Hertz Global (HTZ) 28 Apr 222022 Q1 Earnings call transcript

Welcome to Hertz Global Holdings First Quarter 2022 Earnings Call. [Operator Instructions] I would like to remind you that this afternoon's call is being recorded by the company. I would now like to turn the call over to your host, Johann Rawlinson, Vice President of Investor Relations. Please go ahead.

Good afternoon, everyone, and thank you for joining us. have press should financial and you information. now, our release earnings associated By slides conference accompany be also to We've provided our our accessed website. call on can that this that I statements remind like forward-looking you would made to on call contain information. certain

to performance on guarantees subject uncertainties. only that date of this update may call Forward-looking results their Any materially. and inherent by undertakes today's of speaks are reflect nature, and the no to statements forward-looking changed Actual differ not are to information obligation company information relayed as circumstances.

earnings and is using in management believe website. concerning these available GAAP Forward-Looking we'll Today, effects demonstrated better business, profitability in our information XXXX release with the with fleet first sold March Additional our discussed Comparisons non-GAAP on which of our press certain of Form use SEC XXXX. that press and reconciled section of the Donlen Relations statements in Form measures, the and We exclude leasing and contained Factors Hertz XXXX will Investor which our these our are measures. release and filed the quarter Risk non-GAAP is section website. earnings performance financial XX-K our we numbers in on XX-Q Statements the and

afternoon, now the turn call On our Chief Stephen. Stephen Officer. I'll our this have the Executive call Cheung, Scherr, over we Financial Officer; and Chief Kenny to

of quarter coming to speaking as first to and welcome Thank with look the Hertz, and the of weeks earnings This meeting you, CEO I is and in months. Johann. afternoon, Good first many new our call. and my call everyone, you forward

with business, been where improve. part My days am by with first we equally start considerable me the provided I've valuable both a our colleagues other proud TNC. is vehicles brand, electric exciting new combination. as will considerable company. a mobility. brand both that workforce and exceptionally talent, bringing our a XX now terms relationship pricing It first from resilient fleet an Hertz markets have opportunity locations lead in our My and combined the at I with to have A are as in than we in have this the in customers. powerful mover country. as innovative in with tenure terms that employees powerful a well impressions and emerging company. team need EVs leadership attractive appreciation RAC also extraordinary what be with initial do commercially tenured this and spent the deployed a across leaders year-end of possesses that command enjoys is consistent and our with portion lower costs. is for deep of of with long aligns brand talent time into operating Hertz electric attracts in be at advantage saying the the well well new me company economics by of an senior what more field talent need employees, insights promising and and XX and across retention draw an and Let with to Hertz benefits with to that exciting how These positive with company. higher to to uniformly

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the We partner with Hertz API are to architecture with enable others. to building cloud in

be infrastructure charging both companies in charging stations across premises a abroad. on XX large-scale capital, Interested of at a We year-end, X,XXX by investors. we with with in parties and What's a can advancements new will our fleet the lower EV the U.S. network existing conceived North governments, of entire systems we growing equipped participate cost. being American development our more, have need markets nearly telematics Hertz and expanding by the include All network in not energy will by embed and to year-end. built technology fleet as private

are accomplish base. play it our with race As and in Hertz ecosystem we objectives, with the this score, talent. beginning grow an mobility To the it. changes, must exceptional we in compete On will for

to some As for I professionals Hertz years. I us even XX of been XX met who have and noted, with our have with XX, close

Counsel. exciting including our of new with focus recently a morning design a this talent on General new opportunity engineering, new product Hertz, attracting and a Development new also are and Officer at technology around announcement Chief Product We and a to

be detail, for means a with young will in will sharing implemented hit the targets. first now technology Hertz awarded program, a the in story customer which will company participate quarter, our a results innovative the profit also success priority profitability The Combining will in talent employees we pursuit be as company-wide X objectives. of and We which bonuses of with satisfaction and Kenny strategic halves. cash our tell all

EBITDA $X.X in demand level, and from quarter for results year for quarter January of prior well impact By to progressive since volumes. utilization X that the revenue margin and the back from first the were The softer Omicron we of of February weeks late that moving rebound XX% The a demand as rentable and a stability adjusted our improvement softness. March, in was expected management the XX%. the for of and good lower a April. solid initial period the of from we where the $XXX billion, million, indicator was corporate exceeded across Total momentum the was into primarily XX% compensated began the of was see through to into to half of reflection the improvement as XX% due the quarter a fleet. the quarter continue momentum March than its seeing of XXXX first revenue onset are and month February, pandemic

as with our our impact inflationary cars industry to combined us While to new source may Current post-COVID disciplines, unquestionably the fleet. a exceeding forces, with into structural pricing. the cost and The available the is pressures. the attributable vehicles to as an the dynamics are which portion of of persist to in of of led supply share in future also fleet It demand, fleet to improvements difficult they equity certain rental to for of and to results reduce limited XXXX. travel provide strength conditions reflect others constraints rapid invest repurchases. market well are our recent through in value we in positive and supply, materially this the made well on recovery experiencing industry, Like of reflected pricing meet have business demand supply, base residual opportunity dynamic remains

cost and the remains flexible challenges, Given on operationally our these organization careful side.

