Financial Data and Key Metrics Changes - Hertz reported total revenues of $2.2 billion for the quarter, with adjusted corporate EBITDA turning positive at $1 million, a significant improvement from a loss of $460 million in the prior year [28][29]. - The company achieved a depreciation per unit (DPU) of $251, well below the North Star target of $300, marking a meaningful improvement both sequentially and year over year [30][31]. - Vehicle utilization reached 83%, reflecting a 300 basis point improvement year over year, indicating effective fleet deployment [29]. Business Line Data and Key Metrics Changes - The rental revenue was down 7% due to a smaller fleet size, which was down 6% year over year [20][28]. - Retail vehicle sales were the highest in five years, driven by a strong performance in the second quarter [8][13]. - The rent-to-buy program showed strong momentum, contributing to customer satisfaction and volume growth [14]. Market Data and Key Metrics Changes - Domestic air travel returned to positive year-over-year growth in July, indicating a recovery in travel demand [24]. - Forward bookings for U.S. leisure rentals are tracking ahead of planned fleet capacity, suggesting strengthening demand [25][26]. - The overall pricing environment was challenging, with market pricing down mid to high single digits, but improvements were noted in August [24][90]. Company Strategy and Development Direction - Hertz is focused on a multi-year transformation strategy called "Back to Basics," aimed at resetting the company's foundation and driving operational excellence [6][7]. - The company is enhancing its revenue management platform through a partnership with Amadeus to modernize its pricing strategies [21][22]. - The strategy includes a disciplined approach to fleet management, revenue optimization, and rigorous cost management to achieve long-term profitability [9][16]. Management's Comments on Operating Environment and Future Outlook - Management expressed cautious optimism about the second half of the year, noting early signs of pricing improvement and a strengthening demand environment [34][90]. - The company anticipates maintaining a fleet size approximately 6% below 2024 levels through year-end, with flexibility to adjust based on demand signals [33]. - Management acknowledged the challenges posed by recalls but indicated that the impact was manageable due to a younger fleet and proactive operations [55][57]. Other Important Information - Hertz's liquidity at the end of June was $1.4 billion, bolstered by various transactions and a delay in litigation resolution [32]. - The company expects to achieve adjusted corporate EBITDA of $1 billion by 2027, reflecting confidence in its transformation initiatives [35]. Q&A Session Summary Question: Future of AVs and robotaxis - Management sees a significant role for Hertz in the future of autonomous vehicles (AVs) and robotaxis, emphasizing the company's operational capabilities and asset-heavy business model [42][45]. Question: Breakdown of RPD performance - RPD was down about 5%, with market pricing challenges contributing to the decline, but improvements in revenue management strategies were noted [46][49]. Question: Impact of recalls on utilization - The company experienced minimal headwinds from recalls in Q2, with expectations of a more significant impact in Q3 due to a small percentage of vehicles on recall [54][55]. Question: Contribution of retail sales to DPU - The increase in retail vehicle sales was driven by a strategic focus on optimizing the buy, hold, and sell processes, enhancing net returns from vehicle sales [58][62]. Question: Liquidity outlook for 2025 and 2026 - Hertz expects to maintain positive cash flow in the second half of 2025, with a higher liquidity balance anticipated by year-end, while also addressing upcoming debt maturities flexibly [94][99].

Q2 2025 Financial Performance - Revenue decreased by 7% year-over-year, from $2.4 billion in Q2 2024 to $2.2 billion in Q2 2025, driven by lower fleet and pricing[10] - RPU decreased by 2% year-over-year, from $1,425 in Q2 2024 to $1,400 in Q2 2025, but was flat excluding fleet mix impact[10] - RPD decreased by 5% year-over-year, from $58.80 in Q2 2024 to $55.65 in Q2 2025, driven by market pricing and fleet mix shift[10] - DPU decreased significantly by 58% year-over-year, from $595 in Q2 2024 to $251 in Q2 2025, exceeding the North Star target by 16%[10] - Adjusted Corporate EBITDA improved from $(460) million in Q2 2024 to $1 million in Q2 2025, driven by lower vehicle depreciation and DOE[10] - Adjusted Free Cash Flow increased from $(553) million in Q2 2024 to $327 million in Q2 2025, driven by profitability improvement and increased vehicle funding advance rates[10] Operational Metrics - Transaction Days decreased by 3% year-over-year, from 39.7 million in Q2 2024 to 38.7 million in Q2 2025, reflecting strategic fleet reduction[10] - Average Fleet decreased by 6% year-over-year, from 577,000 in Q2 2024 to 543,000 in Q2 2025, aligning fleet size with demand[10] - Vehicle Utilization improved by 300 bps year-over-year, from 80% in Q2 2024 to 83% in Q2 2025, driven by fleet management and improved operations[10] - DOE per Transaction Day decreased by 1% year-over-year, from $36.25 in Q2 2024 to $36.03 in Q2 2025, driven by cost discipline and productivity[10]

