8-K: Custom Truck One Source Reports Q1 2026 Results, Boosts EBITDA Guidance

Custom Truck One Source, Inc. announced record first-quarter revenue of $461.6 million and increased its full-year Adjusted EBITDA guidance, driven by strong performance in its Specialty Equipment Rentals segment.

Summary

• Custom Truck One Source, Inc. reported record first-quarter revenue of $461.6 million for the period ending March 31, 2026, a 9.3% increase year-over-year.
• The company's Adjusted EBITDA for the quarter was $98.0 million, up 33.4% compared to the first quarter of 2025.
• Full-year 2026 Adjusted EBITDA guidance has been increased to a range of $415 million to $440 million.
• Net loss for the quarter improved significantly to $4.1 million, a 76.9% reduction compared to the prior year's first quarter.
• Average fleet utilization reached 81.4%, and the total Original Equipment Cost (OEC) on rent reached a historical high of $1.66 billion.
• The company is focused on Adjusted EBITDA growth, working capital management, free cash flow generation, and continued deleveraging in 2026.

Sentiment

Score: 8

Explanation: StockSavvy.ai views this as a strong positive report, with record revenue, significant Adjusted EBITDA growth, and an increase in full-year guidance, alongside improvements in key operational metrics and a reduction in net loss.

Positives

• Record first quarter revenue of $461.6 million, up 9.3% year-over-year.
• Adjusted EBITDA increased by 33.4% to $98.0 million.
• Full-year Adjusted EBITDA guidance raised to $415M - $440M.
• Net loss improved by 76.9% to $4.1 million.
• Average fleet utilization increased to 81.4%.
• Ending OEC on rent reached a record $1.66 billion.
• Net leverage ratio improved to 4.02x from 4.31x at the end of 2025.
• Levered free cash flow is expected to exceed $50 million for 2026.

Negatives

• The company reported a net loss of $4.1 million for the quarter.
• Total revenue for the quarter was $461.6 million, a decrease from the $528.1 million reported in the fourth quarter of 2025.
• Sales order backlog decreased by 2% year-over-year for the STEM segment.

Risks

• Increases in labor costs.
• Changes in U.S. trade policy including tariffs.
• Inability to obtain raw materials, component parts, and/or finished goods in a timely and cost-effective manner.
• Competition in the equipment dealership and rental industries.
• Increases in unionization rate in the workforce.
• Inability to attract and retain key personnel.
• Material disruptions to operations due to public health concerns, equipment failures, natural disasters, work stoppages, or power outages.
• Significant indebtedness may adversely affect financial position and limit access to capital.

Future Outlook

The company expects consolidated revenue to increase 3% to 9% year-over-year in 2026. Adjusted EBITDA is projected to increase 8% to 15%. Net rental fleet investment is planned between $150 million to $170 million, with mid-single digit net OEC growth. Inventory is expected to trend below six months on hand. Levered free cash flow is anticipated to exceed $50 million, and the net leverage ratio is expected to be meaningfully below four times by the end of 2026, with a long-term target below three times in 2027.

Management Comments

• "In the first quarter, we achieved record first-quarter revenue and delivered substantial year-over-year growth in revenue and Adjusted EBITDA of 9% and 33%, respectively."
• "The sustained performance in our core T&D markets continues to be the primary driver of performance within our SER segment and for the Company as a whole."
• "Our STEM segment also had a strong quarter, delivering revenue of $268 million, which excludes $95 million of sales to our SER segment."
• "Our strong performance in the quarter allowed us to make substantial progress in reducing our net leverage, down almost 30 basis points versus the end of the previous quarter."
• "We continue to be optimistic about the remainder of 2026, as CTOS remains well-positioned to benefit from secular tailwinds driven by data center investments, electrification, utility grid upgrades and infrastructure investment."
• "For 2026, we remain focused on Adjusted EBITDA growth, working capital management, free cash flow generation and continued deleveraging."
• "Looking ahead, our focus in 2026 is on disciplined execution - translating strong end-market demand into profitable growth, free cash flow generation, and further balance sheet improvement."
• "With a younger, highly utilized fleet and improving working capital dynamics, we believe CTOS is positioned to drive higher returns on invested capital while maintaining financial flexibility as we invest selectively to support our customers long-term needs, and to translate that into meaningful free cash flow generation."

Industry Context

StockSavvy.ai notes that Custom Truck One Source's strong first-quarter performance and increased guidance align with broader industry trends in infrastructure investment, electrification, and utility grid upgrades, which are driving demand for specialty equipment and rental services.

Comparison to Industry Standards

• The reported fleet utilization of 81.4% for Q1 2026 is strong, particularly for the utility transmission and distribution market, which is experiencing record demand.
• The increase in Average OEC on rent by 11.8% year-over-year indicates successful fleet deployment and demand capture, a key metric for rental companies.
• The company's focus on reducing net leverage and generating free cash flow is in line with industry best practices for companies in capital-intensive sectors.
• The guidance for Adjusted EBITDA growth of 8% to 15% for the full year 2026 suggests a positive outlook relative to many industrial equipment and services companies facing economic uncertainties.

Stakeholder Impact

• Shareholders: Positive impact from increased revenue, improved profitability, and raised EBITDA guidance, potentially leading to increased shareholder value.
• Employees: Continued focus on growth and operational efficiency may lead to job security and potential for bonuses or incentives.
• Creditors: Improved net leverage ratio and free cash flow generation are positive for debt holders, indicating a stronger ability to service debt.
• Customers: Continued strong performance and investment in fleet may ensure availability of critical equipment for infrastructure projects.

Next Steps

• Continue focus on Adjusted EBITDA growth.
• Manage working capital effectively.
• Generate free cash flow.
• Achieve continued deleveraging.
• Invest selectively to support customer needs.
• Maintain financial flexibility.
• Target a net leverage ratio below three times in 2027.

Key Dates

Recommendation

The company delivered a record quarter with significant year-over-year growth in revenue and Adjusted EBITDA, exceeding prior expectations and leading to an increase in full-year guidance. Key operational metrics are at historical highs, and the company is making substantial progress on deleveraging and free cash flow generation. The strong performance is underpinned by robust demand in core infrastructure-related markets, positioning CTOS favorably for continued growth.

Keywords

Custom Truck One Source, CTOS, Specialty Equipment Rentals, Specialty Truck Equipment, Adjusted EBITDA, Q1 2026 Results, Financial Report, Infrastructure