Second Quarter 2025 Highlights

– H&E acquisition closed on June 2, 2025

– Completed financing of $4.4 billion of new debt at weighted average interest rate of 6.8%

– Equipment rental revenue of $870 million increased 14%

– Total revenues of $1,002 million increased 18%

– Net loss of $35 million or $1.17 per share driven primarily by the H&E acquisition transaction costs and loss on Cinelease assets held for sale

– Adjusted EBITDA of $406 million increased 13% with adjusted EBITDA margin of 41%

BONITA SPRINGS, Fla.--(BUSINESS WIRE)--Jul. 29, 2025-- Herc Holdings Inc. (NYSE: HRI) ("Herc Holdings" or the "Company") today reported financial results for the quarter ended June 30, 2025.

“The second quarter marked an important milestone for our company. On June 2nd, we completed the transaction to bring Herc Rentals and H&E Equipment Services together. This acquisition, the largest in the industry, will accelerate our strategy to deliver market leading growth and superior value creation by providing geographic and customer diversification, a substantially expanded footprint in key regions with economies of scale, and a larger fleet to strengthen our position as a premier rental company in North America,” said Larry Silber, president and chief executive officer.

“With the merger now behind us, our focus is on integration, optimization and ensuring delivery of the revenue and cost synergy targets we established. It has been only about 8 weeks since the close and I am pleased with the go-to-market collaboration, fleet sharing, and process alignment. The teams are working very well together, united in their shared commitment to our customers’ success and energized by the unique opportunity that our combined strengths represent.”

“While integration is off to a great start, of course there is a lot of work ahead. H&E’s performance was impacted by disruptions to the employee base during the acquisition bidding process and through the closing. Since taking over, we have stabilized that, but dis-synergies had already resulted. Those, combined with the continued moderation in the interest-rate sensitive commercial sector are factored into our new, combined outlook for 2025, which also incorporates offsetting strength in mega project activity and ongoing growth in our specialty solutions business.”

2025 Second Quarter Financial Results

• Total revenues increased 18% to $1,002 million compared to $848 million in the prior-year period. This year-over-year increase was driven by a 14% increase in equipment rental revenue, which includes the impact of second half 2024 acquisitions and the June 2025 results of H&E. Sales of rental equipment increased by $41 million during the period.

• Dollar utilization decreased to 38.3% in the second quarter compared to 41.0% in the prior-year period, primarily reflecting the impact from the H&E acquisition and year-over-year decline of the Cinelease business.

• Direct operating expenses were $379 million, or 43.6% of equipment rental revenue, compared to $326 million, or 42.6% in the prior-year period. The increase as a percent of rental revenue related to lower fixed cost absorption due to the ongoing moderation in certain local markets.

• Depreciation of rental equipment increased 18% to $195 million due to higher year-over-year average fleet size primarily as a result of the H&E acquisition. Non-rental depreciation and amortization increased 50% to $45 million primarily due to amortization of intangible assets related to the H&E and Otay acquisitions and an increase in non-rental asset depreciation resulting from the growth of the business.

• Selling, general and administrative expenses were $127 million, or 14.6% of equipment rental revenue compared to $117 million, or 15.3% of equipment rental revenue in the prior-year period. The improvement as a percent of equipment rental revenue was related to initial cost synergies obtained through reduction of H&E corporate overhead as well as overall cost control measures introduced to mitigate the impact of ongoing moderation in certain local markets.

• Transaction expenses were $73 million compared to $3 million in the prior-year period. The increase is related to costs incurred for the H&E acquisition, primarily advisory fees of $27 million, commitment fees related to the bridge facility of $21 million and various other consulting and legal fees.

• Interest expense increased to $86 million compared with $63 million in the prior-year period due to new debt facilities issued in June 2025 to fund the H&E acquisition.

• Loss on assets held for sale was $49 million during the second quarter of 2025 to adjust the carrying value of Cinelease net assets to its fair value less estimated costs to sell.

• Net loss was $35 million compared to net income of $70 million in the prior-year period. Adjusted net income decreased 24% to $56 million, or $1.87 per diluted share, compared to $74 million, or $2.60 per diluted share, in the prior-year period. The income tax benefit in the second quarter was primarily driven by the non-deductible transaction costs related to the H&E acquisition.

• Adjusted EBITDA increased 13% to $406 million compared to $360 million in the prior-year period and adjusted EBITDA margin was 40.5% compared to 42.5% in the prior-year period. The decrease was primarily due to the increased volume of lower margin sales of used equipment and the impact of the H&E acquisition.

