Custom Truck One Source Reports Q1 2025 Financial Results, Reaffirms Full-Year Outlook
A leading provider of specialty equipment and services for the electric utility, telecommunications, rail, forestry, waste management, and other infrastructure-focused industries, has announced its financial results for the first quarter ended March 31, 2025. The company also reaffirmed its full-year 2025 financial guidance, citing strong end-market demand and continued momentum in key business segments.
Strong Revenue Performance Driven by End-Market Demand
For the first quarter of 2025, Custom Truck One Source generated total revenue of $422.2 million, marking a 2.7% year-over-year increase, or an improvement of $10.9 million compared to Q1 2024. The increase reflects steady demand across the company’s diverse infrastructure-related markets, with especially strong activity in utility, telecommunications, rail, and infrastructure sectors.
“We achieved year-over-year revenue growth in the first quarter, supported by continued strength in our core end markets,” said Ryan McMonagle, Chief Executive Officer of Custom Truck One Source. “The demand environment remains healthy, particularly in transmission and distribution (T&D) within the utility sector, which carried over strong momentum from the second half of 2024 into the new year.”
Segment-Specific Growth: ERS and TES Performance Highlights
The company operates across three core business segments: Equipment Rental Solutions (ERS), Truck and Equipment Sales (TES), and Aftermarket Parts and Services (APS). Each of these segments plays a distinct role in the company’s integrated equipment lifecycle offering.
Equipment Rental Solutions (ERS)
ERS, which comprises the company’s core rental operations and used rental equipment sales, was a standout contributor to revenue growth. Rental demand remained strong throughout the quarter, with average utilization of the rental fleet approaching 78%, a significant year-over-year improvement and in line with internal expectations.
In addition, the Average Original Equipment Cost (OEC) on rent rose by $136.6 million, or 13%, compared to the same period last year. The total OEC at quarter-end reached a record high of $1.55 billion, reflecting the company’s ongoing investment in its rental fleet and underscoring its commitment to supporting customer needs across various sectors.
“Our ERS segment continues to deliver robust performance, supported by high utilization rates and rental asset sales,” McMonagle noted. “The strength of our ERS platform positions us well to capitalize on increasing demand tied to grid modernization, data center expansion, and national infrastructure improvements.”
Truck and Equipment Sales (TES)
TES, which focuses on the production and sale of new specialized trucks and equipment, also experienced a strong quarter. Sales momentum was bolstered by sustained demand across all core end markets, particularly in vocational vehicle categories such as utility service trucks, boom trucks, and dump trucks.
A key highlight for the TES segment was the significant growth in net new orders, which translated into an expanded backlog at the end of the quarter. McMonagle emphasized that the backlog has continued to increase in April, indicating a durable pipeline of future business activity.
“We are very encouraged by the continued pace of customer orders in TES,” McMonagle said. “Our growing backlog, combined with a steady flow of new requests, gives us confidence in our ability to meet our full-year growth targets for this segment.”
Aftermarket Parts and Services (APS)
APS, the company’s third business segment, includes aftermarket services, parts, tool sales, and rental support operations. While specific APS financials were not broken out in the quarterly highlights, this segment remains an essential part of CTOS’s value proposition, offering comprehensive service and support to customers over the full lifecycle of their equipment.
Profitability Pressures Amid Cost Dynamics
Despite the positive revenue trends, the company experienced some pressure on profitability in the quarter. Gross profit was $85.5 million, representing a decline of $5.2 million, or 5.7%, compared to the first quarter of 2024. The decrease was primarily attributed to cost mix changes, inflationary headwinds, and the timing of rental fleet maintenance expenditures.
Adjusted Gross Profit, however, rose modestly to $135.6 million, a 0.9% year-over-year increase, reflecting underlying strength in business operations after excluding certain non-cash charges and one-time items.
Adjusted EBITDA, a key profitability metric for the company, came in at $73.4 million, down $4.0 million from the first quarter of 2024. This decline was in line with management’s expectations and reflects continued investment in fleet growth and infrastructure to support long-term expansion.
The company reported a net loss of $17.8 million, an increase of $3.5 million compared to the same period in the prior year. Management attributed this increase to a combination of higher interest expenses, amortization of intangibles, and other non-operational items.
Macroeconomic and Industry Outlook
Looking ahead, McMonagle addressed the broader economic environment, noting both challenges and opportunities on the horizon. While the newly implemented tariff policies are posing some headwinds for industrial and equipment-focused companies, Custom Truck remains optimistic about its strategic positioning and long-term prospects.
“We continue to see favorable secular tailwinds that align well with our business model,” McMonagle said. “Demand drivers such as data center infrastructure, onshoring of U.S. manufacturing, the transition to electric vehicles, and modernization of the national electric grid are expected to support elevated equipment demand for the foreseeable future.”
He added, “Although we remain cautious given ongoing macroeconomic uncertainties, our order book, backlog, and end-market trends give us a strong foundation for growth.”
Full-Year 2025 Guidance Reaffirmed
In light of its first-quarter results and continued demand strength, Custom Truck One Source reaffirmed its full-year 2025 guidance that was previously announced with its fourth-quarter 2024 results. While specific guidance figures were not included in the Q1 release, the company emphasized its commitment to disciplined execution and proactive capital allocation throughout the year.
“Our performance in the first quarter, combined with our growing rental fleet, robust order activity, and high customer engagement across segments, supports our confidence in meeting our 2025 targets,” McMonagle concluded.
Strategic Positioning and Continued Investment
Custom Truck’s unique, vertically integrated business model—spanning rentals, new equipment sales, and aftermarket support—continues to differentiate the company in a competitive landscape. By investing in fleet expansion, supply chain capabilities, and operational enhancements, CTOS is positioning itself for long-term resilience and growth.
As infrastructure-related capital spending accelerates across the United States—fueled in part by federal funding programs and private sector investment—CTOS is poised to play a critical role in enabling utility upgrades, broadband expansion, and transportation modernization projects nationwide.