[Executive Summary & Highlights](index=1&type=section&id=Executive%20Summary%20%26%20Highlights) This section provides a high-level overview of the company's performance and strategic direction from the CEO, alongside key financial and operational achievements for the quarter [CEO Statement](index=1&type=section&id=CEO%20Statement) CEO Gil West stated that Hertz's transformation is taking hold, with the strategy proving effective through smarter fleet management, improved utilization, enhanced customer experience, and disciplined cost control, leading to a stronger, more resilient company - CEO Gil West highlights that the company's transformation strategy, focusing on smarter fleet management, improved utilization, enhanced customer experience, and disciplined cost control, is successfully building a stronger, more resilient Hertz[2](index=2&type=chunk) [Q2 2025 Key Highlights](index=1&type=section&id=Q2%202025%20Key%20Highlights) Hertz achieved its best quarterly results in nearly two years, driven by a ~$0.5 billion year-over-year improvement in Net Income and Adjusted Corporate EBITDA - Net income and Adjusted Corporate EBITDA both improved by approximately **$0.5 billion year-over-year**, marking the first quarter of positive Adjusted Corporate EBITDA in nearly two years, attributed to disciplined fleet management, operational efficiency, and rigorous cost management[6](index=6&type=chunk) - The "Buy Right, Hold Right, Sell Right" strategy delivered results, with Depreciation Per Unit Per Month (DPU) at **$251**, exceeding the sub-$300 target by 16%[6](index=6&type=chunk) - Vehicle Utilization reached **83%**, a 300 basis point year-over-year increase, reflecting precise fleet optimization[6](index=6&type=chunk) - Direct operating expenses (DOE) **declined 3% year-over-year**, with DOE per transaction day improving both sequentially and year-over-year due to disciplined cost control[6](index=6&type=chunk) - Global Net Promoter Score improved by **11 points year-over-year**, and the company ended the quarter with over **$1.45 billion in liquidity**[6](index=6&type=chunk) [Company Overview](index=1&type=section&id=ABOUT%20HERTZ) This section details the company's global operations, brand portfolio, and business segments [Company Description](index=1&type=section&id=Company%20Description) Hertz Global Holdings, Inc is a leading global car rental and mobility solutions provider, operating brands like Hertz, Dollar, Thrifty, and Firefly across over 11,000 locations in 160 countries - Hertz Global Holdings, Inc operates as a leading global car rental and mobility solutions provider, with brands including Hertz, Dollar, Thrifty, and Firefly across more than **11,000 locations in 160 countries**[5](index=5&type=chunk) - The company also operates Hertz Car Sales for used vehicle sales in the U.S and Hertz 24/7 car-sharing in Europe[5](index=5&type=chunk) [Summary Financial Results](index=2&type=section&id=SUMMARY%20RESULTS) This section presents the key consolidated and segmented financial results for the second quarter [Consolidated Summary](index=2&type=section&id=Consolidated%20Summary) Hertz Global reported a 7% decrease in total revenues to $2,185 million for Q2 2025, but significantly reduced its net loss by 66% to $(294) million and adjusted net loss by 76% to $(104) million Consolidated Financial Highlights | Metric | Q2 2025 ($M) | Q2 2024 ($M) | % Change | | :-------------------------------- | :----------- | :----------- | :------- | | Total revenues | 2,185 | 2,353 | (7)% | | Net income (loss) | (294) | (865) | (66)% | | Diluted earnings (loss) per share | (0.95) | (2.82) | (66)% | | Adjusted net income (loss) | (104) | (440) | (76)% | | Adjusted diluted earnings (loss) per share | (0.34) | (1.44) | (76)% | | Adjusted Corporate EBITDA | 1 | (460) | NM | | Depreciation Per Unit Per Month | 251 | 595 | (58)% | | Vehicle Utilization | 83% | 80% | 3% pts | [Americas RAC Segment Summary](index=2&type=section&id=Americas%20RAC%20Segment%20Summary) The Americas RAC segment saw a 10% decline in total revenues to $1,738 million but achieved a significant turnaround in Adjusted EBITDA, reaching $42 million from a loss of $(403) million in Q2 2024 Americas RAC Segment Highlights | Metric | Q2 2025 ($M) | Q2 2024 ($M) | % Change | | :-------------------------------- | :----------- | :----------- | :------- | | Total revenues | 1,738 | 1,928 | (10)% | | Adjusted EBITDA | 42 | (403) | NM | | Adjusted EBITDA Margin | 2% | (21)% | | | Depreciation Per Unit Per Month | 248 | 644 | (61)% | | Vehicle Utilization | 83% | 81% | 2% pts | [International RAC Segment Summary](index=2&type=section&id=International%20RAC%20Segment%20Summary) The International RAC segment reported a 5% increase in total revenues to $447 million and a positive Adjusted EBITDA of $42 million, a significant improvement from a $(6) million loss in Q2 2024 