Hertz Global Holdings ($HTZ) Stock Hub: Earnings Quality and the December Cash Test

01 The Quarter That Turned Positive, And By How Little

Hertz reported $64 million of GAAP net income on $2.396 billion of Q2 revenue, a 2.7% net margin, after a $333 million Q1 loss. The first half still lost $269 million. The GAAP result includes $98 million of public-warrant fair-value gains, a $64 million gain on non-vehicle asset sales and $51 million of net gains on financial instruments. These items make earnings quality central to the analysis: the company’s adjusted net result was a $47 million loss, despite positive adjusted corporate EBITDA of $81 million. Operating recovery and GAAP profit are related, but are not interchangeable.

A car rental company is a leasing business wearing a retail coat. It buys vehicles, rents them by the day, and sells them a year or two later. Three numbers decide whether that loop makes money: how much revenue each car produces per month, how much value each car loses per month, and what share of the fleet is out on rent rather than parked. Hertz calls the first two RPU and DPU, and it has told the market exactly where it wants them: revenue per unit above $1,500 a month, depreciation per unit at or below $300.

Americas monthly RPU was $1,557 and DPU $304; consolidated net DPU was $302. These metrics help evaluate the $1,500 revenue and $300 depreciation objectives, but do not explain the entire GAAP result. Nor was this the first profitable quarter in two years: Q3 2025 reported $184 million of net income before losses in Q4 2025 and Q1 2026. A $20 monthly Americas DPU increase mechanically adds $25.8 million of quarterly expense, while a $20 RPU decline removes $24.7 million of revenue. Together they imply about $50.4 million of pressure before taxes and operating responses, not $100 million from either metric alone.

Source: Hertz Form 10-Q · Q2 results.

02 Executive Summary

This page is the second quarter of 2026 in full, read from the Form 10-Q filed on August 6, 2026 and the results release filed the same day, plus the capital structure that sits underneath it.

The operating picture. Revenue was $2.396 billion, versus $2.185 billion. Americas revenue was $1.918 billion with segment adjusted EBITDA of $88 million; International revenue was $478 million with $47 million of segment adjusted EBITDA. Corporate items reconcile those segments to $81 million of adjusted corporate EBITDA. GAAP pre-tax income was $71 million and net income $64 million, or $0.05 diluted EPS. Adjusted net loss was $47 million and adjusted diluted EPS was −$0.11. The official reconciliation includes multiple gains, expenses and tax effects; simply subtracting three gains from GAAP income does not reproduce the company’s adjusted result.

The fleet. Americas operational utilization was 83% on 410,849 average rentable vehicles; total utilization was 79% on the wider average fleet of 429,465. Transaction days were 30.9 million in the Americas and 7.8 million internationally; Americas revenue per day was $62.11. Consolidated depreciation and lease charges rose to $487 million from $415 million while the average fleet fell to 539,118 from 544,962. Net DPU increased to $302 from $256. A larger year-on-year fleet therefore does not explain the higher depreciation charge.

The balance sheet. Total debt of $18.747 billion at June 30, split between $12.710 billion of vehicle debt and $6.037 billion of non-vehicle debt. Stockholders’ equity of negative $628 million. Cash of $631 million plus $673 million of restricted cash. Liquidity of approximately $984 million, which the company described as in line with its prior guidance of just under $1 billion.

The financing. Hertz issued $350 million of first-lien exchangeable notes in June and another $30 million in July, with a 6.75% coupon split equally between cash and payment in kind and an initial conversion price near $3.58. The approximately 17.7% effective interest rate is an accounting measurement affected by the separated exchange feature, discounts and other issuance accounting. It is not the cash coupon, a lender’s realized return or a rate at which all principal automatically compounds.

What comes next. The August 6 guidance projects $1.0–1.4 billion of year-end liquidity after paying the remaining $200 million December corporate notes in cash. A separate $2.0 billion Series 2021-2 vehicle note maturity also falls in December. Both remain execution checks, not evidence of an already completed refinancing. Q3 adjusted corporate EBITDA is guided to $275–325 million with positive EPS; full-year adjusted corporate EBITDA is guided to $225–275 million. Negative equity, equity-linked financing and pending securities litigation remain part of the risk assessment.

