Hertz Global (HTZ) 27 Oct 222022 Q3 Earnings call transcript

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

Good morning, 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 which call certain I made you to information. that want on remind this contain forward-looking statements

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

these Additional our the XX-K information believe statement in Today, Factors in section contained and the our use quarter concerning reconciled on we'll documents non-GAAP which section We these Relations statements All numbers XX-Q our performance with forward-looking better measures. and financial earnings using the GAAP are the release. is in that Investor Form Hertz available press website. these and measures, non-GAAP are demonstrated Form and press profitability with XXXX is release XXXX third of earnings of our our filed certain Risk SEC.

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

and earnings to quarter Thank you, Johann. Good morning call. welcome our third

town brought home neighbors in the of struck employees Before which be our to been devastation considerable weeks local of and and by our discussion, moment in want officials been organizations, the I relief including with resilience and Hertz our Florida Florida to on I've perseverance customers, we our to Southwest customers. service employees, Having earnings begin Hurricane Estero. to focus Ian, ago, a just of for

Hertz physical in path were is the recovery. team its to direct of assets engaged The affected damage. all our areas Fortunately, our little on with to suffered community no and our safe, employees

to another performance. posted turn quarter results for our now me solid of Let financial QX. Hertz

and to managing corporate operational attractive further a rate across remain the of strong on We stable financial intended were demand. of product rideshare, Our environment fleet high and suit demand and leisure, returns. strategy results to stated excellence focused actions utilization, our

Third EBITDA of the us a XX% margin. conversion our enabled flow and in We year-over-year, healthy to billion, corporate Adjusted rate million share reflects adjusted XX% generated business, our significant quarter of through quarter-over-quarter. of X% well reduce was revenue generation the $XXX resulting over free as a This cash for invest free quarter repurchases. XX% across flow up million base $X.X as $XXX up in by capital cash quarter. X%

continued services, increased The was across particularly than movement QX. third Through by from the quarter characterized all versus customer and strength each value revenue day, revenue per unit per revenue in of experienced and through of X% added with corporate with expected demand. pull in respectively quarter, up we strong X%, rate better contribution segments, and

positive more volume experienced improved out rotation. performance vehicles active fewer Beyond direct including expense fleet progress, service of space, quarter lower operating a as the trends and operating also we

discussed on a in RPD management last us on QX on gain capture residual the our to the and fleet the against in healthier strategy RPU price was fleet $X,XXX. earlier around call with Our earnings $XX.XX focus environment. quarter active as declining consistent enabled sales record

to production than fleet to continue remains historical should Our at to demand. QX continue On levels elevated typically expect with versus adjustment seasonal we manage yield. norms constrained results into quarter performance This we would remain QX. relative and this normal reflected inside expectations as stronger rate seasonal OEM as

Lower QX TNC elevated as summer the contribution economic that margins a to to that multi customer impressive doubled achievement the customer This or is QX, expense, grow. RPD than the we utilization relative the may TNC continue being year-over-year, fleet to customer we segment and first. testament is were score attractive of RAC rental where sequentially we be rental implied and conventional business putting longer during which peak focus volumes transactional our Finally, despite limited lower maintained primary less our our margin. to our mass as RPD RPD to strong pricing our more segment as expectation transaction revenues us grow rental produce vehicles, we length a metric as our QX our terrific customer over week this business business. high the in rideshare manage EBITDA associated all telling, a and Lower In of from across season in unit should a NPS quarter metric alongside not TNCs overall focus the is respect through With will to on geographies, improved employee on service availability business. QX.

as prior in achieved based risk volumes reflect our travel what a business strength see we economic current and slowdown, of for is we for the While opportunity to remains there overall evidence to been pandemic. results bookings. This consistent growth on return with Notwithstanding our QX industry. our of has demand experience across further softness services, the reported continued no

pandemic leisure In this remains trend and bookings we are reflecting pre reached business month fact, one with of levels into revenue continuance metrics RPD, October, Likewise, Corporate for in forward month transaction elevated days up the domestic now are travel QX the into QX. a year-over-year. XX%, including QX. as of

increase small begun and volume. the and year While first these considerable open accounts have of these of contracted price XXX% global demonstrated renewal, we their during In half increase. businesses a renewed of from corporate contained renewals accounts growth the midsized for travel as QX, XX% across larger and accelerated QX, QX, into only activity to corporate customers

return, international activity Finally, dollar. inbound showing U.S. a year-end despite strong holidays the of signs is particularly into and

inbound only and international over early for Florida Coast holiday. bookings are West up reservations While XX% and Christmas for destinations by example in the

we focus want key address I are progress fleet and of They priorities deployment. our details management, cost QX capital of and XXXX. results, look four toward as takes you to areas Kenny structure, strategic Before team our through the for

about some strategy fleet quarter length Let to with spoke I managing demand. our me begin expected fleet. of at Last size

