Avis Budget Group (CAR) Q3 2024 earnings summary

Executive summary

• Q3 2024 revenue was nearly $3.5 billion, down 2% year-over-year, with net income of $238 million and Adjusted EBITDA of $503 million, both significantly lower than the prior year due to higher fleet and interest costs.

• Vehicle utilization improved by approximately 2 points company-wide, with disciplined fleet management and a focus on higher-margin business.

• The model year 2025 fleet buy is nearly complete, expected to drive significant savings and lower holding costs as new vehicles are integrated.

• Robust holiday demand is anticipated, with strong reservations in both Americas and International segments.

• The company operates globally under multiple brands, with an average rental fleet of 736,000 vehicles in Q3 2024.

Financial highlights

• Q3 Adjusted EBITDA was $503 million, down 45% year-over-year, and net income fell 62% to $238 million, mainly due to higher fleet and interest costs.

• Revenue for the quarter was nearly $3.5 billion; Americas contributed $2.64 billion and International $840 million.

• For the nine months ended September 30, 2024, revenue totaled $9.1 billion, with Adjusted EBITDA of $729 million, both down 2% and 67% year-over-year, respectively.

• Total expenses in Q3 rose 12% year-over-year, driven by a 56% increase in vehicle depreciation and lease charges and a 16% rise in vehicle interest costs.

• Diluted EPS for Q3 2024 was $6.65, compared to $16.78 in Q3 2023.

Outlook and guidance

• Management expects significant savings from the ongoing U.S. model year 2025 fleet refresh and historically high vehicle utilization in Q4.

• Holiday demand is strong, with pricing expected to transition seasonally in the Americas and remain flat internationally.

• The company is committed to achieving at least $1 billion in Adjusted EBITDA for the year, excluding fleet losses.

• Further restructuring expenses of approximately $10 million are expected in 2024, with global rightsizing continuing into 2025.