Fourth-quarter Hertz corporate demand continued to progress toward pre-pandemic levels but with higher pricing, Hertz Global Holdings executives said during a Tuesday earnings call.
"Corporate activity proved strong, which was beneficial to mid-week utilization," Hertz CFO Kenny Cheung said. In the Americas, as of the fourth quarter, corporate volume was at about 80 percent of 2019 levels, and international inbound increased to 50 percent, up from 75 percent and 45 percent in the third quarter, respectively.
"We continued our recent success of near 100 percent corporate contract renewal, with many coming at higher renegotiated pricing," Hertz CEO Stephen Scherr said, adding that momentum carried into January, with corporate demand in terms of transaction days up 28 percent from January 2022, and international transaction days up 56 percent for the same period.
Scherr added that "corporates are focused on [electric vehicles] as an alternative" to satisfy their own environmental, social and governance commitment, and "the corporate business is feeling quite good, very strong."
Further, Scherr said that corporate demand was changing "for the better for us." The company's average corporate rental in 2022 lengthened by about 1.5 days for a 20 percent year over year increase.
"That means people are keeping that car longer," Scherr said. "That's manifesting itself as a person is on a business trip, and they may extend by a day and then extend by two more days to keep a weekend in sort of the combination of both leisure and business. That's been quite beneficial to us in terms of overall activity."
Hertz also announced it planned to revamp its Dollar and Thrifty brands. "We intend to revitalize these brands to pursue profitable mid-market growth across leisure and business," Scherr said.
Q4, FY 2022 Metrics
Hertz reported $2.04 billion in fourth-quarter revenue, up 4 percent year over year. Full-year 2022 revenue was $8.69 billion, a nearly 18.4 percent increase versus 2021. Quarterly net income was $116 million compared with a loss of $261 million one year prior. Full-year net income was $2.06 billion versus $365 million in 2021.
The company ended the fourth quarter with more than 465,900 rentable vehicles, up 3 percent year over year. Quarterly vehicle utilization was 79 percent, up 1 percentage point from a year prior. Total revenue per transaction day was $61.65 versus $59.80 a year prior.
Hertz reported revenue in the Americas of $1.71 billion, which accounted for nearly 84 percent of total revenue for the quarter and was up 1 percent from Q4 2021. The company's average number of rentable vehicles was more than 370,700, up 1 percent year over year. Vehicle utilization remained steady at 80 percent, with total revenue per day of $62.50 compared with $62.11 from a year prior.
Hertz reported international quarterly revenue of $328 million, up 27 percent year over year. The segment had more than 96,200 rentable vehicles for the quarter, an increase of 11 percent from a year prior. Vehicle utilization increased to 72 percent from 68 percent year over year. RPD increased 21 percent year over year to $57.98 from $48.01.
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