Herc Holding Inc. (HRI)
Description
A leading North American equipment rental supplier offering a broad portfolio of rental fleet, sales of used and new equipment, parts, and related services.
Historical Reports
Financial Information
- Report Date
- 2025-04-30
- Report Period
- Q1 2025
- Debt
- $4.043 billion
- Debt History
- Debt decreased by approximately 1.0% from $4.086 billion at Dec 2024 to $4.043 billion at Mar 2025.
- Debt Trend
- Decreasing
Profit Information
- Profit
- $18 million
- Profit History
- Profit improved from a net loss of $65 million in Q1 2024 to net income of $18 million in Q1 2025.
- Profit Trend
- Increasing
Detailed Report
Financial Analysis Report: Herc Holding Inc. (10-Q for Quarter Ended March 2025)
Report Date: April 30, 2025
Period Covered: Q1 2025 (Quarter ended March 31, 2025)
Executive Summary
- Herc returned to profitability in Q1 2025, generating $18 million net income vs. a $65 million loss in Q1 2024.
- Total revenue grew 7.1% y-o-y to $861 million, driven by fleet utilization and strong rental pricing.
- Long-term debt was modestly reduced to $4.043 billion, down ~1% from Dec 2024.
Revenue & Profit Analysis
- Total Revenue: $861 M (+7.1% vs. $804 M)
- Equipment Rental: $739 M (+2.8%)
- Sale of Used Rental Equipment: $105 M (flat)
- Sale of New Equipment & Parts: ~$17 M (+30%)
- Direct Operating Expense: $327 M (+6.5% vs. $307 M)
- Rental Depreciation: $172 M (+7.5% vs. $160 M)
- SG&A: $118 M (+5.4% vs. $112 M)
- Transaction & Acquisition Costs: $64 M (one-time termination fee)
- Net Income: $18 M vs. –$65 M in prior year
- EPS (diluted): $0.063 vs. –$0.230
Drivers of Improvement:
- Higher rental utilization across end markets.
- Continued fleet rotation boosting resale margins.
- Discipline in SG&A and maintenance of debt covenant headroom.
Debt & Liquidity
- Total Debt Outstanding: $4.043 B (long-term net)
- Debt Maturity Profile: weighted-avg. maturities 2025–2029; minimal near-term maturities
- Unused Revolver Capacity: ~$1.89 B under ABL facility
- Cash on Hand: $709 M
- Debt Change y-o-y: –1.0%
Pros & Cons
Pros:
- Return to positive cash flow and profitability.
- Strong liquidity: cash + revolver cover > 50% of debt.
- Diversified rental fleet and recurring revenue model.
Cons:
- Elevated interest expense on floating-rate borrowings.
- Seasonality: Q1 tends to be weakest quarter.
- Acquisition-related one-time costs weigh on margins.
Outlook & Risks
- The pending merger with Equipment Services Inc. (mid-2025 closing) will broaden geographic reach and accelerate scale.
- Interest rates and capital markets volatility remain a risk for fleet financing costs.
- Continued supply-chain pressures and labor costs may dampen margins if not passed to customers.
Prepared by Financial Analysis Team
Statistics Breakdown
Revenue by stream (Q1 2025):
- Equipment rental: $739 M (85.8% of total)
- Sale of used rental equipment: $105 M (12.2%)
- Sale of new equipment & parts: ~$17 M (2.0%)
- Service revenue: Minimal/immaterial percentage
Company Direction Insights
Herc is on a positive growth trajectory: returning to profitability, modestly deleveraging, and maintaining robust liquidity. Key indicators include improved fleet utilization, disciplined capital expenditures, and strong covenant headroom. Near-term integration of Equipment Services Inc. will provide scale, but management must navigate interest-rate exposure, seasonal revenue swings, and execution of merger synergies. Overall, the company is financially healthy with opportunities for margin expansion, balanced by macro-economic and financing risks.