Custom Truck One Source’s first quarter was marked by strong growth in its rental business, particularly in the transmission and distribution (T&D) end markets. Management attributed the positive results to higher equipment utilization, robust order activity, and continued productivity gains, especially in its Specialty Equipment Rentals segment. CEO Ryan McMonagle emphasized, “Our rental fleet averaged 81.4% utilization, up 370 basis points from last year, supported by robust levels of equipment on rent.” The company’s focus on operational execution and a younger, well-maintained fleet helped drive margin expansion, while ongoing customer demand for infrastructure and utility projects supported revenue growth.
Is now the time to buy CTOS? Find out in our full research report (it’s free for active Edge members).
Custom Truck One Source (CTOS) Q1 CY2026 Highlights:
- Revenue: $461.6 million vs analyst estimates of $456.7 million (9.3% year-on-year growth, 1.1% beat)
- Adjusted EPS: $0.02 vs analyst estimates of -$0.05 (significant beat)
- Adjusted EBITDA: $97.99 million vs analyst estimates of $86.33 million (21.2% margin, 13.5% beat)
- The company reconfirmed its revenue guidance for the full year of $2.06 billion at the midpoint
- EBITDA guidance for the full year is $427.5 million at the midpoint, in line with analyst expectations
- Operating Margin: 6.8%, up from 2.9% in the same quarter last year
- Backlog: $411.3 million at quarter end, down 2.1% year on year
- Market Capitalization: $2.30 billion
While we enjoy listening to the management's commentary, our favorite part of earnings calls are the analyst questions. Those are unscripted and can often highlight topics that management teams would rather avoid or topics where the answer is complicated. Here is what has caught our attention.
Our Top 5 Analyst Questions From Custom Truck One Source’s Q1 Earnings Call
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Michael Shlisky (DA Davidson & Co.) asked about Section 232 tariff exposure and fleet age competitiveness. CEO Ryan McMonagle responded that current inventory and supplier relationships limit tariff risks, and the fleet remains younger than historical averages.
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Daniel Hultberg (Oppenheimer & Co.) requested details on cost actions and yield management. McMonagle explained productivity gains and a late-2025 price increase, while CFO Christopher Eperjesy highlighted that EBITDA guidance was raised due to both mix and execution.
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Justin Hauke (Baird) probed EBITDA guidance conservatism and potential impacts from data center project delays. Eperjesy described guidance as prudent due to tougher Q2 comparisons, while McMonagle said data center noise isn’t materially affecting demand or customer sentiment.
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Naim Kaplan (Deutsche Bank) questioned how much of the T&D demand is reflected in the quoting pipeline and whether equipment shortages are emerging. McMonagle noted growing demand but no current category shortages, and Eperjesy said margin outperformance drove the increased EBITDA outlook.
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Brian Brophy (Stifel) inquired about bidding activity and equipment pricing trends. McMonagle described transmission-side bidding as robust and Eperjesy said pricing pressure is more stable than last year, with cost improvements offsetting some headwinds.
Catalysts in Upcoming Quarters
In the coming quarters, the StockStory team will be watching (1) whether strong rental utilization and order growth in T&D persist as infrastructure investments ramp up, (2) progress in reducing inventory levels and improving free cash flow, and (3) the company’s ability to maintain or expand margins through further productivity initiatives and pricing discipline. Additionally, we will track how the company adapts to evolving regulatory standards and supply chain developments.
Custom Truck One Source currently trades at $10.09, up from $8.78 just before the earnings. In the wake of this quarter, is it a buy or sell? The answer lies in our full research report (it’s free).
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