Hertz Global 2025 Q1 Earnings Misses Targets as Net Income Declines 138%

Hertz Global Holdings (HTZ) reported its fiscal 2025 Q1 earnings on May 12, 2025. Total revenue fell 12.8% from the previous year to $1.81 billion, missing analysts' projections of $2.01 billion. Hertz's net loss widened significantly to $443 million, or $1.44 per share, compared to a $186 million loss or $0.61 per share in Q1 2024. The company provided cautious guidance amid macroeconomic uncertainty, forecasting positive adjusted EBITDA by Q3 2025.

Revenue

Hertz Global's total revenue for Q1 2025 was $1.81 billion, reflecting a 12.8% decline year-over-year. The operating lease income from vehicle rentals contributed $1.63 billion, while variable operating lease income added $122 million. Revenue accounted for under Topic 606 was $57 million. This decrease was primarily driven by reduced fleet capacity and a strategic shift to a newer fleet composition.

Earnings/Net Income

Hertz Global experienced a significant widening of its net loss in Q1 2025, with the loss per share increasing to $1.44 from $0.61 in Q1 2024, representing a 136.1% decline. The net loss grew to $443 million, up 138.2% from $186 million a year earlier, indicating a challenging quarter for the company.

Post-Earnings Price Action Review

The strategy of buying Hertz Global stock when there is a revenue miss and holding for 30 days has historically underperformed. A backtest revealed a notable loss of 71.99%, with an excess return of -90.39%. This indicates that the approach failed to yield positive returns. The Sharpe ratio stood at -0.39, suggesting negative risk-adjusted returns. A maximum drawdown of 89.54% further highlights the strategy's high risk. These findings emphasize the challenges of relying on this strategy in the current market environment.

CEO Commentary

"Our 'Back-to-Basics Roadmap' is working," said Gil West, Chief Executive Officer of Hertz. "Disciplined fleet management, revenue optimization, and rigorous cost control are driving meaningful results. We have swiftly rotated into a newer, more efficient fleet, reducing vehicle depreciation by 45% year-over-year. While we face macro demand uncertainties, our core U.S. rental fleet is now over 70% comprised of vehicles 12 months old or newer. We intend to remain prudent in our fleet management and capitalize on the strong residual value environment to position Hertz for long-term, sustainable value."

Guidance

Hertz anticipates achieving positive adjusted corporate EBITDA by the third quarter of 2025. The company targets depreciation per unit (DPU) below $300 sooner than previously expected, with model year 2025 vehicles already meeting this goal. Revenue guidance remains cautious amid macroeconomic uncertainty, with expectations for moderate demand in corporate and government segments while leisure bookings increase year-over-year.

Additional News

In recent weeks, Hertz Global Holdings has made strategic moves to strengthen its financial foundation. On May 9, 2025, the company announced the completion of amendments to its credit facilities, extending commitments under its revolving credit facility and vehicle variable funding notes. This action aims to enhance the company's liquidity and flexibility as it navigates economic uncertainties. Additionally, Hertz has partnered with UVeye, a leader in AI-driven vehicle inspection systems, to modernize vehicle maintenance processes across major U.S. airports. This collaboration is expected to improve the efficiency and accuracy of vehicle maintenance, enhancing the overall customer experience. Hertz also continues to expand its retail footprint, leveraging its retail vehicle sales channel to maximize value and improve unit economics.