Q1 2025 WillScot Holdings Corp Earnings Call

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Sherif Abdul: Welcome to the first quarter 2025 Will Scott Earnings Conference Call. My name is Sherif and I will be your operator for today's call. At this time, all participants are in a listen only mode.

Sherry: Welcome to the first quarter 2025, well Scott earnings Conference call. My name is Sherry and I will be your operator for today's call. At this time all participants are in a listen only mode.

Sherif Abdul: Later, we will conduct a question and answer session. Please note that this conference is being recorded.

Sherry: Later, we will conduct a question and answer session. Please note that this conference is being recorded I will now turn the call over to Charlie what Charlie you may begin.

Charlie Wohlhuter: I will now turn the call over to Charlie Wohlhuter. Charlie, you may begin. All right. Thank you, Sherif.

Charlie Wohlhuter: 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.

Charlie: Alright, Thank you Sherry and good afternoon, everyone and welcome to the Wall Scott first quarter 2025 earnings call participants on today's call include Red salts, Chief Executive Officer, Tim Boswell, President and Chief operating Officer and Matt.

Matt Jacobson: Jacobson Chief Financial Officer.

Matt Jacobson: Today's presentation materials may be found on the Investor Relations section of the wall Scott website.

Charlie Wohlhuter: I'd like now to direct your attention to slide number two, containing our safe harbor statement. We will be making forward-looking statements during the presentation in 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 today's comments. For a more complete description of the factors that could cause actual results to differ in other possible risks, please refer to the safe harbor statements in our presentation and our filings with the SEC.

Matt Jacobson: I'd like now to direct your attention to slide number two containing our safe Harbor statements.

Matt Jacobson: 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.

Matt Jacobson: As a result, our actual results may differ materially from todays comments for a more.

Matt Jacobson: Sweet 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.

Bradley Soultz: With that, I'll turn the call over to Brad Soultz to begin. Thanks, Charlie. Good afternoon, everyone, and thank you for joining us today. I'm Brad Soultz, CEO of WillScot. Please turn to slide seven of our Q1 earnings release deck. Our first quarter financial results were consistent with our expectation and support reaffirming our full year 2025 outlook. While there remains macro-related in-market uncertainty, our current pending order book is up 7% year-over-year for both modular and storage products. These pending order levels should support our expected new lease activation levels in the second quarter. In Q1, our team delivered adjusted EBITDA margins of 41%, yielding $145 million of adjusted free cash flow at a 26% margin.

Brad Salts: With that I'll turn the call over to Brad salts to begin.

Brad Salts: Thanks, Charlie Good afternoon, everyone and thank you for joining us today.

Brad Salts: Brad Salt CEO of will Scott please.

Brad Salts: Please turn to slide seven of our Q1 earnings release deck.

Brad Salts: Our first quarter financial results were consistent with our expectation and support reaffirming our full year 2025 outlook.

Brad Salts: While there remains macro related and market uncertainty our current pending order book is up 7% year over year for both modular and storage project products.

Brad Salts: These pending order levels should support our expected new lease activation levels in the second quarter and.

Brad Salts: In Q1, our team delivered adjusted EBITDA margins of 41%, yielding $145 million of adjusted free cash flow at a 26% margin. We returned 45 million to shareholders and we progressed our acquisition pipeline.

Bradley Soultz: We returned $45 million to shareholders, and we progressed our acquisition pipeline. On an LTM basis, our adjusted EBITDA margins are 44%, adjusted free cash flow margins are 23%, ROIC is at 16%, yielding at $3 of free cash flow per share. We expect to build on these metrics to drive shareholder value through our margin expansion initiatives and our portfolio of $2.5 billion of growth leverage. Importantly, we believe our portfolio of growth levers provides multiple paths to achieve our goals through different in-market backdrops. The board and I have confidence in our team's ability to achieve our 3-5 year financial milestones of $3 billion in revenue, $1.5 billion in adjusted EBITDA, and $700 million in adjusted pre-cash flow.

Brad Salts: On an LTM basis, our adjusted EBITDA margins are 44% adjusted free cash flow margins are 23% ROIC is at 16% yielding at $3 of free cash flow per share.

Brad Salts: We expect to build on these metrics to drive shareholder value through our margin expansion initiatives and our portfolio of $2 5 billion of growth levers.

Brad Salts: Importantly, we believe our portfolio of growth levers provides multiple paths to achieve our goals through different end market backdrops.

Brad Salts: The board and I have confidence in our team's ability to achieve our three to five year financial milestones of $3 billion in revenue $1 5 billion, and adjusted EBITDA and $700 million and adjusted free cash flow.

Bradley Soultz: Additionally, we have multiple paths to drive pre-cash flow per share from $3 today to the top end of our revised 3-5 year range of $4 to $6 per share.

Brad Salts: Additionally, we have multiple paths to drive free cash flow per share from $3 today to the top end of our revised three to five year range of four to $6 per share.

Bradley Soultz: Now, before I turn it over to Tim and Matt for additional context, I'd like to thank our team for their steadfast commitment to our customers, to each other, and to our business.

Speaker Change: Now before I turn it over to Tim and Matt for additional context I'd like to thank our team for their steadfast commitment to our customers to each other and to our business and on behalf of our board of directors I'd like to thank Erik Olsson for his years of stewardship and worthy Jackman as he succeeds Eric as our nonexecutive.

Bradley Soultz: On behalf of our Board of Directors, I'd like to thank Eric Olson for his years of stewardship and Worthing Jackman as he succeeds Eric as our Non-Executive Independent Chairman.

Bradley Soultz: And finally, I would like to welcome Nick Cercone, who in June will represent the fourth new independent director added to the board the past three years and is indicative of our commitment to enhance our large scale industrial operational expertise. We collectively believe that we have the right strategy and as important the right team to achieve our goals for 2025 and beyond, creating multiple paths to shareholder value creation along the way.

Brad Salts: Independent Chairman.

Brad Salts: And finally, I would like to welcome Nyx or cone, who in June will represent the fourth new independent director added to the board for the past three years and is indicative of our commitment to enhance our large scale industrial operational expertise.

Brad Salts: We collectively believe that we have the right strategy and as important the right team to achieve our goals for 2025 and beyond creating multiple paths to shareholder value creation, along the way Tim.

Timothy Boswell: Thanks, Brad, and good afternoon, good evening, everybody. We, of course, just met to discuss strategy and operations in detail at the March Investor Day. So thank you again to those of you who made the trip and hopefully enjoyed what is our peak tourism season here in Phoenix. Relative to what we discussed in March, we continue to see stability commercially and progress across all of the internal initiatives that we've prioritized. So all together on track with what we presented at Investor Day with a variety of levers to improve growth and returns in our business.

Brad Salts: Yes.

Brad Salts: Thanks, Brad and good afternoon. Good evening, everybody. We of course, just met to discuss strategy and operations in detail at the March Investor Day. So thank you again to those of you who made the trip and hopefully enjoyed what is our peak tourism season here in Phoenix.

Brad Salts: Relative to what we discussed in March we continue to see stability commercially and progress across all of the internal initiatives that we've prioritized.

Brad Salts: So altogether on track with what we presented at Investor day, with a variety of levers to improve growth and returns in our business.

Timothy Boswell: Let's start commercially. When we met in March, our total pending order book was up 6% year-over-year and that has remained consistent through the end of April and is up 7% year-over-year today, as Brad mentioned, so progressing generally in line with our original volume expectations for the year. That order growth is coming entirely from our larger accounts, offsetting continued weakness in our local accounts, which is consistent with the mix of end market activity that we've been discussing for some time.

Brad Salts: Let's start commercially.

Brad Salts: When we met in March our total pending order book was up 6% year over year.

Brad Salts: That has remained consistent through the end of April and is up 7% year over year today as Brad mentioned, so progressing generally in line with our original volume expectations for the year.

Brad Salts: That order growth is coming entirely from our larger accounts offsetting continued weakness in our local accounts, which is consistent with the mix of end market activity that we've been discussing for some time.

Timothy Boswell: Headlines related to trade policy change daily, creating a level of uncertainty that is greater than we expected two months ago.

Brad Salts: Headlines related to trade policy change daily, creating a level of uncertainty that is greater than we expected two months ago.

Timothy Boswell: The Architectural Billings Index was 44 in March and Q1 non-residential construction square footage starts were down 17% year over year. So we remain cautious for all of those reasons. That said, we also have internal initiatives in flight to drive performance across our local and enterprise accounts, which we think can allow the order book to continue to outperform those market data points, and we're pleased with the build in the order book year-to-date. We are actively adding sales resources across our local and enterprise teams, increasing sales headcount sequentially by 4% in the quarter. and still expecting to increase the sales team by 10 to 20% overall through the course of the year.

The architectural Billings index was <unk> 44 in March in Q1, nonresidential construction square footage starts were down 17% year over year. So we remain cautious for all of those reasons.

Brad Salts: That said, we also have internal initiatives in flight to drive performance across our local and enterprise accounts.

Brad Salts: <unk>, which we think can allow the order book to continue to outperform those market data points and we're pleased with the build in the order book year to date.

Brad Salts: We are actively adding sales resources across our local and enterprise teams, increasing sales head count sequentially by 4% in the quarter.

Brad Salts: And still expecting to increase the sales team by 10% to 20% overall through the course of the year.

Timothy Boswell: And in May, we're rolling out both our enhanced sales HQ workbench in our CRM and our new pricing engine as planned. Those of you in Phoenix got a glimpse of these tools in March. So we expect to have both greater overall resources and productivity levers in place heading into the second half of the year. Unit pricing on new contracts across all product categories has been stable for several quarters now. We have deployed enhanced segmentation methodologies for our out-of-term pricing. and expect targeted increases on new contracts once we've stabilized in the new pricing engine. And value-added products and services continue to grow relative to the overall business, representing over 17% of revenue in the quarter, which Matt will touch on later.

Brad Salts: And in May we are rolling out both our enhanced sales HQ workbench in our CRM and.

Brad Salts: And our new pricing engine as planned.

Brad Salts: Those of you in Phoenix got a glimpse of these tools in March.

Brad Salts: So we expect to have both greater overall resources and productivity levers in place heading into the second half of the year.

Brad Salts: Yes.

Brad Salts: Unit pricing on new contracts across all product categories has been stable for several quarters now.

Brad Salts: We have deployed enhanced segmentation methodologies for our out of term pricing and.

Brad Salts: And expect targeted increases on new contracts once we've stabilized and the new pricing engine.

Brad Salts: And value added products and services continue to grow relative to the overall business representing over 17% of revenue in the quarter, which Matt will touch on later.

Timothy Boswell: In terms of field operations, logistics continue to be our biggest area of focus with delivery and installation margins contracting year over year in Q1, driven by a combination of lower margin seasonal transportation activity, and insourcing initiatives that are not yet at full productivity. As we discussed in March, this is an area where we see opportunity for significant margin expansion and competitive differentiation. Fleet availability and production continue to be key advantages for WillScot, especially in all of the larger project activity that we're seeing. We saw solid expansion in year-over-year leasing margins in the quarter. We know that our in-house production, transportation, setup, and service capabilities are best in class in the market and will become more valuable by the day with continued uncertainty around labor and input.

Speaker Change: In terms of field operations logistics continue to be our biggest area of focus with delivery and installation margins contracting year over year in Q1, driven by a combination of lower margin seasonal transportation activity and in sourcing initiatives that are not yet at full productivity.

Speaker Change: As we discussed in March this is an area, where we see opportunity for significant margin expansion and competitive differentiation.

