Avis Budget Group (CAR) Q1 2025 earnings summary

Executive summary

• Q1 2025 revenue was $2.4 billion, down 5% year-over-year, with an adjusted EBITDA loss of $93 million and a net loss of $505 million, reflecting anticipated fleet rotation costs and a $390 million non-cash fleet charge.

• Aggressive fleet rotation led to a record number of risk vehicle disposals, supporting lower fleet costs and improved operating expenses.

• Technology investments and operational efficiencies contributed to adjusted EBITDA exceeding prior guidance.

• Leadership transition announced, with the CEO stepping down at the end of June 2024.

• Issued multiple new series of asset-backed notes in Q1 2025, expanding funding capacity for vehicle programs.

Financial highlights

• Adjusted EBITDA loss of $93 million, down from a positive $12 million in Q1 2024, reflecting a $105 million year-over-year decrease.

• Total company revenue declined by $120 million year-over-year, mainly due to calendar shifts and a 2% decrease in pricing.

• A $390 million non-cash fleet-related charge was recorded, excluded from adjusted EBITDA.

• Per-unit fleet costs were $351, up from $318 last year, but below the $400 guidance.

• Vehicle interest expense improved by $29 million year-over-year due to a smaller fleet and reduced debt.

• Operating and SG&A expenses improved by $15 million year-over-year.

• Net loss per share was $14.35, compared to $3.21 in Q1 2024.

• Liquidity at quarter-end exceeded $1.1 billion, with $3 billion in additional fleet funding capacity.

Outlook and guidance

• Q2 per-unit fleet costs expected to be approximately $325, improving to $300 by the start of Q4.

• Adjusted EBITDA in Q2 expected to exceed $200 million.

• Long-term target remains above $1 billion of adjusted EBITDA annually, though management is mindful of macroeconomic uncertainty.

• Positive free cash flow expected in later quarters if current trends persist.

• No further fleet charges are expected from the accelerated fleet rotation strategy.