HRI - Earnings call transcript Q3 2024

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Operator

Thank you for standing by. My name is John, and I'll be your conference operator for today. At this time, I would like to welcome everyone to the Herc Holdings Third Quarter 2024 Earnings Call and Webcast. [Operator Instructions] I would now like to turn the call over to Leslie Hunziker, Head of Investor Relations. Please go ahead.

Leslie Hunziker

good and operator, you, morning, everyone. Thank Herc and Webcast. to Holdings Third Call Conference Earnings XXXX Quarter Welcome Earlier press SEC. our XX-Q today, furnished was were our filed release and with the slides presentation and of All on are website. the page posted our events IR

results remarks Today, operations comments an will view the follow and quarter strategic our Q&A. our on industry including by with and we're financials, outlook. third reviewing of our XXXX our The open prepared

forward-looking Today's statements. harbor safe statements and reconciliation on call our will the to differ X. call. include therefore, involve on see move let's based I risks Now we made and that this you materially results it These our caution and on are could GAAP the as from uncertainties. statements Slide environment would actual I today forward-looking

section refer annual ended December You to our Form for Factors Risk the the of XX-K also XX, year on report should XXXX.

call. not through call or believe will can the A this basis, non-GAAP given instructions accessed be non-GAAP addition in this information dial-in on a for webcast equivalent Reconciliations approve the In GAAP measures conference transcribing call any we other the earnings via for useful the Replay found call replay results presented permission these of to the closest be our do on sanction morning. discussing this to website. were or and operating performance. our can in not is included GAAP the release We've of we be in financial that of material. company's evaluating recording any

in Research's Management December CEO York to Atlantic's in Industrial on there. XX. XX, November see hope and at calendars Access the you Conference Finally, XX Forum December New X Melius management Virtual Global virtual our on Coast November on your meetings Research the on please mark North Chicago We and Conference Conference to join Redburn Baird

the Officer; Chief Vice Birnbaum, joined Chief This Larry. and Officer. Vice President Executive and call Aaron turn and morning, by I'm Senior President Officer; Mark and Financial Operating over Larry Senior Humphrey, now to Chief President Silber, I'll

Lawrence Silber

good Thank and you, Leslie, morning, everyone.

the for our to long-term Slide Let's density and increasing the and leveraging position satisfaction. data In with specialty share greater proprietary optimizing geographic on enhance and industry customer to competitive of mix growth turn market fleet fundamentals our #X. and quarter, on to scale, deliver of we strategies, our penetration third focusing technologies equipment and continued

we've branches We're areas with in efficiencies XX key make drive Year-to-date, revenue strategy. progress our line acquired on and market opened these share to continuing in metropolitan locations that all urban greenfield good and of initiatives. will XX market growth

with bring and addition valuable desirable strong In new new categories, fit acquisitions team to locations, local account members a fleet the opportunities. complementary cultural

mix increased fleet allows typically this capturing share demand the products where to specialty verticals newer from incremental mega us market support wallet of cross-sell to year to customers. our fleet and enhanced greater these our with customers we're Our We've end potential as business penetration. GenRent in specialty opportunities CapEx as projects well

financial X. our the business. which to This Slide moving year-to-date includes Now Cinelease is scorecard,

emphasizes developers course, performance equipment specialty geographic of as rate services further continuing market operating await cuts, acquisitions and local the in softness and, strategic this and discipline. diversity, the project the mega year's really project customer With of interest participation, Herc's advantage pricing

is comp year-over-year year period on industry of improving That's Rental X the a of X-month X.X% of quarters and ongoing in a our reflecting basis, increase last X.X% on X.X% rate as top Further X.X% year-to-date. same quarter first leadership pricing over XXXX. sequential was and the as the up rate in tough discipline. well a

and year-to-date on both account and Adjusted slightly is our XXXX margins overall unfavorable results market continues EBITDA growth acquisitions to local incremental volume of generate total greenfields lower revenue trade-off than outpace business. rental last ahead initially margin established Herc data, benchmark and as on based organic profitability running despite basis. an an And significantly

these to new become near-term valuable XX- ROIC impacted long-term that profitability being XX-month accretive will including component fully an efficiencies locations, inefficiencies, over them time. locations of Ultimately, plan. from help and will our make Year-to-date, a period, new which drive by improve is over will scale some those further

