WillScot Mobile Mini (WSC) - 2025 Q2 - Quarterly Results

Executive Summary & Highlights Second Quarter 2025 Performance Highlights WillScot reported Q2 2025 financial results broadly in line with expectations, achieving $589 million in revenue and a 42.3% Adjusted EBITDA Margin. The company deployed $134 million in tuck-in acquisitions and returned $53 million to shareholders, while narrowing its full-year 2025 outlook for revenue and Adjusted EBITDA Q2 2025 Financial Metrics | Metric | Q2 2025 | Change YoY | | :-------------------------------- | :------ | :--------- | | Revenue | $589M | -2.6% | | Net Income | $48M | N/A (vs. loss) | | Diluted EPS | $0.26 | N/A (vs. loss) | | Adjusted EBITDA | $249M | -5.5% | | Adjusted EBITDA Margin | 42.3% | -1.3 pp | | Net cash provided by operating activities | $205M | +16.6% | | Adjusted Free Cash Flow | $130M | +1.1% | | Adjusted Free Cash Flow Margin | 22.1% | +0.8 pp | - Leasing revenues of $443 million improved 2.0% sequentially but were 3.4% below the prior year quarter, primarily due to decreased units on rent, partially offset by increased average monthly rates (modular space units +5.2%, portable storage units +7.2%)[4] - Deployed approximately $134 million towards tuck-in acquisitions, including a leading regional climate-controlled temporary storage business, and returned $53 million to shareholders through share repurchases and quarterly cash dividends[3][4] - Narrowed original FY 2025 Revenue and Adjusted EBITDA outlook ranges, reflecting the Company's macroeconomic views on the second half of 2025[4] CEO Commentary CEO Brad Soultz highlighted Q2 2025 results were in line with expectations, emphasizing strong Adjusted EBITDA and Adjusted Free Cash Flow margins. He noted continued strength in larger projects despite a mixed near-term end market outlook and reiterated long-term targets of $3 billion annualized revenue, $1.5 billion Adjusted EBITDA, and $700 million Adjusted Free Cash Flow within three to five years - Q2 2025 financial results were broadly in line with expectations, achieving an Adjusted EBITDA Margin of 42.3% and an Adjusted Free Cash Flow Margin of 22.1%[3] - Deployed approximately $134 million towards tuck-in acquisitions and returned $53 million to shareholders through share repurchases and quarterly cash dividends, consistent with capital allocation framework[3] - While seeing strength in larger projects, the end market outlook overall remains mixed in the near term[3] - Targeting to achieve $3 billion of annualized revenue, $1.5 billion of Adjusted EBITDA, and $700 million of Adjusted Free Cash Flow in three-to-five years[3] Second Quarter 2025 Financial Results Condensed Consolidated Statements of Operations The condensed consolidated statements of operations show a significant improvement in net income for Q2 2025 compared to a net loss in Q2 2024, driven by the absence of a large impairment loss on intangible assets and reduced selling, general, and administrative expenses Condensed Consolidated Statements of Operations (in thousands) | (in thousands) | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :-------------------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Revenues: | | | | | | Leasing | $442,916 | $458,592 | $877,306 | $919,193 | | Delivery and installation | $108,452 | $108,147 | $197,113 | $208,509 | | New units sales | $21,620 | $21,378 | $44,057 | $34,877 | | Rental units sales | $16,095 | $16,473 | $30,158 | $29,192 | | Total revenues | $589,083 | $604,590 | $1,148,634 | $1,191,771 | | Gross profit | $296,070 | $327,118 | $596,436 | $644,006 | | Selling, general and administrative | $145,023 | $180,793 | $302,169 | $349,107 | | Impairment loss on intangible asset | — | $132,540 | — | $132,540 | | Operating income (loss) | $126,900 | ($5,232) | $246,334 | $124,714 | | Interest expense, net | $58,977 | $55,548 | $117,446 | $112,136 | | Income (loss) before income tax | $67,923 | ($60,780) | $128,888 | $12,578 | | Income tax expense (benefit) | $19,984 | ($13,929) | $37,894 | $3,189 | | Net income (loss) | $47,939 | ($46,851) | $90,994 | $9,389 | | Diluted earnings (loss) per share | $0.26 | ($0.25) | $0.49 | $0.05 | Condensed Consolidated Balance Sheets The balance sheet as of June 30, 2025, shows a slight increase in total assets and shareholders' equity