Welcome to Hertz Global Holdings Third Quarter 2025 Earnings Call. 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. By now, you should have our earnings press release and associated financial information. We've also provided slides to accompany our conference call, and these can be accessed through the Investor Relations section of our website. I want to remind you that certain statements made on this call contain forward-looking information. Forward-looking statements are not a guarantee of performance, and by their nature, are subject to inherent risks and uncertainties. Actual results may differ materially. Any forward-looking information relayed on this call speaks only as of today's date, and the company undertakes no obligation to update that information to reflect changed circumstances. Additional information concerning these statements, including factors that could cause our actual results to differ is contained in our earnings press release and in the Risk Factors and Forward-Looking Statements section in the filings that we make with the Securities and Exchange Commission. Our filings are available on the SEC's website and the Investor Relations section of the Hertz website. Today, we'll use certain non-GAAP financial measures, which are reconciled with GAAP numbers in our earnings press release and earnings presentation available on the website. We believe that these non-GAAP measures provide additional useful information about our operations, allowing better evaluation of our profitability and performance. Unless otherwise noted, our discussion today focuses on our global business. On the call this morning, we have Gil West, our Chief Executive Officer, who will discuss strategy, operational highlights and our fleet. Our Chief Commercial Officer, Sandeep Dube, will then share insights into our commercial strategy, followed by Scott Haralson, our Chief Financial Officer, who will discuss our financial performance and liquidity. I'll now turn the call over to Gil.

