WillScot Holdings Corp 10-Q

ITEM 1. Financial Statements WillScot Holdings Corporation Condensed Consolidated Balance Sheets (in thousands, except share data) March 31, 2025 (unaudited) December 31, 2024 Assets Cash and cash equivalents $ 10,679 $ 9,001 Trade receivables, net of allowances for credit losses at March 31, 2025 and December 31, 2024 of $ 100,291 and $ 101,693 , respectively 400,501 430,381 Inventories 47,736 47,473 Prepaid expenses and other current assets 57,585 67,751 Assets held for sale 1,953 2,904 Total current assets 518,454 557,510 Rental equipment, net 3,367,026 3,377,939 Property, plant and equipment, net 365,497 363,073 Operating lease assets 257,530 266,761 Goodwill 1,201,710 1,201,353 Intangible assets, net 239,816 251,164 Other non-current assets 11,643 17,111 Total long-term assets 5,443,222 5,477,401 Total assets $ 5,961,676 $ 6,034,911 Liabilities and equity Accounts payable $ 93,976 $ 96,597 Accrued expenses 168,889 121,583 Accrued employee benefits 25,689 25,062 Deferred revenue and customer deposits 240,816 250,790 Operating lease liabilities – current 66,559 66,378 Current portion of long-term debt 25,439 24,598 Total current liabilities 621,368 585,008 Long-term debt 3,596,816 3,683,502 Deferred tax liabilities 496,418 505,913 Operating lease liabilities - non-current 191,736 200,875 Other non-current liabilities 43,976 41,020 Long-term liabilities 4,328,946 4,431,310 Total liabilities 4,950,314 5,016,318 Preferred Stock: $ 0.0001 par, 1,000,000 shares authorized and zero shares issued and outstanding at March 31, 2025 and December 31, 2024 — — Common Stock: $ 0.0001 par, 500,000,000 shares authorized and 183,109,208 and 183,564,899 shares issued and outstanding at March 31, 2025 and December 31, 2024, respectively 19 19 Additional paid-in-capital 1,793,859 1,836,165 Accumulated other comprehensive loss ( 78,607 ) ( 70,627 ) Accumulated deficit ( 703,909 ) ( 746,964 ) Total shareholders' equity 1,011,362 1,018,593 Total liabilities and shareholders' equity $ 5,961,676 $ 6,034,911 The accompanying notes are an integral part of these condensed consolidated financial statements. 3 WillScot Holdings Corporation Condensed Consolidated Statements of Operations (Unaudited) Three Months Ended March 31, (in thousands, except share data) 2025 2024 Revenues: Leasing and services revenue: Leasing $ 434,390 $ 460,601 Delivery and installation 88,661 100,362 Sales revenue: New units 22,437 13,499 Rental units 14,063 12,719 Total revenues 559,551 587,181 Costs: Costs of leasing and services: Leasing 88,070 102,394 Delivery and installation 73,796 77,842 Costs of sales: New units 15,198 8,273 Rental units 8,169 6,876 Depreciation of rental equipment 73,952 74,908 Gross profit 300,366 316,888 Other operating expenses: Selling, general and administrative 157,146 168,314 Other depreciation and amortization 23,140 17,920 Currency losses, net 223 77 Other expense, net 423 631 Operating income 119,434 129,946 Interest expense, net 58,469 56,588 Income before income tax 60,965 73,358 Income tax expense 17,910 17,118 Net income $ 43,055 $ 56,240 Earnings per share: Basic $ 0.23 $ 0.30 Diluted $ 0.23 $ 0.29 Weighted average shares: Basic 183,680,565 190,137,533 Diluted 185,301,787 193,065,392 The accompanying notes are an integral part of these condensed consolidated financial statements. 4 WillScot Holdings Corporation Condensed Consolidated Statements of Comprehensive Income (Unaudited) Three Months Ended March 31, (in thousands) 2025 2024 Net income $ 43,055 $ 56,240 Other comprehensive (loss) income: Foreign currency translation adjustment, net of income tax expense of $ 0 . 161 ( 5,548 ) Net (loss) gain on derivatives, net of income tax (benefit) expense of $( 2,693 ) and $ 4,515 for the three months ended March 31, 2025 and 2024, respectively. ( 8,141 ) 13,540 Total other comprehensive (loss) income ( 7,980 ) 7,992 Total comprehensive income $ 35,075 $ 64,232 The accompanying notes are an integral part of these condensed consolidated financial statements. 5 WillScot Holdings Corporation Condensed Consolidated Statements of Changes in Equity (Unaudited) Three Months Ended March 31, 2025 Common Stock Additional Paid-in-Capital Accumulated Other Comprehensive Loss Accumulated Deficit Total Shareholders' Equity (in thousands) Shares Amount Balance at December 31, 2024 183,565 $ 19 $ 1,836,165 $ ( 70,627 ) $ ( 746,964 ) $ 1,018,593 Net income — — — — 43,055 43,055 Other comprehensive loss — — — ( 7,980 ) — ( 7,980 ) Withholding taxes on net share settlement of stock-based compensation — — ( 7,718 ) — — ( 7,718 ) Common Stock-based award activity 451 — 8,341 — — 8,341 Repurchase and cancellation of Common Stock ( 1,095 ) — ( 32,117 ) — — ( 32,117 ) Cash dividends declared — — ( 13,044 ) — — ( 13,044 ) Issuance of Common Stock from the exercise of options 188 — 2,232 — — 2,232 Balance at March 31, 2025 183,109 $ 19 $ 1,793,859 $ ( 78,607 ) $ ( 703,909 ) $ 1,011,362 Three Months Ended March 31, 2024 Common Stock Additional Paid-in-Capital Accumulated Other Comprehensive Loss Accumulated Deficit Total Shareholders' Equity (in thousands) Shares Amount Balance at December 31, 2023 189,967 $ 20 $ 2,089,091 $ ( 52,768 ) $ ( 775,093 ) $ 1,261,250 Net income — — — — 56,240 56,240 Other comprehensive income — — — 7,992 — 7,992 Withholding taxes on net share settlement of stock-based compensation — — ( 14,524 ) — — ( 14,524 ) Common Stock-based award activity 628 — 9,099 — — 9,099 Issuance of Common Stock from the exercise of options 3 — 69 — — 69 Balance at March 31, 2024 190,598 $ 20 $ 2,083,735 $ ( 44,776 ) $ ( 718,853 ) $ 1,320,126 The accompanying notes are an integral part of these condensed consolidated financial statements. 