Custom Truck One Source, Inc.

Second-quarter 2026 total revenue was $563 million, up 10% year over year, and adjusted EBITDA was $117 million, up 25%. GAAP net income was $10 million, or $0.05 per diluted share, versus a net loss of $28 million a year ago; management said about $19 million of the improvement came from a favorable tax swing. In SER, third-party revenue was $219 million, up 20% year over year, with segment adjusted EBITDA of $117 million and margin of 53%; utilization averaged 81.6% and average OEC on rent was $1.37 billion. In STEM, third-party revenue was $345 million, up 5% year over year, with segment adjusted EBITDA of $37 million and margin of 8.5%; backlog ended the quarter at $322 million and then rose to more than $340 million in Q3. On the balance sheet, net debt was $1.66 billion and net leverage was 3.85x, with $229 million of ABL availability and more than $240 million of additional potential availability. Guidance was raised to consolidated revenue of $2.1 billion-$2.2 billion and adjusted EBITDA of $437.5 million-$455 million, implying year-over-year growth of 8%-13% and 14%-19%, respectively. SER revenue guidance was raised to $850 million-$875 million and STEM revenue guidance to $1.63 billion-$1.7 billion; net rental CapEx is now expected to be $170 million-$200 million, non-rental CapEx $40 million-$50 million, and management still expects more than $50 million of levered free cash flow and net leverage meaningfully below 4x by year-end.

Ryan McMonagle framed the quarter as evidence that the company is in the early stages of a potential “once-in-a-generation transmission demand super cycle.” He emphasized record fleet utilization and OEC on rent, the company’s young fleet age, and a long runway of demand from utility transmission and broader infrastructure work. His tone was confident and upbeat, especially around the durability of demand through the rest of 2026 and beyond.

Chris Eperjesy focused on the operating leverage in SER and the improving balance sheet. He cited SER third-party revenue of $219 million, EBITDA of $117 million, 53% margin, 81.6% utilization, and a 39.4% on-rent yield, while noting net rental CapEx of $36 million and a fleet age of just over 3 years. He highlighted net leverage of 3.85x, $229 million of ABL availability, more than $240 million of additional borrowing-base availability, and still expects more than $50 million of levered free cash flow as inventory and floor plan balances decline in the second half.

Analysts focused on cadence, asking how much Q2 pull-forward came from Q3 or Q4; management said it was hard to quantify precisely, but described the impact as “tens of millions” and said full-year expectations were unchanged. Questions also centered on emissions-rule changes, with management estimating non-conformance penalties of about $4,500 to $7,000 depending on spec and saying they are buying inventory ahead of 2027 to mitigate customer cost pressure. Analysts probed whether federal funding is translating into orders and whether 81.6% SER utilization is sustainable; management said T&D demand is being driven more by customer planning and regulatory needs than by federal dollars, and said low-80s utilization looks like a good run rate.