Thanks, Johann. I want to start by thanking our teams for their exceptional work this summer. Their disciplined execution is moving this transformation forward, and I'm grateful for their continued commitment to delivering for our customers every day worldwide. We said it would take consistent dedicated effort to rebuild this company's foundation no matter the macro environment by focusing on what we can control, disciplined fleet management, revenue optimization and rigorous cost control, and that is exactly what's happening. This quarter, we achieved $2.5 billion in revenue and delivered adjusted corporate EBITDA of $190 million, a $350 million year-over-year improvement and positive EPS for the first time in 2 years. In Q3, we completed our transformative fleet refresh hitting another major milestone and setting a new standard for our sales and the life cycle of our vehicles. With our younger fleet, we also achieved a record high utilization rate since 2018. While we could not control, 2% of our U.S. fleet was under recall, being able to drive record utilization in that environment shows that even when headwinds get in the way, we're able to deliver strong results. Managing with rigor also means keeping our customers at the center of everything we do. Our Net Promoter Score continues to rise, up nearly 50% year-over-year in North America, with measurable improvement in ease of rental and confidence in vehicle quality. Fundamentally, Hertz is an asset management company built on a century of buying, renting, and selling vehicles at scale. That's why we set North Star metrics to guide the improvements to our core rental business and ensure operational excellence comes first. This quarter, we maintained our sub-$350 DPU goal, overcame cost headwinds and inflation to lower DOE per day, both year-over-year and sequentially while continuing to execute initiatives that are driving us closer to the low $30 and made solid progress towards our annual target RPU of over $1,500. These results continue last quarter's momentum and show we're doing what we said we'd do. Our progress is steady, our heads are down, but our eyes are on the horizon. Transforming a 100-year-old company requires executing with discipline today while building, testing, and innovating for tomorrow. That's why our North Star metrics aren't the finish line. They're the stakes we're putting in the ground to rebuild our foundation. Through this work, we're sharpening our skills, enhancing our systems and creating a platform for growth. While our near-term priority remains transforming our rent-a-car business with operational rigor and a relentless customer focus, we're simultaneously laying the groundwork for a diversified value-creating platform. That platform spans four strategic areas: rent-a-car, fleet, service, and mobility. Today, these fuel our core rental business, but we see unique opportunities for each to scale and synergies between them all, unlocking new revenue streams across the entire enterprise. It's still early, but the actions we're taking are already revealing what a bright future for Hertz looks like. Let's start with the fleet, a powerful economic lever. We've transformed our fleet from a headwind to a competitive advantage by continuing to hone our skills, sourcing vehicles optimally, deploying them effectively, and monetizing them strategically. Today, our U.S. fleet is newer and more aligned to customer preference than it's been in years. With the refresh complete, our average fleet age is now under 12 months and we're positioned to sustain a modern fleet aligned with our DPU North Star metric. Model year 2026 buys landed with both price and volume hitting our targets, unlocking model year 2025 sales and activating our short-hold strategy. Shorter vehicle life cycles sustain favorable fleet economics and enable additional unit cost efficiencies in our service operations while also driving stronger residual values in the used car market, reinforcing our retail car sales momentum. which brings us to the big story this quarter, Hertz car sales. For 50 years, Hertz car sales existed as a valuable but under-leveraged business line and dormant brand. We've been working to transform it from a simple fleet rotation mechanism into a profit-accretive engine, one that not only strategically monetizes our fleet but expands our relationship with our customers from rental to ownership. We have all the tools traditional dealers have, plus significant built-in advantages. We own and service hundreds of thousands of cars with a consistent inventory pipeline. We're essentially a used car factory that rents to millions of loyal customers who test drive our cars every day. Those differentiators guide our strategy. As such, we're meeting customers where they are and capitalizing on what makes Hertz unique. A great example is our rent-to-buy program, which offers a 3-day test drive before you buy. This leverages our competitive advantage to convert renters into buyers and is now available in more than 100 cities and is working. 70% of our rent-to-buy customers purchase their vehicle, far exceeding traditional dealership conversion rates. With a few notable exceptions, car buying remains a largely antiquated and fragmented industry, and we're here to compete. Our view is simple. Customers shouldn't have to choose between digital ease and dealer confidence. Our strategy connects both worlds, meeting them however they choose to buy with a trusted global brand. So partnering with Cox Automotive, we're further advancing our digital retail channels. We now have a full-service e-commerce site with financing and delivery, turning a browsing tool into a transaction engine. In August, we launched Hertz car sales on Amazon Autos, letting customers browse and purchase our vehicles with one of the world's most trusted retail services. These digital innovations create an omnichannel experience that we believe only Hertz can offer. We strengthen our foundation enables partnerships like Cox and Amazon, giving us flexibility and speed to move from strategy to execution. It's early, but by scaling our direct-to-consumer and e-commerce channels, we're positioned to capture $2,000 or more incremental margin benefit per vehicle versus wholesale channels. And this is all while maximizing fleet utilization by renting vehicles right up until they're sold, reducing holding and selling costs, leveraging real-time AI pricing and capturing back-end finance and insurance revenue. This is just the start. Our goal is to scale these channels so the vast majority of vehicles sell through e-commerce retail. We will execute this effectively, harnessing our fleet size and broad customer base. Every Hertz renter becomes a potential buyer and vice versa. Just as Hertz car sales will create new value and scale, we see the same opportunity across other areas. This company cannot and will not rest on rent-a-car alone. The skills and capabilities we're building through our transformation are strengthening our operations while creating the foundation for diversified growth. It's a platform spanning rent-a-car, fleet, service and mobility that can expand into complementary revenue streams from servicing customer vehicles and scaling Hertz car sales to expanding rideshare partnerships and managing AV fleets. With each area sitting at a different maturity stage. But together, they reinforce one vision, turn Hertz into a value-creating mobility platform that meets customers wherever they are. And wherever mobility goes next, from today's rental and ownership models to tomorrow's connected and autonomous vehicle ecosystems, we'll share our momentum as these capabilities mature and demonstrate the tangible results behind our strategy. Near term, our focus remains disciplined fleet management, revenue optimization and rigorous cost control and ensuring each area of our business powers the next and can grow. We're proud of this transformation's progress, but we are most excited about what is to come. What excites us most is how much more the Hertz platform can become. With that, I'll turn it over to Sandeep to walk through the strategic actions we're taking and the progress we're making on our rental business.

