Custom Truck One Source, Inc., a leading provider of specialty equipment and services for infrastructure-focused industries such as electric utilities, telecommunications, rail, and construction, has reported its financial results for the fourth quarter and full year ending December 31, 2025. The company delivered record revenue during the final quarter and the full year, supported by strong demand for rental equipment, continued infrastructure investments, and high utilization of its fleet across key markets.
The results reflect the company’s continued efforts to strengthen its position as a major equipment solutions provider to infrastructure sectors that are benefiting from long-term trends such as electrification, power grid modernization, telecommunications expansion, and major construction projects. Unless otherwise specified, all financial comparisons are based on the corresponding period in 2024.
Record Revenue Performance in the Fourth Quarter
During the fourth quarter of 2025, the company achieved record quarterly revenue of $528.2 million, representing an increase of $7.4 million, or 1.4%, compared with the same period in 2024. The growth was driven primarily by strong demand within the company’s equipment rental operations, which benefited from increased fleet utilization and higher equipment on rent.
Despite the increase in revenue, quarterly net income for the fourth quarter reached $20.9 million, compared with $27.6 million reported in the fourth quarter of the previous year. The decline was mainly due to a one-time financial gain recorded in the prior year, which did not recur in the 2025 period.
At the same time, the company recorded significant growth in profitability when measured through Adjusted EBITDA, a key metric used to evaluate operating performance. Fourth-quarter Adjusted EBITDA reached $120.7 million, representing an increase of $18.7 million, or 18.4%, compared with the same quarter in 2024.
Another key operational metric, fleet utilization, reached 83.6%, marking the highest level in nearly three years. High utilization indicates that a large portion of the company’s rental fleet was actively deployed with customers, highlighting strong demand across its markets.
Strong Full-Year Financial Results
For the full year 2025, the company generated record annual revenue of $1.944 billion, representing a 7.9% increase compared with the previous year. This growth was supported by strong activity in equipment rentals, ongoing demand for vocational trucks and equipment, and steady orders across multiple infrastructure-related industries.
While revenue grew, the company reported a net loss of $31.1 million for the full year, slightly wider than the $28.7 million net loss recorded in 2024. This was influenced by a combination of operational factors and financial adjustments.
However, operating performance improved substantially when evaluated through Adjusted EBITDA. The company posted full-year Adjusted EBITDA of $383.6 million, reflecting an increase of $43.9 million, or 12.9%, compared with $339.7 million in 2024.
Additionally, the company expanded the amount of equipment actively deployed in the field. Average Original Equipment Cost (OEC) on rent rose significantly, increasing $165.9 million, or 13.7%, during the fourth quarter and $154.8 million, or 14.1% for the full year compared with the previous year.
The company ended 2025 with total OEC of $1.64 billion, the highest level in its history. This reflects continued investment in expanding and modernizing its rental fleet to support expected growth in the coming years.
CEO Commentary on Business Performance
According to CEO Ryan McMonagle, the company delivered a strong finish to the year with solid revenue growth and significant improvement in operating profitability.
He noted that the fourth quarter saw both sequential and year-over-year improvements in revenue and Adjusted EBITDA, with the company achieving 18% growth in Adjusted EBITDA for the quarter and 13% growth for the full year.
The CEO also highlighted the strong performance of the company’s rental operations, which benefited from improved conditions in transmission and distribution (T&D) markets during the second half of the year. These markets are closely tied to electric utility investments and infrastructure upgrades, which continue to drive equipment demand.
As a result, the company’s Equipment Rental Solutions (ERS) segment finished the year with 20% revenue growth in the fourth quarter and 17% growth for the full year.
The rental fleet also achieved particularly strong utilization levels, averaging nearly 84% during the quarter. According to management, this marks the highest utilization in nearly three years and reflects strong customer demand.
Strong Performance in the Truck and Equipment Sales Segment
The company’s Truck and Equipment Sales (TES) segment also delivered notable results during 2025. The segment recorded record annual revenue approaching $1.1 billion, representing approximately 4% growth for the year.
