0001709682-25-000031
SEC filingRevenue grew 11.9% to $933.7M in H1 2025; net loss widened to $46.2M due to higher income tax expense.
For the six months ended June 30, 2025, Custom Truck One Source reported total revenue of $933.7 million, an increase of 11.9% compared to $834.3 million in the same period of 2024. The growth was driven by strong equipment sales (up 12.9% to $629.9 million) and rental revenue (up 13.3% to $237.1 million). Gross profit rose 4.5% to $188.1 million, but gross margin contracted from 21.6% to 20.1% due to higher cost of revenue and increased depreciation. Operating income grew 11.9% to $40.3 million, in line with revenue growth, though operating margin remained flat at 4.3%. Net loss widened to $46.2 million from $38.8 million, primarily due to a sharp increase in income tax expense from $1.1 million to $9.8 million, reflecting adjustments to the estimated annual effective tax rate.
The Equipment Rental Solutions (ERS) segment delivered robust performance, with revenue up 18.4% to $324.8 million, driven by a 13.0% increase in average OEC on rent and fleet utilization improving from 72.4% to 77.3%. Gross profit for ERS rose 13.7% to $90.1 million, with gross margin steady at 27.7%. The Truck and Equipment Sales (TES) segment saw revenue growth of 9.9% to $535.8 million, but gross profit declined 4.0% to $82.1 million as gross margin fell from 17.5% to 15.3%, pressured by pricing and sales mix. The Aftermarket Parts and Services (APS) segment was relatively flat, with total revenue of $73.0 million (up 1.3%), but gross profit increased 4.4% to $15.9 million due to higher-margin rental revenue.
Management highlighted robust demand for vocational vehicles, especially from local and regional customers, and continued investment in the rental fleet with purchases of $60.1 million more than the prior year. The company ended the period with $5.3 million in cash and $275.7 million of availability under its ABL facility, with suppressed availability of $231.1 million. The net leverage ratio improved from 4.80x to 4.66x, but remains elevated. No forward guidance was provided, but the focus remains on managing inventory levels and fleet utilization to drive cash flow. The significant tax expense adjustment suggests variability in earnings; however, management expects annual cash taxes to remain consistent with prior years.
As of June 30, 2025, the company held $5.3 million in cash and cash equivalents, up from $3.8 million at December 31, 2024. Total assets stood at $3.58 billion, with inventory representing the largest current asset at $1.09 billion (up from $1.05 billion). Total debt outstanding was $1.63 billion, net of deferred financing fees of $17.7 million. The ABL Facility had $670.5 million drawn, with $275.7 million of borrowing availability remaining and $3.9 million in outstanding standby letters of credit. Stockholders' equity decreased to $790.1 million from $861.3 million, driven by net losses and share repurchases.
The company enters into purchase agreements with manufacturers and suppliers for rental fleet and inventory equipment. All such agreements are cancellable within a specified notification period, so no material non-cancellable purchase commitments are disclosed. Floor plan payables totaled $790.2 million ($408.3 million trade, $381.9 million non-trade), collateralized by inventory. The non-trade PNC facility of $520.0 million matures on August 25, 2025. Deferred revenue and customer deposits were $21.5 million, of which $4.4 million was deferred rental revenue.
During the six months ended June 30, 2025, the company repurchased 8,143,635 shares from affiliates of ECP at $4.00 per share for $32.6 million. As of June 30, 2025, $1.9 million remained available under the stock repurchase program. No dividends were declared or paid. Capital expenditures for rental equipment totaled $225.3 million, with proceeds from sales of rental equipment of $94.0 million. Net debt increased by $83.1 million, primarily from ABL Facility borrowings. The company also made $4.5 million in principal payments on long-term debt.
The company operates three segments: Equipment Rental Solutions (ERS), Truck and Equipment Sales (TES), and Aftermarket Parts and Services (APS). For the six months ended June 30, 2025, ERS generated $324.8 million in revenue and $90.1 million in gross profit; TES generated $535.8 million in revenue and $82.1 million in gross profit; APS generated $73.0 million in revenue and $15.9 million in gross profit. Geographically, 97.8% of total revenue came from the United States ($913.1 million) and 2.2% from Canada ($20.6 million) for the six-month period. Total assets were concentrated in the U.S. ($3.47 billion) versus Canada ($111.3 million).