WillScot Holdings Corporation (WSC) Earnings

Management highlights

- Commercial Strategy & Growth Progress * Achieved the 2026 top priority of returning to organic top-line growth in Q2, with strong order book activation volumes across large project segments * Reallocated commercial resources to prioritize enterprise accounts and large complex projects: sales organization staffing increased 5% year-over-year, and enterprise account revenue grew 21% year-over-year, with the enterprise strategy still in early execution innings * Improved win rates, particularly for higher-complexity large projects, driven by differentiated operational and service capabilities; demand is diversified across end markets including critical infrastructure, manufacturing, power generation, data centers, large retail, and large-scale events * Still faces headwinds in smaller transactional product lines, with transactional portable storage demand remaining weak - Operational Highlights * Modular work order and fleet refurbishment activity increased 17% year-over-year to support elevated activation levels and improve fleet readiness * Executed on the fleet and real estate disposition plan, while increasing fleet investments; 2026 is on track to deliver the most significant modular fleet upgrade in company history * Successfully deployed over 2,000 fleet units to World Cup host cities in Q2, and is currently redeploying these units to new customer opportunities * Safety performance improved year-over-year, with fewer recordable incidents despite higher overall activity levels * Rolling out a new route optimization and dispatch software platform, expected to deliver margin and customer experience benefits in 2027; ongoing business process improvements in shared services are also expected to drive future margin gains - Capital Allocation * The business remains highly cash generative and capital efficient; all capital investments are demand-driven, with the company maintaining agility to ramp up or scale back work order production rapidly (a core competitive advantage) * Increased full-year 2026 net capex guidance to support strong demand and a pipeline stretching into 2027; all incremental capex is allocated to high-demand large project fleet, with investments meeting the company's existing high ROIC underwriting thresholds * In the last 12 months, ~50% of capital generation has been reinvested in the business, with remaining free cash flow used for shareholder dividends and debt paydown; the company ended Q2 with $3.5 billion in net debt (3.7x LTM adjusted EBITDA) and ~$1.5 billion in available liquidity, with no debt maturities until 2028

Guidance

- Full-year 2026 guidance was upgraded modestly from prior estimates, reflecting stronger than expected Q2 performance and sustained demand momentum through the end of the year: * Total revenue guidance increased $50 million to ~$2.3 billion, with the increase split evenly between higher leasing revenue and higher delivery & installation revenue * Adjusted EBITDA guidance increased to ~$920 million, reflecting that upfront investment costs to support new demand limit near-term flow-through to profits, consistent with the company's typical growth cycle pattern of investing today for future leasing and free cash flow growth * Net capex guidance increased to ~$375 million, with all incremental capex allocated to new units and refurbishment of high-utilization fleet to support the large project pipeline extending into early 2027 - Q3 2026 specific guidance: * Total revenue is expected to be ~$585 million, up ~3% year-over-year, after a sequential step-down from Q2 as World Cup-related revenue completes * Adjusted EBITDA is expected to be ~$232 million, representing a 39.7% margin, a significant sequential expansion from Q2's 37.2% margin * Depreciation & amortization is expected to be ~$100 million, interest expense ~$54 million, and the effective tax rate ~27% - Margin outlook: Management expects significant sequential margin expansion through the second half of 2026, with flat to positive year-over-year EBITDA margin comparisons by Q4. 2027 margin expansion is expected from operating leverage on a higher lease revenue run rate, normalization of activation costs, and benefits from internal operational improvement initiatives - Leasing revenue outlook: Excluding the World Cup, combined leasing revenue was flat year-over-year in Q2; management expects sustained year-over-year leasing revenue growth through the remainder of 2026

Segment performance

Will Scott reported total Q2 2026 revenue of $612 million, an increase of 4% year-over-year. Key segment performance is as follows: - Leasing and services: Revenue grew 6% year-over-year, driven by strong modular activation activity. Total leasing revenue (including all segments) increased 2% year-over-year to $450 million, marking an inflection point to overall portfolio growth. - Modular: Modular activations grew 16% year-over-year (10% year-over-year excluding the 2026 World Cup contribution), with pending orders up 13% year-over-year. Average modular units on rent were within 450 units of prior year levels, with the World Cup contributing 750 units of year-over-year growth. Enterprise account modular revenue grew 21% year-over-year. - Portable storage: Activations were slightly positive year-over-year driven entirely by World Cup activity; the core non-event business still faces year-over-year unit on rent headwinds. Growth in climate-controlled storage (one of the company's strongest performing product categories) partially offsets these headwinds. - Value-added products (VAPs): Total value-added product leasing revenue increased 3% year-over-year to $103 million, contributing approximately 23% of total Q2 leasing revenue. Newer offerings including climate-controlled storage, clear span industrial tenting, and perimeter solutions are on track to exit 2026 with ~20% year-over-year growth.

Risks & headwinds

- General macroeconomic uncertainty remains, with continued bifurcation of demand between strong large/enterprise project activity and continued weak demand in smaller transactional product lines - Large projects commonly experience delays, though management notes that delayed projects are typically offset by new project starts that emerge to maintain overall activity levels - Inflationary pressures and ongoing labor and supply chain constraints impact both the company and its customers, creating potential crowding-out effects for smaller market segments - Seasonal headwinds are expected in Q4, with typical sequential declines in transactional activity that could impact overall unit on rent levels - Market tightening and supply constraints in specific fleet segments have driven higher new unit costs across the company's supply base

Analyst Q&A

• Q: Given current growth is driven by large projects, is there risk of modular rates turning negative in 2027 from mix effects? /

  A: Management stated there is no negative rate risk from large project mix. Newer differentiated fleet products allocated to large projects support higher, not lower, modular rates. Large projects deliver stronger rates, higher value-added product penetration, and longer contract durations, improving overall revenue quality. Increasing fleet constraints in categories favored by large projects also support a strong pricing environment.

• Q: What was the size and impact of 2026 World Cup-related revenue, and how should we think about 2027 comparables? /

  A: Approximately 2,000 total units (half modular, half storage) were deployed for the World Cup, generating ~$13 million in Q2 revenue (40% rental, 60% delivery & installation). ~$5 million in remaining dismantling delivery & installation revenue will be recognized in Q3, with no material recurring revenue after that. While this event will not repeat in 2027, underlying large project demand is expected to offset the gap and deliver year-over-year leasing growth.

• Q: With CapEx increased to support 2027 project visibility, how do you mitigate risk of project push-outs, and what drives your confidence to invest today? /

  A: Management deploys capital against probability-adjusted project pipelines, and while project delays are common, new project starts consistently offset delayed projects to maintain overall activity levels. Investments are made in highly versatile fleet categories that can be reallocated to other opportunities if needed. Large/mega project new opportunities are up 14% year-over-year, diversified across end markets (data centers are only 25% of activity), and enterprise account momentum continues to build, supporting current investment levels.

• Q: What components of Q2 margin compression will reverse in the second half of 2026, and what is the 2027 margin outlook? /

  A: The largest reversals will come from subsiding high delivery & installation mix from the World Cup, and a smaller year-over-year increase in upfront activation costs compared to Q2. This will drive 200-300 bps of sequential margin expansion in Q3, and an additional 300-500 bps of expansion in Q4. For 2027, margin expansion is expected from operating leverage on higher lease revenue, normalization of activation activity growth, route optimization software improvements, and back office/sales productivity gains.