EX-99.1 2 ex991q22025pressrelease.htm EX-99.1 Document
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EXHIBIT 99.1

Custom Truck One Source, Inc. Reports Second Quarter 2025 Results and Reaffirms 2025 Guidance
KANSAS CITY, Mo. July 30, 2025 – (BUSINESS WIRE) – Custom Truck One Source, Inc. (NYSE: CTOS), a leading provider of specialty equipment to the electric utility, telecom, rail, forestry, waste management and other infrastructure-related end markets, today reported financial results for the three and six months ended June 30, 2025.
CTOS Second-Quarter Highlights
•Total revenue of $511.5 million, an increase of $88.5 million, or 20.9%, compared to the second quarter of 2024
•Gross profit of $102.5 million, an increase of $13.3 million, or 14.9%, compared to the second quarter of 2024
•Adjusted Gross Profit of $156.5 million, an increase of $22.7 million, or 17.0%, compared to the second quarter of 2024
•Net loss of $28.4 million, an increase of $3.9 million, or 15.9%, compared to the second quarter of 2024
•Adjusted EBITDA of $93.4 million, an increase of $13.4 million, or 16.7%, compared to the second quarter of 2024
•Increased Average OEC on rent by $162.5 million, or 15.6%, compared to the second quarter of 2024

“In the second quarter, we achieved strong year-over-year revenue growth of 21% and adjusted EBITDA growth of 17%, driven by growth in every segment. We continue to see steady performance in our core T&D market, carrying forward our solid first quarter performance into the second quarter. This resulted in significant year-over-year increases in rental revenue and rental asset sales within our ERS segment of 17% and 40%, respectively. For the quarter, our rental fleet saw average utilization of just under 78%, a significant improvement versus the same period last year and in line with our expectations. Average OEC on rent for the second quarter was more than $160 million higher than the same period last year and we ended the quarter with total OEC of $1.56 billion. This was up sequentially from the end of last quarter and the highest in our history, which we anticipate will support our expected growth within ERS for the remainder of 2025 and into 2026,” said Ryan McMonagle, Chief Executive Officer of CTOS. “TES sales were up more than 22% year-over-year and achieved the second highest quarter of sales ever. Sustained, robust demand for vocational vehicles across our end markets, particularly intra-quarter demand from local and regional customers, continues to drive the performance within the TES segment. Signed orders in the quarter were up 30% on a year-over-year basis and we continue to believe that this current strong pace of customer orders and our existing TES backlog position us well to achieve the growth we expect in the segment this year. Given current market conditions and ongoing customer conversations regarding demand for the second half of 2025, we continue to believe Custom Truck is well-positioned to benefit from secular tailwinds driven by data center investments, electrification, and utility grid upgrades. As a result, we are reaffirming our 2025 guidance,” McMonagle added.

Summary Actual Consolidated Financial Results
Three Months Ended June 30,Six Months Ended June 30,Three Months Ended March 31, 2025
(in $000s)2025202420252024
Rental revenue$120,814 $102,997 $237,075 $209,168 $116,261 
Equipment sales356,112 285,633 629,975 558,235 273,863 
Parts sales and services34,557 34,383 66,665 66,917 32,108 
Total revenue511,483 423,013 933,715 834,320 422,232 
Gross Profit$102,542 $89,267 $188,078 $179,976 $85,536 
Adjusted Gross Profit1
$156,549 $133,852 $292,176 $268,305 $135,627 
Net Income (Loss)$(28,380)$(24,478)$(46,171)$(38,813)$(17,791)
Adjusted EBITDA1
$93,428 $80,056 $166,854 $157,432 $73,426 
1 - Each of Adjusted Gross Profit and Adjusted EBITDA is a non-GAAP measure. Further information and reconciliations for our non-GAAP measures to the most directly comparable financial measure under United States generally accepted accounting principles (“GAAP”) are included at the end of this press release.
Summary Actual Financial Results by Segment
Our results are reported for our three segments: Equipment Rental Solutions (“ERS”), Truck and Equipment Sales (“TES”) and Aftermarket Parts and Services (“APS”). ERS encompasses our core rental business, inclusive of sales of used rental equipment to our customers. TES encompasses our specialized truck and equipment production and new equipment sales activities. APS encompasses sales and rentals of parts, tools, and other supplies to our customers, as well as our aftermarket repair service operations.