are cars vehicles vehicles and including before. pre-owned low more longer, infleeting mileage electric quickly new buying car supply, than We keeping

being of product. dispose quality to are of We careful so fleet to older ensure also as vehicles from the

the as when Domestic while prepandemic strong, achieved corporate coming this turn. leisure strong below high international the age, remained our for results time care season. and conditions activity and As levels. remains quarter we cars to used dispositions our get returns. is to car Notwithstanding are prepared weigh asset time rental potential line elevated now taking into Impressively, prices considerably and performance, maximize earnings were summer strong inbound top nonetheless, our to travel, against market

aggregate, near-term my be systems the changes to address highest demand As market any and business days, earnings established activity we of expect serving Progress incremental, such. of we XX to offered in technology focused real journey. international travel In margins our it customer time. corporate and are work margin and on returns, other balance and to and architecture, the have as In for the app core inbound report of highest plans year. the will we the return accretive stack, we be the at our first to various will quality, the on given components

have summer initiated already to the customer we As we enter enhancements peak experience. season, the

technology provide to the a a with period. will but with hassle reimagined. experience car. to customers time renting of begins which our must way, manageable This seamless is digital progress be customers, in a out step to be Our better ensured app, of objective the visible the take every get experience Early over always won't the

will programs gate We these experiences. and test exit to currently be rental scale touchless underway invaluable pilot have initiatives. Learnings as certain field here multiple we

back-end enhanced telematics. Stripe customer systems. running a Earlier improve Web the vehicle and week, of system be tools to our platform. on of we key engaged We're integrity Hertz replacement digital will a move collaborating Amazon customer to operations components that with payment our with also mobility this business to to also modernize Oracle improvements are such digitize and experience. data pilot onto and from platform the with our with heavily initiatives and the and as efficiency upgrade of will These we analytics Services insurance a equip the on improve announced new us experience our We and systems our paper-based

the ongoing of On to false arrest want media customers, topic the the coverage address around litigation. I

note the who their of will own, through fault a where as responsibility were customers right the no by have them. do assets protect affected, publicly, of minority cases In and well I secure overwhelming kept we have to have vehicles and our return company. to said these cars. those requests renters negatively of majority cases our Hertz first In our date me involve the from beyond due repeated the Let that instances, we ignore

Our in diminish policies and innocent to possibility are being the of designed customers procedures future. impacted the

and While year, a we fix is millions rentals a a company. me customer CEO this of impacted task is negatively of fraction the too the X even percentage much. to with as being theaffected unfairly The belongs group the of of process

around continues. with pivot we Let rental intend electric offering our more and markets, to expanded our XX markets me year-end. where XX to Tesla our We've strategy Teslas momentum by than vehicles, to in be

Model forward, California are of for vehicles commenced will quarters. and additional soon. the country in Model Y to rest Looking course the and take we of Ys the the the over excited in coming Model follow X Rentals have

and partnership with another stretches Polestar is X This to journey. partnership bring our aims in important XX,XXX fleet. into our years yet recent Our over Polestar X milestone vehicles EV

XX% to We of to fleet the our footprint. being our accelerate I continue of of multiple end electrification carbon see lower XXXX. would EV manufacturers a And adoption fleet, like of talk electric than to promoting by while the more to

Our portion can over this EV assets. drivers channel lower seeing well flexibility States. meaningfully increased our continues ownership. demand, generate partnership are fleet so greater periods and of stretches in this to with and from The earnings to the typical The grow costs. to to longer strong by utilization This provides versus better are Uber the use experience fewer pivot of between XX our supported these us with make as also means markets over rates rental XX% vehicle turns rental also segment we United driver variable across outright continue we the vehicles on and of and Hertz by ridesharing, renting

to and providing prices progress see results, through Several partnership. with wholesale are to have Carvana us our a continuing platform, to the thousand been market. strong Hertz. We expected very cars with Carvana for accretive pleased found sold these also are in be earnings are with All material the we initiatives uptick the

see fact, summer. the with and our elevate we all efficiency and extremely which acquire has this the plans technology fleet. offer competitive products fleet cost and right we we for to mobility our we confidence quarter chain evolving attention have our This, not channels strategic and I coupled manage success with experience of busy and expanding to we the do we the the customer we operating business to high the in the demand cars position which supply control well for me the in maps taking that increasing point Hertz price and that And dispose execution in to now and ahead, landscape. an confidence way our Looking position. soon. to leverage its road for to to of whom with we engage are anytime services From of the next an the lessening of indications customers positioned equally steps gives year. balance to are risks the

