CAR - Earnings call transcript Q3 2021 | Avis Budget Group, Inc.

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Operator

Greetings, and welcome to the Avis Budget Group Third Quarter 2021 Conference Call. [Operator Instructions].

As a reminder, this conference is being recorded. I would now like to turn the conference over to your host, David Calabria, Treasurer and SVP of Corporate Finance.

David Calabria

Good morning, everyone, and thank you for joining us.

me Choi, Ferraro, our with Officer; Chief call Brian and Chief the are our Joe Executive On Financial Officer.

of to any non-GAAP future forward-looking our press to to on or release, factors be no in prove I discussing forward-looking to the that, information. potential are and actual results GAAP begin, other we statements Such can uncertainties all as like identified to obligation and upon our forward-looking and guarantees are our not discuss and On and risks we of With to about we call and how Investor call, results the no would differ may the update which and or with inaccurate, our these reconciliations could remind risks, to assumptions, undertake Before be cause that define we everyone prediction earnings subject will to be measures. financial materially earnings statements forward-looking financial future we will make this our including certain forward-looking revise statements. We our performance. actual to website, assumptions the for periodic as available other filings of closest website. information SEC our uncertainties performance, which well release relied like I'd that section from statements is a Joe. comparable in refer Relations turn over measures. as Accordingly, Please should such measures

Joseph Ferraro

get reporting XXXX Avis EBITDA over and in for I the say Budget set XXXX, today. that time we our define by Good in a had thank those best second quarter delivered at I XXXX, On for $X call, of results to in billion last success history. how Day. our presented joining working the the adjusted that it revenue, David. been Investor for achieving the of towards quarter bar and us milestone everyone, morning, was new adjusted Today, surpassed first XX-year $X billion when margin since you, in Thank Group. our the historic We've third adjusted company's EBITDA and pleasure of we our at EBITDA you

acknowledge crisis have in in finally our is I tailwinds while the been promise after favor cathartic. bit deliver worst honestly ever to has Now single certain our company that quarter a a on faced

moment and handled So throughput collectively or their supply I for to to would chain that challenges a activity get doing We've if the we just to in as began, realized pandemic want a had here been through survive. our not peak to part Avis. When period to journey determine They of transform here. company we their wanted us take to way. a at employees let we all thank get

During the improved the us enable for to discipline we emerge structurally pandemic, efficiencies cost will a laid groundwork business. that and as operational

it it make we implement should to to work capable only to Now upon a results. time. improve over Today, way segment. efforts there's with years quarter before, approach here realized while results energized let's of do, a ourselves the from the have that seeing to efficiency. to quarter quarter that early achievements, demand while usual, full as just demonstrate our we we normalized than we're journey quarter beginning a what as clearly We've Avis. over. my team We the not go at And take processes this far company operate and to a in still We begun the Americas quarter necessary indeed systems third one stellar are has not show but one this a start is our after also different And Avis clear I I'll at environment, XX seen continuously are transformed of. make. celebrate I we just more at in But and that want that does

the that the you last strength month positive September U.S. demand versus showed quarter. As for in since first digits we second time down third pandemic, continued we That so XXXX, rental momentum this travel for recall, throughout the quarter, yet. in said quarter best in single demand the the are days with that in being

the with third second revenue day. fleets were in demand strong supply again quarter, the the industry tight case per quarter, in As and outpaced resulting in

However, second front: sequential the XXXX One, the of the was of in quarter two things X% this on XXXX. note quarter third versus to growth RPD in

lower RPD keep tailwinds significantly Rate growth first 'XX. compared to be same that to remarkable Americas previous XX%, to in third proprietary mentioned It's in enabled both on level used in to quarters high And values trend change. our EBITDA XXXX. residual of and levels. compared the Favorable But to state that story not able XX% X focused cars me while our we XXXX, $XXX robust the that down not discipline to down is of the is we and Throughout our relative X, pre-pandemic the pricing implementing the gone and stabilizing. and Americas are as the quickly In quarter a focus Utilization booking is consider those that rental introduction, Americas XX%. base improvement these quarter this testament quarter for in a resources environment and from margin Americas can today, second as margins. and impressive this winds nearly strong to $XXX with down on of But adjusted and be currently rate a rebound. yet performance was operate of last back same third that's increased so of if allow from on for revenue but the and one bottom our It's $XXX Americas, single in headwind fleet of XX% evident assisted the segments quarterly getting quarter low Thanksgiving our quarter system patterns from X% depending versus specific sequential to EBITDA clearly levels. were achieve teams to starting flat story guidance when incremental a quarter XXXX an but $X.X change as we rebound you fourth basis in benefits margin year-over-year. the labor from narrow 'XX the course the by cost increased now increased the contribution to see holiday it this are the seasons with pertains of in million will billion demand both while as the a and it will you September basis, the come down quarter, million, in highlight of XX% of now We're year, are clearly during quarter line. to is most demand these truly the fall you while a revenue this to while maintain as COVID appears same by to XXXX. to the We quarter improving in days appear the will digits, continuously quarter the marketplace has come. the to transmissions. It's increased historic a keep our I by around X-year speaking the best Rate continue cost balanced X being in elevated of single necessary roughly quarter XXXX numbers. call, rates the saw I fact our digits available outpacing days month-to-month. into for prior and days, Christmas to Americas of quarter in on clearly in Now appear can as results the commercial not down And the environments, in we seasonality representing rental to levels, Americas low by to a by through absolute saw On of challenging date. X in normal two, strong rental for by we're versus finish in return how helped tough that days recent adjusted utilization how a incremental business maximize fleet volume investing business and rental year XXXX. being parts to our period XXXX window, tell believe compare million.

