Custom Truck One Source (NYSE:CTOS) reported third-quarter financial results on Tuesday. The transcript from the company’s third-quarter earnings call has been provided below.
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Summary
Custom Truck One Source reported a strong Q3 2026 with adjusted EBITDA of $111 million, a 16% increase year-over-year, and consolidated revenue of $495 million, up 3%.
The company raised its full-year adjusted EBITDA guidance for the third time this year, now expecting $447.5 to $460 million, driven by strong demand in the transmission and distribution (T&D) markets.
Rental fleet utilization averaged 81.5% in Q3 and is expected to remain strong, with OEC on rent surpassing $1.5 billion in Q4.
Strategic capital allocation decisions increased 2026 net rental fleet investment to $210-$230 million, focusing on long-term transmission rentals and high-return specialty products.
STEM segment faced temporary revenue delays due to a chassis vendor recall and hailstorm damage but maintained strong order flow, ending Q3 with a $342 million backlog, up 22% year-over-year.
The company projects continued strong demand in T&D markets into 2027 and 2028, supporting further growth in SER and STEM segments.
Net leverage improved to 3.7 times in Q3, with a commitment to reduce it below 3 times by 2027 through adjusted EBITDA growth and free cash flow improvements.
Full Transcript
OPERATOR
Ladies and gentlemen, thank you for standing by and welcome to Custom Truck One Source’s third quarter 2026 earnings conference call. Please note this conference call is being recorded. I would now like to hand the conference over to your host today, Brian Perman, Vice President of Investor Relations for Custom Truck One Source.
Brian Perman (Vice President of Investor Relations)
Thank you, operator, and good morning. 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 a discussion of some of the factors that could cause actual results to differ, please refer to the Risk Factors section of the company’s filings with the SEC.
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 after the market close. That press release and our third quarter investor presentation are posted on the Investor Relations section of our website. Yesterday afternoon we also filed our third quarter 2026 10-Q with the SEC. 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 September 30, 2026 and prior periods. Joining me today are Ryan McMonagle, CEO, and Chris Epergese, CFO. I will now turn the call over to Ryan.
Ryan McMonagle (Chief Executive Officer)
Thanks, Brian, and good morning everyone. Custom Truck delivered another strong quarter led by record performance in our rental business. Third quarter adjusted EBITDA was $111 million, up 16% year over year and adjusted EBITDA is up 24% through the first nine months. SER segment revenue was up 18% and STEM segment revenue was up 8% year over year. Consolidated revenue finished at $495 million, up 3%. On the strength of these results, we are raising our full year adjusted EBITDA guidance for the third time this year.
SER continues to deliver consistently strong performance driven by record demand in the transmission and distribution, or T&D, markets. Our rental fleet averaged 81.5% utilization during the third quarter, up 220 basis points from Q3 of last year. This was supported by record levels of OEC on rent which averaged just under $1.4 billion in Q3, up more than 10% year over year. So far in Q4, both measures have remained quite strong with OEC on rent currently greater than $1.5 billion and utilization surpassing 84%.
As I said last quarter, we believe that we are in the early stages of what could be a once-in-a-generation transmission demand super cycle which our SER third quarter results support. We ended the third quarter with total OEC of over $1.76 billion, up almost $86 million in the quarter and the highest quarter-end level in our history. The continued investment in our rental fleet reflects sustained record level demand and supports our expected continued growth in SER for the remainder of the year and into 2027. Given the additional growth capex in our fleet year to date, our average fleet age is just under three years old, which we continue to believe is one of the youngest fleets in the industry and positions us well to support our customers’ needs across the country.
I want to spend a minute on capital allocation because it was the most important decision we made this quarter. Demand from our transmission customers, much of it tied to long-duration projects, has continued to build beyond what our original fleet plan assumed. We chose to meet that demand. We are raising our 2026 net rental fleet investment to $210 to $230 million with the incremental dollars going into long-term transmission rentals and high return specialty products and we directed STEM production capacity to our own fleet to get these units on rent faster.
These are the highest return dollars we can deploy. Rental gross margins were nearly 79% in the quarter and on-rent yield was over 39%. The trade-off is timing-levered. Free cash flow this year will now be slightly positive rather than the more than $50 million we had expected and most of the earnings from these units arrive in 2027. To size that, at today’s rental rates and utilization, roughly $60 million of fleet generates approximately $20 million of annualized revenue and $15 million of annualized adjusted EBITDA. So the incremental units we are adding this year should be a meaningful contributor in 2027 with only a modest contribution in 2026 given delivery timing.
