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Item 2. Management’s Discussion and Analysis

2025-05-01 compared with 2024-10-30 · 166 added, 395 removed, 156 unchanged (78% of the section changed)

Management’s Discussion and Analysis of Financial Condition and Results of Operations

The following Management’s Discussion and Analysis of Financial Condition and Results of Operations (“MD&A”) is intended to help the reader understand WillScot Holdings Corporation ("WillScot") operations and our present business environment.

The following Management’s Discussion and Analysis of Financial Condition and Results of Operations (“MD&A”) is intended to help the reader understand WillScot Holdings Corporation's ("WillScot") operations and our present business environment.

MD&A is provided as a supplement to, and should be read in conjunction with, our financial statements and the accompanying notes thereto, contained in Part I, Item 1 of this report.

The discussion of results of operations in this MD&A is presented on a historical basis, as of or for the three and nine months ended September 30, 2024 or prior periods.

On January 31, 2023, the Company completed the sale of its former United Kingdom ("UK") Storage Solutions segment.

This MD&A presents the historical financial results of the former UK Storage Solutions segment as discontinued operations for all periods presented.

On July 29, 2024, the Company amended and restated its certificate of incorporation to effect a change of the Company’s name from “WillScot Mobile Mini Holdings Corp.” to “WillScot Holdings Corporation."

The discussion of results of operations in this MD&A is presented on a historical basis, as of or for the three months ended March 31, 2025 or prior periods.

The consolidated financial statements were prepared in conformity with accounting principles generally accepted in the United States (“GAAP”).

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Executive Summary

We are a leading business services provider specializing in innovative and flexible turnkey temporary space solutions.

We are a leading business services provider specializing in innovative and flexible turnkey space solutions.

We offer our customers an extensive selection of space solutions with over 152,000 modular space units and over 209,000 portable storage units in our fleet.

Our diverse product offering includes modular space solutions (modular office complexes, mobile offices, classrooms, blast-resistant modules, clearspan structures and sanitation solutions) and portable storage solutions (portable storage containers and climate-controlled containers and trailers).

We also offer our customers a thoughtfully curated selection of solutions with Value-Added Products ("VAPS"), such as workstations, furniture, appliances, media packages, power and solar solutions, telematics, connectivity and data solutions, security and protection products, entrance packages, electrical and lighting products, organization and space optimization assets, perimeter solutions, and other items that improve the customer experience.

We operate a hybrid in-house and outsourced logistics and service infrastructure that provides delivery, site work, installation, disassembly, removal and other services to our customers for an additional fee as part of our leasing and sales operations.

We service diverse end markets across all sectors of the economy throughout the United States ("US"), Canada, and Mexico.

As of September 30, 2024, our branch network included approximately 260 branch locations and additional drop lots to service our over 85,000 customers.

We offer our customers an extensive selection of “Ready to Work” temporary space solutions with over 152,000 modular space units and over 210,000 portable storage and cold storage units in our fleet.

We primarily lease, rather than sell, our modular and portable storage units to customers, which results in a highly diversified and predictable recurring revenue stream.

As of March 31, 2025, our branch network included approximately 260 branch locations and additional drop lots to service our over 85,000 customers.

We primarily lease, rather than sell, our space solutions to customers, which results in a highly diversified and predictable recurring revenue stream.

Over 90% of new lease orders are on our standard lease agreement, pre-negotiated master lease or national account agreements.

The initial lease periods vary, and our leases are customarily renewable on a month-to-month basis after their initial term.

Our lease revenue is highly predictable due to its recurring nature and the underlying stability and diversification of our lease portfolio.

Furthermore, given that our customers value flexibility, they consistently extend their leases or renew on a month-to-month basis such that the average effective duration of our lease portfolio, excluding seasonal portable storage leases, is approximately 38 months.

Rental contracts with customers are generally based on a 28-day or monthly rate and billing cycle.

The initial lease periods vary, and our leases are customarily renewable on a month-to-month basis after their initial term and continue until cancelled by the customer or us.

Given that our customers value flexibility, they consistently extend their leases or renew on a month-to-month basis such that the average effective duration of our consolidated lease portfolio, excluding seasonal portable storage units, is approximately 41 months.

We believe our lease revenue is highly predictable due to its recurring nature and the underlying stability and diversification of our lease portfolio.

We complement our core leasing business by selling both new and used units, allowing us to leverage scale, achieve purchasing benefits, and redeploy capital employed in our lease fleet.

Our customers operate in a diversified set of end markets, including construction, commercial and industrial, retail and wholesale trade, energy and natural resources, education, government and institutions and healthcare.

Our customers operate in a diversified set of end markets, including construction and infrastructure, commercial and industrial, energy and natural resources, and government and institutions.

Core to our operating model is the ability to redeploy standardized assets across end markets.

We track several market leading indicators to predict demand, including those related to our two largest end markets, the commercial and industrial sector and the construction sector, which collectively accounted for approximately 85% of our revenues for the nine months ended September 30, 2024.

We remain focused on our core priorities of growing leasing revenues by increasing units on rent, both organically and through our acquisition strategy, delivering “Ready to Work” turnkey solutions to our customers with value added products and services ("VAPS"), and continually improving the overall customer experience.

We track several leading market indicators to predict demand, including Gross Domestic Product in North America, the Architecture Billings Index, and non-residential construction square foot starts.

These indicators, among others, support our demand forecast for our two largest end markets, the commercial and industrial sector and the construction and infrastructure market, which collectively accounted for approximately 83% of our revenues for the three months ended March 31, 2025.

Significant Developments

Termination of Agreement to Acquire McGrath RentCorp

On January 28, 2024, we entered into an agreement and plan of merger (the “Merger Agreement”) with McGrath RentCorp ("McGrath").

On September 17, 2024, the Company and McGrath mutually agreed to terminate the Merger Agreement.

In accordance with the terms of the Merger Agreement, during the three months ended September 30, 2024, we paid McGrath a $180.0 million termination fee, which was treated as an operating expense in the quarter.

During the three and nine months ended September 30, 2024, we recorded $8.8 million and $41.3 million respectively, in legal and professional fees primarily related to the McGrath transaction within selling, general and administrative expense ("SG&A").

In connection with the proposed acquisition of McGrath, we entered into a commitment letter dated January 28, 2024, which was amended and restated on June 13, 2024 and modified by a Notice of Reduction of Bridge Commitments on June 28, 2024 (the "Commitment Letter"), pursuant to which certain financial institutions committed to make available, in accordance with the terms of the Commitment Letter, (i) a senior secured bridge credit facility and (ii) an upsize to the existing ABL Facility (as defined below).

As a result of the termination of the Merger Agreement, the Commitment Letter was terminated.

Restructuring

In June 2024, the Company implemented a cost-reduction plan to be completed by the end of 2024.

During the three and nine months ended September 30, 2024, r estructuring costs incurred under this plan i ncluded employee termination costs of $2.3 million and $8.5 million, respectively.

Financing Activities

On June 28, 2024, Williams Scotsman, Inc.

("WSI") completed a private offering of $500.0 million in aggregate principal amount of 6.625% senior secured notes due 2029 (the "2029 Secur ed Notes") to qualified institutional buyers pursuant to Rule 144A .

P roceeds were used to repay approximately $495.0 million of outstanding indebtedness under the ABL Facility and certain fees and expenses.

Mobile Mini Trade Name Impairment

In the second quarter of 2024, we determined that a review of the carrying value of the Mobile Mini trade name was necessary based on the Company's plan to rebrand under a single WillScot brand name and discontinue the use of the Mobile Mini trade name.

As of June 30, 2024, the Mobile Mini trade name was tested for impairment using the relief from royalty valuation method.

After determining the estimated fair value, we recorded an impairment charge of $132.5 million during the three months ended June 30, 2024.

This non-cash charge was recorded to impairment loss on intangible asset on the consolidated statement of operations.

After the impairment charge , t he remaining net book value of the Mobile Mini trade name was $31.5 million, which is being amortized over a remaining useful life.

During the nine months ended September 30, 2024, we acquired certain assets and assumed certain liabilities of three local storage and modular companies, which consisted primarily of approximately 600 storage units and 800 modular units, and one national provider of premium large clearspan structures for $84.5 million.

As of the acquisition dates, the fair value of rental equipment acquired was $80.7 million.

On March 26, 2025, Williams Scotsman, Inc.

("WSI") completed a private offering of $500.0 million in aggregate principal amount of its 6.625% senior secured notes due 2030 (the "2030 Secured Notes") to qualified institutional buyers pursuant to Rule 144A of the Securities Act of 1933, as amended.

On March 27, 2025, net proceeds of the offering of the 2030 Secured Notes, together with $33.0 million of additional borrowings under the ABL Facility, were used to (i) redeem all of WSI's outstanding 6.125% senior secured notes due 2025 (the "2025 Secured Notes") at a redemption price equal to 100.00% of the principal amount of the 2025 Notes outstanding, totaling $526.5 million, plus accrued and unpaid interest to, but excluding, the redemption date and (ii) pay related fees and expenses.