6 WillScot Holdings Corporation Condensed Consolidated Statements of Cash Flows (Unaudited) Three Months Ended March 31, (in thousands) 2025 2024 Operating activities: Net income $ 43,055 $ 56,240 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization 97,092 92,828 Provision for credit losses 12,338 11,807 Gain on sale of rental equipment and other property, plant and equipment ( 5,697 ) ( 5,677 ) Amortization of debt discounts and debt issuance costs 4,030 2,947 Stock-based compensation expense 8,341 9,099 Deferred income tax (benefit) expense ( 5,343 ) 8,811 Unrealized currency gains, net 205 46 Other 957 1,030 Changes in operating assets and liabilities Trade receivables 17,663 ( 8,099 ) Inventories ( 232 ) ( 366 ) Prepaid expenses and other assets 7,882 1,914 Operating lease assets and liabilities 238 282 Accounts payable and other accrued expenses 37,254 30,414 Deferred revenue and customer deposits ( 11,156 ) 7,400 Net cash provided by operating activities 206,627 208,676 Investing activities: Acquisitions, net of cash acquired ( 3,060 ) ( 43,399 ) 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 — Purchase of investments ( 63 ) ( 2,792 ) Net cash used in investing activities ( 64,955 ) ( 110,967 ) Financing activities: Receipts from borrowings 615,433 123,585 Repayment of borrowings ( 702,579 ) ( 199,925 ) Payment of financing costs ( 6,665 ) — Payments on finance lease obligations ( 5,742 ) ( 4,827 ) Receipts from issuance of Common Stock from the exercise of options 2,232 69 Repurchase and cancellation of Common Stock ( 22,008 ) — Taxes paid on employee stock awards ( 7,718 ) ( 14,524 ) Dividends paid ( 12,882 ) — Net cash used in financing activities ( 139,929 ) ( 95,622 ) Effect of exchange rate changes on cash and cash equivalents ( 65 ) 102 Net change in cash and cash equivalents 1,678 2,189 Cash and cash equivalents at the beginning of the period 9,001 10,958 Cash and cash equivalents at the end of the period $ 10,679 $ 13,147 Supplemental cash flow information: Interest paid, net $ 44,308 $ 43,179 Income taxes paid, net $ 4,542 $ 952 Capital expenditures accrued or payable $ 17,430 $ 15,844 Accrued Common Stock repurchases $ 10,000 $ — The accompanying notes are an integral part of these condensed consolidated financial statements. 7 WillScot Holdings Corporation Notes to the Condensed Consolidated Financial Statements (Unaudited) NOTE 1 - Summary of Significant Accounting Policies Organization and Nature of Operations WillScot Holdings Corporation (“WillScot” and, together with its subsidiaries, the “Company”) is a leading business services provider specializing in innovative and flexible turnkey space solutions in the United States (“US”), Canada, and Mexico. The Company leases, sells, delivers and installs modular space solutions (modular office complexes, mobile offices, classrooms, blast-resistant modules, clearspan structures and sanitation solutions) and portable storage products (portable storage containers and climate-controlled containers and trailers) through an integrated network of branch locations. WillScot also offers its 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 overall customer experience. The Company operates a hybrid in-house and outsourced logistics and service infrastructure that provides delivery, site work, installation, disassembly, removal and other services to customers for an additional fee as part of leasing and sales operations. Basis of Presentation and Principles of Consolidation The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with the instructions to Form 10-Q and do not include all the information and notes required by accounting principles generally accepted in the US ("GAAP") for complete financial statements. The accompanying unaudited condensed consolidated financial statements comprise the financial statements of WillScot and its subsidiaries that it controls due to ownership of a majority voting interest and contain all adjustments, which are of a normal and recurring nature, considered necessary by management to present fairly the financial position, results of operations and cash flows for the interim periods presented. Subsidiaries are fully consolidated from the dat e of acquisition, being the date on which the Company obtains control, and continue to be consolidated until the date when such control ceases. The financial statements of the subsidiaries are prepared for the same reporting period as WillScot. All intercompany balances and transactions are eliminated in consolidation. The results of operations for the three months ended March 31, 2025 are not necessarily indicative of the results to be expected for the full year. For further information, refer to the consolidated financial statements and notes included in the Company's Annual Report on Form 10-K for the year ended December 31, 2024. Recently Issued Accounting Standards ASU 2023-09. Income Taxes (Topic 740): Improvements to Income Tax Disclosures In December 2023, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update No. 2023-09 Income Taxes (Topic 740): Improvements to Income Tax Disclosures ("ASU 2023-09"). ASU 2023-09 requires entities to disclose more detailed information in their reconciliation of their statutory tax rate to their effective tax rate. ASU 2023-09 also requires entities to disclose more detailed information about income taxes paid, including by jurisdiction; pretax income (or loss) from continuing operations; and income tax expense (or benefit). ASU 2023-09 is effective for fiscal years beginning after December 15, 2024. Early adoption is permitted. The Company is currently evaluating the impact of ASU 2023-09 on its income tax disclosures. ASU 2024-03. Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses In November 2024, the FASB issued Accounting Standards Update No. 2024-03 Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses ("ASU 2024-03"). ASU 2024-03 requires incremental disclosures about specific expense categories, including but not limited to, purchases of inventory, employee compensation, depreciation, amortization, and selling expenses. The amendments are effective for annual reporting periods beginning after December 15, 2026, and interim reporting periods within annual reporting periods beginning after December 15, 2027. Early adoption is permitted, and the amendments may be applied either prospectively or retrospectively. The Company is currently evaluating ASU 2024-03 to determine its impact on the Company's disclosures. 8 NOTE 2 - Revenue Revenue Disaggregation Geographic Areas The Company had total revenue in the following geographic areas for the three months ended March 31, 2025 and 2024 as follows: Three Months Ended March 31, (in thousands) 2025 2024 US $ 531,046 $ 553,433 Canada 23,199 26,532 Mexico 5,306 7,216 Total revenues $ 559,551 $ 587,181 Major Product and Service Lines Equipment leasing is the Company's core business and the primary driver of the Company's revenue and cash flows. This includes turnkey space solutions along with VAPS. Leasing is complemented by new unit sales and sales of rental units. In connection with its leasing and sales activities, the Company provides services including delivery and installation, maintenance, removal, and other ad hoc services. The Company’s revenue by major product and service line for the three months ended March 31, 2025 and 2024 was as follows: Three Months Ended March 31, (in thousands) 2025 2024 Modular space leasing revenue (a) $ 245,864 $ 252,147 Portable storage leasing revenue 77,035 91,449 VAPS and third party leasing revenues (b) 96,339 96,314 Other leasing-related revenue (b),(c) 15,152 20,691 Leasing revenue 434,390 460,601 Delivery and installation revenue 88,661 100,362 Total leasing and services revenue 523,051 560,963 New unit sales revenue 22,437 13,499 Rental unit sales revenue 14,063 12,719 Total revenues $ 559,551 $ 587,181 (a) Includes revenue from clearspan structures. (b) Includes $ 9.2 million and $ 7.5 million of service revenue for the three months ended March 31, 2025 and 2024, respectively. (c) Includes primarily damage billings, delinquent payment charges, service revenue, and other processing fees, and is partially offset by provisions for specific uncollectible receivables. Leasing and Services Revenue The majority of revenue ( 76 % and 77 % for the three months ended March 31, 2025 and 2024, respectively) was generated by lease income subject to the guidance of Accounting Standards Update No. 2016-02, Leases (Topic 842) ("ASC 842"). The remaining revenue was generated by performance obligations in contracts with customers for services or the sale of units subject to the guidance in Accounting Standards Update No. 2014-09, Revenue from Contracts with Customers (Topic 606) ("ASC 606"). Receivables The Company manages credit risk associated with its accounts receivable at the customer level. Because the same customers generate the revenues that are accounted for under both ASC 842 and ASC 606, the discussions below on credit risk and the Company's allowance for credit losses address the Company's total revenues. Concentration of credit risk with respect to the Company's receivables is limited because of a large number of geographically diverse customers who operate in a variety of end markets. The Company manages credit risk through credit approvals, credit limits, and other monitoring procedures. The Company's allowance for credit losses reflects its estimate of the amount of receivables that the Company will be unable to collect. T he estimated losses are calculated using the l oss rate method based upon a review of outstanding receivables, related aging, and historical collection experience. The Company's estimate is sensitive to changing circumstances, and the Company may be required to increase or decrease its allowance in future periods in response to 9 changing circumstances, including changes in the economy or in the particular circumstances of individual customers. Specifically identifiable lease revenue receivables and sales receivables not deemed probable of collection are recorded as a reduction of revenue following the completion of collection efforts. The remaining provision for credit losses is recorded as selling, general and administrative expense. Activity in the allowance for credit losses was as follows: Three Months Ended March 31, (in thousands) 2025 2024 Balance at beginning of period $ 101,693 $ 81,656 Provision for credit losses, net of recoveries 12,338 11,807 Write-offs recorded as a reduction to revenue ( 13,765 ) ( 7,055 ) Foreign currency translation and other 25 10 Balance at end of period $ 100,291 $ 86,418 Contract Assets and Liabilities When customers are billed in advance for services, the Company defers recognition of revenue until the related services are performed, which generally occurs at the end of the contract. The balance sheet classification of deferred revenue is determined based on the contractual lease term. For contracts that continue beyond their initial contractual lease term, revenue continues to be deferred until the services are performed. As of March 31, 2025 and December 31, 2024, the Company had approximately $ 134.8 million and $ 139.4 million , respectively, of deferred revenue related to service revenue billed in advance. During the three months ended March 31, 2025, $ 34.7 million of deferred revenue related to service revenue billed in advance was recognized as revenue. The Company does not have material contract assets, and it did not recognize any material impairments of any contract assets. The Company's uncompleted contracts with customers have unsatisfied (or partially satisfied) performance obligations. For the future services