Nov 24, 2025 4:17 PM Eastern Standard Time Herc Holdings Inc. Announces Promotion of Aaron Birnbaum to President Share BONITA SPRINGS, Fla.--(BUSINESS WIRE)--Herc Holdings, Inc. (NYSE: HRI) ("Herc Holdings†or "the Company†), one of North America's leading equipment rental suppliers operating through Herc Rentals Inc., today announced that Aaron Birnbaum, most recently senior vice president and chief operating officer, has been promoted to president, effective Jan. 1, 2026. In his expanded role, Birnbaum w ...

BONITA SPRINGS, Fla.--(BUSINESS WIRE)--Herc Holdings, Inc. (NYSE: HRI) ("Herc Holdings†or "the Company†), one of North America's leading equipment rental suppliers operating through Herc Rentals Inc., today announced the election of two new independent directors: John Olin, executive vice president and chief financial officer at Westinghouse Air Brake Technologies Corporation, and Patrick Shannon, former senior vice president and chief financial officer at Allegion plc. Their elections to the. ...

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Summary of Herc Rentals FY Conference Call Company Overview - Herc Rentals (NYSE:HRI) is the third largest equipment rental company in North America, celebrating its 60th anniversary and 10 years as a public company [3][2] - The company operates over 612 locations across 46 states and five western Canadian provinces, with a market valued at approximately $89 billion [3][4] - Herc Rentals employs over 9,900 team members and focuses on disciplined capital management and profitable growth [3][4] Key Points and Arguments Acquisition of H&E Equipment Services - Herc Rentals acquired H&E Equipment Services on June 2, 2025, marking the largest acquisition in the industry’s history, adding over 160 locations [4][5] - The acquisition aims to enhance market presence in 11 of the top 20 rental regions and improve urban density in 7 of the top 10 markets in North America [4][5] - The combined fleet has an original equipment cost of over $9.6 billion, with Herc holding approximately 5% market share [5] Integration and Synergies - The integration of H&E is progressing well, with IT integration completed across all branches, and a focus on sales optimization and cultural training [5][6] - Expected synergies from the acquisition include about $300 million in incremental EBITDA, with $175 million from revenue synergies and $125 million from cost synergies [6][8] - The company plans to reduce its leverage ratio to 2-3 times by the end of 2027 through debt repayment and EBITDA growth [8][43] Demand and Market Conditions - Demand for equipment rental has been mixed, with Herc experiencing modest growth while H&E faced a 15% year-over-year decline prior to the acquisition [12][13] - The company sees stability in local markets and robust opportunities in mega projects, particularly in data centers and LNG [16][20] - Herc aims to capture 10-15% of mega project opportunities, currently participating at that level [20][27] Financial Performance and Outlook - The company anticipates stable performance in 2026, with potential improvements if interest rates decrease [19][20] - There is a focus on managing variable costs, which constitute 35% of the business, to enhance profitability [34] Technology and Innovation - Herc Rentals utilizes a technology platform called ProControl, which enhances customer interaction and fleet management [48] - New features include remote operation of equipment via Bluetooth and integrated safety training [49][50] - The integration of telematics from H&E has been seamless, allowing for enhanced fleet management capabilities [51][52] Additional Important Information - The company is focused on expanding its specialty business, which offers higher financial returns, without incurring additional fixed overhead [31][40] - The management emphasizes the importance of safety in operations and has developed training programs to ensure safe equipment usage [49][50] - Herc Rentals is committed to reducing leverage and improving financial health post-acquisition, with a clear path to achieving these goals [43][46]

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Financial Data and Key Metrics Changes - For Q3 2025, equipment rental revenue increased approximately 30% year-over-year, driven by the acquisition of H&E Equipment Services Inc. and strong contributions from mega projects and specialty solutions [23] - Adjusted EBITDA rose 24% compared to the previous year's third quarter, benefiting from higher equipment rental revenue and used equipment sales [23] - Net income for the third quarter included $38 million of transaction costs related to the acquisition, with adjusted net income at $74 million [25] Business Line Data and Key Metrics Changes - Local accounts represented 52% of rental revenue, down from 53% a year ago on a pro forma basis, while national accounts continue to show robust private funding for large-scale projects [14] - The company is focusing on optimizing its fleet management and has made significant progress in disposing of underutilized and aged equipment [19][20] Market Data and Key Metrics Changes - The industrial spending forecast indicates strong capital and maintenance spending through the end of the decade, with non-residential construction starts in 2025 estimated at $467 billion, a 4% increase year-over-year [16] - The mega project pipeline is projected to exceed $650 billion for 2025, indicating significant growth opportunities in the construction sector [16][17] Company Strategy and Development Direction - The company is prioritizing the integration of H&E Equipment Services Inc. and has paused other M&A initiatives to focus on achieving cost and revenue synergies [10] - Plans include consolidating general rental branches and expanding specialty equipment locations, aiming for a 25% increase in specialty network next year [9][11] Management's Comments on Operating Environment and Future Outlook - Management noted that while local market growth is limited due to high interest rates, robust activity in mega projects continues to drive demand [4][14] - The company remains confident in its ability to deliver full value from the acquisition and achieve long-term growth strategies [10][12] Other Important Information - The company completed a full systems integration in just 90 days, significantly faster than the typical timeline for similar-sized companies [6] - The integration allows for real-time visibility into performance metrics and operational KPIs, enhancing decision-making capabilities [7][8] Q&A Session Summary Question: What is the status of the fleet right-sizing process? - The heavy lifting was completed in Q3, with more work expected in Q4, aiming to close this part of the process by the end of the year [31][33] Question: How does the mix of national accounts impact margins? - Management does not expect significant margin dilution from national accounts or mega projects, as these projects typically involve minimal movement and higher volumes of specialty products [35][36] Question: Can you clarify the consolidation of general rental locations? - The strategy involves opening specialty businesses within general rental branches rather than closing them, with plans for 50 new specialty locations [38] Question: Are there updates on cost and revenue synergies? - Cost synergy targets are evolving, with ongoing efficiency reviews now that the companies are on the same platform [40] Question: How is customer attrition being managed post-acquisition? - Customer attrition has stabilized, and efforts are being made to engage with former H&E Equipment Services Inc. customers to regain business [44][61]

