Item 2. Management’s Discussion and Analysis
ITEM 2. 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'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 six months ended June 30, 2025 or prior periods.
The consolidated financial statements were prepared in conformity with accounting principles generally accepted in the United States (“GAAP”). We use certain non-GAAP financial metrics to supplement the GAAP reported results to highlight key operational metrics that are used by management to evaluate Company performance. Reconciliations of GAAP financial information to the disclosed non-GAAP measures are provided in the Reconciliation of Non-GAAP Financial Measures section of MD&A.
Executive Summary
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 150,000 modular space units and over 213,000 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 June 30, 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. Rental contracts with customers are generally based on a 28-day or monthly rate and billing cycle. 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 44 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 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 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 86% of our revenues for the six months ended June 30, 2025.
Significant Developments
Financing Activities
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.
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Dividends
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 $0.07 per share, totaling $13.0 million. In May 2025, our Board of Directors declared a quarterly dividend of $0.07 per share, totaling $12.9 million. Dividends paid were $25.6 million for the six months ended June 30, 2025.
Share Repurchases
During the six months ended June 30, 2025, we repurchased 2,628,041 shares of Common Stock for $71.9 million, excluding excise tax. As of June 30, 2025, $750.0 million of the authorization for future repurchases of the Common Stock remained available.
Business Combination and Asset Acquisition
During the six months ended June 30, 2025, we acquired a regional provider of climate-controlled containers and trailers for $115.6 million, net of cash acquired, which consisted primarily of approximately 2,100 temperature-controlled units. As of the acquisition date, the fair value of the goodwill recorded was $54.1 million, the fair value of the intangible assets acquired was $18.7 million, and the fair value of rental equipment acquired was $37.0 million. The purchase price allocation is preliminary and subject to revision as additional information is obtained. The preliminary allocation of purchase price, including the valuation of acquired rental equipment and intangible assets, is based on the best estimates of management and is subject to revision based on the final valuations. Revenue and earnings from the business combination following the acquisition date are not available, as the business was integrated into the Company's centralized financial and operational processes following acquisition.
During the six months ended June 30, 2025, we also acquired certain assets and assumed certain liabilities of one local provider of clearspan solutions for $18.2 million in cash. As of the acquisition date, the fair value of rental equipment acquired was $16.4 million.
Second Quarter Highlights
For the three months ended June 30, 2025, as compared to the three months ended June 30, 2024, results and key drivers of our financial performance included:
• Total revenues decreased $15.5 million, or 2.6%, to $589.1 million. Leasing revenue decreased $15.7 million, or 3.4%, driven by a decrease in total average units on rent of 22,615, or 10.3%, 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. Despite a decrease in the quantity of deliveries during the quarter, delivery and installation revenue increased $0.3 million, or 0.3%, due to an increased mix of large, complex projects. New unit sales revenue increased $0.2 million, or 1.1%, and rental unit sales revenue decreased $0.4 million, or 2.3%.
• Generated net income of $47.9 million for the three months ended June 30, 2025, representing an increase of $94.8 million, or 202.3%, as compared to the same period in 2024. In 20 24, we recorded an impairment loss of $132.5 million for the three months ended June 30, 2024 related to the impairment of the Mobile Mini trade name as a result of rebranding under the WillScot brand name and discontinuing the use of the Mobile Mini trade name. Additionally, d iscrete costs in the period were $1.1 million, including $1.5 million of transaction and integration costs, compared to $3.1 million of transaction and integration costs in 2024. Finally, in 2024, we recorded a tax benefit of $13.9 million, as compared to an income tax expense of $20.0 million for the three months ended June 30, 2025.
• Generated Adjusted EBITDA of $248.9 million for the three months ended June 30, 2025, representing a decrease of $14.7 million, or 5.6%, as compared to the same period in 2024.
• Net cash provided by operating activities increased $29.7 million to $205.3 million for the three months ended June 30, 2025 from $175.6 million net cash provided by operating activities for the three months ended June 30, 2024.
