Herc (HRI) Q3 2026 earnings summary

Executive summary

• Q3 equipment rental revenue reached a record $1.254B, up 11.8%; total revenue reached a record $1.364B, up 4.6%.

• Adjusted EBITDA rose 9.4% to a record $603M, with margin up 190 bps to 44.2%; adjusted net income was $131M, or $3.91 per diluted share.

• H&E integration, mega-project activity and specialty growth supported results; fuel, delivery and fleet-related costs pressured expenses.

• Larry Silber becomes Executive Chairman and Aaron Birnbaum becomes CEO on January 1, 2027.

Financial highlights

• Q3 net income was $104M versus $30M; diluted EPS was $3.10 versus $0.90.

• Q3 REBITDA was $572M, up 9.8%; core rental REBITDA margin was 45.2%, down 70 bps as inflation, incentives, fuel and freight offset volume, pricing and synergies.

• Direct operating expenses were 42.4% of rental revenue versus 41.6%; SG&A was 14.2% versus 14.8%, reflecting operating leverage and acquisition cost synergies.

• Nine-month revenue rose 17.1% to $3.707B; adjusted EBITDA increased 18.4% to $1.538B, and free cash flow was $133M.

• Used-equipment sales declined 44% in Q3 as prior-year fleet dispositions were elevated; sales margins improved to 20% from 11%.

Outlook and guidance

• FY2026 equipment rental revenue guidance increased to $4.475B–$4.550B from $4.375B–$4.475B; adjusted EBITDA guidance rose to $2.10B–$2.15B from $2.05B–$2.125B.

• Net rental equipment expenditures guidance increased to $1.0B–$1.1B and gross capex to $1.45B–$1.60B; free cash flow guidance remains $250M–$350M.

• Estimated fleet dispositions increased to ~$950M–$1B at OEC; guidance assumes $100M–$120M incremental revenue synergies and $90M incremental cost synergies toward a $125M year-end target.

• At guidance midpoints, H2 rental revenue growth is ~14% on ~4% average OEC fleet growth; FY pro forma rental revenue growth is ~8% on ~2% average OEC growth.

• Rental growth is expected to outpace fleet growth into early 2027 before normalizing; 2027 synergy targets of $90M incremental cost and $110M–$120M incremental revenue remain on track.