Herc Holdings Sees 33% EBITDA Growth and $94M Cash Flow in Q1
Equipment rental revenue rose 33% year-over-year to drive adjusted EBITDA up 33% and free cash flow of $94 million, supported by H&E acquisition expanding branch network by 30%. Pro forma rental revenue fell 3% and pro forma leverage remains elevated at 3.96x despite target $125 million cost synergies by year-end.
1. Q1 Financial Performance
Herc Holdings delivered a 33% year-over-year increase in equipment rental revenue, while pro forma rental revenue declined 3%, marking sequential improvement. Adjusted EBITDA rose 33% with a 40% margin, adjusted net income reached $7 million and free cash flow totaled $94 million.
2. H&E Integration and Synergy Outlook
Completion of the H&E Equipment Services integration expanded Herc’s branch network by 30% and supported record e-commerce sales. The company aims for $125 million in cost synergies by year-end, with revenue synergies expected to ramp in the second half of the year.
3. Capital Structure and Operational Highlights
Pro forma leverage stands at 3.96x with fleet expenditures up 78% on a pro forma basis and disposals 20% higher at 49% of original equipment cost. Specialty revenue achieved double-digit growth and e-commerce hit an all-time high, though timing of major project starts remains uncertain.