to Mark the walk an operations favorable team. positive minute. our just comparison paid In execution year-to-date, fleet, X you it's will efficiency on market, sales and a productivity a is have on fleet months the year-over-year on stayed in off. focused through in by that's they for basis a flat and But organic a detail due such dynamic and strong note,

about me let As #X the thoughts. Slide to share year, we think jump remainder to of some the

in once hurricanes again, efforts acquisitions revenue to accelerate, rental the recent generate new expect, support related quarter captured. projects mega of and are record provide revenue recovery fourth for X incremental as our contributions the the We

to fleet When near-term to it this seeing cost regions, utilization and and comes this We'll agility to we're in also enhance project quickly efforts to certain local market. of demand the and timing margin, to address possible Experience, we're our types. issue the customer continue carefully to disparity will between as synergies discipline as acquisitions structure from recent profitability. continually pull help manage going navigate

this in ramp taken next the our fleet we'll seasonal of most net over and new up at For point, CapEx, dispositions months. few we've fleet

of to excellent the it based From dispositions an trends. managing timing industry market disciplined being continuing job regional on in data, investments new growth. comes the has the to equally against and of the done amount when allocation fleet what we're fleet and group demand equipment in fleet overall new see fleet Our adjusting is in

growth costs puts you our current our will talk little bit the while manage we takes a support range. carefully and always, and operating more business our Aaron? that business. assets performance of more full then to year and core about will through specific Mark Aaron and continue the support As trends, guidance we'll take

Aaron Birnbaum

and North rental over demand strong. company remains suite America's rental and AI growth with trends a modernizing supporting opportunities energy, rapid Herc Thanks, fundamentals all capabilities, infrastructure, grid, centers rental of full the products equipment electrical fortifying move the Larry, good for future towards in reshoring leading best-in-class represent everyone. morning, a long-term and equipment manufacturing data clean The and The as underlying services. significant ownership, of

the a While interest transition some and today the the more local environment from year more normal rates higher peak revenue and resiliency current growth uncertainty was operating much period to deliver our provides margins. to operating to the post-COVID of drive diversified strong position challenged this with continue macroeconomic

their secret dedication to team projects. unwavering the customers of Of is course, the our sauce in critical hurts success

do. is core with safety, starts the at and Success safety everything of we

X, of major strive program safety perfect on days of In our internal XXX% a throughout perfect quarter, least can achieved organization. days, we focuses third operations and at branch-by-branch you Slide the our perfect. all XX% As days on is measurement, on for see the

industry's reflecting markets. Equally you our than XXX safety our on commitment and urban top high of the Slide making great and notable, our can we greenfield our by people of X.X, through are strategy see market remains rate of acquisitions standards to our locations total the and benchmark better X, that metropolitan progress recordable incident the expanding On customers. growth

Florida, total in In adding on The the of launching our in acquisition Arizona million acquisitions, West cash our and third $XXX networks our net we X call, California. And largest of a construction I was as quarter, XXXX. locations to spent since Phoenix premium transaction in X the mentioned at last business of July. completed locations Diego. customers industrial and end the We this our in strategy San and on M&A brings serving X

in Diego the XX San Of position a mega locations project top substantially this hotspot top course, Arizona a and market. in share leader now and as XX market is expand our a us

also in the XX X trailing to greenfield quarter openings a over bringing We comparable in XX-month the XX, over period. increase greenfield months is total which opened XX% nearly the locations our last

we and greenfield along and complement current Eastern know, you acquisitions focused the where Seaboard. California, As targeted opportunities cultural filters. high-growth like and are being the we in of the on many additions financial markets mega in Arizona Texas, announced fit industrial Moreover, our projects network our are have geographies branch manufacturing our in Southern that strategic,

XXX into HERC with locations XXXX. since late businesses XX the integrated successfully network have We

As a been X.Xx. multiples efficiencies, approximately X.X generating maturity to we've result synergized of of revenue at

While remain new acquisition opportunities robust.

