10-K: Hertz Reports Reduced Net Loss, Strategic Fleet Adjustments in 2025

Hertz Global Holdings, Inc. reported a significantly reduced net loss and improved Adjusted Corporate EBITDA in 2025, driven by fleet management and revenue optimization efforts, despite a decline in overall revenues.

Summary

• Hertz Global Holdings, Inc. reported a net loss of $747 million for the fiscal year ended December 31, 2025, a substantial improvement from a $2,862 million loss in 2024.
• Total revenues decreased by 6% to $8,504 million in 2025 from $9,049 million in 2024, primarily due to lower pricing and volume in the Americas RAC segment.
• Adjusted Corporate EBITDA improved significantly, moving from a loss of $1,541 million in 2024 to a loss of $339 million in 2025.
• Depreciation of revenue earning vehicles and lease charges, net, decreased by $1.7 billion in 2025 compared to 2024, attributed to fleet refresh, stronger residual values, optimized disposition mix, and lower average vehicles.
• The Americas RAC segment experienced a revenue decrease of $639 million (9%) and a $1.6 billion (51%) decrease in depreciation of revenue earning vehicles and lease charges, net.
• The International RAC segment saw a revenue increase of $94 million (6%) and a $60 million (15%) decrease in depreciation of revenue earning vehicles and lease charges, net.
• Vehicle Utilization increased in both Americas RAC (to 82% from 80%) and International RAC (to 79% from 76%).
• The company recognized a $154 million gain from a legal settlement distribution in September 2025 related to an antitrust class action.
• An additional expense of $24 million was recognized in 2025 for an existing bankruptcy-related litigation reserve.
• Total indebtedness as of December 31, 2025, was approximately $17.1 billion, comprising $11.6 billion in vehicle-related debt and $5.4 billion in non-vehicle-related debt.
• The company de-emphasized its EV strategy, with the EV fleet now representing less than 10% of its U.S. operating fleet, following a $223 million incremental net depreciation expense in 2024 related to EV sales.

Sentiment

Score: 5

Explanation: StockSavvy.ai views this filing as neutral to slightly positive. While the company continues to report a net loss, the significant reduction in losses and substantial improvement in Adjusted Corporate EBITDA, coupled with strategic adjustments in fleet management and successful debt maturity extensions, indicate a positive trajectory from previous challenges. However, ongoing legal proceedings and a decline in overall revenues temper the optimism.

Positives

• Net loss for Hertz Global Holdings, Inc. significantly reduced to $747 million in 2025 from $2,862 million in 2024, indicating a substantial improvement in financial performance.
• Adjusted Corporate EBITDA improved by 78%, moving from a loss of $1,541 million in 2024 to a loss of $339 million in 2025.
• Depreciation of revenue earning vehicles and lease charges, net, decreased by $1.7 billion in 2025, driven by fleet refresh, strengthening residual values, and an optimized vehicle disposition channel mix.
• The company achieved per unit gains on vehicle dispositions in 2025, contrasting with per unit losses in 2024.
• Vehicle Utilization increased in both Americas RAC (from 80% to 82%) and International RAC (from 76% to 79%), indicating more efficient use of the rental fleet.
• International RAC segment revenues increased by $94 million (6%) in 2025, primarily due to higher volume in the leisure channel and a favorable foreign currency impact.
• A $154 million gain was recognized in 2025 from a legal settlement distribution in connection with an antitrust class action.
• The enactment of the One Big Beautiful Bill Act (OBBBA) on July 4, 2025, reinstating full bonus depreciation, is expected to decrease federal cash taxes in the near term.
• Several debt facilities, including the First Lien RCF, HVF III Series 2021-A Notes, Hertz Canadian Securitization, European ABS, Australian Securitization, and New Zealand RCF, had their maturity dates successfully extended in 2025, improving liquidity management.
• The company maintained effective internal control over financial reporting as of December 31, 2025.