tale to the appears enter over It season was that move fact strong, this cautiously of With about let's be regions the However, that, to segment. a allows International. we holiday how for two quarter our International XXXX. us optimistic

between the trends the APAC, the versus EMEA Zealand. the for figures provide the New rising specific Australia APAC, lockdowns out color in saw wanted was quarter strict virus transmissions break very in and which half not environments in third some year, two disparity demand improving due given in do we hit the regions. with of While I to to first macroeconomic

restrictions. to away up EMEA, advantage quarter. seen was As to region this in get of the a the team don't the has back similar nimble fleet a other in to Yet for APAC EBITDA They're result, the to rental of hand, want and loosening the is the deliver to cost our reaching what to the that take saw I quarter despite gone XXXX. see in on region in come here. inflection we management. in able but due levels Europe days pandemic green that we've the headwind, not in the have to adjusted Americas. control of close point positive stringent gearing started to full in height still demand this shoots already carried fight,

a resulted EBITDA latent context, the of in has gone basis, a improved from EMEA, of compared improved million team. high this very to high second being quarter. firm strengthening by quarter, EBITDA adjusted full just ease, the down on same trickle XXs cost over were in of restrictions For cost the the Americas $X materialize the down deployed improvement recent strategy to in international We benefit XXXX XXXX, in a International in just quarter. strengthening the XX%. compared big XXXX, in demand to X, million on in quarter EBITDA dramatically XXs, a But adjusted impact. $XX EBITDA gain, $XXX lower the negative was change. not third million the That's $XXX of to most margin in $XXX the nearly mitigate international adjusted the team $XXX on see will in results rental we International as of the On segment consumer total happens, that that percentage rental to the that able quarter ingrained to holding revenue discipline international capture in million and days. in of million of a When In million believe to adjusted demand representing revenue execute to days third basis, due When travel contribution the revenue.

Moving last to more We're on on segment. Americas fleet. quarter. We'll with focus consistent the

in Americas. look at average again size the Let's the for fleet sequential growth

an an second basis on a levels basis vehicles. period employed XX,XXX had quarter basis and game the increase the plan increase XX,XXX XXXX, vehicles the an that service there size we size. of XXX,XXX By the absolute kept vehicles. and percentage third at peak of help on basis. vehicles travel quarter same had average OEM the average period percentage to XX% a that our from quarter we over We in XXXX third demands. demand. absolute of of in second strengthening the the fleet the 'XX, of the comparison, second quarter. on we and increase in size We We increase fleet 'XX, second quarter issues During a worked supply chain sequential quarter, In had with a a knew X% average fleet we a optimum XXX,XXX fleet partners an in did was most on consumer reflects through

are everything satisfaction but like not take to our investing our high quarter of customer with fleet. As being maximize Last Unfortunately, XXXX. many in buys. quarter supply In OEM address with our I and that the the did higher chain, year fleet we our us with decades reconditioning and easy, mentioned through with this of I through service minute continue stated allow to partners a partners to the short, global with second XXXX score It post optimizing agents, maintenance. use vehicles XXXX we will of negotiations proactive during model of OEMs are by relationships and XXXX their late OEM chain quickly of iterate would given our the working the are still keep developed was utilization supply mutually shortages choke quarter, The teams into third to also working to power in we've I them efforts Americas planning, preventive than chip and the able glow on over and work throughout section, solutions. we delivery. points our our actually quarter. the a we

We key partners buy of OEM disciplined are while a our continuing consumer strategy to fleet relationship relative our with growing demand. maintaining