shareholders. as declines declining decisions. dynamics in at of the volume XX% to equity enabled younger customer had monetizing XXX,XXX a that for whole same embedded volume persist expect embedded a we fleet and the in sold. composition across value as market refresh on while at which we beyond fleet, bought residual QX, that QX at and the the made with take of we we reduced quarter against a a we the the us our XXX,XXX, maximize to subsidize of and value approximately strategy In in to as fleet managing back equity elevated In time acquisition the of demand, size well rendering equity price Given market, well residual vehicles rental of included to the lower return account QX, at as harvest to the fleet as level price to process Should The size the releasing equity as purchase of prices. fleet. vehicle capital points continue using disposition the remaining and overall decline, fleet began finished basis fleet and size, considered of and fleet our aggregate residuals we the with

more decline than accelerated While residual price pace expected. anticipated the was proved in QX,

the partnership enabling to with time sell car Beyond use are vehicles in retail at with information, and a on wholesale pricing broad value. decisions make to to vehicles Carvana provided us premium real most enabled potential footprint indices These to platforms us exposed also decline large swift us market.

us tight QX demand Our buy the meet QX more the to fleet and market QX fourth fleet and on to going prices. into mitigated at quarter attractive where our want exactly be exposure with cars actions the we option to to positioned standing normalizing

to cost Let our turn me structure.

QX operator and of is render a markets. costs the with to in mechanics however, half into ambition all workforce, take out because the reorganization. levels, year, quarter higher the Our reduced down unit elevated coming particularly primarily our out we service of came efficient Hertz first recalls in more of of among In to

recalls, with into procured, fleet. quarter made two operations and of putting first higher address usable our the down the we in out service back the intentional parts costs to bringing effectively to decision During months the carry vehicles the of

DOE experiencing even are in our quarter level cost the in higher costs operating remained and desired, unit displayed months, our but September than October, result, we better QX. two lower based as a than open As in the prior we

throughout operating improvement We expect leverage further to XXXX. QX, and improving we look in

the including continued completion pivot across expect product several of most XXX% to notably and as labor, to be We Americas as our well of third a Hertz in pronounced factors, party badged a of more expensive employees, reduction the fleet. installation cost QX the telematics reduction the

the more vehicles, service already accurate bringing and readings is customer efficiencies alerts to contributing value the investment real in times telematics recovery experience upon superior field. missing on to and return, timely fuel Our

on initiatives. Next, our let strategic comment me

strength the over making of the quarter our EVs, increasing electrification on a to activity fleet and our charging. both progress more growing terms in Our diversified of fleet, the reflects commitment of of

made in announcements to two we know, you significant related As QX electrification.

points. and our memorandum categories, EV The through and with of EVs offering and the agreement various source compact next wide arrangement spans across and years. at The to more. EV understanding will midsize GM pick-ups, dramatically First, XXX,XXX encompasses our five importantly, acquire XXXX more and to our up price attractive vehicles ever From of SUVs we of announced price deliveries electric luxury vehicle points. over to expand vehicles diversify a range

rental. more to a able of timing across stations are increase and basis location an BP unit at fund to enable Likewise, a our Hertz of EVs customize in management costs. usage to attractive fleet. and the national to partnership management in Of preparation of and install are charge a at volumes thereby for our to lower we promises to and costs containing pace and Hertz will pricing. to and with will of drive use improve equal with accelerated be networks ensuring This charging Pulse fleet at which allow provide us electric an EV will BP, to access to software at customers attractive an also growing charge and the importance, Pulse’s expand BP, increasing growing infrastructure margins announced customers our the charging BP platform available provided an for EV Hertz cap choice network available footprint. customers number pulse, energy the quickly infrastructure of our ensure to agreement level. will We vehicle BP optimize network us appropriate charging cost recharged of will efficient energy, charging

are new progressing the quarter, In well. technology we hallmarks new designed an a of the I Beyond of innovative improve our the in that data of structure fleet. our harness are road before, platform live against in Telematics the to operating as will on went us appropriately analytics our more analytics enables get large, ways QX. our complexities quickly, introduction model diverse of reduce model introduction The demand, Palantir. two and by electrification, cost a and early progress initiatives noted pricing and Hertz our customers the on calibrate

our the to we and a believe up U.S. early, bring I'll business, the a While costs benefits on both significant perspective. deployment. wrap from will capital with few rollout across operating comments revenue

the invest continue We and common stock. in to quarter and repurchase to fleet in or non-fleet CapEx

