Sign in

You're signed outSign in or to get full access.

WH

WillScot Holdings Corp (WSC)·Q2 2025 Earnings Summary

Executive Summary

  • Q2 2025 was broadly in line with management’s outlook: Revenue $589.1M, GAAP diluted EPS $0.26 (Adjusted diluted EPS $0.27), and Adjusted EBITDA $248.9M (42.3% margin); leasing revenue rose 2.0% sequentially but was down 3.4% YoY as price/mix offset lower units on rent .
  • Versus S&P Global consensus, revenue was essentially in line/slight beat ($589.1M vs $587.5M*), Adjusted EBITDA was in line (~$248.9M vs $249.2M*), while EPS missed ($0.26 GAAP / $0.27 adj. vs $0.35*); management cited small-project demand weakness and D&I margin headwinds from insourcing/logistics investments as drivers .
  • FY25 outlook narrowed: Revenue to $2.30–$2.35B (from $2.275–$2.475B) and Adjusted EBITDA to $1.00–$1.02B (from $1.00–$1.09B); Net CAPEX to $250–$300M (from $225–$305M). Adjusted FCF raised to $500–$550M on working capital gains and U.S. tax legislation (100% bonus depreciation, EBITDA-based interest deductibility) enacted July 4, 2025 .
  • Capital allocation remained active: ~$134M deployed on tuck-in M&A (including a leading climate-controlled storage provider), $40M of buybacks (1.53M shares), and a $0.07 dividend; board also declared the next $0.07 dividend payable Sep 17, 2025 (record Sep 3) .

Values marked with * are from S&P Global.

What Went Well and What Went Wrong

What Went Well

  • Sequential fundamentals improved: leasing revenue +2% QoQ; Adjusted EBITDA margin expanded 140 bps QoQ to 42.3% as D&I and sales margins and SG&A improved .
  • Mix and pricing tailwinds: Average monthly rates rose 5.2% in modular and 7.2% in storage, and VAPS reached ~17% of revenue (LTM ~16.9%); Flex units on rent +30% YoY; climate-controlled storage units on rent +30% YoY, supported by tuck-in acquisition and organic investments .
  • Cash generation strength: CFO up 17% YoY to $205M and Adjusted FCF $130M (22.1% margin), aided by working-capital execution (DSO improvement) and back-office productivity initiatives; FY25 Adjusted FCF outlook raised to $500–$550M .

What Went Wrong

  • Small-project demand remained weak: Units on rent for smaller modular/container categories pressured volumes; management does not expect a UoR inflection by year-end given macro uncertainty (rates, trade, labor) and seasonality .
  • Year-over-year margin headwinds: YoY EBITDA margin down 130 bps, driven primarily by D&I margins and negative operating leverage while insourcing logistics and cross-training drivers (a medium-term margin expansion lever) .
  • Order book momentum cooled from Q1 levels: Modular order rates plateaued in April–May versus the rapid build in Q1; storage orders stabilized after declines and are sensitive to seasonal timing at large retailers .

Financial Results

Headline P&L and Cash Flow (oldest → newest)

MetricQ4 2024Q1 2025Q2 2025
Revenue ($M)$602.5 $559.6 $589.1
GAAP Diluted EPS ($)$0.48 $0.23 $0.26
Adjusted Diluted EPS ($)$0.49 $0.24 $0.27
Gross Profit Margin (%)55.8% 53.7% 50.3%
Adjusted EBITDA ($M)$284.7 $228.8 $248.9
Adjusted EBITDA Margin (%)47.3% 40.9% 42.3%
Cash from Operations ($M)$178.9 $206.6 $205.3
Adjusted Free Cash Flow ($M)$136.8 $144.8 $130.3

Segment/Line-of-Business Revenue (oldest → newest)

Revenue Line ($M)Q2 2024Q1 2025Q2 2025
Leasing$458.6 $434.4 $442.9
Delivery & Installation$108.1 $88.7 $108.5
Sales – New Units$21.4 $22.4 $21.6
Sales – Rental Units$16.5 $14.1 $16.1
Total Revenue$604.6 $559.6 $589.1

