CAR Q2 2023 Earnings

Call Details

• Call Title: Avis Budget Group Q2 2023 Earnings Call
• Date: August 1, 2023 at 12:30 PM UTC
• Management Team:
  • David Calabria (Senior Vice President of Corporate Finance)
  • Joe Ferraro (Chief Executive Officer)
  • Brian Choi (Chief Financial Officer)

Call Summary

Financial Performance

• Company reported over $3 billion in revenue and $737 million of adjusted EBITDA for Q2 2023.
• Last twelve months adjusted EBITDA was $3.4B through the period discussed on the call.
• Americas revenue decreased roughly $140 million year-over-year driven by an 8% decline in RPD partially offset by rental day growth of 3%.
• Americas adjusted EBITDA decreased roughly $410 million year-over-year primarily due to rate pressure, vehicle depreciation, and vehicle interest.
• Overall rental days grew roughly 3% year-over-year with June growing 6%.
• Utilization increased over one percentage point to finish at 71% in the Americas.
• International segment generated an 18% margin while volume grew 7% year-over-year and RPD declined 4% year-over-year.
• International produced over $175 million of adjusted EBITDA in H1 2023, which the company noted was nearly ten times the region's H1 2019 result despite days being down some 20% versus 2019.

Guidance

• Company declined to provide formal annual guidance in order to preserve operational flexibility.
• Company expects Q3 2023 adjusted EBITDA to be roughly $850 million.
• Q3 rental day growth is expected to be mid-single digits in the Americas and high-single digits in the international segment.
• Company expects sequential RPD growth in both regions in Q3 versus Q2 2023.
• Vehicle disposition gains are expected to moderate and gross/net depreciation convergence is expected to continue through the year.
• Company expects pricing in Q3 to improve sequentially from Q2 and to be more aligned with traditional seasonality.