Herc Holdings Inc. (NYSE: HRI), founded in 1965 and headquartered in Bonita Springs, Florida, is a major player in the equipment rental industry. Through its principal subsidiary, Herc Rentals, the company provides a vast array of equipment for rent, including aerial lifts, earthmoving machinery, material handling equipment, trucks, trailers, air ...Herc Holdings Inc. (NYSE: HRI), founded in 1965 and headquartered in Bonita Springs, Florida, is a major player in the equipment rental industry. Through its principal subsidiary, Herc Rentals, the company provides a vast array of equipment for rent, including aerial lifts, earthmoving machinery, material handling equipment, trucks, trailers, air compressors, compaction equipment, and lighting. It also offers specialized solutions under the ProSolutions brand for power generation, climate control, remediation and restoration, pumps, trench shoring, and studio/production needs. Beyond rentals, Herc provides repair and maintenance services, equipment management, safety training, and ancillary services like transport and refueling. The company sells used equipment and contractor supplies, including consumables and safety gear.
Herc serves a diverse customer base including non-residential and residential construction, specialty trade, industrial manufacturing (refineries, petrochemical, automotive, aerospace, power, metals, mining, agriculture, food and beverage), infrastructure and government, and commercial facilities like data centers, healthcare, and hospitality. The company markets its services through a direct sales team, catalogs, and participation in industry events.
Financially, Herc Holdings has a market cap of about $5.6 billion, with a revenue of $4.376 billion as of 2025. Its EBITDA margin is robust at 23%, though its net profit margin is relatively low (1.0%) due to high debt and depreciation. The company has a high debt-to-equity ratio of 5.0, reflecting the capital-intensive nature of the rental business. Despite this, it maintains a dividend yield of 1.7%.
Key leadership includes CEO Lawrence H. Silber and President Aaron D. Birnbaum. The company employs approximately 9,600 people and operates over 600 locations across North America. Herc Holdings became an independent public company in 2016 when it was spun off from Hertz Global Holdings. With over 60 years of experience, Herc aims to be a full-service provider, offering cost-effective solutions for customers' equipment needs while maintaining a strong focus on safety and operational excellence.
Operator: Thank you for standing by. My name is Kate, and I will be your conference operator today. At this time, I would like to welcome everyone to the Herc Holdings, Inc. Second Quarter 2026 Earnings Call and Webcast. I would now like to turn the call over to Leslie Hunziker, Head of Investor Relations. Please go ahead.
Leslie Hunziker: Thank you, operator, and good morning, everyone. Today, we're reviewing our second quarter 2026 results with comments on operations and our financials, including our view of the industry and our strategic outlook. The prepared remarks will be followed by Q&A. Let me remind you that today's call will include forward-looking statements. These statements are based on the environment as we see it today and are subject to risks and uncertainties that could cause actual results to differ materially from our expectations and projections. These risks and uncertainties include, but are not limited to, the factors identified in the press release, our Form 10-Q and our most recent annual report on Form 10-K, as well as other filings with the SEC. In addition, we'll be discussing non-GAAP information that we believe is useful in evaluating the company's operating performance. Reconciliations to these non-GAAP measures to the closest GAAP equivalent can be found in the conference call material. Finally, please mark your calendars to join our third quarter management meetings at Morgan Stanley's 14th Annual Laguna Conference in California on September 16. This morning, I'm joined by Larry Silber, Chief Executive Officer; Aaron Birnbaum, President; and Mark Humphrey, Senior Vice President and Chief Financial Officer. I'll now turn the call over to Larry.
Lawrence Silber: Thank you, Leslie, and good morning, everyone. With the H&E integration successfully completed in the first quarter, our entire focus in the second quarter shifted to execution. As we've discussed, the first half of 2026 was about converting our larger optimized platform into stronger utilization and revenue growth as we move through the seasonal ramp. I'm incredibly proud of how Team Herc is performing. In the second quarter, we reached an important post-acquisition turning point as pro forma equipment rental revenue returned to growth, increasing 2% overall. Importantly, that return to growth happened earlier than we expected within the quarter, which gives us momentum and confidence heading into the second half. Alongside revenue growth, disciplined fleet management drove positive fleet efficiency as we continue to align the combined fleet. We are also progressively capturing more of the value of this acquisition as revenue cross-selling synergies build and cost synergies track to plan. That operating momentum, combined with accelerating customer demand gives us confidence to raise our full year guidance today. Of course, the quarter was not without its challenges. Fuel inflation was a macroeconomic headwind that pressured margins, most notably in …