Source: Hertz Form 10-Q · Q2 results.

03 How A Car Rental Company Actually Earns

Before the numbers, the mechanics, because a rental quarter cannot be read like a retailer’s.

The fleet is the inventory and the factory at the same time. Hertz buys vehicles, holds them on the balance sheet as revenue earning equipment, depreciates them against an estimate of residual value, and eventually sells them into the used car market. If used car prices fall faster than the depreciation schedule assumed, the loss shows up twice: as a higher depreciation charge going forward and as a loss on disposal today. If they rise, the same mechanism runs in reverse, which is why 2021 and 2022 flattered the whole industry and 2023 and 2024 punished it.

Revenue per unit is a pricing and mix number. RPU rises when daily rates rise, when the mix shifts toward airport and corporate business, and when ancillary sales such as insurance products and prepaid fuel attach at a higher rate. It falls when the fleet grows faster than demand, because the extra cars either sit idle or are rented cheaply.

Depreciation per unit is a purchasing and disposal number. It is set years before it appears in the income statement, by what the company paid for the car, what programme terms it negotiated with the manufacturer, and how well it sells the vehicle at the end. Disposal channel matters: retail sales to consumers recover more than auction lanes, and Hertz has spent two years pushing more of its disposals into higher-recovery channels.

Utilization measures vehicle-days, not a fixed percentage of theoretical revenue: rental rates and mix vary. Hertz’s operational utilization divides transaction days by rentable vehicle-days, whereas total utilization uses the entire average fleet. Consolidated Q2 utilization was 82% operational and 79% total; total utilization would have been 81% excluding recalls. Americas figures were 83% operational and 79% total. Recalled vehicles can lose rental revenue while continuing to depreciate, but those effects should be measured from the company’s recall disclosures rather than inferred from the difference between average and rentable fleet counts.

Debt comes in two flavours that must never be added together carelessly. Vehicle debt is secured against the fleet, sized to the value of that fleet, and repaid as vehicles are sold. Non-vehicle debt is corporate debt. When a rental company reports $18.7 billion of total debt, the corporate leverage question is about the $6.0 billion, not the $18.7 billion. The vehicle debt is closer to a warehouse line than to a bond issue, though it still has to be refinanced on schedule.

Source: Hertz Form 10-Q · Q2 results.

04 Second Quarter 2026 In Numbers

The consolidated income statement for the three months to June 30, 2026, with the same quarter of 2025 alongside, as filed.

Depreciation and lease charges grew 17.3%, faster than revenue’s 9.7% increase. The year-on-year consolidated average fleet nevertheless fell about 1.1%, and net DPU rose from $256 to $302. The monthly Q2 figure comprised approximately $298 gross depreciation plus $4 of net disposal losses in management’s prepared remarks. This is a per-unit and disposal-economics issue, not evidence that a larger fleet generated the higher charge. Being close to the current $300 management objective also does not mean depreciation fell against Q2 2025.

The second is the tax line. Hertz recorded a $7 million tax expense on $71 million of pre-tax income, an effective rate near 10 per cent, and in the first half a $36 million expense on a $233 million pre-tax loss. A company with a valuation allowance against its deferred tax assets does not get the tax shield an ordinary loss-making company would, so the tax line moves in ways that look counterintuitive until you remember it is being computed jurisdiction by jurisdiction.

For the half year the picture is unambiguously negative: revenue of $4.400 billion against $3.998 billion, and a net loss of $269 million against $737 million. The improvement is real and large. The absolute number is still a loss.

Source: Hertz Form 10-Q · Q2 results.

05 Americas: 80 Per Cent Of The Business

The Americas supplied 80.1% of Q2 revenue and remain the largest operating contributor. International earnings, corporate expenses and financial gains also affect the consolidated result; the Americas segment alone does not explain the GAAP swing.

The 18,616 difference between 429,465 average vehicles and 410,849 average rentable vehicles is not a recall count. The 10-Q definition excludes vehicles on retail sales lots or actively being disposed of from rentable vehicles. These counts cannot establish that each excluded vehicle sat idle for the full quarter or caused a $17 million recall expense. Hertz instead disclosed nearly 15,000 recalled vehicles on average across the company and estimated a $30 million Q2 adjusted corporate EBITDA impact and $27 million net-income impact. The recall disclosure and the fleet-definition reconciliation answer different questions.