On February 18, 2025, our Board of Directors approved a quarterly dividend program.

Under the program, subject to quarterly approval and declaration by the Board of Directors, dividends will be payable on the third Wednesday of the third month of each calendar quarter to stockholders of record as of the first Wednesday of that same month.

In February 2025, our Board of Directors declared a quarterly dividend of $13.0 million or $0.07 per share.

Dividends paid were $12.9 million for the three months ended March 31, 2025.

Share Repurchases

During the nine months ended September 30, 2024, we repurchased 3,623,298 shares of Common Stock for $140.4 million, excluding excise tax.

As of September 30, 2024, $951.9 million of the authorization for future repurchases of the Common Stock remained available.

Given that we believe our free cash flow is predictable (with the exception of isolated events), we believe that repurchases will be a recurring capital allocation priority.

Interest Rate Swap Agreements

In January 2024, we entered into two interest rate swap agreements with financial counterparties relating to $500.0 million in aggregate notional amount of variable-rate debt under the ABL Facility.

Under the terms of the agreements, we receive a floating rate equal to one-month term SOFR and make payments based on a weighted average fixed interest rate of 3.70% on the notional amount.

The swap agreements were designated and qualified as hedges of our exposure to changes in interest payment cash flows created by fluctuations in variable interest rates on the ABL Facility.

The swap agreements terminate on June 30, 2027.

Segment Reporting

In January 2024, we completed the unification of our go-to market structure by integrating our modular and storage divisions under a single leadership team organized by metropolitan statistical area (MSA), which enables us to consistently deliver our portfolio of solutions to our entire customer base.

In connection with this change in operating model, we realigned the composition of our operating and reportable segments.

As a result, we concluded we have two operating segments (US and Other North America) that aggregate into one reportable segment.

Third Quarter Highlights

Three Months Ended September 30, 2024 vs.

(in thousands, except for units on rent and monthly rental rate) 1

Revenue $ 601,432 $ 604,834 $ (3,402)

(Loss) income from continuing operations $ (70,475) $ 91,516 $ (161,991)

Adjusted EBITDA from continuing operations $ 266,863 $ 265,480 $ 1,383

Capital expenditures for rental equipment $ 69,398 $ 63,388 $ 6,010

Net CAPEX $ 58,560 $ 43,230 $ 15,330

Average modular space units on rent 94,899 98,169 (3,270)

Average modular space utilization rate 62.1 % 63.9 % (180) bps

Average modular space monthly rental rate $ 1,199 $ 1,130 $ 69

Average portable storage units on rent 122,730 150,281 (27,551)

Average portable storage utilization rate 58.1 % 70.2 % (1,210) bps

Average portable storage monthly rental rate $ 265 $ 242 $ 23

1 In 2024, we reclassified approximately 2,000 units that were previously reported as modular space units on rent to portable storage units on rent as these units are generally used in a dry storage application.

Additionally, based on our segment realignment, we have conformed our VAPS presentation to include all VAPS not specific to portable storage orders as modular space VAPS and recalculated average monthly rental rates.

This treatment is consistent with prior treatment in our previous Modular Segment.

All historical product operating key performance indicators have been recast to be presented on a comparable basis for all periods.

For the three months ended September 30, 2024, as compared to the three months ended September 30, 2023, results and key drivers of our financial performance included:

• Total revenues decreased $3.4 million, or 0.6%.

Leasing revenue decreased $11.2 million, or 2.4%, and delivery and installation revenue decreased $0.8 million, or 0.7%.

These decreases were partially offset by an increase in new unit sales revenue of $7.7 million, or 75.8%, and an increase in rental unit sales revenue of $0.9 million, or 7.5%.

• Modular product revenue, which represented 77.8% of consolidated revenue for the three months ended September 30, 2024, increased $17.3 million, or 3.8%, to $467.8 million.

The increase was driven by delivery and installation revenue, which increased $7.2 million, or 8.6%, new unit sales revenue, which increased $8.2 million, or 92.5%, and rental unit sales revenue, which increased $1.2 million, or 12.3%.

Core leasing revenue increased $0.7 million, or 0.2%.

Modular revenue drivers for the three months ended September 30, 2024 included:

• Modular space average monthly rental rate increased $69, or 6.1%, year over year to $1,199 representing a continuation of the long-term price optimization and VAPS penetration opportunities across our portfolio.

• Average modular space units on rent decreased 3,270, or 3.3%, year over year.

• Average modular space monthly utilization decreased 180 basis points ("bps") to 62.1%.

• Storage product revenue, which represented 22.2% of consolidated revenue for the three months ended September 30, 2024, decreased $20.7 million, or 13.4%, to $133.6 million.

The decrease was driven by a decrease in core leasing revenue of $11.9 million, or 10.1%, driven by reduced portable storage container volumes, partially offset by increased rates on portable storage containers and increased revenue from acquired climate-controlled containers and refrigerated storage units.

Delivery and installation revenue also decreased $8.0 million, or 25.0%, driven by reduced delivery volumes and decreased pricing.

Rental unit sales revenue decreased $0.3 million, or 9.1%, and new unit sales decreased $0.5 million, or 40.6%.

Storage revenue drivers for the three months ended September 30, 2024 included:

• Portable storage average monthly rental rate increased $23, or 9.5%, year over year to $265 as a result of our price management tools, processes and benefits from increased VAPS penetration opportunities, as well as higher rates on the climate-controlled containers and refrigerated storage units acquired in 2023 and 2024.

• Average portable storage units on rent decreased 27,551, or 18.3%, year over year driven by lower demand for the three months ended September 30, 2024.

The lower demand was driven largely by decreased new construction project starts over the past two years as compared to higher activity levels experienced during 2021 and 2022 and less demand in the retail and wholesale trade customer segment.

• Average portable storage monthly utilization decreased 12.1% to 58.1% for the three months ended September 30, 2024, as compared to the three months ended September 30, 2023.

• Generated loss from continuing operations of $70.5 million for the three months ended September 30, 2024, which included the $180.0 million termination fee paid to McGrath and other discrete costs in the period of $13.4 million, including $8.8 million of legal and professional fees related to the proposed acquisition of McGrath, $1.7 million of integration costs, and $2.5 million of restructuring, lease impairment expense, and other related charges primarily related to employee termination costs as a result of a cost-reduction plan implemented in June 2024.

Gross profit margin for the three months ended September 30, 2024 was 53.5%.

• Generated Adjusted EBITDA from continuing operations of $266.9 million for the three months ended September 30, 2024, representing an increase of $1.4 million, or 0.5%, as compared to the same period in 2023.

• Adjusted EBITDA margin from continuing operations was 44.4% for the three months ended September 30, 2024 and increased 50 bps versus prior year.

Leasing margins increased 127 bps versus prior year and delivery and installation margins decreased 896 bps versus prior year.

• Net cash (used in) provided by operating activities decreased $192.6 million to $1.6 million net cash used in operating activities for the three months ended September 30, 2024 from $191.0 million net cash provided by operating activities for the three months ended September, 30, 2023.

Net cash used in investing activities, excluding cash used for acquisitions, increased by $18.2 million.

Capital expenditures for rental equipment increased $6.0 million for the three months ended September 30, 2024 as a result of increased new fleet purchases, including additional investment in climate-controlled containers and refrigerated storage units.

Purchases of property, plant, and equipment decreased $2.2 million for the three months ended September 30, 2024.

Proceeds from the sale of rental equipment increased $0.5 million.

Proceeds from the sale of property, plant, and equipment decreased $12.1 million.

Net CAPEX increased $15.3 million for the three months ended September 30, 2024.

• Generated a Free Cash Flow deficit of $60.1 million for the three months ended September 30, 2024, representing a decrease of $207.9 million as compared to the same period in 2023, which was driven by the $180.0 million termination fee paid to McGrath and related transaction costs.

Excluding one-time, nonrecurring payments of $180.0 million for the McGrath termination fee and $23.3 million for transaction costs from terminated acquisitions, Adjusted Free Cash Flow was $143.1 million for the three months ended September 30, 2024 as compared to $147.8 million for the three months ended September 30, 2023.

During the three months ended September 30, 2024, we acquired a national provider of premium large clearspan structures for $13.9 million.

We also returned $61.7 million to shareholders through stock repurchases, reducing outstanding Common Stock by 1,587,785 shares.

• With the exception of isolated events, we believe the predictability of our Free Cash Flow allows us to pursue multiple capital allocation priorities opportunistically, including investing in organic opportunities we see in the market, maintaining leverage in our stated range, opportunistically executing accretive acquisitions, and returning capital to shareholders.

In addition to using GAAP financial measurements, we use Adjusted EBITDA, Adjusted EBITDA margin, Adjusted Gross Profit, Adjusted Gross Profit Percentage, Net CAPEX and Free Cash Flow, which are non-GAAP financial measures, to evaluate our operating results.

