Avis Budget Group (CAR) Q4 2025 earnings summary

Executive summary

• Q4 and full-year 2025 results missed guidance, with full-year revenue at $11.7 billion, a net loss of $995 million, and Adjusted EBITDA of $748 million, mainly due to demand decline, pricing pressure, and a $518 million EV impairment charge.

• Americas revenue fell 2% for the year, while International revenue was flat; both segments focused on profitable segments and disciplined fleet management.

• Management is implementing tighter fleet discipline, utilization, and capital allocation to reduce volatility and improve returns, aiming for sustainable EBITDA above $1 billion annually.

Financial highlights

• Full-year Adjusted EBITDA was $748 million, up 19% year-over-year but below the $900 million guidance; Q4 Adjusted EBITDA was $5 million, up from a $101 million loss in Q4 2024.

• Full-year revenue declined 1% to $11.65 billion; Q4 revenue was $2.66 billion, down 2% year-over-year.

• Per-unit fleet costs per month dropped 10% to $320 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.

• A $500–$518 million impairment/write-down was taken on the EV fleet, with $180–$183 million monetized in federal EV tax credits.

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; Americas revenue is expected to grow modestly.

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

• Management expects tightened fleet discipline and improved balance sheet to support sustainable earnings growth.