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What changed in Custom Truck One Source, Inc.'s 10-K — 2024 vs 2025

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Paragraph-level year-over-year comparison of Custom Truck One Source, Inc.'s 2024 and 2025 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2025 report.

+207 added−211 removedSource: 10-K (2026-03-10) vs 10-K (2025-03-04)

Top changes in Custom Truck One Source, Inc.'s 2025 10-K

207 paragraphs added · 211 removed · 180 edited across 8 sections

Item 1. Business

Business — how the company describes what it does

67 edited+13 added−10 removed84 unchanged
Biggest changeWe offer employees options to enhance their financial security through our 401(k) savings program that includes a Company matching component, health savings account, and pre-tax flexible spending accounts for healthcare and dependent care. We provide employees with the opportunity to participate in the Company’s success with equity ownership at a discounted price through our Employee Stock Purchase Plan.
Biggest changeWe aim to offer competitive pay and a comprehensive benefit program including medical, vision, dental, life and disability insurance to attract and retain top talent. We offer employees options to enhance their financial security through our 401(k) savings program that includes a Company matching component, health savings account, and pre-tax flexible spending accounts for healthcare and dependent care.
These attributes, together with a strong reputation built over many years, position Custom Truck to capitalize on attractive secular growth trends across its end-markets. Custom Truck owns one of the industry’s largest fleets of specialty rental equipment focused on electric utility transmission and distribution (“T&D”), rail, telecommunications, and infrastructure end-markets through our ERS segment.
These attributes, together with a strong reputation built over many years, position Custom Truck to capitalize on attractive secular growth trends across its end-markets. Custom Truck owns one of the industry’s largest fleets of specialty rental equipment focused on electric utility transmission and distribution (“T&D”), infrastructure, rail and telecommunications end-markets through our ERS segment.
The equipment is also often used for working on older infrastructure such as repairing bridges and terminals with more antiquated track and systems that are in need of upgrades with more modern systems. The five largest public railroads operating in North America spend more than $13 billion annually in capital expenditures.
The equipment is also often used for working on older infrastructure such as repairing bridges and terminals with more antiquated track and systems that are in need of upgrades with more modern systems. The five largest public railroads operating in North America spend more than $13.5 billion annually in capital expenditures.
These employee-led groups are open to any employees who express interest, and they contribute to making CTOS a more inclusive workplace while positively impacting the communities we serve. Our Talent Attraction At CTOS, we are dedicated to identifying, hiring, and retaining a diverse and skilled workforce.
These employee-led groups are open to any employees who express interest and contribute to making CTOS a more inclusive workplace while positively impacting the communities we serve. Our Talent Attraction At CTOS, we are dedicated to identifying, hiring, and retaining a diverse and skilled workforce.
This spend is expected to continue to grow due largely to spending from the BEAD program that is a part of the Infrastructure Act, which allocated over $42 billion to expand high-speed internet across all 50 U.S. states plus the U.S. territories.
This spending is expected to continue to grow due largely to spending from the BEAD program that is a part of the Infrastructure Act, which allocated over $42 billion to expand high-speed internet across all 50 U.S. states plus the U.S. territories.
Our Culture Our success is rooted in our core values that guide how we interact with our colleagues, customers, vendors, suppliers, and key stakeholders in the communities we serve. • Care & Respect - We treat each other with respect and show genuine care for one another, our customers, suppliers, and communities where we live and work. • Solve Problems Like A Mechanic - We relish solving problems, our curiosity and true grit enables us to find lasting solutions that meet our customers’ needs. • Driven to Deliver - We own our work, take initiative, and use our determination to make our work better and deliver on our commitments and drive results that matter. • Engage Collaboratively - We help each other, we openly share and listen to each other’s ideas and opinions – even when we disagree because we succeed when we work together. • Spark Innovation - We embrace new ways of working; we challenge the status quo and continue to explore and learn to enhance our skills and work.
Our Culture Our success is rooted in our core values that guide how we interact with our colleagues, customers, vendors, suppliers, and key stakeholders in the communities we serve. 8 Table of Contents • Care & Respect – We treat each other with respect and show genuine care for one another, our customers, suppliers, and communities where we live and work. • Solve Problems Like A Mechanic – We relish solving problems, our curiosity and true grit enables us to find lasting solutions that meet our customers’ needs. • Driven to Deliver – We own our work, take initiative, and use our determination to make our work better and deliver on our commitments and drive results that matter. • Engage Collaboratively – We help each other, we openly share and listen to each other’s ideas and opinions – even when we disagree because we succeed when we work together. • Spark Innovation – We embrace new ways of working; we challenge the status quo and continue to explore and learn to enhance our skills and work.
Our digital advertising efficacy is maximized by the following: • We invest in Search Engine Optimization to maintain top result ranks for search terms we anticipate our customers would use; • We leverage marketing analytics to measure and adapt campaign performance; • We use social media to connect with customers and prospects across an array of core end-user segments, and to source user-generated content of our equipment excelling in use; • We leverage Search Engine Marketing, and regularly adjust our campaign investments to: i. target peak sales and rental seasonality by segment, ii. align with Company inventory levels, and iii. achieve target revenue goals • We advertise available inventory in select industry online marketplaces.
Our digital advertising efficacy is maximized by the following: • We invest in Search Engine Optimization to maintain top result ranks for search terms we anticipate our customers would use; • We leverage marketing analytics to measure and adapt campaign performance; • We use social media to connect with customers and prospects across an array of core end-user segments, and to source user-generated content of our equipment excelling in use; 7 Table of Contents • We leverage Search Engine Marketing, and regularly adjust our campaign investments to: i. target peak sales and rental seasonality by segment, ii. align with Company inventory levels, and iii. achieve target revenue goals • We advertise available inventory in select industry online marketplaces.
Of our top 20 customers, 15 of them both rent and purchase equipment. We have very strong brand recognition among our industry-leading customers. Our ability to deliver an unmatched value proposition for our customers’ most complex and technical requirements, on a tight deadline, results in long-tenured relationships with premier customers across our different end-markets.
Of our top 20 customers, 16 of them both rent and purchase equipment. We have very strong brand recognition among our industry-leading customers. Our ability to deliver an unmatched value proposition for our customers’ most complex and technical requirements, on a tight deadline, results in long-tenured relationships with premier customers across our different end-markets.
The contents of our website are not incorporated by reference in this Annual Report. The SEC also maintains an Internet website that contains reports, proxy and information statements and other information regarding issuers that file electronically with the SEC. The public can obtain any documents that are filed by us at www.sec.gov . 10 Table of Contents
The contents of our website are not incorporated by reference in this Annual Report. The SEC also maintains an Internet website that contains reports, proxy and information statements and other information regarding issuers that file electronically with the SEC. The public can obtain any documents that are filed by us at www.sec.gov .
Custom Truck has successfully opened five locations in geographic areas where there were no attractive acquisition targets, exemplifying the ability to expand our reach without the use of acquisitions. In addition to organic geographic expansion, we may opportunistically pursue acquisitions to expand our product and service offering and accelerate growth.
Custom Truck has successfully opened six locations in geographic areas where there were no attractive acquisition targets, exemplifying the ability to expand our reach without the use of acquisitions. In addition to organic geographic expansion, we may opportunistically pursue acquisitions to expand our product and service offering and accelerate growth.
Sales and Marketing Sales We operate with a nationwide direct sales team to address the specialized needs of our customer base and to cultivate strategic partnerships with key customers. Our more than 100-member sales organization is led by members of our senior management team, including Presidents, Vice Presidents and Regional Sales Managers.
Sales and Marketing Sales We operate with a nationwide direct sales team to address the specialized needs of our customer base and to cultivate strategic partnerships with key customers. Our more than 120-member sales organization is led by members of our senior management team, including Presidents, Vice Presidents and Regional Sales Managers.
Insulated Tools Extension arms, temp arms, insulated ladders, etc., used to insulate and dielectrically protect workers and temporarily reposition powerlines for safe execution of tasks while working at height in live line circumstances. 4 Table of Contents Other parts, tools, and accessories Crimping tools and dies, pumps/motors, underground fiber laying tools, and various other tools used in either utility, telecom, or rail applications.
Insulated Tools Extension arms, temp arms, insulated ladders, etc., used to insulate and dielectrically protect workers and temporarily reposition powerlines for safe execution of tasks while working at height in live line circumstances. Other parts, tools, and accessories Crimping tools and dies, pumps/motors, underground fiber laying tools, and various other tools used in either utility, telecom, or rail applications.
We collaborate with organizations such as Hiring Our Heroes, the U.S. Chamber of Commerce, and Military Transition Assistance Programs to recruit veterans seeking rewarding careers after their military service. Our Veterans Employee Resource Group (ERG) plays a pivotal role in outreach efforts, actively participating in career fairs and veteran community events to connect with potential candidates.
We collaborate with organizations such as Hiring Our Heroes, the U.S. Chamber of Commerce, and Military Transition Assistance Programs to recruit veterans seeking rewarding careers after their military service. Our Veterans ERG plays a pivotal role in outreach efforts, actively participating in career fairs and veteran community events to connect with potential candidates.
This trend is being driven by several factors including a desire by manufacturers to reduce supply chain bottlenecks; increased labor and transportation costs; various tariff regimes imposed on certain goods and countries; and geopolitical tensions.
This trend is being driven by several factors including a desire by manufacturers to reduce supply chain bottlenecks; increased labor and transportation costs; various tariff regimes imposed on certain goods and jurisdictions; and geopolitical tensions.
This allows us to maintain high utilization rates for our entire rental fleet while quickly responding to both equipment and service requests from customers. Our broad reach also represents a competitive advantage in serving customers with nationwide operations who may prefer the convenience of interacting with a limited number of 5 Table of Contents equipment providers.
This allows us to maintain high utilization rates for our entire rental fleet while quickly responding to both equipment and service requests from customers. Our broad reach also represents a competitive advantage in serving customers with nationwide operations who may prefer the convenience of interacting with a limited number of equipment providers.
Our comprehensive APS offering expands opportunities to serve our equipment rental and sales customers through the convenience of a single vendor for all their specialty equipment, tools and accessories needs. End-Market Overview Our core end-markets include electric utility T&D, telecom, rail and general infrastructure, among others.
Our comprehensive APS offering expands opportunities to serve our 1 Table of Contents equipment rental and sales customers through the convenience of a single vendor for all their specialty equipment, tools and accessories needs. End-Market Overview Our core end-markets include electric utility T&D, general infrastructure, rail and telecom, among others.
Data indicates that these Class I operators account for just under 70% of total United States freight rail mileage. Commuter Rail – Trends such as population growth, increasing urbanization, a focus on sustainability, environmental awareness, and increasing highway congestion are expected to drive continued investment in commuter rail.
Data indicates that these Class I operators account for just under 70% of total United States freight rail mileage. 3 Table of Contents Commuter Rail – Trends such as population growth, increasing urbanization, a focus on sustainability, environmental awareness, and increasing highway congestion are expected to drive continued investment in commuter rail.
Products and Services Equipment Rental Solutions and Truck and Equipment Sales Our equipment rental fleet consists of more than 10,000 units, which management believes is among the largest specialty equipment rental fleets in North America.
Products and Services Equipment Rental Solutions and Truck and Equipment Sales Our equipment rental fleet consists of more than 10,400 units, which management believes is among the largest specialty equipment rental fleets in North America.
This growth in demand will require investment in additional power generation, which will require the installation of new transmission and distributions lines to deliver the power to the grid and ultimately, to the customers. 2 Table of Contents Increased Outsourcing by Utility Companies – Utilities are increasingly turning to specialized third-party contractors to fulfill construction and maintenance needs.
This growth in demand will require investment in additional power generation, which will require the installation of new transmission and distributions lines to deliver the power to the grid and ultimately, to the customers. Increased Outsourcing by Utility Companies – Utilities are increasingly turning to specialized third-party contractors to fulfill construction and maintenance needs.
We believe that customers’ growing preference for equipment rental is driven by several factors including the avoidance of significant capital outlay, improved asset utilization, reduced storage and maintenance, access to a wider range of modern productive equipment, dedicated 1 Table of Contents customer care, and operational efficiencies.
We believe that customers’ growing preference for equipment rental is driven by several factors including the avoidance of significant capital outlay, improved asset utilization, reduced storage and maintenance, access to a wider range of modern productive equipment, dedicated customer care, and operational efficiencies.
