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Custom Truck One Source, Inc. Reports Third Quarter 2025 Results and Reaffirms 2025 Guidance
KANSAS CITY, Mo. October 27, 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 nine months ended September 30, 2025.
CTOS Third-Quarter Highlights
•Total revenue of $482.1 million, an increase of $34.8 million, or 7.8%, compared to the third quarter of 2024
•Gross profit of $100.8 million, an increase of $8.9 million, or 9.7%, compared to the third quarter of 2024
•Adjusted Gross Profit of $155.5 million, an increase of $17.7 million, or 12.9%, compared to the third quarter of 2024
•Net loss of $5.8 million, a decrease of $11.7 million, or 66.9%, compared to the third quarter of 2024
•Adjusted EBITDA of $96.0 million, an increase of $15.8 million, or 19.6%, compared to the third quarter of 2024
•Increased Average OEC on rent by $179.8 million, or 16.6%, compared to the third quarter of 2024

“In the third quarter, we achieved strong year-over-year revenue growth of 8% and adjusted EBITDA growth of 20%, driven by continued strength in our core T&D markets. In our ERS segment, we saw substantial growth in OEC on rent, both on a sequential and a year-over-year basis, leading to average utilization in the quarter of over 79%, the highest level in more than two years. Average OEC on rent for the quarter was $180 million higher than for the third quarter last year. We remain very positive on the mega trends driving the utility end market and the role we play in supporting the continued buildout,” said Ryan McMonagle, Chief Executive Officer of CTOS. “Coming off near-record quarterly TES sales in the second quarter, revenue in the segment in the third quarter was up 6% versus the third quarter of last year and is up more than 8% year-to-date. We continue to see robust demand for vocational vehicles across our end markets. Signed orders in the quarter were up 30% on a year-over-year basis, more than 40% among our local and regional accounts. Given current market conditions and ongoing customer conversations regarding demand for the remainder of 2025 and for 2026, we continue to believe Custom Truck is well-positioned to benefit from the spending required to address the unprecedented power demand required for data center and electrification investments, as well as for continued utility grid upgrades. As a result, we are reaffirming our 2025 consolidated revenue and Adjusted EBITDA guidance for the year,” McMonagle added.

