|
| 6,110 |
Rental AR provision(1) |
| 2,390 |
|
|
| 2,358 |
|
| 4,566 |
|
|
| 4,203 |
|
| 2,176 |
Total segment cost of revenue expenses |
| 89,458 |
|
|
| 93,076 |
|
| 174,932 |
|
|
| 174,516 |
|
| 85,474 |
Selling, general and administrative expenses |
| 14,347 |
|
|
| 16,180 |
|
| 28,208 |
|
|
| 30,474 |
|
| 13,861 |
Total segment expenses |
| 103,805 |
|
|
| 109,256 |
|
| 203,140 |
|
|
| 204,990 |
|
| 99,335 |
Segment Adjusted EBITDA | $ | 117,199 |
|
| $ | 92,835 |
| $ | 222,696 |
|
| $ | 178,884 |
| $ | 105,497 |
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 |
| Six Months Ended |
|
Three Months
| |||||||||
(in $000s) | June 30, 2026 |
| June 30, 2025 |
| June 30, 2026 |
| June 30, 2025 |
| ||||||
Revenue from external customers: |
|
|
|
|
|
|
|
|
| |||||
Equipment sales | $ | 331,900 |
| $ | 316,451 |
| $ | 586,757 |
| $ | 560,459 |
| $ | 254,857 |
Parts sales and services |
| 12,727 |
|
| 12,204 |
|
| 25,729 |
|
| 23,347 |
|
| 13,002 |
Total revenue from external customers |
| 344,627 |
|
| 328,655 |
|
| 612,486 |
|
| 583,806 |
|
| 267,859 |
Intersegment sales |
| 93,153 |
|
| 97,599 |
|
| 188,603 |
|
| 192,388 |
|
| 95,450 |
Total Segment Revenue |
| 437,780 |
|
| 426,254 |
|
| 801,089 |
|
| 776,194 |
|
| 363,309 |
Segment Expenses: |
|
|
|
|
|
|
|
|
| |||||
Cost of equipment sales, net of purchase accounting, sales-type leases and depreciation(1) |
| 281,235 |
|
| 265,542 |
|
| 494,460 |
|
| 470,991 |
|
| 213,225 |
Cost of parts and services, excluding depreciation |
| 9,551 |
|
| 8,634 |
|
| 18,645 |
|
| 16,078 |
|
| 9,094 |
Cost of intersegment sales |
| 78,596 |
|
| 97,599 |
|
| 158,781 |
|
| 192,388 |
|
| 80,185 |
Total segment cost of revenue expenses |
| 369,382 |
|
| 371,775 |
|
| 671,886 |
|
| 679,457 |
|
| 302,504 |
Selling, general and administrative expenses |
| 20,042 |
|
| 16,663 |
|
| 37,622 |
|
| 32,516 |
|
| 17,580 |
Floor plan interest expense |
| 11,139 |
|
| 13,764 |
|
| 21,658 |
|
| 27,061 |
|
| 10,519 |
Total segment expenses |
| 400,563 |
|
| 402,202 |
|
| 731,166 |
|
| 739,034 |
|
| 330,603 |
Segment Adjusted EBITDA | $ | 37,217 |
| $ | 24,052 |
| $ | 69,923 |
| $ | 37,160 |
| $ | 32,706 |
1 | Excludes the non-cash impact of purchase accounting. |
Consolidated Adjusted EBITDA
| Three Months Ended |
| Six Months Ended |
|
Three Months
| ||||||||||||||
(in $000s) | June 30, 2026 |
| June 30, 2025 |
| June 30, 2026 |
| June 30, 2025 |
| |||||||||||
SER Adjusted EBITDA | $ | 117,199 |
|
| $ | 92,835 |
|
| $ | 222,696 |
|
| $ | 178,884 |
|
| $ | 105,497 |
|
STEM Adjusted EBITDA |
| 37,217 |
|
|
| 24,052 |
|
|
| 69,923 |
|
|
| 37,160 |
|
|
| 32,706 |
|
Eliminations Adjusted EBITDA |
| (14,942 | ) |
|
| — |
|
|
| (30,887 | ) |
|
| — |
|
|
| (15,945 | ) |
Segment Adjusted EBITDA |
| 139,474 |
|
|
| 116,887 |
|
|
| 261,732 |
|
|
| 216,044 |
|
|
| 122,258 |
|
Reconciling Items: |
|
|
|
|
|
|
|
|
| ||||||||||
Corporate and non-allocated selling, general and administrative expenses |
| (22,720 | ) |
|
| (23,459 | ) |
|
| (46,992 | ) |
|
| (49,190 | ) |
|
| (24,272 | ) |
Adjusted EBITDA | $ | 116,754 |
|
| $ | 93,428 |
|
| $ | 214,740 |
|
| $ | 166,854 |
|
| $ | 97,986 |
|
See the Company’s Quarterly Report on Form 10-Q for the three months ended June 30, 2026 for a reconciliation of segment-level adjusted EBITDA to Consolidated income (loss) before income taxes.