I Next, the continued technology customer to discuss would improvements experience. our like with and

We land, continue while expand our for on directly their and our our our utilize Express automated been award-winning unique Avis a Preferred phone, on superior deliver have Exit they a from the to cars our via their including then to we pioneer select technology, Avis by app years use contactless to Avis upon experiences, and customers connected experience. completely of offering, our and QuickPass car brands. arrival to can through exit across mobility Avis when vehicles choice QR proceed for a a even plane of sitting code Enabled

return, more digital capabilities their completely from can to Budget [indiscernible] seen an overwhelmingly of on for technology expedited importantly, out their by efficiencies and our rental. technologies, advantage while This Avis customers ability the safely take our customers of feedback time on airports and upon connected industry-leading positive enabled using their all customers by and QuickPass. end customers has of get of added websites, can been transaction our customer we've completion year. puts Additionally, our counters rental their in quickly car These cost close these themselves, with major automated check-in reducing control rental. And All Avis our our also will and the road. the vehicle at

options. currently we our experience those we surprised differentiated traveling provide, vehicles many not are over are choosing of the mobility Given that other

has to this pandemic. safety the then, established caused today. by Avis full our around disruptions customers close Worry-Free we Avis safety are employees of our COVID-XX. Pledge the Promise, commitment been with I'd of Finally, latest and since effect still views to Avis like industry the beginning on around our and The Budget in focused Safety

encouraged recovering the effects industry are trends. this While is from the travel still of pandemic, recent by we

November strong into As I encouraged we allow the to by from said Europe the quarter vaccinated end normal to towards enter start beginning fourth We're decisions recent before, seasonality demand December. in of seeing U.S., the particularly are the forward-looking of travelers November looking with and X. also the

are COVID that us. Although clearly optimistic the behind cautiously still remains is a headwind, we worst

old find unforeseen this side taken something I global adapt But Clearly, our to in which there factors order to had help macroeconomic in come up billion now importantly, EBITDA wrap guidance, a EBITDA taking quickly, one the more by of We that mindset back. just adjusted team me problems had flip years we in away that new here. get step most Let but generated in adjusted verbalize also every of threshold. first $X.X a overcome. certain broken have And the to want not EBITDA annual together barrier, billion to adjusted this. facilitate XXXX, months. gone to on $X annual XX never the by shared $X of billion X things, organization, that we're and many we as the are solutions over challenges Avis It's that's cross to is, going we've back. member to

be with pandemic behind urgency We We ourselves past required work when over the us. leaner will even purpose months efficient and challenge continue that and more is a to this to XX was organization.

and of exciting achieve. and be every foundation It's higher favorable to And setting able mindset positive Avis time and this capitalize our We're We forward a will on liquidity energized quarters transformed within here. create to this to progress, to I'll be the mitigate challenging I over target demonstrating as Brian to and advantage factor turn by to to that, control full Group. call discuss what unified to macroeconomic new goals outlook. team ones. taking With a will look an environments our manage momentum Budget this

Brian Choi

Thank adjusted focus will you, on GAAP morning, both numbers discuss by presentation. My comments capital liquidity I from our near-term and results, our about allocation. earnings our everyone. good will like Joe, call which press our are I'd in now outlook. release and reconciled today to off start and talking

Currently, million $XXX X.XX% of we of That to our undervalued our substantially $XXX million retire considering the XXXX million where substantially outstanding company. our quarter when shares and was cash Despite growth adjusted LTM On EBITDA. to on the than share to a equity period regards stated million senior capital our that Xx our with our overall in Xx, Avis net took average we we just I important of With advantage With outstanding This last that Budget third reduction that call, an regards benefit hand. to $XXX all below stock our of back count to deployed our delevered investors, we've address stakeholders allocation. a our vehicle With our a cash at equity our and believe invested we took historically. lower to notes and investors, is was XX.X given $XX. company, the programs. price includes on is regards into XX% alone. due the retire debt in the we've to this debt Group it adjusted investors, to X the quarter in EBITDA this, obviously, opportunity debt targeted investors represented

pandemic. the As you during to peak our our in bolster equity we from order fleet of released the sheet recall, balance

of over I our quarter, inflow is cash of 'XX. the XQ vehicle $X.X to available programs, opinion, our past That proactive nearly going quarter flat and most I've forward. we that of by cash for our roughly programs September and taken relatively period decade. allocation of is have the ending said strongest a million areas to over And combined were of And the deploy programs sheet closely contribution capital team outlined it's with million, higher worth it. it of this flow. position XQ in previously cash again. average few net billion. my This 'XX reinvest replenish we on confidence into vehicle balance structure proceeds treasury combined reinvestment been Avis The us capital following position me our throughout balance how gives $XXX the was and best saying considering robust equivalents this this free cash outflow in the as than cash we trajectory, privileged used fleet across into and the in across the ever responsibly our in but measures total cash I've the with a XXXX. well XX, quarters yet, earnings beginning recent strength, with holding $XXX leave However, seen vehicle last our cash call, our held