International RAC Segment Highlights | Metric | Q2 2025 ($M) | Q2 2024 ($M) | % Change | | :-------------------------------- | :----------- | :----------- | :------- | | Total revenues | 447 | 425 | 5% | | Adjusted EBITDA | 42 | (6) | NM | | Adjusted EBITDA Margin | 9% | (1)% | | | Depreciation Per Unit Per Month | 261 | 384 | (32)% | | Vehicle Utilization | 81% | 77% | 4% pts | [Forward-Looking Statements & Risk Factors](index=3&type=section&id=CAUTIONARY%20NOTE%20REGARDING%20FORWARD-LOOKING%20STATEMENTS) This section outlines the inherent uncertainties in forward-looking statements and details the various factors that could materially affect the company's performance [Cautionary Note](index=3&type=section&id=Cautionary%20Note) The report contains forward-looking statements based on management's assumptions, which are not guarantees of future performance, and the company undertakes no obligation to update these statements - Forward-looking statements are based on management's assumptions and are not guarantees of future performance, with actual results potentially differing materially due to various factors[10](index=10&type=chunk) - The company explicitly states it undertakes no obligation to publicly update or revise any forward-looking statements, except as required by law[15](index=15&type=chunk) [Important Factors Affecting Results](index=3&type=section&id=Important%20Factors%20Affecting%20Results) Key factors that could impact Hertz's actual results include fleet management, supply chain disruptions, travel demand, operational efficiency, competition, cybersecurity, and financial stability - Factors affecting results include fleet management (mix of program/non-program vehicles, residual value risk, ability to purchase/dispose of vehicles, fleet age)[12](index=12&type=chunk) - Supply chain disruptions, manufacturer recalls, and levels of travel demand (business/leisure) are significant external factors[12](index=12&type=chunk) - Operational challenges include the ability to implement business strategy, achieve cost savings, respond to technology changes, manage competition, maintain customer loyalty, and manage labor relations[12](index=12&type=chunk)[13](index=13&type=chunk) - Cybersecurity threats, data protection compliance, risks of operating internationally, tax law changes, and the availability of financing at acceptable rates are also critical[13](index=13&type=chunk)[16](index=16&type=chunk) [Unaudited GAAP Financial Statements](index=6&type=section&id=UNAUDITED%20FINANCIAL%20INFORMATION) This section provides the detailed unaudited consolidated statements of operations, balance sheets, and cash flows for the reporting period [Consolidated Statements of Operations](index=6&type=section&id=UNAUDITED%20CONSOLIDATED%20STATEMENTS%20OF%20OPERATIONS) For Q2 2025, Hertz reported total revenues of $2,185 million, a net loss of $(294) million, and diluted EPS of $(0.95), with the net loss significantly narrowing from the prior year Unaudited Consolidated Statements of Operations | Metric | Three Months Ended June 30, 2025 ($M) | Three Months Ended June 30, 2024 ($M) | | :------------------------------------------ | :------------------------------------ | :------------------------------------ | | Revenues | 2,185 | 2,353 | | Direct vehicle and operating expenses | 1,394 | 1,440 | | Depreciation of revenue earning vehicles and lease charges, net | 415 | 1,035 | | Total expenses | 2,501 | 2,826 | | Net income (loss) | (294) | (865) | | Diluted earnings (loss) per share | (0.95) | (2.82) | [Consolidated Balance Sheets](index=7&type=section&id=UNAUDITED%20CONSOLIDATED%20BALANCE%20SHEETS) As of June 30, 2025, total assets increased to $23,083 million, while total liabilities also increased, resulting in a total stockholders' deficit of $(504) million Unaudited Consolidated Balance Sheets | Metric | June 30, 2025 ($M) | December 31, 2024 ($M) | | :------------------------------------------ | :----------------- | :--------------------- | | Total assets | 23,083 | 21,802 | | Total liabilities | 23,587 | 21,649 | | Total stockholders' equity (deficit) | (504) | 153 | | Revenue earning vehicles, net | 13,295 | 11,963 | | Total debt | 17,636 | 16,335 | [Consolidated Statements of Cash Flows](index=8&type=section&id=UNAUDITED%20CONSOLIDATED%20STATEMENTS%20OF%20CASH%20FLOWS) For Q2 2025, net cash provided by operating activities was $346 million, while net cash used in investing activities significantly decreased to $(846) million Unaudited Consolidated Statements of Cash Flows | Metric | Three Months Ended June 30, 2025 ($M) | Three Months Ended June 30, 2024 ($M) | | :------------------------------------------ | :------------------------------------ | :------------------------------------ | | Net cash provided by (used in) operating activities | 346 | 546 | | Net cash provided by (used in) investing activities | (846) | (2,077) | | Net cash provided by (used in) financing activities | 587 | 1,582 | | Net increase (decrease) in cash and cash equivalents and restricted cash and cash equivalents during the period | 108 | 49 | [Segment Financial