Oct 27, 2026 earnings call — Record rental demand and higher EBITDA guidance
Company raised full year adjusted EBITDA guidance to $447.5 to $460 million.
Revenue $0.5B (est $0.5B) · EPS $0.01 (est $0.01)
Key quotes
"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 now expect a range of $447.5 to $460 million."
"In addition, sales were negatively impacted by more than $20 million of sales delayed by a chassis vendor recall as well as the need to repair damage. To some of our vehicle inventory from a hailstorm that occurred during the quarter."
Analyst Q&A 6
utilization, demand drivers, hailstorm and recall
Q (Michael Shlisky · DA Davidson): He asked whether current utilization above 84% will drop to the usual low-80s and whether demand is from data centers or older grid work. He also asked if hailstorm damage and a product recall are insured or covered.
A: Management said utilization normally rises late October into November and may slow a bit in December but likely stay high because demand is strong. They said demand is driven by transmission and distribution work, not only data centers. They said the hailstorm was small, covered by insurance above a $1 million deductible, and OEMs will cover recall repairs, with both expected to unwind in Q4.
"In terms of the hailstorm, know, in the big picture, it was relatively immaterial, and, yes, it is covered by insurance." — Christopher J. Eperjesy (CFO)
SER margins and pricing
Q (Cantor Fitzgerald): He asked whether SER margins in the mid-50s are sustainable or a blip. He also asked about pricing power into 2027, infrastructure/BEAD impacts, and how deleveraging will split between EBITDA growth and debt paydown.
A: Management said SER margins have been in the low- to mid-50s for several quarters and modeling low- to mid-50s is reasonable. They said pricing opportunities exist as demand is strong, the December price increase is still rolling through, transmission mix helps, and some price increases may offset supplier cost increases. On leverage, they said deleveraging will come from a combination of double-digit EBITDA growth and continued free cash flow to pay down debt, with more detail after Q4.
"I think modeling kind of the low- to mid-50s is a reasonable number." — Christopher J. Eperjesy (CFO)
STEM backlog and capex pull-forward
Q (Oppenheimer and Co.): He asked what is driving STEM backlog and how STEM looks into next year for the double-digit adjusted EBITDA plan. He also asked about the size and cash/EBITDA impact of the fleet pull-forward CapEx and SG&A discipline in SER.
A: Management said backlog and order conversion increased in the quarter, which is a positive sign ahead of Q4, the biggest STEM quarter. They said year-to-date third-party STEM revenue is up about 1.5% and overall revenue up 5% with fleet additions, so STEM growth is expected in the mid single-digits and the fleet pull-forward was about $60 million, roughly $15 million annualized EBITDA. They said SG&A is being managed tightly through efficiency and footprint decisions.
"As we talked about, we saw backlog and order conversion both increase in the quarter, which to us is a positive indicator heading in Q4, which is typically the biggest quarter generally for stem." — Ryan McMonagle (CEO)
timing of large transmission projects
Q (Brian Brophy · Stifel): He asked how far out the large transmission projects customers are discussing currently are, and what normal lead times look like. He also asked how much of the $20 million deferred STEM shipments have been delivered in October versus later in the quarter.
A: Management said the dynamic changed: they are now talking about projects starting in 2027 and some in 2028, versus the usual projects starting in weeks or months. They said the majority of the $20 million of deferred STEM has already been delivered and the rest will finish over the quarter, with OEMs and dealers helping resolve recall issues.
"So we are talking about projects, obviously, now that are starting in 2027 and some that are even starting in 2028." — Ryan McMonagle (CEO)
customer conversations and Q4 assumptions
Q (Naim Kaplan · Deutsche Bank): He asked what changed in customer conversations over the past six months that makes transmission a "once in a generation" cycle. He also asked for key assumptions behind the Q4 guidance range, especially STEM timing and SER utilization.
A: Management said two things changed: more new projects entering construction and more maintenance on existing lines, so both new projects and upkeep are increasing. They said customers report growing backlogs and stronger expectations for 2027 and 2028, and publicly available forecasts keep rising. On Q4 guidance, they said STEM shipment timing is a key variable and rental asset sales make SER timing harder to predict, which is why guidance has a range.
"So I think it is a combination of both, and I think we listen to our customers, you know, they are saying the same thing that their backlogs are increasing, that their expectations for 2027 and 2028 are increasing." — Ryan McMonagle (CEO)
free cash flow and CapEx outlook
Q (Justin Hauke · Baird): He asked how free cash flow should look next year given the pull-forward CapEx and what prevents CapEx from remaining a continuing drag if growth stays strong.
A: Management said three things matter: higher cash flow from operations, work on networking capital, and using the rental fleet to generate cash as it grows. They said the 2027 path will be a mix of EBITDA growth and other actions, and they will give firmer guidance later.
"As Chris mentioned, it will be a mix of EBITDA growth." — Ryan McMonagle (CEO)