Negatives

• Hertz Global Holdings, Inc. reported a net loss of $747 million in 2025, indicating continued unprofitability.
• Total revenues decreased by $544 million (6%) in 2025 compared to 2024, primarily due to lower pricing and volume in the Americas RAC segment.
• Selling, general and administrative expenses increased by $138 million (17%) in 2025, mainly due to higher personnel costs and professional fees.
• Non-vehicle interest expense, net, increased by $100 million (27%) in 2025, driven by higher debt levels and average interest rates.
• An additional expense of $24 million was recognized in 2025 related to an existing bankruptcy-related litigation reserve.
• The company incurred a significant $1.0 billion impairment charge on Long-Lived Assets in 2024, primarily affecting revenue earning vehicles and right-of-use assets.
• The de-emphasis of the EV strategy resulted in $223 million of incremental net depreciation expense in 2024 related to EV sales.
• The U.S. Supreme Court denied Hertz's petition for writ of certiorari on January 12, 2026, in the make-whole and post-petition interest claims case, remanding it for final judgment on disputed amounts.
• Hertz made a payment of $346 million in January 2026 for the undisputed amount in the Wells Fargo legal case, impacting corporate liquidity.
• A securities class action complaint was filed in May 2024, alleging violations related to statements regarding EV demand, with some claims allowed to proceed after a motion to dismiss.
• Multiple class action complaints were filed in April 2025 regarding a data breach event involving a third-party vendor, alleging negligence and seeking unspecified damages.

Risks

• The significant majority of the fleet consists of non-program vehicles, exposing the company to increased residual value risk and potential substantial losses on sales if values decline.
• Inability to purchase adequate supplies of competitively priced vehicles or significant increases in vehicle costs could adversely affect operations and financial results.
• Difficulty in effectively disposing of non-program vehicles at optimal times or through preferred channels could negatively impact results.
• Lengthening the age of the fleet may lead to higher depreciation and maintenance costs, lower customer satisfaction, and challenges in selling vehicles at acceptable prices.
• Disruptions in the global supply chain, including those caused by geopolitical conflicts, tariffs, or logistics issues, may adversely affect vehicle supply and costs.
• Failure of vehicle manufacturers to fulfill repurchase obligations under program vehicle agreements could expose the company to losses and credit enhancement deficiencies.
• Manufacturer safety recalls could require costly and time-consuming repairs, impacting fleet availability, customer service, and reputation.
• The vehicle rental business is highly sensitive to reductions in business and leisure travel, which can be affected by economic conditions, global events, and regional trends.
• The highly seasonal nature of the business means that disruptions during peak periods could materially adversely affect financial results.
• Inaccurate estimation of future rental activity and consumer preferences could lead to sub-optimal fleet size, utilization, and increased costs.
• The EV fleet exposes the company to risks such as volatility in EV pricing, uncertain customer demand, high damage frequency, elevated maintenance costs, talent acquisition challenges, battery cell risks, data connectivity issues, and regulatory uncertainty.
• Failure to adequately respond to rapid changes in technology within the mobility industry could result in loss of competitive differentiation and market share.
• Intense competition in the vehicle rental market may lead to downward pricing pressure and an inability to increase prices.
• Reliance on third-party distribution channels for a significant portion of revenues poses risks if access, prominence, or terms change adversely.
• Maintaining favorable brand recognition is essential, and negative publicity or inability to enforce brand protection could materially affect the business.
• The ability to attract and retain front-line employees, senior leadership, and other key personnel is critical, and failure to do so could harm operations.
• Issues with union-represented employees, including potential work stoppages or increased operating costs from renegotiated labor agreements, pose risks.
• Cybersecurity threats and incidents, including data breaches and system disruptions, could interrupt operations, incur costs, and cause reputational harm.
• Reliance on third-party information technology systems means significant failures or disruptions could adversely impact business functions.
• Failure to evaluate, maintain, upgrade, and consolidate information technology systems could lead to inefficiencies and heightened security risks.
• Misuse or theft of information, including personal data, could harm the brand, competitive position, and lead to legal liabilities.
• Strict data protection and privacy laws (e.g., GDPR, CCPA) in various jurisdictions pose compliance risks and potential penalties.
• Operating in many different countries exposes the company to varying regulatory requirements, foreign currency risks, tax regimes, and political instability.
• Taxable income from vehicle disposition may not be fully offset by new vehicle depreciation, potentially leading to material cash tax payments.
• The ability to utilize net operating loss carryforwards (NOLs) may be limited due to ownership changes under Section 382 of the Code.
• Exposure to uninsured liabilities relating to personal injury, death, and property damage, or otherwise, including material litigation, could exceed insurance or reserves.
• Evolving corporate and social responsibility laws and regulations (e.g., climate change laws) could require material expenditures and impact operations.
• Changes in the legal and regulatory environment, including those affecting optional insurance products or franchising agreements, could disrupt business and increase expenses.
• Disagreements with tax authorities regarding the application of complex tax laws could result in substantial payments to government authorities.
• An impairment of long-lived assets (revenue earning vehicles, ROU assets, property and equipment) could materially impact results of operations.
• An impairment of goodwill and other indefinite-lived intangible assets could have a material impact on results of operations.
• Changes in management's estimates and assumptions, particularly for depreciation, liabilities, and asset recoverability, could materially affect reported amounts.
• Failure of the compliance program to operate as designed could lead to violations of anti-bribery, antitrust, or other laws, resulting in significant penalties.
• Hertz Holdings, as a publicly traded holding company, depends on its subsidiaries for cash, and restrictions on subsidiary distributions could adversely affect its financial condition.
• Failure to meet corporate and social responsibility expectations or standards could harm reputation and business.
• High indebtedness exposes the company to risks from interest rate fluctuations and challenges in refinancing existing debt.
• Reliance on asset-backed financing arrangements subjects the company to risks such as credit enhancement deficiencies and manufacturer insolvency.
• Substantially all consolidated assets secure outstanding indebtedness, limiting flexibility for additional secured debt or asset sales.
• Limitations on deducting certain business interest expenses could materially affect results of operations and liquidity.
• The share price of common stock may be volatile due to numerous factors, including market reactions, credit ratings, and speculative trading.
• Anti-takeover provisions in charter documents and significant ownership by Plan Sponsors could make an acquisition more difficult and affect stock price.
• The choice of forum provision in the Certificate of Incorporation could limit stockholders' ability to obtain a favorable judicial forum for disputes.
• Failure of the business continuity plan in exigent circumstances could materially adversely affect operations.
• Inability to maintain effective internal control over financial reporting could harm reputation and financial results.
• Challenges with properly managing the use of AI, including flawed data, inaccurate outputs, cybersecurity incidents, and ethical issues, could result in reputational harm and legal liability.
• Strategic transactions, including acquisitions and divestitures, could be difficult to implement, disrupt business, or change the business profile significantly.

