Hertz Global Holdings ($HTZ) Stock Hub 2026: A Profitable Quarter Built On Two Numbers

01 The Quarter That Turned Positive, And By How Little

Hertz reported a profitable quarter on August 6, 2026, and the number that matters is smaller than it looks. Net income of $64 million on revenue of $2.396 billion is a 2.7 per cent net margin, and it arrives after a first quarter that lost $333 million. The half year is still $269 million in the red. What changed between January and June is not demand: revenue rose 9.7 per cent year over year, which is solid but not transformative. What changed is the cost of owning the fleet.

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.

In the second quarter of 2026 the Americas fleet produced $1,557 of revenue per unit per month against $304 of depreciation per unit per month. The company reported a consolidated net DPU of $302. Both sides of the North Star are now within a few dollars of target, and that is the entire explanation for a positive quarter after two years of losses. It is also the fragility: a $20 move in either direction, on a fleet averaging 429,465 vehicles in the Americas alone, is worth roughly $100 million a quarter.

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 of $2.396 billion, up from $2.185 billion. Americas rental car revenue of $1.918 billion with adjusted EBITDA of $88 million; International revenue of $478 million with adjusted EBITDA of $47 million. Pre-tax income of $71 million against a $316 million pre-tax loss a year earlier. Net income of $64 million, five cents per diluted share.

The fleet. Americas vehicle utilisation of 83 per cent on 429,465 average vehicles, with 410,849 of them rentable. Total revenue per day of $62.11. Transaction days of 30.9 million in the Americas and 7.8 million internationally. Depreciation of revenue earning vehicles and lease charges of $487 million in the quarter, up from $415 million, because the fleet is larger and newer.

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. In June 2026 Hertz issued $350 million of Exchangeable First Lien Notes due 2030 at a 6.75 per cent coupon, half of it paid in cash and half in kind, with an initial conversion price around $3.58 a share. A further $30 million followed in July. The effective interest rate carried on those notes at June 30 was 17.7 per cent. That number, not the coupon, is the honest price of the money.

What is unresolved. A $200 million senior note matures in December 2026 and a $2.0 billion vehicle facility matures in the same month. A securities class action was filed on July 24, 2026 against the company and its current chief executive and chief financial officer. The equity is negative, the diluted share count is 418 million against a basic count of 317 million, and every additional dollar of losses is financed rather than earned.

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.

Utilisation is the multiplier. A fleet at 83 per cent utilisation earns 83 per cent of its theoretical revenue while depreciating at 100 per cent of its schedule. That asymmetry is why a rental company can be busy and still lose money, and why the recall-adjusted utilisation figure that Hertz publishes, 81 per cent against 79 per cent reported, is not a cosmetic distinction: a car sitting on a lot waiting for a safety recall part is a car depreciating with no revenue against it.

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.

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.

Two lines deserve a second look. The first is depreciation, up 17 per cent against revenue up 9.7 per cent. That is what fleet renewal costs: newer cars carry a larger absolute depreciation charge even when the per-unit rate is falling, because the asset base per vehicle is higher. The company is trading a larger charge today for better utilisation, fewer recalls and better disposal proceeds later, and the second quarter is the first period in which that trade shows a positive result.

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.

05 Americas: 80 Per Cent Of The Business

The Americas segment is the business: 80 per cent of revenue and the entire swing factor in the result.

The gap between average vehicles and average rentable vehicles, 429,465 against 410,849, is 18,616 cars that were in the fleet but not available to rent. Some of that is normal: vehicles in transit, in maintenance, being prepared for sale. Some of it is recall. Whatever the cause, those cars depreciated for three months and produced nothing, and at $304 a month they cost roughly $17 million over the quarter.

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.

06 International: Smaller, Steadier, Better Margin

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

Adjusted EBITDA of $47 million on $478 million is a 9.8 per cent margin, more than double the Americas rate, on a fleet a quarter of the size. The per-unit economics are close to identical: $1,485 of revenue against $294 of depreciation, versus $1,557 against $304. What differs is the cost layer between those two numbers, which in Europe includes a different mix of airport concession fees, labour arrangements and vehicle taxes, and a fleet that skews toward smaller and cheaper cars.

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.

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.

That is an unusually testable piece of guidance, and it is worth understanding why management chose those two numbers rather than a revenue or earnings range. RPU and DPU are the two ends of the fleet loop. Multiply the gap between them by the number of vehicles and the number of months, and you have the gross margin of the rental business before any operating cost. In the Americas in the second quarter, the gap was $1,253 a month across roughly 429,000 vehicles: about $1.6 billion of gross fleet contribution in a quarter, out of which come labour, locations, airport fees, insurance, technology, interest and everything else.