Equipment Rental Solutions
Three Months Ended June 30,Six Months Ended June 30,Three Months Ended March 31, 2025
(in $000s)2025202420252024
Rental revenue$117,728 $100,699 $230,693 $203,987 $112,965 
Equipment sales52,744 37,712 94,127 70,452 41,383 
Total revenue170,472 138,411 324,820 274,439 154,348 
Cost of rental revenue30,328 29,281 60,716 59,081 30,388 
Cost of equipment sales40,396 25,792 71,403 49,890 31,007 
Depreciation of rental equipment53,303 43,581 102,627 86,278 49,324 
Total cost of revenue124,027 98,654 234,746 195,249 110,719 
Gross profit$46,445 $39,757 $90,074 $79,190 $43,629 
Adjusted Gross Profit1
$99,748 $83,338 $192,701 $165,468 $92,953 
1 - ERS Adjusted Gross Profit is a non-GAAP measure. Further information and reconciliations for our non-GAAP measures to the most directly comparable financial measure under United States generally accepted accounting principles (“GAAP”) are included at the end of this press release.
Truck and Equipment Sales
Three Months Ended June 30,Six Months Ended June 30,Three Months Ended March 31, 2025
(in $000s)2025202420252024
Equipment sales$303,368 $247,921 $535,848 $487,783 $232,480 
Cost of equipment sales256,276 205,526 453,746 402,228 197,470 
Gross profit$47,092 $42,395 $82,102 $85,555 $35,010 
Aftermarket Parts and Services
Three Months Ended June 30,Six Months Ended June 30,Three Months Ended March 31, 2025
(in $000s)2025202420252024
Rental revenue$3,086 $2,298 $6,382 $5,181 $3,296 
Parts and services revenue34,557 34,383 66,665 66,917 32,108 
Total revenue37,643 36,681 73,047 72,098 35,404 
Cost of revenue27,934 28,562 55,674 54,816 27,740 
Depreciation of rental equipment704 1,004 1,471 2,051 767 
Total cost of revenue28,638 29,566 57,145 56,867 28,507 
Gross profit$9,005 $7,115 $15,902 $15,231 $6,897 
Summary Combined Operating Metrics
Three Months Ended June 30,Six Months Ended June 30,Three Months Ended March 31, 2025
(in $000s)2025202420252024
Ending OEC(a) (as of period end)
$1,560,704 $1,457,955 $1,560,704 $1,457,955 $1,548,210 
Average OEC on rent(b)
$1,207,231 $1,044,683 $1,192,333 $1,055,189 $1,177,271 
Fleet utilization(c)
77.6 %71.7 %77.3 %72.4 %76.9 %
OEC on rent yield(d)
38.6 %40.0 %38.3 %40.3 %38.5 %
Sales order backlog(e) (as of period end)
$334,805 $478,244 $334,805 $478,244 $420,149 
(a) Ending OEC — Ending original equipment cost (“OEC”) is the original equipment cost of units at the end of the measurement period.
(b) Average OEC on rent — Average OEC on rent is calculated as the weighted-average OEC on rent during the stated period.
(c) Fleet utilization — total number of days the rental equipment was rented during a specified period of time divided by the total number of days available during the same period and weighted based on OEC.


(d) OEC on rent yield (“ORY”) — a measure of return realized by our rental fleet during a period. ORY is calculated as rental revenue (excluding freight recovery and ancillary fees) during the stated period divided by the Average OEC on rent for the same period. For periods of less than 12 months, the ORY is adjusted to an annualized basis.
(e) Sales order backlog — purchase orders received for customized and stock equipment. Sales order backlog should not be considered an accurate measure of future net sales.
Management Commentary
Second quarter 2025 consolidated rental revenue increased 17.3% compared to the second quarter of 2024 due to higher average OEC on rent and fleet utilization. Consolidated equipment sales increased 24.7% compared to the second quarter of 2024, primarily driven by an increase in new equipment sales. Consolidated parts sales and service revenue remained flat year-over-year.
The 16.9% increase in ERS segment rental revenue in the second quarter of 2025 compared to the second quarter of 2024 was the result of improved fleet utilization (which increased to 77.6% compared to 71.7%) driven by increased rental volume, with average OEC on rent increasing by 16% year-over-year. Compared to the second quarter of 2024, rental equipment sales increased 39.9% in the second quarter of 2025. ERS gross profit and adjusted gross profit increased 16.8% and 19.7%, respectively, in the second quarter of 2025 compared to the second quarter of 2024.
Revenue in our TES segment increased 22.4% in the second quarter of 2025 compared to the second quarter of 2024 driven by robust demand for vocational vehicles across our end markets, particularly intra-quarter demand from local and regional customers. Gross profit increased by 11.1% in the second quarter of 2025 compared to the second quarter of 2024. While our TES backlog was down 9% compared to the fourth quarter of 2024, it remains within our expected range of four to six months.
APS segment revenue in the second quarter of 2025 increased by 2.6% compared to the second quarter of 2024 due to an increase in rental revenue. Gross profit margin increased due to the increase in rental revenue.
The increase in net loss in the second quarter of 2025 compared to the second quarter of 2024, was primarily due to higher income tax expense. Income tax expense for the six-month period ended June 30, 2025 was $9.8 million. Income tax expense for the quarterly ended June 30, 2025 reflects an adjustment for the change to our estimated annual effective tax rate resulting from changes in expected taxable income in differing taxing jurisdictions. Despite this change, we expect annual cash taxes to be paid to remain at levels consistent with previous years.
Adjusted EBITDA for the second quarter of 2025 was $93.4 million, a 16.7% increase compared to the second quarter of 2024, which was largely driven by increased gross profit and lower interest expense on variable-rate floor plan liabilities from lower inventory levels.
As of June 30, 2025, cash and cash equivalents was $5.3 million, Total Debt outstanding was $1,630.7 million, Net Debt was $1,625.4 million and Net Leverage Ratio was 4.66x. Availability under the senior secured credit facility was $275.7 million as of June 30, 2025, and based on our borrowing base, we have an additional $231.1 million of suppressed availability that we can potentially utilize by upsizing our existing facility.