KPIs and Balance Sheet Highlights

  • Average monthly rental rate: modular +5.2% YoY; storage +7.2% YoY .
  • VAPS: 17% of Q2 revenue; LTM ~16.9% .
  • Net Debt / LTM Adjusted EBITDA: 3.6x (Net Debt $3.687B; LTM Adj. EBITDA $1.029B) .
  • Weighted average pre-tax interest rate ~5.8%; est. annual cash interest ~$218M (≈$230M incl. non-cash) .
  • Liquidity: ~$1.6B ABL availability .
  • Capital deployed in Q2: ~$134M M&A; $40M buybacks (1.53M shares); paid $0.07 dividend in June .

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Revenue ($B)FY 2025$2.275–$2.475 $2.300–$2.350 Narrowed
Adjusted EBITDA ($B)FY 2025$1.000–$1.090 $1.000–$1.020 Narrowed (lower top end)
Net CAPEX ($M)FY 2025$225–$305 $250–$300 Narrowed/raised low end
Adjusted Free Cash Flow ($M)FY 2025N/A$500–$550 Introduced/raised view

Note: Management cited working capital improvements and U.S. tax legislation (100% bonus depreciation; EBITDA-based interest limitation) as key drivers of higher FY25 Adjusted FCF .

Earnings Call Themes & Trends

TopicPrevious Mentions (Q4’24 and Q1’25)Current Period (Q2’25)Trend
AI/technology enablementDiscussed at March Investor Day; sales/ops excellence to drive growth (Q4 outlook commentary) .Rolled out AI-enabled pricing engine and enhanced SalesHQ; early adoption underway to lift sales productivity .Positive execution; early-stage adoption.
Logistics/insourcing & D&I marginsFlex cost structure with margin focus in 2025 outlook .Insourcing and driver cross-training are ongoing; near-term YoY D&I margin headwinds with medium-term expansion potential .Investment phase near term; expanding sequentially.
Macro (rates/trade/labor)2025 outlook framed by uncertainty .Small-project demand constrained by rates/trade/labor; no UoR inflection expected in 2025; potential 2026 benefit .Cautious near-term; 2026 improvement possible.
Product performance (Flex, climate-controlled storage)Expanded product offerings planned for 2025 .Flex units on rent +30% YoY; climate-controlled storage +30% YoY; strong order rates for climate-controlled; seasonal demand expected in Q4 .Strong growth sub-categories.
Enterprise vs. local marketsExpect second-half moderation in YoY headwinds (Q4 outlook) .Enterprise modular UoR +4% YoY; storage -1% YoY; large/long-duration projects remain robust; local/smaller transactional weaker .Mix shifting to enterprise/complex.
Working capital/DSONoted structural flexibility .DSO improving toward low 70s; CFO +17% YoY; supports FCF raise .Improving execution.
Regulatory/tax—July 4 legislation boosts FCF; minimal federal cash taxes expected in 2025; multi-year benefit possible .Positive multi-year cash flow tailwind.
New offerings/partnerships—Launch of Solar Power by WillScot (proprietary, integrated power); Penske/INDYCAR partnership expands events vertical .Portfolio/vertical expansion.

Management Commentary

  • CEO: “Our second quarter 2025 financial results were broadly in line with our expectations… While we continue to see strength in larger projects, the end market outlook overall remains mixed in the near term.” .
  • COO/President: “Flex units on rent are up 30% YoY… climate controlled [storage] units on rent are up 30% YoY… we rolled out our AI enabled pricing engine and our enhanced SalesHQ platform in Q2 as planned.” .
  • CFO: “Adjusted EBITDA margin expanded sequentially… 140 bps to 42.3%… D&I margins, sales margins and SG&A reductions… We… narrowed our Revenue outlook… and Adjusted EBITDA… and… now expect full year 2025 Adjusted Free Cash Flow of $500–$550 million.” .

