Custom Truck One Source, Inc.

Previous wording

Total Revenue - The increase in total revenue for the three months ended March 31, 2026, compared to the same period in 2025 is a result of higher rental revenue driven by higher average OEC on rent of 11.8% as well as strong new equipment sales.

Current wording

Total Revenue - The increase in total revenue for the three and six months ended June 30, 2026, compared to the same periods in 2025 is a result of strong new equipment sales primarily within utility and forestry equipment and rental revenue driven by increases in average OEC on rent for the three and six months ended June 30, 2026 of 13.1% and 13.6%, compared to the same periods in 2025, respectively, and improvement in OEC on rent yield of 2.1% for both periods.

Previous wording

Cost of Revenue, Excluding Rental Equipment Depreciation - The increase in cost of revenue, excluding rental equipment depreciation for the three months ended March 31, 2026, compared to the same period in 2025, was driven primarily by the increase in equipment sales volume.

Current wording

Cost of Revenue, Excluding Rental Equipment Depreciation - The increase in cost of revenue, excluding rental equipment depreciation for the three and six months ended June 30, 2026, compared to the same periods in 2025, was driven primarily by the increase in equipment sales volume.

Previous wording

Depreciation of Rental Equipment - Depreciation of our rental equipment increased in the three months ended March 31, 2026, compared to the same period in 2025, as a result of higher rental equipment levels.

Current wording

Depreciation of Rental Equipment - Depreciation of our rental equipment increased in the three and six months ended June 30, 2026, compared to the same periods in 2025, as a result of higher rental equipment levels.

Previous wording

Operating Expenses - Operating expenses decreased for the three months ended March 31, 2026, compared to the same period in 2025, primarily as a result of lower stock compensation expense and IT software amortization.

Current wording

Operating Expenses - Operating expenses increased for the three and six months ended June 30, 2026, compared to the same periods in 2025, primarily as a result of an increase in general and administrative expenses due to increased compensation.

Previous wording

Total Other Expense - Other expense decreased for the three months ended March 31, 2026, compared to the same period in 2025, due to less interest expense on floorplan financing as a result of lower inventory levels.

Current wording

Total Other Expense - Other expense decreased for the three and six months ended June 30, 2026, compared to the same periods in 2025, due to less interest expense on floor plan financing as a result of lower inventory levels.

Previous wording

Income Tax Expense (Benefit) - Income tax expense for the three months ended March 31, 2026 was $0.3 million, resulting in an effective tax rate of (7.8)%. Income tax benefit for the three months ended March 31, 2025 was $7.7 million, at an effective tax rate of 30.2%. The changes in effective tax rate was primarily attributable to changes in the valuation allowance recorded against deferred tax assets.

Current wording

Income Tax Expense (Benefit) - Income tax benefit was $1.4 million and $1.1 million for the three and six months ended June 30, 2026, respectively, compared to income tax expense of $17.5 million and $9.8 million for the same periods in 2025. The changes in effective tax rate were primarily attributable to changes in the valuation allowance recorded against deferred tax assets, and the inclusion of an adjustment to our estimated effective tax rate in the three months ended June 30, 2025, resulting from changes in expected taxable income in different tax jurisdictions.

Previous wording

Net Income (loss) - Net loss decreased for the three months ended March 31, 2026, compared to the same period in 2025, primarily due to higher operating income as a result of higher rental revenue driven by higher average OEC on rent as well as strong new equipment sales.

Current wording

Net Income (Loss) - Net income increased for the three and six months ended June 30, 2026, compared to the same periods in 2025, primarily due to higher operating income as a result of strong new equipment sales and higher rental revenue driven by higher average OEC on rent. The increase is also due to an income tax benefit in the three and six months ended June 30, 2026, compared to expense for the same periods in 2025, as discussed above.

Previous wording

Total Revenue - The increase in total revenue for the three months ended March 31, 2026, compared to the same period in 2025, was due to an increase in rental revenue as well as rental equipment sales. Rental revenue increased as a result of higher fleet utilization of 3.7% for the three months ended March 31, 2026, driven by higher average OEC on rent of 11.8%. Rental equipment sales increased due to an increase in buyout activity of rental contracts with purchase options. The decrease in parts sales and services was driven by fewer tool kits sold. Intersegment sales decreased as fewer units were identified as rental asset disposals given the increased demand for rental units.

