Herc Rentals Team and Agenda Chief Executive Officer Aaron Birnbaum President Q&A Larry Silber Mark Humphrey Senior Vice President & Chief Financial Officer Scaling for Sustainable Growth Q4 AND FULL YEAR 2025 EARNINGS CONFERENCE CALL February 17, 2026 Leslie Hunziker Senior Vice President Investor Relations, Communications & Sustainability Agenda Safe Harbor FY 2025 Overview Q4 Operations Review Q4 Financial Review 2026 Outlook Herc Holdings Inc. NYSE: HRI Q4 2025 2 Safe Harbor Statements and Non-GAAP Fina ...

Revenue and Market Dynamics - The company's revenues are significantly affected by the cyclical nature of the construction and industrial sectors, with a decline in these sectors potentially leading to decreased demand for rental equipment [79]. - A substantial portion of revenues is derived from equipment rentals to contractors in the non-residential construction market, making the company vulnerable to fluctuations in construction activity [80]. - Key national account customers accounted for 49% of the company's rental revenue in 2025, highlighting the importance of maintaining positive relationships with these clients [116]. - Equipment rental revenue increased by 18% to $3.77 billion in 2025 from $3.19 billion in 2024 [201]. - Total revenues rose by 23% to $4.38 billion in 2025 compared to $3.57 billion in 2024 [201]. Competition and Market Risks - The company faces competitive pressures from various market participants, which could adversely affect rental volumes and pricing strategies [83]. - The company faces intense competition in the equipment rental market, which may lead to downward pricing pressures and affect revenue if it cannot maintain competitive pricing [108]. - Economic downturns or public health crises, such as pandemics, could lead to significant disruptions in business operations and financial performance [93]. Operational Challenges - Integration of H&E into the company's operations may be complex and costly, with potential delays in achieving anticipated cost savings and synergies [85]. - The company relies heavily on relationships with key suppliers for equipment, and disruptions in supply chains could negatively impact operations and financial results [91]. - The company has experienced delays in receiving equipment due to global supply chain issues, which could impair growth plans and operational effectiveness [92]. - Disruptions in customer-facing systems could impair customer satisfaction and result in lost revenue opportunities [105]. Financial Position and Debt - As of December 31, 2025, the company had total outstanding debt of approximately $8.1 billion, which significantly impacts cash flow and profitability [139]. - Substantially all of the company’s consolidated assets secure certain indebtedness, impacting financial flexibility and liquidity [141]. - The company may need to reduce or delay capital expenditures if cash flows are insufficient to meet obligations [140]. - A substantial portion of the company's debt bears interest at floating rates, increasing vulnerability to economic conditions and interest rate fluctuations [144]. - The ability to refinance existing indebtedness is contingent on economic conditions and could lead to increased servicing costs if interest rates rise [145]. Acquisitions and Strategic Transactions - The acquisition of H&E Equipment Services, Inc. is expected to provide significant benefits and synergies, but the realization of these benefits may take longer than anticipated [84]. - The acquisition of H&E Equipment Services was completed for a total purchase price of $4.8 billion, including $2.9 billion in cash [196]. - The company may continue to make acquisitions, with rental equipment and intangible assets being significant components of these transactions [242]. Cybersecurity and Compliance - Cybersecurity threats pose a risk to the company's IT systems and sensitive information, which could result in operational disruptions and reputational harm [94]. - Compliance with data privacy and security obligations is critical, as breaches could lead to financial loss and regulatory penalties [101]. - The company has established a comprehensive cybersecurity program overseen by the Board of Directors, focusing on risk management and incident response [153]. - The incident response program is regularly tested and evaluated to ensure effectiveness against cybersecurity threats [161]. Environmental and Regulatory Risks - The company is subject to numerous environmental, health, and safety laws, which could materially adversely affect its financial position and results of operations [125]. - The company faces risks related to climate change, which may increase demand for rental equipment and require additional capital expenditures [126]. - The aggregate amounts accrued for environmental liabilities as of December 31, 2025 and 2024 were $0.4 million and $0.5 million, respectively [125]. Employee and Labor Relations - The company has approximately 620 employees in the U.S. and 80 in Canada under labor contracts, which could lead to work stoppages if new agreements are not negotiated [134]. Financial Performance Metrics - Net income dropped to $1 million in 2025, a decrease of 100% from $211 million in 2024 [201]. - Cash provided by operating activities decreased by $140 million in 2025 compared to 2024, primarily due to decreased profitability and increased transaction expenses [216]. - Cash used in investing activities increased by $3.4 billion in 2025, mainly for the H&E acquisition and rental equipment purchases [217]. - Interest expense rose by 60% to $416 million in 2025 compared to $260 million in 2024 [201]. Miscellaneous - The company declared a quarterly dividend of $0.70 per share on December 5, 2025 [182]. - An asset impairment charge of $49 million was recorded for Cinelease in 2025, compared to $194 million in 2024 [252]. - The company has a defined benefit pension plan that has been frozen to new employees since 2016 [240].

