Heavy equipment distributor Custom Truck One Source 
CTOS reported a strong revenue performance for Q1 CY2026, with a year-over-year sales increase of 9.3% to $461.6 million. The company’s full-year revenue forecast of $2.06 billion was 1.5% above analysts’ expectations. Additionally, its non-GAAP profit of $0.02 per share was significantly higher than the consensus estimates.
Custom Truck One Source (CTOS) Q1 CY2026 Highlights:
- Revenue: $461.6 million vs analyst estimates of $456.7 million (9.3% year-on-year growth, 1.1% beat)
- Adjusted EPS: $0.02 vs analyst estimates of -$0.05 (significant beat)
- Adjusted EBITDA: $97.99 million vs analyst estimates of $86.33 million (21.2% margin, 13.5% beat)
- Operating Margin: 6.8%, up from 2.9% the same quarter last year
- Backlog: $411.3 million at quarter end, down 2.1% year-on-year
- Market Capitalization: $2.00 billion
StockStory’s Analysis
CTOS’s first quarter showcased robust growth in its rental services, particularly within the transmission and distribution (T&D) markets. Management credited the positive results to increased equipment utilization rates, strong order activity, and productivity enhancements, especially in the Specialty Equipment Rentals division. CEO Ryan McMonagle highlighted, “Our rental fleet averaged 81.4% utilization, an increase of 370 basis points from the previous year.” The company’s operational focus and well-maintained fleet were key drivers of margin growth, with strong demand for infrastructure projects boosting revenues.
Future Expectations
Management anticipates a sustained favorable market for T&D and utility rental equipment throughout the year, driven by trends in infrastructure investment and grid modernization. McMonagle emphasized that order activity and customer discussions suggest these favorable conditions are likely to persist into 2026 and beyond. CFO Christopher Eperjesy noted that productivity improvements and careful cost management would enhance margins, as the company plans to lower maintenance capital expenditures while prioritizing free cash flow amidst economic uncertainties and evolving regulatory frameworks such as the EPA’s 2027 emission standards.
Key Management Insights
Management attributed the quarter’s success to strong rental activity in T&D, better fleet utilization, and strict cost control. They noted that order growth and margin improvements in both segments helped mitigate some of the weaknesses observed in the infrastructure markets.
Drivers of Upcoming Growth
CTOS’s outlook is shaped by robust T&D demand and ongoing fleet investments, along with a strong focus on productivity. Management identified grid modernization and utility investments as key continuous drivers for T&D rental demand, suggesting a strong pipeline for the future.
Upcoming Monitoring Factors
In subsequent quarters, the StockStory team will assess (1) the sustainability of strong rental utilization and order growth, (2) the company’s progress in managing inventory levels and enhancing free cash flow, and (3) their ability to maintain or increase margins through further productivity and pricing strategies. Additionally, we will observe how the company adapts to changing regulations and supply chain conditions.
