Custom Truck One Source (CTOS) Q4 2025 earnings summary

Executive summary

• Achieved record full-year 2025 revenue of $1.94B (up 8% YoY) and record Q4 revenue of $528M, driven by strong rental business, robust demand in utility and T&D markets, and improved KPIs in Equipment Rental Solutions (ERS).

• Adjusted EBITDA for Q4 was $121M (up 18% YoY); full-year Adjusted EBITDA reached $384M (up 13% YoY), reflecting robust operational execution and exceeding guidance midpoint.

• Rental fleet utilization averaged 83.6% in Q4, the highest in nearly three years, with OEC on rent up 14% YoY.

• Opened two new branches in Portland, OR and Orlando, FL, reinforcing growth strategy in underserved markets.

• Announced a strategic partnership with Hiab and investments in aftermarket service to support TES growth.

Financial highlights

• Q4 2025 revenue: $528M (up 1.4% YoY); full-year revenue: $1.94B (up 8% YoY); Q4 Adjusted EBITDA: $121M (up 18% YoY); full-year Adjusted EBITDA: $384M (up 13% YoY).

• Q4 GAAP net income: $21M; full-year GAAP net loss: $31M, impacted by prior year sale leaseback gain.

• ERS Q4 revenue: $207M (up 20% YoY); full-year ERS revenue up 17% YoY.

• TES Q4 equipment sales: $284M (down 8% YoY); full-year TES revenue up 4% YoY, with Q4 gross margin at 15.6%.

• Inventory reduced by over $100M in Q4 and nearly $120M in 2025, supporting lower working capital needs.

Outlook and guidance

• 2026 revenue guidance: $2.005–2.12B (3–9% YoY growth); Adjusted EBITDA: $410–435M (7–13% YoY growth).

• Segment guidance for 2026: ERS revenue $725–760M, TES $1.125–1.2B, APS $155–160M.

• Net rental fleet investment expected at $150–170M in 2026, down from over $250M in 2025.

• Expect to generate over $50M in levered free cash flow and reduce net leverage below 4x by year-end 2026 and below 3x by 2027.

• ERS and TES segments expected to benefit from sustained demand and strong order flow, with TES backlog up nearly 20% in Q4.