Hertz Swings to Profit on Reduced Depreciation, Legal Win

TL;DR

**Hertz's Q3 profit is a strong signal of operational recovery, but the full-year picture remains challenging; proceed with cautious optimism.**

AI Summary

Hertz Global Holdings, Inc. reported a significant turnaround in net income for the three months ended September 30, 2025, posting a net income of $184 million, a stark improvement from a net loss of $1,332 million in the same period of 2024. This positive shift occurred despite a slight decrease in revenues, which fell to $2,478 million from $2,576 million year-over-year. The improvement was primarily driven by a substantial reduction in depreciation of revenue earning vehicles and lease charges, which decreased by 51.2% from $937 million in Q3 2024 to $457 million in Q3 2025. Additionally, the company recorded a $154 million legal settlement gain and avoided a $1,048 million long-lived assets impairment charge that impacted the prior year. However, for the nine months ended September 30, 2025, Hertz still reported a net loss of $553 million, though this was a significant improvement from the $2,383 million net loss in the comparable 2024 period. Total assets increased to $22,990 million as of September 30, 2025, from $21,802 million at December 31, 2024, largely due to an increase in revenue earning vehicles, net, to $12,693 million from $11,963 million. Vehicle debt also rose to $11,759 million from $11,231 million, indicating continued investment in their fleet.

Why It Matters

Hertz's return to profitability in Q3 2025, driven by lower depreciation and a legal settlement, signals a potential stabilization for investors after a period of significant losses. The substantial reduction in vehicle depreciation suggests improved fleet management and potentially better resale values, which is crucial in the highly competitive car rental market against rivals like Avis Budget Group. For employees, this financial improvement could mean greater job security and potential for growth. Customers might see continued investment in fleet quality and technology. The broader market will watch if Hertz can sustain this positive momentum, especially given the overall nine-month loss, as it reflects on the health of the travel and leisure sector.

Risk Assessment

Risk Level: medium — While Hertz reported a Q3 2025 net income of $184 million, a significant improvement from a $1,332 million loss in Q3 2024, the company still recorded a net loss of $553 million for the nine months ended September 30, 2025. This indicates that while there's positive momentum, the company is not yet consistently profitable. Furthermore, total debt increased to $17,408 million from $16,335 million, and stockholders' equity remains a deficit of $(317) million, suggesting ongoing financial leverage and a need for sustained positive performance.

Analyst Insight

Investors should closely monitor Hertz's Q4 2025 results for continued profitability and further reductions in fleet depreciation. While the Q3 turnaround is positive, the nine-month loss and increased debt warrant a cautious approach. Consider this a potential turning point, but wait for more consistent positive financial trends before making significant investment decisions.

Financial Highlights

revenue

$2,478M

total Assets

$22,990M

total Debt

$17,408M

net Income

$184M

cash Position

$1,549M

revenue Growth

-3.8%

Key Numbers

• $184M — Net Income (Q3 2025, a significant improvement from a $1,332M loss in Q3 2024)
• $2,478M — Revenues (Q3 2025, a decrease from $2,576M in Q3 2024)
• $457M — Depreciation of revenue earning vehicles and lease charges, net (Q3 2025, a 51.2% reduction from $937M in Q3 2024)
• $154M — Legal settlement gain (Recorded in Q3 2025, contributing to profitability)
• $1,048M — Long-Lived Assets impairment (Charge incurred in Q3 2024, avoided in Q3 2025)
• $553M — Net Loss (Nine months ended September 30, 2025, an improvement from $2,383M loss in 2024)
• $22,990M — Total Assets (As of September 30, 2025, up from $21,802M at December 31, 2024)
• $12,693M — Total revenue earning vehicles, net (As of September 30, 2025, up from $11,963M at December 31, 2024)
• $17,408M — Total Debt (As of September 30, 2025, up from $16,335M at December 31, 2024)
• $(317)M — Total Stockholders' Equity (Deficit) (As of September 30, 2025, still negative but improved from $(504)M at June 30, 2025)