Summary Actual Consolidated Financial Results
Three Months Ended September 30,Nine Months Ended September 30,Three Months Ended June 30, 2025
(in $000s)2025202420252024
Rental revenue$127,142 $108,324 $364,217 $317,492 $120,814 
Equipment sales320,583 305,476 950,558 863,711 356,112 
Parts sales and services34,333 33,420 100,998 100,337 34,557 
Total revenue482,058 447,220 1,415,773 1,281,540 511,483 
Gross Profit$100,753 $91,829 $288,831 $271,805 $102,542 
Adjusted Gross Profit1
$155,528 $137,785 $447,704 $406,090 $156,549 
Net Income (Loss)$(5,756)$(17,416)$(51,927)$(56,229)$(28,380)
Adjusted EBITDA1
$95,963 $80,205 $262,817 $237,637 $93,428 
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 September 30,Nine Months Ended September 30,Three Months Ended June 30, 2025
(in $000s)2025202420252024
Rental revenue$123,945 $105,317 $354,638 $309,304 $117,728 
Equipment sales45,160 45,574 139,287 116,026 52,744 
Total revenue169,105 150,891 493,925 425,330 170,472 
Cost of rental revenue30,425 29,415 91,141 88,496 30,328 
Cost of equipment sales34,339 33,975 105,742 83,865 40,396 
Depreciation of rental equipment54,068 44,964 156,695 131,242 53,303 
Total cost of revenue118,832 108,354 353,578 303,603 124,027 
Gross profit$50,273 $42,537 $140,347 $121,727 $46,445 
Adjusted Gross Profit1
$104,341 $87,501 $297,042 $252,969 $99,748 
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 September 30,Nine Months Ended September 30,Three Months Ended June 30, 2025
(in $000s)2025202420252024
Equipment sales$275,423 $259,902 $811,271 $747,685 $303,368 
Cost of equipment sales234,038 218,012 687,784 620,240 256,276 
Gross profit$41,385 $41,890 $123,487 $127,445 $47,092 
Aftermarket Parts and Services
Three Months Ended September 30,Nine Months Ended September 30,Three Months Ended June 30, 2025
(in $000s)2025202420252024
Rental revenue$3,197 $3,007 $9,579 $8,188 $3,086 
Parts and services revenue34,333 33,420 100,998 100,337 34,557 
Total revenue37,530 36,427 110,577 108,525 37,643 
Cost of revenue27,728 28,033 83,402 82,849 27,934 
Depreciation of rental equipment707 992 2,178 3,043 704 
Total cost of revenue28,435 29,025 85,580 85,892 28,638 
Gross profit$9,095 $7,402 $24,997 $22,633 $9,005 
Summary Combined Operating Metrics
Three Months Ended September 30,Nine Months Ended September 30,Three Months Ended June 30, 2025
(in $000s)2025202420252024
Ending OEC(a) (as of period end)
$1,621,725 $1,493,799 $1,621,725 $1,493,799 $1,560,704 
Average OEC on rent(b)
$1,262,477 $1,082,679 $1,215,570 $1,064,188 $1,207,231 
Fleet utilization(c)
79.3%73.2%78.0%72.7%77.6%
OEC on rent yield(d)
38.2%38.4%38.2%39.2%38.6%
Sales order backlog(e) (as of period end)
$279,785 $395,603 $279,785 $395,603 $334,805 
(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
The 17.7% increase in ERS segment rental revenue in the third quarter of 2025 compared to the third quarter of 2024 was the result of improved average fleet utilization (which increased to 79.3% compared to 73.2%) driven by increased rental volume, with average OEC on rent increasing by 17% year-over-year. Compared to the third quarter of 2024, rental equipment sales were flat in the third quarter of 2025. ERS gross profit and adjusted gross profit increased 18.2% and 19.2%, respectively, in the third quarter of 2025 compared to the third quarter of 2024.
Revenue in our TES segment increased 6.0% in the third quarter of 2025 compared to the third 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 decreased by 1.2% in the third quarter of 2025 compared to the third quarter of 2024. Our TES backlog was down 29% compared to the third quarter of 2024, and is just below our expected range of four to six months.
APS segment revenue in the third quarter of 2025 increased by 3.0% compared to the third quarter of 2024 due to an increase in rental revenue. Gross profit margin increased due to the increase in rental revenue.
The decrease in net loss in the third quarter of 2025 compared to the third quarter of 2024 was primarily due to higher operating income as a result of strong new equipment sales as well as higher rental revenue driven by higher average OEC on rent.
Adjusted EBITDA for the third quarter of 2025 was $96.0 million, a 19.6% increase compared to the third 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 September 30, 2025, cash and cash equivalents was $13.1 million, total debt outstanding was $1,666.4 million, net debt was $1,653.3 million and our net leverage ratio was 4.53x. Availability under the senior secured credit facility was $237.6 million as of September 30, 2025, and based on our borrowing base, we have an additional $232.0 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, reflecting our confidence in the business and the momentum across our core segments. With average OEC on rent up $180 million, or 17%, in the third quarter compared to the same period last year, and new sales on pace for another record year, we continue to expect 2025 to be a year of double-digit consolidated revenue and Adjusted EBITDA1, 4 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. After the volatility in our ERS segment rental markets in 2024, we have experienced strong demand in our rental business over the past four fiscal quarters, driven by particular strength in our core utility markets and our continued focus on further penetrating the vocational rental market. Given the strong demand environment, we now expect to invest up to an additional net $50 million in our rental fleet this year compared to our previous guidance, resulting in at least high-single digit fleet growth (based on net OEC) this year. Given the strong growth trajectory in our OEC on rent, we expect to come in at the higher end of our ERS revenue guidance. Regarding TES, while our strong order flow, particularly among our local and regional customers, will allow us to generate significant revenue growth this year, given the impact of the continued macroeconomic uncertainty and the high level of interest rates, particularly on our smaller customers, we now expect to come in at the lower end of our TES revenue guidance for the year. However, the permanent reinstatement of the accelerated depreciation provisions that were part of the recently enacted Federal tax and spending bill could be a catalyst for year-end equipment sales and provide upside to our current expectations. We continue to expect to make progress on unwinding our significant strategic investment in inventory over the last two years by the end of the year. However, given the strong demand environment that we are expecting to continue into 2026 and beyond, we now expect to reduce our inventory by $125 million to $150 million compared to the level at the end of last year. In the third quarter, we also made some incremental non-rental fleet capital investments that will allow us to expand our production capabilities at our Kansas City location and better position us for future growth. As a result, we now expect our levered free cash flow2, 4 to be less than our previous $50 million target but still expect to deliver a meaningful reduction in our net leverage ratio3, 4 from current levels 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 October 28, 2025, to discuss its third quarter 2025 financial results. A webcast will be publicly available at: investors.customtruck.com on the “Events & Presentations” page. To listen by phone, please dial 1-800-715-9871 or 1-646-307-1963 and provide the operator with conference ID 2542689. A replay of the call will be available until 11:59 p.m. ET, Tuesday, November 4, 2025, by dialing 1 800-770-2030 or 1-609-800-9909 and entering the passcode 2542689.
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 more than 10,350 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 September 30,Nine Months Ended September 30,Three Months Ended June 30, 2025
(in $000s except per share data)2025202420252024
Revenue
Rental revenue$127,142 $108,324 $364,217 $317,492 $120,814 
Equipment sales320,583 305,476 950,558 863,711 356,112 
Parts sales and services34,333 33,420 100,998 100,337 34,557 
Total revenue482,058 447,220 1,415,773 1,281,540 511,483 
Cost of Revenue
Cost of rental revenue30,434 29,439 91,172 88,559 30,338 
Depreciation of rental equipment54,775 45,956 158,873 134,285 54,007 
Cost of equipment sales268,377 251,987 793,526 704,105 296,672 
Cost of parts sales and services27,719 28,009 83,371 82,786 27,924 
Total cost of revenue381,305 355,391 1,126,942 1,009,735 408,941 
Gross Profit100,753 91,829 288,831 271,805 102,542 
Operating Expenses
Selling, general and administrative expenses54,863 54,630 173,479 168,322 59,165 
Amortization6,683 6,696 20,274 19,966 6,911 
Non-rental depreciation3,332 3,472 9,904 9,752 3,232 
Transaction expenses and other3,246 3,994 12,209 14,684 5,303 
Total operating expenses68,124 68,792 215,866 212,724 74,611 
Operating Income 32,629 23,037 72,965 59,081 27,931 
Other Expense
Interest expense, net40,247 43,875 119,364 124,191 40,204 
Financing and other expense (income)(874)(2,818)(3,261)(9,399)(1,371)
Total other expense39,373 41,057 116,103 114,792 38,833 
Income (Loss) Before Income Taxes(6,744)(18,020)(43,138)(55,711)(10,902)
Income Tax Expense (Benefit)(988)(604)8,789 518 17,478 
Net Income (Loss)$(5,756)$(17,416)$(51,927)$(56,229)$(28,380)
Net Income (Loss) Per Share
Basic$(0.03)$(0.07)$(0.23)$(0.24)$(0.13)
Diluted$(0.03)$(0.07)$(0.23)$(0.24)$(0.13)