Performance](index=9&type=section&id=CONDENSED%20STATEMENT%20OF%20OPERATIONS%20BY%20SEGMENT) This section breaks down the company's financial performance by its primary operating segments, Americas RAC and International RAC, for quarterly and semi-annual periods [Three Months Ended June 30, 2025 & 2024](index=9&type=section&id=Three%20Months%20Ended%20June%2030%2C%202025%20%26%202024) For Q2 2025, the Americas RAC segment's income before taxes improved to $84 million from a $(465) million loss, while the International RAC segment's income improved to $13 million from a $(18) million loss Q2 Segment Performance | Segment | Q2 2025 Revenues ($M) | Q2 2024 Revenues ($M) | Q2 2025 Income (Loss) Before Taxes ($M) | Q2 2024 Income (Loss) Before Taxes ($M) | | :---------------- | :-------------------- | :-------------------- | :-------------------------------------- | :-------------------------------------- | | Americas RAC | 1,738 | 1,928 | 84 | (465) | | International RAC | 447 | 425 | 13 | (18) | | Corporate | — | — | (413) | 10 | | Hertz Global | 2,185 | 2,353 | (316) | (473) | [Six Months Ended June 30, 2025 & 2024](index=10&type=section&id=Six%20Months%20Ended%20June%2030%2C%202025%20%26%202024) For the first six months of 2025, the Americas RAC segment's loss before taxes narrowed to $(210) million, and the International RAC segment's loss narrowed to $(10) million H1 Segment Performance | Segment | H1 2025 Revenues ($M) | H1 2024 Revenues ($M) | H1 2025 Income (Loss) Before Taxes ($M) | H1 2024 Income (Loss) Before Taxes ($M) | | :---------------- | :-------------------- | :-------------------- | :-------------------------------------- | :-------------------------------------- | | Americas RAC | 3,228 | 3,667 | (210) | (1,016) | | International RAC | 770 | 766 | (10) | (69) | | Corporate | — | — | (621) | 31 | | Hertz Global | 3,998 | 4,433 | (841) | (1,054) | [Non-GAAP Financial Measures & Reconciliations](index=11&type=section&id=RECONCILIATION%20OF%20GAAP%20TO%20NON-GAAP%20MEASURE) This section provides reconciliations of GAAP financial measures to their non-GAAP counterparts to offer a clearer view of the company's operational performance [Adjusted Net Income (Loss) and Adjusted Diluted EPS](index=11&type=section&id=Adjusted%20Net%20Income%20(Loss)%20and%20Adjusted%20Diluted%20EPS) For Q2 2025, Adjusted Net Loss improved significantly to $(104) million from $(440) million, and Adjusted Diluted EPS improved to $(0.34) from $(1.44) Reconciliation of Adjusted Net Income (Loss) | Metric | Three Months Ended June 30, 2025 ($M) | Three Months Ended June 30, 2024 ($M) | | :------------------------------------------ | :------------------------------------ | :------------------------------------ | | Net income (loss) (GAAP) | (294) | (865) | | Adjusted Net Income (Loss) | (104) | (440) | | Adjusted Diluted Earnings (Loss) Per Share | (0.34) | (1.44) | [Adjusted Corporate EBITDA](index=12&type=section&id=Adjusted%20Corporate%20EBITDA) Adjusted Corporate EBITDA for Q2 2025 turned positive at $1 million, a substantial improvement from $(460) million in Q2 2024, with the margin improving from (20)% to 0% Reconciliation of Adjusted Corporate EBITDA | Metric | Three Months Ended June 30, 2025 ($M) | Three Months Ended June 30, 2024 ($M) | | :------------------------------------------ | :------------------------------------ | :------------------------------------ | | Net income (loss) (GAAP) | (294) | (865) | | Adjusted Corporate EBITDA | 1 | (460) | | Adjusted Corporate EBITDA margin | 0% | (20)% | [Adjusted Operating Cash Flow and Adjusted Free Cash Flow](index=15&type=section&id=Adjusted%20Operating%20Cash%20Flow%20and%20Adjusted%20Free%20Cash%20Flow) For Q2 2025, Adjusted Operating Cash Flow was $(100) million, and Adjusted Free Cash Flow significantly improved to $327 million from $(553) million in the prior year Reconciliation of Adjusted Free Cash Flow | Metric | Three Months Ended June 30, 2025 ($M) | Three Months Ended June 30, 2024 ($M) | | :------------------------------------------ | :------------------------------------ | :------------------------------------ | | Net cash provided by (used in) operating activities (GAAP) | 346 | 546 | | Adjusted operating cash flow | (100) | (576) | | Adjusted free cash flow | 327 | (553) | | Net fleet growth after financing | 350 | 45 | [Net Debt Calculation](index=16&type=section&id=Net%20Debt%20Calculation) As of June 30, 2025, Total Net Debt increased to $16,720 million, and Net Corporate Leverage improved to (5.7)x from (2.9)x at year-end 2024 Net Debt and Leverage | Metric | As of June 30, 2025 ($M) | As of December 31, 2024 ($M) | | :------------------------------------------ | :------------------------ | :-------------------------- | | Vehicle Debt | 12,202 | 11,231 | | Non-Vehicle Debt | 5,434 | 5,104 | | Total Debt (as reported) | 17,636 | 16,335 | | Net Debt | 16,720 | 15,416 | | LTM Adjusted Corporate EBITDA | (838) | (1,541) | | Net Corporate Leverage | (5.7)x | (2.9)x | [Key Metrics Calculations](index=17&type=section&id=KEY%20METRICS%20CALCULATIONS) This section details the calculation of key operational metrics for the