Future Outlook

The company is committed to its 'Back-to-Basics' roadmap, focusing on disciplined fleet management, revenue optimization, and rigorous cost control to achieve sustainable growth in the future of mobility. It expects federal cash taxes to decrease in the near term due to the OBBBA's reinstatement of full bonus depreciation, assuming fleet investments are maintained or increased. The company anticipates maintaining heightened levels of indebtedness into 2026.

Management Comments

• Committed to executing a comprehensive strategy to transform our business, anchored by three financial pillars: disciplined fleet management, revenue optimization and rigorous cost control.
• Strengthened our fleet by refining our capabilities by sourcing vehicles strategically, deploying them efficiently and monetizing them effectively.
• Our approach balances disciplined execution today with systematic innovation for tomorrow, leveraging industry experience to adapt to evolving market dynamics and position us for sustainable growth in the future of mobility.
• We continue to balance our mix of EVs, non-program vehicles and program vehicles based on market conditions, including residual values.
• We believe that cash and cash equivalents generated by our operations and cash received on the disposal of vehicles, together with amounts available under various liquidity facilities and refinancing options available to us in the capital markets, will be sufficient to fund our operating activities and obligations for the next twelve months and for the foreseeable future thereafter.

Industry Context

StockSavvy.ai notes that Hertz's strategic shift away from a heavy EV emphasis reflects broader market challenges in EV adoption for rental fleets, including residual value volatility and charging infrastructure limitations, a trend observed across the rental car industry. The company's 'Back-to-Basics' roadmap, focusing on disciplined fleet management and cost control, is a common response to volatile market conditions, supply chain disruptions, and intense competition from traditional rivals like Avis Budget Group and Enterprise Holdings, as well as emerging mobility solutions like ride-sharing and peer-to-peer car sharing.

Comparison to Industry Standards

• The filing does not provide specific comparable company data or global benchmarks for direct comparison of financial metrics or operational performance against industry standards.