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


(in $000s) September 30, 2025December 31, 2024
Assets
Current Assets
Cash and cash equivalents$13,058 $3,805 
Accounts receivable, net 182,217 215,873 
Financing receivables, net6,823 8,913 
Inventory1,035,642 1,049,304 
Prepaid expenses and other19,759 23,557 
Total current assets1,257,499 1,301,452 
Property and equipment, net140,110 130,923 
Rental equipment, net1,088,346 1,001,651 
Goodwill705,055 704,806 
Intangible assets, net232,327 252,393 
Operating lease assets104,502 94,696 
Other assets12,868 16,046 
Total Assets$3,540,707 $3,501,967 
Liabilities and Stockholders' Equity
Current Liabilities
Accounts payable$107,086 $88,487 
Accrued expenses91,595 69,349 
Deferred revenue and customer deposits27,467 26,250 
Floor plan payables - trade367,174 330,498 
Floor plan payables - non-trade366,414 470,830 
Operating lease liabilities - current8,865 7,445 
Current maturities of long-term debt20,892 7,842 
Total current liabilities989,493 1,000,701 
Long-term debt, net1,628,866 1,519,882 
Operating lease liabilities - noncurrent99,097 88,674 
Deferred income taxes38,569 31,401 
Total long-term liabilities1,766,532 1,639,957 
Stockholders' Equity
Common stock25 25 
Treasury stock, at cost(122,602)(88,229)
Additional paid-in capital1,557,389 1,550,785 
Accumulated other comprehensive loss(11,675)(14,744)
Accumulated deficit(638,455)(586,528)
Total stockholders' equity784,682 861,309 
Total Liabilities and Stockholders' Equity$3,540,707 $3,501,967 