Even with that investment, net leverage fell to 3.7 times this quarter, down sequentially from Q2, and we remain committed to getting below 3 times in 2027. Our trucks and equipment continue to power the people who strengthen and build critical infrastructure in the U.S. and Canada. The market has been focused on the durability of demand in T&D and our ability to convert improving rental KPIs into earnings and deleveraging and we believe our trending results over recent quarters speak directly to that.
Bidding activity and ongoing conversations with our customers lead us to believe that these conditions will persist into the fourth quarter and beyond. Our STEM segment had a solid quarter with strong order flow. Third quarter orders were up 22% year over year even as third-party deliveries were affected by timing. For Q3 overall, STEM revenue was up more than 8% while third-party revenue excluding sales to our SER segment was down 5% versus Q3 of 2025.
Third-party revenue in the quarter was impacted by our strategic decision to prioritize additional investment in the rental fleet to take advantage of current and anticipated rental demand. As we noted in August, certain third-party new equipment sales were delivered in the second quarter rather than in the second half which also weighs on the third quarter comparison. Additionally, STEM saw more than $20 million of delayed new equipment sales in Q3 resulting from a chassis vendor recall as well as the need to repair damage to some of our vehicle inventory from a hailstorm at our Kansas City facility during the quarter.
Excluding these delayed deliveries, STEM third-party revenue would have been up year over year. We believe these are short-term timing issues and that these sales will be recognized in the fourth quarter. We continue to have a high degree of confidence in our STEM business and are affirming our STEM revenue guidance for 2026. New sales order backlog ended the third quarter at $342 million, up $19 million from the end of Q2 and up 22% year over year. Intra-quarter order flow remains strong in Q3 and our backlog has grown so far in Q4. We continue to see strong sales demand in the utility end market focused on both transmission and distribution equipment.
In the infrastructure end market we have seen less growth. However, third quarter orders grew strongly in several categories and together with our ongoing conversations with our customers and the pace of bidding activity, this gives us the confidence to expect another year of growth in third-party customer revenue for STEM. With respect to the EPA 27 NOx emission regulations, little has changed since the EPA introduced its proposed changes to the rules in early July. Given our current inventory position, the chassis pre-buy actions we have already taken and our strong relationships with our chassis OEM partners, we continue to believe that CTOS is well positioned to navigate the impact of the upcoming emissions standards changes.
Given our strong year-to-date performance, robust conditions in the T&D end markets and our outlook for the rest of the year, we are raising our full year 2026 consolidated adjusted EBITDA guidance for the third time this year and now expect a range of $447.5 to $460 million. We are also raising our SER segment revenue guidance to $870 to $890 million and are affirming our previous consolidated revenue guidance in the range of $2.1 to $2.2 billion.
Long-term sustained end market demand buoyed by secular megatrends, combined with our ability to provide exceptional execution on behalf of our customers sets us apart from our competition. Our long-standing relationships with our strategic suppliers and customers continue to be the keys to our success. I continue to have the highest degree of confidence in the Custom Truck team and want to thank everyone for their hard work and dedication that helped deliver our strong results in the third quarter.
We look forward to updating everyone soon. With that, I’ll turn it over to Chris to walk through the numbers in more detail.
OPERATOR
We will now begin the question-and-answer session. If you would like to ask a question, please press star one to raise your hand. To withdraw your question, press star one again. We ask that you pick up your handset when asking a question to allow for optimum sound quality. If you’re muted locally, please remember to unmute your device. Please stand by while we compile the Q&A roster. Your first question comes from the line of Michael Schleske with D.A. Davidson.
Your line is open. Please go ahead.
Michael Schleske (Analyst)
Good morning, and thanks for taking my questions. Can we get there, guys? Can we start with your comments, Ryan, on utilization in the current quarter? I think you mentioned it exceeded 84% at this point of the year, but you expect it to come down and kind of be more normalized in that low 80s that you’ve seen by the end of the quarter as the assets that you’re trying to roll out, I would assume, still have some ways to go for the rest of the quarter here.
Or do you think Q4 is actually okay and maybe at the high end of that sweet spot range?
