Herc Rentals revenue soars 35% after H&E integration

Equipment rental company Herc Rentals reported a surge in total revenue in the third quarter as it completed the integration of H&E Equipment Services.  

As part of its $5.3 billion acquisition, Herc fully integrated all 160 H&E locations into its information technology system, marking a “major milestone” for the company, President and Chief Executive Larry Silber stated in Herc’s earnings release today.  

The combined company now operates “from a single, unified dashboard that includes ERP, fleet management, pricing, CRM, logistics, business intelligence, human capital management” and its ProControl fleet management tool for customers, he said. “This alignment is poised to drive efficiencies and position us for long term market-share expansion.” 

The enhanced data will allow Herc to better measure performance, with deeper review of underperforming locations while “identifying top-tier branches where we can replicate best practices,” Silber said during today’s earnings call. 

Moreover, the company continued to benefit from large commercial construction projects and strong demand for specialty rental equipment in Q3, Silber said. Some smaller projects are on hold due to high interest rates, though, he said.  

BY THE NUMBERS: Bonita Springs, Fla.-based Herc Rentals reported in Q3: 

• Total revenue increased 35.1% year over year to $1.3 billion; 
• Rental revenue rose 29.6% YoY to $1.1 billion; 
• Sales of rental equipment totaled $151 million, up 86.4% YoY; 
• Dollar utilization rate was 39.9%, down from 42.2% in Q3 of 2024; and 
• Net income fell 75.4% YoY to $30 million. 

Profits were primarily affected by expenses tied to the H&E integration, including fleet retitling costs, consulting fees and professional fees, according to the release. A larger fleet resulting from acquired locations contributed to the lower utilization rate, but the surge in equipment sales is expected to improve utilization and product mix.  

Moreover, the company maintained its targeted 10% to 15% share of mega construction projects, Chief Operating Officer Aaron Birnbaum said during the call. Mega project starts are projected to more than double to $652 billion in 2025, according to Herc’s earnings presentation, citing construction data and solutions provider Dodge Construction Network.  

FUTURE LOOK: Herc plans to consolidate several general rental branches over the next six months and will repurpose some into stand-alone specialty equipment locations, Silber said. 

“In other instances, we’ll further expand access to our specialty solutions by co-locating specialty equipment within existing general rental facilities,” he said. “These initiatives are expected to result in about 50 additional specialty locations, increasing our specialty network by 25% next year and supporting accelerated growth in these high-margin product categories.” 

The company also plans to offload a large chunk of underutilized, off-brand and aged equipment in the coming months, targeting $1.1 billion to $1.2 billion in original-equipment-cost disposals in 2025, Birnbaum said. 

“We’re tracking at about 75% of that target with the remainder coming in the fourth quarter,” he said.  

MARKET REACTION: Shares of Herc Rentals [NYSE: HRI] were up 4% from market open to $138.64 as of market close today. It has a market capitalization of $4.6 billion.  

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