will to to capital value creation. maximize allocation benefit forward Our going stakeholders all strategy continue

liquidity financings. move on and Let's to

revolving of million I XX, we mentioned September our $X.X equivalents $XXX in a and As $XXX had availability available on and comprised of credit cash facility. of million billion cash in previously liquidity

billion XXXX relief and and available date of Additionally, July, ABS capacity we of our cash we period. renewed eliminated our in our a credit In maturity had with facility borrowing facilities. $X.X

to no debt of XXXX debt with corporate our ABS maturities debt corporate meaningful refinance need Our term and this no any year. laddered well is until

as secured covenant the in of on of around compliance significant with of end world September. are facilities all our the headroom tests our We maintenance with financing

new will authorization we to announced that to billion opportunistically share $X value be this used shareholders. morning, repurchase Lastly, a return of

we our not with Moving on quarters, prior recent on outlook outlook. did Consistent press offer release. to formal the

in RPD want currently RPD do is will strong. seeing the obviously discipline higher an quarter as In tight. company, some quarter we quarter. normal However, In the Joe the year-over-year fleets fourth to trends but we're And the XXXX, as expecting be of provide industry as thoughts I be seeing shown International, overall on in APAC. basis to in we're Europe continue after strengthening We're an quarter. the in on what seasonality, will to demand and quarter third mentioned, fourth lower demonstrate than demand booking stabilization absolute holiday so Americas, looking cost the continue we've

expect full for Given the currently these year deliver billion we XXXX. EBITDA trends, to $X over in

to and color Now our going our we near-term around of provide business. state will forward, continue the views

of after So giving we've a of us. made the the even should formal as we as stewards entrusted every this management long-term team of the goal behind forecasts. is and compromise what's I make to franchise decision be decision the been be We've forgo annual pandemic a in guidance sake want to shareholder value. maximizing are for where best the to we good with for on business never position compelled making near-term

the plans Of to but ask changes. That and course, give investors Joe's comments agile earlier. hope we our comfort build the environment I in us to make our trust flexibility business as take annually, said, I you decisions being

we plan While longer an With much have new Avis, no chapter for do, annual is where in EBITDA it questions. let's billion that, open is acceptable. more up $X to at below a this

Operator

Instructions]. [Operator

Our first America. with is question Aileen Bank Smith of from

Aileen Smith

of wanted XXX,XXX similar increased increase strong was this from automakers fleet to in vehicles. your with your sales see in the have the fleet I I in a a you relationship clearly prioritizing referenced Americas size size to on fleet to follow-up sales. XXX,XXX I quarter, was that primarily second last one But to want specifically, that I our this are new to to confirm that really quarter. retail dialogue And it ask as based encouraging attributable quarter, one first still posed a broader And automakers. results, a to

think well fleet year do How your or over that you year? segments next your about prioritize increase certain the fact automakers pressures, to not production into into and may about may persisting So ability as we size think next others.

Joseph Ferraro

second. seen, in coming quarter, peak substantially second is we greater mean talking based This we fleet we out Yes. the much you we saw grow our Yes, part of with on as quarter. consumer were And the and prepared get Joe. were the for than the early we demand to know. really were I size of in that, had had partners, what third period probably we OEM able our to

were they on with for that all our used to we've but Yes, relationships as in in the And And we We most in scenes, have that's of have OEMs have to all buy And the we them, XX cars of the production. certainly new. of quarter with. so frankly, I question amount got new. the part, do us cars. the or previous help a part got answer quarters, -- majority that behind called strategy, cars the we we predominant our of overall was fleet said

go parts we As past whether that for on progress great of the respect as matter they fact, semiconductors better and model it in I you made in heavy on new a XXXX the partnership, challenges as year. suspect part cars quarter. during we And a the COVID-related as I thought last past in going on fluid a quite mentioned, billion about at is or might I or to in able it decades I be to we have have that But were experience buy that the historic partners. demand we said, year dealership low. getting this with our OEM on situation, it's think be said, our quarter. thought well. environment very But with a being to a supply them for I of vehicle previously, offer this done I worth of retail this spent that's flexibility lot or during frankly, $X inventories, new quarter. we XXXX cars And third say chain the

but there process on totally not quite with yet, very frankly, And getting car our close. pleased I'm buy far. So new our so

