WillScot Holdings Corp 10-Q

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 the operations and present business environment of WillScot Holdings Corporation (“WillScot”) and its subsidiaries (collectively with WillScot, the “Company,” “we,” “us” or “our”). MD&A is provided as a supplement to, and should be read in conjunction with, our financial statements and the accompanying notes thereto, contained in Part I, Item 1 of this report. The discussion of results of operations in this MD&A is presented on a historical basis, as of or for the three and nine months ended September 30, 2025 or prior periods. The 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 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 approximately 150,000 modular space units and 210,000 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. • Portable Storage Solutions : portable storage containers and climate-controlled containers and trailers. • Value-Added Products ("VAPS") : a thoughtfully curated selection of solutions that supports our Right from the Start value proposition, including workstations, furniture, appliances, media packages, power and solar solutions, telematics, connectivity and data solutions, security and protection products, entrance packages, electrical and lighting products, organization and space optimization assets, perimeter solutions, and other items that improve the customer experience. We operate a hybrid in-house and outsourced logistics and service infrastructure that provides delivery, site work, installation, disassembly, removal and other services to our customers for an additional fee as part of our leasing and sales operations. We service diverse end markets across all sectors of the economy throughout the United States ("US"), Canada, and Mexico. As of September 30, 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 diversified and predictable recurring revenue stream. Over 90% of new lease orders are on our standard lease agreement, pre-negotiated master lease, or enterprise 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 41 months. We believe our lease revenue is 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 85% of our revenues for the nine months ended September 30, 2025. Significant Developments Leadership Updates On September 3, 2025, we announced that our Board of Directors had unanimously elected Tim Boswell to succeed Brad Soultz as Chief Executive Officer, effective January 1, 2026, and that Mr. Boswell would also join the Board at that time. We also announced that effective immediately, Worthing Jackman, current non-Executive Chairman of the Board, would now serve as Executive Chairman of the Board, both to continue to lead the Board and to assist the CEO and senior management team in achieving the Company’s strategic plan. In addition, Jeff Sagansky was appointed Lead Independent Director, also effective immediately. 24 Network Optimization Initiative As of September 30, 2025, our branch network consisted of approximately 400 physical properties, of which 260 locations were considered branch locations. Real estate leases for branch locations are typically under long-term contracts that may include initial terms of five to ten years with one or two five-year extensions, whereas non-branch locations used for unit storage often have shorter contractual terms. Our real estate footprint has increased over the years through the combination of the legacy WillScot and Mobile Mini respective branch networks, locations acquired through acquisitions, and additional non-branch locations added to store incremental idle fleet. Without intervention, we expect real estate costs to continue to increase 10 to 15 percent per year as they have for the past several years. In 2024, we consolidated the WillScot and Mobile Mini field sales and operations teams into a single leadership structure. In the beginning of 2025, we began evaluating our real estate footprint on a property-by-property basis to reduce our overall real estate costs opportunistically while maintaining market coverage. To exit certain real estate positions, we disposed of certain rental fleet units, with a primary focus on long idle, non-standard or higher repair cost units, while maintaining adequate idle fleet to meet projected demand. During the three and nine months ended September 30, 2025, rental equipment identified for disposal was depreciated to its salvage value, resulting in incremental depreciation of rental equipment of $7.3 million and $26.6 million, respectively. Management is considering expanding this program to evaluate all real estate leases maturing in the next four or five years for consolidation opportunities, and we estimate the net book value of rental fleet units that could be disposed of as part of this optimization to be in the range of $250 million to $350 million, which would be recognized as incremental depreciation expense as properties and rental fleet units are identified for exit. We believe this initiative could reduce leased acreage by more than 20% and reduce annual real estate costs by $20 million to $30 million. To the extent we finalize a multi-year network optimization plan by the end of 2025, and the plan is approved by the Board of Directors, we may accelerate the recognition of the $250 million to $350 million of incremental depreciation expense on identified rental equipment into 2025 as a non-cash restructuring charge. 