Avis Budget Group (CAR -1.29%), a global provider of vehicle rental services with more than 10,000 locations across 180 countries, reported its second quarter 2025 results on July 29, 2025. The main headline was a substantial miss on earnings per share, which came in at $0.10 (GAAP) compared with analyst expectations of $2.21. Revenue (GAAP) was $3,039 million, narrowly exceeding the $2,992.6 million consensus estimate, and compared to $3,048 million in Q2 2024. Despite progress in key operational areas such as fleet costs and utilization, restructuring charges and continued pricing and demand pressures limited profitability. The overall assessment: solid execution on cost controls, but persistent headwinds at the bottom line.
| Metric | Q2 2025 | Q2 2025 Estimate | Q2 2024 | Y/Y Change |
|---|---|---|---|---|
| EPS (GAAP) | $0.10 | $2.21 | $0.41 | (75.6%) |
| Revenue (GAAP) | $3.04 billion | $2.99 billion | $3.05 billion | -0.3% |
| Adjusted EBITDA | $277 million | $214 million | 29.4% | |
| Adjusted EBITDA – Americas | $220 million | $186 million | 18.3% | |
| Adjusted EBITDA – International | $82 million | $48 million | 70.8% |
Source: Analyst estimates for the quarter provided by FactSet.
About Avis Budget Group and Key Success Factors
Avis Budget Group operates one of the largest vehicle rental fleets in the world. Its brands serve customers ranging from everyday travelers to business clients and operate at airports and neighborhood locations. The company’s reach and size allow it to offer diverse mobility services and respond flexibly to global travel trends.
Critical to its performance are several focus areas: maintaining a broad international presence, managing fleet costs and utilization efficiently, adopting technology to improve service and cost structure, and delivering a strong customer experience. The introduction of sustainable vehicle offerings and digital tools has also become a growing area of importance for long-term success.
Quarter in Review: Financial and Operational Highlights
GAAP revenue was essentially flat, nudging slightly above expectations but down 0.3% from the same quarter in the previous year. This flatness masked diverging performance by region: revenue in the Americas came in below last year, while international locations posted a 2.9% increase to $707 million compared to the prior year. Ongoing cost pressures and a changed mix in rental demand limited growth on the revenue line, while restructuring and other below-the-line charges weighed further on net income.
Earnings per share (GAAP) fell dramatically year over year, declining from $0.41 to just $0.10, driven by higher restructuring expenses and a sharp jump in corporate debt costs. Adjusted EBITDA, which measures operating performance before interest, taxes, depreciation, and significant non-recurring items, improved by 29% to $277 million, with gains seen in both major segments. Yet, the gap between operational improvements and net income underscores pressures that are showing up at the bottom line.
Fleet management continued as a top priority. Americas per-unit fleet costs per month, a key measure of how efficiently the company turns its vehicles into revenue, fell to $312 from $361, a 14% improvement compared to Q2 2024. International fleet cost per unit dropped by 13% compared to the prior year. Company-wide vehicle utilization — the percentage of time vehicles generate rental revenue — increased to 70.7%, up 0.5 percentage points from the prior-year period. Total rental days held flat overall, with modest growth in the Americas and a 4% decline in international markets. However, despite higher utilization, the Americas segment saw a 2% decrease in revenue per day, a sign of ongoing competitive pricing pressure. The international segment managed a 3% gain in revenue per day, helping offset weakness elsewhere.
Restructuring and other related charges spiked to $59 million, up from $14 million in Q2 2024. The company’s net income (GAAP) dropped substantially, falling to $4 million from $14 million in Q2 2024, further illustrating the effect of non-operating costs. Meanwhile, cash flow was negative, with adjusted free cash flow (non-GAAP) for the first six months of 2025 reported at negative $475 million—a result of ongoing investments in fleet, working capital, and restructuring-related outlays.
There were a number of strategic and new product updates. Avis announced a partnership with Waymo, a provider of autonomous ride-hailing services, in Dallas in July 2025, positioning itself as a key player in next-generation mobility operations. Another highlight was the launch of "Avis First," a premium concierge offering aimed at high-end travelers and promising enhanced customer convenience through features like frictionless curbside pickup and dedicated staff. These initiatives showcase the company’s focus on digital innovation and service differentiation, though their financial impact is still unclear.
On the balance sheet, liquidity was $950 million at quarter-end, and the company had an additional $1.7 billion available in fleet funding capacity. However, overall indebtedness remained high, with corporate debt at $6,077 million and stockholders’ equity negative at $2,745 million as of June 30, 2025. Management continues to highlight flexibility in fleet planning, supported by recent debt refinancing and ongoing control over capital deployment. Nevertheless, the company’s high leverage and negative equity position mean that financial flexibility will remain a key area to watch in future quarters.
Looking Forward: Guidance and Focus Areas
The company did not update its detailed financial guidance for the full year. Management reiterated its long-term target of achieving over $1 billion in annual Adjusted EBITDA (a non-GAAP measure), but expressed increased caution about mid-term free cash flow and profitability expectations. Instead, commentary pointed to ongoing focus on cost control, fleet optimization, and flexible adaptation to shifting demand patterns. It also highlighted normalization of per-unit fleet costs as a milestone for 2025, with a stated goal of reaching about $300 per vehicle per month by the start of Q4.
Looking ahead, investors should pay close attention to trends in rental demand, pricing strategies, and the actual impact of new technology initiatives like autonomous ride-hailing partnerships. The ongoing gap between operational improvements — such as better fleet costs and utilization — and actual profit conversion will remain an important theme. Other priorities include reducing leverage and ensuring the success of premium service offerings.
Revenue and net income presented using U.S. generally accepted accounting principles (GAAP) unless otherwise noted.