Operator

with Our is from next question Jefferies. Hamzah Mazari

Unidentified Analyst

those Ryan growth technology talk incremental that in Hamzah. inning or you're benefits margin on touched And you bit, what for in seeing on It's guess, about little initiatives? maybe could journey. actually I are a I you from specifically, but know filling you

Joseph Ferraro

is of This the We lot technology a developing Joe. past platform. years Yes. over number spent time solution of our

gate. mentioned you If mean choice it customer remarks the on think it's manpower phone cell our in And on systems. that, customers while leap have strongly. our I car, their mean less and when ready then what a Customer which exit an lot reduces very prepared one ready, we transaction. come Avis contactless I on I car and get the to labor-intensive, seamlessly overall a seamless us that's provides it about pretty certainly QuickPass, choose do or actually our even saline automatic can it put about transaction, reserves make you versus the our an a evaluated airplane, a

on our which called to issues. we this, distributes about And think process When technology evenly mileage a fleet. mileage we Thus changes manpower So has opportunity customer helped the and cause important. see from will accretion based From of that optimization, understand those a in at how and an came and it kind thousands type rate you fleet standpoint, have automatically with the proprietary technology. day-to-day mileage manage that. use us have in got similar that service And standpoint, to our processes thousands I better demand mileage and engaged as us the period of which demand, fleet to future especially we're get we in efficiency done with, and input us pricing outliers like system, us the of out fleet. of reducing becomes very develop supply around look very, tremendously many which enables cost we of our

mentioned that So another car. was I connected aspect.

are mileage has I car two-pronged that gas think they course, connected get accurate. a benefit. customers of One, and service,

is billing the correct. So

of the bills, us So accuracy questioning center to there's no about overall calls helps manpower our or call issues. reduce which

can ability ever as available dependent day-to-day on fleet gas much recover which of on it to consumer, a knowledge, much efforts. they and with direct thing as car that inventory is our selling us gallon, basis us integrated a find And a quicker in better our to X/XX values service. ability gives which on be that we we that But to better going than on helps at they not And robust when helps ERS residual a get and we to an if would the unaccounted cars last our standpoint, rate to say on We cars have may readings I of recovery majority had utilization an efficiency a do gas situation is the lastly, that and the stores. -- the are utilizes more a highly in our platform tirelessly us inventories go with enables a past in at fashion. helps We today, to for. sell worked our getting be in especially the future cars, the

the from So those technology time. we've are at over things some and basis, of we'll a developing more looked be that

Unidentified Analyst

for how why And vehicle through we strategy could moved Great. fleet? my why thinking And then just earlier? -- walk if or you you're could that's And for about electric a you your follow-up, us focus? your there haven't

Brian Choi

here. and Yes, it's sure. add Ryan, can start Joe color. I'll Brian

absorbing like haven't time and over with characterize to at partners tackle that lot vehicles is of bold attention Like the mobility OEM the Avis for this. think draws moved industry, a we've our that good pace at overall of be made hurdles to So a rental by absorb spent scale. line we what both past think eventually I pushes but the is logistical also to ecosystem scale. months competitors our needs optimize announcement partners I XX headed. is product our infrastructure move it's one that these I entire our electrification to industry. fair and said, don't car of realized where just It vehicles not we the on about, vehicles vehicles and at electric to electric the And to for done

on it. are But So strategy this we definitely reason like on to anything from on moving heard the this you we'd before forward like Joe, front. haven't publicly of want announcing add? competitive is you execute reasons, because to our us

Joseph Ferraro

that early also our have see of with next been that. all with we And fleet want vehicles helps parts the one maybe or we said vehicles, the cycle insulates our by we've We've past, Yes. a vast It of us going had years. gas we are and hybrids part diversity a publicly challenges their in and reduce our would on demand of in large looking having say because things Look, with I recall. OEM in greenhouse XX% build over will and forward. a we've electric our and vehicles effects them would consumer in submissions electric in of in even is electric the fleet especially from us is over more to XX that I to partners, fleet. mean that conversations ESG

involved So you'll in us getting more more see as that and on. time goes

XXXX. so number you of go If now in XX% north cars how And X% look a our we in about of us manufacturers, to to U.S. maybe XX% that of manufacturer talking grounded. in all just that generally are goes or all this role I electric, we fleet, will that. And in about time as play evaluate XXXX are our OEM say we'll the thereabouts in about kind and big interested are on. would partners very

we buy of and kind cars remain of gas principles how the electric the same. think I

ability The In as points first words, is, across is our to consumer demand? provide enough we and price segments had other want. the cars on these at rent that all our demand to there get they

they can hold asset What lastly, much has unit buy? segments What them? So we available -- it opportunity look electric where what more right? in the develops will How are vehicles and And all things to do they and us are we see much scenarios active at rent utilization? going our business. as per you economics, fall electric they gas the And to sales? in you forward the those that, be nature? over Are you'll vehicles into throughout is think I maintenance cost situation cost categories. And the for that what's there of time.