• Net cash used in investing activities, excluding cash used for acquisitions, increased by $19.2 million. Capital expenditures for rental equipment increased $20.1 million for the three months ended June 30, 2025. Net CAPEX increased $20.3 million for the three months ended June 30, 2025.
• Generated Adjusted Free Cash Flow of $130.3 million for the three months ended June 30, 2025 as compared to $128.9 million for the three months ended June 30, 2024. During the three months ended June 30, 2025, we deployed Adjusted Free Cash Flow to:
– Repurchase $39.9 million of our Common Stock, reducing outstanding Common Stock by 1,533,109 shares.
– Pay a $0.07 per share dividend, returning $12.7 million to our shareholders.
• 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.
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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."
Consolidated Results of Operations
Three Months Ended June 30, 2025 Compared to the Three Months Ended June 30, 2024
Certain consolidated results of operations for the three months ended June 30, 2025 and 2024 are presented below.
Three Months Ended June 30, 2025 vs. 2024
$ Change
(in thousands)
2025 2024
Revenues:
Leasing and services revenue:
Leasing $ 442,916 $ 458,592 $ (15,676)
Delivery and installation 108,452 108,147 305
Sales revenue:
New units 21,620 21,378 242
Rental units 16,095 16,473 (378)
Total revenues 589,083 604,590 (15,507)
Costs:
Costs of leasing and services:
Leasing 95,338 98,248 (2,910)
Delivery and installation 88,154 81,170 6,984
Costs of sales:
New units 13,552 13,358 194
Rental units 7,525 9,085 (1,560)
Depreciation of rental equipment 88,444 75,611 12,833
Gross profit 296,070 327,118 (31,048)
Other operating expenses:
Selling, general and administrative 145,023 180,793 (35,770)
Other depreciation and amortization 24,188 18,135 6,053
Impairment loss on intangible asset — 132,540 (132,540)
Currency gains, net (79) (42) (37)
Other expense, net 38 924 (886)
Operating income (loss) 126,900 (5,232) 132,132
Interest expense, net 58,977 55,548 3,429
Income (loss) before income tax 67,923 (60,780) 128,703
Income tax expense (benefit) 19,984 (13,929) 33,913
Net income (loss) $ 47,939 $ (46,851) $ 94,790
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Three Months Ended June 30, 2025 vs. 2024 Change
(in thousands, except for units on rent and monthly rental rate) 2025 2024
Adjusted EBITDA $ 248,913 $ 263,576 $ (14,663)
Capital expenditures for rental equipment $ 85,269 $ 65,174 $ 20,095
Net CAPEX $ 74,984 $ 54,733 $ 20,251
Average modular space units on rent 90,285 95,671 (5,386)
Average modular space utilization rate 59.6 % 62.5 % (290) bps
Average modular space monthly rental rate $ 1,237 $ 1,176 $ 61
Average portable storage units on rent 107,514 124,743 (17,229)
Average portable storage utilization rate 50.8 % 59.2 % (840) bps
Average portable storage monthly rental rate $ 282 $ 263 $ 19
Comparison of Three Months Ended June 30, 2025 and 2024
Revenue: Total revenue decreased $15.5 million, or 2.6%, to $589.1 million for the three months ended June 30, 2025 from $604.6 million for the three months ended June 30, 2024. The decline in revenue was driven by a decrease in units on rent and an $11.0 million increase in write-offs recorded as a reduction to revenue compared to the same period in 2024. Leasing revenue decreased $15.7 million, or 3.4%, as compared to the same period in 2024, driven by the increase in write-offs and a decrease of 22,615 total average units on rent. Increases in average monthly rental rates offset some of these decreases. Delivery and installation revenue increased $0.3 million, or 0.3%. Rental unit sales decreased $0.4 million, or 2.3%, and new unit sales increased $0.2 million, or 1.1%.
