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Mar 31, 2020
Avis Q1 2020 Earnings Report
Avis Budget Group experienced a challenging first quarter due to the COVID-19 pandemic, with revenue decline and net loss, but took decisive actions to reduce costs and preserve liquidity.
Key Takeaways
Avis Budget Group reported a decrease in revenue by 9% to $1.8 billion in the first quarter of 2020, primarily due to the impact of the COVID-19 pandemic. The company experienced a net loss of $158 million, or $2.16 per diluted share, and an adjusted net loss of $103 million, or $1.40 per adjusted diluted share. In response to the crisis, Avis Budget Group implemented significant cost-saving measures, including personnel reductions and fleet size adjustments, targeting over $2.0 billion in annualized cost removal actions.
Revenues decreased by 9% to $1.8 billion due to the impact of the COVID-19 pandemic.
Net loss was $158 million, or $2.16 per diluted share, and adjusted net loss was $103 million, or $1.40 per adjusted diluted share.
Adjusted EBITDA loss of $87 million, a significant downturn compared to the prior year.
Available liquidity was $1.6 billion as of March 31, 2020, with an estimated cash burn of approximately $800 million for the second quarter.
Revenue by Segment
Revenue by Geographic Location
Forward Guidance
Avis Budget Group anticipates revenues to be approximately 80% lower in April and May compared to the prior year, with a gradual recovery expected in June and improving thereafter. They are optimistic for the third quarter, as they are seeing early indications of improving demand in markets where shelter in place restrictions are being lifted.
Positive Outlook
- Gradual recovery in revenue expected from June onwards.
- Improving demand in markets where shelter in place restrictions are being lifted.
- Emphasis on safety, trust, and empathy to attract customers.
- Renting a vehicle is an attractive alternative to other forms of transportation.
- Enhanced cleaning protocols, including disinfectant that is CDC-recommended and EPA certified.
Challenges Ahead
- Revenues anticipated to be approximately 80% lower in April and May compared to the prior year.
- Significant cancellations of vehicle orders, reducing the number of units being added to the fleet.
Revenue & Expenses
Visualization of income flow from segment revenue to net income
Historical Earnings Impact
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Avg. Return Before/After Earnings
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