Our QX of billion through our under net stock. non-fleet $XXX months, of share just repurchased have the On months CapEx investment to first year our for repurchases the throughout $XXX $X.X CapEx million. million we nine to nine and fleet

authorization. billion October $X XX, had billion As remaining we of our $X.X under

one using Our strategy flow capital investing then repurchase shares. to on around be to cash continues our allocation free of business,

have the what to of strong for context and call we want the our our our others the airlines across view over are to put undeniably last Kenny, experiencing and industry demand two begin in as communicated QX. we business results the I turn weeks. of the Like I services travel the As forward hotels,

that and is residuals elevated leisure demand utilization is is corporate, price remains a earlier, factors expression I declined noted customers. distinguish true current would drive QX is by forecast factors the that neither our that by and cars I being As of used driven pricing that that precipitously from car is demand progressed, up use underlie supply driven not shown concession. That driven fundamental being activity on It across reality. as

deployment contrast economy, out for prepared now, a one well pandemic. right walk be industry are in travel the are cost our the I'll or the attractive of stands by remains But negative materialize. the a it specific in right is we capital to economy travel the now returns the nature to to Regardless, demand signal focused over seen. emerging our experiencing slowdown the of to you over base through turn for we for Whether underlying Kenny may tone the broader As matter to more to be management, should of changing patterns strategic fueled for fleet, and and on more detail. risk right we remain shareholders time. the this a maintaining of generate results

Stephen. And morning, you, Thank good everyone.

As third was resulted high possibility the strong quarter, and focus Stephen rentals margin on in mentioned, demand for in business. our a

and on tighter $X,XXX. improvements the and strongest company we driver and growth the despite expectations. by and second quarter achieved line our reflecting quarter third been The is in It was Volume adjusted in was RPD X% This high-margin services and adjusted volume versus the month X% business, $X.XX, key XX%. RPU than of year-over-year, changes. RPD less disciplined increase driven $XX third revenue a for the $XX.XX XX% achieve by should quarter utilization RPD of Revenue in management revenue for year increasing ahead XX% the approximately out of and quarter a million, $X,XXX second was basis. monthly for About to million, million were and in a two year-over-year mindset. by to RPU This of a $XXX due X% the volume room grew QX. with Most be thirds previous a impacted returning, respectively in was and billion These provide pandemic that came noted ROA Our XX% Revenue a further our expectation RPD presents to utilization. EPS the was higher post value from by $X.X corporate growth of growth slightly services. the for added increase growth over volume the typically a volume rates driven the period, fleet constitutes a EBITDA accretive prior with and growth for year the our has margin fleet and customer quarter-over-quarter post record. transaction million exceeding increase constant of for we currency on to ancillary $XX at X% international which and and third quarter. previous rentals, increase the and record the compared negatively pandemic growth. continued leisure The the from quarter-over-quarter quarter quarter see days about attributable laid versus quarter, XX was the of RPU revenue aided July EBITDA currency rate. one call. was of

from volumes inbound increase was their quarter, service to quarter-over-quarter our recovery classified and and levels Through investment of XX% international and corporate continue by and our earlier. Our in the of XX% reduced. to to XX% efforts, drive and levels determined improved as out preventative out number maintenance service enabled QX pre-XX noted we of Utilization an recalls down of vehicles fixing was the materially as respectively.

is To XXX put an point XXXX. As a exit utilization, which versus basis a the XX rate were utilization XXXX into is of a versus rates September and month operational and a impressive this to on point we XX.X% this basis improvement achieve perspective, result, improvement exit for able achievement.

call, of carrying which the and Moving Net unit more We costs. the $XXX sell $XXX QX third industry offset September. than estimated to recorded residual by DPU month in last high depreciation net end the per growth primarily August wise fleet our of from was was $XXX. we quarter gains in of on on values declining $XX for per range resulting

broadly $X,XXX vehicle of to $XXX of which across expect on $XXX quarter. EPU Stephen up cars full steeper over the XX,XXX DPU during the we half back in in was The car we the amounts While the million our $XX we noted, review, reduction recent guidance of the sold per a to $XXX. the excess QX second Based result of a reduction as in expected. will or our QX year about to $XXX depreciation than anticipated year, expense the prices half and used decline in

in as the gains of cars of to some mileage untrap out expect which We fleet short continue to of side of gross to actions declines able that fleet offset values, from month-over-month vehicles looking benefited taken year, manifest demand. higher fleet. so to a quarter benefited unrealized And fully on We placed will up And as the XX% depreciated our seasonal high and as our are still XXXX Doing prices de-fleeting We to important rotation keep average to as discussed in and the with rotate due in to proactive capture residual and QX residual age earlier. an depreciation. likewise part earlier it's in were we than seller and the the saw vehicles forward, over both our in of they were the mind values today. levels. part the third of are and reduce

our ways. following We the expect to managing exposure in continue to residuals

so First, fleet we the not are expect on long to cars. keep we tight

we for vehicles to to used can and new so market. the increase costs demand, to we vehicles, cap the do need extent a meet acquiring car reduced standing While have preference we through at

we equity of any to various decline remained We need for do from as to with a the insulation this of ABS rotation. residuals, contribution. not vehicles equity notwithstanding with was in potential accelerated prioritize well residuals cushion equity continue collateral trust such falling into the provides our any make our stability cushion $X of facility a at equity older factors. foresee billion as in exposure cushion The identify to the QX. Second, The at need inject ABS. The fleet those over product to and vehicles more end greatest of

vehicles new cushion in fair immediately. of value purchases QX MSRP almost a First, at provided select the below

and values data. have And falling selling of presence to exposure the EVs. trim model third, on residual granular elevated level to the Second, based vehicles of considered

relative proved values resilient. as EVs beneficial residual Our were on generally more a their basis

