WSC

WillScot leases modular space and portable storage units to construction and commercial customers — a high-margin rental model, shown by the 51.0% gross margin. But FY2025 was a down year: revenue fell 4.8% to $2.28B, operating income dropped 31.2% to $181M, and the company swung to a net loss of $53M (-$0.29 EPS) from a small profit. With operating income still solidly positive, the net loss is driven below the operating line — chiefly heavy interest expense on a debt-laden balance sheet, plus likely transaction/impairment items. The multi-year history shows how far profitability has fallen: net income ran $160M, $340M, $476M, $28.1M and now -$53M, tracking softer non-residential construction activity.

The cash engine, however, remains strong. Operating cash flow rose 35.7% to $762M against minimal maintenance capex, so the rental fleet throws off substantial cash even as GAAP earnings turned negative. That cash funds the dividend ($51.1M) and debt service. The concern is the capital structure: liabilities of $4.96B against just $856M of equity put leverage at 5.79x, with retained earnings deeply negative at -$800M (a function of the leveraged roll-up/buyback history) and cash of only $14.6M.