Speaker Change: Fleet availability and production continue to be key advantages for well Scott, especially in all of the larger project activity that we're seeing.

Speaker Change: And we saw solid expansion in year over year leasing margins in the quarter.

Speaker Change: We know that our in house production transportation setup and service capabilities are best in class in the market. It will become more valuable by the day with continued uncertainty around labor and inputs.

Timothy Boswell: We are uniquely positioned without any significant supply chain constraints while ready to unlock significant operating leverage within our fleet and field operations.

Speaker Change: We're uniquely positioned without any significant supply chain constraints, while ready to unlock significant operating leverage within our fleet and field operations.

Timothy Boswell: And in our centralized operations, we saw encouraging improvements in performance levels by the team and a $30 million reduction of accounts receivable in the quarter, which is a good first step towards realizing the longer term working capital and earnings opportunities that we discussed in March. So overall, we have clear initiatives and performance levers that are within our control and give us confidence in the outlook for the year, so we're staying focused on those.

Speaker Change: And in our centralized operations, we saw encouraging improvements in performance levels by the team and a $30 million reduction of accounts receivable in the quarter, which is a good first step towards realizing the longer term working capital and earnings opportunities that we discussed in March.

Speaker Change: So overall, we have clear initiatives and performance levers that are within our control and give us confidence in the outlook for the year. So we're staying focused on those and I would like to thank the entire team for their solid execution in Q1, Matt.

Timothy Boswell: And I'd like to thank the entire team for their solid execution in Q1. Thank you, Jim.

Speaker Change: Matt.

Matthew Jacobsen: Turning to slide 22. We've provided a brief overview of the quarter. As Brad noted, Q1 results were in line with our expectations to begin the year and support our reaffirmed full year outlook for 2025. Looking at the first quarter, total revenue of $560 million declined 5% year-over-year or mid-single digits as we had expected due to lower volumes. Average units on rent were down 5% year-over-year for modular and down 16% year-over-year for storage, broadly in line with our expectations. Pricing and VAPs continue to help mitigate some of the impact from the volume declines in the quarter.

Matt Jacobson: Thank you Tim.

Speaker Change: Turning to slide 22.

Speaker Change: Provide a brief overview of the quarter as Brian noted Q1 results were in line with our expectations to begin the year and support our reaffirmed full year outlook for 2025.

Speaker Change: Looking at the first quarter total revenue of $560 million declined 5% year over year are mid single digits. As we had expected due to lower volumes average units on rent were down 5% year over year for modular and down 16% year over year for storage broadly in line with our expectations.

Speaker Change: Pricing and <unk> continued to help mitigate some of the impact from the volume declines in the quarter.

Matthew Jacobsen: Average monthly rental rates were up 5% year-over-year for modular and up 2% year-over-year for storage.

Speaker Change: <unk> monthly rental rates were up 5% year over year for modular and up 2% year over year for storage I'll touch on maps and a bit more detail shortly.

Matthew Jacobsen: I'll touch on VAPS in a bit more detail shortly. Total leasing revenue was down $26 million or 6% year-over-year, while delivery and installation revenue was down $12 million or 12%. This was partially offset by higher sales, which increased $10 million or 39%, most of which was driven by increased new sales activity. Adjusted EBITDA for the quarter amounted to $229 million at a margin of 40.9%. The margin decline year-over-year of 130 basis points was generally in line with our expectations, but impacted slightly more due to a greater mix of new sales in the quarter versus 2024.

Speaker Change: Total leasing revenue was down $26 million or 6% year over year, while delivery and installation revenue was down $12 million or 12%.

Speaker Change: This was partially offset by higher sales, which increased $10 million or 39% most of which was driven by increased new sales activity.

Speaker Change: Adjusted EBITDA for the quarter amounted to $229 million at a margin of 49%.

Speaker Change: The margin decline year over year of 130 basis points was generally in line with our expectations, but impacted slightly more due to a greater mix of new sales in the quarter versus 2024.

Matthew Jacobsen: The increase in sales mix drove approximately 40 basis points of the margin compression year-over-year in the quarter.

Speaker Change: The increase in sales mix drove approximately 40 basis points of the margin compression year over year in the quarter.

Matthew Jacobsen: Turning back up to slide 20, this is a new addition to our quarterly earnings presentation, introduced to align the discussion we had during our March 2025 Investor Day. Tim mentioned VAPS briefly in his remarks, but this slide highlights the percentage of revenue contributed by value-added products and services on a quarterly basis back to 2022. This quarter, we surpassed the 17% mark, moving steadily towards our long-term goal of generating 20-25% of total revenue from VAPS over a 3-5 year horizon. This achievement is particularly noteworthy given the 11.5% decline in consolidated units on rent, underscoring the strength and the resilience of our VAPS portfolio.

Speaker Change: Turning back up to slide 20.

Speaker Change: This is a new addition to our quarterly earnings presentation introduced to align the discussion we had during our March 2025 Investor day.

Speaker Change: Tim mentioned <unk> briefly in his remarks, but this slide highlights the percentage of revenue contributed by value added products and services on a quarterly basis back to 2022.

Speaker Change: This quarter, we surpassed the 17% Mark moving steadily towards our long term goal of generating $20 to 25% of total revenue for box over a three to five year horizon.

Speaker Change: This achievement is particularly noteworthy given the 11, 5% decline in consolidated units on rent underscoring the strength and the resilience of our vast portfolio and reflects deeper penetration of these offerings across our core product lines and reinforces our ability to drive growth through levers within our control.

Matthew Jacobsen: It reflects deeper penetration of these offerings across our core product lines and reinforces our ability to drive growth through levers within our control.

Matthew Jacobsen: Turning to cash flows on slide 23, we generated $145 million of adjusted free cash flow at a 26% margin in the quarter, which was 120 basis points higher year-over-year. This equates to adjusted free cash flow per share of $0.79 at our current share account or $3.02 over the last 12 months. The stability of our cash flows continues to be a compelling part of our business model and affords us great optionality to allocate our capital, allowing us to reinvest at strong returns for continued value creation.

Speaker Change: Yes.

Speaker Change: Turning to cash flows on slide 23, we.

Speaker Change: We generated $145 million of adjusted free cash flow at a 26% margin in the quarter, which was 120 basis points higher year over year.

Speaker Change: Equates to adjusted free cash flow per share of 79 at our current share count or $3 <unk> over the last 12 months.

Speaker Change: The stability of our cash flows continues to be a compelling part of our business model and affords us great optionality to allocate our capital, allowing us to reinvest at strong returns for continued value creation.

Matthew Jacobsen: Moving on to slide 24. We successfully refinanced our 2025 senior secured notes during the quarter, extending the maturity to 2030 at a fixed interest rate of 6.625%. Given the current interest rate environment, we view this as a proactive step to further strengthen our balance sheet to preserve ample liquidity in our ABL, which remained at over $1.6 billion as of March 31. It also increases our financial flexibility, allowing us to allocate capital towards creative investments and future growth initiatives, including both organic growth and potential M&A opportunities.

Speaker Change: Moving on to Slide 24, we successfully refinanced our 2025 senior secured notes during the quarter extending the maturity to 2030 at a fixed interest rate of six 6% 5%.

Speaker Change: Given the current interest rate environment, we view this as a proactive step to further strengthen our balance sheet to preserve ample liquidity and our ABL, which remained at over $1 6 billion as of March 31.

Speaker Change: It also increases our flexible our financial flexibility, allowing us to allocate capital towards accretive investments and future growth initiatives, including both organic growth and potential M&A opportunities.

Matthew Jacobsen: We appreciate the continued support and confidence of our debt investors in our long-term strategy and our operational execution. Moving on to slide 25, we continue to prioritize our capital investments first towards organic growth, and we invested $62 million of net capex in the quarter, which was down just slightly to the prior year of $65 million. We continue to invest in fleet refurbishments and new fleet in select categories to meet demand, including office complexes, flex, VAPs, and also into growth CAPEX into our newer product categories, such as climate controlled units, clear span, and perimeter solutions. We will also continue pursuing acquisitions that fit our criteria, and that pipeline continues to develop.

Speaker Change: We appreciate the continued support and confidence of our investors and our long term strategy and our operational execution.

Speaker Change: Moving on to Slide 25, we continue to prioritize our capital investments first towards organic growth and we invested $62 million of net capex in the quarter, which was down just slightly to the prior year of $65 million.

Speaker Change: We continue to invest in fleet, Refurbishments and new fleet in select categories to meet demand, including office complexes Flex box and also into growth capex into our newer product categories, such as climate control units clear span and perimeter solutions.

Speaker Change: We also we will also continue pursuing acquisitions that fit our criteria and that pipeline continues to develop.

Matthew Jacobsen: Lastly, in Q1 we returned $45 million to shareholders by repurchasing approximately 1.1 million shares of common stock and paying our first quarterly cash dividend of $13 million. Given the recent trading activity, we continue to be opportunistic with repurchases and repurchased an additional 741,000 shares for $18.1 million during April. Our leverage during the quarter remained flat at 3.5 times. We expect our leverage to naturally decrease, largely through earnings growth, from 3.5 times currently into our 3-5 year target range of 2.5 to 3.25 times.

Speaker Change: Lastly in Q1, we returned $45 million to shareholders by repurchasing approximately one 1 million shares of common stock and paying our first quarterly cash dividend of $13 million.

Speaker Change: Given the recent trading activity, we continue to be opportunistic with repurchases and repurchased an additional 741000 shares for $18 1 million during April.

Speaker Change: Our leverage during the quarter remained flat at three five times, we expect our leverage to naturally decrease largely through earnings growth from three five times currently into our three to five year target range of two five to 325 times.

Matthew Jacobsen: And finally, on slide 27, as Brad mentioned, we are reaffirming our 2025 financial outlook. As discussed during our investor day on March 7th, we anticipated that year-over-year unit-on-rent headwinds would persist into the first quarter before beginning to ease over the remainder of the fiscal year. First quarter results were consistent with those expectations, and our current pending orders support the underlying volume assumptions in our second quarter.

Speaker Change: And finally on slide 27.

Speaker Change: As Brian mentioned, we are reaffirming our 2025 financial outlook as discussed during our Investor day on March 7th we anticipated that year over year unit on rent headwinds will persist into the first quarter before beginning to ease over the remainder of the fiscal year.

Speaker Change: First quarter results were consistent with those expectations and our current pending orders support the underlying volume assumptions in our second quarter outlook.

Matthew Jacobsen: Out. Looking ahead to the rest of the year, we expect continued easing of volume headwinds such that rate and BAPS growth, along with our expanded product offerings, will drive modest top-line, year-over-year growth in the second half of the year. What that means for the second quarter is that we expect total revenues to improve sequentially, such that revenue will be down approximately 2.5% year-over-year, rather than nearly 5% as they were in the first quarter. From an EBITDA margin perspective, we expect margins in the second quarter to expand sequentially, similar to or slightly better than they did in the prior year, and we expect flattish adjusted EBITDA margins year-over-year in the second half of the year.

Speaker Change: <unk> ahead to the rest of the year, we expect continued easing of volume headwinds such that rate and perhaps growth along with our expanded product offerings will drive modest top year topline year over year growth in the second half of the year.

Speaker Change: What that means for the second quarter is that we expect total revenues to improve sequentially such that revenue will be down approximately two 5% year over year, rather than nearly 5% as they were in the first quarter.

Speaker Change: From an EBITDA margin perspective, we expect margins in the second quarter to expand sequentially similar to or slightly better than they did in the prior year and we expect flattish adjusted EBITDA margins year over year in the second half of the year.