In last from XX capturing months. completed closed on synergies fleet acquisitions last the cross-selling and fact, are productivity we we ensuring on focused the week, are over equally another we just

new XX, Slide in acquisitions, investments is our our On through increasing key addition equipment to a share strategy core to expanding fleet demand and growing up specialty our with opportunities. keeping and

Our fleet right is OEC page. of the the at composition side on

fleet as September now of $X.X Cinelease total. XXXX. the roughly XX, Total fleet X% represents of billion a is record

held So about base assets you sale, billion. exclude for Cinelease fleet is when $X.X our the

approximately higher-margin You'll of XX% represents specialty note the that total today. fleet

with total, to up XX% room Excluding grow. Cinelease, the makes continue about specialty plenty to of of

delivery to supply the quarter, in of investments comes with patterns this year-over-year it the year more return XX% to seasonal reflective a recovery. is When fleet the increase normal chain

investments down back year. general expansion significantly are of mega In about demand at -- It into projects supporting fact, in OEC from fleet XX%. efficiency manage half peak in fleet the that incremental the we new our market the while greenfields season, accelerated year-to-date, the was the

fleet. at XXXX year, For quarter, we disposals billion is keeping earlier Again, year. were rightsizing this OEC $X with fleet seasonal disposals on with both Year-to-date, we our were compared our lower at and new the purchases. XX% In more fleet this normal OEC XX% plan full for cadence year. dispositions down last of to year than refreshing in third a the are expect spend the roughly when

the fleet $XXX year, improving incentives economically For retail fleet existing for the technology, continued on sales the to acquisition dispositions transportation higher-return fleet some and planned we participate of used adjust certain market increased and in approximately we've In more in million training regions force wholesale gain OEC to utilizing sales demand our to to capabilities, quarter, are for the third and to update lower local channels. the less our traction full efficient. to cost move

basis mix last or of levels, As year. more market quarter OEC peak now a in despite our favorable equipment our used the channel at points the and than higher from of XX% XXX proceeds moderating result

underway. accounts facility revenue accounts are in both regions addressing growth are contractors. the as projects infrastructure, as in Slide are through third gains and expanding of Local organic to XX, and we education, select Turning repair quarter share greenfield XX% where well successfully large utilities rental represented acquisition locations needs maintenance local local and and the of from national

primarily continue local starts hearing. the to project rate everything on view issue slowdown timing an interest based We we're as in

battery growth we're provides continued and projects private accounts. and local continue resiliency. diversification the This like to government a revenue data semiconductor, in areas new We'll target funding LNG XX/XX national national On for side, and for account centers. on storage, and energy, infrastructure, capitalizing split between plants

represent incremental across provider Turning demand expertise and types of market from top continuing distinguishes projects to in solid to specialty coverage, logistics opportunities markets, any end and us Mega end to advancements a us new Slide see we're as project We XX. most technology expanded and market variety geographies a offering, resolutions for continue XXXX. our vertical. as Overall, service

And is our professionalism gearing team Herc Their day. single execution shows up of in already customers every services to our up.

our are long our and account Our customers culture. for projects. our to winning of growth local people is new They national we're for tenure business reason mega the the attributable the on and and

call to the pass I'll Now Mark. on

W. Humphrey

good Thanks, the everyone. morning, third our with of Slide quarter. Aaron, I'm XX key starting for a on and metrics summary

to before are For Entertainment couple discussed make turning for of held we've here Studio core as GAAP focus as the quick points is clarification, previously, include just Cinelease which classified the a that our results. I'll these sale. assets the results business,

In revenue utilization million. XXX adjusted EBITDA and a the margin X.X% points XX.X% $XXX to up basis record quarter, expanded dollar increased was rental slightly. and EBITDA third increased

metrics, can exclude The business Cinelease appendix our Slide outline periods XX quarter. the Here, in to reconciliation Slides you be on of better XX. found results, XX in of presentation. give from move a which Cinelease A quarterly our the of performance core base we sense full order Let's both how the to and performed financial in excluding

working. our sales as diversification For the a speaks industry's sources, well strong nearly the variety quarter and the from significantly Rental reinforcing which of third fleet capital allocation at performance. offerings, our force, is overall of as operators that execution fleet revenue and revenue branch team our came outpaced to the strategy XX%, rental business of our

Mega projects. well a as of grew business at business municipal growth projects acquisitions line led recent as health rental from with national while growth from expectations, care, organic local double-digit in the MRO our result and education, as also account contributions our

