Despite achieving 32.3% revenue growth in 2026Q1, the company faces structural margin pressure as operating margins contracted from 27.2% in 2024Q3 to 15.4% in 2026Q1.
| Metric | TTM | Dec'25 | Dec'24 | Dec'23 | Dec'22 | Dec'21 | Dec'20 | Dec'19 | Dec'18 | Dec'17 | Dec'16 | Dec'15 | Dec'14 | Dec'13 | Dec'12 | Dec'11 | Dec'10 | Dec'09 | Dec'08 | Dec'07 | Dec'06 |
|---|
| Sales/Revenue | 4.65B | 4.38B | 3.57B | 3.28B | 2.74B | 2.07B | 1.78B | 2B | 1.98B | 1.75B | 1.55B | 1.68B | 1.77B | 1.74B | 1.61B | 8.3B | 7.56B | 7.1B | 8.53B | 8.69B | 8.06B |
| Revenue Growth % | 28.39% | 22.65% | 8.71% | 19.78% | 32.18% | 16.38% | -10.89% | 1.13% | 12.66% | 12.84% | -7.35% | -5.21% | 2.01% | 7.92% | -80.62% | 9.73% | 6.49% | -16.7% | -1.85% | 7.78% | - |
| Cost of Goods Sold | 3.29B | 3.14B | 2.22B | 2.06B | 1.68B | 1.32B | 1.25B | 1.46B | 1.45B | 1.33B | 1.2B | 1.28B | 1.32B | 1.26B | 0 | 6.47B | 6.15B | 6.02B | 7.12B | 6.65B | 6.23B |
| COGS % of Revenue | - | 71.8% | 62.16% | 62.74% | 61.13% | 63.53% | 70.44% | 72.87% | 73.59% | 75.77% | 77.4% | 76.09% | 74.67% | 72.63% | - | 77.99% | 81.33% | 84.71% | 83.57% | 76.53% | 77.35% |
| Gross Profit | 1.36B | 1.23B | 1.35B | 1.22B | 1.06B | 756M | 526.6M | 542.3M | 522M | 425.2M | 351.4M | 401.3M | 448.4M | 475M | 678.8M | 1.83B | 1.41B | 1.09B | 1.4B | 2.04B | 1.83B |
| Gross Margin % | 29.22% | 28.2% | 37.84% | 37.26% | 38.87% | 36.47% | 29.56% | 27.13% | 26.41% | 24.23% | 22.6% | 23.91% | 25.33% | 27.37% | 42.21% | 22.01% | 18.67% | 15.29% | 16.43% | 23.47% | 22.65% |
| Gross Profit Growth % | - | -8.59% | 10.38% | 14.84% | 40.87% | 43.56% | -2.9% | 3.89% | 22.77% | 21% | -12.43% | -10.5% | -5.6% | -30.02% | -62.83% | 29.34% | 30.03% | -22.48% | -31.27% | 11.66% | - |
| Operating Expenses | 597M | 564M | 480M | 448M | 411M | 310M | 257.4M | 294.8M | 311.3M | 319.1M | 274.5M | 262.6M | 251.4M | 204.3M | 502.4M | 745.28M | 664.51M | 641.15M | 769.63M | 775.88M | 723.92M |
| OpEx % of Revenue | - | 12.89% | 13.45% | 13.65% | 15% | 14.95% | 14.45% | 14.75% | 15.75% | 18.19% | 17.66% | 15.65% | 14.2% | 11.77% | 31.24% | 8.98% | 8.79% | 9.03% | 9.03% | 8.93% | 8.98% |
| Selling, General & Admin | 592M | 564M | 480M | 448M | 411M | 310M | 257.4M | 294.8M | 311.3M | 319.1M | 274.5M | 262.6M | 251.4M | 204.3M | 212.6M | 745.28M | 664.51M | 641.15M | 769.63M | 775.88M | 723.92M |
| SG&A % of Revenue | - | 12.89% | 13.45% | 13.65% | 15% | 14.95% | 14.45% | 14.75% | 15.75% | 18.19% | 17.66% | 15.65% | 14.2% | 11.77% | 13.22% | 8.98% | 8.79% | 9.03% | 9.03% | 8.93% | 8.98% |
| Research & Development | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| R&D % of Revenue | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - |
| Other Operating Expenses | 1000K | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 289.8M | 0 | 0 | 0 | 0 | 0 | 0 |