Key Players & Entities

• HERTZ CORP (company) — Registrant for 10-Q filing
• Hertz Global Holdings, Inc. (company) — Parent company and primary registrant
• The Hertz Corporation (company) — Subsidiary and voluntary filer
• Nasdaq Stock Market LLC (regulator) — Exchange where HTZ and HTZWW are registered
• SEC (regulator) — Securities and Exchange Commission
• Rental Car Intermediate Holdings, LLC (company) — 100% owner of The Hertz Corporation's common stock
• $184 million (dollar_amount) — Net income for Q3 2025
• $1,332 million (dollar_amount) — Net loss for Q3 2024
• $553 million (dollar_amount) — Net loss for the nine months ended September 30, 2025
• $2,383 million (dollar_amount) — Net loss for the nine months ended September 30, 2024

FAQ

Risk Factors

• Vehicle Fleet Depreciation and Residual Value Risk [high — financial]: The company's financial performance is heavily tied to the value of its revenue-earning vehicles. Significant depreciation charges, as seen in the $457 million for Q3 2025, directly impact profitability. Fluctuations in used vehicle market values can lead to substantial losses if residual values are lower than anticipated, as evidenced by the avoided $1,048 million long-lived assets impairment charge in Q3 2024.
• Debt Levels and Interest Expense [high — financial]: Hertz carries substantial debt, with total debt rising to $17,408 million as of September 30, 2025, up from $16,335 million at December 31, 2024. A significant portion of this debt is vehicle debt, which increased to $11,759 million. High debt levels increase financial risk, particularly if interest rates rise or if the company's ability to service its debt is impaired.
• Fleet Management and Availability [medium — operational]: The company's core business relies on maintaining an adequate and modern fleet of vehicles. Disruptions in vehicle supply chains, increased acquisition costs, or challenges in managing fleet utilization and disposition can negatively impact revenue and profitability. The increase in revenue earning vehicles to $12,693 million net indicates ongoing investment, but also exposes the company to these operational risks.
• Litigation and Legal Settlements [medium — legal]: Hertz has experienced significant legal costs and settlements, including a $154 million legal settlement gain in Q3 2025. While this gain was positive, the existence of such large contingent liabilities highlights the potential for future financial impacts from ongoing or new legal proceedings.
• Competition and Pricing Pressures [medium — market]: The car rental industry is highly competitive. Hertz faces competition from other major rental companies, ride-sharing services, and car-sharing platforms. This competitive landscape can lead to pricing pressures, impacting revenue and margins, as suggested by the slight decrease in Q3 2025 revenues to $2,478 million from $2,576 million in Q3 2024.
• Negative Stockholders' Equity [high — financial]: As of September 30, 2025, Hertz reported a total stockholders' deficit of $(317) million. While this is an improvement from previous periods, a negative equity position indicates that liabilities exceed assets, which can be a sign of financial distress and may limit the company's ability to raise capital.

Industry Context

The car rental industry is characterized by significant capital investment in fleet acquisition and management, alongside intense competition. Trends include the increasing adoption of technology for booking and vehicle management, and evolving consumer preferences influenced by ride-sharing and subscription models. Hertz operates within this dynamic environment, balancing fleet size and utilization with market demand and pricing.

Regulatory Implications

As a publicly traded company, Hertz is subject to SEC regulations and accounting standards. Specific to its operations, it must comply with regulations related to vehicle safety, emissions, and consumer protection. Changes in accounting standards, particularly those related to leasing and asset valuation, can significantly impact financial reporting.

What Investors Should Do

1. Monitor fleet depreciation and residual value trends.
2. Analyze debt reduction strategies and interest coverage.
3. Evaluate the sustainability of the Q3 2025 profit turnaround.
4. Assess the impact of fleet expansion on cash flow and returns.

