Hertz Global Earnings Call Signals Cautious Turnaround

Hertz Global Holdings Inc ((HTZ)) has held its Q1 earnings call. Read on for the main highlights of the call.

Hertz Global Holdings’ latest earnings call struck a cautiously upbeat tone, as management highlighted the company’s strongest revenue growth in years, better pricing and improving unit economics while openly acknowledging ongoing GAAP losses and heavy recall-related disruptions. Executives framed 2026 as a transition year in which operational gains, tighter cost control and new mobility initiatives lay the groundwork for a return to sustained profitability, but stressed that execution risk remains high.

Revenue Rebounds With Double-Digit Growth

Hertz reported first-quarter 2026 revenue of $2.0 billion, up 11% year over year and the fastest top-line growth the company has seen in three years. Management emphasized sequential improvements in revenue per unit and revenue per day through the quarter, suggesting better demand patterns and more disciplined yield management across the fleet.

Profitability Metrics Show Meaningful Improvement

Adjusted corporate EBITDA improved by $141 million from a year ago to negative $161 million, nearly a 50% improvement despite remaining in the red. Adjusted net loss narrowed by about $105 million to negative $224 million, while adjusted EPS improved by $0.35 to negative $0.72 and EBITDA margin climbed roughly 860 basis points to negative 8%.

Pricing Power and Transaction Growth Gain Traction

Revenue per day rose by about 5% to 5.5% versus last year, supported by roughly 3% growth in transaction days, signaling both stronger pricing and expanding volume. U.S. airport locations led the way with RPD up about 8% to 9%, and the spread between RPD and DOE per day improved by roughly 12%, pointing to healthier unit-level profitability.

Fleet Economics Improve Despite Depreciation Noise

Gross depreciation per unit per month came in at $296, with another $16 per unit from losses on sale, for a net DPU of $312. Management touted having its youngest fleet in nearly a decade, improving residual values and disciplined fleet rotation, noting that they previously reached their net DPU “North Star” and remain confident in hitting fleet targets again.

Customer Experience Scores Hit Record Levels

Customer satisfaction continued to climb, with Hertz reporting a 50% improvement in Net Promoter Score last year that carried into the first quarter and a record NPS in Europe. The company was named the only rental car brand on USA Today’s Most Trusted Brands 2026 list and delivered top year-over-year gains in Business Travel News rankings, helped by new service initiatives at major U.S. airports.

Oro Mobility Platform and Uber Ties Expand

Hertz used the call to formally unveil its Oro mobility business, built around an owned and operated fleet and more than 1,000 drivers serving ride-hail demand. Oro has already logged over 4 million miles on the Uber platform across markets such as Atlanta, Los Angeles, San Francisco and Northern New Jersey, and has joined Uber’s autonomous robo-taxi program, which management sees as a potential high-growth, value-accretive asset.

Car Sales and F&I Omnichannel Strategy Advance

The company highlighted progress in its omnichannel car sales strategy, including partnerships with Amazon Autos, a new tie-up with eBay and integration of Cox Automotive tools. Hertz also delivered its best finance and insurance revenue quarter in roughly three and a half years and expects F&I income to scale alongside growing used car sales, boosting overall unit economics.

Liquidity Position Strengthens Through Financing

Hertz closed the quarter with $837 million in liquidity, combining cash and revolver capacity, and later completed an asset-backed securities financing in April that added $200 million. Management expects to finish the second quarter with just under $1.0 billion of available liquidity and projects more than $1.5 billion by year-end as additional balance-sheet actions are executed.

Holiday Performance Underscores Operational Discipline

The company underscored strong performance around Easter, with utilization reaching its highest level for that holiday since 2017 and RPD up 10% year over year. Revenue per unit on the rentable fleet climbed 16% despite operating with roughly 20,000 fewer vehicles, marking the seventh straight major holiday showing year-over-year gains in both utilization and pricing.

Persistent GAAP Losses Highlight Work Still To Do

Despite operational gains, Hertz reported a GAAP net loss of $333 million in the first quarter, underscoring that the business remains structurally unprofitable. Adjusted EBITDA, while significantly improved, was still negative $161 million, and management acknowledged that returning to consistent GAAP profitability will require continued discipline on costs, fleet efficiency and new revenue streams.

Elevated Recalls Drag on Utilization and Earnings

Recall activity surged nearly 300% year over year, taking on average more than 16,000 vehicles off the road each month during the quarter and cutting utilization by roughly 200 basis points. Management estimated recalls reduced revenue by about $50 million and shaved more than $25 million from adjusted EBITDA, while the need to carry extra fleet to offset outages added depreciation and pressured transaction days.

Depreciation Outlook Leaves Investors Seeking Clarity

Although first-quarter net DPU of $312 reflected manageable depreciation, management commentary on full-year DPU guidance was mixed and left uncertainty about sustaining sub-$300 levels. Investors are watching closely because hitting the company’s net DPU North Star is central to its margin ambitions, particularly in a market still digesting volatile residual values.

Cost Inflation and DOE Per Day Pressure Margins

Adjusted direct operating expense per transaction day rose 1.7% year over year to $38.43, driven partly by revenue-related variable costs and sale-leaseback real estate expenses. While management said underlying core DOE per day actually improved by about 1.6%, the reported increase and new lease-related charges underscore persistent short-term cost pressure on the income statement.

Capacity Outlook Trimmed Amid Recall and Liquidity Constraints

Hertz modestly reduced its capacity outlook, now expecting full-year transaction days to rise by mid-single digits and fleet size to increase by low-single digits, versus prior mid-to-high and mid-single digit guidance. For the second quarter, days are expected to decline 2% to 3% and fleet 1% to 2% year over year, as recall disruptions and liquidity considerations limit the ability to add vehicles aggressively.

External Disruptions Add to Operational Noise

First-quarter results were also influenced by broader external headwinds, including a partial government shutdown, prolonged TSA wait times and storm-related disruptions in key markets. Management argued that underlying trends remained solid despite these shocks, but the narrative underscores the sensitivity of rental demand and operations to macro and logistical disturbances.

SG&A and Advertising Spend Support Brand Building

Selling, general and administrative expenses rose modestly from a year earlier, largely due to increased advertising during what is typically a seasonal trough. Even so, SG&A as a share of revenue improved from 12% to 11.6%, as management framed the higher marketing outlay as an investment in demand generation and long-term brand strength rather than a structural cost step-up.

Guidance Points to Gradual Margin Recovery

Hertz reaffirmed expectations for a full-year EBITDA margin of about 3% to 6% and reiterated a longer-term goal of reaching $1.0 billion in EBITDA by 2027, even as it dialed back capacity growth. For the second quarter, the company anticipates transaction days down 2% to 3%, fleet down 1% to 2%, RPD gains exceeding the roughly 5% to 5.5% seen in Q1, EBITDA margins in the low-to-mid single digits and net DPU “well below” $300 per month, with full-year net DPU guided below the $300 North Star.

Hertz’s latest call paints a picture of a business regaining commercial momentum, with double-digit revenue growth, improved margins and stronger customer satisfaction offset by heightened recall disruptions and lingering losses. Investors will be watching whether management can sustain pricing power, control depreciation and deliver on its EBITDA targets while scaling Oro and other growth initiatives without overextending the balance sheet.