Q1 2025 WillScot Holdings Corp Earnings Call Transcript
Key Points
- WillScot Holdings Corp (WSC) reported a 7% year-over-year increase in their pending order book for both modular and storage products, indicating strong demand.
- The company achieved adjusted EBITDA margins of 41% in Q1, with $145 million in adjusted free cash flow at a 26% margin.
- WillScot Holdings Corp (WSC) returned $45 million to shareholders and progressed its acquisition pipeline, demonstrating a commitment to shareholder value.
- The company successfully refinanced its 2025 senior secured notes, extending maturity to 2030 at a fixed interest rate of 6.625%, enhancing financial flexibility.
- Value-added products and services (VAPS) represented over 17% of revenue in the quarter, moving towards a long-term goal of 20% to 25% of total revenue.
- Total revenue of $560 million declined 5% year-over-year due to lower volumes, with average units on rent down 5% for modular and 16% for storage.
- Delivery and installation margins contracted year-over-year in Q1, driven by lower-margin seasonal transportation activity and in-sourcing initiatives not yet at full productivity.
- The Architectural Billings Index was 44% in March, and Q1 nonresidential construction square footage starts were down 17% year-over-year, indicating potential market challenges.
- There is ongoing macro-related end market uncertainty, with trade policy changes creating a level of uncertainty greater than expected two months ago.
- The company faces potential downside risks, including unit-on-rent deterioration in the second half of the year if customer demand reduces due to economic uncertainty.
Welcome to the first-quarter 2025 WillScot earnings conference call. My name is Sherri, and I will be your operator for today's call. (Operator Instructions) Please note this conference is being recorded.
I will now turn the call over to Charlie Wohlhuter. Charlie, you may begin.
All right. Thank you, Sherri. Good afternoon, everyone, and welcome to the WillScot First Quarter 2025 Earnings Call. Participants on today's call include Brad Soultz, Chief Executive Officer; Tim Boswell, President and Chief Operating Officer; and Matt Jacobsen, Chief Financial Officer. Today's presentation material may be found on the Investor Relations section of the WillScot website.
I'd like now to direct your attention to slide number 2 containing our safe harbor statements. 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
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