Total average units on rent for the three months ended June 30, 2025 and 2024 were 197,799 and 220,414, respectively, representing a decrease of 22,615 units, or 10.3%. Lower demand was driven by reduced non-residential construction project starts due to higher interest rates and increased economic uncertainty. Portable storage average units on rent decreased by 17,229 units, or 13.8%, for the three months ended June 30, 2025 driven by lower demand in 2025. The average portable storage unit utilization rate during the three months ended June 30, 2025 was 50.8% as compared to 59.2% during the same period in 2024. Modular space average units on rent decreased 5,386 units, or 5.6%, for the three months ended June 30, 2025 as compared to the three months ended June 30, 2024. The average modular space utilization rate during the three months ended June 30, 2025 was 59.6% as compared to 62.5% during the same period in 2024.
Modular space average monthly rental rates increased 5.2% year over year to $1,237 for the three months ended June 30, 2025, driven by our long-term price optimization strategies and VAPS penetration opportunities. Average portable storage monthly rental rates increased 7.2% year over year to $282 for the three months ended June 30, 2025 as a result of the mix effects from higher rates on climate-controlled containers and trailers. Total VAPS revenues, which were included in leasing revenue, were $100 million for both the three months ended June 30, 2025 and 2024.
Gross profit: Gross profit decreased $31.0 million, or 9.5%, to $296.1 million for the three months ended June 30, 2025 from $327.1 million for the three months ended June 30, 2024. The decrease in gross profit was a result of a $12.8 million decrease in leasing gross profit, decreased delivery and installation gross profit of $6.7 million, and a $12.8 million increase in depreciation of rental equipment. The decrease in gross profit was partially offset by a $1.2 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 increased by $4.1 million, or 2.3%, for the three months ended June 30, 2025 versus the three months ended June 30, 2024, driven by increased sitework expense associated with an increased mix of large, complex projects, an increase in subcontractor costs of $5.0 million, or 8.6%, and an increase in materials costs of $1.0 million, or 4.3%, partially offset by a decrease in labor costs of $1.0 million, or 1.5%. Cost of sales decreased by $1.4 million, or 6.1%, driven by an increased mix of sales of lower net book value rental units. Our resulting gross profit percentage was 50.3% and 54.1% for the three months ended June 30, 2025 and 2024, respectively.
Selling, general and administrative expense ("SG&A"): SG&A decreased $35.8 million, or 19.8%, to $145.0 million for the three months ended June 30, 2025, as compared to $180.8 million for the three months ended June 30, 2024. The decrease was driven by a $23.6 million decrease in discrete expenses for legal and professional fees primarily related to our terminated acquisition of McGrath RentCorp ("McGrath") in 2024, a $6.0 million decrease in restructuring costs, a $2.7 million decrease in integration expense, and a $10.5 million decrease in the provision for credit losses, net of write offs. These decreased costs were partially offset by a $1.7 million, or 9.5%, increase in service agreements and professional fees, excluding discrete expenses for certain one-time projects, a $1.5 million increase in real estate and occupancy costs, and a $1.6 million increase in marketing and advertising expense.
Adjusted EBITDA: Adjusted EBITDA decreased $14.7 million, or 6%, to $248.9 million for the three months ended June 30, 2025 from $263.6 million for the three months ended June 30, 2024. The decrease was driven by a $12.8 million decrease in leasing gross profit and decreased delivery and installation gross profit of $6.7 million for the three months ended
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June 30, 2025 as compared to the three months ended June 30, 2024. The decrease was partially offset by a $1.2 million increase in new and used sales gross profit and decreased SG&A, excluding discrete costs, of $3.4 million.
Other depreciation and amortization: Other depreciation and amortization increased $6.1 million to $24.2 million for the three months ended June 30, 2025 as compared to $18.1 million for the three months ended June 30, 2024, primarily related to the amortization of the Mobile Mini trade name beginning in the third quarter of 2024.
Impairment loss on intangible asset: Impairment loss on intangible asset was $132.5 million for the three months ended June 30, 2024 related to the impairment of the Mobile Mini trade name due to our plan to rebrand under a single WillScot brand name and discontinue the use of the Mobile Mini trade name.
