H&E Equipment Services, Inc. (HEES): Business Model Canvas [Dec-2025 Updated]

You're analyzing a major equipment rental powerhouse, now fully integrated into the Herc Holdings Inc. structure after that significant mid-2025 acquisition, and you need the hard numbers on its operating model. Honestly, figuring out the core engine of the former H&E Equipment Services, Inc. is crucial for assessing the combined entity's near-term trajectory. This Business Model Canvas distills that complexity: think a $\mathbf{\$2.9}$ billion rental fleet across $\mathbf{160}$ U.S. branches, generating about $\mathbf{\$1.46}$ Billion in Trailing Twelve Months revenue as of 2025, all built on an integrated value proposition of rental, parts, and service for contractors. Dive below to see the precise partnerships, key activities, and revenue streams that make this operation tick.

H&E Equipment Services, Inc. (HEES) - Canvas Business Model: Key Partnerships

You're looking at the relationships H&E Equipment Services, Inc. maintained, especially considering the major shift in ownership that occurred in mid-2025. This section details the critical external entities H&E Equipment Services, Inc. relied upon, which are now integrated or aligned under the new structure of Herc Holdings Inc.

Herc Holdings Inc. as the new parent company

The most significant partnership shift for H&E Equipment Services, Inc. was its acquisition by Herc Holdings Inc., which closed on June 2, 2025. Following the merger, H&E became a wholly-owned subsidiary of Herc, and its common stock ceased trading on the NASDAQ. This relationship immediately scales operations; Herc's pro forma 2024 total revenues reached approximately $5.1 billion, and the combined entity operates 613 locations across North America. The transaction consideration for H&E shareholders was $78.75 in cash and 0.1287 shares of Herc common stock per H&E share. This integration is intended to accelerate growth and provide economies of scale.

Major equipment manufacturers (e.g., Komatsu, John Deere, Skyjack)

H&E Equipment Services, Inc. has historically relied on strong relationships with original equipment manufacturers (OEMs) to supply its rental fleet and support its sales division. While specific 2025 volume commitments aren't public, the scale of the fleet and sales activity dictates substantial OEM reliance. As of the first quarter of 2025, H&E's rental fleet, based on original equipment cost, was valued at approximately $2.9 billion, comprising 63,014 units. The business is structured around providing equipment like aerial work platforms, earthmoving, and material handling gear.

Here's a look at the revenue contribution from the equipment sales side of the business in Q1 2025, which directly reflects the flow of goods from manufacturers or their dealers:

The sales of new equipment segment, which was $7.4 million in Q1 2025, is a direct channel for manufacturer partnerships, though the majority of equipment flow is likely managed through authorized dealer agreements.

Financial institutions for fleet financing and capital expenditure

Acquiring and maintaining a fleet valued in the billions requires deep, consistent access to capital markets and credit facilities. The Herc acquisition itself highlighted major financing partners. For the transaction closing on June 2, 2025, the financing sources included:

• Borrowing of $750 million under a seven-year senior secured term loan facility.
• Issuance of $1.65 billion in 7.000% senior notes due 2030.
• Issuance of $1.1 billion in 7.250% senior notes due 2033.

Credit Agricole Corporate and Investment Bank served as the lead financing bank for the acquisition. You defintely need to track the terms of the revolving credit facility, which was also amended and restated as part of this capital structure overhaul. The company's rental fleet original cost was $2.9 billion at the end of Q1 2025, all of which is financed or supported by debt instruments.

Third-party transportation and logistics providers

Operating 160 branch locations across 31 states prior to the merger, and now part of a much larger network, H&E Equipment Services, Inc. depends on external logistics partners to move heavy machinery efficiently between job sites and branches. This partnership category is essential for maintaining utilization rates, which saw H&E's average time utilization at 60.3% in Q1 2025. While specific third-party contracts aren't itemized, the scale of the fleet movement necessitates established, reliable third-party carriers for regional and cross-regional transport.

Independent dealers for new equipment sales

The sales of new equipment segment, which generated $7.4 million in Q1 2025, often involves relationships with independent dealers who act as authorized resellers for various OEMs. These dealers are key for H&E Equipment Services, Inc. to move equipment that is sold rather than rented, or to supplement their own fleet purchases with specific, smaller-scale dealer inventory. The relationship is transactional, focused on securing competitive pricing and access to specific models not directly supplied by the primary OEM agreements.

