Herc reports restricted growth in ‘local markets’

Reporting its financial results for the first three months of the year, Herc president and chief executive officer, Larry Silber, said that the team continued to target a mid-year closing date for the US$5.3 billion deal and was getting ready to migrate Herc systems and processes to H&E.

Siber said that the US$18 million net loss for the quarter, which compared with a net income of US$65 million the same time last year, was “in line with expectations for the seasonally low first quarter,” and that the company remained “on pace to outperform the overall equipment rental market.” It said the loss was driven primarily by H&E acquisition transaction costs.

Adjusted EBITDA profit was flat at $339 million, equivalent to a margin of 39.4% compared to 42.2% in the prior-year period.

Total revenues increased 7% to US$861 million, boosted by an increase in equipment rental revenue of US$20 million which the company said reflected new income from acquisitions and new locations as well as high demand from national mega projects.

“As expected, the 2025 operating landscape continues to be a tale of two disparate economic trends,” said Silber. “Our national account business is growing, fuelled by federal and private funding for large construction projects like data centres, manufacturing onshoring and LNG facilities.

“At the same time, while facility maintenance, municipal, and infrastructure projects are supporting the local markets, other more interest-rate sensitive projects continue to be on hold, restricting overall local account growth.”

Herc said that at the end of March, the value of its total fleet stood at US$6.9 billion based on its original equipment cost, an increase of 9% compared with the same period a year earlier. The average age of the Herc fleet was 47 months – the same average age as recorded the previous year.

Revenues from sales of rental equipment more than doubled during the period, increasing from US$69 million in Q1 2024 to US$105 million in Q1 2025. Meanwhile revenue from equipment rental increased from US$719 million to US$739 million.

Meanwhile net debt stood at US$4 billion at the end of the quarter with net leverage of 2.5x, unchanged from the same prior year period. Cash and cash equivalents and unused commitments from its credit facility contributed to US$1.9 billion in liquidity at the end of March.

The company said that depreciation of rental equipment increased 8% to US$172 million due to higher year-over-year average fleet size. Non-rental depreciation and amortization increased 14% to US$33 million primarily due to an increase in non-rental asset depreciation resulting from the growth of the business.