Localiza Q2 Net Income Hits US$197 Million, Swinging from Year-Ago Loss

Brazil · Business

Adjusted profit rose 30.6% year over year, excluding a R$937 million tax write-off that caused a loss.

A parking lot filled with cars. Localiza, Brazil’s largest car-rental and fleet company, reported Q2 2026 net income of about R$1.003 billion (US$197 million). (Photo: Husskeyy, CC BY-SA 4.0, Wikimedia Commons.)

Localiza (B3: RENT3) reported Q2 2026 net income of R$1.003 billion (US$197 million), swinging from a R$167.1 million loss a year earlier. The prior-year quarter was hit by a R$937 million tax-loss carryforward write-off.

So the widely cited 30.6% growth is an adjusted comparison, not a simple year-over-year jump from the reported loss.

Localiza: Adjusted Profit Growth Explained

Localiza’s Q2 2026 net income of R$1.003 billion (US$197 million) represents a 30.6% increase over the adjusted prior-year figure. The company said in its earnings release on August 6, 2026.

The reported year-ago quarter showed a loss of R$167.1 million due to the write-off, which distorted the raw comparison. Excluding that one-time tax item, the profit comparison is positive, according to multiple independent reports from ADVFN, Investing.

com, and MarketScreener. The write-off, related to deferred tax assets on tax-loss carryforwards.

Was a non-cash charge that reduced the previous year’s net income but did not affect cash flow or operational performance. As noted in the earnings call transcript.

The adjusted growth of 30.6% reflects a strong operational performance across all segments. With cost control and fleet expansion contributing to the bottom line.

Analysts at CNN Brasil highlighted that the profit beat market expectations, while the adjusted metric provided a clearer view of underlying profitability. The company’s management emphasized in the earnings call that the tax write-off was an accounting measure required by Brazilian tax rules.

And it did not signal any deterioration in financial health. This explanation helped investors focus on the operational momentum rather than the headline loss in the prior-year period.

Revenue and Fleet Growth

Consolidated net revenue reached R$12.3 billion (US$2.422 billion) in Q2 2026, up 24.5% year over year, the company reported. The total fleet expanded to 670,446 vehicles, a 6.3% increase from 630,771 a year earlier.

Car rental (RAC) revenue rose 11.2% to R$2.736 billion (US$538 million). While fleet rental revenue grew 5.8% to R$2.379 billion (US$467 million), according to the earnings release.

The RAC segment benefited from increased travel demand and tourism in Brazil, as mentioned in the earnings call transcript. Fleet rental growth was driven by new contracts with corporate clients.

Particularly in the logistics and delivery sectors, which have expanded with e-commerce demand. The company also reported that vehicle utilization rates in the RAC segment improved, helping to boost revenue per vehicle.

The fleet expansion was supported by higher vehicle acquisitions from manufacturers. And the company maintained a balanced approach between rental and sales channels.

Management noted in the earnings call that they expect continued fleet growth in the second half of 2026, aligned with market demand.

What Localiza Rent a Car does. Localiza Rent a Car S.A., together with its subsidiaries, engages in the car rental business in Brazil and internationally. It is involved in fleet administration and management; sale and support of used cars; granting franchises; vehicle claims management; provision of tracking and telemetry solutions; travel and tourism agency services; and other automotive…

Seminovos Drives Growth

Seminovos—used vehicle sales—revenue surged 39.0% to R$7.177 billion (US$1.410 billion), the company said. Vehicle sales in Brazil reached 92,043 units, up from 68,901 a year earlier.

The strong performance in the Seminovos segment was a key driver of overall revenue growth, according to CNN Brasil and Visno Invest. This segment benefits from the company’s ability to refresh its rental fleet and sell vehicles at optimal prices.

As explained in market analysis. The increase in vehicle sales was supported by higher demand for used cars in the Brazilian market.

Partly due to attractive pricing compared with new vehicles. Localiza’s online platform and physical auction channels also expanded, reaching a broader customer base, as detailed in the earnings call transcript.

Management highlighted that the Seminovos segment’s growth also helped to reduce fleet holding costs, as vehicles were sold before significant depreciation. This strategy contributed to the improved profitability, with the gross margin in Seminovos remaining stable despite higher volume.

Profitability and Leverage

EBITDA rose 14.1% to R$3.755 billion (US$738 million), while EBIT increased 15.1% to R$2.325 billion (US$457 million), per the company’s earnings release. ROIC reached 16.1% annualized for the first half of 2026, with a 6.1 percentage-point spread over the after-tax cost of debt.

Cash and financial investments totaled R$11.390 billion (US$2.238 billion) at quarter-end, according to Visno Invest. Net debt stood at R$32.352 billion (US$6.356 billion) on June 30, 2026.

The company’s leverage ratio, measured by net debt to EBITDA, was approximately 2.4 times. Based on trailing twelve-month EBITDA, which remained within its target range.

In the earnings call, management expressed confidence in deleveraging through operational cash flow and asset sales. The ROIC improvement was driven by higher operational efficiency and the growth in the Seminovos segment.

Which typically yields higher returns on invested capital. Management noted that the company aims to sustain an ROIC above its cost of capital, with a focus on capital allocation discipline.

Market Context and Analyst View

The results were released on August 6, 2026, and shares fell in trading, according to an earnings call transcript from Investing. com.

Analysts noted the profit beat expectations, but some raised concerns about Seminovos inventory levels, reported euqueroinvestir. Despite the positive headline, the company’s leverage and used-car market dynamics remain investor focus points, as noted in the earnings call.

The stock price reaction reflected profit-taking after a strong run-up in the shares prior to the earnings release, as per market commentary. Analysts at Visno Invest pointed out that the Seminovos growth was robust.

But they monitored the potential impact of rising vehicle supply on future selling prices. The company’s guidance for the second half of 2026 assumes stable market conditions, which will be tested by macroeconomic factors.

The earnings call transcript from Investing. com showed that management fielded questions on competition and pricing, with executives emphasizing their brand strength and scale advantages.

They also addressed the impact of higher interest rates on consumer financing for used vehicles. Noting that they are working with financial partners to offer competitive terms.

Frequently Asked Questions

What was Localiza’s net income in Q2 2026?

Localiza reported net income of R$1.003 billion (US$197 million) for the quarter ended June 30, 2026, according to the company’s earnings release. This compares with a R$167.1 million loss in the same period a year earlier.

Why does the 30.6% growth rate not match the reported loss?

The prior-year quarter included a R$937 million tax-loss carryforward write-off, which depressed the reported bottom line. The 30.6% figure is based on adjusted comparison, excluding that one-time item, as explained by multiple financial outlets.

How did Localiza’s revenue perform in Q2 2026?

Consolidated net revenue rose 24.5% year over year to R$12.3 billion (US$2.422 billion). The Seminovos segment saw the strongest growth, with revenue up 39.0%.

What was Localiza’s fleet size at the end of Q2 2026?

The total fleet reached 670,446 vehicles, up 6.3% from 630,771 a year earlier. The company sold 92,043 vehicles in Brazil during the quarter.

Sources: Localiza Rent A Car S.A., ADVFN, Investing.com, MarketScreener, CNN Brasil, Visno Invest