Business Segments - The company operates in three segments: Equipment Rental Solutions, Truck and Equipment Sales, and Aftermarket Parts and Services[97]. - Revenue is generated through rentals, sales, and services of new and used heavy-duty trucks and cranes, with rental revenue primarily from rental agreements and freight charges[82]. Fleet and Utilization - As of September 30, 2025, the rental fleet consists of more than 10,350 units, providing a diverse range of specialty equipment[98]. - The company emphasizes the importance of fleet utilization, defined as the percentage of time the rental fleet is on rent, as a key performance indicator[94]. - Fleet utilization improved to 79.3% for the three months ended September 30, 2025, up from 73.2% in 2024[109]. Financial Performance - Total revenue for the three months ended September 30, 2025, increased by 7.8% to $482,058,000 compared to $447,220,000 in 2024[101]. - Rental revenue for the three months ended September 30, 2025, rose by 17.4% to $127,142,000, up from $108,324,000 in 2024[101]. - Equipment sales for the three months ended September 30, 2025, increased by 4.9% to $320,583,000 compared to $305,476,000 in 2024[101]. - Gross profit for the three months ended September 30, 2025, was $100,753,000, reflecting a 9.7% increase from $91,829,000 in 2024[101]. - Net loss for the three months ended September 30, 2025, decreased to $5,756,000 from a loss of $17,416,000 in 2024, representing a 66.9% improvement[101]. - Adjusted EBITDA for the three months ended September 30, 2025, was $95,963,000, compared to $80,205,000 in 2024, reflecting a significant increase[128]. - Adjusted EBITDA for the twelve months ended September 30, 2025, was $364.8 million, compared to $339.7 million for the prior fiscal year[133]. Equipment Costs - Ending OEC (Original Equipment Cost) for the three months ended September 30, 2025, was $1,621,725,000, an 8.6% increase from $1,493,799,000 in 2024[109]. - Average OEC on rent for the three months ended September 30, 2025, increased by 16.6% to $1,262,477,000 compared to $1,082,679,000 in 2024[109]. - The cost of equipment sales for the three months ended September 30, 2025, was $234,038,000, a 7.4% increase from $218,012,000 in 2024[114]. Sales and Backlog - The sales order backlog consists of purchase orders for customized and stock equipment, although it may not accurately predict future net sales[96]. - Total revenue for the Equipment Rental Solutions segment for the three months ended September 30, 2025, increased by 12.1% to $169,105,000 compared to $150,891,000 in 2024[110]. - Equipment sales for the three months ended September 30, 2025, increased to $275,423,000, a 6.0% rise from $259,902,000 in 2024[113]. - Total revenue for the Aftermarket Parts and Services segment for the three months ended September 30, 2025, was $37,530,000, up 3.0% from $36,427,000 in 2024[116]. - Gross profit for the Aftermarket Parts and Services segment increased by 22.9% to $9,095,000 for the three months ended September 30, 2025, compared to $7,402,000 in 2024[116]. Cash Flow and Debt - As of September 30, 2025, the company had $13.1 million in cash and cash equivalents, up from $3.8 million as of December 31, 2024[120]. - Outstanding borrowings under the ABL Facility increased to $708.5 million as of September 30, 2025, from $582.9 million as of December 31, 2024[120]. - The net debt as of September 30, 2025, was $1,653.3 million, with a net leverage ratio of 4.53[133]. - The company's Consolidated Total Debt Ratio was not greater than 5.00 to 1.00 as of September 30, 2025, allowing for no restrictions on distributions[122]. Risks and Uncertainties - The company faces risks including labor cost increases, supply chain disruptions, and competition in the equipment dealership and rental industries[79]. - Future performance is subject to various uncertainties, including macroeconomic conditions and government spending impacts[79]. - Each one-eighth percentage point change in interest rates would affect interest expense by approximately $1.8 million annually, given the $1,442.1 million of variable rate debt outstanding[138]. Sustainability and Taxation - The company is committed to sustainability and is subject to evolving expectations for environmental, social, and governance initiatives[79]. - The company expects annual cash taxes to remain consistent with previous years despite fluctuations in income tax expense[106].