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. We redeemed the 2025 Secured Notes to extend the Company's debt maturity profile, consistent with our capital structure optimization strategy. The redemption did not result in a material gain or loss on extinguishment, as the notes were redeemed at par and related fees were expensed as incurred. On October 16, 2025, we amended our ABL Facility ("Amended ABL Facility") to reduce borrowing costs and extend the maturity date to October 16, 2030. The aggregate principal amount of the Amended ABL Facility was reduced from $3.7 billion to $3.0 billion to reduce undrawn line fees, and the accordion feature was increased from $750 million to $1.0 billion. We anticipate meaningful annual cash interest expense savings of approximately $5.0 million at current borrowing levels with opportunities to further reduce our interest costs in the future based on availability in the Amended ABL Facility and net debt to EBITDA leverage levels. After giving effect to the extension, we have no maturities of debt until 2028 other than for finance leases. Dividends On February 18, 2025, our Board of Directors approved a quarterly dividend program. Under the program, subject to 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, May, and July 2025, our Board of Directors declared quarterly dividends of $0.07 per share, totaling $13.0 million, $12.9 million, and $12.9, respectively. Dividends paid were $38.4 million for the nine months ended September 30, 2025. The Company intends to continue its quarterly dividend program, subject to Board approval and based on available cash flow, capital allocation priorities, and market conditions. Share Repurchases During the nine months ended September 30, 2025, we repurchased 2,924,846 shares of Common Stock for $80.2 million, excluding excise tax. As of September 30, 2025, $741.7 million of the authorization for future repurchases of the Common Stock remained available. We executed share repurchases as part of our capital allocation strategy to enhance shareholder value and optimize capital deployment in light of current market valuations. Business Combination and Asset Acquisitions During the nine months ended September 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. We expect this acquisition to expand our climate-controlled product offering and enhance our regional market presence, 25 with anticipated operational synergies and customer cross-sell opportunities. As of the acquisition date, the fair value of the goodwill recorded was $54.5 million, the fair value of the intangible assets acquired was $18.7 million, and the fair value of rental equipment acquired was $36.6 million. The purchase price allocation is preliminary, based on the best estimates of management, and subject to revision as management obtains additional information regarding the valuation of acquired rental equipment and intangible assets. 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 nine months ended September 30, 2025, we acquired $23.2 million in rental fleet assets from two companies for $25.8 million in cash. Third Quarter Summary For the three months ended September 30, 2025, as compared to the three months ended September 30, 2024, results and key drivers of our financial performance included the following: • Total revenues decreased $34.6 million, or 5.8%, to $566.8 million. The decline in revenue was driven by a decrease in units on rent, a large project in the prior year representing approximately $18.0 million, and a $20.0 million increase in accounts receivable write-offs recorded as a reduction to revenue compared to the same period in 2024. The increased write-offs were primarily driven by aged receivables that we deemed uncollectible as our central operations team progresses our initiative to improve our order-to-cash process and reduce our days sales outstanding. However, write-offs to receivables recorded as a reduction to revenue result in a corresponding reduction to the provision for credit losses recorded in selling, general, and administrative expense ("SG&A") to the extent that the related receivables are already reserved. See further discussion within our Consolidated Results of Operations. • Leasing revenue decreased $21.4 million, or 4.7%, driven by an increase of $15.5 million of write-offs of aged receivables deemed uncollectible recorded as a reduction to revenue, a decrease in total average units on rent of 22,461, or 10.3%, partially offset by a 8.8% increase in average monthly rates. 