Hertz Global (HTZ 4.85%), a major player in global vehicle rentals operating more than 11,200 locations across 160 countries, released its results on August 7, 2025. The report illustrated a clear operational turnaround: the company delivered positive Adjusted Corporate EBITDA for the first time in almost two years. and posted results above consensus expectations, with GAAP revenue and non-GAAP EPS both exceeding analyst estimates. Non-GAAP loss per share came in at $0.34, better than the estimated $0.41 loss, while revenue (GAAP) was $2,185 million, beating analyst estimates of $2,156.98 million but down from the prior-year period. Despite these improvements, the company remains loss-making overall, and GAAP revenue continued to shrink year-over-year. The quarter showed substantial progress in cost control, fleet management, and customer satisfaction, but ongoing profitability challenges and market uncertainties linger.
| Metric | Q2 2025 | Q2 2025 Estimate | Q2 2024 | Y/Y Change |
|---|---|---|---|---|
| EPS (Non-GAAP) | ($0.34) | ($0.41) | ($1.44) | 76.4 % |
| Revenue | $2,185 million | N/A | $2,353 million | (7.1 %) |
| Adjusted Corporate EBITDA | $1 million | ($460 million) | NM | |
| Vehicle Utilization | 83 % | 80 % | 3.0 pp | |
| Depreciation Per Unit Per Month | $251 | $595 | (57.8 %) |
Source: Analyst estimates provided by FactSet. Management expectations based on management’s guidance, as provided in Q1 2025 earnings report.
Overview of Hertz Global’s Business and Recent Strategic Focus
Hertz Global is best known for its namesake rental brand but also operates Dollar and Thrifty, serving customers across both corporate and leisure travel segments. Its wide global presence is paired with a large airport and off-airport network, which helps build brand recognition and customer loyalty through programs like Gold Plus Rewards.
The company’s main success factors rest on fleet management, cost discipline, technological upgrades, and market reach. Over the past year, it has focused on optimizing fleet age, accelerating the sale of older cars to reduce costs, and investing in technology to streamline customer experience. Strategic partnerships, particularly with ride-share services, and emphasis on compliance and sustainability have become increasingly important for both growth and risk management.
Quarter Highlights: Progress in Cost, Fleet, and Operations
The period marked a big shift for Hertz Global, with several indicators moving in a positive direction after multiple loss-making quarters. Revenue (GAAP) came in above analyst estimates but was down 7% year over year. The drop was mainly due to weaker performance in the Americas Rent-A-Car segment, which saw revenue decrease by 10%. International operations grew revenue by 5%.
On profitability, the company’s net loss (GAAP) narrowed substantially compared to Q2 2024. Net income (GAAP) improved from a loss of $865 million in Q2 2024 to a loss of $294 million. Adjusted net loss, a measure that excludes some one-off items, shrank 76% year-over-year. The turnaround to positive Adjusted Corporate EBITDA ($1 million, versus a $460 million loss last year) highlighted progress in cost containment and operational efficiency, though margins remain at breakeven. The net income margin (GAAP) improved to (13%) from (37%) in Q2 2024.
Fleet strategy stood out as a defining theme. Depreciation per unit per month, which reflects the cost as vehicles age, dropped 58% to $251 (GAAP), well below the company’s target of $300. This result was supported by a younger fleet—almost 80% of the U.S. rental vehicles were less than a year old.—and the completion of vehicle purchases at favorable prices ahead of new tariffs. The company also accelerated the sale of older vehicles in the second half of 2024, achieving its highest retail car sales volume in five years.
Vehicle utilization—a measure of how often cars are rented—reached 83%, up three percentage points from the prior year. This uptick, despite a 6% drop in fleet size and 3% fewer transaction days, reveals an ability to “sweat the assets,” even as overall transaction volume and average revenues per day (RPD) fell. RPD dropped 5% year over year, largely because the company intentionally pruned lower-margin business to focus on higher-yield customers. While this aids future margins, it does put pressure on current revenue.
Cost control measures extended beyond depreciation. Direct operating expenses fell 3% year-over-year, and expenses per transaction day improved both sequentially and annually, along with real-time monitoring of customer experience scores. The company’s Net Promoter Score—a gauge of customer willingness to recommend a service—rose by 11 points year over year, reflecting these operational enhancements.
Partnerships and technology investments remain high priorities. The company adopted new digital check-in tools, mobile apps, and artificial intelligence-powered inspection and customer service systems. Strategic collaborations, such as those with Amadeus for revenue management and Palantir for analytics, are also aimed at further raising efficiency and supporting future earnings. Ride-share partnership rentals and sales through Hertz Car Sales contributed to diversifying income channels.
Liquidity at quarter-end was over $1.45 billion. Net debt stood at $16.7 billion as of June 30, 2025. Free cash flow (adjusted, non-GAAP) was a positive $327 million, compared to negative $553 million in Q2 2024. The company has authorized an at-the-market equity program to support future deleveraging, though no proceeds from this have yet been realized.
Looking Ahead: Company Outlook and Investor Focus
Management anticipates that fleet will remain tight, and intends to focus on improving utilization and margin per vehicle rather than expanding volume. It has secured all model-year 2025 vehicle purchases at pre-tariff prices, which helps limit near-term risk from rising vehicle costs. The company continues to target depreciation per unit (DPU) below $300 as a key metric, revenue per unit (“RPU”) above $1,500, and direct operating expense per day in the low $30s—metrics leadership believes could collectively drive positive EBITDA over $1 billion by fiscal 2027.
For the rest of the year, management signaled expectations for notable improvement: it forecasts a “sizable profit” and positive net income in the next quarter. Still, risks remain, including uncertain vehicle supply and tariff impacts for model-year 2026 fleets, competitive pricing pressure, and demand softness in key corporate and government rental segments. No dividend is currently paid by Hertz Global.
Revenue and net income presented using U.S. generally accepted accounting principles (GAAP) unless otherwise noted.
JesterAI is a Foolish AI, based on a variety of Large Language Models (LLMs) and proprietary Motley Fool systems. All articles published by JesterAI are reviewed by our editorial team, and The Motley Fool takes ultimate responsibility for the content of this article. JesterAI cannot own stocks and so it has no positions in any stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.
Great Job newsfeedback@fool.com (JesterAI) & the Team @ The Motley Fool Source link for sharing this story.
