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WillScot Holdings Corp (WSC)·Q3 2025 Earnings Summary

Executive Summary

  • Q3 revenue of $566.8M declined 5.7% YoY and 3.8% QoQ; revenue missed S&P Global consensus ($579.7M*) while Adjusted Diluted EPS of $0.30 slightly beat ($0.289*). Adjusted EBITDA was $243.3M (42.9% margin), modestly below S&P consensus ($247.4M*) but +60 bps QoQ on margin expansion .
  • Results were impacted by elevated write-offs tied to order-to-cash cleanup (approx. $25M of $32M total write-offs reduced leasing revenue; +$15.5M YoY), lower Canada and seasonal retail storage, and prior-year Rams project comparables; excluding write-offs, leasing revenue was flat sequentially and down 1.3% YoY .
  • Outlook reset conservatively: Q4 revenue ≈$545M and Adjusted EBITDA ≈$250M; FY25 revenue ≈$2.26B, Adjusted EBITDA ≈$970M, Net CAPEX ≈$275M (vs prior FY25 guidance of $2.30–$2.35B revenue, $1.00–$1.02B Adjusted EBITDA, $250–$300M Net CAPEX) .
  • Cash generation remained strong (CFO: “consistent with our expectations”); Net cash from ops $191M and Adjusted FCF $122M (22% margin) enabled $84M debt paydown; ABL amendment extends to 2030 and cuts annual cash interest by ≈$5M, supporting 3.6x Net Debt/EBITDA and optionality for 2026 .

What Went Well and What Went Wrong

  • What Went Well

    • Sequential margin execution: Adjusted EBITDA margin expanded 60 bps QoQ to 42.9% as variable costs were calibrated to demand; Adjusted FCF of $122M delivered despite softer top-line .
    • Balance sheet and interest savings: Amended ABL to 2030; ≈$5M annual cash interest reduction at current debt; ample availability ≈$1.5B; total debt reduced by $84M in Q3 .
    • Strategic portfolio progress: Management emphasized enterprise accounts, differentiated offerings (Flex, Complexes, climate-controlled storage), and operating excellence; DSO down ~10% YoY to low 70s with improved customer satisfaction from order-to-cash enhancements .

  • What Went Wrong

    • Revenue headwinds: Revenue missed consensus, with leasing revenue down 4.7% YoY; write-offs tied to AR cleanup reduced leasing revenue by $24.5M (vs $9.0M in Q3’24), masking underlying sequential stability .
    • Canada and seasonal retail storage softness: Canada decelerated vs Q2; seasonal retail storage weaker than expected; ClearSpan/Perimeter ramp slower into Q4 .
    • 2025 guidance cut and potential non‑cash charge: FY25 revenue/EBITDA lowered; management may accelerate $250–$350M rental fleet depreciation in 2025 if network optimization plan is approved, creating a non-cash restructuring charge overhang .

Financial Results

MetricQ3 2024Q2 2025Q3 2025
Revenue ($M)$601.4 $589.1 $566.8
Diluted EPS ($)($0.37) $0.26 $0.24
Adjusted Diluted EPS ($)$0.38 $0.27 $0.30
Gross Profit Margin (%)53.5% 50.3% 49.7%
Adjusted EBITDA ($M)$266.9 $248.9 $243.3
Adjusted EBITDA Margin (%)44.4% 42.3% 42.9%
Net Cash from Ops ($M)($1.6) $205.3 $191.2
Adjusted Free Cash Flow ($M)$143.1 $130.3 $122.2

Segment and revenue mix (YoY)

Revenue Component ($M)Q3 2024Q3 2025
Modular Space Leasing$254.5 $250.8
Portable Storage Leasing$85.7 $79.8
VAPS & 3rd‑party Leasing$100.2 $100.2
Other Leasing‑Related (incl. write-offs)$15.1 $3.5
Leasing Revenue$455.6 $434.2
Delivery & Installation$114.8 $98.5
New Unit Sales$17.9 $18.4
Rental Unit Sales$13.2 $15.7
Total Revenue$601.4 $566.8
  • Note: Write-offs recorded as a reduction to revenue were $24.5M in Q3’25 vs $9.0M in Q3’24 .

Key KPIs and balance sheet

KPIQ3 2024Q3 2025
Net Debt / Adjusted EBITDA (x)—3.6x
Total Debt ($M)—$3,617
Cash & Equivalents ($M)—$14.8
Shares Diluted (Wtd Avg)188.3M 182.8M
Dividend—$0.07 paid Sept 17, 2025

Vs S&P Global Consensus (Q3 2025)

MetricActualConsensusSurprise
Revenue ($M)$566.8 $579.7*Miss (~$12.9M)
Adjusted Diluted EPS ($)$0.30 $0.289*Beat ($0.01)
Adjusted EBITDA ($M)$243.3 $247.4*Miss (~$4.1M)
Values marked with * retrieved from S&P Global.

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
RevenueFY 2025$2,300–$2,350M ≈$2,260M Lowered
Adjusted EBITDAFY 2025$1,000–$1,020M ≈$970M Lowered
Net CAPEXFY 2025$250–$300M ≈$275M Maintained (midpoint)
RevenueQ4 2025—≈$545M New
Adjusted EBITDAQ4 2025—≈$250M New
  • CFO added on the call: FY25 Adjusted FCF ≈$475M (implied with Net CAPEX ≈$275M) .

