Custom Truck One Source’s second quarter results were well received by the market, driven by robust demand in its rental and equipment sales businesses. Management attributed the 21% revenue growth to continued strength in utility and infrastructure end markets, as well as higher equipment utilization rates. CEO Ryan McMonagle pointed out that “average utilization in the quarter was just under 78%, up almost 600 basis points versus Q2 of last year,” emphasizing the resilience of core markets and successful fleet investments. The company also saw meaningful growth in signed orders, particularly among local and regional customers.
Is now the time to buy CTOS? Find out in our full research report (it’s free).
Custom Truck One Source (CTOS) Q2 CY2025 Highlights:
- Revenue: $511.5 million vs analyst estimates of $466.7 million (20.9% year-on-year growth, 9.6% beat)
- Adjusted EPS: -$0.09 vs analyst estimates of -$0.03 (significant miss)
- Adjusted EBITDA: $93.43 million vs analyst estimates of $86.59 million (18.3% margin, 7.9% beat)
- The company reconfirmed its revenue guidance for the full year of $2.02 billion at the midpoint
- EBITDA guidance for the full year is $380 million at the midpoint, above analyst estimates of $374.2 million
- Operating Margin: 5.5%, up from 4.2% in the same quarter last year
- Backlog: $334.8 million at quarter end
- Market Capitalization: $1.34 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 Q2 Earnings Call
- Naim Gavriel Kaplan (Deutsche Bank): asked about the impact and timing of tariffs in 2025. CEO Ryan McMonagle responded that the impact will be minimal this year due to proactive inventory purchases and supply chain management, with some costs anticipated in the third and fourth quarters.
- Naim Gavriel Kaplan (Deutsche Bank): inquired about the decline in backlog and whether it signals concern or a return to normal seasonality. McMonagle explained that, despite the lower backlog, strong order volumes—especially among regional customers—support a positive outlook for the rest of the year. No other analyst questions were taken on the call.
Catalysts in Upcoming Quarters
In the upcoming quarters, our team will be watching (1) whether high utilization rates and strong rental demand persist across major end markets, (2) the ability to further improve TES segment gross margins while navigating tariff and regulatory developments, and (3) progress in reducing net leverage through disciplined free cash flow generation. The outcome of pending emissions regulations and overall macroeconomic trends will also be important to monitor.
Custom Truck One Source currently trades at $5.81, up from $5.71 just before the earnings. Is there an opportunity in the stock?The answer lies in our full research report (it’s free).
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