During the three months ended March 31, 2025, we repurchased 1,094,932 shares of Common Stock for $32.0 million, excluding excise tax.

As of March 31, 2025, $789.8 million of the authorization for future repurchases of the Common Stock remained available.

We believe our Adjusted Free Cash Flow is predictable (with the exception of isolated events).

As such, we believe that repurchases will be a recurring capital allocation priority.

First Quarter Highlights

For the three months ended March 31, 2025, as compared to the three months ended March 31, 2024, results and key drivers of our financial performance included:

• Total revenues decreased $27.6 million, or 4.7%, to $559.6 million.

Leasing revenue decreased $26.2 million, or 5.7%, driven by a decrease in total average units on rent of 26,108, or 11.5%, and partially offset by increased pricing and VAPS penetration.

Reductions in non-residential construction project start activity as a result of higher interest rates reduced demand for our services, which resulted in fewer deliveries.

This same trend caused delivery and installation revenue to decrease by $11.7 million, or 11.7%.

New unit sales revenue increased $8.9 million, or 66.2%, and rental unit sales revenue increased $1.3 million, or 10.6%.

• Generated net income of $43.1 million for the three months ended March 31, 2025, representing a decrease of $13.2 million, or 23.4%, as compared to the same period in 2024.

Discrete costs in the period were $3.7 million, including $0.3 million of integration costs and $0.7 million of restructuring, lease impairment expense, and other related charges.

• Generated Adjusted EBITDA from operations of $228.8 million for the three months ended March 31, 2025, representing a decrease of $19.2 million, or 7.8%, as compared to the same period in 2024.

• Net cash provided by operating activities decreased $2.0 million to $206.6 million for the three months ended March 31, 2025 from $208.7 million net cash provided by operating activities for the three months ended March 31, 2024.

• Net cash used in investing activities, excluding cash used for acquisitions, decreased by $5.7 million.

Capital expenditures for rental equipment increased $0.1 million for the three months ended March 31, 2025.

Purchases of property, plant, and equipment decreased $1.9 million for the three months ended March 31, 2025.

Proceeds from the sale of rental equipment decreased $0.1 million.

Proceeds from the sale of property, plant, and equipment increased $1.3 million.

Net CAPEX decreased $2.9 million for the three months ended March 31, 2025.

• Generated Adjusted Free Cash Flow of $144.8 million for the three months ended March 31, 2025 as compared to $145.0 million for the three months ended March 31, 2024.

During the three months ended March 31, 2025, we deployed Adjusted Free Cash Flow to:

– Repurchase $32.0 million of our Common Stock, reducing outstanding Common Stock by 1,094,932 shares.

– Declare and pay a $0.07 dividend, returning $13.0 million to our shareholders.

– Reduce debt by $85.8 million.

• We believe that the predictability of our Adjusted Free Cash Flow allows us to pursue multiple capital allocation priorities opportunistically, including investing in organic opportunities that we see in the market, maintaining leverage in our stated range, opportunistically executing accretive acquisitions, and returning capital to shareholders via share repurchases and dividend distributions.

In addition to using GAAP financial measurements to evaluate our operating results, we use Adjusted EBITDA, Net CAPEX, and Adjusted Free Cash Flow, which are non-GAAP financial measures.

As such, we include in this Form 10-Q reconciliations to their most directly comparable GAAP financial measures.

These reconciliations and descriptions of why we believe these measures provide useful information to investors as well as a description of the limitations of these measures are included in "Reconciliation of non-GAAP Financial Measures" and "Liquidity and Capital Resources."

These reconciliations and descriptions of why we believe these measures provide useful information to investors, as well as a description of the limitations of these measures are included in "Reconciliation of non-GAAP Financial Measures."

Consolidated Results of Operations

Three Months Ended September 30, 2024 Compared to the Three Months Ended September 30, 2023

Our condensed consolidated statements of operations for the three months ended September 30, 2024 and 2023 are presented below.

Three Months Ended September 30, 2024 vs.

(in thousands)

Leasing and services revenue:

Leasing $ 455,578 $ 466,769 $ (11,191)

Delivery and installation 114,765 115,598 (833)

Sales revenue:

New units 17,850 10,155 7,695

Rental units 13,239 12,312 927

Total revenues 601,432 604,834 (3,402)

Costs of leasing and services:

Leasing 96,050 104,331 (8,281)

Delivery and installation 91,775 82,081 9,694

Costs of sales:

New units 9,665 5,096 4,569

Rental units 6,246 6,682 (436)

Depreciation of rental equipment 76,212 66,950 9,262

Gross profit 321,484 339,694 (18,210)

Other operating expenses:

Selling, general and administrative 150,865 151,983 (1,118)

Other depreciation and amortization 23,108 17,852 5,256

Termination fee 180,000 — 180,000

Restructuring costs 2,334 — 2,334

Lease impairment expense and other related charges, net 144 — 144

Currency (gains) losses, net (129) 96 (225)

Other expense (income), net 380 (8,336) 8,716

Operating (loss) income (35,218) 178,099 (213,317)

Interest expense, net 55,823 53,803 2,020

(Loss) income from continuing operations before income tax (91,041) 124,296 (215,337)

Income tax (benefit) expense from continuing operations (20,566) 32,780 (53,346)

(Loss) income from continuing operations $ (70,475) $ 91,516 $ (161,991)

Comparison of Three Months Ended September 30, 2024 and 2023

Total revenue decreased $3.4 million, or 0.6%, to $601.4 million for the three months ended September 30, 2024 from $604.8 million for the three months ended September 30, 2023.

Leasing revenue decreased $11.2 million, or 2.4%, as compared to the same period in 2023, driven by a decrease of 30,821 total average units on rent, which was primarily driven by a decrease in portable storage units on rent.

Delivery and installation revenues decreased $0.8 million, or 0.7%, due to decreased deliveries and returns.

Rental unit sales increased $0.9 million, or 7.5%, and new unit sales increased $7.7 million, or 75.8%, primarily related to sales activity from a company we acquired in the middle of the third quarter of 2023.

Total average units on rent for the three months ended September 30, 2024 and 2023 were 217,629 and 248,450, respectively, representing a decrease of 30,821 units, or 12.4%.

Portable storage average units on rent decreased by 27,551 units, or 18.3%, for the three months ended September 30, 2024 driven by lower demand in 2024.

The average portable storage unit utilization rate during the three months ended September 30, 2024 was 58.1% as compared to 70.2%

during the same period in 2023.

Modular space average units on rent decreased 3,270 units, or 3.3%, for the three months ended September 30, 2024 as compared to the three months ended September 30, 2023, which was also largely driven by decreased new construction project starts over the past two years as compared to higher activity levels experienced during 2021 and 2022.

The average modular space utilization rate during the three months ended September 30, 2024 was 62.1% as compared to 63.9% during the same period in 2023.

Modular space average monthly rental rates increased 6.1% year over year to $1,199 for the three months ended September 30, 2024.

Increases were driven by a continuation of the long-term price optimization and VAPS penetration opportunities.

Average portable storage monthly rental rates increased 9.5% year over year to $265 for the three months ended September 30, 2024 as a result of our price management tools, processes and benefits from increased VAPS penetration opportunities, as well as higher rates on the climate-controlled containers and refrigerated storage units acquired in 2023 and 2024.

Total VAPS revenues, which are included in leasing revenues, increased $0.3 million, or 0.3%, to $100.2 million for the three months ended September 30, 2024 from $99.9 million for the three months ended September 30, 2023.

Gross profit:

Gross profit decreased $18.2 million, or 5.4%, to $321.5 million for the three months ended September 30, 2024 from $339.7 million for the three months ended September 30, 2023.

The decrease in gross profit was a result of decreased delivery and installation gross profit of $10.5 million, increased depreciation expense of $9.3 million, and a $2.9 million decrease in leasing gross profit.

The decrease was partially offset by a $4.5 million increase in new and rental unit sales gross profit.

The decrease in leasing gross profit was primarily driven by lower demand in 2024.

Cost of leasing and services increased by $1.4 million, or 0.8%, for the three months ended September 30, 2024 versus the three months ended September 30, 2023, driven by an increase in subcontractors costs of $7.7 million, or 11.5%, and an increase in labor costs of $0.8 million, or 1.1%.

These increased costs were partially offset by a decrease in materials costs of $6.1 million, or 21.5%.

Cost of sales increased by $4.1 million, or 35.1%, which is directionally in line with the 38.4% increase in sales revenues for the three months ended September 30, 2024.

Our resulting gross profit percentage was 53.5% and 56.2% for the three months ended September 30, 2024 and 2023, respectively.

Our Adjusted Gross Profit Percentage, excluding the effects of depreciation of rental equipment, was 66.1% and 67.2% for the three months ended September 30, 2024 and 2023, respectively.

