Summary of Custom Truck One Source (CTOS) FY Conference Call Company Overview - **Company**: Custom Truck One Source (CTOS) - **Industry**: Industrial Machinery, specializing in vocational trucks and specialty rental fleets - **Key Products**: Vocational trucks, rental services, truck upfitting Core Business Segments - **Truck Upfitting**: Custom Truck builds, sells, services, and rents vocational trucks, which account for 55% of revenue from utility contractors and 30% from infrastructure projects [7][8] - **Specialty Rental Fleet**: The company has over 10,000 trucks in its rental fleet, valued at approximately $1.6 billion [13][14] Market Position and Competitive Advantages - **Market Share**: Custom Truck is about 1.5 times larger than its closest competitor, Altec, in terms of rental fleet size [17] - **Unique Offering**: The company provides a broad range of products across multiple end markets, including utility, infrastructure, rail, and telecom, which are not offered by competitors [18] - **Scale and Service Network**: Custom Truck operates about 40 service locations across the U.S. and Canada, enhancing its service capabilities [15] Growth Drivers and Market Outlook - **Utility and Infrastructure Demand**: The utility market, which constitutes 55% of revenue, is experiencing growth due to new transmission projects and aging infrastructure requiring modernization [21][23] - **Data Center Development**: Increased demand for energy to support new data centers is driving the need for Custom Truck's products [24] - **Market Share Gains**: The company is focused on capturing new customers and expanding into new regional markets [67] Financial Performance and Utilization Trends - **Rental Fleet Utilization**: Utilization rates fluctuated between 60% and 90% over the past two years, with current rates stabilizing in the high 70s to low 80s [30][34] - **Investment in Fleet**: Custom Truck has made significant investments in its rental fleet, with a net investment of approximately $260 million over the past year [50] Gross Margins and Pricing Strategy - **Sales Division Margins**: Gross margins for the sales division have been targeted between 15% and 18%, with recent pressures due to increased inventory and pricing competition [70][72] - **Rental Division Margins**: The rental business has seen improvements in gross margins, with a target range in the mid-70s [74] Parts and Service Segment - **Growth Potential**: The parts and service segment is expected to grow as the installed base increases, providing opportunities for upselling tools and accessories [78][81] Balance Sheet and Leverage - **Debt Levels**: The company reported a leverage ratio of 4.5 times, with a focus on reducing this to 3 times by 2026 through EBITDA expansion and inventory reduction [84][88] - **Asset Valuation**: The rental fleet's orderly liquidation value is estimated at $1.3 billion, providing a cushion against debt levels [85] Tariff Impact - **Minimal Effect**: The impact of tariffs on chassis and parts has been minimal, with the company successfully mitigating risks by purchasing chassis in advance [94][96] Conclusion Custom Truck One Source is well-positioned in the industrial machinery sector, with a strong focus on utility and infrastructure markets. The company is leveraging its scale, diverse product offerings, and service capabilities to capture market share and drive growth, while managing financial performance and navigating external challenges such as tariffs.

Group 1 - Custom Truck One Source, Inc. announced the opening of a new location in Orlando, Florida on October 1, 2025 [1] - The new facility aims to enhance the company's ability to serve customers in the Florida market and the broader Southeast region [1] - The location is strategically situated in the heart of Orlando [1]

Core Insights - Custom Truck One Source, Inc. will present at the 24th Annual D.A. Davidson Diversified Industrials & Services Conference on September 18, 2025 [1] - The presentation will feature CEO Ryan McMonagle and CFO Chris Eperjesy, including a fireside chat and Q&A session [1]

Core Viewpoint - Custom Truck One Source, Inc. reported a strong performance in Q2 2025, achieving a revenue growth of 21% compared to the previous year [5]. Financial Performance - The company filed its Q2 2025 10-Q with the SEC, detailing operations for the three months ended June 30, 2025 [4]. - The revenue growth of 21% indicates a robust operational performance during the quarter [5]. Management Commentary - The earnings call featured key executives, including the CEO and CFO, who provided insights into the company's performance and future outlook [4].

Financial Data and Key Metrics Changes - The company reported a revenue of $511 million for Q2 2025, representing a 21% increase compared to 2024. Adjusted gross profit and adjusted EBITDA both grew by 17% to $157 million and $93 million, respectively [14][21]. - Average utilization of the rental fleet improved to just under 78%, up from 72% in Q2 2024, while average OEC on rent increased to over $1.2 billion, a 16% year-over-year rise [14][15]. Business Line Data and Key Metrics Changes - The ERS segment generated $170 million in revenue, up more than 23% from $138 million in Q2 2024, with significant increases in both rental revenue and rental asset sales [15][17]. - The PES segment achieved over $100 million in sales for two consecutive months, marking a historical milestone, with year-over-year sales growth exceeding 22% [8][17]. - The APS segment reported revenue of $38 million, reflecting a 3% increase year-over-year [19]. Market Data and Key Metrics Changes - Demand in core T and D markets remained strong, contributing to robust results across ERS and TES segments [6][12]. - Signed orders from local and regional customers increased by more than 45% year-over-year, driving overall signed order growth of just under 35% [9][18]. Company Strategy and Development Direction - The company plans to continue investing in its rental fleet to meet current and projected demand, with a focus on maintaining adequate equipment levels [8][16]. - The management expressed confidence in achieving expected growth targets for 2025, reaffirming revenue and adjusted EBITDA guidance [6][21]. Management's Comments on Operating Environment and Future Outlook - Management noted that the macroeconomic environment remains volatile but expressed optimism due to strong fundamentals and order flow [6][12]. - The company is closely monitoring legislative and regulatory changes, particularly regarding tariffs and emission standards, which are expected to have minimal impact on business this year [10][11][25]. Other Important Information - The company finished Q2 with net leverage of 4.66x, an improvement from the end of Q1, and aims to reduce net leverage to below three times by the end of fiscal 2026 [20][21]. - The company expects to generate meaningful levered free cash flow in 2025, targeting over $50 million [21]. Q&A Session Summary Question: Update on tariff impact for 2025 and quarterly cadence - Management indicated that the tariff impact will be minimal this year, with some costs expected to hit in Q3 and Q4, but overall, the business is well-managed regarding supply base [24][25]. Question: Concern regarding backlog decline - Management acknowledged the backlog decline but emphasized that revenue growth of 21% is a positive trend, with strong order volume still being observed [26][28].