Kenny results through turn it walk I'll Now over more in to detail. to you our

Thank afternoon, good Stephen, you, everyone. and

We disciplined continue and with to strategy fleet execute growth, focusing of utilization productivity. on on and size, staying profitable our revenue

margin, $X.XX EPS million, was adjusted EBITDA $XXX noted, a of first XX%. corporate Stephen and as quarter Our adjusted was

revenue XXXX. periods put X I the last than quarter this that first and XX% on $X.X that in really as earlier. different forward call for was mentioned fact was our the quarter, was the than billion, higher slightly Our the within higher mask estimate This

compensated Omicron, originally that. The expected to than weeks more first were March X for weaker than due but

half back due primarily improved demand. was customers the by rates, large quarter Our in the leisure performance to of measure in driven

sequential XXXX. disciplined together $X,XXX unit over increased March, RPU led per QX, effective about previously, spoken pricing, monthly pricing. that Within structural highlight $X,XXX we to sequentially month revised of calculation from of should Our and utilization with January to as were the from RPU, our actively as by lots approximately better in We in we've from up total fluctuations on excludes or sold Average improvements to revenue driven revenue per XX% $X,XXX, unit, QX, is our other a I improvement channels denominator. rentable vehicles rentable per in productivity for unavailable disposition believe and disposition of measurement therefore, fleet the retail rent. activity. sale it this are, vehicles is unaffected use our vehicles by in for of being our average company's through rental

cars to unit the depreciation. unchanged calculation For clarity, remains per fleet the of as depreciation subject these all and remain includes in

unit pursuing bottom As worked more that before, go-to-market are from improve I've and keenly the forces month said business which market we Depreciation within limited was a focused of expense, pricing generating permanently on deliberate hard we healthy of revenue demand. is business. We've but accretive QX about a line, an are to to and gain a previously supply on $XX are high-quality our the is of standpoint, per per range function guided. we recurring instead for

market for of explained strong today's As is detail cars. our used call, this on result QX a in

our into more fleet, As peak number and of vehicles the summer cars season decrease. rotate will we fully expensive and fleet spring as up depreciated we the for

As the expect year. normalizing to of per unit such, continue end to increase remainder of through monthly the XXXX, depreciation towards the we sequentially

QX, unit per to expect between we $XXX. For per be $XXX depreciation month and

year $XXX and be We expect between monthly $XXX. full DPU to

costs Present periods. both plan, factor disposal Our and disposition therefore, connection residual in quarterly in also our are and acquisitions relevant assessing fleet vehicle depreciation. and amounts factors based into related and estimates and and of are depreciation vehicle of conditions market holding ROA also impact composition, acquisition with These on value vehicles. future cap

to maintenance costs the pricing industry-wide mentioned, that and gross in quarter, resulting and costs first, by other primarily increased ways: cost second, be need Stephen experienced initiatives. as X labor. vehicles and compensation; our to pricing also operating impacted pressure labor as shortages Like increased due factors of see which employee acquisition in higher most broadly. which parts us being offset to inflationary U.S., higher from Now third, increased we costs, for We companies the moving service vehicle and during and more higher depreciation; these

are needs fleet. cost maintenance and will have made Notwithstanding more the at with the inflationary initiatives mitigate and and improvements the bringing of these across and field labor will more allocation level efficiencies, the we pressures. making meet to us additional board. efficient of cost vendors challenges, we outsourced the several to to anticipate avoid to costly We Overall, and discipline drive a these emerge immediate inflation operational mitigate productivity we that challenges, promote hiring permanent business industry mechanics ongoing leveraging we have helped operationally ensure further on optimal resources As to have organization. the these including partnership

of were As and and DOE million XXX bps XXXX. XXXX percentage $XX better bps quarter million revenue, better than the SG&A or $XXX than a for XXX or

balance capital and and strategic to repurchase to our healthy, well of via remains positioning terms initiatives liquidity, In share very sheet structure our shareholders return us program. our fund value our

of of billion, our comprised liquidity and of is nearly $X.X under March unrestricted billion and available facility. was credit $X.X revolving billion $X.X the cash As XX,

the During corporate we our financial capacity nearly RCF our which billion, million creates liquidity. $X.X flexibility by to increased and enhances $XXX quarter, additional

capacity of billion We which also $X.X the in The existing to for debt, as freed repay medium-term structure. of turn, raised notes proceeds revolving approximately our ABS part used were ABS issuance future up through growth. incremental

billion. notes We the also commitments the to million by increased $X.X $XXX under variable funding