The decreases, as referenced above, were mainly driven by lower utilization rates, specifically on portable storage products.

SG&A decreased $1.1 million, or 0.7%, to $150.9 million for the three months ended September 30, 2024, as compared to $152.0 million for the three months ended September 30, 2023.

Employee SG&A excluding stock compensation decreased $9.7 million, or 15.4%, primarily as a result of decreased variable compensation expense, including management incentives, and lower employee headcount as a result of the cost-reduction plan implemented in June 2024.

Service agreements and professional fees, excluding discrete expenses for certain one-time projects, decreased $5.6 million, or 24.4%, and our provision for credit losses, net of write offs, decreased $1.1 million, or 10.6%.

These decreased costs were partially offset by a $8.0 million increase in discrete expenses for certain one-time projects, primarily legal and professional fees related to the proposed acquisition of McGrath, a $3.2 million increase in real estate and occupancy costs, a $1.1 million increase in marketing and advertising expense, and a $1.0 million increase in travel costs.

Adjusted EBITDA:

Adjusted EBITDA increased $1.4 million, or 1%, to $266.9 million for the three months ended September 30, 2024 from $265.5 million for the three months ended September 30, 2023.

The increase was driven by a $4.5 million increase in new and used sales gross profit and decreased SG&A, excluding discrete costs, of $10.2 million, or 7.2%, for the three months ended September 30, 2024 as compared to the three months ended September 30, 2023.

The increase was partially offset by a $2.9 million decrease in leasing gross profit and decreased delivery and installation gross profit of $10.5 million.

Other depreciation and amortization:

Other depreciation and amortization increased $5.3 million to $23.1 million for the three months ended September 30, 2024 as compared to $17.9 million for the three months ended September 30, 2023, primarily related to the amortization of the Mobile Mini tradename in 2024.

Termination fee:

We paid the termination fee of $180.0 million to McGrath related to the termination of the Merger Agreement during the three months ended September 30, 2024, which was treated as an operating expense.

Restructuring costs:

Restructuring costs of $2.3 million for the three months ended September 30, 2024 were due to employee termination costs as a result of a cost-reduction plan implemented in June 2024.

Currency (gains) losses, net:

Currency (gains) losses, net decreased by $0.2 million for the three months ended September 30, 2024 as compared to the three months ended September 30, 2023.

Other expense (income), net:

Other expense, net was $0.4 million for the three months ended September 30, 2024 as compared to other income, net of $8.3 million for the three months ended September 30, 2023.

This change was primarily attributable to a gain on sale of fixed assets related to a real estate sale transaction during the three months ended September 30, 2023.

Interest expense, net:

Interest expense, net increased $2.0 million, or 3.8%, to $55.8 million for the three months ended September 30, 2024 from $53.8 million for the three months ended September 30, 2023.

The increase in interest

expense was a result of higher overall weighted average interest rates as a result of increased benchmark rates and higher outstanding debt balances.

See Note 9 to the condensed consolidated financial statements for further discussion of our debt.

Income tax (benefit) expense:

Income tax benefit was $20.6 million for the three months ended September 30, 2024 compared to income tax expense of $32.8 million for the three months ended September 30, 2023, a change of $53.3 million.

The change was primarily driven by a decrease in income from continuing operations before income tax for the three months ended September 30, 2024 as compared to the three months ended September 30, 2023.

Capital expenditures for rental equipment:

Capital expenditures for rental equipment increased $6.0 million, or 9%, to $69.4 million for the three months ended September 30, 2024 from $63.4 million for the three months ended September 30, 2023 as a result of increased refurbishment spending and new fleet purchases, including additional investment in climate-controlled containers and refrigerated storage units.

Net CAPEX increased $15.3 million, or 35%, to $58.6 million for the three months ended September 30, 2024 from $43.2 million for the three months ended September 30, 2023 driven by the increase in capital expenditures for rental equipment as described above and a $12.1 million decrease in proceeds from the sale of property, plant, and equipment, partially offset by a $2.2 million decrease in purchases of property, plant and equipment, and a $0.5 million increase in proceeds from the sale of rental equipment.

Nine Months Ended September 30, 2024 Compared to the Nine Months Ended September 30, 2023

Our condensed consolidated statements of operations for the nine months ended September 30, 2024 and 2023 are presented below.

Nine Months Ended September 30, 2024 vs.

2023 $ Change

Three Months Ended March 31, 2025 Compared to the Three Months Ended March 31, 2024

Certain consolidated results of operations for the three months ended March 31, 2025 and 2024 are presented below.

Three Months Ended March 31, 2025 vs.

(in thousands)

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Other depreciation and amortization 23,140 17,920 5,220

Termination fee 180,000 — 180,000

Impairment loss on intangible asset 132,540 — 132,540

Restructuring costs 8,540 — 8,540

Lease impairment expense and other related charges, net 867 22 845

Currency (gains) losses, net (94) 6,885 (6,979)

Other expense (income), net 1,935 (14,533) 16,468

Currency losses, net 223 77 146

Other expense, net 423 631 (208)

Operating income 119,434 129,946 (10,512)

Interest expense, net 58,469 56,588 1,881

(Loss) income from continuing operations before income tax (78,463) 350,371 (428,834)

Income tax (benefit) expense from continuing operations (17,377) 94,855 (112,232)

(Loss) income from continuing operations (61,086) 255,516 (316,602)

Discontinued operations:

Income from discontinued operations before income tax — 4,003 (4,003)

Gain on sale of discontinued operations — 176,078 (176,078)

Income tax expense from discontinued operations — 45,468 (45,468)

Income from discontinued operations — 134,613 (134,613)

Net (loss) income $ (61,086) $ 390,129 $ (451,215)

The following table and discussion summarizes our financial performance for the nine months ended September 30, 2024, as compared to the nine months ended September 30, 2023.

Nine Months Ended September 30, 2024 vs.

Income before income tax 60,965 73,358 (12,393)

Income tax expense 17,910 17,118 792

Net income $ 43,055 $ 56,240 $ (13,185)

Three Months Ended March 31, 2025 vs.

(in thousands, except for units on rent and monthly rental rate) 2025 2024

Revenue $ 1,793,203 $ 1,752,391 $ 40,812

(Loss) income from continuing operations $ (61,086) $ 255,516 $ (316,602)

Adjusted EBITDA from continuing operations $ 778,448 $ 773,663 $ 4,785

Adjusted EBITDA $ 228,785 $ 248,009 $ (19,224)

Capital expenditures for rental equipment $ 72,552 $ 72,417 $ 135

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Average portable storage monthly rental rate $ 267 $ 262 $ 5

This treatment is consistent with prior treatment in our previous Modular Segment.

All historical product operating key performance indicators have been recast to be presented on a comparable basis for all periods.

Comparison of Nine Months Ended September 30, 2024 and 2023

Total revenue increased $40.8 million, or 2.3%, to $1,793.2 million for the nine months ended September 30, 2024 from $1,752.4 million for the nine months ended September 30, 2023.

Leasing revenue increased $18.7 million, or 1.4%, as compared to the same period in 2023 driven by improved pricing and value added products penetration, partially offset by a decrease of 35,125 total average units on rent.

Delivery and installation revenues decreased $11.7 million, or 3.5%, due to decreased deliveries and returns.

Rental unit sales increased $10.9 million, or 34.5%, primarily driven by a single large project in the second quarter and increased overall rental unit sales activity, and new unit sales increased $22.9 million, or 76.8%, primarily related to sales activity from a company we acquired in the middle of the third quarter of 2023.

Total average units on rent for the nine months ended September 30, 2024 and 2023 were 221,619 and 256,744, respectively.

Modular space average units on rent decreased 3,522 units, or 3.6%, and portable storage average units on rent decreased by 31,603 units, or 20.0%, for the nine months ended September 30, 2024.

The average modular space utilization rate during the nine months ended September 30, 2024 was 62.3% as compared to 64.8% during the same period in 2023.

The average portable storage utilization rate during the nine months ended September 30, 2024 was 59.8% as compared to 74.1% during the same period in 2023.

Modular space average monthly rental rates increased 8.4% to $1,175 for the nine months ended September 30, 2024.

Increases were driven by a continuation of the long-term price optimization and VAPS penetration opportunities.

Average portable storage monthly rental rates increased 16.4% to $263 for the nine months ended September 30, 2024 as a result of our price management tools, processes and benefits from increased VAPS penetration opportunities, as well as higher rates on the climate-controlled containers and refrigerated storage units acquired in 2023 and 2024.

Total VAPS revenues, which are included in leasing revenues, increased $4.9 million, or 1.7%, to $296.6 million for the nine months ended September 30, 2024 from $291.7 million for the nine months ended September 30, 2023.

Comparison of Three Months Ended March 31, 2025 and 2024

Total revenue decreased $27.6 million, or 4.7%, to $559.6 million for the three months ended March 31, 2025 from $587.2 million for the three months ended March 31, 2024.

