Custom Truck One Source, Inc. a leading provider of specialty equipment and services for critical infrastructure industries, has reported a strong start to 2026, delivering record financial performance for the first quarter ended March 31. The company, which supports sectors including electric utilities, telecommunications, rail, forestry, and waste management, continues to benefit from sustained demand tied to infrastructure modernization, electrification, and grid upgrades.
Record Revenue and Strong Year-Over-Year Growth
During the first quarter of 2026, Custom Truck One Source achieved record revenue of $461.6 million, marking an increase of $39.4 million, or 9.3%, compared to the same period in 2025. This milestone underscores the company’s ability to capitalize on favorable market dynamics, particularly in transmission and distribution (T&D) infrastructure projects.
The revenue growth was supported by strong performance across both of the company’s newly structured business segments, as well as improved utilization of its rental fleet and increased demand for specialty equipment solutions.
Gross profit for the quarter rose to $103.1 million, representing a significant increase of $17.5 million, or 20.5%, year-over-year. Adjusted gross profit, a key internal metric that reflects underlying operational performance, reached $159.3 million—up $23.6 million, or 17.4%, compared to the first quarter of 2025. These gains highlight the company’s ability to enhance margins while scaling operations.
Improved Profitability and EBITDA Expansion
Despite reporting a net loss of $4.1 million for the quarter, the company demonstrated substantial improvement in bottom-line performance. The net loss narrowed by $13.7 million, or 76.9%, compared to the prior-year period, reflecting stronger operational efficiency and higher earnings before non-cash and one-time items.
Adjusted EBITDA, a critical measure of operating performance, increased to $98.0 million in the first quarter of 2026. This represents a year-over-year increase of $24.6 million, or 33.4%, significantly outpacing revenue growth and indicating improved cost management and operating leverage.
The company’s ability to generate higher EBITDA growth relative to revenue demonstrates the scalability of its business model, particularly within its rental operations, where increased utilization and fleet expansion are driving higher returns.
Rental Fleet Growth and Utilization Gains
A major contributor to the company’s performance was the continued expansion and efficient deployment of its rental fleet. Average original equipment cost (OEC) on rent increased by $141.4 million, or 11.8%, compared to the first quarter of 2025.
Rental fleet utilization averaged 81.4% during the quarter, representing an increase of 370 basis points year-over-year. This improvement reflects robust demand across core infrastructure markets and the company’s ability to optimize fleet allocation.
By the end of the quarter, total OEC reached $1.66 billion—the highest level in the company’s history. This expanded asset base positions Custom Truck One Source to support continued growth, particularly in its Specialty Equipment Rentals (SER) segment.
Segment Performance and New Reporting Structure
Beginning January 1, 2026, Custom Truck One Source implemented a new reporting structure designed to better align with its operational strategy and capital allocation approach. The company now reports results across two primary segments:
- Specialty Equipment Rentals (SER)
- Specialty Truck Equipment and Manufacturing (STEM)
The SER segment combines the majority of the company’s historical Equipment Rental Solutions (ERS) business along with selected aftermarket services. This segment remains the primary growth engine, benefiting from strong demand in T&D markets and increasing rental fleet utilization.
The STEM segment includes the company’s truck and equipment sales operations, manufacturing activities, and certain used equipment sales. It also incorporates elements of the aftermarket parts and services business, creating a more integrated offering for customers.
During the first quarter, the STEM segment delivered revenue of $268 million, excluding $95 million in intercompany sales to the SER segment. This performance highlights solid demand for new and used equipment, as well as the company’s ability to support its rental operations with internally manufactured and refurbished assets.
The introduction of this two-segment reporting structure provides greater transparency into the company’s operations and reflects how management evaluates performance and allocates resources. Segment profitability is measured using Adjusted EBITDA, which excludes depreciation, amortization, purchase accounting adjustments, and certain lease accounting impacts.
Strategic Positioning and Market Tailwinds
Custom Truck One Source continues to benefit from several long-term secular trends that are driving demand for its products and services. Key growth drivers include:
- Electrification and grid modernization: Utilities are investing heavily in upgrading transmission and distribution infrastructure to support renewable energy integration and increased electricity demand.
- Data center expansion: The rapid growth of data centers is driving demand for reliable power infrastructure, further supporting T&D investments.
- Infrastructure spending: Government and private sector investments in infrastructure projects are creating sustained demand for specialty equipment.
- Telecommunications upgrades: Ongoing deployment of advanced telecom networks, including 5G, continues to require specialized equipment and services.
These tailwinds are particularly beneficial for the SER segment, which provides critical equipment for utility and infrastructure projects.
Balance Sheet Improvements and Deleveraging
In addition to strong operating performance, the company made meaningful progress in strengthening its balance sheet. Net leverage declined by nearly 30 basis points compared to the end of the previous quarter, reflecting improved earnings and disciplined financial management.
Custom Truck One Source remains focused on reducing leverage, improving working capital efficiency, and generating free cash flow. These priorities are expected to enhance financial flexibility and support long-term growth initiatives.
Raised Full-Year 2026 Guidance
Reflecting confidence in its business outlook and strong first-quarter performance, Custom Truck One Source has increased its full-year 2026 Adjusted EBITDA guidance. The company now expects Adjusted EBITDA to range between $415 million and $440 million, up from the previous guidance range of $410 million to $435 million.
This upward revision is driven by continued strength in T&D markets, high rental fleet utilization, and favorable demand conditions across infrastructure-related sectors.
Leadership Commentary and Outlook
Ryan McMonagle, Chief Executive Officer of Custom Truck One Source, highlighted the company’s strong start to the year and its positioning for continued growth. He emphasized that performance in core T&D markets remains the primary driver of results, particularly within the SER segment.
McMonagle also noted the importance of the company’s expanded rental fleet and improved utilization rates in supporting growth. Additionally, he pointed to the solid performance of the STEM segment as evidence of balanced growth across the organization.
Looking ahead, the company remains optimistic about the remainder of 2026. Management expects continued demand driven by infrastructure investment, electrification, and data center expansion to support sustained growth.
Custom Truck One Source’s first-quarter 2026 results demonstrate a strong combination of revenue growth, margin expansion, and improved profitability. Record revenue, significant EBITDA growth, and increased guidance reflect both favorable market conditions and effective execution of the company’s strategy.
With a strengthened balance sheet, expanded rental fleet, and a more streamlined reporting structure, the company is well-positioned to capitalize on long-term infrastructure trends. As demand for specialty equipment continues to grow across key industries, Custom Truck One Source appears poised to deliver continued value for customers and shareholders throughout 2026 and beyond.
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