Well, I think we can get started. So I'm Kyle Menges. I'm the US machinery analyst at Citi. I'm joined by the Herc team. I've got Larry Silber here, CEO, and then Mark Humphrey, CFO. Larry, I think you had some prepared remarks you wanted to start with?
Yeah, good.
Get in the Q&A.
Sure. Thank you, Kyle. Thanks for inviting us this morning. And good morning, everybody, and thanks for joining us. Glad to have the opportunity to speak to you. Like to first start with our safe harbor statement and remind everybody that everything that we're here is talking about, you know, adjusted numbers or non-GAAP financial numbers as we discuss through the morning. So a little bit about Herc, for those that don't know. We're a company built around mission, vision, value, with a purpose to be a full supplier and support our customers and communities in everything that they do. We're one of the leading full-line equipment rental suppliers in North America, and we've been on a growth trajectory over the last 10 years since we went public.
That's been, you know, a CAGR of nearly 10% CAGR growth over that period of time. We've been servicing our customers. We've been in business for over 60 years, servicing a very broad and diverse customer base. No one customer represents more than 3% of our business, and no vertical is more than 10% of our business. We have approximately 9,600 employees today, post the acquisition of H&E Equipment last June, and we have over 600 locations across North America. We're in 46 states and the 5 western Canadian provinces. And we participate in a market that's approaching $90 billion of market opportunity on an annual basis. A little about us in terms of how we go and what's important to us.
You know, we operate from a set of core strengths that differentiates us in a highly fragmented market and industry. Together, the top three players have less than 40% of this highly fragmented market that I just mentioned. We've been generating above-market growth through investments in fleet, M&A, and greenfield locations over the last 10 years, and really are in a position to accelerate that growth with the acquisition that we completed with H&E. That added about 30% size to our capability. We're disciplined stewards of capital in everything that we do, and we really focus on, you know, developing scale where it matters, following secular trends, infrastructure spending, and the industrial mega-project opportunities that are with us.
We've made tremendous investments in technology, and we believe we have industry-leading technology and capabilities, and we continue to invest in that on an annual basis. We're executing on a, you know, multifaceted diversification strategy to improve our operating results and make sure that we have resiliency, even in uncertain times, by focusing on top metropolitan markets that have large-scale populations that tend to be more resilient during economic downturns. And finally, you know, we've been a market consolidator. H&E acquisition that we completed in June was our 54th acquisition in the last five years. It was certainly our largest. We, we added, with that acquisition, 162 locations to our already 460 that we've had. You can see they're represented on this slide by the blue dots.
We believe that this was an outstanding opportunity to increase our network, our branch network, our customer reach. They brought us 45,000 new customers that we did not participate in a big way in, and certainly the efficiencies that come with the economies of scale. The transaction probably accelerated our growth by four to five years, whereas we've been doing smaller acquisitions over the last five years. And this essentially sort of takes up a four to five-year process along that way. From a synergy standpoint, we're successfully integrated, completely integrated this. The IT stack was completely done within a 90-day period. It's kind of a record for this type of a deal. We've expanded our field operating structure to support this business.
We've completed an extensive sales territory, organizational realignment exercise, and we've completed the fleet optimization plan. At the same time, the branch network optimization will be complete by the end of this quarter, with adding about 50 new specialty locations. That'll increase our specialty capability and branch count by about 25%, and we'll be ready to go for the beginning of the season, which begins, you know, in early April. You know, from a standpoint of what's our strategy, our strategy is really focused around growing the core branch network scale density in the top 100 MSAs, is really how we've been focused. A broad fleet mix, including expanding the specialty gear. We're currently at about 18% of our fleet is specialty.
We were higher, but that got diluted a little bit with H&E because they were not in the specialty arena, and that is where the big synergy opportunity is for us.... We continue to elevate and expand and invest in technology. As I mentioned earlier, our technology stack is at the forefront of the industry. We believe we are a leader, if not the leader in technology in the industry, and we'll continue to focus around capital and allocating that capital in a very disciplined manner, making sure that we're focused on free cash flow and paying down debt and deleveraging over the next couple of years. Mark will be glad to talk to that.
Finally, you know, we want to make sure that we execute at the highest levels, provide our customers with the service level that they expect, particularly on these large mega projects, mission-critical jobs that we need to perform, and we are performing well so that we get invited to future opportunities. And with that, Kyle, I'll turn it over to you.