on calculations long-term vehicles the and In and investment demand not are we investments basis. to on between positions the whereby depreciable asset an extended decision requires fleet, our of on together the more investment the broadly. EVs because on of They return Turning of on now the balance return strategy There example, on revenue-generating and exclusive. are possibility in cash, as Capital allocation mindful as for elevated capacity our base, to assess cash we potential uses return relative life. on several these of needs for that costs, are our a making flow differentiated growth our size fleet, between which considered consider EVs a possible prove quarter and return and to and higher on our ICE are RPD, We investments. capital lower may mutually and operating an based asset. deployment be and consider

strategy non-fleet infrastructure, which We with the also Stephen information improving of spoke and earlier. and that experience all to consists expenditure, capital of customer consistent operational consider mainly efficiency technology

these focus experience. in and of terms deployment we on of improving ROI again, investments fleet Here customer

As return several the we we have over past consider the shareholders. quarters, cash of to

net invest balance governor of and up our Given sheet. a we we ability, X.Xx pressure our on can without in return in cash the position to leverage are growth and cash placing shareholders current to generating where

As of XX purchased with approximately approximately the million million billion we $X spend. April shares under XX, remaining $XXX plan to

subsequent around we Before will with be approaching Board plan, current exhaust proposals plans. the the we

Turning cash for now the some to specific numbers quarter. flow

Our adjusted our was of and cash quarter. adjusted $XXX million, flow CapEx free $XX million million, nonfleet in this fleet operating $XXX cash flow million, was CapEx $XX resulting was net

our preowned was rotate our growth high-quality broaden to cars, about and at in fleet we share reduction XX% related generated or those fund flow new older cash sufficient and repurchases. liquidity fund we As cars We to the equity.

the out I moment me how see explain Let for full cash flow year. for a on playing

$XXX cash to CapEx will capital and for million expect be non-fleet around the We $XXX EBITDA year. our and that million XX% will taxes that be of working approximately

and fleet expect equity we of Given billion, CapEx the this fleet market to $X mind, on growth that the EBITDA between EBITDA. component to be conditions which our to and are upon this Bear of net our the $X.X acutely investment the our billion in in by making reflect investments. rejuvenation vehicles, depreciation fleet depending once know normalizes. cash our other we therefore, on view in are in realized of are people funded reflected flow We and focused embedded mostly is gains market disposals reported year,

relationships. fleet free of This EBITDA fleets the fleet billion, levels EBITDA is levels, our expect annual a adequately EBITDA a CapEx that industry-wide and return our baseline, transition to prepandemic towards flow more entirety and normally reflect conversion once From As we normalized normal we least Carvana cash we $X.X ridesharing that of aggregate as past, our Amex and GBT depreciation and rates, fleet such XX%. excluding that expense and will the because continue have will our the to we expect be generation told you EVs, at [supplying] value in net would demand be approximately initiatives depreciation believe will minimal. at

EBITDA are forward industry, seeing March strength month-to-day Finally, in similar tightness limited where more to fleet with expected travel March. We a We the any the vehicle see and across saw QX, in to trend of is generated mentioned earlier. RPU abatement positive as demand. and we view is in March originally not XX% consistent do we than continuing had what we supply, strong due the into saw we Stephen with the

industry continue current to result. the be due are for to a exceed will our remain open pricing QX With business, for seasonality, supply been constraints, than by expect fleets XX%. XX% we let's will chain we given the and impacting seeing QX in our the elevated believe that, With Q&A. as call to QX environment to geopolitical the XX% revenue about I performance momentum QX higher historically value residual has and that tight by

comes question first Woronka of Bank. the Deutsche line from Chris Your Instructions] [Operator from

are Stephen, as of most I range, think opportunities people I the kind normalized that of some threats of XXXX yes, there's the what new a do kind $X.X a you or mention billion -- which EBITDA as to as what mean, of of beyond. CEO, think and the number?

sure. Yes,

I Chris. about in in thanks, appreciate question. Kenny, 'XX EBITDA of remarks, normalized context the reference as a his point. the prepared So talked

conditions of a to think current at So is look where delta let kind normal is. as we me angle, different come let's which at slightly it

first side. let's look the at So demand

shy normal where demand we're sit. is, demand think side, of I it the will On elevated notwithstanding still how

'XX, it's coming us demand so these to international you so is you to corporate you RAC a in business, the it United travelers look limited at there. leisure recovered at look that considerable normal So States, and amount inbound, if get to affairs. see can be was look are the about XX% at at of in But of to where state

Corporate is of about and change. running entry So States running will into measures XX%, as United that and are will XX% at 'XX and in where now thinking it corporate about COVID only change the about like at was of travel. the inbounds

on demand room, side, limited share you So conditions think a improvement get the right? there's I maybe of supply will Typically a said, I fleet, to we've still 'XX, for get Then at through as look more state. normalized beyond. think, we fair right, in and it, as side, the to us around supply, persist through much our bit

grow And in so us increase. levels, will as to there, of I think there, demand you'll normalized our but comes on that's context see grow fleet so the fleet more it fleet

at in can now through that the sustain utilization think levels March seeing and I second we're we quarter. in

