The following is a summary of the Custom Truck One Source, Inc. (CTOS) Q1 2024 Earnings Call Transcript:
Financial Performance:
Custom Truck One Source reported Q1 2024 revenue of $411 million, driven by strong demand in its infrastructure, rail, and telecom sectors.
Despite supply chain complications and regulatory issues slowing down the utility sector, the TES segment achieved a 15% revenue growth.
The company's gross margins saw a 170 basis point improvement compared to Q1 2023 due to increased demand and refined production capabilities.
Adjusted EBITDA guidance was lowered to $400-$440 million.
Lower-than-expected sales were observed in used units in the ERS for Q1 2024; nonetheless, compelling residual values maintained a satisfactory gross profit.
Business Progress:
The company announced the acquisitions of SOS Fleet Services and the business of AMD Maintenance and Repair, expanding its geographical footprint and service capacity.
Despite current challenges, the company anticipates a recovery in 2024 due to increased demand for new equipment and rental asset sales.
The company plans to fast-track its fleet investment in high-performing sectors and expects to see an increase in OEC on rent by the end of the year.
Custom Truck is proactively preparing for the upcoming chassis emission regulations, expecting an increase in demand due to these changes.
The company expects regulatory procedures and improvements in its clients' supply chain challenges to unlock further progress moving into 2025 and 2026.
More details: Custom Truck One Source IR
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