Herc Holdings reports first half 2025 results and updates 2025

Herc Holdings Inc. recently reported financial results for the quarter ended June 30, 2025.

“The second quarter marked an important milestone for our company. On June 2nd, we completed the transaction to bring Herc Rentals and H&E Equipment Services together. This acquisition, the largest in the industry, will accelerate our strategy to deliver market leading growth and superior value creation by providing geographic and customer diversification, a substantially expanded footprint in key regions with economies of scale, and a larger fleet to strengthen our position as a premier rental company in North America,” says Larry Silber, president and CEO.

“With the merger now behind us, our focus is on integration, optimization and ensuring delivery of the revenue and cost synergy targets we established. It has been only about eight weeks since the close and I am pleased with the go-to-market collaboration, fleet sharing, and process alignment. The teams are working very well together, united in their shared commitment to our customers’ success and energized by the unique opportunity that our combined strengths represent," Silber reports.

"While integration is off to a great start, of course there is a lot of work ahead. H&E’s performance was impacted by disruptions to the employee base during the acquisition bidding process and through the closing. Since taking over, we have stabilized that but dis-synergies had already resulted. Those, combined with the continued moderation in the interest rate-sensitive commercial sector are factored into our new, combined outlook for 2025, which also incorporates offsetting strength in mega project activity and ongoing growth in our specialty solutions business,” Silber says.

2025 second quarter financial results

• Total revenues increased 18 percent to $1,002 million compared to $848 million in the prior-year period. This year-over-year increase was driven by a 14 percent increase in equipment rental revenue, which includes the impact of second half 2024 acquisitions and the June 2025 results of H&E. Sales of rental equipment increased by $41 million during the period.
• Dollar utilization decreased to 38.3 percent in the second quarter compared to 41.0 percent in the prior-year period, primarily reflecting the impact from the H&E acquisition and year-over-year decline of the Cinelease business.
• Direct operating expenses were $379 million, or 43.6 percent of equipment rental revenue, compared to $326 million, or 42.6 percent in the prior-year period. The increase as a percent of rental revenue related to lower fixed cost absorption due to the ongoing moderation in certain local markets.
• Depreciation of rental equipment increased 18 percent to $195 million due to higher year-over-year average fleet size primarily as a result of the H&E acquisition. Non-rental depreciation and amortization increased 50 percent to $45 million primarily due to amortization of intangible assets related to the H&E and Otay acquisitions and an increase in non-rental asset depreciation resulting from the growth of the business.
• Selling, general and administrative expenses were $127 million, or 14.6 percent of equipment rental revenue compared to $117 million, or 15.3 percent of equipment rental revenue in the prior-year period. The improvement as a percent of equipment rental revenue was related to initial cost synergies obtained through reduction of H&E corporate overhead as well as overall cost control measures introduced to mitigate the impact of ongoing moderation in certain local markets.
• Transaction expenses were $73 million compared to $3 million in the prior-year period. The increase is related to costs incurred for the H&E acquisition, primarily advisory fees of $27 million, commitment fees related to the bridge facility of $21 million and various other consulting and legal fees.
• Interest expense increased to $86 million compared with $63 million in the prior-year period due to new debt facilities issued in June 2025 to fund the H&E acquisition.
• Loss on assets held for sale was $49 million during the second quarter of 2025 to adjust the carrying value of Cinelease net assets to its fair value less estimated costs to sell.
• Net loss was $35 million compared to net income of $70 million in the prior-year period. Adjusted net income decreased 24 percent to $56 million, or $1.87 per diluted share, compared to $74 million, or $2.60 per diluted share, in the prior-year period. The income tax benefit in the second quarter was primarily driven by the non-deductible transaction costs related to the H&E acquisition.
• Adjusted EBITDA increased 13 percent to $406 million compared to $360 million in the prior-year period and adjusted EBITDA margin was 40.5 percent compared to 42.5 percent in the prior-year period. The decrease was primarily due to the increased volume of lower margin sales of used equipment and the impact of the H&E acquisition.

