CAR Q3 2023 Earnings

Call Details

• Call Title: Avis Budget Group Q3 2023 Earnings Call
• Date: November 2, 2023 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)
  • Brian Schweit (CFO (transitioning to EVP, Chief Transformation Officer))
  • Izzy Martins (EVP and Head of the Americas (named Global CFO))
  • Bernardo Heese (Executive Chairman (transitioning to Board member))
  • Jagdeep Palwa (Vice Chairman (named Chairman))

Call Summary

Financial Performance

• Company reported record quarterly revenue of $3.6B and adjusted EBITDA of over $900M, both non-GAAP measures reconciled in the press release.
• Last 12 months adjusted EBITDA was $2.8B as stated on the call.
• Americas rental days increased 7% year-over-year and were up 14% versus 2019 for the quarter.
• Americas RPD was down 5% year-over-year and up 3% sequentially in Q3 2023.
• Americas revenue increased by over $30M year-over-year, driven by record rentals offset by RPD declines.
• Americas adjusted EBITDA decreased by roughly $445M year-over-year, driven by higher depreciation, vehicle interest, and rate pressure.
• International rental days were up 1% year-over-year, and international adjusted EBITDA was nearly $200M at a 24% margin.
• Consolidated monthly per unit vehicle interest was $92 in Q3 2023 and is expected to move slightly above $100 in Q4 2023.

Guidance

• Company is not providing formal annual guidance and will remain flexible to changing conditions.
• Company expects Q4 Americas rental days to grow in the mid-single-digits while observing normal seasonal sequential declines from 3Q to 4Q.
• Company expects International rental day growth in the low single-digits with flat RPV for Q4.
• Consolidated monthly per unit vehicle interest is expected to move slightly above $100 per vehicle in Q4 2023.
• Monthly net vehicle depreciation is expected to converge with straight-line depreciation of roughly $300 per vehicle by Q4.
• Company reiterated full-year adjusted EBITDA expectation of over $2.5B for the year, presented on a non-GAAP basis.
• Company expects to fleet slightly inside demand to maintain return on invested capital discipline through Q4.