On August 5, 2024, Avis Budget Group Inc (CAR, Financial) released its 8-K filing for the second quarter of 2024. Avis Budget Group Inc is a provider of automotive vehicle rental and car-sharing services, operating under brands such as Avis, Budget, and Zipcar. The company primarily serves the Americas region, with a significant presence in North America, Europe, and Australasia.
Performance Overview
Avis Budget Group Inc reported revenues of $3.048 billion for Q2 2024, a 2% decrease from the $3.123 billion reported in Q2 2023. The company’s net income plummeted to $15 million, a stark contrast to the $436 million reported in the same period last year. Adjusted EBITDA also saw a significant decline, falling 71% to $214 million from $737 million in Q2 2023.
Key Financial Metrics
Despite the revenue decline, the company experienced a 2% increase in rental days compared to Q2 2023, with revenue per day showing sequential improvement throughout the quarter. Vehicle utilization improved to 70.2%, with June showing a one-point increase compared to June 2023.
| Metric | Q2 2024 | Q2 2023 | % Change |
|---|---|---|---|
| Revenue | $3.048 billion | $3.123 billion | (2%) |
| Net Income | $15 million | $436 million | (97%) |
| Adjusted EBITDA | $214 million | $737 million | (71%) |
Segment Performance
In the Americas, Adjusted EBITDA was $186 million, with rental days up 1% compared to Q2 2023. Revenue per day improved month-to-month, although June revenue per day was down 2% compared to June 2023. Internationally, Adjusted EBITDA was $48 million, driven by improved vehicle utilization and a 5% increase in rental days compared to Q2 2023.
Financial Position
The company ended the quarter with $511 million in cash and cash equivalents and an additional $2.9 billion in fleet funding capacity. Corporate debt stood at $5.261 billion, with no significant maturities until 2027.
Commentary
“As the second quarter progressed, demand elevated with pricing and vehicle utilization sequentially improving. June pricing finished down slightly and vehicle utilization up a point in the Americas compared to June 2023,” said Joe Ferraro, Avis Budget Group Chief Executive Officer. “Our actions to get our fleet size in-line with demand enabled us to start the third quarter with strong pricing around the Fourth of July holiday, setting us up well to take advantage of the summer peak.”
Analysis
The decline in revenue and net income highlights the challenges Avis Budget Group Inc faces in a competitive and fluctuating market. However, the improvement in vehicle utilization and sequential revenue per day growth are positive indicators of the company's operational adjustments. The company's strong liquidity position and well-laddered debt maturities provide a buffer against market volatility.
For more detailed insights and to access the full earnings report, visit the 8-K filing.
Explore the complete 8-K earnings release (here) from Avis Budget Group Inc for further details.
