Record Q3 With 15.6% EBITDA Growth; Full-Year Guidance Raised for Third Time
CTOS sits 59% above its 52-week low of $5.18.
Summary
CTOS posted Q3 revenue of $495.2 million, up 2.7% year-over-year, with rental revenue up 20.1% and Adjusted EBITDA of $110.9 million, up 15.6%, as margin expanded roughly 250 basis points to 22.4%. Net income swung to $2.3 million from a $5.8 million loss a year ago. The rental segment carried the quarter: average OEC on rent hit a record $1.39 billion, utilization was 81.5% and SER Adjusted EBITDA rose 22.5% with segment margin at 54.6%. Management raised full-year Adjusted EBITDA guidance to $447.5-$460 million from $437.5-$455 million — the third increase this year — and lifted SER revenue guidance to $870-$890 million from $850-$875 million. The offset: net rental fleet investment rises to $210-$230 million, pushing 2026 levered free cash flow to only slightly positive from prior guidance of more than $50 million, with the earnings payoff weighted to 2027. Net leverage fell to 3.70x from 4.53x a year ago. STEM third-party deliveries of more than $20 million slipped into Q4 on a hailstorm and vendor recall, but backlog is $342 million, up 22% year-over-year. Q3 earnings call is scheduled for 9:00 a.m. ET on October 27.
At the time of this announcement, CTOS was trading at $8.25 on NYSE in the Trade & Services sector, with a market capitalization of approximately $2B. The 52-week trading range was $5.18 to $12.23. This news item was assessed with positive market sentiment and an importance score of 8 out of 10. Source: BusinessWire.