| Operating Income | 763M | 670M | 870M | 775M | 654M | 446M | 269.2M | 247.5M | 210.7M | 106.1M | 76.9M | 138.7M | 197M | 270.7M | 176.4M | 1.08B | 747.52M | 444.82M | 631.24M | 1.26B | 1.1B |
| Operating Margin % | 16.39% | 15.31% | 24.38% | 23.61% | 23.87% | 21.51% | 15.11% | 12.38% | 10.66% | 6.05% | 4.95% | 8.26% | 11.13% | 15.6% | 10.97% | 13.03% | 9.88% | 6.26% | 7.4% | 14.53% | 13.67% |
| Operating Income Growth % | - | -22.99% | 12.26% | 18.5% | 46.64% | 65.68% | 8.77% | 17.47% | 98.59% | 37.97% | -44.56% | -29.59% | -27.23% | 53.46% | -83.68% | 44.61% | 68.05% | -29.53% | -49.99% | 14.61% | - |
| EBITDA | 1.27B | 1.75B | 997M | 887M | 749M | 514M | 331.7M | 308.5M | 268M | 157.6M | 121.7M | 215.9M | 272.1M | 339.6M | 537.7M | 1.08B | 747.52M | 444.82M | 631.24M | 1.26B | 1.1B |
| EBITDA Margin % | 27.29% | 39.99% | 27.94% | 27.03% | 27.34% | 24.8% | 18.62% | 15.43% | 13.56% | 8.98% | 7.83% | 12.86% | 15.37% | 19.57% | 33.43% | 13.03% | 9.88% | 6.26% | 7.4% | 14.53% | 13.67% |
| EBITDA Growth % | 27.77% | 75.53% | 12.4% | 18.42% | 45.72% | 54.96% | 7.52% | 15.11% | 70.05% | 29.5% | -43.63% | -20.65% | -19.88% | -36.84% | -50.26% | 44.61% | 68.05% | -29.53% | -49.99% | 14.61% | - |
| D&A (Non-Cash Add-back) | 507M | 1.08B | 127M | 112M | 95M | 68M | 62.5M | 61M | 57.3M | 51.5M | 44.8M | 77.2M | 75.1M | 68.9M | 361.3M | 0 | 0 | 0 | 0 | 0 | 0 |
| EBIT | 611M | 670M | 743M | 663M | 559M | 378M | 206.7M | 247.5M | 210.7M | 106.1M | 76.9M | 138.7M | 197M | 270.7M | 176.4M | 1.02B | 759.83M | 509.26M | 0 | 0 | 0 |
| Net Interest Income | -482M | -416M | -260M | -224M | -122M | -86M | -92.6M | -119.9M | -131.6M | -128.6M | -84.2M | -32.9M | -41.4M | -72.9M | -80.9M | -705.27M | 0 | 0 | 0 | 0 | 0 |
| Interest Income | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | -5.55M | 0 | 0 | 0 | 0 | 0 |
| Interest Expense | 482M | 416M | 260M | 224M | 122M | 86M | 92.6M | 119.9M | 131.6M | 128.6M | 84.2M | 32.9M | 41.4M | 72.9M | 80.9M | 699.72M | 773.43M | 680.27M | 0 | 0 | 0 |
| Other Income/Expense | -777M | -669M | -579M | -328M | -220M | -155M | -175.1M | -183.9M | -141.9M | -170.5M | -81.8M | 18.2M | -52.5M | -117.6M | -87.8M | 323.19B | -761.12M | -615.83M | -1.64B | -1.1B | -1.05B |
| Pretax Income | -14M | 1M | 291M | 447M | 434M | 291M | 94.1M | 63.6M | 68.8M | -64.4M | -4.9M | 156.9M | 144.5M | 153.1M | 88.6M | 324.27M | -13.59M | -171.01M | -1.01B | 161.99M | 47.95M |
| Pretax Margin % | -0.3% | 0.02% | 8.16% | 13.62% | 15.84% | 14.04% | 5.28% | 3.18% | 3.48% | -3.67% | -0.32% | 9.35% | 8.16% | 8.82% | 5.51% | 3.91% | -0.18% | -2.41% | -11.85% | 1.86% | 0.6% |
| Income Tax | -9M | 0 | 80M | 100M | 104M | 67M | 20.4M | 16.1M | -300K | -224.7M | 14.8M | 45.6M | 54.8M | 55M | -207.47M | -128.54M | -17.07M | 59.67M | 196.85M | -102.57M | -67.99M |