Interest expense, net: Interest expense, net increased $3.4 million, or 6.2%, to $59.0 million for the three months ended June 30, 2025 from $55.5 million for the three months ended June 30, 2024. The increase in interest expense was a result of increased average debt outstanding. See Note 7 to the condensed consolidated financial statements for further discussion of our debt.
Income tax expense (benefit): Income tax expense was $20.0 million for the three months ended June 30, 2025 compared to income tax benefit of $13.9 million for the three months ended June 30, 2024, an increase in expense of $33.9 million. The increase in expense was primarily driven by an increase in income before income tax for the three months ended June 30, 2025.
Capital expenditures for rental equipment: Capital expenditures for rental equipment increased $20.1 million, to $85.3 million for the three months ended June 30, 2025 from $65.2 million for the three months ended June 30, 2024. Net CAPEX increased $20.3 million, or 37%, to $75.0 million for the three months ended June 30, 2025 from $54.7 million for the three months ended June 30, 2024.
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Six Months Ended June 30, 2025 Compared to the Six Months Ended June 30, 2024
Certain consolidated results of operations for the six months ended June 30, 2025 and 2024 are presented below.
Six Months Ended June 30, 2025 vs. 2024 $ Change
(in thousands)
2025 2024
Revenues:
Leasing and services revenue:
Leasing $ 877,306 $ 919,193 $ (41,887)
Delivery and installation 197,113 208,509 (11,396)
Sales revenue:
New units 44,057 34,877 9,180
Rental units 30,158 29,192 966
Total revenues 1,148,634 1,191,771 (43,137)
Costs:
Costs of leasing and services:
Leasing 183,408 200,642 (17,234)
Delivery and installation 161,950 159,012 2,938
Costs of sales:
New units 28,750 21,631 7,119
Rental units 15,694 15,961 (267)
Depreciation of rental equipment 162,396 150,519 11,877
Gross profit 596,436 644,006 (47,570)
Other operating expenses:
Selling, general and administrative 302,169 349,107 (46,938)
Other depreciation and amortization 47,328 36,055 11,273
Impairment loss on intangible asset — 132,540 (132,540)
Currency losses, net 144 35 109
Other expense, net 461 1,555 (1,094)
Operating income 246,334 124,714 121,620
Interest expense, net 117,446 112,136 5,310
Income before income tax 128,888 12,578 116,310
Income tax expense 37,894 3,189 34,705
Net income $ 90,994 $ 9,389 $ 81,605
Six Months Ended June 30, 2025 vs. 2024 Change
(in thousands, except for units on rent and monthly rental rate) 2025 2024
Adjusted EBITDA $ 477,698 $ 511,585 $ (33,887)
Capital expenditures for rental equipment $ 157,821 $ 137,591 $ 20,230
Net CAPEX $ 136,816 $ 119,509 $ 17,307
Average modular space units on rent 90,398 95,721 (5,323)
Average modular space utilization rate 59.5 % 62.5 % (300) bps
Average modular space monthly rental rate $ 1,222 $ 1,163 $ 59
Average portable storage units on rent 109,079 128,045 (18,966)
Average portable storage utilization rate 53.4 % 60.7 % (730) bps
Average portable storage monthly rental rate $ 274 $ 262 $ 12
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Comparison of Six Months Ended June 30, 2025 and 2024
Revenue: Total revenue decreased $43.1 million, or 3.6%, to $1,148.6 million for the six months ended June 30, 2025 from $1,191.8 million for the six months ended June 30, 2024. The decline in revenue was driven by a decrease in units on rent and a $17.7 million increase in write-offs recorded as a reduction to revenue compared to the same period in 2024. Leasing revenue decreased $41.9 million, or 4.6%, as compared to the same period in 2024, driven by the increase in write-offs and a decrease of 24,289 total average units on rent. Increases in average monthly rental rates offset some of these decreases. Delivery and installation revenues decreased $11.4 million, or 5.5%, due to decreased deliveries and returns. Rental unit sales increased $1.0 million, or 3.3%, and new unit sales increased $9.2 million, or 26.3%.
