WillScot Holdings Corp. 10-Q Summary: Q1 2026
Business Context and Reporting Period
WillScot Holdings Corporation (WSC) is a leading provider of modular space and portable storage solutions across the United States, Canada, and Mexico. This report covers the quarterly period ended March 31, 2026. The company operates a hybrid logistics network to lease, sell, and service modular office complexes, mobile offices, and storage containers. As of the reporting date, the company had approximately 181 million shares of common stock outstanding.
Key Financial Metrics
| Metric (in thousands, except per share) | Q1 2026 | Q1 2025 |
|---|---|---|
| Total Revenues | $548,628 | $559,551 |
| Net Income | $28,123 | $43,055 |
| Diluted EPS | $0.15 | $0.23 |
| Adjusted EBITDA | $211,014 | $228,785 |
| Operating Cash Flow | $191,058 | $206,627 |
| Adjusted Free Cash Flow | $115,556 | $144,795 |
| Total Debt (Gross) | $3,514,231 | $3,588,168 |
| Cash and Equivalents | $15,543 | $10,679 |
| ABL Availability | $1.5 billion | N/A |
Material Changes vs. Prior Period
- Revenue Decline: Total revenue decreased 2.0% to $548.6 million, driven by a 59.9% drop in new unit sales ($13.4 million decrease) and a 2.0% decline in leasing revenue due to a 7.3% reduction in average units on rent.
- Profitability Pressure: Net income fell 34.7% to $28.1 million. This was significantly impacted by $11.6 million in restructuring charges related to the Network Optimization Plan and increased accounts receivable write-offs ($3.4 million increase vs. prior year).
- Cost Increases: Costs of leasing and services rose 10.8% due to higher subcontractor, material, and labor costs, partially offset by a decrease in depreciation of rental equipment.
- Capital Deployment: Capital expenditures for rental equipment increased 40.5% to $101.9 million to support large complex projects. Net CAPEX rose to $89.3 million.
- Shareholder Returns: The company paid $12.7 million in dividends and repurchased $7.3 million of common stock (352,900 shares).
Outlook, Risks, and Unusual Items
- Network Optimization Plan: Approved in December 2025, this initiative aims to exit 108 branch/drop lot locations and dispose of approximately 53,000 rental units (net book value of $312.1 million). The company expects to complete real estate exits and disposals by 2029. Future estimated costs include $30 million for disposal and $20 million for relocation.
- Market Conditions: Lower demand for modular space and portable storage is attributed to reduced non-residential construction starts, higher interest rates, and economic uncertainty.
- Liquidity: The company maintains $1.5 billion in available borrowing capacity under its Asset-Based Lending (ABL) Facility. Management believes liquidity is sufficient for the next 12 months and beyond.
- Risks: Key risks include credit risk (increased write-offs), interest rate fluctuations, supply chain constraints, and the successful execution of the Network Optimization Plan.
Investor Verification Checklist
- Restructuring Execution: Verify the pace of unit disposals and real estate exits against the 2029 completion target and monitor for additional unexpected costs.
- Credit Quality: Review the trend in accounts receivable write-offs and the adequacy of the allowance for credit losses given the economic environment.
- Utilization Rates: Monitor the recovery of average units on rent and utilization rates (currently 68.0% for modular space and 55.9% for portable storage) as construction activity stabilizes.
- Debt Covenants: Confirm continued compliance with ABL Facility covenants, particularly regarding leverage ratios and borrowing base calculations.
- Capital Allocation: Assess the balance between high Net CAPEX requirements for new projects and the company's ability to sustain dividends and share repurchases.