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BONITA SPRINGS, Fla. - On Tuesday, Herc Holdings Inc. (NYSE:HRI) reported second-quarter revenue that exceeded analyst expectations, driven by its recent acquisition of H&E Equipment Services (NASDAQ:HEES), though earnings fell short of estimates.
The company’s stock edged up 0.55% in after hours trading following the announcement.
The equipment rental company posted revenue of $1 billion for the quarter, significantly above the consensus estimate of $876.23 million. However, adjusted earnings per share came in at $1.87, missing analyst expectations of $2.05. The company’s equipment rental revenue increased 14% to $870 million compared to the same period last year.
Herc completed its acquisition of H&E Equipment Services on June 2, which CEO Larry Silber called "the largest in the industry." The transaction included $4.4 billion of new debt financing at a weighted average interest rate of 6.8%. The company reported a net loss of $35 million, or $1.17 per share, primarily due to H&E acquisition transaction costs and a loss on Cinelease assets held for sale.
"With the merger now behind us, our focus is on integration, optimization and ensuring delivery of the revenue and cost synergy targets we established," said Silber. "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."
Adjusted EBITDA increased 13% to $406 million, though the adjusted EBITDA margin decreased to 41% from 42.5% in the prior-year period. The company attributed the margin decline to increased volume of lower margin sales of used equipment and the impact of the H&E acquisition.
Herc updated its full-year 2025 guidance, excluding its Cinelease studio entertainment business, projecting equipment rental revenue between $3.7 billion and $3.9 billion and adjusted EBITDA between $1.8 billion and $1.9 billion.
The company’s net debt stood at $8.3 billion as of June 30, with net leverage of 3.8x compared to 2.6x in the same prior-year period.
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