2025 Outlook and Growth Cadence
Q: How will margins and growth progress in 2025?
A: The first half of 2025 is likely to be flat in revenue growth due to lost momentum at year-end. " However, with market stabilization, commercial initiatives, progress on newer product lines, and pricing levers, we expect modest growth with margin expansion for the year. "

Units on Rent vs. AMR Growth
Q: How are you thinking about units on rent versus AMR growth next year?
A: Units on rent will start 2025 down, but not as much as last year. " We have a strong tailwind in modular average monthly rental rates (AMR), good traction in storage value-added products (VAPS), and signs of growth in modular VAPS. " New product offerings could potentially double run rates, and we expect margins to improve by optimizing processes and leveraging technology investments. "

Expected AMR Growth in Modular and Storage
Q: Is high single-digit AMR growth in modular still expected? What about storage AMR?
A: To achieve AMR growth, we need spot rates on traditional containers to increase. " Cold storage growth and value-added products, up 16% year-over-year in traditional storage, will help. " With a 12% spread in modular, AMR growth may reach low to mid-single digits without further spot rate improvements. "

Volume Headwinds Moderating
Q: Are volume headwinds expected to moderate in 2025?
A: Yes, the average units on rent deficit was about 3% in Q3, down from 5% at the start of 2024. " We expect this deficit to continue decreasing, leading to a smaller volume headwind as we enter 2025. "

Gap Between Spot and Reported Pricing
Q: What's the gap between spot pricing and reported pricing for storage and modular?
A: In modular, there's about a 12% favorable spread. " For storage, it's about flat, but with a growing spread in the cold storage segment. "

Interest Rates Impact on Modular Units
Q: When will transactional modular units rebound with lower interest rates?
A: Certainty is as important as rate cuts. " Rate cuts may stimulate projects that didn't meet economic hurdles, benefiting volume in transactional product lines. " Complex units are up slightly year-over-year, driven by FLEX products, but transactional single units remain challenging. "

Capital Allocation Plans
Q: How will you allocate capital among CapEx, M&A, and buybacks?
A: We plan to invest about 25% of capital into maintenance and growth, including VAPS and adjacencies. " We've deployed over $1 billion into acquisitions, about one-fourth in modular and the rest in storage, including clearspan and cold storage. " We see ample pipeline for tuck-in M&A and will continue consistent share repurchases to compound returns. "

Storage Units Increase Heading into Q4
Q: Are you still expecting a sequential increase of storage units in Q4?
A: Yes, the retail side is performing as expected. " We anticipate ending October with nearly 130,000 storage units on rent, up from 122,700 average in Q3. " Overall delivery expectations have been reduced by about 10%, but the retail component aligns with prior expectations. "

Return Volume Dynamics Amid Low Starts
Q: Are returning units creating additional headwinds in a low-starts environment?
A: As the units on rent portfolio decreases, return volumes also decrease proportionately. " Total returns in modular dropped from over 70,000 units in 2022 to forecasts of just over 60,000 units this year. " This dynamic mitigates new demand headwinds. "

Pricing Strategies for 2025
Q: How are you approaching pricing strategies for next year?
A: We're implementing a new pricing technology platform with AI-informed recommendations. " This will help automate bundling of value-added products and improve cross-selling. " We're also testing different inflationary escalators in out-of-term processes. "