Pricing came is the quarter companies trends, and in discipline at the align X.X% fleet in markets. working pricing as continue industry evident local with the to especially across demand in

also we're fleet quality, or where of rightsize the For disposing or fleet softer country, Herc, in regions upgrade for of through the necessary. moving to working addition acquired in to refresh age newly

metrics fleet improvements Organic as efficiency to the was weighs to ownership. in expect fleet our utilization, of positive seen fleet in second see and we this have continue versus mature acquisition both quarter quarter. we and dollar year on While improvement under acquisitions efficiency sequentially the

higher acquisitions intangibles. operating fund expense SG&A was interest amortization in to and acquisition higher was cost leverage and rental Partially gained equipment expand. invest borrowings related in these impacts impacted our revenues as by income Net with to associated discipline offsetting increased from our expense nonrental

have REBITDA during REBITDA million to was we a margin $X in the us flow-through updated was quarter and expected bit for XX% at when only of expectations. was than we perspective, XX%. lower REBITDA additional quarter third our the would QX, the a record in gotten at nearly strong XX% but

revenue market imbalance the we the Aaron creates which a greenfield leverage full as acquisition gaining bring with by on starts, on direct mentioned, as impacted operating fixed costs, side the being still project in are and on our short-term local particularly slowdown also We locations.

of driving these core branch this from long-term believe XX-month The network at an the basis benefited XXX success. to on dispositions declined are during XX gain the quarter. business us year basis scale our fleet impact. point approximate end expanding phase positions points Trailing necessary growth and prior for We accelerated XX% through investments period ROIC to the

we point and drive supports associated acquisitions expect the greenfields onboarding The remaining efficiency, ROIC the with new and variance prudent to XXX basis to improvement. fleet relates new impact locations fleet of as mature our in

rent. a adjusted OEC to the the in in Let's turn XX% In and XXXX roughly walk XX, up bridges rental and increase increase year-over-year third to you increase quarter to revenue XXXX through revenue Slide EBITDA and you give quarter of fleet I'll X.X% from chart, was visual rate the on third reconciliation. made XX.X% a

offset of of equipment mix Mix reflecting equipment on the X.X%, of was inflation and net rent. an favorable more higher a

revenue, to is in comes mix to the metric. OEC it when at to volume dollars clarification, For the adjust fleet unit inflation measured a

quarter, growth X.X came and roughly X.X% contributing acquisitions. points the was came in and XXXX growth rental points from X.X Of year-to-date, XX% X.X growth acquisitions. of points the X.X rental the the Of points split revenue organic from from XXXX revenue organic

Adjusted to our in year-over-year, fleet proceeds mix SG&A channel from exposure at expense EBITDA to the as margin overall revenue. was management strong higher increased year-over-year and quarter, primarily rental due of higher on auction X.X% disposals benefiting Adjusted shift to sales favorable sales. EBITDA wholesale and our we OEC retail and reduce lower-margin

on management capital XX. to Shifting Slide

fleet flow in no can You allocate capital we we resulted into of as Higher to and continue and maturities in drive cash to fund our see ample operating invest cycle. net and liquidity to flow free expenditures goals have capital growth disciplined $XXX this business million cash growth near-term our year-to-date.

in as within Our our target is we with leverage well expectations and line invest our X.Xx at X in and growth. range Xx current ratio to

model We declared quarterly third per the to of are shareholder $X.XX $X.XX, a increasing the and quarter, for remain which confident committed represents we in value. our In year. dividend share business

markets. On today. primary can in XX, upper total revenue. Slide market estimate rental billion North is a the We of see strength with you XXXX a our operate industry In the in $XX continued growing the addressable ARA American left for end industry

offset agreed recorded that majority a reported score projects discourage experience Architectural weakness. as rates in left Also, a Surveyed with showed to Index architecture having the prolonged the activity. to the of Billing little regional interest the lever new On continue survey that that bottom firms project the XX.X% August release. is respondents high of mega

right, right at resources spending on starts. XXXX $XXX Industrial elevated projecting look Info industrial at lower a level on forecast is top the highest the last Dodge's billion In billion on nonresidential spend. construction be record is $XXX to the top Taking for forecast updated of quadrant year's the

growth of XXXX charts these to $XXX starts on both over billion. levels. to estimated peak are increase pre-pandemic line reflects The dotted X%

You activity has projected year the some seen. industry years the strongest are X that of can to see of be next this this ever that periods in

project for That's XX% in billion Additionally, infrastructure slated XXXX. there's XXXX. a increase over another $XXX

updating If you flip Slide was set see we're can guidance XXXX that the February. XX, you that to in

