Hertz Global Holdings Inc. has recently reported significant financial challenges, with losses exceeding analyst expectations in both the fourth quarter of 2025 and the first quarter of 2026. In Q4 2025, the company posted a loss of $0.63 per share, missing the average analyst estimate of a $0.52 loss. This performance, though an improvement from the prior year, was attributed to the impact of a government shutdown and a softening used-car market. The government shutdown, flight cancellations, technology vendor outages, and higher-than-normal vehicle recalls collectively reduced earnings before interest, taxes, depreciation, and amortization (EBITDA) by over $100 million, resulting in an adjusted EBITDA of negative $205 million, significantly worse than the projected loss of $97.5 million. This led to a 1.5% drop in Hertz shares and contributed to a 14% year-to-date decline by the time of the Q4 report in February 2026.
The trend of missed expectations continued into Q1 2026, where Hertz reported an adjusted loss of $0.72 per share, narrowly missing the average analyst estimate of a $0.71 loss. This marked the ninth loss in the last ten quarters for the company. Despite these losses, Hertz achieved its strongest year-over-year revenue growth in three years, with revenue totaling $2.0 billion, an 11% increase. This was driven by strategic initiatives and improvements in revenue per day (RPD), which saw a 5.5% increase. However, the company faced substantial headwinds, including a 300% year-over-year increase in recall activity, which reduced fleet utilization by approximately 200 basis points, impacted transaction days by about 930,000, and resulted in a roughly $50 million revenue impact.
A major contributing factor to Hertz's struggles has been the cooling used-car market and associated depreciation costs. In Q4 2025, vehicle depreciation remained above expectations at $330 per vehicle per month, and fleet utilization declined. While Hertz has been focusing on streamlining operations, more profitably selling used vehicles, and refreshing its fleet with in-demand models, the persistent issue of high depreciation costs for its fleet cars continues to impact profitability. The company's “Buy Right, Hold Right, Sell Right” strategy aims to mitigate these costs, with depreciation per unit per month improving to $312 in Q1 2026. Looking ahead, Hertz anticipates improvement in Q1 2026, projecting mid-single-digit revenue growth due to ongoing revenue management initiatives and better pricing, with CEO Gil West noting that the improvements seen are structural.
It is important to note that the provided search results do not contain an article with the exact title "Hertz Slides After Warning Used Car ‘Softness’ Is Hurting Profit" published on June 24, 2026. However, the information regarding Hertz's challenges with used car prices and quarterly losses is consistent across the latest Bloomberg reports for Q4 2025 and Q1 2026, which describe how the cooling used-car market has hurt profit and led to wider-than-expected losses.