2025 First Half Financial Results

• Total revenues increased 13% to $1,863 million compared to $1,652 million in the prior-year period. The year-over-year increase was driven by a 8% increase in equipment rental revenue, which includes the impact of second half 2024 acquisitions and the June 2025 results of H&E. Sales of rental equipment increased by $77 million during the period.

• Dollar utilization decreased to 38.0% compared to 40.4% in the prior-year period, primarily reflecting the impact from the H&E acquisition and year-over-year decline of the Cinelease business.

• Direct operating expenses were $706 million, or 43.9% of equipment rental revenue, compared to $633 million, or 42.7%, in the prior-year period. The increase as a percent of rental revenue related to lower fixed cost absorption due to the ongoing moderation in certain local markets.

• Depreciation of rental equipment increased 13% to $367 million due to higher year-over-year average fleet size, primarily as a result of the H&E acquisition. Non-rental depreciation and amortization increased 32% to $78 million, primarily due to amortization of intangible assets related to the H&E and Otay acquisitions and an increase in non-rental asset depreciation resulting from the growth of the business.

• Selling, general and administrative expenses were $245 million, or 15.2% of equipment rental revenue, compared to $229 million, or 15.4% of equipment rental revenue, in the prior-year period. The improvement as a percent of equipment rental revenue was related to initial cost synergies obtained through reduction of H&E corporate overhead as well as overall cost control measures introduced to mitigate the impact of ongoing moderation in certain local markets.

• Transaction expenses were $147 million compared to $6 million in the prior-year period. The increase related to costs incurred for the H&E acquisition, primarily a $64 million termination fee paid on behalf of H&E, advisory fees of $27 million, commitment fees related to the bridge facility of $21 million and various other consulting and legal fees.

• Interest expense increased to $148 million compared with $124 million in the prior-year period due to new debt facilities issued in June 2025 to fund the H&E acquisition.

• Loss on assets held for sale was $49 million during the first half of 2025 to adjust the carrying value of Cinelease net assets to its fair value less estimated costs to sell.

• Net loss was $53 million compared to net income of $135 million in the prior-year period. Adjusted net income decreased 34% to $93 million, or $3.17 per diluted share, compared to $141 million, or $4.96 per diluted share, in the prior-year period. The income tax benefit in the first half was primarily driven by the level of pre-tax loss offset by non-deductible transaction costs related to the H&E acquisition.

• Adjusted EBITDA increased 7% to $745 million compared to $699 million in the prior-year period and adjusted EBITDA margin was 40.0% compared to 42.3% in the prior-year period, primarily due to the increased volume of lower margin sales of used equipment and the impact of the H&E acquisition.

Rental Fleet

• Net rental equipment capital expenditures were as follows (in millions):

• As of June 30, 2025, the Company's total fleet was approximately $9.9 billion at OEC.

• Average fleet at OEC in the second quarter increased 21% compared to the prior-year period.

• Average fleet age was 46 months and 47 months at June 30, 2025 and 2024, respectively.

Disciplined Capital Management

• The Company opened 11 new greenfield locations during the six months ended June 30, 2025.

• Net debt was $8.3 billion as of June 30, 2025, with net leverage of 3.8x¹ compared to 2.6x in the same prior-year period. Cash and cash equivalents and unused commitments under the ABL Credit Facility contributed to approximately $1.6 billion of liquidity as of June 30, 2025.

• The Company declared its quarterly dividend of $0.70 paid to shareholders of record as of May 30, 2025 on June 13, 2025.

2025 Outlook—Excluding Cinelease

The Company is updating its full year 2025 equipment rental revenue, adjusted EBITDA, and gross and net rental capital expenditures guidance ranges, excluding Cinelease studio entertainment and lighting and grip equipment rental business.

As a leader in an industry where scale matters, the Company expects to continue to gain share by capturing an outsized position of the forecasted higher construction spending in 2025 by investing in its fleet, optimizing its existing fleet, capitalizing on recent acquisitions and greenfield opportunities, and cross-selling a diversified product portfolio.

Earnings Call and Webcast Information

Herc Holdings' second quarter 2025 earnings webcast will be held today at 8:30 a.m.U.S. Eastern Time. Interested U.S. parties may call +1-800-715-9871 and international participants should call the country specific dial in numbers listed at https://registrations.events/directory/international/itfs.html, using the access code: 9128891. Please dial in at least 10 minutes before the call start time to ensure that you are connected to the call and to register your name and company.

Those who wish to listen to the live conference call and view the accompanying presentation slides should visit the Events and Presentations tab of the Investor Relations section of the Company's website at IR.HercRentals.com. The press release and presentation slides for the call will be posted to this section of the website prior to the call.

A replay of the conference call will be available via webcast on the Company website at IR.HercRentals.com, where it will be archived for 12 months after the call.

About Herc Holdings Inc.