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. Seasonal retail demand, primarily for storage containers, was down $2.6 million year-over-year. • Delivery and installation revenue decreased $16.2 million, or 14.2%, driven by fewer deliveries and a large project in the prior year representing approximately $18.0 million. • Sales revenue: new unit sales revenue increased $0.5 million, or 2.9%, and rental unit sales revenue increased $2.5 million, or 18.8%. • Generated net income of $43.3 million for the three months ended September 30, 2025, representing an increase of $113.8 million, or 161.5%, as compared to the same period in 2024. For the three months ended September 30, 2024 , we recorded a $180.0 million termination fee and $8.8 million in legal and professional fees related to the termination of a merger agreement with McGrath RentC orp ("McGrath"). In 2024, we recorded a tax benefit of $20.6 million, as compared to an income tax expense of $17.0 million for the three months ended September 30, 2025. • Generated Adjusted EBITDA of $243.3 million for the three months ended September 30, 2025, representing a decrease of $23.6 million, or 8.8%, as compared to the same period in 2024. • Net cash provided by operating activities increased $192.7 million to $191.2 million cash provided by operating activities for the three months ended September 30, 2025 from $1.6 million net cash used in operating activities for the three months ended September 30, 2024. The increase in net cash provided by operating activities was primarily due to the payment of $203.3 million for the McGrath termination fee and transaction costs from terminated acquisitions during the three months ended September 30, 2024. • Net cash used in investing activities , excluding cash used for acquisitions, increased by $7.5 million. Capital expenditures for rental equipment increased $11.6 million for the three months ended September 30, 2025. Net CAPEX increased $10.4 million for the three months ended September 30, 2025. • Generated Adjusted Free Cash Flow of $122.2 million for the three months ended September 30, 2025 as compared to $143.1 million for the three months ended September 30, 2024. During the three months ended September 30, 2025, we deployed Adjusted Free Cash Flow to: • Reduce outstanding borrowings under the ABL Facility by $84.4 million. • Acquire assets from a local provider of storage solutions for $7.6 million. • Repurchase $8.3 million of our Common Stock, reducing outstanding Common Stock by 296,805 shares. • Pay a $0.07 per share dividend, returning $12.8 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 appropriate leverage, opportunistically executing accretive acquisitions, and returning capital to shareholders via share repurchases and dividend distributions. We also believe our strong operating cash flow generation, countercyclical Net CAPEX profile, and $1.5 billion of available borrowing capacity under our Amended ABL Facility, provide ample liquidity to execute our strategy. 26 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 September 30, 2025 Compared to the Three Months Ended September 30, 2024 Certain consolidated results of operations for the three months ended September 30, 2025 and 2024 are presented below. Three Months Ended September 30, 2025 vs. 2024 $ Change (in thousands) 2025 2024 Revenues: Leasing and services revenue: Leasing $ 434,224 $ 455,578 $ (21,354) Delivery and installation 98,517 114,765 (16,248) Sales revenue: New units 18,370 17,850 520 Rental units 15,730 13,239 2,491 Total revenues 566,841 601,432 (34,591) Costs: Costs of leasing and services: Leasing 97,551 96,050 1,501 Delivery and installation 82,058 91,775 (9,717) Costs of sales: New units 13,806 9,665 4,141 Rental units 8,174 6,246 1,928 Depreciation of rental equipment 83,634 76,212 7,422 Gross profit 281,618 321,484 (39,866) Other operating expenses: Selling, general and administrative 137,699 153,343 (15,644) Other depreciation and amortization 24,424 23,108 1,316 Termination fee — 180,000 (180,000) Currency gains, net 100 (129) 229 Other expense, net 589 380 209 Operating income (loss) 118,806 (35,218) 154,024 Interest expense, net 58,466 55,823 2,643 Income (loss) before income tax 60,340 (91,041) 151,381 Income tax expense (benefit) 17,008 (20,566) 37,574 Net income (loss) $ 43,332 $ (70,475) $ 113,807 27 Three Months Ended September 30, 2025 vs. 2024 Change (in thousands, except units on rent and monthly rental rate) 2025 2024 Adjusted EBITDA $ 243,307 $ 266,863 $ (23,556) Capital expenditures for rental equipment $ 81,018 $ 69,398 $ 11,620 Net CAPEX $ 68,939 $ 58,560 $ 10,379 Average modular space units on rent 89,390 94,911 (5,521) Average modular space utilization rate 59.3 % 62.1 % (280) bps Average modular space monthly rental rate $ 1,254 $ 1,199 $ 55 Average portable storage units on rent 105,792 122,732 (16,940) Average portable storage utilization rate 50.3 % 58.1 % (780) bps Average portable storage monthly rental rate $ 290 $ 265 $ 25 Comparison of Three Months Ended September 30, 2025 and 2024 Revenue: Total revenue decreased $34.6 million, or 5.8%, to $566.8 million for the three months ended September 30, 2025 from $601.4 million for the three months ended September 30, 2024. The decline in revenue was driven by a decrease in units on rent and a $20.0 million increase in accounts receivable write-offs recorded as a reduction to revenue compared to the same period in 2024. The increased write-offs were primarily driven by accounts