The equipment rental market, long characterized by cyclical demand and fragmented competition, has seen a bold consolidation play with Herc

HRI -1.43%

Holdings' acquisition of H&E Equipment Services. This $3.6 billion deal, completed in early 2025, has transformed Herc into a near-monolithic player, operating 622 locations across North America [4). Yet, the question remains: Can Herc sustain this momentum while navigating the inherent risks of post-merger integration and capital allocation efficiency?

The data suggests a mixed picture. Q2 2025 revenue surged 18.1% year-over-year to $1.002 billion, driven by the expanded

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footprint and cross-selling opportunities [4].

Adjusted EBITDA, a critical metric for capital-intensive industries, rose 13% to $406 million, albeit with a margin contraction to 40.5%— a drag from the acquisition's integration costs and the sale of lower-margin Cinelease assets [2]. This margin pressure underscores a broader challenge: reconciling aggressive growth with operational discipline.