Hertz Records Q4 Losses Amid EV Fleet Fallout

Hertz Global Holdings, Inc. reported results on Feb. 6 for its fourth quarter and full year 2023 that show a quarterly net loss of $348 million on revenue of $2.2 billion, resulting in a negative 16% margin, or $1.14 loss per diluted share.

The adjusted net loss for Q4 was of $418 million, or $1.36 loss per diluted share, and an adjusted corporate EBITDA of negative $382 million, a negative 17% margin, including recognition of $245 million of net depreciation expense related to the previously announced sale of electric vehicles.

The losses come as Hertz holds off on a planned bulk purchase of Polestar electric vehicles, reported on Feb. 5.

Hertz Chairman and CEO Stephen Scherr partially attributed the losses to its electric vehicle fleet, which it previously announced it would downsize by 20,000 vehicles or a third of its EV fleet.

"We continued to face headwinds related to our electric vehicle fleet and other costs throughout the quarter," Scherr said in a news release. "We have taken steps to address those challenges and heading into 2024, we are confident that our planned reduction in EVs and cost base, along with the ongoing execution of our enhanced profitability plan, will enable us to regain our operational cadence and improve our financial performance with increasing effect into 2025."

Strong Q4 2023 revenue per transaction day of $58.09 reflected continued price discipline and a moderating trend relative to prior quarterly comparisons, Hertz reported. It prioritized rate over usage, purposely forgoing lower margin business. 

Depreciation per unit per month of $498 reflected the impact of the write down of electric vehicles held for sale to their fair value and a decline in residual values, as well as a modestly higher than expected fleet.

Fleet interest expense increased to $91 per unit per month in the fourth quarter, up from $55 per unit per month in Q4 of 2022. The increase year over year was mostly a reflection of rising interest rates.

Direct operating expense on a per transaction day basis, exclusive of litigation settlements in Q4 2022, increased year over year, mostly due to elevated net collision and damage expenses.