Custom Truck One Source 2nd Quarter 2025 Investor Presentation July 30, 2025 CONFIDENTIAL DRAFT1 Safe Harbor This presentation includes certain financial measures that have not been prepared in a manner that complies with generally accepted accounting principles in the United States ("GAAP"), including, without limitation, Adjusted Gross Profit, Adjusted Gross Margin, EBITDA and Adjusted EBITDA (collectively, the "non-GAAP financial measures"). These non-GAAP financial measures may exclude items that are si ...

分组1 - Custom Truck One Source, Inc. (CTOS) reported a quarterly loss of $0.13 per share, which was worse than the Zacks Consensus Estimate of a loss of $0.05, marking an earnings surprise of -160.00% [1] - The company posted revenues of $511.48 million for the quarter ended June 2025, exceeding the Zacks Consensus Estimate by 12.94%, compared to revenues of $423.01 million a year ago [2] - Custom Truck One Source shares have increased by approximately 20.2% since the beginning of the year, outperforming the S&P 500's gain of 8.3% [3] 分组2 - The current consensus EPS estimate for the upcoming quarter is -$0.01 on revenues of $505.81 million, and for the current fiscal year, it is -$0.08 on revenues of $1.97 billion [7] - The Zacks Industry Rank for Automotive - Original Equipment is currently in the top 30% of over 250 Zacks industries, indicating a favorable outlook for the industry [8]

[PART I FINANCIAL INFORMATION](index=3&type=section&id=PART%20I%20FINANCIAL%20INFORMATION) This section presents the company's financial statements, notes, management's discussion, market risks, and controls [Item 1. Financial Statements](index=3&type=section&id=Item%201.%20Financial%20Statements) This section presents the unaudited condensed consolidated financial statements and related notes for the periods ended June 30, 2025, and December 31, 2024 [Unaudited Condensed Consolidated Statements of Operations and Comprehensive Income (Loss)](index=4&type=section&id=Unaudited%20Condensed%20Consolidated%20Statements%20of%20Operations%20and%20Comprehensive%20Income%20(Loss)) This section details the company's financial performance, including revenue, gross profit, operating income, and net income **Three Months Ended June 30, 2025 vs. 2024 (in thousands of dollars):** | Metric | 2025 | 2024 | Change ($) | Change (%) | | :-------------------------------- | :----- | :----- | :--------- | :--------- | | Total Revenue | 511,483 | 423,013 | 88,470 | 20.9% | | Gross Profit | 102,542 | 89,267 | 13,275 | 14.9% | | Operating Income | 27,931 | 17,674 | 10,257 | 58.0% | | Net Income (Loss) | (28,380) | (24,478) | (3,902) | 15.9% | | Basic EPS | (0.13) | (0.10) | (0.03) | 30.0% | | Diluted EPS | (0.13) | (0.10) | (0.03) | 30.0% | **Six Months Ended June 30, 2025 vs. 2024 (in thousands of dollars):** | Metric | 2025 | 2024 | Change ($) | Change (%) | | :-------------------------------- | :----- | :----- | :--------- | :--------- | | Total Revenue | 933,715 | 834,320 | 99,395 | 11.9% | | Gross Profit | 188,078 | 179,976 | 8,102 | 4.5% | | Operating Income | 40,336 | 36,044 | 4,292 | 11.9% | | Net Income (Loss) | (46,171) | (38,813) | (7,358) | 19.0% | | Basic EPS | (0.20) | (0.16) | (0.04) | 25.0% | | Diluted EPS | (0.20) | (0.16) | (0.04) | 25.0% | [Unaudited Condensed Consolidated Balance Sheets](index=5&type=section&id=Unaudited%20Condensed%20Consolidated%20Balance%20Sheets) This section details the company's financial position, including assets, liabilities, and equity **As of June 30, 2025 vs. December 31, 2024 (in thousands of dollars):** | Metric | June 30, 2025 | December 31, 2024 | Change ($) | Change (%) | | :-------------------------- | :------------ | :---------------- | :--------- | :--------- | | Total Assets | 3,576,924 | 3,501,967 | 74,957 | 2.1% | | Total Current Assets | 1,330,915 | 1,301,452 | 29,463 | 2.3% | | Inventory | 1,089,245 | 1,049,304 | 39,941 | 3.8% | | Rental Equipment, net | 1,055,115 | 1,001,651 | 53,464 | 5.3% | | Total Liabilities | 2,786,797 | 2,640,658 | 146,139 | 5.5% | | Total Current Liabilities | 1,059,640 | 1,000,701 | 58,939 | 5.9% | | Long-term debt, net | 1,589,883 | 1,519,882 | 70,001 | 4.6% | | Total Stockholders' Equity | 790,127 | 861,309 | (71,182) | (8.3)% | [Unaudited Condensed Consolidated Statements of Cash Flows](index=6&type=section&id=Unaudited%20Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) This section outlines the company's cash flows from operating, investing, and financing activities **Six Months Ended June 30, 2025 vs. 2024 (in thousands of dollars):** | Cash Flow Activity | 2025 | 2024 | Change ($) | | :-------------------------------- | :----- | :----- | :--------- | | Net cash flow from operating activities | 181,353 | 23,408 | 157,945 | | Net cash flow for investing activities | (139,807) | (98,688) | (41,119) | | Net cash flow from financing activities | (39,889) | 72,973 | (112,862) | | Net Change in Cash and Cash Equivalents | 1,454 | (2,250) | 3,704 | | Cash and Cash Equivalents at End of Period | 5,259 | 8,059 | (2,800) | [Unaudited Condensed Consolidated Statements of Stockholders' Equity](index=7&type=section&id=Unaudited%20Condensed%20Consolidated%20Statements%20of%20Stockholders'%20Equity) This section details changes in stockholders' equity, including net income, repurchases, and share-based payments **Changes in Stockholders' Equity (in thousands of dollars):** | Metric | Dec 31, 2024 | Mar 31, 2025 | Jun 30, 2025 | | :-------------------------------- | :----------- | :----------- | :----------- | | Total