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WillScot Holdings Corp (WSC)·Q1 2025 Earnings Summary

Executive Summary

  • Q1 2025 revenue was $559.6M, gross margin 53.7%, Adjusted EBITDA $228.8M (40.9% margin), and diluted EPS $0.23; management reaffirmed full‑year 2025 outlook for revenue ($2.275B–$2.475B), Adjusted EBITDA ($1.000B–$1.090B), and Net CAPEX ($225M–$305M) .
  • Versus S&P Global consensus, revenue beat by $4.31M while EPS missed by ~$0.03; Adjusted EBITDA was roughly in line with consensus* .
  • Order book rose ~7% YoY, with strength in enterprise accounts; pricing held firm (modular +5% YoY AMR; storage +2%), and VAPS reached 17% of revenue, supporting resilience despite unit‑on‑rent headwinds .
  • Near‑term catalyst: reaffirmed FY guide, visible Q2 sequential improvement (revenue down ~2.5% YoY vs ~5% in Q1, D&I growth ~10%, margin expansion), capital return (dividend and buybacks), and successful refinancing of 2025 notes with new 2030 senior secured notes .

What Went Well and What Went Wrong

  • What Went Well

    • Pricing and VAPS: AMR up 5% YoY in modular and 2% in storage; VAPS reached >17% of revenue, progressing toward long‑term 20–25% target .
    • Order book resilience: Pending orders up ~7% YoY, driven by larger enterprise accounts; management expects Q2 new lease activations supported by this backlog .
    • Capital allocation and balance sheet: $45M returned to shareholders (1.1M shares repurchased for $32M; first quarterly dividend of $0.07/share), refinancing extended maturities to 2030, ABL availability ~$1.6B .

  • What Went Wrong

    • Volume headwinds: Average units on rent down 5% (modular) and 16% (storage) YoY; total revenue declined ~5% YoY .
    • Delivery & Installation margins: Contracted YoY due to seasonal transportation mix and insourcing initiatives not yet at full productivity; management expects improvement as Q2/Q3 volume returns .
    • Adjusted EBITDA margin compressed ~130 bps YoY to 40.9%, partly from a higher mix of new unit sales (~40 bps impact) .

Financial Results

MetricQ3 2024Q4 2024Q1 2025
Revenue ($USD Millions)$601.4 $602.5 $559.6
Gross Profit Margin %53.5% 55.8% 53.7%
Adjusted EBITDA ($USD Millions)$266.9 $284.7 $228.8
Adjusted EBITDA Margin %44.4% 47.3% 40.9%
Net Income ($USD Millions)$(70.5) $89.2 $43.1
Diluted EPS ($)$(0.37) $0.48 $0.23
Adjusted Diluted EPS ($)$0.38 $0.49 $0.24
Cash from Operations ($USD Millions)$(1.6) $178.9 $206.6
Adjusted Free Cash Flow ($USD Millions)$143.1 $136.8 $144.8

Segment revenue breakdown

Segment ($USD Millions)Q3 2024Q4 2024Q1 2025
Leasing$455.6 $465.1 $434.4
Delivery & Installation$114.8 $95.6 $88.7
Sales – New Units$17.9 $21.8 $22.4
Sales – Rental Units$13.2 $20.0 $14.1
Total Revenue$601.4 $602.5 $559.6

Estimates vs. actuals (Q1 2025)

MetricConsensus*ActualSurprise
Revenue ($USD Millions)$555.2*$559.6 +$4.31M (beat)
Primary EPS ($)$0.269*$0.24 -$0.029 (miss)
EBITDA ($USD Millions)$229.2*$228.8 (Adj. EBITDA) -$0.4M (in line; definitions vary)

KPIs and operating drivers (Q1 2025)

KPIQ1 2025
VAPS as % of Revenue>17%
AMR YoY – Modular+5%
AMR YoY – Storage+2%
Avg. Units on Rent YoY – Modular-5%
Avg. Units on Rent YoY – Storage-16%
Pending Order Book YoY+7%

Note: *Values retrieved from S&P Global.

