Revenue Growth Outlook
Q: Is the lower revenue growth outlook due to volumes or pricing?
A: The decrease in revenue growth outlook to 4% from 8% at the midpoint is 100% related to sequential volume growth. The volume build from Q1 into Q2 was not as strong as forecasted, reducing the base for compounding into Q3 and Q4. Pricing remains strong, and we are confident in the second half outlook. "

2025 Growth Confidence
Q: Why are you confident units on rent will inflect upward?
A: Despite a 23% contraction in nonresidential square footage, our modular portfolio has outperformed. Activation activity is up versus prior year, and reduced return volumes improve net units on rent. We anticipate an inflection in units on rent possibly in Q4 2024, with no significant volume headwinds entering 2025, giving us confidence for a record growth year. " "

Cost Savings from Headcount Reduction
Q: Will the 15% indirect headcount reduction yield savings this year?
A: Yes, we recognized about $6 million of severance in Q2. The annualized benefit of these actions is about $40 million. Savings will start building in Q3, reach full run rate in Q4, and the full-year benefit will be realized in 2025. "

Guidance Drivers
Q: What factors could put you at high or low end of guidance?
A: Key drivers include maintaining margin trajectory into H2, expecting a 300+ basis point margin expansion from Q3 to Q4. Modular volumes are forecasted as sequentially flat, and we have high confidence in volume improvements in storage driven by retail demand from Q3 into Q4. "

AMR Growth Outlook
Q: Is high single-digit AMR growth expected next year?
A: Yes, we expect upper single-digit average monthly rental (AMR) growth. The narrowing of the spread from over 20% to 15–20% is due to value-added products tapering over the last year. We continue to see strong unit-level pricing trends, and value-added products are now back to neutral compared to a year ago. " "

Modular Volume Inflection Timing
Q: When can we expect a modular unit on rent inflection?
A: It's possible in Q4 2024. By 2025, we expect to no longer have significant year-over-year volume headwinds in both modular and storage, supporting record growth expectations. "

Storage Demand in H2
Q: What's driving the expected increase in storage units in H2?
A: The uptick from Q3 into Q4 is primarily driven by retail demand, which we anticipate will cause a sequential pickup. While some rentals are seasonal, many turn into longer-term leases. "

Price Sensitivity and Testing
Q: What are you seeing in terms of customer price sensitivity?
A: We're seeing steady improvement in spot rates across all products except conventional storage. In that area, we're more aggressive in testing price-volume elasticity to gain volume, but overall, the portfolio is performing as expected. "

M&A Strategy
Q: Does your scale advantage increase M&A opportunities?
A: We are generally in the markets we need to be in. Recent M&A focuses on expanding into new space solutions like blast-resistant units, temperature-controlled storage, and clear span structures. These offer significant upside over the next 3 to 5 years. "

Seasonal Portable Storage Outlook
Q: What is the outlook for the seasonal storage business and AMR?
A: Current order rates support sequential unit on rent growth in Q3 across all end markets. We expect a pickup upwards of 10,000 units from Q3 into Q4, stronger than last year. Storage value-added products are contributing to AMR growth, with LTM delivered rate around $33 per unit per month, aiming for a $70 per unit longer-term target. Temperature-controlled storage is also boosting AMR. "

Competitive Advantage in Transactional Projects
Q: Are you competitively advantaged in transactional, interest rate-sensitive projects?
A: Yes, our modular activations are up modestly despite declines in nonresidential starts, indicating we're faring well due to scale. Enhancements to our digital customer experience are targeting this market, allowing us to efficiently convert customers using technology. "

Modular Rate Spread
Q: What is the current spread between your average modular rate and the LTM rate?
A: The spread is favorable in the 15–20% range, representing a significant tailwind as we close 2024 and head into 2025. "

Fleet Readiness for 2025 Growth
Q: Is the fleet prepared for 2025's expected growth?
A: Yes, we can adjust refurbishment on a 2-week lead time, especially for the modular business. We have 20% idle capacity on the storage side, worth upwards of $150 million in lease revenue. We run a 90-day zero-based capital budgeting process and are well-prepared for 2025. "

Large vs. Small Project Demand
Q: Are you seeing increased infrastructure activity and what would boost small projects?
A: Large projects continue to provide foundational demand across all regions, with no material change. Transactional, interest rate-sensitive small projects could benefit from rate cuts, but the extent needed is uncertain. More significant cuts would have a greater impact. "

Modular Activation Trends
Q: Can you elaborate on modular activation trends?
A: April and May modular activations were up 8% year-over-year, June was light, and July activations rebounded, up about 3% year-over-year. Overall, Q2 modular activations were up 1%, and the backlog into August is promising. "