receivables that we deemed uncollectible as our central operations team progresses our initiative to improve our order-to-cash process and reduce our days sales outstanding. However, write-offs to receivables recorded as a reduction to revenue result in a corresponding reduction to the provision for credit losses recorded in SG&A to the extent that the related receivables are already reserved. See further discussion below of the net impact to Adjusted EBITDA. Leasing revenue decreased $21.4 million, or 4.7%, as compared to the same period in 2024, driven by a decrease of 22,461 total average units on rent and the increase in accounts receivable write-offs, which drove $15.5 million of the decrease. Increases in average monthly rental rates offset some of these decreases. Delivery and installation revenue decreased $16.2 million, or 14.2%, due to the decline in activations and returns, as well as a large project in the prior year of approximately $18.0 million. Rental unit sales increased $2.5 million, or 18.8%, and new unit sales increased $0.5 million, or 2.9%. Total average units on rent for the three months ended September 30, 2025 and 2024 were 195,182 and 217,643, respectively, representing a decrease of 22,461 units, or 10.3%. Lower demand was driven by reduced non-residential construction project starts due to higher interest rates and increased economic uncertainty. Modular space average units on rent decreased 5,521 units, or 5.8%, for the three months ended September 30, 2025 as compared to the three months ended September 30, 2024. The average modular space utilization rate during the three months ended September 30, 2025 was 59.3% as compared to 62.1% during the same period in 2024. The decline in modular space units on rent was primarily driven by weaker non-residential construction starts. Portable storage average units on rent decreased by 16,940 units, or 13.8%, for the three months ended September 30, 2025 driven by lower demand in 2025, as well as lower orders related to seasonal retail business that typically occurs in the third and fourth quarters. The average portable storage unit utilization rate during the three months ended September 30, 2025 was 50.3% as compared to 58.1% during the same period in 2024. Modular space average monthly rental rates increased 4.6% year over year to $1,254 for the three months ended September 30, 2025, driven by our long-term price optimization strategies and VAPS penetration opportunities. Average portable storage monthly rental rates increased 9.6% year over year to $290 for the three months ended September 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 $100.2 million for both the three months ended September 30, 2025 and 2024. Gross profit: Gross profit decreased $39.9 million, or 12.4%, to $281.6 million for the three months ended September 30, 2025 from $321.5 million for the three months ended September 30, 2024. The decrease in gross profit was a result of a $22.9 million decrease in leasing gross profit, decreased delivery and installation gross profit of $6.5 million, a $3.1 million decrease in new and rental unit sales gross profit, and a $7.4 million increase in depreciation of rental equipment. The decrease in leasing gross profit was primarily driven by lower demand in 2025 and the increased accounts receivable write-offs. A $7.3 million increase in depreciation of rental equipment was driven by incremental depreciation recorded for rental equipment identified for disposal as part of the Company's network optimization initiative. Cost of leasing and services decreased by $8.2 million, or 4.4%, for the three months ended September 30, 2025 as compared to the three months ended September 30, 2024, driven primarily by a decrease in subcontractor costs of $17.0 million, or 22.8%, as we continued our insourcing initiatives and reduced variable costs to match demand, partially offset by an increase in materials costs of $1.3 million, or 5.9%, and an increase in labor costs of $4.2 million, or 6.3%. Increased material costs and labor costs were driven by increased sitework expense associated with an increased mix of large, complex projects. We expect to continue adjusting variable costs where appropriate to match demand in the fourth quarter of 2025. 28 Cost of sales increased by $6.1 million, or 38.1%, driven by an increased mix of sales of higher value new units. Our resulting gross profit percentage was 49.7% and 53.5% for the three months ended September 30, 2025 and 2024, respectively. Selling, general and administrative expense: SG&A decreased $15.6 million, or 10.2%, to $137.7 million for the three months ended September 30, 2025, as compared to $153.3 million for the three months ended September 30, 2024. The decrease was driven by a $6.8 million decrease in legal and professional fees primarily related to our terminated acquisition of McGrath in 2024, a $23.1 million decrease in the provision for credit losses, and a $2.5 million decrease in restructuring costs. These decreased costs were partially offset by a $13.7 million increase in employee SG&A excluding stock compensation, which was primarily related to variable