Custom Truck One Source Reports Strong First Quarter Rental Demand
Custom Truck One Source posted $461.6 million in first quarter 2026 revenue compared to $422.2 million in the first quarter last year, a 9.3-percent increase. Rental revenue zoomed from $116.3 million in the first quarter of 2025 to $137.2 million this year, an 18-percent jump.
Equipment sales rose at a pretty solid clip, from $273.9 million in the first quarter of 2025, to $292.6 million in the recently concluded quarter, a 6.8-percent increase. Parts sales and service stayed relatively flat, from $32.1 million last year to $31.8 million in Q126.
Beginning in January 2026, Custom Truck One Source is reporting under two separate reportable segments. Specialty Equipment Rentals (SER) is the company’s historical Equipment Rental Solutions division while the new Specialty Truck Equipment and Manufacturing segment (STEM) consists of CTOS’ histocial Truck and Equipment Sales segment. The company’s rental revenue falls in the SER segment.
“In the first quarter, we achieved record first-quarter revenue and delivered substantial year-over-year growth in revenue and adjusted EBITDA of 9 percent and 33 percent, respectively,” said Ryan McMonagle, CEO of CTOS. “The sustained performance in our core T&D markets continues to be the primary driver of performance within our SER segment and for the company as a whole. For the quarter, our rental fleet achieved average utilization of 81.4 percent, up 370 basis points versus the first quarter of last year. We ended the quarter with total OEC of $1.66 billion, the highest in our history, which should support our expected growth within SER in 2026.
“Our STEM segment also had a strong quarter, delivering revenue of $268 million, which excludes $95 million of sales to our SER segment. Our strong performance in the quarter allowed us to make substantial progress in reducing our net leverage, down almost 30 basis points versus the end of the previous quarter. We continue to be optimistic about the remainder of 2026, as CTOS remains well-positioned to benefit from secular tailwinds driven by data center investments, electrification, utility grid upgrades and infrastructure investment. For 2026, we remain focused on adjusted EBITDA growth, working capital management, free cash flow generation and continued deleveraging.”
Demand from utility transmission and distribution at record levels
Looking at its equipment rental prospects for 2026, the company reported demand for equipment serving the utility transmission and distribution market remains very strong and at record levels, adding that further penetration of the vocational rental market is expected to provide incremental growth. Average fleet age ended 2025 at slightly higher than 2.9 years old, which positioned the company to reduce rental fleet investment while continuing to pursue growth with OEC expected to increase by mid-single digits.
“Our rental business continues to perform very strong, driven by demand in our utility transmission and distribution markets, and we are seeing the benefit of that strength flow through to margins and Adjusted EBITDA,” added chief financial officer Chris Eperjesy.
About the Author
Michael Roth
Editor
Michael Roth has covered the equipment rental industry full time for RER since 1989 and has served as the magazine’s editor in chief since 1994. He has nearly 30 years experience as a professional journalist. Roth has visited hundreds of rental centers and industry manufacturers, written hundreds of feature stories for RER and thousands of news stories for the magazine and its electronic newsletter RER Reports. Roth has interviewed leading executives for most of the industry’s largest rental companies and manufacturers as well as hundreds of smaller independent companies. He has visited with and reported on rental companies and manufacturers in Europe, Central America and Asia as well as Mexico, Canada and the United States. Roth was co-founder of RER Reports, the industry’s first weekly newsletter, which began as a fax newsletter in 1996, and later became an online newsletter. Roth has spoken at conventions sponsored by the American Rental Association, Associated Equipment Distributors, California Rental Association and other industry events and has spoken before industry groups in several countries. He lives and works in Los Angeles when he’s not traveling to cover industry events.