What WillScot (WSC) Said on Its Q3 Earnings Call

Key Points

• Q3 results beat expectations: Revenue rose 6% year over year to $601 million, while adjusted EBITDA reached $234 million. WillScot raised its 2026 revenue outlook to $2.34 billion but kept its $920 million adjusted EBITDA forecast.
• Modular demand is strengthening: Activations grew 12% for a fourth straight quarter, average units on rent returned to growth, and the pending modular order book was up more than 20%. Management’s initial 2027 outlook calls for low-single-digit organic revenue growth and mid-single-digit organic EBITDA growth, while noting uncertainty around data center construction.
• Investment and costs shape near-term performance: WillScot raised its 2026 net capital expenditure forecast to $400 million, with more than 90% of incremental fleet already on rent or assigned to orders. Activation costs have pressured margins, but the company expects Q4 adjusted EBITDA margin to expand 300–400 basis points sequentially.

WillScot NASDAQ: WSC reported higher third-quarter revenue and raised its 2026 sales outlook as demand for modular space helped reverse a decline in units on rent. The company also offered an initial forecast for organic growth in 2027, while cautioning that the pace of future data center construction remains uncertain.

Revenue rose 6% from a year earlier to $601 million, ahead of the company’s $585 million outlook, Chief Financial Officer Matt Jacobsen said on the earnings call. Net income was $52 million, or $0.28 per diluted share, while adjusted earnings were $0.29 per share. Adjusted EBITDA was $234 million, above the company’s $232 million outlook, with a margin of 38.8%.

For 2026, WillScot raised its revenue outlook to $2.34 billion and its net capital expenditure forecast to $400 million. It maintained its adjusted EBITDA expectation at $920 million, citing upfront costs associated with deploying more modular units.

Modular demand supports growth outlook

Total leasing revenue increased 4% year over year to $452 million, accelerating from 1.5% growth in the second quarter. Delivery and installation revenue rose 23%, reflecting increased activation activity.

Modular activations grew 12% from a year earlier, their fourth consecutive quarter of year-over-year growth. Average modular units on rent increased 1.2%, marking a volume inflection after several quarters of rising activations. The average monthly rate on modular units rose approximately 2%.

President and Chief Executive Officer Tim Boswell said the company’s pending modular order book was up more than 20% year over year and had grown throughout 2026. More than half of that order book came from enterprise customers, he said.

“With a volume tailwind going into a future period, that can give you a lot more confidence around the kind of baseline performance that you can expect out of the business,” Boswell said.

Enterprise account revenue increased 15% in the quarter and represented more than 30% of revenue on a trailing 12-month basis. Boswell cited projects involving a pharmaceutical campus, a temporary college campus, a semiconductor facility and data centers among examples of the company’s larger assignments.

Early 2027 outlook and data center risks

Management said low-single-digit organic revenue growth and mid-single-digit organic EBITDA growth were achievable in 2027. Boswell described the forecast as an initial outlook rather than formal guidance and said the company had not taken a definitive position on activity in the second half of the year.

He said the outlook reflects momentum entering the year but also accounts for uncertainty surrounding the political landscape and potential risks to the pace of data center construction. A recovery in transactional product lines or continued growth in modular activations could provide upside, he said.

Data centers represented approximately 18% of the pending order book, Boswell said, with the vast majority of those orders scheduled to activate within 30 days. More than 75% of the large and mega projects in WillScot’s system were outside the data center category, he said. Boswell viewed cancellation risk for contracted data center projects as low but said it was too soon to predict the level of new project starts next year.

Portable storage remained weaker: leasing revenue fell approximately 7% year over year, reflecting volume pressure in transactional projects and local nonresidential construction. Jacobsen said storage volume was expected to remain down around 7% year over year in the fourth quarter, consistent with prior expectations.

Investment and margins

WillScot’s $400 million net capital expenditure outlook is approximately $125 million above its expectation at the start of the year. Boswell said more than 90% of the incremental fleet acquired was on rent or assigned to customer orders. The company has directed the investment toward highly utilized product categories and longer-duration projects.

Higher activation and transfer costs have pressured margins in the near term. Jacobsen said the company expects fourth-quarter adjusted EBITDA margin to expand by 300 to 400 basis points sequentially as some activation costs taper and leasing revenue builds.

Third-quarter operating cash flow rose about 4% to $198 million. Adjusted free cash flow was $78 million after $123 million in net capital expenditures. WillScot ended the quarter with approximately $3.4 billion in net debt and leverage of 3.7 times trailing 12-month adjusted EBITDA.

Jacobsen said debt reduction remains a priority after fleet investment, and the company expects leverage to approach three times as it exits 2027.

About WillScot (NASDAQ:WSC)

WillScot Holdings Corporation NASDAQ: WSC provides flexible workspace and storage solutions primarily to customers across North America. The company offers modular buildings, mobile offices, portable classrooms, storage units and other temporary or permanent space solutions for businesses, schools, construction sites, health care organizations, government agencies and other institutions.

In addition to renting and selling modular space and portable storage products, WillScot provides related services such as delivery, installation, relocation, site improvements, furnishings and facility services.

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