Custom Truck One Source, Inc. ((CTOS)) has held its Q2 earnings call. Read on for the main highlights of the call.
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Custom Truck One Source, Inc. recently held its earnings call, revealing a strong performance marked by significant growth in revenue and EBITDA. The company reported robust demand and strategic execution as key drivers of this success. Despite some concerns about the TES backlog decline and potential tariff impacts, the company’s proactive measures and strong order flow instill confidence in continued growth.
Strong Revenue and EBITDA Growth
Custom Truck One Source, Inc. reported a remarkable 21% growth in revenue and a 17% increase in adjusted EBITDA for Q2 2025 compared to the same period in 2024. This impressive performance was fueled by strong demand in the core Transmission & Distribution (T&D) markets and excellent execution by the company’s team.
ERS Segment Performance
The Equipment Rental Solutions (ERS) segment demonstrated outstanding results, with revenue increasing by over 23% year-over-year. Rental revenue grew by 17%, and rental asset sales surged by 40%. Additionally, the average utilization improved by 600 basis points, reaching just under 78%.
TES Segment Achievements
The Truck & Equipment Sales (TES) segment achieved a significant milestone, with sales surpassing $100 million for two consecutive months. This achievement contributed to a 22% year-over-year sales growth and more than 30% sequential growth, highlighting the segment’s strong performance.
Strong Order Flow
Custom Truck reported an impressive growth in overall signed orders, which increased by just under 35% year-over-year. This growth was primarily driven by a 45% increase in orders from local and regional customers, indicating strong market demand.
TES Segment Backlog Decline
Despite the strong sales activity, the TES segment experienced a decline in its new sales backlog by $85 million during the quarter. This decline reflects the high level of sales activity and the company’s ability to fulfill orders efficiently.
Tariff Concerns
Tariffs continue to be a focus area for Custom Truck. However, the company has effectively managed the cost impact through proactive inventory management strategies, ensuring minimal disruption to its financial performance for 2025.
Forward-Looking Guidance
Looking ahead, Custom Truck One Source, Inc. reaffirmed its 2025 guidance, projecting total revenue between $1.97 billion and $2.06 billion and adjusted EBITDA in the range of $370 million to $390 million. Despite the decrease in the TES backlog, strong order flow and positive customer feedback support expectations for double-digit revenue growth in the TES segment for the year. The company plans to invest approximately $200 million in net rental CapEx to support this anticipated demand.
In summary, Custom Truck One Source, Inc.’s earnings call highlighted a strong financial performance with significant growth in revenue and EBITDA. Key segments such as ERS and TES showed impressive results, and the company’s proactive measures against potential challenges like tariffs and backlog declines provide a positive outlook for continued growth. Investors and stakeholders can remain optimistic about the company’s trajectory in 2025.