Let's there's in elevated. price, some going softness assume it's to not stay as

Kenny at included, the going what and we're to we revenue margins, billion. one sources that rate as to is get right, produce we're at to we okay, incremental referred because modest reduction, The it, or normalized reductions. on $X.X a that, okay, and that to depreciation, at cost if looking XX% haven't So XX% then take fact upside of both is more to assumes more look

to of higher that sell cost vehicles or what the those matter, we're We'll basis of much Cloud reduction on marketing older just of bit take engine. we and perspective better technology, to seeing we we on collaborative side, come are there. XXXX and through to overall on good again, spend are So as down. to what Uber you context will than we're but supply/demand we're a what can talked than those on more both take to And slightly the or on context our generate through what or a will increment have out-of-service going 'XX. RPU a meaningful ICE. in I out not puts and back of check, benefit migration so my giving revert thinking is Carvana I'm platform offer increased are certain ridesharing the the just for looking of electric technology what wanted own and I about at in efforts the get different simply there to generation cost developments kind in an takes. of growing about that just gut the pricing our generate like, you a can And

And the of wanting side, to the fleet could in a so the RPU bringing therefore, fleet, make not demand, to things very different? have in, follow-up, there? just lot even the and as going liquidity? into matching that does a Is Stephen, fleet there and different really on bit with Yes. on EVs fleet cost totally to fleet you mentioned reconsider that like which levels helpful. case you kind the the the zone And be gets you demand you on if you're the the even to of made smaller because coming little total to that of that fleet -- RPU a be a get back of fleet the is to look 'XX

a is view my is on ROA and this okay, mean, set fleet. managing the your of sweating that this I assets, Yes. on

aggregate making history. on depreciation sure higher on part life end, ICE a costs I'm they lower very with the appreciably vehicles I'm had But with carry of because unless And rate limited longer will on that So attract EVs into be vehicles higher focused I with consideration electric be the those think to of think operating those less. They otherwise. depreciation the into because of composition on and the the fleet I more vehicle maintenance be and think I higher. forward, between fleet, them and to focused will amount demand. I will is as sizing respect the ROA think they in of the because be the And taken good fleet and operating on there's in we're the more that

ROA, So the fleet is the the and meeting where I in margin sweating number. harvest to fleet prescribed to mix of I'm to I there fleet you itself. to context the go not back fleet point in context want looking at my the that's of looking grow that greatest demand can on the a of the

question comes the of Healy line Research. John from Northcoast next from your And

Big picture question for you, Stephen and Kenny.

on Just maybe the about happening a is historical to your view relative love about the the cycle in you're and to what's we might Hertz And get I that just where is the just Would of or those at thoughts be kind resistant economic how cyclically? thinking maybe business? different maybe of planning encounter love the leading indicators we're potential And would economy? Hertz to business how periods getting hear economy. lot your some and as turbulence? pressures to with more So of about come how questions less economic how

it's Kenny, first. try I'll yes, one answer to John, Hey, this

So can A profit. I'll X my the The below say recession our question. the fleet the fixed The name demand can hospitality and things I pressure. up right? mind as to foremost, very, recession unlike for things no of question now to think fleet demand, or for their about is come your us, regardless right here, travel to of few right? peers or potential game right, thanks quickly, environment, down very we economic and asset. First downturn, fleet and to match maximize other with who curve, any pressure,

provides remember, business book we and is this volume second have a strong of very down. thing resilient and off flexes a peak are of at XX% that we the is fact The our And of proven as pandemic. I'd cost base combined company, is the that which as right? with up nimble the is flexibility year, say variable very

is thing allocation, in a about pricing don't for industry creates necessary and view I'd thing this the people you discipline say as second talk more right? can see The terms bad inflation is view us of currently. inflation, as across My that we which asset

thing The second I'd to inflationary car place that say environment, an bad is at. be not a is rental in

strong thing last offset I'd and And optimize then utilizing productivity, inflation about that against processes rising slash that you're As we And current purchase an rate that. say environment. I'd the drive the the and around And mentioned historical continue prepared right, today largely stack, rates, remarks, of rate say thing have backdrop monetize really business is we drive operational efficiencies to debt the value total is is my them profile, rate, as environment well asset on have to of place But hikes. last the we think you insulated from caps interest if I debt standpoint. fixed As sheet. are our debt a we about in interest XX% balance our so VSN right? in

are participate -- So is a been we story environment and are is quite We circumstances. our students pointed auto analyze short, current all in and dynamic, we battle-tested aspects market. business. model the while of Since you way, resilient frankly, of the long the range we've out, all of wide by aspects And as we business the it. across of study