compensation and higher employee insurance costs, as well as an increase of approximately 100 incremental sales headcount, a $2.3 million increase in real estate and occupancy costs, and a $1.3 million increase in service agreements and professional fees Adjusted EBITDA: Adjusted EBITDA decreased $23.6 million, or 9%, to $243.3 million for the three months ended September 30, 2025 from $266.9 million for the three months ended September 30, 2024. The decrease was driven by a $22.9 million decrease in leasing gross profit, decreased delivery and installation gross profit of $6.5 million, and a $3.1 million decrease in new and used sales gross profit. The decrease was partially offset by decreased SG&A, excluding discrete costs, of $7.5 million. The net impact to Adjusted EBITDA of accounts receivable write-offs recorded as a reduction to revenue and the provision for credit losses recorded in SG&A was a $17.8 million and $22.1 million reduction to Adjusted EBITDA for the three months ended September 30, 2025 and the three months ended September 30, 2024, respectively, thus resulting in a $4.3 million positive impact to Adjusted EBITDA year over year. Other depreciation and amortization: Other depreciation and amortization increased $1.3 million to $24.4 million for the three months ended September 30, 2025 as compared to $23.1 million for the three months ended September 30, 2024. Termination fee: We paid a termination fee of $180.0 million to McGrath related to the termination of a merger agreement during the three months ended September 30, 2024. This charge did not occur in the third quarter of 2025. Interest expense, net: Interest expense, net increased $2.6 million, or 4.7%, to $58.5 million for the three months ended September 30, 2025 from $55.8 million for the three months ended September 30, 2024. The increase in net interest expense was driven by a decrease in amounts received from the Company’s interest rate swap agreements as a result of decreased benchmark rates. Income tax expense (benefit): Income tax expense was $17.0 million for the three months ended September 30, 2025 compared to income tax benefit of $20.6 million for the three months ended September 30, 2024, an increase in expense of $37.6 million. The increase in expense was primarily driven by an increase in income before income tax for the three months ended September 30, 2025. Capital expenditures for rental equipment: Capital expenditures for rental equipment increased $11.6 million, to $81.0 million for the three months ended September 30, 2025 from $69.4 million for the three months ended September 30, 2024. Net CAPEX increased $10.4 million, or 18%, to $68.9 million for the three months ended September 30, 2025 from $58.6 million for the three months ended September 30, 2024. 29 Nine Months Ended September 30, 2025 Compared to the Nine Months Ended September 30, 2024 Certain consolidated results of operations for the nine months ended September 30, 2025 and 2024 are presented below. Nine Months Ended September 30, 2025 vs. 2024 $ Change (in thousands) 2025 2024 Revenues: Leasing and services revenue: Leasing $ 1,311,530 $ 1,374,771 $ (63,241) Delivery and installation 295,630 323,274 (27,644) Sales revenue: New units 62,427 52,727 9,700 Rental units 45,888 42,431 3,457 Total revenues 1,715,475 1,793,203 (77,728) Costs: Costs of leasing and services: Leasing 280,959 296,692 (15,733) Delivery and installation 244,008 250,787 (6,779) Costs of sales: New units 42,556 31,296 11,260 Rental units 23,868 22,207 1,661 Depreciation of rental equipment 246,030 226,731 19,299 Gross profit 878,054 965,490 (87,436) Other operating expenses: Selling, general and administrative 439,868 502,450 (62,582) Other depreciation and amortization 71,752 59,163 12,589 Termination fee — 180,000 (180,000) Impairment loss on intangible asset — 132,540 (132,540) Currency losses (gains), net 244 (94) 338 Other expense, net 1,050 1,935 (885) Operating income 365,140 89,496 275,644 Interest expense, net 175,912 167,959 7,953 Income before income tax 189,228 (78,463) 267,691 Income tax expense 54,902 (17,377) 72,279 Net income $ 134,326 $ (61,086) $ 195,412 Nine Months Ended September 30, 2025 vs. 2024 Change (in thousands, except units on rent and monthly rental rate) 2025 2024 Adjusted EBITDA $ 721,005 $ 778,448 $ (57,443) Capital expenditures for rental equipment $ 238,839 $ 206,989 $ 31,850 Net CAPEX $ 205,755 $ 178,069 $ 27,686 Average modular space units on rent 90,063 95,458 (5,395) Average modular space utilization rate 59.4 % 62.3 % (290) bps Average modular space monthly rental rate $ 1,232 $ 1,175 $ 57 Average portable storage units on rent 107,842 126,316 (18,474) Average portable storage utilization rate 52.9 % 61.0 % (810) bps Average portable storage monthly rental rate $ 279 $ 263 $ 16 30 Comparison of Nine Months Ended September 30, 2025 and 2024 Revenue: Total revenue decreased $77.7 million, or 4.3%, to $1,715.5 million for the nine months ended September 30, 2025 from $1,793.2 million for the nine months ended September 30, 2024. The decline in revenue was driven by a decrease in units on rent and a $37.6 million increase in