Hertz Global Holdings, Inc.

What they do

Hertz rents vehicles to consumers and businesses through company-operated and franchised locations under the Hertz, Dollar, and Thrifty brands. The company operates a peak fleet of approximately 442,000 vehicles in the Americas and 96,000 in International RAC. It buys vehicles under repurchase programs and sells them through wholesale, auction, and its retail channel, Hertz Car Sales, which also operates on Amazon Autos.

Revenue drivers

• Americas RAC — Rental car operations in the U.S. and Canada, the largest revenue segment, driven by pricing (RPD), utilization, and fleet size.
• International RAC — Rental car operations in Europe and other regions, contributing smaller share of revenue; fleet of about 96,000 vehicles at peak.
• Vehicle Sales — Revenue from selling off-rental vehicles through wholesale, auction, and retail channels like Hertz Car Sales and Amazon Autos, at higher margins.

Recent performance

Second quarter 2026 revenue was $2.4 billion, up 10% year over year despite a 1% smaller fleet, with RPD up 9% (strongest Q2 on record excluding 2022) and RPU up 8%. GAAP net income was $64 million (EPS $0.05), but adjusted net loss was $47 million (adjusted EPS -$0.11). Adjusted Corporate EBITDA was $81 million, up $63 million year over year. Total utilization was 79%, up 80 bps year over year (81% excluding recalls). For fiscal 2025, annual revenue was $8.50 billion with a net loss of $747 million.

Strategy

Management is executing a transformation across four strategic areas: Rent-a-Car, Service, Fleet, and Mobility. The plan emphasizes commercial discipline, fleet rotation to younger vehicles (94% of U.S. core fleet is model year 2025/2026), and prioritizing retail channels like Hertz Car Sales and Amazon Autos for higher margins. The company is also investing in Oro Mobility, which has completed over six million miles and is launching its first AV partnership in the San Francisco Bay Area later this year. Management expects full-year RPU to trend above its 'North Star' target of $1,500.

Risks

• Fleet residual value risk — Depreciation expense and vehicle resale values could worsen if used-car prices decline, pressuring margins (Net DPU at $302 vs. target of $300).
• Liquidity and debt covenants — Liquidity was $984 million at June 30, 2026, but the company has minimum liquidity covenants ($400M in Q2/Q3, $500M in Q1/Q4) and high debt levels (shareholder equity was negative $786M).
• Dependence on third-party distribution — A significant portion of reservations come through OTAs and other intermediaries; loss of access or prominence, or changes in commission structures, could reduce revenue.
• Interest rate and refinancing risk — Higher borrowings on the First Lien RCF and new exchangeable notes increase interest expense, and rising rates could cost more to refinance vehicle debt.

Outlook

Management expects full-year 2026 Net DPU to be at or below $300 per unit per month, and RPU to exceed the $1,500 target. Revenue growth is expected to continue, driven by strong pricing and a balanced industry supply-demand environment. The company aims to maintain liquidity around $1 billion and execute its transformation to improve long-term profitability.