Custom Truck One Source (CTOS) Q1 2026 earnings summary

Executive summary

• Achieved record Q1 2026 revenue of $462 million, up 9.3% year-over-year, driven by strong demand in T&D, infrastructure, and robust rental activity.

• Adjusted EBITDA rose 33.5% to $98 million, reflecting high utilization, improved cost management, and strong end-market demand.

• Net loss narrowed to $4.1 million from $17.8 million in Q1 2025, due to higher operating income and rental revenue.

• Rental fleet utilization reached 81.4%, up 370 basis points year-over-year, with OEC on rent averaging $1.34 billion, up 12%.

• Transitioned to two reportable segments (SER and STEM) as of January 1, 2026, with new segment reporting effective this quarter.

Financial highlights

• Q1 2026 revenue: $462 million (+9% YoY); Adjusted EBITDA: $98 million (+33% YoY); Adjusted Gross Profit: $159 million (+17% YoY).

• SER third-party revenue: $194 million (+16% YoY); STEM third-party revenue: $268 million (+5% YoY).

• SER Adjusted EBITDA: $105 million (+23% YoY), margin 51.5%; STEM Adjusted EBITDA: $33 million, margin 9%.

• Net rental CapEx in Q1: $49 million; OEC in rental fleet at quarter end: $1.66 billion (+$107 million YoY).

• Gross profit margin improved to 22.3% from 20.3% in Q1 2025.

Outlook and guidance

• Affirmed 2026 revenue guidance: $2.005 billion–$2.12 billion, up 3%–9% YoY.

• Raised Adjusted EBITDA guidance to $415 million–$440 million (8%–15% YoY growth).

• SER revenue guidance: $835 million–$870 million; STEM revenue: $1.58 billion–$1.655 billion.

• Net leverage expected to fall below 4x by year-end 2026, targeting 3x in 2027.

• Levered free cash flow expected to exceed $50 million in 2026.