Awesome. Thanks, Larry. That's, that was a great overview. So maybe, maybe taking a step back, thinking about just your time since you've, you came into the business a decade ago when it spun from Hertz. Maybe just talk a little bit about what you've done, you know, since the spin, with the portfolio, the strategy, your infrastructure, and then, I know you started to do some M&A, and that's really led you to now acquiring H&E. Maybe just talk a little bit about that evolution and the transformation that you've driven over the last decade at Hertz.
Yeah, thanks. You're making me feel old. I've joined the company back in 2015, as Kyle said, when it was still part of Hertz. And then we spent about a year getting ready to separate the car rental business from the equipment rental business. We completed that July 1st, 2016. So we're coming up on our 10th anniversary as an independent public company. And we've really, you know, spent the first five years of that evolution in fixing the company. It was a neglected business. It was a strong business. It was the first national account recognized equipment rental supplier with national footprint. Actually, an international footprint. And we spent the first five years cleaning that up, exiting the European locations, the Saudi locations, the China locations, the Latin America locations.
There were locations all over the world, and we just began to focus on North America only. And then once we got into it, we even exited Eastern Canada, everything that was non-English speaking, going east, and really got down to a strategy of we want to be in first, we started with the top 50 MSAs, and then we expanded that in the last couple of years once we were ready to top 100. But we had to rebuild the company. We had to invest in technology. We had to clean up the fleet, invest in fleet, develop a fleet strategy for the business, develop a, you know, a program to educate and train people, bring people in from the ground floor level and build them up and really be ready to grow. So we've had some...
As I mentioned before, we've grown at over 10% CAGR over the last 10 years on revenue. EBITDA has grown nearly close to 12% CAGR over that period of time, and we've had about, you know, 800-1,000 basis points of margin expansion over that period. We implemented a specialty business, which Hertz did not have when we spun. We began to build a specialty platform, beginning with HVAC, moving into pumps, moving into other types of technologies like trench shoring, and added more and more capabilities to build that specialty portfolio, which improves the margin profile of the total business. Then locations. Once we pared out all of the international and I would call non-strategic locations, we started with about 300 locations. We began first to add greenfields before we did M&A.
And then, as I mentioned, we've completed 54 M&A transactions, bringing us to, you know, over 600 locations today. Our priorities now are, you know, once the heavy lifting on the integration is complete, we now want to get that traction as we go into the second quarter of this year and build on, you know, the new expanded capability that we have, and then also make sure that our leverage is focused on to bring that down, so that at some point, we can get back into that game of looking to do more M&A and do more greenfield openings.
Awesome. That's a really helpful overview of the last decade. Maybe-
It wasn't that easy.
Yeah, you made it sound so easy, right? I'd love to hear from both of you guys, just on the H&E acquisition and in your view, you know, maybe talk about the merits of the deal and then also what surprised you the most relative to your initial expectations since you closed.
Yeah. So look, from a merit standpoint, you know, we were number three, H&E was number four . You know, was the largest, what I would call, big regional player that was left at the time. And I knew that company for many years. As you know, they, my time with Ingersoll Rand, for 30 years, they were a dealer of mine. So I knew the company, I knew the family, I knew their business. We competed against them, but they were really competing at a different level, more focused on what I'll call regional and large regional and smaller accounts and local accounts. They did some participation at the, at the bigger account level, but there wasn't really any overlap.
We knew they didn't have a specialty business, so when we looked at the deal, we saw 165 great locations that, you know, were all purpose-built by them. And they tend to be larger because they were a dealer for big equipment. They were a Komatsu dealer, Grove Crane dealer, so they handled a lot bigger equipment. So all of these were large locations with great capability. So we looked at that. We looked at the customer base, 45,000 customers. We looked at there was a tremendous opportunity for synergy with specialty and with an expanded general rental business, and we said, "Hey, this is the right deal for us. We can accelerate our growth by four to five years in one fell swoop." Yeah, it'll be challenging, but we knew we were up for the challenge.
We had 53 prior acquisitions that we had gone through that had prepared us for, you know, technology, cut over, training, education, getting people onboarded, dealing with those HR issues, knowing how to get everybody settled down, and we pulled the trigger. We thought it was the right thing for us at the right time.
Mark, anything to add that Larry missed or just-
No, I think, I think Larry nailed that one.
Yeah, I would agree. Yeah. You maybe since the deal is closed, you've had some dyssynergies-
Right.
that have maybe come a little bit sooner than-
Yeah
anticipated. Maybe talk about that, and then transitioning to just how things are going now on the synergy front as well, which is, I mean, going better than initial expectations.