global, Americas, and International RAC segments [Global RAC Key Metrics](index=17&type=section&id=Global%20RAC%20Key%20Metrics) For Q2 2025, Global RAC Total RPD decreased by 5%, while Vehicle Utilization improved by 3 percentage points and Depreciation Per Unit Per Month decreased by 58% Global RAC Key Metrics | Metric | Q2 2025 | Q2 2024 | % Change | | :-------------------------------- | :------ | :------ | :------- | | Total RPD (in dollars) | 55.65 | 58.80 | (5)% | | Total RPU Per Month (in whole dollars) | 1,400 | 1,425 | (2)% | | Vehicle Utilization | 83% | 80% | 3% pts | | Depreciation Per Unit Per Month (in whole dollars) | 251 | 595 | (58)% | [Americas RAC Key Metrics](index=18&type=section&id=Americas%20RAC%20Key%20Metrics) In Q2 2025, Americas RAC Total RPD decreased by 6%, while Vehicle Utilization improved by 2 percentage points and Depreciation Per Unit Per Month decreased by 61% Americas RAC Key Metrics | Metric | Q2 2025 | Q2 2024 | % Change | | :-------------------------------- | :------ | :------ | :------- | | Total RPD (in dollars) | 56.08 | 59.73 | (6)% | | Total RPU Per Month (in whole dollars) | 1,420 | 1,460 | (3)% | | Vehicle Utilization | 83% | 81% | 2% pts | | Depreciation Per Unit Per Month (in whole dollars) | 248 | 644 | (61)% | [International RAC Key Metrics](index=19&type=section&id=International%20RAC%20Key%20Metrics) For Q2 2025, International RAC Total RPD decreased by 2%, while Vehicle Utilization improved by 4 percentage points and Depreciation Per Unit Per Month decreased by 32% International RAC Key Metrics | Metric | Q2 2025 | Q2 2024 | % Change | | :-------------------------------- | :------ | :------ | :------- | | Total RPD (in dollars) | 53.93 | 54.78 | (2)% | | Total RPU Per Month (in whole dollars) | 1,322 | 1,282 | 3% | | Vehicle Utilization | 81% | 77% | 4% pts | | Depreciation Per Unit Per Month (in whole dollars) | 261 | 384 | (32)% | [Non-GAAP Measures and Key Metrics Definitions](index=20&type=section&id=NON-GAAP%20MEASURES%20AND%20KEY%20METRICS) This section provides detailed definitions for the non-GAAP financial measures and key operational metrics used throughout the report [Non-GAAP Measures Definitions](index=20&type=section&id=Non-GAAP%20Measures%20Definitions) This section defines key non-GAAP financial measures used by Hertz, explaining their calculation and importance for assessing operational performance and liquidity - Adjusted Net Income (Loss) and Adjusted Diluted EPS are used to assess operational performance by excluding non-operational items like debt-related charges and restructuring costs[60](index=60&type=chunk)[62](index=62&type=chunk) - Adjusted Corporate EBITDA is a key operating performance metric for internal monitoring, planning, and investment analysis, isolating profitability effects of core rental business[63](index=63&type=chunk)[65](index=65&type=chunk) - Adjusted Operating Cash Flow and Adjusted Free Cash Flow provide insights into cash generated from operations and cash available for debt reduction, share repurchase, and acquisitions[66](index=66&type=chunk)[67](index=67&type=chunk)[68](index=68&type=chunk) - Net Debt measures (Net Non-vehicle Debt, Net Vehicle Debt, Total Net Debt) and Net Corporate Leverage are crucial for assessing the company's corporate and vehicle-related leverage and ability to service debt[71](index=71&type=chunk)[72](index=72&type=chunk)[73](index=73&type=chunk)[74](index=74&type=chunk) [Key Metrics Definitions](index=21&type=section&id=Key%20Metrics%20Definitions) This section defines operational key metrics, explaining their relevance for management and investors in evaluating fleet efficiency, pricing, and revenue generation - Depreciation Per Unit Per Month (DPU) reflects the effectiveness of managing vehicle costs and facilitates industry comparisons[78](index=78&type=chunk) - Total Revenue Per Transaction Day (RPD) measures changes in underlying pricing in the vehicle rental business[79](index=79&type=chunk) - Total Revenue Per Unit Per Month (RPU) provides a measure of revenue productivity relative to the rental fleet, indicating asset efficiency[80](index=80&type=chunk) - Vehicle Utilization measures the proportion of vehicles used to generate revenues relative to rentable fleet capacity[82](index=82&type=chunk) - Transaction Days represent the total number of revenue-generating days for vehicles on rent[81](index=81&type=chunk)