CUSTOM TRUCK ONE SOURCE, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(unaudited)
Nine Months Ended September 30,
(in $000s)20252024
Operating Activities
Net income (loss)$(51,927)$(56,229)
Adjustments to reconcile net income (loss) to net cash flow from operating activities:
Depreciation and amortization195,010 173,271 
Amortization of debt issuance costs3,289 4,627 
Provision for losses on accounts receivable7,429 9,541 
Share-based compensation6,259 8,748 
Gain on sales and disposals of rental equipment(32,177)(34,702)
Change in fair value of warrants— (527)
Deferred tax expense (benefit)6,974 (718)
Changes in assets and liabilities:
Accounts and financing receivables28,929 12,980 
Inventories15,753 (213,468)
Prepaids, operating leases and other5,610 11,390 
Accounts payable17,582 (27,219)
Accrued expenses and other liabilities22,205 (14,628)
Floor plan payables - trade, net36,675 175,559 
Customer deposits and deferred revenue1,193 (8,691)
Net cash flow from operating activities262,804 39,934 
Investing Activities
Acquisition of business, net of cash acquired— (6,015)
Purchases of rental equipment(348,923)(278,507)
Proceeds from sales and disposals of rental equipment138,749 155,788 
Purchase of non-rental property and cloud computing arrangements(23,612)(36,149)
Net cash flow for investing activities(233,786)(164,883)
Financing Activities
Borrowings under revolving credit facilities260,581 168,069 
Repayments under revolving credit facilities(135,000)(92,569)
Proceeds from debt, net issuance costs— 987 
Principal payments on long-term debt(6,836)(7,946)
Acquisition of inventory through floor plan payables - non-trade363,907 490,195 
Repayment of floor plan payables - non-trade(468,321)(405,522)
Repurchase of common stock(32,575)(28,984)
Share-based payments(1,453)(1,451)
Net cash flow from financing activities(19,697)122,779 
Effect of exchange rate changes on cash and cash equivalents(68)299 
Net Change in Cash and Cash Equivalents9,253 (1,871)
Cash and Cash Equivalents at Beginning of Period3,805 10,309 
Cash and Cash Equivalents at End of Period$13,058 $8,438 


Nine Months Ended September 30,
(in $000s)20252024
Supplemental Cash Flow Information
Interest paid$104,109 $105,202 
Income taxes paid697 4,140 
Non-Cash Investing and Financing Activities
Rental equipment and property and equipment purchases in accounts payable1,508 439 
Rental equipment sales in accounts receivable1,355 111 



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 (excluding interest on floorplan financing), 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 September 30,Nine Months Ended September 30,Three Months Ended June 30, 2025
(in $000s)2025202420252024
Net income (loss) $(5,756)$(17,416)$(51,927)$(56,229)$(28,380)
Interest expense26,462 27,156 78,518 79,174 26,440 
Income tax expense (benefit)(988)(604)8,789 518 17,478 
Depreciation and amortization67,048 59,295 195,985 173,253 66,426 
EBITDA86,766 68,431 231,365 196,716 81,964 
   Adjustments:
   Non-cash purchase accounting impact (1)
3,406 4,066 11,502 12,286 3,915 
   Transaction and integration costs (2)
3,246 3,994 12,209 14,684 5,303 
   Sales-type lease adjustment (3)
465 1,295 1,482 5,730 471 
Share-based payments (4)
2,080 2,419 6,259 8,748 1,775 
Change in fair value of warrants (5)
— — — (527)— 
Adjusted EBITDA$95,963 $80,205 $262,817 $237,637 $93,428 
Adjusted EBITDA is defined as net income (loss), as adjusted for provision for income taxes, interest expense, net (excluding interest on floorplan financing), 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 September 30,Nine Months Ended September 30,Three Months Ended June 30, 2025
(in $000s)2025202420252024
Equipment sales$(383)$(3,701)$(3,528)$(8,273)$(984)
Cost of equipment sales118 4,111 2,906 8,162 949 
Gross margin(265)410 (622)(111)(35)
Interest income(872)(2,766)(3,206)(8,791)(1,322)
Rental invoiced1,602 3,651 5,310 14,632 1,828 
Sales-type lease adjustment$465 $1,295 $1,482 $5,730 $471 
(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 September 30,Nine Months Ended September 30,Three Months Ended June 30, 2025
(in $000s)2025202420252024
Revenue
Rental revenue$127,142 $108,324 $364,217 $317,492 $120,814 
Equipment sales320,583 305,476 950,558 863,711 356,112 
Parts sales and services34,333 33,420 100,998 100,337 34,557 
Total revenue482,058 447,220 1,415,773 1,281,540 511,483 
Cost of Revenue
Cost of rental revenue30,434 29,439 91,172 88,559 30,338 
Depreciation of rental equipment54,775 45,956 158,873 134,285 54,007 
Cost of equipment sales268,377 251,987 793,526 704,105 296,672 
Cost of parts sales and services27,719 28,009 83,371 82,786 27,924 
Total cost of revenue381,305 355,391 1,126,942 1,009,735 408,941 
Gross Profit100,753 91,829 288,831 271,805 102,542 
Add: depreciation of rental equipment54,775 45,956 158,873 134,285 54,007 
Adjusted Gross Profit$155,528 $137,785 $447,704 $406,090 $156,549 

