Custom Truck One Source Raises 2026 Guidance Amid Record Electrical Grid Demand
Custom Truck One Source (CTOS) has raised its full-year earnings guidance for the third time in 2026, driven by unprecedented demand for electrical grid infrastructure. During its third-quarter earnings call, management highlighted a strategic shift toward capital allocation for rental fleet expansion, increasing net rental fleet investment guidance to between $210 million and $230 million. To capitalize on what CEO Ryan McMonagle describes as a 'once in a generation transmission demand super cycle,' the company has prioritized internal fleet production over third-party equipment sales. While this move temporarily reduced levered free cash flow and third-party segment revenue, it resulted in high rental gross margins of 79% and increased fleet utilization to over 81%. The company is positioning itself for long-term recurring revenue as utility spending on transmission projects continues across North America.