Total average units on rent for the six months ended June 30, 2025 and 2024 were 199,477 and 223,766, respectively. Lower demand was driven by reduced non-residential construction project starts due to higher interest rates and increased economic uncertainty. Portable storage average units on rent decreased by 18,966 units, or 14.8%, for the six months ended June 30, 2025 driven by lower demand in 2025. The average portable storage utilization rate during the six months ended June 30, 2025 was 53.4% as compared to 60.7% during the same period in 2024. Modular space average units on rent decreased 5,323 units, or 5.6%, for the six months ended June 30, 2025 as compared to the six months ended June 30, 2024. The average modular space utilization rate during the six months ended June 30, 2025 was 59.5% as compared to 62.5% during the same period in 2024.
Modular space average monthly rental rates increased 5.1% to $1,222 for the six months ended June 30, 2025, driven by our long-term price optimization strategies and VAPS penetration opportunities. Average portable storage monthly rental rates increased 4.6% to $274 for the six months ended June 30, 2025 as a result of the mix effects from higher rates on climate-controlled containers and trailers. Total VAPS revenues, which are included in leasing revenues, were $196.4 million for both the six months ended June 30, 2025 and 2024.
Gross profit: Gross profit decreased $47.6 million, or 7.4%, to $596.4 million for the six months ended June 30, 2025 from $644.0 million for the six months ended June 30, 2024. The decrease in gross profit was a result of a $24.7 million decrease in leasing gross profit, decreased delivery and installation gross profit of $14.3 million, and a $11.9 million increase in depreciation of rental equipment. The decrease was partially offset by a $3.3 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 $14.3 million, or 4.0%, for the six months ended June 30, 2025 as compared to the six months ended June 30, 2024, driven by a decrease in labor cost of $8.5 million, or 5.9%, and a decrease in material costs of $3.8 million, or 7.7%, as we reduced variable costs to match demand. Cost of sales increased by $6.9 million, or 18.2%. Our resulting gross profit percentage was 51.9% and 54.0% for the six months ended June 30, 2025 and 2024, respectively.
SG&A: SG&A decreased $46.9 million, or 13.4%, to $302.2 million for the six months ended June 30, 2025, as compared to $349.1 million for the six months ended June 30, 2024. The decrease was primarily driven by a $33.5 million decrease in legal and professional fees primarily related to our terminated acquisition of McGrath in 2024, a $6.0 million decrease in restructuring costs, and a $16.6 million, or 237.1%, decrease in the provision for credit losses, net of write offs. Employee SG&A excluding stock compensation decreased $2.1 million, or 1.5%, due to lower employee headcount. These decreased costs were partially offset by a $6.5 million increase in travel costs associated with our bi-annual Company meeting, a $4.1 million, or 11.1%, increased in service agreements and professional fees, excluding discrete expenses for certain one-time projects, a $3.6 million increase in real estate and occupancy costs, and a $2.2 million increase in marketing and advertising expense.
Adjusted EBITDA: Adjusted EBITDA decreased $33.9 million, or 7%, to $477.7 million for the six months ended June 30, 2025 from $511.6 million for the six months ended June 30, 2024. The decrease was driven by a $24.7 million decrease in leasing gross profit and decreased delivery and installation gross profit of $14.3 million for the six months ended June 30, 2025 as compared to the six months ended June 30, 2024. The decrease was partially offset by a $3.3 million increase in new and used sales gross profit and decreased SG&A, excluding discrete costs, of $1.3 million.
Other depreciation and amortization: Other depreciation and amortization increased $11.3 million to $47.3 million for the six months ended June 30, 2025 as compared to $36.1 million for the six months ended June 30, 2024, primarily related to the amortization of the Mobile Mini trade name beginning in the third quarter of 2024.
