WillScot Holdings Corporation (WSC) | The Buildout — AI Infrastructure
The Verdict
WillScot rents temporary flexible space to the people building things. Its fleet of modular buildings and offices, portable and climate-controlled storage, industrial tenting and perimeter fencing — plus the crews that deliver, install and remove it all — gives contractors site offices, secure storage and laydown space for the length of a project. Data-center construction is one of the end markets that reaches the business, alongside critical infrastructure, manufacturing, power generation, large-scale retail and special events. WillScot is a temporary-site-infrastructure landlord: reached by the AI buildout, not a supplier of anything that goes inside a data center.
| Market Cap | — |
| Revenue (TTM) | $2.3B |
| Revenue Growth | −2.5% |
| EBITDA Margin (TTM) | 38.0% |
| Net Debt | $3.8B |
| Earnings Beats | 3 of 7 |
| P/E (TTM) | — |
| EV/EBITDA (TTM) | — |
What We Like
- Modular activations have grown year over year for three consecutive quarters, reaching +16% in Q2 2026, or about +10% excluding the World Cup.
- The FY2026 outlook has been raised twice, to revenue of approximately $2.3 billion and adjusted EBITDA of approximately $920 million.
- Enterprise account revenue accelerated to +21% year over year in Q2 from +12% in Q1, on a channel management still describes as early innings.
- The large and mega project pipeline extends into 2027, with new opportunities into that pipeline up 14% year over year in Q2 2026.
- Net debt is approximately $3.5 billion at 3.7x LTM adjusted EBITDA, with roughly $1.5 billion of ABL liquidity and no maturities until August 2028.
What We’re Watching
- Margin recovery: management guides to sequential adjusted EBITDA margin expansion of 200–300 basis points in Q3 and 300–500 basis points in Q4, after missing its own Q2 sequential guide by roughly 100 basis points.
- Local and transactional demand: nonresidential construction square footage is still declining, and guidance assumes no recovery and no further erosion.
- The World Cup unwind: roughly 1,000 modular units come off rent and about $5 million of delivery-and-installation dismantle remains in Q3, with no similar project known for next year.
- Data-center disclosure: the specific data-center growth rates given in Q1 — +70% project volume and a ~+50% new activated revenue target for 2026 — were not repeated on the Q2 call.
The demand side of the thesis is strengthening: three consecutive quarters of activation growth, two guidance raises, and a large-project pipeline management says stretches into 2027. The margin side is not. Q2 adjusted EBITDA margin fell to 37.2%, and the company's own sequential guide was missed by roughly 100 basis points. Strip out the World Cup and the reported leasing inflection disappears, so the underlying growth rate of the base business is still thin. The open question is whether leasing revenue grows year over year without the event, and whether the margin recovery management has scheduled for the second half arrives on time.
Earnings
WillScot reported Q2 2026 revenue of $612 million, up 4% year over year, at a gross margin of 50.0%. Leasing revenue rose about 2% to roughly $450 million, which the company called an important milestone; excluding the World Cup event, combined leasing revenue for modular, storage and VAPS was essentially flat. Delivery and installation revenue grew more than 25% year over year. On the company's own measure, adjusted EBITDA margin was 37.2%, roughly 500 basis points below the prior year, as upfront activation and mix costs ran ahead of the revenue they support.
| Metric | Q2 FY2026 | Q1 FY2026 | Q2 FY2025 | YoY |
|---|---|---|---|---|
| Revenue | $612M | $549M | $589M | +3.9% |
| Gross margin | 50.0% | 52.1% | 50.3% | -30bps |
| EBITDA | $213M | $201M | $240M | −11.1% |
| EPS | $0.26 | $0.15 | $0.26 | −1.0% |
| Leasing revenue | ~$450M | $425.5M | n/a | +2% YoY |
| Modular activations | +16% YoY | +8% YoY | n/a | — |
While total reported leasing revenue was up 1.5% year-over-year, this includes the shorter term contribution from the World Cup event. Excluding this event, combined leasing revenue for modular storage and VAPS was essentially flat year-over-year in Q2.— Matt Jacobsen, Chief Financial Officer, 2026-08-06
Management tone: Management raised full-year guidance for the second time in 2026 and described the quarter as reaching an important milestone on leasing revenue. The tone on margins was explanatory rather than defensive: the company pre-committed to about 30 basis points of sequential pressure, delivered roughly 130, and then walked through the bridge line by line. Management volunteered the caveat that leasing revenue was flat excluding the World Cup, reaffirmed its caution on local and transactional demand, and said out loud that sequential unit-on-rent inflection is not in the base guide.