revenues that are expected to be recognized within twelve months, the Compa ny has elected to utilize the optional disclosure exemption made available regarding transaction price allocated to unsatisfied (or partially unsatisfied) performance obligations. The transaction price for performance obligations that will be completed in greater than twelve months is variable based on the market rate in place at the time those services are provided, and therefore, the Company is applying the optional exemption to omit disclosure of such amounts. The primary costs to obtain contracts fo r new and rental unit sales with the Company's customers are commissions. The Company pays its sales force commissions on the sale of new and rental units. For new and rental unit sales, the period benefited by each commission is less than one year. As a result, the Company has applied the practical expedient for incremental costs of obtaining a sales contract and expenses commissions as incurred. NOTE 3 - Inventories Inventories at the respective balance sheet dates consisted of the following: (in thousands) March 31, 2025 December 31, 2024 Raw materials $ 40,305 $ 39,823 Finished units 7,431 7,650 Inventories $ 47,736 $ 47,473 NOTE 4 - Rental Equipment Rental equipment, net at the respective balance sheet dates consisted of the following: (in thousands) March 31, 2025 December 31, 2024 Modular space units $ 3,702,224 $ 3,658,086 Portable storage units 1,062,200 1,070,025 Value added products 221,145 220,205 Total rental equipment 4,985,569 4,948,316 Less: accumulated depreciation ( 1,618,543 ) ( 1,570,377 ) Rental equipment, net $ 3,367,026 $ 3,377,939 10 NOTE 5 - Intangible Assets Intangible assets other than goodwill at the respective balance sheet dates consisted of the following: March 31, 2025 (in thousands) Weighted average remaining life (in years) Gross carrying amount Accumulated impairment loss Accumulated amortization Net book value Intangible assets subject to amortization: Customer relationships 3.2 $ 215,408 $ — $ ( 120,717 ) $ 94,691 Technology 1.3 1,500 — ( 1,188 ) 312 Trade names 2.5 165,500 ( 132,540 ) ( 13,147 ) 19,813 Indefinite-lived intangible assets: Trade name – WillScot 125,000 — — 125,000 Total intangible assets other than goodwill $ 507,408 $ ( 132,540 ) $ ( 135,052 ) $ 239,816 December 31, 2024 (in thousands) Weighted average remaining life (in years) Gross carrying amount Accumulated impairment loss Accumulated amortization Net book value Intangible assets subject to amortization: Customer relationships 3.5 $ 215,408 $ — $ ( 113,415 ) $ 101,993 Technology 1.5 1,500 — ( 1,125 ) 375 Trade names 2.7 165,500 ( 132,540 ) ( 9,164 ) 23,796 Indefinite-lived intangible assets: Trade name – WillScot 125,000 — — 125,000 Total intangible assets other than goodwill $ 507,408 $ ( 132,540 ) $ ( 123,704 ) $ 251,164 Amortization expense related to intangible assets was $ 11.3 million and $ 7.4 million for the three months ended March 31, 2025 and 2024, respectively. As of March 31, 2025, the expected future amortization expense for intangible assets was as follows for the years ended December 31: (in thousands) 2025 (remaining) $ 32,090 2026 37,093 2027 30,463 2028 14,920 2029 250 Total $ 114,816 11 NOTE 6 - Debt The carrying value of debt outstanding at the respective balance sheet dates consisted of the following: (in thousands, except rates) Interest rate Year of maturity March 31, 2025 December 31, 2024 2025 Secured Notes 6.125 % 2025 $ — $ 525,283 ABL Facility Varies 2027 1,499,088 1,556,651 2028 Secured Notes 4.625 % 2028 495,861 495,582 2029 Secured Notes 6.625 % 2029 492,708 492,467 2030 Secured Notes 6.625 % 2030 493,249 — 2031 Secured Notes 7.375 % 2031 494,360 494,329 Finance Leases Varies Varies 146,989 143,788 Total debt 3,622,255 3,708,100 Less: current portion of long-term debt 25,439 24,598 Total long-term debt $ 3,596,816 $ 3,683,502 Maturities of debt, including finance leases, during the periods subsequent to March 31, 2025 are as follows: (in thousands) 2025 (remaining) $ 25,740 2026 32,043 2027 1,543,809 2028 531,291 2029 523,413 Thereafter 1,028,577 Total $ 3,684,873 Asset Backed Lending Facility On July 1, 2020, certain subsidiaries of the Company, including Williams Scotsman, Inc. ("WSI"), entered into an asset-based credit agreement. As amended on June 30, 2022, the agreement provides for revolving credit facilities in the aggregate principal amount of up to $ 3.7 billion, consisting of: (i) a senior secured asset-based US dollar revolving credit facility in the aggregate principal amount of $ 3.3 billion (the “US Facility”), (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"), available to be drawn in US Dollars, Canadian Dollars, British Pounds Sterling or Euros, and (iii) an accordion feature that permits the Company to increase the lenders' commitments in an aggregate amount not to exceed the greater of $ 750.0 million and the amount of suppressed availability (as defined in the ABL Facility), plus any voluntary prepayments that are accompanied by permanent commitment reductions under the ABL Facility, subject to the satisfaction of customary conditions including lender approval. The ABL Facility is scheduled to mature on June 30, 2027. The applicable margin for Canadian Bankers' Acceptance Rate, Term Secured Overnight Financing Rate ("SOFR"), British Pounds Sterling and Euro loans is 1.50 %. In addition to the applicable margin, the facility includes a credit spread adjustment of 0.10 %. The applicable margin for base rate and Canadian Prime Rate loans is 0.50 %. The applicable margins are subject to one step down of 0.25 % or one step up of 0.25 % based on the Company's leverage ratio and excess availability from the prior quarter. The ABL Facility requires the payment of a commitment fee on the unused available