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What factors drove the changes in Custom Truck One's revenue and profit?

What is Custom Truck One's gross profit margin?

Did Custom Truck One beat or miss consensus estimates last quarter?

What were the key takeaways from Custom Truck One's earnings call?

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What is the revenue and EPS growth rate for Custom Truck One year over year?

- **Record Financial Performance**: FY2025 revenue $1.944B (+8% YoY), EBITDA $384M (+13% YoY). Q4 rental utilization 84%, highest in 3 years.
- **Strategic Growth Drivers**: Hiab partnership expands product portfolio; $50M+ investment in aftermarket services to boost TES margins.
- **2026 Outlook**: Revenue $2.005B-$2.12B, EBITDA $410M-$435M. Free cash flow target >$50M, with net leverage <4x by year-end.
- **Key Risks**: Macroeconomic uncertainty could impact T&D demand; inventory management critical to achieving margin targets.

**【CEO Summary Section】**
- **Record Q4 and Full-Year 2025 Results**: Revenue of $528 million (Q4) and $1.944 billion (FY2025), up 8% YoY. Adjusted EBITDA reached $121 million (Q4) and $384 million (FY2025), up 13% YoY.
- **Rental Business Strength**: Q4 rental utilization at 84% (highest in 3 years), OEC on rent of $1.4 billion (14% YoY growth). FY2025 T&D demand drove 17% rental revenue growth.
- **TES Segment Growth**: FY2025 TES revenue $1.1 billion (4% YoY), with Q4 orders up 21% YoY. Backlog rose to $370 million as of early 2026.
- **Strategic Initiatives**: Partnership with Hiab to expand product portfolio; $50 million+ investment in aftermarket service capacity.
- **2026 Outlook**: Revenue $2.005B-$2.12B, EBITDA $410M-$435M. New segment reporting (SER, STEM) to enhance transparency.

**【CFO Financial Commentary】**
- **Q4 Financials**: GAAP net income $21 million; Non-GAAP metrics show strong cost control (SG&A down 5% YoY). Free cash flow generation targeted at >$50 million in 2026.
- **Segment Performance**: ERS gross margin 78% (Q4), TES gross margin 15.6% (highest Q4 level). APS gross margin 27% (stable).
- **Balance Sheet**: Net debt $1.65 billion (4.3x leverage), with $248 million ABL availability. Inventory reduced by $100 million in Q4, targeting 6 months' turnover in 2026.
- **CapEx Guidance**: Net rental CapEx $150M-$170M (vs. $250M in 2025), with maintenance CapEx decline supporting free cash flow.

**【Q&A Highlights】**
- **Demand Drivers**: T&D utility markets at record levels; vocational market showing early 2026 strength. 2026 guidance assumes sustained demand and reduced macro uncertainty.
- **Pricing Environment**: On-rent yield in upper 30s to low 40s, with opportunities for rate improvement in transmission-intensive work.
- **Fleet Management**: Fleet age 2.9 years (youngest in 4 years), enabling lower maintenance costs. 2026 net OEC growth expected at mid-single digits.
- **Inventory Strategy**: Targeting 6 months' inventory turnover to reduce floor plan interest expense and improve liquidity.
- **Segment Reporting**: SER (rental-focused) and STEM (manufacturing) to better reflect business dynamics and investor expectations.

Custom Truck One Source, Inc. (CTOS) Q4 2025 Earnings Call Transcript

- **Revenue Growth**: 8% YoY to $482M, with EBITDA up 20% to $96M.
- **ERS Strength**: 12% revenue growth, 18% rental revenue increase, and 17% OEC on rent expansion.
- **CapEx Acceleration**: $250M+ rental fleet investment for 2025, targeting 15%+ OEC growth.
- **Margin Expansion**: ERS gross margin 62% (up 370 bps YoY), TES margin expected to recover.
- **2026 Outlook**: Confident in double-digit EBITDA growth despite macro challenges, with transmission pipeline supporting demand.