Our drive, expertise, and responsiveness to the specialized needs of our customers set us apart. Management values a strong relationship with our employees across all our locations. As of December 31, 2024, we had approximately 2,619 employees in more than 40 locations across North America. Approximately 2% of our U.S. employees are covered by a collective bargaining agreement.
Our drive, expertise, and responsiveness to the specialized needs of our customers set us apart. Management values a strong relationship with our employees across all our locations. As of December 31, 2025, we had approximately 2,500 employees in more than 40 locations across North America. Approximately 2% of our U.S. employees are covered by a collective bargaining agreement.
In 2024, we provided 26 paid internship opportunities to students from vocational high schools and university programs. Additionally, we recruit experienced professionals externally to bring fresh perspectives and expertise into our organization. CTOS is committed to offering meaningful career opportunities to individuals from all walks of life, including those with prior criminal histories.
In 2025, we provided 29 paid internship opportunities to students from vocational high schools and university programs. Additionally, we recruit experienced professionals externally to bring fresh perspectives and expertise into our organization. CTOS is committed to offering meaningful career opportunities to individuals from all walks of life, including those with prior criminal histories.
Legal Proceedings and Insurance From time to time, we are subject to various lawsuits, claims and legal proceedings, the vast majority of which arise out of the ordinary course of business. The nature of our business is such that disputes related to vehicles and accidents occasionally arise.
Legal Proceedings and Insurance 10 Table of Contents From time to time, we are subject to various lawsuits, claims and legal proceedings, the vast majority of which arise out of the ordinary course of business. The nature of our business is such that disputes related to vehicles and accidents occasionally arise.
To strengthen and celebrate our culture, we rely on our active Culture Champion Network, which is comprised of a cross-section of employees from a diverse range of backgrounds who collaborate to promote and enhance our work environment. 8 Table of Contents Our Employee Resource Groups (“ERG’s”) provide a community for our employees with shared interests, encouraging meaningful connections, promoting wellbeing, and fostering personal and professional growth.
To strengthen and celebrate our culture, we rely on our active Culture Champion Network, which is comprised of a cross-section of employees from a diverse range of backgrounds who collaborate to promote and enhance our work environment. Our Employee Resource Groups (“ERGs”) provide community for employees with shared interests, encouraging meaningful connections, promoting wellbeing, and fostering personal and professional growth.
In the past, we have expanded into new geographical markets through both strategic acquisitions and through internal growth. There is an opportunity for future expansion across the United States 6 Table of Contents to support growth.
In the past, we have expanded into new geographical markets through both strategic acquisitions and through internal growth. There is an opportunity for future expansion across the United States to support growth.
This program enables technicians to progress from apprentice to master mechanic. • Continuing Education: To support employees in expanding their formal education, we provide tuition assistance, empowering them to pursue academic growth while advancing their careers.
This program enables technicians to progress from apprentices to master mechanics. • Continuing Education: To support employees in expanding their formal education, we provide tuition assistance, empowering them to pursue academic growth while advancing their careers.
Waste is 3 Table of Contents generally considered to be a recession-resistant industry given the non-discretionary nature of waste collection and disposal. Ongoing consolidation amongst waste haulers results in increasing market share for large, well-capitalized companies that have the resources to invest in the latest trucks and equipment.
Waste is generally considered to be a recession-resistant industry given the non-discretionary nature of waste collection and disposal. Ongoing consolidation amongst waste haulers results in increasing market share for large, well-capitalized companies that have the resources to invest in the latest trucks and equipment, which the Company sells.
We rent, produce, sell, and service a broad range of new and used equipment, including bucket trucks, digger derricks, dump trucks, cranes, service trucks, and heavy-haul trailers. We manage our business in our three reporting segments: Equipment Rental Solutions (“ERS”), Truck and Equipment Sales (“TES”), and Aftermarket Parts and Services (“APS”).
We rent, produce, sell, and service a broad range of new and used equipment, including bucket trucks, digger derricks, dump trucks, cranes, service trucks, and heavy-haul trailers. Through December 31, 2025, we managed our business in our three reporting segments: Equipment Rental Solutions (“ERS”), Truck and Equipment Sales (“TES”), and Aftermarket Parts and Services (“APS”).
As of December 31, 2024, our fleet is comprised of more than 10,000 units with an average unit age of approximately 3.2 years, which we believe is young by rental fleet standards and compares favorably to the long useful life of the equipment.
As of December 31, 2025, our fleet is comprised of more than 10,400 units with an average unit age of approximately 2.9 years, which we believe is young by rental fleet standards and compares favorably to the long useful life of the equipment.
These trends have contributed to increased electricity demand in the U.S., as this growth often requires energy-intensive operations, including advanced automation and robotics, further straining existing power grids.
These trends have contributed to increased manufacturing spending and, as a result, increase electricity demand in the U.S., as this growth often requires energy-intensive operations, including advanced automation and robotics, further straining existing power grids.
This ensures we successfully transfer institutional knowledge and expertise from seasoned leaders to emerging talent while offering rewarding career paths. • Leadership Development: In 2024, we introduced a leadership development program to strengthen leadership capabilities and foster a culture aligned with our core values to support our people, operations, and growth.
This ensures we successfully transfer institutional knowledge and expertise from seasoned leaders to emerging talent while offering rewarding career paths. • Leadership Development: In 2025, we continued our investment in leadership development programs to strengthen leadership capabilities and foster a culture aligned with our core values to support our people, operations, and growth.
Although we have an expansive national footprint already, we have identified additional attractive geographic markets for potential expansion. Strong, Diverse Client Relationships and Industry Expertise – We serve more than 8,000 customers, with the top 15 customers representing approximately 17% of total revenue and no single customer representing greater than 3% of total revenue in 2024.
Although we have an expansive national footprint already, we have identified additional attractive geographic markets for potential expansion. Strong, Diverse Client Relationships and Industry Expertise – We serve approximately 8,000 customers, with the top 15 customers representing approximately 23.6% of total revenue and no single customer representing greater than 4% of total revenue in 2025.
We provide the specialty equipment required to maintain and install telecom cells, towers, and communication lines. Spending on telecommunications infrastructure was approximately $95 billion in 2023.
We provide the specialty equipment required to maintain and install telecom cells, towers, and communication lines. Spending on broadband telecommunications infrastructure was approximately $90 billion in 2024.
Long-term, secular growth in this market is driven by growing waste volumes generated by increasing waste generation per capita. Population and income growth drive municipal solid waste generation. Municipal solid waste revenue in the U.S. is projected to grow at a CAGR of 4.7% from 2024 to 2030.
Long-term, secular growth in this market is driven by growing waste volumes generated by increasing waste generation per capita. Population and income growth drive municipal solid waste generation. Municipal solid waste revenue in the U.S. is projected to grow at a CAGR of over 5% from 2025 to 2034.
Total infrastructure capex spend in the U.S. in 2024 was estimated to be just over $300 billion, and we believe the infrastructure end-market outlook remains positive, as total infrastructure spending is projected to increase to just under $350 billion by 2028. We consider the waste end-market as part of the general infrastructure industry.
Total infrastructure capex spend in the U.S. in 2025 was estimated to be over $310 billion, and we believe the infrastructure end-market outlook remains positive, as total infrastructure spending is projected to increase to approximately $365 billion by 2029. We consider the waste end-market as part of the general infrastructure industry.
We are dedicated to fostering an inclusive workplace where our employees can thrive regardless of background. We are always striving to enhance our employee experience and seek feedback from employees through engagement surveys, which helps us identify areas where we can continuously enhance our work experience.
We are dedicated to fostering an inclusive workplace where our employees can thrive regardless of background. We seek feedback from employees through engagement surveys, which help us identify opportunities to continuously improve the employee work experience.
Such capital expenditures are expected to continue to grow as freight demands increase. In addition to freight rail, spend on active commuter rail projects is significant with a growing pipeline.
Such capital expenditures are expected to continue to grow as freight demands increase. In addition to freight rail, spend on active commuter rail projects is significant with a growing pipeline. The Infrastructure Act provided $66 billion to support passenger rail improvement projects.
The growth in domestic manufacturing, along with data center growth trends detailed above, were cited in a recent industry report as the primary contributing factors to an increase in forecasted five-year growth in nationwide electric demand to approximately 16% from under 3% in 2022.
The growth in domestic manufacturing, along with data center growth trends detailed above, were cited in a recent industry report as the primary contributing factors to an increase in forecasted five-year cumulative growth from 2025 to 2030 in annual nationwide electricity demand to approximately 29% from under 4% forecasted in 2022 for the same period.
We have significant tenure with our top customers, with key relationships spanning more than 18 years.
We have significant tenure with our top customers, with key relationships spanning approximately 20 years.
Electrification Trends - Electrification in the U.S. transportation, commercial and residential real estate, and industrial sectors coupled with the shift to renewal electricity generation detailed above have been identified among the key factors towards reducing reliance on fossil fuels in the U.S. The U.S. energy consumption in 2050 could be more than 80% higher than it was in 2018.
Electrification Trends – Continued electrification in the U.S. transportation, commercial and residential real estate, and industrial sectors coupled with the shift to renewable electricity generation detailed above have been identified among the key factors towards reducing reliance on fossil fuels in the U.S.
Aftermarket Parts and Services Our APS offerings include a broad range of parts, tools, and accessories products, which is a natural extension of our core equipment offering and can be rented or purchased on an individual basis or in packaged specialty kits.
Underground Equipment Variety of equipment used to place and remove underground utility and telecom lines without disruption to the surface. 4 Table of Contents Aftermarket Parts and Services Our APS offerings include a broad range of parts, tools, and accessories products, which is a natural extension of our core equipment offering and can be rented or purchased on an individual basis or in packaged specialty kits.
We train our employees on our Code of Conduct and offer multiple pathways for reporting any concerns promptly, including through their leader, Human Resources, Legal or our anonymous 24/7 compliance hotline, which is managed by an experienced and objective third-party. 9 Table of Contents Our Health, Safety & Well Being We are committed to a safe and healthy workplace and culture of total well-being.
We train our employees on our Code of Conduct and offer multiple pathways for reporting any concerns promptly, including through their supervisors, Human Resources, Legal or our anonymous 24/7 compliance hotline, which is managed by an experienced and objective third party.
Facilities We are headquartered in Kansas City, Missouri where we house executive management, accounting, finance, information technology, human resources, marketing, and procurement professionals, as well as production, assembly, service and distribution operations.
Facilities We are headquartered in Kansas City, Missouri where we house executive management, accounting, finance, information technology, human resources, marketing, and procurement professionals, as well as production, assembly, service and distribution operations. We maintain a diverse geographic footprint in the U.S. and Canada, with more than 40 locations.
We strive to have zero workplace injuries and engage our employees in raising awareness and education through our Safety Ambassador Network, which includes a cross section of employees from multiple work facilities. We have a network of approximately 100 Safety Ambassadors who are provided training and instruction from our Environmental, Health and Safety professionals.
Our Health, Safety & Well Being We are committed to a safe and healthy workplace and culture of total well-being. We strive to have zero workplace injuries and engage our employees in raising awareness and education through our Safety Ambassador Network, which includes a cross section of employees from multiple work facilities.
The prevention of additional incidents associated with the continued operations of aging electric utility T&D infrastructure is expected to continue to drive increasing levels of maintenance and repair and replacement spend by utilities. Changing Generation Landscape – The ongoing transition from coal to gas and renewables continues to drive changes in the generation landscape and transmission project development.
The prevention of additional incidents associated with the continued operations of aging electric utility T&D infrastructure is expected to continue to drive increasing levels of maintenance and repair and replacement spend by utilities.
This program featured our ACE Leadership Model, which emphasizes shared leadership competencies and behaviors needed for success. In addition, we launched Foundational Leadership training to equip frontline and emerging leaders with essential skills.
This program featured our ACE Leadership Model, which emphasizes shared leadership competencies and behaviors needed for success. In addition, ACE Foundational Leadership training experienced continued success, equipping more than 200 frontline and 9 Table of Contents emerging leaders with essential skills.
Governmental Regulation We are subject to various governmental, including environmental, laws and regulations. Regulations affecting our operations principally relate to the licensing, permitting and inspection requirements for vehicles in our rental fleet.
We believe we own or license, or could obtain on reasonable terms, any intellectual property rights needed to conduct our business. Governmental Regulation We are subject to various governmental, including environmental, laws and regulations. Regulations affecting our operations principally relate to the licensing, permitting and inspection requirements for vehicles in our rental fleet.