Financial Performance - Total revenue for Q3 2025 was $482.1 million, an increase of $34.8 million, or 7.8%, compared to Q3 2024[8] - Adjusted EBITDA for Q3 2025 was $96.0 million, a 19.6% increase compared to Q3 2024[19] - Net loss for Q3 2025 was $5.8 million, a decrease of $11.7 million, or 66.9%, compared to Q3 2024[8] - Operating income for Q3 2025 was $32,629,000, an increase from $23,037,000 in Q3 2024[30] - Net income for Q3 2025 was a loss of $5,756,000, compared to a loss of $17,416,000 in Q3 2024[30] - Adjusted Gross Profit for the three months ended September 30, 2025, was $155,528,000, up from $137,785,000 in 2024, reflecting a growth of 12.9%[44] - Gross Profit for the three months ended September 30, 2025, was $100,753,000, compared to $91,829,000 in 2024, indicating a 9.9% increase[44] Revenue Segments - Rental revenue in the Equipment Rental Solutions (ERS) segment increased by 17.7% in Q3 2025 compared to Q3 2024[16] - Revenue in the Truck and Equipment Sales (TES) segment increased by 6.0% in Q3 2025 compared to Q3 2024[17] - APS segment revenue in Q3 2025 increased by 3.0% compared to Q3 2024 due to higher rental revenue[18] - Rental revenue increased to $127,142,000 for the three months ended September 30, 2025, up from $108,324,000 in 2024, representing a growth of 17.4%[44] - Equipment sales reached $320,583,000 for the three months ended September 30, 2025, compared to $305,476,000 in 2024, marking a 4.0% increase[44] Debt and Leverage - Total debt outstanding as of September 30, 2025, was $1,666.4 million, with a net leverage ratio of 4.53x[20] - The net leverage ratio is a key performance measure, calculated as net debt divided by Adjusted EBITDA for the last twelve months, providing insight into the company's debt levels[39] - Long-term debt increased to $1,628,866 from $1,519,882, an increase of 7.2%[31] - The Net Leverage Ratio decreased to 4.53 as of September 30, 2025, down from 4.66 as of June 30, 2025[48] Guidance and Future Outlook - The company reaffirms its full-year revenue guidance for 2025, expecting consolidated revenue between $1,970 million and $2,060 million, with Adjusted EBITDA between $370 million and $390 million[22] - The ERS segment revenue guidance is set between $660 million and $690 million, while the TES segment is expected to generate revenue between $1,160 million and $1,210 million[22] - The company anticipates strong demand in its rental business to continue into 2026 and beyond, driven by core utility markets[21] - The company expects to achieve a meaningful reduction in its net leverage ratio by the end of the fiscal year, despite a lower levered free cash flow target than previously set at $50 million[21] Asset Management - Total assets increased to $3,540,707, up from $3,501,967 as of December 31, 2024, representing a growth of 1.1%[31] - Total current liabilities decreased to $989,493 from $1,000,701, a reduction of 1.1%[31] - Accounts receivable decreased to $182,217 from $215,873, a decline of 15.6%[31] - Inventory levels slightly decreased to $1,035,642 from $1,049,304, a reduction of 1.3%[31] - Inventory reduction is expected to be between $125 million and $150 million compared to the end of last year, reflecting a strategic unwinding of inventory investments[21] Cash Flow - The company reported net cash flow from operating activities of $262,804 for the nine months ended September 30, 2025, compared to $39,934 in 2024, an increase of 558.5%[32] - Cash and cash equivalents at the end of the period increased to $13,058 from $3,805 at the beginning of the period, marking a significant increase of 243.5%[32] Fleet and Utilization - Average fleet utilization increased to 79.3% in Q3 2025 compared to 73.2% in Q3 2024[12] - The company plans to invest an additional net $50 million in its rental fleet this year, leading to at least high-single digit fleet growth based on net OEC[21] - Average OEC on rent increased by $179.8 million, or 16.6%, compared to Q3 2024[8] - Average OEC on rent increased by $180 million, or 17%, in Q3 compared to the same period last year, indicating strong demand in the rental market[21] Orders and Market Activity - Signed orders in Q3 2025 were up 30% year-over-year, with over 40% growth among local and regional accounts[3]

Core Insights - Custom Truck One Source, Inc. reported a strong year-over-year revenue growth of 8% and adjusted EBITDA growth of 20% in Q3 2025, driven by robust performance in core T&D markets [2][3] - The company reaffirmed its 2025 consolidated revenue and adjusted EBITDA guidance, indicating confidence in ongoing demand and market conditions [3][18] Financial Performance - Total revenue for Q3 2025 was $482.1 million, an increase of $34.8 million, or 7.8%, compared to Q3 2024 [5] - Gross profit for Q3 2025 was $100.8 million, up $8.9 million, or 9.7%, from Q3 2024 [5] - Adjusted EBITDA for Q3 2025 reached $96.0 million, a 19.6% increase compared to Q3 2024 [5][16] - The net loss for Q3 2025 was $5.8 million, a decrease of $11.7 million, or 66.9%, compared to Q3 2024 [5] Segment Performance - Equipment Rental Solutions (ERS) segment rental revenue increased by 17.7% in Q3 2025 compared to Q3 2024, attributed to improved fleet utilization [13] - Truck and Equipment Sales (TES) segment revenue rose by 6.0% in Q3 2025, driven by strong demand for vocational vehicles [14] - Aftermarket Parts and Services (APS) segment revenue increased by 3.0% in Q3 2025, supported by higher rental revenue [15] Operational Metrics - Average OEC on rent increased by $180 million, or 17%, in Q3 2025 compared to the same period last year [18] - Fleet utilization improved to 79.3% in Q3 2025 from 73.2% in Q3 2024 [10][13] - The company reported a sales order backlog of $279.8 million as of the end of Q3 2025, down from $395.6 million in Q3 2024 [10] Outlook - The company expects to invest an additional net $50 million in its rental fleet in 2025, anticipating high-single digit fleet growth [18] - Despite a strong order flow, the company expects to come in at the lower end of its TES revenue guidance due to macroeconomic uncertainties [19] - The reinstatement of accelerated depreciation provisions may boost year-end equipment sales [19]

Core Insights - Custom Truck One Source, Inc. and Load King Manufacturing showcased advanced equipment at Utility Expo 2025, highlighting their focus on innovation and customer-centric solutions in the utility, infrastructure, and construction sectors [1] Group 1: Product Launch - The Outback Series was introduced as a new family of tracked easement machines, specifically designed for off-road and hard-to-reach environments [1] - The equipment features retractable capabilities, enhancing its functionality in challenging terrains [1]

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 ...