borrowings of 0.20 % annually. As of March 31, 2025, the weighted average interest rate for borrowings under the ABL Facility, as adjusted for the effects of the interest rate swap agreements, was 5.33 %. Refer to Note 9 for a more detailed discussion on interest rate management. Borrowing availability under the US Facility and the Multicurrency Facility is equal to the lesser of (i) the aggregate revolver commitments and (ii) the borrowing base ("Line Cap"). At March 31, 2025, the Line Cap was $ 3.2 billion and the Company had $ 1.6 billion of available borrowing capacity under the ABL Facility, including $ 1.4 billion under the US Facility and $ 185.9 million under the Multicurrency Facility. Borrowing capacity under the ABL Facility is made available for up to $ 220.0 million of letters of credit and $ 220.0 million of swingline loans. At March 31, 2025, the available capacity was $ 193.5 million of letters of credit and $ 186.0 million of swingline loans. At March 31, 2025, letters of credit and bank guarantees carried fees of 1.625 %. The Company had issued $ 26.5 million of standby letters of credit under the ABL Facility at March 31, 2025. 12 The Company had approximately $ 1.5 billion of outstanding borrowings under the ABL Facility at March 31, 2025. Debt issuance costs of $ 15.9 million and $ 19.0 million were included in the carrying value of the ABL Facility at March 31, 2025 and December 31, 2024, respectively. As of March 31, 2025, the Company had no outstanding principal borrowings on the Multicurrency Facility and $ 1.2 million of related debt issuance costs, which were recorded in other non-current assets on the condensed consolidated balance sheet. The ABL Facility and related guarantees are secured by a first priority security interest in substantially all of the assets of WSI and the Company’s other subsidiaries that are borrowers or guarantors under the ABL Facility (collectively the “ABL Loan Parties”), subject to customary exclusions. Senior Secured Notes On March 26, 2025, 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 under the Securities Act of 1933, as amended and to non-U.S. persons outside the U.S. in accordance with Regulation S under the Securities Act. The 2030 Secured Notes mature on April 15, 2030 and bear interest at a rate of 6.625 % per annum. Interest is payable semi-annually on April 15 and October 15 of each year, beginning October 15, 2025. Unamortized deferred financing costs pertaining to the 2030 Secured Notes were $ 6.8 million as of March 31, 2025. On March 27, 2025, net proceeds from 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. The 2028 Secured Notes, 2029 Secured Notes, 2030 Secured Notes, and 2031 Secured Notes (collectively, “the Secured Notes”) are unconditionally guaranteed by certain subsidiaries of the Company (collectively, “the Note Guarantors”). WillScot is not a guarantor of the Secured Notes. The Note Guarantors are guarantors or borrowers under the ABL Facility. To the extent lenders under the ABL Facility release the guarantee of any Note Guarantor, such Note Guarantor will also be released from obligations under the Secured Notes. The Secured Notes and related guarantees are secured by a second priority security interest in substantially the same assets of WSI and the Note Guarantors securing the ABL Facility. Upon the repayment of the 2028 Secured Notes, if the lien associated with the ABL Facility represents the only lien outstanding on the collateral under the 2029 Secured Notes, 2030 Secured Notes, and the 2031 Secured Notes (other than certain permitted liens), the collateral securing the 2029 Secured Notes, 2030 Secured Notes, and the 2031 Secured Notes will be released and the 2029 Secured Notes, 2030 Secured Notes, and the 2031 Secured Notes will become unsecured subject to satisfaction of customary conditions. Finance Leases The Company maintains finance leases primarily for transportation-related equipment. At March 31, 2025 and December 31, 2024, obligations under the finance leases were $ 147.0 million and $ 143.8 million, respectively. Covenant Compliance The Company was in compliance with all debt covenants and restrictions associated with its debt instruments as of March 31, 2025. NOTE 7 – Equity Common Stock In connection with the stock compensation vesting and stock option exercises described in Note 11, the Company issued 639,241 shares of Common Stock during the three months ended March 31, 2025 . Dividends On February 18, 2025, the Company's 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, the 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. Stock Repurchase Program In September 2024, the Board of Directors approved a reset of the share repurchase program authorizing the Company to repurchase up to $ 1.0 billion of its outstanding shares of Common Stock. The stock repurchase program does not obligate the Company to purchase any particular number of shares, and the timing and exact amount of any repurchases will depend on various factors, including market pricing, business, legal, accounting, and other considerations. During the three months ended March 31, 2025 , the Company 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 Common Stock remained available. 