This spend is driven by a number of attractive dynamics, demonstrating that the U.S. is potentially in the very early stages of a multi-year electric utility T&D spending cycle.
Total capital expenditures among U.S. investor-owned utilities in the electric utility T&D end-market were projected to be approximately $102 billion in 2025. This spend is driven by a number of attractive dynamics, demonstrating that the U.S. is potentially in the very early stages of a multi-year electric utility T&D spending cycle.
The most recent Federal estimates quantify the backlog of projects required to attain a “state of good repair,” meaning public transit is repaired to an age within its average service life, at $105 billion, which is projected to grow to as high as $270 billion by 2029 if not addressed.
The most recent Federal estimates quantify the backlog of projects required to attain a “state of good repair,” meaning public transit is repaired to an age within its average service life, at over $140 billion, an almost 40% increase since 2018.
Lastly, a large percentage of our rental fleet is currently focused on serving the electric utility T&D and telecom industries, but we believe there is significant opportunity to continue to grow our fleet of specialty equipment tailored to serve the growing rail and infrastructure end-markets as well.
Lastly, a large percentage of our rental fleet is currently focused on serving the electric utility T&D and telecom industries, but we believe there is significant opportunity to continue to grow our fleet of specialty equipment tailored to serve the growing rail and infrastructure end-markets as well. 6 Table of Contents Grow Equipment Sales Across Both Current and New Customers, End-Markets, and Product Offerings – We will be able to leverage our national and local sales approach to achieve growth in our existing customer base and across existing and newly entered product categories.
Our Safety Ambassadors are volunteers who have shown a willingness and capability to devote a portion of their workday to ensure that employees have a safe environment in which to work. We track recordable injuries and have an incident management system to investigate all safety incidents.
We have a network of approximately 100 Safety Ambassadors who are provided training and instruction from our Environmental, Health and Safety professionals. Our Safety Ambassadors are volunteers who have shown a willingness and capability to devote a portion of their workday to ensure that employees have a safe environment in which to work.
We are well positioned to benefit from this projected growth and maintain the flexibility to pivot our production and focus to any end-market that is experiencing greater demand due to our deep knowledge and expertise in the production of different types of equipment.
We are well positioned to benefit from this projected growth and maintain the flexibility to pivot our production and focus to any end-market that is experiencing greater demand due to our deep knowledge and expertise in the production of different types of equipment. 5 Table of Contents Young, Well-Maintained Rental Fleet Comprised of In-Demand Equipment – Our rental fleet consists of more than 10,400 units and is one of the youngest in the industry, with an average age of 2.9 years as of December 31, 2025.
We provide employees and their family members with 24/7 access to doctors and counselors with telemedicine and virtual counseling with no cost to our employees.
We provide employees with the opportunity to participate in the Company’s success with equity ownership at a discounted price through our Employee Stock Purchase Plan. We provide employees and their family members with 24/7 access to doctors and counselors with telemedicine and virtual counseling at no cost to our employees.
We maintain a diverse geographic footprint in the U.S. and Canada, with more than 40 locations. 7 Table of Contents Intellectual Property We do not own or license any patents, patent applications, or registered copyrights. We own a number of trademarks and domain names important to the business.
Intellectual Property We do not own or license any patents, patent applications, or registered copyrights. We own a number of trademarks and domain names important to the business. Our material trademarks are registered or pending applications for registrations in the U.S. Patent and Trademark Office and various non-U.S. jurisdictions.
Electric Utility T&D End-Market Maintaining safe and effective transmission and distribution lines is critical to national infrastructure, as they carry the electricity that powers the nation. Transmission lines carry high voltage electricity long distances, while distribution lines carry electricity from local transformers to houses and businesses.
Third-party industry research supports this and suggests that spending from the Infrastructure Act should continue through 2026 and possibly into 2027. Electric Utility T&D End-Market Maintaining safe and effective transmission and distribution lines is critical to national infrastructure, as they carry the electricity that powers the nation.
Additionally, pursuant to an agreement with Terex, we have a revocable, royalty-free, limited license to use certain Terex trademarks to promote the sale and servicing of Terex products, subject to certain conditions of use. We believe we own or license, or could obtain on reasonable terms, any intellectual property rights needed to conduct its business.
We use “Custom Truck One Source” as unregistered trademarks and “Load King” as a registered trademark. Additionally, pursuant to an agreement with Terex, we have a revocable, royalty-free, limited license to use certain Terex trademarks to promote the sale and servicing of Terex products, subject to certain conditions of use.
Increased Manufacturing Onshoring - In recent years, manufacturing onshoring in the U.S. - the building of manufacturing facilities in the U.S. to replace existing overseas production - has increased substantially.
As a result, significant spend for new transmission lines will be required to interconnect these new sources of power with the electrical grid. Increased Manufacturing Onshoring – In recent years, manufacturing onshoring in the U.S. - the building of manufacturing facilities in the U.S. to replace existing overseas production - has increased substantially.
Roll-Off Trucks Trucks equipped to transport waste containers Knuckleboom Trucks Trucks equipped to lift for utility, construction, and building materials applications Vacuum Trucks Trucks equipped to safely dig holes and transport materials by vacuuming materials or liquids Cranes Equipment made to lift heavy objects utilized in our core markets Underground Equipment Variety of equipment used to place and remove underground utility and telecom lines without disruption to the surface.
Rail Trucks Trucks equipped with specialty equipment to drive on rail tracks. Roll-Off Trucks Trucks equipped to transport waste containers. Knuckleboom Trucks Trucks equipped to lift for utility, construction, and building materials applications. Vacuum Trucks Trucks equipped to safely dig holes and transport materials by vacuuming materials or liquids.
Additionally, we launched our e-commerce platform in 2020 to begin selling proprietary Load King™ equipment parts and other targeted specialty equipment parts. Continue to Pursue Domestic Geographic Expansion – We operate more than 40 locations; however, broad sections of the United States and Canada are still outside of our primary operating area.
We believe this strategic reallocation of capacity and focus will strengthen our overall business and connection with our customers. Continue to Pursue Domestic Geographic Expansion – We operate more than 40 locations; however, broad sections of the United States and Canada are still outside of our primary operating area.
The Infrastructure Act was amended and renamed to the Infrastructure Investment and Jobs Act. This amended version included approximately $1.2 trillion in spending in new and reallocated funds with positive impacts to each of our end-markets.
The final amended version included approximately $1.2 trillion in spending in new and reallocated funds with positive impacts to each of our end-markets. Recent data released by the Federal government indicates that, as of September 2025, more than 75% of the funds from the Infrastructure Act have been allocated and less than 50% of the funds have been spent.
Data traffic is at an all-time high and is expected to increase in the future. North America data traffic is expected to grow at a CAGR of 16% from 2024 to 2030.
Rapid technological advancements, including advanced digital and video service offerings, continue to increase demand for greater wireline and wireless network capacity and reliability. Data traffic is at an all-time high and is expected to increase in the future. North America data traffic is expected to grow at a CAGR of 12% from 2025 to 2031.
Our specialty equipment is used for these projects, including the maintenance and repair of live lines and installation of new lines. Capital expenditure spend in the electric utility T&D end-market were estimated to be approximately $95 billion in 2024.
From 2024 through 2029, capital expenditures in these categories are forecasted to grow at CAGRs of approximately 15% for transmission and 4% for distribution. Our specialty equipment is used for these projects, including the maintenance and repair of live lines and installation of new lines.
Every incident is investigated and based on the findings, our safety team implements processes and procedures to prevent recurrences and remediate known hazards. We aim to offer competitive pay and a comprehensive benefit program including medical, vision, dental, life and disability insurance to attract and retain top talent.
We track recordable injuries and have an incident management system to investigate all safety incidents. Every incident is investigated and based on the findings, our safety team implements processes and procedures to prevent recurrences and remediate known hazards.
In addition, the continued expansion and implementation of wireless 5G technology, which requires existing cell sites add equipment to support new frequencies, will continue to contribute to a sustained level of industry spending. Rapid technological advancements, including advanced digital and video service offerings, continue to increase demand for greater wireline and wireless network capacity and reliability.
Currently, all 56 states and U.S. territories have re-submitted their final proposals under the updated guidelines. Funds are expected to begin to be deployed in 2026 . In addition, the continued expansion and implementation of wireless 5G technology, which requires existing cell sites add equipment to support new frequencies, will continue to contribute to a sustained level of industry spending.
Additionally, as the economy “electrifies,” in pursuit of reducing greenhouse gas emissions, electric reliability has become increasingly important. There will continue to be an increasing need for grid resiliency projects such as fire mitigation and storm hardening, and substantial renewable energy investments will be required in the electric transmission grid.
There will continue to be an increasing need for grid resiliency projects, such as fire mitigation and storm hardening, with substantial renewable energy investments likely to be required in the electric transmission grid. From 2015 to 2024, the compound annual growth rate (“CAGR”) for U.S.-based investor-owned utilities’ capital expenditures was approximately 5% for transmission and 10% for distribution.
Supporting these trends, the Infrastructure Act includes $7.5 billion to build a national network of electric vehicle chargers and $65 billion to upgrade power infrastructure. Telecom End-Market Telecommunications infrastructure, including telecom cells, towers, and wirelines, are the backbone of telephonic interaction and the transportation of mobile data.
Recent forecasts indicate that U.S. energy consumption in 2050 could be approximately 80% higher than it was in 2023. 2 Table of Contents Supporting these trends, the Infrastructure Act includes $7.5 billion to build a national network of electric vehicle chargers and $65 billion to upgrade power infrastructure.
Twenty- three states plus the District of Columbia have adopted specific greenhouse gas reduction targets to address climate change. As a result, significant spend for new transmission lines will be required to interconnect these new sources of power with the electrical grid.
Changing Power Generation Landscape – The ongoing transition from coal to gas and renewables continues to drive changes in the generation landscape and transmission project development. Twenty-five states plus the District of Columbia have adopted specific greenhouse gas reduction targets to address climate change.
Removed
Recent data released by the Federal government indicates that, as of November 2024, less than 50% of the funds from the Infrastructure Act have been allocated. Third-party industry research supports this and suggests that spending from the Infrastructure Act should continue for at least the next two to three years.
Added
Recently, our Chief Executive Officer reevaluated how he assesses performance and allocates resources across our business. This review resulted in a change in the reporting of management’s internal financial information.
Removed
From 2015 to 2023, the compound annual growth rate (“CAGR”) for capital expenditures relating to transmission, distribution and solar in North America was approximately 5%, 9% and 31%, respectively. From 2023 through 2028, capital expenditures in these categories are forecasted to grow at CAGRs of approximately 9%, 6%, and 18%, respectively.
Added
As a result, beginning in the three months ending March 31, 2026, we will report our results under two reportable segments: (1) Specialty Equipment Rentals (“SER”) and (2) Specialty Truck Equipment and Manufacturing (“STEM”).
Removed
Electricity demand from data centers is expected to grow from 25 megawatts of power in 2024 to more than 80 megawatts of power in 2030, a CAGR of more than 21%.
Added
Upon implementation, the new SER segment will consist of our historical ERS segment and a portion of our historical APS segment, and the new STEM segment will consist of our historical TES segment and a portion of our historical APS segment. We will also begin reflecting intercompany activity between the two segments, which will ultimately be eliminated in consolidation.
Removed
From 2010 to 2023, annual spending by the major U.S. wireline, wireless and cable broadband providers has increased from approximately $68 billion to approximately $95 billion, a CAGR of approximately 2.4%. The Infrastructure Act provided an additional $65 billion to increase access to reliable high-speed internet.
Added
This new segment reporting reflects how CTOS’s business is managed and how resources are allocated in 2026, and management believes this new presentation better reflects the positioning of CTOS’s strategies and operations portfolio. Management expects to provide more information on the new two segments in early April.
Removed
The Infrastructure Act provides $39 billion to modernize transportation and an additional approximate $90 billion in guaranteed funding for public transportation along with an additional $66 billion of funding specifically earmarked for passenger rail services.
Added
We believe our new segment realignment will better reflect key economic drivers, capital intensity, and margin profiles of the respective new segments, as well as align our external reporting with how management allocates capital and evaluates performance.
Removed
The Infrastructure Act provides $55 billion to expand access to clean drinking water for households, businesses, schools, and child care centers across the United States through many programs starting in 2021, over a 5 year period.
Added
Transmission lines carry high voltage electricity long distances, while distribution lines carry electricity from local transformers to houses and businesses. Additionally, as the economy “electrifies,” in pursuit of reducing greenhouse gas emissions, electric reliability has become increasingly important.
Removed
Rail Trucks Trucks equipped with specialty equipment to drive on rail tracks.