Revenue Growth - Equipment rental revenue for Q4 2025 was $1,039 million, a 24% increase year-over-year, while total revenues reached $1,209 million, up 27% from the prior year[7]. - Full year 2025 total revenues increased 23% to $4,376 million, driven by an 18% rise in equipment rental revenue, with record equipment rental revenue of $3,770 million[10]. - Total revenues for the year ended December 31, 2025, increased to $4,376 million, up 22.6% from $3,568 million in 2024[27]. - Equipment rental revenue for the three months ended December 31, 2025, was $1,039 million, a 24% increase compared to $839 million in the same period of 2024[27]. Profitability Metrics - Adjusted EBITDA for Q4 2025 was $519 million, a 19% increase, with an adjusted EBITDA margin of 43%[7]. - Adjusted EBITDA for the year ended December 31, 2025, was $1,818 million, representing a 14.9% increase from $1,583 million in 2024[35]. - Adjusted EBITDA margin for the year ended December 31, 2025, was 41.5%, slightly down from 44.4% in 2024[35]. - The company reported a net income of $24 million, or $0.72 per diluted share, compared to a net loss of $46 million, or $1.62 loss per diluted share, in the prior-year period[10]. - Net income for the year ended December 31, 2025, was $1 million, a significant decrease from $211 million in 2024[31]. - Adjusted net income for the year ended December 31, 2025, was $239 million, down from $367 million in 2024, reflecting a decrease of approximately 35%[38]. - Adjusted earnings per diluted share for the year ended December 31, 2025, was $7.61, down from $12.88 in 2024, a decrease of approximately 40%[38]. Debt and Cash Management - Net debt as of December 31, 2025, was $8.1 billion, with a net leverage ratio of 3.95x compared to 2.54x in the prior-year period[20]. - Long-term debt increased to $8,021 million as of December 31, 2025, compared to $4,069 million in 2024[29]. - Cash and cash equivalents decreased to $52 million at the end of 2025, down from $83 million at the end of 2024[29]. - The company reported a net cash provided by operating activities of $1,085 million for the year ended December 31, 2025, compared to $1,225 million in 2024[31]. - Net cash provided by operating activities for the year ended December 31, 2025, was $1,085 million, compared to $1,225 million in 2024, indicating a decrease of about 11.5%[45]. Capital Expenditures and Investments - Net rental equipment capital expenditures for 2025 were $649 million, down from $760 million in 2024[11]. - Rental equipment expenditures for the year ended December 31, 2025, were $1,097 million, an increase from $1,048 million in 2024[45]. - Proceeds from the disposal of rental equipment increased to $448 million in 2025 from $288 million in 2024, representing a growth of 55.6%[45]. - Acquisitions net of cash acquired amounted to $4,257 million in 2025, significantly higher than $600 million in 2024, indicating aggressive market expansion efforts[45]. Strategic Initiatives - The integration of H&E, the largest acquisition in the rental industry, is progressing well, with cost synergies achieved ahead of schedule[4]. - The company plans to achieve equipment rental revenue guidance of $4.275 billion to $4.4 billion for 2026, with adjusted EBITDA guidance of $2.0 billion to $2.1 billion[17]. - The company opened 26 greenfield locations in 2025, contributing to its market expansion strategy[20]. - The company incurred transaction expenses of $199 million for the year ended December 31, 2025, compared to $11 million in 2024[35]. - The company incurred transaction expenses of $222 million in 2025, reflecting the costs associated with acquisitions and other strategic initiatives[45]. Asset Management - As of December 31, 2025, the company's total fleet was valued at approximately $9.5 billion, with an average fleet age of 45 months[13]. - The company’s total assets increased to $13,776 million as of December 31, 2025, up from $7,877 million in 2024[29].