Demand for vocational trucks and specialized equipment across infrastructure sectors helped drive these results. Customers in industries such as utilities, telecommunications, and construction continued to invest in equipment to support large-scale projects.
However, the TES segment faced some challenges during the fourth quarter. Revenue declined 7.7% compared with the fourth quarter of 2024. According to management, this was primarily due to unusual purchasing patterns among customers.
Earlier in the year, many customers accelerated equipment purchases to avoid potential tariff increases and price hikes. This pulled some demand forward into earlier quarters. Additionally, certain customers chose to delay deliveries until 2026, which reduced year-end demand.
As a result, gross profit in the TES segment declined 13.1% year-over-year in the fourth quarter due to ongoing pricing pressure in the truck sales market.
Despite this temporary slowdown, order intake remained strong. The company’s sales order backlog increased by $30 million compared with the previous quarter, reaching $335.3 million by the end of 2025. This backlog represents approximately four to six months of expected sales, which management considers a healthy range.
Aftermarket Parts and Services Segment
The company’s Aftermarket Parts and Services (APS) segment experienced softer demand during the fourth quarter.
Revenue in this segment declined by $3.4 million, or 8.5%, compared with the fourth quarter of 2024. The decrease was primarily due to reduced demand for parts, tools, and accessories, as well as lower service activity during the quarter.
Despite the revenue decline, profitability remained stable. The gross profit margin held steady at 27.0%, matching the level recorded in the same period of the previous year.
This stability suggests that the company was able to maintain pricing discipline and manage costs effectively within its service operations.
Factors Impacting Net Income
The decline in net income during the fourth quarter was largely influenced by a financial event recorded in the previous year.
In the fourth quarter of 2024, the company recorded a $23.5 million gain from a sale-leaseback transaction, which significantly boosted net income for that period. Because this gain did not recur in 2025, the comparison resulted in a lower net income figure.
However, several positive factors partially offset this impact. These included higher gross profit, reduced selling and administrative expenses, lower interest expenses, and a larger tax benefit.
Balance Sheet and Liquidity Position
As of December 31, 2025, the company reported cash and cash equivalents of $6.3 million.
Total debt outstanding stood at $1.6608 billion, resulting in net debt of $1.6545 billion. The company’s net leverage ratio was 4.3 times, indicating its debt relative to earnings.
The company also maintained substantial borrowing capacity. As of the end of the year, $248.1 million remained available under its senior secured credit facility. In addition, based on its borrowing base, the company could potentially access an additional $200.8 million by expanding its existing credit facility.
These financial resources provide flexibility for continued investment in fleet expansion, equipment purchases, and operational growth.
Inventory Reduction and Operational Efficiency
Another key focus area during the fourth quarter was inventory management.
The company successfully reduced inventory levels by more than $100 million during the quarter. This improvement supports the company’s goals of strengthening working capital management, generating free cash flow, and reducing debt levels over time.
Management believes these efforts will help position the company for stronger financial performance in 2026.
New Segment Reporting Structure for 2026
Beginning with the quarter ending March 31, 2026, the company will implement a new reporting structure designed to better reflect how its business operations are managed.
Under the new structure, the company will report results under two segments:
- Specialty Equipment Rentals (SER)
- Specialty Truck Equipment and Manufacturing (STEM)
The SER segment will combine the company’s existing equipment rental business with portions of the aftermarket services operations. Meanwhile, the STEM segment will include the truck and equipment sales business along with other manufacturing-related activities.
The company will also begin reporting intercompany transactions between the two segments, which will ultimately be eliminated when consolidated financial statements are prepared.
Management believes that the new structure will more accurately reflect the economic drivers, capital requirements, and margin profiles of its operations. It also aligns external financial reporting with the way management internally evaluates performance and allocates resources.
Additional information about the new segment structure, including updated financial guidance, is expected to be released in early April 2026.
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