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- **Revenue Growth**: Q3 rental revenue up 30% YoY, driven by H&E acquisition and mega projects.
- **Margin Challenges**: 240bps margin compression from auction sales, targeting 2026 return to normal wholesale channels.
- **Specialty Expansion**: 50 new specialty locations planned, 25% increase in specialty network.
- **Fleet Efficiency**: $1.1B OEC disposals in Q3, targeting $1.2B annualized. 2026 CapEx shift to specialty equipment.
- **Financial Targets**: 2025 adjusted EBITDA ~$1.6B, leverage reduction to 2-3x by end-2027.

**【CEO Summary Section】**
- **Integration Progress**: Completed 90-day systems migration, including ERP consolidation and pricing engine integration. ProControl technology now available across all branches.
- **Market Dynamics**: Mega projects (e.g., LNG, AI infrastructure) driving 48% of national account revenue, while local commercial construction remains constrained by high interest rates.
- **Specialty Expansion**: Planning 50 new specialty locations (25% increase) to support high-margin equipment demand, repurposing 10% of acquired branches.
- **Fleet Strategy**: Disposed $1.1B OEC of underutilized equipment in Q3, targeting $1.2B annualized disposals. Shifting to specialty-focused CapEx allocation.

**【COO Operational Update】**
- **Safety Metrics**: 97%+ perfect safety days across branches,优于行业基准1.0的总可记录伤害率.
- **Fleet Management**: Nearly doubled Q3 disposals vs. prior year, achieving 41% OEC proceeds via auctions. 2026 fleet age target aligned with historical Herc averages.
- **Sales Force**: Stabilized attrition at normalized levels, with 60%+ of new hires from internal training programs.

**【CFO Financial Performance】**
- **Revenue Growth**: Q3 rental revenue +30% YoY (H&E acquisition + mega projects), adjusted EBITDA +24% to $420M.
- **Margin Impact**: 240bps margin compression from auction sales, 150bps from underutilized fleet. REBITDA margin 46% (excludes used sales).
- **Leverage**: 3.8x debt/EBITDA, targeting 2-3x by end-2027 via synergies and free cash flow ($342M YTD).
- **Guidance**: Full-year 2025 adjusted EBITDA ~$1.6B, with Q4 auction sales pressure persisting.

**【Q&A Highlights】**
- **Fleet Rightsizing**: 50% of planned $250M-300M disposals completed in Q3, with 2026 shift to wholesale/retail channels.
- **National Accounts**: 10-15% share of targeted mega projects, no margin dilution due to specialty equipment mix.
- **Branch Consolidation**: No closures of acquired locations; 50 new specialty branches via co-locations and repurposing.
- **Employee Retention**: Attrition stabilized at Herc norms, with 80%+ sales force trained on Herc systems.
- **Pricing Strategy**: Proprietary pricing engine being adopted by H&E sales, targeting 2026 rental rate normalization.

Herc Holdings Inc. (HRI) Q3 2025 Earnings Call Transcript

Revenue

Sales and Services Revenue

Financing Services Revenue

Other Revenue

Cost of Revenue

Cost of Goods and Services

Cost of Financing Services

Other Cost

Gross Profit

Other Operating Income

Operating Expenses

Selling, General and Administrative Expenses

Selling and Marketing Expenses

General and Administrative Expenses

Research and Development Expenses

Loss on Bad Debts

Loss on Impairment of Other Assets

Loss on Disposal of Assets

Other Operating Expenses

Operating Income

Non-Operating Income (Loss)

Income (Loss) from Affiliates

Income (Loss) from Associates

Income (Loss) from Joint ventures

Gain (Loss) on Other Investment

Gain (Loss) on Change in Fair Value

Gain (Loss) on Foreign Currency Exchange

Other Non-Operating Income (Loss)

Net Interest Expense

Interest Expense

Interest Income

Pretax Income From Continuing Operations

Income Tax Expense

Current Income Tax

Deferred Income Tax

Income Tax Adjustments

Net Income from Continuing Operations

Income from Discontinued Operations

Other Items Before Net Income

Net Income

Net Income Attributable to Minority Interests

Net Income Attributable to Owners of the Company

Preferred Stock Dividends

Other Adjustments

Net Income Attributable to Common Stockholders

Other Comprehensive Income

Total Comprehensive Income

Total Comprehensive Income Attributable to Minority Interests

Total Comprehensive Income Attributable to Owners of the Company

Basic EPS

Basic EPS from Continuing Operations

Basic EPS from Discontinued Operations

Diluted EPS

Diluted EPS from Continuing Operations

Diluted EPS from Discontinued Operations

HRI

HRI fundamentals

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