Hertz's Strategic Turnaround: A Path to Sustainable Growth in 2025

Hertz Global Holdings’ 2025 transformation has emerged as a compelling case study in corporate resilience. After years of financial turmoil, the company has achieved its first positive Adjusted Corporate EBITDA in seven quarters, marking a pivotal milestone in its recovery [1]. This progress is driven by a disciplined approach to fleet management, cost control, and revenue optimization, all underpinned by its “Back-to-Basics Roadmap.” For investors, the question is no longer whether Hertz can survive, but whether it can capitalize on its momentum to deliver long-term value.

Fleet Management: The Engine of Turnaround

At the heart of Hertz’s revival is its “Buy Right, Hold Right, Sell Right” strategy, which has slashed depreciation per unit (DPU) to $251/month in Q2 2025—16% below its $300 target [2]. This achievement reflects a radical overhaul of fleet acquisition and disposal practices. By prioritizing newer, lower-depreciating vehicles and accelerating the sale of older assets, Hertz has refreshed its core U.S. rental fleet, with over 80% of units now less than a year old [3]. The result? A 58% year-over-year decline in DPU and an 83% vehicle utilization rate, up 300 basis points from 2024 [4].

Financial Resilience: Liquidity and Debt Management

Hertz’s liquidity position has also strengthened significantly. As of June 30, 2025, the company held $1.45 billion in liquidity, providing a buffer against macroeconomic risks [5]. This flexibility is further enhanced by the extension of $1.7 billion in First Lien Revolving Credit Facility maturities to 2028, delaying near-term debt pressures [6]. While Hertz’s $18.9 billion debt load remains a concern, its focus on asset efficiency has improved free cash flow, with direct operating expenses declining by 3% year-over-year [7].

Strategic Diversification and Innovation

Beyond fleet optimization, Hertz is leveraging digital innovation to future-proof its business. A partnership with Amadeus to modernize its revenue management system enables real-time pricing adjustments and localized demand forecasting [8]. Meanwhile, initiatives like the Rent2Buy program—now available in over 100 U.S. cities—and AI-driven retail vehicle sales have boosted margins and customer engagement [9]. These moves position Hertz to capitalize on emerging trends, including electric vehicle adoption and autonomous mobility [10].

Challenges and Risks

Despite these strides, Hertz faces headwinds. Supply chain delays and vehicle recalls affecting 2% of its U.S. fleet could disrupt operations [11]. Litigation with Wells Fargo and competitive pressures from rivals like Enterprise and Zipcar also pose risks [12]. Additionally, the company’s reliance on U.S. markets exposes it to regional economic volatility. However, its strategic focus on cost discipline and asset efficiency has mitigated some of these threats, as evidenced by its Q2 2025 breakeven EBITDA and improved liquidity [13].

Long-Term Outlook: A $1 Billion EBITDA Target

Hertz’s long-term goal of achieving $1 billion in adjusted EBITDA by 2027 appears increasingly attainable. The company’s current trajectory—marked by a 21% sequential revenue increase in Q2 2025 and a 16% DPU improvement—suggests it is on track to meet this target [14]. For investors, the key will be monitoring progress on revenue per unit (RPU) and direct operating expenses (DOE), which remain below pre-pandemic levels [15]. If Hertz can sustain its operational momentum while scaling digital initiatives, it could emerge as a leader in the evolving mobility landscape.

Source:
[1] Hertz Logs Best Quarterly Results in Nearly Two Years [https://ir.hertz.com/news/news-details/2025/Hertz-Logs-Best-Quarterly-Results-in-Nearly-Two-Years-Driven-by-Half-a-Billion-Dollar-Profitability-Improvement/default.aspx]
[2] Hertz's Leadership Overhaul and Strategic Turnaround [https://www.ainvest.com/news/hertz-leadership-overhaul-strategic-turnaround-prospects-2508/]
[3] Hertz Q2 2025 slides: Achieves breakeven EBITDA amid transformation journey [https://www.investing.com/news/company-news/hertz-q2-2025-slides-achieves-breakeven-ebitda-amid-transformation-journey-93CH-4177467]
[4] Hertz's Earnings Turnaround: A Strategic Rebuild Positions Company for $1B EBITDA Future [https://www.ainvest.com/news/hertz-earnings-turnaround-strategic-rebuild-positions-company-1-billion-ebitda-future-2508/]
[5] Hertz Global Holdings: Navigating Earnings Downturns [https://www.ainvest.com/news/hertz-global-holdings-navigating-earnings-downturns-strategic-turnaround-potential-q2-2025-2508/]
[6] Hertz’s Earnings Turnaround: A Strategic Rebuild Positions the Company for a $1 Billion EBITDA Future [https://www.ainvest.com/news/hertz-earnings-turnaround-strategic-rebuild-positions-company-1-billion-ebitda-future-2508/]
[7] Hertz’s Strategic Position in the Evolving Mobility Landscape [https://www.ainvest.com/news/hertz-strategic-position-evolving-mobility-landscape-catalyst-long-term-investor-confidence-2508/]
[8] Hertz’s Leadership Overhaul and Strategic Turnaround Prospects [https://www.ainvest.com/news/hertz-leadership-overhaul-strategic-turnaround-prospects-2508-7/]
[9] Hertz Logs Best Quarterly Results in Nearly Two Years [https://ir.hertz.com/news/news-details/2025/Hertz-Logs-Best-Quarterly-Results-in-Nearly-Two-Years-Driven-by-Half-a-Billion-Dollar-Profitability-Improvement/default.aspx]
[10] Hertz’s Earnings Turnaround: A Strategic Rebuild Positions the Company for a $1 Billion EBITDA Future [https://www.ainvest.com/news/hertz-earnings-turnaround-strategic-rebuild-positions-company-1-billion-ebitda-future-2508/]
[11] Hertz Q2 2025 slides: Achieves breakeven EBITDA amid transformation journey [https://www.investing.com/news/company-news/hertz-q2-2025-slides-achieves-breakeven-ebitda-amid-transformation-journey-93CH-4177467]
[12] Hertz’s Leadership Overhaul and Strategic Turnaround [https://www.ainvest.com/news/hertz-leadership-overhaul-strategic-turnaround-prospects-2508/]
[13] Hertz’s Strategic Position in the Evolving Mobility Landscape [https://www.ainvest.com/news/hertz-strategic-position-evolving-mobility-landscape-catalyst-long-term-investor-confidence-2508/]
[14] Hertz’s Earnings Turnaround: A Strategic Rebuild Positions the Company for a $1 Billion EBITDA Future [https://www.ainvest.com/news/hertz-earnings-turnaround-strategic-rebuild-positions-company-1-billion-ebitda-future-2508/]
[15] Hertz Q2 2025 slides: Achieves breakeven EBITDA amid transformation journey [https://www.investing.com/news/company-news/hertz-q2-2025-slides-achieves-breakeven-ebitda-amid-transformation-journey-93CH-4177467]