Yeah. I mean, I think that, you know, from the dyssynergy perspective, the way that we had, you know, sort of modeled this is that we would have sort of 10%-ish customer degradation over a couple of year period. Just having, you know, tough pricing conversations and/or just fit. Somebody just didn't want to, to continue, you know, doing business with a, a large national player. That was sort of the expectation, and I think that, you know, what we, what we received was sort of a 15% dyssynergy, effectively, the day that we closed. So this dyssynergy was very, very front-sided, which, you know, you know, we sprung into action. We sort of, you know, we right-sized the, the fleet, by market in the back half of 2025.
That better positions us, you know, as we enter into 2026. You know, I think on the, on the synergy side of this, you know, we invested a little over $100 million of synergy fleet in the back half of 2025, and, you know, with that investment and being able to sort of rely on our larger GenR ent portfolio, you know, we did about $40 million of rev synergy in the back six months. Anticipating an incremental $100 million-$120 million of rev synergies inside of the 2026 guide.
You know, I think that next layer of synergy fleet injection will come, you know, as we work our way out of the shoulder period and getting back into Q2 and Q3, to sort of fuel that next round of synergy fleet after we've ingested, you know, this first round that we put in in the back half of 2025.
Got it. And, maybe on the cost synergies as well, just talk about that.
Thank you. Yeah, so from the cost synergy perspective, we had essentially modeled this, that we would have effectively the $125 million of cost synergies in the first two years, about 60% by the end of year one. And the reality is that we'll have the entirety of that $125 million in EBITDA in 2026. So, you know, the cost synergy side of this probably went, you know, better than... certainly better than modeled and maybe better than we had originally thought. But, yeah, good story. Certainly a good story on the cost side.
Yeah. And, I understand going into the deal, the modeling is not perfect. So, on the cost synergy side, any cost buckets where you're seeing maybe more synergy or less than anticipated?
you know, I mean, there's always puts and takes in that.
Yeah.
But I think when I sort of look at how the overall synergy components broke out, you know, it was about 50/50 from a G&A perspective to an operational perspective. And so buckets may have changed a little bit, but inside of the broader G&A category or the DOE category, it sort of fit back in there rather nicely.
Yeah. And, maybe you guys can both talk about, just now that you've had H&E for a little while, just how you're getting the employee base situated up to speed, getting the IT infrastructure in place as well, getting them on the ERP system, I guess, pricing system. Maybe talk about that a little bit too.
Yeah. Well, you know, obviously there was some any kind of a major transaction such as this, there's a lot of disruption, a lot of consternation on the part of the acquired company. And there was a fair amount of disruption in the sales organization early on. A lot of that, quite frankly, happened at the first announcement when the company was being sold to one of our peers, and then and they had a fair amount of loss of some talent in that organization. We came on, and that loss slowed down, and in fact, we've been able to recapture some of those folks that left over the last couple of months and brought them back on board. Not all of them, but, you know, a good number of folks.
But we, you know, we immediately, you know, we couldn't talk to the organization, obviously, until we closed. So early June, as soon as we, as soon as we closed, we were in there. We had everybody onboarded onto our payroll system, our health and benefits system, indoctrinated into our safety culture and system within the first couple of days that we, you know, we owned the company. So all of that happened, you know, smoothly and seamlessly, got everybody on board. And then we began to deal with, certainly first with the, with the sales organization, getting them understanding what their key issues were. Most salespeople are concerned about: What's my territory? What truck am I gonna drive? What do I have to wear? What do I have to do?
What am I gonna have to learn from equipment, from sales force automation, from technology standpoint, and ultimately, you know, how am I gonna be paid? And so we got all of that settled down in the first 30 days. We got, you know, people understanding that things were gonna change, but it was gonna change for the better. And then we began an extensive training program, getting people trained on our technology stack, our tools, our pricing tools, particularly the salespeople, understanding that we have a technology pricing tool that's proprietary in our industry. Get them familiar with that and understanding how that can actually help them make money and help them be better at what they do. And then understanding our whole portfolio, which is sort of an outtake of Salesforce, and how that helps them manage their territory.
So we've gone through all that training, and then we began product training, introducing them to the broader amount of general rental gear and the broader amount of specialty gear, which we're not requiring them to learn per se. We want them to understand what that is, but more importantly, learn who their counterpart is on the specialty side, so they can bring them in and be the subject matter experts, the SMEs, to help them close deals. And we've seen, you know, obviously, as we went through the fourth quarter, we saw a fair amount of synergy sales already on the specialty product, and that continues to grow and develop. So, next week, we're gonna have this whole team together.
