CTOS

The end of an earnings season can be a great time to discover new stocks and assess how companies are handling the current business environment. Let’s take a look at how Custom Truck One Source (NYSE:CTOS) and the rest of the specialty equipment distributors stocks fared in Q2. Historically, specialty equipment distributors have boasted deep selection and expertise in sometimes narrow areas like single-use packaging or unique lighting equipment. Additionally, the industry has evolved to include more automated industrial equipment and machinery over the last decade, driving efficiencies and enabling valuable data collection. Specialty equipment distributors whose offerings keep up with these trends can take share in a still-fragmented market, but like the broader industrials sector, this space is at the whim of economic cycles that impact the capital spending and manufacturing propelling industry volumes. The 8 specialty equipment distributors stocks we track reported a very strong Q2. As a group, revenues beat analysts’ consensus estimates by 5.1%. In light of this news, share prices of the companies have held steady as they are up 4% on average since the latest earnings results. Inspired by a family gas station, Custom Truck One Source (NYSE:CTOS) is a distributor of trucks and heavy equipment. Custom Truck One Source reported revenues of $563.4 million, up 10.2% year on year. This print exceeded analysts’ expectations by 8.8%. Overall, it was an incredible quarter for the company with a beat of analysts’ EPS and EBITDA estimates. Custom Truck One Source achieved the highest full-year guidance raise among its peers. Investor expectations, however, were likely higher than Wall Street’s published projections, leaving some wishing for even better results (analysts’ consensus estimates are those published by big banks and advisory firms, not the investors who make buy and sell decisions). The stock is down 5.9% since reporting and currently trades at $10. Is now the time to buy Custom Truck One Source? Access our full analysis of the earnings results here, it’s free. Founded in 1947, Richardson Electronics (NASDAQ:RELL) is a distributor of power grid and microwave tubes as well as consumables related to those products. Richardson Electronics reported revenues of $66.2 million, up 27.6% year on year, outperforming analysts’ expectations by 19.6%. The business had an incredible quarter with a beat of analysts’ EPS and EBITDA estimates. Richardson Electronics achieved the biggest analyst estimate beat and fastest revenue growth of the whole group. The market seems happy with the results as the stock is up 11.2% since reporting. It currently trades at $20.02. Is now the time to buy Richardson Electronics? Access our full analysis of the earnings results here, it’s free. Known for distributing John Deere tractors and LESCO turf care products, SiteOne Landscape Supply (NYSE:SITE) provides landscaping products and services to professionals, including irrigation, lighting, and nursery supplies. SiteOne reported revenues of $1.53 billion, up 4.7% year on year, falling short of analysts’ expectations by 0.7%. It was a softer quarter as it posted a significant miss of analysts’ EPS and EBITDA estimates. As expected, the stock is down 7.6% since the results and currently trades at $95.65. Read our full analysis of SiteOne’s results here. Formerly a subsidiary of Hertz Corporation and with a logo that still bears some similarities to its former parent, Herc Holdings (NYSE:HRI) provides equipment rental and related services to a wide range of industries. Herc reported revenues of $1.20 billion, up 20.2% year on year. This number surpassed analysts’ expectations by 4.9%. Aside from that, it was a satisfactory quarter as it also recorded a beat of analysts’ EPS estimates but full-year revenue guidance missing analysts’ expectations significantly. Herc had the weakest full-year guidance update in the group. The stock is up 8.2% since reporting and currently trades at $173.15. Read our full, actionable report on Herc here, it’s free. Founded as Lollicup, Karat Packaging (NASDAQ: KRT) distributes and manufactures environmentally-friendly disposable foodservice packaging solutions. Karat Packaging reported revenues of $136.3 million, up 9.9% year on year. This print topped analysts’ expectations by 0.6%. Overall, it was an exceptional quarter as it also logged a beat of analysts’ EPS estimates and a solid beat of analysts’ EBITDA estimates. The stock is up 12.7% since reporting and currently trades at $47.76. Read our full, actionable report on Karat Packaging here, it’s free. Over the past year, investors have been forced to repeatedly answer the same question: what is the market’s biggest risk? The answer has changed several times, and each shift has reshaped market leadership. Late in 2025 and early 2026, artificial intelligence became the market’s primary uncertainty. Investors questioned whether AI would erode software pricing power and weaken competitive moats as AI made it easier to replicate once-differentiated products. By the spring, technology took a back seat to geopolitics. The U.S. conflict with Iran briefly became the market’s dominant narrative, raising concerns about oil prices, inflation, and global growth. But as energy markets remained orderly and fears of a prolonged supply disruption faded, investors quickly turned their focus back to fundamentals. Want to invest in winners with rock-solid fundamentals? Check out our Hidden Gem Stocks and add them to your watchlist. These companies are poised for growth regardless of the political or macroeconomic climate.

Image source: The Motley Fool. Thursday, Aug. 6, 2026 at 9:00 a.m. ET Chief Executive Officer - Ryan McMonagle Chief Financial Officer - Christopher Eperjesy Vice President of Investor Relations - Brian Perman Operator: Ladies and gentlemen, thank you for standing by, and welcome to Custom Truck One Source's Second Quarter 2026 Earnings Conference Call. Please note, this conference call is being recorded. I would now like to hand the conference call over to your host today, Brian Perman, Vice President of Investor Relations for Custom Truck One Source. Brian Perman: Thank you, operator, and good morning. Before we begin, we would like to remind you that management's commentary and responses to questions on today's call may include forward-looking statements, which, by their nature, are uncertain and outside of the company's control. Although these forward-looking statements are based on management's current expectations and beliefs, actual results may differ materially. For a discussion of some of the factors that could cause actual results to differ, please refer to the Risk Factors section of the company's filings with the SEC. Additionally, please note that you can find reconciliations of the historical non-GAAP financial measures discussed during the call in the press release we issued yesterday after the market closed. That press release and our second quarter investor presentation are posted on the Investor Relations section of our website. Yesterday afternoon, we also filed our second quarter 2026 10-Q with the SEC. Today's discussion of our results of operations for Custom Truck One Source Inc., or Custom Truck, is presented on a historical basis as of or for the 3 months ended June 30, 2026, and prior periods. Also a reminder that beginning last quarter, our financial reporting now reflects our 2 new reportable segments: Specialty Equipment Rentals, or SER, and Specialty Truck Equipment and Manufacturing, or STEM. While our 2026 results in our earnings press release and SEC filing reflect the application of intersegment pricing and margins as per accounting requirements for intersegment sales, the segment results for 2025 reflect the intersegment sales with no margin as no intersegment agreement was in place in the period. For an illustrative comparison of what the 2025 results would have been had intersegment sales been reflected with the appropriate gross margin and had other internal accounting policies been in place at the time, please see the appendix of the Q2 investor presentation posted on our Investor Relations website. Joining me today are Ryan McMonagle, CEO; and Chris Eperjesy, CFO. I will now turn the call over to Ryan. Ryan McMonagle: Thanks, Brian, and good morning, everyone. We delivered record revenue in the second quarter, capping a strong first half, driven by continued strong momentum in our core end markets and outstanding execution by our team. In the second quarter, we generated revenue of $563 million and adjusted EBITDA of $117 million, up 10% and 25% year-over-year, respectively. Our Specialty Equipment Rental segment continues to deliver consistently strong performance, driven by sustained and growing demand in the transmission and distribution or T&D markets. Our rental fleet averaged 81.6% utilization during the quarter, up 400 basis points from Q2 of last year. This was supported by continued robust levels of OEC on rent, which averaged $1.37 billion in Q2, up 13% year-over-year. So far in Q3, both measures have continued to show year-over-year growth. We believe that we are in the early stages of what could be a once-in-a-generation transmission demand super cycle. We ended the quarter with total OEC of $1.68 billion, the highest quarter end level in our history, which will support our expected continued growth in SER revenues in the second half of this year. Also, our average fleet age is just over 3 years old, which we believe is one of the youngest fleets in the industry, and positions us well to support our customers' needs across the country. Our trucks and equipment continue to power the