Avis Budget Group 2025 Q2 Earnings Misses Targets as Net Income Falls 66.7%

Avis Budget Group (CAR) reported its fiscal 2025 Q2 earnings on July 30th, 2025. The company faced disappointing results, falling short of analyst expectations. Revenue declined 0.3% year-over-year to $3.04 billion, missing Wall Street's forecast of $3.07 billion. Net income also dropped sharply, contributing to a negative investor reaction. Despite challenges, the company remains optimistic about its strategic initiatives, including the launch of Avis First and a partnership with Waymo. Avis Budget Group anticipates firming demand but acknowledges pricing challenges and external impacts on fleet management.

Revenue

Avis Budget Group's total revenue for 2025 Q2 was $3.04 billion, reflecting a slight decrease from the previous year. The Avis segment generated $1.72 billion, while Budget contributed $1.13 billion. The "Other" segment added $188 million, rounding out the overall revenue figures for the quarter.

Earnings/Net Income

Avis Budget Group's earnings per share fell dramatically by 75.6% to $0.10 in 2025 Q2 compared to $0.41 in 2024 Q2. Meanwhile, net income decreased by 66.7% to $5 million, indicating a challenging financial quarter for the company.

Post-Earnings Price Action Review

The investment strategy of buying Avis Budget Group stock following an earnings beat and holding for 30 days has shown impressive results. It delivered a strong return of 112.79%, significantly outperforming the benchmark return of 87.61%. This strategy demonstrated a capital appreciation with an excess return of 25.18% and achieved a compound annual growth rate (CAGR) of 16.41%. The approach also exhibited robust risk management, evidenced by a maximum drawdown of 0.00% and a Sharpe ratio of 0.24. These metrics underscore the strategy's effectiveness in balancing risk and reward, making it an attractive option for investors seeking both returns and stability.

CEO Commentary

Brian J. Choi, Chief Executive Officer, emphasized consistent financial execution and long-term growth through innovation. He highlighted the company’s launch of Avis First, a premium product aimed at enhancing customer experience. Choi expressed confidence in the company's strategic positioning despite challenges such as tariffs and recalls affecting fleet rotation.

Guidance

Avis Budget Group projects an EBITDA of $900 million to $1 billion for 2025. The CEO noted firm demand but persistent pricing challenges influenced by macroeconomic factors. The company aims for a normalized annual EBITDA of at least $1 billion, focusing on disciplined fleet purchases amidst ongoing challenges.

Additional News

Avis Budget Group announced the appointment of Daniel Cunha as Chief Financial Officer, effective July 1, 2025, aiming to strengthen its financial leadership amidst challenging results. The company also formed a multi-year strategic partnership with Waymo, a leading self-driving technology firm, to launch autonomous ride-hailing services in Dallas. Furthermore, Avis Budget Group initiated the expansion of Avis First, a premium rental service, to 50 additional locations, focusing on enhancing customer experience through concierge services and premium vehicles. These strategic moves reflect Avis Budget Group's commitment to innovation and growth despite recent financial hurdles.