CAR Q4 2021 Earnings

Call Details

• Call Title: Avis Budget Group Q4 2021 Earnings Call
• Date: February 15, 2022 at 1:30 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

• Americas revenue increased by $1.1B year over year in Q4 2021.
• America's adjusted EBITDA increased by over $550M year over year in Q4 2021, representing an incremental margin of 52%.
• On a two-year basis versus Q4 2019, Americas revenue was up $570M and adjusted EBITDA was up $526M, implying an incremental margin of 92% versus 2019.
• RPD in Q4 2021 was down 10% sequentially but up 30% versus Q4 2019.
• International adjusted EBITDA improved from negative $28M in Q4 2020 to positive $32M in Q4 2021, a roughly $60M improvement on $143M of revenue gains.
• Company reported Q4 vehicle gains on sale of approximately $120M and indicated depreciation and lease charges of over $250 per month per vehicle when backing out those gains.

Demand & Seasonality

• Omicron materially weakened travel demand beginning late November and pressured December RPD and rental days.
• Americas rental days grew more than 5% versus Q4 2019 due to redeploying fleet to warmer leisure and mountain destinations.
• December 2021 represented the lowest RPD in the quarter, reversing a normal pattern where December is the highest-RPD month.
• January 2022 RPD was sequentially down from December but declined less than in a normal seasonality year due to constrained supply and persistent underlying demand.
• Midweek utilization was challenged in January due to low commercial travel, with utilization in the Americas at 70% in Q4 versus 72% in Q3.
• Forward bookings were described as strengthening with booking windows shifting further out, and early indications pointed to strengthening demand around President's Day and into March.