Turning now to cost structure. our

months operating intentionally first quarter, of earlier. address of the to During costs out a service two company with levels, ran Stephen mentioned the elevated as

result of decreased efforts, the have thereby these a levels increasing end out the quarter, service As by of of utilization.

improving transaction base DOE forward, as about our per our QX, was it cost date monitor Going are metric progress. focused evaluate $XX. we on per closely a our In to DOE will day transaction

Within noted, improvement. experienced month-over-month Stephen the showing decline further as we October quarter, is

in and We place initiatives which we several around some labor, earlier reduce have DOE overall of telematics. to mentioned

grows, and of Additionally, business expect the profile, economics with lower as TNC we fleet cost. lower improve maintenance we the transaction in the our as EVs number increase to will

structure now me capital turn to Let and liquidity.

balance Our the quarter available we of available under credit comprised the leverage unrestricted ended liquidity of sheet in healthy, a remains revolving our and billion times. was with At $X.X and September the $X billion X.X facility. balance cash XXth,

the $X to billion, quarter, by we and capacity financial million creating our increased liquidity. additional corporate During our $XX almost flexibility enhancing RCF

notes We by billion. over also commitment under to million increased $XX funding variable the $X.X our

Our for balance sheet well positioned in a exceptionally and residual ABS environment. change structure remains

Turning over allocation a flow was $XX quarter and cash million, million a now of EBITDA. was free through million our strong net $XXX was cash the $XXX cash XX% the quarter. QX, of from The flow for conversion XX% for $XX million. flow adjusted Adjusted CapEx a Nonfleet EBITDA. for and conversion capital operating resulting fleet CapEx was

strategic priorities funding excess our capital our investing initiatives cash to Our shareholders and remain returning unchanged. of fleet in

from million. flow. share and we during quarter, we operating million Overall, all cash During capital $XXX the XX towards $XXX for shares nearly repurchases repurchase allocated investments million funded quarter, the

me touch Demand, are on what of volumes let see we expected through seasonal from year-end. lessening no Stephen apart On we adjustment, mentioned, expecting for Lastly, QX. as

QX. relative volume QX, will XX% in seasonal about peak fact, a in we ordinarily observe a In to reduction summer

expect and size to Given On reduction to fleet in days we we current consistent the we our expect closer remain XX%. it begin tight be as large our fleet, year. trends, QX with to transaction

on demand reduce age to realized We And equity, of form will continue the while of we'll fleet. rotation our the selectively warrants. of add residual Rotation sale vehicles simultaneously enables in us also gains as the fleet. harvest

be previously And to $X XX%. render net X% $XXX lower will fleet QX softening rotation, the in months. the current two to now or to of And we seasonal of expect Our about for discussed we context expect fleet that the end this at fleet by CapEx the QX rates, the and million follow year the range typically In of around historical of younger billion. plant to our year patterns. QX reflect over

open bookings, to and for the exit QX us us Q&A. momentum for continue operating to with QX utilization, costs, positions will experienced on With date. Our rates the let's well call permit that,

[Operator from question Instructions] Bank. is comes Our Chris, open. Chris with Woronka Deutsche your first line

guys. taking Stephen. the good Hey, Thanks questions. morning, for

prepared you driving rail are distinction of drive in comments, some factors little mean, I the between kind car think mentioned color on factors give used between for distinction I us could demand you pricing the cars. and those that factors? that a more maybe

sure. for the Sure, Thanks question.

with the car let's start side. So used

So by prices factors. largely are used driven car supply

OEMs prospect the the for as falls, pricing. of the for more than therefore cars the produce So supply available. is used cars, volume and cars the is a prospect the it reality demand At that tends becomes the those reality used car as and moment, be residuals. more And of influencing may car OEM new and the softens increased of cars affordable increase prospect but to demand soften more used of

function out pricing I'd driver that's the doesn't point is residual cars, price, dampened a of rates the our used rising obviously driven moment. for interest demand used also falls supply the dampen new car the of by aside, of As and demand reality rental increased of with an whole By driven for contrast, as that demand therefore and for the a profitability a the cars cars as product appetite travelers largely the range owning post to there demand travel TNC demand as share are of the driven activity. car COVID factors different are for commercial And drivers opposed leisure largely assets. travelers, renting it. patterns hard of ride experience over associated expressing are by a Corporate for is

supply to are the of the at to mean, the size And We not of your supply cars true, history, would a it on at itself of of question, if lead had discipline historically often RPDs we and the companies I demand. would aside you up fleet will found our fleet depleted not factors. call season, lower double to a different would you more component lower the a strategy it's we important sizing that to kind lower the That's residuals around pricing new business. this okay, industry So robust is for articulated core not risk effect, rent. that the as last look control executed and put demand rental this the perhaps materialize, very put that of fleet available the lacked and position where of so But the residual. of and are in obviously kind we travel to and RPD quarter. a size product, lower runs car car where answer set a running it

we meet demand Now, contrast, and we where perceive the sit demand to other price. source to can control we we supply and cars sit now because that cars inside fleet safeguard grow in of and

demand of if And on two I the equation. versus really think, side differential, side the so you supply will, sides, if the you that's will,

going that's looking could that? but terms on guidance, the for next the to depreciation stuff you not year, have you parts in Yes, like moving of on how Thanks. follow DOE I year? think what kind specific up, and color maybe plants we many impact And guess, thanks. helpful, can for a as bit little all And inflate a very get next then Stephen. That's more maybe, of EV

