Record Utilization and Return to Profitability Mark a New Chapter for Hertz
Transformation Delivers Highest Utilization Since 2018 and EPS Profitability
Hertz’s latest quarterly results offer more than just an earnings turnaround. With vehicle utilization climbing to 84%—a level not seen since 2018—and positive earnings per share (EPS) for the first time in two years, the company’s transformation is making an unmistakable impact. Management credits a disciplined Back-to-Basics approach and improved operational processes for reducing downtime and sharpening rental efficiency, allowing Hertz to capitalize on every available vehicle in its streamlined fleet.
Operational Execution Cuts Costs, Drives Fleet Economics
Hertz has completed a major fleet refresh, realigning vehicle life cycles and costs. Notably, the company reduced depreciation per unit per month (DPU) to $273—nearly half of last year’s $532, and within the targeted sub-$300 level. Direct operating expenses (DOE) dropped 1% year-over-year, with per transaction day costs also falling despite lower fleet capacity. These cost control achievements, paired with better vehicle turnover via expanded retail sales channels, underline an emphasis on rigorous asset management and margin improvement.
Profitability Returns on Stronger Margins and Improved Customer Experience
While total revenue for the quarter dipped 4% to $2.48 billion due to a smaller fleet, Hertz reversed last year’s $1.33 billion net loss to achieve $184 million in net income, and $0.42 in diluted EPS. Adjusted Corporate EBITDA surged by about $350 million to $190 million, and margin rose to 8% from -6%. Importantly, the North America Net Promoter Score climbed nearly 50% year-over-year—reflecting efforts to streamline rental processes and deliver a higher-quality vehicle experience for customers.
Segment Insights: Americas Streamline While International Expansion Shines
| Metric | Americas RAC | Intl. RAC |
|---|---|---|
| Total Revenue ($M) | 1,910 | 568 |
| Adj. EBITDA ($M) | 152 | 100 |
| Utilization (%) | 85 | 82 |
| DPU Per Month ($) | 278 | 254 |
| Total RPU Per Month ($) | 1,552 | 1,454 |
While Americas RAC (Rent-a-Car) saw revenue decrease, efficiency and cost discipline led to positive EBITDA and improved utilization. International RAC delivered an 11% revenue jump and a 59% increase in adjusted EBITDA, aided by stronger vehicle demand and better rental pricing. The focus on efficient fleet allocation paid off across both segments.
Balance Sheet and Cash Flow: Strong Liquidity and Free Cash Generation
At quarter’s end, Hertz boasted $2.2 billion in liquidity, supported by $1.55 billion in total cash and restricted cash. Positive adjusted free cash flow reached $250 million, and adjusted operating cash flow stood at $178 million, signaling disciplined capital allocation even amid a fleet downsizing strategy.
Customer-Centric Moves Reinforce Future Platform for Growth
The “Buy Right, Hold Right, Sell Right” strategy not only improved retail sales margins—fleet sold through retail channels jumped 570 basis points year-on-year—but also set up a foundation for lasting profitability. The company’s successful Model Year 2026 vehicle procurement and DPU guidance below $300 reinforce confidence in sustained operational strength.
Key Financial Metrics Snapshot
| Q3 2025 | Q3 2024 | Change | |
|---|---|---|---|
| Net Income ($M) | 184 | (1,332) | NM |
| Diluted EPS ($) | 0.42 | (4.34) | NM |
| Adj. Corporate EBITDA ($M) | 190 | (157) | NM |
| Adj. Free Cash Flow ($M) | 248 | (154) | NM |
| Vehicle Utilization (%) | 84 | 82 | +2 pts |
| DPU Per Month ($) | 273 | 532 | -49% |
| Liquidity ($B) | 2.2 | N/A | N/A |
Takeaway: Platform Now in Place for Resilient, Profitable Mobility
Hertz’s third-quarter transformation is more than a bounce off a low base: it demonstrates that strategic fleet management, strict cost controls, and an improved customer focus can reshape performance in even a tough environment. The jump in utilization and return to profitability provide a solid base as Hertz pivots toward the next generation of mobility. As the company eyes its RPU ‘North Star’ of $1,500+ per month, ongoing operational discipline and adaptability could keep it ahead of shifting trends in travel and transportation.
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