Avis Budget Group today reported results for its third quarter ended September 30, 2019.
The company announced revenues of $2.753 billion, an increase of 1% compared to the prior year’s third quarter, excluding a $44 million impact from currency exchange rate movements.
For the quarter, adjusted EBITDA was $471 million including a $9 million impact from currency exchange rate movements, a 1% decline from the previous year’s quarter. Adjusted net income was $223 million, a drop from $265 last year.
Avis reported a 2% increase in rental days, partially offset by a 1% decrease in revenue per day (RPD). Per-unit fleet costs improved by 6% year-over-year and utilization improved 20 basis points.
“Our adjusted EBITDA margin was more than 17% for the quarter. Our Americas segment had record adjusted EBITDA performance. Our operations achieved record Net Promoter Scores for the second quarter in a row, showing the impact of our efforts to improve our customer experience,” said Larry De Shon, Avis Budget Group president and CEO.
“In addition, we made further progress on our strategic partnerships with Uber, Lyft, and Via where we increased our ride-hail fleet by nearly 60% from prior quarter. We remain focused on improving our core rental car business, while driving innovation to continue our transformation into a mobility service provider.”
In the Americas, third quarter revenues increased 1% to a record $1.868 billion compared to the prior year, primarily due to a 3% increase in rental days, partially offset by a 2% decrease in RPD. Per-unit fleet costs improved by 9%, with utilization improving 30 basis points to 72.6%. As a result, adjusted EBITDA increased to a record $321 million.
Joe Ferraro, president, Americas commented, “Positive revenue growth in the quarter, along with strong ancillary performance and corporate account volume growth contributed to our success. Also, stable residual values and a record 70% of our vehicle dispositions through alternative channels drove fleet cost improvements. Altogether, this generated all-time record revenue and adjusted EBITDA.”
In the international segment, third quarter revenues decreased 1% compared to prior year, excluding a 4% negative impact from currency exchange rate movements, primarily due to a 1% decrease in rental days. RPD, excluding exchange rate effects, improved compared to prior year.
Per-unit fleet costs were up 1%, excluding exchange rate effects, and utilization was flat. As a result, Adjusted EBITDA was flat to the prior year’s quarter, excluding a $9 million negative impact from currency exchange rate movements, primarily due to mitigating cost reduction actions.
Avis Budget Group missed on revenue by $90 million, according to Wall Street estimates. The company was trading down 10% at market close, while Hertz was off over 3%.