Ryan McMonagle (Chief Executive Officer)
Yeah, it’s a good question, Mike. And there’s two things I think that are really worth highlighting. One, we’re seeing it generally increase this time of year. So really late October into November is one that will continue to build, and that’s what we’re seeing currently. So that’s trending. But the demand for transmission, Mike, right now is so strong that, as we’re talking internally, I think there will be some customers who decide to keep equipment rather than returning it, which is what normally happens during the holidays, just because it may not be available for them after the holidays. And so I think it will—and I think Chris made the comment—that it will slow down a little bit into December, but we think it will not be as significant into the end of the year just because the demand environment right there, Mike, is so good that I think people don’t want to lose some of that transmission year in particular.
Michael Schleske (Analyst)
Got it. Great. And then your comments that you’ve made all along here about really good demand sounds like it’s both transmission and distribution. Is a lot of that really still pinned on data centers and AI in various communities? Or is it really the older drivers that you’ve had, which are just ongoing grid hardening and maintenance and expansion for everyday activities not related to data centers? I guess I’m kind of curious, are you getting any pushback or anyone saying we’re going to be holding off a little bit of that data activity late ’26–’27 as, you know, communities speak out, election day passes, et cetera, or are you still seeing strong demand from the older drivers?
Ryan McMonagle (Chief Executive Officer)
Yeah, we’re still seeing good—it’s a great question—and we’re still seeing good growth, Mike. And so I think you’re right, as we’ve talked about in the past, we’re not data-center-specific—that when a new data center is announced, somehow that drives incremental demand for specific Custom Truck One Source equipment. It’s much more that that’s just a big consumer of power. And so I think a lot of what we’re seeing right now we would be talking about even if it was just the grid upgrade and some of the modernization was happening.
Certainly data centers are a consumer of power, so that’s a very good thing for us. But, you know, we’re seeing a lot. You know, we have our own construction trackers that we’re tracking on the transmission side as we talk to our customers. They’re all talking about new projects that are going into construction. There’s obviously a lot of line upgrades that are happening right now. And then you’re correct, distribution is also in a very good spot right now.
And we’re seeing rate cases continue to be approved. And so we’re seeing—when we look forward with our own forecasting—it feels like ’27 and really into ’28 will continue to be a very strong demand environment, which should benefit Custom Truck and, certainly with some of the other macro dynamics going on, will benefit the rental fleet in particular.
Michael Schleske (Analyst)
Got it. Maybe the last one for me: the impacts from the hailstorm—I was curious whether that was covered by any kind of insurance or is going to be in the fourth quarter. And then even the product recall—did you have to actually send trucks back, or did they have your techs take care of the recall, and are you going to be paid for that as well?
Chris Eperjesy (Chief Financial Officer)
Yeah. Mike, this is Chris. In terms of the hailstorm, you know, in the big picture, it was relatively immaterial. And yes, it’s covered by insurance. We had a $1 million deductible on our policy, and it did go above that, but not much above that. And on the second one, we’re working with the dealers to get the repairs done, and the OEM is covering those costs. And again, we think both of those will kind of unwind here in the fourth quarter.
Michael Schleske (Analyst)
Great. I appreciate the answers. I’ll pass it along.
Ryan McMonagle (Chief Executive Officer)
Thanks, Mike.
OPERATOR
Your next question comes from the line of Manish Samea with Cantor Fitzgerald. Your line is open. Please go ahead.
Manish Samea (Analyst)
Thank you. Good morning, Ryan, Chris, Brian and the team. My first question is on SER margins, which were quite impressive this quarter at 54.6%. How should we think about those margins as we move ahead? Is the mid-50s the right normalized range, or is this sort of a temporary blip? Maybe if we can start there.
Chris Eperjesy (Chief Financial Officer)
Yeah—sorry, Manish—it’s Chris. If you look back, I think we’ve been living kind of in that low to mid-50s for the past few quarters. I would expect that we can continue to live there. You know, there may be a little bit of upside there. But the answer is yes, I think modeling kind of in the low to mid-50s is a reasonable number. You know, a lot of that, Manish, would just be a function of mix too, between core rental revenue and then what assets are sold out of the rental fleet. And so that would—that’s really the only thing.
Manish Samea (Analyst)
And then I think on the pricing front—sorry, Ryan, I don’t know if I interrupted on something. The line just kind of cut off a little bit. Okay, sorry. On the pricing that you had at 39.4%, again despite all the growth that you had on the fleet side, maybe if you can just give us a sense on what you’re seeing, what the opportunity is for higher pricing as we go into ’27. I think you guys have alluded to the fact that the transmission markets are quite strong as we move into ’27 and into ’28 as well.
