EBITDA

Q1 2025

Negative EBITDA "

no current guidance

no current guidance

EBITDA

Q2 2025

breakeven "

approximately breakeven "

no change

EBITDA

Q3 2025

no prior guidance

sizable profit "

no prior guidance

EBITDA

Q4 2025

small profit "

positive "

no change

Depreciation Per Unit (DPU)

Q1 2025

“Slightly inflated” in Q1 2025 " " "

no current guidance

no current guidance

Depreciation Per Unit (DPU)

FY 2025

Targeting sub‑$300 net DPU by end of FY 2025 " " "

Expected to be below $300 starting in Q2 2025 " " "

no change

Revenue Per Unit (RPU)

FY 2025

Progressing toward a target of $1,500 RPU "

Targeting above $1,500 " " "

raised

Direct Operating Expense (DOE) Per Day

FY 2025

Aiming for DOE in the low 30s per transaction day " "

Targeting low $30s " "

no change

EBITDA Margin

FY 2025

Low single-digit adjusted EBITDA margin "

Low single digits "

no change

Cash Flow

FY 2025

Anticipating cash burn in H1 FY 2025—with the low point in Q2 "

no current guidance

no current guidance

Fleet Rotation

FY 2024

60% of cars being less than 1 year old at end of FY 2024 "

no current guidance

no current guidance

2026 EBITDA Target

2026

no prior guidance

Expected to exceed $1 billion "

no prior guidance

2027 Scale and Efficiencies

2027

no prior guidance

Achieving North Star metrics by 2027 "

no prior guidance

Fleet Optimization, Rotation & Utilization (DPU Improvement)

Q2 2024, Q3 2024 and Q4 2024 calls focused on an aggressive, end-to-end fleet rotation strategy that aimed to lower DPU – with targets sometimes hinted around sub‑$300 and improvements turning fleet rotation from a headwind into a tailwind ( " " " " " " ).

Q1 2025 emphasized a disciplined “buy right, hold right, and sell right” approach with over 70% of the U.S. RAC fleet now 12 months old or newer, a Q1 DPU of $353 per month and expectations to dip below $300 by Q2, signaling accelerated improvements ( " " " " ).

Consistent focus on fleet rotation with further acceleration and earlier-than-anticipated DPU improvements, shifting sentiment from cautious to more positive as operational metrics improve.

Revenue Management & Pricing Strategies

In Q2–Q4 2024, Hertz detailed a transformation of revenue management through dynamic pricing, optimizing value-added services and channel mix, with incremental RPD gains and a focus on exiting low-yielding segments ( " " " " " " ).

Q1 2025 discussions highlighted a transformation journey via partnerships (Amadeus, Cox Automotive) and adjustments in fleet mix affecting pricing; temporary challenges (e.g. a 5% drop in pricing) are deemed isolated, with the long‑term target of higher margins maintained ( " " " " " ).

Ongoing transformation that builds on prior innovations – while temporary pricing headwinds persist, strategic shifts and technology partnerships continue to strengthen revenue management and pave the way for durable margin improvements.

Liquidity & Capital Market Actions

Q2–Q4 2024 earnings calls consistently reported strong liquidity positions (ranging from $1.6B to $1.8B), active capital raises (e.g. $500M in Q4, $1B raised in June Q2), refinancing actions including ABS programs, and preparatory steps for addressing upcoming maturities ( " " " " " " ).

In Q1 2025, liquidity stood at $1.2B with expectations to exceed $1B in Q2 despite litigation costs; additionally, a revolving credit facility amendment extended maturities and an ATM equity offering was authorized, underscoring robust capital flexibility ( " " " ).

Stable liquidity with ongoing capital market activity – slight adjustments in facility terms and proactive steps (ATM offering) indicate a continued focus on financial flexibility amid operational changes.

Operational Efficiency & Cost Management

Q2–Q4 2024 calls stressed improving efficiency through process engineering, leveraging technology (Palantir, process improvements), targeted cost reductions (DOE in the low 30s), and structural cost cuts in SG&A and maintenance, albeit facing headwinds such as insurance and lease expense adjustments ( " " " " " ).

Q1 2025 emphasized progress in operational efficiency via advanced technology integration (e.g. Palantir, UVI, Decagon) and notable DOE improvements (a 4% quarterly decline and gradual SG&A improvement), alongside significant DPU reduction achievements ( " " " " " " ).

Consistent cost management efforts that build on earlier process improvements – continued use of technology and disciplined fleet management are yielding incremental cost reductions and enhanced efficiency, moving towards long‑term DOE targets.

