Core Viewpoint - JPMorgan analyst Ryan Brinkman maintains an Underweight rating on Hertz Global Holdings, indicating concerns about the sustainability of the company's earnings despite recent partnerships and pricing strategies [1][3]. Financial Performance - Hertz reported first-quarter revenue of $1.81 billion, which fell short of the $2 billion analyst consensus, marking a 13% year-over-year decline [4]. - The company also experienced a first-quarter adjusted loss of $1.12 per share, compared to an expected loss of 97 cents per share [4]. Earnings Outlook - Brinkman suggests that while Hertz may appear undervalued based on normalized earnings, the company is not expected to reach those levels until after 2026 [3]. - The company is projected to generate negative free cash flow in 2024 and 2025, which will limit its ability to repurchase shares at current lower prices [3]. Operational Initiatives - Hertz is making progress on cost efficiency initiatives, including partnerships with technology firms aimed at enhancing customer experience and operational productivity [5]. - The company is implementing improvements to its revenue management system and deploying AI tools for vehicle inspection and pricing optimization [5]. - Management has reaffirmed expectations for the progression of EBITDA throughout the year [5]. Market Reaction - Hertz shares are trading lower by 2.88% to $5.60 at the time of publication [6].

From giving a friendly Jeep® wave to showing kindness with rubber ducks, Hertz has everything drivers need to join the Jeep community and explore the open road like a Jeep 4x4 owner this summer ESTERO, Fla., May 14, 2025 /PRNewswire/ -- Hertz, one of the world's largest car rental companies, is teaming up with the iconic Jeep® brand to add a dedicated collection of Jeep Wrangler 4xe vehicles to its newest fleet yet. Just in time to open the roof top and enjoy open-air freedom, the Wrangler 4xe (America's No ...

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Core Viewpoint - Hertz Global's shares experienced a significant decline following the release of disappointing first-quarter earnings and the announcement of a $250 million stock offering aimed at deleveraging the company [1][2]. Financial Performance - Hertz reported a loss per share of $1.12 adjusted, which was worse than the expected loss of 97 cents [7]. - The company's automotive revenue was $1.81 billion, falling short of the expected $2 billion [7]. - Revenue decreased by 13% year-over-year, primarily due to a reduced fleet capacity, which was down 8% compared to the first quarter of 2024 [5]. Strategic Initiatives - Hertz's CFO indicated that the combination of an improved earnings profile, refinancing options, and the stock offering provides multiple alternatives for addressing upcoming maturities [3]. - The company is implementing a "Back-to-Basics Roadmap" plan to optimize vehicle utilization and create more demand than it can satisfy, aiming to improve profitability [6]. Market Conditions - Investors are concerned about Hertz's strategy to reduce the number of cars available for rent due to lower bookings and the impact of auto tariffs on vehicle prices [4]. - The company is also facing challenges from lower consumer sentiment and decreased U.S. tourism [4].