| Effective Tax Rate % | 64.29% | 0% | 27.49% | 22.37% | 23.96% | 23.02% | 21.68% | 25.31% | -0.44% | 348.91% | -302.04% | 29.06% | 37.92% | 35.92% | -234.16% | -39.64% | 125.56% | -34.89% | -19.49% | -63.32% | -141.8% |
| Net Income | -5M | 1M | 211M | 347M | 330M | 224M | 73.7M | 47.5M | 69.1M | 160.3M | -19.7M | 111.3M | 89.7M | 98.1M | 61.4M | 452.81M | -48.04M | -126.02M | -1.21B | 264.56M | 115.94M |
| Net Margin % | -0.11% | 0.02% | 5.91% | 10.57% | 12.04% | 10.81% | 4.14% | 2.38% | 3.5% | 9.14% | -1.27% | 6.63% | 5.07% | 5.65% | 3.82% | 5.46% | -0.64% | -1.77% | -14.16% | 3.05% | 1.44% |
| Net Income Growth % | -103.91% | -99.53% | -39.19% | 5.15% | 47.32% | 203.93% | 55.16% | -31.26% | -56.89% | 913.71% | -117.7% | 24.08% | -8.56% | 59.77% | -86.44% | 1042.49% | 61.88% | 89.56% | -556.13% | 128.18% | - |
| Net Income (Continuing) | -5M | 1M | 211M | 347M | 330M | 224M | 73.7M | 47.5M | 69.1M | 160.3M | -19.7M | 111.3M | 89.7M | 98.1M | 61.4M | 452.81M | -48.04M | -126.02M | -1.21B | 264.56M | 115.94M |
| Discontinued Operations | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| Minority Interest | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 19M | 19M | 16.5M | 17.29M | 0 | 0 | 0 |
| EPS (Diluted) | -0.15 | 0.03 | 7.40 | 12.09 | 10.92 | 7.37 | 2.51 | 1.63 | 2.39 | 5.60 | -0.72 | 3.93 | 3.17 | 3.47 | 2.17 | 20.36 | -2.33 | -6.79 | -74.79 | 16.26 | 9.53 |
| EPS Growth % | -106% | -99.57% | -38.79% | 10.71% | 48.17% | 193.63% | 53.99% | -31.8% | -57.32% | 877.78% | -118.32% | 23.97% | -8.65% | 59.91% | -89.34% | 973.82% | 65.68% | 90.92% | -559.96% | 70.62% | - |
| EPS (Basic) | - | 0.03 | 7.43 | 12.18 | 11.15 | 7.57 | 2.53 | 1.66 | 2.43 | 5.66 | -0.73 | 3.93 | 3.17 | 3.47 | 2.17 | 21.78 | -2.33 | -6.79 | -74.79 | 16.47 | 9.56 |
| Diluted Shares Outstanding | 33.3M | 31.4M | 28.5M | 28.7M | 30.2M | 30.4M | 29.4M | 29.1M | 28.9M | 28.6M | 28.3M | 28.31M | 28.31M | 28.31M | 28.3M | 22.24M | 20.6M | 18.57M | 16.14M | 16.27M | 12.17M |
| Basic Shares Outstanding | 33.3M | 31.3M | 28.4M | 28.5M | 29.6M | 29.6M | 29.1M | 28.7M | 28.4M | 28.3M | 28.14M | 28.31M | 28.31M | 28.31M | 21.01M | 20.79M | 20.6M | 18.57M | 16.14M | 16.06M | 12.12M |
| Dividend Payout Ratio | - | 8700% | 36.49% | 21.04% | 20.61% | 6.7% | - | - | - | - | - | - | - | - | - | - | - | - | - | - | 13343.63% |
Margin volatility and profitability
According to quarterly financial disclosures, HRI achieved a notable 32.3% revenue growth in 2026Q1, signaling a significant acceleration in top-line expansion compared to the mid-single-digit growth rates observed throughout 2024, suggesting successful market penetration or aggressive pricing strategies within the specialty equipment rental segment.