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Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

39 edited+2 added−3 removed109 unchanged
Biggest changeWe may be required to take write-downs or write-offs, restructuring and impairment or other charges that could have a material negative effect on our financial condition and results of operations and contribute to negative market perceptions about the Company or its securities, which could cause you to lose some or all of your investment.
Biggest changeWe may be required to take write-downs or write-offs, restructuring and impairment or other charges that could have a material negative effect on our financial condition and results of operations and contribute to negative market perceptions about the Company or its securities, which could cause you to lose some or all of your investment. 12 Table of Contents The cost of new equipment that we purchase for use in our rental fleet or for sale as inventory may increase, and the aging or obsolescence of our existing equipment, and fluctuations in the market value thereof, could have a material adverse effect on our business, financial condition and results of operations.
The White House, SEC and other regulators have accordingly increased their focus on companies’ cybersecurity vulnerabilities and risks. We have also observed a global increase, in both frequency and impact, in cybersecurity threats and more sophisticated cyber-attacks and threat actors. Such attacks and threats are unpredictable as to their timing, nature and scope.
The White House, the SEC and other regulators have accordingly increased their focus on companies’ cybersecurity vulnerabilities and risks. We have also observed a global increase, in both frequency and impact, in cybersecurity threats and more sophisticated cyber-attacks and threat actors. Such attacks and threats are unpredictable as to their timing, nature and scope.
We currently make, and in future may be required to make additional capital expenditures to comply with environmental and other regulations, such as: • Applicable motor vehicle safety standards established by the National Highway Traffic Safety Administration; • Emissions or other standards related to climate change as established by international, federal, state and local regulatory bodies; • Reclamation and remediation and other environmental protection; and • Standards for workplace safety established by the Occupational Safety and Health Administration.
We currently make, and in the future may be required to make additional capital expenditures to comply with environmental and other regulations, such as: • Applicable motor vehicle safety standards established by the National Highway Traffic Safety Administration; • Emissions or other standards related to climate change as established by international, federal, state and local regulatory bodies; • Reclamation, remediation and other environmental protection; and • Standards for workplace safety established by the Occupational Safety and Health Administration.
During 2023, we published our inaugural ESG report, and we may in the future engage in additional voluntary ESG initiatives (such as voluntary disclosures, certifications, or goals, among others) or commitments to improve the ESG profile of our company and/or our products; such initiatives or achievements of such commitments may be costly and may not have the desired effect.
During 2023, we published our inaugural ESG report, and we may in the future engage in additional voluntary ESG initiatives (such as voluntary disclosures, certifications, or goals, among others) or commitments to improve the ESG profile of the Company and/or our products; such initiatives or achievements of such commitments may be costly and may not have the desired effect.
The level of our indebtedness could have important consequences, including: • a portion of our cash flows from operations is dedicated to debt service and may not be available for other purposes; • limiting our flexibility in planning for, or reacting to, changes in our business and the industry in which we operate; • limiting our ability to obtain financing in the future for working capital, capital expenditures and general corporate purposes, including acquisitions, and potentially impeding our ability to secure favorable lease terms; • exposing us to the risk of increased interest rates, as borrowings under our ABL Facility are subject to variable rates of interest; • making us more vulnerable to economic downturns and industry conditions and possibly limiting our ability to withstand competitive pressures; • placing us at a competitive disadvantage compared to our competitors with less indebtedness; • making it more difficult for us to satisfy our obligations with respect to our debt; and • increasing our cost of borrowing.
The level of our indebtedness could have important consequences, including: • a portion of our cash flows from operations is dedicated to debt service and may not be available for other purposes; • limiting our flexibility in planning for, or reacting to, changes in our business and the industry in which we operate; • limiting our ability to obtain financing in the future for working capital, capital expenditures and general corporate purposes, including acquisitions, and potentially impeding our ability to secure favorable lease terms; • exposing us to the risk of increased interest rates, as borrowings under our ABL Facility are subject to variable rates of interest; • making us more vulnerable to economic downturns and industry conditions and possibly limiting our ability to withstand competitive pressures; 15 Table of Contents • placing us at a competitive disadvantage compared to our competitors with less indebtedness; • making it more difficult for us to satisfy our obligations with respect to our debt; and • increasing our cost of borrowing.
With respect to the ABL Facility, on any date when Specified Excess Availability (as defined in the ABL Credit Agreement) is less than the greater of (i) 10% of the lesser of (A) the aggregate revolving commitments under the ABL Facility at such time and (B) the borrowing base at such time (such lesser amount, the “Line Cap”) and (ii) $60 million, we will also be required by a springing covenant to maintain a minimum fixed charge coverage ratio of 1.00 to 1.00, tested for the four fiscal quarter period ending on the last day of the most recently ended fiscal quarter for which financials have been delivered, and at the end of each succeeding fiscal quarter thereafter until the date on which Specified Excess Availability has been equal to or greater than the greater of (x) 10% of the Line Cap and (y) $60 million for 30 consecutive calendar days.
With respect to the ABL Facility, on any date when Specified Excess Availability (as defined in the ABL Credit Agreement) is less than the greater of (i) 10% of the lesser of (A) the aggregate revolving commitments under the ABL Facility at such time and (B) the borrowing base at such time (such lesser amount, the “Line Cap”) and (ii) $60 million, we will also be required by a springing covenant to maintain a minimum fixed charge coverage ratio of 1.00 to 1.00, tested for the four fiscal quarter period ending on the last day of the most recently ended fiscal quarter for which financials have been delivered, and at the end of each succeeding fiscal quarter thereafter until the date on which Specified Excess Availability has been equal to or greater than the greater of (x) 10% of the Line Cap and (y) $60 million for 30 consecutive 16 Table of Contents calendar days.
In addition, because our systems may contain sensitive data and information about individuals and businesses, our failure to maintain the security, integrity 17 Table of Contents or confidentiality of the data we hold, whether the result of our insider malfeasance or errors or the malfeasance or errors of others, could harm our reputation or give rise to legal liabilities leading to lower revenues, increased costs for compliance and systems remediation, increased costs of liability for litigation (including class actions) and regulatory proceedings as well as fines and penalties, result in the misuse of our systems and networks, manipulation and destruction of data, misappropriation of assets or production stoppages and supply shortages, and other potential material adverse effects on our results of operations.
In addition, because our systems may contain sensitive data and information about individuals and businesses, our failure to maintain the security, integrity or confidentiality of the data we hold, whether the result of our insider malfeasance or errors or the malfeasance or errors of others, could harm our reputation or give rise to legal liabilities leading to lower revenues, increased costs for compliance and systems remediation, increased costs of liability for litigation (including class actions) and regulatory proceedings as well as fines and penalties, result in the misuse of our systems and networks, manipulation and destruction of data, misappropriation of assets or production stoppages and supply shortages, and other potential material adverse effects on our results of operations.
For example, expectations around company’s management of ESG matters continues to evolve rapidly, in many instances due to factors that are out of our control.
For example, expectations around the Company’s management of ESG matters continues to evolve rapidly, in many instances due to factors that are out of our control.
As a small portion of our workforce is unionized, we are subject to risk of work stoppages and other labor relations matters. As of December 31, 2024, approximately 2% of the U.S. hourly workers of the Company were represented by a labor union and were covered by a collective bargaining agreement.
As a small portion of our workforce is unionized, we are subject to risk of work stoppages and other labor relations matters. As of December 31, 2025, approximately 2% of the U.S. hourly workers of the Company were represented by a labor union and were covered by a collective bargaining agreement.
Additionally, many of our business partners and suppliers may be subject to similar expectations, which may augment or create additional risks, including risks that may not be known to us. 19 Table of Contents Certain market participants, including major institutional investors and capital providers, use third-party benchmarks and scores to assess companies’ ESG profiles in making investment or voting decisions.
Additionally, many of our business partners and suppliers may be subject to similar expectations, which may augment or create additional risks, including risks that may not be known to us. Certain market participants, including major institutional investors and capital providers, use third-party benchmarks and scores to assess companies’ ESG profiles in making investment or voting decisions.
Our ability to pay interest and principal in the future on our indebtedness and to fund our capital expenditures and acquisitions will depend upon our future operating performance and the 15 Table of Contents availability of refinancing options, which will be affected by prevailing economic conditions and, the availability of capital, as well as financial, business and other factors, some of which are beyond our control.
Our ability to pay interest and principal in the future on our indebtedness and to fund our capital expenditures and acquisitions will depend upon our future operating performance and the availability of refinancing options, which will be affected by prevailing economic conditions and, the availability of capital, as well as financial, business and other factors, some of which are beyond our control.
To the extent we are subject to such activism, it may require us to incur costs or otherwise adversely impact our business. This and other stakeholder expectations will likely lead to increased costs as well as scrutiny that could heighten all of the risks identified in this risk factor.
To the extent we are subject to such activism, it may require us to incur costs 19 Table of Contents or otherwise adversely impact our business. This and other stakeholder expectations will likely lead to increased costs as well as scrutiny that could heighten all of the risks identified in this risk factor.
Platinum may also pursue acquisition opportunities that may be complementary to our business and, as a result, these acquisition opportunities may not be available to us. 14 Table of Contents The price of our common stock has been, and may continue to be, volatile. The market price of our common stock price historically has fluctuated over a wide range.
Platinum may also pursue acquisition opportunities that may be complementary to our business and, as a result, these acquisition opportunities may not be available to us. The price of our common stock has been, and may continue to be, volatile. The market price of our common stock price historically has fluctuated over a wide range.
We may also be liable, under certain laws and regulations, for product liability, personal injury, other environmental damages (including natural resources), and other claims, as well as the costs of investigation and remediation of environmental contamination and any sanctions, such as fines and penalties.
We may also be liable, under certain laws and regulations, for product liability, personal injury, other 18 Table of Contents environmental damages (including natural resources), and other claims, as well as the costs of investigation and remediation of environmental contamination and any sanctions, such as fines and penalties.
We are unable to predict the ultimate cost of compliance with these requirements or their effect on our operations. 18 Table of Contents We are subject to a series of risks related to climate change. There are inherent climate-related risks wherever business is conducted.
We are unable to predict the ultimate cost of compliance with these requirements or their effect on our operations. We are subject to a series of risks related to climate change. There are inherent climate-related risks wherever business is conducted.
If we fail to maintain compliance with these covenants in the future, we cannot assure you that we will be able to obtain waivers from the lenders and/or amend the covenants. 16 Table of Contents Our variable rate indebtedness subjects us to interest rate risk, which could cause our debt service obligations to increase significantly.
If we fail to maintain compliance with these covenants in the future, we cannot assure you that we will be able to obtain waivers from the lenders and/or amend the covenants. Our variable rate indebtedness subjects us to interest rate risk, which could cause our debt service obligations to increase significantly.
Cybersecurity risks due to work-from-home arrangements at the Company and third parties have increased due to the challenges associated with managing remote computing assets and the security vulnerabilities in many non-corporate and home networks.
Cybersecurity risks due to work-from-home arrangements at the Company and third parties have increased due to the challenges associated with managing remote 17 Table of Contents computing assets and the security vulnerabilities in many non-corporate and home networks.
The equipment dealership and rental industries are highly competitive and fragmented. Many of the markets in which the Company operates are served by a large number of competitors, ranging from national and multi-regional equipment rental companies to small, independent businesses with a limited number of locations.
Many of the markets in which the Company operates are served by a large number of competitors, ranging from national and multi-regional equipment rental companies to small, independent businesses with a limited number of locations.
There can also be no assurance that our cybersecurity risk management program and processes, including our policies, controls or procedures, will be fully implemented, complied with or effective in protecting our IT systems and Confidential Information.
There can also be no assurance that our cybersecurity risk management program and processes, including our policies, controls or procedures, are fully implemented, complied with or effective in protecting our IT systems and Confidential Information at all times.
Uncertainty remains regarding supply chain disruptions, inflationary pressure, public health crises, and geopolitical risks that have led to issues, broadly, in the supply chain.
Uncertainty remains regarding supply chain disruptions, inflationary pressure, tariffs and international trade restrictions, public health crises, and geopolitical risks that have led to issues, broadly, in the supply chain.
Such increases could materially impact our financial condition and results of operations in future periods if we are not able to pass such cost increases through to our customers in the form of higher prices. In addition, our inventory has increased recently as part of our measures to manage supply chain challenges.
Such increases could materially impact our financial condition and results of operations in future periods if we are not able to pass such cost increases through to our customers in the form of higher prices. In addition, in recent years we have maintained high levels of inventory as part of our measures to manage supply chain challenges.
As of December 31, 2024, we have variable rate debt, consisting of $1,384.2 million outstanding under the ABL Facility and floor plan financing arrangements.
As of December 31, 2025, we have variable rate debt, consisting of $1,355.4 million outstanding under the ABL Facility and floor plan financing arrangements.
Our reported sales order backlog may not be converted to revenue in any particular period and actual revenue from such orders may not equal our backlog.
Our reported sales order backlog may not be converted to revenue in any particular period and actual revenue from such orders may not equal our backlog. Therefore, our sales order backlog may not be indicative of the level of our future revenues.
As of December 31, 2024, our total indebtedness was $1,547.7 million, consisting of $920.0 million in aggregate principal amount of the 2029 Secured Notes, $582.9 million of borrowings under our Asset Based Lending (“ABL”) Facility and other debt obligations of $44.8 million (excluding approximately $801.3 million of indebtedness under our floor plan financing agreements).
As of December 31, 2025, our total indebtedness was $1,660.8 million, consisting of $920.0 million in aggregate principal amount of the 2029 Secured Notes, $698.0 million of borrowings under our Asset Based Lending (“ABL”) Facility and other debt obligations of $42.8 million (excluding approximately $657.4 million of indebtedness under our floor plan financing agreements).
We cannot guarantee that future 13 Table of Contents political and public policy uncertainties, limitations on the availability of capital, higher or changing costs of capital, or the desire to preserve liquidity, will not cause our current or prospective customers to make reductions in future capital budgets and spending.
We cannot guarantee that future political and public policy uncertainties, limitations on the availability of capital, higher or changing costs of capital, or the desire to preserve liquidity, will not cause our current or prospective customers to make reductions in future capital budgets and spending. If petroleum prices increase, then our results of operations could be adversely affected.
During fiscal 2024, the price of our common stock ranged from a low of $3.03 per share to a high of $7.00 per share.
During fiscal 2025, the price of our common stock ranged from a low of $3.18 per share to a high of $6.78 per share.
Therefore, our sales order backlog may not be indicative of the level of our future revenues. 11 Table of Contents A small portion of our workforce is unionized, and more of our workforce could become unionized in the future, which could negatively impact the stability of our production, materially reduce our profitability and increase the risk of work stoppages.
A small portion of our workforce is unionized, and more of our workforce could become unionized in the future, which could negatively impact the stability of our production, materially reduce our profitability and increase the risk of work stoppages.
Increased scrutiny from various parties may also result in increased compliance costs and increased legal risks may also impact our suppliers or customers, which may indirectly impact our business, financial condition, or results of operations.
Reporting expectations are also increasing, with a variety of customers, capital providers, and regulators seeking increased information on climate related risks. Increased scrutiny from various parties may also result in increased compliance costs and increased legal risks may also impact our suppliers or customers, which may indirectly impact our business, financial condition, or results of operations.
We can provide no assurance that we will be successful in generating growth, maintaining or increasing our cash flows or profitability or achieving cost savings and revenue enhancements, and our inability to do so could have a material adverse effect on our business, results of operations and financial condition.
Moreover, our customers may, in response to the announcement or consummation of a transaction, delay or defer purchasing decisions, and our revenues could materially decline or any anticipated increases in revenue could be lower than expected. 14 Table of Contents We can provide no assurance that we will be successful in generating growth, maintaining or increasing our cash flows or profitability or achieving cost savings and revenue enhancements, and our inability to do so could have a material adverse effect on our business, results of operations and financial condition.
Regulatory, technological advancement, or other changes in our core end-markets may affect our customers’ spending on the products and services we provide. Many of our customers operate in regulated industries (for example, electric utility T&D, telecom, rail, and general infrastructure) and are subject to laws and regulations that can change frequently and without notice.
Many of our customers operate in regulated industries (for example, electric utility T&D, telecom, rail, and general infrastructure) and are subject to laws and regulations that can change frequently and without notice.
In addition, our profit margins would decrease if prices of purchased raw materials, component parts or finished goods increase and we are unable to pass on those increases to our customers. The Company is subject to competition, which may have a material adverse effect on the Company’s business by reducing the Company’s ability to increase or maintain revenues or profitability.
In addition, our profit margins would decrease if prices of purchased raw materials, component parts or finished goods increase and we are unable to pass on those increases to our customers.
Recorded reserves represent our estimate of current expected credit losses on existing receivables and are determined based on historical customer assessments, current financial conditions, and reasonable and supportable forecasts. An unexpected change in customer financial condition or future economic uncertainty could result in additional requirements for specific reserves, which could have a negative impact on our consolidated financial position.
An unexpected change in customer financial condition or future economic uncertainty could result in additional requirements for specific reserves, which could have a negative impact on our consolidated financial position.
Any significant increase in such costs could have a material adverse effect on our business, financial condition and results of operations. In addition, the market value of any given piece of rental equipment could be less than its book value at the time of sale.
In addition, the market value of any given piece of rental equipment could be less than its book value at the time of sale.
If petroleum prices increase, then our results of operations could be adversely affected. Petroleum prices have fluctuated significantly in recent years. Prices and availability of petroleum products are subject to political, economic and market factors that are outside of our control.
Petroleum prices have fluctuated significantly in recent years. Prices and availability of petroleum products are subject to political, economic and market factors that are outside of our control. Political events in petroleum-producing regions as well as hurricanes and other weather-related events may cause the price of fuel to increase.
In addition, we may incur losses upon dispositions of our rental fleet due to residual value risk or upon any write-off and write-down of our sales inventory. If the average age of our fleet of rental equipment were to increase, the cost of maintaining our equipment, if not replaced within a certain period of time, will likely increase.
Our efforts to realign our inventory with market demand may not be successful. In addition, we may incur losses upon dispositions of our rental fleet due to residual value risk or upon any write-off and write-down of our sales inventory.
Political events in petroleum-producing regions as well as hurricanes and other weather-related events may cause the price of fuel to increase. If the price of fuel increases, the demand for our products may decline and transportation and freight costs may increase, which would adversely affect our financial condition and results of operations.
If the price of fuel increases, the demand for our products may decline and transportation and freight costs may increase, which would adversely affect our financial condition and results of operations. Regulatory, technological advancement, or other changes in our core end-markets may affect our customers’ spending on the products and services we provide.
If our operating costs increase as our rental equipment fleet ages and we are unable to pass 12 Table of Contents along such costs, our results of operations will be negatively impacted. As of December 31, 2024, the average age of our rental equipment fleet was less than four years. The costs of maintenance may materially increase in the future.
If the average age of our fleet of rental equipment were to increase, the cost of maintaining our equipment, if not replaced within a certain period of time, will likely increase. If our operating costs increase as our rental equipment fleet ages and we are unable to pass along such costs, our results of operations will be negatively impacted.
The diversion of management’s attention, and any difficulties encountered in such a process, could harm our business, financial condition, and operating results. Moreover, our customers may, in response to the announcement or consummation of a transaction, delay or defer purchasing decisions, and our revenues could materially decline or any anticipated increases in revenue could be lower than expected.
The diversion of management’s attention, and any difficulties encountered in such a process, could harm our business, financial condition, and operating results.
The cost of new equipment that we purchase for use in our rental fleet or for sale as inventory may increase, and the aging or obsolescence of our existing equipment, and fluctuations in the market value thereof, could have a material adverse effect on our business, financial condition and results of operations.
As of December 31, 2025, the average age of our rental equipment fleet was less than three years. The costs of maintenance may materially increase in the future. Any significant increase in such costs could have a material adverse effect on our business, financial condition and results of operations.
Removed
Our ERS segment has experienced some near-term pressure in demand in the utility market due to a lack of customer access to financing in a tight credit environment, and our customers’ decision to delay purchase decisions being influenced by their expectation of lower interest rate to come and the previous uncertainty surrounding the 2024 presidential election.
Added
The Company is subject to competition, which may have a material adverse effect on the Company’s business by reducing the Company’s ability to increase or maintain revenues or profitability. 11 Table of Contents The equipment dealership and rental industries are highly competitive and fragmented.
Removed
Throughout 2024, our ERS segment experienced near-term pressure on demand in the utility market, partially caused by regulatory compliance issues that affected the timing of customers’ job starts.
Added
Recorded reserves represent our estimate of current expected credit losses on existing receivables and are determined based on historical customer assessments, current financial conditions, and reasonable and supportable 13 Table of Contents forecasts.
Removed
Reporting expectations are also increasing, with a variety of customers, capital providers, and regulators seeking increased information on climate related risks. For example, the SEC has proposed a rule that, if adopted, may require us to incur significant costs to assess and disclose on a range of climate-related data and risks.

Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

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Biggest changeAudit Committee members also receive presentations on cybersecurity topics from our Chief Information Officer and Chief Financial Officer, supported by our internal security staff, or external experts as part of the Board’s continuing education on topics that impact public companies. 20 Table of Contents Our management team, including our Chief Financial Officer and Chief Information Officer, is responsible for assessing and managing our material risks from cybersecurity threats.
Biggest changeAudit Committee 20 Table of Contents members also receive presentations on cybersecurity topics from our Chief Information Officer and Chief Financial Officer, supported by our internal security staff, or external experts as part of the Board’s continuing education on topics that impact public companies.
The management team has overall responsibility for leading our overall cybersecurity risk management program, including our internal cybersecurity personnel and our external cybersecurity service providers. Our Chief Information Officer has more than 20 years of experience managing and leading IT and cybersecurity teams.
Our Chief Information Officer has more than 20 years of experience managing and leading IT and cybersecurity teams.
Added
Our Chief Information Officer, who is a member of our management team that also includes our Chief Financial Officer, has primary responsibility for assessing and managing our material risks from cybersecurity threats. The management team has responsibility for leading our overall cybersecurity risk management program, including our internal cybersecurity personnel and our external cybersecurity service providers.

Item 2. Properties

Properties — owned and leased real estate

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Biggest changeCommerce Ave, Suite 200 Kansas City, MO United States Leased 6 Sutton Cir and Unit 2 Sutton Cir Condominium Hooksett, NH United States Leased 1400 Union Lndg Rd and 1850 Union Lndg Rd Cinnaminson, NJ United States Leased 6708 Townline Rd Syracuse, NY United States Leased 3522 Middlebranch Rd NE Canton, OH United States Leased 3205 Davinion Rd El Reno, OK United States Leased 300 Johnson St and 370 Johnson St Wilkes Barre, PA United States Leased 1400 E Hwy 67 Alvarado, TX United States Leased 7200 Jack Newell Blvd S and 2422 Gravel Rd Fort Worth, TX United States Leased 18725 Mckay Blvd Humble, TX United States Leased 12519 W I-20 Odessa, TX United States Leased 9775 E Lynchburg Salem Tpke Forest, VA United States Leased 26109 & 26119 United Rd NE and 26129 Calvary Kingston, WA United States Leased 5734 Minder Rd Ste A-1 Poulsbo, WA United States Leased 11139 W Becher St West Allis, WI United States Leased 5065 140th Ave NW, Williston, ND United States Leased 2900 Rissler Rd and 5105 Pelham Dr Sedalia, MO United States Leased 4334 Snapfinger Woods Dr Atlanta, GA United States Leased 21209 & 21115 Durand Ave; 4601 Haag Dr, Union Grove, WI United States Leased 1700 Leider Dr Union Grove, WI United States Leased 12660 E Lynchburg Salem Turnpike Lynchburg, VA United States Leased 701, 702 and 704 East Rose St and 306 N Pearl St Elk Point, SD United States Leased 738 W Boeing Dr Casas Grande, AZ United States Leased 2040 and 2060 Industrial Park Rd Alexandria, LA United States Leased 7473 Reese Rd Sacramento, CA United States Leased 2794 S Commerce Way Ogden, UT United States Leased 118 Wyandanch Ave Wyandanch, NY United States Leased 4840 90 Ave SE Calgary, Alberta Canada Leased We believe that all of our properties are in good operating condition and are suitable to adequately meet our current needs.
Biggest changeOur one-stop shop approach focuses on providing the products and services offered by each of our segments at each of our locations. 21 Table of Contents Location Type 7701 Independence Avenue, Kansas City, MO United States Owned 11102 261 St Acheson, AB Canada Leased 9230 51 St SE Calgary, AB Canada Leased 127 Earl Thompson PL, Ayr, ON Canada Leased 4045 Hwy 5 and 2665 South Rockwood Cabot, AR United States Leased 655 E 20Th St Yuma, AZ United States Leased 4500 State Rd and 1032 Black Gold Rd Bakersfield, CA United States Leased 14670 Randall Ave Fontana, CA United States Leased 5455 E 52nd Ave Commerce City, CO United States Leased 4729 Capital Cir Nw and 4755DI Capital Cir Nw Tallahassee, FL United States Leased 9879 Us Hwy 301 N; 7906 Baseline Ct and 8949 Maislin Rd Tampa, FL United States Leased 3112 E State Rd 124 Bluffton, IN United States Leased 10740 Nall Ave Overland Park, KS United States Leased 9230 Cedar Knoll Dr Grass Lake, MI United States Leased 2370 and 2384 English St Maplewood, MN United States Leased 2109 Manchester Trafficway, 1850 Southern Road, and 6900 N Executive Drive, Kansas City, MO United States Leased 6 Sutton Cir and Unit 2 Sutton Cir Condominium Hooksett, NH United States Leased 1400 Union Lndg Rd and 1850 Union Lndg Rd Cinnaminson, NJ United States Leased 7909 N Upland Drive, Portland, OR United States Leased 3522 Middlebranch Rd NE Canton, OH United States Leased 3205 Davinion Rd El Reno, OK United States Leased 300 Johnson St and 212 Johnson St Wilkes Barre, PA United States Leased 1400 E Hwy 67 Alvarado, TX United States Leased 7200 Jack Newell Blvd S, 2020 E 4th St, and 2422 Gravel Rd Fort Worth, TX United States Leased 18725 Mckay Blvd Humble, TX United States Leased 12519 W I-20 Odessa, TX United States Leased 9775 E Lynchburg Salem Tpke Forest, VA United States Leased 26109 and 26119 United Rd NE Kingston, WA United States Leased 5734 Minder Rd Ste A-1 Poulsbo, WA United States Leased 1150 Jetport Drive, Orlando, FL United States Leased 5065 140th Ave NW, Williston, ND United States Leased 2900 Rissler Rd and 5105 Pelham Dr Sedalia, MO United States Leased 4334 Snapfinger Woods Dr Atlanta, GA United States Leased 21209 & 21115 Durand Ave; 4601 Haag Dr, Union Grove, WI United States Leased 1625 and 1700 Leider Dr Union Grove, WI United States Leased 12660 E Lynchburg Salem Turnpike Lynchburg, VA United States Leased 701, 702 and 704 East Rose St and 306 N Pearl St Elk Point, SD United States Leased 738 W Boeing Dr Casa Grande, AZ United States Leased 2040 and 2060 Industrial Park Rd Alexandria, LA United States Leased 7473 Reese Rd Sacramento, CA United States Leased 2794 S Commerce Way Ogden, UT United States Leased 118 Wyandanch Ave Wyandanch, NY United States Leased 4840 90 Ave SE Calgary, Alberta Canada Leased 6177 S Bay Rd, Cicero, NY United States Leased We believe that all of our properties are in good operating condition and are suitable to adequately meet our current needs. 22 Table of Contents
We maintain a diverse geographic footprint in the U.S. and Canada, with more than 39 equipment rental and service locations. These facilities are typically service centers for the maintenance and support of our equipment and, depending on the location, may include separate areas for displaying and storage of equipment and parts.
We maintain a diverse geographic footprint in the U.S. and Canada, with more than 40 equipment rental and service locations. These facilities are typically service centers for the maintenance and support of our equipment and, depending on the location, may include separate areas for displaying and storage of equipment and parts.
Removed
Our one-stop shop approach focuses on providing the products and services offered by each of our segments at each of our locations. 21 Table of Contents Location Type 7701 Independence Avenue, Kansas City, MO United States Owned 11102 261 St Acheson, AB Canada Leased 9230 51 St SE Calgary, AB Canada Leased 127 Earl Thompson PL, Ayr, ON Canada Leased 4045 Hwy 5 and 2665 South Rockwood Cabot, AR United States Leased 655 E 20Th St Yuma, AZ United States Leased 4500 State Rd and 1032 Black Gold Rd Bakersfield, CA United States Leased 14670 Randall Ave Fontana, CA United States Leased 5455 E 52nd Ave Commerce City, CO United States Leased 4729 Capital Cir Nw and 4755DI Capital Cir Nw Tallahassee, FL United States Leased 9879 Us Hwy 301 N; 7906 Baseline Ct and 8949 Maislin Rd Tampa, FL United States Leased 3112 E State Rd 124 Bluffton, IN United States Leased 10740 Nall Ave Overland Park, KS United States Leased 9230 Cedar Knoll Dr Grass Lake, MI United States Leased 2370 and 2384 English St Maplewood, MN United States Leased 2109 Manchester Trafficway and 6501 E.

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

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Biggest changeIn the opinion of management, there are no pending litigations, disputes or claims against the Company that, if decided adversely, would have a material adverse effect on its consolidated financial condition, cash flows or results of operations. 22 Table of Contents
Biggest changeIn the opinion of management, there are no pending litigations, disputes or claims against the Company that, if decided adversely, would have a material adverse effect on its consolidated financial condition, cash flows or results of operations.

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest changeThe authorization does not have an expiration date. Repurchases under the program may be made in the open market, in privately negotiated transactions or otherwise, with the amount and timing of repurchases depending on market conditions and corporate needs.
Biggest changeThe authorization does not have an expiration date. Repurchases under the program may be made in the open market, in privately negotiated transactions or otherwise, with the amount and timing of repurchases depending on market conditions and corporate needs. We did not purchase any shares of our common stock during the three months ended December 31, 2025.
Recent Sales of Unregistered Securities; Use of Proceeds From Registered Securities There were no sales of unregistered securities by the Company during the year ended December 31, 2024.
Recent Sales of Unregistered Securities; Use of Proceeds From Registered Securities There were no sales of unregistered securities by the Company during the year ended December 31, 2025.
Item 5. Market for Registrant’s Common Equity, Related Shareholder Matters and Issuer Purchases of Equity Securities Market Information Custom Truck One Source, Inc.’s common stock and warrants trade on the New York Stock Exchange under the symbol “CTOS” and “CTOS.WS,” respectively. As of February 26, 2025 , there were approximately 60 holders of record of our common stock.
Item 5. Market for Registrant’s Common Equity, Related Shareholder Matters and Issuer Purchases of Equity Securities Market Information Custom Truck One Source, Inc.’s common stock trades on the New York Stock Exchange under the symbol “CTOS”. As of March 6, 2026 , there were approximately 54 holders of record of our common stock.
Removed
We purchased and held in treasury 135,434 shares for tax withholding purposes related to our equity compensation plans during the fourth quarter of 2024. The shares purchased under our equity compensation plans were withheld to satisfy tax withholding obligations upon the vesting of restricted stock unit awards or exercise of stock options.
Added
The actual number of shareholders, which exceeds the number of record shareholders, includes shareholders who are beneficial owners but whose shares are held in retail brokerage accounts. Additionally, the number of record shareholders does not include shareholders whose shares may be held in trust by other entities.
Removed
The following table contains information regarding our purchases of our common stock during the three months ended December 31, 2024: Period Total Number of Shares Purchased Average Price Paid per Share Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs Approximate Dollar Value of Shares that May Yet Be Purchased Under the Plans or Programs (in $000s) October 1, 2024 to October 31, 2024 — $ — — 1,892 November 1, 2024 to November 30, 2024 — $ — — 1,892 December 1, 2024 to December 31, 2024 135,434 $ 4.81 — 1,892 Total 135,434 $ 4.81 — On January 30, 2025, the Company purchased 8,143,635 shares of the Company’s common stock, par value $0.0001 per share (the “Common Stock”), from affiliates of Energy Capital Partners, at a purchase price of $4.00 per share, which represents an approximately 23% discount from the price of $5.19 per share of Common Stock at the close of trading on January 29, 2025, for an aggregate purchase price of $32.6 million.
Removed
The transaction was approved by the Company’s Board of Directors and Audit Committee of the Board of Directors and the purchased shares are held in treasury.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

