WillScot (WSC) Q3 2026 earnings review
WillScot's office rentals grow again, and it expects higher profit
WillScot, which rents site offices and storage boxes, is placing more offices on rent while its cash flow shrinks. Sales rose 6%, mostly because WillScot wrote off fewer unpaid customer bills; by our math, underlying sales grew about 2%. Fleet purchases for large projects cut free cash flow by more than a third.
| Sales growth, excluding smaller write-offs | about 2% 6% as reported |
|---|---|
| Site offices on rent | +1.2% first rise from a year ago since late 2022 |
| Free cash flow | $78M $124M a year ago |
| Full-year sales outlook | Raised $40M $2.34 billion; profit outlook unchanged at $920M |
⚖️ Verdict: 🟢 Bullish
The story got better because orders for WillScot's site offices kept climbing, and the company now expects profit to rise next year. One caution: WillScot raised its sales plan but kept its profit plan, because each new rental costs money to deliver and set up.
The question now is whether big projects such as data centers keep placing orders next year. If they do, the new fleet stays rented and cash repays debt; if not, WillScot holds spare units it paid for. Chief executive Tim Boswell said it is "too soon to say", so fourth-quarter data center orders will tell.
🐂 Bull Case
Office Rentals Rise for First Time Since 2022
WillScot earns most of its money renting modular space, meaning portable offices, classrooms and office complexes for building sites. Leases average about three years, so new rentals lift the count of units on rent only slowly.
That turn came this quarter. The average number of modular units on rent rose 1.2% from a year ago, the first gain since late 2022, the company said. Chief executive Tim Boswell said the "pending order book for modular has grown and is now up over 20% versus prior year".
- Modular activations, meaning new rentals started: up 12%, a fourth straight rise
- Modular order book: up more than 20%, against 13% three months earlier
This matters because each new rental brings delivery fees now and monthly rent for years after. Orders are climbing faster than rentals, so Boswell expects the gain in units on rent to widen in the fourth quarter. But finance chief Matt Jacobsen expects storage container volumes to stay about 7% lower.
What to watch: modular units on rent in the fourth-quarter results, due in February. A gain above this quarter's 1.2% would show the order book turning into rent on the schedule Boswell described.
Big Customers Sign Longer, Pricier Leases
Enterprise accounts are WillScot's largest national customers, the ones running big projects. Their revenue rose 15% from a year ago, the company said, after 21% growth last quarter. These customers now bring in about a third of sales.
Chief executive Tim Boswell said the extra fleet bought this year carries minimum leases of over two years, about double the usual 12 months. He added that WillScot is "seeing rates on new orders that are up double digits year-over-year" for large office complexes.
Those prices have barely reached reported revenue yet, because the average monthly rate across all modular units rose only 1.8%. Smaller FLEX units, a compact modular office, held that gain back.
What to watch: the average modular monthly rate in February's results. A rise above 2% would show the higher prices on new orders feeding into rent.
WillScot Expects Profit to Rise Again in 2027
Profit before interest, tax, depreciation and one-offs has fallen from a year ago for five straight quarters, including 4% this time. Chief executive Tim Boswell now says the business can deliver "mid-single digit percentage growth in Adjusted EBITDA in 2027".
Boswell called this first view of next year "a balanced initial outlook given potential risks to the pace of data center build-outs". It came with a third raise to this year's sales plan.
The starting point is low, though. By our math, about 5% growth on this year's plan gives roughly $966 million. That still falls short of what WillScot earned in 2025, so the forecast restores growth but not the old profit level.
What to watch: the formal 2027 plan, due with fourth-quarter results in February. A profit range centred near 5% would confirm this early view.
🐻 Bear Case
Without Write-Offs, Leasing Revenue Did Not Grow
WillScot reported that leasing revenue, its monthly rent income, rose 4% from a year ago. A year earlier, though, it cut revenue by $24.5 million when it wrote off old unpaid customer bills. This quarter that charge fell to $7.0 million, so the comparison started from a low base.