Cinelease excludes of the guidance Entertainment, performance which our noted, for is sale. Studio As held

expecting the We to full XXXX rental outsized X.X% performance of organic activity for revenue mega continuing on contribution year growth growth now to the the our significantly are overall from the industry's XX% includes based share of outpace and acquisitions. which project

at X% EBITDA to over reflecting expected net CapEx our prior in is high come CapEx is ranging and adjusted range $X.X both growth, gross year. billion, ranges. $X.XX guidance unchanged another billion, X% to from near of Rental year year of the to full profitable equipment end Our

Q&A, before you open we Now let with me it this. up leave for

While for of years. outsized growth macro drivers diversified the Today's XXXX broader the is in companies. transitioning most clearly the from last the demand X environment multidimensional are largest,

in system on foothold solidifying growth. competitive Herc dedicated our out and expanding by continues project company's path growth called and market HercXOS broad portfolio, fast-growing branch are increasing our services for we to pricing fleet our share, a and members environment, as outpace to continue roll our operating product And sustainable gain leadership, elevating purpose. improve long-term team market efficiency, network advantages, the we to further our our mega capitalizing

operator, we'll that, take With question. our first

Operator

from comes [Operator Instructions] Revich line Goldman from Your Sachs. of the first question Jerry

Jerry Revich

should mark? ask and be Larry just of 'XX flattish about OEC was where you that you I fourth on essentially improving with hope team. you're dynamic a we cadence in guys Are the year-over-year in given the utilization the and that the quarter? doing hurricane entering talk XQ performance that in line mentioned fleet in with time just point of I at had utilization rent want so year-over-year. Can you growth, well, to too, terms generally time

Lawrence Silber

a mean I to unpack there. a as lot of even lot into sort there's XQ. Jerry. There's quarter impact really to we in the question, Good and roll

expect X the certainly not your very impacted also hurricane. from to But I necessarily to there pinpoint question, but too what uplift think storms And the really where And we early quarter. some involved I they that the regions. reality but probably we in and it's additionally, storms today, avoiding our were the were that that's impact the X is duration, we sort of of is, will think begin different. know here, are different

sort as for through, was And so on really, part a reasonably the uplift we the our that I think to better mix, of question have But your of timeout. there's impacts sort unpack the way well. a feel work your we'll of as first line. component I think and in large of specialty And

from M&A QX quarter overhang was weighing -- achieved on really half into activity, the efficiency. the front weighted so came the the core about and in quarter M&A. where a was think the I fleet from in perspective, heavily from end we us really fleet back side into growth It's of of the that and which the

Jerry Revich

then Appreciate folks versus a have XQ. looks it normally, up rate that's like pricing XQ the color. And standpoint, from Super. you

the structure think So are margins rate for wondering be folks into we cost pricing. what essentially if $XX position about I'm range thinking exit to of that deliver given should heading means pricing stable the we that in as and million. about level a low at in that to you

Lawrence Silber

marketplace to. sort again, we that's Yes. expect a I think would as of sort performing I of it it's mean,

with we improvement was to of it where sequential to be, the think that in QX right thought sort we gained going and was that line aligned I sequential. in

a out far directionally, don't than of directionally, As movement respectively. speaking, not But off generally work to into too XQ that don't you're QX I historically I trying the really, less X pinpointing point think too of your X, terms exit and way has of and in through get here. think Jerry, been bit you XXXX.

Jerry Revich

of to margins cost Is up inflationary that Sorry, Mark. rate part that The picture? level to to get you given of conversation? the enough stable

W. Humphrey

being driving right, everything driven I by Thank is mean, again, structure this, the demand else Yes. accurate. fixed But into of of I our sort all that's of cost right, equal, sort again, side mean, business. you. the of

Operator

the from Your next Research. Melius line question Robert Wertheimer Heimer from of comes

Robert Wertheimer

of seems grow that that constrained There's absorb mega see as where really CapEx is rising got there's fleet a better. cost, are that increase. Is bit a me But guessed The increase, was because I a a a I'm curious a about got have you margin, opposed that and little projects there. know you've I lot guys wondering, raise being can't and the opportunity cost here. cross Progress and can I might on to the I'm you've that the greenfield, know signal signal I currents efficiency improving know that trim enough just you slight acquisitions fleet? when industry CapEx? an bit thing and the to surprised by

Aaron Birnbaum

Rob, question. is good yes, This Aaron.