13 Accumulated Other Comprehensive Loss The changes in accumulated other comprehensive income (loss) ("AOCI"), net of tax, for the three months ended March 31, 2025 and 2024 were as follows: Three Months Ended March 31, 2025 (in thousands) Foreign currency translation Unrealized gains on hedging activities Total Balance at December 31, 2024 $ ( 80,720 ) $ 10,093 $ ( 70,627 ) Other comprehensive income (loss) before reclassifications 161 ( 5,710 ) ( 5,549 ) Reclassifications from AOCI to income — ( 2,431 ) ( 2,431 ) Balance at March 31, 2025 $ ( 80,559 ) $ 1,952 $ ( 78,607 ) Three Months Ended March 31, 2024 (in thousands) Foreign currency translation Unrealized gains on hedging activities Total Balance at December 31, 2023 $ ( 56,031 ) $ 3,263 $ ( 52,768 ) Other comprehensive (loss) income before reclassifications ( 5,548 ) 18,807 13,259 Reclassifications from AOCI to income — ( 5,267 ) ( 5,267 ) Balance at March 31, 2024 $ ( 61,579 ) $ 16,803 $ ( 44,776 ) For the three months ended March 31, 2025 and 2024, gains of $ 2.4 million and $ 5.3 million, respectively, were reclassified from AOCI into the condensed consolidated statements of operations within interest expense related to the interest rate swa ps. Th e interest rate swaps are discussed in Note 9. Associated with these reclassifications, t he Company recorded tax expense of $ 0.6 million and $ 1.4 million for the three months ended March 31, 2025 and 2024, respectively. NOTE 8 – Income Taxes The Company recorded $ 17.9 million and $ 17.1 million of income tax expense for the three months ended March 31, 2025 and 2024, respectively. The Company’s effective tax rate for the three months ended March 31, 2025 and 2024 was 29.4 % and 23.3 %, respectively. The effective tax rate for the three months ended March 31, 2025 differed from the US federal statutory rate of 21% primarily due to state and provincial taxes, non-deductible executive compensation, and discrete tax expense related to equity compensation. The effective tax rate for the three months ended March 31, 2024 differed from the US federal statutory rate of 21% primarily due to state and provincial taxes and non-deductible executive compensation, partially offset by a discrete tax benefit related to employee stock vesting. NOTE 9 - Derivatives In January 2023, the Company entered into two interest rate swap agreements with financial counterparties relating to $ 750.0 million in aggregate notional amount of variable-rate debt under the ABL Facility. Under the terms of the agreements, the Company receives a floating rate equal to one-month term SOFR and makes payments based on a fixed interest rate of 3.44 % on the notional amount. In January 2024, the Company 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, the Company receives a floating rate equal to one-month term SOFR and makes payments based on a fixed interest rate of 3.70 % on the notional amount. The swap agreements were designated and qualified as hedges of the Company's 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. At March 31, 2025, the floating rate that the Company received under the terms of these swap agreements was 4.32 %. The location and the fair value of derivative instruments designated as hedges were as follows: (in thousands) Balance Sheet Location March 31, 2025 December 31, 2024 Cash Flow Hedges: Interest rate swaps Prepaid expenses and other current assets $ 4,707 $ 6,990 Interest rate swaps Other non-current assets $ — $ 6,666 Interest rate swaps Other non-current liabilities $ ( 1,897 ) $ — 14 The fair value of the interest rate swaps was based on dealer quotes of market forward rates, a Level 2 input on the fair value hierarchy (see Note 10), and reflected the amount that the Company would receive or pay for contracts involving the same attributes and maturity dates. The following table discloses the impact of the interest rate swaps, excluding the impact of income taxes, on other comprehensive income (“OCI”), AOCI and the Company’s condensed consolidated statements of operations for the three months ended March 31, 2025 and 2024 : Three Months Ended March 31, (in thousands) 2025 2024 (Loss) gain recognized in OCI $ ( 8,403 ) $ 23,322 Location of gain recognized in income Interest expense, net Interest expense, net Gain reclassified from AOCI into income $ ( 2,431 ) $ ( 5,267 ) NOTE 10 - Fair Value Measures The fair value of financial assets and liabilities are included at the amount at which the instrument could be exchanged in a current transaction between willing parties, other than in a forced or liquidation sale. The Company utilizes the following accounting guidance for the three levels of inputs that may be used to measure fair value: Level 1 - Observable inputs such as quoted prices in active markets for identical assets or liabilities; Level 2 - Observable inputs, other than Level 1 inputs in active markets, that are observable either directly or indirectly; and Level 3 - Unobservable inputs for which there is little or no market data, which require the reporting entity to develop its own assumptions The Company has assessed that the fair values of cash and short-term deposits, marketable securities, trade receivables, trade payables, and other current liabilities approximate their carrying amounts. The Company's nonfinancial assets, which are measured at fair value on a nonrecurring basis, include rental equipment, property, plant and equipment, goodwill, intangible assets and certain other assets. Based on the borrowing rates currently available for bank loans with similar terms and average maturities, the fair values of finance leases at March 31, 2025 and December 31, 2024 approximate their respective book values. The carrying value of the ABL Facility, excluding debt issuance costs, approximates fair value as the interest rates are variable and reflective of current market rates. The fair values of the Secured Notes are based on their last trading price at the end of each period obtained from a third party. The following table shows the carrying amounts and fair values of these financial liabilities measured using Level 2 inputs: March 31, 2025 December 31, 2024 (in thousands) Carrying Amount Fair Value Carrying Amount Fair Value 2025 Secured Notes $ — $ — $ 525,283 $ 527,269 2028 Secured Notes 495,861 485,135 495,582 477,170 2029 Secured Notes 492,708 506,005 492,467 506,235 2030 Secured