Earnings Call Themes & Trends

TopicPrevious Mentions (Q1 & Q2 2025)Current Period (Q3 2025)Trend
Guidance philosophyQ1 reaffirmed FY25 ranges; Q2 narrowed ranges amid mixed end markets .More conservative, “beatable” guidance to avoid negative surprises; tightened forecasting; baseline for 2026 .More conservative/credible
Order‑to‑cash, collectionsQ2: early working capital benefits .DSO down ~10% YoY to low 70s; write-offs elevated in 2025 as cleanup; improved NPS/customer satisfaction .Improving process; short‑term revenue headwind
Enterprise & differentiated offeringsQ2: climate-controlled storage acquisition; continued focus on Flex/Complexes .Enterprise accounts +~5% YoY in 2H; climate-controlled units on rent +44% YoY; Flex +30% .Positive mix shift
Storage marketQ2: demand gating near‑term volumes .Traditional storage weak; seasonal retail below expectations; rate pressure persists .Ongoing headwind
Network optimizationNot highlighted in Q1/Q2.Multi‑year network and real estate footprint optimization; potential $250–$350M non‑cash depreciation if accelerated in 2025 .New structural cost action
Canada macroNot cited in Q1/Q2.Canadian revenue weaker since Q2; cited as contributor to outlook reset .Weaker
Capital structureQ2: Net debt ~3.6x; maturities 2027 .ABL extended to 2030; cash interest −~$5M/yr; no maturities until 2028 .Improved flexibility

Management Commentary

  • CEO Brad Soultz: “Our third quarter 2025 financial results were mixed… Leasing revenues excluding write-offs were stable sequentially… we remain agile in controlling what we can control… to maintain our free cash flow and return profile” .
  • CFO Matt Jacobsen: “Revenue of $567 million and Adjusted EBITDA of $243 million reflect isolated events… accounts receivable write-offs increased $20 million YoY… Approximately $25 million of the $32 million of total write-offs were recorded as a reduction to leasing revenue… Adjusted EBITDA Margin… expanded 60 bps sequentially” .
  • CFO on outlook: “Q4… approximately $545 million of revenue and $250 million of Adjusted EBITDA… conservative… establish an initial baseline for 2026” .
  • President/COO Tim Boswell: Focus on organic revenue inflection, enterprise growth, VAPS and newer product lines; operating excellence initiatives and ROIC expansion; network optimization to reduce real estate costs and optimize fleet .
  • Executive Chairman Worthing Jackman: Shift to differentiated, higher-value offerings; drive Adjusted EBITDA margins “above 45%”; adopt conservative guidance to “minimize the risk of negative surprises” .

Q&A Highlights

  • Fleet/network optimization: Plan driven “real estate first” to reduce structural costs; disposal targets excess fleet (roughly up to ~10% of total at midrange) tied to transactional categories, not differentiated Flex/Complexes; potential acceleration of $250–$350M depreciation into 2025 if approved .
  • Demand trajectory: Modular activations up low-single-digits recently with order book down ~1% YoY; traditional storage weak; climate-controlled storage orders/activations up ~60% YoY .
  • Market conditions into 2026: ABI soft (~43) with slowing declines in non‑res starts; modular spot rates mostly stable (except ground-level offices); storage order book ex-seasonal down ~6% with rate softening .
  • Guidance framework: Forecasting tightened; avoid “calling the turn”; keep upside in elements outside management control .
  • Enterprise strategy: Reorganized by verticals; bundling of VAPS and newer offerings (climate‑controlled, ClearSpan, Perimeter) into enterprise RFPs to deepen wallet share .

Estimates Context

  • Q3 vs S&P Global consensus: Revenue $566.8M vs $579.7M* (miss); Adjusted Diluted EPS $0.30 vs $0.289* (beat); Adjusted EBITDA $243.3M vs $247.4M* (miss) .
  • Q4 setup: Company guides revenue ≈$545M and Adjusted EBITDA ≈$250M vs S&P consensus revenue $547.4M* and EBITDA $248.9M*—roughly in line on revenue and slightly above on EBITDA .
  • Implications: Expect models to reflect lower FY25 revenue/EBITDA and incorporate higher write‑off assumptions in 2025, but potentially higher 2026 baseline given conservative reset and cost actions.
    Values marked with * retrieved from S&P Global.

Key Takeaways for Investors

  • FY25 reset appears conservative; near-term downside protected by cost controls and strong FCF, with a clearer baseline for 2026 .
  • Temporary revenue headwinds from AR cleanup (write-offs) obscure sequential leasing stability; the cleanup is largely a 2025 issue and net positive to Adjusted EBITDA vs bad debt YoY, per CFO .
  • Mix is improving toward higher-value offerings (enterprise, climate-controlled, Flex/Complexes) and should support margin trajectory—management targets >45% Adjusted EBITDA margins longer term .
  • Structural cost program (network/real estate) could reduce leased acreage >20% and avoid $20–$30M in annual real estate cost increases over 3–5 years; monitor risk of a 2025 non‑cash restructuring charge ($250–$350M) if accelerated .
  • Balance sheet flexibility improved: ABL to 2030, interest savings ≈$5M/year, no maturities until 2028; Net Debt/EBITDA ~3.6x affords optionality across capex, M&A, and deleveraging .
  • Trading lens: Near-term sentiment hinges on revenue miss, guidance cut, and non‑cash charge risk versus visible FCF and execution on portfolio mix/cost initiatives; catalysts include Q4 delivery vs conservative targets and early 2026 demand signs .