What is Custom Truck One's gross profit margin?

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

What is the market's earnings forecast for Custom Truck One next quarter?

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

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

What guidance did Custom Truck One's management provide for the next earnings period?

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

What does Custom Truck One do and what are its main business segments?

- **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.


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