Custom Truck Raised Outlook After Record Revenue
Revenue reached $563.4 million as the company lifted its full-year sales forecast.
Custom Truck One Source (CTOS), a specialty-equipment rental and sales provider, reported record second-quarter revenue and returned to profitability as rental demand and equipment deliveries strengthened.
Revenue rose 10.2% from a year earlier, accelerating from 9.3% growth in the first quarter, and increased 22.1% sequentially. Net income improved to $10.4 million, or $0.05 a share, from a loss of $28.4 million, or $0.13 a share, a year earlier.
Rental revenue increased 20.1% to $145.1 million, supported by a larger fleet, higher utilization and improved yield. Equipment sales rose 7.7% from a year earlier and 31.1% from the first quarter, while parts and services revenue was nearly flat. Fleet utilization climbed to 81.6% from 77.6%, and average original equipment cost on rent increased 13.1% to $1.366 billion.
The stronger rental business and sales volume lifted adjusted EBITDA 25% to $116.8 million. Its margin widened to 20.7% from 18.3% a year earlier, though it eased from 21.2% in the first quarter. Adjusted gross margin followed a similar path, rising from a year earlier while falling sequentially to 32.1%.
Sales, Equipment Rental and Services revenue from external customers increased 19.7%, aided by a 30.3% rise in rental-equipment sales as more customers exercised rental-purchase options. Truck and Equipment Sales and Manufacturing revenue reached a record $344.6 million, driven by demand for utility and forestry vehicles, while the segment’s adjusted EBITDA increased 54.7%.
Custom Truck raised its 2026 revenue forecast to $2.10 billion to $2.20 billion from $2.005 billion to $2.12 billion. It now expects adjusted EBITDA of $437.5 million to $455 million, lifting that range for a second consecutive quarter. The company also increased its planned net rental-fleet investment to about $170 million to $200 million to support demand.
Net leverage declined below four times, reaching 3.85 times from 4.02 times at the end of the first quarter. The balance-sheet improvement came as first-half operating cash flow fell to $68.2 million from $181.4 million, with higher inventory and receivables absorbing cash. Inventory rose to $1.042 billion, though the company expects months on hand to trend below six.
The company expects third-quarter revenue and adjusted EBITDA to remain above year-earlier levels but decline modestly from the second quarter after some equipment sales and rental-purchase-option buyouts occurred earlier than anticipated. Its sales-order backlog fell 21.6% sequentially to $322.5 million after record equipment deliveries, leaving it below the company’s target range.