scenarios. are all we prepared for So

that range the a you to of more perspective other meaning The if travel in as car John, offer led it's beneficiary going to industry -- is I the delayed Steven. you I car a half I'll one is would of look think rental consumptive across the XXXX. broadly industry the industries, what rental of stimulus be and back increased consumption other response, describe

at the yet pick look travel, where patterns place. think was it's said is we've about bookings I been around we by virtue travel to not forward demand and book we yet, answering to beneficiary be some may our the it. the will restrictions of and there's what I in I that. has to just indicates consumptive If had that look that have that If travel, as delay at of opportunity you up see in question suggesting that that just for summer, of in COVID me response largely the And delayed to Chris,

corporate to what's to through. on And left come think profitable what's U.S., on us. demand impressively, is a segment traveler the international for inbound So the left about which very

summer. element we And the it that so in I stimulus way think consumers, through, of necessarily this the here where I consumptive but will it there's didn't saw which in think in materialize came an behavior in

a to the holds broad the you offer just forward what that's context perspective in for so the And industry. of

end question, a through XXX cost it's, math to the again? Was out run because to Kenny. us those that was X number That's for that sketch view $XXX to And the hoping number Could comments? Great. U.S. was the -- the just Or just on in the just $XXX of the I to And were at size, like helpful. really follow-up on of company-wide? you kind year? try be year fleet maybe a

Okay.

me let so yes, sure I'll I'll so get So I'm go hit now. right a deeper on bit since more questions it depreciation,

you XX. about think this if So negative call right, it quarter,

$XXX it, If call So of right, per $XXX per work depreciated mentioned terms you're is bifurcate bifurcate And will of per $XXX car will your and QX gross closer your it, right? into, decrease, sale, $XXX QX per that, depreciation I of between vehicles then on the per do your essentially, vehicle, or call your the and if back which car in you was, depreciation as $XX, fully and gross means change, that's half simply of depreciation, negative depreciation. gains then in unit unit, if as then your you recorded gains month you If right? roughly per prepared month normalize, $XXX mark that the math, remarks. now, way the to you

So given full the number. for -- year, then the global is number I've a and that

Grambling we Goldman Stephen next And from up, Sachs. have

picture what what like. looks big a opportunity, question a attracted it, was what a future Stephen. is were bit looks are are mobility parts. nimble about X for question your goes There a in framework over you to staying that next, while if And of future different this lot moving there first But how also that balancing as obviously, to the own the a moving view, X you company And the of My are of call direction? views lot the like for future towards of years?

I Sure. Thanks, Stephen. it. appreciate

on answer of a I'll So couple levels. that

view my really and that enough in think the around Carvana I doesn't more worthy can mobility, players context already we're of Uber that, there's an there. are are the of context comfortably. impressive and And was that Hertz of build, there to better all, In an happen. do First in align and we those that can quite changes like. with And doing the was which business, even and think I often a that where of Hertz brand, Tesla itself think obviously, and perhaps extraordinary sits brand I

forward the now about diversification us of customer around about in the is equally thinking about we mobility me, the channels. diversify composition For way which all path of and think our fleet

of means In okay? great what and side, will the fleet to On dynamic what context context vehicle just their management developing a and mean employees, direct, of the footprint electric forward there. corporate, thinking they're the playing that it's overall. view an what combustion carbon about fleet, phenomenon, an in their of that's interesting that is cars for and satisfying also to and to They corporate And and but out need ESG our and customer. it ridesharing that corporate the through electric to which be EV, is objectives. sort So own mean equally but not carries, equally customer turning on there's might appeal engine vehicle, obviously, about rent the that interesting

dynamics what other and case, Hertz them, translate in the electric of fleets delivery changing to EVs context of the and product vehicles position, other of in other in rent we management a with and where that over to the fleet driver, economic the fleet do consistency players, could side there. is Lyft Uber to a take the and or through to this On variety imagine

that so And forward there's can right, a we achieve. path,

better on a customers fleet have serve sits we like. these in the a meant I of it that ever-changing: extraordinary and data, sort can analyzed find of of are corporate be mine position interests we all to and yet of that manage ourselves haven't it tap much and sort such to to a and electric we fleets, into for company that think an it, achieved consumed is

I our so And ability quite really is ways here the to think existing technology. do it forward and that in embed real

phone identification fob be cars. you of in a about the We individual. the We because use the So the customer start phone an phone can now key can we used can By the think way, to your the mobile improve will meaningfully the change. on way car. can access identify phone. as We experience can the The geo-locate car. to

can All of rental that what of do a changes today with view with mobility. the forward the to Hertz business dynamic

is can and existing location. the using journey. demographic So car for in a it. another technology car Hertz location. It They preposition where and in all can need has not customer proposition a them seamless embedding that a We rent the be younger access a can it of

quite ability was the exciting many of for think with there ways promise proposition I are real. the is do into an the that impressive financial me, consistent prospect forward the we and holds and that can So and think mobility tap company. returns and I realizing that others And to to is

