Earnings Recap — Q2 FY2026
CY Q3 2026 · Reported August 6, 2026 · Beat 3 of last 7 quarters
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WillScot's strong activation growth and large project pipeline are directly tied to AI infrastructure buildout, as data centers, power generation, and manufacturing projects drive demand for modular space and storage. The company's increased CapEx and raised guidance signal sustained investment in supporting these large-scale projects, which could benefit the broader AI infrastructure supply chain. The company's ability to win complex projects and expand enterprise accounts positions it as a key enabler of data center construction activity.
WillScot delivered a strong Q2 with total revenue of $612M, up 4% YoY, driven by a 6% increase in leasing & services revenue and a 25% surge in delivery & installation revenue. Modular activations rose 16% YoY, and the pending order book grew 13% YoY, with enterprise account revenue up 21% YoY. Adjusted EBITDA of $228M exceeded guidance, though margins compressed 500 bps YoY due to upfront activation costs, revenue mix, and SG&A investments. The company raised its full-year outlook and increased net CapEx guidance to $375M to support large project demand, while noting continued softness in transactional/local markets.
Management raised full-year 2026 revenue guidance by $50M to approximately $2.3B, with roughly $25M from higher leasing revenue and $25M from higher delivery & installation revenue. Adjusted EBITDA guidance was increased to approximately $920M, reflecting continued upfront investments in cost of leasing and transfer costs to support strong demand. Q3 revenue is expected at ~$585M (up ~3% YoY) with adjusted EBITDA of ~$232M (39.7% margin). Net CapEx guidance was raised to ~$375M, with incremental dollars directed to new units and refurbishment to support large-scale project demand into early 2027. Management expects significant sequential margin expansion in Q3 and Q4, potentially reaching flat to positive YoY EBITDA margins by Q4, and remains confident in sustained leasing revenue growth through the remainder of 2026 and into 2027.
“We are increasing variable expenses and fleet investments to support that demand. The combination makes us more confident in our outlook for the remainder of the year and sustained lease revenue growth.”
on Demand and investment
“Margins are temporarily pressured primarily because modular activation activity accelerated. We invested approximately $17 million more in cost of leasing and unit transfer costs during the second quarter compared to the same period last year, which helped drive 16% year-over-year growth in modular activations.”
on Margin pressure and activation investment
“We are increasing variable expenses and fleet investments to support that demand. The combination makes us more confident in our outlook for the remainder of the year and sustained lease revenue growth.”
on Demand and investment
Starting to think about 2027, is there any risk of modular rates turning negative at some point, just maybe from a mix of larger projects driving the growth in 2027?
Tim Boswell said no risk driven by large project mix, noting newer differentiated fleet products support higher rates, and while panelized/FLEX fleet growth could present a mixed headwind, large projects bring strong rates, VAPS penetration, and better duration. Matt Jacobsen added that incremental investments are made where returns are better than average.
Should we expect free cash flow to be down year-over-year in the second half due to the step up in CapEx? And do higher value product categories require more CapEx as a percentage of sales?
Matt Jacobsen confirmed continued investment through Q3, with similar FCF dynamics, and noted the incremental CapEx is for differentiated units like complexes, which have been in the fleet for a long time and still generate strong returns. Tim Boswell added that underwriting thresholds haven't changed, and the investments are driven by attractive ROIC, long duration, and positioning for complex projects.
Can you clarify the World Cup unit counts and how to think about the dismantling costs and comps next year?
Matt Jacobsen explained that ~2,000 units were deployed (half modular, half storage), generating ~$13M revenue in Q2 (40% rental, 60% D&I), with ~$5M of dismantle D&I remaining in Q3. Excluding World Cup, combined leasing revenue was essentially flat YoY in Q2, and the company expects continued YoY leasing revenue growth in the back half without a similar event next year.