Key Dates

• 2025-09-30: End of Q3 2025 — Reported net income of $184 million, a significant turnaround from a $1,332 million loss in Q3 2024, driven by reduced depreciation and a legal settlement gain.
• 2025-09-30: Nine Months Ended Q3 2025 — Reported a net loss of $553 million, a substantial improvement from the $2,383 million net loss in the same period of 2024.
• 2025-09-30: Balance Sheet Date — Total assets reached $22,990 million, with revenue earning vehicles, net, at $12,693 million, reflecting continued fleet investment.
• 2024-09-30: End of Q3 2024 — Reported a net loss of $1,332 million, impacted by a $1,048 million long-lived assets impairment charge and higher depreciation costs.
• 2024-12-31: End of Fiscal Year 2024 — Total assets were $21,802 million, and total debt was $16,335 million, providing a baseline for year-over-year comparisons.

Glossary

Revenue earning vehicles, net

The value of vehicles owned by the company that are actively used to generate revenue, net of accumulated depreciation. (This is a core asset for Hertz, and its net value ($12,693 million as of Sept 30, 2025) directly impacts the company's balance sheet and its ability to generate revenue.)

Accumulated depreciation

The total amount of depreciation expense that has been recorded for an asset since it was acquired. (A significant reduction in depreciation charges ($457 million in Q3 2025 vs. $937 million in Q3 2024) was a key driver of Hertz's improved profitability in the current quarter.)

Long-lived assets impairment charge

A charge taken when the carrying amount of a long-lived asset (like property or equipment) exceeds its fair value or its expected future cash flows. (Hertz avoided a substantial $1,048 million impairment charge in Q3 2025 that had negatively impacted results in Q3 2024, contributing to the current period's improved net income.)

Stockholders' Equity (Deficit)

The net worth of a company, calculated as total assets minus total liabilities. A deficit means liabilities exceed assets. (Hertz reported a stockholders' deficit of $(317) million as of September 30, 2025, indicating a negative net worth, though it improved from prior periods.)

Operating lease right-of-use assets

Assets recognized under accounting standards for leases, representing the right to use an underlying asset for the lease term. (These assets, valued at $2,288 million as of September 30, 2025, represent a significant portion of Hertz's leased infrastructure and fleet.)

Year-Over-Year Comparison

Compared to the prior year's third quarter, Hertz has demonstrated a significant financial recovery, turning a $1,332 million net loss into a $184 million net income. This improvement was driven by a substantial reduction in depreciation expenses and the absence of a large impairment charge, alongside a $154 million legal settlement gain. While revenues saw a slight decrease from $2,576 million to $2,478 million, the operational efficiencies and one-time gains masked underlying pressures. Total assets and debt have both increased, indicating continued investment in the fleet, while the equity deficit has narrowed, suggesting a gradual improvement in the balance sheet's strength.

Key Financial Figures

• $0.01 — l Holdings, Inc. Common Stock Par value $0.01 per share HTZ The Nasdaq Stock Market L
• $13.61 — c. common stock at an exercise price of $13.61 per share, subject to adjustment HTZWW

Filing Documents

• htzz-20250930.htm (10-Q) — 2871KB
• ex102-hvfiii2021xaxthirdar.htm (EX-10.2) — 2490KB
• ex105-offerletter_markkosm.htm (EX-10.5) — 23KB
• ex106-mmoore_offerletterxs.htm (EX-10.6) — 15KB
• ex107-cbergsalaryandequity.htm (EX-10.7) — 6KB
• hghq32025exhibit311.htm (EX-31.1) — 11KB
• hghq32025exhibit312.htm (EX-31.2) — 11KB
• thcq32025exhibit313.htm (EX-31.3) — 11KB
• thcq32025exhibit314.htm (EX-31.4) — 11KB
• hghq32025exhibit321.htm (EX-32.1) — 6KB
• hghq32025exhibit322.htm (EX-32.2) — 6KB
• thcq32025exhibit323.htm (EX-32.3) — 6KB
• thcq32025exhibit324.htm (EX-32.4) — 6KB
• htzz-20250930_g1.jpg (GRAPHIC) — 68KB
• htzz-20250930_g2.jpg (GRAPHIC) — 65KB
• image_01.jpg (GRAPHIC) — 42KB
• image_0a.jpg (GRAPHIC) — 11KB
• image_1.jpg (GRAPHIC) — 40KB
• image_1a.jpg (GRAPHIC) — 0KB
• 0001657853-25-000134.txt ( ) — 16605KB
• htzz-20250930.xsd (EX-101.SCH) — 67KB
• htzz-20250930_cal.xml (EX-101.CAL) — 84KB
• htzz-20250930_def.xml (EX-101.DEF) — 612KB
• htzz-20250930_lab.xml (EX-101.LAB) — 788KB
• htzz-20250930_pre.xml (EX-101.PRE) — 751KB
• htzz-20250930_htm.xml (XML) — 2261KB