Matthew Jacobsen: We remain poised to invest in our fleet, which will drive higher net capex versus last year as we continue free refurbishments and fleet repurchases in select categories to meet demand, including again some of our newer product categories that are driving the incremental spend year over year. At the midpoint of our guidance ranges, we still expect to deliver $2.375 billion in revenue, $1.045 billion in adjusted EBITDA, and $265 million in net capex for full year 2025. This is no change to the base case of our 2025 outlook from when we first provided it back in late February, and we continue to have opportunities that could take us up in the range and additional risks that could take us lower in the range.

Speaker Change: We remain poised to invest in our fleet, which will drive higher net capex versus last year as we continue free Refurbishments and fleet repurchases in select categories to meet demand, including again some of our newer product categories that are driving the incremental spend year over year.

Speaker Change: At the midpoint of our guidance ranges, we still expect to deliver $2 $3 75 billion in revenue 1.0, $4 5 billion and adjusted EBITDA and $265 million and net capex for full year 2025.

This is no change to the base case of our 2025 outlook from when we first provided it back in late February and we continue to have opportunities that could take us up in the range and additional risks that could take us lower in the range.

Matthew Jacobsen: We're cognizant of concerns over the broader market right now, driven by tariffs, labor, and other evolving policies, and we're closely monitoring these trends and the potential impact on the broader North American economy and the indirect impact on our business. The midpoint of our revenue guidance assumes that demand remains consistent with our original expectations for the year, supported by our first quarter results and by our current pending order book, which is up 7% versus last year, as Brad noted earlier. We see little direct impact from tariffs within our P&L, but there remains uncertainty about how these could influence demand in the second half of the year.

Speaker Change: We're cognizant of concerns over the broader market right now driven by tariffs labor and other evolving policies are closely monitoring these trends and the potential impact on the broader north American economy, and the indirect impact on our business.

Speaker Change: The midpoint of our revenue guidance assumes that demand remains consistent with our original expectations for the year supported by our first quarter results and by our current pending order book, which is up 7% versus last year as Brad noted earlier.

Speaker Change: We see little direct impact from tariffs within our P&L, but there remains uncertainty about how this could influence demand in the second half of the year.

Matthew Jacobsen: As a result, we've maintained a wider revenue outlook range than we generally would sitting here on March 1st. To move up from the midpoint of the revenue range, we would expect to see a combination of increased demand, incremental pricing performance, and or greater VAPS penetration. Downside risks primarily include unit-on-rent deterioration in the second half of the year, should customer demand reduce meaningfully due to economic uncertainty, which could move revenues below the midpoint. Should the demand environment change, we can quickly adapt by flexing our variable cost base to match demand levels, as we have in the past, to support margins while still supporting our customers.

Speaker Change: As a result, we've maintained a wider revenue outlook range than we generally would sitting here on March one.

Speaker Change: To move up from the midpoint of the revenue range, we would expect to see a combination of increased demand incremental pricing performance and or greater of apps penetration.

Speaker Change: Downside risks primarily include unit on rent deterioration in the second half of the year should customer demand reduce meaningfully due to economic uncertainty, which could move revenues below the midpoint.

Speaker Change: So the demand environment change, we can quickly adapt by flexing our variable cost base to match demand levels as we have in the past to support margins, while still supporting our customers, but as of today. We continue to see an order book that supports continued investment both in the form of our fleet and our sales organization as Tim noted earlier.

Matthew Jacobsen: But as of today, we continue to see an order book that supports continued investment, both in the form of our fleet and our sales organization, as Tim noted earlier. As a reminder, 95% of our revenues are generated by maintaining and releasing our existing owned assets. Our views related to the direct impacts of tariffs haven't changed much from when we spoke at Investor Day back in March. Based on our supply chain across our entire expense base, both in the P&L within CapEx, we estimate about a two to four percent annual direct impact from tariffs, with the vast majority of the increase in cost impacting our net capital.

Speaker Change: As a reminder, 95% of our revenues are generated by maintaining and re leasing our existing owned assets our views related to the direct impacts of tariffs haven't changed much from when we spoke at Investor day back in March.

Speaker Change: On our supply chain across our entire expense base both in the P&L within Capex, we estimate about a 2% to 4% annual direct impact from tariffs with the vast majority of the increase in cost impacting our net capex generally these pressures will impact competitors as well and as such historic and as we have historically.

Matthew Jacobsen: Generally, these pressures will impact competitors as well, and as we have historically, we've been able to price through cost increases to help mitigate the impact. Based on all of this, we expect a direct tariff-related impact to be quite manageable. While tariffs might create demand uncertainty in the near term, if the intended impacts are successful balancing trade and spurring increased investment in domestic manufacturing and other industries, our business could benefit from the multi-year tailwinds as we partner with our customers to transition their operations in the future. Transition is generally good for our business and supportive of increased demand for our solutions.

Speaker Change: We've been able to price through cost increases to help mitigate the impact based on all of this we expect a direct tariff related impacts to be quite manageable.

Speaker Change: While tariffs might create demand uncertainty in the near term at the intended impact our successful balancing trade in spring increased investment in domestic manufacturing and other industries or businesses, sorry, our business could benefit from the multiyear tailwind as we partner with our customers to transition their operations in the future.

Speaker Change: Transition is generally good for our business and supportive of increased demand for our solutions.

Bradley Soultz: Wrapping things up, our start to the year was in line with our expectations, and our pending order book should support our expected new lease activation levels in the second quarter. Customer demand will continue to guide our 90-day zero-based planning process, including appropriate adjustments in our cost structure and our capital spending, and we have great flexibility to adjust to changing demand, which leaves us very comfortable with our current outlook range.

Speaker Change: Wrapping things up or start to the year was in line with our expectations and our pending order book should support our expected new lease activation levels in the second quarter customer demand will continue to guide our 90 days zero based planning process, including appropriate adjustments in our cost structure and our capital spending and we have great flexibility to adjust to changing demand which Lou.

Speaker Change: So it's very comfortable with our current outlook ranges.

Bradley Soultz: I will now hand it back to Brad for some closing remarks. Thank you, Tim and Matt. Thank you to our customers for your continued business, and thank you to our team for their focus on safety and customer satisfaction. And thank you to our shareholders for your trust with your capital. We look forward to connecting with you over the course of the quarter at various conferences and meetings.

Brad Salts: I will now hand, it back to Brad for some closing remarks. Thank.

Brad Salts: Thank you Tim and Matt.

Brad Salts: Thank you to our customers for your continued business and thank you to our team for their focus on safety customer satisfaction and thank you to our shareholders for your trust with your capital we look forward to connecting with you over the course of the quarter at various conferences and meetings.

Bradley Soultz: I wish all of you listening today continued safety and good health.

Brad Salts: I wish all of you listening today continued safety and good health. This concludes our prepared remarks, operator would you. Please open the line for questions.

Unknown Executive: This concludes our prepared remarks.

Sherif Abdul: Operator, would you please open the line for questions? Thank you. To ask a question, please press star 1 1 on your telephone and wait for your name to be announced. To withdraw your question, press star 1 1 again.

Speaker Change: Thank you to ask a question. Please press star one on your telephone and wait for your name to be announced to withdraw your question Press Star one again due to time restraints. We ask that you. Please limit yourself to one question and one follow up question. Please standby, while we compile the Q&A roster.

Sherif Abdul: Due to time restraints, we ask that you please limit yourself to one question and one follow-up question. Please stand by while we compile the Q&A roster.

Andrew Wittmann: And our first question will come from the line of Andrew Wittmann with Baird. Your line is open. Great, excuse me. Thanks for taking my questions this afternoon, guys. Appreciate it. I guess just on the order book, you know, plus seven, I think it's a good result considering everything that's going on out there. These are the order book.

Speaker Change: And our first question will come from the line of Andrew Wittmann with Baird. Your line is open.

Speaker Change: Great.

Andrew Wittmann: Excuse me thanks for taking my questions. This afternoon guys appreciate it.

Speaker Change: I guess.

Just on the order book plus seven.

Speaker Change: Good result, considering everything that's going on out there.

Timothy Boswell: And so I was just wondering if you would comment a little bit about the conversion time. Are things, is the order to delivery time expanding, given some of the economic uncertainty? Are there pauses, delays, cancellations? Are things coming in and out of the order book and netting to plus seven? Maybe just some of the characteristics that underpin that, that might give us a flavor for the overall demand environment that resides under that nice 7% level that you're highlighting today.

Speaker Change: These are the order book and so I was just wondering if you could comment a little bit about the conversion time.

Speaker Change: Our things is the is the order to delivery time, expanding given some of the economic uncertainty.

Speaker Change: Are there positive delays cancellations or things coming in and out of the order book and netting to plus seven.

Speaker Change: Just some of the characteristics that underpin that might give us a flavor for the overall demand environment.

Speaker Change: <unk> is under that nice, 7% level that youre highlighting today.

Timothy Boswell: And this is Tim. It's a great question. And it might be a little bit too soon to observe some of the concerns that you're raising. So we're watching it, watching it carefully. I can say that quoting activity, for example, over the last 30 days, since Liberation Day has been up about 10% year over year across all product categories. So you're continuing to see healthy new customer inquiries coming into the funnel. We have not observed any change in conversion rates or cancellation rates. I mean, cancellation rates through Q2 so far are actually down slightly relative to prior year.

Tim Boswell: Andrew This is Tim its a great question and it might be a little bit too.

Speaker Change: Too soon.

Speaker Change: <unk> some of the concerns that you are raising so we're watching it watching it carefully I can say that.

Speaker Change: Quoting activity for example over the last 30 days since Liberation day has been up.

Speaker Change: About 10% year over year across all product categories, So you're continuing to see healthy.

Speaker Change: New customer inquiries coming into the funnel.

Speaker Change: We have not observed any change in conversion rates or cancellation rates cancellation rates through Q2, so far are actually down down slightly relative to prior year.

Timothy Boswell: So you're raising the logical concerns that are on our mind, but we just haven't observed any data yet that tells us those things are happening. And in terms of the progress through the course of the year, as long as we see this type of progress in our leading indicators, we have added to the sales force. We've got some productivity tools in the CRM and the pricing engine that should allow our teams to be more effective in the field. But to the extent we see any slowdowns or changes in customer behavior, those things are all levers that we can pull in the other direction if necessary.

Speaker Change: So youre raising the logical concerns that were also.

Speaker Change: That are on our mind, but we just haven't observed any data yet that tells us those things are happening.

Speaker Change: And in terms of the the progress through the course of the year as long as we see this type of progress in our leading indicators. We have added to the sales force we've got some.

Speaker Change: Productivity tools in the CRM and the pricing engine that should allow our teams to be more effective in the field.

Speaker Change: But to the extent, we see any.

Speaker Change: Slowdowns or changes in customer behavior. Those things are all levers that we can pull in the other direction if necessary. So we're watching it carefully though encouraged with the order book.

Andrew Wittmann: So we're watching it carefully, though encouraged with the order book billed year to date. Great, that's really helpful, Culler.

Speaker Change: Build year to date.

Matthew Jacobsen: And then for my follow up question, I guess it's probably for Matt. Matt, I wanted to ask about the VAP. Just historically you've provided kind of average and spot VAPs and you know kind of use that to talk about your goal of getting up to you know $600 per unit per month at least on the modular side there.

Speaker Change: Great that's really helpful color.

Speaker Change: For my follow up question I guess, it's probably for Matt I wanted to ask about the Fabs.

Speaker Change: Just <unk>.

Speaker Change: Historically you've provided.

Speaker Change: Kind of average and spot Fabs.