H&E Equipment Services, Inc. (HEES) - Canvas Business Model: Key Activities

You're looking at the core engine of H&E Equipment Services, Inc. (HEES) right before it fully integrated into Herc Holdings, so the Q1 2025 numbers give you the clearest picture of the activities they were executing day-to-day.

Equipment rental operations and fleet management is definitely the primary focus, driving the bulk of the business. As of March 31, 2025, the original equipment cost of the rental fleet stood at approximately $2.9 billion, comprising 63,014 units. You saw rental revenues for the first quarter of 2025 hit $274.0 million, even as utilization softened. Management was actively managing the fleet composition, noting the average age was 43.2 months, which was younger than the industry average of 49.3 months.

Here's a quick look at the utilization metrics from that Q1 2025 snapshot:

The activity of maintenance, repair, and reconditioning of the rental fleet is embedded within the Parts, Service and Other Revenues segment, which supports the fleet to keep that average age low. This activity is crucial because the fleet's quality directly impacts rental rates and utilization, which saw rental gross margins narrow to 38.2% for total equipment rentals in Q1 2025.

Strategic fleet procurement and disposal (used equipment sales) is the second leg of the fleet management stool. Disposing of older assets via sales of rental equipment generated $23.9 million in Q1 2025, a sharp drop of 50.3% year-over-year. The gross margin on these sales was 59.0% for the quarter. New equipment sales were also a key activity, bringing in $7.4 million, down 28.7%, though the gross margin on new sales improved to 18.9%.

The company was aggressively pursuing branch network expansion and integration, which is a major driver for future capacity. You saw them open four new branches in Q1 2025 alone, including locations in Pensacola and St. Louis West. This expansion contributed to the rental fleet's original equipment cost increasing by $108.1 million, or 3.8%, compared to the end of Q1 2024. Overall, H&E Equipment Services operated 160 branch locations across 31 states as of early 2025.

Finally, a massive activity dominating the near-term focus was managing the $5.3 billion acquisition integration by Herc Holdings, which closed on June 2, 2025. This effort required significant resources, evidenced by the $9.8 million in merger-related expenses that influenced the Q1 2025 net loss of $6.2 million. The pro forma goal was significant: the combined entity was projected to operate more than 600 branches with a fleet OEC of approximately $10 billion at closing. Herc also targeted realizing $130 million of annualized cost synergies within 24 months post-close. Herc's plans included adding roughly 50 specialty rental locations over the six months following the late 2025 integration announcement.

The overall financial scale before the full integration impact was reflected in the Trailing Twelve Month (TTM) revenue as of December 2025 being reported at A$2.23 Billion.

Finance: draft 13-week cash view by Friday.

H&E Equipment Services, Inc. (HEES) - Canvas Business Model: Key Resources

You're looking at the core assets H&E Equipment Services, Inc. (HEES) brought to the table, especially right before and after the Herc Rentals acquisition in mid-2025. These resources are what made the company a prime target.

Rental Fleet and Physical Assets

The physical fleet is the engine of the business, and H&E Equipment Services, Inc. maintained a substantial, relatively young asset base. As of the first quarter of 2025, the rental fleet's original equipment cost (OEC) stood at approximately $2.9 billion. While the exact unit count specified in your outline wasn't explicitly confirmed in the Q1 2025 filings I reviewed, context from the acquisition discussions suggests H&E had around 64,000 pieces of rental equipment just prior to the merger closing on June 2, 2025. This fleet is comprised of core categories like aerial work platforms, earthmoving, material handling, and general/specialty lines.

The company's physical footprint is also a major asset, providing necessary geographic density and customer access. As of early 2025, H&E Equipment Services, Inc. operated an extensive network of approximately 160 branches across 31 U.S. states. This network was actively growing, with four new branches opened in the first quarter of 2025 alone.

Here's a quick look at the scale of the physical assets as of March 31, 2025:

Human Capital and Digital Platform

Beyond the iron, the people and the technology they use are critical. The value proposition relies heavily on the expertise of the staff.

• Highly-skilled service technicians: Essential for maintaining the fleet's relatively young average age of 43.2 months as of Q1 2025.
• Professional sales force: Drives new equipment sales and supports the rental revenue stream.

The proprietary digital customer platform, CONNECT, was a key resource for managing customer activity online, offering features like equipment reservation, service request management, and telematics data access. However, you need to know this is a transitional asset as of late 2025. Following the acquisition by Herc Rentals on June 2, 2025, active and future rentals are managed through ProControl by Herc Rentals™. Importantly, the CONNECT by H&E Rentals desktop application is scheduled for deactivation on December 1, 2025, meaning historical records must be downloaded by November 30, 2025.

