Can Custom Truck One Source (NYSE:CTOS) Sustain Rental Momentum After Raising 2026 Guidance?

Sonal Goyal

28 October 2026 12:12 AM AEDT

Can Custom Truck One Source (NYSE:CTOS) Sustain Rental Momentum After Raising 2026 Guidance?

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Key Highlights

Third-quarter revenue was $495.2 million, up 2.7%, with rental revenue up 20.1%.
Adjusted EBITDA rose 15.6% to $110.9 million, a margin of 22.4%.
Net leverage fell to 3.70x from 4.31x at year-end 2025.
2026 Adjusted EBITDA guidance was raised to $447.5 million to $460 million.

Custom Truck One Source, Inc. (NYSE:CTOS), a provider of specialty equipment to the electric utility, telecom, rail, forestry, waste management and other infrastructure-related markets, reported third-quarter 2026 results on October 26, 2026. The company raised its full-year Adjusted EBITDA and rental segment revenue guidance, the third increase to Adjusted EBITDA guidance this year.

Third-Quarter Results and Segments

Revenue was $495.2 million, up $13.2 million from a year earlier. Rental revenue was $152.7 million, up 20.1% and equipment sales were $309.6 million. Gross profit was $113.3 million, up 12.4%, and Adjusted Gross Profit was $170.2 million, up 9.4%. Net income was $2.3 million compared with a loss of $5.8 million a year earlier.

Adjusted EBITDA, a non-GAAP measure, was $110.9 million, up 15.6%, and the margin widened about 250 basis points to 22.4%. For nine months, revenue was $1,520.3 million, net income was $8.6 million against a $51.9 million loss, and Adjusted EBITDA was $325.7 million versus $262.8 million.

In the rental segment, average equipment on rent, measured by original equipment cost, reached $1.39 billion, up 10.5%. Fleet utilization was 81.5% compared with 79.3%, and the yield was 39.4%. Segment Adjusted EBITDA was $121.9 million, up 22.5%, with the margin at 54.6% against 52.4%, and ending fleet reached $1.76 billion.

In the truck equipment segment, total revenue rose 8% on higher intercompany sales, while new equipment sales fell 5.5%. The company said more than $20.0 million of third-party deliveries shifted to the fourth quarter after a vendor recall and hail damage at its Kansas City location. Orders grew 22% and backlog reached $342 million, about 3.8 months of trailing third-party new sales.

Balance Sheet and 2026 Guidance

The net leverage ratio declined to 3.70x from 4.31x at year-end 2025 and 4.53x a year earlier. At September 30, cash was $14.6 million, total debt was $1,666.0 million and net debt was $1,651.5 million.

Adjusted EBITDA guidance moved to $447.5 million to $460 million from $437.5 million to $455 million, representing 17% to 20% growth. Revenue is expected between $2,100 million and $2,200 million, including $870 million to $890 million of rental segment revenue. Net rental fleet investment was raised to $210 million to $230 million from $170 million to $200 million, and levered free cash flow is expected to be slightly positive.

Why This Could Matter

CEO Ryan McMonagle tied the results to demand in transmission and distribution markets, and CFO Chris Eperjesy said the added fleet investment targets visible demand with most earnings benefit arriving in 2027. The company said it expects net leverage meaningfully below four times at the end of 2026 and a target below three times in 2027. A webcast call was set for 9:00 a.m. ET on October 27, 2026.

Final Perspective

Custom Truck One Source paired higher rental revenue and Adjusted EBITDA with lower leverage, a larger fleet investment plan and raised full-year guidance.

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