Thanks, Gil, and good morning, everyone. As we continue to improve fleet economics and agility, we are leveraging that momentum to action our commercial strategy. By maximizing asset productivity and strengthening pricing through enhanced customer experience, diversified durable demand and advanced revenue management actions, we have positioned ourselves to deliver both near-term gains and long-term value. This quarter, we delivered sequential year-over-year improvement in revenue, RPU and RPD while achieving record utilization. While we actively manage RPD, we prioritize RPU because it captures both rate and utilization. This helps our team balance rate and days, giving us a truer measure of the revenue generated by each vehicle in a given month. This is especially relevant for lower rate, longer keep rentals like those in our rideshare and off-airport segments, where costs are lower and rentals are longer. RPU came in at $1,530, nearly flat year-over-year and sequentially improved through the quarter on a year-over-year basis. Internally, we also track RPU across our total fleet, which includes all vehicles irrespective of operating status, whether in service, out of service, or in our car sales inventory. RPU on total fleet better measures our economic progress, and that metric improved 2% year-over-year. Breaking RPU into its components, let's dive into utilization first. As Gil mentioned, we delivered record utilization since 2018 of 84% this quarter. Days were nearly flat, thanks to our strategic ability to offset the impact of recalls despite our decision to operate a 7% smaller fleet overall. This utilization rate, which excludes vehicles being held for sale, improved by 260 basis points year-over-year. Utilization across our total fleet, a term which I just defined a moment ago, showed a more substantial improvement of 460 basis points. This improvement was driven by better process management of our car sales inventory. This utilization performance didn't happen by chance. It's the product of sharper coordination between fleet planning, technical operations, and revenue management, aligning capacity to demand in real time, reducing out-of-service units and accelerating vehicle redeployment. Turning to pricing, which as we discussed last quarter, remains our largest unlock to fuel RPU growth. Our sights are set on delivering a positive RPD for a comparable asset class. Global RPD was down approximately 4% year-over-year. RPD was negatively impacted 2% year-over-year by changes to the fleet mix. Within the quarter, July RPD was down over 3% for a comparable fleet mix and improved by September to down 2%. Encouragingly, October RPD performed even better. The results in late Q3 and October incorporate some of the short-term wins that have come from a critical review of our commercial strategies and tactics. Many of these haven't been innovated for years, and we have been acting upon them with urgency, including driving a better customer experience, which leads to better pricing power, generating greater durable demand from higher-margin channels and segments, including continued diversification beyond airport, improving our pricing tactics and strategies, elevating our revenue management tools and processes, monetizing our higher RPU assets more effectively and integrating world-class commercial talent into our team. The improvement in Q3 was powered by an updated booking curve strategy, enhanced revenue management tools, stronger value-added service monetization and local level fleet mix optimization. As I mentioned earlier, October RPD performed better than September. Looking ahead at the rest of the fourth quarter, there is some softness in the remaining months, driven by seasonal leisure troughs combined with the impact of the government shutdown. Over the next few quarters, we expect our efforts to gain further traction, fueling our ultimate objective of achieving absolute price increases across comparable asset classes. For an insight into what's to come, let's detail the initiatives a bit, starting with delivering better customer experience, a pathway to greater repeat business and brand advocacy. Our focus is on delivering greater consistency, convenience, and care across our customers' rental journey, knowing that when we invest in our customers, they invest in us. Great customer experiences start with great employee experiences. This quarter, we focused on reconnecting our employees around the world through new communication channels and giving them the right tools to succeed. We rolled out a new customer experience training, empowering our customer-facing teams with new approaches to get it right and make it right each time. We also leveraged technology to deliver a smoother customer experience, including making it easier to modify reservations and purchase upgrades digitally, enabling self-service rental extensions and building on customer trust through improved post-rental communications. The AI-powered chat and call support launched earlier this year now services 72% of U.S. inbound chats, delivering faster resolutions and improved satisfaction while also delivering cost efficiency. As Gil said, these improvements translated into a nearly 50% increase in our North American Net Promoter Score versus last year, a clear signal that customers are noticing the difference. To help build further momentum, we welcomed a seasoned leader yesterday as our new Chief Customer Experience Officer. This last quarter, we made progress on growing and diversifying durable demand, a strategy important in growing RPD as it enables us to curate our portfolio by weaning off lower-yielding demand. In the U.S., app bookings increased by 800 basis points year-over-year, making the app our fastest-growing channel. We simplified membership sign-up and added exclusive benefits, driving U.S. Hertz loyalty member enrollments up over 90% year-over-year. Previously, we said we would further diversify revenue streams through our off-airport and rideshare business lines. These combined business lines showed year-over-year sequential revenue improvement, a dynamic which is RPD dilutive, yet RPU and EBITDA accretive. This diversification approach expands scale, drives utilization, especially during truck and shoulder seasons and feeds the flywheel across all four of our verticals. We are also reexamining every aspect of revenue management. The advancements we are making go well beyond the multiyear transformation of our pricing systems and present a significant opportunity. We are improving the demand funnel with the goal of delivering a healthier upward sloping pricing curve for our various segments. Part of October's pricing improvement can be attributed to this work, and we believe we'll unlock greater value as we progress. We also strengthened our revenue management leadership team with a world-class pricing and revenue management systems leader. His experience will help us deliver smarter pricing strategies that maximize value for both our customers and our business. Alongside these commercial upgrades, we are transforming how local teams operate, ensuring we are adapting our strategy to each market's unique demand and opportunity. New dashboards and analytical tools now give field leaders visibility into pricing, utilization, and customer satisfaction drivers in real time, equipping them to identify opportunities and act faster. This shift represents more than a process change. It's a cultural one. We are empowering our teams to think like owners and build lasting trust with every customer. So stepping back, the playbook is working and the results prove it. Better customer experience is increasing loyalty, driving more durable demand. Our revenue management transformation is off the starting blocks led by world-class talent. Revenue metrics improved through the quarter, including a pathway to better RPD. With that, I'll hand it over to Scott to walk through our financial performance and liquidity.