PART I. FINANCIAL INFORMATION [Condensed Consolidated Financial Statements (Unaudited)](index=4&type=section&id=ITEM%201.%20Condensed%20Consolidated%20Financial%20Statements%20%28Unaudited%29) Presents unaudited condensed consolidated financial statements for Hertz Global Holdings, including balance sheets, income, cash flows, and detailed notes [Financial Statements - Hertz Global Holdings, Inc.](index=5&type=section&id=Financial%20Statements%20-%20Hertz%20Global%20Holdings%2C%20Inc%2E) Hertz Global Holdings reported decreased Q2 2025 revenue but a narrowed net loss, with assets increasing and equity turning to a deficit Hertz Global Holdings, Inc. - Key Financials (Q2 2025 vs Q2 2024) | Metric | Q2 2025 (in millions) | Q2 2024 (in millions) | | :--- | :--- | :--- | | **Revenues** | $2,185 | $2,353 | | **Net Loss** | $(294) | $(865) | | **Basic and Diluted EPS** | $(0.95) | $(2.82) | Hertz Global Holdings, Inc. - Balance Sheet Summary | Metric | June 30, 2025 (in millions) | Dec 31, 2024 (in millions) | | :--- | :--- | :--- | | Total Assets | $23,083 | $21,802 | | Total Liabilities | $23,587 | $21,649 | | Total Stockholders' Equity (Deficit) | $(504) | $153 | - For the six months ended June 30, 2025, net cash provided by operating activities was **$597 million**, a decrease from **$916 million** in the prior year period. Net cash used in investing activities improved to **$1.56 billion** from **$2.78 billion**[26](index=26&type=chunk) [Notes to Condensed Consolidated Financial Statements](index=17&type=section&id=Notes%20to%20Condensed%20Consolidated%20Financial%20Statements) Notes detail an **$89 million** gain from sale-leaseback, improved vehicle disposal gains, total debt increase to **$17.6 billion**, and a **$330 million** litigation accrual - In June 2025, the company sold and leased back certain properties, recognizing a pre-tax gain of **$89 million**. An additional sale-leaseback in July 2025 is expected to generate a pre-tax gain between **$35 million** and **$40 million**[56](index=56&type=chunk)[57](index=57&type=chunk) - The company recorded a net gain on disposal of revenue earning vehicles of **$38 million** in Q2 2025, a significant improvement from a **$182 million** loss in Q2 2024. This was a primary driver of improved profitability[60](index=60&type=chunk) Total Debt Summary | Debt Category | June 30, 2025 (in millions) | Dec 31, 2024 (in millions) | | :--- | :--- | :--- | | Non-Vehicle Debt | $5,434 | $5,104 | | Vehicle Debt | $12,202 | $11,231 | | **Total Debt** | **$17,636** | **$16,335** | - The company has accrued approximately **$330 million** for litigation related to make-whole premiums and post-petition interest on Unsecured Notes following an adverse appellate court ruling. The company is seeking a review by the U.S. Supreme Court[154](index=154&type=chunk) [Segment Information](index=39&type=section&id=Segment%20Information) Both operating segments improved profitability year-over-year, with Americas RAC Adjusted EBITDA swinging to **$42 million** profit and International RAC also turning positive, driven by lower vehicle depreciation Segment Performance (Three Months Ended June 30) | Segment | Revenues 2025 (in millions) | Revenues 2024 (in millions) | Adjusted EBITDA 2025 (in millions) | Adjusted EBITDA 2024 (in millions) | | :--- | :--- | :--- | :--- | :--- | | Americas RAC | $1,738 | $1,928 | $42 | $(403) | | International RAC | $447 | $425 | $42 | $(6) | | **Total** | **$2,185** | **$2,353** | **$84** | **$(409)** | [Management's Discussion and Analysis of Financial Condition and Results of Operations (MD&A)](index=46&type=section&id=ITEM%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) MD&A discusses Q2 2025 financial results, highlighting improved profitability despite revenue decline, primarily due to reduced vehicle depreciation, and details liquidity, capital resources, and debt financing [Consolidated Results of Operations](index=50&type=section&id=Consolidated%20Results%20of%20Operations) Q2 2025 consolidated revenues decreased by **7%** to **$2.19 billion**, but net loss narrowed significantly to **$179 million**, primarily due to a **60%** (**$620 million**) decrease in vehicle depreciation - The decrease in total revenues for Q2 2025 was primarily due to lower pricing and volume, particularly in the Americas RAC segment[200](index=200&type=chunk) - The key driver of improved profitability was a **$620 million** decrease in net vehicle depreciation expense in Q2 2025 compared to Q2 2024, resulting from a fleet refresh, stronger residual values, and gains on vehicle sales[201](index=201&type=chunk) [Results of Operations by Segment](index=53&type=section&id=Results%20of%20Operations%20by%20Segment) Americas RAC revenue declined **10%** but Adjusted EBITDA improved to **$42 million** profit, driven by **61%** lower depreciation; International RAC revenue grew **5%**, with Adjusted EBITDA turning to **$42 million** profit Americas RAC - Key Metrics (Q2 2025 vs Q2 2024) | Metric | Q2 2025 | Q2 2024 | % Change | | :--- | :--- | :--- | :--- | | Total Revenues | $1,738 M | $1,928 M | (10)% | | Adjusted EBITDA | $42 M | $(403) M | NM | | Total RPD | $56.08 | $59.73 | (6)% | | Depreciation Per Unit Per Month | $248 | $644 | (61)% | International RAC - Key Metrics (Q2 2025 vs Q2 2024) | Metric | Q2 2025 | Q2 2024 | % Change | | :--- | :--- | :--- | :--- | | Total Revenues | $447 M | $425 M | 5% | | Adjusted EBITDA | $42 M | $(6) M | NM | | Vehicle Utilization | 81% | 77% | +4 p.p. | | Depreciation Per Unit Per Month | $261 | $384 | (32)% | [Liquidity and Capital Resources](index=62&type=section&id=Liquidity%20and%20Capital%20Resources) Corporate liquidity was **$1.45 billion** as of June 30, 2025, a decrease from year-end 2024, deemed sufficient for the next twelve months, with recent RCF amendments and new