Adjusted EBITDA of $88 million on $1.918 billion of revenue is a 4.6 per cent margin. For the first half, Americas adjusted EBITDA is still negative at $15 million, against negative $193 million a year earlier. The seasonal shape of this business puts the money in the second and third quarters, so a first half that is roughly at breakeven at the segment level is what a profitable year would look like at this stage. It is not proof of one.

Source: Hertz Form 10-Q · Q2 results.

06 International: Smaller, Steadier, Better Margin

International is smaller, steadier and, on the reported numbers, more profitable per dollar of revenue.

International adjusted EBITDA was $47 million on $478 million of revenue, a 9.8% segment margin versus 4.6% in the Americas. Monthly RPU/DPU were $1,485/$294 versus $1,557/$304. The remaining costs, revenue mix and geographic operating structures differ, but the disclosed data do not isolate a numerical margin bridge for airport fees, labor, taxes or vehicle mix. International’s stronger segment margin is an observation; attributing all of that advantage to particular cost categories would require more evidence.

For the half year International produced $45 million of adjusted EBITDA against $28 million. In a group that lost $269 million at the net line, the international arm is the part that has not needed fixing.

Source: Hertz Form 10-Q · Q2 results.

07 RPU And DPU: The Two Numbers Management Publishes

Hertz has given the market a two-number target and repeated it in the second quarter release. The wording is the company’s own: full-year RPU is expected to trend above its North Star target of $1,500, and the company expects to achieve its net DPU target of at or below $300 for the full year.

The denominators differ. RPU uses exchange-adjusted revenue divided by average rentable vehicles and months; DPU uses exchange-adjusted net depreciation divided by average vehicles and months. Subtracting $304 from $1,557 and multiplying both by 429,465 therefore does not reconstruct reported fleet contribution. A simpler Americas calculation is $1.918 billion revenue less $391 million of vehicle depreciation and lease charges, or $1.527 billion before other operating costs, corporate charges and interest. This arithmetic subtotal is not a reported gross-profit measure and is not net cash generation.

For a mechanical three-month sensitivity using Q2 Americas fleet counts, a $25 monthly DPU increase costs $32.21 million: $25 × 429,465 × 3. A $25 monthly RPU decline reduces revenue by $30.81 million: $25 × 410,849 × 3. Together that is $63.02 million of pre-tax pressure before fleet resizing, cost responses, mix and currency changes. It cannot be directly deducted from the $64 million GAAP net profit as a net-income forecast because tax, finance and accounting adjustments also change.

The recall impact is disclosed more directly than a simple utilization multiplication. Management’s August remarks estimated about $55 million of lost Q2 revenue, while the release estimated $30 million of Q2 adjusted corporate EBITDA impact and $27 million of net-income impact. The first-half adjusted corporate EBITDA impact exceeded $55 million. These figures refer to different periods and profit levels; $55 million of quarterly revenue is not $55 million of quarterly EBITDA. Resolution timing and the ability to earn replacement revenue remain uncertain.

Source: Hertz Form 10-Q · Q2 results · August 6 prepared remarks.

08 The Balance Sheet, And Why The Two Debts Are Different

The balance sheet at June 30, 2026, with the year-end position alongside, as filed.

Vehicle debt increased $1.081 billion over the first half. Vehicle purchases of $7.217 billion exceeded disposal proceeds of $5.083 billion by $2.134 billion. This measures cash invested in the fleet during the half, not an increase in the year-on-year Q2 average vehicle count, which declined. The debt amounts in the balance-sheet table are carrying values; they are not interchangeable with the contractual principal amounts in individual maturity schedules. Asset backing also does not eliminate refinancing or collateral-value risk.

Read subordination within each series, keeping maturity constant: Series 2026-3 coupons range from 5.51% for Class A to 10.33% for Class E; Series 2026-4 ranges from 5.87% to 11.35%. Comparing the lowest coupon in the first series with the highest in the second would mix subordination and maturity differences. Hertz retained both Class E tranches, totaling $40.25 million; outside investors supplied $834.75 million. Scheduled principal payments can start earlier upon an amortization event, so the stated September 2029 and September 2031 dates are not unconditional protection against earlier cash requirements.