Management Guidance
For the full year 2026, management guides to revenue of approximately $2.3 billion, adjusted EBITDA of approximately $920 million and net capital expenditure of approximately $375 million. For Q3 2026 it guides to revenue of approximately $585 million and adjusted EBITDA of approximately $232 million, about a 39.7% margin, with D&A of about $100 million, interest of about $54 million and a tax rate of about 27%. It expects sequential adjusted EBITDA margin expansion of 200–300 basis points in Q3 and 300–500 basis points in Q4, potentially producing flat to positive year-over-year margin comparisons by the fourth quarter, plus continued year-over-year leasing revenue growth through the rest of 2026 with the World Cup behind it. The outlook assumes no local market recovery and no further erosion.
Trajectory
Revenue has been roughly flat across the last five quarters, running from $589 million in Q2 2025 to $567 million, $566 million, $549 million and then $612 million. The composition is shifting underneath it: leasing revenue is roughly flat, delivery and installation is the growing line, and unit sales have shrunk sharply. Delivery revenue actually fell in Q1 while installation revenue rose, and installation is the subcontracted, materials-heavy half. That mix is where the margin went. On the company's own measure, adjusted EBITDA margin fell to 37.2% in Q2, about 500 basis points below the prior year, from roughly $17 million more of cost of leasing and unit transfer costs (about 250 basis points), the higher D&I mix (about 160 basis points) and SG&A (about 100 basis points). The question is whether those are the price of growth that converts into recurring lease revenue, or a permanent drag.
The Model
The model projects FY+1 revenue of $2,320 million and EBITDA of $891 million, a 38.4% margin, and FY+2 revenue of $2,440 million and EBITDA of $974 million, a 39.9% margin. The near term rests on management's FY2026 outlook of approximately $2.3 billion of revenue and approximately $920 million of adjusted EBITDA, and on the guided margin expansion of 200–300 basis points in Q3 and 300–500 basis points in Q4. FY+2 requires a modest step up in revenue and roughly 150 basis points more margin, which depends on the upfront activation costs moderating and the large-project pipeline converting into recurring lease revenue.
| Metric | FY2025 | Next FY (E) | Following FY (E) |
|---|---|---|---|
| Revenue | $2.3B | $2.3B | $2.4B |
| YoY Growth | — | +1.7% | +5.2% |
| EBITDA | $915M | $891M | $974M |
| EBITDA Margin | 40.1% | 38.4% | 39.9% |
Projections are the median of 5 independent model runs. The model’s revenue sits 5.2% above analyst consensus.
For the full year 2026, management guides to revenue of approximately $2.3 billion, adjusted EBITDA of approximately $920 million and net capital expenditure of approximately $375 million. For Q3 2026 it guides to revenue of approximately $585 million and adjusted EBITDA of approximately $232 million, about a 39.7% margin, with D&A of about $100 million, interest of about $54 million and a tax rate of about 27%. It expects sequential adjusted EBITDA margin expansion of 200–300 basis points in Q3 and 300–500 basis points in Q4, potentially producing flat to positive year-over-year margin comparisons by the fourth quarter, plus continued year-over-year leasing revenue growth through the rest of 2026 with the World Cup behind it. The outlook assumes no local market recovery and no further erosion.
What Could Go Right — and Wrong
- Leasing revenue grows year over year in Q3 and Q4 without the World Cup, turning the reported Q2 inflection into an underlying trend.
- Sequential modular units on rent inflect in the second half — management said this is not in its base guide.
- Modular pending orders, up 13% year over year in Q2, keep growing and convert into activations.
- Local and transactional demand stabilises, lifting the higher-VAPS-attach part of the business.
- The 2027 margin levers management names — operating leverage, work order costs, D&I mix, route optimization, back office, bad debt and sales productivity — are sized and delivered.
- The reported leasing inflection proves to have been the World Cup event, and underlying leasing revenue stays flat.
- Q3 and Q4 margins land below the guided 200–300 and 300–500 basis point bands, and the Q4 flat-to-positive year-over-year comparison fails.
- Large-project delays start to outnumber starts, thinning the pipeline that justifies the raised capital expenditure.
- Credit-loss provisions keep climbing at the Q1 rate of +44% year over year, pointing to a weakening transactional customer base.
