Herc Holdings Reports First Quarter 2025 Results

Herc Holdings Inc., a leading equipment rental supplier, has released its financial results for the first quarter of 2025. The company reported record equipment rental revenue and total revenues, despite facing a net loss primarily due to acquisition-related costs.

Financial Highlights

For the first quarter of 2025, Herc Holdings reported:

• Record equipment rental revenue of $739 million, a 3% increase year-over-year.
• Total revenues of $861 million, up 7% from the prior-year period.
• Net loss of $18 million, or $0.63 per share, primarily due to transaction costs associated with the H&E acquisition.
• Adjusted EBITDA remained flat at $339 million, with an adjusted EBITDA margin of 39.4%.
• Free cash flow of $49 million for the three months ended March 31, 2025.

Business and Operational Highlights

Herc Holdings experienced growth in its national account business, driven by federal and private funding for large construction projects. However, local account growth was restricted due to interest-rate sensitive projects being on hold. The company’s diversified business model helped maintain resiliency in this uneven economic landscape.

Key operational metrics include:

• Dollar utilization decreased to 37.6% from 39.7% in the prior-year period.
• Direct operating expenses increased to $327 million, or 44.2% of equipment rental revenue.
• Depreciation of rental equipment rose by 8% to $172 million.
• Three new greenfield locations were opened during the quarter.

Strategic Initiatives and Corporate Developments

The company is in the process of acquiring H&E Equipment Services, with the closing date targeted for mid-year. The integration team is preparing for the migration of Herc systems and processes. Additionally, Herc Holdings declared a quarterly dividend of $0.70, an increase of 5%, paid to shareholders on March 4, 2025.

Management's Perspective

Larry Silber, President and CEO, commented on the results, highlighting the growth in mega project activity and the incremental revenue benefits from last year’s acquisitions. He emphasized the company’s strategic management of its fleet and capital, and the focus on delivering value to customers.

Future Outlook

Herc Holdings affirmed its full-year 2025 guidance, excluding the Cinelease studio entertainment business, which is expected to be sold in 2025. The company projects equipment rental revenue growth of 4% to 6%, adjusted EBITDA between $1.575 billion and $1.650 billion, and net rental equipment capital expenditures ranging from $400 million to $600 million.

SEC Filing: HERC HOLDINGS INC [ HRI ] - 8-K - Apr. 22, 2025