Shares of Herc Holdings (HRI) plummeted 8.09% in Tuesday's trading session following the release of its second-quarter 2025 earnings report. Despite reporting strong revenue growth, the equipment rental company's bottom line fell short of analyst expectations, raising concerns about its profitability and integration efforts.

Herc reported Q2 revenue of $1.002 billion, an 18.1% increase year-over-year, surpassing analyst estimates of $981.4 million. The growth was primarily driven by a 14% rise in equipment rental revenue, bolstered by recent acquisitions, including the June 2025 H&E Equipment Services deal. However, the company's adjusted earnings per share came in at $1.87, missing the FactSet consensus estimate of $2.05 and marking a significant 28.08% decrease from the $2.60 reported in the same quarter last year.

The earnings miss was attributed to several factors, including margin compression and integration costs associated with recent acquisitions. Herc reported a net loss of $35 million for the quarter, a stark contrast to the $70 million net income in the prior-year period. This loss was partly due to $73 million in transaction expenses related to the H&E deal and a $49 million GAAP charge tied to Cinelease asset sales. The company's adjusted EBITDA margin also declined from 42.5% to 40.5% year-over-year, reflecting the impact of lower-margin used equipment sales and the H&E acquisition. Despite these challenges, Herc maintained its quarterly dividend of $0.70 per share and updated its full-year 2025 guidance, projecting equipment rental revenue of $3.7-$3.9 billion and adjusted EBITDA of $1.8-$1.9 billion.