Non-vehicle debt increased $612 million, including the June exchangeables. GAAP first-half operating cash flow was $401 million, while company-defined adjusted free cash flow was negative $304 million for the half and positive $162 million in Q2. Adjusted operating cash flow was negative $319 million for the half and negative $161 million in Q2. These measures have different treatments of fleet funding and other items; none can be substituted for another. Of the $673 million restricted cash, $399 million was vehicle-related and $274 million non-vehicle-related, including $245 million in the Term C loan arrangement. Adding restricted cash to $631 million of cash does not make $1.304 billion freely spendable at the parent.

Equity of negative $628 million is not, by itself, an emergency for a company of this type: it reflects accumulated losses against a capital structure that has been through bankruptcy and recapitalisation. It does matter for what it implies about optionality. A company with negative book equity, a loss-making first half and a $200 million bond maturing in December has a narrow set of financing doors, and the ones that are open are expensive.

Source: Hertz Form 10-Q · Q2 results · August 27 ABS / 8-K.

09 Exchangeable Notes: Coupon, Accounting and Dilution

In June 2026 Hertz issued $350 million of Exchangeable First Lien Notes due July 1, 2030, followed by a further $30 million in July when part of the greenshoe was exercised. The stated coupon is 6.75 per cent, structured as 3.375 per cent paid in cash and 3.375 per cent paid in kind. The initial conversion price is approximately $3.58 per share. The effective interest rate the company carries on those notes was approximately 17.7 per cent at June 30, 2026.

The 6.75% stated coupon and the approximately 17.7% effective accounting rate answer different questions. Cash interest is 3.375%, while the 3.375% payment-in-kind component increases the debt claim under the instrument’s terms. Accounting separates the embedded exchange feature and recognizes discounts and other costs over time, producing a higher effective rate on the debt component. That rate is not a promise that lenders earn 17.7%, not an extra 17.7% cash coupon and not evidence that principal compounds at that entire rate. Assess cash service, contractual accretion and potential dilution separately.

These notes are not alone. The exchangeable notes due 2029 carry $282 million of principal at an 8.00 per cent payment-in-kind coupon, and the exchangeable notes due 2030 carry $425 million at 5.50 per cent. Payment in kind means the principal grows rather than the cash going out, which protects liquidity today and enlarges the claim later.

Q2 EPS used approximately 317 million basic and 418 million diluted weighted-average shares. The diluted calculation includes about 11 million shares from equity instruments, 43 million for the 2029 exchangeables, 46 million for the separate 2030 exchangeables and 1 million for the new first-lien notes; rounding affects the totals. These are different instruments with different terms, not 101 million shares all converting at $3.58. The diluted numerator was also adjusted to about $23 million under the if-converted method, so $64 million divided by 418 million is not the EPS calculation. The 356,451,393 common shares outstanding on July 30 are a point-in-time count, not either quarterly weighted-average denominator.

Source: Hertz Form 10-Q · Q2 results.

The financing also involved 37,037,037 shares lent and sold by the share borrower to facilitate the exchangeable transaction. Hertz received a nominal lending fee based on par value, not the borrower’s gross sale proceeds as a conventional equity raise. Under the disclosed accounting these borrowed shares are excluded from basic and diluted EPS. Public warrants outstanding were approximately 82.7 million, with a $12.81 strike and 1.0772 shares deliverable per warrant; they were antidilutive for Q2. These contractual exposures cannot be added blindly to the quarterly EPS denominator or the market-data share count. 10-Q.

10 Liquidity, Covenants and the December Cash Plan

June 30 liquidity was approximately $984 million, combining cash with available revolving capacity under the company’s definition. Management said the July $30 million note issuance took pro-forma liquidity slightly above $1 billion. Liquidity guidance and the contractual covenant definitions must still be read on their own terms; the broader balance-sheet total that includes restricted cash is not the same amount. Forecast liquidity also depends on operating performance, fleet financing and the uses of cash assumed in the plan.

The first-lien ratio limit is 3.0× in Q1 and Q4 and 3.5× in Q2 and Q3. Minimum liquidity is tested at each month-end, at $400 million during Q2/Q3 and $500 million during Q1/Q4. Hertz reported compliance at June 30. That observation does not certify future compliance: the test must be met on its contractual dates using the agreement’s definitions. The seasonal step-up makes Q4 liquidity worth monitoring even when management forecasts a buffer.