We're gonna have 1,750 sales and operators together at our annual, what we call our Pro Expo, which will further solidify their connectivity and relationship with the company, help them build those relationships with the specialty people and enable them to go to market as we come out of, you know, March and into our peak season, so.
Yeah, good to hear. And, I heard that you wanted to go out and visit all the H&E branches. Are you close yet?
Well, I've visited 87 locations-
Okay
... of the 162 that we talked about. We're gonna get through this next couple of weeks, you know, of earnings and, and investor meetings like this and our own big meeting. And then, Aaron and I will be back on the road, visiting all of these locations, and we're gonna try to get to all 162 locations before the end of 2026. So-
Awesome.
That's my, that's my target.
You're a busy man.
Yeah. You know, keeping the airlines busy.
Maybe we can talk a little more about the revenue synergies. So you talked about $40 million last year, $100 million-$120 million this year. Sounds like it's mostly specialty, but, you know, what else is within that revenue synergy number?
Yeah, it's actually, you know, the broader Gen Rent fleet that we can offer into that customer base is a huge component of that.
Okay.
You know, it's if you thought about the $100 million, it's kind of 50/50-ish from a specialty to GenRent. And you know, I think that you know, it Larry was talking about this, but from a sales perspective, right? It's just gaining the comfort. We don't necessarily need them to have the wisdom to be able to you know sell all of these products. It's really about being comfortable attaching yourself to an SME, a subject matter expert, to walk into your customer that you've had for a long period of time and sell these additional products into them. And so you know as we sort of walked our way through the fourth quarter, you know the third quarter was this quarter of just adjustment for everybody, technologies and new tools and new apps.
Really, the fourth quarter was really the first time that the entirety of the workforce had had the opportunity to begin to experience these tools and put them into practice. And so, you know, I think as we sort of walk forward into 2026, this will continue to sort of expand and become more experiential for them, where they can gain the confidence that, and the trust that, "Yep, I'm gonna bring someone with me. They're gonna sell as well as I sell." And we'll continue to gain traction, you know, out of this shoulder period, Q1, really start ramping into the back half of Q2 and into Season 3 and 4.
Yeah. Awesome. I'll pause and see if there's any questions from the audience. You got one up front?
Thanks. You guys have done a lot of work over the last, over the last several years, decade, for sure. My question was just on the specialty business. You described it, but maybe in a little bit more detail, and then you mentioned in the H&E acquisition, they didn't really have a specialty business. And it sounds like that's better margin. Have you described the difference in the margin profile between specialty and the regular businesses? And then how big can that become, I guess, once you get H&E ramped up there?
Yeah, great question. I, I think that, you know, sort of the way we look at, and there's several verticals inside of, you know, our specialty offerings. But on whole, I would tell you that sort of the dollar utilization runs 800-1,000 basis points better. And generally speaking, that makes its way down through your PNL, even from a cost recovery side, from a-- so your margins generally reflect that as well. You know, I think that, you know, as we sit here today, I think Larry mentioned it, we're down, our specialty gear to our overall fleet is about 18% today. I think as we sort of walk through this sort of initial 3-year journey, you know, we would like to bring that specialty percentage back up into the early 20s, you know, 22%-23%.
which is essentially where we had left off prior to the H&E acquisition, and then our goal from there is to continue to sort of round out those specialty offerings. There may be additional specialty offerings, you know, in three years, five years time, but, you know, at this point in time, focusing in on the areas that we are expert in and driving that overall specialty to Gen Rent percentage into that 25%-30% range over time.
Let me maybe just clarify a little further on specialty. You got to think about specialty, not necessarily as just more gear. You got to really think about specialty as a solution that we're providing, something that's either engineered or near engineered, that provides, you know, a methodology to bring a solution to the customer that either they may not know about or not know how to complete, but we get really, we really get paid for that expertise, where really that the additional margin comes from, is providing the expertise to the solution.
Any other questions? All right, good question, though. I can continue. Maybe, maybe we can talk a little bit about mega projects. I would think with this added capacity and, and some of the revenue synergy you're seeing, you could start to win more share on the mega projects. I think your target's 10%-15%. I want to say you said on the earnings call, you were somewhere in the middle of that today. Just maybe talk a little bit about mega projects and what you're seeing as far as just how competitive, how competitive it is bidding on those. How do you win the mega projects, opportunity to gain more share as well on those mega projects?
