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Avis Budget's total rental days declined 2.6% year over year to 48.11 million. The average rental fleet decreased 5.3% to 706,717 vehicles as management continued reducing fleet capacity in response to weaker travel demand.
Total vehicle utilization improved 2 percentage points to 74%, marking a third-quarter record. Revenues per day, excluding currency effects, increased slightly to $71.54 from $71.22 in the prior-year period. Management attributed the volume weakness primarily to softer airline passenger traffic and reduced international inbound travel.
Avis Budget's Americas Revenues & Profit Decline
Americas revenues declined 2.6% year over year to $2.55 billion. Rental days fell 2.8% to 34.82 million, while the average fleet contracted 6.5% to 510,817 vehicles. Revenues per day, excluding currency effects, increased slightly to $73.38 from $73.19.
Americas adjusted EBITDA decreased 8.3% to $365 million. Vehicle utilization improved 2.8 percentage points to 74.1%, the highest third-quarter level in two decades. However, per-unit fleet costs increased 6.8% to $330 per month, reflecting weaker used-vehicle residual values and disposition timing.
CAR's International Operations Face Cost Pressures
International revenues declined 1.6% year over year to $884 million. Rental days decreased 2.2% to 13.29 million, while the average fleet shrank 2% to 195,900 vehicles. Revenues per day, excluding currency effects, increased 1% to $66.71.
International adjusted EBITDA fell 5.3% to $180 million. Vehicle utilization slipped to 73.7% from 73.9%. However, per-unit fleet costs, excluding currency effects, declined 2.1% to $279 per month as the company continued replacing older, higher-cost vehicles. Higher distribution commissions and customer acquisition costs weighed on profitability.
Avis Budget's Operating Costs Weigh on Margins
Total operating expenses increased 7.1% year over year to $1.62 billion. Selling, general and administrative expenses declined 5.7% to $398 million, while vehicle depreciation and lease charges decreased 1.5% to $668 million.
Vehicle interest expenses declined slightly year over year to $247 million from $248 million. Corporate interest expenses decreased to $108 million from $109 million. Adjusted EBITDA declined 8.2% to $513 million, with the adjusted EBITDA margin contracting to 14.9% from 15.9%. Management cited weaker operating leverage and expenses that did not adjust quickly enough to reduced demand.
CAR's Liquidity Position & Cash Flow Improve
Avis Budget ended September with $561 million in cash and cash equivalents compared with $519 million at 2025-end. Corporate debt stood at $6.01 billion, while debt under vehicle programs totaled $18.92 billion.
Available liquidity was $866 million, supplemented by $2.5 billion in fleet funding capacity. The adjusted free cash flow for the first nine months reached $198 million, improving $750 million year over year. The company subsequently received $650 million from the Pentwater settlement and announced plans to redeem $350 million in senior notes due in 2027.
Avis Budget Targets Q4 EBITDA Recovery
CAR expects 2026 adjusted EBITDA of $850 million, at the lower end of its previously announced guidance range. This indicates 14% year-over-year growth over 2025.
Management anticipates fourth-quarter adjusted EBITDA of $165 million compared with $5 million a year earlier. The improvement is expected to benefit from stronger pricing, improved fleet utilization, lower per-unit fleet costs and cost-reduction initiatives.
For the fourth quarter, per-unit fleet costs are projected between $310 and $320 per month. The full-year guidance remains unchanged at $315-$325. Management also expects low-single-digit consolidated revenue growth in the fourth quarter, supported by pricing improvements despite continued rental volume pressures.
Avis Budget carries a Zacks Rank #5 (Strong Sell) at present.
Verisk Analytics (VRSK - Free Report) reported third-quarter 2026 adjusted earnings of $1.96 per share, beating the Zacks Consensus Estimate of $1.92 by 2.1%. The figure increased 14% from the year-ago quarter.
Revenues of $809 million topped the consensus mark of $806.8 million by 0.3% and rose 5.3% year over year.
Corpay (CPAY - Free Report) posted strong third-quarter 2026 results, with earnings and revenues surpassing the Zacks Consensus Estimate.
CPAY registered adjusted earnings per share of $7.54, rising 32% year over year and beating the Zacks Consensus Estimate of $7.19 by 4.9%. Revenues increased 18% to $1.38 billion, surpassing the consensus mark of $1.36 billion by 1.7%.
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Avis Budget Stock Appreciates 10% Despite Earnings Miss in Q3
Key Takeaways
Avis Budget Group (CAR - Free Report) reported disappointing third-quarter 2026 results, with earnings missing the Zacks Consensus Estimate but revenues marginally beating expectations.
Despite the earnings miss, the stock has gained 10.2% since the earnings release on Nov. 3.
CAR's earnings of $5.15 per share missed the consensus estimate of $8.47 by 39.2%. Earnings declined 49.1% from $10.11 in the year-ago quarter.
