Herc Rentals posted $719 million in rental revenue in the first quarter of 2024, compared to $654 million in the first quarter of 2023, a 9.9-percent increase. Herc reported $804 million in total revenues, compared to $740 million a year ago, an 8.6-hike. Sales of rental equipment dropped slightly from $71 million in Q123 to $69 million in the just-concluded quarter. Sales of new equipment, parts and supplies went up from $8 to $9 million, and service revenue was flat year over year at about $7 million.
Net income slipped slightly year over year from $67 million to $65 million. However, EBITDA took off from $301 million in the first quarter of 2023, to $331 million this year, a 10-percent incline, with adjusted EBITDA rising similarly from $308 million to $339 million, also at 10 percent.
“We are off to a strong start in 2024, achieving record first-quarter revenue and adjusted EBITDA margin as we continue to capitalize on key growth markets, like semiconductor, data centers, renewables and public infrastructure, while also investing our network scale through greenfields and acquisitions, and elevating our higher-return specialty product lines,” said Larry Silber, president and CEO of Herc Rentals. “Once again, our teams are delivering for customers both in the local markets and at the national level, capitalizing on our broad geographic coverage and strong demand for our products and services.
“We are making progress against each of our key 2024 priorities – enhancing our customer experience through our E3 business operating system, managing fleet efficiency and expenses with discipline, and scaling our network through greenfield locations and acquisitions in top 100 metropolitan markets. Based on this strong performance and current line-of-sight to market trends, we are affirming our annual performance targets, excluding Cinelease, of 7 to 10 percent year-over-year equipment rental growth and adjusted EBITDA of $1.55 billion to $1.60 billion for 2024.”
Direct operating expenses were $307 million, or 42.7 percent of equipment rental revenue, compared to $281 million, or 43.0 percent in the prior-year period, reflecting better cost performance and fixed cost absorption on higher revenue despite increases related to additional headcount, facilities and maintenance expenses associated with strong rental activity and an expanding branch network.
Depreciation of rental equipment increased 5 percent to $160 million due to higher year-over-year average fleet size. Non-rental depreciation and amortization increased 12 percent to $29 million primarily caused by amortization of acquisition intangible assets.
Herc said it expects to continue to gain share by capturing an outsized position of the forecasted higher construction spending in 2024 by investing in its fleet, optimizing its existing fleet, capitalizing on strategic acquisitions and greenfield opportunities, and cross selling a diversified product portfolio.
Herc Rentals is based in Bonita Springs, Fla., and is No. 3 on the RER 100.
