Spike in rental rates drives revenue growth in Q2
Herc Rentals saw largest YoY increase at 9%
H&E Equipment Services, Herc Rentals and United Rentals all reported year-over-year revenue growth in the second quarter as rental rates appreciated.
The companies’ strong showings in Q2 reflect growing demand for heavy-equipment rentals, driven by factors such as mega–construction projects, increased infrastructure spending and evolving consumer needs amid higher interest rates and material prices.
H&E Equipment Services
H&E Equipment Services’ rental revenue totaled $275.5 million in Q2, up 6.5% YoY, according to today’s earnings report. Rental rates increased 1.9% YoY, which along with expansion efforts contributed to revenue growth, Chief Executive Brad Barber said on the company’s earnings call.
“The growth in revenue demonstrated the significant expansion of our branch network and continued gains from rental rates,” Barber said. “Since the close of the second quarter in 2023, we opened 15 new locations through our accelerated new location program, including seven openings through the first six months of 2024.”
Baton Rouge, La.-based H&E’s dollar utilization — measured by dividing rental revenue by total cost of equipment — stood at 38.6% in Q2. That’s down 2 percentage points YoY but up 1.6% quarter over quarter.
Herc Rentals
Bonita Springs, Fla.-based Herc Rentals earned a record $765 million in rental revenue in Q2, a 9% increase YoY, according to its July 23 earnings report.
Like H&E, the company benefited from higher rental rates, which rose 3.5% YoY, and expanded market share, adding 10 locations last quarter. Dollar utilization rose 70 basis points YoY to 41%.
Herc anticipates continued growth in the second half of 2024 as megaprojects proliferate, said CEO Larry Silber in its earnings statement.
“Despite temporarily slower growth in the more rate-sensitive local market this year, the outlook for rental demand long-term is robust as the pipeline for mega-projects remains strong, data center construction is accelerating, federal infrastructure spending continues to roll out and rental penetration increases.” Silber said.
United Rentals
United Rentals raked in $3.2 billion of rental revenue in Q2, up 7.8% YoY. Fleet productivity, which reflects the impact of changes in rental rates, time utilization and mix on owned equipment rental revenue, increased 4.6% YoY.
Stamford, Conn.-based United Rentals said it is optimistic about the second half of 2024 as it works to capitalize on strong rental demand while increasing its presence in the matting business, propelled by the acquisition of Yak Access in March.
“This acquisition builds upon our one-stop shop strategy of providing customers a best-in-class rental experience through our general rentals and specialty offerings,” United Rentals CEO Matthew Flannery said in the July 24 earnings report. “The team’s steadfast focus on providing this unique value proposition to our customers, coupled with an unwavering focus on safety, operational excellence and innovation, remains the cornerstone of our strategy and enables us to drive long-term shareholder value.”
United Rentals acquired Yak, the largest supplier of access mats in North America, for $1.1 billion in cash.
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