Avis Returned to Profit as Fleet Cuts Lifted Utilization
Adjusted EBITDA rose 3% to $286 million as fleet costs declined.
Avis Budget Group (CAR), the vehicle-rental company, returned to quarterly profit as a smaller fleet and lower depreciation costs offset weaker rental demand. Net income rose to $63 million from $5 million a year earlier, reversing a $234 million first-quarter loss.
The performance marked a sharp sequential recovery despite a continued deterioration in volume. Rental days fell 2% from a year earlier after rising 1% in the third quarter of 2024 and declining 1% in the fourth quarter.
Second-quarter revenue declined 1.3% to $2.998 billion from $3.039 billion a year earlier, though it increased about 20% from the first quarter. Total revenue per day rose 1% to $68.29 and was essentially flat in constant currency, leaving lower rental volume as the source of the year-over-year revenue decline.
Avis cut its average rental fleet 5% to 664,638 vehicles, outpacing the decline in rental days and lifting utilization 1.9 percentage points to a second-quarter record of 72.6%. Americas utilization climbed 2.5 points to a record 73.2%, while International utilization edged up 0.2 point to 70.8%.
The tighter fleet also reduced operating costs. Monthly per-unit fleet costs fell 4% in constant currency to $290, improving from the first quarter, when the $351 cost was unchanged from a year earlier. Vehicle depreciation and lease charges declined 8% to $583 million, while vehicle interest expense increased slightly to $232 million.
Americas revenue fell about 2% to $2.288 billion as pricing remained essentially flat. International revenue was roughly unchanged at $710 million and benefited from foreign exchange; excluding currency effects, it was $689 million. Constant-currency pricing was flat in both regions after each posted 3% growth in the first quarter.
Avis ended the quarter with about $1.0 billion of liquidity, up from $915 million in the first quarter, though fleet-funding capacity declined to $1.9 billion from $2.9 billion. The company's Waymo autonomous-vehicle partnership began operating in Dallas on June 1 and completed thousands of trips during its first month.