compared to December 31, 2024, primarily driven by growth in rental equipment and goodwill from acquisitions, while total liabilities remained relatively stable Condensed Consolidated Balance Sheets (in thousands) | (in thousands) | June 30, 2025 (unaudited) | December 31, 2024 | | :-------------------------------- | :------------------------ | :---------------- | | Assets | | | | Cash and cash equivalents | $12,850 | $9,001 | | Total current assets | $530,300 | $557,510 | | Rental equipment, net | $3,424,524 | $3,377,939 | | Goodwill | $1,257,264 | $1,201,353 | | Total assets | $6,104,703 | $6,034,911 | | Liabilities and equity | | | | Total current liabilities | $655,705 | $585,008 | | Long-term debt | $3,672,856 | $3,683,502 | | Total liabilities | $5,070,108 | $5,016,318 | | Total shareholders' equity | $1,034,595 | $1,018,593 | | Total liabilities and shareholders' equity | $6,104,703 | $6,034,911 | CFO Commentary CFO Matt Jacobsen affirmed Q2 2025 results were consistent with outlook, highlighting sequential Adjusted EBITDA margin expansion to 42.3% and a 17% year-over-year increase in net cash from operating activities. He noted improvements in working capital and benefits from new tax legislation, leading to an updated FY 2025 Adjusted Free Cash Flow expectation of $500 million to $550 million - Achieved quarterly revenue of $589 million and Adjusted EBITDA of $249 million, with Adjusted EBITDA margin expanding sequentially by 140 basis points to 42.3%[5] - Net cash provided by operating activities for the quarter was $205 million, up 17% year-over-year, reflecting early benefits from increased focus on back office productivity and working capital management[5] - Generated Adjusted Free Cash Flow of $130 million at an Adjusted Free Cash Flow Margin of 22.1%, an 80 basis points increase year-over-year[5] - Narrowed Revenue outlook range to $2,300 million to $2,350 million and Adjusted EBITDA outlook range to $1,000 million to $1,020 million for FY 2025, while expecting full year Adjusted Free Cash Flow of $500 million to $550 million due to working capital improvements and new tax legislation[5] Capitalization and Liquidity Update Capital Structure and Debt WillScot maintained strong liquidity with approximately $1.6 billion available under its revolving credit facility. Total debt stood at $3.7 billion, with a net debt to Adjusted EBITDA ratio of 3.6x, slightly increased due to acquisition timing. The company's debt structure is predominantly fixed-to-floating, with the next maturity in 2027 - Net cash provided by operating activities was $205 million, resulting in $130 million of Adjusted Free Cash Flow after Net CAPEX investments[6] - Invested $75 million of Net CAPEX, including $85 million for rental equipment, supporting maintenance and growth in new product lines[6] - Maintained availability under the asset-backed revolving credit facility of approximately $1.6 billion[6] Capital Structure and Debt Metrics | Metric | Amount | | :---------------------- | :------- | | Total debt | $3,700M | | Net debt | $3,687M | | Net Debt to Adjusted EBITDA (LTM) | 3.6x | | Weighted average pre-tax interest rate | ~5.8% | | Estimated annual cash interest expense | ~$218M | | Debt structure (fixed-to-floating) | 87% / 13% | Shareholder Returns WillScot continued its commitment to shareholder returns by repurchasing 1.53 million shares for $40 million, contributing to a 3.4% reduction in outstanding shares over 12 months, and paid a quarterly cash dividend of $0.07 per share - Repurchased 1,533,109 shares of Common Stock for $40 million, contributing to a 3.4% reduction in outstanding share count over the 12 months ending June 30, 2025[11] - Paid Common Stock quarterly cash dividend of $0.07 per share on June 18, 2025[11] 2025 Full Year Outlook 2025 Full Year Outlook WillScot narrowed its full-year 2025 financial outlook, reflecting current macroeconomic views for the second half of the year, with updated ranges for Revenue, Adjusted EBITDA, and Net CAPEX 2025 Full Year Outlook | Metric | 2025 Outlook Range | | :---------------- | :----------------- | | Revenue | $2,300M - $2,350M | | Adjusted EBITDA | $1,000M - $1,020M | | Net CAPEX | $250M - $300M | Non-GAAP Financial Measures Overview and Rationale WillScot utilizes non-GAAP financial measures to provide investors