Financial Data and Key Metrics Changes - Revenue for Q1 2025 was $1.8 billion, with adjusted EBITDA showing a loss of $325 million, an improvement from a loss of $567 million in the prior year, resulting in a 9% margin improvement year over year [33] - Depreciation per unit (DPU) for the quarter was $353, a 45% decrease year over year, with expectations to drop below $300 in Q2 2025 [35][36] - Direct operating expenses (DOE) per day decreased by 4% quarter over quarter and 1% year over year on a volume-adjusted basis [36] Business Line Data and Key Metrics Changes - The fleet was down 8% year over year, with a focus on tighter fleet management to capitalize on strong residual values [24][44] - Retail car sales achieved record performance, positively impacting depreciation per unit [18] - The company is prioritizing retail as the primary car selling channel, enhancing net margins through better management of reconditioning costs [19] Market Data and Key Metrics Changes - Overall demand remains solid, particularly in leisure segments, while corporate and government segments are experiencing moderation [27][64] - The average selling price through the retail channel strengthened in March, indicating a positive trend in the retail market [18] - The MMR Rental Car Index for April was up 8%, reflecting rising residual values in the wholesale market [58] Company Strategy and Development Direction - The company is focused on disciplined fleet management, revenue optimization, and rigorous cost management as part of its transformation strategy [9][22] - The strategy includes a shift towards a younger fleet, with over 70% of the core U.S. RAC fleet now 12 months old or newer [11] - The company aims to leverage technology partnerships to enhance fleet management and customer experience [20][21] Management's Comments on Operating Environment and Future Outlook - Management acknowledges potential macroeconomic headwinds but remains confident in the company's ability to navigate uncertainties [15][22] - The company expects to achieve a full-year EBITDA margin in the low single digits, with a target of over $1 billion in EBITDA by 2026 [45][46] - Management is optimistic about the future, citing strong demand in leisure and the potential for rising residual values [48] Other Important Information - The company amended its revolving credit facility, extending the maturity date and maintaining access to $2 billion until June 2026 [38] - The company is pursuing various transactions to optimize liquidity, including an ATM equity offering to start deleveraging [42][41] Q&A Session Summary Question: Can you discuss the fleet situation and residual values? - Management indicated that while there was temporary overfleeing at the local market level, overall fleet management remains tight, with a focus on optimizing pricing and utilization [54][55] - Residual values are rising, with retail sales skewed towards higher residuals, and the wholesale market showing quick increases [58] Question: How is demand geographically and what is the impact of seasonality? - Demand is moderating in corporate and government segments, but leisure bookings are up year over year, with normal seasonal demand expected as summer approaches [64] Question: What are the fleet activities in April and May? - The company continues to take deliveries throughout the year, with a focus on model year 2025 vehicles and maintaining flexibility in fleet management [68] Question: How do you balance cost-cutting with revenue generation? - Management emphasized the importance of customer experience alongside cost control, noting improvements in Net Promoter Scores and the use of technology to enhance service [75][78] Question: What is the outlook for depreciation and fleet value? - The company expects DPU to remain below $300, with rising residual values contributing positively to fleet economics [101][103]

Financial Data and Key Metrics Changes - Revenue for Q1 2025 was $1.8 billion, with adjusted EBITDA loss of $325 million, an improvement from a loss of $567 million in the prior year, resulting in a 9% margin improvement year over year [32][34] - Depreciation per unit (DPU) decreased by 45% year over year, with DPU for the quarter at $353 per month, and expectations to drop below $300 in Q2 2025 [34][35] - Direct operating expenses (DOE) per day decreased by 4% quarter over quarter and 1% year over year on a volume-adjusted basis [35] Business Line Data and Key Metrics Changes - The fleet was down 8% year over year, with a focus on tighter fleet management to capitalize on strong residual values [22][43] - Retail car sales saw a record quarter, with an increase in average selling price through the retail channel positively impacting depreciation per unit [15][16] - The company is focusing on increasing net margins by managing reconditioning costs and capturing more finance and insurance commissions [16] Market Data and Key Metrics Changes - Overall demand remains solid, but there are potential macroeconomic headwinds; corporate, government, and US inbound segments are moderating, while leisure bookings are up year over year [25][61] - The rental car index for April was up 8%, indicating rising residual values in the wholesale market [56] Company Strategy and Development Direction - The company is focused on disciplined fleet management, revenue optimization, and rigorous cost management as part of its transformation strategy [7][8] - The strategy includes a shift towards a younger fleet, with over 70% of the core US rental fleet being 12 months old or newer, aimed at reducing costs and improving utilization [10][12] - The company is leveraging technology partnerships to enhance fleet management and customer experience, including collaborations with Palantir and Amadeus [18][19] Management's Comments on Operating Environment and Future Outlook - Management acknowledges macroeconomic uncertainties but remains confident in the company's strategy and ability to adapt [20][46] - The company expects to achieve its North Star metrics, which could unlock over $1 billion of EBITDA run rate by 2026 [45][47] - Management is optimistic about rising residual values and solid demand, particularly in leisure segments, while remaining cautious about potential headwinds [47][42] Other Important Information - The company amended its revolving credit facility, extending the maturity date and maintaining strong liquidity of $1.2 billion at the end of Q1 [36][37] - The company is pursuing various transactions to optimize liquidity, including an ATM equity offering to start deleveraging [41][40] Q&A Session Summary Question: About fleet overfitting and residuals in retail vs wholesale - Management clarified that while there was temporary overfitting at the local market level due to early vehicle deliveries, overall fleet management remains tight [52][54] - Residual values are rising, with retail sales skewed towards higher values, and wholesale markets showing quicker price movements [55][56] Question: Geographic demand variations and corporate spending - Management noted no major geographic differences in demand but acknowledged a dip in corporate and government segments, with seasonal demand expected to pick up [60][61] Question: Fleet activity in April and May - The company continues to take deliveries and expects a mid to high single-digit increase in fleet size in Q2 compared to Q1 [66] Question: Balance of cost-cutting and revenue generation - Management emphasized the importance of maintaining customer experience while controlling costs, with improvements in Net Promoter Scores indicating success in this area [72][73] Question: Fleet strategy and RPD - The company is focusing on diversifying revenue streams and improving unit economics, with a tighter fleet aimed at producing more demand than can be satisfied [78][82]

