11.11.2025

Higher revenues but losses for Herc

US rental company Herc Rentals has reported strong third quarter revenue growth, along with a loss, thanks to the H&E acquisition kicking in.

YTD

Total revenues for the nine months to the end of September increased 21 percent to $3.17 billion. Rental revenues increased 16.5 percent to $2.73 billion. The company also opened a further 17 new greenfield locations.

Pre-tax profit In spite of the higher revenues the company reported a loss of $16 million compared to a profit of $334 million for the same period last year. This due to a huge spike in costs and depreciation brought on by the big acquisition as well as all the transaction costs.

Capex Capital expenditure over the nine months was $835 million 11 percent up on the amount spent in the same period last year, sales of used equipment from the fleet also increased from $198 million last year to $306 million. As a result, the average age of the fleet was reduced to 45 months from 46 months this time last year.

Net Debt at the end of the period more than doubled to $8.2 billion last year, thanks to the H&E acquisition.

Third Quarter

Total revenues were 35 percent higher at $1.3 billion

Pre-Tax Profit fell from $160 million last year to $38 million this year.

Full year forecasts
Revenues: rental- $3.7 to $3.9 billion which means total revenues will be in the region of $4.3 to $4.5 billion.
Capex $900 million to $1.1 billion, with used equipment sales from the fleet of around $500 million.

Chief executive Larry Silber said: “As we continue to execute on our strategic priorities, the third quarter marked a pivotal step in unlocking the value of our acquisition of H&E Equipment Services. From day one, our focus has been on bringing together the strengths of both companies through a seamless integration, and we’re very pleased with the pace and success of those efforts to date.”

“In the third quarter, we achieved a major milestone by completing the full IT integration—successfully migrating all of the acquired branches onto Herc’s systems and network infrastructure within a best in class timeline. Our combined team now operates from a single, unified dashboard that spans ERP, fleet management, pricing, CRM, logistics, business intelligence, human capital management and our industry-leading, customer-facing technology platform, ProControl by Herc Rentals. This alignment is poised to drive efficiencies and position us for long term market-share expansion.”

“As we continue integration efforts for fleet and branch network optimization, the operating environment remains stable despite broader macroeconomic uncertainties. While local market growth is tempered by prolonged high interest rates, our national accounts and specialty products and solutions delivered another strong quarter. Our scale and diversified footprint—across geographies, end markets, and product lines—continue to be key strengths, enabling us to navigate this bifurcated landscape with resilience and agility,”

Vertikal Comment

This is not really a surprising result, given the size of the H&E deal, over the three to six months the company will be reducing duplicated overhead and backroom costs. The third quarter numbers are already showing signs of this happening.

It will be interesting to see how the new year kicks off, and how rapidly it manages to pay down its renewed debt pile.