Herc Holdings Inc.

What they do

Herc Holdings rents a broad portfolio of equipment including aerial, earthmoving, material handling, trucks, trailers, air compressors, compaction and lighting. It also sells used equipment and contractor supplies, and provides repair, maintenance, equipment management services, safety training, re-rental, and on-site support. The company operates through a network of 602 locations in North America.

Revenue drivers

• Equipment rental revenue — Core business; Q2 2026 revenue was $1,072 million, up 23% year-over-year, driven by the H&E acquisition, mega project volume, and revenue synergies.
• Sales of rental equipment — Secondary revenue stream; Q2 2026 sales increased by $4 million as the company aligns fleet mix with customer demand.
• Contractor supplies and services — Includes construction consumables, tools, small equipment, safety supplies, repair and maintenance services; part of total revenues.
• ProSolutions and ProContractor — Specialty services including power generation, climate control, remediation, pumps, trench shoring, and professional-grade tools, supporting higher-return fleet mix.

Recent performance

In Q2 2026, total revenues increased 20% to $1,204 million, with equipment rental revenue up 23% to $1,072 million. Net income was $19 million, or $0.57 per diluted share, compared to a net loss of $35 million in the prior-year period. Adjusted EBITDA increased 19% to $487 million, with margin flat at 40.4%. Dollar utilization improved to 39.3% from 38.3% in the prior year. For the first half of 2026, total revenues rose 26% to $2,343 million, and free cash flow nearly doubled to $202 million.

Strategy

Management is focused on integrating H&E Equipment Services, which closed in June 2025, to capture scale, fleet capacity, talent and branch density for large, complex projects. They are prioritizing revenue and cost synergies, which are tracking to plan. The company is increasing net fleet capital expenditures to serve customer demand from mega projects and a higher mix of specialty equipment rentals. They are also taking actions to mitigate fuel inflation, which was a headwind in Q2 2026.

Risks

• Cyclical industry dependence — Demand is tied to capital investment and maintenance spending by contractors and industrial customers, which can decline in economic downturns.
• Integration risk from H&E acquisition — Failure to realize anticipated benefits from integrating H&E Equipment Services could hurt financial results, as noted in the 10-K.
• Fuel inflation and operating costs — Increased fuel and transportation expenses in Q2 2026 pressured margins, and continued inflation could further impact profitability.
• High leverage — The company has significant indebtedness (total liabilities of $11.83B at June 30, 2026), which could increase vulnerability to adverse conditions.

Outlook

Management raised full-year 2026 guidance and increased net fleet capital expenditures due to strong demand from multi-year mega projects. They have 'strong line of sight' into the second half of the year. Key metrics are expected to improve on a comparable basis, with revenue and cost synergies from H&E tracking to plan.