Herc Holdings Reports Strong Financial Performance for 2025 and Sets Ambitious 2026 Guidance

Herc Holdings Inc. (NYSE: HRI) has released its financial results for the fourth quarter and the full year ended December 31, 2025. The company highlighted a significant turnaround in its financial performance, largely attributed to the successful integration of H&E Equipment Services, Inc., which marks the largest acquisition in the equipment rental industry.

For the fourth quarter of 2025, Herc Holdings reported a 27% increase in total revenues, reaching $1.209 billion, compared to $951 million in the same period of the previous year. This impressive growth can be attributed to a 24% increase in equipment rental revenue, alongside a notable rise in sales of rental equipment, which increased by $51 million as the acquisition fleet was sold to improve mix and utilization.

However, dollar utilization fell to 37.5%, down from 40.6% in the prior-year period, primarily due to lower utilization of the acquired fleet ahead of ongoing optimization efforts.

For the entirety of 2025, total revenues grew by 23% to $4.376 billion, up from $3.568 billion in 2024. Despite the increase in revenues, Herc Holdings faced challenges with profitability, reporting a net income of only $1 million, or $0.03 per diluted share, compared to $211 million or $7.40 per diluted share in the prior year. Adjusted net income also saw a decline, falling to $239 million from $367 million year-over-year.

The company experienced elevated direct operating expenses, which reached $1.602 billion (42.5% of equipment rental revenue), compared to $1.291 billion (40.5%) in 2024. These increases were largely driven by acquisition-related redundancies and lower fixed cost absorption stemming from moderation in certain local markets. Transaction expenses surged to $199 million, primarily linked to the H&E acquisition.

Adjusted EBITDA for the year increased by 15% to $1.818 billion, with an adjusted EBITDA margin of 41.5%, down from 44.4% in the previous year. The decline in margin was attributed to acquisition-related costs and a larger volume of used equipment sales through lower-margin channels.

As of December 31, 2025, Herc Holdings' rental equipment capital expenditures amounted to $1.097 billion, with net rental equipment capital expenditures at $649 million. The total fleet value stood at approximately $9.5 billion, with an average fleet age of 45 months.

The company also opened 26 greenfield locations in 2025, emphasizing its commitment to expanding its footprint in the equipment rental market.

Despite the challenges faced during the integration of H&E, Herc Holdings maintains a robust financial position. As of December 31, 2025, net debt was reported at $8.1 billion, with net leverage at 3.95x. The company also highlighted approximately $1.9 billion in liquidity, supported by cash and cash equivalents, as well as unused commitments under the ABL Credit Facility.

Looking ahead, Herc Holdings has set ambitious targets for 2026. The company expects equipment rental revenue to range between $4.275 billion and $4.4 billion and anticipates adjusted EBITDA between $2.0 billion and $2.1 billion. The guidance also includes net rental equipment capital expenditures projected to range from $500 million to $800 million.

CEO Larry Silber emphasized the company's strategic position heading into the 2026 spring/summer construction season, leveraging scale-driven network benefits and industry-leading technology to foster above-market growth. He highlighted increased participation in mega projects and favorable trends in specialty equipment, positioning Herc Holdings to capitalize on the anticipated rise in construction spending.

Herc Holdings Inc. has demonstrated strong growth and resilience in 2025, successfully navigating the complexities of a major acquisition while setting the stage for continued expansion in 2026. As the company capitalizes on operational synergies and market opportunities, investors and stakeholders will be keenly watching its progress in the coming year.