people who strengthen and build critical infrastructure in the U.S. and Canada. The market has been focused on the durability of demand in T&D and our ability to convert improving rental KPIs into earnings and cash flow, and we believe our trending results over recent quarters speak directly to that. Bidding activity and ongoing conversations with our customers lead us to believe that these conditions will persist through the remainder of 2026 and beyond. Our Specialty Truck Equipment and Manufacturing segment had record performance in the second quarter, with equipment sales reaching an all-time quarterly high for the company and reflecting continued healthy end market demand and order flow. For Q2, STEM revenue, excluding sales to our SER segment, was up 5% versus Q2 of 2025, which at the time was a record for non-fourth quarter equipment sales. New sales order backlog ended the second quarter at $322 million, down $89 million from the end of Q1 on record Q2 deliveries. Despite the decrease in our backlog in Q2, intra-quarter order flow remains strong, and our backlog has grown so far in Q3. We continue to see strong sales demand in the utility end market, especially focused on transmission equipment. In the infrastructure end market, we have seen less growth, but our ongoing conversations with our customers and the pace of bidding and our order activity combined to provide us with the confidence to expect another year of growth in third-party customer revenue for STEM. With respect to the EPA '27 NOx emission regulations, the EPA introduced its proposed changes to the rules in early July, which maintained the 2027 NOx standards while adding non-conformance penalty provisions. The regulations are expected to be finalized later this year. Given our current inventory position, the chassis prebuy actions we have already taken and our strong relationships with our chassis OEM partners, we believe CTOS is well positioned to navigate the impact of the upcoming emission standards changes. Given our strong year-to-date performance, robust conditions in the T&D end markets and our outlook for the rest of the year, we are increasing our previous full year 2026 consolidated revenue and adjusted EBITDA outlooks. We expect consolidated revenue in the range of $2.1 billion to $2.2 billion and adjusted EBITDA in the range of $437.5 million to $455 million. Long-term sustained end market demand buoyed by secular megatrends, combined with our ability to provide exceptional execution on behalf of our customers, sets us apart from our competition. Our long-standing relationships with our strategic suppliers and customers continue to be keys to our success. I continue to have the highest degree of confidence in the Custom Truck team and want to thank everyone for their hard work and dedication that helped achieve our extraordinary results in the second quarter. We look forward to updating everyone soon. With that, I'll turn it over to Chris, to walk through the numbers in more detail. Christopher Eperjesy: Thanks, Ryan, and good morning, everyone. I'll start with the consolidated results for the quarter, then discuss segment performance, our balance sheet, liquidity and leverage and finally, our updated 2026 outlook. Our second quarter 2026 results reflect stronger operating performance across the business and improved rental fundamentals, particularly in our T&D end markets. For the second quarter, total revenue was $563 million and adjusted EBITDA was $117 million, representing 10% and 25% growth, respectively, versus Q2 2025. On a GAAP basis, second quarter net income was $10 million or $0.05 per diluted share compared with a net loss of $28 million a year ago, bringing first half net income to $6 million. About $19 million of that year-over-year improvement reflects a favorable income tax swing as the prior year quarter carried a tax expense related to an adjustment in our estimated effective tax rate. The balance was driven by higher operating income. Turning to our segments. In SER, second quarter third-party revenue, excluding intersegment sales, was $219 million, up 20% year-over-year, driven by strong double-digit growth in both rental revenue and rental equipment sales activity. Rental sales activity benefited from an increase in RPO activity in Q2 versus the same period last year. Segment adjusted EBITDA of $117 million was up 26% year-over-year, with segment adjusted EBITDA margin of 53%, up more than 700 basis points versus Q2 2025. Our key rental KPIs in SER remained quite strong in Q2, continuing the momentum we've experienced in recent quarters. In Q2, utilization averaged 81.6%, up 400 basis points versus Q2 2025. Average OEC on rent in the quarter was $1.37 billion, up almost $160 million or 13% versus the same period in 2025. On-rent yield in the second quarter was 39.4%, reflecting both sequential and year-over-year increases for the quarter. On-rent yield remained within our targeted upper 30s to low 40s percent range, and we continue to see opportunities for rate improvement as transmission mix grows and pricing discipline holds. Our historically strong rental KPIs reflect both increased rental activity and the continued scaling of our fleet to meet demand. Net rental CapEx in Q2 was $36 million, and our fleet age at quarter end was just over 3 years, a modest increase from the end of last quarter, which is consistent with our plan to reduce maintenance CapEx and age the fleet somewhat this year. Our OEC in the rental fleet ended the quarter at almost $1.68 billion, up approximately $120 million versus the end of Q2 2025 and by almost $24 million sequentially. The increase reflects disciplined fleet investment in the face of strong demand, particularly in T&D. While we expect to continue to invest in the fleet in 2026, our planned decrease in maintenance CapEx in 2026 compared to 2025, should contribute to increased free cash flow generation this year versus last year. In STEM, second quarter third-party revenue was $345 million, a quarterly record and up 5% versus Q2 of 2025, which previously represented our highest non-fourth quarter revenue in our history. STEM segment adjusted EBITDA was $37 million and segment adjusted EBITDA margin was 8.5% in the quarter. Recall that our 2025 segment adjusted EBITDA does not include any margin on intersegment sales, while 2026 segment adjusted EBITDA does. STEM gross margins in the quarter were slightly lower as a result of increased sales to national accounts, which tend to carry modestly lower margins. Our new sales backlog ended Q2 at $322 million, down $89 million sequentially on record Q2 deliveries at approximately 3.5 months, just below our targeted range of 4 to 6 months of new sales. June quoting activity increased 26% year-over-year, supporting expected growth in our order intake in the second half. We've seen strong order growth so far in Q3, and our backlog currently stands at more than $340 million. Turning to the balance sheet and liquidity. With LTM adjusted EBITDA of more than $431 million and net debt of $1.66 billion, we finished Q2 with net leverage of 3.85x. This represents a sequential quarterly improvement of 0.17 turns and more than a 0.8 turn improvement versus the end of Q2 2025. Availability under our ABL was $229 million as of June 30. And based on our borrowing base, we have more than $240 million of additional availability that we can potentially access via our existing facility. Free cash flow generation and deleveraging remain key focus areas for us. The increase in our inventory during the first half was largely planned, reflecting chassis and whole goods positioning ahead of scheduled second half deliveries together with the chassis prebuy actions Ryan discussed. Even with that increase, we expect to reduce inventory and floor plan balances during the second half of 2026, which should support improved free cash flow generation. Through the first half of the year, levered free cash flow improved by approximately $40 million versus the prior year period. With respect to our 2026 guidance, the demand environment across our key end markets remains very strong. We expect the STEM segment to continue to benefit from an overall favorable macro demand environment as well as our strong relationship with our key customers and chassis and attachment suppliers. Our order backlog supports this. In our SER segment, what we see on rent and utilization reached historically high levels in the second half of fiscal 2025, and consistent with our year-to-date results, we expect those levels to continue building sequentially in the second half of 2026. Demand for our equipment that serves the T&D utility markets continues at record levels, and we expect the vocational rental market to provide incremental growth as we further penetrate this expanding end market. Given our young fleet age, we continue to expect to be able to significantly reduce our overall investment in our rental fleet in 2026 versus 2025, while continuing to generate growth. The small increase in our fleet age to just over 3 years in the second quarter reflects this. However, given demand trends in our T&D end markets, we plan to modestly increase our net investment in our rental fleet from our previous estimate and now expect a range of $170 million to $200 million, which supports mid-single-digit net OEC growth this year. This represents a meaningful reduction from over $250 million in net fleet CapEx in 2025. After prior year's investments in inventory, driven by the strong demand environment, we expect to continue making progress on further net working capital improvements in 2026, as we continue on our path of reducing inventory levels on hand to our target level