Herc Rentals’ Rental Revenue Jumps 13.2 Percent in Third Quarter
Herc Rentals posted $965 million in total revenue in the third quarter of 2024, compared to $908 million in the third quarter of 2023, a 6.3-percent year-over-year increase. Equipment rental revenue was $866 million compared to $765 million in Q324, a still-strong 13.2-percent jump. Sales of rental equipment declined from $124 million to $81 million, a 34.7-percenet decline, while sales of new equipment parts and supplies dipped from $11 million to $9 million. Service and other revenues increased from $8 million to $9 million.
For the first nine months of 2024, total revenue increased to $2.617 million from $2.450 billion for the first nine months of 2023, a 6.8-percent increase. Equipment rental revenue jumped 10.8 percent from $2.121 billion in the first three quarters of 2023 to $2.350 billion in the first nine months of 2024. Third quarter rental pricing rose 2.3 percent year over year.
Mergers and acquisitions and greenfield openings offset the impact from decelerating local-market revenue growth. Net income increased 8 percent to $122 million, or $4.28 per diluted share. Adjusted EBITDA of $446 million increased 9 percent, while Herc’s adjusted EBITDA margin was 46.2 percent. Free cash flow was $218 million for the nine month ended Sept. 30, 2024.
“As we manage the complexities of disparate levels of demand across geographies, end markets and project types, our team is agile and remains focused on aligning costs and balancing fleet, while continuing to support the growth of our business and deliver outstanding customer service,” said Larry Silber, president and CEO of Herc Rentals. “In the third quarter, we significantly outpaced overall industry growth on both a total rental revenue basis and from an organic revenue perspective. By capitalizing on our broad end-market coverage, diversified product and services offering and expanding share in resilient urban markets, we continue to deliver strong volume and a solid price/mix performance. We increased third quarter rental revenue by 13 percent to a new quarterly record, primarily reflecting the continued robust growth from mega projects and contributions from our increased branch network and recent acquisitions. This growth was achieved despite a tough year-over-year comparison and a challenging interest rate environment for local-project starts.”
An agile team
“As we manage the complexities of disparate levels of demand across geographies, end markets and project types, our team is agile and remains focused on aligning costs and balancing fleet, while continuing to support the growth of our business and deliver outstanding customer service,” added Silber.
Net income was $122 million compared to $113 million in the prior-year period. Adjusted net income increased 9 percent, or $4.35 per diluted share, compared to $114 million or $4 per diluted share a year ago. Adjusted EBITDA increased 9 percent to $446 million compared to $410 million a year ago.
As of September 30, 2024, Herc’s total fleet was approximately $7.1 billion at OEC. Average fleet at OEC in the third quarter increased 12 percent compared to the prior-year period. Average fleet age was 46 months as of September 30, 2024 compared to 45 months in the comparable prior-year period.
Herc Rentals, No. 3 on the RER 100, is headquartered in Bonita Springs, Fla.
About the Author
Michael Roth
Editor
Michael Roth has covered the equipment rental industry full time for RER since 1989 and has served as the magazine’s editor in chief since 1994. He has nearly 30 years experience as a professional journalist. Roth has visited hundreds of rental centers and industry manufacturers, written hundreds of feature stories for RER and thousands of news stories for the magazine and its electronic newsletter RER Reports. Roth has interviewed leading executives for most of the industry’s largest rental companies and manufacturers as well as hundreds of smaller independent companies. He has visited with and reported on rental companies and manufacturers in Europe, Central America and Asia as well as Mexico, Canada and the United States. Roth was co-founder of RER Reports, the industry’s first weekly newsletter, which began as a fax newsletter in 1996, and later became an online newsletter. Roth has spoken at conventions sponsored by the American Rental Association, Associated Equipment Distributors, California Rental Association and other industry events and has spoken before industry groups in several countries. He lives and works in Los Angeles when he’s not traveling to cover industry events.