H&E Rentals reports 14% decline in Q1

H&E Rentals reported a 14% year-over-year revenue decline in the first quarter of 2025, totaling $319.5 million, amid weak local demand and market uncertainty tied to merger activity.

Baton Rouge-based H&E’s equipment rental revenues fell 7.2% to $274 million, and the company posted a net loss of $6.2 million, according to an April 29 H&E press release. Excluding merger-related expenses, adjusted net income was $1.2 million, down from $25.9 million a year earlier.

Gross profit declined 25% to $123.6 million, with gross margin dropping to 38.7% from 44.4% in the same quarter of 2024, according to the release. Rental gross margin narrowed to 43.6%, while time utilization declined to 60.3% from 63.6%.

Dollar utilization dropped to 33.1%, and average rental rates declined 2% year-over-year, according to the release. The company continued its planned branch expansion, opening four new locations in the first quarter.

The fleet’s original equipment cost stood at approximately $2.9 billion at quarter-end, up 3.8% year-over-year, according to the release. The average fleet age was 43.2 months.

Operating loss was $5.8 million; excluding $9.8 million in transaction expenses related to the pending merger with Herc Holdings, adjusted operating income was $15.6 million, according to the release. The merger with Herc Holdings is expected to close midyear, which the company believes will enhance its resilience and geographic reach.

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