Herc Holdings Inc
Q1 2026 Earnings
Market Reaction
S&P 500 over the same 30 days: +6.29%.
Did HRI Beat Earnings? Q1 2026 Results
Herc Holdings delivered a sharply better-than-expected first quarter for 2026, with adjusted earnings per diluted share of $0.21 beating the consensus estimate of negative $0.21 by 201.20%, while revenue of $1.14 billion cleared the $1.06 billion estimate by 7.08% and rose 32.3% year over year. The primary engine behind those gains was the June 2025 acquisition of H&E Equipment Services, which expanded Herc's fleet significantly and drove equipment rental revenue up 33% to $981 million, though it also more than doubled interest expense to $128 million and pushed GAAP net loss to $24 million for the quarter. Adjusted EBITDA climbed 33% to $448 million, holding margins steady at 39.3%, while free cash flow nearly doubled to $94 million. Analysts have noted mixed views on the stock even after the beat, with a consensus hold rating reflecting uncertainty around the company's elevated net leverage of 3.96x. Management reaffirmed full-year 2026 guidance for equipment rental revenue of $4.28 billion to $4.40 billion and adjusted EBITDA of $2.00 billion to $2.10 billion, projecting accelerating performance in the second half as integration synergies and fleet optimization take hold.
- H&E Equipment Services acquisition driving 33% increase in equipment rental revenue from larger fleet size
- Volume increase on mega projects
- SG&A improved to 14.9% of equipment rental revenue from 16.0% through operating leverage and cost synergies
- Completed branch optimization program increasing specialty branch network by 25%
- Free cash flow nearly doubled to $94 million
“The first quarter of 2026 marked a defining milestone for Herc Rentals as we successfully completed the integration of our H&E acquisition — the largest in the history of our industry — and we are already capturing the strategic benefits we anticipated: 25% more specialty locations, a stronger and deeper sales network, expanded share in local and regional accounts, and greater density in top metropolitan markets, where construction activity is most resilient. Financial performance in the first quarter was in line with our expectations and seasonal trends. While we expect performance to build as we move through the second half of 2026, the value of this combination will be realized over our three-year synergy plan, and we are executing against that roadmap with confidence.”
Herc Holdings CEO, on the earnings call
Forward Guidance & Outlook
Herc Holdings affirmed its full-year 2026 guidance: equipment rental revenue of $4.275 billion to $4.4 billion, adjusted EBITDA of $2.0 billion to $2.1 billion, net rental equipment capital expenditures of $500 million to $800 million, and gross capex of $800 million to $1.1 billion. Free cash flow is expected in the range of $400–$600 million. The company expects performance to accelerate in the second half of 2026 as fleet optimization improves utilization, new specialty locations gain momentum, and the larger sales force matures. Revenue synergies are estimated at an incremental $100M to $120M, and cost synergies at an incremental $90M for a fully realized target of $125M by year-end 2026. Fleet dispositions are estimated to be approximately 50% lower year-over-year. The effective tax rate is expected at approximately 25%. Interest expense will reflect a full year of acquisition debt.
HRI YoY Financials
HRI Revenue by Segment
Figures from SEC filings and company reports. Not investment advice.