of below 6 months. As a result, we continue to expect to generate more than $50 million of levered free cash flow and reduce our net leverage ratio to meaningfully below 4x by year-end 2026, while progressing towards our 3x net leverage target in 2027. Our increased 2026 revenue guidance reflects consolidated revenue in the range of $2.1 billion to $2.2 billion or year-over-year growth of 8% to 13%. Given the strong environment in the T&D end markets and overall strength across both of our segments, we are also raising both the bottom and top ends of our adjusted EBITDA guidance and now project a range of $437.5 million to $455 million, resulting in year-over-year growth of 14% to 19%. We still expect non-rental CapEx of $40 million to $50 million. We are increasing our segment guidance for 2026 as well. We are projecting SER revenue of $850 million to $875 million and STEM revenue of $1.63 billion to $1.7 billion, with STEM third-party new sales revenue growth of 3% to 10%. Overall STEM sales are expected to be down marginally to up 3%, with the variance attributable solely to a year-over-year reduction in intersegment sales due to lower SER maintenance rental CapEx spending this year. For the third quarter, we expect consolidated revenue and adjusted EBITDA to be up year-over-year, though modestly below second quarter levels. A portion of our second quarter new and used equipment deliveries, including RPO buyouts, have been planned for the second half. That timing shifted results between quarters but did not reduce the full year expectations reflected in the ranges we raised today. Our rental business enters the third quarter with OEC on rent and utilization above prior year levels. We expect both to grow sequentially with year-over-year growth rates naturally moderating from here as we lap a second half of 2025, that posted the largest increase in OEC on rent in our history. The fourth quarter remains our historically strongest quarter. In closing, I want to echo Ryan's comments regarding our continued strong business outlook. Despite broader macroeconomic uncertainty, recent results and end market fundamentals support our confidence in the long-term demand drivers and our ability to deliver meaningful adjusted EBITDA growth this year. With that, operator, we can open the line for questions. Swetha Rakhecha: Ryan and Chris, Swetha here on behalf of Manish. Congrats on the great quarter. My first question is on the quarterly cadence given that you've indicated that third-party new equipment sales and used equipment sales and RPO buyouts have shifted from the second half into 2Q. Can you help us quantify the revenue and the adjusted EBITDA that is being pulled forward and clarify how much of it came from 3Q versus 4Q? Operator: Brian, just making sure you're unmuted on your end. We are currently experiencing some technical difficulties. One moment while we deal with these difficulties. Everybody, thank you so much for standing by while we dealt with those technical difficulties. We are back in the Q&A portion. Just a reminder that the question is from Swetha Rakhecha from Cantor Fitzgerald. Swetha, if you could just ask your question one more time, so we could get the Q&A portion rolling. Christopher Eperjesy: She's not able to, I can repeat the question. Basically, she was asking -- this is Chris. She was asking about the cadence, Q2, Q3, first half, second half. And so I think the way I'd answer that, Swetha, is typically -- especially in Q2 and Q3, we have seen historically some push forwards and pushouts. So to quantify the net is a little more challenging. But maybe just to give you a little bit of color, what we're expecting in Q3 -- if you look back last year, we saw Q3 growth of roughly 20% EBITDA year-over-year. What we're expecting this year is we're expecting both revenue and EBITDA to grow kind of high single-digit percentage range, while coming in below the second quarter levels that we had mentioned, really, which just reflects the delivery and RPO buyouts that shifted into Q2 from the second half. And then historically, we've given guidance of the split first half, second half, which has been anywhere 45% to 47% first half and then 55% to kind of 57% in the second half of the year. This year, we think because of that pull forward and just the timing of last year's ramp-up on OEC on rent in the second half of the year that it's likely to be more of a 48%, 52% kind of split, first half, 48%, second half, 52%. And then looking at Q4, that typically is our seasonally strongest quarter, and we'd expect that to continue to be the same this year. Michael Shlisky: Can you hear me okay? Ryan McMonagle: Yes, we can hear you. Good to talk to you. Michael Shlisky: Because I couldn't hear you for a few moments there. Okay. You had mentioned intra-quarter order flow was strong. Perhaps I missed this, but could you maybe just share with us how much were orders up year-over-year in the STEM segment, whether they were put in the backlog or they made through within the quarter? Ryan McMonagle: Yes. It's a good question, Mike. We saw converted orders up kind of in that low single digits range and then orders or quotes were up in the double-digit range. And so it's kind of a good leading indicator for the back half of the year. Michael Shlisky: Got you. And I also wanted to ask about the emissions standard changes. I mean, basically, your customers aren't really hauling freight. They're not looking to be out on the road 12 hours a day driving around. Do you consider the recent changes really just an inflation item that you need to pass along? And if so, I mean, have the customers had a really negative reaction to the fact that because of things that are out of your control, you're going to have to raise prices a bit? Ryan McMonagle: Yes, it's an interesting one to work through, and it still feels like some of the regulation is still being finalized. But I think the non-conformance penalties have been announced, and we're estimating those are in kind of the $4,500 to $7,000 range depending on spec and obviously, a few of the factors in there. And that's to continue running on the same engines, right, that we're running on today. And so we've taken the position, Mike, as you know, that let's buy forward a little bit, just the economics of the non-conformance penalty to us makes sense to carry more inventory heading into 2027. And then obviously, for us, the engine that is most impacted is the L9 engine, which is shifting to the X10 engine from Cummins. And so we're watching that closely and Cummins is now saying they'll be in full production on the X10 later in Q3 of next year. So we're watching how that plays through. But yes, it's going to be a cost increase for our customers, and we're obviously doing everything we can to mitigate that heading into '27. Michael Shlisky: And maybe lastly, just the map in the slide deck, how close are you to opening up some of those lesser served markets right now, like the New York, New Jersey Metro area, the Carolinas, et cetera, the other items that you mentioned on the slide deck. I did see an opening in the Northwest. What might be next on the calendar for you for your footprint here? Ryan McMonagle: Yes, we're working on all those markets. So that's -- those are areas where there's clearly opportunity to grow. And so I don't -- we're not expecting any other openings this year. And so those would be kind of in the years ahead. And that would be fairly consistent with how we guided a couple of locations -- opening a couple of locations this year. Naim Kaplan: This is Naim on for Nicole DeBlase. So my first question, you've consistently highlighted that your long-term demand is underpinned by major federal funding packages, including the IIJA, the IRA and the CHIPS Act. So given that we're getting later into 2026, can you describe how these federal dollars are translating into actual order flow? What percentage of the $322 million STEM backlog or SER booking pipeline directly tied to projects receiving federal subsidies or grants? And in which fiscal year do you project the legislative tailwinds could reach their peak contribution to top line growth? Ryan McMonagle: Yes. Good question, and I'll try to answer it with maybe kind of broad comments about our end market demand. So we're seeing -- right now, we're seeing really strong demand in transmission and distribution. I would argue that is less kind of backstopped by some of the federal funding programs. Obviously, there are some grants and approvals that are going on out there. So I'd say those are less directly impacted by federal spending dollars. They are impacted by some of the regulatory improvements, right, that we're seeing on that side of the business. And so I think that's where we're seeing really strong demand right now. In some of our prepared comments, we mentioned the infrastructure side of things, which would be more directly impacted by some of those federal spending dollars. We have yet to see that pick up in a meaningful way. And so I would expect that as those dollars are released, it's kind of a future benefit later this year or really into next year that we would begin to see some of those dollars really impact backlog and ultimately our revenue. Naim Kaplan: Got it. That is helpful. And then one question on SER, if I may. So SER average fleet utilization reached 81.6%. So this utilization is at the very high end of your historical target ranges with a young average fleet of about 3 years, is 81% to 82% sustainable run rate in the supply environment? Or should we model a normalization back down to like the high 70s as you raise net rental CapEx -- as you raise net rental CapEx brings