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Avis Budget Group(CAR) - 2025 Q1 - Earnings Call Transcript
CARAvis Budget Group(CAR)2025-05-08 13:30

Financial Data and Key Metrics Changes - The company reported quarterly revenue of 2.4billion,downfrom2.4 billion, down from 2.5 billion in Q1 2024, reflecting a year-over-year decrease of 4% [4][32] - Adjusted EBITDA loss was 93millioncomparedtoapositive93 million compared to a positive 12 million in Q1 2024, marking a 105millionyear−over−yearchange[31][32]−Totalnetdebtleverageratioremainedstableataround5x,withapproximately105 million year-over-year change [31][32] - Total net debt leverage ratio remained stable at around 5x, with approximately 1.1 billion in available liquidity as of March 31 [36][37] Business Line Data and Key Metrics Changes - The Americas segment generated over 1.9billioninrevenuewithanadjustedEBITDAlossof1.9 billion in revenue with an adjusted EBITDA loss of 67 million, reflecting a 4% decrease in revenue on a constant currency basis [8][19] - International segment revenues were 523millionwithanadjustedEBITDAlossof523 million with an adjusted EBITDA loss of 3 million, showing a year-over-year improvement of 12million[19][20]MarketDataandKeyMetricsChanges−InTheAmericas,vehicleutilizationimprovednearlyfourpointsyear−over−year,reachingnearly7012 million [19][20] Market Data and Key Metrics Changes - In The Americas, vehicle utilization improved nearly four points year-over-year, reaching nearly 70% for the quarter [11][12] - International utilization was 69%, up more than two points compared to Q1 2024 [21] Company Strategy and Development Direction - The company is focused on an accelerated fleet rotation strategy, achieving a record number of vehicle disposals and accepting deliveries of model year 2025 vehicles [5][18] - Investments in technology are aimed at enhancing customer experience, revenue generation, and operational efficiencies [7][24] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about leisure demand growth, with forward bookings up over the prior year, despite a pullback in commercial demand [15][38] - The company anticipates adjusted EBITDA in Q2 to exceed 200 million, driven by improved pricing and operational agility [39][40] Other Important Information - The company is navigating uncertainties related to automotive tariffs and their potential impact on fleet costs and vehicle pricing [14][15] - Management emphasized the importance of maintaining fleet flexibility to adapt to changing demand conditions [16][39] Q&A Session Summary Question: What operational strategies are in place to maintain higher utilization rates? - Management highlighted the importance of fleet planning and operational efficiencies to optimize vehicle utilization while meeting demand [44][46] Question: How might rising vehicle prices impact fleet plans for model year '26 vehicles? - Management noted that flexibility in fleet size and strategic modeling will help navigate the evolving tariff environment and vehicle pricing [49][52] Question: What is the competitive landscape like in The Americas? - Management indicated that the competitive environment remains intense but stable, with a focus on execution and operational excellence [56][58] Question: What gives confidence in achieving the long-term adjusted EBITDA target? - Management pointed to strong advanced reservations and a favorable used car market as indicators of potential success [66][70] Question: How is the company balancing buybacks versus deleveraging? - Management stated a balanced approach is being taken, prioritizing deleveraging while also investing in capital expenditures that drive operational efficiencies [82][84]