Now run the sensitivity. A $25 deterioration in monthly DPU across the Americas fleet costs roughly $32 million a quarter. A $25 deterioration in monthly RPU costs the same. Both moving together, which is what happens when the used car market softens and the industry responds by keeping cars longer and discounting to fill them, is a $65 million quarterly swing against a quarter that earned $64 million. The margin of safety between the current result and a loss is thinner than the profit headline suggests.

This is also why the recall drag matters more than it sounds. Utilisation reported at 79 per cent consolidated, 81 per cent excluding recalled vehicles, is a two-point difference. Two points of utilisation on a half-million-vehicle fleet, at roughly $62 a day, is worth several tens of millions of dollars a quarter in revenue that was available to be earned and was not.

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.

Read the two debt lines separately. Vehicle debt rose $1.081 billion in six months because the fleet was rebuilt: the cash flow statement shows $7.217 billion of vehicle purchases against $5.083 billion of disposal proceeds, so $2.134 billion of net fleet investment in the half. That is what a fleet refresh costs, and it is financed the way fleet is always financed, against the cars themselves.

Non-vehicle debt rose $612 million, and that is the corporate line. It includes the June exchangeable notes. Operating cash flow of $401 million in the half did not cover the corporate cash needs, so the gap was bridged with paper.

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.

09 The June 2026 Exchangeable Notes And The Real Cost Of Money

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 distance between 6.75 and 17.7 is the whole story of this financing. The coupon is what the company pays in cash and paper each year. The effective rate is what the accounting says the money actually costs once the conversion feature, the issue discount and the fees are amortised over the life of the instrument. An investor reading only the coupon would conclude that Hertz refinanced cheaply. An investor reading the effective rate would conclude that first-lien money, with an equity kicker attached at $3.58, was the market’s price for lending to a company with negative equity and a loss-making half year.

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.

The dilution arithmetic is visible in the earnings per share note. The second quarter diluted calculation used 418 million shares against 317 million basic, because the exchangeables are treated as if converted whenever that treatment is dilutive. The cover of the Form 10-Q reports 356,451,393 shares outstanding at July 30, 2026. The gap between the share count on the cover and the share count in the diluted calculation is the shape of the capital structure: existing holders own the recovery jointly with the creditors who financed it.

10 Liquidity, Covenants And The December Wall

Liquidity at the end of the second quarter was approximately $984 million, which the company described as in line with its prior guidance of just under $1 billion. That figure combines unrestricted cash with undrawn corporate capacity, and it is the number the covenants are written against.

There are two covenants worth knowing. The first lien ratio must stay at or below 3.0 times in the first and fourth quarters and 3.5 times in the second and third, which is a seasonal accommodation for a business that earns its money in the middle of the year. The minimum liquidity covenant is $400 million in the second and third quarters and $500 million in the first and fourth. Hertz stated that it was in compliance with both at June 30, 2026.

Compliance today is not the question. The question is December. A $200 million senior note matures in December 2026, and a $2.0 billion vehicle facility, HVF III 2021-2, matures in the same month. The vehicle facility is the routine one: fleet financing is refinanced continuously and the collateral is the fleet itself, so absent a dislocation in the asset-backed market it gets rolled. The $200 million corporate note is the one that must be paid or replaced with corporate money, in a quarter when the minimum liquidity covenant steps up from $400 million to $500 million and when seasonal demand steps down.

That combination — a maturity, a tighter covenant and the weakest quarter of the year, all in the same three months — is the reason the June financing happened in June rather than in November. It is also the reason the effective rate on that financing was 17.7 per cent. A borrower arranging money ahead of a wall pays for the calendar.

11 The Litigation File

Three legal matters appear in the filings, and they are different in kind.

The Wells Fargo claim is finished and paid. The dispute concerned make-whole premiums and post-petition interest on unsecured notes from the bankruptcy period. After the Supreme Court declined to hear the case on January 12, 2026, Hertz paid $346 million on January 27, 2026. That payment is the single largest reason the first quarter of 2026 looks as bad as it does, and it will not repeat.

