Hertz's third-quarter revenue declined amid what it calls a "back-to-basics" strategy and "operational transformation," marked by fleet reduction and which executives on a Tuesday earnings call said is "on track" for completion by the end of 2025.
The company reported a third-quarter net loss of $1.33 billion, down from a profit of $629 million one year prior. Revenue was $2.58 billion, down about 5 percent year over year.
Hertz CFO Scott Haralson cited a third-quarter 4 percent year-over-year reduction in transaction days to 41,300, revenue per day—which slipped to $62.63 from $63.04 in Q3 2024— and a "noncash asset impairment charge of just over $1 billion" as some of the reasons for the weak performance. The impairment charge delayed the company's earnings release date and was largely due "to the decline in fleet residual values over the past year or so," he said.
Fleet reduction is a key component to the company's strategy to help ensure supply remains inside of demand.
"We believe we can produce the same number of transaction days with less fleet, which will also benefit our cost structure," Hertz CEO Gil West said, adding that the company has accelerated its fleet rotation and during the quarter established a new vertical dedicated to end-to-end fleet management.
Hertz's average number of rentable vehicles in the third quarter declined 2 percent year over year to about 550,100. Further, electric vehicles are "less than 10 percent of the fleet today," Haralson said. "We've sort of rotated through a vast majority of that move. The remaining EVs are strategically placed in our fleet, so we're happy with those levels."
Hertz in January 2024 announced a sell-off of 20,000 vehicles from its U.S. EV fleet, then in April increased that number by another 10,000.
Third-quarter revenue for the Americas segment declined 5 percent year over year to nearly $2.1 billion. Average rentable vehicles in the Americas were down 2 percent to 432,600. Vehicle utilization was 82 percent, down from 84 percent a year prior. Transaction days declined 5 percent to about 32.7 million.
The international segment reported revenue down 3 percent to $514 million, vehicle utilization stable at 80 percent, rentable vehicles down 2 percent to 117,500, and RPD of $60.45 compared with $61.47 in Q3 2023.
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