Yeah, absolutely. H&E does give us more scale, more density, and more capability with fleet, with people, resources, you know, service techs, branches in those markets. But when we talk about mega projects and our 10%-15% share, yeah, we're in about the midpoint of the higher end of that in terms of where we wanna go, but we don't really count a mega project as our participation unless we're named as a primary or secondary on that project. You know, you can... and H&E, as a case in point, H&E, if you remember their earnings calls prior to the acquisition, they would say they were participating in mega projects.
Well, they were only participating through maybe a sub that brought a piece or two equipment onto the site, and they termed that as participation, but they weren't primary or secondary on any once we got in there and were able to, you know, take a look at the business. So, we don't say we're on a mega project until we're actually named by the general as a primary or secondary, and that's where we are. We expect that over the next, you know, year or two, we'll be able to move to the top end of that range. Not necessarily because of H&E, but certainly gives us the capability to do that, but because of the relationships that we've developed and the performance that we've had over that period of time. And what helps you win a mega project?
You know, it starts with safety. You're not even invited to the party unless you have a safety record where they can responsibly bring you on to one of these sites, knowing that you're gonna be committed to safety standards that are, you know, better than industry standards and certainly in line with what they wanna do for their customer and for their own business. So safety starts there. And then you know, it could start with specialty gear that you go on, or it could start with general rental gear, and depending upon where that starts, sort of determines where your margin profile is gonna be, either at the beginning or over a period. But over a period of time, and maybe Mark can talk to a little more, the margin profile of a mega project emulates what we do elsewhere.
So it's, you know, no better, no worse. It just depends on where you are in sort of the spectrum of how you get engaged on these mega projects. But we're in a broad, diverse universe where, you know, everything from LNG plants, to data centers, to power plants, to small nuclear reactors, to stadiums, to big infrastructure projects, you know, we're participating in it all. And we feel really good about our position and our relationships that are growing with these larger contractors doing these and them inviting us to the next-
Yeah
... project that they have.
Awesome. So you only count it if you're the primary or secondary. Hopefully, your competitors are counting it the same. I don't, I don't know if that's the case, but, yeah, I mean, Mark, it would be helpful, I think, I get the common question from investors is that margin profile-
Yeah
-on mega projects. So maybe you can elaborate on that a little bit. Is there any sort of, you know, inefficiency to, at the start, like in year one, and then maybe you make that back in year two, year three? Just how to think about that.
Yeah, I wouldn't necessarily call it inefficiency.
Yeah.
I think that, you know, when you think about, you know, being able to layer into one project, you know, or two or three size of gear, right? You're talking, you know, $20 million, $40 million, $60 million of gear onto a single project. You know, you do get economies of scale, from the very beginning of that, right? Your time utilization, less touches, you know, your on-rent, is probably far in excess of what your general rental fleet looks like. However, if, you know, and to Larry's point, if that starts with all GenRent gear, then yeah, your margin probably does lag that of your consolidated, margin profile on the outset.
But generally, what happens in this, you know, primary or secondary position is you then bring in additional solutions and gear, specialty side, and so sort of over time, the margin looks very, very similar to that of your overall business. And so I don't see it, you know, we don't have any data that shows, you know, you're, you know, 10 basis points off or 100 basis points off. One way or the other, it sort of performs like you would expect it to perform over time.
Got it. That's helpful. Maybe we can talk a little bit about, from your guys' perspective, how the industry's evolved and gotten more disciplined over time. Seems like there's been some shift in that over the last decade, and just what's your confidence level that we can maintain a positive rate environment, maybe irrespective of macro conditions?
Yeah. You know, look, this industry has certainly, in the last 10 years, grown to where, you know, certainly the big three have professional management in place, professional systems, IT capability, ERP systems, pricing systems that we all use, all proprietary. Each company has their own, management capability. Telematics has added to be able to understand, you know, fleet productivity, fleet maintenance, predictive maintenance, understanding how you manage and control that. So, you know, that level of sophistication in now what used to be a mom-and-pop industry, is now a professionally managed industry with professionals that have experience in the business and, you know, treat it like it's supposed to be like any, you know, what I would call mature, developed, industry is. So, you know, the the industry is disciplined.