OUTLOOK
We are reaffirming our full-year revenue and Adjusted EBITDA1, 4 guidance for 2025 at this time. With record new sales in the quarter and average OEC on rent up more than $160 million, or 16%, in the second fiscal quarter compared to the same period last year, we continue to expect 2025 to be a year of double-digit revenue and adjusted EBITDA growth. The TES segment continues to benefit from a good macro demand environment as well as our strong relationships with our key customers, and chassis and attachment suppliers. While our backlog was down in the quarter, our intra-quarter order flow remains quite strong, particularly among local and regional customers, with signed orders from this portion of our customer base up more than 45% on a year-over-year basis in the quarter, driving overall year-over-year signed order growth of just under 35%. After the volatility in our ERS segment rental markets in 2024, primarily in the transmission and distribution utility market, we have experienced strong demand in our rental business over the past three fiscal quarters. We continue to focus on further penetrating the vocational rental market and believe the ERS outlook from our rental customers for long-term demand and growth will be strong. Given the strong demand environment, we expect to grow our rental fleet (based on net OEC) by at least mid-single digits by the end of the year. Regarding TES, supply chain improvements, healthy, but improved inventory levels exiting 2024, normalized backlog levels, and strong order flow will continue to allow us to generate double-digit revenue growth in 2025. Further, despite a tactical investment in inventory during the first half of the year to mitigate the impact of new tariffs, we expect to make progress on unwinding our significant strategic investment in inventory levels over the last two years by the end of the year. As a result, we expect to generate meaningful free cash flow in 2025, setting a target to generate more than $50 million of levered free cash flow2, 4 and deliver a meaningful reduction in our net leverage ratio3, 4 by the end of the fiscal year.
2025 Consolidated Outlook
Revenue$1,970 million—$2,060 million
Adjusted EBITDA1, 4
$370 million—$390 million
2025 Revenue Outlook by Segment
ERS$660 million—$690 million
TES$1,160 million—$1,210 million
APS$150 million—$160 million
1 - Adjusted EBITDA is a non-GAAP performance measure that we use to monitor our results of operations, to measure performance against debt covenants and performance relative to competitors. Refer to the section below entitled “Non-GAAP Financial and Performance Measures” for further information about Adjusted EBITDA.
2 - Levered Free Cash Flow is defined as net cash provided by operating activities, less cash flow for investing activities, excluding acquisitions, plus acquisition of inventory through floor plan payables – non-trade less repayment of floor plan payables – non-trade, both of which are included in cash flow from financing activities in our Consolidated Statements of Cash Flows.
3 - Net leverage ratio is a non-GAAP performance measure used by management, and we believe it provides useful information to investors because it is an important measure to evaluate our debt levels and progress toward leverage targets, which is consistent with the manner our lenders and management use this measure. Refer to the section below entitled “Non-GAAP Financial and Performance Measures” for further information about net leverage ratio.
4 - CTOS is unable to present a quantitative reconciliation of its forward-looking Adjusted EBITDA, Levered Free Cash Flow, and Net Leverage Ratio for the year ending December 31, 2025 to their respective most directly comparable GAAP financial measure due to the high variability and difficulty in predicting certain items that affect such GAAP measures including, but not limited to, customer buyout requests on rentals with rental purchase options and income tax expense. Adjusted EBITDA, Levered Free Cash Flow, and Net Leverage Ratio should not be used to predict their respective most directly comparable GAAP measure as the differences between the respective measures are variable and unpredictable.
CONFERENCE CALL INFORMATION
The Company has scheduled a conference call at 9:00 a.m. ET on July 31, 2025, to discuss its second quarter 2025 financial results. A webcast will be publicly available at: investors.customtruck.com. To listen by phone, please dial 1-800-715-9871 or 1-646-307-1963 and provide the operator with conference ID 9155613. A replay of the call will be available until 11:59 p.m. ET, Thursday, August 7, 2025, by dialing 1-800-770-2030 or 1-609-800-9909 and entering passcode 9155613.
ABOUT CTOS
CTOS is one of the largest providers of specialty equipment, parts, tools, accessories and services to the electric utility transmission and distribution, telecommunications, and rail markets in North America, with a differentiated “one-stop-shop” business model. CTOS offers its specialized equipment to a diverse customer base for the maintenance, repair, upgrade, and installation of critical infrastructure assets, including electric lines, telecommunications networks, and rail systems. The Company's coast-to-coast rental fleet of approximately 10,300 units includes aerial devices, boom trucks, cranes, digger derricks, pressure drills, stringing gear, hi-rail equipment, repair parts, tools, and accessories. For more information, please visit customtruck.com.