But again, just trying to understand what the flexibility might be on the pricing front with the strong demand.
Ryan McMonagle (Chief Executive Officer)
Yeah, I think it should be a good demand environment, and so that means that there should be a pricing opportunity. I think we’re seeing the price increase that we actually took last December continue to roll through. We’re seeing some of the benefit of transmission—it’s typically a higher rate or higher on rent yield. So we’re seeing some positive mix that way. And then yes, I would expect as we start to think about guidance into ’27 that there will be the opportunity to increase price. Some of that will be to take care of some of the cost increases that we’re seeing from our suppliers heading into ’27, but it should be an opportunity to increase price as well.
Manish Samea (Analyst)
And just on the infrastructure markets, you know, the transport bill I guess is still out there pending some permanency. And then on the telecom side, I think you did kind of mention BEAD—that could potentially help that market. So perhaps if you can just give us your sense as to how you’re thinking about the transportation bill, those markets, plus potentially the positive impact from BEAD as we kind of look ahead.
Ryan McMonagle (Chief Executive Officer)
Yeah. Look, infrastructure—transmission and distribution—has been incredibly strong, and I think that’s certainly what we’re seeing, and that shows up more in our rental fleet, as we talked about. On the infrastructure side specifically, we’re seeing some pockets of growth. Some things like our dump truck and water truck and some of our heavy-haul tractor and trailer product categories are really beginning to pick up. Some of that is related to more data center construction. So there’s some positive from data center construction. We haven’t seen a big lift yet from BEAD. As you know, telecom is a small part of our business, but we have not seen that materialize yet in any significant lift.
Manish Samea (Analyst)
Right. And then just lastly, on the leverage metrics that you laid out for ’27—below three times in ’27—how should we think about the deleveraging as far as the mix between EBITDA growth and debt paydown? For modeling purposes, is it safe to assume sort of like a 50/50 type scenario?
Chris Eperjesy (Chief Financial Officer)
This is Chris. Again, we haven’t really given specific guidance for next year yet, and we will coming out of Q4. We have given a little bit of guidance indicating that we’re going to have double-digit EBITDA growth next year. But the answer to your question is it’ll be a combination of both. Certainly there’s going to be a part of the deleveraging that comes from that double-digit EBITDA growth, but we’re also going to continue to focus on generating free cash flow and paying down debt.
So it’ll be a combination of both. And coming out of Q4, we’ll give a lot more granularity on kind of the path to get there.
Manish Samea (Analyst)
Okay, well, thank you so much, guys. Congrats.
Ryan McMonagle (Chief Executive Officer)
Thank you.
OPERATOR
Your next question comes from the line of Scott Schneiderberger with Oppenheimer and Company. Your line is open. Please go ahead.
Daniel (Analyst)
Hey guys, good morning. It’s Daniel for Scott. Thank you for taking our question. I’m curious, could you please provide some color on the drivers of the backlog for STEM and how we should think about STEM generally as we look into next year as it pertains to the double-digit adjusted EBITDA growth? So a little bit more color on the outlook for STEM, please. Thank you.
Ryan McMonagle (Chief Executive Officer)
Yeah, look, as we talked about, we saw backlog and order conversion both increase in the quarter, which to us is a positive indicator heading into Q4, which is typically the biggest quarter generally for STEM. So I think you’ll see good growth there. And then I think year to date, STEM third-party revenue is up—I think it’s like one and a half percent, if I’m not mistaken. And if you think about overall revenue year to date, it’s up 5%, which includes adding the assets into the rental fleet. And so I think it will look similar as you’re starting to think about what next year can look like. We see opportunities to grow. We’ll obviously be thoughtful on how we invest in the rental fleet, but I think that kind of mid-single-digit growth is why we’ve continued to hold the guide from a STEM revenue perspective as well.
Daniel (Analyst)
Got it. Thank you. And also, thinking about the pull-forward effect here from the fleet investment—it makes sense given the growth environment you are seeing—but as we think about the pull-forward impact on CapEx and free cash flow into this year that could catch up next year, how should we think about the magnitude of that, please? Thank you.
Ryan McMonagle (Chief Executive Officer)
I’ll start and Chris can add some color. But yeah, I mentioned in my comments that it was about $60 million is what we were talking about in terms of sizing that. So you can think about that as a meaningful portion of the levered free cash flow we would have generated otherwise. And then we’ve tried to quantify that for you too—I think I said about $15 million of annualized EBITDA. And so to me, that’s a pretty easy payback scenario as you start to think about 2027 and think about a three-times leverage target on that incremental EBIT, and then obviously the cash flow that generates next year too.