Financial Strength and Capital Access

The ultimate key resource, realized in mid-2025, is the backing of the new parent company. H&E Equipment Services, Inc. was acquired by Herc Rentals in a deal that closed on June 2, 2025. This transaction immediately provided H&E's operations with access to Herc's capital structure and scale. Prior to the deal, H&E was managing merger-related expenses, which impacted Q1 2025 results, including $9.8 million in transaction expenses. The acquisition itself was valued at approximately $5.3 billion (cash and stock consideration). Post-merger, the combined entity has a fleet valued at roughly $10 billion.

The financial health underpinning this was reflected in its balance sheet, with total assets reported at $2.67 Billion USD as of March 2025. This scale, now integrated into Herc Rentals, positions the former H&E operations within a company projecting pro forma 2024 revenue of $5.1 billion.

Finance: draft 13-week cash view by Friday.

H&E Equipment Services, Inc. (HEES) - Canvas Business Model: Value Propositions

You're looking at the core reasons customers choose H&E Equipment Services, Inc. over the competition, right as the company was heading into its merger with Herc Rentals in mid-2025. The value propositions are built around a comprehensive, multi-faceted approach to equipment support.

Diverse fleet mix: aerial, earthmoving, material handling, and specialty lines

H&E Equipment Services, Inc. offers a broad selection of heavy construction and industrial equipment. This variety means a single provider can often meet diverse project needs, which simplifies procurement for the customer. As of the first quarter of 2025, the rental fleet, valued at original acquisition cost, stood at approximately $2.9 billion.

• Aerial work platforms
• Earthmoving equipment
• Material handling equipment
• Other general and specialty lines

Integrated service model: rental, new/used sales, parts, and service

The business isn't just about renting; it's about providing a full lifecycle of equipment support. This integration captures revenue across multiple touchpoints. For the first quarter of 2025, the revenue streams clearly show this mix:

The rental margin for Q1 2025 was 43.6%, showing the profitability of the core rental offering. Also, the Parts, Service and Other Revenues segment supports the entire ecosystem.

One of the industry's youngest rental fleets (pre-acquisition)

Keeping the fleet modern means less downtime and better reliability for you. This is a key differentiator. As of March 31, 2025, the average age of the rental fleet was 43.2 months. Honestly, that's quite a bit newer than the reported industry average age of 49.3 months for the same period. This focus on fleet age was a competitive advantage leading up to the expected mid-2025 merger close.

Localized service and quick response via the branch network

You get service where you work. H&E Equipment Services, Inc. maintained a significant physical footprint to ensure quick support. As of Q3 2024, the company operated 160 branch locations across 31 states in high-growth geographies. Plus, they were actively expanding, opening four new branches in the first quarter of 2025 alone.

Digital self-service capabilities via the CONNECT platform

The company offered digital tools to streamline transactions. CONNECT is positioned as the platform to transform how you rent equipment when you need it. While specific usage metrics aren't public, the platform's existence is a clear value-add for efficient customer interaction.

H&E Equipment Services, Inc. (HEES) - Canvas Business Model: Customer Relationships

You're looking at how H&E Equipment Services, Inc. (HEES) connects with its customers, which is now deeply intertwined with Herc Holdings Inc. following the acquisition closing on June 2, 2025.

Dedicated direct sales force for large and national accounts

The Sales of New Equipment segment specifically utilizes a professional sales force to handle transactions. Prior to the merger, H&E Equipment Services used its infrastructure to effectively service multi-regional and national accounts. Post-integration in Q3 2025, the combined entity noted that national accounts delivered another strong quarter. As of December 31, 2022, H&E had an aggregate of 301 salespeople in its sales force.

Localized, high-touch service at the branch level

The strategy relies heavily on its physical presence to service local and regional customers closely. As of the Q1 2025 report, H&E operated 160 branch locations across 31 states in the U.S. The company continued this strategy by opening four new branches in Q1 2025, despite the merger activity. The combined Herc/HEES entity aims for a network spanning 400+ branches.

Digital self-service via the CONNECT platform for reservations and payments

The CONNECT platform was designed as the easiest way to rent equipment online. Following the merger, the full IT integration was completed in Q3 2025, migrating all acquired branches onto Herc\'s systems. The customer-facing technology is now unified under the ProControl by Herc RentalsTM platform. This unified dashboard spans CRM and logistics, helping to streamline customer interactions.

