Custom Truck Q4 2024 Earnings Report
Key Takeaways
Custom Truck One Source achieved Q4 2024 revenue of $520.7 million, reflecting sequential growth of 16.4%. The company reported net income of $27.6 million, reversing a net loss in Q3. Rental revenue increased 4.3% year-over-year, while equipment sales declined slightly. The TES segment recorded record revenue exceeding $300 million for the quarter, and backlog remained strong despite a 46.4% reduction from the previous year.
Total revenue of $520.7 million, flat year-over-year but up 16.4% sequentially.
Net income of $27.6 million, improving from a net loss in Q3.
Adjusted EBITDA of $102.0 million, down 13.8% from Q4 2023.
Rental fleet utilization reached 78.9%, the highest level since Q3 2023.
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Custom Truck Revenue by Segment
Forward Guidance
Custom Truck One Source expects a return to revenue growth in 2025, driven by strong demand in TES and a recovery in ERS. The company plans to grow its rental fleet and generate meaningful free cash flow.
Positive Outlook
- 2025 revenue guidance set at $1.97 billion to $2.06 billion.
- TES segment expected to benefit from strong demand and improved supply chain conditions.
- ERS rental fleet expected to grow by mid-single digits.
- Company targeting $50 million to $100 million in free cash flow generation.
- Net leverage ratio projected to decline below 4x by year-end 2025.
Challenges Ahead
- Adjusted EBITDA decreased 13.8% year-over-year.
- Backlog declined 46.4% from Q4 2023 due to improved supply chain and order fulfillment.
- Higher interest expenses impacted profitability.
- Decline in used equipment sales in the ERS segment weighed on margins.
- Market volatility and macroeconomic conditions remain key risks.
Revenue & Expenses
Visualization of income flow from segment revenue to net income