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WillScot Holdings (WSC) Q1 FY26 earnings call: guidance and Q&A

Earnings call· Mar 2026 (Q1 FY26)· Industrials· May 7, 2026

Source: earnings call transcript

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

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

Orderbook & backlog

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

ProductTypeDetails
Perimeter Solutionslaunch
Clearspanlaunch

Capital programs

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 Optimization underway
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

Local market softness Ongoing

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 mix Q1 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 delays Ongoing

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

Leasing Revenue Inflection

Second half of 2026
Current down ~2% YoY (Q1 FY26)
Target year-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.

Find out whether WSC delivers this. Inve re-checks your case every morning.

Q&A highlights

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 read 5 chapters

Detailed narrative

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.

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.

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.

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.

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.

Summary of the company's earnings call; see how call summaries are prepared. Not investment advice.