Herc Holdings 2025 Q2 Earnings Misses Targets as Net Income Declines 150%

Herc Holdings reported its fiscal 2025 Q2 earnings on Jul 29th, 2025. Herc Holdings Inc (HRI) released its financial results for the second quarter of 2025, revealing a net loss primarily due to acquisition-related costs. The company's adjusted earnings per share fell short of expectations, reflecting the challenges of merger integration. Despite these difficulties, Herc Holdings maintains its focus on achieving synergy targets and optimizing operations to enhance future performance.

Revenue
Herc Holdings experienced an 18.2% growth in total revenue, reaching $1 billion in Q2 2025 compared to $848 million in Q2 2024. Equipment rental was the primary driver, generating $870 million. Sales of rental equipment added $106 million, while sales of new equipment, parts, and supplies contributed $17 million. Service and other revenue accounted for $9 million, collectively leading to the impressive total revenue.

Earnings/Net Income
The company reported a substantial decline in earnings per share, swinging from a profit of $2.46 per share in Q2 2024 to a loss of $1.17 per share in Q2 2025. This reflects a 147.6% negative change, with a net loss of $35 million in 2025 Q2, compared to a net income of $70 million in 2024 Q2. The EPS decline was significant, indicating a challenging quarter for Herc Holdings.

Price Action
The stock price of Herc Holdings has tumbled 10.26% during the latest trading day, has dropped 7.59% during the most recent full trading week, and has dropped 4.74% month-to-date.

Post Earnings Price Action Review
The strategy of purchasing Herc Holdings shares following a revenue increase on the earnings report release date and holding them for 30 days has historically yielded impressive returns over the past three years. This approach generated a return of 342.99%, which significantly surpassed the benchmark return of 87.35%. The excess return of 255.64% underscores the strategy's effectiveness, driven by the focus on revenue growth events. With a compounded annual growth rate of 34.90%, the strategy demonstrated consistent growth, albeit with a high volatility rate of 49.32%, indicating that the returns involved considerable risk. The Sharpe ratio of 0.71 further emphasizes the strategy's risk-adjusted performance, highlighting that the gains adequately compensated for the associated risk.

CEO Commentary
Herc Holdings’ CEO, Larry Silber, noted that the second quarter marked a significant milestone for the company with the completion of the H&E Equipment Services acquisition, which is expected to enhance market growth and create value through geographic diversification and an expanded fleet. He emphasized the integration efforts underway, highlighting positive go-to-market collaboration and fleet sharing. However, he acknowledged challenges, including disruptions to H&E's employee base during the acquisition process, which led to dis-synergies and a cautious outlook due to ongoing interest rate impacts in the commercial sector.

Guidance
The company anticipates a combined outlook for 2025 that reflects challenges stemming from dis-synergies and interest rate moderation, while also factoring in strengths from mega project activities and growth in specialty solutions. Herc Holdings is focused on achieving established revenue and cost synergy targets as integration progresses, with expectations for continued operational optimization in the coming periods.

Additional News
In recent developments, Herc Holdings has completed the acquisition of H&E Equipment Services, finalizing the merger on June 2, 2025. This strategic move aims to boost market growth and diversify offerings through an expanded fleet and geographic reach. The integration process has faced challenges, including workforce disruptions and margin compression, affecting short-term performance. Additionally, the company is navigating the disposal of Cinelease assets, impacting profitability. Amid these changes, Herc Holdings is committed to capturing growth opportunities and optimizing operations for future success. Traders should keep an eye on merger progress updates and strategic adjustments in response to these developments.