HERTZ GLOBAL HOLDINGS, INC. Q1 2025 EARNINGS PRESENTATION IMPORTANT DISCLOSURES FORWARD-LOOKING STATEMENTS Certain statements made within this presentation contain forward-looking statements. Forward-looking statements are not guarantees of future performance and by their nature are subject to inherent uncertainties. Actual results may differ materially. Any forward-looking information relayed in this presentation speaks only as of May 13, 2025, and Hertz Global Holdings, Inc. ("Hertz Global" or the "Compan ...

Group 1 - Hertz Global Holdings, Inc. reported $1.81 billion in revenue for the quarter ended March 2025, a year-over-year decline of 12.8% [1] - The EPS for the same period was -$1.12, an improvement from -$1.28 a year ago [1] - The reported revenue was below the Zacks Consensus Estimate of $2.02 billion, resulting in a surprise of -10.43% [1] Group 2 - Key metrics indicate that shares of Hertz Global have returned +72.8% over the past month, outperforming the Zacks S&P 500 composite's +3.8% change [3] - The stock currently holds a Zacks Rank 3 (Hold), suggesting it may perform in line with the broader market in the near term [3] Group 3 - In the Americas RAC segment, transaction days were 27,758, below the average estimate of 29,796 days [4] - The total revenue per day (RPD) for the Americas RAC was $53.68, compared to the average estimate of $56.69 [4] - The average number of vehicles in the Americas RAC was 413,381, lower than the estimated 425,709 [4] Group 4 - In the International RAC segment, depreciation per unit per month was $265, compared to the estimated $283.55 [4] - The total RPD for the International RAC was $52.07, below the average estimate of $55.53 [4] - The average number of vehicles in the International RAC was 91,343, slightly below the estimated 91,979 [4] Group 5 - Geographic revenue for the International RAC was $323 million, below the three-analyst average estimate of $349 million, representing a year-over-year change of -5.3% [4] - Geographic revenue for the Americas RAC was $1.49 billion, compared to the estimated $1.67 billion, reflecting a -14.3% change year-over-year [4]

Company Performance - Hertz Global Holdings reported a quarterly loss of $1.12 per share, which was worse than the Zacks Consensus Estimate of a loss of $1.08, but an improvement from a loss of $1.28 per share a year ago, indicating a surprise of -3.70% [1] - The company posted revenues of $1.81 billion for the quarter ended March 2025, missing the Zacks Consensus Estimate by 10.43%, and down from $2.08 billion in the same quarter last year [2] - Over the last four quarters, Hertz has not surpassed consensus EPS or revenue estimates [2] Stock Performance - Hertz Global shares have increased by approximately 83.6% since the beginning of the year, contrasting with a decline of -3.8% in the S&P 500 [3] - The current consensus EPS estimate for the upcoming quarter is -$0.35 on revenues of $2.35 billion, and for the current fiscal year, it is -$1.29 on revenues of $9.11 billion [7] Industry Outlook - The Transportation - Services industry, to which Hertz belongs, is currently ranked in the bottom 44% of over 250 Zacks industries, suggesting potential challenges ahead [8] - The performance of Hertz's stock may be influenced by the overall outlook for the industry, as historical data shows that the top 50% of Zacks-ranked industries outperform the bottom 50% by more than 2 to 1 [8]