That's and interesting. helpful

then how more how kind the this, to terms response, they maybe you've vehicle on alluded you're pricing in early of these is consumers but ubiquitous? versus of any vehicles uptake see base As it's customers? you as And in to between become about pricing a this rolled And side too for follow-up out of the versus business your just umbrella really differences electric sense generally the fleet thinking of more? trended there has

electric with had equally fleet consistent of early of is is, the I RAC attractive. the in vehicles we Well, ROA the in the what modeled ridesharing. decision pricing into Sure. seeing analytically segment the think and fleet elevated we're making that introduction we're That was on into seeing certainly into what this

the which carries would the less, X, touch point X, rentals the car won't side, weeks. meaning of longer, in in normal we extra we On it ridesharing way times appreciably our cars those benefit touch X being It those into the the X fleet. in means is

cost operating maintenance, maintenance while it's is The lower. associated early, is that the So much with lower. the

well in in We and demand, demand as expression expect and continue RAC utilization, as corporate quick those an both drivers we're of seeing mean I corporate these would the that impressive. at uptake, maintenance costs the very, us be suggest we're waiting across really as to and is Uber among lower lists the to cars, ridesharing again, seeing to levels consumer very segment to high and utilization side. the take

ICE Teslas I'm in standpoint, financial vehicles. long-term from a our say validating mean, the Kenny. that EV being to accretive is I of economics excited it's Hey, view coming to the

view huge a giving was advantage. advantage our a daily our competitive is invaluable as and here here So are having improving us learnings first-mover the operations

say to component that we pricing as price, a think where Therefore, for is forward go, other the advantage. will there a hold our fleet, the price, reasons, ability be think, if higher. a the view defensive within floor, of softness scarce pretty in you variety meaning a Steve, are I first-mover fleet one if of basis. a would will they I to They one as grow also right, on a will, which have thing, that I is present EVs just harbors relative

an exciting proposition for with of us And these OEMs more the look take more so it's on to in just vehicles as intake. partner we and

up, Next we Barclays. Johnson Brian from have

price the in X their another. I'm well-known used sure little to earlier or you're market not car outlook, then just last resellers there's most I by used buying a selling particular, but earnings in them used acquisitions seen who late just in cars used some depreciation, probably year more year pricing bit recent talk around and the and for want car as in about car the sales were aware results

analyst into what's an But So some depreciation of isn't X slightly, referenced. of to you're you that that our quarter, get guiding acquisition in One, numbers? factors car in your the do then two, similar that. X,XXX XXX prices sense model very other as used number normalizing that how part We depreciation activity to your and how number, outlook? do have there about investors comfort next your overshoot how moderate of as it's can And some in the market us give questions. comforting depreciation car used was,

and start So Kenny I back. don't we'll then let why come

As right as now, I right? the that the do back questions rate that how know, think of $XXX one to a normalized exit is think about alluded to, going you're the think forward, you alluding Brian, I close I earlier. half, rate we to depreciation

very residuals, quick conjunction right to I prepandemic, cap right? So at silo, So me in that you depreciation, have simple a XX% versus cap give it's a up at right? with RPU it DPU, it, X,XXX, RPD, look So look right, residual how went right, right? important about not really think cost $XXX, it I night, high." take When on? example, let costs, But a conjunction other in add at few, to about moment, point Stephen you anything variables. you it's dynamics. to to RPD, in day just I XX% if that name use is, depreciation may mentioned, think unfair stat. is to have Here's at I'd right? now, that at with So assets You that's look other falls right? coincidence up don't look right? an know, all by to that this really to "Wow, else all all on And back the Stephen, say, to It's math goes return and to you if economics

one, No, that need come think be of that a no. at making you at tandem. when it, looking okay? those Kenny looking think we're looking We're and to which the I'll fleet, in dashboard in take looking the multiple indicators depreciation we're I at on and is, think has utilization. manage We're of and how that. the to I I and we is business, rate I mindful charging. we the at the We're all is context manage need mean right obviously, But depreciation the to about back point it Kenny

the sort sweat us. yield are to a to is inputs to return the ultimately to framework to is that all as Now want going we fleet my And of asset. good adherence of the therefore, ROA these

analytics, elevated other as price that that we or harvesting behavior And level the on looking of car high At residual or value. kind a the used demand through our present fleet a seller. in attractive when otherwise math that selling deteriorating are, in of the customer market, and the and product the are is. they do excess that buyer go revenue at okay? we the in not market a used cars they're of and we So the that's of is dynamic it a supply That's through low we the a time, high-quality value context of both are It's we at because displaying current need want channel the are cars, the seller, returns same portions relative to we the mileage moment, Now of in. because a any do buyer rental are take we're mileage, own car the our of we Carvana in both kind buying a to going to put at in. to

this but so think broadly. And that question, I that's thinking your we're how more answers about

