Avis Budget Group (CAR) Q2 2024 earnings summary

Executive summary

• Q2 2024 revenue was $3.05 billion, down 2% year-over-year, with Adjusted EBITDA of $214 million, reflecting strong operational execution but a 71% decline from Q2 2023 due to higher fleet and interest costs despite increased rental volume.

• Net income for Q2 2024 was $15 million, a 97% decrease from Q2 2023, driven by higher fleet and interest costs.

• For the first half of 2024, revenue was $5.6 billion (down 1% year-over-year), with a net loss of $98 million compared to net income of $748 million in the prior year period.

• Demand and pricing improved as the quarter progressed, with strong fleet alignment to demand entering Q3.

• Aggressive fleet rightsizing in the first half, with 70% of anticipated full-year vehicle dispositions completed by May, improved utilization and positioned the company for summer demand.

Financial highlights

• Q2 2024 operating expenses rose 4% to $1.53 billion; vehicle depreciation and lease charges nearly doubled to $733 million.

• Vehicle interest expense increased 42% to $244 million in Q2 2024; corporate interest expense rose 29% to $88 million.

• Diluted EPS for Q2 2024 was $0.41, down from $11.01 in Q2 2023.

• Per-unit fleet costs per month rose 90% to $346.

• Operating and SG&A expenses per rental day improved by 1% year-over-year despite inflationary pressures.

Outlook and guidance

• Q3 Adjusted EBITDA expected in the range of $500 million to $600 million.

• Pricing for Q3 anticipated to be about flat, with utilization above prior year and continued strong summer demand.

• Management expects continued restructuring expenses of approximately $25 million for the remainder of 2024 as part of the Global Rightsizing initiative.

• Model Year 2025 fleet purchases are about halfway complete, with materially lower holding costs expected.

• Entered Q3 with strong pricing around the July 4th holiday, positioning well for the summer peak.