Sure.

of is, by targeted couple things. a to the quarter fleet of a we've So roughly EV XXXX. end be One of the

an cap our and lower the fall of in It'll the a debt models. and at cars a to in obviously, Over range customers positive come go the a on be GM will will of That renting begin rate buying it will those course will attractive to margin vehicles, take electric a selection operate price us a points and very XXXX, which of choice. at context as we hand in And give across vehicles. we're cost. lower even one because higher enable a will

open And you EVs our picture the of think products that so experience customer in I and set. terms and the add doing will, be Polestar, we're the what of both will I in to Tesla, to positive, if supply economic around of overall a valve around depreciation, think, for

Chris Hey Kenny. it’s

little the right. let bit a So me part question, just color your last to add of

and foremost, the it's our long into say our I'll accretive view vehicles in are are ICE economics EVs expected, coming first to validating as we and that excited term the So the business. and being

In itself, premium rentals. a know ICE we EV between RPD of is the $XX. customers seeing impact for now terms on the roughly willing pay are vehicle we Right and to revenue these P&L the side, spread an Right.

flow throughout again, So XX% the EBITDA.

and mentioned improving we're depreciation X%. more than percent right given right every day. scores the right each mentioned, residual And points single is a ICE NPS landscape. seeing bit are higher Stephen the and now, cap EVs depreciation changing X.XX% resilient literally remarks Stephen the XX As we average vehicles between of now cost is a EV in prepared my for now, and and utilization, the as

up X.XX%. around Chris, used usually remember may you we As

about it's ICE than vehicles. lower So XX%

So how the, than side we side some it. of now, modeled depreciation coming is the all right cases revenue in better to

On maintenance the some expense well we're side, the costs ICE side. of productivity So as DOE the seeing seeing we XX% on are vehicles, being than right? less

guys. Thanks helpful. Very Great. Okay.

you. Thank

our for question. Please hold next

next Oppenheimer. from Ian is your open. Ian, line question comes Our Zaffino with

you like like fluctuating fleet that. have the the basis? guys depreciation forward, good last I a the hear about for us you of Thank just in wanted longer are of guys, be commentary you if follow-up. actually ask outlook. maybe much. question as the building you some on Hi near-term should thank on providing. Thank for the very to context all giving depreciation. the we I But to going strong values, the glad but quarter, how far longer-term Very mix depreciation we term, look thinking of also a residual as

the it's Kenny. Thanks question. Ian, Hey for

way manage the depreciation don't So say manage ROA. right? I'd the First, We because, thoughts, not business. a isolation have and that think we Steve driving margin we in that's by and I about few frankly,

differently, input margin, and So be the as fleet depreciation, So of just EBITDA has making considered on all decisions. related. revenue, depreciation just one one Steve of said that business, it's right? manage the is And I knob all or to directly when is linked and dashboard, that

give let me an So you example.

As of depreciation. now, ICE as just EV on vehicle. higher our relatively to fleet. face Chris But as right EVs, right about may Obviously, value, as I than is now, that diversify yes, of change higher depreciation are we mentioned they the

it that look would Therefore, it's our RPD you into now has metric, a has margins. at our an profile. be EV lower cost accretive to misleading If right just and higher attachment, business maintenance the because

net So tell my end, what revenue keep cannot buy exactly earn because or agree I can Carvana, wholesale. of gains. just by and function vehicles those wrap with be we to tell a depreciation, through and it's expect it a of I our we modest bifurcate know, have right? as significant including converge as time, retail vehicles. we from kind what inform going which vehicles to and what gross demand channels, you depreciation sell gross of a of you hence to you the rate to you is is we this, margins, net expect is you Over What spread numbers which while If up will

in fourth about believe you But just know year, Okay. for Great. And is we provided Maybe Can easier into do later what look I remind little cadence October. you you for commentary comps us as wanted the also, go standpoint, have quarter? RPD bit from just can I over comps. like? an the probably us just the I you Thanks. a got remind the you. more. what quarter then to the And Thank

Yes.

for quarter, me up bit. So little a let third back so

our be with So guidance call, last during the to RPD flat.