Financial Performance - Hertz reported total revenues of $1.813 billion for Q1 2025, a decrease of 13% compared to $2.080 billion in Q1 2024[23] - Adjusted net income for Q1 2025 was a loss of $346 million, an improvement of 12% compared to a loss of $392 million in Q1 2024[23] - Revenues for Q1 2025 were $1,813 million, a decrease of 12.8% compared to $2,080 million in Q1 2024[35] - Net loss for Q1 2025 was $443 million, compared to a net loss of $186 million in Q1 2024, indicating a worsening of 138%[35] - Total revenues for Hertz Global Holdings decreased to $1,813 million in Q1 2025 from $2,080 million in Q1 2024, representing a decline of approximately 12.8%[42] - Adjusted Net Income for Q1 2025 was a loss of $346 million, compared to a loss of $392 million in Q1 2024, showing an improvement of 11.7%[45] - Adjusted Corporate EBITDA for Q1 2025 was a loss of $325 million, compared to a loss of $567 million in Q1 2024, indicating a significant improvement[47] - Cash flows from operating activities provided $251 million in Q1 2025, down from $370 million in Q1 2024, a decrease of 32.2%[39] - Adjusted operating cash flow for Q1 2025 was $(373) million, an improvement from $(697) million in Q1 2024[57] - Adjusted free cash flow for Q1 2025 was $(578) million, an improvement from $(729) million in Q1 2024[57] Expenses and Cost Management - The company achieved a year-over-year improvement in direct operating expenses of $92 million, supported by cost control initiatives and fleet rotation[7] - Total expenses for Q1 2025 were $2,338 million, down from $2,661 million in Q1 2024, reflecting a reduction of 12.1%[35] - Vehicle depreciation decreased by 45% year-over-year, with depreciation per unit (DPU) for the quarter at $353, down from $588[10] - Depreciation of revenue earning vehicles and lease charges, net for Q1 2025 was $535 million, down from $969 million in Q1 2024[62] - Total interest expense, net for Q1 2025 was $129 million, a slight increase from $128 million in Q1 2024[56] Vehicle and Fleet Metrics - Hertz's average vehicles decreased by 8% year-over-year to 504,723, while average rentable vehicles decreased by 10% to 477,273[23] - Hertz's vehicle utilization increased by 240 basis points year-over-year to 79%[13] - The number of revenue earning vehicles increased to 13,139 units in Q1 2025, compared to 12,714 units in Q4 2024[37] - Average rentable vehicles decreased to 477,273 in Q1 2025 from 529,232 in Q1 2024[62] - Vehicle utilization improved to 75% in Q1 2025, up from 72% in Q1 2024, indicating better efficiency in fleet usage[68] - Depreciation per unit per month decreased by 14% to $265 in Q1 2025 from $308 in Q1 2024, reflecting improved cost management[68] Debt and Cash Position - The total cash and cash equivalents, along with restricted cash, decreased to $1,021 million from $1,133 million as of December 31, 2024[37] - Total assets increased to $22,047 million as of March 31, 2025, compared to $21,802 million at the end of 2024[37] - Total debt rose to $16,772 million in Q1 2025, up from $16,335 million at the end of 2024, representing an increase of 2.7%[37] - Net debt as of March 31, 2025, was $15,896 million, up from $15,355 million as of December 31, 2024[60] - The company’s accounts payable increased to $861 million in Q1 2025, up from $642 million at the end of 2024, reflecting a rise of 34.1%[37] - The company’s retained earnings showed an accumulated deficit of $2,945 million as of March 31, 2025, compared to a deficit of $2,502 million at the end of 2024[37] Strategic Initiatives - The company is on track to achieve positive Adjusted Corporate EBITDA by Q3 2025[18] - The company extended the maturity of $1.7 billion of its First Lien revolving credit facility to June 2028, enhancing its capital structure[19] - Hertz's retail vehicle sales reached a record high in Q1 2025, benefiting from tariff-driven pricing dynamics[12] - The company expects to achieve DPU below $300 faster than anticipated, now forecasted for Q2 2025[7] Revenue Generation - Total revenue per unit per month decreased to $3,792 in Q1 2025 from $3,896 in Q1 2024[62] - Total revenue per transaction day (RPD) increased to $52.07 in Q1 2025 from $51.89 in Q1 2024, indicating a stable pricing environment[68] - Average rentable vehicles decreased to 90,516 units in Q1 2025 from 95,409 units in Q1 2024, impacting overall revenue generation capacity[68]