A North American equipment rental company, Herc Holdings rents out machinery like aerial lifts, earthmoving machines, power generators, and climate-control units to construction firms, manufacturers, governments, and even entertainment productions. It began in 1965 as Hertz Equipment Rental Corporation, the rental arm of the car-rental giant, and was spun off as an independent company in 2016. The name "Herc" is just an acronym for that original Hertz Equipment Rental Corporation — not a nod to the mythical strongman, though the coincidence fits.
Herc Holdings returned to net income of $19M in Q2 2026, reversing a year-ago loss, as the H&E acquisition drove revenue up 20%.
Herc Holdings returned to profitability in the second quarter. rose 20% to $1.2 billion and reached $19 million, compared with a $35 million loss a year ago, as the absence of prior-year acquisition and divestiture charges more than offset a 47% increase in . The H&E integration is adding scale, but higher operating costs and a $7.9 billion debt load continue to weigh on the bottom line.
Key takeaways
was $19 million, compared with a $35 million loss in Q2 2025, when results were weighed down by $73 million in H&E transaction expenses and a $49 million loss on Cinelease assets held for sale.
Equipment rental , the core business, rose 23% to $1,072 million, driven by the H&E Equipment Services acquisition and growth in average original equipment cost on rent for large-scale projects.
On a basis — including H&E's results as if the acquisition had occurred earlier — equipment rental grew 2% , an improvement from the 3% decline reported in Q1 2026, though management noted continued moderation in certain local markets.
Section summaries
Management's Discussion and Analysis
H&E acquisition drove 20% total revenue growth in Q2 2026, but higher operating costs and interest expense pressured margins.
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Equipment rental rose 23% to $1,072M in Q2 2026, primarily from the H&E acquisition and growth in average for mega projects.
On a basis including pre-acquisition H&E results, equipment rental grew only 2% , reflecting moderation in certain local markets.
Direct operating expenses rose 30% to $491 million, reaching 45.8% of equipment rental , up from 43.6% a year ago, as the H&E integration, greenfield location maturation, and higher delivery and fuel costs pressured the ratio.
Net rose 47% to $126 million, driven by the debt issued to fund the June 2025 H&E acquisition, and absorbed more than five times the $24 million in .
rose 30% to $314 million and rose 41% to $273 million, supported by higher collections and a lower pace of net rental equipment .
What changed
equipment rental returned to growth, rising 2% in Q2 2026 after a 3% decline in Q1 2026, suggesting the acquisition disruption flagged in earlier quarters may be easing, though local market moderation persists.
Direct operating expenses as a percentage of equipment rental eased slightly to 45.8% from 46.2% in Q1 2026, but remain well above the 43.6% recorded in Q2 2025, indicating that and integration pressures have not yet meaningfully improved.
The Cinelease overhang, flagged in every filing since early 2024, was resolved with the July 2025 divestiture; the $49 million loss on assets held for sale that weighed on Q2 2025 did not recur.
The $73 million in H&E transaction expenses that drove the Q2 2025 net loss did not recur, allowing the contribution from the acquisition to flow through to a positive, though narrow, .
What to watch
Whether equipment rental growth accelerates from the 2% recorded in Q2 2026 as the H&E integration progresses, or whether local market moderation keeps growth in the low single digits.
Whether direct operating expenses as a percentage of equipment rental , which reached 45.8% in Q2 2026, begins to decline toward pre-acquisition levels as improves and integration costs fade.
The trajectory of net relative to , given the $7.9 billion debt load and the company's estimate that a one-point rate rise would reduce pre-tax earnings by $32 million over 12 months.
Whether the company can achieve the cost and synergies from the H&E acquisition that it has identified, and whether integration costs continue to pressure earnings in subsequent quarters.
Direct operating expenses increased 30% to $491M, rising to 45.8% of equipment rental , driven by H&E integration, greenfield maturation, and higher delivery and fuel costs.
, net surged 47% to $126M due to new debt issued to fund the H&E acquisition in June 2025.
swung to $19M from a $35M loss a year ago, helped by the absence of prior-year transaction expenses and a loss on assets held for sale.
Liquidity remains strong with $2.0B in availability under the ABL , and the company expects and disposals to cover needs over the next twelve months.
Quantitative and Qualitative Disclosures About Market Risk
We are exposed to a variety of market risks, including the effects of changes in interest rates (including credit spreads), foreign currency exchange rates, and fluctuations in fuel prices. We manage our exposure to these market risks through our regular operating and financing…
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We are exposed to a variety of market risks, including the effects of changes in interest rates (including credit spreads), foreign currency exchange rates, and fluctuations in fuel prices. We manage our exposure to these market risks through our regular operating and financing activities and, when deemed appropriate, through the use of derivative financial instruments. Derivative financial instruments are viewed as risk management tools and have not been used for speculative or trading purposes. In addition, derivative financial instruments are entered into with a diversified group of major financial institutions in order to manage our exposure to counterparty nonperformance on such instruments.
Management has evaluated its exposure to market risk as of June 30, 2026 and concluded that there have been no material changes in the information reported under Part II, Item 7A, "Quantitative and Qualitative Disclosures About Market Risk," in our Annual Report on Form 10-K for the year ended December 31, 2025.
For a description of certain pending legal proceedings see Note 12, "Commitments and Contingencies" to the notes to our condensed consolidated financial statements in Part I, Item 1 "Financial Statements" of this Report.
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For a description of certain pending legal proceedings see Note 12, "Commitments and Contingencies" to the notes to our condensed consolidated financial statements in Part I, Item 1 "Financial Statements" of this Report.
There have been no material changes to our risk factors from those previously disclosed under Part I, Item 1A, "Risk Factors" in our Annual Report on Form 10-K for the year ended December 31, 2025.
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There have been no material changes to our risk factors from those previously disclosed under Part I, Item 1A, "Risk Factors" in our Annual Report on Form 10-K for the year ended December 31, 2025.