Herc Raises 2026 Rental Revenue Outlook to $4.55 Billion
Key Facts
Herc Holdings raised its 2026 equipment rental revenue outlook to a range of $4.475 billion to $4.550 billion, from $4.375 billion to $4.475 billion previously. It also raised its forecast for adjusted EBITDA to between $2.10 billion and $2.15 billion, compared with the previous range of $2.05 billion to $2.125 billion. The update followed the release of third-quarter results, which showed equipment rental revenue increasing 12% year over year. The company said its average equipment fleet grew by less than 2%, while fleet utilization by value improved. The combination of revenue growth and limited fleet expansion points to more efficient equipment utilization during the quarter.
Fleet utilization by value was 43.5% in the third quarter, up from 39.9% in the same period a year earlier. Herc attributed the improvement to greater fleet efficiency and a favorable shift toward equipment that generates higher returns while on rent. The company said rental revenue increased as the average value of its fleet grew by less than 2%. Fleet utilization improved by 360 basis points, according to results data cited by Investing.com. CEO Larry Silber said, "Our team delivered an exceptional third quarter."
Adjusted EBITDA rose 9% to $603 million, and its margin widened 190 basis points to 44.2%. Net income was $104 million, or $3.10 per diluted share, compared with $30 million and $0.90 per share a year earlier. Adjusted net income was $131 million, or $3.91 per diluted share, versus $74 million and $2.22 per share in the third quarter of 2025. Direct operating expenses rose to $532 million, or 42.4% of equipment rental revenue, from $467 million and 41.6% a year earlier. The company attributed the increase to higher transportation and fuel costs and field incentive compensation.
The market's reading of the results was mixed: Herc shares rose 5.4% in premarket trading after the announcement, according to Investing.com. Adjusted earnings per share came in at $3.91, above the platform's cited analyst consensus estimate of $2.96. By contrast, equipment rental revenue was $1.25 billion, below the estimate of $1.35 billion. The company's shares closed at $127.13 on October 26, before the results were announced. The reaction combined an early trading gain and earnings per share above estimates with rental revenue below expectations.