Herc to moderate spending after strong 2024

Herc reported 9% growth in revenues in 2024 despite what it described as a “more challenging market than anticipated”. Rental revenues of $3.199 billion rose 11% year-over-year, with total revenues up 9% at $3.57 billion.

Looking to its fourth quarter ending December 31, 2024, the company set records for both equipment rental revenue and total revenues, with rental revenues up 12% to $839 million and total revenues up 14% to $951 million.

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

The company is forecasting more moderate rental revenue growth of between 4% and 6% this year, and its gross spending on fleet will be between $700 million and $900 million, down from $1048 million in 2024.

“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,” said Larry Silber, president and CEO, Herc Rentals.

“While the higher-for-longer interest rate environment continues to pressure local market growth, 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 and greater efficiencies of scale.”

Growth and diversification

For the full year, the equipment rental company made nine acquisitions that saw 28 locations added to its footprint and 23 greenfield openings, 15 of which are specifically for specialty.

Herc also increased its specialty equipment lineup in order to support mega project demand, cross-selling and end-market expansion, with specialty now amounting to 23% of Herc’s fleet, just one percentage point below aerials, which rests at 24%.

The company’s total fleet value stood at approximately $7 billion at the end of ‘24, with an average fleet age of 46 months.

Herc’s gross fleet expenditures for 2025 are projected to be between $700 and $900 million, with a focus on increasing specialty equipment to support the mega project pipeline.

“We expect to continue to win an outsized share of mega project activity again in 2025,” said Aaron Birnbaum, senior vice president and COO. “Our strategic pricing, agile fleet management and disciplined cost controls position us well to maintain our industry-leading growth trajectory.”

Looking ahead, Silber acknowledged the challenges ahead regarding 2025’s operating landscape, but expressed confidence in Herc’s ability to navigate market pressures and continue to capitalize.

“The 2025 operating landscape is still lacking good clarity,” Silber said. “We are monitoring industry opportunities and 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.

“Long term, we expect new government policies and spending initiatives will expand opportunities for Herc and our industry.”