Founded in 1965, Herc Holdings Inc., which operates through its Herc Rentals Inc. subsidiary, is a full-line rental supplier and, with the recent acquisition of H&E Equipment Services, we have 622 locations across North America and 2024 pro forma total revenues were approximately $5.1 billion. We offer products and services aimed at helping customers work more efficiently, effectively, and safely. Our classic fleet includes aerial, earthmoving, material handling, trucks and trailers, air compressors, compaction, and lighting equipment. Our ProSolutions® offering includes industry-specific, solutions-based services in tandem with power generation, climate control, remediation and restoration, pumps, and trench shorting equipment as well as our ProContractor professional grade tools. We employ approximately 10,200 employees, who equip our customers and communities to build a brighter future. Learn more at www.HercRentals.com and follow us on Instagram, Facebook and LinkedIn.

Certain Additional Information

In this release we refer to the following operating measures:

• Dollar utilization: calculated by dividing rental revenue (excluding re-rent, delivery, pick-up and other ancillary revenue) by the average OEC of the equipment fleet for the relevant time period, based on the guidelines of the American Rental Association (ARA).

• OEC: original equipment cost based on the guidelines of the ARA, which is calculated as the cost of the asset at the time it was first purchased plus additional capitalized refurbishment costs (with the basis of refurbished assets reset at the refurbishment date).

Forward-Looking Statements

This press release includes forward-looking statements within the meaning of Section 21E of the Securities Exchange Act, as amended, and the Private Securities Litigation Reform Act of 1995. Forward-looking statements are generally identified by the words "estimates," "expects," "anticipates," "projects," "plans," "intends," "believes," "forecasts," "looks," and future or conditional verbs, such as "will," "should," "could" or "may," as well as variations of such words or similar expressions. All forward-looking statements are based upon our current expectations and various assumptions and there can be no assurance that our current expectations will be achieved. You should not place undue reliance on the forward-looking statements. They are subject to future events, risks and uncertainties - many of which are beyond our control - as well as potentially inaccurate assumptions, that could cause actual results to differ materially from those in the forward-looking statements. Factors that could cause actual results to differ materially from those projected include, but are not limited to, the following: (1) the cyclical nature of our industry and our dependence on the levels of capital investment and maintenance expenditures by our customers; (2) the competitiveness of our industry, including the potential downward pricing pressures or the inability to increase prices; (3) our dependence on relationships with key suppliers; (4) our heavy reliance on communication networks, centralized information technology systems and third party technology and services and our ability to maintain, upgrade or replace our information technology systems; (5) our ability to respond adequately to changes in technology and customer demands; (6) our ability to attract and retain key management, sales and trades talent; (7) our rental fleet is subject to residual value risk upon disposition; (8) the impact of climate change and the legal and regulatory responses to such change; (9) our ability to execute our strategy to grow through strategic transactions; (10) our significant indebtedness; and (11) our ability to integrate the acquisition of H&E Equipment Services, Inc. into our business and our ability to realize the anticipated benefits of the transaction. Further information on the risks that may affect our business is included in filings we make with the Securities and Exchange Commission from time to time, including our most recent annual report on Form 10-K, subsequent quarterly reports on Form 10-Q, and in our other SEC filings. We undertake no obligation to update or revise forward-looking statements that have been made to reflect events or circumstances that arise after the date made or to reflect the occurrence of unanticipated events.

Information Regarding Non-GAAP Financial Measures

In addition to results calculated according to accounting principles generally accepted in the United States (“GAAP”), the Company has provided certain information in this release that is not calculated according to GAAP (“non-GAAP”), such as EBITDA, adjusted EBITDA, adjusted EBITDA margin, adjusted net income, adjusted earnings per diluted common share, free cash flow, adjusted free cash flow and certain results excluding the Cinelease studio entertainment business. Management uses these non-GAAP measures to evaluate operating performance and period-over-period performance of our core business without regard to potential distortions, and believes that investors will likewise find these non-GAAP measures useful in evaluating the Company’s performance. These measures are frequently used by security analysts, institutional investors and other interested parties in the evaluation of companies in our industry. Non-GAAP measures should not be considered in isolation or as a substitute for our reported results prepared in accordance with GAAP and, as calculated, may not be comparable to similarly titled measures of other companies. For the definitions of these terms, further information about management’s use of these measures as well as a reconciliation of these non-GAAP measures to the most comparable GAAP financial measures, please see the supplemental schedules that accompany this release.

(See Accompanying Tables)

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Leslie Hunziker
Senior Vice President,
Investor Relations, Communications & Sustainability
Leslie.hunziker@hercrentals.com
239-301-1675

Source: Herc Holdings Inc.