2025 first half financial results

• Total revenues increased 13 percent to $1,863 million compared to $1,652 million in the prior-year period. The year-over-year increase was driven by an eight percent increase in equipment rental revenue, which includes the impact of second half 2024 acquisitions and the June 2025 results of H&E. Sales of rental equipment increased by $77 million during the period.
• Dollar utilization decreased to 38.0 percent compared to 40.4 percent in the prior-year period, primarily reflecting the impact from the H&E acquisition and year-over-year decline of the Cinelease business.
• Direct operating expenses were $706 million, or 43.9 percent of equipment rental revenue, compared to $633 million, or 42.7 percent, in the prior-year period. The increase as a percent of rental revenue related to lower fixed cost absorption due to the ongoing moderation in certain local markets. • Depreciation of rental equipment increased 13 percent to $367 million due to higher year-over-year average fleet size, primarily as a result of the H&E acquisition. Non-rental depreciation and amortization increased 32 percent to $78 million, primarily due to amortization of intangible assets related to the H&E and Otay acquisitions and an increase in non-rental asset depreciation resulting from the growth of the business.
• Selling, general and administrative expenses were $245 million, or 15.2 percent of equipment rental revenue, compared to $229 million, or 15.4 percent of equipment rental revenue, in the prior-year period. The improvement as a percent of equipment rental revenue was related to initial cost synergies obtained through reduction of H&E corporate overhead as well as overall cost control measures introduced to mitigate the impact of ongoing moderation in certain local markets.
• Transaction expenses were $147 million compared to $6 million in the prior-year period. The increase related to costs incurred for the H&E acquisition, primarily a $64 million termination fee paid on behalf of H&E, advisory fees of $27 million, commitment fees related to the bridge facility of $21 million and various other consulting and legal fees.
• Interest expense increased to $148 million compared with $124 million in the prior-year period due to new debt facilities issued in June 2025 to fund the H&E acquisition.
• Loss on assets held for sale was $49 million during the first half of 2025 to adjust the carrying value of Cinelease net assets to its fair value less estimated costs to sell. • Net loss was $53 million compared to net income of $135 million in the prior-year period. Adjusted net income decreased 34 percent to $93 million, or $3.17 per diluted share, compared to $141 million, or $4.96 per diluted share, in the prior-year period. The income tax benefit in the first half was primarily driven by the level of pre-tax loss offset by non-deductible transaction costs related to the H&E acquisition.

• Adjusted EBITDA increased 7 percent to $745 million compared to $699 million in the prior-year period and adjusted EBITDA margin was 40.0 percent compared to 42.3 percent in the prior-year period, primarily due to the increased volume of lower margin sales of used equipment and the impact of the H&E acquisition.

Rental fleet

• Net rental equipment capital expenditures were as follows (in millions): Six Months Ended June 30, 2025 2024 Rental equipment expenditures $ 421 $ 468 Proceeds from disposal of rental equipment (183) (125) Net rental equipment capital expenditures $ 238 $ 343.

• As of June 30, 2025, total fleet was approximately $9.9 billion at OEC.
• Average fleet at OEC in the second quarter increased 21 percent compared to the prior-year period.

• Average fleet age was 46 months and 47 months at June 30, 2025 and 2024, respectively.

Disciplined capital management

• The company opened 11 new greenfield locations during the six months ended June 30, 2025.
• Net debt was $8.3 billion as of June 30, 2025, with net leverage of 3.8x1 compared to 2.6x in the same prior-year period. Cash and cash equivalents and unused commitments under the ABL Credit Facility contributed to approximately $1.6 billion of liquidity as of June 30, 2025.
• The company declared its quarterly dividend of $0.70 paid to shareholders of record as of May 30, 2025 on June 13, 2025. Current period net leverage is calculated using pro forma trailing twelve month adjusted EBITDA including the standalone, pre-acquisition results of H&E.

2025 outlook—excluding Cinelease

The company is updating its full year 2025 equipment rental revenue, adjusted EBITDA, and gross and net rental capital expenditures guidance ranges, excluding Cinelease studio entertainment and lighting and grip equipment rental business. Equipment rental revenue: $3.7 billion to $3.9 billion

Adjusted EBITDA: $1.8 billion to $1.9 billion Net rental equipment capital expenditures: $400 million to $600 million Gross capex: $900 million to $1.1 billion

As a leader in an industry where scale matters, the company expects to continue to gain share by capturing an outsized position of the forecasted higher construction spending in 2025 by investing in its fleet, optimizing its existing fleet, capitalizing on recent acquisitions and greenfield opportunities, and cross-selling a diversified product portfolio.

https://ir.hercrentals.com/overview/default.aspx

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