Hertz Global (HTZ) Q3 2024 earnings summary

Executive summary

• Management is executing a turnaround and transformation strategy focused on operational excellence, cost control, and fleet optimization, with a new leadership team and clear roadmap for sustainable value creation.

• Q3 2024 revenue declined 5% year-over-year to $2.6B, with transaction days down 4% and RPD down 1%; sequential revenue rose 10% from Q2 2024, driven by higher leisure demand and improved pricing.

• Net loss for Q3 2024 was $1.35 billion, driven by a $1.0 billion non-cash asset impairment charge and increased depreciation expenses.

• Adjusted Corporate EBITDA was negative $157 million, compared to positive $359 million in Q3 2023, mainly due to higher vehicle depreciation.

• Transformation is centered on fleet, revenue, and cost management, leveraging people, technology, and process improvements.

Financial highlights

• Q3 2024 revenue was $2.6 billion, down 5% year-over-year; net loss was $1.35 billion, including a $1.0 billion non-cash asset impairment charge.

• Adjusted Corporate EBITDA was negative $157 million; adjusted free cash flow was negative $154 million, improved from Q2 2024.

• Depreciation per unit per month (DPU) was $537 in Q3 2024, up from $284 in Q3 2023, but down from $600 in Q2 2024.

• Vehicle utilization was 82% in Q3 2024, down from 83% in Q3 2023; average rentable vehicles were 550K.

• Corporate liquidity at quarter end was $1.6 billion, including $501 million in cash and $1.1 billion in revolving credit.

Outlook and guidance

• DPU is targeted to normalize below $300 by end of 2025, improved from previous $325 guidance.

• Management expects continued pressure on depreciation expense in Q4 2024 due to uncertain residual values and ongoing fleet refresh initiatives.

• No formal guidance provided for 2025 transaction days or other metrics, but regular guidance is planned for 2025.

• Liquidity is expected to be sufficient for the next twelve months, with plans to access capital markets for additional cushion.

• Further impairments may occur if market conditions or asset performance deteriorate.