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Biggest changeSee further discussion of this transaction in Note 7: Rental Equipment and Property and Equipment and Note 9: Leases as Lessee in the Notes to the Consolidated Financial Statements under Part II, Item 8, Consolidated Results of Operations Year Ended December 31, (in $000s) 2024 % of revenue 2023 % of revenue $ Change % change Rental revenue $ 442,953 24.6% $ 478,910 25.7% $ (35,957) (7.5)% Equipment sales 1,223,036 67.9% 1,253,453 67.2% (30,417) (2.4)% Parts sales and services 136,291 7.6% 132,737 7.1% 3,554 2.7% Total revenue 1,802,280 100.0% 1,865,100 100.0% (62,820) (3.4)% Cost of revenue, excluding rental equipment depreciation 1,228,557 68.2% 1,240,176 66.5% (11,619) (0.9)% Depreciation of rental equipment 183,453 10.2% 170,664 9.2% 12,789 7.5% Gross profit 390,270 21.7% 454,260 24.4% (63,990) (14.1)% Gain on sale leaseback transaction (23,497) — (23,497) Total other operating expenses 287,404 283,312 4,092 Total operating expenses 263,907 283,312 (19,405) Operating income 126,363 170,948 (44,585) Total other expense 155,550 112,872 42,678 Income (loss) before income taxes (29,187) 58,076 (87,263) Income tax expense (532) 7,364 (7,896) Net income (loss) $ (28,655) $ 50,712 $ (79,367) Total Revenue - The decrease in revenue for the year ended December 31, 2024, was primarily due to lower rental revenue and lower volume of used equipment sales.
Biggest changeThe Company continues to monitor the impact on its supply chain, including, but not limited to, the commercial vehicle manufacturers that provide the chassis used in the Company’s production and manufacturing processes, which could potentially limit the ability of these manufacturers to meet demand in future periods. 27 Table of Contents Results of Operations Year Ended December 31, 2025, Compared to the Year Ended December 31, 2024 Consolidated Results of Operations Year Ended December 31, (in $000s) 2025 % of revenue 2024 % of revenue $ Change % Change Rental revenue $ 506,198 26.0% $ 442,953 24.6% $ 63,245 14.3% Equipment sales 1,304,483 67.1% 1,223,036 67.9% 81,447 6.7% Parts sales and services 133,276 6.9% 136,291 7.6% (3,015) (2.2)% Total revenue 1,943,957 100.0% 1,802,280 100.0% 141,677 7.9% Cost of revenue, excluding rental equipment depreciation 1,316,430 67.7% 1,228,557 68.2% 87,873 7.2% Depreciation of rental equipment 215,635 11.1% 183,453 10.2% 32,182 17.5% Gross profit 411,892 21.2% 390,270 21.7% 21,622 5.5% Gain on sale leaseback transaction — (23,497) 23,497 (100.0)% Total other operating expenses 286,949 287,404 (455) (0.2)% Total operating expenses 286,949 263,907 23,042 8.7% Operating income 124,943 126,363 (1,420) (1.1)% Total other expense 153,073 155,550 (2,477) (1.6)% Income (loss) before income taxes (28,130) (29,187) 1,057 (3.6)% Income tax expense (benefit) 2,922 (532) 3,454 (649.2)% Net income (loss) $ (31,052) $ (28,655) $ (2,397) 8.4% Total Revenue - The increase in revenue for the year ended December 31, 2025, is a result of higher rental revenue driven by higher average OEC on rent as well as strong new and used equipment sales.
The rate is also affected by discrete items that may occur in any given year, such as legislative enactments and changes in our corporate structure that may occur. These discrete items may not be consistent from year to year.
The rate is also affected by discrete items that may occur in any given year, such as legislative enactments and changes in our corporate structure. These discrete items may not be consistent from year to year.
The Company presents Net Leverage Ratio, which is equivalent to Consolidated Total Net Leverage Ratio in our ABL Credit Agreement and Consolidated Total Debt Ratio in the Indenture, is defined as Net Debt over Adjusted EBITDA for the previous twelve-month period.
The Company presents Net Leverage Ratio, which is equivalent to Consolidated Total Net Leverage Ratio in our ABL Credit Agreement and Consolidated Total Debt Ratio in the Indenture. Net Leverage Ratio is defined as Net Debt over Adjusted EBITDA for the previous twelve-month period.
Quantitative Impairment Test – The quantitative impairment test involves a comparison of the estimated fair value of a reporting unit to its carrying amount with the fair value of a reporting being unit being estimated by using a discounted cash flow model (the “income approach”) that calculates fair value as the present value of expected cash flows of the reporting unit.
Quantitative Impairment Test – The quantitative impairment test involves a comparison of the estimated fair value of a reporting unit to its carrying amount with the fair value of a reporting unit being estimated by using a discounted cash flow model (the “income approach”) that calculates fair value as the present value of expected cash flows of the reporting unit.
Under the income approach, the discounted cash 35 Table of Contents flow model determines fair value based on the present value of projected cash flows over a specified period and a residual value related to future cash flows beyond the projection period.
Under the income approach, the discounted cash flow model determines fair value based on the present value of projected cash flows over a specified period and a residual value 35 Table of Contents related to future cash flows beyond the projection period.
The verifiable evidence, such as future reversals of existing temporary differences and the ability to carryback, are considered before 36 Table of Contents estimated future taxable income (exclusive of temporary differences and tax planning strategies) is considered because future taxable income estimates are more subjective.
The verifiable evidence, such as future reversals of existing temporary differences and the ability to carryback, are considered before estimated future taxable income (exclusive of temporary differences and tax planning strategies) is considered because future taxable 36 Table of Contents income estimates are more subjective.
Income Tax Expense - Our overall effective tax rate is affected by a number of factors, such as the relative amounts of income we earn in differing tax jurisdictions, tax law changes, certain non-deductible expenses (non-taxable income), such as compensation disallowance and mark-to-market adjustments on derivative financial instruments, and changes in the valuation allowance we establish against deferred tax assets.
Income Tax Expense (Benefit) - Our overall effective tax rate is affected by a number of factors, such as the relative amounts of income we earn in differing tax jurisdictions, tax law changes, certain non-deductible expenses (non-taxable income), such as compensation disallowance and mark-to-market adjustments on derivative financial instruments, and changes in the valuation allowance we establish against deferred tax assets.
Depreciation of Rental Equipment - Depreciation expense of our rental equipment for the year ended December 31, 2024 increased as a result of higher rental equipment levels. Gain on Sale Leaseback Transaction - During 2024, the Company closed on a sale leaseback transaction with an unrelated third party which resulted in a gain of $23.5 million.
Depreciation of Rental Equipment - Depreciation expense of our rental equipment for the year ended December 31, 2025, increased as a result of higher rental equipment levels. Gain on Sale Leaseback Transaction - During 2024, the Company closed on a sale leaseback transaction with an unrelated third party which resulted in a gain of $23.5 million.
Telecom, specifically the continued expansion of 5G, has seen some positive trends over the last few years. Our existing T&D related contactor customers will continue to deliver the roll-out, and our existing equipment portfolio aligns well with the needs of this market. Rail investment, both in the freight and commuter markets, remains robust.
Telecom, specifically the continued expansion of 5G, has seen some positive trends over the last few years. Our existing T&D related contractor customers will continue to deliver the roll-out, and our existing equipment portfolio aligns well with the needs of this market. Rail investment, both in the freight and commuter markets, remains robust.
We enter into purchase agreements with manufacturers and suppliers of chassis, parts and components and attachments, for our rental fleet and inventory. The purchase agreements are cancellable within a specified notification period to the supplier. Such amounts are not estimable as of December 31, 2024. Operating Lease Payments.
We enter into purchase agreements with manufacturers and suppliers of chassis, parts and components and attachments, for our rental fleet and inventory. The purchase agreements are cancellable within a specified notification period to the supplier. Such amounts are not estimable as of December 31, 2025. Operating Lease Payments.
Goodwill is attributable to the synergies and economies of scale expected from the combination of the businesses. There were no material acquisitions made during the years ended December 31, 2024 and 2023. In addition to long-lived fixed assets, we also acquire other assets and assume liabilities.
Goodwill is attributable to the synergies and economies of scale expected from the combination of the businesses. There were no material acquisitions made during the years ended December 31, 2025 and 2024. In addition to long-lived fixed assets, we also acquire other assets and assume liabilities.
As of December 31, 2024, the Company’s Consolidated Total Debt Ratio was not greater than 5.00 to 1.00 and, as a result, the Company determined there were no restrictions on distributions by the Issuer and its restricted subsidiaries by the Indenture.
As of December 31, 2025, the Company’s Consolidated Total Debt Ratio was not greater than 5.00 to 1.00 and, as a result, the Company determined there were no restrictions on distributions by the Issuer and its restricted subsidiaries by the Indenture.
The following is a discussion of the estimates and assumptions from our October 1, 2024 quantitative impairment test for the ERS, TES and APS reporting units: • The risk adjusted cost of capital varies by reporting unit and was in the range of 10.5% to 11.0% and represents our estimate of the overall after-tax rate of return required by equity and debt holders of a business enterprise. • Our projections were based on our assessment of macroeconomic variables, industry trends and market opportunities, as well as our strategic objectives and future growth plans.
The following is a discussion of the estimates and assumptions from our October 1, 2025 quantitative impairment test for the ERS, TES and APS reporting units: • The risk adjusted cost of capital varies by reporting unit and was in the range of 9.5% to 10.0% and represents our estimate of the overall after-tax rate of return required by equity and debt holders of a business enterprise. • Our projections were based on our assessment of macroeconomic variables, industry trends and market opportunities, as well as our strategic objectives and future growth plans.
We allocate the cost of rental equipment generally over the rentable life of the equipment. The depreciation allocation is based upon estimated lives ranging from five to seven years. The cost of equipment is depreciated to an estimated residual value using the straight-line method.
We allocate the cost of rental equipment generally over the rentable life of the equipment. The depreciation allocation is based upon estimated lives ranging from one to seven years. The cost of equipment is depreciated to an estimated residual value using the straight-line method.
As of December 31, 2024, the Company’s distribution conditions were satisfied and, as a result, the Company determined there were no restrictions on distributions by the Borrower and its restricted subsidiaries by the ABL Credit Agreement.
As of December 31, 2025, the Company’s distribution conditions were satisfied and, as a result, the Company determined there were no restrictions on distributions by the Borrower and its restricted subsidiaries by the ABL Credit Agreement.
Year Ended December 31, 2023, Compared to the Year Ended December 31, 2022 For a comparison of our liquidity and capital resources for the year ended December 31, 2023, compared to the year ended December 31, 2022, see “ Part II, Item 7.
Year Ended December 31, 2024, Compared to the Year Ended December 31, 2023 For a comparison of our liquidity and capital resources for the year ended December 31, 2024, compared to the year ended December 31, 2023, see “ Part II, Item 7.
Management’s Discussion and Analysis of Financial Condition and Results of Operations” of our annual report on Form 10-K for the year ended December 31, 2023 , filed with the Securities and Exchange Commission on March 7, 2024, which is incorporated herein by reference. Critical Accounting Estimates We prepare our consolidated financial statements in accordance with U.S.
Management’s Discussion and Analysis of Financial Condition and Results of Operations” of our annual report on Form 10-K for the year ended December 31, 2024 , filed with the Securities and Exchange Commission on March 4, 2025, which is incorporated herein by reference. Critical Accounting Estimates We prepare our consolidated financial statements in accordance with U.S.
At December 31, 2024, a 100 basis point increase to our credit loss estimate would increase our allowance for doubtful accounts by approximately $0.9 million.
At December 31, 2025, a 100 basis point increase to our credit loss estimate would increase our allowance for doubtful accounts by approximately $0.9 million.
While we remain in a financial reporting loss position based on a cumulative pre-tax loss for the three-year period ended December 31, 2024, the determination of the valuation allowance is based on our evaluation of the periods over which future taxable items are expected to be utilized to offset tax loss and deduction carryforward items in those future periods.
While we no longer remain in a financial reporting loss position based on a cumulative pre-tax loss for the three-year period ended December 31, 2025, the determination of the valuation allowance is based on our evaluation of the periods over which future taxable items are expected to be utilized to offset tax loss and deduction carryforward items in those future periods.
Equipment Rental Solutions (“ERS”) Segment — We own a broad range of new and used specialty equipment, including truck-mounted aerial lifts, cranes, service trucks, dump trucks, trailers, digger derricks and other machinery and equipment. As of December 31, 2024, this equipment (the “rental fleet”) is comprised of more than 10,000 units.
Equipment Rental Solutions (“ERS”) Segment — We own a broad range of new and used specialty equipment, including truck-mounted aerial lifts, cranes, service trucks, dump trucks, trailers, digger derricks and other machinery and equipment. As of December 31, 2025, this equipment (the “rental fleet”) is comprised of more than 10,400 units.
For the Year Ended December 31, 2023, Compared to the Year Ended December 31, 2022 For a comparison of our results of operations for the year ended December 31, 2023, compared to the year ended December 31, 2022, see “ Part II, Item 7.
For the Year Ended December 31, 2024, Compared to the Year Ended December 31, 2023 For a comparison of our results of operations for the year ended December 31, 2024, compared to the year ended December 31, 2023, see “ Part II, Item 7.
Net debt is defined as total debt (calculated as current and long-term debt, excluding deferred financing fees, plus current and long-term finance lease obligations) minus cash and cash equivalents. 31 Table of Contents Our creditors utilize Adjusted EBITDA and Net Leverage Ratio to assess our compliance with the restrictive covenants in the ABL Credit Agreement and the Indenture.
Net debt is defined as total debt (calculated as current and long-term debt, excluding deferred financing fees, plus current and long-term finance lease obligations) minus cash and cash equivalents. Our creditors utilize Adjusted EBITDA and Net Leverage Ratio to assess our compliance with the restrictive covenants in the ABL Credit Agreement and the Indenture.
We believe that our liquidity sources and operating cash flows are sufficient to address our operating, debt service and capital requirements, including investments in our rental fleet, over the next 12 months and beyond. As of December 31, 2024, we had $3.8 million in cash and cash equivalents compared to $10.3 million as of December 31, 2023.
We believe that our liquidity sources and operating cash flows are sufficient to address our operating, debt service and capital requirements, including investments in our rental fleet, over the next 12 months and beyond. As of December 31, 2025, we had $6.3 million in cash and cash equivalents compared to $3.8 million as of December 31, 2024.