**【CEO Opening Remarks】**
- Q3 2025 revenue grew 8% YoY to $482 million, with adjusted EBITDA up 20% to $96 million.
- ERS segment revenue rose 12% YoY, driven by 18% rental revenue growth and 17% increase in OEC on rent to $1.26 billion.
- TES segment sales grew 6% YoY, with year-to-date growth of 8.5%, despite a 30% decline in backlog due to strong intra-quarter order flow.
- Fleet utilization reached 79% (up 600 bps YoY), with Q4 utilization exceeding 80%.
- Accelerated rental CapEx of $79 million in Q3, targeting OEC growth of 15%+ YoY.

**【CFO Financial Commentary】**
- ERS segment gross margin expanded to 62% (up 370 bps YoY), driven by higher rental mix and improved margins.
- TES gross margin contracted to 15% due to market supply dynamics, but expected to recover in 2026.
- Levered free cash flow for 2025 expected to be below $50 million due to elevated CapEx ($250 million+ for rental fleet).
- Inventory reduction target of $125-$150 million from 2024 levels, with 2026 net leverage target below 3x.

**【Q&A Highlights】**
- **2026 Visibility**: Strong transmission demand and 5-year T&D CapEx of $600B (10% CAGR) support ERS growth.
- **Cash Flow Dynamics**: Q4 2025 expected to generate free cash flow, but full year levered FCF below $50M due to CapEx.
- **Customer Behavior**: Utility contractors seeing sustained activity, while infrastructure customers show hesitancy due to macro uncertainty.
- **Fleet Management**: Fleet age reduced to 2.9 years (from 4+ years), positioning for long-term returns.
- **Tariff Impact**: Mitigated direct costs, but market supply constraints persist.


Custom Truck One Source, Inc. (CTOS) Q3 2025 Earnings Call Transcript

- **Revenue Growth**: 21% YoY to $111 million, driven by 23% ERS and 22% TES segment growth.
- **Rental Fleet Strength**: OEC on rent up 16% YoY to $1.2 billion, utilization at 78% (600 bps YoY improvement).
- **Profitability**: Adjusted EBITDA up 17% to $93 million; TES gross margin improving to 15.5%.
- **Strategic Investments**: Fleet OEC at record $1.56 billion; 2025 guidance reaffirmed with >$50 million free cash flow target.
- **Tariff and Regulatory Updates**: Minimal 2025 impact; CARB emission standard changes delayed, no prebuy activity assumed.


**【Management Opening Remarks】**
- Brian Perman provided standard disclaimers about forward-looking statements and reminded participants of the availability of financial documents, including the press release, investor presentation, and 10-Q filing.

**【CEO Summary Section】**
- **Strong Q2 Results**: Revenue grew 21% YoY to $111 million, with adjusted EBITDA up 17% to $93 million. T&D markets remained robust, driving growth in both ERS and TES segments.
- **ERS Segment Highlights**: Rental revenue and asset sales increased 17% and 40% YoY, respectively. Average OEC on rent reached $1.2 billion (16% YoY growth), with utilization at 78% (up 600 basis points YoY). Fleet OEC ended at $1.56 billion, the highest in company history.
- **TES Segment Performance**: Sales hit $303 million (22% YoY growth), with two consecutive months over $100 million. Signed orders rose 35% YoY, driven by 45% growth in local/regional customer orders.
- **Strategic Investments**: Reaffirmed 2025 guidance and emphasized fleet expansion to meet demand. Tariffs have minimal direct impact this year, and legislative changes (e.g., bonus depreciation) are expected to benefit small/mid-sized customers.
- **Emission Standards Update**: CARB waivers revoked, delaying emission standard changes. EPA 2027 standards remain uncertain, but no prebuy activity is assumed in current outlook.

