Herc (HRI) Q3 2024 earnings summary

Executive summary

• Achieved record Q3 2024 equipment rental revenue of $866 million, up 13.2% year-over-year, with total revenues rising 6.3% to $965 million and adjusted EBITDA up 8.8% to $446 million (46.2% margin).

• Net income for Q3 2024 grew 8% to $122 million, or $4.28 per diluted share; adjusted EPS was $4.35.

• Growth was driven by disciplined pricing, mega project participation, acquisitions, greenfield expansion, and strong national account activity.

• Cinelease studio entertainment business remains held for sale, with results presented with and without Cinelease.

• Free cash flow for the nine months ended September 30, 2024, was $218 million.

Financial highlights

• Q3 equipment rental revenue grew 13% to $866 million; total revenues up 6% to $965 million.

• Adjusted EBITDA for Q3 was $446 million (46.2% margin); for nine months, $1,145 million (43.8% margin).

• Free cash flow year-to-date at $218 million; net leverage at 2.7x, within target range and ample liquidity of $1.9 billion.

• Rental pricing increased 2.3% in Q3 and 3.5% year-to-date; volume up 10.7%.

• Net income for Q3 was $122 million; adjusted net income was $124 million, or $4.35 per diluted share.

Outlook and guidance

• 2024 equipment rental revenue growth guidance raised to 9.5%–11%, reflecting continued outperformance and mega project contributions.

• Full-year adjusted EBITDA guidance unchanged at $1.55–$1.6 billion, up 6%–9% over prior year, excluding Cinelease.

• Net rental equipment capex guidance raised to $650–$700 million, supporting mega projects and specialty equipment.

• Q4 expected to see record rental revenue, with incremental contributions from acquisitions and hurricane recovery efforts.

• Sale process for Cinelease studio entertainment business is ongoing.