Speaker Change: Kind of use that to.

Speaker Change: Talked about your goal of getting up to $600 per unit per month at least on the modular side there.

Matthew Jacobsen: I didn't see that here so I thought I would ask if you could provide the average and spot VAPs for both the modular and the portable storage segments so we can understand the underpinning dynamics to that 17% of total revenue that you articulated here already. Yeah, sure, Andy. So I think the biggest reason for that, and we went through this a little bit at the investor day, was more around, you know, as we've expanded the overall portfolio of apps, you know, we've added in perimeter solutions, we've, you guys saw, you would have seen some of the solar, some of the solar product that's out there and some of these other products, it's just not, it's, those orders go out kind of separately now, sometimes the timing is different than our modular and our storage, and attributing those to one or the other, just doesn't doesn't really work anymore with the overall, you know, product portfolio that we're operating.

Speaker Change: I didn't see that here, so I thought I would ask if you could provide the average and spot that's for both the modular and portable storage segments.

Speaker Change: Can understand the underpinning dynamics to that 7% 17% of total revenue.

Speaker Change: You articulated here already.

Andy: Sure Andy So I think the biggest reason for that and we went through that a little bit.

Speaker Change: Investor day was more around as well.

Speaker Change: We've expanded the overall portfolio of apps, we've added in perimeter solutions.

Speaker Change: We've you guys saw you would have seen some of the solar some of the solar product Thats out there and some of these other products. It's just not.

Speaker Change: Those orders go out kind of separately announced sometimes the timing is different that are modular in our storage and attributing those to one or the other.

Speaker Change: Just doesn't it doesn't really work anymore with the overall.

Speaker Change: <unk>.

Matthew Jacobsen: That's why we've moved to this percentage of revenue, because ultimately what matters is that as we grow, as we grow the business, as we put more units on rent, as we drive rate, we're also, you know, loading each of those customers or job sites up with a full, you know, site solution. And that's where the percentage kind of came in. It's a much better way to capture all that. Okay, I'll try.

Speaker Change: Portfolio that we're operating in that's why we've moved to this percentage of revenue because ultimately what matters is that as we grow as we grow the business as we put more units on rent as we drive rate were also floating each of those customers are job sides up with a full <unk> solution.

Speaker Change: And Thats, where the percentage kind of came in it's a much better way to capture all of that.

Andrew Wittmann: Thank you, I appreciate the perspective on that. Have a good evening. Yep, thanks Andy.

Speaker Change: Okay, but I tried thank you I appreciate your perspective on that have a good evening.

Sherif Abdul: Thank you. One moment for our next question.

Speaker Change: Thanks, Andy.

Speaker Change: Thank you one moment our next question.

Faiza Alwy: And now we'll come from the line of Sherif El-Sabahi with Bank of America. Your line is open. Hi, good afternoon. I just wanted to touch on the Q2 top line outlook. Obviously, with the guy down two and a half percent, it's improving sequentially, notably. Within that, historically, Q2 volumes have come down sequentially. Is that something you still expect to happen in the second quarter?

Speaker Change: And that will come from the line of Sherri.

Speaker Change: Oh I'm.

Sherif: I am sorry, Sherif <unk> with Bank of America. Your line is open.

Hi, good afternoon.

Sherif: I just wanted to touch on the Q2 top line outlook.

Sherif: Obviously with the guide down.

Sherif: Down two 5%, it's improving sequentially, notably we've done that historically Q2 volume have come down sequentially is that something you still expect to happen in the second quarter.

Timothy Boswell: Generally, no, that's typically, you know, in a normal seasonal, because the normal seasonal cadence of our business, you do bottom typically and kind of in Q1 timeframe, and things start to build through the busier, you know, Q2, Q3 seasons. So no, our outlook would not expect that as we continue to see, you know, the orders in our book moving forward, especially in modular, right? That's the typical busy season for modular. You know, there's those different, you know, seasonal patterns within storage with the Q4 piece. So that is a little bit different, but modular, definitely not.

Sherif: Yes.

Sherif: Generally no that's typically in a normal seasonal.

Sherif: Because of the normal seasonal cadence of our business you do bottom typically in kind of in Q1 timeframe.

Sherif: And things start to build.

Sherif: Through through the busier Q2, Q3 season, so no our outlook would not.

Sherif: Not expect that.

Sherif: As we continue to see the orders in our book moving forward, especially in modular right. That's the typical busy season for modular.

Sherif: There's those different.

Sherif: Seasonal patterns within storage with the Q4 piece of that is little bit different but modular definitely not that should drive forward as we.

Timothy Boswell: That should drive forward as we go forward, and we expect stable kind of through the year. Understood. And looking just at the module delivery installation, obviously it's varied a little bit with the change in volumes. Could you give us an idea of what cadence you expect for that side of the business? for the delivery and installation you're asking about. That's correct. Yeah, so it'll grow with that increase in activity, right, in the second quarter, you know, we would expect growth, I don't know, maybe somewhere in that 10-ish percentage range as you start to get more activity there in the second quarter.

Sherif: As we go forward and we expect stable.

Sherif: For the year.

Sherif: Understood and then looking at the state the module delivery and installation.

Sherif: Obviously, it varied a little bit.

Sherif: The change in volumes could you give us an idea of what cadence you expect for that side of the business.

Speaker Change: Sorry for the delivery and installation youre asking about.

Sherif: Correct.

Sherif: Yes.

Sherif: Will grow with that increase in activity right in the second quarter.

Sherif: We would expect growth.

Speaker Change: I don't know maybe.

Speaker Change: Somewhere in that 10 ish percentage range as you start to get more activity there in the second quarter, so not to nail down maybe specific numbers, but yes definitely the DNI will grow into the second quarter as we have more activity.

Timothy Boswell: So not to nail down maybe specific numbers, but yeah, definitely the D&I will grow into the second quarter as we have more activity. Thank you.

Speaker Change: Thank you.

Scott Schneeberger: One moment for our next question. And that will come from the line of Scott Schneeberger with Oppenheimer. Your line is open. Thanks very much. And I guess to start, I'm curious, I want to want to talk about the end markets served. And there's on slide 13, a quote, about retail. And I just wanted to delve in there. It's Anticipating Improvement in Retail Customer Segment this year. And I think you've been speaking about that.

Speaker Change: Thank you one moment our next question.

Speaker Change: And that will come from the line of Scott Schneeberger with Oppenheimer. Your line is open.

Scott Schneeberger: Thanks very much.

Speaker Change: I guess start I'm curious I wanted to I wanted to talk about the end market served and there is on slide 13.

Scott Schneeberger: <unk>.

Scott Schneeberger: Sure.

Scott Schneeberger: About about retail and I just wanted to delve in there.

Scott Schneeberger: It's anticipating improvement in retail customer segment this year and I think you've been speaking about that has the.

Timothy Boswell: Has the Liberation Day updates or anything like that affected your view for the back half of the season on that, mid-year and back half?

Scott Schneeberger: Yes.

Scott Schneeberger: The liberation.

Speaker Change: Liberation day updates or anything like that affected your view.

Speaker Change: For the back half of the season on that mid year and back half. Thanks.

Timothy Boswell: Hey, Scott, this is Tim. I think the short answer is no. There hasn't been a real change in our view as to retail related demand over the last 30 days. We've had pretty in depth conversations with some of the larger accounts within that sector. And those conversations predate Liberation Day, and they're ongoing. And they're certainly contributing to the year over year growth in the order book, particularly in the storage side of the business, which we're very encouraged about. And some of that we expected, if you rewind to where we were maybe a year ago, giving the pause and some of the story model activity among some of the larger retailers, which we do see coming back.

Tim Boswell: Hey, Scott This is Tim I think the short answer is no.

Speaker Change: There hasnt been a real change in our view as to retail related demand over the last 30 days.

Speaker Change: We've had pretty in depth conversations with some of the larger accounts within that sector and those conversations pre date.

Speaker Change: Liberation day, and they are ongoing and there are certainly contributing to the year over year growth in the order book, particularly in the storage side of the business, which we're very encouraged about.

Some of that we expected if you rewind to where we were maybe a year ago give.

Speaker Change: Giving the pause in some of the store remodel activity among some of the larger retailers, which we do see coming back.

Timothy Boswell: So we haven't seen any increment or decrement specific to the tariff policy. But again, we're deeply engaged in those conversations. Encouragingly, in the retail sector, historically, as you'll know, that's primarily been a storage clientele. And we are seeing better cross selling activity with climate controlled storage and some of the rest of the offering as we engage those accounts a bit more strategically. Appreciate that, Tim.

Speaker Change: So we haven't seen any incremental or decremental specific to the tariff policy, but again were deeply engaged in those conversations encouragingly in the retail sector historically as Youll know, that's primarily been a storage.

Speaker Change: Clientele, and we are seeing better cross selling activity with climate controlled storage and some of the rest of the offering.

Speaker Change: We engaged those accounts a bit more strategically.

Scott Schneeberger: And then you guys were active with share repurchases in the quarter, and that appears to be a very logical move.

Speaker Change: Thanks, I appreciate that Tim and then.

Speaker Change: You guys were active with share repurchases in the quarter and that appears to be a very logical move just curious I guess, Matt for you with the.

Matthew Jacobsen: I'm just curious, I guess, Matt, for you, what's the, or any of you, how are you thinking about continued stock buybacks, assuming current levels, versus M&A? Maybe a little bit of discussion about what you're looking at there and the ripeness of such a pipeline. Thanks. Yeah, Scott, I don't think it's any different than the way we've approached it the last few years. As you know, M&A can be, you know, it's going to transact when it transacts, so that can be a little bit bumpy. But we'll continue to work that pipeline, and for those deals, you know, that come to us and make sense, we'll absolutely transact.

Speaker Change: Any of you how are you thinking about continued stock buybacks.

Speaker Change: Assuming current levels.

Speaker Change: Versus M&A and maybe a little bit of discussion about what you are looking at there and the rightness of such a pipeline. Thanks.

Speaker Change: Yes, Scott I don't think it's any different than the way we've approached it the last few years as you know M&A can be.

Speaker Change: It is going to transact when that transaction, so that can be a little bit a.

Speaker Change: A little bit bumpy, but we will continue to work that pipeline in for those deals.

Speaker Change: They come to us and it makes sense, we will absolutely transact.

Matthew Jacobsen: And then we'll, you know, continue to be active, you know, with our, or consistent with our kind of long-term capital allocation framework, sorry, as it relates to repurchases, and you saw again today that we announced the second dividend, you know, the dividend for Q2, which will be another way, is another way for us to return capital to shareholders. All right. Thanks.

Speaker Change: And then we will continue to be active.

Speaker Change: With our consistent with our kind of long term capital allocation for our capital allocation framework sorry.

Speaker Change: As it relates to repurchases in and you saw again today that we announced the second dividend the dividend for Q2, which will be another way is another way for us to return capital to shareholders.

Scott Schneeberger: I'll turn it over. Appreciate it. Thank you.

Speaker Change: Okay, all right. Thanks, I'll turn it over to Jay.

Manav Patnaik: One moment for our next question. And that will come from the line of Manav Patnaik with Barclays. Your line is open.

Speaker Change: Thank you one moment our next question.

Speaker Change: And that will come from the line of Manav Patnaik with Barclays. Your line is open.

Unknown Executive: Hi, this is Rony Kennedy on from Manon. Thank you for taking my questions. Can I just dive a little deeper in relation to the quote on the pending orders as a follow up to Andy's question? How is that historic? What's the historic correlation there say to activations, actual delivery and installation and ultimately UOR? How should we think about that? You know, as for the reliability of that as a leading indicator?