**【CFO Financial Commentary】**
- **Financial Performance**: GAAP revenue of $111 million, adjusted gross profit of $157 million, and adjusted EBITDA of $93 million. ERS gross margin was 59%, while TES margin improved to 15.5% (up 45 basis points QoQ).
- **Cash Flow and Leverage**: Borrowings under ABL increased to $670 million to fund CapEx. Net leverage improved to 4.66x, with a target to reduce below 3x by end of 2026. Free cash flow target for 2025 is >$50 million.
- **Segment Guidance**: Reaffirmed full-year revenue ($1.97-2.06 billion) and EBITDA ($370-390 million) guidance. TES gross margins expected to improve in H2.

**【Q&A Highlights】**
- **Tariff Impact**: Minimal cost impact in 2025, with any incremental costs deferred to 2026. TES gross margin improvement in Q2 reflects effective supply chain management.
- **Backlog Decline**: Q2 backlog decreased due to strong sales, but signed orders grew 35% YoY. Management remains confident in achieving double-digit TES growth for the year, with Q3 backlog already growing.
- **Customer Sentiment**: Local/regional customers driving order growth, with no signs of macroeconomic uncertainty affecting demand.


Custom Truck One Source (CTOS)-31 Jul 25-2025 Q2 Earnings call transcript

- **Q1 Growth Drivers**: ERS rental OEC up 13% YoY to $1.2B, TES backlog +14% to $420M. Full-year guidance reaffirmed.
- **Tariff Mitigation Success**: $26M inventory pull-forward; no operational disruption anticipated.
- **Financial Discipline**: Targeting 3x leverage by 2026 via $50M-$100M free cash flow. ERS rate hikes to boost margins.
- **Key Risks**: TES margin pressure from industry inventory levels, macroeconomic caution among small customers.

**【CEO Opening Remarks】**
- Q1 2025 revenue reached $422 million, up 13% YoY in ERS segment and flat in TES due to sequential growth in March. 
- ERS rental OEC on rent hit $1.2B (13% YoY), with 78% utilization vs. 73% last year. TES backlog grew $51M (14%) to $420M.
- Tariff mitigation strategies include vendor pricing agreements and inventory pull-forward, with fleet investments to support rental demand.
- Full-year guidance reaffirmed: $1.97B-$2.06B revenue, $370M-$390M adj. EBITDA, $200M net rental CapEx.

**【CFO Financial Details】**
- ERS segment: $154M revenue (+13%), 60% gross margin, $93M adj. GP. Rental asset sales up 26% YoY.
- TES segment: $232M sales (-1% YoY), 15.1% gross margin. Sequential sales growth in Feb/March drove record March performance.
- Financial metrics: $73M adj. EBITDA, 4.8x net leverage, $655M ABL borrowings. Targeting $50M-$100M free cash flow to reduce leverage below 3x by 2026.

**【Key Q&A Takeaways】**
- **Tariff Impact**: Vendors shifting production to U.S. and offering non-tariff pricing; CTOS pulled forward $26M in chassis inventory. No material disruption expected.
- **Inventory Management**: Q1 inventory increase tactical; expects second-half reduction with linear TES conversion lag (3-6 months by product).
- **Leverage Target**: Aiming for 4.0x or below by year-end if high end of free cash flow range achieved.
- **ERS Pricing**: On-rent yield stable Q/Q; 100bps+ rate increases expected to flow through 2025.
- **TES Margin Outlook**: 15%-18% gross margin range maintained, with normalization expected later in year.

Custom Truck One Source, Inc. (CTOS) Q1 2025 Earnings Call Transcript

- **ERS Recovery Strong**: Q4 rental revenue up 15% QoQ, utilization 79% (vs. 73% Q3), with $1.5B OEC fleet driving 2025 growth expectations. 
- **TES Surpasses $1B Annual Sales**: Q4 new orders +35% YoY, 2025 revenue target 12.5% growth despite lower backlog. 
- **Leverage Reduction Path**: 2024 net leverage 4.5x → targeting <3x by 2026 via free cash flow ($50M-$100M in 2025). 
- **Utility Tailwinds**: AI data center buildout, grid upgrades project 24%-29% U.S. electricity demand growth by 2035, supporting utility contractor activity. 
- **Margin Resilience**: ERS gross margin 61%, TES gross margin 16.6% despite industry inventory headwinds.

