Custom Truck One Source Beats Q1 Estimates, Lifts Full-Year EBITDA Forecast
Custom Truck One Source (NYSE:CTOS) reported first-quarter 2026 results that exceeded analyst expectations on both the top and bottom lines, driven by surging demand in its core utility end markets. The company also raised its full-year Adjusted EBITDA guidance, a move that appears to have been well received by investors.
Earnings and Revenue vs. Estimates
The specialty equipment provider posted a non-GAAP net loss of $0.02 per share for the quarter ended March 31, 2026, which was significantly narrower than the $0.0554 loss per share analysts had projected. On the revenue side, the company delivered $461.6 million in total sales, beating the consensus estimate of $456.8 million.
Key financial comparisons for Q1 2026 vs. Q1 2025 include:
- Revenue: $461.6 million (+9.3% year-over-year)
- Adjusted EBITDA: $98.0 million (+33.4% year-over-year)
- Gross Profit: $103.1 million (+20.5% year-over-year)
- Net Loss: ($4.1 million), an improvement of 76.9% compared to a ($17.8 million) loss in Q1 2025
Market Reaction
The stock is trading up approximately 1.8% in after-market trading following the release, suggesting a positive initial reaction from investors. This move reflects the market's approval of the company's ability to outperform estimates and its decision to lift the full-year outlook, even as the company guided for flatter growth in the second quarter.
Segment Performance and Operational Highlights
The company recently reorganized into two reportable segments: Specialty Equipment Rentals (SER) and Specialty Truck Equipment and Manufacturing (STEM).
- SER Segment: This was the standout performer. Segment Adjusted EBITDA surged 22.6% to $105.5 million, fueled by record demand in the transmission and distribution (T&D) markets. Rental revenue grew 18% to $137.2 million, driven by fleet utilization hitting 81.4%, up from 77.7% a year ago. The average OEC (original equipment cost) on rent increased 11.8% to $1.34 billion.
- STEM Segment: This segment also showed solid improvement, with Adjusted EBITDA more than doubling to $32.7 million from $13.1 million in the prior year. Third-party equipment sales revenue increased 4.4% to $254.9 million, supported by demand for forestry vehicles. The sales order backlog stood at $411.3 million at quarter-end, up from $335.3 million at the end of December 2025.
- Balance Sheet: The company made progress on deleveraging, with its net leverage ratio improving to 4.02x from 4.3x at the end of the previous quarter. Net debt stood at $1.64 billion.
2026 Outlook and Guidance
Management raised its full-year 2026 Adjusted EBITDA guidance to a range of $415 million to $440 million, up from the prior range of $410 million to $435 million. This new midpoint of $427.5 million is above the current analyst estimate of $427 million for the full year.
Other key elements of the 2026 outlook include:
- Revenue: Expected to increase by 3% to 9% year-over-year (implied range of $2.005 billion to $2.12 billion). The consensus estimate of $2.077 billion sits at the midpoint of this range.
- Q2 2026: The company guided for flat revenue and single-digit Adjusted EBITDA growth sequentially, which aligns with analyst estimates for Q2 revenue of $525 million.
- Free Cash Flow: The company expects levered free cash flow to exceed $50 million for the full year.
- Net Leverage: Management expects the net leverage ratio to be "meaningfully below" 4.0x by year-end 2026, with a long-term target of below 3.0x in 2027.
CEO Ryan McMonagle attributed the strong results to sustained performance in the core T&D markets, stating the company is "well-positioned to benefit from secular tailwinds driven by data center investments, electrification, utility grid upgrades and infrastructure investment."
To view detailed historical earnings data and access future projections and analyst estimates for Custom Truck One Source, please visit the earnings page here and the full analyst ratings and forecasts page here.
Disclaimer: This article is for informational purposes only and does not constitute investment advice. Investors should conduct their own research before making any investment decisions.