Stockholders' Equity | 861,309 | 813,419 | 790,127 | | Net income (loss) | (586,528) | (17,791) | (28,380) | | Common stock repurchases | (88,229) | (32,575) | (1,798) | | Share-based payments | 1,550,785 | 2,404 | 2,120 | [Notes to Unaudited Condensed Consolidated Financial Statements](index=8&type=section&id=Notes%20to%20Unaudited%20Condensed%20Consolidated%20Financial%20Statements) This section provides detailed explanations and disclosures for the financial statements [Note 1: Business and Organization](index=9&type=section&id=Note%201:%20Business%20and%20Organization) Custom Truck One Source, Inc. provides specialty equipment rentals, sales, parts, and services across three segments in North America - The Company is a specialty equipment provider to electric utility, telecommunications, rail, forestry, and waste management industries in North America[20](index=20&type=chunk) - The business is managed in three reporting segments: Equipment Rental Solutions (ERS), Truck and Equipment Sales (TES), and Aftermarket Parts and Services (APS)[20](index=20&type=chunk) [Note 2: Revenue](index=10&type=section&id=Note%202:%20Revenue) Total revenue increased, driven by equipment sales and rental revenue, with most revenue from the United States **Total Revenue by Geographic Area (in thousands of dollars):** | Geographic Area | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :-------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | United States | 499,582 | 414,066 | 913,134 | 811,763 | | Canada | 11,901 | 8,947 | 20,581 | 22,557 | | **Total Revenue** | **511,483** | **423,013** | **933,715** | **834,320** | **Total Revenue by Major Product and Service Line (in thousands of dollars):** | Product/Service Line | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Total rental revenue | 120,814 | 102,997 | 237,075 | 209,168 | | Equipment sales | 356,112 | 285,633 | 629,975 | 558,235 | | Parts and services | 34,557 | 34,383 | 66,665 | 66,917 | | **Total revenue** | **511,483** | **423,013** | **933,715** | **834,320** | **Accounts Receivable, Net (in thousands of dollars):** | Metric | June 30, 2025 | December 31, 2024 | | :-------------------------- | :------------ | :---------------- | | Accounts receivable | 206,499 | 233,688 | | Less: allowance for doubtful accounts | (17,505) | (17,815) | | **Accounts receivable, net** | **188,994** | **215,873** | [Note 3: Sales-Type Leases](index=13&type=section&id=Note%203:%20Sales-Type%20Leases) Sales-type lease revenue and gross margin decreased for both the three and six months ended June 30, 2025 **Sales-Type Lease Revenue and Gross Margin (in thousands of dollars):** | Metric | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :------------------ | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Equipment sales | 984 | 1,554 | 3,145 | 4,572 | | Cost of equipment sales | 949 | 1,229 | 2,788 | 4,051 | | **Gross margin** | **35** | **325** | **357** | **521** | [Note 4: Inventory](index=13&type=section&id=Note%204:%20Inventory) Total inventory increased to **$1,089.2 million** as of June 30, 2025, driven by whole goods inventory **Inventory Composition (in thousands of dollars):** | Inventory Type | June 30, 2025 | December 31, 2024 | | :-------------------------- | :------------ | :---------------- | | Whole goods | 958,697 | 913,571 | | Aftermarket parts and services inventory | 130,548 | 135,733 | | **Total Inventory** | **1,089,245** | **1,049,304** | [Note 5: Floor Plan Financing](index=13&type=section&id=Note%205:%20Floor%20Plan%20Financing) Floor plan payables saw mixed changes, and interest expense decreased for both periods ended June 30, 2025 **Floor Plan Payables (in thousands of dollars):** | Type | June 30, 2025 | December 31, 2024 | | :-------------------------- | :------------ | :---------------- | | Trade floor plan payables | 408,274 | 330,498 | | Non-trade floor plan payables | 381,917 | 470,830 | | **Total Floor Plan Payables** | **790,191** | **801,328** | **Floor Plan Interest Expense (in thousands of dollars):** | Period | 2025 | 2024 | | :-------------------------- | :----- | :----- | | Three Months Ended June 30, | 13,800 | 15,400 | | Six Months Ended June 30, | 27,100 | 28,300 | - The Company was in compliance with floor plan financing covenants as of June 30, 2025[37](index=37&type=chunk) [Note 6: Rental Equipment](index=15&type=section&id=Note%206:%20Rental%20Equipment) Net rental equipment increased to **$1,055.1 million** as of June 30, 2025 **Rental Equipment, Net (in thousands of dollars):** | Metric | June 30, 2025 | December 31, 2024 | | :-------------------------- | :------------ | :---------------- | | Rental equipment | 1,591,114 | 1,522,710 | | Less: accumulated depreciation | (535,999) | (521,059) | | **Rental equipment, net** | **1,055,115** | **1,001,651** | [Note 7: Long-Term Debt](index=16&type=section&id=Note%207:%20Long-Term%20Debt) Total debt outstanding increased to **$1,630.7 million** due to ABL borrowings, with **$275.7 million** availability **Debt Obligations and Interest Rates (in thousands of dollars):** | Debt Type | June 30, 2025 | December 31, 2024 | Interest Rate (June 30, 2025) | Interest Rate (Dec 31, 2024) | | :-------------------------- | :------------ | :---------------- | :---------------------------- | :--------------------------- | | ABL Facility | 670,475 | 582,900 | 6.4% | 7.1% | | 2029 Secured Notes | 920,000 | 920,000 | 5.5% | 5.5% | | 2023 Credit Facility | 17,474 | 17,648 | 5.8% | 5.8% | | Other notes payable | 22,753 | 27,102 | 3.1%-7.0% | 3.1%-7.0% | | **Total debt outstanding** | **1,630,702** | **1,547,650** | | | | Long-term debt, net | 1,589,883 | 1,519,882 | | | - Borrowing availability under the ABL Facility was **$275.7 million** as of June 30, 2025[47](index=47&type=chunk) [Note 8: Earnings (Loss) Per Share](index=16&type=section&id=Note%208:%20Earnings%20(Loss)%20Per%20Share) Basic and diluted net loss per share increased for both the three and six months ended June 30, 2025 **Net Income (Loss) Per Share:** | Metric | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :-------------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Basic EPS | (0.13) | (0.10) | (0.20) | (0.16) | | Diluted EPS | (0.13) | (0.10) | (0.20) | (0.16) | [Note 9: Equity](index=17&type=section&id=Note%209:%20Equity) The company has a stock repurchase program with **$1.9 million** remaining, and repurchased shares in January 2025 - As of June 30, 2025, **$1.9 million** was available under the stock repurchase program[54](index=54&type=chunk) - On January 30, 2025, the Company purchased **8,143,635 shares** of common stock from affiliates of ECP for **$32.6 million**, representing an approximately **23% discount** from the market price[56](index=56&type=chunk)[57](index=57&type=chunk) - Approximately **2.8 million** 'Minimum and Second Target Earnout Shares' were forfeited on July 31, 2024, as price targets were not met[55](index=55&type=chunk) [Note 10: Fair Value Measurements](index=18&type=section&id=Note%2010:%20Fair%20Value%20Measurements) Fair values of most financial liabilities approximated carrying values, while 2029 Secured Notes used Level 2 inputs **Carrying Value vs. Fair Value of Financial Liabilities (in thousands of dollars):** | Liability | June 30, 2025 Carrying Value | June 30, 2025 Fair Value (Level 2) | December 31, 2024 Carrying Value | December 31, 2024 Fair Value (Level 2) | | :-------------------------- | :----------------------------- | :------------------------------- | :------------------------------- | :------------------------------- | | ABL Facility | 670,475 | 670,475 | 582,900 | 582,900 | | 2029 Secured Notes | 920,000 | 887,800 | 920,000 | 859,050 | | 2023 Credit Facility | 17,474 | 17,474 | 17,648 | 17,733 | | Other notes payable | 22,753 | 22,753 | 27,102 | 27,102 | [Note 11: Income Taxes](index=18&type=section&id=Note%2011:%20Income%20Taxes) Income tax expense for the six months ended June 30, 2025, was **$9.8 million**, with an effective tax rate of **(26.9)%** - For the six months ended June 30, 2025, income tax expense was **$9.8 million**, with an effective tax rate of **(26.9)%**[61](index=61&type=chunk) - An adjustment of **$17.5 million** was recorded to income tax expense in Q2 2025 due to changes in expected taxable income across jurisdictions[61](index=61&type=chunk) - The recently signed One Big Beautiful Bill Act (OBBBA) is being evaluated for its potential impact on future financial position, results of operations, and cash flows[62](index=62&type=chunk)[63](index=63&type=chunk) [Note 12: Commitments and Contingencies](index=20&type=section&id=Note%2012:%20Commitments%20and%20Contingencies) The company is involved in various legal matters and an IRS audit, but management expects no material adverse financial impact - Management believes that no pending litigation, disputes, or claims against the Company would have a material adverse effect on its consolidated financial condition, cash flows, or results of operations[68](index=68&type=chunk) - The Company is under IRS audit for federal excise taxes for 2015, with an assessment of **$2.4 million**, but management does not believe a loss is probable[67](index=67&type=chunk) [Note 13: Related Parties](index=20&type=section&id=Note%2013:%20Related%20Parties) Related party revenues decreased, while expenses in cost of revenue decreased and operating expenses showed mixed changes **Related Party Transactions (in thousands of dollars):** | Metric | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :-------------------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Total revenues from related parties | 1,325 | 7,945 | 5,997 | 11,604 | | Expenses in cost of revenue | 5 | 286 | 115 | 752 | | Expenses in operating expenses | 819 | 127 | 1,378 | 1,400 | | Accounts receivable from related parties (June 30, 2025 / Dec 31, 2024) | 343 | N/A | 3,688 | N/A | | Accounts payable to related parties (June 30, 2025 / Dec 31, 2024) | 204 | N/A | 211 | N/A | [Note 14: Segments](index=21&type=section&id=Note%2014:%20Segments) The company manages three segments: ERS, TES, and APS, with performance primarily evaluated based on gross profit **Segment Gross Profit (in thousands of dollars):** | Segment | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :-------------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | ERS Gross Profit | 46,445 | 39,757 | 90,074 | 79,190 | | TES Gross Profit | 47,092 | 42,395 | 82,102 | 85,555 | | APS Gross Profit | 9,005 | 7,115 | 15,902 | 15,231 | | **Total Gross Profit** | **102,542** | **89,267** | **188,078** | **179,976** | [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=25&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) This section provides management's perspective on financial performance, key metrics, segment results, and liquidity - Total revenue increased by **20.9%** for the three months and **11.9%** for the six months ended June 30, 2025, driven by strong new equipment sales and higher rental revenue[107](index=107&type=chunk) - Net