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.--(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

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

Specialty Truck Equipment & Manufacturing

Consolidated Adjusted EBITDA

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

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 EBITDA^{1, 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 EBITDA^{1, 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 flow^{2, 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 ratio^{3, 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 ratio^{3, 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 EBITDA^{1, 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 EBITDA^{1, 4} to be up both year-over-year and sequentially. The incremental fleet investment moderates our 2026 levered free cash flow^{2, 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 leverage^{3, 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 EBITDA^{1, 4} now above $446 million, we currently expect another year of double-digit Adjusted EBITDA^{1, 4} growth in 2027.”

INVESTOR CONTACT
Brian Perman, Vice President, Investor Relations
investors@customtruck.com