Hertz reported its strongest quarterly revenue and Adjusted Corporate EBITDA in three years, as higher rental pricing and disciplined fleet management lifted results despite flat capacity. The improvement was concentrated in the U.S. core rental business, while international operations remained softer.
The quarter also showed a divergence between operating progress and reported earnings: net income fell from a year earlier, even as revenue and Adjusted Corporate EBITDA increased.
Key details
-
Revenue and operating performance: Third-quarter revenue was $2.6 billion, up about 6% from a year earlier. Adjusted Corporate EBITDA was $233 million, a 15% increase and the company’s best quarterly result on that measure in three years.
-
Pricing improved: Revenue per Unit and Revenue per Day each rose about 5% year over year, marking a third consecutive quarter of sequential improvement. In Hertz’s U.S. core business, Revenue per Day increased about 8%, despite lower TSA-related volumes. International softness partly offset the U.S. strength.
-
Net income declined: GAAP net income was $116 million, compared with $184 million a year earlier; diluted GAAP earnings per share were $0.20. Adjusted net income was $67 million, or $0.14 per diluted share.
-
Fleet and depreciation: Net depreciation per unit per month was $285, in line with the company’s expectations. Hertz said its U.S. core fleet had an average age of nine months, its youngest in 12 years.
-
Operating costs rose, but the revenue-cost spread widened: Direct Operating Expense per Day increased 6% year over year, while Adjusted Direct Operating Expense per Day rose about 5%. Roughly 240 basis points of the adjusted increase reflected revenue-related costs associated with higher Revenue per Day; most of the remainder came from higher collision and maintenance expense. The spread between Revenue per Day and Adjusted Direct Operating Expense per Day improved about 5% year over year, the fourth consecutive quarter of improvement.
-
Liquidity: Hertz ended the quarter with approximately $946 million of liquidity.
-
Oro investment: Hertz said mobility platform Oro secured an $80 million strategic equity investment from a consortium of investors. The company described the funding as giving Oro dedicated capital and flexibility to grow as a standalone platform. Oro drivers have completed more than 10 million miles, and its first autonomous-vehicle partnership is underway in the San Francisco Bay Area.
What changes for investors
The results point to stronger pricing and improving per-day economics in Hertz’s core U.S. rental business, while higher operating costs and international softness remain part of the picture. The quarter’s higher adjusted operating profit did not translate into higher GAAP net income, which fell year over year. Separately, Oro’s investment gives it dedicated outside capital to pursue growth as a standalone platform; the announcement did not specify the investment’s ownership or financial impact on Hertz.