Hertz Global (HTZ) Q4 2023 earnings summary

Executive summary

• Q4 revenue rose 7% YoY to $2.184B; GAAP net loss was $348M, adjusted net loss was $418M and Adjusted Corporate EBITDA was $(382)M.

• FY 2023 revenue increased 8% to $9.371B; GAAP net income was $616M, adjusted net income was $172M and Adjusted Corporate EBITDA was $561M, down 76%.

• Leisure, corporate and rideshare demand supported higher volume, while normalized rates, fleet costs and EV-related depreciation weighed on results.

Financial highlights

• Q4 transaction days rose 12% YoY to 37.6M; RPD fell 4% to $58.09 and average fleet grew 11% to 554K vehicles.

• FY transaction days rose 13% to 154.2M; RPD declined 4% to $60.62 and utilization increased 190 bps to 80%.

• Q4 adjusted free cash flow was $(128)M versus $424M a year earlier; FY adjusted free cash flow was $(321)M versus $1.5B in FY 2022.

• Q4 GAAP operating cash flow was $564M, versus adjusted operating cash outflow of $366M; FY GAAP operating cash flow was $2.5B versus adjusted operating cash flow of $44M.

• Q4 adjusted net loss was $418M, or $1.36 per diluted share; FY adjusted net income was $172M, or $0.53 per diluted share.

Outlook and guidance

• A targeted cost program aims to deliver ~$250M of productivity and cost benefits in 2024, separate from the EV sales plan benefit.

• EV fleet and cost-base reductions, alongside the enhanced profitability plan, are expected to support improving financial performance with increasing effect into 2025.

• Incremental Adjusted Corporate EBITDA initiatives target profitable revenue, asset yield, staffing and third parties, direct operating expense, technology, footprint and procurement.