Residual Value & Depreciation Uncertainty

Previous periods (Q2–Q4 2024) discussed declining residual values, asset impairments (notably a noncash asset impairment in Q3 around $1B), and a clear strategy for achieving sub‑$300 DPU despite short‑term volatility and depreciation “noise” from fleet rotation ( " " " " " ).

Q1 2025 highlighted improved residual dynamics where every 1% increase in residual value drives significant economic benefits; the DPU was $353 and expected to be under $300 soon, signaling that the curated younger fleet and proactive management are starting to pay off ( " " " " ).

Gradual improvement and stabilization – while previous calls noted volatility and impairment noise, Q1 2025 conveys a more optimistic outlook with enhanced residual values and earlier DPU improvements, reflecting the success of fleet strategy adjustments.

Tariff Exposure & Regulatory Risks

In Q4 2024, Hertz described its fleet strategy as largely insulating the company from tariff effects and noted that a diversified supply chain helped mitigate risks; prior Q3 and Q2 calls did not emphasize regulatory risks ( " ).

Q1 2025 elaborated on proactive measures such as accelerating deliveries for model year 2025 to avoid tariffs, with two‑thirds of the fleet delivered pre‑tariff, though caution remains for future model years, underlining a more proactive stance amid tariff uncertainty ( " " " " ).

Increased focus in Q1 2025 on preemptively managing tariff risks – while earlier periods mentioned the benefits of fleet strategy, the current discussion is more detailed and forward‑looking regarding potential regulatory and tariff impacts.

Local Market Dynamics (Over‑fleeting Risk)

Q4 2024 discussions emphasized aligning fleet size with demand (e.g. a 7% reduction) and using “sweating assets” strategies; Q3 did not specifically mention over‑fleeting while Q2 noted market‑level allocation adjustments ( " " " ).

Q1 2025 acknowledged temporary over‑fleeting in certain local markets due to early vehicle deliveries, though corrective actions have been taken; despite local excesses, rising residuals helped offset pricing impacts ( " ).

Greater granularity with an added focus in Q1 2025 – while earlier periods considered fleet alignment broadly, current period highlights local over‑fleeting challenges and proactive measures to address them, indicating a more nuanced approach to market dynamics.

Digital Transformation & Customer Experience

Q2–Q4 2024 calls highlighted digital initiatives such as improvements in the digital car sales experience, dynamic pricing, increased loyalty enrollments, and partnerships leveraging data and AI for enhanced customer service and operational efficiency ( " " " " " ).

Q1 2025 placed strong emphasis on digital transformation with new technology partnerships (Palantir, UVI, Amadeus, Decagon) leading to improved NPS (an 11‐point year-over-year increase) and a focus on frictionless, self‑service experiences, reinforcing a customer-centric transformation ( " " " " ).

Continued and expanding investment in digital and customer experience platforms – while the strategy was present in earlier periods, Q1 2025 shows enhanced integration of technology across multiple functions, signaling deeper commitment to improving customer satisfaction and efficiency.

Market Forecasting, Guidance & Vehicle Sales Challenges

Q2–Q4 2024 discussions offered directional guidance for 2025, outlined long‑term targets (e.g. DPU, DOE, RPD) and addressed vehicle sales challenges—including losses on Q4 vehicle sales due to seasonal softness and reliance on wholesale channels—while noting fleet rotation and residual value headwinds ( " " " " " " ).

Q1 2025 covered macroeconomic uncertainties with guidance on long‑term North Star metrics for 2027, detailed temporary local over‑fleeting challenges, and underscored record retail car sales and robust residual tailwinds as key counterbalances to vehicle sales challenges ( " " " " " " ).

Consistent long‑term focus with evolving nuance – previous periods laid the groundwork for targets and challenges, whereas Q1 2025 demonstrates a confident strategy backed by strong retail performance and proactive measures to mitigate temporary local and macro challenges.

Insurance Costs & Accounting Adjustments

Q2–Q4 2024 calls consistently mentioned higher-than-expected insurance costs, increases in insurance reserves, and adjustments in lease and depreciation accounting (notably following impairments), impacting DOE and SG&A while setting the stage for subsequent cost normalization ( " " " " ).

Q1 2025 noted that persistent insurance cost headwinds were partly offset by year-over-year DOE improvements and adjusted SG&A metrics (excluding one‑time stock-based compensation impacts), indicating positive cost management amid ongoing challenges ( " ).

Persistent challenges continue – while insurance headwinds remain across periods, incremental accounting adjustments and cost management initiatives have led to modest improvements in Q1 2025, suggesting a careful stabilization of these cost factors over time.