BONITA SPRINGS, Fla.--(BUSINESS WIRE)--Herc Holdings Inc. (NYSE: HRI) ("Herc Holdings" or the "Company") today reported financial results for the quarter and full year ended December 31, 2025. "2025 was a pivotal year for Herc Rentals. In June, we completed the largest acquisition in our industry, bringing together two highquality equipment rental operators to create significant longterm strategic and financial value,†said Larry Silber, chief executive officer. "We are extremely pleased with. ...

Core Viewpoint - The market anticipates a year-over-year decline in earnings for Herc Holdings (HRI) despite higher revenues, with actual results being crucial for stock price movement [1][2]. Earnings Expectations - Herc Holdings is expected to report quarterly earnings of $1.84 per share, reflecting a year-over-year decrease of 48.6%, while revenues are projected to reach $1.26 billion, an increase of 34.7% from the previous year [3]. Estimate Revisions - The consensus EPS estimate has remained unchanged over the last 30 days, indicating stability in analysts' assessments [4]. Earnings Surprise Prediction - The Zacks Earnings ESP model indicates that the Most Accurate Estimate for Herc Holdings is higher than the Zacks Consensus Estimate, resulting in a positive Earnings ESP of +0.72% [12]. Historical Performance - In the last reported quarter, Herc Holdings exceeded the expected earnings of $1.83 per share by delivering $2.22, achieving a surprise of +21.31% [13]. Over the past four quarters, the company has beaten consensus EPS estimates twice [14]. Investment Considerations - While Herc Holdings shows potential as an earnings-beat candidate, investors should consider other factors influencing stock performance beyond earnings results [15][17].

Core Insights - Herc Holdings is a leading provider of equipment rental and specialty solutions for construction, industrial, and commercial clients across the U.S. [6] Company Overview - As of February 4, Herc Holdings' stock price was $169.38, with a market capitalization of $5.73 billion and a revenue of $3.88 billion over the trailing twelve months (TTM) [4] - The company has a dividend yield of 1.62% [4] Recent Transactions - GAMCO Investors sold 34,492 shares of Herc Holdings in the fourth quarter, amounting to an estimated $4.73 million based on average pricing [2] - Despite the sale, the value of GAMCO's stake in Herc Holdings increased by $29.81 million during the same period, attributed to both the share reduction and a more than 25% increase in share price [2] Financial Performance - Equipment rental revenue increased by 30% year over year to $1.12 billion, contributing to a total revenue rise of 35% to $1.30 billion [11] - Adjusted EBITDA grew by 24% to $551 million, although margins were compressed due to integration costs from the acquisition of H&E Equipment Services [11] - Management completed full IT integration during the quarter and reaffirmed full-year guidance, indicating confidence in future synergies and utilization improvements [11] Market Position - Herc Holdings serves a diverse customer base across various sectors, including non-residential and residential construction, specialty trades, industrial manufacturing, infrastructure, government, and commercial facilities [9] - The company benefits from infrastructure spending, fleet scale, and operational leverage, positioning it favorably alongside other industrial and asset-heavy holdings [10] Investment Implications - The recent sale by GAMCO appears to be more of a portfolio adjustment rather than a loss of confidence in Herc Holdings, as the company still represents a significant portion of GAMCO's U.S. equity AUM [3][12] - Despite a 15% decline in share price over the past year, Herc Holdings continues to show strong revenue growth and operational capabilities, suggesting potential for recovery [12]

Core Viewpoint - The analysis compares Herc Holdings (HRI) and Westinghouse Air Brake Technologies (WAB) to determine which stock represents a better value opportunity for investors in the Transportation - Equipment and Leasing sector [1]. Valuation Metrics - HRI has a forward P/E ratio of 17.45, while WAB has a forward P/E of 22.72 [5]. - HRI's PEG ratio is 1.33, indicating a more favorable valuation relative to its expected earnings growth compared to WAB's PEG ratio of 1.57 [5]. - HRI's P/B ratio stands at 2.47, whereas WAB's P/B ratio is higher at 3.55 [6]. - These metrics contribute to HRI receiving a Value grade of A, while WAB has a Value grade of D [6]. Earnings Outlook - Both HRI and WAB have a Zacks Rank of 2 (Buy), indicating a positive earnings outlook supported by favorable analyst estimate revisions [3]. - The analysis emphasizes that while both companies have solid earnings prospects, HRI is currently viewed as the superior value option based on the discussed valuation figures [7].