Impairment loss on intangible asset: Impairment loss on intangible asset was $132.5 million for the six months ended June 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.
Interest expense, net: Interest expense increased $5.3 million to $117.4 million for the six months ended June 30, 2025 from $112.1 million for the six months ended June 30, 2024. The increase in interest expense was a result of increased average debt outstanding. See Note 7 to the condensed consolidated financial statements for further discussion of our debt.
Income tax expense: Income tax expense increased $34.7 million to $37.9 million for the six months ended June 30, 2025 as compared to $3.2 million for the six months ended June 30, 2024. The increase in expense was driven by an increase in income before income tax for the six months ended June 30, 2025 as compared to the six months ended June 30, 2024.
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Capital expenditures for rental equipment: Capital expenditures for rental equipment increased $20.2 million, or 15%, to $157.8 million for the six months ended June 30, 2025 from $137.6 million for the six months ended June 30, 2024. Net CAPEX increased $17.3 million, or 14%, to $136.8 million for the six months ended June 30, 2025 from $119.5 million for the six months ended June 30, 2024 driven by the increase in capital expenditures for rental equipment, partially offset by a $1.9 million decrease in the purchase of property, plant and equipment and a $1.4 million increase in proceeds from the sale of property, plant, and equipment.
Reconciliation of Non-GAAP Financial Measures
In addition to using GAAP financial measurements, we use certain non-GAAP financial measures to evaluate our operating results. As such, we include in this Quarterly Report on Form 10-Q reconciliations of non-GAAP financial measures to their most directly comparable GAAP financial measures. Set forth below are definitions and reconciliations to the nearest comparable GAAP measure of certain non-GAAP financial measures used in this Quarterly Report on Form 10-Q along with descriptions of why we believe these measures provide useful information to investors as well as a description of the limitations of these measures. Each of these non-GAAP financial measures has limitations as an analytical tool and should not be considered in isolation from, or as a substitute for analysis of, results reported under GAAP. Our measurements of these metrics may not be comparable to similarly titled measures of other companies.
Adjusted EBITDA
We define EBITDA as net income (loss) plus net interest (income) expense, income tax expense (benefit), depreciation and amortization. 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.
• 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 relocation and training costs, and other costs required to realize cost or revenue synergies.
• Non-cash charges for stock compensation plans.
• Other expense, including consulting expenses related to certain one-time projects, financing costs not classified as interest expense, gains and losses on disposals of property, plant, and equipment, and unrealized gains and losses on investments.
Our 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.
Adjusted EBITDA has limitations as an analytical tool, and you should not consider the measure in isolation or as a substitute for net income (loss), cash flow from operations or other methods of analyzing WillScot’s results as reported under GAAP. Some of these limitations are:
• Adjusted EBITDA does not reflect changes in, or cash requirements for, our working capital needs;
• Adjusted EBITDA does not reflect our interest expense, or the cash requirements necessary to service interest or principal payments, on our indebtedness;
• Adjusted EBITDA does not reflect our tax expense or the cash requirements to pay our taxes;
• Adjusted EBITDA does not reflect historical cash expenditures or future requirements for capital expenditures or contractual commitments;
• Adjusted EBITDA does not reflect the impact on earnings or changes resulting from matters that we consider not to be indicative of our future operations;
• Although depreciation and amortization are non-cash charges, the assets being depreciated and amortized will often have to be replaced in the future and Adjusted EBITDA does not reflect any cash requirements for such replacements; and
• Other companies in our industry may calculate Adjusted EBITDA differently, limiting its usefulness as a comparative measure.
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.