new fleet online in the second half? Ryan McMonagle: Yes, I think that low 80s is a good spot to live, right? And I think a couple of things are benefiting that, right? You mentioned the fleet days, which I think is a positive. And then certainly, as you're heading into a transmission cycle, those projects are generally longer duration projects, which should benefit utilization kind of where it is or even climbing into the fall, which is generally what happens in our business. Justin Hauke: Yes. I guess, Chris, you kind of answered this question with the seasonality, but I was just wondering if you could quantify the pull forward of orders that you saw in 2Q that were expected in 3Q? And then I guess maybe a broader question is just -- is some of that people converting from what would otherwise have been a rental and they want to own equipment ahead of kind of long-term visibility? Or what's driving that? Ryan McMonagle: Yes. I'll let Chris start maybe on the seasonality, Justin, and then I can give you some commentary on what's driving it. Christopher Eperjesy: Yes, Justin, it's hard to quantify because there would have been pull forward and push out last year as well. And so I don't want to give a gross number when it really should be a net number. But it was tens of millions, I guess, between both new sales and used sales. But again, last year, there would have been a similar pull forward related to some of the prebuy pre-tariff to get ahead of the tariff prebuy last year. I'll let Ryan answer the second part. Ryan McMonagle: Yes. And then, Justin, we've talked about this in the past and certainly when -- several years ago when the business was performing well. But we see kind of that -- some of that prebuy is just a good indicator of long-term demand. So some of that showed up and Chris mentioned some of those sides, but some of that showed up in our rental asset sales line. And that was customers who wanted to go ahead and have their equipment for the long term. And so that's -- you take that as a good indicator of future as well. Justin Hauke: Great. And I guess my second question, I apologize if you gave this number, I didn't hear it. But obviously, the levered free cash flow guidance isn't changed, but you did talk about holding the inventories up or I guess, investing a little bit more there. They were up sequentially. Are you still expecting kind of $100 million of inventory benefit for the year? And I think on a working capital basis, I think it was supposed to be closer to $30 million to $40 million. I'm just trying to see if there was any change in kind of the inventory expectations. Christopher Eperjesy: Sitting here today, that is still our target. I think more importantly, we still feel comfortable we'll be above the $50 million of levered free cash flow. How that comes EBITDA growth versus net working capital versus other potential cash flow triggers, they're kind of moving parts, but I think we still feel like there's a path to get the numbers that you just quoted. Scott Schneeberger: Congratulations on the strong quarter. Ryan, I very much appreciate the transition demand super cycle phrase coined. I'd like to dig in a little bit there. Could you talk, maybe take us a little bit deeper about what is driving in transmission, what you're seeing there? How sustainable is it? Why coining it a super cycle? And then maybe some digging into some other verticals that are very strong. Are you seeing a lot of data center and obviously, transmission-related enabling of power tied to it? Just a bit digging in more to the end markets. Ryan McMonagle: Yes. No, good to talk to you, Scott, and yes, happy to do that. There's a couple of things I think that we're really lasered in on. One is obviously a lot of our customer -- what our customers are saying, so both our public company customers and kind of what they've reported even in this quarter and how they're talking about it. But maybe more importantly for us is what our kind of day-to-day conversations are with those customers. And so there's a lot of planning going on for new lines that are beginning, that are being prepared, that are being designed, and the equipment is beginning to be staged. And so for us, that's really kind of that indicator of, hey, this is a long-term cycle. So it's projects that don't begin until 2027 and going into 2028 as well. And so I think that's where the tone of the conversation has changed meaningfully. So we -- obviously, that's what we're listening to most closely. A lot of kind of the industry aggregators of what's going on with line miles and completes and expected starts, obviously, is strong, it's encouraging there as well. So I'd say that's kind of the fundamental thing, Scott, that really gives us comfort that this is the beginning or early innings, beginnings of a very long cycle here, which generally is how transmission plays if you look back historically as well. So I'd say that's certainly where the strongest is. And then to ask about some of the other end markets, distribution is still good. It does feel like maybe there are some IOU dollars shifting from distribution to transmission to meet the demand that we're seeing in the short term. And then you're right, Scott, things like data centers are -- they are a good tailwind. They're a good tailwind for us, but not fundamentally what's driving kind of the growth that we're seeing in the T&D end market. Scott Schneeberger: I appreciate that, Ryan. And then can we talk a little bit about pricing? Obviously, a lot of dynamics impacting how pricing is right now, how it is going to be going forward. OEC yield on rent has been accelerating in each of the quarters in the first half, coming into some tougher comps and obviously, engine changes into next year. Can you just speak about appetite of the customers on taking pricing? It seems like it's pretty good right now, and there's understanding of cost pressure. But just where you think that can go over, let's say, the next 2 to 6 quarters, please? Ryan McMonagle: Yes, I'll start, and Chris can kind of give some historical perspective, too. But look, Scott, 2 things are going on right now. There's obviously, when there's strong demand, we obviously want to be competitive in price and take price kind of where we can. The other dynamic that we've talked about, too, is as transmission picks up, right, it's generally at a higher on-rent yield than distribution. And so you'seeing a little bit of that impact in our business today as we talk about this transmission super cycle period, right, that we're going into. So I think we talked about on the Q1 call, we took price up about 5%. And obviously, the way that gets applied is it's not just a peanut butter spread, but we took price up about 5% at the very end of last year, beginning of this year. Chris, do you want to add anything else? Christopher Eperjesy: No, probably the only other thing I would add is we've talked about kind of wanting to live in that 15% to 18% range on new sales. We're at the lower end of that range right now. And largely, that was driven in this quarter, really high volume with some mix to larger customers and then some product mix, but we still feel comfortable that we can within that range and get certainly towards the higher end of that range as demand continues to be strong in the next year. Scott Schneeberger: And just following on that, how important a driver is it of margin expansion? And what do you see as the primary drivers of margin expansion in the SER segment? That's all. Christopher Eperjesy: I can start. We've lived in that mid-70% kind of gross margin range, certainly on the rental side, which we think is a good spot. We typically have said we want to be in the kind of low to mid-70s, and we're at the higher end of that range. I guess, the way I'd answer it is we think that's sustainable. There could be some upside there, but we feel really comfortable kind of where we're living right now in that mid-70s percent range. Ryan McMonagle: Thanks, everyone, for your time today and your interest in Custom Truck. We appreciate the continued engagement and look forward to updating you next quarter. In the meantime, please don't hesitate to reach out with any questions. Thank you again, and have a great day. Operator: This concludes today's call. Thank you for attending. You may now disconnect. Before you buy stock in Custom Truck One Source, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Custom Truck One Source wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years. Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you’d have $399,832!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $1,374,595!* Now, it’s worth noting Stock Advisor’s total average return is 968% — a market-crushing outperformance compared to 215% for the S&P 500. Don't miss the latest top 10 list, available with Stock Advisor, and join an investing community built by individual investors for individual investors. See the 10 stocks » *Stock Advisor returns as of August 10, 2026. This article is a transcript of this conference call produced for The Motley Fool. While we strive for our Foolish Best, there may be errors, omissions, or inaccuracies in this transcript. As with all our articles, The Motley Fool does not assume any responsibility for your use of this content, and we strongly encourage you to do your own research, including listening to the call yourself and reading the company's SEC filings. Please see our Terms and Conditions for additional details, including our Obligatory Capitalized Disclaimers of Liability. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. Custom Truck One Source (CTOS) Q2 2026 Earnings Call Transcript was originally published by The Motley Fool

