Shares of Custom Truck One Source Inc (CTOS) tumbled 13.12% in after-hours trading on Monday following the release of the company's third-quarter earnings report and cautious outlook. The significant drop comes as the specialty truck and heavy equipment solutions provider missed revenue expectations and signaled challenges ahead.

Custom Truck One Source reported Q3 revenue of $482.1 million, falling short of the analyst consensus estimate of $492.12 million. Despite a 7.79% year-over-year increase in sales, the company posted a net loss of $5.8 million for the quarter. The earnings per share (EPS) came in at $(0.03), meeting analyst expectations but still in negative territory.

Adding to investor concerns, the company now expects to come in at the lower end of its 2025 revenue guidance range, citing the impact of macroeconomic uncertainty and high interest rates. Custom Truck One Source had previously forecast full-year revenue between $1.97 billion and $2.06 billion. While the company reaffirmed its full-year revenue and adjusted EBITDA guidance, the cautious tone regarding the lower end of expectations has likely contributed to the sharp stock decline.

Despite the challenges, Custom Truck One Source reported some positive developments. The company's adjusted EBITDA for Q3 beat estimates, coming in at $96 million compared to the expected $92.9 million. Additionally, the firm announced plans to invest an additional $50 million in its rental fleet this year, aiming for high-single-digit fleet growth. However, these positives were overshadowed by the revenue miss and cautious outlook, leading to the significant after-hours sell-off.