we revenue. As raised the guidance you on the saw,

actually fleet customers, the that So the to of mix, be arena of X really to our end kind year what year need the view high on from that's But of And is than end view the mega X it go stronger our for year. the where our is the primarily a the needs in guidance. or we kind it's CapEx than fleet the matching that revenue year. of of up case was. our less we bought we when ago, the and quarters, we will did finished

come a part generated the of going remaining will that's quarter next first year, but revenue and really still the the be we it's fleet into as the in of it's really that So year. to through go

W. Humphrey

conversation. through I don't a we'd we'd add that, fleet efficiency And first right, if different months of year. think I just X on Rob, conversation having having be hadn't the think, we to I maybe think the to the be achieved

the customer is think sort if those we're and this, end day, of of meeting the demand I driving right, at So demands.

Robert Wertheimer

falls question. not definition could out sorry And Okay. us fleet this the of you That's that. give exact efficiency. I'm basic just for But I'm anything where or else on sure helpful. Cinelease

Lawrence Silber

top fleet challenge ahead inefficient, growth. it that right? the fleet of looks you quarter, to you in Accidentally, unpack completely right, fair. level, XX.X%. you It's our were really So No, versus growth revenue get fleet because grew growth like of Yes. just

the unpack the was M&A organic to that was while piece piece efficient. you If inefficient M&A the piece,

Operator

next Your comes Steven Thompson from from line Group. question Ramsey the of Research

Steven Ramsey

mega the into share have you the used above opportunity you nature that your being market jobs projects, of rental types that's opportunity as they at with as learned progress fleet ramp capturing On gotten far this as it well more you've point What in the this as market total seems activity, make as share. competitive like are these as mature. they

learnings the your you there's and you've curious that? to achieved Just if upside think even market if share

Aaron Birnbaum

of The set market to X times. share our what kind market a X achieve, that or of we we achieves of out share current multiple

companies a a have safe what they've they're and are seen contractors of happy where that want But be available They we enough employees that got mega large technology, that's going of you arena, they of kind what fleet. to the opportunities. we've that they the of the if expands, So program in to fleet. strategically into pieces local want is volumes It want that they they And employees gone are. but our and their environment. there, find really In they safety that how end get young because we're players, up fleet, so scale the after remains is want variety a want markets. deliver

or those that pieces the So X critical by is customers. are the X required large

Lawrence Silber

Yes.

the that think way core strong these in capability for people a our maximizing fleet penetration supplement the big really are accounts. of important it's that our with. I and the can they in have to is any a Additionally, of specialty that helping to offering think mix in certainly us with And be of sort fleet I

Steven Ramsey

what the of Okay. activity channels? And sales operating secondly, how these improved what in we as through in you you the scale? mix, And operate volume inning are just learn That's better this are on a in on to then used efficiency channel moving helpful. on then inning

Aaron Birnbaum

us. we're -- wholesale early is that. the for this our innings team's our on and Yes, full in year delivering on of retail marketing the channel force been definitely to we're mix of And it first the our really we've the transitioning team. getting sales It's from focused kind --

And higher. exit for that the we we each because to we will next or over know quarter. So we think continue the in And it's us just early sales of will equipment higher years, that that X proceeds us. used come like give mix that as X

Operator

Tyler from question of Atlantic. Neil line Next Redburn from comes the

Neil Tyler

the First question, just on rate increase.

twice, the given and previously, a breakout or and once some trends you a or think rate longer you've of bit I local within of that term the sort us number between of trends of sort short-term of differing report national.

the could medium-term the you assumption of today, that number. given wonder within in it And discuss over guide there I CapEx efficiency missed next year. targets investor have your growth do fleet years your And on you this that change us sort describing medium-term sort comments event given the -- last guidance of so well if as but And into the the CapEx Where the you from 'XX. year-on-year-on-year back as can may sort fleet improves and right outlook in 'XX that of I the that. And in Mega that, help are for that impacted of you're perhaps, we i.e., and of of path is X sort context this presented year? mix, the at how earlier, the has then X.X% on efficiency, when you've

Lawrence Silber

Let me take first. question the rate

performing expected. you of both of the so versus are tell as noncontract that them about let's would talk -- I contract. Sort

sort picture stable. sort as of we QX's said, tell price the that big you with performing expected. market The on lift is of points. those would think And got sort I line break spot of will between I pass a XX like sequential I But in giving that.