But I think that’s probably the right way to think about sizing, and it should be additional growth for the SER—for the rental fleet—heading into 2027, and that would help quantify some of the cash impact as well.
Chris Eperjesy (Chief Financial Officer)
Yeah, probably the only other things I’d add is, if you think about it year over year, the rental fleet is up about $150 million, leverage is down about 0.8 times, and we’ve been able to do that with slightly positive levered free cash flow. So I think we feel like it was a really good investment to set us up for next year, as Ryan just kind of laid out the impact in 2027.
Daniel (Analyst)
Got it. Thank you. Final one from me. I know that DEC mentioned disciplined SG&A management in the SDR segment. Could you just please elaborate on that—if there’s any nuances we should think about? Thank you.
Ryan McMonagle (Chief Executive Officer)
No, I think it’s just an area that we’ve continued to stay focused on—is let’s be efficient with how we’re spending SG&A. The teams have done a great job from a footprint perspective and then obviously from managing the overall cost perspective as well. So I think we feel like we’re well positioned heading into the last quarter and heading into 2027 as well.
Daniel (Analyst)
Got it. Thanks, guys. Congrats.
Ryan McMonagle (Chief Executive Officer)
Thanks, Daniel.
OPERATOR
Your next question comes from the line of Brian Brophy with Stifel. Your line is open. Please go ahead.
Brian Brophy (Analyst at Stifel)
Yeah, thanks. Good morning, everybody. Appreciate you taking the question. Curious how far out some of the large transmission projects are that you’re talking with customers currently, and what you would typically see in a more normalized demand environment. Thanks.
Ryan McMonagle (Chief Executive Officer)
Yeah, it’s… and I think that’s why we say it’s such a great demand environment, Brian, is because the dynamic has certainly changed. So we’re talking about projects, obviously now, that are starting in ’27 and some that are even starting in 2028. And that’s just a new dynamic for us generally. You know, it’s… it’s about projects that are starting in the next few weeks, or maybe it’s months in advance. And so that’s, that’s, I think, why we made the decision to invest additional capital into the rental fleet, too, is that when we’re making that investment, it’s for projects that are imminent.
That we’re deploying that capital right away and so feel really good about that. And then the visibility forward has continued to stay very strong, which is why I think we’re as optimistic about the growth we’re seeing in 2027 and even into 2028 as well.
Brian Brophy (Analyst at Stifel)
That’s… yeah, appreciate it. That’s very helpful. And then I guess just on the 20 million that was deferred in the quarter in STEM, how much of that has already been delivered here in October versus how much are you expecting kind of later in the quarter? Thanks.
Ryan McMonagle (Chief Executive Officer)
Yeah, I think it’s… I think a majority has already been delivered. And so it’s obviously, as we’re working through some of the recall issues, which, as Chris mentioned, the OEM and the dealer are both helping us kind of, you know, daily with that to work through those issues. We’re able to deliver those trucks. So I think the majority of it has been delivered and the rest will finish kind of over the rest of the quarter.
Brian Brophy (Analyst at Stifel)
Appreciate it. I’ll pass it on. Thanks, guys.
Ryan McMonagle (Chief Executive Officer)
Thanks, Brian.
Chris Eperjesy (Chief Financial Officer)
Thanks, Brian.
OPERATOR
Your next question comes from the line of Nam Kaplan with Deutsche Bank. Your line is open. Please go ahead.
Nam Kaplan (Analyst)
Hi, good morning. Thanks for taking my question. On the line for Nicole DeBlase. So, yeah, the first one: you described the current transmission market as potentially a, you know, once-in-a-generation cycle. So just wondering maybe if we can get a view into, like, the customer conversations. Maybe like what’s changed most meaningfully with respect to those customer conversations, let’s say the past six months or so.
Ryan McMonagle (Chief Executive Officer)
Yeah, it’s… I think it’s two things. It’s a great question, and I think it’s why we’re, you know, we’re as optimistic as we are and obviously why we made the investment that we did. But there’s an increase in both new projects, right? So we’re seeing new projects that are going into construction. Which I think a lot of that is some of the regulatory changes we’re starting to see the benefits of, and that will continue to accelerate. And then we’re seeing some of the maintenance work on those lines also happening, too. So I think it’s a combination of both. I think as we listen to our customers, you know, they’re saying the same thing: that their backlogs are increasing, that their expectations for 2027 and 2028 are increasing as well. And then when we track the data ourselves, you know, from the publicly available sources, that’s what you’re seeing, right, is the forecasts continue to increase every time we do a data pull.
