Herc Holdings Shares Jump 10% as Equipment Rental Firm Posts Record Revenue and Raises Full-Year Guidance

Herc Holdings Inc. shares jumped more than 10% on Tuesday. The equipment rental company reported record rental revenue and profit well above Wall Street's expectations, and raised its full-year forecast for the second time this year.

Herc shares rose $13.35, or 10.51%, to $140.47 in early trading on the New York Stock Exchange. The gain lifted the company's market value to about $4.6 billion.

The stock is down about 8% over the past 52 weeks.

Record quarter

For the third quarter, Herc reported:

Total revenue of $1.364 billion, up 5% from $1.304 billion a year earlier Record equipment rental revenue of $1.254 billion, up 12% Net income of $104 million, or $3.10 a share, up from $30 million, or 90 cents a share Adjusted earnings of $131 million, or $3.91 a share, up from $2.22 Adjusted EBITDA of $603 million, up 9%, with the margin widening to 44.2% from 42.3%

Adjusted earnings beat analysts' average estimate of about $2.90 a share, according to market data.

"Our team delivered an exceptional third quarter," Chief Executive Larry Silber said.

Guidance raised again

Herc raised its full-year 2026 outlook:

Equipment rental revenue to $4.475 billion to $4.55 billion, from $4.375 billion to $4.475 billion Adjusted EBITDA to $2.10 billion to $2.15 billion, from $2.05 billion to $2.125 billion Net rental equipment capital spending to $1 billion to $1.1 billion, from $850 million to $950 million

The higher spending plan signals confidence in demand, as rental companies typically add to their fleets when they expect strong customer activity.

H&E deal pays off

The results reflect Herc's acquisition of rival H&E Equipment Services, completed last year, which greatly expanded the company's size and footprint.

"Revenue synergies from H&E were an increasing contributor in the quarter," Silber said.

Integration costs have declined. Transaction expenses fell to $1 million in the quarter from $38 million a year earlier. Direct operating expenses rose as a share of rental revenue over the first nine months, which the company largely attributed to new specialty locations that are still maturing.

Mega-projects fuel demand

Herc has benefited from a wave of large construction projects across the United States, including data centers, semiconductor plants, power facilities and infrastructure work.

"Growth in our large-project pipeline continues to exceed our expectations," Silber said. He added that "local-market demand remained stable."

Dollar utilization, a measure of how productively the rental fleet is used, rose to 43.5% from 39.9% a year earlier.

Debt remains a focus

Herc took on significant debt to fund the H&E acquisition. Net debt was $8 billion at the end of the quarter, down from $8.2 billion a year earlier. Net leverage was 3.9 times adjusted EBITDA, and the company had about $2.1 billion in available liquidity.

Interest expense for the first nine months rose to $380 million from $282 million, reflecting the debt issued in June 2025 to finance the deal.

Herc declared a quarterly dividend of 70 cents a share.

Analyst views

Not all of the reaction was uniformly positive. Some analysts noted that the company's full-year total revenue outlook, which includes equipment sales, came in below expectations, even as rental revenue guidance was raised, according to StockStory.

Investors, however, focused on the strong profit beat and the improved rental outlook.

Industry backdrop

Equipment rental companies have been watched closely as a gauge of U.S. construction and industrial activity. Spending on data centers and manufacturing has offset weakness in some areas of commercial construction, which has been pressured by high interest rates.

Larger rival United Rentals is also reporting results this earnings season, offering another read on demand.

The Fed's interest rate decision on Wednesday is also in focus, because borrowing costs affect both construction activity and the financing costs of heavily indebted rental companies.

Herc, based in Bonita Springs, Florida, operates hundreds of locations across North America.