Custom Truck One Source, Inc. (NYSE:CTOS) Q1 2023 Results Conference Call May 9, 2023 5:00 PM ET

Company Participants

Brian Peman - IR

Ryan McMonagle - CEO

Chris Eperjesy - CFO

Conference Call Participants

Mike Shlisky - D.A. Davidson

Tami Zakaria - JPMorgan

Justin Hauke - Robert W. Baird

Operator

Ladies and gentlemen, thank you for standing by, and welcome to Custom Truck One Sources First Quarter 2023 Earnings Conference Call. Please note this conference call is being recorded.

I would now like to hand the conference call over to your host today, Brian Peman, Vice President of Investor Relations for Custom Truck. Thank you, sir. Please go ahead.

Brian Peman

Thank you, and good afternoon. 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 today. The press release we issued this afternoon and our quarterly investor presentation are posted on the Investor Relations section of our website. We filed our first quarter 2023 10-Q with the SEC this 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 March 31, 2023, and prior periods.

Joining me today are Ryan McMonagle, CEO; and Chris Eperjesy, CFO. I will now turn the call over to Ryan.

Ryan McMonagle

Thanks, Brian, and welcome, everyone, to today's call. I'd like to begin by thanking all of our employees, customers and suppliers who continue to support our business and helped us deliver such a strong quarter. The entire custom truck team continues to work tirelessly to maintain record levels of production, enabling us to grow our rental fleet to meet continued strong demand for new equipment and to fulfill our goal of providing unrivaled service to our customers. For the first quarter of the year, we delivered strong year-over-year revenue, adjusted gross profit and adjusted EBITDA growth. We generated $452 million of revenue, $150 million of adjusted gross profit and $105 million of adjusted EBITDA in Q1, up 23%, 16% and 15%, respectively, versus Q1 2022. Overall demand remains very strong in each of our strategically selected primary end markets, utility or T&D, telecom, rail and infrastructure. These markets offer compelling long-term growth opportunities well in excess of GDP, which we believe should continue for the foreseeable future. The reported backlogs of the utility and telecom contractors, our largest customer base, continue to be good proxies for this sustained growth and remain at or near record levels. We see continued strong demand in our new sales backlog and in the performance of the rental fleet. Additionally, in the first quarter, we continued to experience strong demand from our customers to purchase assets in the rental fleet. We see all of these as positive leading indicators for sustained future demand.