Herc Holdings (HRI) Q3 2026 Earnings Report
MX:HRI Q3 2026 EPS Results
- Actual EPS
- MXN 72.97
- Consensus EPS
- MXN 54.53
- Beat/Miss
- Beat by +MXN 18.44
- One Year Ago EPS
- MXN 41.43
MX:HRI Q3 2026 Revenue Results
- Actual Revenue
- MXN 25.46B
- Expected Revenue
- MXN 25.13B
- Beat/Miss
- Beat by +MXN 327.40M
- YoY Revenue Growth
- +4.60%
Earnings Announcement Details
- Quarter
- Q3 2026
- Date
- 10/27/2026
- Time
- Before Open
- Conference Call
- Tuesday, October 27, 2026
MX:HRI Upcoming Earnings
Herc Holdings's next earnings date is estimated for February 16, 2027, based on past reporting schedules.
Q3 2026 Earnings Call Audio
MX:HRI Q3 2026 Earnings Call
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Q3 2026 Earnings Slide Deck
Q3 2026 Earnings Call Summary
Earnings Call Sentiment|Positive
The call was strongly positive overall. Management reported robust rental revenue and EBITDA growth, improved fleet efficiency, successful H&E integration, growing specialty and mega-project demand, raised earnings guidance, and maintained free cash flow guidance. These positives outweighed margin pressure from operating cost inflation, fuel and freight, pricing that has not fully matched inflation, softness in commercial construction, and the continued maturation required for some specialty locations.
Company Guidance
Management’s updated 2026 guidance is for full year equipment rental revenue of $4.513 billion and adjusted EBITDA of $2.13 billion at the midpoint, up about 2% from the previous guidance, with net fleet CapEx of approximately $1.05 billion at the midpoint, including roughly $150 million of incremental net fleet CapEx pulled forward from the 2027 fleet budget; 2026 free cash flow guidance remains unchanged at $250 million to $350 million. At the new midpoint, second half equipment rental revenue growth is approximately 14% on average OEC fleet growth of approximately 4%, and full year pro forma rental revenue growth is about 8% on roughly 2% average OEC growth; management expects to return to the top of its targeted leverage range by the end of 2027, with $90 million incremental cost synergies and $110 million to $120 million incremental revenue synergies both on track.
- Leadership Succession and ContinuityLawrence Silber will transition to Executive Chairman at the start of next year, and Aaron Birnbaum will become CEO on January 1. Management described the transition as reflecting strong succession planning, with Birnbaum bringing more than 35 years of experience across branch operations, sales, regional field management and executive leadership.
- Strong Third-Quarter Rental Revenue GrowthEquipment rental revenue increased nearly 12% in the third quarter on average OEC fleet growth of less than 2%, reflecting disciplined fleet management and improved fleet efficiency.
- Improved Fleet EfficiencyDollar utilization increased 360 basis points in the quarter. Management attributed the improvement to specialty equipment returning to 20% of the fleet, strong timing, and improving pricing, and said the first goal is to return to the pre-acquisition annual run rate of approximately 42%.
- Specialty Business ExpansionSpecialty revenues grew double digits year-over-year. Specialty equipment represented 20% of total fleet at OEC, up from 17% a year ago and back to the pre-acquisition mix. Management said specialty equipment generates higher dollar utilization and higher margins and remains a focus of targeted investment.
- National Account and Mega-Project MomentumNational accounts continued to lead expansion, supported by mega-project activity across data centers, infrastructure, manufacturing and energy. Management said the expanded network, broader fleet capacity and stronger sales force are enabling deeper relationships with major contractors and more wins in the mega-project market.
- Large Mega-Project OpportunityDodge's updated projection calls for nearly $723 billion of U.S. mega-project starts in 2026 and about $776 billion in 2027, with trillions of dollars more in planning. Herc is targeting a 20% share of the mega-project rental opportunity over time, counting revenue from projects where it is a designated primary or secondary supplier.
- Targeted Fleet InvestmentHerc added approximately $580 million of fleet at original equipment cost in the third quarter and approximately $1.2 billion year-to-date, supporting life-cycle replacement, mega-project demand and the expanding specialty offering. Management said the investments are guided by customer requirements and attractive returns.
- Successful H&E Integration and Revenue SynergiesThe H&E Equipment Services integration was completed nine months after the acquisition and the third quarter was the first full quarter of comparable year-over-year combined results. Revenue synergies were an increasing contributor, driven by maturing specialty locations, cross-selling and deeper national-account penetration. Management said the expected incremental $90 million of cost synergies and $110 million to $120 million of revenue synergies are both on track.