The remaining $200 million Senior Notes due 2026 have a December maturity and a 4.63% coupon. In the August 6 prepared remarks, management explicitly said the $1.0–1.4 billion year-end liquidity guide includes repaying them in cash. It also removed assumed ATM proceeds from its guidance. The base management plan therefore is a cash repayment, not a necessary new corporate bond issue. The separate $2.0 billion HVF III Series 2021-2 securities are medium-term vehicle ABS notes with a December maturity, not the Series 2021-A revolving facility; their funding must be evaluated independently.

The August ABS proceeds partly repay Series 2021-A variable-funding notes. Remaining proceeds support eligible vehicle acquisition or refinancing, with excess distributions to The Hertz Corporation allowed in specified circumstances. The deal demonstrates access to term vehicle funding, but does not itself document repayment or refinancing of either December maturity. Nor should one assume those proceeds are all unrestricted corporate cash. Series 2021-A Class A capacity had separately been extended to May 2028; that extension must not be assigned to the December Series 2021-2 notes.

The practical check is whether operating cash generation and available funding leave the forecast liquidity after the planned cash repayment. A lower result could require different cash uses, financing or fleet decisions. The filings do not establish that the December calendar alone caused the June financing or its accounting rate. Keep disclosed terms, management’s intended use of resources and an analyst’s stress scenarios distinct.

Source: Hertz Form 10-Q · Q2 results · August 6 prepared remarks.

11 The Litigation File

Several legal matters appear in the filings, spanning bankruptcy-era claims, repurchase governance and securities disclosures. Their cash, accounting and governance effects differ.

After the Supreme Court declined review on January 12, Hertz paid $346 million on January 27 in the Wells Fargo dispute over make-whole premiums and post-petition interest. The undisputed amount had already been reserved: payment reduced cash and did not create a new $346 million Q1 expense. It therefore must not be described as the main reason for the $333 million Q1 net loss. The filing also discusses the later denial of additional prejudgment interest and a nominal principal correction; the disclosed payment is not a basis to erase all procedural distinctions.

The share repurchase litigation is settled. Cascia v. Hertz Global, in the Delaware Court of Chancery, was approved by the court on July 23, 2026, including roughly $3 million of fees.

The July 24 Schweitzer securities class action names Hertz, CEO Gil West and CFO Scott Haralson and concerns alleged statements during May 7–June 23, 2026 about liquidity and used vehicles. The separate Doller action names the company and former CEO Stephen Scherr. These are unresolved allegations, not findings of misconduct. The filings do not support assigning a small expected financial impact or assuming a particular resolution date. Read the claims separately from the completed repurchase settlement.

Self-insured liabilities, which for a rental company are a genuine operating item rather than a legal footnote, stood at $643 million at June 30, of which $501 million sits in the Americas segment. That is a book of accident and liability claims that runs off over years, and its adequacy is an accounting estimate.

August 20, 2026: what the share repurchase settlement actually produced, and the shareholder behind that agreement

The settlement recorded above did not simply close a file. On August 20, 2026 Hertz entered into an amended and restated voting agreement with CK Amarillo LP, filed under Item 1.01 of a Form 8-K, and the filing states plainly that it was entered into “in connection with settlement of the Cascia v. Farmer, et al. litigation”. It amends and restates the voting agreement of March 24, 2025.

CK Amarillo LP reported 181,455,469 beneficially owned shares, or 50.9%, in its August 24 Schedule 13D/A No. 11, using the July 30 outstanding count of 356,451,393. Multiple reporting entities describe overlapping interests in that position; their holdings must not be added together. This is a beneficial majority subject to contractual voting restrictions, not unrestricted discretion over more than half of all votes. It also uses a different definition from a market-data provider’s aggregate insider percentage.

What the new agreement does about that. On every matter put to a vote, CK Amarillo agreed to vote the “Excess Voting Securities” — the portion of its holding that, with affiliates, exceeds 45% of total voting power — in the same proportion as all other votes cast, excluding its own votes and excluding shares not voted or subject to a broker non-vote. Below that 45% line it votes at its discretion. In practice the holder keeps 45% of the voting power outright and mirrors the rest.