with additional insights into core operating performance, facilitate period-over-period comparisons, and align with internal management assessments and credit agreement definitions. However, the company acknowledges the limitations of these measures, emphasizing they should not be considered in isolation from GAAP results - Non-GAAP financial measures are used for comparison to prior periods, development of future projections, and to measure the profitability of ongoing operations and analyze business performance and trends[24] - Adjusted EBITDA and Adjusted EBITDA Margin are useful to investors as they allow comparison of performance over various reporting periods on a consistent basis by removing the impact of items not reflecting core operating performance, and are used by management to assess performance[25] - Adjusted EBITDA has limitations as an analytical tool, as it does not reflect changes in working capital, interest expense, tax expense, capital expenditures, or the impact of non-recurring items, and may not be comparable to similarly-titled measures of other companies[26][28] Adjusted EBITDA and Margin Adjusted EBITDA is defined as net income (loss) adjusted for interest, taxes, depreciation, amortization, and certain non-cash or non-core operational items. The Adjusted EBITDA Margin is calculated by dividing Adjusted EBITDA by revenue, providing a profitability metric that management believes reflects core business performance - Adjusted EBITDA is defined as net income (loss) plus net interest (income) expense, income tax expense (benefit), depreciation and amortization, further adjusted to exclude certain non-cash items and transactions not related to core business operations[12][25] Adjusted EBITDA Reconciliation (in thousands) | (in thousands) | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :------------------------------------------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Net income (loss) | $47,939 | ($46,851) | $90,994 | $9,389 | | Income tax expense (benefit) | $19,984 | ($13,929) | $37,894 | $3,189 | | Interest expense, net | $58,977 | $55,548 | $117,446 | $112,136 | | Depreciation and amortization | $112,632 | $93,746 | $209,724 | $186,574 | | Impairment loss on intangible asset | — | $132,540 | — | $132,540 | | Adjusted EBITDA | $248,913 | $263,576 | $477,698 | $511,585 | - Adjusted EBITDA Margin is defined as Adjusted EBITDA divided by revenue, providing a useful measure of business performance[30] Adjusted EBITDA Margin (in thousands) | (in thousands) | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :----------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Adjusted EBITDA (A) | $248,913 | $263,576 | $477,698 | $511,585 | | Revenue (B) | $589,083 | $604,590 | $1,148,634 | $1,191,771 | | Adjusted EBITDA Margin (A/B) | 42.3 % | 43.6 % | 41.6 % | 42.9 % | | Gross Profit Margin (C/B) | 50.3 % | 54.1 % | 51.9 % | 54.0 % | Net Debt to Adjusted EBITDA Ratio The Net Debt to Adjusted EBITDA ratio, calculated as total debt net of cash and cash equivalents divided by the last twelve months' Adjusted EBITDA, is presented as a key indicator of the company's leverage and financial health - Net Debt to Adjusted EBITDA ratio is defined as total debt, net of total cash and cash equivalents, divided by Adjusted EBITDA from the last twelve months[9][31] Net Debt to Adjusted EBITDA Ratio (in thousands) | (in thousands) | June 30, 2025 | | :------------------------------------------ | :------------ | | Total debt | $3,699,784 | | Cash and cash equivalents | $12,850 | | Net debt (A) | $3,686,934 | | Adjusted EBITDA from the last twelve months (B) | $1,029,273 | | Net Debt to Adjusted EBITDA ratio (A/B) | 3.6 | Adjusted Net Income and Adjusted Diluted Earnings Per Share Adjusted Net Income and Adjusted Diluted Earnings Per Share are non-GAAP measures that adjust net income (loss) for certain non-cash items and transactions not related to core business operations, providing a clearer view of underlying profitability - Adjusted net income is defined as net income (loss) plus certain non-cash items and the effect of transactions not related to core business operations, including impairment charges, restructuring costs, transaction costs, and integration costs[12][32][35] - Adjusted diluted earnings per share is defined as adjusted