Avis Budget Group (CAR) Q4 2025 earnings summary

Executive summary

• Q4 and full-year results missed guidance, with Q4 adjusted EBITDA falling short by $150 million, mainly in the Americas, and a $518 million impairment charge related to U.S. EV rental vehicles.

• Full-year revenue declined 1% to $11.65 billion, with Q4 revenue down 2% to $2.66 billion; net loss for the year was $995 million, and Adjusted EBITDA rose 19% to $748 million.

• Management is prioritizing fleet utilization, disciplined capital allocation, and cost rationalization, with a focus on customer experience and premium offerings.

• Strategic initiatives include a global reduction in force, exiting non-core businesses, and rebalancing OEM partnerships.

• Americas revenue fell 2% for the year, while International revenue was flat; International Adjusted EBITDA rose 80% to $290 million.

Financial highlights

• Full-year Adjusted EBITDA was $748 million, missing the $900 million guidance; Q4 Adjusted EBITDA improved to $5 million from a $101 million loss in Q4 2024.

• Rental days were flat at 175.1 million, with average rental fleet down 2% to 684,148 vehicles; revenue per day decreased 1% to $66.13.

• Per-unit fleet costs per month dropped 11% to $318 for the year and 18% to $326 in Q4.

• Adjusted Free Cash Flow was negative $698 million, mainly due to $859 million in fleet contributions.

• Year-end liquidity was $818 million, with $2.1 billion in additional fleet funding capacity.

Outlook and guidance

• FY 2026 Adjusted EBITDA is projected between $800 million and $1 billion, reflecting industry volatility and a conservative approach.

• Per-unit fleet costs per month are expected to be $320–$330 for FY 2026.

• Fleet size is expected to decrease, with a focus on utilization and contribution margin.

• Depreciation per unit will be elevated in Q1 (~$400), then normalize to low $300s.

• Management aims for sustainable EBITDA north of $1 billion annually through disciplined execution.