Speaker Change: Hi, This is roni Kennedy offer manner. Thank you for taking my questions can I just dive a little deeper in.

Speaker Change: In relation to the quote on the pending orders as follow up to Andy's question.

Speaker Change: How is that what's the historic correlation there say to activations actual delivery and installation and ultimately you or how should we think about that.

Speaker Change: For the reliability of that as a leading indicator.

Timothy Boswell: Right, and this is Tim. So we're talking about net orders, right? So that'll take out cancellations, right? When we're thinking about the net order rates that we're seeing in in the business. There can be a timing element. So depending on how much lead time a customer is giving us, between the time of order and delivery, it does appear if you look at the order book, that the timing waiting is shorter or nearer term this year relative to last year, which gives us more confidence in the activation levels that we're expecting for Q2 specific to that guidance.

Speaker Change: Brian This is Tim so we're talking about.

Speaker Change: Net orders right, so that will take out cancellations right when we're thinking about.

Speaker Change: The net order rates that we're seeing in the business.

Speaker Change: There can be a timing element so.

Speaker Change: On how much lead time, a customer is giving us.

Speaker Change: Between the time of order and delivery.

Speaker Change: It does appear if you look at the order book that the timing waiting is <unk>.

Speaker Change: <unk> or near term.

Speaker Change: This year relative to last year, which is gives us more confidence in the activation levels that were expecting for Q2 specific to that guidance. So relative to last year all else equal the book is weighted a little bit more towards the next.

Timothy Boswell: So relative to last year, all else equal, the book is weighted a little bit more towards the next four or five weeks relative to where we would have been last year. Flip side of that is maybe not as much visibility into the second half. But as you know, with our lead times, that's almost always, always the case. And we're kind of forecasting 90 days out on a on a rolling basis.

Speaker Change: Four or five weeks relative to where we would have been.

Speaker Change: Last year flip side of that is maybe not as much visibility into the second half, but as you know with our lead times, that's almost always always the case and we're kind of forecasting 90 days out on a on a rolling basis.

Timothy Boswell: So yes, absent any change in Transcript by Rev.com Page 1 Okay, thank you. And then for the guys at the midpoint, can I confirm what the underlying expectation is, with regards to volume inflection, if and when that's expected to happen? And if you're able to give a reminder on The contemplated AMR growth and UOR growth for both segments to the extent possible, please. Yeah, Ronan, maybe I'll just hit it kind of broadly. I think consistent with, you know, the outlook we would have given at the beginning of the year, not a whole lot has has really changed.

Speaker Change: So yes absent any change in.

Speaker Change: Cancellation rate or project timeline, those orders convert too.

Speaker Change: Convert to deliveries and as you know given you've got about three year lease duration in the business you need several quarters of sustained year over year delivery growth to cause a unit on rent portfolio to inflect.

Speaker Change: Okay. Thank you and then for the.

Speaker Change: The guidance at the midpoint can I confirm what the underlying expectation is with regards to volume inflection.

Speaker Change: If and when that is.

Speaker Change: And if you're able to get.

Speaker Change: Mind you on.

Speaker Change: The contemplated anr growth.

Speaker Change: <unk> growth for both segments to the extent possible.

Speaker Change: Yeah, Ron I'll, just maybe I'll just hit it kind of broadly I think consistent with the outlook, we would have given it.

Speaker Change: Beginning of the year not a whole lot has really changed we're expecting to continue to kind of eat into that volume headwind as we move throughout the year sequentially.

Timothy Boswell: We're expecting to continue to kind of eat into that volume headwind as we move throughout the year sequentially. And so, you know, by the end of the year, you're, you know, you're kind of, you're kind of maybe getting getting close to the flattish, right? Pick your pick your point. That's that's kind of the way that we view the volume, the volume side of things on rates. I think it's consistent with what we've been what we've been seeing here here recently. So, if you're looking at, you know, our modular, our modular units, you know, you're starting to grow that a little bit more as you get a bit more contribution from some of the expansions we're doing in box and those things.

Speaker Change: So by the end of the year Youre kind of you're kind of maybe getting getting close to flattish right pick your pick your point.

Speaker Change: That's that's kind of the way that we view.

Speaker Change: The volume the volume side of things.

Speaker Change: On rates I think it's consistent with what we've been what we've been seeing here here recently, so if youre looking at are modular.

Speaker Change: Our modular units.

Speaker Change: You are starting to grow that a little bit more as you get a bit more contribution from some of the expansions we're doing in <unk> and those things.

Timothy Boswell: So, you know, you might start to move up in that range that we provided the five to ten, and then on storage, you'll see a similar move from where we are today. The two percent in the first quarter, you know, as mix moves a little bit more again to the cold storage or temperature controlled storage. You'll continue to see positive contributions from that as you move throughout the year. So could we expect some further progress there? I guess is what I'm. Thank you.

Speaker Change: So you might start to move up in that range that we provided the five to 10.

Speaker Change: And then on storage you will see a similar move from where we are today the 2% in the first quarter as mix moves a little bit more again to the cold storage for temperature controlled storage Youll continue to see positive contributions from that as you move through.

Speaker Change: Without the year so.

Speaker Change: Could we expect some further progress there I guess is what I'm, saying.

Unknown Executive: Appreciate it. Thank you.

Speaker Change: Thank you I appreciate it.

Faiza Alwy: One moment for our next question. And that will come from the line of Faiza Alwy with Deutsche Bank. Your line is open. Yes, hi, thank you. Tim, you talked about logistics as the biggest area of focus. And we did see, you know, delivery and installation margins contracting. You mentioned sort of lower, lower margin seasonal transportation activities. So just talk a little bit more about that. So what is what does that really mean? And you know, how quickly do you think we can see margins improve in that particular area? Yeah, Faiza, so a couple of different things going on there.

Speaker Change: Yep.

Speaker Change: Thank you one moment, our next question and that will come from the line of Faiza <unk> with Deutsche Bank. Your line is open.

Faiza: Yes, hi, thank you.

Faiza: Tim you talked about logistics is the biggest area of focus and we did see delivery and installation margin contracting you mentioned lower all lower margin seasonal transportation activities, So talk a little bit more about ball.

Speaker Change: What does that really mean and how quickly do you think we can see our margins improve.

Faiza: In that particular.

Faiza: Yes.

Faiza: Yes, so a couple of different things going on there and I do think these margins can move relatively relatively quickly. We did have a stronger seasonal storage quarter in Q4 of last year, then that in recent years, which is a good thing.

Timothy Boswell: And I do think these margins can move relatively, relatively quickly. We did have a stronger seasonal storage quarter in Q4 last year than in recent years, which is a good thing. And the return activity on much of that volume did stretch into January and February. And on certain of those contracts, we did have flat mileage-based pricing, which in some cases came in at a lower margin, though overall from a cash contribution on that business, we were actually really, really happy with the season, but it was a, put some pressure on the margin in the quarter.

Faiza: The return activity on much of that volume did stretch into January and February and on certain of those contracts we did have.

Faiza: Flat mileage based pricing, which in some cases came in at a lower margin overall from a cash contribution on that business. We were actually really really happy with the season, but it was a.

Faiza: <unk> put some pressure on the margin in the quarter. You also have heard us talk about in sourcing activity and we are bringing more of that fixed cost in house to eliminate third party trucking that is a work in progress and I would say we added more of that.

Timothy Boswell: You also have heard us talk about insourcing activity, and we are bringing more of that fixed cost in-house to eliminate third-party trucking. That is a work in progress, and I'd say we added more of that, those resources in the quarter in anticipation of volume pickups going into Q2 and Q3.

Faiza: Those resources in the quarter in anticipation of <unk>.

Timothy Boswell: So maybe a temporary burden in the quarter that we expect to get some operating leverage out of as we progress into the second half of the year. So across logistics, the types of initiatives that we have in place, once you have those resources in-house, we talked about it in March, the cross-training of those resources to work across both the storage and modular product lines, as well as climate-controlled storage. We are actively pursuing a new scheduling capability that will allow our dispatchers to utilize those resources more efficiently. And then route optimization is kind of the last piece of that puzzle as we look forward into 2026.

Faiza: Volume pickups going into Q2 and Q3.

Faiza: So may be a temporary burden in the quarter that we expect to get some operating leverage out of as we.

Faiza: Progress into the second half of the year so.

Faiza: So across logistics the types of initiatives that we have in place. Once you have those resources in house, we talked about it in March the cross training of those resources to work across both the storage and modular product lines as well as climate controlled storage.

Faiza: We are actively pursuing a new scheduling capability that will allow our dispatchers too.

Faiza: And utilize those resources more efficiently and then route optimization is kind of the last piece of that puzzle as we look forward into 2026. So those are all things that the team is working on.

Timothy Boswell: So those are all things that the team is working on to drive profitability at the delivery and installation level.

Faiza: To drive profitability at delivery and installation level.

Faiza Alwy: Great, thank you. And then I wanted to follow up on pricing. I know you usually give us the difference or the gap between LTM delivered and reported pricing for storage and modular. If you could just give us that, that would be really helpful.

Speaker Change: Great. Thank you.

Speaker Change: Wanted to follow up on pricing I know you usually give us all the.

Speaker Change: The difference or the gap between LTM delivered on reported pricing for storage and module wondering if you could just give us that would be really helpful. But then more broadly I wanted to ask about if we do go into a more inflationary environment. Historically, what we saw last time post COVID-19.

Timothy Boswell: But then more broadly, I wanted to ask about, you know, if we do go into a more inflationary environment, like, historically, what we saw last time, you know, post COVID, like, you really benefited from that. And, you know, we saw much higher pricing from you, but I'm curious if we should think about that differently this time, just given the, I'm wondering if that was more a function of higher demand and just some of the early initiatives that you had taken on on pricing as opposed to inflation, you know, as opposed to just more broad inflation.

Speaker Change: Benefited from that and we saw much higher pricing from you, but I'm curious if we should think about that differently. This time just given.

Speaker Change: I'm wondering if that was more of a function of higher demand and just some of the early initiatives that you have taken on pricing as opposed to in place.

Timothy Boswell: So just would love your big picture thoughts.

Speaker Change: The poster, but just more broadly so just would love your.

Speaker Change: Next I'll touch on that.

Timothy Boswell: Hi, this is Tim, I'll start and I'll look to the rest of the team here to jump in. And I would tend to agree with you that inflationary environment tends to be supportive for our business. Obviously, many input costs continue to inflate. In this environment, when it comes to our, our big biggest cost, which is our fleet, we already own it. And that's the nice thing about how we're positioned. And on top of that, we have the in-house capability to ready, remanufacture, deliver, install, which is pretty unique in our industry. So we feel like we've got our our piece of the cost puzzle under under control, which I think is a relative advantage in the marketplace for others who might need to either source new equipment or use third parties to deploy that equipment.

Tim Boswell: The size of this is Tim I'll start and I'll look to the rest of the team here to jump in and I would tend to agree with you that.

Speaker Change: Inflationary environment tends to be supportive.

Speaker Change: For our business, obviously, many input costs continue to inflate in this environment when it comes to our our biggest cost which is our fleet, we already own it and that's the nice thing about how we're positioned and on top of that.

Speaker Change: We have the in house capability to ready remanufacture deliver install.

Speaker Change: Which is pretty unique in our industry.

Speaker Change: So we feel like we've got our RPC did the cost puzzle under under control, which I think is a relative advantage in the marketplace for others, who might need to either source new equipment or used third parties to deploy that equipment. The analysis is maybe a little bit different on the container side of the business.