Leasing revenue decreased $26.2 million, or 5.7%, as compared to the same period in 2024, driven by a decrease of 26,108 total average units on rent.

Delivery and installation revenue decreased $11.7 million, or 11.7%, due to decreased deliveries and returns.

Rental unit sales increased $1.3 million, or 10.6%, and new unit sales increased $8.9 million, or 66.2%.

Total average units on rent for the three months ended March 31, 2025 and 2024 were 200,723 and 226,831, respectively, representing a decrease of 26,108 units, or 11.5%.

Portable storage average units on rent decreased by 20,839 units, or 15.9%, for the three months ended March 31, 2025 driven by lower demand in 2025.

Lower demand was driven by reduced new construction project starts.

The average portable storage unit utilization rate during the three months ended March 31, 2025 was 52.6% as compared to 62.1% during the same period in 2024.

Modular space average units on rent decreased 5,269 units, or 5.5%, for the three months ended March 31, 2025 as compared to the three months ended March 31, 2024.

The average modular space utilization rate during the three months ended March 31, 2025 was 59.3% as compared to 62.5% during the same period in 2024.

Modular space average monthly rental rates increased 5.2% year over year to $1,209 for the three months ended March 31, 2025, driven by our long-term price optimization strategies and VAPS penetration opportunities.

Average portable storage monthly rental rates increased 1.9% year over year to $267 for the three months ended March 31, 2025 as a result of our price management tools, VAPS penetration, and mix effects from higher rates on climate-controlled containers and refrigerated storage units.

Total VAPS revenues, which are included in leasing revenue, were $96.3 million for both the three months ended March 31, 2025 and 2024.

Gross profit:

Gross profit decreased $25.2 million, or 2.5%, to $965.5 million for the nine months ended September 30, 2024 from $990.7 million for the nine months ended September 30, 2023.

The decrease in gross profit was a result of a $36.2 million increase in depreciation of rental equipment and decreased delivery and installation gross profit of $24.1 million.

These decreases in gross profit were partially offset by a $22.4 million increase in leasing gross profit and increased new and rental unit sale gross profit of $12.6 million.

The increase in leasing gross profit was primarily a result of increased revenues due to favorable average monthly rental rates including VAPS across both portable storage and modular space units, which offset lower unit on rent volumes.

Cost of leasing and services increased by $8.6 million, or 1.6%, for the nine months ended September 30, 2024 as compared to the nine months ended September 30, 2023, driven by a $19.2 million, or 10.0%, increase in labor cost and a $3.5 million, or 4.7%, increase in vehicle, equipment and other costs partially offset by a $10.7 million, or 13.1%, decrease in material costs and a $3.3 million, or 1.7%, decrease in subcontractor costs.

Cost of sales increased by $21.2 million, or 65.6%, which is directionally in line with increased sales revenues of 55.1% for the nine months ended September 30, 2024.

Our gross profit percentage was 53.8% and 56.5% for the nine months ended September 30, 2024 and 2023, respectively.

Our Adjusted Gross Profit Percentage, excluding the effects of depreciation of rental equipment, was 66.5% and 67.4% for the nine months ended September 30, 2024 and 2023, respectively.

The decreases, as referenced above, were mainly driven by lower utilization rates, specifically on portable storage products.

SG&A increased $43.4 million, or 9.6%, to $493.0 million for the nine months ended September 30, 2024, as compared to $449.7 million for the nine months ended September 30, 2023.

Discrete expenses for certain one-time projects, primarily legal and professional fees related to the proposed acquisition of McGrath, increased $42.7 million.

Real estate and occupancy costs increased $11.8 million, or 18.7%, and stock compensation expense increased $2.1 million to $28.2 million for the nine months ended September 30, 2024, as compared to $26.1 million for the nine months ended September 30, 2023.

These increases were partially offset by a $5.6 million, or 9.4%, decrease in service agreements and professional fees, a $2.9 million, or 1.5%, decrease in employee costs, a $2.3 million, or 12.5%, decrease in travel costs and a $3.8 million, or 19.0%, decrease in the provision for credit losses, net of write offs.

Gross profit decreased $16.5 million, or 5.2%, to $300.4 million for the three months ended March 31, 2025 from $316.9 million for the three months ended March 31, 2024.

The decrease in gross profit was a result of a $11.9 million decrease in leasing gross profit and decreased delivery and installation gross profit of $7.7 million.

The decrease was partially offset by a $2.1 million increase in new and rental unit sales gross profit.

The decrease in leasing gross profit was primarily driven by lower demand in 2025.

Cost of leasing and services decreased by $18.4 million, or 10.2%, for the three months ended March 31, 2025 versus the three months ended March 31, 2024, driven by a decrease in subcontractors costs of $4.8 million, or 8.5%, a decrease in labor costs of $7.5 million, or 10.3%, and a decrease in materials costs of $4.8 million, or 19.6% as we reduced variable costs to match demand.

Cost of sales increased by $8.2 million, or 54.2%, which is directionally in line with the 39.2% increase in sales revenue for the three months ended March 31, 2025.

Our resulting gross profit percentage was 53.7% and 54.0% for the three months ended March 31, 2025 and 2024, respectively.

Selling, general and administrative expense ("SG&A"):

SG&A decreased $11.2 million, or 6.6%, to $157.1 million for the three months ended March 31, 2025, as compared to $168.3 million for the three months ended March 31, 2024.

Employee SG&A excluding stock compensation decreased $2.4 million, or 3.4%, due to lower employee headcount.

The decrease was further driven by a $9.9 million decrease in discrete expenses for certain one-time projects and a $6.2 million decrease in our provision for credit losses, net of write offs.

These decreased costs were partially offset by a $5.2 million increase in travel costs associated with our bi-annual Company meeting, a $2.4 million, or 12.7%, increase in service agreements and professional fees, excluding discrete expenses for certain one-time projects, a $2.0 million increase in real estate and occupancy costs, and a $0.6 million increase in marketing and advertising expense.

Adjusted EBITDA:

Adjusted EBITDA increased $4.8 million, or 1%, to $778.4 million for the nine months ended September 30, 2024 from $773.7 million for the nine months ended September 30, 2023.

The increase was driven by a $22.4 million increase in leasing gross profit, a $12.6 million increase in new and used sales gross profit, and decreased SG&A, excluding discrete costs, of $1.3 million, or 0.3%, for the nine months ended September 30, 2024 as compared to the nine months ended September 30, 2023.

The increase was partially offset by decreased delivery and installation gross profit of $24.1 million and decreased other expense (income), net of $16.5 million.

Adjusted EBITDA decreased $19.2 million, or 8%, to $228.8 million for the three months ended March 31, 2025 from $248.0 million for the three months ended March 31, 2024.

The decrease was driven by a $11.9 million decrease in leasing gross profit, decreased delivery and installation gross profit of $7.7 million, and increased SG&A, excluding discrete costs, of $2.1 million for the three months ended March 31, 2025 as compared to the three months ended March 31, 2024.

The decrease was partially offset by a $2.1 million increase in new and used sales gross profit.

Other depreciation and amortization:

Other depreciation and amortization increased $6.8 million to $59.2 million for the nine months ended September 30, 2024 as compared to $52.4 million for the nine months ended September 30, 2023, primarily related to the amortization of the Mobile Mini tradename in 2024.

Termination fee:

We paid the termination fee of $180.0 million to McGrath related to the termination of the Merger Agreement during the nine months ended September 30, 2024, which was treated as an operating expense.

Impairment loss on intangible asset:

Impairment loss on intangible asset was $132.5 million for the nine months ended September 30, 2024 related to the impairment of the Mobile Mini trade name based on the Company's plan to rebrand under a single WillScot brand name and discontinue the use of the Mobile Mini trade name.

Lease impairment expense and other related charges:

Lease impairment expense and other related charges increased to $0.9 million for the nine months ended September 30, 2024.

These charges were related to the exit of an office property.

Restructuring costs:

Restructuring costs of $8.5 million for the nine months ended September 30, 2024 were primarily due to employee termination costs as a result of a cost-reduction plan implemented in June 2024.

Currency (gains) losses, net:

Currency gains, net decreased by $7.0 million for the nine months ended September 30, 2024.

This change was primarily attributable to a $7.7 million loss in 2023 on the settlement of the contingent foreign currency forward contract relating to the sale of the former UK Storage Solutions segment in January 2023.

Other expense (income), net:

Other expense, net was $1.9 million for the nine months ended September 30, 2024 as compared to other income, net of $14.5 million for the nine months ended September 30, 2023.

This change was primarily attributable to a gain on sale of fixed assets related to a real estate sale transaction during the nine months ended September 30, 2023 and insurance recoveries received in 2023 related to Hurricane Ian in the Gulf Coast area of the United States in 2022.

Other depreciation and amortization increased $5.2 million to $23.1 million for the three months ended March 31, 2025 as compared to $17.9 million for the three months ended March 31, 2024, primarily related to the amortization of the Mobile Mini tradename beginning in the third quarter of 2024.

