Business Context and Reporting Period
This summary covers the Combined Form 10-K for Hertz Global Holdings, Inc. and The Hertz Corporation for the fiscal year ended December 31, 2025. Hertz Global is the top-level holding company, while The Hertz Corporation is the primary operating subsidiary. The company operates globally through its Hertz, Dollar, and Thrifty brands, with approximately 11,000 locations across 160 countries. The reporting period reflects the execution of a "Back-to-Basics" strategy focused on disciplined fleet management, revenue optimization, and cost control.
Key Financial Metrics
| Metric | 2025 | 2024 | Change |
|---|---|---|---|
| Total Revenues | $8,504 million | $9,049 million | (6)% |
| Net Income (Loss) | $(703) million | $(3,137) million | (78)% |
| Adjusted Corporate EBITDA | $(339) million | $(1,541) million | (78)% |
| Operating Cash Flow | $1,628 million | $2,226 million | (27)% |
| Total Debt | $17.1 billion | $16.3 billion | 4% |
| Cash & Restricted Cash | $1.167 billion | $1.133 billion | 3% |
| Vehicle Utilization (Americas) | 82% | 80% | +2 pts |
| Vehicle Utilization (International) | 79% | 76% | +3 pts |
Material Changes vs. Prior Period
- Revenue Decline: Total revenues decreased by $544 million (6%) primarily due to lower pricing and volume in the Americas RAC segment, partially offset by a $94 million increase in the International RAC segment.
- Depreciation Reduction: Depreciation of revenue earning vehicles and lease charges dropped significantly by $1.7 billion (47%) to $1.9 billion. This was driven by a fleet refresh reducing capital costs, stronger residual values, and per-unit gains on dispositions compared to losses in 2024.
- Impairment Absence: Unlike 2024, which included a $1.0 billion long-lived asset impairment charge, 2025 had no such impairment.
- One-Time Gains: The 2025 results included a $154 million gain from a legal settlement (antitrust litigation) and a $144 million gain from the sale of non-vehicle capital assets.
- Interest Expense: Net interest expense increased by $118 million (12%) to $1.1 billion, driven by higher debt levels and interest rates, particularly on non-vehicle debt.
Guidance, Outlook, and Risks
Management Commentary: Management continues to focus on fleet rotation to optimize the mix of program and non-program vehicles. The company successfully reduced its EV fleet exposure, which had previously resulted in significant write-downs. The "Back-to-Basics" roadmap aims to balance disciplined execution with innovation.
Key Risks:
- Fleet Residual Value: Significant exposure to residual value risk on non-program vehicles; declines could accelerate depreciation or cause losses on sale.
- Debt and Liquidity: Total indebtedness is approximately $17.1 billion. The company relies heavily on asset-backed financing. A decline in vehicle values could trigger collateral requirements.
- EV Strategy: While the EV fleet has been reduced to less than 10% of the U.S. operating fleet, the company remains exposed to volatility in EV pricing and demand.
- Legal Contingencies: A significant litigation reserve exists regarding a bankruptcy-related make-whole claim. In January 2026, the company paid $346 million related to this matter, funded by borrowings.
Investor Verification Checklist
- Debt Covenants: Verify compliance with the First Lien Ratio (3.0x/3.5x) and minimum liquidity covenants under the First Lien Credit Agreement, especially given the recent $346 million litigation payment.
- Fleet Mix: Confirm the current percentage of program vs. non-program vehicles and the associated residual value assumptions used for depreciation.
- Legal Settlements: Review the status of the Wells Fargo bankruptcy litigation and the final determination of any additional amounts owed beyond the $346 million paid.
- EV Disposition: Assess the remaining exposure to EV assets and the realized gains/losses on recent EV dispositions.
- Refinancing Needs: Monitor the maturity schedule of vehicle debt, with approximately $3.1 billion in the Americas RAC segment maturing within the next 12 months.