provide. premium intend, our think a trying our to we that I we that's the off performing and And right, it's that's so we're and as cover grab for And remember, inflation goal would service intent.

to that As we context then efficiency, efficiency an specifics right, me the laid From mark to to was what it plan, are at of that out the think blanking us. relates of would the where on today inside it's there. you Obviously, efficiency align early and XXXX, we expectation. fleet X-year too with have in where goals of of perspective, cover that had I I'm end and of the wanted sort now even

and has fairly we're we I the marketplace itself in think that time rolled from what changed that in today. that operating out the to significantly of

bit shows, And into online a put And wait quickly be markets. back interest rates so it. we'll these demand I I think hold, there's how as there a to think local capitalize ready developers on and see these take that of as activity

going not speculate there think health of to play. we're in supports I that, and buy that So certainly of the advance

Operator

Your comes from Zakaria line from of JPMorgan. next question Tami the

Tami Zakaria

my first you saw saw rental growth organic the to performance quarter overall in able you is, trying in question rent rental to are specialty the in in growth, I'm revenues. you So I the X.X% just said relative you comment think for general specialty versus understand versus quarter. on the to quarter

Lawrence Silber

won't of specialty our and double performing more mean, generally pointed break extremely we digits, tailwind well certainly than at back I Yes. through for work any It's I as way we mean we don't a but the I get year. think half speaking, that out. the specifically that. us grew

Tami Zakaria

going acquisitions, Is color to did versus on in and account give commentary super And quarters. helpful. X there you to local in acquisitions is how That to director the quarter. mentioned So Are due XQ the any in I stabilization revenues question organic in helpful. markets understand my able think the or things is, for? ex quantify these would local around then just greenfield. accounts prior you next increased it. growth Got there in the or I'm greenfield local trying be quarter any

Lawrence Silber

Certainly.

no experienced think -- I we obviously, what pointed somewhere that tell X% local plus growth. sort of national I growth color grew in mean, the that I really out to we range. versus terms you the local I QX mean, market market that is organically of is that of coming is, behavior in getting in would QX.

we a to anticipated our out perspective, say we you as I . So would of as through way worked QX color from QX. had stabilized coming

Operator

Markets. Newman the Ken line from from next Capital Your question of KeyBanc comes

Kenneth Newman

some the margins of you curious just know on mid-XX% morning. But or kind from XQ of moving XQ was it and you step Obviously, EBITDA us bridge year hurricane to from I this the midpoint. pieces if in range. a helps various volume it's both XQ touch provide better on that's to last think last to I that here, absorption. guidance wanted could lot up updated a I Mark, does impact just help a whether there's on maybe the imply decent to what low rental quarter. core I get buckets those

W. Humphrey

There's components if you it's obviously, speaking, to a that XQ, then historically, not about wrong. underneath sort talk actions parts mean, determined. or the the confidence taken the I I I sort we levels, X reasonably moving you're of But be in sort at I think, of the But through sometimes of outperforms same that look X. hurricane lot talked way more have we performed think we've and us sort outperforms walk talked XQ give XQ, Well, demand that And lift sometimes of as there's of have. think a a be in at But QX. going gives X those the to a generally cost that. think of X I around into about, take, that we've it that we there bit to

think look of comp you is a if XQ other than XXXX. XQ easier XXXX the that this of an at bit piece I

that's all of of sort and fall of out. that relative you put mix, into of So I think where that all sort the

Kenneth Newman

Got Okay. it.

So higher of cost maybe that magnitude type levering from benefit point? levels hurricanes so is more XX,XXX-foot say the a at so this mix it view. more SG&A actions, of than just a fair to It's from

W. Humphrey

determined. be To

put being we our of wrong. of a behind to bit had of right, think all tied think amount you're I not arm halfway significant we're disruption. X the with together equal, back, But first this hurricane month of a I because through else

Lawrence Silber

what to X on estimates hurricanes, Yes. tell hurricanes, is duration for or think depends different we've the I rent length A past. little best upon And on the use to our of different tell. But too the early fleet gear too for the on early again, types of hurricane. mix that. done based X

Kenneth Newman

potentially And process in new it guidance year. ready seeing to assume plots is growth Yes. I yet, here. build know are of quickly, not give you're my just this Look, for follow-up in to think what then you the beyond Got at 'XX you I but it. equipment XXXX? time, at fleet drive you're fair for given point that expect delivery next replacement to securing