accounts receivable write-offs recorded as a reduction to revenue compared to the same period in 2024. The increased write-offs were primarily driven by accounts receivables that we deemed uncollectible as our central operations team progresses our initiative to improve our order-to-cash process and reduce our days sales outstanding. However, write-offs to receivables recorded as a reduction to revenue result in a corresponding reduction to the provision for credit losses recorded in SG&A to the extent that the related receivables are already reserved. See further discussion below of the net impact to Adjusted EBITDA. Leasing revenue decreased $63.2 million, or 4.6%, as compared to the same period in 2024, driven by a decrease of 23,869 total average units on rent and the increase in accounts receivable write-offs, which drove $29.2 million of the decrease. Increases in average monthly rental rates offset some of these decreases. Delivery and installation revenues decreased $27.6 million, or 8.6%, due to the decline in activations and returns. Rental unit sales increased $3.5 million, or 8.1%, and new unit sales increased $9.7 million, or 18.4%. Total average units on rent for the nine months ended September 30, 2025 and 2024 were 197,905 and 221,774, respectively. Lower demand was driven by reduced non-residential construction project starts due to higher interest rates and increased economic uncertainty. Modular space average units on rent decreased 5,395 units, or 5.7%, for the nine months ended September 30, 2025 as compared to the nine months ended September 30, 2024. The average modular space utilization rate during the nine months ended September 30, 2025 was 59.4% as compared to 62.3% during the same period in 2024. Portable storage average units on rent decreased by 18,474 units, or 14.6%, for the nine months ended September 30, 2025 driven by lower demand in 2025, as well as lower orders related to seasonal retail business that typically occurs in the third and fourth quarters. The average portable storage utilization rate during the nine months ended September 30, 2025 was 52.9% as compared to 61.0% during the same period in 2024. Modular space average monthly rental rates increased 4.9% to $1,232 for the nine months ended September 30, 2025, driven by our long-term price optimization strategies and VAPS penetration opportunities. Average portable storage monthly rental rates increased 6.1% to $279 for the nine months ended September 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 $296.6 million for both the nine months ended September 30, 2025 and 2024. Gross profit: Gross profit decreased $87.4 million, or 9.1%, to $878.1 million for the nine months ended September 30, 2025 from $965.5 million for the nine months ended September 30, 2024. The decrease in gross profit was a result of a $47.5 million decrease in leasing gross profit, decreased delivery and installation gross profit of $20.9 million, and a $19.3 million increase in depreciation of rental equipment. The decrease was partially offset by a $0.2 million increase in new and rental unit sales gross profit. The decrease in leasing gross profit was primarily driven by lower demand in 2025 and the increased accounts receivable write-offs. The increase in depreciation of rental equipment was driven by incremental depreciation of $26.6 million recorded for rental equipment identified for disposal as part of the network optimization initiative. Cost of leasing and services decreased by $22.5 million, or 4.1%, for the nine months ended September 30, 2025 as compared to the nine months ended September 30, 2024, driven primarily by a decrease in subcontractor costs of $16.7 million, or 8.8%, as we continued our insourcing initiatives and reduced variable costs to match demand, a decrease in labor cost of $4.3 million, or 2.0%, and a decrease in material costs of $2.4 million, or 3.4%, as we reduced variable costs to match demand. Cost of sales increased by $12.9 million, or 24.2%, driven by an increased mix of sales of higher value new units. Our resulting gross profit percentage was 51.2% and 53.8% for the nine months ended September 30, 2025 and 2024, respectively. SG&A: SG&A decreased $62.6 million, or 12.5%, to $439.9 million for the nine months ended September 30, 2025, as compared to $502.5 million for the nine months ended September 30, 2024. The decrease was primarily driven by a $40.2 million decrease in legal and professional fees primarily related to our terminated acquisition of McGrath in 2024, a $8.5 million decrease in restructuring costs, and a $39.7 million, or 243.6%, decrease in the provision for credit losses. These decreased costs were partially offset by an increase of employee SG&A excluding stock compensation of $11.6 million, or 6.1%, primarily relating to variable compensation and higher employee insurance costs, as well as an increase of approximately 100 incremental sales headcount, $5.7 million increase in travel costs associated with our bi-annual Company meeting, a $5.4 million, or 9.9%, increase in service agreements and professional fees, excluding discrete expenses for certain one-time projects, a $5.9 million increase in real estate and occupancy costs, and a $2.3 million increase in marketing and advertising expense. 