07.05.2026

Higher sales bigger losses for Herc

Herc Rentals in the USA has reported a sharp rise in revenues, losses and debt load as it digests H&E Equipment.

Total revenues for the three months to the end of March, jumped 32 percent to $1.14 billion, compared to the same quarter last year. Rental revenues leapt 33 percent to $981 million, while the other three revenue sectors - sales of new machines, sales of used rental equipment and services all posted positive gains. This is, of course, not all down to organic growth, it includes H&E Equipment, the acquisition of which completed last June.

Last year’s Pre-tax loss of $8 million increased to a $23 million loss this year, due to a range of things, including higher operating costs and higher depreciation, while both sales & administration costs and interest doubled.

Capital expenditure on the rental fleet increased 46 percent to $272 million, bouncing back from last year's reduction but still well below the same quarter in 2023. The average age of the fleet remained at 47 months. The company is forecasting full year capex of $800 million to $1.1billion.

Net debt at the end of March was $8 billion double what it was prior to the H&E acquisition. During the quarter, the company opened three new pre-planned greenfield locations.

Full year revenue outlook Herc is forecasting full year rental revenues of between $4.27 and 4.4 billion, representing an increase of 13.5 to 16.9 percent. Don’t forget that Herc benefited from the H&E revenue in the second half of 2025.

Chief executive Larry Silber said: “The first quarter of 2026 marked a defining milestone for Herc Rentals as we successfully completed the integration of our H&E acquisition — the largest in the history of our industry — and we are already capturing the strategic benefits we anticipated: 25% more specialty locations, a stronger and deeper sales network, expanded share in local and regional accounts, and greater density in top metropolitan markets, where construction activity is most resilient.”

“Financial performance in the first quarter was in line with our expectations and seasonal trends. While we expect performance to build as we move through the second half of 2026, the value of this combination will be realised over our three year synergy plan, and we are executing against that roadmap with confidence.”

"The demand environment remains constructive — local markets are stable and national account activity is strong, fueled by continued megaproject growth. In this bifurcated market, our diversification, deep customer relationships, and superior project execution are clear differentiators. While we are mindful of broader economic uncertainties, including ongoing geopolitical tensions, we remain confident in our proven playbook: driving network efficiency through scale, delivering value through our broad product mix and expert solutions, accelerating customer efficiency and safety through ongoing enhancements to our ProControl platform, maintaining a sharp focus on productivity, and deploying capital with discipline.”

“None of this is possible without the dedication and expertise of the Herc team, and I want to thank every one of our employees for their commitment to our customers and to each other as we continue to build the premier equipment rental company in North America,"

Vertikal Comment

The H&E move was always going to be a major gamble, and significantly outbidding United suggested that Herec overpaid. However, it does have the potential to be transformational, assuming that the integration makes the ‘synergy savings’ that it planned for.
As to whether Herc’s “deep customer relationships, and superior project execution are clear differentiators”, is a fact as suggested, or merely a future aspiration – the ‘jury is out’.

The company is less than a year into its three year integration programme, the next two years will require brilliant management, an improving market and a bit of luck. All of which is well within the realms of possibility. All too often, however, it goes the other way, and the big debt load becomes a killer.

At the moment, the odds of success are even, but you would be mistaken to bet against veteran operator Larry Silber, who has been at the helm for 11 years now.

Let's see how it looks in three months when the acquisition completes its first year.