Account management focused on long-term customer retention

H&E Equipment Services historically focused on building long-term relationships by offering tailored solutions. The company maintains complementary Parts and Services segments, which help maintain the rental fleet in excellent condition, supporting the quality of service offered to customers. The merger is expected to enhance operating resiliency and broaden market reach, which supports long-term customer relationships.

Transactional relationships for short-term, small rentals

The core business remains equipment rentals, offering customers flexibility without large capital investments, which naturally supports transactional, short-term needs. The original equipment cost of the rental fleet as of March 31, 2025, was approximately $2.9 billion. In Q1 2025, total equipment rental revenues were $274.0 million.

Here's a quick look at the scale of the operation relevant to customer touchpoints as of early to mid-2025:

The integration efforts, including migrating all acquired branches onto Herc\'s systems, are a major focus for streamlining customer interactions across the expanded footprint. The company is also planning to consolidate some general rental branches and repurpose others into stand-alone specialty equipment locations over the next six months.

H&E Equipment Services, Inc. (HEES) - Canvas Business Model: Channels

You're looking at how H&E Equipment Services, Inc. gets its equipment and services in front of the customer, which is a mix of physical presence and digital tools. Honestly, for a heavy equipment player, the brick-and-mortar footprint is still king, but the digital layer is getting more important.

The backbone of the physical channel is the extensive branch network. As of the first quarter of 2025, H&E Equipment Services operated 160 branch locations spanning 31 states across high-growth U.S. geographies. This network supports both rental transactions and equipment sales. To be fair, the company was still expanding this footprint, having opened four new branches in Q1 2025 alone. This physical density helps them compete on availability and rapid deployment.

Direct customer engagement relies heavily on the sales force. While I don't have the exact headcount for the direct sales team, the company had 2,431 total employees as of 2025, many of whom are dedicated to servicing the four core revenue streams: rentals, sales of rental equipment, new equipment sales, and parts/service. The Sales of New Equipment segment, for instance, explicitly sells equipment through a professional sales force. This team is crucial for on-site relationships and closing larger, project-based deals.

The digital channel centers on the CONNECT platform. This isn't just a static website; it's a functional portal allowing customers to manage their entire rental lifecycle online. You can reserve equipment, submit service requests, take items off-rent, and view telematics data 24/7. The platform offers customized reports and handles online billing and payments, which definitely streamlines the administrative side for the customer.

The monetization of the fleet, which had an original equipment cost (OEC) of roughly $2.9 billion as of Q1 2025, flows through several channels. The table below breaks down the revenue contribution from these primary sales and rental channels based on the standalone Q1 2025 results:

The used equipment channel, represented by the Sales of Rental Equipment segment, saw a steep drop in Q1 2025 revenue to $23.9 million, down 50.3% from the prior year. Post-merger, the combined entity is planning a significant offloading of aged equipment, targeting $1.1 billion to $1.2 billion in original-equipment-cost disposals for the full year 2025, which suggests a major push through wholesale or auction channels later in the year.

For logistics beyond the immediate branch service area, H&E Equipment Services relies on external support. The channel structure includes:

• Physical branch network of 160 locations across 31 states.
• Direct sales team supporting the Sales of New Equipment segment.
• The CONNECT platform for digital reservations and account management.
• Third-party freight and delivery services for equipment transport to job sites.
• Used equipment channels, evidenced by the $23.9 million in Q1 2025 sales of rental equipment.

The overall channel strategy is clearly anchored by physical density, supplemented by digital efficiency tools, and supported by the monetization of the fleet through direct sales and used equipment disposition.

H&E Equipment Services, Inc. (HEES) - Canvas Business Model: Customer Segments

H&E Equipment Services, Inc. historically served a diverse base of approximately 43,100 customers (pre-acquisition). Following the merger completion on June 2, 2025, the customer base is now integrated into Herc Holdings Inc., which reports a diversified customer mix across its operations.

The business generates revenue across four primary segments, which directly correlate to the types of customers served:

The largest customer group, historically driven by the equipment rentals segment, includes non-residential construction contractors. This segment, along with industrial and manufacturing companies, forms the core demand base for heavy equipment services. The infrastructure focus is supported by projects related to infrastructure and public utility projects, which are projected to see growth through 2028.

Further diversification comes from commercial companies and municipalities, which fall under the commercial facilities category in the combined entity's reporting. The company's operational scale, which supports these segments, includes:

• 160 branch locations across 31 states in the U.S. as of early 2025.
• A rental fleet size of 63,014 units based on original equipment cost.
• The total original acquisition cost of the rental fleet was approximately $2.9 billion as of the first quarter of 2025.

