Custom Truck One Source (CTOS) reported record quarterly revenue of $528.2 million and adjusted EBITDA of $120.7 million, an 18% increase from the same period a year earlier. Full‑year revenue reached $1.944 billion, up 7.9% from 2024, while full‑year adjusted EBITDA rose to $383.6 million, a 12.9% increase. The company posted a net loss of $31.1 million for 2025, a slight worsening from the $28.7 million loss recorded in 2024.
The Equipment Rental Solutions (ERS) segment drove the quarter’s growth, with rental revenue rising 13.5% to $141.98 million and a gross margin of 62%. Rental fleet utilization averaged 84%, the highest in nearly three years. In contrast, the Truck and Equipment Sales (TES) segment saw revenue of just under $1.1 billion, up 4% for the year, but faced pricing pressures that limited margin expansion.
Earnings per share of $0.09 matched the consensus estimate of $0.09 and beat a lower estimate of $0.07, a 28.6% surprise. The EPS beat was driven by disciplined cost management and the strong margin performance in ERS, which offset the weaker performance in TES. Revenue, however, fell short of the $581.67 million consensus, missing by about 9.6%, largely because demand in TES did not meet expectations and pricing headwinds persisted.
Full‑year net loss widened to $31.1 million, reflecting higher operating expenses and inventory build‑up, while the company continued to reduce inventory by over $100 million in Q4. Management maintained its 2026 guidance, projecting total revenue of $2.00 billion to $2.12 billion and adjusted EBITDA of $410 million to $435 million, signaling confidence in continued growth driven by electrification, infrastructure investment and utility grid upgrades.
CEO Ryan McMonagle said, “In the fourth quarter, we achieved record quarterly revenue, as well as sequential and year‑over‑year improvement in both revenue and Adjusted EBITDA, delivering 18% Adjusted EBITDA growth in the quarter and 13% for the full year.” He added, “The significant improvements in our core T&D markets that we experienced in the third quarter continued into the fourth quarter, positioning our ERS segment to finish the year with 20% revenue growth in the fourth quarter and 17% for the full year.” McMonagle also noted the company will report results under two segments—Specialty Equipment Rentals (SER) and Specialty Truck Equipment and Manufacturing (STEM)—and highlighted a $1.64 billion operating cash‑equivalent balance that should support future growth.
Investors reacted negatively, citing the revenue miss as the primary driver of the market’s response. Despite the EPS beat, the company’s guidance and strategic initiatives—such as inventory reduction, fleet age management and a shift to a two‑segment reporting structure—suggest a focus on long‑term profitability and balance‑sheet strength.
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