CTOS Filings — Custom Truck One Source, Inc. - FilingSpy
CTOS
Custom Truck One Source, Inc.
A North American one-stop shop for specialty trucks and heavy equipment, Custom Truck One Source rents, sells, and services vehicles like bucket trucks, digger derricks, and cranes for utilities, telecom, rail, and infrastructure crews. It grew from Custom Truck Sales, founded in 1996 in Kansas City by Fred Ross and his siblings, who got their start in the family gas station and towing business before expanding into a full-service equipment provider. Its rental fleet of more than ten thousand units is kept young—about three years old on average—so crews get dependable machines.
Net income turned positive at $10.4M as rental utilization reached 81.4% and equipment sales rose 7.7%.
Custom Truck One Source returned to profitability. rose 10.2% to $563.4 million and expanded 2.0 points to 22.0%, driven by a 20.1% increase in rental revenue as fleet utilization improved and average rose. The company is now generating profits, but fell sharply as the reduction cycle reversed.
Key takeaways
was $10.4 million, compared to a $28.4 million loss a year ago, helped by an income tax benefit versus a prior-year expense.
Rental rose 20.1%, driven by a 13.1% increase in average and a 2.1% improvement in , extending the recovery that began in 2025.
expanded to 22.0% from 20.0% a year ago, as the shift toward higher-margin rental outpaced the increase in cost of revenue.
Section summaries
Management's Discussion and Analysis
Revenue rose 10.2% in Q2 2026 driven by strong equipment sales and rental growth, with net income turning positive.
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Total increased 10.2% to $563.4 million in Q2 2026, driven by a 7.7% rise in equipment sales and a 20.1% jump in rental revenue.
Rental growth was fueled by a 13.1% increase in average on rent and a 2.1% improvement in .
Equipment sales rose 7.7%, and the STEM 's adjusted increased 54.7% to $37.2 million, benefiting from higher sales and lower floor plan .
fell to $68.2 million for the first half from $181.4 million a year ago, as the company built rather than reducing it.
Variable-rate debt stood at $1,481.1 million, with each one-eighth percentage point rate move changing annual by approximately $1.9 million; the company does not currently hedge this exposure.
What changed
The rental recovery flagged in 2025 continued: fleet utilization reached 81.4% in Q1 2026, and Q2 rental rose 20.1%, confirming the improvement is durable through mid-year.
The sales order , which fell 30.0% to $334.8 million in Q1 2026, was not updated this quarter, leaving open whether the contraction has stabilized.
, which reached a record $310.1 million in FY2025 on reduction, fell to $68.2 million in the first half of 2026 as the company shifted to building inventory — a reversal of the cycle that drove prior cash generation.
The improved to 4.02x in Q1 2026 from 4.31x at year-end 2025, but was not updated this quarter.
The material weakness in business process controls remains unremediated, with no new disclosure on progress.
What to watch
Whether the sales order stabilizes or continues to contract, and whether the decline begins to weigh on equipment sales in future quarters.
Whether recovers in the second half as investment moderates, or whether cash generation remains well below the $310.1 million annual level achieved in 2025.
Whether the , last reported at 4.02x in Q1 2026, is updated and whether it approaches any thresholds.
Any progress toward remediating the material weakness in business process controls, which has now been unremediated for over three years.
expanded to 22.0% from 20.0% a year ago, as growth outpaced the increase in cost of revenue.
was $10.4 million compared to a $28.4 million loss last year, helped by an income tax benefit versus a prior-year expense.
The STEM 's surged 54.7% to $37.2 million, benefiting from higher equipment sales and lower floor plan .
fell to $68.2 million from $181.4 million, primarily due to a larger build.
Quantitative and Qualitative Disclosures About Market Risk
Interest rate risk We are subject to interest rate market risk in connection with our long-term debt. Our principal interest rate exposure relates to outstanding amounts under the ABL Credit Facility and our floor plan financing arrangements. Interest rate changes generally impa…
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Interest rate risk
We are subject to interest rate market risk in connection with our long-term debt. Our principal interest rate exposure relates to outstanding amounts under the ABL Credit Facility and our floor plan financing arrangements. Interest rate changes generally impact the amount of our interest payments and, therefore, our future net income and cash flows, assuming other factors are held constant. As of June 30, 2026, we had $1,481.1 million aggregate principal amount of variable rate debt, consisting of the balance outstanding under floor plan financing and the ABL Facility. Holding other variables constant, each one-eighth percentage point increase or decrease in the applicable interest rates would correspondingly change our interest expense under floor plan financing and the ABL Facility by approximately $1.9 million on an annual basis.
We, from time to time, may manage a portion of our risks from exposures to fluctuations in interest rates as part of our risk management program through the use of derivative financial instruments. The objective of controlling these risks is to limit the impact on earnings and cash flows caused by fluctuations in the interest rates of our variable-rate debt. We do not currently hedge our interest rate exposure.
Foreign currency exchange rate risk
During the six months ended June 30, 2026, we generated $16.8 million of revenues denominated in Canadian dollars. Each 100-basis point increase or decrease in the average Canadian dollar to U.S. dollar exchange rate for the year would have correspondingly changed our revenues by approximately $0.3 million on an annual basis. We do not currently hedge our exchange rate exposure.
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We may, at any given time, be named as a defendant in certain lawsuits, investigations and claims arising in the ordinary course of business. While the outcome of these potential lawsuits, investigations and claims cannot be predicted with certainty, we do not expect these matte…
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We may, at any given time, be named as a defendant in certain lawsuits, investigations and claims arising in the ordinary course of business. While the outcome of these potential lawsuits, investigations and claims cannot be predicted with certainty, we do not expect these matters to have a material adverse impact on our business, results of operations, cash flows or financial condition. In the opinion of management, there are no pending litigation, disputes or claims against the Company that, if decided adversely, would have a material adverse effect on its consolidated financial condition, cash flows or results of operations.