The company's own presentation shows leasing revenue before write-offs at $459 million in both quarters. It credits part of the reported gain to "Fewer receivable write-offs recorded as reductions to revenue".
- Modular space leasing revenue: up 2.2%
- Add-on products such as furniture, steps and power (VAPS): up 4.2%
- Portable storage leasing revenue: down 7.0%
- Storage units on rent: down 6.7%
This matters because rent income is what WillScot's long leases are meant to build. Its filing blames the storage decline on fewer non-residential construction starts and "increased economic uncertainty", so local demand has not turned. That means most of the 4% headline reflects last year's bad-debt clean-up.
What to watch: finance chief Matt Jacobsen expects leasing revenue to grow about 4% in the fourth quarter. That quarter last year carried $25.3 million of write-offs. Leasing revenue before write-offs, in February's presentation, will show how much of the growth is new rent.
Higher Sales Outlook Brings No Extra Profit
WillScot raised its full-year sales plan by $40 million but held its profit plan at $920 million. Finance chief Matt Jacobsen said extra rental setups are "reducing the seasonal sequential margin expansion that would be typical in the fourth quarter".
The cost shows in the accounts. Delivery and installation costs climbed to 17.1% of revenue, from 14.5% a year ago, as WillScot paid subcontractors more. Other operating costs, which include bad-debt expense, took 2.7 percentage points more of revenue.
- Margin before interest, tax, depreciation and one-offs: 38.8%, against 42.9% a year ago
- Change from last quarter: up 1.6 percentage points
- Fourth-quarter margin implied by the full-year plan: about 42.8% by our math, against 44.2% a year earlier
This matters because the plan three months ago implied a fourth-quarter margin near 45%, by our math. New rentals pay off over leases of about three years, but WillScot keeps paying setup costs before that rent arrives.
What to watch: the fourth-quarter margin in February, which Jacobsen expects to widen by 3 to 4 percentage points. A smaller gain would push the margin recovery into 2027.
Fleet Purchases Shrink Free Cash Flow
WillScot is buying new office complexes and compact FLEX offices for large projects. It raised its plan for net capital spending, meaning purchases minus sales of used units, to $400 million from $375 million.
- Net capital spending this quarter: $123 million, up 78%
- Free cash flow: $78 million, down 37%
Chief executive Tim Boswell said "Over 90% of the incremental fleet we've acquired is either on rent or assigned to a customer order". That answers the fear of idle fleet, but not the cash question. By our math, the full-year plan leaves far less for the fourth quarter than WillScot spent in the third. Yet Boswell said he would "maintain that run rate" into early next year.
What to watch: fourth-quarter net capital spending in February. A figure near the third quarter's level would leave less cash for debt repayment than the full-year plan implies.
Risks this quarter didn't answer
Four standing concerns got no clear answer in these results. WillScot gave a partial signal on each, but none came with the number that would settle it.
- Large projects slowing: data centers make up about 18% of the pending order book, chief executive Tim Boswell said; new data center starts after November's political changes will show the risk.
- Customer credit: write-offs against revenue fell to $9.2 million from $31.8 million, but bad-debt expense in overhead rose; a breakdown by customer type would settle the cause.
- Add-on products such as furniture and fencing: 17.4% of revenue over the past year, below the company's longer-term goal; fencing rentals, which finance chief Matt Jacobsen expects to double in the fourth quarter, will test it.
- World Cup and refinancing: next year's second quarter loses this year's World Cup work, and $500 million of notes fall due in August 2028; the formal 2027 plan in February will show how WillScot handles both.
👓 Other Themes
Non-Residential Building Starts Fell 12%
Builders started 12% less non-residential floor space in the third quarter than a year earlier, according to Dodge Construction Network data in WillScot's presentation. Chief executive Tim Boswell said mega projects are pulling skilled trades away from other work. WillScot has absorbed material cost inflation of 6% to 7% a year, he said. Boswell also named early November's political changes as a risk to data center building.