Thanks, Sandeep. Good morning, everyone, and thank you for joining us. I want to congratulate the team on a great quarter. We achieved our first positive EPS in over 2 years, improved RPD and RPU, record utilization and a major leap in NPS scores. That's great stuff, and we are all proud of the progress, but we're only getting started. Tech, we've barely begun. Our focus doesn't stop with being just the best rental car company. Our vision expands beyond that. If our goal was to just be the same old rental car company in the same old industry that has largely been the same for a couple of generations, the value of our business would be limited. Now that is not to say that the rental car business isn't important. It is, very important, critical, in fact. And we'll strive to be the best in the world, but we view it as a stepping stone to bigger ideas. We're building a diverse platform of value-enhancing capabilities that could make Hertz considerably more valuable than today. It's hard to look past the near-term quarter-to-quarter year-over-year metrics the industry typically focuses on. We just don't view them as the ultimate predictors of real long-term value creation. It will be our job to figure out how to eventually tell the story in a way that highlights that value. Over time, we'll publicly release the components of our platform as they become ready, like we have with our digital car sales platform. We had to start with our rental car fleet in order to turn the rental car business upright. There was no avenue to pursue the extended vision until that was progressing. We've been refining our vision over the last year or so and are still doing that today. We have said all along, this wasn't a quick fix, and we couldn't yet articulate our expanded vision. So we are starting to now. Now changing course, let me give you some details on the numbers for the quarter, our view on Q4 and a framework for 2026. Revenue was $2.5 billion and adjusted corporate EBITDA was $190 million, an 8% margin within guidance and up roughly $350 million year-over-year. We also posted net income of $184 million and positive EPS for the first time in 2 years. Our International segment saw increasingly strong margins with larger RPD and RPU gains as the international market is seeing a strong pricing environment globally, RPU was $1,530, nearly flat year-over-year but improving sequentially through the quarter. Transaction days were almost flat versus Q3 of 2024 despite a 7% smaller fleet, with utilization reaching the highest number in more than 5 years at above 84%, even with more than 2% of the U.S. fleet impacted by OEM recalls. That's the operating model working, tighter fleet, sharper deployment, better productivity. Our buy right, hold right, sell right strategy continues to anchor fleet unit economics. DPU was $273 per month, in line with expectations, supported by healthy residuals and disciplined channel management. As planned, gains on sale moderated with lower volumes with overall fleet returns remaining balanced. On cost, discipline is sticking. Direct operating expenses declined 1% year-over-year and DOE per day improved both sequentially and annually despite inflation and smaller scale. SG&A remained tightly managed as technology and process leverage flowed through. This is the kind of durable cost posture we set out to build. We ended the quarter with $2.2 billion of total liquidity, including about $1.1 billion of unrestricted cash and the balance in revolver capacity and generated approximately $250 million in positive adjusted free cash flow. We had a $154 million benefit in the quarter from cash received from the previously disclosed litigation settlement distribution. Our ABS programs remain healthy with ABS vehicle fair values comfortably above net book values and market access is solid. In September, we completed a $425 million senior unsecured exchangeable notes issuance. We used cap calls to increase the effective strike price of the notes to $13.94. At least $300 million of that will be used to partially redeem our $500 million bond obligation that matures in December of 2026. The remaining balance is our only corporate maturity in 2026. Looking to Q4, we expect