Financial Data and Key Metrics Changes - For Q3 2025, equipment rental revenue increased approximately 30% year-over-year, driven by the acquisition of H&E and strong contributions from mega projects and specialty solutions [23] - Adjusted EBITDA rose 24% compared to the previous year's third quarter, benefiting from higher equipment rental revenue and used equipment sales [23] - Adjusted net income for the quarter was $74 million, with $38 million in transaction costs related to the H&E acquisition included in the net income [25] Business Line Data and Key Metrics Changes - The company completed a full systems integration in just 90 days, which is significantly faster than the typical timeline of six to 18 months for similar-sized companies [6] - The focus on fleet management included disposing of underutilized and aged equipment, with gross CapEx expected to be between $900 million and $1.1 billion for 2025 [19] - The company plans to consolidate some general rental branches to improve operational efficiencies, expecting to add about 50 specialty locations, increasing the specialty network by 25% next year [9] Market Data and Key Metrics Changes - Local accounts represented 52% of rental revenue, down from 53% a year ago, indicating a slight shift in market dynamics [14] - The company is targeting a long-term revenue split of 60% local and 40% national accounts, which provides growth and resiliency [15] - The industrial spending forecast indicates strong capital and maintenance spending through the end of the decade, with non-residential construction starts estimated at $467 billion for 2025, a 4% increase year-over-year [16] Company Strategy and Development Direction - The integration of H&E is the primary focus, with other M&A initiatives paused to ensure successful integration and realization of synergies [10] - The company aims to capitalize on the shift from ownership to rental, particularly in the specialty market, and is increasing its gross CapEx plans towards specialty equipment [11] - Diversification into new end markets and products has reduced reliance on a single industry, enhancing resilience to downturns [22] Management Comments on Operating Environment and Future Outlook - Management noted that while local market demand is affected by high interest rates, mega project activity remains robust, indicating a bifurcated demand environment [4] - The company expects continued growth in national accounts and specialty solutions, with plans to optimize fleet mix and geography to support this momentum [21] - Management remains confident in achieving both revenue and cost synergies over the next three years, despite the challenges posed by the integration process [28] Other Important Information - The company generated $342 million of free cash flow in the nine months ended September 30, 2025, aligning with expectations [26] - The current leverage ratio stands at 3.8x, with a goal to return to a target range of two to three times by the end of 2027 [26] - The company has onboarded 2,500 new team members into its health and safety program, emphasizing a strong commitment to safety [13] Q&A Session Summary Question: What is the status of the fleet right-sizing process? - Management indicated that significant progress was made in Q3, with more work expected in Q4, aiming to close this process by the end of 2026 [31][33] Question: How does the mix of national accounts impact margins? - Management stated that they do not expect significant margin dilution from national accounts or mega projects, as these projects typically involve minimal movement and higher volumes of specialty products [36] Question: Can you clarify the consolidation of general rental locations? - Management clarified that the strategy involves opening specialty businesses within general rental branches rather than closing them, aiming for a net increase in specialty locations [39] Question: Are there updates on cost and revenue synergies? - Management noted that cost synergy targets are evolving, and efficiency reviews are ongoing now that the integration is complete, which will contribute to incremental margins [41] Question: How is customer attrition being managed post-acquisition? - Management reported stabilization in the sales organization and is focusing on re-engaging customers, with positive early signs of revenue synergies from introducing specialty products to former H&E customers [62]