Q&A Highlights

  • Modular/utilization trends: Sequential improvements tied to pricing/VAPS and strong Flex/complex; order book up ~1% YoY and stabilizing in modular; storage saw modest sequential UoR improvement late Q2 .
  • Margin outlook: Expect 50–100 bps sequential EBITDA margin expansion into Q3 from logistics/D&I and some SG&A leverage; insourcing investments continue .
  • Macro sensitivities: Small-project demand tied to rates/trade/labor; management sees potential 2026 benefit from rate cuts; seasonality implies limited 2025 inflection .
  • Tax legislation impact: 2025 federal cash taxes pushed out; benefit likely persists 3–4 years; working-capital execution contributing $10–$15M thus far .
  • M&A and mix: Climate-controlled storage acquisition added ~$3M revenue and ~$1M EBITDA (partial-quarter) in Q2; more tuck-ins possible subject to timing .

Estimates Context

  • Revenue: Actual $589.1M vs consensus $587.5M* (Outcome: Beat/In line) .
  • EPS: GAAP diluted $0.26 (Adjusted $0.27) vs Primary EPS consensus $0.35* (Outcome: Miss) .
  • Adjusted EBITDA: Actual $248.9M vs EBITDA consensus $249.2M* (Outcome: In line) .

Values marked with * are from S&P Global.

Q2 vs. Street (S&P Global)

MetricActual Q2 2025ConsensusOutcome
Revenue ($M)$589.1 $587.5*Beat/In line
GAAP Diluted EPS ($)$0.26 $0.35*Miss
Adjusted Diluted EPS ($)$0.27 $0.35*Miss
Adjusted EBITDA ($M)$248.9 $249.2*In line

Values marked with * are from S&P Global.

Drivers of variance: EPS below consensus due to ongoing small-project volume headwinds and YoY D&I margin pressure from logistics insourcing, partially offset by pricing/VAPS and enterprise/complex strength .

Other Q2 2025 Press Releases

  • Dividend: Declared $0.07 per share, payable Sep 17, 2025 (record Sep 3, 2025) .
  • Product innovation: Launched Solar Power by WillScot, a proprietary, integrated solar and battery solution for modular and storage offerings; available in select U.S. branches with plans to expand .
  • Partnerships: Announced collaboration with Penske Entertainment (INDYCAR/IMS) to provide turnkey space solutions across 2025–2027 seasons .

Key Takeaways for Investors

  • Mix shift continues toward higher-value enterprise/complex projects and premium offerings (Flex, climate-controlled storage), supporting price/mix resilience despite unit pressure .
  • Sequential improvement underway: First non-seasonal sequential leasing revenue growth since 2023; sequential margin expansion expected to continue into Q3 via logistics/D&I optimization .
  • 2025 guide prudently narrowed on macro caution (rates, trade, labor) and seasonality; inflection in small-project UoR more likely in 2026 if macro supports .
  • Cash flow story strengthens: FY25 Adjusted FCF raised to $500–$550M on working capital and multi-year U.S. tax policy tailwinds; minimal federal cash taxes expected in 2025 .
  • Active capital deployment: Tuck-ins to accelerate climate-controlled storage and ClearSpan adjacencies; buybacks and dividend provide shareholder returns alongside growth investments .
  • Watch list for near-term trading: Sequential margin cadence, Q3 D&I comps (Rams project non-repeat), storage seasonal order timing at large retailers, and any incremental M&A announcements .

Appendix: Additional Detail

Quarterly Comparisons vs Prior Periods (oldest → newest)

MetricQ4 2024Q1 2025Q2 2025
Leasing revenue ($M)$465.1 $434.4 $442.9
D&I revenue ($M)$95.6 $88.7 $108.5
Sales – New ($M)$21.8 $22.4 $21.6
Sales – Rental ($M)$20.0 $14.1 $16.1
Gross profit ($M)$336.3 $300.4 $296.1
SG&A ($M)$136.8 $157.1 $145.0
Cash from Ops ($M)$178.9 $206.6 $205.3
Net CAPEX ($M)$(55.4) $(61.8) $(75.0)

All values from company filings/press materials as cited above.