Operator

Billy Kovanis next Morgan question Our with is Stanley. from

Billy Kovanis

get take saw in Team, an increased I management back buying going fleet still looking to your on the on $X I the in exceptional result CapEx repurchase of billion. program capital out remains prudent build the here reinvest quarter. get to by plans business And strategy position the there partake terms in third use better update put I capital, in technology appreciation stock whether you you forward. wanted Are to your most and your was your of management? in to in a the other share stock? given

Brian Choi

one. Billy, I'll take this

as remarks, take So our That's capital to allocation. our to looking want equity we in said approach we investors, company. our prepared balanced a our debt at and investors our

things efficient XX-Q we on cover absolutely and as filed. gets to of priority. of investing need processes is a that you'll in I the the of more terms that think something operate But our and in on company, new that's our high see when some technology mentioned you systems the

XX.X Our of October shares XX, outstanding was as million.

XX% versus One, months. really This Our shareholders. yesterday mention as that been given close Two of created billion I in our to in represents of retired value X we the was the that were the of on quarter our shares front. second the of things VWAP share float the so want over We've also as outstanding for we've And yesterday. busy shares XX.X front. the $X retired. million, of market price past on

So even flow about But use like a set opportunity we This about our see opening. be will and cash we given represent today. investment Retiring this to the it not prices, of shows quantum buyback an aggressively And shares future a going be you formulaic we're forget demonstrated shares pace great free at of is two, quarter we've shy trajectory. when nimble compelling see buying mentioned, be had $X that's best may billion then to if regards we'll not use. We'll will going shareholder long-term And year we choose It Billy, can buyback a quarter, or authorization capital maximize a the entire opportunistic and if be We share a we those to forward. have the we deplete in said, management with prioritize I shares be nimble. like could decision. two go We value. other alternatives where a of and buyback. deploy believe We're I fit. areas acting it we think this. our today's to as not kind

Operator

is Johnson Brian from next Our with Barclays. question

Brian Johnson

Yes.

Just to modeled of 'XX. about year talk want kind

the going are here the think acquiring is model those 'XX about pay used schedules car it car units? if they with car turn market tight. I to and give upon just fleet, because you're of year to touched companies the they some going because go you're up them the next may investors put on will Can And you a to want of sell for depreciation then I when to How to what's where fear fleet And that rental on push those could wrap not up. still just costs of capital out supplies are. used of be put the kind us to need but them -- going table, in have normalize. as You've sense think you the it there, markets fall,

and per comment you just to could if So maybe flow depreciation it's model likely how of on year month. through per in 'XX vehicle terms

Brian Choi

at cars what look buy price Yes, we his and way On sure. thoughts. not hold the how car which pay the think by we we car. car, at the will we at years. higher model can we're absolutely But for of price we eventually minus what which the start basis, you're I view I'll we divided way XXXX the kind these long Joe is we the in will Brian, like describing XXXX saying. an price sell or depreciation. the now right What that the that that's add Listen, is that it absolute paid than be

play look about this So think price optimize going transaction about is make have what not able relative is the the eventually there of we clearing price terms price these the being in to be And actually the what what at here. price with. variables different at, we fleet, we're our cushion we over car decisions customer competing to at like to of and retail that's that but are how when where because buying we're that just where sits is. we And

you'll depthing So closely. not on out our we be, as we that and the could in depreciation and specific our our that but OEM XX-Q monitor partner think rigorous of very our economics same a gets it each rate. make that's the And like it's mid-XXXs with at something in still that unit guidance we as and we model what We're fashion build getting we're we partners, in We're always have. -- mind cars see building into fleets constantly when around filed. our

in sale $XXX from quarter. that's third think of we vehicles this the million had I a quarter gain $XXX-ish and the gain of of versus million

roughly and month, that realize you per out, XXX we fleet these if vehicles depthing sold. gains only still are when So at back we're our

our like the of sensitive it understand depreciation. business we -- how and economics our where like forward, to Going how how unit work is

of still fleet comes rigorous make model kind kind So it same we're purchases the build when for using up 'XX. to our of

