In what can only be described as an astoundingly predictable act of monetary acrobatics, shareholders of Avis Budget Group (CAR) watched their investments perform a graceful—if somewhat chaotic—dive into the abyss of second-quarter earnings, which, much like an over-enthusiastic squirrel on a caffeine binge, failed to deliver what one might call good news. As of 1:16 p.m. ET, the stock was down 15.4%, which is approximately the same as the number of times you can say “fool me once” before everyone stops listening altogether.
Avis hits the brakes—hard
Ever on the lookout for signs of economic vitality, investors had, at least temporarily, clung to hope that the rental car kingpin was riding a wave of renewed optimism. The second quarter had seen Avis leap through some hoops—probably on fire—buoyed by vague notions of a trade détente and a hope that the global economy might, just maybe, not be secretly contemplating its own demise. The market had also taken note of billionaire Bill Ackman’s strategic dalliance with Hertz (a company whose financial future resembles a particularly half-hearted miracle), which may—or may not—have turbocharged interest in the rental car sector. But alas, the numbers, much like a British weather forecast—nebulous, unpredictable, slightly disappointing—failed to sustain the euphoria.
Revenue was as flat as a pancake in a plastic box, clocking in at $3.04 billion—a smidge above the consensus’s cautious $3 billion. However, cars are never enough. So Avis announced a spike in EBITDA—a fancy acronym for “earnings before interest, taxes, depreciation, and a few other things you probably don’t understand”—which rose 29% from $214 million to $277 million. That’s an impressive number, assuming you find EBITDA as fascinating as watching paint dry. Still, it did little to offset the reality that, when measured in the time-honored tradition of financial reporting, things weren’t quite as rosy as they looked in the brochure.
To add a dash of futuristic whimsy, Avis unveiled a multiyear pact with Waymo (a name that sounds as if it should belong to a robot but is actually just a very serious part of Google’s ambitions), promising to launch fully autonomous ride-hailing in Dallas—a city that, like most of the universe, seems willing to embrace the idea of driverless cars with all the enthusiasm of a hedgehog in a balloon factory. Meanwhile, Avis launched Avis First, a luxury offering that includes curbside pickup, a dedicated concierge, and vehicles from an era when we all joked about flying cars—except these are actually cars that just pretend to be futuristic, while still being firmly grounded in the boring reality of depreciation and maintenance.
On the sacred grounds of GAAP accounting, the company reported earnings per share of $0.10—less than a penny in typical American currency—down from $0.41 a year prior and well below the estimations that must have been whispered in hushed tones during conference calls. Clearly, the numbers are as encouraging as a tumbleweed in a hurricane, and as the stock chart proclaims, the rollercoaster is apparently heading down the same tracks as the Hogwarts Express—relentlessly and with a certain sense of inevitability.
What’s next for Avis? A question of infinite possibility (or not)
Forecasts for the year seem as ambitious as trying to lock down a shadow—targeting $900 million to $1 billion in EBITDA, with fleet costs marching along at $310-$320 per month—numbers that might make angels weep with envy or investors yawn in collective boredom. The third quarter guidance was conspicuously absent, probably because the summer season, like a particularly fickle goddess, holds the real key to profitability—if it doesn’t decide to rain on everyone’s parade. Yet, amidst the current gloom, Avis’s pioneering efforts with Avis First hint that, perhaps, innovation (and a touch of stubborn optimism) might just keep the company afloat in the economic storm. Or, at the very least, make it look busy for a little longer.
If the economy remains steadfast and avoids performing an elaborate disappearing act, the stock could, in some whimsical universe, climb back from its recent tumble. Or, at the very least, it will give investors something to watch while contemplating the extraordinary improbability of it all—like trying to explain why the universe appears to be expanding at an ever-increasing rate, or why your sock always goes missing in the dryer. Either way, strap in; the ride might be turbulent, but at least it’s never dull. 🚗
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2025-07-30 21:41