Management Changes

Corporate Governance

Legal Proceedings

• Make-Whole and Post-Petition Interest Claims: The U.S. Supreme Court denied Hertz's petition for writ of certiorari on January 12, 2026, remanding the case to the Delaware Bankruptcy Court for final judgment on disputed amounts. Hertz paid $346 million (undisputed amount) on January 27, 2026.
• Claims Related to Alleged False Arrests: The company entered into settlement agreements with 364 claimants for approximately $168 million in December 2022. The Delaware Supreme Court affirmed a lower court's ruling in favor of insurers on November 12, 2025, regarding insurance coverage for these claims. The company continues to vigorously defend remaining claims.
• Share Repurchase Program Litigation: A putative class and derivative lawsuit was filed on May 11, 2023. The Delaware Chancery Court granted in part and denied in part a motion to dismiss on June 20, 2024. The Board formed a Special Litigation Committee on August 26, 2024. The parties subsequently settled the direct and derivative claims, pending court approval.
• Securities Class Action Complaint: Filed on May 31, 2024, alleging violations of securities laws related to statements about EV demand. The Florida Middle District Court granted in part a motion to dismiss on October 16, 2025, allowing claims based on two specific statements by the former CEO to proceed.
• Data Breach Claims: Multiple class action complaints were filed starting April 15, 2025, alleging negligence in data security due to a third-party vendor breach. Litigation is stayed pending a global scheduling order. The company does not believe the ultimate resolution will have a material adverse effect.
• Antitrust Litigation Settlements: The company received a $154 million settlement distribution in September 2025 from its participation in the In re Automotive Parts Antitrust Litigation.

Related Party Transactions

• In June 2024, Hertz entered into a Note Purchase Agreement with entities affiliated with CK Amarillo (an affiliate of Hertz Holdings), which purchased approximately $44 million of the Exchangeable Notes Due 2029 on terms no less favorable than those for non-related parties.
• In December 2024, affiliated investors holding Exchangeable Notes Due 2029 received approximately $1 million in consent fees for tendering their consents to amend certain indenture provisions, at a rate no greater than that paid to non-related holders.
• The company engages in rental and procurement transactions with customers and vendors potentially affiliated with Board members, believing all such transactions were on terms no less favorable than those obtained in the absence of such affiliation.

Stakeholder Impact

• Shareholders: Impacted by the company's continued net losses, although significantly reduced, and the volatility of common stock. The share repurchase program and potential ATM equity offering could influence share value and dilution.
• Customers: Benefit from the 'Back-to-Basics' strategy focusing on operational excellence, service, and product innovation. The de-emphasis of EVs aims to align fleet with customer preferences and reduce collision/damage expenses.
• Employees: Affected by human capital management strategies focused on attraction, retention, professional development, and comprehensive benefits. Union relations and labor agreement negotiations are ongoing considerations.
• Creditors: Impacted by the company's high indebtedness levels and reliance on asset-backed financing. Successful debt maturity extensions provide stability, but asset encumbrances and covenant compliance remain critical.
• Suppliers: Affected by the company's strategic vehicle sourcing and supply chain management, including potential disruptions and changes in tariff policies.
• Regulatory Authorities: The company is subject to increasing scrutiny regarding data protection, privacy, environmental matters, and corporate social responsibility, requiring ongoing compliance efforts and potential expenditures.

Next Steps

• Renegotiate labor contracts with approximately 2% of union-represented employees in 2026.
• Continue to monitor actual results versus expectations and the impact of market events on future cash flows and weighted average cost of capital.
• Assess the overall impact of adopting new accounting guidance on Disaggregation of Income Statement Expenses (effective after December 15, 2026) and Targeted Improvements to the Accounting for Internal-Use Software (effective after December 15, 2027).
• The Delaware Bankruptcy Court will determine any additional amounts due in the Wells Fargo make-whole and post-petition interest claims case.
• The company will continue to vigorously defend itself against remaining false arrest claims.
• The parties in the share repurchase program litigation settled direct and derivative claims, subject to approval of the Delaware Chancery Court, which will also determine attorneys' fees.
• Defendants' responses to data breach class action complaints are stayed pending the Illinois Northern District, Western Division Court's entry of a global scheduling order.

Key Dates

Recommendation

The company demonstrated significant improvement in reducing its net loss and improving Adjusted Corporate EBITDA in 2025, indicating a positive operational turnaround from the previous year's substantial impairment and EV-related challenges. Strategic fleet adjustments and successful debt refinancing efforts are positive steps. However, the company still reported a net loss, faces ongoing legal challenges with material financial implications (e.g., Wells Fargo case), and experienced a decline in overall revenues. While the 'Back-to-Basics' strategy shows promise, the path to sustained profitability and resolution of legal uncertainties warrants a cautious 'hold' position for seasoned investors, allowing time for these initiatives to fully materialize and for legal outcomes to become clearer.

Keywords

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