And so I think it’s why we’re as optimistic as we are, you know, that this will continue for the foreseeable future.
Nam Kaplan (Analyst)
All right, that’s very helpful. And then kind of looking at 4Q: so if you do the bridge for, you know, full-year guidance, it implies 560 to 580 revenue, then, like, 120 or so, 130 to the 135 adjusted EBITDA in 4Q. So just trying to maybe get a better understanding of, like, the key assumptions behind, you know, the range, particularly around maybe, like, STEM delivery timing and the FCR utilization.
Chris Eperjesy (Chief Financial Officer)
Yeah, this is Chris. You know, that is one of the challenges we always have in Q4 is, you know, what’s going to ship in the fourth quarter on the STEM side because, you know, things can pull forward from January, things can push out to Q1. And then on the SCR side, you know, we have pretty good visibility, as Ryan walked through, on the rental side. What’s a little bit more challenging is the rental asset sales, where, you know, either the customer has a right to buy a unit or comes to us and wants to buy a unit.
And that’s why we’ve left a little bit of a range in our guidance is because those variables are difficult to predict. You know, sitting here today, I think, you know, our commentary on the rental side is, you know, we’re seeing good utilization, good OEC on rent. You know, it’s now over a billion five. Q3, I think, on average, was a billion 394, billion 395. So we’ve continued to see growth, you know, but I think overall, I think we feel very good, you know, overall about the business, certainly on the rental side. And that’s why, you know, we’ve kept a narrower range, but still a reasonable range to kind of take into account some of those variables that could either pull in or push out, you know, certainly on the STEM side.
Nam Kaplan (Analyst)
Okay, great. That is helpful. I will pass it on.
OPERATOR
Your next question comes from the line of Justin Hawk with Baird. Your line is open. Please go ahead.
Justin Hawk (Analyst)
Oh, great. Yeah, I guess I just wanted to ask one from the free cash flow as we look into next year. I mean, obviously I think it makes sense, the pull forward on the capex and the returns you outlined, I mean that’s obvious. But you did reiterate the three times levered by the end of ’27. And I guess, you know, I don’t know what double-digit EBITDA growth means necessarily, but it would imply that there still is, like, a, I think, pretty meaningful free cash flow to kind of drive that.
And so I guess the question is, you know, I think part of the opportunity for you guys has been that you have a lot of excess fleet that you can deploy. And I just am curious about your thinking for next year. If you continue to see this strong growth, you know, what keeps the capex from kind of having to continue to be a factor there to support that? Thanks.
Ryan McMonagle (Chief Executive Officer)
Yeah, it’s a great question. I’ll start, I’ll let Chris chime in. But, Justin, you know, I think you got three things that we like to talk about there. One, you’re going to have the increase even though… …and the cash flow that that generates. So I think you’ll see the benefit of that heading into 2027. We’ll continue to work on networking capital here. We talked about—Chris mentioned—some of the strategic investments we’ve made to get in front on chassis heading into 2027. So I think some of that we should benefit from heading into 2027. And then you’re right, we just, you know, as the fleet grows, you know, as we think about capex into next year, I think there’s just the opportunity to continue to use the fleet to generate cash as well.
So, as Chris mentioned, it’ll be a mix of EBITDA growth, and we said double digit. We’ve got to—you know, we’ll give more firm guidance on where in double digit, obviously, that growth will come from. And then you’re right, that implies some amount of free cash flow, which would be, you know, more consistent with what we originally said for ’26. Obviously, with some of the growth that we’re seeing from you, then I think you get kind of right there.
Justin Hawk (Analyst)
Okay, that’s helpful. That’s all for me for right now. Thank you. Great.
Ryan McMonagle (Chief Executive Officer)
Thanks, Justin.
OPERATOR
There are no further questions at this time. I will now turn the call back to CEO Ryan McMonagle for closing remarks.
Ryan McMonagle (Chief Executive Officer)
Thanks, everyone, for your time today and your interest in Custom Truck One Source. We appreciate the continued engagement and look forward to updating you next quarter. In the meantime, please don’t hesitate to reach out with any questions. Thank you again and have a great day.
OPERATOR
This concludes today’s call. Thank you for attending. You may now disconnect.
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