FORWARD-LOOKING STATEMENTS
This press release includes “forward-looking statements” within the meaning of the “safe harbor” provisions of the United States Private Securities Litigation Reform Act of 1995, as amended, and within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended, and Section 27A of the Securities Act of 1933, as amended. When used in this press release, the words “estimates,” “projected,” “expects,” “anticipates,” “forecasts,” “suggests,” “plans,” “targets,” “intends,” “believes,” “seeks,” “may,” “will,” “should,” “future,” “propose” and variations of these words or similar expressions (or the negative versions of such words or expressions) are intended to identify forward-looking statements. These forward-looking statements are not guarantees of future performance, conditions or results, and involve a number of known and unknown risks, uncertainties, assumptions and other important factors, many of which are outside the Company's management’s control, that could cause actual results or outcomes to differ materially from those discussed in this press release. This press release is based on certain assumptions that the Company's management has made in light of its experience in the industry, as well as the Company’s perceptions of historical trends, current conditions, expected future developments and other factors the Company believes are appropriate in these circumstances and at such time. As you read and consider this press release, you should understand that these statements are not guarantees of performance or results. Many factors could affect the Company’s actual performance and results and could cause actual results to differ materially from those expressed in this press release. Important factors, among others, that may affect actual results or outcomes include: increases in labor costs, changes in U.S. trade policy including tariffs, our inability to obtain raw materials, component parts and/or finished goods in a timely and cost-effective manner, and our inability to manage our rental equipment in an effective manner; competition in the equipment dealership and rental industries; our sales order backlog may not be indicative of the level of our future revenues; increases in unionization rate in our workforce; our inability to attract and retain key personnel, including our management and skilled technicians; material disruptions to our operation and manufacturing locations as a result of public health concerns, equipment failures, natural disasters, work stoppages, power outages or other reasons; any further increase in the cost of new equipment that we purchase for use in our rental fleet or for sale as inventory; and aging or obsolescence of our existing equipment, and the fluctuations of market value thereof; disruptions in our supply chain; our business may be impacted by government spending; we may experience losses in excess of our recorded reserves for receivables; uncertainty relating to macroeconomic conditions, unfavorable conditions in the capital and credit markets and our customers’ inability to obtain additional capital as required; increases in price of fuel or freight; regulatory, technological advancement, or other changes in our core end-markets may affect our customers’ spending; our strategic initiatives including acquisitions and divestitures may not be successful and may divert our management’s attention away from operations and could create general customer uncertainty; the interest of our majority stockholder, which may not be consistent with the other stockholders; volatility of our common stock market price; our significant indebtedness, which may adversely affect our financial position, limit our available cash and our access to additional capital, prevent us from growing our business and increase our risk of default; our inability to generate cash, which could lead to a default; significant operating and financial restrictions imposed by our debt agreements; changes in interest rates, which could increase our debt service obligations on the variable rate indebtedness and decrease our net income and cash flows; disruptions or security compromises affecting our information technology systems or those of our critical services providers could adversely affect our operating results by subjecting us to liability, and limiting our ability to effectively monitor and control our operations, adjust to changing market conditions, or implement strategic initiatives; we are subject to complex laws and regulations, including environmental and safety regulations that can adversely affect cost, manner or feasibility of doing business; we are subject to a series of risks related to climate change; and increased attention to, and evolving expectations for, sustainability and environmental, social and governance initiatives. For a more complete description of these and other possible risks and uncertainties, please refer to the Company's Annual Report on Form 10-K for the year ended December 31, 2024, and its subsequent reports filed with the Securities and Exchange Commission. All forward-looking statements attributable to the Company or persons acting on its behalf are expressly qualified in their entirety by the foregoing cautionary statements.
INVESTOR CONTACT
Brian Perman, Vice President, Investor Relations
(816) 723 - 7906
investors@customtruck.com




CUSTOM TRUCK ONE SOURCE, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(unaudited)