You know, look, there's always pockets where you're someone's gonna, you know, have an opportunity maybe to disrupt or not, but I don't think it impacts the general nature of, you know, the majors that are playing in this, in this field today. We all know we have big organizations to run. Everybody wants a raise every year, so you gotta make sure you're growing that to cover your inflationary pressures. You have, you know, cost of facilities go up every year, you know, with lease renewals. You know, for those of you that live in areas where energy is expensive, you know, cost of energy is going up, the cost of fuel is going up.
So, we all have to continue to try to grow margin, and you grow margin by raising prices, to cover those costs and provide the same acceptable rate of return to your shareholders, right?
Yeah.
We all know that.
Yeah. And maybe you guys could talk a little bit about your tech platform as well, and how you think it stacks up, maybe both against some of the large-scale players, but also some of the smaller players, and just how it's evolved over time.
Yeah. From a tech standpoint, we, as I mentioned, we believe we are a leader, if not the leader, in terms of the technology stack. You know, look, all of the big three have technology capability. We all operate on basically the same initial platform, which was something called RentalMan, but then we've all taken that and developed it on our own. Last year alone, we developed 300 new features to our technology stack to enable greater use of the, of the, you know, what we have from a telematics standpoint, to give our customers greater application, greater use, and greater capability. So we continue to invest in that. It's a key feature. You know, last year alone, we increased our online ordering by over 50%, from, you know, what it was the prior year, and we continue to invest in...
You know, guys your age don't wanna really talk to people. They wanna be able to get immediate feedback from their cell phone. Everything we have can be done on a handheld today. You don't need to be on a connected device. It all has Bluetooth capability. We have several patents that are proprietary patents in our technology stack, and we view that as a key enabler, certainly for us. And, you know, the other big three have similar but different capabilities, but I think, you know, the industry is pretty well technology-enabled and is gonna continue to invest there.
Yeah. I can open it up one more time if there's any questions from the audience. We got one over here.
...
Yeah.
We've been hearing from other industrial companies that the tone shift is kind of, in some of the industrial markets, is kind of picking up, so anything filtering through to the local markets?
Yeah. We would say the local markets are, you know, moderated or rooted. Nothing positive, but nothing negative either. In areas where there is mega project activity, the local markets seem to be a little more vibrant and a little more active because the mega projects, you know, bring in people, and then they have to bring in additional capabilities. They have to provide hotels, they have to provide strip malls. As they build out permanent workforces, they need to build communities, they need to build schools and hospitals and things to support that. But outside of that, and particularly what I'll call the western third of the country, you know, Rocky Mountains going west, there really aren't a lot of mega project activity. So that's where the local markets are probably most impacted and most muted.
But, we're not seeing any, you know, real big green shoots anywhere other than around where mega project activity is. And, you know, I think it's gonna take some more rounds of interest rate cuts to get those developers to want to invest money, to kick that off, and it'll have to flow back down through the 10-year treasuries in order to do that. But, even when that happens, we're probably 6-9 months away before shovels can really go in the ground. 'Cause once they get comfortable, then they have to go get permits, then they have to go get, you know, contractors and people and materials.
So it's, you know, best case, we might see it late in the back half of the year, but more likely not until 2027, as that being, having an impact on the general local market activity. Hope that helps.
Any other questions? All right, maybe we can just wrap up quickly, talking about the 2026 guidance and just on the integration work. You're planning to continue into the first half of the year.
Yeah.
And some noise lapping the acquisition, but maybe how will things look as you move into the second half of the year and, you know, on margin, fleet metrics, things like that?
Yeah, no, it kind of ties into the last question and answer, really. I think that the sort of the building blocks of the plan was sort of based on a sort of muted, not headwind, not tailwind, sort of local market environment inside of 2026. I think when we look inward, you know, we've got, you know, we exited the year on a pro forma negative growth rate. And so, you know, as we work our way through Q1 with all of the fleet work and the activities that took place in the back six months, we feel like we've positioned ourselves to sort of begin to lap those metrics as we work our way out of Q1. Q1 will be down sort of year-over-year on a pro forma basis.
And then as you sort of work your way and begin to sort of feel that springtime seasonal aspect at the back into Q2 and into Q3, that's when we'll inject, you know, our, our growth CapEx into this and begin to turn that corner and then actually experience growth. And then all of the metrics sort of sequentially and year-on-year should be improved as we walk our way through the year.
Yeah. Awesome. Well, we can wrap it up there. Thanks for joining us today, guys.
Thanks for having us. Thank you, everybody, for joining us.
Thank you. Thank you.