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 September 30,Nine Months Ended September 30,Three Months Ended June 30, 2025
(in $000s)2025202420252024
Revenue
Rental revenue$123,945 $105,317 $354,638 $309,304 $117,728 
Equipment sales45,160 45,574 139,287 116,026 52,744 
Total revenue169,105 150,891 493,925 425,330 170,472 
Cost of Revenue
Cost of rental revenue30,425 29,415 91,141 88,496 30,328 
Cost of equipment sales34,339 33,975 105,742 83,865 40,396 
Depreciation of rental equipment54,068 44,964 156,695 131,242 53,303 
Total cost of revenue118,832 108,354 353,578 303,603 124,027 
Gross profit50,273 42,537 140,347 121,727 46,445 
Add: depreciation of rental equipment54,068 44,964 156,695 131,242 53,303 
Adjusted Gross Profit$104,341 $87,501 $297,042 $252,969 $99,748 


The following table presents the reconciliation of Adjusted ERS Rental Gross Profit:
Three Months Ended September 30,Nine Months Ended September 30,Three Months Ended June 30, 2025
(in $000s)2025202420252024
Rental revenue$123,945 $105,317 $354,638 $309,304 $117,728 
Cost of rental revenue30,425 29,415 91,141 88,496 30,328 
Adjusted Rental Gross Profit$93,520 $75,902 $263,497 $220,808 $87,400 

Reconciliation of Net Debt
(unaudited)
The following table presents the reconciliation of Net Debt:
(in $000s) September 30, 2025June 30, 2025
Current maturities of long-term debt$20,892 $23,114 
Long-term debt, net1,628,866 1,589,883 
Deferred financing fees16,638 17,705 
Less: cash and cash equivalents(13,058)(5,259)
Net Debt$1,653,338 $1,625,443 


Reconciliation of Net Leverage Ratio
(unaudited)
The following table presents the reconciliation of the Net Leverage Ratio:
Twelve Months Ended
(in $000s)September 30, 2025June 30, 2025
Net Debt (as of period end)$1,653,338 $1,625,443 
Divided by: LTM Adjusted EBITDA (1)
$364,837 $349,079 
Net Leverage Ratio4.53 4.66 

(1) The following tables presents the calculation of LTM Adjusted EBITDA for the periods ended September 30, 2025 and June 30, 2025:
Current Year To Date PeriodLess: Prior Year To Date PeriodAdd: Prior Fiscal YearLTM Adjusted EBITDA
(in $000s)September 30, 2025September 30, 2024December 31, 2024September 30, 2025
Net income (loss)$(51,927)$(56,229)$(28,655)$(24,353)
Interest expense78,518 79,174 105,895 105,239 
Income tax expense (benefit)8,789 518 (532)7,739 
Depreciation and amortization195,985 173,253 235,807 258,539 
EBITDA231,365 196,716 312,515 347,164 
Adjustments:— 
Non-cash purchase accounting impact 11,502 12,286 16,833 16,049 
Transaction and integration costs12,209 14,684 17,915 15,440 
Sales-type lease adjustment1,482 5,730 4,559 311 
Gain on sale leaseback transaction— — (23,497)(23,497)
Share-based payments6,259 8,748 11,859 9,370 
Change in fair value of warrants— (527)(527)— 
Adjusted EBITDA$262,817 $237,637 $339,657 $364,837 

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