CAR Q4 2022 Earnings

Call Details

• Call Title: Avis Budget Group Q4 2022 Earnings Call
• Date: February 14, 2023 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

• The company reported over $4.1B of adjusted EBITDA for fiscal year 2022 on a non-GAAP basis.
• Americas revenue increased by $104M year-over-year in Q4 2022 while Americas adjusted EBITDA decreased by $46M year-over-year in Q4 2022 due primarily to a $68M headwind in vehicle depreciation and interest.
• Gain on dispositions contributed $163M to results in Q4 2022 and management stated that such gains are expected to moderate in 2023.
• International adjusted EBITDA for Q4 2022 was $63M on a reported basis, including a $16M negative impact from currency exchange, and full-year international adjusted EBITDA was $560M reported, including a $79M negative FX impact.
• Adjusted EBITDA grew from $2.4B in 2021 to $4.1B in 2022, and the Americas reported over $3.6B of adjusted EBITDA for the year.
• As of December 31, 2022, available liquidity was approximately $1.6B with additional ABS borrowing capacity of $1.9B, and reported net leverage was less than one times.

Demand & Seasonality

• The company reports a return to more normal seasonal patterns with Q4 reflecting typical holiday-driven leisure demand and strong commercial activity.
• Q4 2022 was the highest fourth-quarter commercial volume in company history and the commercial customer mix is elevated compared to 2019.
• Commercial account re-signings for 2022 were approximately 100% and re-signings were, on average, at an increased price.
• Americas price in Q4 was up 1% year-over-year, rebounding from a 3% decline in Q3, driven by peak period pricing and improved ancillary sales.
• Forward-looking reservations showed strength into January and February, supporting management statements that demand remained robust at the start of 2023.
• International rental days in Q4 were up 15% versus Q4 2021 but remained 22% below Q4 2019, indicating runway for international volume recovery.