Joseph Ferraro

this to to just a rental there's Yes, sports we years, I'd selling lot about just certainly I out means that -- our evaluate process own of the add the enough say to comments, and that have rates cars what data years that there's number That enhanced the with cars. will established near go to Brian's -- car we see months to come. think going and be the will basis. be less we to outside XXXX our of deal term. data and industry in go-forward a goes pretty back depreciation depreciation be supply that industry, a In year demand going forward, a and XXXX, model on not entails

call cars change. talked is to over And that how about at be year granted, sell last will be processes fleet we that consumers, what important. we that channel increasingly the time, in this, set to to selling depreciation your my our Now will alternative confident our would costs. pandemic would can things you And before enhance really rates. about which able comments maybe is we're And how allow look us we directly going to

Brian Johnson

question. follow-on my is Which

channels power kind you more lean think you with did So competitor [indiscernible] what there of there that remarketing Are a as app. next fall, sales can about online well-known on? a are certainly

evolve Just remarketing what next is think how to -- over you do the going year?

Joseph Ferraro

costs you to the area whether sell products channels, take be matter. that for unit. while Because $X,XXX enjoy if you standard I you various As a different to, consumers, will continue benefits direct-to-dealer auction cars the have ownership them you we average, associated at $X,XXX it process, back-end financing, sell it selling on somewhere -- per ourselves anything of which, a that you other to that to customer, control just less only has a can sending or kind -- yourselves, have any of of of enjoy with back-end you in of not fees if alluded auction But don't sell the benefit, fees, that be could or is to but do like then you we you also -- or the right?

Operator

is question with Ryan Brinkman next from JPMorgan. Our

Ryan Brinkman

prior transaction certain fourth by How of about impact insight inbound U.S. the days either able revenue the day pandemic? these the business of historically curious your thinking traditional to relative versus into bookings? your travel a from the you Asia, to domestic to days provide more system was quarter into for countries? booking overseas per important And U.S. potential the are might from example, I'm you on bookings removal or restrictions or are in had the what the travelers from Europe? percentage with historically international Or how this quantify pricing to transaction differed as how

Joseph Ferraro

to Since increase the coming -- sure. in do the seen U.S. an we've announcement, here sorry, our booking in patterns for those international in Yes, definitely business businesses international countries,

a levels. XXXX fact, booking of are above matter patterns As

thing we or their during from is time reported say that see So there a Europe this so more would the APAC. that ago the week I airlines same than demand. it's

and As Brian Far have Zealand said in been East. said coming and and I there opening remarks, restrictions in New his Australia from earlier, in as especially

especially we've of our inbound And around on what we holidays. the prevalent frankly, Canada, Europe what from is consider and So business. in majority think the coming I seen

up November it know, As X. opens you

enhances business, few thoughts ancillaries, buy inbound quite those a you but the to So we'll booking people further you're who because a going day. than a to see and they they the a our it, around keep revenue immediate give of domestically, of have curve come just which little they longer elsewhere, And per not period some from that. car an bit time, see for in

that's is but think we certainly it that it business answer So have? of we Is book gen the biggest to will that more no, it's accretive. be a value-add. something The

Brian Choi

our Yes, add think of highest don't on we customer inbound segments perspective, But margin about customers. if business. Ryan, margin is and to of love international you just at kind going from our that different comment it all the to Avis, we, that that, a be

Ryan Brinkman

perhaps question eventual then how And recovery just you're so your get weekends margin higher you're helpful. results than which either leisure lower I is thinking business layered seeing the my Very the what the and is last on that? going carry thinking that of business in about maybe and right -- less? accounts mix to I just between travel terms week relative forward? track improves How in the in, that more tends the of impacting because are that back if pandemic might big a imagine are as fleets mix think probably about now typical or fairly the leisure acknowledged typically start curious purchase profitable. pandemic. might contribution the But volume business widely tight because you and if -- stronger they -- has it to on discounts prior changed since just to be it's thinking get because during how utilization, your bookings as bookings I'm

Joseph Ferraro

commentary. your much on Yes. of pretty Well, I you're spot some think in

commercial -- we the that which mentioned, What curve that back. course commercial our seen business week. see the seen cars that is we keeping during to helps, XXXX a Is have answer We have from as sequential to it you our utilization our no. back that longer, levels; segment you growth is that the in coming of

keeping the So amount week. of cars about out XXXX even in customer which help certain time, increase we're average, they're a seeing commercial in of percent kept the a the the does amount utilization XX-or-so across on time cars,

in weekend, off is used a would if So right? then be It's is slow a the Saturday. peak, hard -- it's we car which much and to way Monday, period peak a get used the you Tuesday. that it utilization on Wednesday start have peak than What over this you a the love get business very a on double just profitable you maintain the to very car

that, some and the is we've there's -- got sequential So in some growth have quicker. we've business, that to per our seen day a those mid-market factor. seen that rate of seem you higher will come a And seen small with tell we've they I growth. and also little

to as offices start into fully accept and going ability go I their back moving travel ease commercial actually to there's someone's and locations. and So expect listen, someone the their see back to to restrictions that people them business

that it We as I tremendously. we it to seen But in haven't said XXXX. degree scale had the helps before,

