Avis Budget Group(US:CAR)2025-07-30 13:32Financial Data and Key Metrics Changes - The company is experiencing challenges with revenue per day (RPD) due to tariffs and recalls affecting fleet management, which has led to a conservative approach in accounting for gross depreciation [60][64]. - The company expects a normalized EBITDA of at least $1 billion going forward, despite current challenges [80][81]. Business Line Data and Key Metrics Changes - The introduction of Avis First aims to redefine the premium car rental experience, with expectations that it will capture a significant share of rental days similar to premium airline seats [106][112]. - The company is focusing on maintaining a fleet of newer, low-mileage vehicles for the Avis First offering, which may involve reallocating resources within the existing fleet [50][51]. Market Data and Key Metrics Changes - The overall car rental market is competitive, with the company aiming to differentiate itself through innovative offerings rather than competing solely on price [95]. - The company is seeing signs of demand recovery in the leisure segment, which is stronger than the commercial segment [58]. Company Strategy and Development Direction - The company is prioritizing value-creating innovation as a core responsibility, with a focus on enhancing customer experience and operational efficiency [9][10]. - The partnership with Waymo is seen as a strategic move to position the company within the autonomous vehicle ecosystem, leveraging its fleet management expertise [30][32]. Management's Comments on Operating Environment and Future Outlook - Management acknowledges the current operational challenges due to tariffs and recalls but remains optimistic about long-term growth opportunities in the mobility ecosystem [65][66]. - The company is committed to maintaining a disciplined approach to investments, ensuring that growth translates into free cash flow while enhancing customer experience [102][103]. Other Important Information - Avis First has been launched in over a dozen locations, with plans to expand to over 50 markets by the end of the year [22][112]. - The company is actively managing its fleet to adapt to market conditions, including being cautious with vehicle purchases in light of tariff uncertainties [85][86]. Q&A Session Summary Question: Confirmation of competitive process for Waymo partnership - Management indicated that discussions with multiple AV parties were ongoing, and both parties were aware of the competitive landscape [37]. Question: Long-term vision for Avis Budget's business model - The company sees its core competency in mega fleet management continuing, with potential expansion into autonomous ride-hailing as a future growth area [40][41]. Question: Bandwidth for future partnerships - Management expressed confidence in their capacity to take on future partnerships while maintaining focus on the core rental car business [47]. Question: Fleet considerations for Avis First - The company plans to include more premium vehicles in the fleet for Avis First, ensuring a high-quality customer experience [50][51]. Question: Guidance on RPD and market conditions - Management noted that RPD has been challenged but is seeing signs of improvement due to tightening industry supply and strong leisure demand [58][92]. Question: Revenue model for AV strategy - The specifics of the revenue model for the Waymo partnership are not disclosed, but management emphasized alignment on profitability variables [70][71]. Question: Measuring success of investments - The company evaluates investments based on growth, free cash flow generation, and customer experience enhancement [102][103].