vehicle-backed notes - Corporate liquidity stood at **$1.45 billion** as of June 30, 2025, down from **$1.84 billion** at December 31, 2024[275](index=275&type=chunk) - In May 2025, the company amended its First Lien RCF, extending the maturity of **$1.7 billion** of commitments from June 2026 to March 2028[277](index=277&type=chunk) - Net capital expenditures for revenue earning vehicles for the first six months of 2025 was **$1.65 billion**, a **40%** decrease from **$2.73 billion** in the same period of 2024, driven by higher proceeds from vehicle disposals[306](index=306&type=chunk)[307](index=307&type=chunk) [Quantitative and Qualitative Disclosures About Market Risk](index=73&type=section&id=ITEM%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) No material changes to market risk exposures, including interest rates, foreign currency, and fuel prices, have occurred since the 2024 Form 10-K disclosures - There have been no material changes to the company's market risk disclosures since its Annual Report on Form 10-K for the year ended December 31, 2024[328](index=328&type=chunk) [Controls and Procedures](index=73&type=section&id=ITEM%204.%20Controls%20and%20Procedures) CEO and CFO concluded disclosure controls and procedures were effective, with no material changes to internal control over financial reporting during the quarter - The CEO and CFO concluded that as of June 30, 2025, the company's disclosure controls and procedures were effective[329](index=329&type=chunk)[331](index=331&type=chunk) - No material changes in internal control over financial reporting occurred during the three months ended June 30, 2025[330](index=330&type=chunk)[332](index=332&type=chunk) PART II. OTHER INFORMATION [Legal Proceedings](index=74&type=section&id=ITEM%201.%20Legal%20Proceedings) Refers to Note 12 of the Condensed Consolidated Financial Statements for detailed information on pending legal proceedings - For a description of pending legal proceedings, the report refers to Note 12, "Contingencies and Off-Balance Sheet Commitments," in Part I, Item 1[334](index=334&type=chunk) [Risk Factors](index=74&type=section&id=ITEM%201A.%20Risk%20Factors) No material changes to risk factors have occurred since those disclosed in the company's 2024 Annual Report on Form 10-K - There have been no material changes to the risk factors disclosed in the company's 2024 Form 10-K[335](index=335&type=chunk) [Other Items (Items 2, 3, 5, 6)](index=74&type=section&id=Other%20Items%20%28Items%202%2C%203%2C%205%2C%206%29) Covers standard disclosures, reporting no unregistered equity sales, no defaults on senior securities, no Rule 10b5-1 trading plans by directors/officers, and refers to the Exhibit Index - The company reported no unregistered sales of equity securities or use of proceeds for the period[336](index=336&type=chunk) - No defaults upon senior securities were reported[337](index=337&type=chunk) - No director or officer entered into a Rule 10b5-1 trading arrangement during the quarter ended June 30, 2025[338](index=338&type=chunk)

Stock Performance - Hertz stock is up 64% [1] Revenue Impact - Car damage AI could add 16.4% to Hertz revenue [1]

Core Viewpoint - Hertz's stock has experienced significant volatility, rising 64% in 2025, primarily due to Bill Ackman's investment, but has faced challenges with disappointing earnings and customer service issues related to its new AI technology partnership with UVeye [2][3][4]. Financial Performance - Hertz's revenue for Q1 2025 was $1.81 billion, down 13% year-over-year and 10.4% below consensus estimates, with a loss per share of $1.28, which was 3.7% worse than expected [7]. - Analysts predict a 7.6% revenue decline for Q2 2025, with an anticipated loss per share of 44 cents, while Hertz aims for breakeven adjusted earnings before interest, taxes, depreciation, and amortization [7]. Investment and Strategic Moves - Bill Ackman's $46 million investment in Hertz was made with an understanding of the company's turnaround strategy, which includes cost cuts, fleet restructuring, and the integration of AI technology for vehicle inspections [4][10]. - The partnership with UVeye could potentially add significant revenue by improving damage detection and charging customers for previously undetected vehicle damage, with optimistic projections suggesting an addition of $1.5 billion to Hertz's revenue [5][19]. Customer Experience and Challenges - The implementation of UVeye's technology has led to customer complaints regarding the checkout process, with reports of high charges for minor damages and difficulties in disputing those charges [14][15][16]. - Hertz acknowledges the need for improvement in customer service related to the new technology and is committed to enhancing the rental experience [18]. Market Outlook - Analysts view Hertz's shares as overvalued, with an average price target of $4.24, indicating a potential 34% decline from current levels [22]. - The upcoming earnings report on August 7 could influence stock performance, particularly if the UVeye partnership yields positive guidance, although expectations remain low [23].