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The following table provides reconciliations of net income (loss) to Adjusted EBITDA:
Three Months Ended
June 30, Six Months Ended
June 30,
(in thousands) 2025 2024 2025 2024
Net income (loss) $ 47,939 $ (46,851) $ 90,994 $ 9,389
Income tax expense (benefit) 19,984 (13,929) 37,894 3,189
Interest expense, net 58,977 55,548 117,446 112,136
Depreciation and amortization 112,632 93,746 209,724 186,574
Currency (gains) losses, net (79) (42) 144 35
Restructuring costs, lease impairment expense and other related charges 205 6,183 907 6,929
Impairment loss on intangible asset — 132,540 — 132,540
Transaction costs 1,125 40 1,159 40
Integration costs 386 3,066 613 5,943
Stock compensation expense 8,373 9,614 16,714 18,713
Other (629) 23,661 2,103 36,097
Adjusted EBITDA $ 248,913 $ 263,576 $ 477,698 $ 511,585
Net CAPEX
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.
The following table provides reconciliations of Net CAPEX:
Three Months Ended
June 30, Six Months Ended
June 30,
(in thousands) 2025 2024 2025 2024
Purchase of rental equipment and refurbishments $ (85,269) $ (65,174) $ (157,821) $ (137,591)
Proceeds from sale of rental equipment 16,269 16,473 30,332 30,668
Net CAPEX for Rental Equipment (69,000) (48,701) (127,489) (106,923)
Purchase of property, plant and equipment (6,286) (6,247) (10,920) (12,801)
Proceeds from sale of property, plant and equipment 302 215 1,593 215
Net CAPEX $ (74,984) $ (54,733) $ (136,816) $ (119,509)
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 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.
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The following table provides a reconciliation of net cash provided by operating activities to Adjusted Free Cash Flow.
Three Months Ended
June 30, Six Months Ended
June 30,
(in thousands) 2025 2024 2025 2024
Net cash provided by operating activities $ 205,311 $ 175,611 $ 411,938 $ 384,287
Purchase of rental equipment and refurbishments (85,269) (65,174) (157,821) (137,591)
Proceeds from sale of rental equipment 16,269 16,473 30,332 30,668
Purchase of property, plant and equipment (6,286) (6,247) (10,920) (12,801)
Proceeds from sale of property, plant and equipment 302 215 1,593 215
Cash paid for transaction costs from terminated acquisitions
— 8,070 — 9,185
Adjusted Free Cash Flow $ 130,327 $ 128,948 $ 275,122 $ 273,963
Liquidity and Capital Resources
Overview
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 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 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. If we obtain additional capital by issuing equity, the interests of our existing stockholders will be diluted. If we incur additional indebtedness, that indebtedness may contain significant financial and other covenants that may significantly restrict our operations. Availability of financing and the associated terms are inherently dependent on the debt and equity capital markets and subject to change. From time to time, we may also seek to streamline our capital structure and improve our financial position through refinancing or restructuring our existing debt or retiring certain of our securities for cash or other consideration.
Our revolving credit facility provides an 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”) 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 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 June 30, 2025, we had $1.6 billion of available borrowing capacity under the ABL Facility.
Cash Flows
The following summarizes our change in cash and cash equivalents for the periods presented:
Six Months Ended
June 30,
(in thousands)
2025 2024
Net cash provided by operating activities $ 411,938 $ 384,287
Net cash used in investing activities (273,099) (193,329)
Net cash used in financing activities (135,942) (195,662)
Effect of exchange rate changes on cash and cash equivalents
952 (330)
Net change in cash and cash equivalents
$ 3,849 $ (5,034)
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Comparison of the Six Months Ended June 30, 2025 and 2024
Cash flows from operating activities
Net cash provided by operating activities for the six months ended June 30, 2025 was $411.9 million as compared to $384.3 million for the six months ended June 30, 2024, an increase of $27.7 million. The increase in net cash provided by operating activities was primarily due to an increase of $37.4 million in the net movements of the operating assets and liabilities, partially offset by a $9.8 million decrease in net income, adjusted for non-cash items, during the six months ended June 30, 2025.
Cash flows from investing activities
Net cash used in investing activities for the six months ended June 30, 2025 was $273.1 million as compared to $193.3 million for the six months ended June 30, 2024, a $79.8 million increase in net cash used in investing activities. The increase in net cash used in investing activities resulted from a $66.2 million increase in cash used in acquisitions, net of cash acquired, and a $20.2 million increase in the purchase of rental equipment and refurbishments during the six months ended June 30, 2025.