Currency losses, net:

Currency losses, net increased by $0.1 million for the three months ended March 31, 2025 as compared to the three months ended March 31, 2024.

Other expense, net:

Other expense, net was $0.4 million for the three months ended March 31, 2025 as compared to $0.6 million for the three months ended March 31, 2024.

Interest expense, net:

Interest expense increased $22.0 million to $168.0 million for the nine months ended September 30, 2024 from $145.9 million for the nine months ended September 30, 2023.

The increase in interest expense was a result of higher overall weighted average interest rates as a result of increased benchmark rates and higher outstanding debt balances.

Interest expense, net increased $1.9 million, or 3.3%, to $58.5 million for the three months ended March 31, 2025 from $56.6 million for the three months ended March 31, 2024.

The increase in interest expense was a result of higher overall weighted average interest rates as a result of increased benchmark rates.

See Note 6 to the condensed consolidated financial statements for further discussion of our debt.

Income tax (benefit) expense:

Income tax (benefit) expense decreased $112.2 million to a benefit of $17.4 million for the nine months ended September 30, 2024 as compared to expense of $94.9 million for the nine months ended September 30, 2023.

The decrease in expense was driven by a decrease in income from continuing operations before income tax for the nine months ended September 30, 2024 as compared to the nine months ended September 30, 2023.

Income from discontinued operations:

Income from discontinued operations for the nine months ended September 30, 2023 was related to the former UK Storage Solutions segment, which was sold January 2023.

Income tax expense:

Income tax expense was $17.9 million for the three months ended March 31, 2025 compared to $17.1 million for the three months ended March 31, 2024, a change of $0.8 million.

The increase was primarily driven by a discrete tax expense related to equity compensation for the three months ended March 31, 2025 as compared to a discrete tax benefit related to equity compensation for the three months ended March 31, 2024.

This was offset by a decrease in income before income tax for the three months ended March 31, 2025.

Capital expenditures for rental equipment:

Capital expenditures for rental equipment increased $40.9 million, or 25%, to $207.0 million for the nine months ended September 30, 2024 from $166.1 million for the nine months ended September 30, 2023 as a result of increased refurbishment spending and new fleet purchases, including additional investment in climate-controlled containers and refrigerated storage units.

Net CAPEX increased $46.5 million, or 35%, to $178.1 million for the nine months ended September 30, 2024 from $131.6 million for the nine months ended September 30, 2023 driven by the increase in capital expenditures for rental equipment as described above and a $12.1 million decrease in proceeds from the sale of property, plant, and equipment.

This increase was partially offset by a $5.9 million increase in proceeds from the sale of rental equipment for the nine months ended September 30, 2024.

Capital expenditures for rental equipment increased $0.1 million, to $72.6 million for the three months ended March 31, 2025 from $72.4 million for the three months ended March 31, 2024.

Net CAPEX decreased $2.9 million, or 5%, to $61.8 million for the three months ended March 31, 2025 from $64.8 million for the three months ended March 31, 2024 driven by a $1.9 million decrease in purchases of property, plant and equipment and a $1.3 million increase in proceeds from the sale of property, plant, and equipment.

Reconciliation of Non-GAAP Financial Measures

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Our adjusted EBITDA ("Adjusted EBITDA") reflects the following further adjustments to EBITDA to exclude certain non-cash items and the effect of what we consider transactions or events not related to our core business operations:

• Currency (gains) losses, net on monetary assets and liabilities denominated in foreign currencies other than the subsidiaries’ functional currency.

• Goodwill and other impairment charges related to non-cash costs associated with impairment charges to goodwill, other intangibles, rental fleet and property, plant and equipment.

• Restructuring costs, lease impairment expense, and other related charges associated with restructuring plans designed to streamline operations and reduce costs including employee and lease termination costs.

• Currency (gains) losses, net on monetary assets and liabilities denominated in foreign currencies other than the subsidiaries’ functional currency.

• Transaction costs including legal and professional fees and other transaction specific related costs.

• Costs to integrate acquired companies, including outside professional fees, non-capitalized costs associated with system integrations, non-lease branch and fleet relocation expenses, employee training costs, and other costs required to realize cost or revenue synergies.

• Costs to integrate acquired companies, including outside professional fees, non-capitalized costs associated with system integrations, non-lease branch and fleet relocation expenses, employee relocation and training costs, and other costs required to realize cost or revenue synergies.

• Non-cash charges for stock compensation plans.

• Other expenses, including consulting expenses related to certain one-time projects, financing costs not classified as interest expense, and gains and losses on disposals of property, plant, and equipment.

Our Chief Operating Decision Maker ("CODM") evaluates business performance utilizing Adjusted EBITDA as shown in the reconciliation of the Company’s consolidated income from continuing operations to Adjusted EBITDA below.

• Other expense, including consulting expenses related to certain one-time projects, financing costs not classified as interest expense, and gains and losses on disposals of property, plant, and equipment, and unrealized gains and losses on investments.

Our Chief Operating Decision Maker ("CODM") evaluates business performance utilizing Adjusted EBITDA as shown in the reconciliation of the Company’s consolidated net income to Adjusted EBITDA below.

Management believes that evaluating performance excluding such items is meaningful because it provides insight with respect to the intrinsic and ongoing operating results of the Company and captures the business performance inclusive of indirect costs.

9 unchanged sentences

Because of these limitations, Adjusted EBITDA should not be considered as discretionary cash available to reinvest in the growth of our business or as a measure of cash that will be available to meet our obligations.

The following table provides reconciliations of (Loss) income from continuing operations to Adjusted EBITDA from continuing operations:

The following table provides reconciliations of net income to Adjusted EBITDA:

Three Months Ended

September 30, Nine Months Ended

September 30,

(in thousands) 2025 2024

(Loss) income from continuing operations $ (70,475) $ 91,516 $ (61,086) $ 255,516

Income tax (benefit) expense from continuing operations (20,566) 32,780 (17,377) 94,855

Depreciation and amortization 99,320 84,802 285,894 242,927

Net income $ 43,055 $ 56,240

Income tax expense 17,910 17,118

Interest expense, net 58,469 56,588

Impairment loss on intangible asset — — 132,540 —

Restructuring costs, lease impairment expense and other related charges, net 2,478 — 9,407 22

Currency (gains) losses, net (129) 96 (94) 6,885

Depreciation and amortization 97,092 92,828

Currency losses, net 223 77

Restructuring costs, lease impairment expense and other related charges 702 746

Transaction costs 34 —

1 unchanged sentence

Stock compensation expense 8,341 9,099

Termination fee 180,000 — 180,000 —

Other 2,732 12,436

Adjusted EBITDA from continuing operations $ 266,863 $ 265,480 $ 778,448 $ 773,663

Adjusted EBITDA Margin

We define Adjusted EBITDA Margin as Adjusted EBITDA divided by revenue.

Management believes that the presentation of Adjusted EBITDA Margin provides useful information to investors regarding the performance of our business.

The following table provides reconciliations of Adjusted EBITDA Margin:

Three Months Ended

September 30, Nine Months Ended

September 30,

(in thousands) 2024 2023 2024 2023

Adjusted EBITDA from continuing operations (A) $ 266,863 $ 265,480 $ 778,448 $ 773,663

Revenue (B) $ 601,432 $ 604,834 $ 1,793,203 $ 1,752,391

Adjusted EBITDA Margin from Continuing Operations (A/B) 44.4 % 43.9 % 43.4 % 44.1 %

Gross profit (C) $ 321,484 $ 339,694 $ 965,490 $ 990,694

Gross Profit Margin (C/B) 53.5 % 56.2 % 53.8 % 56.5 %

Adjusted Gross Profit and Adjusted Gross Profit Percentage

We define Adjusted Gross Profit as gross profit plus depreciation of rental equipment.

Adjusted Gross Profit Percentage is defined as Adjusted Gross Profit divided by revenue.

Adjusted Gross Profit and Adjusted Gross Profit Percentage are not measurements of our financial performance under GAAP and should not be considered as an alternative to gross profit, gross profit percentage, or other performance measures derived in accordance with GAAP.

In addition, our measurement of Adjusted Gross Profit and Adjusted Gross Profit Percentage may not be comparable to similarly titled measures of other companies.

Management believes that the presentation of Adjusted Gross Profit and Adjusted Gross Profit Percentage provides useful information to investors regarding our results of operations and assists in analyzing the performance of our business.

