Custom Truck One Source Reports Strong Third Quarter 2025 Results and Reaffirms Full-Year Guidance
Custom Truck One Source, Inc. (NYSE: CTOS), a leading provider of specialized equipment solutions serving electric utility, telecommunications, rail, forestry, waste management, and other infrastructure-related markets, announced its financial results for the three and nine months ended September 30, 2025. The company reported robust growth across key performance indicators, underpinned by sustained demand from its core Transmission & Distribution (T&D) end markets and strong execution across its operating segments.
Third Quarter 2025 Highlights
- Total Revenue: $482.1 million, up 7.8% year-over-year.
- Gross Profit: $100.8 million, up 9.7% compared to Q3 2024.
- Adjusted Gross Profit: $155.5 million, up 12.9% from the prior year period.
- Net Loss: $5.8 million, an improvement of 66.9% year-over-year.
- Adjusted EBITDA: $96.0 million, up 19.6% year-over-year.
- Average Original Equipment Cost (OEC) on Rent: Increased by $179.8 million, or 16.6%, compared to Q3 2024.
CEO Commentary
“In the third quarter, Custom Truck One Source delivered another strong performance, achieving year-over-year revenue growth of 8% and adjusted EBITDA growth of 20%,” said Ryan McMonagle, Chief Executive Officer of CTOS. “Our continued momentum was fueled by the sustained strength of our T&D markets and exceptional performance in our Equipment Rental Solutions (ERS) segment. We reached the highest fleet utilization levels in more than two years, averaging over 79% for the quarter.”
McMonagle added, “Average OEC on rent rose by $180 million compared to the same quarter last year, reflecting both increased rental activity and disciplined capital deployment. Following near-record Truck and Equipment Sales (TES) performance in the previous quarter, TES revenue increased 6% year-over-year and remains up more than 8% on a year-to-date basis.”
He continued, “We continue to see solid demand for vocational vehicles across our end markets. Signed orders grew 30% compared to last year and more than 40% among local and regional accounts, signaling the continued strength of our customer relationships and market position. Given the positive momentum across our operations and the increasing infrastructure investment tied to electrification, data center growth, and utility grid modernization, we are reaffirming our full-year 2025 consolidated revenue and Adjusted EBITDA guidance.”
Consolidated Financial Performance
For the third quarter ended September 30, 2025, total revenue rose to $482.1 million, compared to $447.2 million in the same period last year. Rental revenue increased 17.4% to $127.1 million, while equipment sales grew 4.9% to $320.6 million. Parts sales and services contributed $34.3 million, up slightly from $33.4 million in Q3 2024.
Gross profit improved to $100.8 million from $91.8 million last year, while Adjusted Gross Profit rose 12.9% to $155.5 million. The company reported a net loss of $5.8 million, significantly narrower than the $17.4 million loss in the third quarter of 2024.
Adjusted EBITDA grew 19.6% to $96.0 million, reflecting improved gross profit margins and lower financing costs. On a nine-month basis, total revenue was $1.42 billion, compared to $1.28 billion a year ago, while Adjusted EBITDA reached $262.8 million, up from $237.6 million in the prior-year period.
Segment Performance Overview
Custom Truck One Source operates three primary segments: Equipment Rental Solutions (ERS), Truck and Equipment Sales (TES), and Aftermarket Parts and Services (APS). Each segment delivered strong contributions to consolidated growth during the quarter.
Equipment Rental Solutions (ERS)
The ERS segment, which includes the company’s core rental business and sales of used rental equipment, continued to demonstrate robust performance and operational efficiency.
- Rental Revenue: $123.9 million, up 17.7% year-over-year.
- Equipment Sales: $45.2 million, roughly flat compared to Q3 2024.
- Total Revenue: $169.1 million, up 12.1% from $150.9 million last year.
- Gross Profit: $50.3 million, up 18.2%.
- Adjusted Gross Profit: $104.3 million, up 19.2%.
Growth in the ERS segment was primarily driven by higher fleet utilization and an expanded rental fleet. Average fleet utilization rose to 79.3%, compared to 73.2% in Q3 2024, marking the highest level in over two years. Average OEC on rent climbed 17% year-over-year, supported by both fleet expansion and stronger demand from T&D customers.
The segment’s profitability benefited from higher rental volumes, disciplined pricing, and cost management. Depreciation of rental equipment increased due to fleet growth, but overall returns improved with better yield management.
Truck and Equipment Sales (TES)
The TES segment, which focuses on specialized truck production and new equipment sales, also delivered steady results amid a strong vocational vehicle market.
- Revenue: $275.4 million, up 6.0% year-over-year.
- Gross Profit: $41.4 million, compared to $41.9 million in Q3 2024.
TES revenue growth was driven by higher sales to local and regional customers, reflecting elevated demand across end markets such as utilities, telecom, and infrastructure. However, gross profit saw a modest decline due to changes in product mix and slightly higher input costs.
