Herc Rentals posted $802 million in total revenue in the second quarter of 2023, compared to $640 million in the second quarter of 2022, a 25.3-percent year-over-year increase. Equipment rental revenue also grew substantially to $702 million compared to $605 million in the year-ago second quarter, a 16.4-percent jump. Sales of used rental equipment multiplied more than fourfold to $83 million compared to $19 million in Q222.
The year-over-year increase of $162 million was primarily related to an increase in equipment rental revenue of $97 million, reflecting positive pricing of 7.8 percent and increased volume of 17.3 percent. Dollar utilization was 40.3 percent compared to 42.5 million a year ago, primarily because of a slowdown in the studio entertainment business as a result of labor disruptions in the film and television industry, as well as the continued supply chain challenges that have disrupted the normal cadence of deliveries.
Direct operating expenses increased 14 percent compared to the previous year because of strong rental activity and associated additional headcount, in addition to higher maintenance and facilities expenses as the company increased its fleet size and expanded its branch network.
Adjusted EBITDA increased 24 percent to $352 million compared to $284 million in the second quarter of 2022, with adjusted EBITDA margin of 43.9 percent.
“We continue to generate strong, double-digit growth as a result of sound strategies and an unmatched team of product and logistics experts that embody a customer-first mindset,” said Larry Silber, president and CEO. “In the second quarter, Team Herc increased equipment rental revenue by 16 percent on 7.8-percent higher pricing, despite continued supply chain inefficiencies and labor disruptions in the film and television industry, which has all but halted our studio entertainment business. Growth in national account revenue and local market expansion through acquisitions and greenfield locations drove rental revenue higher, while strong returns on fleet sales represented an incremental benefit to total revenue. This, coupled with cost efficiencies, supported a 24-percent increase in adjusted EBITDA year over year.
“Our non-residential and industrial markets are healthy and growing with outsized opportunities coming from federally funded, large-scale infrastructure and mega projects. The favorable market environment coupled with our expanding branch network, broad selection of premium equipment, leading customer experiences, comprehensive fleet management services and advanced technologies position us to continue to capture above-market growth in 2023 and over the long term.”
For the first half, total revenues increased to $1.542 billion compared to $1.208 billion for the first half of 2022, a 27.6-percent hike, with positive pricing of 7.4 percent. Equipment rental revenue was $1.356 billion, compared to $1.132 billion in the first half of 2022, a 19.8-percent hike.
Herc completed six acquisitions with a total of 10 locations and opened nine new greenfield locations during the first half of 2023.
Headquartered in Bonita Springs, Fla., Herc Rentals is No. 3 on the RER 100.