31 Adjusted EBITDA: Adjusted EBITDA decreased $57.4 million, or 7%, to $721.0 million for the nine months ended September 30, 2025 from $778.4 million for the nine months ended September 30, 2024. The decrease was driven by a $47.5 million decrease in leasing gross profit and decreased delivery and installation gross profit of $20.9 million for the nine months ended September 30, 2025 as compared to the nine months ended September 30, 2024. The decrease was partially offset by decreased SG&A, excluding discrete costs, of $8.8 million. The net impact to Adjusted EBITDA of write-offs recorded as a reduction to revenue and the provision for credit losses recorded in SG&A was a $37.6 million and $45.3 million reduction to Adjusted EBITDA for the nine months ended September 30, 2025 and the nine months ended September 30, 2024, respectively, thus resulting in a $7.7 million positive impact to Adjusted EBITDA year over year. Other depreciation and amortization: Other depreciation and amortization increased $12.6 million to $71.8 million for the nine months ended September 30, 2025 as compared to $59.2 million for the nine months ended September 30, 2024, primarily related to the amortization of the Mobile Mini trade name beginning in the third quarter of 2024. Termination fee: We paid a termination fee of $180.0 million to McGrath related to the termination of a merger agreement during the nine months ended September 30, 2024. This charge did not occur in 2025. Impairment loss on intangible asset: Impairment loss on intangible asset was $132.5 million for the nine months ended September 30, 2024 related to the impairment of the Mobile Mini trade name based on the Company's plan to rebrand under a single WillScot brand name and discontinue the use of the Mobile Mini trade name. Interest expense, net: Interest expense increased $8.0 million to $175.9 million for the nine months ended September 30, 2025 from $168.0 million for the nine months ended September 30, 2024. The increase in net interest expense was driven by a decrease in amounts received from the Company’s interest rate swap agreements as a result of decreased benchmark rates. Income tax expense (benefit): Income tax expense increased $72.3 million to expense of $54.9 million for the nine months ended September 30, 2025 as compared to a benefit of $17.4 million for the nine months ended September 30, 2024. The increase in expense was driven by an increase in income before income tax for the nine months ended September 30, 2025 as compared to the nine months ended September 30, 2024. Capital expenditures for rental equipment: Capital expenditures for rental equipment increased $31.9 million, or 15%, to $238.8 million for the nine months ended September 30, 2025 from $207.0 million for the nine months ended September 30, 2024. Net CAPEX increased $27.7 million, or 16%, to $205.8 million for the nine months ended September 30, 2025 from $178.1 million for the nine months ended September 30, 2024 primarily driven by the increase in capital expenditures for rental equipment. 32 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. • 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. • 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. • 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. • Transaction costs including legal and professional fees and other transaction specific related costs. • 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, costs to implement a network optimization initiative, non-equity executive transition costs, and unrealized gains and losses on investments. Our Chief Operating Decision Maker 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. 33 The following table provides reconciliations of net income (loss) to Adjusted EBITDA: Three Months Ended September 30, Nine Months Ended September 30, (in thousands) 2025 2024 2025 2024 Net income (loss) $ 43,332 $ (70,475) $ 134,326 $ (61,086) Income tax expense (benefit) 17,008 (20,566) 54,902 (17,377) Interest expense, net 58,466 55,823 175,912 167,959 Depreciation and amortization 108,058 99,320 317,782 285,894 Currency losses (gains), net 100 (129) 244 (94) Restructuring costs, lease impairment expense and other related charges (21) 2,478 886 9,407 Termination fee — 180,000 — 180,000 Impairment loss on intangible asset — — — 132,540 Integration and transaction costs 1,149 1,692 2,921 7,675 Stock compensation expense 9,964 9,534 26,678 28,247 Other (a) 5,251 9,186 7,354 45,283 Adjusted EBITDA $ 243,307 $ 266,863 $ 721,005 $ 778,448 (a) For the three and nine months ended September 30, 2024, respectively, other included $8.8 million and $41.3 million in legal and professional fees related to a terminated transaction. For the three and nine months ended September 30, 2025, other included $1.5 million in costs to implement the Company's network optimization initiative and $1.3 million in non-equity executive transition costs. 