WillScot Q4 Earnings Call Highlights

Key Points

• WillScot posted Q4 revenue of $566 million and Adjusted EBITDA of $250 million (44.2% margin), and delivered strong full-year cash generation with $2.28 billion revenue, $971 million Adjusted EBITDA and $489 million of Adjusted Free Cash Flow—above guidance.
• Management issued a cautious 2026 guide—revenue of about $2.175 billion and Adjusted EBITDA of $900 million—but highlighted early commercial momentum (enterprise revenue +7% for 2025 and +10% in Q4 excluding a seasonal customer, and modular pending orders +17% YoY) that could drive upside if sustained.
• WillScot recorded a $302 million non‑cash restructuring charge as part of a board‑approved network optimization expected to cut $25–30 million of annual real estate costs, with roughly $60 million of cash implementation costs (about $35 million in 2026) to be incurred over several years.

WillScot NASDAQ: WSC reported fourth-quarter and full-year 2025 results that management described as in line with expectations, while outlining a conservative 2026 outlook that does not assume an improvement in recent business trends. Company leaders emphasized early signs of commercial momentum—particularly in enterprise accounts and modular orders—alongside operational initiatives intended to support customer experience and margins.

Fourth-quarter results: revenue down modestly excluding prior-period cleanup

In the fourth quarter, WillScot posted total revenue of $566 million and Adjusted EBITDA of $250 million, representing an Adjusted EBITDA margin of 44.2%. CFO Matt Jacobsen said revenue was down $38 million, or 6%, versus the prior-year quarter. Excluding the out-of-period accounts receivable cleanup discussed on the company’s previous call, revenue declined about $12 million, or 2%, year over year.

Management attributed most of the underlying decline to reduced seasonal retail container volumes from one customer. CEO Tim Boswell said total revenue was down 2% year over year in the quarter excluding write-offs, “with the decline nearly all attributable” to that customer’s seasonal storage demand.

While revenues were “a bit better” than the company expected, Jacobsen said consolidated margins came in below the company’s internal expectations due to revenue mix and elevated health insurance costs. He quantified about 50 basis points of margin pressure from mix versus expectations and about 60 basis points of compression tied to higher health insurance costs.

Full-year 2025: cash flow strength and balanced capital allocation

For full-year 2025, WillScot reported $2.28 billion in total revenue and $971 million of Adjusted EBITDA, for an Adjusted EBITDA margin of 42.6%. Jacobsen said results ended the year “a little better” than the company had guided.

Cash generation remained a central theme. WillScot delivered $91 million of Adjusted Free Cash Flow in the quarter (a 16.1% margin, or $0.50 per share) and $489 million for the full year, exceeding the company’s $475 million guidance. Full-year Adjusted Free Cash Flow represented a 21.4% margin, or $2.70 per share.

Management highlighted a balanced approach to capital allocation in 2025, including:

• $273 million of net CapEx (up 17% year over year), with the company investing above an estimated $200 million maintenance level to support demand for FLEX, additional complexes, and newer product categories
• $145 million allocated to acquisitions
• $146 million of borrowings paid down
• $151 million returned to shareholders through repurchases and dividends

At year-end, total debt was under $3.6 billion and leverage stood at 3.6x. During the quarter, the company amended and extended its ABL facility maturity to October 2030 and used availability to redeem $50 million of 2031 notes, which management called the highest-interest portion of its debt stack.

Commercial momentum: enterprise growth, modular order strength, and World Cup demand

Boswell said the company is “beginning to see momentum” from initiatives to improve local execution, develop enterprise accounts and verticals, and expand value-added offerings. Entering 2026, WillScot’s sales staffing is up 13% year over year, with greater tenure and lower turnover, and the company strengthened regional sales management in the fourth quarter.

Enterprise accounts were a key focus in Q&A. Boswell said enterprise account revenue increased 7% year over year for full-year 2025 and 10% in Q4, excluding a large seasonal container customer. The company expects mid- to high-single-digit revenue growth from the enterprise portfolio in 2026. In response to a question about the drivers, Boswell said enterprise growth is “really volume driven” and that the company does not see meaningful pricing differences between enterprise and other customers.

On orders, management pointed to a strengthening modular pipeline. Boswell said the modular pending order book was up 17% year over year, helped by large RFP wins tied to project demand including data centers, power generation, and large-scale manufacturing. Excluding enterprise activity, he said modular pending orders were up 5% year over year. He also cited 3% activation growth in modular products in Q4 and said strong order growth continued into January and February.

The company also discussed anticipated short-duration demand tied to the upcoming World Cup. Boswell said WillScot expects an additional 2,000 units of demand in Q2 and Q3, but characterized it as “short duration” and excluded it from the order statistics he provided.

Operations and portfolio actions: network optimization and process improvements

WillScot outlined a multi-pronged operational agenda intended to improve efficiency and service. Boswell pointed to three initiatives: advancing a network optimization plan, rolling out enhanced scheduling and route optimization in Q2, and improving support-center operations to accelerate cash collections, reduce days sales outstanding, and improve net promoter score tied to invoicing and customer service.

Jacobsen provided details on the network optimization plan approved by the board on December 18. As leases expire over the next four years and the company exits about 25% of its leased acreage, management expects $25 million to $30 million of annual real estate cost savings. WillScot recorded a $302 million non-cash restructuring charge in Q4 from accelerated depreciation on rental equipment, reducing the net book value of approximately 53,000 units to salvage value (about $10 million).

The company expects cash implementation costs for the plan—rental equipment disposals and fleet relocation—of about $60 million over several years, including roughly $35 million in 2026. Those costs will be treated as restructuring expenses and added back in adjusted metrics, with salvage value and potential future real estate proceeds expected to partially offset cash costs but have “limited impact on earnings,” according to Jacobsen.

2026 guidance: conservative view, with potential upside if trends persist

WillScot issued 2026 guidance for revenue of approximately $2.175 billion and Adjusted EBITDA of $900 million. Management repeatedly characterized the outlook as conservative and said it does not assume sustained improvements in leading indicators or benefits from internal initiatives.

Jacobsen said the company is entering 2026 with an approximate $50 million headwind in its traditional storage business, which he described as the primary factor bridging 2025 Adjusted EBITDA to 2026 guidance. For the first quarter, the company guided to approximately $515 million of revenue and $200 million of Adjusted EBITDA, noting Q1 is typically the slowest period for activations and that variable rental costs rise into spring. Beyond Q1, management expects revenue to increase sequentially by 7% to 8% into Q2, reflecting logistics activity and the start of World Cup demand.

For net CapEx, WillScot guided to approximately $275 million in 2026, described as slightly front-half weighted. Jacobsen said about 70% of net CapEx will be split evenly between modular refurbishments and new fleet purchases in differentiated product categories such as FLEX and complexes; 25% will be directed toward continued value-added products and services (VAPS) investment, and 5% to infrastructure.

During Q&A, Jacobsen also said the company’s math implies approximately $415 million of Adjusted Free Cash Flow for 2026, excluding roughly $35 million of cash costs to implement network optimization.

About WillScot NASDAQ: WSC

WillScot NASDAQ: WSC is a leading North American provider of modular space and portable storage solutions. The company designs, manufactures, leases and sells temporary and permanent modular buildings to serve sectors such as education, healthcare, construction, industrial and government. Its modular space offerings range from single‐unit office trailers and classrooms to complex multi‐unit configurations tailored to diverse project requirements.

In addition to modular structures, WillScot offers a broad portfolio of portable storage containers and related services, including site logistics, customization, delivery and installation.

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