Notes 493,249 505,625 — — 2031 Secured Notes 494,360 514,595 494,329 514,310 Total $ 1,976,178 $ 2,011,360 $ 2,007,661 $ 2,024,984 As of March 31, 2025, the carrying values of the 2028 Secured Notes, the 2029 Secured Notes, the 2030 Secured Notes, and the 2031 Secured Notes included $ 4.1 million, $ 7.3 million, $ 6.8 million, and $ 5.6 million, respectively, of unamortized debt issuance costs, which were presented as a direct reduction of the corresponding liability. As of December 31, 2024, the carrying values of the 2025 Secured Notes, the 2028 Secured Notes, the 2029 Secured Notes, and the 2031 Secured Notes included $ 1.2 million, $ 4.4 million, $ 7.5 million, and $ 5.7 million, respectively, of unamortized debt issuance costs, which were presented as a direct reduction of the corresponding liability. The location and the fair value of derivative assets and liabilities in the condensed consolidated balance sheets are disclosed in Note 9. 15 NOTE 11 - Stock-Based Compensation Stock-based compensation expense includes grants of stock options, time-based restricted stock units ("Time-Based RSUs") and performance-based restricted stock units ("Performance-Based RSUs," together with Time-Based RSUs, the "RSUs"). In addition, stock-based payments to non-executive directors include grants of restricted stock awards ("RSAs"). Time-Based RSUs and RSAs are valued based on the intrinsic value of the difference between the exercise price, if any, of the award and the fair market value of WillScot's Common Stock on the grant date. Performance-Based RSUs are valued based on a Monte Carlo simulation model to reflect the impact of the Performance-Based RSU's market condition. The probability of satisfying a market condition is considered in the estimation of the grant-date fair value for Performance-Based RSUs and the compensation cost is not reversed if the market condition is not achieved, provided the requisite service has been provided. Restricted Stock Awards The following table summarizes the Company's RSA activity for the three months ended March 31, 2025 and 2024 : 2025 2024 Number of Shares Weighted-Average Grant Date Fair Value Number of Shares Weighted-Average Grant Date Fair Value Outstanding at beginning of period 36,346 $ 38.11 28,946 $ 44.44 Outstanding at end of period 36,346 $ 38.11 28,946 $ 44.44 Compensation expense for RSAs recognized in selling, general and administrative ("SG&A") expense on the condensed consolidated statements of operations was $ 0.3 million for both the three months ended March 31, 2025 and 2024. At March 31, 2025, unrecognized compensation cost related to RSAs totaled $ 0.3 million and was expected to be recognized over the remaining weighted average vesting period of 0.2 years. Time-Based RSUs The following table summarizes the Company's Time-Based RSU activity for the three months ended March 31, 2025 and 2024 : 2025 2024 Number of Shares Weighted-Average Grant Date Fair Value Number of Shares Weighted-Average Grant Date Fair Value Outstanding at beginning of period 576,652 $ 43.87 618,836 $ 36.07 Granted 391,843 $ 35.27 273,524 $ 48.68 Forfeited ( 14,453 ) $ 42.79 ( 9,795 ) $ 44.92 Vested ( 237,655 ) $ 39.86 ( 223,566 ) $ 33.31 Outstanding at end of period 716,387 $ 40.52 658,999 $ 42.11 Compensation expense for Time-Based RSUs recognized in SG&A expense on the condensed consolidated statements of operations was $ 2.4 million and $ 2.3 million for the three months ended March 31, 2025 and 2024, respectively. At March 31, 2025, unrecognized compensation cost related to Time-Based RSUs totaled $ 25.9 million and was expected to be recognized over the remaining weighted average vesting period of 3.2 years. Performance-Based RSUs The following table summarizes the Company's Performance-Based RSU award activity for the three months ended March 31, 2025 and 2024 : 2025 2024 Number of Shares Weighted-Average Grant Date Fair Value Number of Shares Weighted-Average Grant Date Fair Value Outstanding at beginning of period 1,768,460 $ 47.02 1,939,691 $ 42.95 Granted 406,265 $ 44.16 295,833 $ 66.60 Forfeited ( 6,579 ) $ 62.57 ( 7,150 ) $ 47.70 Vested (a) ( 601,129 ) $ 42.34 ( 353,323 ) $ 39.10 Outstanding at end of period 1,567,017 $ 48.01 1,875,051 $ 47.39 (a) The Performance-Based RSUs vested at 77 % of target, or 462,886 shares, and 200 % of target, or 706,646 shares, for the three months ended March 31, 2025 and 2024, respectively. 16 Compensation expense for Performance-Based RSUs recognized in SG&A expense on the condensed consolidated statements of operations was $ 5.6 million and $ 6.4 million for the three months ended March 31, 2025 and 2024, respectively. At March 31, 2025, unrecognized compensation cost related to Performance-Based RSUs totaled $ 37.2 million and was expected to be recognized over the remaining weighted average vesting period of 1.6 years. Certain Performance-Based RSUs cliff vest based on achievement of the relative total stockholder return ("TSR") of the Company's Common Stock as compared to the TSR of the constituents in the S&P MidCap 400 Index at the grant date over the performance period of three years . The target number of RSUs may be adjusted from 0 % to 200 % based on the TSR attainment levels defined by the Company's Compensation Committee. The 100 % target payout is tied to performance at the 50 % percentile, with a payout curve ranging from 0 % (for performance less than the 25 % percentile) to 200 % (for performance above the 85 % percentile). For 555,790 Performance-Based RSUs granted in 2021, the awards cliff vest based on achievement of specified share prices of the Company's Common Stock at annual measurement dates over performance periods of 4.5 years to 4.8 years. The target number of RSUs may be adjusted from 0 to 1,333,334 based on the stock price attainment levels