Avis Budget at least for the second and third quarters is prioritizing "longer-duration, higher-contribution transactions" over shorter rentals, executives noted during a Wednesday earnings call.
As such, the company will prefer rentals of at least a week to one-day or two-day rentals.
This decision is due to the company's move to further reduce its fleet by 5 percent after "forward bookings started to erode" in early May, ABG CEO Brian Choi said.
"We accelerated vehicle dispositions well beyond our original plan," Choi added. "With fleet as a scarce resource this quarter, we made the deliberate choice to optimize for revenue per transaction versus revenue per day. Put simply, we accepted fewer one-day rentals, which carry an RPD premium, in order to fulfill more weekly business."
The company expects fleet to remain tight into the third quarter, and will "continue prioritizing longer-duration, higher-value transactions over shorter rentals that may carry a higher RPD but create less attractive overall economics," Choi said.
Meanwhile, the company expanded its Avis First curbside concierge offering to "additional major airport locations," including Orlando, Washington Dulles, London Heathrow and Paris Charles de Gaulle. "We also broadened the vehicle portfolio with high-demand models, including select Mercedes and BMW vehicles," Choi said.
Avis Budget Q2 Metrics
Avis Budget reported second-quarter revenue of just under $3 billion, down about 1 percent year over year. Americas revenue was down nearly 2 percent to about $2.3 billion. International revenue increased slightly to $710 million from $707 million a year prior.
Second-quarter net income was $63 million compared with $4 million a year prior.
Americas second-quarter rental days were down 2 percent year over year to about 32.6 million with revenue per day up slightly to $70.20 from $70.03, its second consecutive quarterly growth. "We had not achieved consecutive quarterly RPD growth [in the Americas] in 16 quarters," ABG CFO Daniel Cunha said.
Americas average rental fleet was down to 489,200 after the 5 percent year-over-year reduction. Vehicle utilization increased 2.5 percentage points to 73.2 percent, "our highest second-quarter utilization level in company history," Cunha added.
International second-quarter rental days declined 3 percent year over year to about 11.3 million with revenue per day increasing 3 percent to $62.78. The rental fleet shrank by 3 percent year over year to about 175,450. Vehicle utilization increased 0.2 percentage points to 70.8 percent.
"We anticipated weakness in commercial segments as we cycled through the structural mix-shift actions executed in the second half of 2025," Cunha said. "However, the weakness was more pronounced than planned with strategic accounts declining 10 percent year over year."
In addition, geopolitical developments, particularly in the Middle East, pressured inbound travel to Europe with flight capacity down as much as 38 percent in April and May, Cunha said.
Overall, Avis Budget thinks the "RPD dynamic is going to be constructive in the third quarter, but we're planning for roughly flattish pricing in Q3," Choi said.
Pentwater Settlement
Pentwater Capital Management, Avis Budget's second-largest shareholder, has agreed to pay the mobility company a $650 million cash settlement to resolve a June 16 lawsuit ABG brought against the investment company seeking recovery of profits made while in violation of the Security and Exchange Commission's Section 16 short swing profit rules, the companies jointly announced July 21.
Pentwater had increased its economic interest in ABG from below 10 percent in February to 51 percent by March. ABG share value spiked from $96.47 on Feb. 20, the date Pentwater disclosed it held an economic interest in the company of 39 percent, to $713.97 on April 21. Pentwater proceeded to sell off 4.3 million shares on April 22-23 for gross proceeds of $1.75 billion, Choi explained during a first-quarter earnings call. After the sale, ABG closed at $182.01 per share on April 28.
"We believe the settlement represents a fair resolution of the dispute and a meaningful recovery for our shareholders," Choi said. "The settlement remains subject to final court approval, but we expect this matter to be resolved by year-end."
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