Guidance Changes

MetricPeriodPrevious Guidance (Feb 20, 2025)Current Guidance (May 1, 2025)Change
Revenue ($USD Billions)FY 2025$2.275–$2.475 $2.275–$2.475 Maintained
Adjusted EBITDA ($USD Billions)FY 2025$1.000–$1.090 $1.000–$1.090 Maintained
Net CAPEX ($USD Millions)FY 2025$225–$305 $225–$305 Maintained
Revenue YoYQ2 2025N/A~-2.5% YoY (improving sequentially) New color
D&I RevenueQ2 2025N/A~10% growth expected New color
Adj. EBITDA MarginQ2 2025N/ASequential expansion vs Q1 New color

Earnings Call Themes & Trends

TopicPrevious Mentions (Q3 2024, Q4 2024)Current Period (Q1 2025)Trend
VAPS penetrationPricing/VAPS supported margins; AMR modular +6% YoY Q3; reiterated VAPS strategy Q4 VAPS >17% of revenue; long‑term target 20–25% Improving
Enterprise vs local demandLarger projects/enterprise strength; local softness Order growth entirely from larger accounts; local remains weak Mix shift to enterprise
Logistics/D&I marginsCost takeout and margin expansion highlighted D&I margins contracted; insourcing ramp and seasonal mix; expected improvement Near‑term pressure; medium‑term opportunity
Pricing levelsSolid pricing progression in 2024 Spot rates stable; modest sequential gains expected through 2025 Stable→modest up
Tariffs/macroNon‑res construction bottoming later; caution Direct tariff impact manageable (~2–4% of annual costs; mostly CAPEX) Watchful; manageable
AR/working capitalNotable cash generation $30M AR reduction in Q1; focus on DSO improvements Improving execution
Capital allocationBuybacks resumed Q3/Q4 2024 $45M returned in Q1; dividend declared again; additional April buybacks Ongoing returns

Management Commentary

  • CEO Brad Soultz: “Pending order book is up 7% year‑over‑year…multiple performance levers…confidence in…$3B revenue, $1.5B Adjusted EBITDA, and $700M Adjusted Free Cash Flow in three‑to‑five years” .
  • COO Tim Boswell: “Order growth is coming entirely from our larger accounts…we remain cautious given ABI at 44% and nonres starts down 17% YoY, but internal initiatives can allow the order book to outperform” .
  • CFO Matt Jacobsen: “Q1 revenues of $560M and Adjusted EBITDA of $229M…invested $62M of Net CAPEX; confident in full‑year outlook; refinancing 2025 notes extended maturities and increased flexibility” .

Q&A Highlights

  • Order book conversion and timing: No change in conversion/cancellation rates; book weighted more to near‑term (~4–5 weeks), supporting Q2 activations .
  • VAPS metrics: Shifted reporting to % of revenue due to expanded portfolio (e.g., climate‑controlled storage, perimeter solutions) and timing of monetization beyond activation .
  • Q2 outlook cadence: Expect typical seasonal build; D&I to grow ~10%; modular activations flat YoY in March–April, storage activations up ~3% .
  • Pricing: Spot rates stable across categories; expect modest sequential gains in modular and mix‑driven gains in storage via climate‑controlled units .
  • Logistics margin roadmap: Seasonal returns and insourcing weighed on Q1; cross‑training, scheduling, and route optimization expected to lift margins into 2H and 2026 .

Estimates Context

  • Q1 2025 results vs consensus*: revenue beat (+$4.31M); EPS missed (~$0.03); Adjusted EBITDA broadly in line (consensus ~$229.2M vs company $228.8M; note definitional differences between SPGI EBITDA and company Adjusted EBITDA) .
  • Outlook implications: With Q2 sequential improvement expected and H2 flat margins YoY, consensus revenue trajectories may shift modestly higher on rate/VAPS strength, while EPS may need slight near‑term trimming until D&I margin recovery and volume easing materialize .
    Note: *Values retrieved from S&P Global.

Key Takeaways for Investors

  • Reaffirmed FY 2025 outlook amid macro uncertainty demonstrates resilience of recurring lease revenues and VAPS monetization; order book +7% YoY supports Q2 activation levels .
  • Near‑term EPS pressure from D&I margins and volumes should ease as insourcing productivity improves and seasonal activity builds; watch Q2 cadence and D&I growth (~10%) .
  • Pricing intact and VAPS penetration rising (>17% of revenue), providing non‑volume levers to sustain margins and cash generation .
  • Capital structure de‑risked (2030 notes), liquidity robust (~$1.6B ABL), and shareholder returns ongoing (dividend + buybacks), supporting total return profile .
  • Enterprise account strength vs local softness skews mix to longer‑duration projects; monitor enterprise penetration and cross‑selling initiatives for incremental margin uplift .
  • Tactical trading: Favor on reaffirmation and Q2 sequential improvement; key watch items are D&I margin recovery, activation trends, and any tariff‑related demand noise. Medium‑term thesis: VAPS growth, pricing discipline, and operating leverage in logistics underpin path to long‑term milestones .