Financial Data and Key Metrics Changes - For the third quarter of 2025, equipment rental revenue increased approximately 30% year over year, driven by the acquisition of H&E Equipment Services Inc. and strong contributions from mega projects and specialty solutions [25] - Adjusted EBITDA rose 24% compared to the previous year's third quarter, benefiting from higher equipment rental revenue and used equipment sales [25] - Net income for the third quarter included $38 million of transaction costs related to the H&E Equipment Services Inc. acquisition, with adjusted net income at $74 million [26] Business Line Data and Key Metrics Changes - The company completed a full systems integration within 90 days, significantly faster than the typical timeline of six to 18 months for similar-sized companies [6][8] - The focus on fleet management included disposing of underutilized and aged equipment, with a goal of optimizing the fleet to match demand patterns [10][20] - The company expects to consolidate some general rental branches for cost and operational efficiencies, resulting in about 50 additional specialty locations, increasing the specialty network by 25% next year [10][12] Market Data and Key Metrics Changes - Local accounts represented 52% of rental revenue compared to 53% a year ago, indicating a slight shift in revenue sources [16] - The company is targeting a long-term revenue split of 60% local and 40% national, which provides growth and resiliency [17] - Industrial spending is projected to remain strong, with non-residential construction starts estimated at $467 billion for 2025, a 4% increase year over year [18] Company Strategy and Development Direction - The integration of H&E Equipment Services Inc. is the primary focus, with other M&A initiatives paused to ensure successful integration [11] - The company aims to capitalize on the shift from ownership to rental, particularly in the specialty market, and is increasing gross CapEx plans towards specialty equipment [12][13] - The strategy includes optimizing the branch network and enhancing customer-facing technology to improve service levels and operational efficiency [10][12] Management's Comments on Operating Environment and Future Outlook - Management noted that while local market growth is limited due to high interest rates, robust activity continues in mega projects and specialty solutions [4][16] - The company remains confident in achieving full revenue and cost synergies over the next three years, despite the ongoing integration challenges [30] - Management highlighted the importance of safety and operational efficiency, with a commitment to maintaining high standards across the organization [15][16] Other Important Information - The company generated $342 million of free cash flow in the nine months ended September 30, 2025, aligning with expectations [27] - The current leverage ratio stands at 3.8 times, with a goal to return to a target range of two to three times by year-end 2027 [27] Q&A Session Summary Question: What is the status of the fleet right-sizing process? - Management indicated that significant progress was made in Q3, with expectations to complete the right-sizing in Q4, depending on the economic landscape for 2026 [32][35] Question: How does the mix of national accounts impact margins? - Management stated that they do not expect significant margin dilution from national accounts or mega projects, as these projects typically involve minimal movement of equipment and higher volumes [36][39] Question: Can you clarify the consolidation of general rental locations? - Management explained that the strategy involves opening specialty businesses within general rental branches rather than closing them, aiming for a net increase in specialty locations [41] Question: Are there updates on cost and revenue synergies? - Management confirmed that while initial synergy targets may evolve, they are focused on efficiency reviews and believe there will be incremental margin improvements [43][45] Question: How is customer retention and pricing being managed post-acquisition? - Management reported stabilization in attrition rates and is working on improving pricing for H&E Equipment Services Inc. customers to align with Herc's historical performance [57][61]

Core Insights - Herc Holdings (HRI) reported quarterly earnings of $2.22 per share, exceeding the Zacks Consensus Estimate of $1.83 per share, but down from $4.35 per share a year ago, indicating an earnings surprise of +21.31% [1] - The company generated revenues of $1.3 billion for the quarter ended September 2025, surpassing the Zacks Consensus Estimate by 1.12% and showing a significant increase from $965 million year-over-year [2] - The stock has underperformed, losing approximately 29.6% since the beginning of the year, compared to a 16.9% gain in the S&P 500 [3] Earnings Performance - Over the last four quarters, Herc Holdings has surpassed consensus EPS estimates two times and topped revenue estimates three times [2] - The current consensus EPS estimate for the upcoming quarter is $2.23, with expected revenues of $1.34 billion, and for the current fiscal year, the estimate is $6.32 on $4.46 billion in revenues [7] Market Outlook - The company's earnings outlook is crucial for investors, as it reflects current consensus expectations and any recent changes [4] - The Zacks Rank for Herc Holdings is currently 4 (Sell), indicating expectations of underperformance in the near future [6] - The Transportation - Equipment and Leasing industry, to which Herc Holdings belongs, is ranked in the top 26% of Zacks industries, suggesting a favorable industry outlook [8]

Scaling for Sustainable Growth Q3 2025 EARNINGS CONFERENCE CALL October 28, 2025 Herc Rentals Team and Agenda President & Chief Executive Officer Q&A Larry Silber Aaron Birnbaum Senior Vice President & Chief Operating Officer Mark Humphrey Senior Vice President & Chief Financial Officer Leslie Hunziker Senior Vice President Investor Relations, Communications & Sustainability Agenda Safe Harbor Q3 2025 Overview Q3 Operations Review Q3 Financial Review 2025 Outlook Herc Holdings Inc. NYSE: HRI Q3 2025 2 Safe ...