Summary Combined Operating Metrics
| Three Months Ended June 30, |
| Six Months Ended June 30, |
|
Three Months Ended
| ||||||||||||||
(in $000s) |
| 2026 |
|
|
| 2025 |
|
|
| 2026 |
|
|
| 2025 |
|
| |||
Ending OEC(a) (as of period end) | $ | 1,679,255 |
|
| $ | 1,560,704 |
|
| $ | 1,679,255 |
|
| $ | 1,560,704 |
|
| $ | 1,655,414 |
|
Average OEC on rent(b) | $ | 1,365,689 |
|
| $ | 1,207,231 |
|
| $ | 1,354,822 |
|
| $ | 1,192,333 |
|
| $ | 1,343,712 |
|
Fleet utilization(c) |
| 81.6 | % |
|
| 77.6 | % |
|
| 81.5 | % |
|
| 77.3 | % |
|
| 81.4 | % |
OEC on rent yield(d) |
| 39.4 | % |
|
| 38.6 | % |
|
| 39.1 | % |
|
| 38.3 | % |
|
| 38.9 | % |
Sales order backlog(e) (as of period end) | $ | 322,470 |
|
| $ | 334,805 |
|
| $ | 322,470 |
|
| $ | 334,805 |
|
| $ | 411,311 |
|
(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 second quarter of 2026 compared to the second quarter of 2025 was the result of improved average fleet utilization (which increased to 81.6% compared to 77.6%) driven by increased rental volume, with average OEC on rent increasing by 13.1% year-over-year and OEC on rent yield improving 80 basis points to 39.4%. Compared to the second quarter of 2025, SER rental equipment sales increased 30.3% in the second quarter of 2026 due to an increase in buyout activity of rental contracts with purchase options. SER adjusted EBITDA in the second quarter of 2026 increased 26.2% compared to the second quarter of 2025.
Equipment sales in our STEM segment increased 4.9% in the second quarter of 2026 compared to the second quarter of 2025 driven by demand for utility and forestry vehicles. Adjusted EBITDA increased by $13.2 million in the second quarter of 2026 compared to the second quarter of 2025. Our STEM backlog was down 3.7% compared to the second quarter of 2025, and, at approximately 3.5 months of LTM third-party new sales, sits modestly below our targeted range of four to six months, reflecting record equipment deliveries in the quarter.
The increase in net income in the second quarter of 2026, compared to a loss in the second quarter of 2025, was primarily due to higher operating income as a result of strong new equipment sales and higher rental revenue driven by higher average OEC on rent. The increase is also due to an income tax benefit in the quarter, compared to an expense for the same period in 2025 which reflected an adjustment to our estimated effective tax rate.
Adjusted EBITDA for the second quarter of 2026 was $116.8 million, a 25.0% increase compared to the second quarter of 2025, which was largely driven by increased gross profit.
As of June 30, 2026, cash and cash equivalents were $10.3 million, total debt outstanding was $1,673.2 million, net debt was $1,662.9 million and our net leverage ratio was 3.85x. Availability under the senior secured credit facility was $229.4 million as of June 30, 2026, and based on our borrowing base, we have an additional $242.0 million of suppressed availability that we could access by upsizing our existing facility.
2026 Outlook
We are increasing our full year 2026 consolidated revenue, segment revenue, and Adjusted EBITDA1, 4 guidance to reflect our record first half results and continued momentum in the rental business.
Consolidated CTOS:
Specialty Equipment Rentals (SER):
Specialty Truck Equipment & Manufacturing (STEM):
“Our focus for the remainder of 2026 is on disciplined execution – converting strong end-market demand into profitable growth, cash generation and further balance sheet improvement. Our rental business continues to perform very well, driven by demand in our utility transmission and distribution markets, and that strength is flowing through to margins and Adjusted EBITDA1, 4,” said Chris Eperjesy, Chief Financial Officer of CTOS. “We expect third quarter revenue and Adjusted EBITDA1, 4 to be up year-over-year but, modestly below the second quarter, as certain third-party new equipment and used equipment sales, including rental purchase option buyouts, were delivered in the second quarter rather than the second half. That timing shifts results between quarters, not out of the year, and it is reflected in our raised full-year ranges. Rental enters the third quarter with OEC on rent and utilization above prior-year levels and is expected to continue growing sequentially, with year-over-year growth rates naturally moderating as we lap a second half of 2025 that posted the largest increase in OEC on rent in our history. 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.”
2026 Consolidated Outlook |
|
|
|
Revenue | $2,100 million | — | $2,200 million |
Adjusted EBITDA1, 4 | $437.5 million | — | $455 million |
|
|
|
|
2026 Revenue Outlook by Segment 5 |
|
| |
SER | $850 million | — | $875 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 second quarter 2026 results at 9:00 a.m. ET on August 4, 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.
INVESTOR CONTACT
Brian Perman, Vice President, Investor Relations
investors@customtruck.com
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