Data Center Market Expansion and Product Innovation
Gates has significantly increased its involvement in the data center cooling market, with program involvement and revenue from this segment growing rapidly from a small base.
The company introduced new products such as the universal quick disconnect fitting and scaled up its electric pump portfolio to meet higher flow requirements.
Negotiations are underway with a major hyperscaler for 2026 supply, indicating a strategic focus on high-growth data center opportunities.
The momentum in product development and commercial coverage in data centers is expected to lead to a revenue inflection over the next few years.
Management sees the liquid cooling market expansion as a key secular growth opportunity, with potential revenues exceeding $150 million in the near term.
The company is actively building relationships with infrastructure providers and engineering firms, aiming for additional design wins.
Successful Integration of H&E Acquisition and Synergy Realization
Herc completed the acquisition of H&E Equipment Services in Q2 2025, with integration activities focused on financial, operational, and cultural assumptions.
Integration management office established to ensure minimal disruption and focus on key talent retention.
Early signs of synergy include fleet sharing, cross-referrals, and expanded project pipeline, with examples of new mega project support and joint town halls.
Technology integration is progressing with phased system cutovers planned through September, aiming for 45% of acquired locations on Herc's platform by then.
Dafinchi