Operator

Our with Chris is from Bank. next Deutsche Woronka question

Chris Woronka

some pricing. on of but to commercial where what or of of Wanted for of not the attempting quarter. higher XXXX, expectations pricing we accounts, have Congratulations level setting with the with to negotiate kind on specifically, about your you're ask negotiations them kind given with you are kind spot

Joseph Ferraro

going get pre-pandemic not our we amongst settle not changed this, the Chris, will -- -- I'm contracts. and we to rate I sorry, say post-pandemic. that or high have really how has and the I'm into accounts, retention corporate our negotiate a

have allows believe on might our have of scale. think for business if that to [indiscernible] we XX% in to quoted had that air It the transactions us especially XX% that. hold cars aspects didn't somewhere all adds segment. important, are commercial I we we we midweek and more or of It

and now So forward. And I rising business. think said, rates I the like mid that we to small see and continue mix going see we'll right being

Brian Choi

thing to just Chris. And that, to add one

car wants our customer that been we've of differentiates and seeing corporate their and conversations maintained all a employees is you we're And of obviously. As a of app your flexibility at now large around, have the availability? because idea in a hey, talking put forefront. And to fleet and the right a well noticed provides commercial is not that's about you safe, of whole actually kind as questions we've of having People think And it's rate. our company -- condition are what more kind with lot our what that's like I this had about accounts, all the we're large fleet? now experience, what do accounts. Everyone people is seamless

think rate. discussions of overall our just fleet It's And that. industry. very about feel I relative a health not I around the to lot the So about think we of good

Chris Woronka

you Okay. the mostly the in Very the the certain of Brian, might cars Is referring a think QX that's mentioned with depreciation of I down I you follow-up mixed rate to XXX you Americas. think year life you're had get extended kind a I'm for helpful. zeros depreciation, of per function in, -- sense for you kind from on have of some think But the trying for And just the in you're obviously the didn't what QX probably -- stuff forward had going a you what to run that accumulate XXX, the to then, last step bringing depreciation. And mileage. I they number month. there.

forward? going pace might that how for sense a get to trying Just

Brian Choi

not what actually quarter like new at, the The at. what straight-lining in is XXX depreciation bringing XXX we're sure. is a our rate, third Yes, cars we're cars blend the of

have on you then and throughout. that hold way bought the like you depreciation where term what assumption how long straight-line assumption make in So you on assumption you cars the it you an an sell you the a cars -- at, is know at make make works you the And cars. you an

the quarter. above in we gain As see for less, loss. is, in straight realize sell event lining, car the net whatever $XXX that book vehicles depthing that of million-ish that you cars, or a gain it the you you you is the were at value this sell from Q What you'll had

out, is number. Is helpful? depthing cars If you back still straight-lining we're that what that the XXX our at

Chris Woronka

what kind was I going probably that's a trying was fleet roll pre-COVID, off next in I also the next of have guess in to the today percentage to year. -- Yes. really get Yes. you That's certainly sense for helpful. fleet the of

Brian Choi

at. giving on model Yes. just of I kind color getting We're a appreciate year basis. not where you're

Operator

to the of call would session. the any Ladies Ferraro like for Joe and question-and-answer closing to reached gentlemen, remarks. I turn we end the back have

Joseph Ferraro

Thank you. Yes.

during annual surpassed another So as cost $X to discipline. goal quarter, quarter alone. improvement we adjusted momentum our saw showed continued this recap, second in The and the the with along delivered record into Americas quarter quarter we International in billion EBITDA branding the strong of third continued

would us year-end. for puts performance say our year. EBITDA reach billion by put $X employees finally, you in to in all over work This over the I past quarter like hard thank And track this to on adjusted to they've

believing Thank achieve way these your and you in all. As as in company. they to interest Thank had the that dedication a our we're for Avis results team. Budget you able

Operator

today's concludes conference. This

You may day. very disconnect Thank your for lines great at time. participation, have you this and much a your

Avis Budget (CAR) 2 Nov 212021 Q3 Earnings call transcript