transaction days to be close to flat year-over-year, even with our expected fleet to be down just under 5%. Total fleet utilization will face an elevated number of fleet recalls, but should remain solid. We also expect lower DOE per day by roughly 5%. This outsized number is primarily due to a large true-up expense we took in 2024 related to our insurance claims reserve that shouldn't reoccur this quarter. Excluding that, DOE per day would still be down about 1% to 2%. We are, however, seeing a large number of vehicles being sold at auctions in the quarter, which is having an effect on residuals in the period. We believe this to be isolated to the quarter, but it will likely have an effect on used car pricing for Q4. Given that, we expect net DPU to rise slightly quarter-over-quarter to $280 to $285 per month. For revenue, while you heard from Sandeep around the positive pricing trends in October, the softness in the remaining months of the quarter seems to potentially be government shutdown related and are likely transitory. We do expect the peaks of the quarter to perform well. The softness will likely sit in the troughs, which Q4 has a large trough to peak spread given Thanksgiving, Christmas, and some New Year's impacts. Also, in October, we experienced three different external system outages at three of our larger infrastructure vendors. Two of the events were isolated to us, but the other one affected multiple companies. We are certainly not happy about the ineffectiveness of the redundancies at our vendors. These outages will likely cost us about $10 million to $20 million of revenue in the fourth quarter. While isolated to this quarter, we are taking further steps to reduce the likelihood of these types of events in the future. As a result of all the Q4 moving pieces, we have updated our Q4 guidance to a slightly negative margin range of negative low to mid-single digits EBITDA margin. So let's talk 2026. While there has been some recent dust in the air for Q4, we are cautiously optimistic for a stable setup for next year. Our fleet is in a good position for continued rotation and growth of Hertz car sales with model year 2026 vehicle purchases progressing nicely as we now have more than 80% of purchase volume already procured with line of sight to a good bit more. We still expect to have a run rate net DPU well below $300 per month. For capacity, we are looking to start growing the fleet again in 2026, but doing it the right way. With the three usages for vehicles being: one, our on-airport rental business; two, our HLE or off-airport locations; and three, our rental car adjacent mobility business. Each has different levels of maturity and different growth opportunities. For 2026, we expect to grow the mature airport business at GDP-like levels in the low single-digit range. Our HLE or off-airport business is less developed and has more white space for us to grow. So that business will likely grow in the mid-to-high single-digit range. And lastly, our emerging mobility business has a large amount of runway and will likely grow in the 10% to 20% range next year. All of this together should put us in the mid-single-digit growth range in transaction days and a somewhat smaller number in growth of the fleet with the ability to increase or decrease with minimal lead time based on market dynamics given our fleet flexibility. This is likely the same framework we would see again in 2027 as well. We expect that our continued revenue management initiatives as well as continued cost performance, along with DPU and capacity assumptions in 2026 will drive a significant margin improvement year-over-year. We are targeting a 3% to 6% EBITDA margin for next year and putting us on our way to our target of $1 billion of EBITDA production in 2027. In closing, I am encouraged by the progress we've made in strengthening our rental car business. However, my true optimism lies in the possibilities unlocked by the diverse platform we're building. Car rental is an important piece of our business, but the horizon is expanding well beyond it. It is exciting to think about what Hertz could look like in the years ahead. With that, I'll turn it back to Gil for closing remarks.

