Hertz Global Holdings Inc
NASDAQ:HTZ
Hertz Global Holdings Inc
In the dynamic landscape of transportation, Hertz Global Holdings Inc. has carved a niche for itself as a leading name in car rental services. Tracing its origins back to 1918, the company started with a fleet of just a dozen Model T Fords. Over the decades, Hertz expanded its reach globally, establishing a ubiquitous presence at airports and metropolitan cities around the world. Its business model is straightforward yet effective: Hertz acquires vehicles in bulk from manufacturers, leveraging its purchasing power for significant discounts. These vehicles form the core of its rental fleets, which are offered to a variety of customer segments including business travelers, tourists, and corporate clients.
Hertz generates revenue primarily through short-term rentals, but its operations extend beyond just renting out cars. It has developed a strong foothold in leasing and fleet management services, providing long-term vehicle solutions to businesses and government agencies. Furthermore, the company capitalizes on the resale of its rental vehicles through its direct-to-consumer Car Sales program, adding another revenue stream. The operational efficiency is key; maximizing vehicle utilization rates and optimizing the sell-off timing ensures Hertz maintains a steady pipeline of revenue across its business cycles. As the automotive and travel industries evolve, Hertz continues to innovate with initiatives in mobility solutions and ventures into electric vehicle rentals to align with sustainability trends.
In the dynamic landscape of transportation, Hertz Global Holdings Inc. has carved a niche for itself as a leading name in car rental services. Tracing its origins back to 1918, the company started with a fleet of just a dozen Model T Fords. Over the decades, Hertz expanded its reach globally, establishing a ubiquitous presence at airports and metropolitan cities around the world. Its business model is straightforward yet effective: Hertz acquires vehicles in bulk from manufacturers, leveraging its purchasing power for significant discounts. These vehicles form the core of its rental fleets, which are offered to a variety of customer segments including business travelers, tourists, and corporate clients.
Hertz generates revenue primarily through short-term rentals, but its operations extend beyond just renting out cars. It has developed a strong foothold in leasing and fleet management services, providing long-term vehicle solutions to businesses and government agencies. Furthermore, the company capitalizes on the resale of its rental vehicles through its direct-to-consumer Car Sales program, adding another revenue stream. The operational efficiency is key; maximizing vehicle utilization rates and optimizing the sell-off timing ensures Hertz maintains a steady pipeline of revenue across its business cycles. As the automotive and travel industries evolve, Hertz continues to innovate with initiatives in mobility solutions and ventures into electric vehicle rentals to align with sustainability trends.
Return to Profit: Hertz posted positive EPS for the first time in two years, signaling a turnaround in financial performance.
Revenue & Margin: Revenue was $2.5 billion with an adjusted corporate EBITDA of $190 million, up $350 million year-over-year and at an 8% margin within guidance.
Fleet Transformation: The company completed a major fleet refresh, reducing average vehicle age to under 12 months and hitting record utilization of 84%.
Digital Car Sales Expansion: Hertz is aggressively scaling its car sales business, leveraging e-commerce including partnerships with Cox Automotive and Amazon Autos, aiming for higher retail margins per vehicle.
Cost Discipline: Direct operating expenses declined 1% year-over-year and DOE per day improved sequentially and annually, despite inflation and a smaller fleet.
2026 Outlook: Management expects mid-single-digit growth in transaction days, plans to keep net DPU below $300, and targets a 3% to 6% EBITDA margin for 2026.
Near-Term Guidance: Q4 EBITDA margin is expected to be negative low to mid-single digits, impacted by system outages and softness in certain demand periods, but seen as transitory.