net income divided by adjusted diluted weighted average common shares outstanding[12][32] Adjusted Net Income and Adjusted Diluted EPS (in thousands, except share data) | (in thousands, except share data) | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :------------------------------------------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Net income (loss) | $47,939 | ($46,851) | $90,994 | $9,389 | | Impairment loss on intangible asset | — | $132,540 | — | $132,540 | | Transaction costs from terminated acquisitions | — | $22,893 | — | $35,180 | | Estimated tax impact | ($446) | ($42,828) | ($683) | ($46,964) | | Adjusted Net Income | $49,209 | $75,043 | $92,990 | $143,057 | | Adjusted Diluted Earnings Per Share | $0.27 | $0.39 | $0.50 | $0.74 | | Weighted average diluted shares outstanding | 183,439,165 | 189,680,091 | 184,367,127 | 192,409,616 | | Adjusted Weighted Average Dilutive Shares Outstanding | 183,439,165 | 191,753,841 | 184,367,127 | 192,409,616 | Adjusted Free Cash Flow and Adjusted Free Cash Flow Margin Adjusted Free Cash Flow (AFCF) is defined as net cash provided by operating activities, adjusted for capital expenditures and proceeds from asset sales, excluding one-time transaction costs. AFCF Margin, calculated as AFCF divided by revenue, provides insight into the cash flow available for capital allocation and comparison against peers - Adjusted Free Cash Flow is defined as net cash provided by operating activities, less purchases of rental equipment and property, plant and equipment, plus proceeds from sale of rental equipment and property, plant and equipment, excluding one-time, nonrecurring payments for transaction costs from terminated acquisitions[12][36] - Adjusted Free Cash Flow Margin is defined as Adjusted Free Cash Flow divided by revenue[12][36] Adjusted Free Cash Flow and Margin (in thousands) | (in thousands) | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :------------------------------------------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Net cash provided by operating activities | $205,311 | $175,611 | $411,938 | $384,287 | | Purchase of rental equipment and refurbishments | ($85,269) | ($65,174) | ($157,821) | ($137,591) | | Proceeds from sale of rental equipment | $16,269 | $16,473 | $30,332 | $30,668 | | Cash paid for transaction costs from terminated acquisitions | — | $8,070 | — | $9,185 | | Adjusted Free Cash Flow (A) | $130,327 | $128,948 | $275,122 | $273,963 | | Revenue (B) | $589,083 | $604,590 | $1,148,634 | $1,191,771 | | Adjusted Free Cash Flow Margin (A/B) | 22.1 % | 21.3 % | 24.0 % | 23.0 % | Net CAPEX Net CAPEX represents the net capital invested in the company's rental fleet and property, plant, and equipment, calculated as total capital expenditures less proceeds from asset sales. This measure provides insight into the company's investment in its operational assets - Net CAPEX is defined as purchases of rental equipment and refurbishments and purchases of property, plant and equipment, less proceeds from the sale of rental equipment and proceeds from the sale of property, plant and equipment[12][37] Net CAPEX Reconciliation (in thousands) | (in thousands) | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :------------------------------------------ | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Purchases of rental equipment and refurbishments | ($85,269) | ($65,174) | ($157,821) | ($137,591) | | Proceeds from sale of rental equipment | $16,269 | $16,473 | $30,332 | $30,668 | | Net CAPEX for Rental Equipment | ($69,000) | ($48,701) | ($127,489) | ($106,923) | | Purchases of property, plant and equipment | ($6,286) | ($6,247) | ($10,920) | ($12,801) | | Proceeds from sale of property, plant and equipment | $302 | $215 | $1,593 | $215 | | Net CAPEX | ($74,984) | ($54,733) | ($136,816) | ($119,509) | Return on Invested Capital Return on Invested Capital (ROIC) is a non-GAAP measure defined as Adjusted earnings before interest and amortization divided by Average Invested Capital. It provides insight into the long-term health and profitability of the business relative to its cost of capital - Return on Invested Capital (ROIC) is defined as Adjusted earnings before interest and amortization divided by Average Invested Capital, providing information about the long-term health