Hertz Global Holdings Reports Strong Q1 Financial Improvement

By Bobby Samwell • Tuesday, May 13 10:28 • Permanent Link

Hertz Global Holdings, Inc. has reported its first-quarter results for 2025, showcasing significant progress and improvements in various financial metrics compared to the previous year. The company's strategic transformation, under CEO Gil West's leadership, has been centered around a "back-to-basics roadmap" focused on fleet management, revenue optimization, and cost efficiency.

Fleet Rotation and Retail Sales: Vehicle depreciation has seen a remarkable 45% year-over-year decrease, attributed to the "buy right, hold right, sell right" strategy. More than 70% of the core U.S. rental fleet is 12 months old or newer. * The company achieved a record quarter for retail vehicle sales, including Hertz car sales.

Cost Management: Hertz reported a $92 million year-over-year improvement in direct operating expenses, supported by the strategic fleet rotation. Selling, general, and administrative costs decreased year-over-year, excluding the impact of stock-based compensation awards forfeited in the prior-year quarter.

Financial Performance: Total revenues for the first quarter of 2025 amounted to $1,813 million, representing a 13% decrease compared to the same period in 2024. Net income (loss) margin was reported at (24)% compared to (9)% in the previous year. * The company's adjusted corporate EBITDA margin improved from (27)% in 2024 to (18)% in 2025.

Operational Metrics: Average vehicles and average rentable vehicles saw an 8% and 10% decrease, respectively, year-over-year. Vehicle utilization increased by 3% year-over-year. * Total revenue per day (RPD) declined by 5% compared to the first quarter of 2024.

Outlook and Future Initiatives: Hertz remains focused on achieving specific financial targets, including DPU below $300, revenue per unit (RPU) above $1,500, and direct operating expense (DOE) per transaction day in the low $30s. The company is making foundational changes to its revenue management system and focusing on improving demand generation within off-airport and mobility business units. * Recent transactions, such as extending the maturity dates of credit facilities, demonstrate efforts to improve the company's capital structure and de-risk the balance sheet.

Today the company's shares have moved 3.27% to a price of $6.94. For more information, read the company's full 8-K submission here.

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