Given saw strong mentioned, dynamics that demand the pricing. Stephen we a and strong

So quarter-over-quarter, year-over-year. RPD up up close Year-over-year, it to was X%. was X%

Stephen now on seeing are right October, tick up basis. trend mentioned, a we year-over-year As higher for even that

look as at fourth just also the point out I'd just out we quarter.

both profile, is as change I to think expense the dramatically. indicated, we going

obviously $XX a that as our number million noted, of we elevated run million that probably describe to was. what in more like. would onetime kind amounted to recalls costs purposely I We've rate As of $XX the I what incurred brought down. and And the context around

look we the quarter. roughly where in lower XX% that month-to-month right, day transaction at equally, So And was at October in sequentially were. per DOE than now we within being decline,

cost of for experiencing the million of the XX,XXX monthly the or the And incurring. year, call Just cars EBITDA million incurring that's that that brought margin. point top months, of the if $XX margin this you expense was were incremental about probably And revenue. out, frame bring X really exchange of expense on line to at million X balance $X,XXX think XX% were incremental to we expenses, $XXX for it, so we a we contribution RPU that probably $XX points in to is that excluding that sort of in, revenue the

were relative in to fourth And think to where so in incurrence. I just frame pull-through business we one-time improving the to the and question want about your you forward that a improve of quarter, to will as expense looking is the

incurred understand I in margin so important thinking And the that significant the to was we as of incremental on we return use. into to transaction contribution exchange sort think per revenue bring as back context down. in incremental expense it putting of fleet about And more much day QX DOE for productive equally, then why a on our revenue it just and it's that

color. That’s great

on So the and again. thank you guys congratulations quarter

you. Thank

Please stand next by for our question.

comes question your from Brinkman line open. next Ryan, is with Our Ryan JPM.

thoughts impact your the latest would Act. get that questions. from for Hi, my thanks the Inflation potential taking It great Reduction to on be hurts

reducing the a rebate, the view because clarifying, treasury owed a that credit interest of as whether tax or local price with police was credits. credit CEO the the of it vehicle. against whether advantage commercial could listened be electric still I the I being treated vehicle might expressed his until treated fleets last the will instead as these issues think there night including take of municipalities unknowns credits is and underappreciated tax Ford at least as tax of here, number a be are

course, governments Of pay taxes. local don't income

credits buy. Like Teslas in which XXX,XXX a price for to you, XXX,XXX treated the received right? the as to would GM plan would against of So dollars the of believe if thousands back you the be EVs reduction and he essentially you seemed that the be incredible vehicle,

looking think but what premature, impacted be Or Act? is thinking is as this ways Inflation one maybe do you're by possible? least So in Reduction at you other it you at scenarios that of the could the

corporate year it our Well, has will captured different yours, first this, of around has and a much certainly listen, obviously, effect as as as the it attention the individuals. in get than treated as of right? So takes the details

me on corporate just side. let focus So the

there's credit to right up electric tax say you're vehicle. So $X,XXX a to per of

Now to come. there's some rule-making

determined okay? Tesla a eligible going particular kind measure the as vehicle. XXX,XXX cap the to positive vehicle this known, and for the between electric not Exactly of lesser yet vein vehicle XX% this production But be extensively GM, is us vehicle So on a of cap cars, now the price comparable comparability note because of pre-existing renders legislation in and right of of and ICE being this tax removed a credit. it the to an delta

of sort to day, forward about important recapture has this the will of corporate At the about a corporate talk XX tax; So and There's take tax minimum it offset like. a will I that the carry life stock that. think years. credit of of end or be some

it know, of as is meant rule hard vehicles you're considerable piece attractiveness economics like, And consequential to around to is how and so it it will a the the legislation hard as making us. to the at look offset relates value price this be to know, themselves. and but of the the to Exactly to of an

of previously. decline to of also given is risen the lot. prices, the not than day, rose historical they other your in addressed while a you revenue wanted driver is on used precipitously in surprising which check I some And that also thanks. higher has per which precipitous big Great, how car Okay. which maybe results,

you new high vehicles We've XXXX automakers still for revenue the what the ancillary normalize some inevitably still to the that services used the like imagined higher I unusual per not a do hold of or they I demand could rental been lower? RPD cars driver likely there could heard trend lines? biggest is end than the vehicles the factors? thinking in side RPD. big, feel better had sell dust if only could to as extent be And in these would imbalance cars? elevated day once maybe normalize you that and were of to then so. and are Just on rising to Kenny along suggesting these of the rental more you the cars the semiconductor resulting from that in fleet balance prices. benefiting thoughts for But increase by demand general along It and maybe imbalance rental for the biggest outlook dealer RPD. ancillary loss retail for consumer driver, the maybe the What be was your the of here, be well think of look XXXX on rental the is maybe chip just supply sounds shortage supply with do services RPD might keep like aggressively could your still then. supply implication mention of abnormally What settles with and think into industry macro normal from what that

your there's Sure. question. lot in Well, a

the plus little of a me it. So seeing I'll rate, to bit just X% October, which with of start into okay? X% month And is we're maybe plus Let address try the following, insight volume.