Three Months Ended June 30,Six Months Ended June 30,Three Months Ended March 31, 2025
(in $000s except per share data)2025202420252024
Revenue
Rental revenue$120,814 $102,997 $237,075 $209,168 $116,261 
Equipment sales356,112 285,633 629,975 558,235 273,863 
Parts sales and services34,557 34,383 66,665 66,917 32,108 
Total revenue511,483 423,013 933,715 834,320 422,232 
Cost of Revenue
Cost of rental revenue30,338 29,295 60,738 59,120 30,400 
Depreciation of rental equipment54,007 44,585 104,098 88,329 50,091 
Cost of equipment sales296,672 231,318 525,149 452,118 228,477 
Cost of parts sales and services27,924 28,548 55,652 54,777 27,728 
Total cost of revenue408,941 333,746 745,637 654,344 336,696 
Gross Profit102,542 89,267 188,078 179,976 85,536 
Operating Expenses
Selling, general and administrative expenses59,165 55,697 118,616 113,692 59,451 
Amortization6,911 6,692 13,591 13,270 6,680 
Non-rental depreciation3,232 3,360 6,572 6,280 3,340 
Transaction expenses and other5,303 5,844 8,963 10,690 3,660 
Total operating expenses74,611 71,593 147,742 143,932 73,131 
Operating Income 27,931 17,674 40,336 36,044 12,405 
Other Expense
Interest expense, net40,204 42,401 79,117 80,316 38,913 
Financing and other expense (income)(1,371)(3,319)(2,387)(6,581)(1,016)
Total other expense38,833 39,082 76,730 73,735 37,897 
Income (Loss) Before Income Taxes(10,902)(21,408)(36,394)(37,691)(25,492)
Income Tax Expense (Benefit)17,478 3,070 9,777 1,122 (7,701)
Net Income (Loss)$(28,380)$(24,478)$(46,171)$(38,813)$(17,791)
Net Income (Loss) Per Share
Basic$(0.13)$(0.10)$(0.20)$(0.16)$(0.08)
Diluted$(0.13)$(0.10)$(0.20)$(0.16)$(0.08)



CUSTOM TRUCK ONE SOURCE, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(unaudited)


(in $000s)June 30, 2025December 31, 2024
Assets
Current Assets
Cash and cash equivalents$5,259 $3,805 
Accounts receivable, net 188,994 215,873 
Financing receivables, net7,834 8,913 
Inventory1,089,245 1,049,304 
Prepaid expenses and other39,583 23,557 
Total current assets1,330,915 1,301,452 
Property and equipment, net129,335 130,923 
Rental equipment, net1,055,115 1,001,651 
Goodwill705,233 704,806 
Intangible assets, net239,148 252,393 
Operating lease assets103,326 94,696 
Other assets13,852 16,046 
Total Assets$3,576,924 $3,501,967 
Liabilities and Stockholders' Equity
Current Liabilities
Accounts payable$128,613 $88,487 
Accrued expenses87,839 69,349 
Deferred revenue and customer deposits21,474 26,250 
Floor plan payables - trade408,274 330,498 
Floor plan payables - non-trade381,917 470,830 
Operating lease liabilities - current8,409 7,445 
Current maturities of long-term debt23,114 7,842 
Total current liabilities1,059,640 1,000,701 
Long-term debt, net1,589,883 1,519,882 
Operating lease liabilities - noncurrent97,886 88,674 
Deferred income taxes39,388 31,401 
Total long-term liabilities1,727,157 1,639,957 
Stockholders' Equity
Common stock25 25 
Treasury stock, at cost(122,602)(88,229)
Additional paid-in capital1,555,309 1,550,785 
Accumulated other comprehensive loss(9,906)(14,744)
Accumulated deficit(632,699)(586,528)
Total stockholders' equity790,127 861,309 
Total Liabilities and Stockholders' Equity$3,576,924 $3,501,967 


CUSTOM TRUCK ONE SOURCE, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(unaudited)
Six Months Ended June 30,
(in $000s)20252024
Operating Activities
Net income (loss)$(46,171)$(38,813)
Adjustments to reconcile net income (loss) to net cash flow from operating activities:
Depreciation and amortization128,168 113,958 
Amortization of debt issuance costs2,222 2,879 
Provision for losses on accounts receivable5,008 7,058 
Share-based compensation4,179 6,329 
Gain on sales and disposals of rental equipment(21,599)(23,589)
Change in fair value of derivative and warrants— (527)
Deferred tax expense (benefit)7,653 270 
Changes in assets and liabilities:
Accounts and financing receivables23,375 24,605 
Inventories(37,760)(182,751)
Prepaids, operating leases and other(14,541)4,853 
Accounts payable39,504 3,138 
Accrued expenses and other liabilities18,368 (20,045)
Floor plan payables - trade, net77,776 132,304 
Customer deposits and deferred revenue(4,829)(6,261)
Net cash flow from operating activities181,353 23,408 
Investing Activities
Acquisition of business, net of cash acquired— (6,015)
Purchases of rental equipment(225,299)(165,214)
Proceeds from sales and disposals of rental equipment93,967 99,576 
Purchase of non-rental property and cloud computing arrangements(8,475)(27,035)
Net cash flow for investing activities(139,807)(98,688)
Financing Activities
Borrowings under revolving credit facilities144,269 97,520 
Repayments under revolving credit facilities(56,694)(62,521)
Proceeds from debt, net issuance costs— 4,200 
Principal payments on long-term debt(4,523)(5,259)
Acquisition of inventory through floor plan payables - non-trade237,812 320,325 
Repayment of floor plan payables - non-trade(326,725)(256,827)
Repurchase of common stock(32,575)(23,014)
Share-based payments(1,453)(1,451)
Net cash flow from financing activities(39,889)72,973 
Effect of exchange rate changes on cash and cash equivalents(203)57 
Net Change in Cash and Cash Equivalents1,454 (2,250)
Cash and Cash Equivalents at Beginning of Period3,805 10,309 
Cash and Cash Equivalents at End of Period$5,259 $8,059 


