Skip to content
    WSC
    Earnings call· Mar 2026(Q1 FY26)

    WillScot Holdings Q1 FY26 earnings call WSC

    May 7, 2026 Source

    Executive summary

    WillScot Holdings Corporation Q1 FY26 — Strong Project Activity Drives Raised Outlook

    WillScot delivered a solid first quarter, exceeding its adjusted EBITDA outlook, driven by strong activation volumes and large, complex project demand, particularly within enterprise accounts. The company raised its full-year guidance, now expecting leasing revenue to inflect to year-over-year growth in the second half of 2026, despite continued softness in local markets. Strategic investments in fleet and operational efficiencies are positioning the company for future growth and improved performance.

    Highlights

    5

    • Adjusted EBITDA of $211M exceeded outlook for the quarter.

    • Total activations increased 10% year-over-year in Q1 across all product lines.

    • Modular unit activations increased 8% year-over-year, marking the second consecutive quarter of growth.

    • Enterprise accounts revenue increased 12% year-over-year, with pending order book up over 25% year-over-year (ex-World Cup).

    • Adjusted free cash flow was $116M, representing a 21% margin on total revenue.

    Concerns

    4

    • Adjusted EBITDA margin was 38.5%, lower year-over-year due to higher variable costs (rental costs up 9%, commissions up 33%) and increased delivery and installation activity.

    • Leasing revenue was down approximately 2% year-over-year, reflecting ongoing pressure in local markets.

    • Nonresidential construction starts square footage was down 6% year-over-year.

    • Q2 margins are expected to be pressured by about 30 basis points sequentially from Q1 due to unit prep costs and increased delivery and installation mix.

    Guidance & targets

    9
    CategoryTargetConfidence
    Full-year 2026 Revenue
    ~$2.25B
    high materiality
    High
    Full-year 2026 Adjusted EBITDA
    ~$915M
    high materiality
    High
    Full-year 2026 Net CapEx
    ~$325M
    medium materiality
    High
    Leasing revenue inflection
    year-over-year growth
    high materiality
    High
    Q2 2026 Total Revenues
    ~$585M
    medium materiality
    High
    Q2 2026 Adjusted EBITDA
    ~$223M
    medium materiality
    High
    Q2 2026 Depreciation and Amortization
    ~$100M
    low materiality
    High
    Q2 2026 Interest Expense
    ~$54M
    low materiality
    High
    Q2 2026 Effective Tax Rate
    ~27%
    low materiality
    High

    Operational metrics

    34
    Total Revenue
    $549Mmodestly lower YoY
    Q1 FY26

    Ahead of outlook.

    Leasing and Services Revenue Growth
    $2Mup 0.5% YoY
    Q1 FY26

    A step in the right direction.

    Leasing Revenue
    $426Mdown ~2% YoY
    Q1 FY26

    Reflecting ongoing pressure in local markets with container unit on rent volumes driving the majority of the decline.

    VAPS Revenue as % of Total Revenue
    17.7%up 50 bps YoY
    Q1 FY26

    Ticked up modestly year-over-year in absolute dollars.

    Delivery and Installation Revenue Growth
    >12%YoY
    Q1 FY26

    Increased to $100M, driven by large project demand and solid activation growth.

    Modular Unit Activations Growth
    8%YoY
    Q1 FY26

    Second consecutive quarter of year-over-year activation growth.

    Total Activations Growth
    10%YoY
    Q1 FY26

    Increased across all product lines.

    Adjusted EBITDA
    $211M
    Q1 FY26

    Exceeded outlook.

    Adjusted EBITDA Margin
    38.5%down YoY
    Q1 FY26

    Due to higher variable costs and increased delivery and installation activity.

    Rental Costs Growth
    9%YoY
    Q1 FY26

    Contributed to margin compression.

    Commissions Growth
    33%YoY
    Q1 FY26

    Contributed to margin compression.

    Adjusted Free Cash Flow per Share
    $0.64
    Q1 FY26

    Based on current share count.

