Herc (HRI) Q4 2025 earnings summary

Executive summary

• Completed the largest industry acquisition in June 2025, rapidly integrating operations and expanding scale, with integration 80% complete by year-end and full completion targeted for Q1 2026.

• Achieved significant branch and specialty network growth, with a 30% year-over-year increase in locations and over 2,500 new team members onboarded.

• Digital revenue grew over 50% year-over-year, with 80% of eligible gear telematics-enabled, enhancing customer experience and operational efficiency.

• Maintained strong safety performance, with a recordable incident rate of 0.93 and over 97% of days classified as perfect.

• Completed the sale of the Cinelease studio entertainment business to focus on core rental operations and specialty fleet expansion.

Financial highlights

• Q4 2025 equipment rental revenue rose 24% year-over-year to $1,039 million; full-year equipment rental revenue up 18% to $3,770 million.

• Total Q4 revenues increased 27% year-over-year to $1,209 million; full-year total revenues up 23% to $4,376 million.

• Adjusted EBITDA for Q4 grew 19% to $519 million (margin 42.9%); full-year adjusted EBITDA up 15% to $1,818 million (margin 41.5%).

• Q4 net income was $24 million; full-year net income was $1 million, impacted by acquisition and integration costs; adjusted net income for Q4 was $69 million ($2.07/share).

• Free cash flow for 2025 was $521 million; pro forma leverage ratio at 3.9x-3.95x.

Outlook and guidance

• 2026 equipment rental revenue guidance: $4.275–$4.4 billion; adjusted EBITDA guidance: $2.0–$2.1 billion (10%-16% growth).

• Net rental equipment expenditures expected at $500–$800 million; gross capex at $800 million–$1.1 billion.

• Revenue synergies of $100–$120 million and cost synergies of $125 million targeted for full realization.

• Free cash flow projected at $400–$600 million for 2026; tax rate assumption ~25%.

• Sequential improvement in revenue and fleet metrics expected from H1 to H2 2026 as integration completes and peak season approaches.