WillScot Corporation (WSC) saw its shares tumble nearly 7% in after-hours trading on Monday after the modular space solutions provider reported third quarter revenue that missed Wall Street expectations and cut its full-year outlook, overshadowing better-than-expected earnings for the period.

For the three months ended September 30, WillScot posted revenue of $601.4 million, down 0.6% year-over-year and below the consensus estimate of $617.8 million. The company attributed the top-line miss primarily to softer volumes in its construction end markets as non-residential construction activity remained subdued during the quarter.

However, pricing trended higher across WillScot's modular and storage rental offerings, with average monthly rates for modular units up 6% year-over-year and storage rates up 9%. Adjusted EBITDA margins also expanded 50 basis points from a year ago to 44.4%, driven by rigorous cost controls and operating efficiencies.

On the bottom line, WillScot reported adjusted earnings of $0.38 per share, beating the consensus estimate of $0.36 per share. The earnings upside was driven in part by a $180 million termination fee paid by the company related to its abandoned merger with McGrath RentCorp.

Looking ahead, WillScot lowered its full-year 2024 adjusted EBITDA guidance range to $1.05-1.07 billion, down from its prior outlook of $1.33-1.37 billion. The company cited expectations of a prolonged downturn in non-residential construction markets, which has impacted overall rental demand.

Despite the near-term headwinds, WillScot expressed optimism that steadying interest rates and reduced political uncertainty could set the stage for improved growth prospects in 2025 as it continues investing in new products and commercial capabilities. The company also noted its strong cash flow generation remained a "significant strength," allowing it to return $276 million to shareholders through share buybacks over the past twelve months.