defined by the Company's Compensation Committee. The target payout for the 555,790 Performance-Based RSUs is tied to a stock price of $ 47.50 , with a payout ranging from 0 RSUs (for a stock price less than $ 42.50 ) to 1,333,334 RSUs (for a stock price of $ 60.00 or greater). Stock Options The following table summarizes the Company's stock option activity for the three months ended March 31, 2025 : WillScot Options Weighted-Average Exercise Price per Share Converted Mobile Mini Options Weighted-Average Exercise Price per Share Outstanding at beginning of period 534,188 $ 13.60 814,889 $ 12.77 Exercised — $ — ( 188,134 ) $ 11.86 Outstanding at end of period 534,188 $ 13.60 626,755 $ 13.05 Fully vested and exercisable options, March 31, 2025 534,188 $ 13.60 626,755 $ 13.05 The following table summarizes the Company's stock option activity for the three months ended March 31, 2024: WillScot Options Weighted-Average Exercise Price per Share Converted Mobile Mini Options Weighted-Average Exercise Price per Share Outstanding at beginning of period 534,188 $ 13.60 829,246 $ 12.86 Exercised — $ — ( 3,504 ) $ 19.68 Outstanding at end of period 534,188 $ 13.60 825,742 $ 12.83 Fully vested and exercisable options, March 31, 2024 534,188 $ 13.60 825,742 $ 12.83 NOTE 12 - Commitments and Contingencies The Company is involved in various lawsuits, claims and legal proceedings that arise in the ordinary course of business. The Company assesses these matters on a case-by-case basis as they arise and establishes reserves as required. As of March 31, 2025, with respect to these outstanding matters, the Company believes that the amount or range of reasonably possible loss will not, either individually or in the aggregate, have a material adverse effect on the Company's consolidated financial position, results of operations, or cash flows. However, the outcome of such matters is inherently unpredictable and subject to significant uncertainties. 17 NOTE 13 - Segment Reporting The Company has one reportable segment. Refer to Note 2 for revenue by geographic area and revenue by major product and service lines. Refer to the Condensed Consolidated Balance Sheets for total assets. Refer to the Condensed Consolidated Statements of Cash Flows for total expenditures for additions to long-lived assets. The Company defines EBITDA as net income (loss) plus interest (income) expense, income tax (benefit) expense, depreciation and amortization. The Company reflects further adjustments to EBITDA (“Adjusted EBITDA”) to exclude certain non-cash items and the effect of what the Company considers transactions or events not related to its core and ongoing business operations. The measure of profit or loss used by the CODM to evaluate operating segment performance and allocate resources is Adjusted EBITDA. Management believes that evaluating operating segment performance excluding such items is meaningful because it provides insight with respect to the intrinsic and ongoing operating results of the Company. The Company considers Adjusted EBITDA to be an important metric because it reflects the business performance of the segments, inclusive of indirect costs. The following table sets forth certain information regarding significant expense categories fo r the three months ended March 31, 2025 and 2024, respectively. Three Months Ended March 31, (in thousands) 2025 2024 Revenues: Leasing and services revenue: Unit leasing and other rental-related $ 338,051 $ 364,287 VAPS and third party leasing 96,339 96,314 Delivery revenue 49,035 56,186 Installation revenue 39,626 44,176 Sales revenue: New units 22,437 13,499 Rental units 14,063 12,719 Total revenues 559,551 587,181 Less: (a) Costs of leasing and services: Unit leasing 71,744 85,563 VAPS and third party leasing 16,326 16,831 Delivery 40,556 44,514 Installation 33,240 33,328 Costs of sales: New units 15,198 8,273 Rental units 8,169 6,876 Employee SG&A expense (b) 68,266 70,640 Other segment items (c) 77,267 73,147 Adjusted EBITDA $ 228,785 $ 248,009 (a) The significant expense categories and amounts align with the segment-level information that is regularly provided to the CODM. (b) Employee SG&A expense consists of salaries and wages, bonuses, commissions, payroll taxes, and employee benefits. (c) Other segment items consist of service agreements and professional fees, real estate and occupancy costs, travel, bad debt expense, marketing and advertising, taxes, and other miscellaneous expenses. 18 The following table presents reconciliations of the Company’s net income to Adjusted EBITDA for the three months ended March 31, 2025 and 2024, respectively: Three Months Ended March 31, (in thousands) 2025 2024 Net income $ 43,055 $ 56,240 Income tax expense 17,910 17,118 Interest expense, net 58,469 56,588 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 — Integration costs 227 2,877 Stock compensation expense 8,341 9,099 Other 2,732 12,436 Adjusted EBITDA $ 228,785 $ 248,009 NOTE 14 - Earnings Per Share The following table reconciles the weighted average shares outstanding for the basic earnings per share calculation to the weighted average shares outstanding for the diluted earnings per share calculation: Three Months Ended March 31, (in thousands) 2025 2024 Numerator: Net income $ 43,055 $ 56,240 Denominator: Weighted average Common Shares outstanding – basic 183,681 190,138 Dilutive effect of outstanding securities: RSAs 22 20 Time-based RSUs 88 255 Performance-based RSUs 700 1,676 Stock options 811 976 Weighted average Common Shares outstanding – dilutive 185,302 193,065 The following potential common shares were excluded from the computation of dilutive EPS because their effect would have been anti-dilutive: Three Months Ended March 31, (in thousands) 2025 2024 Time-based RSUs 567 270 Performance-based RSUs 1,011 661 19