Interested in Custom Truck One Source, Inc.? Here are five stocks we like better. Record Q2 performance: Revenue rose 10% year over year to $563 million, adjusted EBITDA increased 25% to $117 million, and the company posted $10 million in GAAP net income versus a loss of $28 million a year earlier. Strong demand across segments: Rental utilization improved to 81.6%, while SER revenue grew 20% and STEM achieved record third-party revenue of $345 million. Management cited sustained transmission and distribution demand, with quoting activity and third-quarter backlog also increasing. Full-year outlook raised: Custom Truck now expects 2026 revenue of $2.1 billion to $2.2 billion and adjusted EBITDA of $437.5 million to $455 million, while targeting more than $50 million in levered free cash flow and net leverage meaningfully below four times by year-end. Massive Upside Forecasted In Alta Equipment Group Custom Truck One Source (NYSE:CTOS) reported record second-quarter revenue and raised its full-year outlook, citing sustained demand in transmission and distribution markets, improved rental utilization and record equipment sales. For the three months ended June 30, the company generated revenue of $563 million, up 10% from a year earlier, while adjusted EBITDA increased 25% to $117 million. On a GAAP basis, net income was $10 million, or $0.05 per diluted share, compared with a net loss of $28 million in the prior-year quarter. → SpaceX’s First Earnings Report Could Decide Whether Shorts or Bulls Have Control CFO Chris Eperjesy said approximately $19 million of the year-over-year improvement in net income reflected a favorable tax-rate comparison, with the remaining improvement driven by higher operating income. First-half net income totaled $6 million. Custom Truck’s Specialty Equipment Rentals, or SER, segment recorded third-party revenue of $219 million, excluding inter-segment sales, a 20% increase from the prior-year period. The company attributed the gain to double-digit growth in rental revenue and rental equipment sales activity, including increased rental purchase option, or RPO, activity. → Why Rare Earth Processing Could Be the Real 2027 Opportunity SER adjusted EBITDA rose 26% year over year to $117 million, and the segment’s adjusted EBITDA margin expanded by more than 700 basis points to 53%. The company’s rental fleet utilization averaged 81.6% during the quarter, up 400 basis points from the second quarter of 2025. Average original equipment cost, or OEC, on rent rose 13% to $1.37 billion. Rent yield was 39.4%, increasing both sequentially and from a year earlier and remaining within the company’s targeted upper-30% to low-40% range. → 3 Drone Stocks That Should Soar After the Summer Slump CEO Ryan McMonagle said the company believes it is in the early stages of a potentially long-lasting transmission demand cycle. He said customer discussions, bidding activity and project planning point to continued demand through the rest of 2026 and beyond. “There’s a lot of planning going on for new lines that are beginning, that are being prepared, that are being designed, and the equipment is beginning to be staged,” McMonagle said during the question-and-answer session. He said some projects are not expected to begin until 2027 and 2028. At quarter-end, rental fleet OEC stood at nearly $1.68 billion, the highest level in the company’s history. The fleet’s average age was just over three years. Net rental capital expenditures were $36 million in the quarter. In the Specialty Truck Equipment and Manufacturing, or STEM, segment, third-party revenue reached a quarterly record of $345 million, up 5% from the year-earlier period. Segment adjusted EBITDA was $37 million and adjusted EBITDA margin was 8.5%. Management said STEM gross margins were slightly lower during the quarter because of increased sales to national accounts, which tend to carry modestly lower margins. Eperjesy said the company continues to target gross margins in a 15% to 18% range for new sales and expects to move toward the upper end as demand remains strong. New-sales backlog ended the quarter at $322 million, down $89 million sequentially as a result of record second-quarter deliveries. The backlog represented about three-and-a-half months of new sales, slightly below the company’s target range of four to six months. However, June quoting activity increased 26% year over year, and management said backlog had climbed above $340 million so far in the third quarter. McMonagle said converted orders increased by low single digits, while orders or quotes increased by double digits. The company continues to see strong demand from utility customers, particularly for transmission equipment. Custom Truck raised its 2026 consolidated revenue outlook to a range of $2.1 billion to $2.2 billion, representing projected growth of 8% to 13%. It increased adjusted EBITDA guidance to $437.5 million to $455 million, which would represent growth of 14% to 19% from 2025. SER revenue is projected at $850 million to $875 million. STEM revenue is projected at $1.63 billion to $1.7 billion. STEM third-party new-sales revenue is expected to grow 3% to 10%. Net rental fleet investment is now expected to be $170 million to $200 million, supporting mid-single-digit net OEC growth. Non-rental capital expenditures are expected to total $40 million to $50 million. The revised rental fleet investment forecast is higher than the company’s prior estimate but remains below the more than $250 million of net fleet capital expenditures recorded in 2025. Management said the younger fleet should allow it to reduce maintenance capital spending while continuing to grow. The company expects more than $50 million of levered free cash flow in 2026 and expects to reduce its net leverage ratio to meaningfully below four times by year-end. At June 30, net debt was $1.66 billion and net leverage was 3.85 times, an improvement of 0.17 turns sequentially and more than 0.8 turns from a year earlier. Custom Truck had $229 million available under its asset-based lending facility at quarter-end, along with more than $240 million of potential additional availability based on its borrowing base. Management said it expects inventory and floor-plan balances to decline in the second half, helping support free cash flow. For the third quarter, the company expects revenue and adjusted EBITDA to rise year over year but to come in modestly below second-quarter levels. Eperjesy said some second-quarter new- and used-equipment deliveries, including RPO buyouts, had originally been expected in the second half. He said the timing shift did not change the company’s increased full-year outlook, and that the fourth quarter remains Custom Truck’s seasonally strongest period. Custom Truck One Source, Inc (NYSE: CTOS) is a North American provider of specialty rental equipment, parts and services. The company's fleet encompasses a wide range of assets, including cranes, aerial work platforms, trench safety and shoring equipment, fluid management solutions, generators and other industrial machinery. Customers rely on Custom Truck One Source to support projects in construction, energy, telecommunications, industrial manufacturing, municipalities and large-scale events. Headquartered in Plano, Texas, Custom Truck One Source has expanded through a combination of organic growth and strategic acquisitions to establish a network of more than 140 branch locations across the United States and Canada. This instant news alert was generated by narrative science technology and financial data from MarketBeat in order to provide readers with the fastest reporting and unbiased coverage. Please send any questions or comments about this story to [email protected]. The article "Custom Truck One Source Q2 Earnings Call Highlights" was originally published by MarketBeat. View MarketBeat's top stocks for August 2026.

This article first appeared on GuruFocus. Release Date: August 04, 2026 For the complete transcript of the earnings call, please refer to the full earnings call transcript. Custom Truck One Source Inc (NYSE:CTOS) delivered record revenue of $563 million in Q2 2026, up 10% year over year, and adjusted EBITDA of $117 million, up 25% year over year. The Specialty Equipment Rentals (SER) segment achieved 81.6% fleet utilization, up 400 basis points year over year, with average OEC on rent growing 13% to $1.37 billion. The Specialty Truck Equipment and Manufacturing (STEM) segment posted record quarterly third-party revenue of $345 million, up 5% year over year, with strong order flow and backlog growth in early Q3. The company raised its full-year 2026 guidance, now expecting consolidated revenue of $2.1-$2.2 billion and adjusted EBITDA of $437.5-$455 million, reflecting 14-19% year-over-year growth. Net leverage improved to 3.85 times, down 0.17 turns sequentially and over 0.8 turns year over year, with expectations to reduce leverage to meaningfully below 4 times by year-end 2026. STEM gross margins were slightly lower in Q2 due to increased sales to national accounts, which carry modestly lower margins. New sales order backlog decreased by $89 million sequentially to $322 million, falling below the targeted range of 4-6 months to approximately 3.5 months. The company increased its planned net rental fleet investment to $170-$200 million for 2026, up from previous estimates, due to strong demand trends. Q3 revenue and adjusted EBITDA are expected to be modestly below Q2 levels due to timing shifts of equipment deliveries and RPO buyouts from the second half into Q2. The company faces potential headwinds from EPA 27 NOx emission regulations, which could impact chassis