The second addition is a sale of control provision. If CK Amarillo sells 50% or more of the total outstanding common stock to a third party above the Market Price as defined in the agreement, and subject to exceptions, it must deliver to the other holders an amount equal to one minus the percentage of outstanding shares sold, multiplied by the excess of the purchase price over the Market Price per share, multiplied by the number of shares sold. It is a sharing mechanism on a control premium, not a tag-along right.

The agreement terminates when CK Amarillo and affiliates cease to hold 45% or more of the voting securities and the 2021 and 2022 repurchase programmes are either fully spent or terminated. Sources: Form 8-K, August 20, 2026 and Schedule 13D/A No. 11, August 24, 2026. Note that the 8-K names the case as Cascia v. Farmer, et al. while the settlement described above is recorded as Cascia v. Hertz Global; we have not read the docket to establish the relationship between the two captions.

Source: Hertz Form 10-Q · Q2 results · Schedule 13D/A · Voting agreement.

12 Hertz Against Avis

Two vehicle rental companies with United States listings run the same trade with opposite settings. The comparison is only fair if the differences are stated.

Both companies report Q2 2026 consolidated net income, but Avis’s $63 million includes $28 million attributable to noncontrolling interests, leaving $35 million attributable to Avis Budget shareholders. The table pairs group-level utilization measures and labels the remaining segment differences. Vehicle mix, geography, FX adjustments and accounting definitions still limit direct comparisons. Avis’s equity deficit shown here is attributable to its shareholders, and its reported vehicle debt includes retained Class R notes. A lower headline fleet-cost figure alone does not establish a better investment outcome.

Source: Hertz Form 10-Q · Q2 results · Avis Q2 2026.

13 What Management Has To Prove

Four things have to hold for the second quarter to become a trend rather than a peak.

DPU has to stay at or below $300 for the full year. It printed $304 in the Americas and $302 consolidated on the company’s net basis. The full-year target is achievable but has no cushion, and it depends on used vehicle values that no rental company controls.

RPU must be assessed at the scope used by guidance: Q2 consolidated RPU was $1,542 and Americas RPU $1,557. Management projects full-year RPU above $1,500 and transaction days up about 2%. Q3 is guided to roughly 1% transaction-day growth and net DPU of $285–295, with adjusted corporate EBITDA of $275–325 million and positive EPS. These are dated management expectations, not reported Q3 results.

Recall performance should improve in the company’s actual recall count, revenue-impact estimates and total utilization. The difference between average and rentable vehicles is a definition adjustment that includes vehicles for sale, not a direct recall gauge. Better disposal execution also matters: the August 25 limited powertrain warranty supports the Car Sales channel, but no quantified profit contribution has been disclosed.

December requires cash execution and appropriate fleet financing. The corporate $200 million repayment is included in the $1.0–1.4 billion year-end liquidity guidance; the separate $2.0 billion vehicle-note maturity and Q4’s $500 million monthly minimum-liquidity threshold remain additional checks. Full-year adjusted corporate EBITDA guidance is $225–275 million. The longer-range $1 billion 2027 EBITDA objective requires scale and execution and must not be read as a secured outcome.

None of those four is a binary event with a date on it, which is what makes this a different kind of file from a biotech hub. There is no single day on which the thesis is proved. There is a sequence of quarters in which two numbers either hold their line or do not.

Source: Hertz Form 10-Q · Q2 results · August 6 prepared remarks · Hertz Car Sales.

14 Risks And Red Flags

Negative equity and a loss-making half year. Stockholders’ equity is negative $628 million and the half-year net loss is $269 million. The second quarter profit does not change either fact; it slows the deterioration.

Financing cost and principal accretion. The 17.7% effective rate on the June first-lien notes is an accounting measure, while contractual cash and PIK coupons determine their immediate servicing and accretion. PIK interest on these and the 2029 notes preserves current cash at the cost of a larger later claim. Equity-linked funding adds another dimension through conversion terms, distinct from either interest measure.

