Analysis CAR
Avis kept fewer cars busier. Why did adjusted profit fall?
Record fleet utilization came with fewer rental days. Higher costs per vehicle limited the savings from a smaller fleet, while the cash picture improved.
Avis Budget Group rented out a larger share of a smaller fleet in the third quarter. Higher costs per vehicle limited the savings, while rental days and total revenue fell.
Adjusted EBITDA fell 8% to $513 million. The result shows the limits of the fleet discipline Avis had already described in July, rather than a failure to keep its cars in use.
A busier fleet can still sell fewer rental days
Research by Ticker Byline shows that the average fleet shrank 5.3% from a year earlier, roughly twice the 2.6% decline in rental days. That lifted utilization to a third-quarter record of 74%, even as the company recorded fewer rental days.
| Measure | 2026 | 2025 |
|---|---|---|
| Average rental fleet, vehicles | 706,717 | 746,161 |
| Rental days, millions | 48.1 | 49.4 |
| Vehicle utilization | 74.0% | 72.0% |
| Monthly fleet cost per vehicle | $315 | $303 |
Revenue per rental day edged higher to $71.42 from $71.22. It did not offset the lower rental volume: total revenue fell $83 million to $3.44 billion.
The cost saving did not match the fleet reduction
Vehicle depreciation and lease charges fell just 1.5%, to $668 million from $678 million. A smaller fleet saved money, but the roughly 4% rise in monthly cost per vehicle limited the benefit. Management said fleet costs, measured at unchanged exchange rates, were within its expectations.
Those vehicle charges remain in Avis's adjusted EBITDA, as does interest tied to vehicle funding. The profit measure removes corporate interest, income taxes, nonvehicle depreciation and amortization, and selected other items. Lower selling and administrative costs helped, but adjusted profit still fell $46 million.
Fleet funding helped the cash picture
Nine-month adjusted free cash flow improved to $198 million from a $517 million outflow. Operating cash flow fell, but the cash needed for net vehicle investment fell much more, partly offset by lower vehicle-program borrowing.
Avis includes vehicle purchases, disposals and vehicle-backed financing in that cash measure. The improvement therefore reflects how it funded and resized the fleet as well as cash from operations. Our Avis Budget company profile tracks those flows, the October settlement receipt and the planned repayment of 2027 notes.