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 September 30, Nine Months Ended September 30, (in thousands) 2025 2024 2025 2024 Purchase of rental equipment and refurbishments $ (81,018) $ (69,398) $ (238,839) $ (206,989) Proceeds from sale of rental equipment 15,713 13,238 46,045 43,906 Net CAPEX for Rental Equipment (65,305) (56,160) (192,794) (163,083) Purchase of property, plant and equipment (4,244) (3,318) (15,164) (16,119) Proceeds from sale of property, plant and equipment 610 918 2,203 1,133 Net CAPEX $ (68,939) $ (58,560) $ (205,755) $ (178,069) 34 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. The following table provides a reconciliation of net cash provided by operating activities to Adjusted Free Cash Flow. Three Months Ended September 30, Nine Months Ended September 30, (in thousands) 2025 2024 2025 2024 Net cash provided by (used in) operating activities $ 191,151 $ (1,562) $ 603,089 $ 382,725 Purchase of rental equipment and refurbishments (81,018) (69,398) (238,839) (206,989) Proceeds from sale of rental equipment 15,713 13,238 46,045 43,906 Purchase of property, plant and equipment (4,244) (3,318) (15,164) (16,119) Proceeds from sale of property, plant and equipment 610 918 2,203 1,133 Cash paid for termination fee — 180,000 — 180,000 Cash paid for transaction costs from terminated acquisitions — 23,266 — 32,451 Adjusted Free Cash Flow $ 122,212 $ 143,144 $ 397,334 $ 417,107 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. Borrowing availability under our Amended ABL Facility is equal to the lesser of $3.0 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 September 30, 2025, we had $1.5 billion of available borrowing capacity under the Amended ABL Facility. 35 Cash Flows The following summarizes our change in cash and cash equivalents for the periods presented: Nine Months Ended September 30, (in thousands) 2025 2024 Net cash provided by operating activities $ 603,089 $ 382,725 Net cash used in investing activities (349,666) (268,668) Net cash used in financing activities (248,841) (113,234) Effect of exchange rate changes on cash and cash equivalents 1,174 (735) Net change in cash and cash equivalents $ 5,756 $ 88 Comparison of the Nine Months Ended September 30, 2025 and 2024 Cash flows from operating activities Net cash provided by operating activities for the nine months ended September 30, 2025 was $603.1 million as compared to $382.7 million for the nine months ended September 30, 2024, an increase of $220.4 million. The increase in net cash provided by operating activities was primarily due to the payment of $212.5 million for the McGrath termination fee and transaction costs from terminated acquisitions during the nine months ended September 30, 2024. Cash flows from investing activities Net cash used in investing activities for the nine months ended September 30, 2025 was $349.7 million as compared to $268.7 million for the nine months ended September 30, 2024, an $81.0 million increase in net cash used in investing activities. The increase in net cash used in investing activities resulted from a $59.9 million increase in cash used in acquisitions, net of cash acquired, and a $31.9 million increase in the purchase of rental equipment and refurbishments during the nine months ended September 30, 2025. Cash flows from financing activities Net cash used in financing activities for the nine months ended September 30, 2025 was $248.8 million as compared to $113.2 million for the nine months ended September 30, 2024, an increase of $135.6 million. The increase was primarily due to a $159.6 million increase in repayments of borrowings, net of receipts from borrowings, and a $38.4 million increase in cash used to pay dividends during the nine months ended September 30, 2025. The increase was partially offset by a $47.8 million decrease in cash used for the repurchase and cancellation of common stock and a $9.9 million increase in receipts from issuance of common stock from the exercise of options in the nine months ended September 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 $3.6 billion as of September 30, 2025, $27.4 million of which is obligated to be repaid within the next twelve months. Refer to Note 8 for further information regarding outstanding debt and Note 17 for details on financing activities completed subsequent to September 30, 2025 whereby the Company amended its ABL Facility to reduce borrowing costs and extend the maturity date to October 16, 2030. After giving effect to the extension, the Company has no maturities of debt until 2028 other than for finance leases. Operating leases The Company has commitments for future minimum rental payments relating to operating leases, which are primarily for real estate. As of September 30, 2025, the Company had lease obligations of $332.8 million, with $88.5 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 September 30, 2025, $741.7 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. 36 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 nine months ended September 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. 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; 37 • 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 • 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.