CAR Q2 2022 Earnings

Call Details

• Call Title: Avis Budget Group Q2 2022 Earnings Call
• Date: August 2, 2022 at 12:30 PM UTC
• Management Team:
  • David Calabria (Treasurer and Senior Vice President of Corporate Finance)
  • Joe Ferraro (Chief Executive Officer)
  • Brian Choi (Chief Financial Officer)

Call Summary

Financial Performance

• Consolidated adjusted EBITDA for Q2 2022 exceeded $1.2B and represented the company's best quarterly result in its history.
• Americas adjusted EBITDA exceeded $1.0B in Q2 2022 and totaled roughly $1.8B year to date for the Americas segment.
• Americas revenue increased by roughly $590M year over year in Q2 2022 and Americas adjusted EBITDA increased by roughly $410M, implying an incremental margin of 69% for the period.
• Consolidated LTM adjusted EBITDA rose to $3.8B versus $965M LTM adjusted EBITDA in 2Q21 as of the prior year.
• Consolidated monthly depreciation cost per vehicle was $117 in Q2 2022, up from $62 in Q1 2022 and materially below the $260 monthly depreciation observed in full-year 2019.
• Gains on dispositions were $194M in Q2 2022 versus $303M in Q1 2022, and management expects disposition gains to moderate in later quarters.
• International adjusted EBITDA was $183M in Q2 2022 while international revenue decreased from $710M in Q2 2019 to $677M in Q2 2022, a decline of $33M versus 2019.
• First half 2022 adjusted EBITDA exceeded $2.0B on a consolidated basis.

Guidance

• The company has elected to forgo formal annual guidance to preserve operational flexibility.
• Management expects third quarter 2022 adjusted EBITDA to be higher than third quarter 2021, which would position full-year 2022 to deliver the highest full-year adjusted EBITDA in company history.
• Management expects third quarter RPD in the Americas to be lower than third quarter 2021.
• Management expects Americas rental day growth in Q3 2022 to continue versus 3Q21 and 3Q19 but to moderate from the stronger growth seen in Q2 2022.
• Management expects disposition gains to moderate through the back half of 2022 as older-model vehicle inventory is depleted.
• Management expects utilization metrics to normalize in Q3 2022 as deliveries arrive and fleet rotation returns toward pre-pandemic patterns.
• Guidance commentary was provided as qualitative color and quarterly directional assumptions rather than as formal numeric guidance.