H&E Equipment Services Reports 14% Revenue Decline and Net Loss in Q1 2025

H&E Equipment Services, Inc. reported a significant decline in financial performance for the first quarter of 2025, with total revenues of $319.5 million, down 14% from $371.4 million in the same period last year. The decrease was primarily driven by a 7.2% drop in equipment rental revenues, which totaled $274.0 million, and a 50.3% decline in sales of rental equipment, which fell to $23.9 million. The company also recorded a net loss of $6.2 million, compared to a net income of $25.9 million in the prior year, resulting in a basic net loss per share of $0.17.

The company's gross profit for the quarter was $123.6 million, a decrease of 25% from $164.9 million in the previous year, with a gross profit margin of approximately 38.7%. This decline was attributed to lower rental revenues, increased depreciation expenses, and a decrease in rental equipment utilization rates. The average rental rates decreased by 2.0% compared to the same period last year, contributing to the overall revenue decline. Additionally, selling, general, and administrative expenses were $111.6 million, slightly lower than the previous year's $114.3 million, but included $9.8 million in transaction expenses related to the ongoing merger with Herc Holdings Inc.

H&E Equipment Services has been actively pursuing strategic growth through acquisitions, having completed the acquisition of Precision Rentals in January 2024 and Lewistown Rentals in May 2024. These acquisitions are part of the company's strategy to expand its geographic footprint and enhance its service offerings. The company operates 160 branch locations across 31 states, serving a diverse range of end markets. As of March 31, 2025, the company reported a rental fleet valued at approximately $1.8 billion, representing 65.5% of its total assets.

Looking ahead, H&E Equipment Services is navigating a complex landscape marked by economic uncertainties, including inflation and rising interest rates, which could impact demand for its services. The company is also in the process of merging with Herc Holdings, a transaction expected to close mid-year 2025, which may further influence its operational strategy and financial outlook. The merger is subject to customary closing conditions, including regulatory approvals and shareholder tender requirements. The company remains focused on managing its capital expenditures and optimizing its rental fleet in response to market conditions.