loss increased for both periods primarily due to higher income tax expense[112](index=112&type=chunk) [Forward-Looking Statements](index=25&type=section&id=Forward-Looking%20Statements) This section outlines the cautionary nature of forward-looking statements and lists various risk factors affecting performance - Forward-looking statements are subject to risks, uncertainties, and assumptions, and readers should not place undue reliance on them[80](index=80&type=chunk) - Key risk factors include increases in labor costs, supply chain disruptions, competition, inability to attract and retain key personnel, material disruptions to operations, increases in new equipment costs, macroeconomic conditions, significant indebtedness, and changes in interest rates[82](index=82&type=chunk) [Financial and Performance Measures](index=27&type=section&id=Financial%20and%20Performance%20Measures) This section defines the key financial measures and operating metrics used to evaluate the company's performance - The company generates revenue through renting, selling, assembling, upfitting, and servicing heavy-duty trucks and cranes, as well as selling related parts[86](index=86&type=chunk) - Key operating metrics include Ending OEC, Average OEC on rent, Fleet utilization, OEC on rent yield, and Sales order backlog, which are consistent with American Rental Association definitions[96](index=96&type=chunk)[97](index=97&type=chunk)[98](index=98&type=chunk)[99](index=99&type=chunk)[100](index=100&type=chunk) [Operating Metrics](index=29&type=section&id=Operating%20Metrics) Operating metrics show increases in OEC and fleet utilization, but a significant decrease in sales order backlog **Key Operating Metrics (in thousands of dollars, except percentages):** | Metric | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Change ($/%) | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | Change ($/%) | | :------------------- | :------------------------------- | :------------------------------- | :------------ | :----------------------------- | :----------------------------- | :------------ | | Ending OEC | 1,560,704 | 1,457,955 | 7.0% | 1,560,704 | 1,457,955 | 7.0% | | Average OEC on rent | 1,207,231 | 1,044,683 | 15.6% | 1,192,333 | 1,055,189 | 13.0% | | Fleet utilization | 77.6% | 71.7% | 5.9% pts | 77.3% | 72.4% | 4.9% pts | | OEC on rent yield | 38.6% | 40.0% | (1.4)% pts | 38.3% | 40.3% | (2.0)% pts | | Sales order backlog | 334,805 | 478,244 | (30.0)% | 334,805 | 478,244 | (30.0)% | [Operating Segments](index=29&type=section&id=Operating%20Segments) The company's ERS and TES segments saw revenue and gross profit increases, while APS had flat revenue but higher gross profit [Equipment Rental Solutions (ERS) Segment](index=33&type=section&id=Equipment%20Rental%20Solutions%20(ERS)%20Segment) The ERS segment saw significant revenue increases for both periods, driven by higher rental revenue and equipment sales **ERS Segment Performance (in thousands of dollars):** | Metric | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Change ($) | Change (%) | | :-------------------------- | :------------------------------- | :------------------------------- | :--------- | :--------- | | Total Revenue | 170,472 | 138,411 | 32,061 | 23.2% | | Rental revenue | 117,728 | 100,699 | 17,029 | 16.9% | | Equipment sales | 52,744 | 37,712 | 15,032 | 39.9% | | Gross Profit | 46,445 | 39,757 | 6,688 | 16.8% | **ERS Segment Performance (in thousands of dollars):** | Metric | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | Change ($) | Change (%) | | :-------------------------- | :----------------------------- | :----------------------------- | :--------- | :--------- | | Total Revenue | 324,820 | 274,439 | 50,381 | 18.4% | | Rental revenue | 230,693 | 203,987 | 26,706 | 13.1% | | Equipment sales | 94,127 | 70,452 | 23,675 | 33.6% | | Gross Profit | 90,074 | 79,190 | 10,884 | 13.7% | - Rental revenue increased due to higher fleet utilization (**5.9%** for Q2, **4.9%** for YTD) and higher average OEC on rent[115](index=115&type=chunk) [Truck and Equipment Sales (TES) Segment](index=34&type=section&id=Truck%20and%20Equipment%20Sales%20(TES)%20Segment) The TES segment's equipment sales increased, but gross profit showed mixed results due to pricing pressures and equipment mix **TES Segment Performance (in thousands of dollars):** | Metric | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Change ($) | Change (%) | | :-------------------------- | :------------------------------- | :------------------------------- | :--------- | :--------- | | Equipment sales | 303,368 | 247,921 | 55,447 | 22.4% | | Gross Profit | 47,092 | 42,395 | 4,697 | 11.1% | **TES Segment Performance (in thousands of dollars):** | Metric | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | Change ($) | Change (%) | | :-------------------------- | :----------------------------- | :----------------------------- | :--------- | :--------- | | Equipment sales | 535,848 | 487,783 | 48,065 | 9.9% | | Gross Profit | 82,102 | 85,555 | (3,453) | (4.0)% | - The decrease in gross profit for the six months was due to pricing pressures on truck sales and the mix of equipment sold[121](index=121&type=chunk) [Aftermarket Parts and Services (APS) Segment](index=34&type=section&id=Aftermarket%20Parts%20and%20Services%20(APS)%20Segment) The APS segment's revenue remained flat, but gross profit increased due to higher rental revenue with lower associated costs **APS Segment Performance (in thousands of dollars):** | Metric | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Change ($) | Change (%) | | :-------------------------- | :------------------------------- | :------------------------------- | :--------- | :--------- | | Total Revenue | 37,643 | 36,681 | 962 | 2.6% | | Gross Profit | 9,005 | 7,115 | 1,890 | 26.6% | **APS Segment Performance (in thousands of dollars):** | Metric | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | Change ($) | Change (%) | | :-------------------------- | :----------------------------- | :----------------------------- | :--------- | :--------- | | Total Revenue | 73,047 | 72,098 | 949 | 1.3% | | Gross Profit | 15,902 | 15,231 | 671 | 4.4% | - The increase in gross profit was primarily driven by the increase in rental revenue, which has lower associated costs[123](index=123&type=chunk) [Liquidity and Capital Resources](index=36&type=section&id=Liquidity%20and%20Capital%20Resources) Liquidity is supported by operations and credit facilities, with cash increasing and the company in compliance with loan covenants - Principal sources of liquidity include cash generated by operating activities and borrowings under revolving credit facilities[125](index=125&type=chunk) - As of June 30, 2025, cash and cash equivalents were **$5.3 million**, an increase of **$1.5 million** from December 31, 2024[125](index=125&type=chunk)[139](index=139&type=chunk) - Borrowing availability under the ABL Facility was **$275.7 million** as of June 30, 2025[125](index=125&type=chunk) [Loan Covenants and Compliance](index=36&type=section&id=Loan%20Covenants%20and%20Compliance) The company was in compliance with all loan covenants, with the Consolidated Total Debt Ratio allowing for unlimited dividends - As of June 30, 2025, the Company's distribution conditions were satisfied under the ABL Credit Agreement, and the Consolidated Total Debt Ratio was not greater than **5.00 to 1.00** under the Indenture, indicating no restrictions on distributions[126](index=126&type=chunk)[127](index=127&type=chunk) **Net Debt and Net Leverage Ratio (in thousands of dollars):** | Metric | June 30, 2025 | March 31, 2025 | | :-------------------------- | :------------ | :------------- | | Net Debt | 1,625,443 | 1,612,624 | | LTM Adjusted EBITDA | 349,079 | 335,707 | | **Net Leverage Ratio** | **4.66** | **4.80** | [Historical Cash Flows](index=40&type=section&id=Historical%20Cash%20Flows) Operating cash flow significantly increased due to lower inventory production, while investing cash use increased and financing shifted to outflow **Summary of Cash Flows (in thousands of dollars):** | Cash Flow Activity | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :-------------------------------- | :----------------------------- | :----------------------------- | | Net cash flow from operating activities | 181,353 | 23,408 | | Net cash flow for investing activities | (139,807) | (98,688) | | Net cash flow from financing activities | (39,889) | 72,973 | | Net change in cash and cash equivalents | 1,454 | (2,250) | - The increase in operating cash flow was driven by lower levels of inventory production in 2025 compared to 2024[140](index=140&type=chunk) - The increase in cash used in investing activities was primarily due to a **$60.1 million** increase in purchases of rental equipment[141](index=141&type=chunk) - The shift to net cash used in financing activities was due to increased repayments on floorplan liabilities and long-term debt, and lower proceeds from these sources[142](index=142&type=chunk) [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=40&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) The company faces interest rate risk on variable-rate debt and foreign currency risk from Canadian revenues, with no hedging - The company has **$1,460.7 million** in variable rate debt, primarily from floor plan financing and the ABL Facility[143](index=143&type=chunk) - A one-eighth percentage point change in interest rates would impact annual interest expense by approximately **$1.8 million**[143](index=143&type=chunk) - Canadian dollar revenues of **$20.6 million** for the six months ended June 30, 2025, expose the company to foreign currency risk, with a **100-basis point change** impacting annual revenues by approximately **$0.4 million**[145](index=145&type=chunk) - The company does not currently hedge its interest rate or exchange rate exposures[144](index=144&type=chunk)[145](index=145&type=chunk) [Item 4. Controls and Procedures](index=41&type=section&id=Item%204.%20Controls%20and%20Procedures) Disclosure controls and procedures were effective as of June 30, 2025, with no material changes to internal control over financial reporting - Disclosure controls and procedures were effective as of June 30, 2025[146](index=146&type=chunk) - No material changes occurred in internal control over financial reporting during the fiscal quarter ended June 30, 2025[147](index=147&type=chunk) [PART II OTHER INFORMATION](index=42&type=section&id=PART%20II%20OTHER%20INFORMATION) This section covers legal proceedings, risk factors, equity sales, defaults, mine safety, other information, and exhibits [Item 1. Legal Proceedings](index=42&type=section&id=Item%201.%20Legal%20Proceedings) The company is involved in various legal matters, but management expects no material adverse impact on its financial condition or operations - Management believes that no pending litigation, disputes, or claims against the Company would have a material adverse effect on its consolidated financial condition, cash flows, or results of operations[149](index=149&type=chunk) [Item 1A. Risk Factors](index=42&type=section&id=Item%201A.