Custom Truck One Source Q3 2026: Rental Surge Masks a Weather Hit
As seen on the 24/7 Wall St. homepage on October 26, 2026.
Rental revenue rose 20.1% on record equipment on rent, and management raised full-year adjusted EBITDA guidance for the third time this year. Revenue missed expectations only because a hailstorm and a vendor recall pushed truck deliveries into Q4.
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Custom Truck One Source posted Q3 2026 revenue of $495.2 million, missing expectations. Management was direct about the gap: a hailstorm at the Kansas City facility and a vendor warranty recall forced truck deliveries to slip into the fourth quarter. Strip those out and the underlying quarter looks considerably cleaner.
Rental revenue climbed 20.1% year-over-year, powered by record average original equipment cost on rent and improving fleet utilization. Adjusted EBITDA grew to $110.9 million, with consolidated margin expanding. GAAP earnings per share of $0.01 came in ahead of the consensus estimate, absorbing transaction and integration costs.
Management has now raised its full-year 2026 Adjusted EBITDA guidance three times, with the current target implying 17% to 20% growth year-over-year and full-year revenue growth of 8% to 13%. To capture what CEO Ryan McMonagle described as long-duration transmission demand at attractive returns, the company lifted its net rental fleet investment target.
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By early October, OEC on rent had already surpassed $1.5 billion with utilization exceeding 84%, and the delayed STEM deliveries are scheduled to ship in the quarter. The STEM order book grew 22% year-over-year. McMonagle pointed to utility grid upgrades, electrification, data center load growth, and infrastructure spending as the secular forces sustaining that demand.
The higher fleet investment pulled levered free cash flow guidance down to slightly positive for 2026, from prior guidance of more than $50 million. Net leverage stood at 3.70x at the end of September, and the company expects to be meaningfully below 4.0x by year-end. Management is projecting another year of double-digit Adjusted EBITDA growth in 2027.
Sources
Mentioned: CTOS