Herc (HRI) Q4 2025 earnings summary

Executive summary

• Completed the largest industry acquisition (H&E) in June 2025, rapidly integrating operations, expanding scale, and enhancing market reach.

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

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

• Completed the sale of the Cinelease studio entertainment business in July 2025, focusing on core rental and specialty fleet expansion.

• Digital revenue grew over 50% year-over-year, with accelerated adoption of telematics and 80% of eligible gear equipped.

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 reached $4,376 million, up 23%.

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

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

• Free cash flow for 2025 was $521 million; adjusted free cash flow also $521 million.

Outlook and guidance

• 2026 equipment rental revenue guidance: $4.275–$4.4 billion; adjusted EBITDA guidance: $2.0–$2.1 billion.

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

• Forecasting $100–$120 million in incremental revenue synergies and $125 million in cost synergies for 2026.

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

• Sequential improvement in revenue and fleet metrics expected from Q1 to Q4 as integration matures.