Current wording

Total Revenue - The increase in total revenue for the three and six months ended June 30, 2026, compared to the same periods in 2025, was due to an increase in rental revenue as well as rental equipment sales. Rental revenue increased as a result of increases in fleet utilization of 4.0% and 4.2%, respectively, for the three and six months ended June 30, 2026, driven by increases in average OEC on rent of 13.1% and 13.6%, respectively. Rental equipment sales increased due to an increase in buyout activity of rental contracts with purchase options. The decrease in parts sales and services was driven by fewer tool kits sold. Intersegment sales decreased as fewer units were identified as rental asset disposals given the increased external demand for rental units and buyout activity of rental contracts with purchase options.

Previous wording

Cost of Rental Revenue, Excluding Depreciation - The increase in cost of rental revenue for the three months ended March 31, 2026, compared to the same period in 2025, was largely due to an increase in rental activity.

Current wording

Cost of Rental Revenue, Excluding Depreciation - The increase in cost of rental revenue for the three and six months ended June 30, 2026, compared to the same periods in 2025, was largely due to an increase in rental activity.

Previous wording

Cost of Equipment Sales, net of Purchase Accounting, Sales-Type Leases and Depreciation - The increase in cost of equipment sales for the three months ended March 31, 2026, compared to the same period in 2025, was due to an increase in rental equipment sales volume.

Current wording

Cost of Equipment Sales, net of Purchase Accounting, Sales-Type Leases and Depreciation - The increase in cost of equipment sales for the three and six months ended June 30, 2026, compared to the same periods in 2025, was due to an increase in rental equipment sales volume.

Previous wording

Cost of Parts and Services, Excluding Depreciation - The decrease in cost of parts and services three months ended March 31, 2026, compared to the same period in 2025, was in line with the decline in parts and services revenue as fewer tool kits were sold.

Current wording

Cost of Parts and Services, Excluding Depreciation - The decrease in cost of parts and services for the three and six months ended June 30, 2026, compared to the same periods in 2025, was in line with the decline in parts and services revenue as fewer tool kits were sold.

Previous wording

Adjusted EBITDA - The increase in adjusted EBITDA for the three months ended March 31, 2026, compared to the same period in 2025, was due to higher operating income.

Current wording

Segment Adjusted EBITDA - The increase in segment adjusted EBITDA for the three and six months ended June 30, 2026, compared to the same periods in 2025, was due to higher operating income.

Previous wording

Total Revenue - The increase in total revenue for the three months ended March 31, 2026, compared to the same period in 2025, was due to higher equipment sales driven by demand in service vehicles. Parts sales and services also increased driven primarily by higher service activity and increased demand for replacement parts. Intersegment sales were consistent for the three months ended March 31, 2026, compared to the same period in 2025. Although unit sales to SER were higher in the prior year, the current year revenue reflects the impact of intercompany markup, which increased the per-unit value and offset the decline in volume.

Current wording

Total Revenue - The increase in total revenue for the three and six months ended June 30, 2026, compared to the same periods in 2025, was due to higher equipment sales driven by demand in utility and forestry vehicles. Parts sales and services also increased driven primarily by higher service activity and increased demand for replacement parts. Intersegment sales decreased for the three and six months ended June 30, 2026, compared to the same periods in 2025, due to fewer units sold to SER for the rental fleet.

Previous wording

Cost of Equipment Sales, net of Purchase Accounting and Depreciation - The increase in cost of equipment sales for the three months ended March 31, 2026, compared to the same period in 2025, was driven by the increase in equipment sales volume.

Current wording

Cost of Equipment Sales, net of Purchase Accounting, Sales-Type Leases and Depreciation - The increase in cost of equipment sales for the three and six months ended June 30, 2026, compared to the same periods in 2025, was driven by the increase in equipment sales volume.