Lawrence Silber

I think of that. say it's a little too sort early to

mega talked look requirements we our cross-selling that stem reach that the and to to towards make looking replacement that CapEx that and -- at opportunities project doing think then those looking I Aaron acquisitions from fill need are first at and acquisitions where what at multiples we is gravitate those about. at and

working So know X- it And but a at with our I field X on our together priorities be the our to think a minimum replacement fleet CapEx, are we X-year top team. is -- you least on at will and that average. fleet which replaced those

take X/X or of core fleet, X/X our billion of or billion $X.X that of about sort So a and $X.X minimum. that's be will

Operator

America. question the of El-Sabbahy next from comes of Sherif Bank from Your line

Sherif El-Sabbahy

on I just flowtegoing given wanted Guide is have if forward? we to slowdown imply I But local year M&A flow-through to this current in touch impacted market think pace your greenfield. Particularly just QX. through. year? and the similar to as QX next M&A pace quarter the understand by maintain in M&A you should how a visibility, third seems of similar you and of about flow

W. Humphrey

making coming market of slowdown. here, of there's larger moving of it parts challenging by just component from the question. Sherif, of a growth immature lot Sort very rev Good its nature Obviously, local M&A right? the and sort

heavy at you extremely environment We margin-expanding right? or we're if margin, in now, flow-throughs EBITDA XXXX, look points coming to better XQ the XXXX. are of than flow-through margin. of comp the fourth through be actions will Cost anticipate sort that would given that quarter XXXX would I XXXX different will, margin that that when basis think in XQ moved year, of was which 'XX, you tell right, right? a a you implies hold XXX incremental in I I sort

Sherif El-Sabbahy

you kind of the of from to able And slowdown impact quarter? and Understood. M&A the us an in of versus give third magnitude greenfield the idea are the

W. Humphrey

again, that's I mean it's it's of cake, I it's of sort In the It to right? just timing. where right generally this XX the of been in I there. given that of contribution, -- the piece mean, M&A sort it's of XX% -- now, in mid-XXs mean, I mean, is is into quarter, no. the of sort M&A just sort ranging right, your rev growth just

Operator

the comes next line Baird. of from Dobre Mig question Your from

Mircea Dobre

clarification Yes. here. just Larry, maybe

concerning to hurricane. some in Slide that baking or this hurricane the mentions Is on into upside. guide comments deck pointing XX, potential is this comment of from sort Your event -- you with contribution essentially there average guidance an in weather earlier your

upside? that would if is don't point hurricanes average, guidance clarify just you are of it than know Or at the any it. reflect these because size really not does to So be that looking then worse just source this that. how the I'm to contribution

Lawrence Silber

only would Yes. QX. the say point, -- been And in what just that more, thing less. not nothing contributing average at we've the to normal I has and baked in a this upside historical nothing it's

and So significantly upside. it's components the the just QX X not of for impacting

Mircea Dobre

going Okay. to question. second be my because was that

an or this that, guidance M&A from the And $XX guys what you and from On how also of of not the raise? incremental seeing impact guess, EBITDA, revenue give revenue million raise, that year. the on of we're I come, drove the take, more sort both done have

Lawrence Silber

EBITDA. an that. market to to focused drag about are, get period are more acquisitions XX-month it we not and up and greenfield the that our existing and is talked do why the impact We have because margins from they're a local I some particularly think there they on do a takes locations

the your I there's. question. Mark I'll think of So let don't comment part on first

W. Humphrey

way the sort there's worked of fair back mean have a of I their Mig. year, that the Yes. through number of half tailwinds

is growth you as of as our levers year-over-year and just is being as we the project quarters for mega in One growth that's REV XQ. anticipated anticipation X performed about the anticipated we had that about also it that XQ had think that those through components -- think has X of those pulled . first into

Operator

questions time, the would this turn remarks. closing back further call like I over As there are no at to Leslie for to

Leslie Hunziker

forward the call on in for to you joining us the today. quarters We to look our come. Thank on you updating progress

if course, any out to please day. us. a Of further you questions, hesitate to have Have great don't reach

Operator

Ladies this Thank today's participation. you for and call. your concludes gentlemen, conference

You disconnect. may now

Herc (HRI) 22 Oct 242024 Q3 Earnings call transcript