**【CEO Opening Remarks】**
- **ERS Segment Performance**: Q4 rental revenue grew 15% sequentially, with average OEC on rent reaching $1.2B (12% QoQ increase) and utilization at 79% (570bps QoQ improvement). Fleet expansion continued with $71M in net rental CapEx, ending Q4 at $1.52B OEC.
- **TES Segment Growth**: Q4 revenue hit $308M (18% QoQ, 3% YoY), marking the first annual TES sales above $1B. Full-year TES gross margin was 17%, with Q4 gross margin up 45bps sequentially. New orders surged 35% YoY to $280M, driving confidence in 2025 growth.
- **2025 Guidance**: Total revenue $1.97B-$2.06B, adjusted EBITDA $370M-$390M. ERS and TES expected to deliver double-digit EBITDA growth, supported by utility demand tailwinds (AI data centers, grid upgrades).

**【CFO Financial Details】**
- **Q4 Financials**: Revenue $521M, adjusted EBITDA $102M. ERS adjusted gross profit $105M (61% margin), TES gross margin 16.6% (down YoY due to industry inventory levels). 
- **Leverage Reduction**: 2024 net leverage 4.5x, targeting below 3x by 2026. Q4 sale-leaseback transaction generated $52M to reduce ABL borrowings. 
- **2025 Outlook**: Free cash flow target $50M-$100M, driven by inventory reduction ($150M+ in Q4) and normalized production levels. Net rental CapEx ~$200M to support fleet growth.

**【Q&A Key Takeaways】**
- **TES Backlog Disconnect**: Despite $445M Q4 backlog (down 35% YoY), management cites strong net orders (+35% YoY) and customer optimism, projecting 12.5% TES revenue growth. 
- **Seasonality**: 2025 revenue split ~45% H1 / 55% H2, with Q1 likely flat to down YoY before improving in Q2. 
- **Margin Outlook**: ERS rental yield ~38%, TES gross margin mid-teens. Tariff mitigation efforts with suppliers expected to limit cost impact. 
- **Real Estate Strategy**: One-time sale-leaseback of 8 properties completed; no further transactions planned. Lease expense increase (~$5M/year) offset by ABL reduction benefits.

Actual			-0.33	-0.27	0.31	-0.15	-0.57	-0.53	-0.08	-0.02	-0.01	0.05	-0.01	0.13	0.06	0.05	0.04	0.07	-0.06	-0.1	-0.07	0.12	-0.08	-0.13	-0.03	0.09
Forecast			-0.0336	-0.139	-0.2354	-0.185	-0.22	0.0292	-0.025	-0.0001	-0.0258	-0.0042	0.0512	0.1136	0.0297	0.0184	0.0446	0.114	-0.0136	-0.0157	-0.0291	0.0399	-0.0582	-0.0493	-0.0248	0.0677
Surprise	0.00%	0.00%	-882.14%	-94.24%	+231.69%	+18.92%	-159.09%	-1915.07%	-220.00%	-19900.00%	+61.24%	+1290.48%	-119.53%	+14.44%	+102.02%	+171.74%	-10.31%	-38.60%	-341.18%	-536.94%	-140.55%	+200.75%	-37.46%	-163.69%	-20.97%	+32.94%

CTOS

CTOS fundamentals

CTOS Q4 2025 Earnings

Earnings Call

You can ask Aime

CTOS

CTOS fundamentals

CTOS Q4 2025 Earnings

Earnings Call

CTOS Earnings Call Summary for Q4/20259:00 AM on Mar 10, 2026

CTOS Earnings Call Summary for Q3/20259:00 AM on Oct 28, 2025

CTOS Earnings Call Summary for Q2/20259:00 AM on Jul 31, 2025

CTOS Earnings Call Summary for Q1/20259:00 AM on May 1, 2025

CTOS Earnings Call Summary for Q4/20249:00 AM on Mar 5, 2025

You can ask Aime