Business Context and Reporting Period
Company: Hertz Global Holdings, Inc. (Hertz Global) and The Hertz Corporation (Hertz).
Filing Type: Form 10-Q (Unaudited Quarterly Report).
Reporting Period: Quarter and six months ended June 30, 2026.
Business Overview: Global vehicle rental and leasing operations primarily through Hertz, Dollar, and Thrifty brands. The company operates in two reportable segments: Americas RAC and International RAC.
Key Financial Metrics
| Metric (in millions) | Q2 2026 | Q2 2025 | 6M 2026 | 6M 2025 |
|---|---|---|---|---|
| Revenues | $2,396 | $2,185 | $4,400 | $3,998 |
| Net Income (Loss) (Hertz Global) | $64 | $(294) | $(269) | $(737) |
| Net Income (Loss) (Hertz) | $(34) | $(179) | $(399) | $(613) |
| Adjusted EBITDA (Total) | $135 | $81 | $30 | $(165) |
| Operating Cash Flow (6M) | $401 | $597 | $401 | $598 |
| Total Debt | $18,747 | $17,054 | $18,747 | $17,054 |
| Cash & Restricted Cash | $1,304 | $1,167 | $1,304 | $1,167 |
| Corporate Liquidity | $984 | $1,489 | $984 | $1,489 |
Note: Hertz Global results include non-operating gains/losses on Public Warrants not present in Hertz results.
Material Changes vs. Prior Period
- Revenue Growth: Total revenues increased 10% year-over-year for both Q2 and the six-month period, driven primarily by improved pricing (Total Revenue Per Transaction Day increased 10% in Americas RAC and 3% in International RAC for Q2).
- Profitability Improvement: Hertz Global reported a net income of $64 million in Q2 2026, a significant turnaround from a $294 million loss in Q2 2025. This was largely aided by a $98 million gain from the change in fair value of Public Warrants.
- Expense Trends:
- Depreciation: Increased 17% in Q2 2026 due to reduced gains on vehicle disposals and residual variability.
- Interest Expense: Non-vehicle interest expense decreased 59% in Q2 2026, primarily due to unrealized gains on exchangeable note derivatives offsetting higher debt levels.
- Direct Operating Expenses: Increased 4% in Q2 2026, driven by higher collision, refueling, and maintenance costs.
- Capital Structure: Total debt increased to $18.7 billion. In Q2 2026, the company issued $350 million in Exchangeable First Lien Notes Due 2030 and $1 billion in vehicle debt (HVF III Series 2026 Notes).
Guidance, Outlook, and Risks
Management Commentary:
- Management continues to execute the "Back-to-Basics" roadmap focusing on disciplined fleet management, revenue optimization, and cost control.
- Vehicle utilization remained stable at 83% in Americas RAC and 80% in International RAC for Q2 2026.
- The company expects to continue evaluating sales and leasebacks of non-vehicle capital assets through the end of 2026.
Risks and Contingencies:
- Legal Proceedings: A significant bankruptcy-related litigation (Wells Fargo) was resolved in January 2026 with a payment of $346 million. A new securities class action was filed in July 2026 alleging misrepresentations regarding liquidity and used car market softness.
- Market Risks: Exposure to residual value risk on non-program vehicles, supply chain disruptions, and volatility in interest rates and foreign currency exchange rates.
- Liquidity: Corporate liquidity decreased to $984 million from $1.5 billion at year-end 2025, though the company asserts sufficient funds for the next 12 months.
Unusual Items:
- Public Warrants: A $98 million gain in Q2 2026 (vs. $115 million loss in Q2 2025) significantly impacted Hertz Global's net income but is excluded from Hertz's results.
- Asset Sales: Recognized a $64 million pre-tax gain on the sale of non-vehicle capital assets in Q2 2026.
Investor Verification Checklist
- Debt Maturities: Verify the impact of $2.4 billion in vehicle debt and $209 million in non-vehicle debt maturing in the remainder of 2026.
- Residual Values: Monitor the "Depreciation Per Unit Per Month" metric ($304 in Americas RAC for Q2 2026), which increased 22% year-over-year, indicating potential pressure on used car residual values.
- Derivative Volatility: Assess the sustainability of the $51 million net gain on financial instruments in Q2 2026, which is driven by fair value changes in exchangeable notes and warrants.
- Liquidity Covenants: Confirm continued compliance with the minimum liquidity covenant ($400 million for Q2/Q3) and the First Lien Ratio (3.5x for Q2).
- Legal Exposure: Track the status of the July 2026 securities class action regarding liquidity disclosures and the outcome of the settled Wells Fargo litigation.