The post-merger customer base also includes an other sectors category accounting for 7% of revenue streams.

H&E Equipment Services, Inc. (HEES) - Canvas Business Model: Cost Structure

You're looking at the core costs H&E Equipment Services, Inc. (HEES) faced as it navigated the merger with Herc Rentals in 2025. The cost structure is heavily weighted toward owning and maintaining that massive fleet of equipment.

High capital expenditure for fleet renewal and expansion (CapEx)

Capital spending remains a significant drain, even as the company integrates into Herc Rentals' larger structure. For H&E Equipment Services standalone, fleet investment was ongoing leading up to the merger close, which was anticipated mid-2025. Post-acquisition, Herc's guidance reflects the combined investment strategy.

• Herc Rentals' gross capital expenditures guidance for full-year 2025 was between $900 million and $1.1 billion.
• Herc Rentals' net rental equipment capital expenditures for the first nine months of 2025 totaled $529 million.
• Herc Rentals' fleet expenditures in Q1 2025 were $200 million.

Depreciation expense on the $2.9 billion rental fleet

The value of the assets themselves drives a huge non-cash cost. The sheer size of the fleet means depreciation is a major component of the cost of revenue, even if the specific expense amount isn't isolated here. You need to keep an eye on utilization to offset this fixed cost.

The original equipment cost of the H&E Rentals fleet as of March 31, 2025, stood at approximately $2.9 billion, which was an increase of $108.1 million, or 3.8%, compared to the end of Q1 2024. The average age of the fleet at that time was 43.2 months.

Selling, General, and Administrative (SG&A) expenses, which were $111.6 million in Q1 2025

SG&A reflects the overhead of running the branch network and corporate functions. Merger activity and branch expansion clearly impacted this line item in early 2025.

The increase in SG&A as a percentage of revenue in Q1 2025, up to 34.9% from 30.8% in Q1 2024, was partly due to approximately $7.7 million in expenses tied to branches opened or acquired during or after Q1 2024.

Personnel costs for technicians and sales staff

Personnel is a core driver within SG&A and service costs. While specific 2025 personnel costs aren't broken out, the structure relies on a skilled workforce to maintain that fleet.

• As of December 31, 2022, the workforce included approximately 553 service technicians.
• As of December 31, 2022, the sales force aggregated 301 salespeople.

Interest expense on debt, now integrated into Herc's larger structure

Debt servicing costs are a direct financial cost. H&E's standalone interest expense decreased year-over-year in Q1 2025, but the overall debt load for the combined entity is substantially higher following the acquisition.

• H&E Equipment Services' interest expense in Q1 2025 was $16.0 million.
• H&E Equipment Services' interest expense in Q1 2024 was $18.4 million.
• Herc Rentals' net debt at the end of the nine months ending September 30, 2025, was $8.2 billion, more than doubling due to the H&E acquisition.

Finance: draft 13-week cash view by Friday.

H&E Equipment Services, Inc. (HEES) - Canvas Business Model: Revenue Streams

You're looking at the hard numbers for H&E Equipment Services, Inc.'s revenue generation as of late 2025. Here's the quick math on where the money came from in the first quarter of 2025, which sets the stage for the Trailing Twelve Months (TTM) view.

The total revenue reported for the first quarter ending March 31, 2025, was $319.5 million. This figure reflects a 14.0% decline compared to the same period in 2024.

The primary revenue drivers for H&E Equipment Services, Inc. are detailed below, showing the contribution of each segment for Q1 2025:

The equipment rental revenue, the core of the business, stood at $274.0 million for Q1 2025, representing a 7.2% decrease year-over-year. Sales of used rental equipment saw a significant drop, coming in at $23.9 million. Sales of new equipment contributed $7.4 million in the quarter, down 28.7% from the prior year.

Looking at the broader picture, the Trailing Twelve Months (TTM) revenue as of late 2025 was approximately $1.46 Billion USD. This TTM figure represents a -3.52% change year-over-year.

You can see the breakdown of the Q1 2025 revenue components here:

• Equipment Rental Revenue: $274.0 million
• Sales of Used Rental Equipment: $23.9 million
• Sales of New Equipment: $7.4 million
• Parts, Service, and Other Revenues: $14.2 million (Derived)

Also, note the rental fleet metrics from that quarter; the average time utilization was 60.3%, and rental rates declined 2.0% compared to Q1 2024. Finance: draft 13-week cash view by Friday.