- Positive Financial PerformanceTotal revenue increased approximately 5%, adjusted EBITDA increased about 9%, and adjusted EBITDA margin expanded 190 basis points to 44.2%. Adjusted net income was $131 million, or $3.91 per diluted share.
- Core Rental Business GrowthREBITDA, which excludes equipment sales, increased roughly 10% and rental revenue growth was supported by higher rental volume, pricing improvement, improved fleet mix, and H&E revenue and cost synergies.
- Liquidity and Capital AllocationHerc generated $133 million of free cash flow through the first nine months, ended the quarter with $2.1 billion of liquidity, and reduced net leverage to 3.9x from 3.95x at the end of June. The company also paid its regular quarterly dividend of $0.70 per share.
- Raised Full-Year Earnings OutlookAt the midpoint of the updated guidance, full-year equipment rental revenue is expected to be $4.513 billion and adjusted EBITDA is expected to be $2.13 billion, both up about 2% from previous guidance.
- Fleet Efficiency Expected to ContinueThe new guidance midpoint implies second-half equipment rental revenue growth of approximately 14% on average OEC fleet growth of approximately 4%, and full-year pro forma rental revenue growth of about 8% on roughly 2% average OEC growth.
- Committed Specialty CapEx Supports Future GrowthNet fleet CapEx was increased to approximately $1.05 billion at the midpoint, primarily for specialty equipment tied to newly won or expanded fourth-quarter mega-project assignments. Management characterized approximately $150 million of incremental net fleet CapEx as pulled forward from the 2027 fleet budget, with the equipment expected to serve customers through 2027 and beyond.
- Free Cash Flow Guidance Maintained and Deleveraging Remains a Priority2026 free cash flow guidance remains unchanged at $250 million to $350 million. Management said the new equipment will begin contributing to EBITDA in the fourth quarter, with the full-year benefit expected in 2027 and beyond, and remains focused on returning to the top of its targeted leverage range by the end of 2027.
- Diversified Demand BaseLocal market activity remains stable overall, while infrastructure, government and maintenance-related demand continue to offset softness in interest-rate-sensitive commercial construction. Management said the balance of local and national accounts, along with exposure to contractors, industrial customers, infrastructure, government, commercial facilities and event-driven demand, supports diversification.
- Technology DifferentiationManagement highlighted the proprietary ProControl platform as a differentiator that gives customers insights and controls to track, measure and manage fleets for safer and more efficient job sites.
- Pricing Environment ImprovingManagement described the pricing environment as rational and constructive, with healthy supply dynamics and pricing improving through the second half of the year. The company also said H&E pricing harmonization is progressing through spot-market tools and a planned one-third price lift over a three-year period for contract customers.
- Positioning in Semiconductor and Other Long-Term ProjectsHerc said it is well positioned for another wave of chip-plant projects, which management described as large projects with timelines lasting several years. The company also said its strengthened relationships with general contractors, expanded fleet and dedicated national-account and operational teams are improving its primary and secondary supplier positioning.
MX:HRI Earnings History
| Report Date | Fiscal Quarter | Forecast / EPS | Last Year's EPS | EPS YoY Change | Press Release |
|---|---|---|---|---|---|
| Feb 16, 2027 | 2026 (Q4) | 55.04- | 38.63 | ― | ― |
| Oct 27, 2026 | 2026 (Q3) | 54.5372.97 | 41.43 | 76.13% (+31.54) | |
| Jul 28, 2026 | 2026 (Q2) | 14.2626.69 | 34.9 | -23.53% (-8.21) | |
| Apr 28, 2026 | 2026 (Q1) | -3.863.92 | 24.26 | -83.85% (-20.34) | |
| Feb 17, 2026 | 2025 (Q4) | 34.8138.63 | 66.81 | -42.18% (-28.18) | |
| Oct 28, 2025 | 2025 (Q3) | 38.1841.43 | 81.18 | -48.97% (-39.75) | |
| Jul 29, 2025 | 2025 (Q2) | 36.6334.90 | 48.52 | -28.08% (-13.62) | |
| Apr 22, 2025 | 2025 (Q1) | 41.2824.26 | 44.04 | -44.92% (-19.78) | |
| Feb 13, 2025 | 2024 (Q4) | 72.5266.81 | 60.47 | 10.49% (+6.35) | |
| Oct 22, 2024 | 2024 (Q3) | 83.5381.18 | 74.65 | 8.75% (+6.53) |
The table shows recent earnings report dates and whether the forecast was beat or missed. See the change in forecast and EPS from the previous year.
Beat Missed