Hertz Global Holdings, Inc. Q3 FY2025 earnings call

• Gil West highlighted the fleet transformation, including a completed fleet refresh, newer fleet aligning with customer preference, and the success of Hertz car sales as a profit accretive engine. Net Promoter Score in North America was up nearly 50% year-over-year. - Sandeep Dube discussed commercial strategy, focusing on maximizing asset productivity, enhancing pricing through customer experience, diversified demand, and advanced revenue management. RPU improved, utilization was record high, and initiatives like customer experience training and AI-powered support were mentioned. - Scott Haralson provided financial details, noting revenue of $2.5 billion, adjusted corporate EBITDA of $190 million, liquidity of $2.2 billion, and discussed Q4 and 2026 guidance, including fleet growth and margin targets.

In the third quarter, Hertz achieved $2.5 billion in revenue and adjusted corporate EBITDA of $190 million, a $350 million year-over-year improvement. RPU (Revenue Per Unit) was $1,530, nearly flat year-over-year but sequentially improved. Utilization rate reached a record high since 2018 at 84%. The U.S. fleet is now newer with an average age under 12 months post-fleet refresh. Hertz car sales has seen success with a rent-to-buy program where 70% of customers purchase their vehicle, available in over 100 cities, contributing to revenue and value creation.

• For Q4, guidance was revised to a negative low to mid-single digits EBITDA margin due to fleet recalls, external system outages, and government shutdown impact. - For 2026, Hertz targets a 3%-6% EBITDA margin. Fleet growth is expected in airport (low single-digit), off-airport (mid-to-high single-digit), and mobility (10%-20%) segments, with focus on revenue management and cost performance to drive margin improvement.

• Fleet recalls affecting 2% of the U.S. fleet. - External system outages in Q4 costing $10 million to $20 million in revenue. - Government shutdown impact on business operations, particularly in November.

Q: Chris Woronka from Deutsche Bank asked about Hertz being a value-creating mobility platform and how it creates value beyond the traditional rental business.

A: Wayne West responded that Hertz is far more than a rental car company, with components like car sales (with strategic advantages and rent-to-buy program), service (potential B2B and B2C opportunities), and mobility (rideshare and AV potential) contributing to value creation.

Q: Chris Stathoulopoulos from Susquehanna International Group asked about the sub-300 DPU and fleet outlook.

A: Scott Haralson and Wayne West discussed fleet strategy, DPU targets, and fleet composition for 2026, noting fleet growth plans in different segments and focus on DPU and channel management.

Q: Ian Zaffino from Oppenheimer & Company asked about international inbounds and off-prem dynamics.

A: Sandeep Dube discussed demand trends, government shutdown impact, and off-prem strategy, noting improvement in corporate and inbound demand and potential in off-prem business.

Q: Stephanie Moore from Jefferies asked about margin outlook and fleet CapEx.

A: Scott Haralson talked about margin targets, fleet CapEx plans, and fleet mix, emphasizing the potential of Hertz car sales to drive value.

Q: Dan Levy from Barclays asked about fleet growth and utilization.

A: Wayne West and Sandeep Dube discussed fleet rightsizing, utilization sustainability, and operational processes, noting focus on customer experience and revenue management to maintain utilization.