Potential dilution comes from several instruments with different terms. The 418 million Q2 diluted weighted-average shares do not mean that all excess shares convert at $3.58 or that conversion has occurred. The 2029 and 2030 exchangeables, equity awards, new first-lien notes and public warrants need separate analysis. The $250 million ATM program remains available, with roughly $3 million of net proceeds used in Q2, even though management removed further ATM proceeds from its full-year liquidity assumptions.

Residual value risk is the whole business. Depreciation per unit is an estimate of what a car will be worth in a year. A softening used vehicle market raises that charge and lowers disposal proceeds simultaneously.

Fleet availability risk. Recalls, parts availability and the mix of vehicle types can strand thousands of cars in a fleet that depreciates whether or not it is rented.

Concentration and cyclicality. Airport rental demand follows air travel, which follows the consumer and the corporate travel budget. A soft leisure season arrives across the whole industry at once, and the industry’s usual response, discounting to hold utilisation, damages RPU precisely when it is most needed.

Litigation and governance. A securities class action naming the current chief executive and chief financial officer was filed in July 2026 and is unresolved.

Source: Hertz Form 10-Q · Q2 results.

15 Scenarios

Three descriptive paths, none of them a forecast and none of them a recommendation.

The operating plan holds. DPU stays near the $300 full-year target, RPU exceeds $1,500 and recall disruption eases. Management achieves its Q3 earnings outlook and pays the $200 million corporate maturity from cash while retaining the guided liquidity. This would strengthen evidence of recovery, but does not by itself establish full-year GAAP breakeven: Q2 already shows why adjusted operating measures and the GAAP net line can diverge. The vehicle-note maturity remains a separate financing task.

The operating plan slips. If Americas RPU fell from $1,557 to $1,500 and DPU rose from $304 to $320, holding the Q2 fleet counts for three months would imply about $70.25 million less revenue and $20.61 million more depreciation, or $90.87 million of combined mechanical pre-tax pressure. The calculation uses 410,849 rentable vehicles for RPU and 429,465 average vehicles for DPU. It is a sensitivity, not a forecast of net loss, and excludes changes in fleet size, other costs, taxes, currency and financial gains.

The liquidity plan misses. If cash generation or financing availability disappoints, the planned December cash payment leaves less liquidity than projected, potentially requiring additional actions. The filed plan does not assume a repeat of the June exchangeable issue to meet the $200 million maturity. Any new transaction would need its own terms and impact assessment; the 17.7% accounting rate is not a ready-made quote for a hypothetical refinancing.

Travel demand, rental pricing, used-vehicle values, recall availability and funding terms all distinguish these paths. Hertz can adjust fleet size, purchasing and disposal channels, but cannot independently determine market demand, residual values or interest rates.

Source: Hertz Form 10-Q · Q2 results · August 6 prepared remarks.

16 What the Recovery Still Needs to Demonstrate

Q2 marks a return to $64 million of GAAP profit, alongside a $47 million adjusted net loss. Americas RPU of $1,557 and DPU of $304 are useful operating measures with different denominators; substantial financial and asset-sale gains also supported GAAP income. A credible recovery requires both durable fleet economics and an improvement in earnings that does not depend on those gains. The company’s $1,500 RPU and approximately $300 net DPU objectives remain management expectations.

The balance sheet determines how much operating recovery can reach common shareholders: $18.747 billion of debt carrying value, including $12.710 billion of vehicle debt, and negative $628 million of equity. Cash interest, PIK accretion and conversion exposure must be distinguished. Management’s year-end liquidity range already allows for the December $200 million corporate cash payment; this is the reference case to monitor, alongside the separate vehicle-note maturity.

Watch the Q3 results against the $275–325 million adjusted corporate EBITDA and $285–295 net DPU outlook; no official reporting date was confirmed in the sources checked. Then monitor actual recall disclosures, total and operational utilization on their proper fleet bases, and cash after the planned December repayment. The August ABS transaction and amended voting agreement add financing and governance context; neither resolves earnings quality or future liquidity by itself.

Source: Hertz Form 10-Q · Q2 results · August 6 prepared remarks.

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These pages sit alongside it in the Merlintrader travel section.

• Avis Budget Group ($CAR) Stock Hub — the same business model with 664,638 vehicles, a $3.4 billion equity deficit and 35.3 million shares outstanding.
• Merlintrader Travel Pub — the travel index, with every airline, cruise and vehicle rental hub and its own update date.