WillScot Holdings Corporation Class A Common Stock 2026 Q2 Earnings Call

Thank you, Sheree. Good afternoon, and welcome to our second quarter 2026 earnings call. With me in the room today are Worthing Jackman, our Executive Chairman, Tim Boswell, President and Chief Executive Officer, and Matt Jacobsen, our Chief Financial Officer. Today's presentation material may be found on our investor relations website at investors.willscot.com. Before we begin, I'd like to direct your attention to slide two of our posted presentation containing our safe harbor statement. We will be making forward-looking statements during the presentation and our Q&A session. Our business and operations are subject to a variety of risks and uncertainties, many of which are beyond our control. As a result, our actual results may differ materially from comments made on today's call.

For a more complete description of the factors that could cause actual results to differ and other possible risks, please refer to the safe harbor statements in our presentation and our filings with the SEC. Now it's my pleasure to turn the call over to our President and Chief Executive Officer, Tim Boswell, to begin today's discussion.

Thank you, Charlie, and good afternoon, everyone. We appreciate you joining us on today's call for a discussion of the operating environment, our second quarter 2026 results, strategic priorities, and expectations for the remainder of the year. Our second quarter results reflect steady progress across both our commercial and operational initiatives and highlight the capabilities that continue to position us well to serve our customers and create long-term value for shareholders. A top priority this year has been returning to organic top-line growth, which we achieved in the second quarter and are positioned to sustain through the remainder of the year. Matt will provide additional detail on the quarter's financial results, the key takeaways are that activation volumes in our order book continue to be quite strong in certain segments. 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. Total revenue of $612 million was up 4% year-over-year in the quarter, driven by leasing and services revenue growth of 6%. Within that, delivery and installation revenue increased by over 25%, which is extraordinary and builds upon the strong growth we were seeing in Q1. Matt will touch on the impact of the World Cup, but modular activations were up 16% year-over-year in the quarter, and modular pending orders are up 13% year-over-year sitting here today. In a backdrop where overall non-residential construction square footage is still declining, I'm really encouraged by the opportunities our team is finding across our target verticals as well as our win rates.

There is clear progress supporting these results across each of our commercial priorities to improve local market execution, expand our enterprise accounts and verticals, and grow our value-added space solutions. Staffing is up approximately 5% across our sales organization, with initiatives in place to continue improving their productivity. Our enterprise accounts and vertical strategies are still in their early innings from an execution standpoint, though showing great traction with enterprise account revenue up 21% year-over-year in the quarter. We expect that revenue from our newer offerings, such as climate-controlled storage, Clearspan industrial tenting, and perimeter solutions, will exit 2026 on roughly a 20% growth rate, supplementing the strength we are seeing in our modular space offering.

Our commercial strategy is focused, execution is improving, it's driving a higher quality revenue mix long term, and it is allowing us to be highly competitive in the segments of the market where we're seeing the biggest opportunities. The opportunities we're seeing are diverse across verticals. We continue to support critical infrastructure investments, manufacturing projects, power generation facilities, data centers, large-scale retail operations, and special events of all sizes. We believe our expanded offering of space solutions, our operational capabilities, and our scale where we specialize continue to differentiate us in these environments, and that distinction is becoming increasingly clear, particularly at the enterprise account level. In our field operations, it's been an extremely dynamic year, and I've been very impressed by how our teams have rallied together and are executing across multiple priorities.

Our branch network is advancing our fleet readiness initiatives with modular work order and refurbishment activity up 17% year-over-year in the quarter, supporting elevated activation levels. At the same time, our team is on track executing our fleet and real estate disposition plan. Taken together with the planned new fleet investments this year, 2026 will likely represent the most significant upgrade to our modular fleet in company history. With all of that going on, we moved over 2,000 fleet units in and out of World Cup host cities over the last three months and are redeploying them to new customer opportunities. Our safety performance continues to improve year-over-year with fewer recordable incidents despite increased activity levels. We are executing in the right way, consistent with our culture and company values.

Looking to the second half of the year, our commercial pipeline suggests that these activity levels will continue. We are rolling out our route optimization and dispatch software platform, which will be a benefit heading into 2027. We're continuing to make improvements in other business processes within our shared services, which again, have potential benefit to both margins and the customer experience. Together, all these initiatives improve execution, enhance customer outcomes, and further differentiate WillScot's long-term competitive positioning. I'd like to thank all of our team members who are aligned and executing against these priorities. Looking over the remainder of the year and how we thought about the guidance, we're still very conscious of the bifurcation in demand levels between large and small projects, and recognize that we continue to face headwinds among our more transactional product lines.

We're also seeing a lot of strength across the business, much of which is internally driven. We're continuing to take a balanced approach with our updated outlook while remaining squarely focused on executing the commercial and operational priorities that are within our control. We are modestly increasing our previously issued full-year 2026 outlook for revenue and adjusted EBITDA. The rationale for the revenue increase I covered in the commentary. Matt will discuss the margin cadence through the remainder of the year, though the margin impacts we see in Q2 and in the outlook are normal in our business and to be expected in periods with sharp changes in activity. I think we've got different pathways to meet the forecast that would set us up well for 2027 with a solid lease revenue trajectory and margin expansion opportunity.

Lastly, on capital allocation, the business continues to be highly cash generative and capital efficient on a relative basis, even in periods of significant investment. Those who have followed us for a while know that our capital investments are entirely demand-driven, and that agility is an important attribute of the business. We have few long-term supply commitments or constraints, and our ability to ramp up our own work order production volumes rapidly is a significant competitive advantage. We increased our outlook for net CapEx based on the reality that we're seeing a lot of interesting opportunities. Utilization levels are rising in key product categories. The commercial pipeline is stretching into 2027, and we remain very confident in the returns we can generate on organic investment.

This level of investment is higher than we would expect over time in our long-term capital allocation framework, but it's the best possible allocation both for the business and shareholders right now. Overall, I'm pleased with the start to the year and the continued momentum we are seeing across the business and our internal initiatives. It's been several years since we've seen these activity levels, and based on the improvements to the business over that period, we're extremely well positioned to execute and win in this environment. The dedication, focus, and capability of our team have been humbling, and I am incredibly proud of what we're building together and excited about our prospects. Every day, we're discovering new commercial opportunities, strengthening our already differentiated capabilities, and reinvesting strategically in the business with a focus on long-term value creation.

Thank you again to the entire WillScot team for the nice work in the first half of the year. I'll now turn the call over to Matt to discuss our financial results and outlook in more detail.

Thanks, Tim. Our second quarter results exceeded our expectations entering the quarter and reflected continued progress against our objective of returning the business to sustainable leasing revenue growth. Large project demand remained strong. The order book continued to grow, we saw further evidence that the commercial initiatives we've discussed over the past several quarters are translating into improved underlying activity levels. Total revenue for the quarter was $612 million, up 4% year-over-year, surpassing our expectation of approximately $585 million. Leasing and services revenue increased 6% year-over-year, driven by continued strength in modular activation activity that drove delivery and installation revenue up 25% year-over-year. This was supported in part by activity related to the World Cup event, even more so by other large project deployments.