Avis Budget Group NASDAQ: CAR used its first-quarter 2026 earnings call to highlight early results from a fleet reduction and supply discipline strategy introduced last quarter, while also addressing unusual stock volatility tied to shareholder activity. Chief Executive Officer Brian Choi said the company’s operational focus “remains squarely on execution and long-term value creation,” and Chief Financial Officer Daniel Cunha said the quarter showed “several clear signs of progress,” including a return to positive pricing in the Americas.
Management addresses share volatility and Pentwater disclosure
Choi opened the call by discussing what he described as “recent volatility” in Avis Budget’s stock price. He said Pentwater Capital, identified as the company’s second-largest shareholder, crossed the 10% ownership threshold on February 20 and became a Section 16 insider. Choi said Pentwater disclosed an economic interest of 39% of the company through stock and cash-settled swaps on that date, and later disclosed the interest increased to 51% in March.
Choi said Avis believes the increase in ownership interest, combined with high short interest, “resulted in a short squeeze.” He added that after the market closed the prior day, Pentwater disclosed the sale of 4.3 million shares for gross proceeds of $1.75 billion on April 22 and April 23, which he said contributed to a sharp stock decline.
Choi emphasized that Avis “has not bought or sold a share since 2024,” and that its largest shareholder, SRS, “has not bought or sold a share since 2023.” He also said Pentwater acknowledged that its sale of Avis shares “at least in part, was violative of the SEC Section 16 short swing profit rules.” Choi said Avis requested relevant information on the trades and “will aggressively pursue all rights on behalf of our stockholders.”
Americas returns to revenue growth and positive pricing
In prepared remarks, Choi said the company’s fleet actions are “starting to show up” in results. Cunha reported that Americas revenue increased 2.9% year-over-year, which he said was the first increase in the segment in 10 quarters. He said rental days were essentially flat while revenue per day (RPD) rose 2.8%.
Cunha said this was “the first quarter of positive pricing in the Americas since the fourth quarter of 2022,” and described it as a “meaningful inflection point.” He added that RPD was modestly positive in January and exited the quarter up nearly 4% year-over-year. He also pointed to ancillary performance, saying ancillary revenue grew 1.9% year-over-year, and said leisure share of revenue increased by 1.1 percentage points in the quarter.
Management tied the pricing shift to fleet strategy. Cunha said TSA volumes rose 1.6% in the quarter while Avis reduced fleet by 0.6% to align supply with demand. Choi later described a philosophical shift: “We’re not there to take every last rental,” and said the company is “fleeting to account for that.”
Fleet actions, used vehicle market, and depreciation trends
Avis said it accelerated fleet reductions in response to used vehicle conditions. Choi said the company took advantage of stronger-than-expected first-quarter used car demand, noting the Manheim Index was tracking above prior years for that point in the seasonal curve. He said the company disposed of a record number of vehicles in the Americas because it did not expect residual values to hold.
Cunha said the company prioritized “speed over yield,” which he said helped accelerate normalization of depreciation. He reported that monthly depreciation in the Americas averaged about $380 for the quarter, “starting above $500 in January and improving into the mid-$300s by March.” He said the company expects depreciation to “decline meaningfully” in the second quarter.
Cunha also said Avis exited the quarter with “the healthiest fleet position we’ve had since the pandemic,” and that the fleet is “approximately 20% younger.” Choi added that utilization in the Americas was the highest the company has seen in more than 15 years for a first quarter, despite “continued recall-related constraints.”
International mix shift continues amid uneven demand
In International, Cunha said rental days declined 3.8% year-over-year, while RPD increased 3% on a constant-currency basis as the company continued shifting its revenue mix toward higher-return segments. He said the company is aligning staffing, real estate footprint, and go-to-market efforts to support that mix, which has created “temporary cost inefficiencies” that management views as transitional.
Cunha described international demand as “uneven and difficult to predict,” citing variability by region influenced by geopolitical developments and higher travel costs. He said Avis expects to benefit from changes in travel behavior, including more intra-regional travel in Europe where rental can be “a more attractive alternative.”
Liquidity, refinancing activity, and raised EBITDA outlook
On the balance sheet, Cunha said that as of March 31 the company had more than $900 million of available liquidity and about $2.9 billion of additional capacity across its ABS facilities. He reported a net corporate leverage ratio of 7.6x and said the company expects to reduce that to below 6x by year-end through earnings growth and debt repayment. He added that the company has “no corporate debt maturities until 2027.”
Cunha outlined several refinancing actions during the quarter:
A February renewal of the European securitization facility for approximately €2.4 billion, extending maturity by two years.
A March issuance of $668 million of ASOP term debt across 3- and 5-year tenors to refinance maturing obligations; Cunha said the deal was oversubscribed and priced on favorable terms.
An expected renewal of the $2.4 billion ASOP VFN facility, plus an additional $480 million of seasonal capacity through October 2026.
Operationally, the company said it exceeded its adjusted EBITDA plan by about $50 million in the first quarter, which Cunha attributed to improved pricing and disciplined fleet execution. Based on the start to the year, Avis raised its full-year adjusted EBITDA guidance to a range of $850 million to $1 billion.
During the Q&A, Choi said the company’s capital allocation focus is shifting toward debt repayment and that the longer-term leverage target remains “2 to 4 times.” He also said the company expects demand to build into the summer season, with rental days in the Americas “trending mid-single-digit growth with RPD holding,” while noting the Easter timing shift will affect second-quarter comparisons. Choi added that the company is seeing strong demand in “World Cup host cities” where both rental days and pricing are performing well.
Choi also provided updates on longer-term initiatives, saying the Avis First program is now in 36 locations, including nine international airports, and that the company is seeing “strong customer satisfaction metrics” and “encouraging adoption.” On Waymo, he said Avis remains on track for a Dallas launch in the third quarter and is nearing public rider availability, while indicating the benefits would be more noticeable “next year in 2027” as the program ramps and expands to additional cities.
About Avis Budget Group NASDAQ: CAR
Avis Budget Group, Inc operates as a leading global provider of vehicle rental and mobility solutions. Through its two core brands, Avis® and Budget®, the company offers a broad range of rental options including daily, weekly and monthly car rentals for leisure and business travelers. In addition to traditional airport and off-airport car rental services, Avis Budget Group delivers innovative mobility platforms such as car-sharing programs and connected fleet solutions designed to meet the evolving needs of corporate, government and individual customers.
The company's roots trace back to Avis Rent a Car, founded in 1946, and Budget Rent a Car, established in 1958.
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