The following table provides reconciliations of gross profit to Adjusted Gross Profit and gross profit percentage to Adjusted Gross Profit Percentage:

Three Months Ended

September 30, Nine Months Ended

September 30,

(in thousands) 2024 2023 2024 2023

Revenue (A) $ 601,432 $ 604,834 $ 1,793,203 $ 1,752,391

Gross profit (B) $ 321,484 $ 339,694 $ 965,490 $ 990,694

Depreciation of rental equipment 76,212 66,950 226,731 190,556

Adjusted Gross Profit (C) $ 397,696 $ 406,644 $ 1,192,221 $ 1,181,250

Gross Profit Percentage (B/A) 53.5 % 56.2 % 53.8 % 56.5 %

Adjusted Gross Profit Percentage (C/A) 66.1 % 67.2 % 66.5 % 67.4 %

Adjusted EBITDA $ 228,785 $ 248,009

We define N et CAPEX as purchases of rental equipment and refurbishments and purchases of property, plant and equipment (collectively, "Total Capital Expenditures"), less proceeds from the sale of rental equipment and proceeds from the sale of property, plant and equipment (collectively, "Total Proceeds"), which are all included in cash flows from investing activities.

Management believes that the presentation of Net CAPEX provides useful information regarding the net capital invested in our rental fleet and property, plant and equipment each year to assist in analyzing the performance of our business.

As presented below, Net CAPEX includes amounts for the former UK Storage Solutions segment through January 31, 2023.

The following table provides reconciliations of Net CAPEX:

Three Months Ended

September 30, Nine Months Ended

September 30,

(in thousands) 2025 2024

5 unchanged sentences

Net CAPEX $ (61,832) $ (64,776)

Adjusted Free Cash Flow

We define Adjusted Free Cash Flow as net cash provided by operating activities;

less purchases of rental equipment and property, plant and equipment and plus proceeds from sale of rental equipment and property, plant and equipment, which are all included in cash flows from investing activitie s;

excluding one-time, nonrecurring payments for the McGrath termination fee and transaction costs from terminated acquisitions.

Man agement believes that the presentation of Adjusted Free Cash Flow provides useful additional information concerning cash flow available to fund our capital allocation alternatives.

The following table provides a reconciliation of net cash provided by operating activities to Adjusted Free Cash Flow.

Three Months Ended

(in thousands) 2025 2024

Net cash provided by operating activities $ 206,627 $ 208,676

Purchase of rental equipment and refurbishments (72,552) (72,417)

Proceeds from sale of rental equipment 14,063 14,195

Purchase of property, plant and equipment (4,634) (6,554)

Proceeds from sale of property, plant and equipment 1,291 —

Cash paid for transaction costs from terminated acquisitions

Adjusted Free Cash Flow $ 144,795 $ 145,015

Liquidity and Capital Resources

WillScot is a holding company that derives its operating cash flow from its operating subsidiaries.

Our principal sources of liquidity include cash flows generated from operating activities of our subsidiaries, borrowings under our ABL Facility, and sales of debt securities.

We have consistently accessed the debt capital markets both opportunistically and as necessary to support the growth of our business, desired leverage levels, and other capital allocation priorities.

We believe we have ample liquidity in the ABL Facility and are generating substantial free cash flow, which together support both organic operations and other capital allocation priorities as they arise.

Our principal sources of liquidity include cash flows generated from operating activities of our subsidiaries, borrowings under our ABL Facility, and issuance of debt securities.

We have consistently accessed the debt and equity capital markets both opportunistically and as necessary to support the growth of our business, desired leverage levels, and other capital allocation priorities.

We believe we have ample liquidity in the ABL Facility and are generating substantial Adjusted Free Cash Flow, which together support both organic operations and other capital allocation priorities.

We believe that our liquidity sources are sufficient to satisfy our anticipated operating, debt service, and capital cash requirements over the next twelve months and thereafter for the foreseeable future.

We continue to review available acquisition opportunities with the awareness that any such acquisition may require us to incur additional debt to finance the acquisition and/or to issue shares of our Common Stock or other equity securities as acquisition consideration or as part of an overall financing plan.

In addition, we will continue to evaluate alternatives to optimize our capital structure, which could include the issuance or repurchase of additional unsecured and secured debt, equity securities and/or equity-linked securities.

We continuously review available acquisition opportunities with the awareness that any such acquisition may require us to incur additional debt to finance the acquisition and/or to issue shares of our Common Stock or other equity securities as acquisition consideration or as part of an overall financing plan.

In addition, we continue to evaluate alternatives to optimize our capital structure, which could include the issuance or repurchase of additional unsecured and secured debt, equity securities and/or equity-linked securities.

There can be no assurance as to the timing of any such issuance or repurchase.

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(i) a senior secured asset-based US dollar revolving credit facility in the aggregate principal amount of $3.3 billion (the “US Facility”) and (ii) a $400.0 million senior secured asset-based multicurrency revolving credit facility (the "Multicurrency Facility," and together with the US Facility, the “ABL Facility”).

Borrowing availability under the ABL Facility is equal to the lesser of $3.7 billion an d the applicable borrowing bases.

The borrowing bases are a function of, among other things, the value of the assets in the relevant collateral pool, of which our rental equipment represents the largest component.

At September 30, 2024, we had $1.7 billion of available borrowing capacity under the ABL Facility.

Cash Flow Comparison of the Nine Months Ended September 30, 2024 and 2023

The consolidated statements of cash flows include amounts for the former UK Storage Solutions segment through January 31, 2023.

See Note 3 to the financial statements for disclosure of significant investing items related to the former UK Storage Solutions segment.

Borrowing availability under the ABL Facility is equal to the lesser of $3.7 billion and the applicable borrowing bases.

The borrowing bases are a function of, among other considerations, the value of the assets in the relevant collateral pool, of which our rental equipment represents the largest component.

At March 31, 2025, we had $1.6 billion of available borrowing capacity under the ABL Facility.

The following summarizes our change in cash and cash equivalents for the periods presented:

Nine Months Ended

September 30,

Three Months Ended

(in thousands)

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$ 1,678 $ 2,189

Comparison of the Three Months Ended March 31, 2025 and 2024

Cash flows from operating activities

Net cash provided by operating activities for the nine months ended September 30, 2024 was $382.7 million as compared to $541.9 million for the nine months ended September 30, 2023, a decrease of $159.2 million.

The decrease in net cash provided by operating activities was primarily due to the payment of $212.5 million for the McGrath termination fee and transaction costs from terminated acquisitions during the nine months ended September 30, 2024.

Net cash provided by operating activities for the three months ended March 31, 2025 was $206.6 million as compared to $208.7 million for the three months ended March 31, 2024, a decrease of $2.0 million.

The decrease in net cash provided by operating activities was primarily due to a $22.2 million decrease in net income, adjusted for non-cash items, partially offset by an increase of $20.1 million in the net movements of the operating assets and liabilities during the three months ended March 31, 2025.

Cash flows from investing activities

Net cash used in investing activities for the nine months ended September 30, 2024 was $268.7 million as compared to $217.5 million for the nine months ended September 30, 2023, a $51.1 million increase in net cash used in investing activities.

The increase in net cash used in investing activities resulted from $404.0 million in proceeds from the sale of the former UK Storage Solutions in the nine months ended September 30, 2023 and a $40.9 million increase in refurbishment spending and new fleet purchases, including additional investment in climate-controlled containers and refrigerated storage units, during the nine months ended September 30, 2024.

The increase in net cash used in investing activities was partially offset by a $397.7 million decrease in cash used in acquisitions, net of cash acquired, a $5.9 million increase in proceeds from the sale of rental equipment and a $7.7 million decrease in cash used for the settlement of a contingent foreign currency forward contract upon the closing of the sale of the former UK Storage Solutions segment in January 2023.

Net cash used in investing activities for the three months ended March 31, 2025 was $65.0 million as compared to $111.0 million for the three months ended March 31, 2024, a $46.0 million decrease in net cash used in investing activities.

The decrease in net cash used in investing activities resulted from a $40.3 million decrease in cash used in acquisitions, net of cash acquired and a $2.7 million decrease in the purchase of investments during the three months ended March 31, 2025.

Cash flows from financing activities

Net cash used in financing activities for the nine months ended September 30, 2024 was $113.2 million as compared to $337.1 million for the nine months ended September 30, 2023, a decrease of $223.8 million.

The decrease was primarily due to a $547.8 million decrease in cash used for the repurchase of common stock in the nine months ended September 30, 2024.

We paused share repurchases in the fourth quarter of 2023 as acquisition discussions advanced with McGrath and resumed repurchasing shares of our Common Stock in April 2024.

The decrease was partially offset by a $319.0 million increase in repayments of borrowings, net of receipts from borrowings.

Free Cash Flow and Adjusted Free Cash Flow

Free Cash Flow and Adjusted Free Cash Flow are non-GAAP measures.

We define Free Cash Flow as net cash provided by operating activities, less purchases of, and proceeds from, rental equipment and refurbishments and property, plant and equipment, which are all included in cash flows from investing activities.

We define Adjusted Free Cash Flow as Free Cash Flow excluding one-time, nonrecurring payments for the McGrath termination fee and transaction costs from terminated acquisitions.

Management believes that the presentation of Free Cash Flow and Adjusted Free Cash Flow provides useful additional information concerning cash flow available to fund our capital allocation alternatives.

