Avis Budget Group (CAR) Q2 FY26 earnings call: guidance and Q&A

Asked about further cost reductions given lower demand and if AV ownership decisions are accelerating.

Management stated cost discipline is foundational and contributed to profitability, while continuing investments in future growth. Regarding AVs, they are not accelerating ownership decisions, keeping both managing fleets on others' balance sheets and purchasing vehicles as options, as the ecosystem is still evolving.

“I don't think that anything is being accelerated right now in terms of having to make that decision. The environment in the ecosystem is still evolving currently.”

asked by Chris Woronka · answered by Brian Choi

Inquired if Q3 RPD would return to normal positive development given the rightsized fleet and market conditions, and about the impact of refinancing on interest expense.

Management expects Q3 fleet to remain down mid-single-digits, prioritizing longer duration rentals for profitability, leading to roughly flat RPD despite underlying constructive pricing. Refinancing costs for fixed-rate debt are expected to be 100-125 bps higher.

“So I think that the dynamics that you're seeing in Q3 will look like what they see in -- but overall, like I said, if we were not making these shifts in terms of length of rental mix, the overall environment is up 3% for us in terms of like-for-like segmentation.”

asked by John Healy · answered by Brian Choi

Asked about competitor actions regarding fleet levels, the broader competitive landscape, and the potential profit benefit from the new agreement with a technology vendor (implied Verra Mobility).

Management noted some competitors adopted similar fleet reduction approaches, leading to better industry supply-demand balance. For the technology vendor, they reached a constructive agreement for continuity and aligned economics, part of broader efforts to re-evaluate operations for efficiency and customer experience.

“With this new management, we're able to reach in terms of preserve those vehicles, allowing vendor to remain a provider of ours. And we think it's a pretty constructive outcome for ABG.”

asked by Dan Levy · answered by Daniel Cunha

Sought details on Avis's role and early learnings from the Waymo partnership in Dallas, and visibility on recall easing and DPU impact.

Avis manages vehicle maintenance, uptime, and real estate infrastructure for Waymo in Dallas, learning to manage complex operations safely and at scale. Recalls are expected to have slightly over half the Q2 impact in H2, with parts availability improving, and have slowed DPU improvement.

“Dallas is an important milestone because we're learning what it takes to manage an operation of this complexity safely, reliably at scale.”

asked by Rajat Gupta · answered by Brian Choi

Asked for specific examples of tech investments improving utilization, the outlook for the used vehicle market, and how Avis would respond to continued subdued demand and moderating used vehicle prices.

Tech investments include an overhaul of the tech stack for better fleet visibility and asset management, minimizing unrentable days. The used vehicle market is seasonally pulling back but seems normal. In a subdued demand/moderating used vehicle price scenario, Avis would continue to prioritize fleet health and conservative vehicle acquisition, leveraging technology to optimize asset management.

“I think the technology that we've put in place allows us to better understand what we want to hold today versus sell today, what we want to elongate the length on, what's worth it to put in additional supply chain dollars to lengthen the life of the vehicles.”

asked by Stephanie Moore · answered by Brian Choi