FINANCIAL INFORMATION

PART I. FINANCIAL INFORMATION ITEM 1. Condensed Consolidated Financial Statements (Unaudited) 1 ITEM 2.

Management's Discussion and Analysis of Financial Condition and Results of Operations

Management's Discussion and Analysis of Financial Condition and Results of Operations 47 ITEM 3.

Quantitative and Qualitative Disclosures About Market Risk

Quantitative and Qualitative Disclosures About Market Risk 76 ITEM 4.

Controls and Procedures

Controls and Procedures 77

OTHER INFORMATION

PART II. OTHER INFORMATION ITEM 1.

Legal Proceedings

Legal Proceedings 78 ITEM 1A.

Risk Factors

Risk Factors 78 ITEM 2. Unregistered Sales of Equity Securities and Use of Proceeds 78 ITEM 3. Defaults Upon Senior Securities 78 ITEM 5. Other Information 78 ITEM 6. Exhibits 78 EXHIBIT INDEX 79 SIGNATURE 81 Table of Contents HERTZ GLOBAL HOLDINGS, INC. AND SUBSIDIARIES THE HERTZ CORPORATION AND SUBSIDIARIES

FINANCIAL INFORMATION

PART I. FINANCIAL INFORMATION

CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

ITEM 1. CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) Index Page Hertz Global Holdings, Inc. and Subsidiaries Condensed Consolidated Balance Sheets as of Septem ber 30, 2025 and December 31, 2024 2 Condensed Consolidated Statements of Operations for the Three and Nine Months Ended September 30, 2025 and 2024 3 Condensed Consolidated Statements of Comprehensive Income (Loss) for the Three and Nine Months Ended Septe mber 30, 2025 and 2024 4 Condensed Consolidated Statements of Changes in Stockholders' Equity (Deficit) for the Three and Nine Months Ended September 30, 2025 and 2024 5 Condensed Consolidated Statements of Cash Flows for the Nine Months Ended September 30, 2025 and 2024 6 The Hertz Corporation and Subsidiaries Condensed Consolidated Balance Sheets as of September 30, 2025 and December 31, 2024 8 Condensed Consolidated Statements of Operations for the Three and Nine Months Ended September 30, 2025 and 2024 9 Condensed Consolidated Statements of Comprehensive Income (Loss) for the Three and Nine Months Ended September 30, 2025 and 2024 10 Condensed Consolidated Statements of Changes in Stockholder's Equity (Deficit) for the Three and Nine Months Ended September 30, 2025 and 2024 11 Condensed Consolidated Statements of Cash Flows for the Nine Months Ended September 30, 2025 and 2024 12 Notes to the Condensed Consolidated Financial Statements Note 1 Background 14 Note 2 Basis of Presentation and Recently Issued Accounting Pronouncements 14 Note 3 Divestitures 15 Note 4 Long-Lived Assets Impairment 16 Note 5 Revenue Earning Vehicles 16 Note 6 Debt 17 Note 7 Leases 25 Note 8 Income Tax (Provision) Benefit 26 Note 9 Public Warrants, Equity and Earnings (Loss) Per Common Share – Hertz Global 27 Note 10 Stock-Based Compensation 28 Note 11 Financial Instruments 30 Note 12 Fair Value Measurements 33 Note 13 Contingencies and Off-Balance Sheet Commitments 37 Note 14

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