Herc (HRI) Q4 2024 earnings summary

Executive summary

• Achieved record equipment rental revenue growth of 11% for FY 2024, with continued expansion through 23 greenfield branches and 9 acquisitions adding 28 locations.

• Adjusted EBITDA grew 9% to $1.58 billion, with Q4 adjusted EBITDA up 15% to $438 million.

• Net income declined 39% to $211 million due to a $194 million loss on Cinelease assets held for sale, while adjusted net income rose 5% to $367 million.

• Strategic focus on specialty fleet CapEx, technology, and process improvements to drive productivity and pricing optimization.

• Safety performance remained strong, with a total recordable incident rate of 0.87, outperforming the industry standard.

Financial highlights

• FY 2024 total revenues reached $3.57 billion, up 8.7% year-over-year; Q4 revenues were $951 million, up 14.4%.

• Adjusted earnings per diluted share for FY 2024 was $12.88, up 4.7% year-over-year; net income per diluted share was $7.40, impacted by Cinelease.

• Adjusted EBITDA margin for FY 2024 was 44.4%; Q4 margin was 46.1%.

• Free cash flow for 2024 was $314 million; quarterly dividend increased 5% to $2.80 per share annually.

• Dollar utilization for the year was 40.9%; average fleet age at year-end was 46 months.

Outlook and guidance

• 2025 guidance (excluding Cinelease): rental revenue growth of 4%-6%, adjusted EBITDA of $1.575-$1.65 billion, and gross fleet CapEx of $700-$900 million.

• Net CapEx expected between $400-$600 million; continued positive rental rate assumed.

• Anticipates continued strength in mega projects, infrastructure, healthcare, and education, offsetting local market weakness.

• Local markets expected to remain flat, with growth driven by infrastructure and mega projects.