Herc Holdings Inc. (NYSE: HRI) has announced its financial results for the fourth quarter and full year ending December 31, 2024. Despite facing a more challenging market environment than anticipated, the company achieved record financial results, significantly outpacing industry revenue growth.

Larry Silber, President and CEO of Herc Holdings, highlighted the company’s resilience and strategic positioning: “In 2024, we delivered another year of record results... We captured an outsized share of national account mega projects last year. We also completed nine acquisitions, supporting market consolidation and positioning our company for long-term growth opportunities.”

2. Fourth Quarter Highlights

Total Revenues: Revenues surged 14% year-over-year to $951 million, up from $831 million in the fourth quarter of 2023. This increase was primarily driven by a $91 million rise in equipment rental revenue, attributed to a 2.1% increase in pricing and an 11.6% increase in volume.

Dollar Utilization: The dollar utilization rate dipped slightly to 40.6% from 40.9% in the same quarter last year.

Operating Expenses: Direct operating expenses climbed to $324 million, accounting for 38.6% of equipment rental revenue, compared to 38.4% in the prior-year period. This was largely due to increased personnel and operational costs from acquisitions and new facilities.

Net Income: The company reported a net loss of $46 million, a significant drop from a net income of $91 million in the prior-year period. This loss was primarily due to a $194 million write-down on assets held for sale related to Cinelease.

Adjusted Net Income: Excluding the impact of the Cinelease write-down, adjusted net income rose by 11% to $102 million, or $3.58 per diluted share.

Adjusted EBITDA: The adjusted EBITDA increased 15% to $438 million, maintaining an adjusted EBITDA margin of 46.1%.

3. Full Year Financial Results

For the full year of 2024, Herc Holdings reported the following:

Total Revenues: Revenues increased by 9% to $3.568 billion, up from $3.282 billion in 2023. Equipment rental revenue saw a significant rise of 11%, reflecting positive pricing and volume growth.

Net Income: The company's net income fell to $211 million from $347 million in 2023, impacted by the loss on Cinelease assets. However, adjusted net income increased to $367 million, or $12.88 per diluted share, reflecting a 5% increase.

Adjusted EBITDA: The adjusted EBITDA for 2024 was $1.583 billion, a 9% increase compared to $1.452 billion in the prior year.

Capital Expenditures: Net rental equipment capital expenditures totaled $760 million, down from $995 million in 2023, as the company strategically optimized its rental fleet.

4. Strategic Initiatives

The company completed nine acquisitions, adding 28 locations, and opened 23 new greenfield locations during 2024. As of December 31, 2024, Herc Holdings had a rental fleet valued at approximately $7.0 billion.

Silber remarked on the company's future outlook: “The 2025 operating landscape is still lacking good clarity... We believe the diversity of our business model, asset optimization, and prudent investments will allow us to navigate local market pressure again this year while capitalizing on incremental new mega project starts.”

5. 2025 Guidance

Looking ahead, Herc Holdings provided its full-year 2025 guidance, projecting:

Equipment Rental Revenue Growth: Expected to be in the range of 4% to 6%.

Adjusted EBITDA: Forecasted between $1.575 billion to $1.650 billion.

Net Rental Equipment Capital Expenditures: Projected at $400 million to $600 million.

Gross Capital Expenditures: Expected to be between $700 million to $900 million.

6. Conclusion

Herc Holdings Inc. continues to navigate a challenging market landscape while delivering robust financial results and strategic growth. The company’s focus on customer relationships, strategic acquisitions, and operational efficiencies positions it well for future opportunities, even in uncertain economic conditions. As the construction sector anticipates increased spending, Herc is poised to leverage its diversified business model to capture growth in 2025 and beyond.

Original press release