Avis Budget Group, Inc. Q3 FY2025 earnings call

• Brian Choi highlighted revenue growth of $3.51 billion, the first time in 8 quarters revenue was higher than the previous year. Emphasized focus on customer experience, launching Avis First to move out of the commodity trap, with renters giving an average of 4.9 stars. • Daniel Cunha discussed segment performance, fleet recall impact on EBITDA, model year 2026 buy progress, liquidity with $1 billion available and $1.9 billion borrowing capacity, and capital allocation priorities of maintaining balance sheet, investing in fleet/technology, and returning capital to shareholders.

Revenue for the quarter was $3.51 billion, up from $3.48 billion the previous year, a $39 million increase. In the Americas, RPD (Revenue per Day) decreased 3% in Q3. In International, RPD grew 5% excluding exchange rate effects, driven by a mix shift towards higher-margin leisure and inbound business. The fleet recall impacted utilization and fleet costs, with an estimated full-year EBITDA impact of $90 million to $100 million.

• Anticipate modest improvement in Q4 Americas RPD. • Fleet recall impact expected to linger into early 2026. • International business to see increased focus and investment going forward. • Expect to share more on model year 2026 depreciation per unit in future calls.

• Fleet recalls affecting utilization and increasing fleet costs, with over 2/3 of vehicles awaiting parts. • Government shutdown impacting the government adjacent business. • Macroeconomic uncertainties and competitive market dynamics affecting RPD and business performance.

Q: John Healy asked about RPD decline in summer and pricing dynamics.

A: Brian Choi said 3% RPD decline is average, with stronger performance in July-August and softening in September, due to seasonal behavior, expecting modest improvement in Q4.

Q: John Healy asked about interest expense for next year.

A: David Calabria said vehicle interest has $3 billion maturities, half at lower rates and half at higher rates, corporate interest expected to be steady with some refinancing.

Q: Chris Woronka asked about recall impact on EBITDA and resolution.

A: Daniel Cunha said recall impact on EBITDA is $90 million to $100 million, with over 2/3 of vehicles awaiting parts, expecting to bleed down out-of-service vehicles but some into Q1.

Q: Chris Woronka asked about industry decommoditization.

A: Brian Choi said Avis will lead in customer experience, welcome others to follow if they improve product for consumers.

Q: Elizabeth Dove asked about RPD structural increase and competitive environment.

A: Brian Choi said RPD should be structurally higher due to cost inflation, focused on return on invested capital, competitive market but aiming for differentiated product to earn pricing power.

Q: Christopher Stathoulopoulos asked about demand and events.

A: Brian Choi said mixed demand environment, leisure healthy, government segment affected by shutdown, focused on discipline and agility, planning for World Cup and America's 250.

Q: Christopher Stathoulopoulos asked about customer experience plan.

A: Brian Choi said investing in customer experience as operating system, focusing on customer journey (predictability, speed, empowerment) and customer care (reengineering contact center with AI).

Q: Ryan Brinkman asked about fleet utilization and recall impact.

A: Daniel Cunha said operations team managed utilization despite recalls, fleet recall full-year impact $90M to $100M, parts starting to come in but still awaiting many.

Q: Dan Levy asked about international trends and DPU.

A: Brian Choi said international business shifting mix to higher RPD leisure, expecting continued focus on international, and DPU impacted by recalls, with model year 2025 fleet refresh driving DPU next year.