and profitability of the business relative to the Company's cost of capital[12][39] - Adjusted earnings before interest and amortization is defined as Adjusted EBITDA reduced by depreciation and estimated statutory taxes (approximately 26%). Average Invested Capital is calculated as an average of net assets, defined as total assets less goodwill, intangible assets, net, and all non-interest bearing liabilities[39][40] Return on Invested Capital (in thousands) | (in thousands) | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :------------------------------------------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Total Assets | $6,104,703 | $6,048,768 | $6,104,703 | $6,048,768 | | Net Assets, as defined above | $3,203,393 | $3,212,446 | $3,203,393 | $3,212,446 | | Average Invested Capital (A) | $3,185,023 | $3,204,978 | $3,206,541 | $3,204,459 | | Adjusted EBITDA | $248,913 | $263,576 | $477,698 | $511,585 | | Depreciation | ($100,911) | ($86,466) | ($186,656) | ($171,849) | | Adjusted EBITA (B) | $148,002 | $177,110 | $291,042 | $339,736 | | Estimated Tax (B*C) | $38,481 | $46,049 | $74,216 | $88,331 | | Adjusted earnings before interest and amortization (D) | $109,522 | $131,061 | $216,826 | $251,405 | | ROIC (D/A), annualized | 13.8 % | 16.4 % | 13.5 % | 15.7 % | Company Information Conference Call Information WillScot announced details for its Q2 2025 earnings conference call and webcast, scheduled for July 31, 2025, at 5:30 p.m. Eastern Time, providing access information for interested participants - WillScot hosted a conference call and webcast to discuss its second quarter 2025 results and 2025 outlook at 5:30 p.m. Eastern Time on Thursday, July 31, 2025[14] - Access to the live call was available via a registration link, and a live webcast was accessible through the 'Events & Presentations' section of the Company's investor relations website[14] About WillScot WillScot Holdings Corporation is a leading provider of innovative temporary space solutions in North America, offering a comprehensive range of modular offices, portable storage, and related services through a vast network of branch locations across the US, Canada, and Mexico - WillScot is the premier provider of highly innovative and turnkey space solutions in North America, listed on the Nasdaq stock exchange under the ticker symbol 'WSC'[15] - The company's comprehensive product range includes modular office complexes, mobile offices, classrooms, temporary restrooms, portable storage containers, protective buildings, climate-controlled units, and clearspan structures, along with furnishings and supplementary services[15] - Headquartered in Phoenix, Arizona, WillScot operates from approximately 260 branch locations and additional drop lots across the United States, Canada, and Mexico, serving diverse customer segments[15] Forward-Looking Statements This section serves as a cautionary note regarding forward-looking statements within the news release, highlighting that such statements are predictions subject to various risks, uncertainties, and important factors that could cause actual results to differ materially from expectations. The company disclaims any obligation to update these statements - The news release contains forward-looking statements, identified by words like 'estimates,' 'expects,' 'anticipates,' and 'outlook,' which are generally not historical in nature[16] - Forward-looking statements are subject to numerous risks, uncertainties, assumptions, and other important factors, many outside the company's control, which could cause actual results to differ materially[16] - Important factors affecting actual results include the ability to acquire and integrate new assets, judge demand outlook, achieve planned synergies, execute growth strategy, manage growth, market acceptance, rising costs, potential litigation, and general economic conditions[16] Additional Information & Contacts Additional company information is available on WillScot's website, and contact details are provided for investor and media inquiries - Additional information can be found on the company's website at www.willscot.com[17](index=17&type=chunk) - Investor inquiries can be directed to Charlie Wohlhuter at investors@willscot.com, and media inquiries to Juliana Welling at juliana.welling@willscot.com[18]