Any change in depreciation expense as a result of a hypothetical change in either useful lives or salvage values would generally result in a proportional increase or decrease in the gross profit we would recognize upon the ultimate sale of the asset.
Any change in 34 Table of Contents depreciation expense as a result of a hypothetical change in either useful lives or salvage values would generally result in a proportional increase or decrease in the gross profit we would recognize upon the ultimate sale of the asset.
Cost of Equipment Sales - The increase in cost of equipment sales for the year ended December 31, 2024, compared to the year ended December 31, 2023, was due to an increase in equipment sales volume.
Cost of Equipment Sales - The increase in cost of equipment sales for the year ended December 31, 2025, compared to the year ended December 31, 2024, was due to an increase in equipment sales volume.
At December 31, 2024, our deferred tax asset valuation allowance was $72.4 million. Recent Accounting Pronouncements See Note 2: Summary of Significant Accounting Policies , to our Annual Report on Form 10-K for a discussion of recently issued and adopted accounting pronouncements.
At December 31, 2025, our deferred tax asset valuation allowance was $85.4 million. Recent Accounting Pronouncements See Note 2: Summary of Significant Accounting Policies , to our Annual Report on Form 10-K for a discussion of recently issued and adopted accounting pronouncements.
We rent, produce, sell and service a broad range of new and used equipment, including bucket trucks, digger derricks, dump trucks, cranes, service trucks, and heavy-haul trailers. We manage the business in three reporting segments: Equipment Rental Solutions (“ERS”), Truck and Equipment Sales (“TES”) and Aftermarket Parts and Services (“APS”).
We rent, produce, sell and service a broad range of new and used equipment, including bucket trucks, digger derricks, dump trucks, cranes, service trucks, and heavy-haul trailers. Through December 31, 2025, we managed the business in three reporting segments: Equipment Rental Solutions (“ERS”), Truck and Equipment Sales (“TES”) and Aftermarket Parts and Services (“APS”).
To the extent that the useful lives of our rental equipment were to increase or decrease by one year, we estimate that our annual depreciation expense would increase or decrease by approximately $36.1 million, respectively.
To the extent that the useful lives of our rental equipment were to increase or decrease by one year, we estimate that our annual depreciation expense would increase or decrease by approximately $197.0 million, respectively.
Also included in financing and other expense (income) are the unrealized remeasurement gains and losses related to our interest rate collar and redeemable warrants. 25 Table of Contents Interest expense — Interest expense consists of contractual interest expense on outstanding debt obligations, floor plan financing facilities, amortization of deferred financing costs and other related to derivative financial instruments.
Also included in financing and other expense (income) are the unrealized remeasurement gains and losses related to derivative financial instruments. 25 Table of Contents Interest expense — Interest expense consists of contractual interest expense on outstanding debt obligations, floor plan financing facilities, amortization of deferred financing costs and other related financing expenses.
We have short-term and long-term minimum cash requirements for operating lease payments of $14.4 million and $158.4 million, respectively. The total amounts do not equal the carrying amount due to imputed interest.
We have short-term and long-term minimum cash requirements for operating lease payments of $17.4 million and $176.1 million, respectively. The total amounts do not equal the carrying amount due to imputed interest.
Cost of Revenue, Excluding Rental Equipment Depreciation - The decrease in cost of revenue, excluding rental equipment depreciation was driven primarily by the decrease in equipment sales volume during the year ended December 31, 2024.
Cost of Revenue, Excluding Rental Equipment Depreciation - The increase in cost of revenue, excluding rental equipment depreciation was driven primarily by the increase in equipment sales volume during the year ended December 31, 2025.
We have floor plan payables of $801.3 million at December 31, 2024 that represent financing arrangement to facilitate our purchase of chassis, parts, components and attachments inventory. All floor plan payables are collateralized by the inventory financed. These payables become due and payable upon the sale, transfer, or reclassification of each unit to inventory.
We have floor plan payables of $657.4 million at December 31, 2025 that represent financing arrangements to facilitate our purchase of chassis, parts, components and attachments inventory. All floor plan payables are collateralized by the inventory financed. These payables become due and payable upon the sale, transfer, or reclassification of each unit to inventory.
Our highly variable cost structure adjusts with the utilization of our equipment, thereby reducing our costs to match our revenue. We principally evaluate operational performance based on the following metrics: ending OEC, average OEC on rent, fleet utilization, and OEC on rent yield.
We are able to generate cash flow through our earnings. Our highly variable cost structure adjusts with the utilization of our equipment, thereby reducing our costs to match our revenue. We principally evaluate operational performance based on the following metrics: ending OEC, average OEC on rent, fleet utilization, and OEC on rent yield.
We have short-term and long-term cash requirements of $7.8 million and $1,539.8 million, respectively, for the payment of principal related to notes payable and loans as of December 31, 2024. The total amount does not equal the carrying amount due to unamortized deferred charges.
We have short-term and long-term cash requirements of $25.9 million and $1,634.9 million, respectively, for the payment of principal related to notes payable and loans as of December 31, 2025. The total amount does not equal the carrying amount due to unamortized deferred charges.
Similarly, to the extent the estimated salvage values of our rental equipment were to increase or decrease by one 34 Table of Contents percentage point, we estimate that our annual depreciation expense would change by approximately $1.9 million.
Similarly, to the extent the estimated salvage values of our rental equipment were to increase or decrease by one percentage point, we estimate that our annual depreciation expense would change by approximately $4.3 million.
Cash Flows from Investing Activities Net cash used in investing activities was $187.5 million for the year ended December 31, 2024, as compared to cash used in investing activities of $176.6 million in 2023.
Cash Flows for Investing Activities Net cash used in investing activities was $282.5 million for the year ended December 31, 2025, as compared to cash used in investing activities of $187.5 million in 2024.
As a result of completing our October 1, 2024 quantitative impairment test, we determined that the fair value of the ERS, TES and APS reporting units exceeded their carrying values by 13%, 82% and 33%, respectively.
As a result of completing our October 1, 2025 quantitative impairment test, we determined that the fair value of the ERS, TES and APS reporting units exceeded their carrying values by 34%, 14% and 81%, respectively.
Our expected material contractual cash requirements over the next twelve months primarily consist of minimum operating lease obligations of $14.4 million, debt principal and interest payments of $7.8 million and $99.5 million, respectively, and the repayment of floor plan borrowings.
Our expected material contractual cash requirements over the next twelve months primarily consist of minimum operating lease obligations of $17.4 million, debt principal and interest payments of $25.9 million and $100.2 million, respectively, and the repayment of floor plan borrowings.
Sales order backlog should not be considered an accurate measure of future net sales. Operating Segments We operate in three reportable operating segments: Equipment Rental Solutions, Truck and Equipment Sales and Aftermarket Parts and Services.
Sales order backlog should not be considered an accurate measure of future net sales. Operating Segments Through December 31, 2025, we reported our results under three reportable operating segments: Equipment Rental Solutions, Truck and Equipment Sales and Aftermarket Parts and Services.
Cost of Revenue - The decrease in total cost of revenue for the year ended December 31, 2024, compared to the year ended December 31, 2023, was largely due to the decrease in rental equipment sales volume.
Cost of Equipment Sales - The increase in cost of equipment sales for the year ended December 31, 2025, compared to the year ended December 31, 2024, was largely due to the increase in equipment sales volume.
On July 31, 2024, all of the Company’s stock purchase warrants expired and unexercised. 32 Table of Contents The following table presents the calculation of Net Debt and Net Leverage Ratio: (in $000s) December 31, 2024 December 31, 2023 Current maturities of long-term debt $ 7,842 $ 8,257 Long-term debt, net 1,519,882 1,487,136 Deferred financing fees 19,926 22,406 Less: cash and cash equivalents (3,805) (10,309) Net Debt $ 1,543,845 $ 1,507,490 Divided by: Adjusted EBITDA 339,657 426,930 Net Leverage Ratio 4.55 3.53 Future Contractual Obligations Our estimated future obligations as of December 31, 2024 include both short-term (over the next 12 months) and long-term obligations.
On July 31, 2024, all of the Company’s stock purchase warrants expired and unexercised. 32 Table of Contents The following table presents the calculation of Net Debt and Net Leverage Ratio: (in $000s) December 31, 2025 December 31, 2024 Current maturities of long-term debt $ 25,858 $ 7,842 Long-term debt, net 1,619,352 1,519,882 Deferred financing fees 15,549 19,926 Less: cash and cash equivalents (6,273) (3,805) Net Debt $ 1,654,486 $ 1,543,845 Divided by: Adjusted EBITDA 383,558 339,657 Net Leverage Ratio 4.31 4.55 Future Contractual Obligations Our estimated future obligations as of December 31, 2025 include both short-term (over the next 12 months) and long-term obligations.
Cash Flows from Operating Activities Net cash from operating activities was $122.0 million for the year ended December 31, 2024, as compared to $30.9 million used for operating activities in the same period of 2023. The change year over year is driven by lower levels of inventory production throughout 2024 compared to 2023.
Cash Flows from Operating Activities Net cash from operating activities was $310.1 million for the year ended December 31, 2025, as compared to $122.0 million in 2024. The increase in net cash from operating activities is driven by lower levels of inventory production throughout 2025 compared to 2024.
Cash Flows from Financing Activities Net cash provided by financing activities was $58.3 million for the year ended December 31, 2024, as compared to $202.9 million in 2023.
Cash Flows (for) from Financing Activities Net cash used in financing activities was $25.3 million for the year ended December 31, 2025, as compared to net cash from financing activities of $58.3 million in 2024.
The following table provides the calculation of Adjusted EBITDA pursuant to the ABL Credit Agreement and the Indenture for the years ended December 31, 2024 and 2023: Year Ended December 31, (in $000s) 2024 2023 Net income (loss) $ (28,655) $ 50,712 Interest expense 105,895 94,694 Income tax expense (benefit) (532) 7,364 Depreciation and amortization 235,807 218,993 EBITDA 312,515 371,763 Adjustments: Non-cash purchase accounting impact (1) 16,833 19,742 Transaction and other costs (2) 17,915 14,143 Sales-type lease adjustment (3) 4,559 10,458 Gain on sale leaseback transaction (4) (23,497) — Share-based payments (5) 11,859 13,309 Change in fair value of derivative and warrants (6) (527) (2,485) Adjusted EBITDA $ 339,657 $ 426,930 (1) Represents the non-cash impact of purchase accounting, net of accumulated depreciation, on the cost of equipment and inventory sold.
The following table provides the calculation of Adjusted EBITDA pursuant to the ABL Credit Agreement and the Indenture for the years ended December 31, 2025 and 2024: Year Ended December 31, (in $000s) 2025 2024 Net income (loss) $ (31,052) $ (28,655) Interest expense 104,882 105,895 Income tax expense (benefit) 2,922 (532) Depreciation and amortization 264,998 235,807 EBITDA 341,750 312,515 Adjustments: Non-cash purchase accounting impact (1) 15,469 16,833 Transaction and other costs (2) 16,639 17,915 Sales-type lease adjustment (3) 1,229 4,559 Gain on sale leaseback transaction (4) — (23,497) Share-based payments (5) 8,471 11,859 Change in fair value of warrants (6) — (527) Adjusted EBITDA $ 383,558 $ 339,657 (1) Represents the non-cash impact of purchase accounting, net of accumulated depreciation, on the cost of equipment and inventory sold.
Year Ended December 31, (in $000s) 2024 2023 Equipment sales $ (9,849) $ (58,064) Cost of equipment sales 9,425 55,716 Gross profit (424) (2,348) Interest income (11,285) (16,065) Rental invoiced 16,268 28,871 Sales-type lease adjustment $ 4,559 $ 10,458 (4) During Q4 2024, the Company closed on a sale leaseback transaction with an unrelated third party.
Year Ended December 31, (in $000s) 2025 2024 Equipment sales $ (5,989) $ (9,849) Cost of equipment sales 4,789 9,425 Gross profit (1,200) (424) Interest income (4,580) (11,285) Rental invoiced 7,009 16,268 Sales-type lease adjustment $ 1,229 $ 4,559 (4) During Q4 2024, the Company closed on a sale leaseback transaction with an unrelated third party.
As of December 31, 2024, we had 30 Table of Contents $582.9 million of outstanding borrowings under our ABL Facility compared to $552.4 million of outstanding borrowings as of December 31, 2023.
As of December 31, 2025, we had $698.0 million of outstanding borrowings under our ABL Facility compared to $582.9 million of outstanding borrowings as of December 31, 2024.
Neither Adjusted EBITDA or Net Leverage Ratio is calculated in accordance with GAAP and may not conform to the calculation of Adjusted EBITDA or Net Leverage Ratio used by other companies. Neither Adjusted EBITDA or Net leverage Ratio should be considered as a substitute for a measure of our financial performance or liquidity prepared in accordance with GAAP.
Neither Adjusted EBITDA or Net leverage Ratio should be considered as a substitute for a measure of our financial performance or liquidity prepared in accordance with GAAP.
Sources and Uses of Cash The following table summarizes our sources and uses of cash: Year Ended December 31, (in $000s) 2024 2023 Net cash flow from operating activities $ 121,985 $ (30,883) Net cash flow from investing activities (187,485) (176,598) Net cash flow from financing activities 58,283 202,876 Effect of exchange rate changes on cash and cash equivalents 713 554 Net change in cash and cash equivalents $ (6,504) $ (4,051) 33 Table of Contents As of December 31, 2024, we had cash and cash equivalents of $3.8 million, a decrease of $6.5 million from December 31, 2023.
Sources and Uses of Cash The following table summarizes our sources and uses of cash: Year Ended December 31, (in $000s) 2025 2024 Net cash flow from operating activities $ 310,112 $ 121,985 Net cash flow for investing activities (282,463) (187,485) Net cash flow (for) from financing activities (25,268) 58,283 Effect of exchange rate changes on cash and cash equivalents 87 713 Net change in cash and cash equivalents $ 2,468 $ (6,504) 33 Table of Contents As of December 31, 2025, we had cash and cash equivalents of $6.3 million, an increase of $2.5 million from December 31, 2024.
For the year ended December 31, 2024, the changes in the effective tax rates were primarily due to pre-tax book loss and the effects of permanent 28 Table of Contents adjustments in the current period, resulting in an overall effective tax rate in the period of 1.8%, $0.5 million of tax expense being recognized.
For the year ended December 31, 2024, pre-tax book loss and the effects of permanent adjustments in the period resulted in an overall effective tax rate of 1.8%, with a $0.5 million tax benefit recognized.
The increase in cash used in investing activities is due to an increase in purchases for rental equipment of $34.1 million, cash paid for acquisitions of businesses (net of cash acquired) of $6.0 million, and a decrease in proceeds from sales and disposals of rental equipment of $25.0 million partially offset by proceeds from the sale leaseback transaction (net of expenses) of $52.5 million.
The increase in cash used in investing activities is due to an increase in purchases of rental equipment of $58.7 million and a decrease in proceeds from sale leaseback transaction (net of expenses) of $52.5 million, partially offset by a decrease in purchases of non-rental property and cloud computing arrangements of $8.7 million.