Six Months Ended June 30,
(in $000s)20252024
Supplemental Cash Flow Information
Interest paid$77,619 $76,175 
Income taxes paid697 4,105 
Non-Cash Investing and Financing Activities
Rental equipment and property and equipment purchases in accounts payable1,052 1,128 
Rental equipment sales in accounts receivable1,775 8,937 



CUSTOM TRUCK ONE SOURCE, INC.
NON-GAAP FINANCIAL AND PERFORMANCE MEASURES
In our press release and schedules, and on the related conference call, we report certain financial measures that are not required by, or presented in accordance with, United States generally accepted accounting principles (“GAAP”). We utilize these financial measures to manage our business on a day-to-day basis and some of these measures are commonly used in our industry to evaluate performance by excluding items considered to be non-recurring. We believe these non-GAAP measures provide investors expanded insight to assess performance, in addition to the standard GAAP-based financial measures. The press release schedules reconcile the most directly comparable GAAP measure to each non-GAAP measure that we refer to. Although management evaluates and presents these non-GAAP measures for the reasons described herein, please be aware that these non-GAAP measures have limitations and should not be considered in isolation or as a substitute for revenue, operating income/loss, net income/loss, earnings/loss per share or any other comparable measure prescribed by GAAP. In addition, we may calculate and/or present these non-GAAP financial measures differently than measures with the same or similar names that other companies report, and as a result, the non-GAAP measures we report may not be comparable to those reported by others.
Adjusted EBITDA. Adjusted EBITDA is a non-GAAP performance measure that we use to monitor our results of operations, to measure performance against debt covenants and performance relative to competitors. We believe Adjusted EBITDA is a useful performance measure because it allows for an effective evaluation of operating performance, without regard to financing methods or capital structures. We exclude the items identified in the reconciliations of net income (loss) to Adjusted EBITDA because these amounts are either non-recurring or can vary substantially within the industry depending upon accounting methods and book values of assets, including the method by which the assets were acquired, and capital structures. Adjusted EBITDA should not be considered as an alternative to, or more meaningful than, net income (loss) determined in accordance with GAAP. Certain items excluded from Adjusted EBITDA are significant components in understanding and assessing a company’s financial performance, such as a company’s cost of capital and tax structure, as well as the historical costs of depreciable assets, none of which are reflected in Adjusted EBITDA. Our presentation of Adjusted EBITDA should not be construed as an indication that results will be unaffected by the items excluded from Adjusted EBITDA. Our computation of Adjusted EBITDA may not be identical to other similarly titled measures of other companies.
We define Adjusted EBITDA as net income or loss before interest expense, income taxes, depreciation and amortization, share-based compensation, and other items that we do not view as indicative of ongoing performance. Our Adjusted EBITDA includes an adjustment to exclude the effects of purchase accounting adjustments when calculating the cost of inventory and used equipment sold. When inventory or equipment is purchased in connection with a business combination, the assets are revalued to their current fair values for accounting purposes. The consideration transferred (i.e., the purchase price) in a business combination is allocated to the fair values of the assets as of the acquisition date, with amortization or depreciation recorded thereafter following applicable accounting policies; however, this may not be indicative of the actual cost to acquire inventory or new equipment that is added to product inventory or the rental fleets apart from a business acquisition. We also include an adjustment to remove the impact of accounting for certain of our rental contracts with customers containing a rental purchase option that are accounted for under GAAP as a sales-type lease. We include this adjustment because we believe continuing to reflect the transactions as an operating lease better reflects the economics of the transactions given our large portfolio of rental contracts. These, and other, adjustments to GAAP net income or loss that are applied to derive Adjusted EBITDA are specified by our senior secured credit agreement and the indenture of our senior secured notes.
Adjusted Gross Profit. We present total gross profit excluding rental equipment depreciation (“Adjusted Gross Profit”) as a non-GAAP financial performance measure. This measure differs from the GAAP definition of gross profit, as we do not include the impact of depreciation expense, which represents non-cash expense. We use this measure to evaluate operating margins and the effectiveness of the cost of our rental fleet.
Net Debt. We present the non-GAAP financial measure “Net Debt,” which is total debt (the most comparable GAAP measure, calculated as current and long-term debt, excluding deferred financing fees, plus current and long-term finance lease obligations) minus cash and cash equivalents. We believe this non-GAAP measure is useful to investors to evaluate our financial position.
Net Leverage Ratio. Net leverage ratio is a non-GAAP performance measure used by management and we believe it provides useful information to investors because it is an important measure to evaluate our debt levels and progress toward leverage targets, which is consistent with the manner our lenders and management use this measure. We define net leverage ratio as net debt divided by Adjusted EBITDA for the previous twelve-month period (“last twelve months,” or “LTM”).

