Joe Ferraro, outgoing AVIS Budget Group CEO, defended Wednesday’s earnings call and gave the company a color to significantly accelerate its fleet rotation strategy, which led to the No. 1 The non-cash asset barriers and other related allegations in the fourth quarter, these expenses totaled almost $2.5 billion.
Combined with the company’s fourth-quarter and full-year results released Tuesday night, the Avis budget also announced Fararo will step down On June 30, former CFO and current Chief Transformation Officer Brian Choi inherited July 1.
Ferrero explained that the strong retail market for the pandemic 2023 and 2024 models forced the company to buy these vehicles at a higher price than historical norms. Initially, the strategy was to make these vehicles longer than usual to devalue the ABG in a flat part of the surplus value curve. “But when we saw the price of 25 vehicles return to normal levels, we made a new decision,” he said.
One option is to keep older vehicles but miss the opportunity to acquire new vehicles on a lower cost basis. Alternatively, the company could choose to refresh its fleet of America by actively exiting the 2023 and 2024 model and replace “them” with new cars purchased at a sustainable price, Ferraro explained. “We think accelerating our fleet rotation is the right strategy for our company. … none of us adopt this situation easily.”
The AVIS budget expects additional non-cash fees in the first quarter as part of its accelerated spin strategy, but “let me be clear that we do not expect further Fleet charges outside of the first quarter of 2025 .” Izzy Martins said. “We are confident that we will set up for 2025 as we take action and the impact that happens in the quarter.”
AVIS Budget Q4, 20024 Fiscal Year Indicators
ABG reported revenue of $2.71 billion in the fourth quarter, down 2% year-on-year. Full-year revenue also fell 2% to $11.79 billion. The company’s net loss was $2.84 billion for the quarter, $2.63 billion for the full year, while net income was $162 million for the fourth quarter, 2023 for the full year, and $1.91 billion for the full year.
The Americas sector reported fourth-quarter revenue of $2.12 billion, down 2% year-on-year. Full-year revenue fell 3% to $9.111 billion. The American leases for the quarter were flat, with nearly 31 million, up 1% for the full year to nearly 128.5 million. Every quarterly revenue fell 2% year-on-year to $68.57, while full-year RPD fell 3% to $70.94.
The average rent fleet in the Americas in the fourth quarter fell 4% year-on-year to about 497.7 million, but rose 1% this year to 510 million. Vehicle utilization in the Americas rose 2.4 percentage points to 67.4% in the quarter and fell to 0.2 percentage points to 68.7% in the full year.
International revenue in the fourth quarter was $593 million, down 1% year-on-year. Full-year revenue rose 1% to $2.68 billion. The international leasing day in the fourth quarter was nearly 11 million, down about 1% year-on-year. The international leasing day increased by 4% to nearly 47.3 million throughout the year. The segment’s quarterly RPD fell 2% to $54.15 and fell 3% to $56.65 for the full year.
The international average rent fleet in the fourth quarter fell 4% year-on-year to about 174.3 million, and remained the same for the whole year at 184.5 million. RPD in the international sector remained flat in quarterly RPD, compared with $54.32 in the fourth quarter in 2023. Over the entire year, RPD fell 3% to $67.10.
