Hertz Global (HTZ) Q3 Earnings call transcript Nov 12, 2024
1min read Hertz Global Holdings recently held its third quarter earnings call, where the company's management team provided insights into the company's performance and future strategies. The call was led by Gil West, the Chief Executive Officer, who emphasized the company's focus on fleet, revenue, and cost management, as part of a back-to-basic strategy.
Fleet Management
Hertz is addressing its fleet management challenges by operating the fleet inside demand, with a goal of producing the same number of transaction days with less fleet. This strategy aims to benefit the cost structure and improve fleet utilization. The company has established a new vertical dedicated to end-to-end fleet management and has recorded an asset impairment charge, primarily affecting the U.S. and European fleets. Hertz's new management team is focusing on buying the right vehicles at competitive prices, optimizing fleet rotation, and maximizing net proceeds from retail car sales.
Revenue and Customer Service
Under the leadership of Sandeep Dube, the Chief Commercial Officer, Hertz is committed to delivering an exceptional customer experience, improving operational utilization, and selectively monetizing demand. The company's commercial team is implementing a rapid test-and-learn approach to improve revenue and drive better utilization of the fleet. Hertz is optimizing its pricing strategy to generate premium rates and maximize revenue per unit while maintaining a strong focus on customer loyalty.
Financial Performance and Outlook
Hertz reported a revenue of $2.6 billion for the third quarter, with an adjusted corporate EBITDA loss of $157 million. The earnings call also addressed the non-cash asset impairment charge of over $1 billion, largely due to the decline in fleet residual values over the last year. The company is targeting a run rate DPU below $300 per unit per month by the end of 2025, which is expected to unlock increased shareholder value.
Challenges and Opportunities
Despite facing hurricane-related challenges and market volatility, Hertz remains optimistic about its future. The company's operational transformation is on track for completion by the end of next year, and the team is focused on leveraging people, technology, and process to achieve sustainable long-term success.
In conclusion, Hertz Global Holdings' third quarter earnings call provided a comprehensive update on the company's financial performance and strategic initiatives. The company's focus on fleet optimization, revenue growth, and cost management positions it well for the future. Despite the challenges faced, Hertz remains committed to delivering value to its customers and shareholders.
