Herc’s 2024 results: 5 things you need to know

Just as we were preparing this story, news broke that Herc Rentals had swooped in to buy H&E Equipment, replacing United Rentals as the buyer. See our story here. We will have more analysis on that deal in the coming days.

Meanwhile, Herc Rentals recently released its quarterly and full-year results, which provided insights into the company’s performance and future strategies. CEO Larry Silber and COO Aaron Birnbaum offered commentary on market conditions and the company’s outlook.

Here’s a breakdown of the key takeaways:

1. Navigating a challenging market with growth

Herc reported a 9% revenue increase in 2024, reaching $3.57 billion, despite what the company termed a “more challenging market than anticipated.” Rental revenues specifically saw an 11% jump to $3.199 billion. Fourth-quarter performance was particularly strong, with rental revenues up 12% to $839 million and total revenues increasing 14% to $951 million.

While 2024 saw impressive growth, Herc is anticipating a more moderate pace in 2025, forecasting rental revenue growth between 4% and 6%. This reflects the company’s assessment of the current economic climate.

Larry Silber, president and CEO, Herc Rentals. (Photo: Herc Rentals)

Silber highlighted the company’s success in 2024, stating, “In 2024, despite a more challenging market than anticipated, we delivered another year of record results, significantly outperforming industry revenue growth by leveraging the strength of tenured customer relationships, the value derived from strategic capital-allocation priorities and our diversified position across products, geographies and end markets.”

2. Mega projects and strategic acquisitions drive growth

Herc’s success in 2024 was partly attributed to mega projects. The focus on large-scale projects helped offset some of the pressures in local markets due to the “higher-for-longer interest rate environment,” Silber explained.

Herc also pursued an aggressive acquisition strategy, completing nine acquisitions in 2024 that saw 28 locations added to its footprint, which included 23 greenfield openings, 15 of which are specifically for specialty. These moves positioned Herc for long-term growth and increased efficiencies of scale.

3. Fleet investment and specialty 

Herc’s total fleet value reached approximately $7 billion by the end of 2024, with an average fleet age of 46 months. Looking ahead to 2025, Herc plans to invest between $700 million and $900 million in gross fleet expenditures. This is a decrease from the $1.048 billion invested in 2024, signaling a more measured approach to fleet expansion.

A key focus of this investment will be increasing its specialty equipment lineup. Specialty equipment now comprises 23% of Herc’s fleet, just slightly behind aerials at 24%. This emphasis on specialty rentals reflects the company’s strategy to support mega project demand, facilitate cross-selling, and expand into new end markets.

Birnbaum emphasized the importance of mega projects, stating, “We expect to continue to win an outsized share of mega project activity again in 2025. Our strategic pricing, agile fleet management and disciplined cost controls position us well to maintain our industry-leading growth trajectory.”

4. Navigating uncertainty and long-term vision

Silber acknowledged the uncertainty surrounding the 2025 operating landscape, stating, “The 2025 operating landscape is still lacking good clarity.” However, he expressed confidence in Herc’s ability to navigate these challenges, citing the company’s diversified business model, asset optimization strategies and prudent investments.

Looking beyond the immediate horizon, Silber sees potential opportunities arising from new government policies and spending initiatives. He believes these initiatives will create expanded opportunities for Herc and the broader equipment rental industry. Herc’s strategy of diversification, strategic acquisitions, and focus on specialty rentals positions them well to capitalize on these long-term trends.

5. Driving profitability

While revenue growth and strategic investments are crucial, Herc’s ultimate success hinges on profitability. The company’s focus on operational efficiency, strategic pricing and cost control measures could likely continue to contribute to healthy profit margins.