Avis Budget Group Inc. (CAR) reported fourth‑quarter 2025 results that fell short of consensus estimates. Revenue for the quarter was $2.66 billion, a 4% decline year‑over‑year, while the company posted a net loss of $995 million and an adjusted EBITDA of only $5 million, compared with a $157 million guidance. The full‑year 2025 revenue was $11.65 billion, and the company recorded a GAAP earnings per share of $-21.25, a miss of more than $21 versus the consensus estimate of $-0.19.
The revenue shortfall was driven by a 4% decline in the Americas segment, where demand for rental vehicles weakened amid a 43‑day government shutdown and FAA/TSA disruptions. International revenue, however, grew 5% year‑over‑year, partially offsetting the Americas decline but not enough to lift overall revenue to consensus levels.
Adjusted EBITDA collapsed to $5 million because of a $518 million impairment charge related to the company’s electric‑vehicle fleet and higher vehicle depreciation costs. The impairment, combined with rising operating expenses, pushed the adjusted EBITDA margin to near zero, a sharp contraction from the $1 billion target and the $157 million guidance for the quarter.
The GAAP net loss and the $-21.25 EPS miss were largely driven by the same $518 million impairment and the $101 million depreciation expense, which together erased the company’s operating income. The loss also reflected higher insurance reserves and a one‑time charge for vehicle recalls that impacted the fleet’s value.
CEO Brian Choi acknowledged the miss, stating, “We fell significantly short of guidance… That’s unacceptable.” He added that the company is shifting its strategy to prioritize fleet utilization over growth, tightening cost discipline, and improving customer experience to restore profitability. The guidance for FY26 remains unchanged, with adjusted EBITDA projected between $800 million and $1 billion, signaling cautious optimism amid ongoing headwinds.
Investors expressed concern over the GAAP EPS miss and the $518 million EV impairment charge, underscoring the need for the company to accelerate its restructuring and cost‑control initiatives to regain investor confidence.
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