    Adjusted Free Cash Flow per Share (LTM)
    $2.54
    LTM

    Over the last 12 months.

    Net CapEx
    $89Mup ~40% YoY
    Q1 FY26

    Reinvested to support fleet growth in higher-value product categories and project demand pipeline.

    Share Repurchases and Dividends
    $20M
    Q1 FY26

    Returned to shareholders.

    Debt Reduction
    $76M
    Q1 FY26

    Reduction in outstanding debt balances.

    Net Debt
    $3.5B
    Q1 FY26

    As of quarter end.

    Leverage Ratio
    3.7x
    Q1 FY26

    Net debt to adjusted EBITDA.

    ABL Facility Availability
    $1.5B
    Q1 FY26

    Ample liquidity.

    Enterprise Accounts Revenue Growth
    12%YoY
    Q1 FY26

    Higher than expected full-year growth rate.

    Nonresidential Construction Starts Square Footage Change
    -6%YoY
    Q1 FY26

    Continued decline.

    Architectural Billings Index
    continued contraction
    Q1 FY26

    Indicates continued softness in the market.

    Sales Organization Size Growth
    10%YoY
    Q1 FY26

    Across the business.

    Commission Payouts Growth
    >30%YoY
    Q1 FY26

    Despite nonresidential construction starts decline.

    Recordable Incident Rate
    <0.5
    last 3 months

    Exceptional safety performance.

    Adjusted Net Income
    $39M
    Q1 FY26

    Impacted by lower unit volumes and higher prep costs, offset by lower SG&A, D&A, interest, and share count.

    Adjusted Diluted EPS
    $0.21
    Q1 FY26

    Impacted by lower unit volumes and higher prep costs, offset by lower SG&A, D&A, interest, and share count.

    Net Cash Provided by Operating Activities
    $191M
    Q1 FY26

    Strong and predictable cash flow generation.

    Modular Average Monthly Rate (AMR)
    just under 3%
    Q1 FY26

    Expected to decelerate slightly in Q2 due to World Cup units, then increase.

    Modular Volume Change
    -3%YoY
    Q1 FY26

    Improved from -5% a quarter ago, contributing to leasing revenue inflection.

    Data Center New Activated Revenue Growth
    50%YoY
    FY26

    Target for the year.

    Large and Mega Project Volume Growth
    30%YoY
    Q1 FY26

    Overall volume of projects being tracked.

    Data Center Project Volume Growth (Large/Mega Segment)
    70%YoY
    Q1 FY26

    Within the large and mega project segment.

    Data Center Projects as % of Large/Mega Projects
    25%
    Q1 FY26

    Still represents a quarter of the large and mega projects pursued.

    Industry KPIs

    1
    MetricValueDetails
    End market pipelineData center projects up 70%%

    Orderbook & backlog

    4
    Pending Orders (Modular)up 14%Q1 FY26

    YoY

    Pending Orders (Storage)up 7%Q1 FY26

    YoY

    Pending Orders (Enterprise Accounts)up >25%Q1 FY26

    YoY

    Excluding the World Cup.

    Pending Orders (Climate Control)up ~100%Q1 FY26

    YoY

    Product announcements

    2
    ProductTypeDetails
    Perimeter Solutionslaunch
    Clearspanlaunch

    Capital programs

    2
    Fleet Investment (Complex Modular)underway
    Period spend: $89M (Q1 FY26 Net CapEx)

    Benefit: Supports demand in larger complex fleet, including FLEX.

    Increased net CapEx is largely going into the highly utilized Complex Modular business. Q1 CapEx growth was 60% new fleet and 30% refurbishment.

    Network Optimizationunderway
    Period spend: $14M

    Benefit: Efficiency gains, control of property insurance costs, indirect cost savings from optimized operations.

    Costs associated with network optimization and executive transition were $14M in Q1. Involves real estate and fleet dispositions.

    Risks & headwinds

    3
    Local market softnessOngoing

    Nonresidential construction starts square footage down 6% YoY; Architectural Billings Index in continued contraction.

