Custom Truck One Source Delivers Record-Breaking First Quarter 2026 Results
Custom Truck One Source, Inc. (CTOS) has announced a remarkable start to 2026, with record-breaking first quarter revenue driven by sustained momentum in core end markets and exceptional team execution.
In the three months ended March 31st, 2026, CTOS generated $462 million in revenue, an adjusted EBITDA of $98 million, which represents a 9% and 33% year-over-year increase respectively. The key driver behind this impressive performance was the continued strength in the company's Specialty Equipment Rentals (SER) segment.
The SER segment experienced significant growth, with rental fleet utilization averaging 81.4%, a notable improvement of 370 basis points from Q1 last year. This upward trend was accompanied by an increase in Original Equipment Costs (OEC) on rent, which averaged $1.34 billion in the quarter, representing a 12% year-over-year rise.
Both measures have continued to strengthen into Q2, with utilization and OEC on rent trending above first-quarter averages. CTOS ended the quarter with total OEC of $1.66 billion, the highest level in company history, positioning it well for anticipated growth in SER revenues this year.
The average age of the rental fleet remains less than 3 years old, underscoring the company's strategic investment in maintaining a young and efficient fleet. This positions CTOS to effectively support customers across various industries.
CTOS's Specialty Truck Equipment and Manufacturing (STEM) segment also demonstrated impressive performance during Q1, driven by continued healthy end-market demand and order flow. STEM revenue, excluding sales to the SER segment, increased by 5% year-over-year.
Gross margin expansion in the STEM segment was attributed to significant cost out and productivity improvements led by the production team, highlighting the company's focus on operational efficiency.
The new sales order backlog ended Q1 at $411 million, representing a notable increase of more than $76 million or 23% from Q4. Bidding activity and ongoing conversations with customers suggest that these positive conditions will persist throughout 2026 and beyond.
CTOS's first quarter results have been met with market enthusiasm, as the company continues to demonstrate its ability to convert improving rental key performance indicators (KPIs) into earnings and cash flow. The durability of demand in transmission and distribution markets remains a key area of focus for both CTOS and industry stakeholders.