Cash flows from financing activities
Net cash used in financing activities for the six months ended June 30, 2025 was $135.9 million as compared to $195.7 million for the six months ended June 30, 2024, a decrease of $59.7 million. The decrease was primarily due to a $67.2 million decrease in repayments of borrowings, net of receipts from borrowings, a $9.9 million increase in receipts from issuance of common stock from the exercise of options, and a $5.5 million decrease in cash used for the repurchase and cancellation of common stock during the six months ended June 30, 2025. The decrease was partially offset by a $25.6 million increase in cash used to pay dividends in the six months ended June 30, 2025.
Material cash requirements
The Company’s material cash requirements include the following contractual and other obligations:
Debt
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 $3.7 billion as of June 30, 2025, $26.9 million of which is obligated to be repaid within the next twelve months. Refer to Note 7 for further information regarding outstanding debt.
Operating leases
The Company has commitments for future minimum rental payments relating to operating leases, which are primarily for real estate. As of June 30, 2025, the Company had lease obligations of $302.8 million, with $72.9 million payable within the next twelve months.
Other
In addition to the cash requirements described above, the Company has a dividend program subject to quarterly approval and declaration by the Board of Directors as well as 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. As of June 30, 2025, $750.0 million of the authorization for future repurchases of our common stock remained available. These programs do not obligate the Company to issue dividends or repurchase shares.
Critical Accounting Estimates
Our discussion and analysis of our financial condition, results of operations, liquidity and capital resources is based on our condensed consolidated financial statements, which have been prepared in accordance with GAAP. GAAP requires that we make estimates and judgments that affect the reported amount of assets, liabilities, revenue, expenses, and the related disclosure of contingent assets and liabilities. 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. 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 six months ended June 30, 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 accounting standards.
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Cautionary Note Regarding Forward-Looking Statements
This Quarterly Report on Form 10-Q contains forward-looking statements within the meaning of the US Private Securities Litigation Reform Act of 1995 and Section 21E of the Securities Act of 1934, as amended. The words “estimates,” “expects,” “anticipates,” “believes,” “forecasts,” “plans,” “intends,” “may,” “will,” “should,” “shall,” “outlook,” “guidance” and variations of these words and similar expressions identify forward-looking statements, which are generally not historical in nature and relate to expectations for future financial performance or business strategies or objectives. 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, 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:
• 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;
• 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;
• 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 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 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;
• our ability to establish and maintain the appropriate physical presence in our markets;
• property, casualty or other losses not covered by our insurance;
• our ability to close our unit sales transactions;
• our ability to maintain an effective system of internal controls and accurately report our financial results;
• evolving public disclosure, financial reporting, internal controls, and corporate governance expectations;
• our ability to achieve our environmental, social, and governance goals;
• operational, economic, political, and regulatory risks;
• effective management of our rental equipment;
• the effect of changes in state building codes on our ability to remarket our buildings;
• foreign currency exchange rate exposure;
• significant increases in the costs and restrictions on the availability of raw materials and labor;
• fluctuations in fuel costs or a reduction in fuel supplies;
• our reliance on third party manufacturers and suppliers;
• impairment of our goodwill, intangible assets and indefinite-life intangible assets;
• 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 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;
• our ability to access the capital and credit markets or the ability of key counterparties to perform their obligations to us;
• our ability to service our debt and operate our business;
• our ability to incur significant additional amounts of debt and avoid risks associated with substantial indebtedness;
• covenants that limit our operating and financial flexibility;
• our stock price volatility; and
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• such other risks and uncertainties described in the periodic reports we file with the SEC from time to time (including our 2024 Annual Report on Form 10-K), which are available through the SEC’s EDGAR system at www.sec.gov and on our website.
Any forward-looking statement speaks only at the date which it is made, and WillScot undertakes no obligation, and disclaims any obligation, to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by law.