The following table provides a reconciliation of net cash (used in) provided by operating activities to Free Cash Flow.

Three Months Ended

September 30, Nine Months Ended

September 30,

(in thousands) 2024 2023 2024 2023

Net cash (used in) provided by operating activities $ (1,562) $ 190,998 $ 382,725 $ 541,918

Purchase of rental equipment and refurbishments (69,398) (63,388) (206,989) (166,097)

Proceeds from sale of rental equipment 13,238 12,720 43,906 37,974

Purchase of property, plant and equipment (3,318) (5,563) (16,119) (16,752)

Proceeds from sale of property, plant and equipment 918 13,001 1,133 13,266

Free Cash Flow $ (60,122) $ 147,768 $ 204,656 $ 410,309

Cash paid for termination fee 180,000 — 180,000 —

Cash paid for transaction costs from terminated acquisitions

23,266 — 32,451 —

Adjusted Free Cash Flow $ 143,144 $ 147,768 $ 417,107 $ 410,309

Free Cash Flow for the nine months ended September 30, 2024 was $204.7 million as compared to $410.3 million for the nine months ended September 30, 2023, a decrease of $205.7 million.

Free Cash Flow decreased principally as a result of the $159.2 million decrease in cash provided by operating activities, a $40.9 million increase in cash used in the purchase of rental equipment and refurbishments, and a $12.1 million decrease in proceeds from the sale of property, plant, and equipment.

The $159.2 million decrease in cash provided by operating activities was driven by $212.5 million of cash paid for the McGrath termination fee and transaction costs from terminated acquisitions.

The $205.7 million decrease in Free Cash Flow was partially offset by a $5.9 million increase in proceeds from the sale of rental equipment.

Adjusted Free Cash for the nine months ended September 30, 2024 was $417.1 million as compared to $410.3 million for the nine months ended September 30, 2023, an increase of $6.8 million.

The $382.7 million in cash provided by operating activities for the nine months ended September 30, 2024 was returned to shareholders through repurchases and cancellations of common stock of $130.3 million and reinvested into the business to support the purchase of rental equipment, including VAPS, and refurbishments, acquire three local storage and modular companies and one national provider of premium large clearspan structures for $84.5 million, and fund repayment of borrowings under our ABL Facility.

Net cash used in financing activities for the three months ended March 31, 2025 was $139.9 million as compared to $95.6 million for the three months ended March 31, 2024, an increase of $44.3 million.

The increase was primarily due to a $22.0 million increase in cash used for the repurchase of common stock, a $12.9 million increase in cash used to pay dividends, and a $10.8 million increase in repayments of borrowings, net of receipts from borrowings in the three months ended March 31, 2025.

Material cash requirements

The Company’s material cash requirements include the following contractual and other obligations:

The Company has outstanding debt related to its ABL Facility, 2025 Secured Notes, 2028 Secured Notes, 2029 Secured Notes, 2031 Secured Notes, and finance leases totaling $3.6 billion as of September 30, 2024, $547.6 million of which is obligated to be repaid within the next twelve months.

We have the intent and believe we have the ability to refinance the $526.5 million carrying value of the 2025 Secured Notes on a long-term basis as demonstrated by the forecasted available capacity under the ABL Facility, among other refinancing alternatives to be considered opportunistically.

The Company has outstanding debt related to its ABL Facility, 2028 Secured Notes, 2029 Secured Notes, 2030 Secured Notes, 2031 Secured Notes, and finance leases totaling $3.6 billion as of March 31, 2025, $25.4 million of which is obligated to be repaid within the next twelve months.

Refer to Note 6 for further information regarding outstanding debt.

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The Company has commitments for future minimum rental payments relating to operating leases, which are primarily for real estate.

As of September 30, 2024, the Company had lease obligations of $300.8 million, with $71.5 million payable within the next twelve months.

As of March 31, 2025, the Company had lease obligations of $299.9 million, with $72.8 million payable within the next twelve months.

In addition to the cash requirements described above, the Company has a Share Repurchase program authorized by the Board of Directors, which allows the Company to repurchase up to $1.0 billion of outstanding shares of Common Stock.

This program does not obligate the Company to repurchase any specific amount of shares.

As of September 30, 2024, $951.9 million of the approved share repurchase amount remained available.

As of March 31, 2025, $789.8 million of the authorization for future repurchases of our common stock remained available.

Critical Accounting Estimates

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We base these estimates on historical experience and on various other assumptions that we consider reasonable under the circumstances and reevaluate our estimates and judgments as appropriate.

The actual results experienced by us may differ materially and adversely from our estimates.

For a complete

discussion of our significant critical accounting estimates, see the “Critical Accounting Estimates” section in Part II, Item 7 of our Annual Report on Form 10-K for the year ended December 31, 2023 (the "2023 Annual Report on Form 10-K").

There were no significant changes to our critical accounting estimates during the nine months ended September 30, 2024.

Our actual results may differ materially and adversely from our estimates.

For a complete discussion of our significant critical accounting estimates, see the “Critical Accounting Estimates” section in Part II, Item 7 of our Annual Report on Form 10-K for the year ended December 31, 2024 (the "2024 Annual Report on Form 10-K").

There were no significant changes to our critical accounting estimates during the three months ended March 31, 2025.

Recently Issued Accounting Standards

Refer to Part I, Item 1, Note 1 of the notes to our condensed consolidated financial statements included in this Quarterly Report on Form 10-Q for our assessment of recently issued and adopted accounting standards.

Cautionary Note Regarding Forward-Looking Statements

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Forward-looking statements are subject to a number of risks, uncertainties, assumptions and other important factors, many of which are outside our control, which could cause actual results or outcomes to differ materially from those discussed in the forward-looking statements.

Although WillScot believes that these forward-looking statements are based on reasonable assumptions, it can give no assurance that any such forward-looking statement will materialize.

Although WillScot believes that these forward-looking statements are based on reasonable assumptions, the Company can give no assurance that any such forward-looking statement will materialize.

Important factors that may affect actual results or outcomes include, among others:

• impacts of various laws and regulations and recent pronouncements related to laws and regulations governing antitrust, climate-related disclosures, privacy, government contracts, anti-corruption and the environment;

• our ability to successfully acquire and integrate new operations;

• the effect of global or local economic conditions in the industries and markets in which the Company operates and any changes therein, including financial market conditions and levels of end market demand;

• risks associated with cybersecurity threats and IT systems disruptions, including our ability to manage the business in the event a cybersecurity incident or a disaster shuts down or materially impacts our management information systems;

• trade policies and changes in trade policies, including the imposition of tariffs, their enforcement and downstream consequences;

• economic conditions and changes therein, including financial market conditions and levels of end market demand;

• our ability to effectively compete in the modular space and portable storage industries;

• our ability to effectively manage our credit risk, collect on our accounts receivable, or recover our rental equipment;

• inflationary pressures and fluctuations in interest rates and commodity prices;

• laws and regulations governing antitrust, climate related disclosures, cybersecurity and information technology, privacy, government contracts, anti-corruption, and the environment;

• the actions of activist shareholders;

• our ability to successfully acquire and integrate new operations;

• trade policies and changes in trade policies, including the imposition and enforcement of tariffs, trade restrictions, and broader economic measures and their consequences;

• fluctuations in interest rates and commodity prices;

• risks associated with labor relations, labor costs and labor disruptions;

• changes in the competitive environment of our customer base as a result of the global, national or local economic climate in which they operate and/or economic or financial disruptions to their industry;

• changes in the competitive environment of our customers as a result of the economic climate in which they operate and/or economic or financial disruptions to their industry;

• our ability to adequately protect our intellectual property and other proprietary rights that are material to our business;

• natural disasters and other business disruptions such as pandemics, fires, floods, hurricanes, earthquakes and terrorism;

• natural disasters and other business disruptions such as pandemics;

• our ability to establish and maintain the appropriate physical presence in our markets;

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• our ability to maintain an effective system of internal controls and accurately report our financial results;

• evolving public disclosure, financial reporting and corporate governance expectations;

• evolving public disclosure, financial reporting, internal controls, and corporate governance expectations;

• our ability to achieve our environmental, social, and governance goals;

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• our ability to use our net operating loss carryforwards and other tax attributes;

• our ability to recognize deferred tax assets such as those related to our tax loss carryforwards and, as a result, utilize future tax savings;

• our ability to recognize deferred tax assets, such as those related to tax loss carryforwards, and utilize future tax savings;

• unanticipated changes in tax obligations, adoption of a new tax legislation, or exposure to additional income tax liabilities;

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• our ability to service our debt and operate our business;

• our ability to incur significant additional amounts of debt, which could further exacerbate the risks associated with our substantial indebtedness;

• our ability to incur significant additional amounts of debt and avoid risks associated with substantial indebtedness;

• covenants that limit our operating and financial flexibility;

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Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 2. Management’s Discussion and Analysis