Custom Truck One Source, Inc.

Hello and welcome to the Custom Truck One Source Inc. Second Quarter 2025 Earnings Conference Call. All lines have been placed on mute to prevent any background noise. After the speakers' remarks, there will be a question and answer session. If you would like to ask a question during this time, see the press star followed by the number one on your telephone keypad. And if you would like to withdraw your question, press star one again. Now I would like to turn the call over to Brian Perman. Brian, the floor is yours.

Thank you. Before we begin, we would like to remind you that management's commentary and responses to questions on today's call may include forward-looking statements which by their nature are uncertain and outside of the company's control. Although these forward-looking statements are based on management's current expectations and beliefs, actual results may differ materially. For discussion of some of the factors that could cause results to differ, please refer to the risk factor section of the company's filings at the FTC. Additionally, please note that you can find reconciliations of the historical non-GAAP financial measures discussed during the call in the press release we issued yesterday afternoon. That press release in our second quarter investor presentation are posted on the investor relations section of our website. We filed our second quarter 2025 10Q with the FTC yesterday afternoon. Today's discussion of our results of operations for Custom Truck One Source Inc. or Custom Truck is presented on a historical basis as of or for the three months ended June 30th, 2025 and prior periods. Joining me today are Ryan McMonigal, CEO, and Chris Eppert, SECFO. I will now turn the call over to Ryan.

Thank you, Brian, and welcome everyone to today's call. Custom Truck had a very strong second quarter, delivering 21% revenue growth and 17% adjusted EBITDA growth versus Q2 of 2024. Characterized by continued solid fundamentals across our primary end markets and excellent execution by our entire team. Demand in our core T&D markets remained robust, leading to strong results in both our ERS and TES segments and overall sequential and year over year revenue growth for the quarter. We continue to navigate the volatile macro economic environment through regular engagement with our customers and suppliers. Our steady business activity and strong intra quarter order flow continue to reinforce our optimism about achieving our expected growth targets in 2025. As a result, we are reaffirming our previous fiscal 2025 revenue and adjusted EBITDA guidance. While Chris will discuss our segments performance in greater detail, I'd like to highlight some key trends. In ERS, our utility contractor customers continue to see sustained and increased levels of activity, which they expect to persist for the foreseeable future. Driven largely by unprecedented secular growth in electricity demand and the continuing need for substantial grid maintenance spending by the utilities. The strong rental demand in the utility end market and across our other primary end markets resulted in average OEC on rent for Q2 of over $1.2 billion, a 16% year over year increase. Average utilization in the quarter was just under 78%, up almost 600 basis points versus Q2 of last year and up sequentially as well. We continue to see mid 70% to mid 80% utilization rates across most of our fleet. Demonstrating the long-term resilience of our end markets. These trends resulted in significant year over year increases in both rental revenue and rental asset sales. Driving total ERS segment revenue of more than 23% versus Q2 of last year. We continue to leverage the substantial rental demand in ERS to selectively invest in our rental fleet. At the end of Q2, our total OEC was just over $1.56 billion, our highest quarter end level ever. We plan to continue to invest during the remainder of the year to ensure we have adequate equipment to meet current and projected rental demand. PES saw outstanding sales performance in the quarter, achieving several milestones. We experienced two consecutive months of PES sales over $100 million each for the first time in our history in the second quarter and saw our second highest quarter of sales ever. This resulted in significant year over year sales growth of more than 22% and sequential growth of more than 30%. While our backlog was down in the quarter, our interquarter order flow remains quite strong, particularly among local and regional customers. Signed orders in the quarter from this portion of our customer base were up more than 45% year over year, driving overall signed order growth of just under 35% on a year over year basis. As we expected, segment gross margin began to normalize in the second quarter and was up versus Q1. Overall, our current pace of orders and the continued strong demand for vocational vehicles across our end markets combined to provide us with the confidence in our outlook for PES for the rest of the year. There have been several legislative and regulatory matters that have affected the overall economic environment for which we gained greater clarity in the recent months. First, the passage of the recent federal spending and tax bill provided a clear understanding of the administration's economic policy and included an accelerated or bonus depreciation provision that we feel will be beneficial to Custom Trucks business, particularly for our small and medium sized customers. Next, while tariffs remain an area of focus for us, as a result of the combination of our proactivity around certain inventory purchases in the first half of the year and the current expectation for the tariffs effect on our vendors, we feel that tariffs will have a limited direct cost impact on our business this year. We continue to hear about uncertainty related to new equipment purchase decisions from some of our smaller customers. We obviously continue to monitor changes to the administration's product and regional tariff policies and we'll adjust our responses accordingly. Finally, with respect to the previously announced changes to emissions standards from both the EPA and CARB, final decisions have yet to be made. However, last month Congress revoked California's waivers that allowed CARB to separately legislate emissions standards, effectively ending upcoming changes to truck and auto emission standards, as well as plans to phase out gas powered vehicles. The orders are being challenged in court by the state of California. In addition, we continue to wait for clarity from the EPA on the 2027 low NOx emission standards and warranty requirements. As we stated in recent quarters, our current outlook for TES assumes no pre-buy resulting from changes in either EPA or CARB emission standards. We are reaffirming our full year 2025 guidance, our strong year to date results, our robust order flow and resilient in-market demand continue to drive our expected growth across our consolidated business this year. Despite some volatility in the macro environment, our business outlook remains positive. Long-term sustained in-market demand, buoyed by secular mega trends and our ability to execute on behalf of our customers, sets us apart from our competition. Our multi-decade relationships with strategic suppliers and our long tenured and diversified customer base will continue to be key to our success. I continue to have the highest degree of confidence in the Cups and Truck team and want to thank everyone for their hard work and dedication that helped achieve these results this quarter. We look forward to updating everyone on our progress on next quarter's call. With that, I'll turn it over to Chris to discuss our second quarter results in detail.