Custom Truck One Source (CTOS) Q2 2026 earnings summary

Executive summary

• Achieved record Q2 2026 revenue of $563.4 million, up 10.2% year-over-year, and Adjusted EBITDA of $117 million, up 25%, driven by strong demand in Transmission & Distribution (T&D), infrastructure, and utility/forestry markets.

• Net income for Q2 2026 was $10.4 million, a significant improvement from a net loss of $28.4 million in Q2 2025, reflecting higher operating income and an income tax benefit.

• Rental fleet utilization averaged 81.6%, up 400 basis points year-over-year, with OEC on rent up 13% to $1.37 billion.

• Both SER and STEM segments posted year-over-year revenue and Adjusted EBITDA growth, with STEM backlog at $322 million at quarter end.

• Raised full-year 2026 consolidated revenue guidance to $2.1–$2.2 billion and Adjusted EBITDA to $437.5–$455 million, reflecting strong first-half performance and end-market momentum.

Financial highlights

• Q2 2026 Adjusted Gross Profit was $181 million, up 16% year-over-year; gross profit margin improved to 22.0%.

• SER segment Q2 revenue was $218.8–$221 million, up 19.7–20% year-over-year; Adjusted EBITDA rose 26.2% to $117.2 million.

• STEM segment Q2 revenue was $344.6–$438 million, up 3–5% year-over-year; Adjusted EBITDA rose 54.7–55% to $37.2 million.

• Net leverage ratio improved to 3.85x at quarter-end, down from 4.02x in Q1 and 4.31x at year-end 2025.

• Cash and cash equivalents at June 30, 2026: $10.3 million; availability under ABL facility: $229.4 million.

Outlook and guidance

• Full-year 2026 revenue guidance raised to $2.1–$2.2 billion (+8–13% YoY); Adjusted EBITDA guidance raised to $437.5–$455 million (+14–19% YoY).

• SER revenue projected at $850–$875 million; STEM revenue at $1.63–$1.7 billion.

• Levered free cash flow expected to exceed $50 million in 2026; net leverage targeted below 4x by year-end and below 3x in 2027.

• Q3 revenue and EBITDA expected to grow year-over-year but be modestly below Q2 levels due to timing shifts.

• Net rental fleet investment for 2026 forecast at $170–$200 million, supporting mid-single digit OEC growth.