- The fleet is built ahead of demand and work-order production has to slow, signalling a demand rollover.
Looking Ahead
The next twelve months are tested quarter by quarter. The Q3 2026 print has to show leasing revenue growing without the World Cup and the opening step of the margin cadence landing. The Q4 print tests the flat-to-positive year-over-year adjusted EBITDA margin comparison and the guided exit rate of roughly 20% growth for the newer offerings. Into 2027, the questions are whether the pipeline management says stretches into 2027 converts, whether the route-optimization platform delivers the benefit management points to for 2027, and whether the 2027 margin levers get quantified. No 2027 financial guidance has been given.
- Q3 2026Q3 2026 earnings — Tests guided revenue of ~$585M and a ~39.7% adjusted EBITDA margin.
- Q4 2026Q4 margin milestone — Tests flat-to-positive YoY adjusted EBITDA margin comparison.
- Exit 2026Newer offerings exit rate — Tests guided ~20% growth for climate-controlled storage, Clearspan and perimeter.
- Early 2027Pipeline conversion — CapEx is tied to known large-project opportunities into early 2027.
- 2027Route optimization benefit — Management expects the dispatch platform to benefit margins into 2027.
Financials
Annual Summary
| Metric | FY2024 | FY2025 | TTM | YoY |
|---|---|---|---|---|
| Revenue | $2.4B | $2.3B | $2.3B | -4.8% |
| Gross Margin | 54.4% | 48.9% | 48.4% | 548bps |
| EBITDA | $649M | $915M | $872M | +41.0% |
| EBITDA Margin | 27.1% | 40.1% | 38.0% | +1,301bps |
| Net Income | $28M | −$53M | −$69M | -289.3% |
| Free Cash Flow | $262M | $521M | $537M | — |
| Net Cash | — | — | — | — |
Key Ratios (Trailing)
- P/E TTM—
- EV/EBITDA TTM—
- EV/Revenue TTM—
- Price/FCF TTM—
- Gross Margin (TTM)48.4%
- EBITDA Margin (TTM)38.0%
- Net Margin (TTM)-3.0%
- ROIC7.8%
- FCF Conversion61.6%
- SBC / Revenue1.1%
The Company
WillScot rents temporary flexible space. The fleet is modular buildings and offices, portable and climate-controlled storage, industrial tenting and perimeter solutions, plus value-added products attached to the rental, and the company also sells and rents units outright. Around the fleet sits a services wrapper — delivery and installation — that moves units onto a site and removes them when the job ends. Customers use it for construction, infrastructure, industrial, commercial, institutional and special-event work. Because roughly three-quarters of revenue is lease income under ASC 842, the business is mostly contracted over the term of a rental rather than sold transaction by transaction.
WillScot runs a branch network with in-house work-order production and refurbishment capability. Management frames that as a competitive advantage: the company says it has 'few long-term supply commitments or constraints' and can 'ramp up our own work order production volumes rapidly.' Work-order volumes are revisited at least every 90 days, and refurbishment can be shut down in about two weeks. The business reports as a single segment and is concentrated in the United States, which produced $517.6 million of the $548.6 million of Q1 2026 revenue, against $25.3 million in Canada and $5.7 million in Mexico. Capital spending is being directed at the Complex Modular and FLEX configurations that serve large projects.
Business Segments
Competitive Landscape
WillScot competes in modular space and portable storage rental against a set of named peers — United Rentals, Herc Holdings, McGrath RentCorp and Vesta Modular appear in the relationship mapping, none with a documented quote. Management addresses the competitive landscape only in general terms, declining to engage on national competitors bulking up and pointing instead to its own win rates and service capability: 'as project complexity goes up, our win rates have gone up.' The company does not disclose win rates. The criticality assessment accompanying this coverage concludes that data-center builds would face no significant slowdown if WillScot disappeared, because customers would shift to competitors within days in a fragmented, competitive modular rental market.
- United RentalsNamed in the relationship mapping; not discussed by management.
- Herc HoldingsNamed in the relationship mapping; not discussed by management.
- McGrath RentCorpNamed in the relationship mapping; not discussed by management.
- Vesta ModularNamed in the relationship mapping; not discussed by management.
Supply Chain
WillScot buys subcontractor labour, materials and fleet components, and describes few long-term supply commitments. No supplier or customer mentions WillScot by name anywhere in the material, so every relationship below is inference rather than a disclosed contract.
More on WSC: Earnings recap