Timothy Boswell: The analysis is maybe a little bit different on the container side of the business. But certainly at a high level, I think we've demonstrated in the past that we can take and take advantage of the inflationary environments and pass those costs through. As I said, at the outset, unclear what the implications are from a demand standpoint. Ultimately, that's where the rubber meets the road. And that's where we're being most vigilant. But you know, activity year to date has been encouraging.

Speaker Change: But.

Speaker Change: Certainly at a high level I think we've demonstrated in the past that we can take and take advantage of this inflationary.

Speaker Change: Environments and pass those costs.

Speaker Change: Through as I said at the outset unclear what the implications are from a demand standpoint, ultimately that's where the rubber meets the road and that's where we're being most vigilant but activity year to date has been encouraging.

Timothy Boswell: All right, thank you.

Matthew Jacobsen: If you don't mind, Tim, or Matt, if you could just give us that, that difference between the report on the map side by the I don't think I have anything really to add from what Andy had asked. I mean, given the portfolio that that we've expanded, it's just you can't attribute everything to one unit or the other. And that's why we've provided the update to the way that we're reporting it so that everybody can understand how that grows as the business grows.

Speaker Change: Alright. Thank you if you don't mind.

Speaker Change: If you could just give us.

Speaker Change: Yes on the Bath side Faiza I don't think I have anything really to add from what Andy had asked I mean.

Speaker Change: Given that portfolio that.

Speaker Change: We've expanded its just you cant attribute everything to one unit or the other and Thats why we.

Speaker Change: Provided the update to the way that we're reporting it so that everybody can understand how that grows as the business grows.

Matthew Jacobsen: I'll give you a good example on that one, Faiza, so think about climate-controlled storage. The majority of the value-added services that we bill on climate-controlled storages actually come either during the course of the rental or towards the end, not at the outset in the form of a delivered rate. So think about runtime charges on refrigeration equipment or telematics services and things like that. So it's really just not conducive to thinking about, okay, what's the VAPS billing at the activation of a contract versus the overall portfolio average, which is how we've talked about it in the past.

Speaker Change: I'll give you a good example in that one 5% or so think about climate controlled.

Speaker Change: Storage.

Speaker Change: The majority of the value added services that we bill on climate controlled storage has actually come.

Speaker Change: Either during the course of the rental or towards the end not at the outset in the form of it delivered right. So think about run time charges on refrigeration equipment or telematics services and things like that so it's really just not conducive to thinking about okay. What's the.

Speaker Change: Vast billing at the activation of a contract versus the overall portfolio average which is how we've.

Matthew Jacobsen: In the past, we would have said we don't have the ability to deploy value-added services after the delivery of a unit. Well, that's just not true anymore. We actually do, and that's a good thing, and that's a reason to look at it a bit differently.

Speaker Change: I talked about it in the past in the past we would have said we don't have the ability to deploy value added services. After the delivery of the unit cost just not true anymore, we actually do and Thats, a good thing and Thats a reason to look at it a bit differently.

Faiza Alwy: Great, thank you very Thank you.

Speaker Change: Great. Thank you very much.

Phil Ng: One moment for our next question and that will come from the line of Phil Ng with Jeffries.

Speaker Change: Thank you one moment our next question.

Speaker Change: And that will come from the line of Phil <unk> with Jefferies. Your line is open.

Phil Ng: Your line is open.

Phil Ng: Hey guys, any color on new activations in the quarter for modular and storage, and then it was helpful data point on the pending order being up 7% in the quarter. Any color on how that has progressed last few quarters has been generally positive, has been negative. Directionally will be helpful.

Speaker Change: Hey, guys any color on new Activations in the quarter for modular and starch and then it was helpful data point on the pending order being up 7% in the quarter.

Speaker Change: Any color on how that has progressed last few quarters has been generally positive has been negative.

Speaker Change: Directionally would be helpful.

Matthew Jacobsen: Yeah, Phil, this is Matt. I can, I can hit that. I think we gave, you know, some of that information through February at the Investor Day. I think modular was kind of low single digits down and storage was higher single digits down. What's been nice to see is over the last couple months, modular activations have really been, you know, flat year over year. So very, very stable there and encouraging. And then on storage up about 3%, you know, collectively between March and, March and April. So we have seen an uptick there. And obviously, given where the current order book is, we are feeling good about our Q2 outlook and what that looks like.

Speaker Change: Yes, Phil this is Matt I can I can hit that I think we gave.

Speaker Change: Some of that information through February at the Investor Day I think.

Speaker Change: Modular was kind of low single digits down in storage was was higher single digits down what's been nice to see is over the last couple of months.

Speaker Change: Modular activations have really been flat year over year, so very very stable, there and encouraging and then on storage up about 3%.

Speaker Change: All actively between March and March and April So we have seen an uptick there and obviously given where the current order book is we are feeling good about our Q2 outlook and what that looks like but some positive results here. The last couple of months since we last spoke.

Matthew Jacobsen: But some, some positive results here in the last couple of months since we last spoke. And in the order book, how that's trended the last few quarters. The order book's been very consistent since March, you know, the 6% as of end of March and 7% as we kind of sit here today. So it really fell off towards the end of last year. I mean, the build year to date has been certainly steeper than it would have been just to start last year. So that piece has been encouraging. Yep.

Speaker Change: And then the order book, how that's trended in the last few quarters.

The order book span very consistent since March.

Speaker Change: The 6% as of end of March.

Speaker Change: 7% as we kind of sit here today, so it really fell off towards the end of last year and the build year to date has been certainly steeper than it would have been.

Speaker Change: To start last year, so that pieces.

Speaker Change: It has been encouraging.

Matthew Jacobsen: That's great.

Speaker Change: Okay.

Timothy Boswell: And then you guys talked about how perhaps you're seeing brighter strength or your order book particularly for some of these larger customers relative to smaller customers. Can you expand on that? What's driving that? Is that some of the go-to-market strategy you guys have talked about that's a WillScot initiative or just your scale or just the customer makes it a little different in terms of liquidity? Bill, I think this has been going on for, you know, the better part of the last 18 months in terms of the composition of end market activity in the non-res construction sector, whether it's large mega projects, reshoring, things like that, that we've been talking about for a while now.

Speaker Change: Great and then you guys talked about how perhaps you're seeing broader strength or your order book, particularly for some of these larger customers relative to smaller customers can you expand on that what's driving that is that some of the go to market strategy. You guys have talked about that's a well Scott initiative or just your scale or just a customer mix is a little different in terms of liquidity.

Speaker Change: Bill I think this has been going on for the better part of the last 18 months in terms of the composition of end market activity in the non res construction sector, whether it's large mega projects re shoring things like that that we've been talking about for a while now and I think the larger the project.

Timothy Boswell: And I think, you know, the larger the project, generally those are going to go to the larger pan-North American general contractors who, in all cases, are enterprise accounts of us, and we're disproportionately well-positioned to compete and win for that, win that business, and that's really all we're seeing right now. As we talked about in March when we were together, we are taking a fresh look at our approach to enterprise accounts, and really allocating talent and resources in that area. I think it's a great growth opportunity for the company. I can't say that any of those efforts have manifested themselves yet in the results, but certainly as we look through to the end of the year and into 2026, I think that's an area where we can really drive some traction.

Speaker Change: Generally those are going to go to the larger Pan North American General contractors, who in all cases, our enterprise accounts of us and we're disproportionately well positioned to compete and win for that win that business.

Speaker Change: That's really all we're seeing right now as we talked about in March where together we are.

Speaker Change: Taking.

Speaker Change: A fresh look at our approach to enterprise accounts and really allocating.

Speaker Change: Talent and resources in that area I think it is.

Speaker Change: Great growth opportunity for the company I can't say that any of those efforts.

Speaker Change: We have many.

Speaker Change: Manifested themselves yet in the results, but certainly as we look through.

Speaker Change: To the end of the year and into 2026, I think thats an area, where we can really drive some traction.

Timothy Boswell: Is there any nuance in terms of the margins between these bigger customers versus smaller customers? On the margin, so the larger the customer, the longer the duration, the fewer turns you've got on your equipment. Pricing, it's hard to really generalize. This is not a business where your largest customers necessarily get the best price, right? Sometimes the larger customers have other purchasing criteria like being on time, being on budget, no project delays, product quality, service levels, et cetera. So we do see pricing and VAPS opportunities on these larger projects. So it's a bit hard to make that generalization, Phil.

Speaker Change: Is there any nuance in terms of the margins between these bigger customers versus smaller customers.

Speaker Change: Ed.

Speaker Change: On the margin so the larger the customer the longer the duration. The few returns you've got on your equipment.

Pricing, it's hard to really hard to really generalize. This is not a business where your largest customers necessarily get the best price, sometimes the larger customers have other purchasing criteria like being on time being on budget No project delays product quality service levels et cetera.

Speaker Change: So we do see pricing in <unk> opportunities on these larger projects.

Speaker Change: So it's a bit hard to make that make that generalization Phil.

Phil Ng: Okay.

Unknown Executive: Thank you. Appreciate the call. Thank you.

Speaker Change: Okay. Thank you appreciate the color.

Angel Castillo: One moment for our next question and that will come from the line of Angel Castillo with Morgan Stanley. Your line is open. Hi, thanks for taking my question. Just wanted to ask a little bit about maybe some of this divergence that you're seeing with, you know, good quoting activity, good levels of kind of pending orders, and yet you kind of talked about ABI earlier, how that's kind of ticked lower, and we've seen some of the construction-type data, you know, remaining a little bit more hesitant, but it doesn't seem to be showing up in terms of your quoting and what you're seeing from your customers.

Speaker Change: Sure.

Speaker Change: Thank you one moment, our next question and that will come from the line of Angel Castillo with Morgan Stanley. Your line is open.

Angel Castillo: Alright, Thanks for taking my question.

Angel Castillo: Just wanted to ask a little bit about maybe some of this vertical.

Angel Castillo: Good quoting activity.

Angel Castillo: Kind of pending orders and yet you kind of talked about Abi earlier, how thats kind of tick lower and we've seen some of your construction type data.

Angel Castillo: The remaining a little bit more hesitant, but it doesn't seem to be showing up in terms of your quoting and what youre seeing from your customers. So just curious anything you can kind of glean from your conversations as to maybe what's driving that divergence is it just the level of expectations.

Timothy Boswell: So, just curious, anything you can kind of glean from your conversations as to maybe what's driving that divergence? Is it just level of expectations, you know, kind of near-term or improvement, or is it more the kind of verticals that you might be exposed to where you're seeing kind of that demand offset other areas?

Angel Castillo: Kind of near term or improvement or is it more the kind of verticals that you might be exposed to.

Angel Castillo: What are you seeing kind of that demand offset other areas.

Timothy Boswell: Hi, Angel, it's Tim. Certainly the larger project activity that you're very familiar with continues to drive the order book. I said in my prepared remarks, all of the year over year growth in the order book is coming from our, our enterprise account. So we still see weakness across local accounts. We're trying to attack both sides of the market. I talked about sales resources and productivity tools. Those are largely directed at local market penetration, which we talked about when we were together in March. And I just mentioned efforts that we're putting behind the enterprise side of the business.

Hey, Joe It's Tim certainly the larger project activity that you're very familiar with continues to drive the order book I said in my prepared remarks, all of the year over year growth in the order book is coming from our our enterprise account, so we still see weakness across.

Angel Castillo: Local accounts, we're trying to attack both sides of the market.

Angel Castillo: I talked about sales resources and productivity tools those are largely directed at local market penetration, which we talked about we're together in March.