Okay.

renting not alternative can what car acquisitions them tight that And to you bought worried in used saying follow you're obviously, basically acquisitions you're the are meantime? new is curve? market and -- a you're car depreciation So in an

beta so new what we're And that the I in right. to taking standing think that is if at my start equally, car equally, and I not see to doing view on use, I'm with the basis. not vehicles residual the a overnight of And okay, expensive in it's we're X. move going on we will, position, meaning prices the move, if it's that's to something move in an a think and to respect where static happens market unlikely relationship, you between

right, sit. where numbers act, And so this because study to going we're time, we all the those on

the spot is the car relative the do itself. money in the keep property car the a price context on we earn to we that you calculus rental about do So you of sell or where can

going to I think which within to think we're quick the is of change. context ROA be broader this But should dynamics So these on again, it.

from Zaffino line comes question the of Oppenheimer. from Ian next our And

got think do As maybe Carvana could how that you far as we there that? how continued many Or you -- upticks? do more is was any you you color mentioned and I about you the move could saying much see channel? uptick? know And through think actually surrounding Maybe to us guys uptick, that? do expect you give vehicles an How

elevated question provide anytime to there's it. incremental and shed we an market changing used the to Sure. seeing What in Well, provides with extent what in a bit market. that's could terms cars, of reasons, we're light market the I'd used point car is competitive the us through away channel to volumes wholesale the imagined. perhaps uptick therefore, on in specifics arrangement alongside from a last I the of yourself Carvana car last had exchange, on initially in material seeing harvest Carvana, pricing. fleet. let is flexibility materially a economics us circumstance more the we but with what what sort quick we relative of think that in to of of the channel Carvana really have to the to or we channel we the me relevant need to out, particularly avail to different provides. move the interesting context little and yourself Hertz you incremental of us you sale provide stay agile of of for retail robust also used a it's an channel us the wholesale host elevated added prices But suiting than good, And are the for what and therefore be as with that

is this Kenny. Ian,

highest which not channel. right, disposition standpoint. through from away from the margin us, usually, right? how for side normal wholesale X/X cannibalizing retail the potential, you Carvana dimensionize It's really wholesale X/X about auction of a we kind taken our side. house, auction a to Just of channel through volume, the In is retail year, think sell is vehicles of and the our the

our accretive and margins. it's So our again, for business

or question, had think kind excess cash you either know about can forward? of have in leverage but buyback. that business going nice based just they Great. that still on Okay. know And that know fit to do And And But talking then left I some in target. your you're your on exactly have in exclusive? I we or buybacks like about fleet. left But leverage how the discussion about it the mutually we are do you incremental ratios you investment and that? capacity, $XXX I as your a And million reach there, take a with follow-up on ROA where again, call about,

Sure.

say just the me following. let So

of do, view what release, us the what and opportunity that context and earnings the that of way elongated volume by existing want blackout, with aggregate repurchase are among doing team therefore, a call will we're the quarter, therefore, volume will of first the for roll this is that. we were were as management and doing up that Board. and and fact were happens of we kind in my the sort pick program, earnings in reevaluate recalibrate shares free we the recalibrate new we First, exhaust program and we'll of the to the just in we the we will occasioned volume we prescribed volume. the the to an to the we was volume we And by Obviously, now, do amount into and a having

it. mechanic just the So of that's

have think in matter, is fleet. had repurchase philosophical which invest a As opportunity we stands alongside I what articulated, Kenny to

opportunity, all efficient. in repurchase, the business of context in on are table to render invest to have attractive this to share returns. the always at more the opportunity we market, yielding it operationally X the have look particularly and We And in

And so that's the philosophy we'll continue to take.

market can the given think we the X. do in, all of in largest we're which I

We pace now will that behind take I do have the us. we of all repurchase earnings And think we'll that up X.

and governor we turn X from comes you shows right. is so optionality And away a allocation. to this it a have that math your when capital of flexibility We're number, lot

was our I Sir? for over CEO, will last call And our Stephen remarks. that Scherr the turn back closing question. to

Okay.

for a prospects company. all now sitting meeting you dynamics and the in with with seeing forward our better the next further with progress to sense in and I So made, a I provided you the for hope improved visiting we're appreciation and on for new you and better the call condition participating thank industry of look to many call the of financial you we've my obviously updates seat. sharing today. and market want I today's the that

you thank us. joining with So we for that, again

Thank you, Call. presenters. Earnings First This concludes and your the participation, Hertz you Quarter Conference XXXX Thank Holdings good Global afternoon. for