CUSTOM TRUCK ONE SOURCE, INC.
ADJUSTED EBITDA RECONCILIATION
(unaudited)
Three Months Ended June 30,Six Months Ended June 30,Three Months Ended March 31, 2025
(in $000s)2025202420252024
Net income (loss) $(28,380)$(24,478)$(46,171)$(38,813)$(17,791)
Interest expense26,440 27,003 52,056 52,018 25,616 
Income tax expense (benefit)17,478 3,070 9,777 1,122 (7,701)
Depreciation and amortization66,426 57,797 128,937 113,958 62,511 
EBITDA81,964 63,392 144,599 128,285 62,635 
   Adjustments:
   Non-cash purchase accounting impact (1)
3,915 5,260 8,096 8,220 4,181 
   Transaction and integration costs (2)
5,303 5,844 8,963 10,690 3,660 
   Sales-type lease adjustment (3)
471 1,961 1,017 4,435 546 
Share-based payments (4)
1,775 3,599 4,179 6,329 2,404 
Change in fair value of derivative and warrants (5)
— — — (527)— 
Adjusted EBITDA$93,428 $80,056 $166,854 $157,432 $73,426 
Adjusted EBITDA is defined as net income (loss), as adjusted for provision for income taxes, interest expense, net, depreciation of rental equipment and non-rental depreciation and amortization, and further adjusted for the impact of the fair value mark-up of acquired rental fleet, business acquisition and merger-related costs, including integration, the impact of accounting for certain of our rental contracts with customers that are accounted for under GAAP as sales-type lease and stock compensation expense. This non-GAAP measure is subject to certain limitations.
(1)    Represents the non-cash impact of purchase accounting, net of accumulated depreciation, on the cost of equipment and inventory sold. The equipment and inventory acquired received a purchase accounting step-up in basis, which is a non-cash adjustment to the equipment cost pursuant to our ABL Credit Agreement and Indenture.
(2)    Represents transaction and other costs related to acquisitions of businesses; costs associated with closed operations; costs associated with restructuring and business optimization activities (inclusive of systems establishment costs); employee retention and/or severance costs; costs related to start-up/pre-openings and openings of locations; reconfiguration or consolidation of facilities or equipment conversion costs. These adjustments are presented as adjustments to net income (loss) pursuant to our ABL Credit Agreement and Indenture.
(3)    Represents the impact of sales-type lease accounting for certain leases containing rental purchase options (or “RPOs”), as the application of sales-type lease accounting is not deemed to be representative of the ongoing cash flows of the underlying rental contracts. The adjustments are made pursuant to our ABL Credit Agreement and Indenture. The components of this adjustment are presented in the table below:
Three Months Ended June 30,Six Months Ended June 30,Three Months Ended March 31, 2025
(in $000s)2025202420252024
Equipment sales$(984)$(1,554)$(3,145)$(4,572)$(2,161)
Cost of equipment sales949 1,229 2,788 4,051 1,839 
Gross margin(35)(325)(357)(521)(322)
Interest income(1,322)(3,283)(2,334)(6,025)(1,012)
Rental invoiced1,828 5,569 3,708 10,981 1,880 
Sales-type lease adjustment$471 $1,961 $1,017 $4,435 $546 
(4) Represents non-cash share-based compensation expense associated with the issuance of restricted stock units.
(5) Represents the charge to earnings for the change in fair value of the liability for warrants. On July 31, 2024, all of the Company’s stock purchase warrants expired and were unexercised.




Reconciliation of Adjusted Gross Profit
(unaudited)
The following table presents the reconciliation of Adjusted Gross Profit:
Three Months Ended June 30,Six Months Ended June 30,Three Months Ended March 31, 2025
(in $000s)2025202420252024
Revenue
Rental revenue$120,814 $102,997 $237,075 $209,168 $116,261 
Equipment sales356,112 285,633 629,975 558,235 273,863 
Parts sales and services34,557 34,383 66,665 66,917 32,108 
Total revenue511,483 423,013 933,715 834,320 422,232 
Cost of Revenue
Cost of rental revenue30,338 29,295 60,738 59,120 30,400 
Depreciation of rental equipment54,007 44,585 104,098 88,329 50,091 
Cost of equipment sales296,672 231,318 525,149 452,118 228,477 
Cost of parts sales and services27,924 28,548 55,652 54,777 27,728 
Total cost of revenue408,941 333,746 745,637 654,344 336,696 
Gross Profit102,542 89,267 188,078 179,976 85,536 
Add: depreciation of rental equipment54,007 44,585 104,098 88,329 50,091 
Adjusted Gross Profit$156,549 $133,852 $292,176 $268,305 $135,627 