Core Insights - Herc Holdings (HRI) is positioned to continue its earnings-beat streak, particularly in the upcoming report, supported by a strong history of exceeding earnings estimates [1] - The average surprise for Herc Holdings over the last two quarters was 33.14%, indicating a consistent performance above expectations [1] Earnings Performance - In the most recent quarter, Herc Holdings reported earnings of $2.22 per share, surpassing the expected $1.83 per share by 21.31% [2] - For the previous quarter, the company reported $1.87 per share against an expectation of $1.29 per share, resulting in a surprise of 44.96% [2] Earnings Estimates and Predictions - There has been a favorable change in earnings estimates for Herc Holdings, with a positive Earnings ESP (Expected Surprise Prediction) indicating potential for another earnings beat [5] - The current Earnings ESP for Herc Holdings is +0.72%, suggesting analysts are optimistic about its near-term earnings potential [8] - The combination of a positive Earnings ESP and a Zacks Rank of 2 (Buy) enhances the likelihood of another earnings beat [8] Statistical Insights - Research indicates that stocks with a positive Earnings ESP and a Zacks Rank of 3 (Hold) or better have a nearly 70% chance of producing a positive surprise [6] - The Zacks Earnings ESP compares the Most Accurate Estimate to the Zacks Consensus Estimate, with the Most Accurate Estimate reflecting the latest analyst revisions [7]

Core Viewpoint - Wells Fargo analysts suggest that a combination of tax refund spending, improved earnings in previously lagging sectors, and new liquidity from the Federal Reserve could lead to a "reflation" in equities [1] Group 1 - Tax refund spending is expected to contribute positively to market dynamics [1] - Stronger earnings are anticipated in sectors that have previously underperformed [1] - Fresh liquidity from the Federal Reserve is seen as a catalyst for potential equity market growth [1]

Core Viewpoint - The Zacks Transportation - Equipment and Leasing industry is facing a challenging macroeconomic environment characterized by persistent inflation, tariff-related tensions, and supply-chain disruptions, which are further exacerbated by geopolitical issues [1][6]. Industry Overview - The industry encompasses companies that provide equipment financing, leasing, and supply-chain management services, including aircraft, railcar, and intermodal container lessors [3]. - Participants in this industry offer fleet management solutions to a diverse customer base, including small businesses and large international enterprises, with significant clients in automotive, electronics, transportation, grocery, lumber, food service, and home furnishing sectors [4]. Financial Performance and Outlook - Companies in the industry are demonstrating strong financial returns for shareholders through dividend payouts and share buybacks, indicating financial strength and confidence in their business models [2][5]. - Ryder's board approved a 12% dividend increase, raising its quarterly cash dividend to $0.91 per share, while Wabtec announced a 25% increase, raising its quarterly cash dividend from $0.20 to $0.25 [5]. Economic Challenges - The industry is grappling with economic uncertainties due to tariff tensions and inflation, which are likely to dampen stock prospects and contribute to market volatility [6]. - Lingering supply-chain disruptions and weak freight rates are negatively impacting the industry's performance, with the Cass Freight Shipments Index declining 7.6% year over year in November, marking a downward trend for seven consecutive months [7]. Industry Ranking and Performance - The Zacks Transportation - Equipment and Leasing industry currently holds a Zacks Industry Rank of 187, placing it in the bottom 22% of over 250 Zacks industries, indicating gloomy near-term prospects [8][9]. - Over the past year, the industry has underperformed the S&P 500 Composite index, declining 17.8% compared to the S&P 500's increase of 17.8% [11]. Current Valuation - The industry is trading at a forward 12-month price-to-earnings (P/E) ratio of 14.24X, which is below the S&P 500's 23.21X and the sector's P/E ratio of 13.78X [12]. Notable Companies - **AerCap**: Engages in leasing and managing commercial flight equipment, with a strong earnings surprise history and an expected earnings growth rate of 22.81% for 2025, carrying a Zacks Rank of 1 (Strong Buy) [14][15]. - **Wabtec**: Offers technology-based locomotives and services for freight rail and passenger transit, with a strong free cash flow and an expected earnings growth rate of 18.39% for 2025, holding a Zacks Rank of 3 (Hold) [16][17]. - **Herc Holdings**: Operates as an equipment rental supplier, with a solid earnings surprise history and a Zacks Rank of 3 [18][19].