Avis Budget Group reported first-quarter revenue growth in its Americas segment for the first time in 10 quarters, "driven by strong [revenue per day] performance," CEO Brian Choi said on a Wednesday morning earnings call.
"That was a direct result of our decision to better align supply with demand, allowing us to be more selective in the business we accepted and improve pricing discipline," he continued. "We believe these changes do much to strengthen Avis."
The company during the quarter reduced its fleet size by "taking advantage of a stronger-than-expected first-quarter used car demand," Choi added.
Avis Budget Q1 Metrics
Avis Budget reported more than $2.5 billion in first-quarter revenue, a 4 percent increase year over year. The Americas segment was up 3 percent for the period to nearly $2 billion. International reported $568 million in revenue.
The company's first-quarter net loss was $234 million compared with a net loss of $504 million a year prior.
Avis Budget's total fleet decreased by 2 percent year over year during the quarter to nearly 619,700. The Americas fleet shrank by 1 percent to about 467,400 vehicles, while international declined by 6 percent to approximately 152,250 vehicles.
First-quarter total revenue per day was up 5 percent year over year to $64.74. In the Americas it was up 3 percent to $66.62, and for international it was up 13 percent to $59.01.
Q1 vehicle utilization was about 70 percent for each the Americas and international segments, "a first-quarter record for both segments in over 15 years," according to Avis Budget.
Stock Volatility
Choi also addressed Avis Budget's recent stock volatility, noting that its second-largest shareholder Pentwater Capital crossed the 10 percent ownership threshold on Feb. 20 and "became a Section 16 insider," he said, which requires disclosure of ownership changes. On that date, Pentwater disclosed it held an economic interest of 30 percent of the company. By March, that interest increased to 51 percent, Choi said.
During this time, ABG's stock price increased from $96.47 per share on Feb. 20 to $713.97 on April 21. After the market closed Tuesday, Pentwater disclosed the sale of 4.3 million shares for gross proceeds of $1.75 billion on April 22-23, Choi explained. "Given the quantum of shares sold in such a short span of time, our stock price experienced a significant decline," he said.
ABG closed at $182.01 per share on April 28.
"Avis has not bought or sold a share since 2024," Choi added. "Our largest shareholder, SRS, has not bought or sold a share since 2023. So, it seems the only insider active during this period of excess volatility was Pentwater Capital."
Choi added that "Pentwater has acknowledged that its sale of Avis stock, at least in part, was violative" of the Security and Exchange Commission's Section 16 short swing profit rules.
"Avis has requested Pentwater furnish it all relevant information concerning the trades, and Avis will aggressively pursue all rights on behalf of our stockholders," he said.
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