Thank you, Scott. This is another quarter where we delivered on our commitments. Proof that our strategy is working. That said, we know there's more work to do. We're holding ourselves accountable for the improvements we need to make by driving rigor across each of our North Star metrics and other key financials every day, every month, every quarter. We'll always strive to be the best rental car company we can be for our customers. But as you've heard, this work is more than that. It's about building on our foundation to create a truly diversified value-creating platform that gives our customers more and positions Hertz to thrive across the full spectrum of mobility. Understanding our customers and evolving to meet their needs is in our DNA. It's driven our success for the past 100 years and it's how Hertz will become more than a rental car company for the next 100. Our philosophy is simple. The best way for Hertz to be part of the future is to be in the service of it. The work we're doing to transform this company is deepening our skills and capabilities across all aspects of our business and giving us a foundation few others have. So while the future of mobility continues to evolve and AVs aren't yet ready for mass deployment, we're building the infrastructure and talent today for when they are, whether it's how our people buy or ride in cars or how the cars themselves change will play a key role. With that, let's open it up for questions. Back to you, operator.

Our first question today comes from the line of Chris Woronka from Deutsche Bank.

Gil, you mentioned in your prepared comments about becoming a value-creating mobility platform. Could you elaborate on what that means in practical terms, what the platform encompasses, and how you envision it adding value beyond the traditional rental business?

Yes, thanks for the question, Chris. Historically, we've prioritized our rental car business, and we see significant growth and value creation opportunities beyond that. To start, our rental car business remains our core focus, and we are committed to rebuilding it. We are making progress, and I hope that is evident in the numbers, but we still have a lot of work ahead. We will not be distracted from this goal. Beyond rental cars, we also engage in car sales, service, and mobility. Regarding car sales, we’ve implemented a strong buy right, hold right, sell right strategy, which positions us well now that the fleet rotation challenges are behind us. We have a respected brand that enables us to trade large volumes of cars each year, and as we reduce hold periods, that volume will increase further. We also have a good supply of discounted vehicles, almost like running used car factories, producing well-maintained, low-mileage vehicles with a history of one owner, placing us among the top used car dealerships in the country. In addition to our supply, we can take trades and purchase used cars from the market, similar to other dealers. We have a large customer base actively test driving our cars, giving us strategic advantages over other large dealers, which we have not fully leveraged yet. Expanding into e-commerce will enhance our retail sales capacity alongside our existing physical infrastructure. As for service, we are in the early stages, but we have improved our operating competency and infrastructure to service vehicles. With over a century of experience in maintaining cars, we can expand our services to both businesses and consumers. We possess a global network of car washes, gas stations, EV charging stations, and repair shops, which presents substantial potential. Lastly, in mobility, we see ourselves as part of the future. We have strong partnerships in rideshare and are piloting innovative models with Uber that we plan to scale by 2026. We consider ourselves well-positioned in the autonomous vehicle space as it develops. Our mobility team is exceptional, and I remain optimistic about this segment. Ultimately, success hinges on execution, and we are dedicated to staying focused and driving our initiatives forward.

