Avis Budget Group(US:CAR)2025-05-08 13:32Financial Data and Key Metrics Changes - The company reported quarterly revenue of $2.4 billion, down from $2.5 billion in Q1 2024, reflecting a year-over-year decline driven by calendar shifts and a 2% decrease in pricing [5][31] - Adjusted EBITDA loss was $93 million compared to a positive $12 million in Q1 2024, marking a $105 million year-over-year change [30][35] - 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 $1.9 billion in revenue with an adjusted EBITDA loss of $67 million, reflecting a 4% decrease in revenue on a constant currency basis [9][17] - International segment revenues were $523 million with an adjusted EBITDA loss of $3 million, showing a year-over-year improvement of $12 million due to better pricing and cost discipline [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 the first quarter of 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 [6][18] - The strategy aims to maintain fleet discipline, optimize costs, and enhance customer experience through technology investments [8][24] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about leisure travel demand, with forward bookings up year-over-year, despite a pullback in commercial demand [16][66] - The company anticipates adjusted EBITDA in Q2 to exceed $200 million, supported by improved pricing and operational efficiencies [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][16] - Management emphasized the importance of flexibility in fleet management to adapt to changing demand conditions [93] 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 [43][46] Question: How are tariffs impacting fleet plans for model year 2026 vehicles? - Management noted ongoing discussions with OEMs and emphasized flexibility in fleet size and vehicle selection based on market conditions [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 efficiency [56][58] Question: What gives confidence in achieving the long-term adjusted EBITDA target? - Management cited strong leisure demand, improved fleet management, and operational agility as key factors supporting their outlook [66][70] Question: How is the company balancing buybacks versus deleveraging? - Management reiterated a balanced approach, prioritizing deleveraging while also investing in capital expenditures that drive operational efficiencies [81][84]