Custom Truck Raises 2026 Adjusted EBITDA Outlook Again

The Tip Desk · October 27, 2026 · 4 min read

The specialty-equipment lessor lifted full-year Adjusted EBITDA guidance to $447.5 million to $460 million after a record $1.39 billion average OEC on rent.

Custom Truck One Source (CTOS), a specialty-equipment lessor and manufacturer serving electric-utility, telecom, rail and other infrastructure markets, raised its 2026 Adjusted EBITDA outlook for a third time this year to $447.5 million to $460 million, from $437.5 million to $455 million, after a third quarter in which the rental fleet set records even as consolidated revenue growth slowed.

The company said the new range represents 17% to 20% growth over 2025. It also raised 2026 SER segment revenue guidance to $870 million to $890 million, from $850 million to $875 million, citing continued strength in transmission and distribution end markets.

Revenue for the three months ended September 30, 2026 was $495.2 million, up 2.7% from a year earlier. That year-over-year rate slowed from 10.2% in the second quarter and 9.3% in the first quarter. Adjusted EBITDA was $110.9 million, up 15.6%, after 25.0% growth in the second quarter and 33.4% in the first quarter. Adjusted EBITDA margin expanded about 250 basis points to 22.4%. Net income was $2.3 million, compared with a $5.8 million loss a year earlier.

The company attributed the slower revenue and EBITDA growth rates in part to more than $20.0 million of third-party STEM deliveries that shifted into the fourth quarter. Chief Executive Officer Ryan McMonagle said record demand across core T&D markets drove 16% year-over-year Adjusted EBITDA growth in the quarter and 24% growth year to date.

Rental revenue rose 20.1% to $152.7 million. Average OEC on rent reached a record $1.39 billion, up 10.5%, with fleet utilization of 81.5% versus 79.3% a year earlier and OEC on rent yield of 39.4%. Management said the increase in rental revenue reflected improved utilization from higher rental volume, the higher average OEC on rent, and the higher yield.

SER segment Adjusted EBITDA was $121.9 million, up 22.5%, with segment Adjusted EBITDA margin expanding to 54.6% from 52.4%. Adjusted rental gross margin reached 78.7%. SER rental equipment sales rose 14.1% on higher buyout activity of rental contracts with purchase options. Ending fleet OEC was a record $1.76 billion, up $143.0 million from a year earlier.

STEM segment Adjusted EBITDA was $36.6 million. Total STEM revenue increased 8% on higher intercompany sales to SER, partially offset by a 5.5% decline in new equipment sales. The company said it prioritized production for additional rental-fleet investment, and that a vendor recall and hailstorm damage to finished vehicles in Kansas City reduced third-party sales by more than $20.0 million. Excluding those shifted deliveries, it said third-party STEM revenue would have exceeded the third quarter of 2025. Those units remain in backlog and are expected to ship in the fourth quarter.

Sales order backlog was $342 million at September 30, up 22% year-over-year and 6% sequentially, or about 3.8 months of LTM third-party new sales, modestly below the company’s targeted range of four to six months. Third-quarter orders increased 22% year-over-year.

Net leverage fell to 3.70x at September 30, from 3.85x at June 30, even as the fleet grew. Cash and cash equivalents were $14.6 million; total debt was $1.666 billion. Availability under the senior secured credit facility was $234.3 million, with an additional $288.0 million of suppressed availability available by upsizing the facility.

The company raised 2026 net rental fleet investment to $210 million to $230 million, from prior guidance of $170 million to $200 million, and increased 2026 gross rental fleet investment to about $400 million to $430 million, with the incremental spend concentrated in long-term transmission rentals. Levered free cash flow for 2026 is now expected to be slightly positive, compared with prior guidance of more than $50 million. The company said the earnings benefit of the incremental fleet is weighted to 2027. Full-year 2026 revenue is expected to increase 8% to 13% year-over-year. Net leverage is expected to be meaningfully below four times at year-end 2026, with a longer-term target of below three times in 2027.