availability and costs, despite prebuy actions taken. Warning! GuruFocus has detected 6 Warning Signs with CTOS. Is CTOS fairly valued? Test your thesis with our free DCF calculator. Q: Can you help us quantify the revenue and adjusted EBITDA that was pulled forward from the second half into Q2, and clarify how much came from Q3 versus Q4? A: (CFO Chris Epperge) A portion of our second quarter new and used equipment deliveries, including RPO buyouts, had been planned for the second half. That timing shifted results between quarters but did not reduce the full year expectations reflected in the ranges we raised today. The shift was not broken out specifically between Q3 and Q4, but the company noted that Q3 is expected to be modestly below Q2 levels, while Q4 remains the historically strongest quarter. Q: What is driving the strong performance in the Specialty Equipment Rental (SER) segment, and how sustainable is the demand? A: (CEO Ryan McMonagle) The SER segment delivered record performance driven by sustained and growing demand in the transmission and distribution (T&D) markets. Rental fleet utilization averaged 81.6% in Q2, up 400 basis points year over year, supported by robust OpEx on rent of $1.37 billion, up 13% year over year. We believe we are in the early stages of a generation mission demand super cycle, and bidding activity and customer conversations lead us to believe these conditions will persist through the remainder of 2026 and beyond. Q: Can you provide more detail on the STEM segment's record performance and the current backlog situation? A: (CEO Ryan McMonagle) The STEM segment had record performance in Q2, with equipment sales reaching an all-time quarterly high. Third-party revenue was $345 million, up 5% versus Q2 2025. New sales order backlog ended Q2 at $322 million, down $89 million sequentially on record Q2 deliveries. However, intra-quarter order flow remains strong, and backlog has grown so far in Q3 to more than $340 million. June quoting activity increased 26% year over year, supporting expected growth in order intake in the second half. Q: How is the company positioned regarding the upcoming EPA 27 NOx emission regulations? A: (CEO Ryan McMonagle) The EPA introduced proposed changes to the rules in early July, maintaining the 2027 NOx standards while adding nonconformance penalty provisions. Regulations are expected to be finalized later this year. Given our current inventory position, the chassis prebuy actions we have already taken, and our strong relationships with chassis OEM partners, we believe Custom Truck One Source is well positioned to navigate the impact of the upcoming emission standards changes. Q: What is the company's updated guidance for 2026, and what are the key drivers? A: (CFO Chris Epperge) We are increasing our full year 2026 consolidated revenue and adjusted EBITDA outlooks. We expect consolidated revenue in the range of $2.1 to $2.2 billion (8% to 13% year-over-year growth) and adjusted EBITDA in the range of $437.5 to $455 million (14% to 19% year-over-year growth). We are also increasing segment guidance, projecting SER revenue of $850 to $875 million and STEM revenue of $1.63 to $1.7 billion. The strong environment in T&D markets and overall strength across both segments are driving the increase. Q: Can you elaborate on the balance sheet, liquidity, and deleveraging progress? A: (CFO Chris Epperge) We finished Q2 with net leverage of 3.85 times, a sequential improvement of 0.17 turns and more than a 0.8 turn improvement versus Q2 2025. Availability under our ABL was $229 million as of June 30th, with more than $240 million of additional availability potentially accessible. Cash flow generation and deleveraging remain key focus areas. We expect to reduce inventory and floor plan balances during the second half of 2026, supporting improved free cash flow generation. We continue to expect to generate more than $50 million of leverage-free cash flow and reduce net leverage to meaningfully below 4 times by year-end 2026, progressing toward our 3 times target in 2027. Q: What is the company's plan for rental fleet investment in 2026, and how does it impact growth? A: (CFO Chris Epperge) Given demand trends in our T&D markets, we plan to modestly increase our net investment in the rental fleet from our previous estimate and now expect a range of $170 million to $200 million, which supports mid-single-digit net OpEx growth this year. This represents a meaningful reduction from over $250 million in fleet CapEx in 2025. Our young fleet age of just over 3 years allows us to significantly reduce overall investment while continuing to generate growth. Q: How are rental KPIs trending entering Q3, and what should we expect for the remainder of the year? A: (CFO Chris Epperge) The rental business enters Q3 with OpEx on rent and utilization above prior year levels. We expect both to grow sequentially, with year-over-year growth rates naturally moderating as we lap the second half of 2025, which posted the largest increase in OEC on rent in our history. So far in Q3, both measures have continued to show year-over-year growth. Q4 remains our historically strongest quarter. Q: Can you discuss the gross margin performance in the STEM segment and the impact of national accounts? A: (CFO Chris Epperge) STEM gross margins in Q2 were slightly lower as a result of increased sales to national accounts, which tend to carry modestly lower margins. However, the segment still delivered record performance with third-party revenue up 5% year over year. The company remains confident in another year of growth in third-party customer revenue for STEM, driven by strong demand in the utility market, especially focused on transmission equipment. Q: What is the company's outlook on free cash flow and working capital improvements? A: (CFO Chris Epperge) Through the first half of the year, free cash flow improved by approximately $40 million versus the prior year period. The increase in inventory during the first half was largely planned, reflecting chassis and hold-goods positioning ahead of scheduled second half deliveries, together with chassis prebuy actions. Even with that increase, we expect to reduce inventory and floor plan balances during the second half of 2026. We continue to expect to generate more than $50 million For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Our analysts just identified a stock with the potential to be the next Nvidia. Tell us how you invest and we'll show you why it's our #1 pick. Tap here. Management believes the company is in the early stages of a once-in-a-generation transmission demand super cycle, driving record OEC on rent and historically high utilization. Record STEM revenue was driven by strong utility end market demand and high delivery volumes, though backlog decreased sequentially due to record Q2 deliveries. The SER segment achieved a 700 basis point margin expansion year-over-year, attributed to improved rental fundamentals and pricing discipline in transmission and distribution markets. Strategic chassis prebuy actions and inventory positioning have been implemented to mitigate potential disruptions from upcoming EPA '27 NOx emission regulations. The company is intentionally aging its rental fleet to just over 3 years to reduce maintenance CapEx and prioritize free cash flow generation. A shift in the timing of new and used equipment deliveries and RPO buyouts into Q2 contributed to the record quarterly performance. Full-year 2026 guidance was raised for both revenue and adjusted EBITDA, reflecting sustained momentum in core T&D end markets. Management expects Q3 results to be modestly below Q2 levels due to the pull-forward of equipment deliveries and RPO buyouts into the second quarter. The company targets a net leverage ratio meaningfully below 4x by year-end 2026, with a long-term goal of reaching 3x in 2027. Inventory and floor plan balances are expected to decrease in the second half of 2026 to support a target of below 6 months of inventory on hand. Net rental CapEx for 2026 is projected at $170 million to $200 million, a significant reduction from 2025 levels while still supporting mid-single-digit OEC growth. Non-conformance penalties for 2027 NOx standards are estimated between $4,500 and $7,000 per unit, representing a looming cost increase for customers. STEM gross margins were slightly lower in Q2 due to a higher mix of sales to national accounts, which typically carry lower margins. The company is monitoring the transition from Cummins L9 engines to X10 engines, with full production expected in Q3 2027. Infrastructure end market growth has been less robust than utility markets, with federal funding from the IIJA and IRA yet to impact results meaningfully. One stock. Nvidia-level potential. 30M+ investors trust Moby to find it first. Get the pick. Tap here. Management expects a 48%/52% split between first-half and second-half results, a shift from the typical 45%/55% split due to Q2 timing. Q3 revenue and EBITDA are expected to grow in the high single-digit range year-over-year but will be lower than Q2 levels. Demand is driven by long-term planning for new lines through 2027 and 2028, with conversations shifting toward multi-year staging of equipment. Transmission projects typically offer longer durations and higher on-rent yields compared to distribution, benefiting overall utilization and margins. The company implemented a roughly 5% price increase at the start of the year and sees further opportunity as the mix shifts toward transmission. STEM margins are currently at the lower end of the 15% to 18% target range due to customer mix, but management expects to move toward the higher end as demand persists.