Reconciliation of ERS Segment Adjusted Gross Profit and Rental Gross Profit
(unaudited)
The following table presents the reconciliation of ERS segment Adjusted Gross Profit:
Three Months Ended June 30,Six Months Ended June 30,Three Months Ended March 31, 2025
(in $000s)2025202420252024
Revenue
Rental revenue$117,728 $100,699 $230,693 $203,987 $112,965 
Equipment sales52,744 37,712 94,127 70,452 41,383 
Total revenue170,472 138,411 324,820 274,439 154,348 
Cost of Revenue
Cost of rental revenue30,328 29,281 60,716 59,081 30,388 
Cost of equipment sales40,396 25,792 71,403 49,890 31,007 
Depreciation of rental equipment53,303 43,581 102,627 86,278 49,324 
Total cost of revenue124,027 98,654 234,746 195,249 110,719 
Gross profit46,445 39,757 90,074 79,190 43,629 
Add: depreciation of rental equipment53,303 43,581 102,627 86,278 49,324 
Adjusted Gross Profit$99,748 $83,338 $192,701 $165,468 $92,953 


The following table presents the reconciliation of Adjusted ERS Rental Gross Profit:
Three Months Ended June 30,Six Months Ended June 30,Three Months Ended March 31, 2025
(in $000s)2025202420252024
Rental revenue$117,728 $100,699 $230,693 $203,987 $112,965 
Cost of rental revenue30,328 29,281 60,716 59,081 30,388 
Adjusted Rental Gross Profit$87,400 $71,418 $169,977 $144,906 $82,577 

Reconciliation of Net Debt
(unaudited)
The following table presents the reconciliation of Net Debt:
(in $000s) June 30, 2025March 31, 2025
Current maturities of long-term debt$23,114 $5,966 
Long-term debt, net1,589,883 1,593,176 
Deferred financing fees17,705 18,862 
Less: cash and cash equivalents(5,259)(5,380)
Net Debt$1,625,443 $1,612,624 


Reconciliation of Net Leverage Ratio
(unaudited)
The following table presents the reconciliation of the Net Leverage Ratio:
Twelve Months Ended
(in $000s)June 30, 2025March 31, 2025
Net Debt (as of period end)$1,625,443 $1,612,624 
Divided by: LTM Adjusted EBITDA (1)
$349,079 $335,707 
Net Leverage Ratio4.66 4.80 

(1) The following table presents the calculation of LTM Adjusted EBITDA for the periods ended June 30, 2025 and March 31, 2025:
Current Year To Date PeriodLess: Prior Year To Date PeriodAdd: Prior Fiscal YearLTM Adjusted EBITDA
(in $000s)June 30, 2025June 30, 2024December 31, 2024June 30, 2025
Net income (loss)$(46,171)$(38,813)$(28,655)$(36,013)
Interest expense52,056 52,018 105,895 105,933 
Income tax expense (benefit)9,777 1,122 (532)8,123 
Depreciation and amortization128,937 113,958 235,807 250,786 
EBITDA144,599 128,285 312,515 328,829 
Adjustments:— 
Non-cash purchase accounting impact 8,096 8,220 16,833 16,709 
Transaction and integration costs8,963 10,690 17,915 16,188 
Sales-type lease adjustment1,017 4,435 4,559 1,141 
Gain on sale leaseback transaction— — (23,497)(23,497)
Share-based payments4,179 6,329 11,859 9,709 
Change in fair value of warrants— (527)(527)— 
Adjusted EBITDA$166,854 $157,432 $339,657 $349,079 

Current Year To Date PeriodLess: Prior Year To Date PeriodAdd: Prior Fiscal YearLTM Adjusted EBITDA
(in $000s)March 31, 2025March 31, 2024December 31, 2024March 31, 2025
Net income (loss)$(17,791)$(14,335)$(28,655)$(32,111)
Interest expense25,616 25,015 105,895 106,496 
Income tax expense (benefit)(7,701)(1,948)(532)(6,285)
Depreciation and amortization62,511 56,161 235,807 242,157 
EBITDA62,635 64,893 312,515 310,257 
Adjustments:— 
Non-cash purchase accounting impact 4,181 2,960 16,833 18,054 
Transaction and integration costs3,660 4,846 17,915 16,729 
Sales-type lease adjustment546 2,474 4,559 2,631 
Gain on sale leaseback transaction— — (23,497)(23,497)
Share-based payments2,404 2,730 11,859 11,533 
Change in fair value of warrants— (527)(527)— 
Adjusted EBITDA$73,426 $77,376 $339,657 $335,707