New Dispatch Software Now Runs Every Branch
In the third quarter WillScot put its "new field service scheduling and dispatch platform" into use across its whole branch network, chief executive Tim Boswell said. The software lets customers book service themselves, sends live updates and plans delivery routes. Boswell expects its benefits in 2027, but WillScot has not yet put a figure on the savings.
💲 Other KPIs
Net debt fell to $3.43 billion, 4.7% below a year ago, as WillScot repaid borrowings. Leverage, net debt divided by the past year's adjusted EBITDA, held at 3.7 times because that profit also fell. The ratio has not moved for four quarters, so repayment has only kept pace with lower earnings.
The share of WillScot's modular fleet out on rent reached 69.3%, against 59.3% a year ago. Most of the gain came because WillScot scrapped old units under its Network Optimization Plan, a programme to close yards and drop idle fleet. It has disposed of about 40,000 of the 53,000 units it targeted.
Deferred revenue, cash customers pay before WillScot delivers the service, rose 3.1% from a year ago to $256.1 million. Growth eased from about 4% at mid-year. Much of the balance is service fees billed in advance, so it tends to move with new rentals.
🔮 Guidance
Raised. The plan now has sales up about 2.6% this year. By our math, it leaves about $578 million for the fourth quarter. That is 2% above a year ago, after 6% growth in the third quarter. Last year's fourth quarter carried large write-offs, so the comparison is easy. Third raise of 2026, each smaller: +$75M, +$50M, +$40M.
Unchanged. The plan still has profit before interest, tax, depreciation and one-offs down about 5% this year. By our math, that leaves about $248 million for the fourth quarter, 1% below a year ago. Jacobsen kept the figure because extra rental setups add costs. Moves this year: +$15M, +$5M, then none.
Raised. WillScot now plans net fleet spending about 46% above last year. By our math, that leaves about $74 million for the fourth quarter, well below the third quarter's pace. The plan has risen three times this year: +$50M, +$50M, +$25M.
New. Boswell's first view of next year has profit before interest, tax, depreciation and one-offs growing by a mid-single-digit percentage. By our math, about 5% growth would follow a drop of similar size this year. WillScot will issue a formal plan with fourth-quarter results.
New. The presentation points to sales growth of a low single-digit percentage next year, near this year's pace. Boswell told analysts to assume the growth runs evenly across 2027, though this year's World Cup work will not repeat.
New. WillScot expects net debt to approach three times its yearly profit before one-offs by the end of 2027. If profit grows as planned, that means paying down over $500 million of net debt, by our math. Finance chief Matt Jacobsen said WillScot will balance repayment against fleet spending.
❓ Key Questions
Why does the plan cut fourth-quarter fleet spending?
By our math, the full-year plan leaves about $74 million of net spending for the fourth quarter, against $123 million in the third. Boswell said he would keep the current pace into 2027. The answer decides how much cash goes to debt.
How much of next quarter's leasing growth is new rent?
Jacobsen expects leasing revenue to rise about 4% in the fourth quarter, against a year-ago quarter cut by large write-offs. Leasing revenue before write-offs was flat this quarter. That figure, every quarter, would show the real trend.
How much of 2027 depends on new data center projects?
Data centers make up about 18% of the pending order book, and most of those units start within 30 days, Boswell said. The 2027 view assumes large projects keep coming. Investors need the share of next year's rent tied to unbooked data center work.
Why did bad-debt expense rise while write-offs fell?
The filing shows a $14.2 million rise in the bad-debt provision in overhead. Meanwhile, write-offs against revenue fell $22.7 million, which lifted reported revenue. WillScot has not said which customers drove the higher provision.
Is the $3 billion sales goal still on schedule?
WillScot still shows its three-to-five-year goals, including $3 billion of sales. Revenue grew 0.4% over the past year, far below the targeted annual pace. Management has not said when it now expects to reach that level.