    Mitigation: Focus on enterprise accounts and large projects; internal execution and commercial strategies.

    Margin pressure from variable costs and D&I mixQ1 FY26, expected to continue in Q2 FY26

    Adjusted EBITDA margin 38.5% (down YoY); rental costs up 9% YoY; commissions up 33% YoY; D&I revenue up >12% YoY (lower margin mix).

    Mitigation: These are 'good' headwinds associated with increasing activations and growth; expect positive operating leverage as business returns to growth in H2.

    Project delaysOngoing

    Some examples of delays in project starts for very large projects.

    Mitigation: Not uncommon for large projects; company benefits if delays occur after project starts.

    What to watch in Q2 FY26

    5

    Leasing Revenue Inflection

    Second half of 2026
    Currentdown ~2% YoY (Q1 FY26)
    Targetyear-over-year growth

    Why it matters

    This is a key indicator of the company's return to organic top-line growth and validates the strategic shift towards larger projects.

    we now have increased conviction around leasing revenue inflecting to year-over-year growth at some point⏳ in the second half of 2026, which is now implied in the current outlook.

    Q&A highlights

    7

    What factors could accelerate or hinder the anticipated leasing revenue growth inflection in H2 2026, considering local market stability and enterprise account performance?

    Management noted that local market activity is a variable outside their control, and they haven't assumed improvement or erosion. Enterprise accounts strategy and backlog are strong, but project delays are a watchpoint. The sales organization's productivity outside enterprise accounts is still developing, but overall activation growth and current order rates provide confidence in the H2 inflection.

    “I'm very, very confident in the enterprise accounts strategy in backlog. There are some really exciting things going on out there in the economy, and we tend to -- our win rates tend to improve as those project sizes go up, right?”

    asked by Scott Schneeberger · answered by Timothy Boswell

    2 min read5 chapters

    Detailed Narrative

    01

    Strategic Focus on Organic Growth and Shareholder Value

    The company remains focused on executing commercial, field, and central operating priorities to support a return to organic top-line growth in the second half of 2026. This includes leveraging its strong competitive positioning in larger, more complex projects, where its capabilities are disproportionately strong. Investments in increased capital expenditures are seen as value-accretive, supporting future growth while maintaining strong free cash flow conversion.

    02

    Commercial Momentum in Enterprise Accounts

    Enterprise accounts revenue increased 12% year-over-year in Q1, exceeding full-year expectations. The pending order book for enterprise accounts is up over 25% year-over-year (excluding the World Cup), providing strong visibility into the second half. This reflects a healthier revenue mix with growing exposure to larger, higher-quality, and longer-duration projects that utilize the full product offering.

    03

    Operational Execution and Efficiency Gains

    Operational teams are on track with network optimization efforts, including real estate and fleet dispositions, while simultaneously supporting elevated activity levels. The company is increasing work order volumes to drive unit availability and reduce lead times, leveraging its ability to reactivate idle equipment quickly. Enhanced dispatch and route optimization tools are being rolled out to improve utilization and customer experience, contributing to efficiency gains and structural margin expansion over time⏳.

    04

    Mega Project and Data Center Demand

    There is a significant mix shift in market activity towards large and mega projects, which are up 30% year-over-year. Data center projects within this segment are up 70% year-over-year, though they still represent about 25% of the large and mega projects pursued. This trend aligns well with WillScot's value proposition for sophisticated requirements, driving disproportionate demand in its larger complex fleet.

    05

    Capital Allocation and Balance Sheet Strength

    The company maintains a balanced capital allocation strategy, returning $20 million to shareholders through share repurchases and dividends, while reducing $76 million in debt balances in Q1. Net CapEx increased about 40% year-over-year to $89 million, primarily directed towards the highly utilized Complex Modular business and other high-demand product categories. The balance sheet remains strong with $3.5 billion net debt, 3.7x leverage, and $1.5 billion ABL availability.

    AI-generated summary of the company’s earnings call. Not investment advice.