KANSAS CITY, Mo., August 03, 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 six months ended June 30, 2026. CTOS Second-Quarter Highlights Record second quarter revenue of $563.4 million, an increase of $52.0 million, or 10.2%, compared to the second quarter of 2025 Increased Average OEC on rent by $158.5 million, or 13.1%, compared to the second quarter of 2025 Gross profit of $124.0 million, an increase of $21.4 million, or 20.9%, compared to the second quarter of 2025 Adjusted Gross Profit of $180.9 million, an increase of $24.4 million, or 15.6%, compared to the second quarter of 2025 Net income of $10.4 million, an improvement of $38.8 million, compared to the second quarter of 2025 Adjusted EBITDA of $116.8 million, an increase of $23.3 million, or 25.0%, compared to the second quarter of 2025 Reduced net leverage ratio to 3.85x at quarter-end, crossing below 4.0x, compared to 4.02x at the end of the first quarter and 4.31x at year-end 2025 Given strong conditions in the transmission and distribution ("T&D") end markets, and record first half results, increasing 2026 full year revenue guidance range from $2.005 billion - $2.12 billion to $2.1 billion - $2.2 billion and Adjusted EBITDA1 guidance range from $415 million - $440 million to $437.5 million - $455 million "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 Summary Actual Financial Results by SegmentBeginning 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 June 30, 2026 for a reconciliation of segment-level adjusted EBITDA to Consolidated income (loss) before income taxes. Summary Combined Operating Metrics Management CommentaryThe 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 OutlookWe 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: Revenue is expected to increase 8% to 13% year-over-year, with Adjusted EBITDA1, 4 expected to increase 14% to 19%. Net rental fleet investment (purchases less proceeds) for 2026 is expected to be approximately $170 million to $200 million, an increase from prior guidance to support strong rental demand, with mid-single digit net OEC growth, while still reflecting a meaningful reduction from over $250 million in 2025. Inventory months on hand is expected to continue trending toward the targeted level of below six months, supporting working capital improvement. Levered free cash flow2, 4 is expected to exceed $50 million for 2026 and net leverage ratio3, 4 is expected to be meaningfully below four times by the end of fiscal 2026; the longer-term target remains achieving a net leverage ratio3, 4 below three times in 2027. Specialty Equipment Rentals (SER): The rental business continues to perform very well with OEC on rent, utilization and gross margin all continuing to perform ahead of expectations through the first half of 2026. Demand for equipment serving the utility transmission and distribution market remains very strong and at record levels, and further penetration of the vocational rental market is expected to provide incremental growth. Average fleet age was approximately three years at the end of the second quarter, which continues to position the Company to moderate rental fleet investment while pursuing growth, with OEC expected to increase by a mid-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, supported by continued customer demand, stable supply chain conditions and relationships with key customers, chassis suppliers and attachment suppliers. Total STEM revenue is expected to be down marginally to up 3% year-over-year, with third-party growth partially offset by lower intercompany rental sales/capex. Sales order backlog ended the second quarter at $322 million, or approximately 3.5 months of LTM third-party new sales, modestly below the targeted range of four to six months, reflecting record equipment deliveries in the quarter; backlog can move quarter to quarter with delivery and production timing, and June quoting activity increased 26% year-over-year, supporting expected order intake in the second half. "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." CONFERENCE CALL INFORMATIONThe 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 CTOSCTOS 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 STATEMENTSThis press release includes "forward-looking statements" within the meaning of the "safe harbor" provisions of the United States Private Securities Litigation Reform Act of 1995, as amended, and within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended, and Section 27A of the Securities Act of 1933, as amended. When used in this press release, the words "estimates," "projected," "expects," "anticipates," "forecasts," "suggests," "plans," "targets," "intends," "believes," "seeks," "may," "will," "should," "future," "propose," "could," "would," and variations of these words or similar expressions (or the negative versions of such words or expressions) are intended to identify forward-looking statements. These forward-looking statements are not guarantees of future performance, conditions or results, and involve a number of known and unknown risks, uncertainties, assumptions and other important factors, many of which are outside the Company's management’s control, that could cause actual results or outcomes to differ materially from those discussed in this press release. This press release is based on certain assumptions that the Company's management has made in light of its experience in the industry, as well as the Company’s perceptions of historical trends, current conditions, expected future developments and other factors the Company believes are appropriate in these circumstances and at such time. As you read and consider this press release, you should understand that these statements are not guarantees of performance or results. Many factors could affect the Company’s actual performance and results and could cause actual results to differ materially from those expressed in this press release. Important factors, among others, that may affect actual results or outcomes include: increases in labor costs, changes in U.S. trade policy including tariffs, our inability to obtain raw materials, component parts and/or finished goods in a timely and cost-effective manner, and our inability to manage our rental equipment in an effective manner; competition in the equipment dealership and rental industries; our sales order backlog may not be indicative of the level of our future revenues; increases in unionization rate in our workforce; our inability to attract and retain key personnel, including our management and skilled technicians; material disruptions to our operation and manufacturing locations as a result of public health concerns, equipment failures, natural disasters, work stoppages, power outages or other reasons; any further increase in the cost of new equipment that we purchase for use in our rental fleet or for sale as inventory aging or obsolescence of our existing equipment, and the fluctuations of market value thereof; disruptions in our supply chain; our business may be impacted by government spending; we may experience losses in excess of our recorded reserves for receivables; uncertainty relating to macroeconomic conditions, unfavorable conditions in the capital and credit markets and our customers’ inability to obtain additional capital as required; increases in price of fuel or freight; regulatory, technological advancement, or other changes in our core end-markets may affect our customers’ spending; our strategic initiatives including acquisitions and divestitures may not be successful and may divert our management’s attention away from operations and could create general customer uncertainty; the interest of our majority stockholder, which may not be consistent with the other stockholders; volatility of our common stock market price; our significant indebtedness, which may adversely affect our financial position, limit our available cash and our access to additional capital, prevent us from growing our business and increase our risk of default; our inability to generate cash, which could lead to a default; significant operating and financial restrictions imposed by our debt agreements; changes in interest rates, which could increase our debt service obligations on the variable rate indebtedness and decrease our net income and cash flows; disruptions or security compromises affecting our information technology systems or those of our critical services providers could adversely affect our operating results by subjecting us to liability, and limiting our ability to effectively monitor and control our operations, adjust to changing market conditions, or implement strategic initiatives; we are subject to complex laws and regulations, including environmental and safety regulations that can adversely affect cost, manner or feasibility of doing business; we are subject to a series of risks related to climate change; and increased attention to, and evolving expectations for, sustainability and environmental, social and governance initiatives. For a more complete description of these and other possible risks and uncertainties, please refer to the Company's Annual Report on Form 10-K for the year ended December 31, 2025, and its subsequent reports filed with the Securities and Exchange Commission. All forward-looking statements attributable to the Company or persons acting on its behalf are expressly qualified in their entirety by the foregoing cautionary statements. CUSTOM TRUCK ONE SOURCE, INC.NON-GAAP FINANCIAL AND PERFORMANCE MEASURESIn 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"). 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. View source version on businesswire.com: https://www.businesswire.com/news/home/20260803192056/en/ Contacts INVESTOR CONTACT Brian Perman, Vice President, Investor [email protected]

Find winning stocks in any market cycle. Join 7 million investors using Simply Wall St's investing ideas for FREE. Custom Truck One Source (CTOS) is back in focus ahead of its upcoming Q2 2026 earnings release, scheduled for after the market close on August 3. This report will provide investors with fresh data on this equipment specialist. See our latest analysis for Custom Truck One Source. The Custom Truck One Source share price closed at $10.15, with a 1-day share price return of 2.32% and a year-to-date share price return of 75.00%. The 1-year total shareholder return of 64.77% and 3-year total shareholder return of 50.59% point to momentum that has cooled over the past month but remains strong over a longer horizon. If you are tracking how equipment and infrastructure spending could influence other opportunities, this is a good moment to widen your search and check out 35 power grid technology and infrastructure stocks After a strong run this year followed by a recent pullback, Custom Truck One Source now sits in a middle ground that can tempt investors. Does the current price already reflect the story, or is patience the better entry here? Custom Truck One Source closed at $10.15 compared with a most followed fair value estimate of $11.50, which frames the current valuation debate ahead of earnings. Custom Truck One Source Future Earnings and Revenue Growth Read the complete narrative. Curious what sits behind that higher fair value for Custom Truck One Source. The narrative leans on steady revenue expansion, rising margins, and a future profit profile that implies a richer earnings multiple than the sector. Want to see which specific long term forecasts tie those pieces together. Result: Fair Value of $11.50 (UNDERVALUED) Have a read of the narrative in full and understand what's behind the forecasts. However, Custom Truck One Source still faces key risks, including high net leverage and pressure on TES and ERS margins, which could unsettle the current growth narrative. Find out about the key risks to this Custom Truck One Source narrative. The most followed fair value for Custom Truck One Source sits at $11.50 and suggests the stock is 11.7% undervalued. Our DCF model points in the opposite direction. It indicates a future cash flow value of $8.09, which would place CTOS as overvalued at today’s $10.15 price. Which set of assumptions do you trust more? Look into how the SWS DCF model arrives at its fair value. Simply Wall St performs a discounted cash flow (DCF) on every stock in the world every day (check out Custom Truck One Source for example). We show the entire calculation in full. You can track the result in your watchlist or portfolio and be alerted when this changes, or use our stock screener to discover 55 high quality undervalued stocks. If you save a screener we even alert you when new companies match - so you never miss a potential opportunity. With sentiment around Custom Truck One Source split between undervaluation potential and DCF caution, this is a moment to move quickly and inspect the details yourself. To see what optimists are focusing on, review the 2 key rewards. Do not stop with Custom Truck One Source. Use this momentum to scan other opportunities now so you are not catching up when markets move again. Target potential mispricings by reviewing companies that currently screen as high quality and potentially undervalued through the 55 high quality undervalued stocks. Strengthen the defensive side of your portfolio by focusing on businesses that appear resilient on leverage and liquidity using the 81 resilient stocks with low risk scores. Hunt for future leaders before they are widely followed by checking the screener containing 19 high quality undiscovered gems. This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned. Companies discussed in this article include CTOS. Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email [email protected]