%20Risk%20Factors) No material changes occurred to the risk factors previously disclosed in the Annual Report on Form 10-K - No material changes occurred to the risk factors as disclosed in the Annual Report on Form 10-K for the year ended December 31, 2024[150](index=150&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=43&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) The company has a stock repurchase program with **$1.9 million** remaining, and no shares were repurchased in Q2 2025 - As of June 30, 2025, **$1.9 million** was available under the stock repurchase program[153](index=153&type=chunk) - No shares were purchased under the program during the three months ended June 30, 2025[153](index=153&type=chunk) [Item 3. Defaults Upon Senior Securities](index=43&type=section&id=Item%203.%20Defaults%20Upon%20Senior%20Securities) There were no defaults upon senior securities during the reporting period - No defaults upon senior securities occurred[154](index=154&type=chunk) [Item 4. Mine Safety Disclosures](index=43&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) This item is not applicable to the company - Mine Safety Disclosures are not applicable to the registrant[155](index=155&type=chunk) [Item 5. Other Information](index=43&type=section&id=Item%205.%20Other%20Information) No director or officer adopted or terminated a Rule 10b5-1 or non-Rule 10b5-1 trading arrangement in Q2 2025 - No director or officer adopted or terminated a Rule 10b5-1 trading arrangement or non-Rule 10b5-1 trading arrangement during the three months ended June 30, 2025[156](index=156&type=chunk) [Item 6. Exhibits](index=44&type=section&id=Item%206.%20Exhibits) This section lists all exhibits filed with the Form 10-Q, including agreements, certifications, and XBRL documents - Exhibits include various retention bonus letter agreements, restricted stock unit agreements, and certifications from the CEO and CFO[157](index=157&type=chunk) - XBRL Instance Document, Taxonomy Extension Schema, Calculation Linkbase, Definition Linkbase, and Label Linkbase Documents are also filed[157](index=157&type=chunk) [SIGNATURES](index=45&type=section&id=SIGNATURES) This section contains the official signatures of the CEO and CFO, certifying the accuracy of the report [SIGNATURES](index=45&type=section&id=SIGNATURES) The report was signed by Ryan McMonagle (CEO) and Christopher J. Eperjesy (CFO) on July 30, 2025 - The report was signed by Ryan McMonagle, Chief Executive Officer, and Christopher J. Eperjesy, Chief Financial Officer, on July 30, 2025[162](index=162&type=chunk)

[Report Overview](index=1&type=section&id=Report%20Overview) [CTOS Second-Quarter Highlights](index=1&type=section&id=CTOS%20Second-Quarter%20Highlights) CTOS reported strong Q2 2025 results with significant revenue and Adjusted EBITDA growth, improved rental fleet utilization, and record OEC, reaffirming 2025 guidance - Achieved strong year-over-year **revenue growth of 21%** and **adjusted EBITDA growth of 17%**, driven by growth in every segment[3](index=3&type=chunk) - Rental fleet average utilization reached just under **78%**, a significant improvement from the prior year and in line with expectations[3](index=3&type=chunk) - Ended the quarter with total OEC of **$1.56 billion**, the highest in company history, expected to support future growth[3](index=3&type=chunk) - TES sales increased over **22% year-over-year**, marking the second-highest quarter of sales ever, driven by robust demand for vocational vehicles[3](index=3&type=chunk) - Signed orders in the quarter were up **30% year-over-year**, positioning the company well for expected segment growth[3](index=3&type=chunk) [Summary Actual Consolidated Financial Results](index=1&type=section&id=Summary%20Actual%20Consolidated%20Financial%20Results) CTOS reported a 20.9% increase in total revenue and 16.7% Adjusted EBITDA growth for Q2 2025, despite an increased net loss Consolidated Financial Highlights (Q2 2025 vs. Q2 2024) | Metric | Q2 2025 ($000s) | Q2 2024 ($000s) | Change ($000s) | % Change | Source Chunk | | :----------------- | :-------------- | :-------------- | :------------- | :------- | :----------- | | Rental revenue | 120,814 | 102,997 | 17,817 | 17.3% | 4, 6 | | Equipment sales | 356,112 | 285,633 | 70,479 | 24.7% | 4, 6 | | Parts sales & services | 34,557 | 34,383 | 174 | 0.5% | 4, 6 | | Total revenue | 511,483 | 423,013 | 88,470 | 20.9% | 4, 6 | | Gross Profit | 102,542 | 89,267 | 13,275 | 14.9% | 4, 6 | | Adjusted Gross Profit | 156,549 | 133,852 | 22,697 | 17.0% | 4, 6 | | Net Income (Loss) | (28,380) | (24,478) | (3,902) | 15.9% | 4, 6 | | Adjusted EBITDA | 93,428 | 80,056 | 13,372 | 16.7% | 4, 6 | [Summary Financial Results by Segment (Introduction)](](index=1&type=section&id=Summary%20Financial%20Results%20by%20Segment%20(Introduction))) CTOS reports financial results across Equipment Rental Solutions (ERS), Truck and Equipment Sales (TES), and Aftermarket Parts and Services (APS) segments - ERS encompasses the core rental business, including sales of used rental equipment[5](index=5&type=chunk) - TES covers specialized truck and equipment production and new equipment sales[5](index=5&type=chunk) - APS includes sales and rentals of parts, tools, and supplies, as well as aftermarket repair services[5](index=5&type=chunk) [Segment Performance](index=3&type=section&id=Segment%20Performance) [Equipment Rental