Year Ended December 31, (in $000s) 2024 2023 Change % Change Ending OEC (as of period end) $ 1,515,461 $ 1,455,708 $ 59,753 4.1 % Average OEC on rent $ 1,101,417 $ 1,183,253 $ (81,836) (6.9) % Fleet utilization 74.3 % 80.4 % (6.1) % (7.6) % OEC on rent yield 39.0 % 40.4 % (1.4) % (3.5) % Sales order backlog (as of period end) $ 368,779 $ 688,559 $ (319,780) (46.4) % Operating Results by Segment The following segment information compares results by segment for years ended December 31, 2024 and December 31, 2023.
Year Ended December 31, (in $000s) 2025 2024 Change % Change Ending OEC (as of period end) $ 1,637,115 $ 1,515,461 $ 121,654 8.0 % Average OEC on rent $ 1,256,266 $ 1,101,417 $ 154,849 14.1 % Fleet utilization 79.4 % 74.3 % 5.1 % 6.9 % OEC on rent yield 38.3 % 39.0 % (0.7) % (1.8) % Sales order backlog (as of period end) $ 335,265 $ 368,779 $ (33,514) (9.1) % Operating Results by Segment The following segment information compares results by segment for years ended December 31, 2025 and December 31, 2024.
Management’s Discussion and Analysis of Financial Condition and Results of Operations” of our annual report on Form 10-K for the year ended December 31, 2023 , filed with the Securities and Exchange Commission on March 7, 2024, which is incorporated herein by reference.
Management’s Discussion and Analysis of Financial Condition and Results of Operations” of our annual report on Form 10-K for the year ended December 31, 2024 , filed with the Securities and Exchange Commission on March 4, 2025, which is incorporated herein by reference. 30 Table of Contents Liquidity and Capital Resources For the Year Ended December 31, 2025, Compared to the Year Ended December 31, 2024 Our principal sources of liquidity include cash generated by operating activities and borrowings under revolving credit facilities as described below.
Gross Profit - The increase in gross profit for the year ended December 31, 2024, compared to the year ended December 31, 2023, was due to higher volume of equipment sales.
Depreciation of Rental Equipment - The increase in depreciation for the year ended December 31, 2025, compared to the year ended December 31, 2024, was a result of higher rental equipment levels.
Cost of Revenue - The increase in cost of revenue for the year ended December 31, 2024, compared to the year ended December 31, 2023, as a result of higher costs of materials.
Cost of Rental Revenue - The increase in cost of rental revenue for the year ended December 31, 2025, compared to the year ended December 31, 2024, was largely due to the increase in rental activity.
Revenue growth rates assumed ranged from approximately 7% to 14% for 2025 and from approximately 3% to 14% for 2026 and beyond. EBITDA Margin assumed ranged from approximately 6% to 43% for 2025 and from approximately 8% to 48% for 2026 and beyond.
Revenue growth rates assumed ranged from approximately 4% to 10% for 2026 and from approximately 3% to 12% for 2027 and beyond. EBITDA Margin assumed ranged from approximately 4% to 45% for 2026 and from approximately 5% to 47% for 2027 and beyond.
Aftermarket Parts and Services (APS) Segment Year Ended December 31, (in $000s) 2024 2023 Rental revenue $ 12,786 $ 15,771 Parts and services revenue 136,291 132,737 Total revenue 149,077 148,508 Cost of revenue: Cost of revenue 111,560 105,791 Depreciation of rental equipment 3,945 3,465 Total cost of revenue 115,505 109,256 Gross profit $ 33,572 $ 39,252 Total Revenue - Total revenue increased for the year ended December 31, 2024, compared to the year ended December 31, 2023, due to the increase in parts and services revenue partially offset by a decrease in rentals of tools and accessories tied to the decline in rental revenue in the ERS segment.
Aftermarket Parts and Services (APS) Segment Year Ended December 31, (in $000s) 2025 2024 Rental revenue $ 14,408 $ 12,786 Parts and services revenue 133,276 136,291 Total revenue 147,684 149,077 Cost of revenue: Cost of revenue 109,775 111,560 Depreciation of rental equipment 2,910 3,945 Total cost of revenue 112,685 115,505 Gross profit $ 34,999 $ 33,572 Total Revenue - The decrease in total revenue for the year ended December 31, 2025, compared to the year ended December 31, 2024, was driven by a decrease in parts and services revenue primarily due to softer demand across parts, tools and accessories, and lower service activity.
Gross Profit - The decrease in gross profit for the year ended December 31, 2024, compared to the year ended December 31, 2023, was primarily driven by the decrease in tools and accessories rentals with an increase in costs of materials driving gross profit down.
Gross Profit - The increase in gross profit for the year ended December 31, 2025, compared to the year ended December 31, 2024, was primarily driven by the increase in rental revenue which has lower costs associated with it.
Availability under the senior secured credit facility was $364.0 million as of December 31, 2024, and based on our borrowing base, we have an additional $158.3 million of suppressed availability that we can potentially utilize by upsizing our existing facility.
Availability under the ABL Facility was $248.1 million as of December 31, 2025, and based on our borrowing base, we have an additional $200.8 million of suppressed availability that we can potentially utilize by upsizing our existing facility. For further information on the ABL Facility, see Note 8: Long-Term Debt in the Notes to the Consolidated Financial Statements.
Equipment Rental Solutions (ERS) Segment Year Ended December 31, (in $000s) 2024 2023 Rental revenue $ 430,167 $ 463,139 Equipment sales 167,638 263,028 Total revenue 597,805 726,167 Cost of revenue: Cost of rental revenue 116,790 118,236 Cost of equipment sales 123,229 198,510 Depreciation of rental equipment 179,508 167,199 Total cost of revenue 419,527 483,945 Gross profit $ 178,278 $ 242,222 Total Revenue - The decrease in total revenue for the ERS segment for the year ended December 31, 2024, compared to the year ended December 31, 2023, was driven by a decrease in equipment sales due to fewer rental asset sales of used equipment, as well as a decrease in rental revenue as a result of a reduction in fleet utilization of 6.1%.
Equipment Rental Solutions (ERS) Segment Year Ended December 31, (in $000s) 2025 2024 Rental revenue $ 491,790 $ 430,167 Equipment sales 209,255 167,638 Total revenue 701,045 597,805 Cost of revenue: Cost of rental revenue 121,357 116,790 Cost of equipment sales 157,846 123,229 Depreciation of rental equipment 212,725 179,508 Total cost of revenue 491,928 419,527 Gross profit $ 209,117 $ 178,278 Total Revenue - The increase in total revenue for the ERS segment for the year ended December 31, 2025, compared to the year ended December 31, 2024, was due to an increase in rental revenue as well as rental equipment sales.
The decrease in cash provided by financing activities is primarily due to a decrease in proceeds of $152.1 million, net of repayments, from floor plan financing and long term debt arrangements, and an increase in cash paid for the repurchase of common stock of $9.9 million.
The increase in cash used in financing activities is primarily due to an increase in repayments on floorplan liabilities and long-term debt of $45.8 million and lower proceeds from floorplan liabilities and long-term debt of $34.1 million.
We also provide truck and equipment maintenance and repair services, which are executed throughout our nationwide branch network and fleet of mobile technicians supported by our 24/7 call center based in Kansas City, Missouri. Overview of Markets We continue to focus on six primary end-markets: Electric Utility Transmission and Distribution, or T&D, Telecom, Rail, Forestry, Waste Management, and Infrastructure.
Overview of Markets We continue to focus on six primary end-markets: Electric Utility Transmission and Distribution, or T&D, Telecom, Rail, Forestry, Waste Management, and Infrastructure.
Gross Profit - The decrease in gross profit for the year ended December 31, 2024, compared to the year ended December 31, 2023, was due to the decrease in rental revenues and rental equipment sales. 29 Table of Contents Truck and Equipment Sales (TES) Segment Year Ended December 31, (in $000s) 2024 2023 Equipment sales $ 1,055,398 $ 990,425 Cost of equipment sales 876,978 817,639 Gross profit $ 178,420 $ 172,786 Equipment Sales - Equipment sales increased for the year ended December 31, 2024, compared to the year ended December 31, 2023.
Gross Profit - The increase in gross profit for the year ended December 31, 2025, compared to the year ended December 31, 2024, was due to the mix of equipment on rent for the period. 29 Table of Contents Truck and Equipment Sales (TES) Segment Year Ended December 31, (in $000s) 2025 2024 Equipment sales $ 1,095,228 $ 1,055,398 Cost of equipment sales 927,452 876,978 Gross profit $ 167,776 $ 178,420 Equipment Sales - The increase in equipment sales for the year ended December 31, 2025, compared to the year ended December 31, 2024, was due to an increase in new equipment sales, driven by robust demand for vocational vehicles across our end markets, particularly demand from local and regional customers.
Operating Metrics We believe that our operating model, together with our highly variable cost structure, enables us to sustain high margins, strong cash flow generation and stable financial performance throughout various economic cycles. We are able to generate cash flow through our earnings.
Net Income (Loss) - The increase in net loss for the year ended December 31, 2025, was primarily due to the gain on a sale leaseback transaction that occurred in the fourth quarter of 2024, partially offset by an increase in gross profit as a result of strong new equipment sales as well as higher rental revenue driven by higher average OEC on rent. 28 Table of Contents Operating Metrics We believe that our operating model, together with our highly variable cost structure, enables us to sustain high margins, strong cash flow generation and stable financial performance throughout various economic cycles.
For the year ended December 31, 2023, the impact of state income taxes and a tax benefit from the reduction to the valuation allowance resulted in an overall effective tax rate in the period of 12.7%, $7.4 million of tax expense recognized.
For the year ended December 31, 2025, the changes in the effective tax rates were primarily due to taxable income in states that do not follow federal deductibility rules and foreign sourced income, resulting in an overall effective tax rate of (10.4)%, with $2.9 million of tax expense being recognized.
Removed
The Company continues to monitor the impact on its supply chain, including, but not limited to, the commercial vehicle manufacturers that provide the chassis used in the Company’s production and manufacturing processes, which could potentially limit the ability of these manufacturers to meet demand in future periods. 27 Table of Contents Results of Operations Year Ended December 31, 2024, Compared to the Year Ended December 31, 2023 Business Update During 2024, the Company executed a sale leaseback transaction for gross proceeds of $53.8 million, and, used a portion of the proceeds, to pay down a portion of the outstanding borrowings under our ABL Facility.
Added
We also provide truck and equipment maintenance and repair services, which are executed throughout our nationwide branch network and fleet of mobile technicians supported by our 24/7 call center based in Kansas City, Missouri. Change in Reportable Segments Recently, our Chief Executive Officer reevaluated how he assesses performance and allocates resources across our business.
Removed
The Company continues to be impacted by factors affecting its customers, including their supply chain constraints, environmental, regulatory and customer financing factors that have impacted the timing of utilities transmission and distribution job starts. These delays contributed to both lower rental revenue and rental asset sales during the year.
Added
This review resulted in a change in the reporting of management’s internal financial information. As a result, beginning in the three months ending March 31, 2026, we will report our results under two reportable segments: (1) Specialty Equipment Rentals (“SER”) and (2) Specialty Truck Equipment and Manufacturing (“STEM”).
Removed
See further discussion of this transaction in Note 7: Rental Equipment and Property and Equipment and Note 9: Leases as Lessee in the Notes to the Consolidated Financial Statements under Part II, Item 8.
Added
Upon implementation, the new SER segment will consist of our historical ERS segment and a portion of our historical APS segment, and the new STEM segment will consist of our historical TES segment and a portion of our historical APS segment. We will also begin reflecting intercompany activity between the two segments, which will ultimately be eliminated in consolidation.
Removed
Total Other Operating Expenses - Other Operating expenses increased for the year ended December 31, 2024, primarily as a result of an increase in transaction expenses and other due to new site openings and launch of new line of businesses.
Added
This new segment reporting reflects how CTOS’s business is managed and how resources are allocated in 2026, and management believes this new presentation better reflects the positioning of CTOS’s strategies and operations portfolio. Management expects to provide more information on the new two segments in early April.
Removed
Total Other Expense - The increase in other expense for the year ended December 31, 2024, was primarily due to the increase in interest expense from variable rate debt and floor plan financing liabilities.
Added
We believe our new segment realignment will better reflect key economic drivers, capital intensity, and margin profiles of the respective new segments, as well as align our external reporting with how management allocates capital and evaluates performance.
Removed
Net Income - The change in net income for the year ended December 31, 2024, was primarily the result of decreased gross profit and higher interest expense on variable-rate debt and variable-rate floor plan liabilities.
Added
Total Other Operating Expenses - Other operating expenses remained flat for the year ended December 31, 2025. Total Other Expense - Other expense remained flat for the year ended December 31, 2025.
Removed
Fleet utilization decreased due to a decline in demand in the utility market as a result of supply chain constraints, environmental, regulatory, and customer financing factors affecting the timing of utilities transmission and distribution job starts. For the year ended December 31, 2024, average OEC on rent decreased 6.9% compared to 2023, primarily as a result of the lower utilization.
Added
Rental revenue increased as a result of higher fleet utilization of 5.1%, driven by an increase in average OEC on rent by 14.1%. Rental equipment sales increased due to higher year-end buyout activity of rental contracts with purchase options.
Removed
The growth in sales was primarily a result of exiting 2023 with healthy inventory levels (due to the improved supply chain), as well as continued robust demand for our products in the forestry and utility end-markets.
Added
Gross Profit - The decrease in gross profit for the year ended December 31, 2025, compared to the year ended December 31, 2024, was due to continued pricing pressures on truck sales.

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

2 edited+0 added−0 removed4 unchanged
Biggest changeForeign currency exchange rate risk During the year ended December 31, 2024, we generated $47.1 million of revenue in Canadian dollars. Each 100 basis point increase or decrease in the average Canadian dollar to U.S. dollar exchange rate for the year would have correspondingly changed our revenues by approximately $0.62 million.
Biggest changeForeign currency exchange rate risk During the year ended December 31, 2025, we generated $39.6 million of revenue in Canadian dollars. Each 100 basis point increase or decrease in the average Canadian dollar to U.S. dollar exchange rate for the year would have correspondingly changed our revenues by approximately $0.4 million.
Interest rate changes generally impact the amount of our interest payments and, therefore, our future net income and cash flows, assuming other factors are held constant. As of December 31, 2024, we had $1,384.2 million aggregate principal amount of variable rate debt, consisting of the balance outstanding under the ABL Facility and floor plan financing arrangements.
Interest rate changes generally impact the amount of our interest payments and, therefore, our future net income and cash flows, assuming other factors are held constant. As of December 31, 2025, we had $1,355.4 million aggregate principal amount of variable rate debt, consisting of the balance outstanding under the ABL Facility and floor plan financing arrangements.

Other CTOS 10-K year-over-year comparisons