Previous wording

Cost of Parts and Services, Excluding Depreciation - The increase in cost of parts and services for the three months ended March 31, 2026, compared to the same period in 2025, corresponded with the increase in parts sales and services revenue reflecting higher volume of work performed and the related increase in materials and labor required to support that activity.

Current wording

Cost of Parts and Services, Excluding Depreciation - The increase in cost of parts and services for the three and six months ended June 30, 2026, compared to the same periods in 2025, corresponded with the increase in parts sales and services revenue reflecting higher volume of work performed and the related increase in materials and labor required to support that activity.

Previous wording

Cost of Intersegment Sales- Cost of intersegment sales declined for three months ended March 31, 2026, compared to the same period in 2025 due to fewer units sold to SER. While intersegment revenue increased slightly because of the markup applied in 2026, the lower unit volume directly reduced the associated cost of sales.

Current wording

Cost of Intersegment Sales- Cost of intersegment sales declined for the three and six months ended June 30, 2026, compared to the same periods in 2025 due to fewer units sold to SER.

Previous wording

Selling, General and Administrative Expenses - Selling, general, and administrative expenses increased for the three months ended March 31, 2026, compared to the same period in 2025, primarily due to higher sales commission.

Current wording

Selling, General and Administrative Expenses - Selling, general, and administrative expenses increased for the three and six months ended June 30, 2026, compared to the same periods in 2025, primarily due to the reclassification of expenses associated with two facilities that transitioned from rental operations to manufacturing operations and are now reported within STEM, as well as higher sales commission.

Previous wording

Floorplan Interest Expense - The decrease in floorplan interest expense for the three months ended March 31, 2026, compared to the same period in 2025, was due to the lower inventory levels.

Current wording

Floor plan Interest Expense - The decrease in floor plan interest expense for the three and six months ended June 30, 2026, compared to the same periods in 2025, was due to the lower inventory levels.

Previous wording

Adjusted EBITDA - The increase in adjusted EBITDA for the three months ended March 31, 2026, compared to the same period in 2025, was due to increased gross profit and lower interest expense on variable-rate floor plan liabilities from lower inventory levels.

Current wording

Segment Adjusted EBITDA - The increase in segment adjusted EBITDA for the three and six months ended June 30, 2026, compared to the same periods in 2025, was due to increased gross profit and lower interest expense on variable-rate floor plan liabilities from lower inventory levels.

Previous wording

Our principal sources of liquidity include cash generated by operating activities and borrowings under revolving credit facilities as described below. 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 March 31, 2026, we had $9.6 million in cash and cash equivalents compared to $6.3 million as of December 31, 2025. As of March 31, 2026 and December 31, 2025, we had $688.0 million and $698.0 million of outstanding borrowings under our ABL Facility, respectively. Availability under the ABL Facility was $256.9 million as of March 31, 2026, and based on our borrowing base, we have an additional $191.6 million of suppressed availability that we can potentially utilize by upsizing our existing facility. For further information on the ABL Facility, see Note 7: Long-Term Debt in the Notes to the Unaudited Condensed Consolidated Financial Statements.

Current wording

Our principal sources of liquidity include cash generated by operating activities and borrowings under revolving credit facilities as described below. 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 June 30, 2026, we had $10.3 million in cash and cash equivalents compared to $6.3 million as of December 31, 2025. As of June 30, 2026 and December 31, 2025, we had $714.9 million and $698.0 million of outstanding borrowings under our ABL Facility, respectively. Availability under the ABL Facility was $229.4 million as of June 30, 2026, and based on our borrowing base, we have an additional $242.0 million of suppressed availability that we can potentially utilize by upsizing our existing facility. For further information on the ABL Facility, see Note 7: Long-Term Debt in the Notes to the Unaudited Condensed Consolidated Financial Statements. Our non-trade floor plan facility with PNC Equipment Finance, LLC, under which $397.0 million was outstanding as of June 30, 2026, matures on August 25, 2026; we expect to complete its renewal on or prior to that date on terms substantially consistent with the existing agreement.

