Equipment rental houses Herc Rentals and United Rentals posted record-high revenues in the first quarter as large commercial developments boosted demand.
The equipment rental market is projected to grow 5.7% in 2025 to nearly $82.6 billion, topping last year’s record of $78.2 billion, according to the American Rental Association. Mega construction projects continue to propel the market, and large rental houses could also benefit from tariff-fueled uncertainty as businesses hesitate to purchase equipment outright.
United Rentals
Stamford, Conn.-based United Rentals reported a record $3.1 billion in rental revenue in Q1, up 7.4% year over year, according to its April 23 earnings statement.
Total revenue increased 6.7% YoY to $3.7 billion. The company’s fleet productivity rose 3.1% YoY, showing an improvement in the impact of changes in rental rates, time utilization and mix on owned equipment rental revenue.
United also expanded its specialty rental division, also known as “specialty cold starts,” with specialty rental revenue increasing 22% YoY, Chief Executive Matthew Flannery said during the company’s earnings call today. These locations provide specialized equipment for niche markets such as power supply, climate control at construction sites and underground construction.
“We opened eight specialty cold starts in the first quarter and expect to open at least 50 this year,” Flannery said. “By vertical, our construction end market saw solid growth across both infrastructure and non-res construction, while our industrial end market saw particular strength within power and chemical processing.”
United continues to observe new projects kicking off, “including data centers, pharmaceuticals, airports and industrial manufacturing facilities,” he said.
Shares of United Rentals [NYSE: URI] were up 9.9% from market open to $647.36 as of market close today. It has a market capitalization of $42.3 billion.
Herc Rentals
Bonita Springs, Fla.-based Herc Rentals’ rental revenue jumped 2.8% YoY in Q1 to a record $739 million, and total revenue rose 7.1% YoY to $861 million, according to its April 22 earnings statement.
Herc’s dollar utilization rate was 37.6%, down from 40.9% in Q4 and 39.7% in Q1 2024. Rental equipment sales soared 52.2% YoY to $105 million.
Similar to United, Herc is capitalizing on “strong megaproject activity” and growing its specialty fleet, which supports power supply, healthcare, manufacturing and renewable energy industries, among others, Chief Operating Officer Aaron Birnbaum said during the company’s earnings call.
“Having a diversified offering that includes specialty fleet is an advantage for us in addressing the comprehensive needs of both local and national account customers,” he said. “And delivering value-added expert solutions to meet these customers’ critical or emergency requirements provides another degree of operating resilience for our business.”
Looking ahead, Herc expects to close its acquisition of H&E Equipment Services and its 160 locations by mid-2025. Integrating these locations will be “our primary focus over the next several years,” CEO Larry Silber said during the call.
“And therefore, as stated, we are pausing other M&A initiatives,” he said.
Shares of Herc [NYSE: HRI] were up 6.3% from market open to $111.45 as of market close today. It has a market capitalization of $3.2 billion.
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