While TES backlog decreased by 29% year-over-year to $279.8 million, management noted that it remains within the company’s expected range of four to six months of sales coverage. Sequentially, order activity remains strong, with notable growth in signed orders compared to the prior quarter.
Aftermarket Parts and Services (APS)
The APS segment, encompassing parts, tools, and repair services, delivered consistent results and maintained healthy margins.
- Revenue: $37.5 million, up 3.0% year-over-year.
- Gross Profit: $9.1 million, up from $7.4 million in Q3 2024.
APS benefited from higher rental-related revenue and increased service activity. Gross profit margins improved due to favorable product mix and operational efficiency, reinforcing the segment’s steady contribution to CTOS’s recurring revenue base.
Operating Metrics and Fleet Performance
CTOS continued to optimize its rental fleet to align with customer demand and capitalize on strong market conditions.
- Ending OEC: $1.62 billion, up from $1.49 billion in Q3 2024.
- Average OEC on Rent: $1.26 billion, up from $1.08 billion a year ago.
- Fleet Utilization: 79.3%, compared to 73.2% last year.
- OEC on Rent Yield: 38.2%, consistent with historical averages.
- Sales Order Backlog: $279.8 million, compared to $395.6 million in Q3 2024.
The increase in OEC on rent underscores growing fleet productivity and customer demand, particularly within energy infrastructure and telecommunications markets. The company’s disciplined asset management strategy continues to balance fleet expansion with utilization optimization.
Financial Position and Liquidity
As of September 30, 2025, Custom Truck One Source maintained a solid liquidity position:
- Cash and Cash Equivalents: $13.1 million.
- Total Debt Outstanding: $1.67 billion.
- Net Debt: $1.65 billion.
- Net Leverage Ratio: 4.53x.
- Availability under Credit Facility: $237.6 million.
Additionally, based on the company’s borrowing base, CTOS had approximately $232 million in suppressed availability that could be unlocked through potential upsizing of its existing facility. Management emphasized its ongoing focus on maintaining a balanced capital structure, improving free cash flow, and optimizing leverage as it continues to invest in growth initiatives.
Management Discussion and Outlook
Custom Truck One Source’s leadership remains optimistic about the remainder of 2025 and the company’s long-term positioning within essential infrastructure markets. CEO Ryan McMonagle highlighted that secular growth trends—particularly in electric grid modernization, data center expansion, and transportation electrification—are creating sustained demand for the company’s specialized truck and equipment solutions.
“The scale of infrastructure investment required to meet rising power demand and connectivity needs presents a significant opportunity for Custom Truck,” McMonagle noted. “Our diverse customer base, vertically integrated business model, and national service footprint allow us to respond quickly to these needs, providing customers with mission-critical equipment and support.”
The company continues to focus on expanding its rental fleet, enhancing utilization, and leveraging its integrated platform to cross-sell products and services. Strong order trends in TES and APS, combined with rising rental demand, are expected to support continued revenue growth and margin expansion through year-end.
2025 Guidance Reaffirmed
Reflecting the company’s solid year-to-date performance and favorable market outlook, Custom Truck One Source reaffirmed its 2025 consolidated revenue and Adjusted EBITDA guidance. Management remains confident in achieving its full-year financial targets, supported by a healthy backlog, robust customer demand, and ongoing operational discipline.
“Our strategic focus remains clear—drive profitable growth, optimize capital efficiency, and deliver value for our shareholders,” McMonagle concluded. “We are well-positioned to capitalize on the accelerating investment cycle across our core end markets, and our performance this quarter underscores the strength and resilience of our business model.”
About Custom Truck One Source
Custom Truck One Source, Inc. (NYSE: CTOS) is a leading single-source provider of specialized truck and heavy equipment solutions serving customers in electric utility transmission and distribution, telecommunications, rail, forestry, waste management, and other essential infrastructure industries. The company offers a full suite of solutions, including equipment rental, new and used equipment sales, aftermarket parts and service, financing, and asset disposal. Headquartered in Kansas City, Missouri, Custom Truck operates a broad national footprint of sales and service locations across North America.
Non-GAAP Financial Measures
The company uses certain non-GAAP financial measures, including Adjusted Gross Profit and Adjusted EBITDA, to evaluate its financial performance. These metrics exclude certain non-recurring or non-cash items to provide investors with greater insight into underlying business trends. Reconciliations of these non-GAAP measures to the most directly comparable GAAP measures are provided in the company’s official earnings release.
This release contains forward-looking statements that reflect management’s current expectations, estimates, and projections about future performance and business prospects. Actual results may differ materially due to a variety of risks and uncertainties, including changes in market conditions, customer demand, supply chain disruptions, and other factors described in the company’s filings with the U.S. Securities and Exchange Commission (SEC).
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