in strength and are showing we are. and rate, rate So context both and right, the of continued where days transaction volume promise,

the production residual much hit vehicles Now, new the factors before of think, prospect downdraft used to XXXX. its cars. vehicles, OEM don't of as the we the was new think of the the or in question, about talked I of stride a to perhaps in prior one of of I price supply of supply I several supply foresee contributing sort

the be plays think this to car is So into the it there I relates that not year, market. used cars extent as new but contemplated or being will

we us back to quarter our in risk, the the we used to the of capture more okay? fleet the meet gain. used The earlier terms to that, objective a of the decline positively as that new So right continue that cars on demand end said, fleet the marginal to most was in can try we cars. we end did were as gain where area plays capture front quarter, that the we to than the in seller, And and car beyond that which we residual as in management on of an in look of to at at extent the value market the

Uber leisure, travel of point we leisure the is new were, across that primary into factor We And context condition is that, coming revenue right, fact cars overall and at used share into and corporate than get from as equally people a okay? trips across sort used the very customers different demand. seeing across obviously, business out Christmas is out, among leisure it's price and ride In where strength, the are patterns So On travelers. of our driver, we bookings We're trips. leisure inbound or extending lower it's the where strong Lyft the or cars okay? pointed benefit. side, holiday demand there good down the pricing is a

they for a in positive Tuesday obviously Friday. So on a They're remotely and city, That's car somebody Friday, Saturday leisure meeting different side. through decide goes taking for us our the Sunday. on Thursday, a for work to

are numbers quite rental then Uber us. and On the And we're it's satisfy profitable Lyft be for I seeing, and proving because drivers ESG up them, and said, the for as to corporate look side, cars seeing to to very in profitable their increasing own also among EVs footprint. profitable employees them strong more picking we're their demand for available put large more Uber corporates, in

dynamics the and those anticipated. in rate might the otherwise strength we're to and volumes breadth, just the seeing you of that demand October, that as through there, out I'm out be so pointing off are right, strength kind of fact falling And dynamics even not of

Hey Ryan, Kenny. it's

And mentioned not That Right now, buyers is inbound, value that's true. my given fully in You we that the record out are which that prepared my services, has of RPD returned. biggest transaction value-added think seeing fairly international the is fact usually impressive, I remarks. level across of days. of service

that segment. historically, means call of of terms XX% in XXXX to And it, of XX% it's that business. roughly, XX% my mentioned, I As

that's back yet. So not fully

our into play. is VAS structure, I mentioned not assets this a well plans achieving we as terms are So right the upside as accident. as our embedding in comp And did our This there's employees as or think I remember, into by improvement we comes do year structural inbound in right, to are earlier digital in the VAS as what of with we well. incentivize luck

I'll second say is thing more the I think general.

remarks, margins RPD think as down is I RPU his be the proxy. prepared could But in relevant Stephen mentioned road. a good more

a you may RPD by example. than an right, TNC low business. carry Let leisure a give RAC nature, me

utilization, time metric and them the which drivers mean in high be better closely. we low the very these is touch fact have that RPU the margin given may would us, However, for what track

of capital lower a to our think going of I increasing business margin, expense, are term. a lower over to drivers run costs, Mean okay, the right, not longer how sustainable, be combination if we sort all of

you. Thank helpful. Very

next question. our for hold Please

John, your comes open. question next from with Research. Our is John Healy Northcoast line

fleet longer-term ABS basis of I those sort to a are about financing basis, to of year. maturities next there math my for what about you balance much all on of on a businesses taking interest impact kind for the think an we ABS what Is maybe wanted headwind roll? Thanks going changed if more are X years your could a Kenny, there? to kind and of us year-to-date next to you. pivot the of the rates market X has how rough kind next of as to rising that Thank have question. kind suggest might And way, thinking over help sheet. year Obviously, bit expense a little on sorts

the Yes. question. John for thanks

earlier on from as cushion think now sheet the right leverage, ABS. all aspects, balance extremely strong I the our liquidity, is I So mentioned

stack, profile if our our you sheet, debt back, is if your to very, it's debt balance a So take look you right, of our at now. debt right XX% question around XX% On or strong step fixed. specifically very

And will with So if every we well insulated our at now, remind If business, stage, me floating of post so, it, So interest call impact XXXX, from not any XXXX, interest for you, rate right annual our term let on $XX rate most is million. we debt hikes, are largely the hikes. I'll this X% be are laddered roughly notes. the maturities our near-term ABS especially right?

the roughly to of so do the exposure folding part place have the they're well. VFNs, XX%. to ABS, right, as limit rates in of In terms We cash

the no call, On think on the we have XXXX. corporate last that maturities mentioned I until debt side, I

So on well. again, we are well laddered side that as

And you. with any there the side then the just into year? terms cost it? things, in ask Stephen, maybe about want us gained maybe help development you from Can bit an differently, to how and wildcards enterprise. about about is a kind of little skills the And next unknowns usage think Great. I talk should you're how we benefits and rollout that across about Palantir thinking the product technology implementation the of you of positions Thank or as

Sure, the Maybe of I'll part sure. start at your last question.

