Hertz Global (HTZ) Q1 2025 earnings summary

Executive summary

• Q1 2025 revenue was $1.8–$1.81 billion, down 13% year-over-year, driven by lower volume and pricing, with transaction days and average fleet both down 8%.

• Adjusted Corporate EBITDA loss improved 43% year-over-year to $(325) million, mainly due to lower vehicle depreciation and cost controls.

• Fleet rotation is over 70% complete, with most vehicles now 12 months old or newer, reducing depreciation and maintenance costs.

• Record quarter for retail car sales, with higher average selling prices and improved net margins, supported by a shift to retail channels.

• Strategic focus on retail car sales, technology partnerships, and operational agility to drive margin improvements and customer experience.

Financial highlights

• Q1 2025 revenue: $1.8–$1.81 billion; Adjusted Corporate EBITDA loss: $(325) million (improved from $(567) million YoY); margin improved to (18)% from (27)%.

• Depreciation per unit per month (DPU) declined 40–45% YoY to $353; expected to fall below $300 in Q2.

• Direct operating expense per day (DOE/day) down 4% sequentially and 1% YoY; revenue per unit per month (RPU) was $1,264, down 3% YoY.

• Liquidity at quarter-end: $1.2 billion, including $626 million cash and $549 million available under First Lien RCF.

• Net loss for Q1 2025 was $443 million, compared to $186 million in Q1 2024, reflecting lower revenues and higher non-vehicle interest expense.

Outlook and guidance

• Q2 EBITDA expected to be break-even; Q3 to show sizable profit and positive net income; Q4 positive EBITDA.

• Full-year EBITDA margin projected in low single digits; North Star targets: DPU < $300, RPU > $1,500, DOE/day in low 30s.

• EBITDA run rate of $1 billion targeted by 2027, with continued focus on utilization and margin improvement.

• Management expects continued focus on optimizing fleet economics, customer experience, and ride share leadership.

• Liquidity and cash flow are believed sufficient to fund operations and obligations for the next twelve months and beyond.