Solutions (ERS)](index=3&type=section&id=Equipment%20Rental%20Solutions%20(ERS)) ERS segment showed strong Q2 2025 growth, with total revenue up 23.2% year-over-year, driven by higher rental revenue and equipment sales ERS Segment Financials (Q2 2025 vs. Q2 2024) | Metric | Q2 2025 ($000s) | Q2 2024 ($000s) | Change ($000s) | % Change | Source Chunk | | :----------------- | :-------------- | :-------------- | :------------- | :------- | :----------- | | Rental revenue | 117,728 | 100,699 | 17,029 | 16.9% | 7 | | Equipment sales | 52,744 | 37,712 | 15,032 | 39.9% | 7 | | Total revenue | 170,472 | 138,411 | 32,061 | 23.2% | 7 | | Gross profit | 46,445 | 39,757 | 6,688 | 16.8% | 7 | | Adjusted Gross Profit | 99,748 | 83,338 | 16,410 | 19.7% | 7 | [Truck and Equipment Sales (TES)](index=3&type=section&id=Truck%20and%20Equipment%20Sales%20(TES)) The TES segment experienced robust Q2 2025 equipment sales growth of 22.0% year-over-year, driven by strong demand for vocational vehicles TES Segment Financials (Q2 2025 vs. Q2 2024) | Metric | Q2 2025 ($000s) | Q2 2024 ($000s) | Change ($000s) | % Change | Source Chunk | | :-------------- | :-------------- | :-------------- | :------------- | :------- | :----------- | | Equipment sales | 303,368 | 247,921 | 55,447 | 22.4% | 8 | | Gross profit | 47,092 | 42,395 | 4,697 | 11.1% | 8 | [Aftermarket Parts and Services (APS)](index=3&type=section&id=Aftermarket%20Parts%20and%20Services%20(APS)) The APS segment showed modest Q2 2025 revenue growth of 2.6%, driven by increased rental revenue and improved gross profit margin APS Segment Financials (Q2 2025 vs. Q2 2024) | Metric | Q2 2025 ($000s) | Q2 2024 ($000s) | Change ($000s) | % Change | Source Chunk | | :---------------------- | :-------------- | :-------------- | :------------- | :------- | :----------- | | Rental revenue | 3,086 | 2,298 | 788 | 34.3% | 9 | | Parts and services revenue | 34,557 | 34,383 | 174 | 0.5% | 9 | | Total revenue | 37,643 | 36,681 | 962 | 2.6% | 9 | | Gross profit | 9,005 | 7,115 | 1,890 | 26.6% | 9 | [Operating Metrics](index=3&type=section&id=Operating%20Metrics) [Summary Combined Operating Metrics](index=3&type=section&id=Summary%20Combined%20Operating%20Metrics) CTOS reported increased Ending OEC, Average OEC on rent, and improved fleet utilization for Q2 2025, despite a decrease in sales order backlog Combined Operating Metrics (Q2 2025 vs. Q2 2024) | Metric | Q2 2025 ($000s) | Q2 2024 ($000s) | Change ($000s) | % Change | Source Chunk | | :----------------- | :-------------- | :-------------- | :------------- | :------- | :----------- | | Ending OEC | 1,560,704 | 1,457,955 | 102,749 | 7.0% | 10 | | Average OEC on rent | 1,207,231 | 1,044,683 | 162,548 | 15.6% | 10 | | Fleet utilization | 77.6% | 71.7% | 5.9 pp | 8.2% | 10 | | OEC on rent yield | 38.6% | 40.0% | (1.4 pp) | (3.5%) | 10 | | Sales order backlog | 334,805 | 478,244 | (143,439) | (30.0%) | 10 | [Definitions of Operating Metrics](index=3&type=section&id=Definitions%20of%20Operating%20Metrics) This section defines key CTOS operating metrics: Ending OEC, Average OEC on rent, Fleet utilization, OEC on rent yield (ORY), and Sales order backlog - Ending OEC is the original equipment cost of units at the end of the measurement period[10](index=10&type=chunk) - Average OEC on rent is the weighted-average OEC on rent during the stated period[11](index=11&type=chunk) - Fleet utilization is the total number of days rental equipment was rented divided by total days available, weighted by OEC[11](index=11&type=chunk) - OEC on rent yield (ORY) measures return realized by the rental fleet, calculated as annualized rental revenue (excluding freight/ancillary fees) divided by Average OEC on rent[12](index=12&type=chunk) - Sales order backlog represents purchase orders for customized and stock equipment, but is not an accurate measure of future net sales[13](index=13&type=chunk) [Management Discussion & Analysis](index=5&type=section&id=Management%20Discussion%20%26%20Analysis) [Consolidated Performance Commentary](index=5&type=section&id=Consolidated%20Performance

Group 1: Stock Performance - Custom Truck One Source, Inc. (CTOS) shares increased by 10.1% to close at $5.67, with trading volume significantly higher than usual [1] - The stock has gained 9.1% over the past four weeks, indicating a positive trend [1] Group 2: Analyst Upgrade - Wall Street firm Stifel upgraded Custom Truck from Hold to Buy and raised its price target, citing improved equipment availability and stronger rental utilization in the Transmission and Distribution market [2] - The upgrade reflects rising optimism for Truck Equipment Sales, which supports a positive earnings outlook [2] Group 3: Earnings Expectations - Custom Truck is expected to report a quarterly loss of $0.05 per share, representing a year-over-year change of +50% [3] - Revenues are projected to be $452.87 million, up 7.1% from the same quarter last year [3] Group 4: Earnings Estimate Revisions - The consensus EPS estimate for Custom Truck has been revised 93.4% lower over the last 30 days, indicating a negative trend in earnings estimate revisions [4] - A negative trend in earnings estimate revisions typically does not lead to price appreciation, suggesting caution moving forward [4] Group 5: Industry Context - Custom Truck One Source is part of the Zacks Automotive - Original Equipment industry, which includes Ferrari (RACE) [5] - Ferrari's consensus EPS estimate has remained unchanged at $2.56, reflecting a year-over-year change of +4.1% [6]