to us avoid of meaning cost build into putting talent enables aspects data work, random build platform Palantir then by of that that is way need guides our this means a the what of technology partner to more the don't and point part cost-efficient as to produce harmonizing own a offers in to to output of foundry and, a type of we it's fact, of of opposed single that decisions. can engineering much reason So

down, a whole can read us sudden of it of kind disparate. Palantir your It of rather at managing be circumstances. help the or surge then the comes weather can in can meet in to form coherent can level. pricing pricing through airline to it goes It etcetera, takes read this hotel produces certain fleet, read right, that the together the fleet, cancellations, automated an on bookings, pricing a look up guide given question, in tool, it and a circumstances a to as then example, can to market we a and okay, of output an It of basis. sort we can price process new anomalous all and action that build data, as tool So first part can

the the be sophistication price economics just business. of think the just akin you of and to at and case to otherwise, business that level very the point the a run we So meaningful us of and but more in what know consequence what we are not terms for it elevates run how I what has airlines for how

operational sort side, and takes makes random the of mundane it seemingly efficient. On infinitely them actions and more somewhat

until for that as we on comes of and of cars a Just day can identify okay? is us of registration car. right, and registration, It new track registration a cumbersome sort It's help car a the registration is They process, or the in, fix. Often, service, very that out a a vehicles. week that take mundane. like. and locations weeks too improve you and sounds ours, the and will and on the operating all rather it that of a car have. matter efficiency return meet This the delivery large days But over fleet base as that the put asset requires

I so with when we market, technology require doing partnering to means is our than partnership of Palantir think us. build. much it. And this And cost-effective it time like faster, someone on so speak, doing right, doesn't in a be this is putting place for would in It to

Thank guys. you Great.

question. next our for standby Please

today from Adam, open. comes Morgan Jonas line is question final with Our Adam Stanley. your

vehicles you're coming going executing that to of enterprise XX,XXX what saying to want third end out heard It's you we've into the quarter. the Thanks And by an start everybody. that, decision? what confirm this? of drove interesting September. sold I you Stephen; Guys, approximately it's very are the Can here. Hertz just -- what impressive at move

do. number expressed fast kind refrain that Suffice look really aggregate to residuals which fleet volatility price to a say into to the that from okay, saw, at of But confirming of our going that we kind needed particular you we can't fleet the transactions. market fleet. that strategy on I'm of just kind we Well, denying have, be demand we with in or consistent in

price was the an used the look component decline lower at composition And to fleet, looking the all it fleet in that where had of did back that on Carvana, that and and what doing identifying we and Our we to in engaged cars that's market, get. well in rental therefore, we optimize highest what where we're at in market bring that feet the the quarter residual through did. which prices. say, channels to And early car in cars to in wholesale later at And decline Whether risk a opportunity is through company the looked just [ph] at car those could, to we of we pacing the or we avail of most in fleet expected retail itself, of the value context would we obviously, rotation sold -- wholesale we prices. sell high embedded us. equity north simply in the another of

run we wanted there pricing business. way plus and retail what So Carvana in offer premium other X%, was through was and what our any X% that context market we saw wholesale the the buyers were the of that to

that and of assured entertain be well. look those can You we kinds as opportunities

appreciate have sufficient known would I'm first other selling Stephen, has the they enterprise Thanks kind I but time not into for you that's vehicles do is again, have prices that mentioning competitor, of the I it. taken consideration reducing it's know just channels? but competitor your a when specifically, something to sure vehicles, feeding amongst team not

its Adam, number important all a part had, the and at market, were very of like. of forte you including there that of companies car pretty company markets think look across I'll they out rental which had to business. over our pricing like a at various car enterprise vehicles of of enterprise different stability Look, who how okay, the levels in about own insurance the I they what market dynamics rental each any that. the strong And industry, in what say then look consideration replacement rented some this, elevated meaning I And the is have in context because than has okay, is very dominates

dynamics competitive need well. as about so context And of the that to you think in

Thanks.

fund Would buyback? final a for take the on me. follow-up debt you to Just

to look I modest leverage? I mean, is. return of like our of capacity it like the attractive, now, incremental but terms fleet on an for on the not opportunity don't and that have. to equally of and kind where have I designated purpose repurchase, leverage. take we But again, balance business. certainly the luxury to wall the against back non I with about particularly Do modest share we're in wouldn't be which liquidity do. in position be right judicious I to to we think find I'm ample take on market just being But to issue fleet in there's CapEx, of incremental could we it's exclusively a sheet profiles being put depending the more my what I debt the this leverage this there's in do market say than given issue. I upon compelled

Thanks, Stephen.

Sure.

would I ahead. Please Officer. call to go like Stephen Chief session. Q&A today's over hand concludes Scherr, to the This Executive now

on for Thank are base employee to participation adaptable with strategic industry. you. I'll to to management circumstances your you our and back and we in advancements has you encouraged and by the our I'm updates team and business be and making Operator, been today. next sharing the and how progress in will all operational call. on demand with continue other look it further I to fluctuations forward pleased turn

Third Thank the Holdings participation. Global Call. Quarter Conference your This concludes you XXXX for Hertz Earnings