Custom Truck One Source, Inc. (CTOS) came out with quarterly earnings of $0.05 per share, beating the Zacks Consensus Estimate of $0.02 per share. This compares to a loss of $0.13 per share a year ago. These figures are adjusted for non-recurring items. This quarterly report represents an earnings surprise of +150.00%. A quarter ago, it was expected that this company would post a loss of $0.05 per share when it actually produced a loss of $0.02, delivering a surprise of +60%. Over the last four quarters, the company has surpassed consensus EPS estimates two times. Custom Truck One Source, which belongs to the Zacks Automotive - Original Equipment industry, posted revenues of $563.45 million for the quarter ended June 2026, surpassing the Zacks Consensus Estimate by 8.05%. This compares to year-ago revenues of $511.48 million. The company has topped consensus revenue estimates two times over the last four quarters. The sustainability of the stock's immediate price movement based on the recently-released numbers and future earnings expectations will mostly depend on management's commentary on the earnings call. Custom Truck One Source shares have added about 76.2% since the beginning of the year versus the S&P 500's gain of 9.4%. While Custom Truck One Source has outperformed the market so far this year, the question that comes to investors' minds is: what's next for the stock? There are no easy answers to this key question, but one reliable measure that can help investors address this is the company's earnings outlook. Not only does this include current consensus earnings expectations for the coming quarter(s), but also how these expectations have changed lately. Empirical research shows a strong correlation between near-term stock movements and trends in earnings estimate revisions. Investors can track such revisions by themselves or rely on a tried-and-tested rating tool like the Zacks Rank, which has an impressive track record of harnessing the power of earnings estimate revisions. Ahead of this earnings release, the estimate revisions trend for Custom Truck One Source was mixed. While the magnitude and direction of estimate revisions could change following the company's just-released earnings report, the current status translates into a Zacks Rank #3 (Hold) for the stock. So, the shares are expected to perform in line with the market in the near future. You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here. It will be interesting to see how estimates for the coming quarters and the current fiscal year change in the days ahead. The current consensus EPS estimate is $0.02 on $506.97 million in revenues for the coming quarter and $0.11 on $2.04 billion in revenues for the current fiscal year. Investors should be mindful of the fact that the outlook for the industry can have a material impact on the performance of the stock as well. In terms of the Zacks Industry Rank, Automotive - Original Equipment is currently in the bottom 30% of the 250 plus Zacks industries. Our research shows that the top 50% of the Zacks-ranked industries outperform the bottom 50% by a factor of more than 2 to 1. One other stock from the same industry, EVgo Inc. (EVGO), is yet to report results for the quarter ended June 2026. The results are expected to be released on August 5. This company is expected to post quarterly loss of $0.20 per share in its upcoming report, which represents a year-over-year change of -100%. The consensus EPS estimate for the quarter has remained unchanged over the last 30 days. EVgo Inc.'s revenues are expected to be $81.78 million, down 16.6% from the year-ago quarter. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Custom Truck One Source, Inc. (CTOS) : Free Stock Analysis Report EVgo Inc. (EVGO) : Free Stock Analysis Report This article originally published on Zacks Investment Research (zacks.com). Zacks Investment Research

Heavy equipment distributor Custom Truck One Source (NYSE:CTOS) will be announcing earnings results this Monday after the bell. Here’s what to look for. Custom Truck One Source beat analysts’ revenue expectations last quarter, reporting revenues of $461.6 million, up 9.3% year on year. It was a very strong quarter for the company, with a beat of analysts’ EPS and EBITDA estimates. Is Custom Truck One Source a buy or sell going into earnings? Read our full analysis here, it’s free for active Edge members. This quarter, the market is expecting Custom Truck One Source’s revenue to grow 1.2% year on year, slowing from the 20.9% increase it recorded in the same quarter last year. Analysts covering the company have generally reconfirmed their estimates over the last 30 days, suggesting they anticipate the business will stay the course heading into earnings. Custom Truck One Source has missed Wall Street’s revenue estimates multiple times over the last two years. Looking at Custom Truck One Source’s peers in the specialty equipment distributors segment, some have already reported their Q2 results, giving us a hint as to what we can expect. Richardson Electronics delivered year-on-year revenue growth of 27.6%, beating analysts’ expectations by 19.6%, and United Rentals reported revenues up 11.8%, topping estimates by 4.9%. Richardson Electronics traded up 21.2% following the results while United Rentals was also up 10.1%. Read our full analysis of Richardson Electronics’s results here and United Rentals’s results here. In the last year or so, investors have shifted their focus from one macro dynamic to the next (AI disintermediation and AI investment to geopolitical conflict, interest rates, and the health of the wider economy). While some of the specialty equipment distributors stocks have shown solid performance in this choppy environment, the group has generally underperformed, with share prices down 5% on average over the last month. Custom Truck One Source is up 2.1% during the same time and is heading into earnings with an average analyst price target of $11.50 (compared to the current share price of $10.16). WHILE YOU’RE HERE: The Next Palantir? One satellite company captures images of every point on Earth. Every single day. The Pentagon wants it. Hedge funds are using it to beat earnings. You’ve probably never heard of it. This is what the early days of Palantir looked like before it became a giant. Same playbook. Different technology. If you missed Palantir, you need to see this. Claim The Stock Ticker for Free HERE.

In its latest reported quarter, Custom Truck One Source generated US$461.6 million in revenue, a 9.3% year-on-year increase that exceeded analyst expectations and came with earnings and EBITDA ahead of forecasts. The company also raised its full-year guidance above peers’ expectations, signaling management’s confidence in the business despite prior concerns about margins and leverage. Next, we’ll examine how the stronger-than-expected quarter and upgraded full-year guidance could reshape Custom Truck One Source’s investment narrative. The latest GPUs need a type of rare earth metal called Dysprosium and there are only 29 companies in the world exploring or producing it. Find the list for free. To own Custom Truck One Source, you need to believe its specialty rental and equipment platform can convert grid, telecom, and infrastructure work into steadily improving earnings, even with a still-leveraged balance sheet and pressured margins. The latest revenue beat and raised full-year guidance support the near term catalyst of better cash generation and leverage progress, but they do not remove the key risk that a slowdown in TES demand or higher interest costs could quickly weigh on profitability. Among recent developments, the expanded Hiab dealer agreement looks most relevant here. By widening access to loader cranes and MOFFETT forklifts across multiple U.S. regions, Custom Truck One Source is deepening its product lineup just as order flow and rental utilization are central to the improved outlook. How effectively the company converts this expanded footprint into higher margin, recurring revenue will matter for both the guidance upgrade and the effort to bring leverage down. Yet despite the upbeat quarter and stronger guidance, investors should still be watching the company’s relatively high net leverage and what happens if revenue momentum slows... Read the full narrative on Custom Truck One Source (it's free!) Custom Truck One Source's narrative projects $2.2 billion revenue and $36.9 million earnings by 2029. This requires 4.3% yearly revenue growth and a $68.0 million earnings increase from -$31.1 million today. Uncover how Custom Truck One Source's forecasts yield a $7.67 fair value, a 21% downside to its current price. Before this beat, the most optimistic analysts were already penciling in about US$2.3 billion of revenue and US$21.1 million of earnings by 2028, which is a much rosier outlook than the consensus narrative. That bullish view leans hard on long term electrification demand and assumes Custom Truck can grow into that potential, while the latest quarter may either reinforce or challenge just how realistic those aggressive targets look once forecasts are updated. Explore 2 other fair value estimates on Custom Truck One Source - why the stock might be worth 21% less than the current price! Disagree with existing narratives? Extraordinary investment returns rarely come from following the herd, so go with your instincts. A great starting point for your Custom Truck One Source research is our analysis highlighting 2 key rewards that could impact your investment decision. Our free Custom Truck One Source research report provides a comprehensive fundamental analysis summarized in a single visual - the Snowflake - making it easy to evaluate Custom Truck One Source's overall financial health at a glance. Don't miss your shot at the next 10-bagger. Our latest stock picks just dropped: The best AI stocks today may lie beyond giants like Nvidia and Microsoft. Find the next big opportunity with these 15 smaller AI-focused companies with strong growth potential through early-stage innovation in machine learning, automation, and data intelligence that could fund your retirement. This technology could replace computers: discover 26 stocks that are working to make quantum computing a reality. Uncover the next big thing with 29 elite penny stocks that balance risk and reward. This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned. Companies discussed in this article include CTOS. Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email [email protected]