Hertz's Q4 2024 Earnings Call: Contradictions in Fleet Strategy, Impairment Effects, and Revenue Outlook

These are the key contradictions discussed in Hertz Global Holdings' latest 2024Q4 earnings call, specifically including: Fleet Rotation Strategy, Impairment Impact on Future EBITDA, EV Integration into the Fleet, and Revenue Growth and Margin Expectations:



Fleet Rotation and Fleet Strategy:
- As of year-end 2024, over 60% of Hertz's fleet comprised cars one year old or less, with plans to complete the fleet rotation by year-end 2025.
- The strategy aims to reduce average cap costs of vehicles by almost 30%, unlocking sub-$300 DPU, and improve customer satisfaction with newer vehicles.

Revenue Performance and Pricing Strategy:
- Hertz reported a 7% decrease in revenue for Q4 2024 year-over-year, primarily due to lower volume.
- The company is focusing on maximizing RPU through better capacity management and improved demand generation, achieving a 150 basis point improvement in RPU between Q3 and Q4.

Cost Control and Operational Efficiency:
- Despite a sizable increase in insurance reserves and accounting changes, Hertz is managing its core operating costs effectively, expecting DOE per day to be flat to down year-over-year in 2025.
- This is attributed to disciplined execution in labor, maintenance, collision, and supply chain costs, along with improved utilization and fleet efficiency.

Liquidity and Financial Flexibility:
- Hertz ended 2024 with $1.8 billion in liquidity, supporting their operational and strategic plans.
- The company is actively managing upcoming debt maturities, with a focus on enhancing liquidity through capital raises, providing flexibility to navigate market uncertainties.