Custom Truck One Source, Inc. reported record third-quarter 2026 results on October 26, 2026, and raised its full-year guidance for adjusted EBITDA and Specialty Equipment Rentals revenue. The Kansas City-based provider of specialty equipment to utility and infrastructure markets attributed the performance to strong demand in grid modernization and electrification sectors.
Total revenue for the three months ended September 30, 2026, reached $495.2 million, a 2.7% increase from the same period in 2025. Rental revenue specifically rose 20.1% year over year. The company noted that more than $20.0 million in third-party STEM deliveries shifted into the fourth quarter. Net income improved by $8.1 million to $2.3 million, while adjusted EBITDA increased 15.6% to $110.9 million. This growth expanded the adjusted EBITDA margin by approximately 250 basis points to 22.4%.
The Specialty Equipment Rentals segment drove much of the profit growth, with segment adjusted EBITDA rising 22.5% to $121.9 million. The segment's adjusted EBITDA margin expanded to 54.6% from 52.4% in the prior year period. The company recorded a record average original equipment cost on rent of $1.39 billion, up 10.5% from the third quarter of 2025. Fleet utilization stood at 81.5%, with an on-rent yield of 39.4%. Ending fleet original equipment cost grew by $143.0 million year over year to a record $1.76 billion.
Ryan McMonagle, Chief Executive Officer of Custom Truck One Source, stated that record demand across core transmission and distribution markets drove 16% year-over-year adjusted EBITDA growth in the third quarter and 24% growth year to date. McMonagle indicated that the company is raising its full-year adjusted EBITDA outlook for the third time this year due to continued strength in utility end markets.
The company raised its 2026 Specialty Equipment Rentals segment revenue guidance to a range of $870 million to $890 million, up from the previous range of $850 million to $875 million. It also increased its total adjusted EBITDA guidance range to $447.5 million to $460 million, previously set at $437.5 million to $455 million. This adjustment represents 17% to 20% growth over 2025 figures.
Custom Truck One Source increased its planned net rental fleet investment for 2026 to $210 million to $230 million to capture visible transmission rental demand. Management expects levered free cash flow to be slightly positive for the year, with the earnings benefit from the additional fleet investment weighted toward 2027. The company reduced its net leverage ratio to 3.70x, down from 4.31x at year-end 2025 and 4.53x at the end of the third quarter of 2025.
In the Specialty Truck Equipment and Manufacturing segment, orders grew 22% year over year, and backlog reached $342 million. McMonagle noted that the company is positioned to participate in secular trends including utility grid upgrades, data center-driven load growth, and infrastructure spending, while maintaining a focus on profitable growth and deleveraging.