Custom Truck One Source Reports Q2 2026 Results: Full Earnings Call Transcript

Custom Truck One Source (NYSE: CTOS ) reported second-quarter financial results on Tuesday.

The transcript from the company's second-quarter earnings call has been provided below.

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Access the full call at Summary Custom Truck One Source reported record revenue of $563 million and adjusted EBITDA of $117 million for Q2 2026, representing 10% and 25% growth year over year, respectively.

The Specialty Equipment Rentals (SER) segment showed strong performance with a 20% increase in third-party revenue year over year, driven by high demand in transmission and distribution markets.

The company increased its full-year 2026 guidance, projecting consolidated revenue between $2.1 to $2.2 billion and adjusted EBITDA between $437.5 to $455 million, citing robust demand and strong execution.

The Specialty Truck Equipment and Manufacturing (STEM) segment achieved a quarterly revenue record with a 5% year-over-year increase, despite a decrease in backlog due to record Q2 deliveries.

Management expressed confidence in navigating upcoming EPA emission regulations and reported strong order flow and healthy demand, particularly in the utility end market.

The company plans to continue investing in its rental fleet while reducing maintenance capex, aiming for increased free cash flow and a reduction in net leverage by the end of 2026.

Full Transcript Brian, Investor Relations By their nature are uncertain and outside of the Company's control.

Although these forward-looking statements are based on management's current expectations and beliefs, actual results may differ materially.

For a discussion of some of the factors that could cause actual results to differ, please refer to the Risk Factors section of the Company's filings with the SEC.

Additionally, please note that you can find reconciliations of the historical non-GAAP financial measures discussed during the call in the press release we issued yesterday after the market closed.

That press release and our second quarter investor presentation are posted on the Investor Relations section of our website.

Yesterday afternoon we also filed our second quarter 2026 10-Q with the SEC.

Today's discussion of our results of operations for Custom Truck One Source, or Custom Truck One Source, is presented on a historical basis as of or for the three months ended June 30, 2026 and prior periods.

Also a reminder that beginning last quarter, our financial reporting now reflects our two new reportable segments, Specialty Equipment Rentals, or SER, and Specialty Truck Equipment and Manufacturing, or STEM.

While our 2026 results in our earnings press release and SEC filing reflect the application of intersegment pricing and margins as per accounting requirements for intersegment sales, the segment results for 2025 reflect the intersegment sales with no margin as no intersegment agreement was in place in the period.

For an illustrative comparison of what the 2025 results would have been had intersegment sales been reflected with the appropriate GR and had other internal accounting policies been in place at the time, please see the appendix of the Q2 investor presentation posted on our Investor Relations website.

Joining me today are Ryan McMonigle, CEO, and Chris Epergese, CFO.

I will now turn the call over to Ryan.

Ryan McMonigle, CEO Thanks, Brian, and good morning, everyone.

We delivered record revenue in the second quarter, capping a strong first half driven by continued strong momentum in our core end markets and outstanding execution by our team.

In the second quarter we generated revenue of $563 million and adjusted EBITDA of $117 million, up 10% and 25% year over year, respectively.

Our Specialty Equipment Rentals segment continues to deliver consistently strong performance driven by sustained and growing demand in the transmission and distribution, or T&D, markets.

Our rental fleet averaged 81.6% utilization during the quarter, up 400 basis points from Q2 of last year.

This was supported by continued robust levels of OEC on rent, which averaged $1.37 billion in Q2, up 13% year over year.

So far in Q3 both measures have continued to show year over year growth.

We believe that we are in the early stages of what could be a once-in-a-generation transmission demand super cycle.

We ended the quarter with total OEC of $1.68 billion, the highest quarter-end level in our history, which will support our expected continued growth in SER revenues in the second half of this year.

Also, our average fleet age is just over three years old, which we believe is one of the youngest fleets in the industry and positions us well to support our customers' needs across the country.

Our trucks and equipment continue to power the people who strengthen and build critical infrastructure in the U.S. and Canada.

The market has been focused on the durability of demand in T&D and our ability to convert improving rental KPIs into earnings and cash flow, and we believe our trending results over recent quarters speak directly to that.

Bidding activity and ongoing conversations with our customers lead us to believe that these conditions will persist through the remainder of 2026 and beyond.

Our Specialty Truck Equipment and Manufacturing segment had record performance in the second quarter, with equipment sales reaching an all-time quarterly high for the company and reflecting continued healthy in-market demand and order flow.