I appreciate the information, Gil. It's very helpful. As a follow-up, I believe we grasp the core of the strategy that's currently being implemented, which includes a rightsized fleet, newer vehicles, and very high utilization. One aspect that might be a factor is the smaller vehicle size, leading to a lower purchase price and potentially less maintenance, among other things. However, I'm wondering if the economics of these smaller vehicles are significantly better, considering that it seems we might sacrifice a bit in terms of revenue per day and pricing overall. I'm curious if this is primarily influenced by the customer mix, such as whether it pertains to rideshare or new corporate and leisure accounts. Could you provide some insights on how customer mix, maintenance, and operating expenses are positively impacted by smaller vehicles?

Yes, I agree with what has been said. There are a few points I'd like to highlight. First, regarding the mix, we do face some challenges with RPD as noted. However, we view the mix as dynamic. Our goal is to optimize and align our car class mix with customer demand, including what customers are booking and their willingness to pay, as well as the car class unit economics at a market level. When we consider our model year '26 purchases, we can look back at our model year '25 buys, which were influenced by market availability along with our strategy to rotate and refresh the fleet. This contributed to a fleet mix that was a significant advantage for us in terms of the macroeconomics of the fleet, which is our most impactful economic factor. For model year '26, the current availability allows us to enhance this aspect further and fine-tune it at the market level. Additionally, the purchases for model year '26 have met our price and volume targets, which keeps our DPU well below our planned North Star target. This also enables us to sell off our model year '25 fleet and transition smoothly to our shorter holding strategy. This approach helps us improve unit economics, whether it relates to maintenance costs or easing the transition to retail sales. We are truly putting effort into changing our approach by focusing on the end goals. When acquiring vehicles, we're considering their resale potential, aiming to foster a dealership-like mindset throughout the process.

On the outlook for the sub-300 DPU for next year, I want to understand the moving pieces here. So it sounds like this vehicle recall is perhaps going to spill into early part of next year. The '26 vehicle purchases seem to be largely in place. And so what other work needs to be done, I guess, with respect to mix and mileage to confidently secure that sub-300 number?

Yes, I will start, and Scott can join in as well. I believe the broader strategy we discussed, which involves our end-to-end fleet approach of buying, holding, and selling effectively, is adaptable to any environment. Reflecting on our situation from a year and a half to two years ago, we faced significant challenges with our fleet. However, through our fleet rotation, we have turned those challenges into advantages with the model year '26 purchases. The pricing and volume we've experienced support our ongoing strategy, and it positions us for shorter holds now, with the volumes enabling us to achieve our key DPU targets.

Yes. No, that's right, Gil. I think Chris, good to see you. Yes, I think, look, what we're looking at today is a very similar platform in '26 we saw in '25. We expect generally stable residuals. We have good pricing on '26. So everything we're seeing and also the sort of channel management of how we dispose of vehicles will influence DPU. And one other point is that while this also even excludes the fact that our F&I revenue doesn't even hit DPU. It hits revenue. So we think we still have a good bit of benefit coming from the Hertz car sales that will benefit DPU, but ultimately impact revenue as well. So we're pretty bullish on the channels and how it affects DPU, but also total EBITDA.

I was just wondering if you could maybe just give us a little bit of color on just the quarter in general as far as what have you seen from international inbounds or corporate? And also maybe any markets that have been particularly strong or particularly weak? I know you referenced the government shutdown. Was that specifically D.C. area or anything else going on there?

And Ian, this is Sandeep here. Just for clarification, you're asking about Q4?

I was actually referring to quarters 3 and 4, if you can. What you've observed and what to expect going forward. Yes.