Angel Castillo: And I just mentioned efforts that we're putting behind the enterprise side of the business. So I think these dynamics have been going on for some time, we haven't seen any significant.

Timothy Boswell: So I think these dynamics have been going on for some time. We haven't seen any significant changes yet. But as I mentioned earlier, we're quite vigilant, given all the data points that you just referenced, in which we watch carefully.

Angel Castillo: Changes, yet, but as I mentioned earlier, we're quite vigilant given all the data points that you just referenced.

Angel Castillo: And which we watch carefully.

Timothy Boswell: Maybe just one quick clarifier and then a follow-up. Just on the local markets, I guess is the right way to read that. It's that it's not getting worse. You're just not seeing maybe an improvement.

Angel Castillo: Maybe just one quick clarifying.

Angel Castillo: A follow up just on the local markets I guess is the right way to read that is that it's not getting worse. You are just not seeing maybe an improvement and then maybe just on the follow up side you noted some improvement there on the accounts receivable.

Matthew Jacobsen: And then maybe just on the follow-up side, you noted some improvement there on the accounts receivable. That was one area that I think you had really gone into a little bit more detail at the end yesterday. Just, can you just talk about kind of the progress that you're seeing there toward your kind of 65 days of day sales outstanding and just how that's kind of progressing overall?

Angel Castillo: That was one area that I think you had really gone into a little bit more detail at the Investor Day. Just can you just talk about kind of the progress that youre seeing there towards your kind of 65 days of days sales outstanding and just how that kind of progressing overall.

Timothy Boswell: I'll talk about the local account piece. Yeah, we haven't seen any market data points that tell us that the local market segments are getting any better. To the extent we get any traction there, I think it's going to be through our own internal initiatives and just frankly being better organized going into 2025 than we were going into 2024. And we talked about sales coverage and roles at the Investor Day. We talked about the productivity tools. And frankly, just good old fashioned performance management is another lever that's being pulled pretty strongly here. So we haven't assumed any recovery of any type in terms of the local market conditions and the guidance.

Angel Castillo: Now I'll talk about the local account piece, yeah, we haven't seen any market data points that tell us that the local.

Angel Castillo: Market segments or getting any better to the extent, we get any traction there I think it's going to be through our own internal initiatives and just frankly being better organized going into 2025, then we were going into 2024, and we talked about sales coverage enrolls at the Investor day, we talked about the productivity tools.

Angel Castillo: And frankly, just old good old fashion performance management is another lever that's being pulled.

Angel Castillo: Pretty strongly here so.

We haven't assumed any recovery or any of any type in terms of the local market conditions in the guidance and I'll, let Matt maybe talk about working capital and tobacco costs more broadly, yes, I think on the working capital side. It's early early days right.

Matthew Jacobsen: And I'll let Matt maybe talk about working capital and the back office more broadly. Yeah, I think on the working capital side, it's early days, right? So I definitely saw some progress here in the first quarter as the team's gotten organized and started to really work through some of these things. And it's something that obviously is a focus for this year. So we'll continue to see progress as we go. But we did see a $30 million reduction in total AR during the period, which is an encouraging start. So it'll continue to be a focus for us as we go forward.

Angel Castillo: <unk> saw some progress here in the first quarter at the team's got gotten to organize and being started two to really work through some of these things and it's something that obviously is a focus for this year. So we'll continue to see progress as we go but we did see a $30 million reduction in total <unk> during the period, which are us and encourage.

Angel Castillo: <unk> start so it will continue to be a.

Matthew Jacobsen: And we look forward to providing continued updates as we move along.

Angel Castillo: A focus for us as we go forward and we look forward to providing continued updates as we move along.

Unknown Executive: Appreciate it.

Tim Mulrooney: Thank you.

Angel Castillo: Appreciate it thank you.

Tim Mulrooney: One moment for our next question. And that will come from the line of Tim Mulrooney with William Blair. Your line is open. Yeah, good afternoon. Thanks for taking my question. I've been bouncing around conference calls. So I apologize if you answered this already, but your comments on the order book are helpful.

Speaker Change: Thank you one moment our next question.

Speaker Change: And that will come from the line of Tim Mulrooney with William Blair. Your line is open.

Tim Mulrooney: Yes. Good afternoon. Thanks for taking my question I have and thoughts around conference calls so I apologize if you answered this already but your comments on the order book are helpful. But I was wondering if you could comment on how actual activations have trended in recent months.

Matthew Jacobsen: But I was wondering if you could comment on how actual activations have trended in recent months, if it's been following a normal level of seasonality that you'd expect for March and April, better or worse. Yeah, Tim, I think what we've seen is, I'll talk May 1st order book, we have seen order book kind of ramp up a bit more this year towards normal seasonality than last year. Last year, didn't really see the normal Q2 ramp that we had historically seen. So that part has been normal. I'm not sure if you caught this piece or not, but when we spoke last in March, we had said that modular activations had been down kind of low single digits year over year, and storage was higher single digits year over year.

Speaker Change: It has been following a normal level of seasonality that you would expect from March and April better or worse. Thank you.

Speaker Change: Yes, Tim I think what we've seen is I'll talk maybe first order book, we have seen order book kind of ramp up a bit more this year towards normal seasonality than last year last year.

Speaker Change: Didn't really see the normal Q2 ramp that we had historically seen so that part has been normal I'm not sure. If you caught this piece or not but when we spoke last in <unk>.

Speaker Change: March we had said that modular activations had bed down kind of low single digits year over year and storage was higher single digits year over year in March and April modular Activations were roughly flat with last year, So thats encouraging.

Matthew Jacobsen: In March and April, modular activations were roughly flat with last year, so that's encouraging. And for storage, it was up 3% March and April combined over last year. So, you know, progress from where we were beginning of March and kind of consistent with what we're seeing as the order book has improved here from the beginning of the year. Okay, so seeing some improvement from from earlier, that's helpful.

Speaker Change: And for storage it was up 3% March April combined over last year. So progress from where we were beginning of March and kind of consistent with what we're seeing is the order book has improved here.

Speaker Change: From the beginning of the year.

Speaker Change: Okay. So seeing some improvement from earlier that's helpful. And then just real quick on pricing as I look at average modular.

Timothy Boswell: And then just real quick on pricing, as I look at average modular, you know, monthly rental rate that we have here in the model, it looks like in the first quarter, You know, both modular and storage a little bit lower in the first quarter relative to what you had in the fourth quarter. And I'm used to that number just compounding and going up every quarter. And I think this might be the first quarter where we've kind of seen it tick down a little bit sequentially. But I also know there's noise in the numbers, right? There's seasonality, there's mix, there's vaps, there's a lot of things here.

Speaker Change: Monthly rental rates.

Speaker Change: That we have here the model it looks like in the first quarter.

Speaker Change: Both modular and storage a little bit lower in the first quarter relative to what you.

Speaker Change: Add in the fourth quarter and I'm used to that number just compounding it going up every quarter and I think.

Speaker Change: This might be the first quarter, where we've kind of seen it ticked down a little bit sequentially, but I also know there's noise in the numbers right. There seasonality there is mix Theres <unk> theres a lot of things here.

Timothy Boswell: But I was just wondering if you could help us understand, like, did you lower prices on your base units? Is it lower spot pricing that's driving it? Or is it activations, returns, mix, other things that I may not be thinking about?

Speaker Change: But I was just wondering if you could help us understand like did you did.

Speaker Change: Did you lower prices on your base units is it lower spot pricing, that's driving it or is it activations returns mix other things that that I may not be thinking about and how should we think about pricing, particularly in storage as we move through the year. Thank you.

Timothy Boswell: And how should we think about pricing, particularly in storage as you move through the year? Thank you. It's him. This is Tim Boswell. It's a it's a fair observation. If you just think about spot rates across all major product categories, single wide mobile offices, ground level offices, complexes, flex, dry storage, climate controlled storage, They're sequentially flat, effectively, for the last several quarters, with a little variation here and there, but there's been no meaningful reductions of spots as we've progressed through the last couple of quarters. And we do see some targeted opportunities to be a bit more aggressive there as we progress through 2025, which we will get after once we're stabilized in the new pricing engine.

Speaker Change: Yes.

Tim Boswell: This is Tim Boswell.

Tim Boswell: Fair observation, if you just think about spot rates across all major product categories single wide mobile offices ground level office as complex as <unk>.

Tim Boswell: <unk> dry storage climate control.

Tim Boswell: Sequentially flat effectively for the last several quarters with a little variation here and there, but theres been no.

Tim Boswell: Meaningful reductions of spots as we've progressed through the last.

Tim Boswell: A couple of quarters, and we do see some targeted opportunities to be a bit more aggressive there as we progress through 2025, which we will get after once we're stabilized and the new pricing engine certainly in terms of the sequential progression of storage.

Timothy Boswell: Certainly, in terms of the sequential progression of storage, you have a fairly pronounced impact of climate-controlled storage in Q4 of 2024, just because the percentage unit on rent growth in climate-controlled relative to dry was much higher. And as that seasonal business came off in Q1, it results in that change in AMR and storage. I think the best way to think about pricing through the course of 2025 is to assume that we can deliver kind of modest sequential gains across both of those major product categories as we progress through the year. In modular, that'll be driven by just the fact that spots continue to be comfortably above the portfolio average.

Tim Boswell: You have a fairly pronounced impact of climate controlled storage in Q4 of 2024, just because of the percentage unit on rent growth and climate controlled relative to dry was much higher.

Tim Boswell: And is that seasonal business came off in Q1 it results in that change in <unk>.

Tim Boswell: In storage I think the best way to think about pricing through the course of 2025 is to assume that we can deliver kind of modest sequential gains across both of those major product categories as we progress.

Tim Boswell: Through the year and modular that'll be driven by just the fact that spots continue to be comfortably above the portfolio average and in storage that will be more driven by the ongoing mixed benefit of climate controlled as that portfolio.

Timothy Boswell: And in storage, that'll be more driven by the ongoing mixed benefit of climate-controlled as that portfolio actually continues to perform quite well. Got it. Thanks, Tim. Thank you.

Tim Boswell: Actually continues to perform quite quite quite well.

Tim: Got it thanks, Tim.

Brent Thielman: One moment for our next question. And that will come from the line of Brent Thielman with DA Davidson. Your line is open. Hi, this is John Vales for Brent. Thank you for your time.

Speaker Change: Thank you one moment our next question.

Speaker Change: And that will come from the line of Brent Thielman with D. A Davidson your line is open.

John Varies: Hi, This is John varies from brands. Thank.

Speaker Change: Thank you for your time.

Unknown Executive: Regarding your initiatives, can you talk about your ability to stay on the construction sites or, as you spoke, I think in the analysis, being able to capture more momentum and stay at a beyond phase one and two? Yeah, could you talk about that, both at the local, regional level and at the enterprise level? Yeah, this is Tim. It's a it's an important opportunity that we need to get better at as a commercial, a commercial team. We are excellent at winning these larger projects. And that's just a testament to the relationships that we have with the larger North American general contractors who are most likely to be leading these projects.

Speaker Change: Regarding your initiatives can you talk about your ability to stay on.

Speaker Change: The construction sites or as you spoke I think in the analyst day being able to capture the momentum in state.

Speaker Change: Beyond phase one and two could you talk about that both at the local regional level and then at the enterprise level.

Speaker Change: Yes. This is Tim it's a it's an important opportunity that we need to get better at as the commercial our commercial team. We are excellent at winning these larger projects and that's just a testament to the relationships that we have with the larger.

Speaker Change: North American General contractors, who are most likely to be leading these projects.