Previous wording

The Company presents Adjusted EBITDA calculated in accordance with “Consolidated EBITDA” as that term is used in the ABL Credit Agreement and the Indenture. Adjusted EBITDA is defined as net income, as adjusted for provision for income taxes, interest expense, net (excluding interest on floorplan financing), depreciation of rental equipment and non-rental depreciation and amortization, and further adjusted for the impact of the fair value mark-up of acquired rental fleet (the “non-cash purchase accounting impact”), business acquisition and merger-related costs, including integration, the impact of accounting for certain of our rental contracts with customers that are accounted for under GAAP as a sales-type lease and stock compensation expense.

Current wording

The Company presents Adjusted EBITDA calculated in accordance with “Consolidated EBITDA” as that term is used in the ABL Credit Agreement and the Indenture. Adjusted EBITDA is defined as net income, as adjusted for provision for income taxes, interest expense, net (excluding interest on floor plan financing), depreciation of rental equipment and non-rental depreciation and amortization, and further adjusted for the impact of the fair value mark-up of acquired rental fleet (the “non-cash purchase accounting impact”), business acquisition and merger-related costs, including integration, the impact of accounting for certain of our rental contracts with customers that are accounted for under GAAP as a sales-type lease and stock compensation expense.

Previous wording

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. 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.

Current wording

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. Neither Adjusted EBITDA nor 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 nor Net Leverage Ratio should be considered as a substitute for a measure of our financial performance or liquidity prepared in accordance with GAAP.

Previous wording

As of March 31, 2026, we had cash and cash equivalents of $9.6 million, an increase of $3.3 million from March 31, 2025. Generally, we manage our cash flow by using any excess cash, after considering our working capital and capital expenditure needs, including paying down the outstanding balance under our ABL Facility, and availability under our credit facilities.

Current wording

As of June 30, 2026, we had cash and cash equivalents of $10.3 million, an increase of $4.0 million from December 31, 2025. Generally, we manage our cash flow by using any excess cash, after considering our working capital and capital expenditure needs, including paying down the outstanding balance under our ABL Facility, and availability under our credit facilities.

Previous wording

Net cash from operating activities was $23.8 million for the three months ended March 31, 2026, as compared to $55.6 million in the same period of 2025. The decrease in net cash from operating activities is driven by higher levels of inventory on hand as of March 31, 2026 when compared to same period in 2025.

Current wording

Net cash from operating activities was $68.2 million for the six months ended June 30, 2026, as compared to $181.4 million in the same period of 2025. The decrease in net cash from operating activities is driven by a higher increase in inventory on hand for the six months ended June 30, 2026, when compared to the same period in 2025.

Previous wording

Net cash used in investing activities was $59.2 million for the three months ended March 31, 2026, as compared to $71.3 million in the same period of 2025. The decrease in cash used in investing activities was primarily due to a decrease in purchases of rental equipment of $15.0 million, partially offset by an increase in purchases of non-rental property and cloud computing assets of $6.2 million.

Current wording

Net cash used in investing activities was $106.2 million for the six months ended June 30, 2026, as compared to $139.8 million in the same period of 2025. The decrease in cash used in investing activities was primarily due to a decrease in purchases of rental equipment of $33.7 million and an increase in proceeds from sales and disposals of rental equipment of $13.0 million, partially offset by an increase in purchases of non-rental property and cloud computing arrangements of $13.2 million.

Previous wording

Net cash from financing activities was $38.6 million for the three months ended March 31, 2026, as compared to $17.2 million in the same period of 2025. The increase in net cash from financing activities was primarily due to a decrease in repurchases of stock of $32.6 million and a decrease in repayments on floorplan liabilities and long term debt of $16.1 million, partially offset by lower proceeds from floorplan liabilities and long term debt of $27.3 million.

Current wording

Net cash from financing activities was $41.3 million for the six months ended June 30, 2026, as compared to cash used for financing activities of $39.9 million in the same period of 2025. The increase in net cash from financing activities was primarily due to a decrease in repurchases of stock of $32.6 million, a decrease in repayments on floor plan liabilities and long-term debt of $32.6 million and higher proceeds from floor plan liabilities and long-term debt of $16.4 million.