Thank you. Overall, I think there was a significant improvement in demand in Q3 compared to Q2 on a year-over-year basis. When examining airport demand, it was mostly slightly negative from February through June this year. However, since July, it has been positive. We've observed an increase in both leisure and corporate segments in Q3. Focusing on the corporate side, there were some improvements when comparing Q3 to Q4, and even more so sequentially within the quarter, particularly in August and September. However, corporate demand was still negative during that time, but it became positive in October as we entered Q4, indicating a favorable trend in that area. Inbound demand had declined significantly in Q2, particularly in May and June, with notable reductions from EMEA and Australia/New Zealand. Since then, we have seen some improvement in inbound demand throughout the summer and into October, although it is still down slightly year-over-year. On the government side, there was a considerable drop in Q2, with a slight improvement in Q3. However, since the beginning of November, we have seen a significant decrease in this sector due to federal government factors, which we believe will be resolved in due course. Overall, Q3 showed a much better demand profile compared to Q2, reflected in the pricing environment at that time. As we moved into Q4 and looked at October, we noticed further improvement in the demand profile and a favorable pricing environment as well.

I wanted to ask about the plans to grow the fleet next year. And specifically in light of the comments in your deck that some of the underlying RPD pressure is still being driven by market pricing pressure. So question is, do you think that fleet levels are rightsized in the industry? Or is there excess fleet? And how do you think the market will absorb your plans to grow fleet? How can you ensure that you will have positive RPD when expanding your fleet next year?

Yes, let me begin. I know Sandeep likely has some thoughts on this, and probably Scott as well. It's a relevant question. Scott presented our view effectively, emphasizing that we need to analyze this on a segment basis, as not all segments are the same. Again, airport, off-airport, and mobility segments, particularly off-airport mobility, are expected to grow at rates surpassing GDP. This is due to our capacity to generate demand and maintain the momentum we've already established in those areas. The airport sector, which seems to be the focus of your question, will grow roughly in line with GDP. We're not aiming to capture market share; rather, we see natural growth opportunities following our fleet rotation and improved unit economics, which positions us well for growth across all three segments. However, we will take a very disciplined approach moving forward.

Yes. I would like to add that when I evaluate the overall pricing environment at the airports from the beginning of the year to now, it appears to have improved significantly, particularly in the third quarter and into what we've observed in the fourth quarter. This improvement is evident across the industry. Additionally, the commercial initiatives we previously discussed are gaining momentum, which was noticeable towards the end of the third quarter. I anticipate this trend will continue to strengthen in the upcoming quarters and have a positive impact in 2026.

Okay. Great. As a follow-up, I wanted to ask about the utilization in the quarter. Can you elaborate on it? I see the commentary here in the deck, but it seems like it's close to a quarterly record. How sustainable is that? What type of utilization can we expect next year?

Yes, that's a great question. We've been gaining momentum in utilization over the past few quarters, largely due to our operational processes gaining traction in reducing out-of-service vehicles and overall idle time. Our commercial team has also excelled at generating better demand. It all begins with demand generation, and we're starting to maximize our assets. We've made significant progress, and I believe there's still more potential for improvement, although the increase in recalls poses a short-term challenge for us. The fourth quarter is expected to be more challenging than the third quarter. However, we will never be content with our performance in this area as our team is dedicated to continuous improvement. Another important aspect, aside from operational processes, is how we're selling cars. Traditionally, we consider total utilization, which encompasses more than just operations because we own these vehicles. A key difference is the inventory we have for sale, where the turnaround times have been quite lengthy. We've engineered processes to improve that, as reflected in this quarter's total utilization. Ultimately, as we sell vehicles digitally and continue to keep them operational until the point of sale, without taking them out of service for extended periods, we create significant opportunities for total utilization. This is our primary focus and strategy moving forward.

And this concludes the Hertz Global Holdings Third Quarter 2025 Earnings Conference Call. Thank you for your participation.