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 securities litigation is open and new. A class action was filed on July 24, 2026 in the Middle District of Florida against Hertz Global Holdings, chief executive Gil West and chief financial officer Scott Haralson. A separate securities class action, Doller, remains pending in the same district against the company and former chief executive Stephen Scherr. Securities cases of this type typically take years, and their financial significance is usually smaller than their headline. Their governance significance is that they keep the previous two years of disclosure inside the record while the current management is trying to establish a new one.

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.

12 Hertz Against Avis And U-Haul

Three vehicle rental companies with United States listings sit in three different places on the same idea. The comparison is only fair if the differences are stated.

Hertz and Avis are the same business model at different scale and with different balance sheets. Avis rents more cars at a higher daily rate and lower utilisation; Hertz rents fewer cars harder. Avis has a deeper equity deficit and more vehicle debt; Hertz has less of both and a smaller revenue base to service them.

U-Haul does not belong in the same sentence as the other two except that it also rents vehicles. It owns its real estate, earns a growing share of revenue from self-storage, has $7.7 billion of positive equity and pays a dividend on one of its two share classes. Comparing its margin with Hertz’s is comparing a property company with a leasing company. What it does provide is a control case: when the American consumer moves house less, U-Haul’s self-moving revenue tells you so directly, and that same consumer eventually shows up in leisure rental demand.

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 has to stay above $1,500. It printed $1,557 in the Americas in the seasonally strong quarter. The fourth and first quarters are the test, because that is when pricing discipline across the industry is hardest to hold.

The recall drag has to clear. Two points of utilisation is the difference between a good quarter and an ordinary one, and the gap between 429,465 average vehicles and 410,849 rentable vehicles is where it sits.

December has to pass without a financing accident. A $200 million corporate maturity, a $2.0 billion vehicle facility and a step-up in the minimum liquidity covenant land in the same quarter.

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.

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.

The cost of new money. An effective rate of 17.7 per cent on the newest first-lien paper is the market’s assessment, and it compounds. Payment-in-kind coupons on the 2029 notes enlarge the principal every period rather than draining cash, which helps liquidity and hurts the eventual claim on equity.

Dilution is structural, not hypothetical. The diluted share count of 418 million against 317 million basic exists because the exchangeables convert at $3.58. If the equity recovers, conversion is what happens; the upside is shared by construction.

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.

15 Scenarios

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

The line holds. DPU finishes the year at or below $300, RPU stays above $1,500, the recall drag clears and the December maturities are refinanced without a punitive coupon. In that world the second half earns enough to leave the full year near breakeven at the net line, and the argument shifts from survival to what a normalised earnings power looks like on a fleet of half a million vehicles.

The line slips. Used vehicle values soften, DPU drifts to $320 and the industry meets a weaker leisure season by discounting. RPU slides toward $1,500 and the gap between the two numbers narrows by $40 a month. On the Americas fleet alone that is roughly $50 million a quarter, which turns a small profit into a loss and puts the December refinancing into a worse negotiation.

The financing case. Independently of operations, the corporate maturity in December has to be met from a balance sheet with negative equity. The June notes showed what the market charges. A repeat at a similar effective rate is manageable at $200 million and unpleasant at multiples of it.

What separates the three is not demand for rental cars. It is the price of used vehicles and the price of money, and Hertz sets neither.

16 Bottom Line

Hertz earned $64 million in the second quarter of 2026 because it moved two numbers within a few dollars of the targets it had published, not because the rental market transformed. Revenue per unit of $1,557 a month against depreciation per unit of $304 is the entire result, and the company has said in its own words that it expects to end the year above $1,500 on the first and at or below $300 on the second.

Everything else on this page is either the machinery that produces those two numbers, or the balance sheet that will decide how much of any recovery reaches the common equity. Total debt of $18.7 billion, of which $12.7 billion is secured against the fleet. Negative equity of $628 million. New first-lien money carried at an effective 17.7 per cent, convertible at $3.58. A December that contains both a corporate maturity and a tighter liquidity covenant.

What to watch, in order. The third quarter release, because it covers the strongest months of the year and will show whether the DPU and RPU lines held outside the recovery quarter. The gap between average vehicles and rentable vehicles, which measures the recall drag directly. The December refinancing, and the coupon and structure it carries. And the used vehicle market, which sits underneath all three and is reported by other people entirely.

Related Research On Merlintrader

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 $3.4 billion equity deficit and 35.3 million shares outstanding.
• U-Haul Holding ($UHAL) Stock Hub — vehicle rental attached to a self-storage property company, with positive equity and two share classes.
• Merlintrader Travel Pub — the travel index, with every airline, cruise and vehicle rental hub and its own update date.