Avis Budget Group (CAR) Q4 2024 earnings summary

Executive summary

• Fourth quarter revenue was $2.7 billion with an Adjusted EBITDA loss of $101 million; full-year revenue reached $11.8 billion and Adjusted EBITDA was $628 million, reflecting a strategic fleet rotation and related non-cash charges.

• Net loss for Q4 was nearly $2 billion and for the full year was $1.8 billion, primarily due to a $2.5 billion non-cash asset impairment and $180 million in other non-cash charges from accelerated fleet rotation in the Americas.

• The company is aggressively rotating out higher-cost 2023 and 2024 vehicles, replacing them with more affordable 2025 models to normalize fleet costs and improve future profitability.

• CEO Joe Ferraro will step down June 30, 2025, transitioning to Board Advisor, with Brian Choi becoming CEO and Jagdeep Pahwa named Executive Chairman.

Financial highlights

• Q4 2024 revenue declined 2% year-over-year to $2.71 billion; full year revenue also down 2% to $11.79 billion.

• Q4 net loss was $1.96 billion versus net income of $259 million in Q4 2023; full year net loss was $1.82 billion compared to net income of $1.63 billion in 2023.

• Adjusted EBITDA for Q4 was a loss of $101 million (vs. $311 million gain in Q4 2023); full year Adjusted EBITDA was $628 million (vs. $2.49 billion in 2023).

• Cash and cash equivalents at year-end were $534 million, with $1.1 billion in total liquidity and $2.8 billion in fleet funding capacity.

• Repurchased 550,000 shares for $45 million in 2024 under the share repurchase program.

Outlook and guidance

• Management expects to generate at least $1 billion of Adjusted EBITDA in 2025, citing strong travel demand and improved fleet cost certainty.

• Q1 2025 Adjusted EBITDA projected to be a loss of $100 million due to elevated fleet costs and calendar shifts; improvement expected from Q2 as fleet costs normalize.

• All-in fleet costs per unit per month expected to drop from ~$400 in Q1 to ~$300 by year-end 2025.

• Free cash flow for 2025 expected to be no less than $500 million.