Custom Truck One Source (CTOS) Q4 2025 earnings summary

Executive summary

• Achieved record quarterly and full-year revenue of $1.94B in 2025, up 8% year-over-year, with strong momentum in core end markets and robust execution across the business.

• Adjusted EBITDA reached $384M, a 13% increase from 2024, reflecting robust operational execution and strong rental demand.

• Utility and T&D end-market demand, improved KPIs in Equipment Rental Solutions (ERS), and record fleet utilization drove performance.

• Opened two new branches and expanded aftermarket service initiatives, reinforcing growth strategy and customer support.

• Strategic partnership with Hiab and ESG initiatives, including electric PTO and all-electric specialty vehicles, support long-term growth.

Financial highlights

• Q4 2025 revenue: $528M; Adjusted EBITDA: $121M, up 18% year-over-year; Adjusted Gross Profit: $180M, up 7%.

• Full-year 2025 revenue: $1.944B, up 8%; Adjusted EBITDA: $384M, up 13%; Adjusted Gross Profit: $628M, up 9%.

• Q4 GAAP net income: $21M; full-year GAAP net loss: $31M, impacted by prior year sale leaseback gain.

• ERS Q4 revenue: $207M, up 20% year-over-year; full-year ERS revenue up 17%.

• TES Q4 equipment sales: $284M; full-year TES revenue up 4% to a record $1.1B; APS Q4 revenue: $37M; gross margin stable at 27%.

Outlook and guidance

• 2026 revenue guidance: $2.005–2.12B (3–9% growth); Adjusted EBITDA: $410–435M (7–13% growth).

• Segment guidance for 2026: ERS revenue $725–760M, TES $1.125–1.2B, APS $155–160M.

• Expect to generate over $50M in levered free cash flow and reduce net leverage below 4x by year-end 2026.

• Rental fleet net OEC expected to grow mid-single digits in 2026, with net investment of $150–170M, down from $250M in 2025.

• Focus on inventory reduction, free cash flow generation, and net leverage improvement.