Timothy Boswell: But to your point, these tend to be long duration, we're seeing three, five, seven year mega projects. And the challenge to our team is how do we be present through the course of that project duration, and to ensure that our local sales teams are incentivized, incentivized to capture all of that subcontractor activity, all of that transactional activity, rather than just being satisfied, satisfied with the large GC relationship. So that's an ongoing focus and initiative here. It requires close collaboration between our enterprise accounts team, and the local leadership and sales team. And it's certainly an opportunity for us, given the mix of activity that we're seeing in the end market.

Speaker Change: But to your point.

Speaker Change: These tend to be a long duration, we're seeing 357 year Mega.

Speaker Change: Mega projects and the challenge to our team is how do we be present through the course.

Speaker Change: That project's duration and to ensure that our local sales teams our incentives incentivized to capture all of that subcontractor activity all of that transactional activity rather than just being satisfied satisfied with the large <unk>.

Speaker Change: <unk> relationships, so that's an ongoing.

Speaker Change: Our focus and initiative here and it requires close collaboration between our enterprise accounts team and the local.

Speaker Change: Our leadership and sales team and it's certainly an opportunity for us given the mix of activity that we're seeing in the end markets.

Timothy Boswell: Thank you. And as a follow up, given with what's going on at the commercial level and private being down and all the noise that's going on. Are you guys able to increase your market share given at the local or regional level, perhaps as some of your competitors might not have the balance sheet or maybe the capacity to withstand some of these headwinds? Yeah, any caller now, that would be helpful. I'll start. This is Tim. I think the build in the order book relative to some of the third party market data points that we pointed to, I think, tells us that we are more than holding our own when it comes to market share.

Speaker Change: Thank you and as a follow up.

Speaker Change: Given with what's going on the commercial.

Speaker Change: Level in private being down.

Speaker Change: Oh, no that's going on.

Speaker Change: Are you guys able to increase your market share.

Speaker Change: At the local or regional level, perhaps.

Speaker Change: Some of your competitors might not have the balance sheet or maybe the capacity too.

Speaker Change: And some of these headwinds.

Speaker Change: Yes, any color on that that would be helpful.

Tim: I'll start this is Tim I think the.

Speaker Change: Building the order book relative to some of the third party market data points that we pointed to I think tells us that we are.

Speaker Change: More than holding our own when it comes to.

Speaker Change: Market share and I think thats again, the mix of activity favoring the larger projects and larger gcs.

Timothy Boswell: And I think that's, again, the mix of activity favoring the larger projects and larger GCs works in our favor in this environment. Certainly, in terms of the ability to deploy incremental capacity into the market, nobody is better positioned than WillScot, and nobody has a lower marginal cost than WillScot. And that's just an advantage of having the largest fleet in the industry and having all of the in-house capabilities to deploy that fleet efficiently into the market. I can't say sitting here today that the supply side of the industry has seen meaningful incremental constraints since Liberation Day, but that's certainly a possibility if inputs, labor, materials, et cetera, get more constrained due to the trade environment as we progress through the year.

Speaker Change: Works in our favor in this environment certainly in terms of the ability to deploy it.

Speaker Change: Commensal of capacity into the market nobody is better positioned than well Scott and nobody has a lower marginal cost then well Scott.

Speaker Change: And that's just an advantage of having the largest fleet in the industry and having all of the in house capabilities to deploy that fleet.

Speaker Change: Efficiently into the market I cant say sitting here today that the supply side of the industry has seen meaningful incremental constraints since liberation day, but that's certainly a possibility if inputs labor materials et cetera get more constrained due to the trade environment as we progress through the year.

Bradley Soultz: But that's more of a hypothetical right now. The only thing I would add to that for folks, this is Brad, is Tim mentioned the leverage we have in our operating platform as volumes come back. That's absolutely the case locally on the commercial side. So the team has never been better equipped with tools and technology and never more stable. So as and when those markets come back, we're going to be equally well positioned to outperform locally as we're already seeing at the enterprise level.

Speaker Change: But.

Speaker Change: But that's more of a hypothetical right now.

Brad Salts: The only thing I would add to that for folks. This is Brad as Tim mentioned the leverage we have in our operating platform as volumes come back.

Speaker Change: Absolutely the case locally on the commercial side. So the team has never been better.

Speaker Change: With tools and technology.

Speaker Change: And never more stable, so as and when those markets come back we're going to be equally well positioned to outperform locally as we're already seeing at the enterprise level.

Matthew Jacobsen: Thank you, and if I could sneak one more, and I apologize if perhaps you already touched on it, but among the different categories, which vertical is providing your ability to withstand some of these headwinds between construction, energy, and so forth? I think we're, this is Matt speaking, just as we look at kind of year-over-year revenues, you know, from that perspective, it's pretty consistent with what we've said. We've seen increases, you know, from our large GCs. We've seen some increases in infrastructure, a little bit in manufacturing, actually. And then, as we talked about earlier, we do expect sequential growth in the retail and wholesale side related to some of the retail remodels we've been talking about.

Speaker Change: Thank you and if I could sneak one more and I apologize if perhaps you already touched on it but among the.

Speaker Change: Different categories.

Speaker Change: Which vertical is providing.

Speaker Change: Your ability to withstand some of these headwinds between construction energy and so forth.

Speaker Change: I think where are we this is Matt speaking just as we look at kind of year over year revenues from that perspective, it's pretty consistent with what we've said we've seen increases from our large dcs, we've seen some increases in infrastructure, a little bit manufacturing actually.

Speaker Change: And then as we talked about earlier, we do expect sequential growth in the retail and wholesale side related to some of the retail remodels, we've been talking about.

Matthew Jacobsen: And some of the areas like subcontractors, which are on some of the smaller projects, we've continued to see that be a bit more challenged. So no different than kind of what we've said from the incoming demand that we're seeing. Great.

Speaker Change: And some of the areas like sub contractors, which are on some of the smaller projects. We've continued to see that a bit more challenged so no different than kind of what we've said from the incoming demand that we're seeing.

Unknown Executive: Thank you so much. I appreciate the time. Thank you.

Speaker Change: Great. Thank you so much I appreciate the time.

Steven Ramsey: One moment for our next question and that will come from the line of Steven Ramsey with Thompson Research Group. Your line is open. Hi, good evening.

Speaker Change: Thank you one moment our next question.

Speaker Change: And that will come from the line of Steven Ramsey with Thompson Research Group. Your line is open.

Timothy Boswell: With the order book ramping up, given it's totally large projects driving that, does it reflect any improvement of cross-selling a larger portfolio of your products into these projects, or is there any way to think about WillScot's density on large projects, and if there's a long-term upward trend now, maybe compared to the last one or two years? Steven, this is Tim. It's an outstanding question because this is one of the primary commercial strategies that we are focused on across the sales organization right now. We've got a pretty good system in place where we've got clear visibility across all project activity in North America.

Steven Ramsey: Hi, good evening with the order book ramping up given its totally large projects driving that.

Speaker Change: Does it reflect any improvement of cross selling.

Speaker Change: A larger portfolio of your products into these projects or is there any way to think about well Scott density on large projects and if there is a long term upward trend now maybe compared to the last point or two years.

Speaker Change: Yeah.

Tim Mulrooney: Stephen This is Tim it's an outstanding question because this is one of the primary.

Tim Mulrooney: Commercial strategies that we are focused on across the across the sales organization right now and we've got a pretty good system in place, where we've got clear visibility across all project activity.

Timothy Boswell: We're absolutely looking at product penetration across all of those projects. And when we go out to do market visits or branch visits, project penetration and then cross-selling within those projects is a core focus at the market level. I will not say that we're satisfied with where we're at yet, right?

Tim Mulrooney: In North America, we're absolutely looking at product penetration across all of those projects and when we go out to do market visits or branch visits project penetration and then cross selling within those projects is a core focus.

Tim Mulrooney: At the market at the market level I will not say that we're satisfied with where we're at yes right.

Timothy Boswell: So I think that this is a prospective opportunity for the company and not reflected in the activity that we've seen to date, but we are laser focused. Okay, that's helpful.

Tim Mulrooney: Alright, So I think that this is a prospective opportunity for the company and not reflected in the activity that we've seen to date, but we are laser focused on it.

Timothy Boswell: And maybe if there's another way to think about this topic, your VAPs as a percentage of revenue for the company. Can you isolate VAPS as a percentage of revenue on these large projects? Basically, the VAPS penetration on large projects, is it better than local market projects? I can't say that, Steven.

Speaker Change: Okay. That's helpful and maybe if there is another way to think about this topic.

Speaker Change: <unk> as a percentage of revenue for the company.

Speaker Change: Can you isolate that as a percentage of revenue on these large projects basically the <unk> penetration on large projects is better than local market projects.

Speaker Change: I can't say that Steve and if you look at that penetration.

Timothy Boswell: If you look at VAPS penetration by product, that's another way to think about it. And this is where Nick starts to come into play again. We actually have some of our best VAPS penetration on a per-square-foot basis on our Flex product, which is the fastest growing product within our modular portfolio and highly conducive to these larger sites that require complexes. On the flip side, single wide mobile offices are an area where historically they're a transactional category. They're very common for local clientele. We get very good VAPS penetration on those, and that category has been struggling just given the end market mix.

Speaker Change: By product that's another way to think about it.

Speaker Change: And this is were mixed.

Speaker Change: Mix starts to come into play again, we actually have some of our best <unk> penetration on a per square foot basis on our flex product, which is the fastest growing.

Speaker Change: Product within our modular portfolio in highly conducive to these larger sites that require complexes.

Speaker Change: On the flip side Single-wide mobile offices.

Speaker Change: Or an area, where historically there are transactional category, they're very common for local clientele, we get very good vast penetration on those in that category has been struggling just given the.

Unknown Executive: So during the investor day, we talked about selling value and the different levers that we have to pull there. Pricing engine has been deployed. Flex, totally differentiated product, fastest growing in our modular portfolio with the highest per-square-foot VAPS penetration. And then some of the newer categories like temperature controlled storage also performing quite well. So we're seeing momentum across a number of those levers. That's helpful.

Speaker Change: End market mix so during.

Speaker Change: During the Investor day, we talked about selling value and the different levers that we have to pull their.

Speaker Change: Pricing engine has been deployed flex totally differentiated product fastest growing.

Speaker Change: Our modular portfolio with the highest per square foot thats penetration.

Speaker Change: And then some of the newer categories like temperature controlled storage also performing quite well. So we're seeing we're seeing momentum across a number of those levers.

Speaker Change: That's helpful. Thank you.

Unknown Executive: I'm showing no further questions in the queue at this time.

Speaker Change: Thank you I'm showing no further questions in the queue. At this time I would now like to turn the call back over to Charlie for any closing remarks.

Charlie Wohlhuter: I would now like to turn the call back over to Charlie for any closing remarks. All right, well, thank you very much, everyone, for your interest and participation in the call today. As Brad said, we look forward to connecting with you over the course of the quarter at various conferences and meetings. Hope you have a good night, and we'll talk soon.

Charlie: Alright, well. Thank you very much everyone for your interest and participation in the call today as Brad said, we look forward to connecting with you over the course of the quarter at various conferences and meetings hope you have a good night.

Speaker Change: We'll talk soon.

Charlie Wohlhuter: This concludes today's program. Thank you all for participating. You may now disconnect.

Speaker Change: This concludes today's program. Thank you all for participating you may now disconnect.

Unknown Executive: Thanks for watching!

Speaker Change: Okay.

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Speaker Change: Okay.

Speaker Change: Yeah.

Speaker Change: Okay.

Speaker Change: Yes.