HTZ — Hertz Global Holdings, Inc.

Hertz Global Holdings Q1 2026 Earnings Call Summary

1. Key Financial Results and Metrics

• Revenue: $2.0 billion, up 11% year-over-year, marking the strongest growth in three years.
• Adjusted Corporate EBITDA: Improved by $141 million year-over-year, reaching negative $161 million.
• GAAP Net Loss: $333 million; adjusted net loss of $224 million, an improvement of $105 million year-over-year.
• Adjusted EPS: Negative $0.72, an improvement of $0.35 from Q1 2025.
• RPD (Revenue Per Day): Increased approximately 5.5%, with U.S. airport RPD up about 8%.
• DPU (Depreciation Per Unit): Gross DPU was $296, with net DPU at $312, above the North Star target of $300.
• Adjusted DOE (Depreciation, Operating, and Expenses) per transaction day: $38.43, a 1.7% increase year-over-year.

2. Strategic Updates and Business Highlights

• Hertz is focused on a transformation strategy centered around three metrics: DPU below $300, RPU (Revenue Per Unit) over $1,500, and DOE in the low $30s, aiming for $1 billion EBITDA by 2027.
• The company launched Oro, a new mobility business aimed at bridging the gap between autonomous technology and demand platforms, leveraging Hertz's fleet management expertise.
• Significant improvements in customer experience and operational efficiency were noted, with a 50% improvement in Net Promoter Score and recognition as a trusted brand.
• Partnerships with Amazon Autos and eBay were established to enhance car sales and expand market reach.

3. Forward Guidance and Outlook

• For Q2 2026, Hertz expects a year-over-year decline in days by 2-3% and fleet down by 1-2% due to elevated recalls.
• Full-year guidance for days is now expected to be up in the mid-single-digit range, with fleet growth projected in low single digits.
• The company maintains its EBITDA margin guidance of 3% to 6% for the full year, with a target of achieving $1 billion EBITDA by 2027.

4. Bad News, Challenges, or Points of Concern

• Elevated Recalls: Recall activity increased nearly 300% year-over-year, significantly impacting fleet availability and utilization, resulting in a revenue loss of about $50 million.
• Utilization Pressure: Utilization was negatively affected by recalls, reducing it by approximately 200 basis points year-over-year.
• Cost Management: Adjusted DOE per transaction day increased due to revenue-related costs and higher real estate expenses from sale-leaseback transactions, although core DOE improved when normalized.
• Market Conditions: The company faces challenges in balancing pricing, supply, and unit costs, particularly in a competitive market environment.

5. Notable Q&A Insights

• Valuation Perspective: Management acknowledged the difficulty in valuing Hertz based on traditional rental car metrics, emphasizing the need for a new approach that considers the broader platform and emerging business segments like Oro.
• RPU Sustainability: Confidence in maintaining positive RPU growth was expressed, driven by structural improvements and a strong demand foundation.
• Oro's Role: The Oro initiative is seen as a critical component for future growth, with plans to scale operations and integrate AV capabilities, although the focus remains on operational readiness and economic viability.
• Liquidity Position: Hertz ended Q1 with $837 million in liquidity, expecting to reach nearly $1 billion by the end of Q2, which is crucial for supporting growth initiatives.

This summary encapsulates the key elements of Hertz's Q1 2026 earnings call, highlighting both the progress made and the challenges faced as the company continues its transformation.