The recent surge in revenue growth appears to be decoupling from the more modest performance of the previous two years. Investors should monitor whether this trajectory is sustainable or if it reflects a temporary spike in project-based demand that may not recur in subsequent quarters.
As reported in recent income statements, gross margins have contracted from a peak of 39.9% in 2024Q3 to 28.6% in 2026Q1, indicating that the company is struggling to maintain pricing power or manage rising fleet-related costs in a competitive industrial rental environment.
The consistent decline in gross margins suggests that the cost of maintaining and deploying the fleet is rising faster than the rental rates being charged. This trend warrants further investigation into whether the company's specialty 'ProSolutions' strategy is providing the expected insulation from commoditized rate cycles.
Based on the provided income statement data, operating income has failed to scale proportionally with revenue, as evidenced by the operating margin dropping from 27.2% in 2024Q3 to 15.4% in 2026Q1, highlighting a lack of operational efficiency in absorbing rising overhead and fleet costs.
The inability to maintain operating margins during a period of high revenue growth suggests that the company's cost structure is becoming increasingly rigid. This may indicate that the fixed costs associated with fleet expansion are currently outweighing the incremental revenue generated by those assets.
Financial filings reveal that net income has swung from a positive $122 million in 2024Q3 to a loss of $24 million in 2026Q1, suggesting that non-operating items or interest expenses are creating significant earnings volatility that obscures the underlying operational health of the business.
The erratic nature of net income, characterized by frequent shifts between profitability and losses, implies that the company's bottom line is highly sensitive to non-operating factors. Investors should scrutinize the impact of interest expenses and potential one-time charges that appear to be disproportionately affecting net results.
Data from recent periods indicates that while revenue is growing at 32.3%, the company is simultaneously reporting net losses, which may lead short-sellers to question the economic viability of the current business model and the long-term sustainability of the fleet investment strategy.
The divergence between top-line growth and bottom-line erosion suggests that the company may be sacrificing profitability to capture market share. This strategy appears risky, as it leaves the firm with little margin for error should the broader industrial construction cycle experience a downturn.
Quick answers to the most common questions about buying HRI stock.
For fiscal year 2025, Herc Holdings Inc. (HRI) reported total revenue of $4.38B. This represents a 45.7% decline compared to $8.06B in 2006.
Herc Holdings Inc. (HRI) is profitable, generating $1.0M in net income for the fiscal year ending 2025 with a net profit margin of 0.0%.
Herc Holdings Inc. (HRI) reported an operating income of $670.0M, resulting in an operating profit margin of 15.3%. This margin reflects the operational efficiency of the business before interest and taxes.
Herc Holdings Inc. (HRI) generated $1.23B in gross profit for the year, representing a gross profit margin of 28.2%. This demonstrates the company's core pricing power and production efficiency.