Revenues fell 2.4% year over year to $3.44 billion but surpassed the consensus estimate of $3.43 billion by 0.2%.
Weaker rental demand, particularly in August, and unfavorable revenue mix pressured results despite improved fleet utilization.
Avis Budget Group, Inc. Price, Consensus and EPS Surprise
Avis Budget Group, Inc. price-consensus-eps-surprise-chart | Avis Budget Group, Inc. Quote
CAR's Fleet Efficiency Gains Offset Volume Weakness
Avis Budget's total rental days declined 2.6% year over year to 48.11 million. The average rental fleet decreased 5.3% to 706,717 vehicles as management continued reducing fleet capacity in response to weaker travel demand.
Total vehicle utilization improved 2 percentage points to 74%, marking a third-quarter record. Revenues per day, excluding currency effects, increased slightly to $71.54 from $71.22 in the prior-year period. Management attributed the volume weakness primarily to softer airline passenger traffic and reduced international inbound travel.
Avis Budget's Americas Revenues & Profit Decline
Americas revenues declined 2.6% year over year to $2.55 billion. Rental days fell 2.8% to 34.82 million, while the average fleet contracted 6.5% to 510,817 vehicles. Revenues per day, excluding currency effects, increased slightly to $73.38 from $73.19.
Americas adjusted EBITDA decreased 8.3% to $365 million. Vehicle utilization improved 2.8 percentage points to 74.1%, the highest third-quarter level in two decades. However, per-unit fleet costs increased 6.8% to $330 per month, reflecting weaker used-vehicle residual values and disposition timing.
CAR's International Operations Face Cost Pressures
International revenues declined 1.6% year over year to $884 million. Rental days decreased 2.2% to 13.29 million, while the average fleet shrank 2% to 195,900 vehicles. Revenues per day, excluding currency effects, increased 1% to $66.71.
International adjusted EBITDA fell 5.3% to $180 million. Vehicle utilization slipped to 73.7% from 73.9%. However, per-unit fleet costs, excluding currency effects, declined 2.1% to $279 per month as the company continued replacing older, higher-cost vehicles. Higher distribution commissions and customer acquisition costs weighed on profitability.
Avis Budget's Operating Costs Weigh on Margins
Total operating expenses increased 7.1% year over year to $1.62 billion. Selling, general and administrative expenses declined 5.7% to $398 million, while vehicle depreciation and lease charges decreased 1.5% to $668 million.
Vehicle interest expenses declined slightly year over year to $247 million from $248 million. Corporate interest expenses decreased to $108 million from $109 million. Adjusted EBITDA declined 8.2% to $513 million, with the adjusted EBITDA margin contracting to 14.9% from 15.9%. Management cited weaker operating leverage and expenses that did not adjust quickly enough to reduced demand.
CAR's Liquidity Position & Cash Flow Improve
Avis Budget ended September with $561 million in cash and cash equivalents compared with $519 million at 2025-end. Corporate debt stood at $6.01 billion, while debt under vehicle programs totaled $18.92 billion.
Available liquidity was $866 million, supplemented by $2.5 billion in fleet funding capacity. The adjusted free cash flow for the first nine months reached $198 million, improving $750 million year over year. The company subsequently received $650 million from the Pentwater settlement and announced plans to redeem $350 million in senior notes due in 2027.
Avis Budget Targets Q4 EBITDA Recovery
CAR expects 2026 adjusted EBITDA of $850 million, at the lower end of its previously announced guidance range. This indicates 14% year-over-year growth over 2025.
Management anticipates fourth-quarter adjusted EBITDA of $165 million compared with $5 million a year earlier. The improvement is expected to benefit from stronger pricing, improved fleet utilization, lower per-unit fleet costs and cost-reduction initiatives.
For the fourth quarter, per-unit fleet costs are projected between $310 and $320 per month. The full-year guidance remains unchanged at $315-$325. Management also expects low-single-digit consolidated revenue growth in the fourth quarter, supported by pricing improvements despite continued rental volume pressures.
Avis Budget carries a Zacks Rank #5 (Strong Sell) at present.
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Earnings Snapshot
Verisk Analytics (VRSK - Free Report) reported third-quarter 2026 adjusted earnings of $1.96 per share, beating the Zacks Consensus Estimate of $1.92 by 2.1%. The figure increased 14% from the year-ago quarter.
Revenues of $809 million topped the consensus mark of $806.8 million by 0.3% and rose 5.3% year over year.
Corpay (CPAY - Free Report) posted strong third-quarter 2026 results, with earnings and revenues surpassing the Zacks Consensus Estimate.
CPAY registered adjusted earnings per share of $7.54, rising 32% year over year and beating the Zacks Consensus Estimate of $7.19 by 4.9%. Revenues increased 18% to $1.38 billion, surpassing the consensus mark of $1.36 billion by 1.7%.