Summary of Hertz Global Holdings, Inc. (HTZ) Core Viewpoint - The market anticipates Hertz Global Holdings, Inc. to report a year-over-year increase in earnings despite lower revenues for the quarter ended June 2025, with actual results being crucial for stock price movement [1][2]. Financial Expectations - The upcoming earnings report is expected to show a quarterly loss of $0.44 per share, reflecting a year-over-year change of +69.4%. Revenues are projected to be $2.17 billion, down 7.6% from the previous year [3]. - The consensus EPS estimate has been revised 4.72% higher in the last 30 days, indicating a reassessment by analysts [4]. Earnings Surprise Prediction - The Zacks Earnings ESP model suggests that the Most Accurate Estimate for Hertz is lower than the Zacks Consensus Estimate, resulting in an Earnings ESP of -0.96%. This indicates a bearish outlook from analysts [12]. - The stock currently holds a Zacks Rank of 4, making it challenging to predict an earnings beat [12]. Historical Performance - In the last reported quarter, Hertz was expected to post a loss of $1.08 per share but actually reported a loss of -$1.12, resulting in a surprise of -3.70%. The company has not beaten consensus EPS estimates in the last four quarters [13][14]. Industry Comparison - In contrast, Expeditors International (EXPD), another player in the Zacks Transportation - Services industry, is expected to post earnings of $1.24 per share with revenues of $2.4 billion, reflecting a slight decline from the previous year. The company has a positive Earnings ESP of +0.11% and a Zacks Rank of 3, indicating a higher likelihood of beating the consensus EPS estimate [18][19][20].

Core Viewpoint - Momentum investing focuses on "buying high and selling higher," contrasting with traditional strategies of "buying low and selling high" [1] Group 1: Momentum Investing Characteristics - Momentum investing can be risky as stocks may lose momentum when their valuations exceed future growth potential [2] - Investing in bargain stocks with recent price momentum may be a safer approach [3] Group 2: Hertz Global Holdings, Inc. (HTZ) Analysis - HTZ has shown a four-week price change of 5.3%, indicating growing investor interest [4] - Over the past 12 weeks, HTZ gained 5.2%, with a beta of 2.15, suggesting it moves 115% higher than the market [5] - HTZ has a Momentum Score of B, indicating a favorable time to invest [6] - HTZ's Zacks Rank is 2 (Buy), supported by upward revisions in earnings estimates, which attract more investors [7] - HTZ is trading at a Price-to-Sales ratio of 0.27, suggesting it is undervalued at 27 cents for each dollar of sales [7] Group 3: Investment Opportunities - HTZ is identified as a strong candidate for investment, with potential for fast-paced growth [8] - Other stocks meeting the 'Fast-Paced Momentum at a Bargain' criteria are also available for consideration [8]

Financial Data and Key Metrics Changes - The preliminary vote report indicates that all director nominees have been elected for a three-year term, and the appointment of Ernst and Young LLP as the independent auditor for the fiscal year ending December 31, 2025, has been ratified [13] Business Line Data and Key Metrics Changes - No specific data or metrics related to individual business lines were discussed during the meeting [11] Market Data and Key Metrics Changes - No specific market data or metrics were provided in the meeting [11] Company Strategy and Development Direction and Industry Competition - The company continues to focus on maintaining strong governance through the election of directors and the appointment of independent auditors, which reflects its commitment to transparency and accountability [9][10] Management's Comments on Operating Environment and Future Outlook - Management did not provide specific comments on the operating environment or future outlook during this meeting [11] Other Important Information - The meeting was conducted virtually, and a quorum was established with proxies representing more than 50% of the company's outstanding shares present [6] Summary of Q&A Session Question: Were there any questions relevant to matters to be voted on at today's meeting? - There were no questions relevant to the matters to be voted on at the meeting [11]

Group 1 - Bill Ackman has made significant investments in the automotive sector, particularly in Uber Technologies, acquiring over 30 million shares, making it the largest holding in the Pershing Square portfolio [2][4] - Ackman increased his stake in Hertz Global Holdings by 18%, with a purchase of 12.7 million shares that was initially undisclosed due to confidentiality [2][3] - Pershing Square exited its position in Nike, previously holding 18.8 million shares, marking a complete divestment [3][5] Group 2 - The latest 13F filing reveals that Ackman and Pershing Square currently hold 11 stocks, with Uber representing 19% of the portfolio, followed by Brookfield Corporation at 18% and Restaurant Brands International at 13% [4][6] - Other notable holdings include Howard Hughes Holdings at 12%, Chipotle at 9.1%, and Canadian Pacific at 8.7% [6] - The portfolio has seen significant changes, with Hilton Worldwide Holdings decreasing by 45% and Google Class C shares down by 16% [5][6]