As the first quarter earnings roll in, the public rental companies are offering valuable insight into the health of the equipment rental market and where they see it heading. Growth strategies, M&A activity, and signals on end-market demand are all front and center. Here’s what we’re watching.
United Rentals delivered another strong quarter, with revenue up nearly 7% year-over-year and adjusted EPS beating expectations. The company credited steady demand across construction and industrial customers. Management reaffirmed full-year guidance and reiterated their commitment to returning capital to shareholders, noting approximately $250 million remaining under the existing $1.5 billion share repurchase program authorized in Q4 2024. Mergers and Acquisitions remains a key driver for URI, with management continuing to highlight tuck-in opportunities to build scale and capabilities.
Herc Rentals also saw top-line growth, with total revenue increasing 8% year-over-year. However, the company reported a net loss due to one-time costs associated with its pending acquisition of H&E Equipment Services. That deal, announced earlier this year for $3.83 billion excluding debt, is Herc’s largest to date and underscores its aggressive strategy to expand market share and add density. Herc continues to invest in specialty equipment and greenfield branches to support larger project work and long-term customer growth.
H&E Equipment Services, meanwhile, reported a challenging Q1 with revenues down 14% and a net loss for the quarter. Uncertainty around the pending merger and general market softness weighed on performance. Still, the company opened four new branches and emphasized its commitment to long-term expansion. Once the merger with Herc closes, mid-year, H&E’s footprint and fleet will significantly enhance Herc’s national capabilities.
Sunbelt Rentals (Ashtead Group), which reports on a fiscal year ending in April, most recently posted results for its fiscal Q3 ending January 31, 2025. U.S. rental revenue grew 4% year-over-year for the nine months ending January 31, 2025, driven by strength in industrial and mega-project activity. Local commercial construction remained soft due to higher interest rates. During the nine-month period ending January 31, 2025, the company added 54 new locations, including both greenfields and bolt-on acquisitions, as part of its continued footprint expansion strategy. Ashtead invested $2.1 billion in capital expenditures during the nine months ending January 31, 2025, supporting fleet growth, greenfield openings, and infrastructure. The company also repurchased $88 million of shares during the quarter as part of its $1.5 billion buyback program launched in December 2024. Management reaffirmed their focus on the Sunbelt 4.0 strategy, which targets $14 billion in annual revenue by 2028.
What the Public Companies Expect for the Remainder of 2025
Despite pockets of economic uncertainty, the public rental companies are expressing cautious optimism about the back half of the year driven by steady demand across infrastructure, non-residential construction, and industrial maintenance.
- United Rentals reaffirmed its full-year 2025 guidance, pointing to continued strength in large-scale infrastructure and manufacturing projects, particularly those supported by federal stimulus and reshoring trends. Management noted that customer backlogs remain healthy and that fleet utilization is tracking with expectations. They also emphasized disciplined capital allocation, signaling they’ll continue investing in fleet while maintaining pricing discipline.
- Herc Rentals maintained its positive long-term outlook, even as the company absorbs near-term costs from the H&E acquisition. The leadership team expects synergies from the deal to begin materializing in the second half of the year and reiterated confidence in market demand across commercial construction, energy, and entertainment sectors. Herc also expects to benefit from the ramp-up of newly opened greenfield locations.
- H&E Equipment Services offered less specific commentary given the pending acquisition but confirmed that they are still seeing demand stabilize in many of their core markets after a soft Q1. The company highlighted continued investments in branch expansion and technology as part of its longer-term growth strategy, regardless of the transaction timeline.
- Sunbelt Rentals (Ashtead Group) expects full-year results to align with previous expectations, despite near-term pressure in commercial construction. The company anticipates recovery in that segment as interest rates stabilize. Its focus remains on growth within strategic accounts, which generated over 20% rental revenue growth year-over-year among its top 200 U.S. customers. Management reiterated confidence in its Sunbelt 4.0 plan, designed to drive continued expansion and scale through 2028.
The consensus: demand remains resilient, mega-project activity is a tailwind, and companies are positioning for growth, both organically and through acquisition. While not immune to economic shifts, the major players are betting on infrastructure momentum and diversified end-markets to carry them through the rest of the year.
