Core Insights - Hertz Global Holdings has partnered with Amazon Autos to sell used vehicles, leading to a significant increase in its stock price by 6% in a single trading session, outperforming the S&P 500 which declined by 0.2% [1][2]. Group 1: Partnership Details - Hertz Car Sales has signed an agreement with Amazon Autos to sell its used vehicles, indicating a strategic move to open a new sales channel [2]. - The inventory will include vehicles from major manufacturers such as Toyota, Ford, and General Motors, enhancing the variety available to consumers [4]. Group 2: Consumer Benefits - The partnership offers advantages for car buyers, including prices that are often below the Kelley Blue Book suggested retail value and a thorough 115-point inspection for each vehicle [5]. - Buyers can purchase vehicles online and pick them up at nearby Hertz Car Sales locations, although this service is initially limited to select markets including Dallas, Houston, Los Angeles, and Seattle [6]. Group 3: Financial Implications - The deal is expected to boost Hertz's revenue and profitability, although specific financial details and estimates regarding its impact on fundamentals have not been disclosed [7].

Business Strategy - Hertz has started selling its used vehicles directly to consumers [1] - The sales are conducted through the online platform Amazon [1]

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Core Insights - Hertz Global reported a significant operational turnaround, achieving positive Adjusted Corporate EBITDA for the first time in nearly two years, with results surpassing consensus expectations [1][5][6] - Despite improvements, the company remains overall loss-making, with GAAP revenue declining year-over-year [1][6] Financial Performance - Non-GAAP loss per share was $0.34, better than the estimated loss of $0.41, while GAAP revenue was $2,185 million, exceeding analyst estimates of $2,156.98 million but down 7.1% from $2,353 million in Q2 2024 [1][2] - Adjusted Corporate EBITDA was $1 million, a significant improvement from a loss of $460 million in the previous year [2][6] - Net loss (GAAP) narrowed from $865 million in Q2 2024 to $294 million in Q2 2025, with adjusted net loss shrinking 76% year-over-year [6] Operational Highlights - Vehicle utilization increased to 83%, up 3 percentage points from the prior year, despite a 6% drop in fleet size [2][8] - Depreciation per unit per month decreased by 57.8% to $251, well below the target of $300, supported by a younger fleet [2][7] - Direct operating expenses fell 3% year-over-year, and customer satisfaction improved, as indicated by an 11-point rise in the Net Promoter Score [9] Strategic Focus - The company is concentrating on fleet management, cost discipline, and technological upgrades, including partnerships with ride-share services and investments in digital tools [4][10] - Management plans to maintain tight fleet levels while focusing on improving utilization and margins rather than expanding volume [12] Future Outlook - Management anticipates a "sizable profit" and positive net income in the next quarter, with a target of achieving positive EBITDA over $1 billion by fiscal 2027 [12][13] - The company has secured vehicle purchases at pre-tariff prices, mitigating risks from rising vehicle costs [12]

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].

Hertz shares surged after the company’s second-quarter loss improved from a year ago and beat Wall Street’s expectations https://t.co/5ObZpVrrKC ...

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)