Avis Budget Group (NASDAQ: CAR) posts Q1 2026 loss as costs pressure margins
Filing Impact
Filing Sentiment
Form Type
10-Q
Avis Budget Group reported a larger operating loss for the first quarter of 2026 despite higher revenue. Revenue rose to $2.53 billion from $2.43 billion, driven mainly by higher revenue per day. Net loss attributable to the company narrowed to $283 million from $505 million, with diluted loss per share improving to $8.01 from $14.35.
Vehicle depreciation and lease charges dropped sharply to $664 million from $1.06 billion, reflecting lower fleet charges than 2025, but operating, selling, and interest costs increased. Adjusted EBITDA showed a loss of $113 million versus a $93 million loss a year earlier, as higher expenses more than offset revenue gains.
Positive
- None.
Negative
- None.
Key Figures
Revenue: $2,530 million
Net loss attributable to Avis Budget Group, Inc.: $283 million
Diluted loss per share: $8.01
+5 more
8 metrics
Revenue
$2,530 million
Three months ended March 31, 2026
Net loss attributable to Avis Budget Group, Inc.
$283 million
Three months ended March 31, 2026
Diluted loss per share
$8.01
Three months ended March 31, 2026
Adjusted EBITDA
$113 million loss
Three months ended March 31, 2026
Vehicle depreciation and lease charges, net
$664 million
Three months ended March 31, 2026
Net cash provided by operating activities
$434 million
Three months ended March 31, 2026
Total assets
$30,603 million
As of March 31, 2026
Debt under vehicle programs
$18,391 million
As of March 31, 2026
Key Terms
Adjusted EBITDA, vehicle-backed debt, redeemable non-controlling interests, variable interest entity, +2 more
6 terms
Adjusted EBITDA financial
"We define Adjusted EBITDA as income (loss) from continuing operations before non-vehicle related depreciation and amortization;"
Adjusted EBITDA is a way companies measure how much money they make from their core operations, like running a business, by removing certain costs or income that aren’t part of regular business activities. It helps investors see how well a company is doing without distractions from unusual expenses or gains, making it easier to compare companies or track performance over time.
vehicle-backed debt financial
"Vehicle-backed debt primarily represents asset-backed securities."
redeemable non-controlling interests financial
"the non-controlling interests were classified as redeemable non-controlling interests of $120 million and $74 million"
Redeemable non-controlling interests are ownership stakes in a company’s unit held by outside investors that can be forced to be bought back by the parent company for cash or a set value. Think of it like a part-owner who has the contractual right to ‘cash out’ their share; for investors this matters because it can create a future cash obligation, change reported equity versus debt, and affect earnings and ownership percentages.
variable interest entity financial
"We review our investments to determine if they are VIEs. A VIE is an entity in which either (i) the equity investors"
A variable interest entity (VIE) is a company structure where one party controls another company’s operations and economic outcomes through contracts or special arrangements instead of owning a majority of its voting shares. For investors, VIEs matter because the controlling party’s financial results, debts and risks can appear in the controller’s reports even though ownership looks separate, so understanding VIEs helps assess true exposure, governance limits and transparency—like spotting a puppet controlled by strings rather than direct ownership.
hypothetical liquidation at book value (HLBV) financial
"The Company has determined the allocation of economics between the controlling party and third-party investors should follow the hypothetical liquidation at book value (“HLBV”) method"
Repurchase Facilities financial
"We entered into several repurchase agreements (the “Repurchase Facilities”) pursuant to which we may sell certain of our Class D notes"
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
For the quarterly period ended March 31, 2026
OR
For the transition period from _____ to _____
Commission File No. 001-10308
(Exact name of registrant as specified in its charter) | ||
| (State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification Number) | |||||||
| (Address of principal executive offices) | (Zip Code) | |||||||
( | ||||||||
| (Registrant’s telephone number, including area code) | ||||||||
Securities registered pursuant to Section 12(b) of the Act:
| TITLE OF EACH CLASS | TRADING SYMBOL(S) | NAME OF EACH EXCHANGE ON WHICH REGISTERED | ||||||
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
| ☒ | Accelerated filer | ☐ | Non-accelerated filer | ☐ | |||||||||||||
| Smaller reporting company | Emerging growth company | ||||||||||||||||
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒
As of April 22, 2026, the number of shares outstanding of the registrant’s common stock was 35,324,986 .
Table of Contents
| Page | ||||||||
| PART I | Financial Information | |||||||
| Item 1. | Financial Statements | |||||||
Condensed Consolidated Statements of Comprehensive Income for the Three Months Ended March 31, 2026 and 2025 (Unaudited) | 4 | |||||||
Condensed Consolidated Balance Sheets as of March 31, 2026 and December 31, 2025 (Unaudited) | 5 | |||||||
Condensed Consolidated Statements of Cash Flows for the Three Months Ended March 31, 2026 and 2025 (Unaudited) | 6 | |||||||
Condensed Consolidated Statements of Stockholders’ Equity for the Three Months Ended March 31, 2026 and 2025 (Unaudited) | 8 | |||||||
Notes to Condensed Consolidated Financial Statements (Unaudited) | 9 | |||||||
| Item 2. | Management’s Discussion and Analysis of Financial Condition and Results of Operations | 31 | ||||||
| Item 3. | Quantitative and Qualitative Disclosures About Market Risk | 39 | ||||||
| Item 4. | Controls and Procedures | 39 | ||||||
| PART II | Other Information | |||||||
| Item 1. | Legal Proceedings | 40 | ||||||
| Item 1A. | Risk Factors | 40 | ||||||
| Item 2. | Unregistered Sales of Equity Securities and Use of Proceeds | 40 | ||||||
| Item 5. | Other Information | 40 | ||||||
| Item 6. | Exhibits | 40 | ||||||
Signatures | 41 | |||||||
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FORWARD-LOOKING STATEMENTS
Certain statements contained in this Quarterly Report on Form 10-Q may be considered “forward-looking statements” as that term is defined in the Private Securities Litigation Reform Act of 1995. The forward-looking statements contained herein are subject to known and unknown risks, uncertainties, assumptions and other factors that may cause our actual results, performance or achievements to be materially different from those expressed or implied by any such forward-looking statements. Forward-looking statements include information concerning our future financial performance, business strategy, projected plans and objectives. These statements may be identified by the fact that they do not relate to historical or current facts and may use words such as “believes,” “expects,” “anticipates,” “will,” “should,” “could,” “may,” “would,” “intends,” “projects,” “estimates,” “plans,” “forecasts,” “guidance,” and similar words, expressions or phrases. The following important factors and assumptions could affect our future results and could cause actual results to differ materially from those expressed in such forward-looking statements. These factors include, but are not limited to:
•the high level of competition in the mobility industry, including from new companies or technology, and the impact such competition may have on pricing and rental volume;
•a change in our fleet costs, including as a result of a change in the cost of new vehicles, resulting from inflation, trade disputes, tariffs or otherwise, manufacturer recalls, disruption in the supply of new vehicles, including due to labor actions, trade disputes, tariffs or otherwise, shortages in semiconductors and/or other parts used in new vehicle production, and/or a change in the price at which we dispose of used vehicles either in the used vehicle market or under repurchase or guaranteed depreciation programs;
•the results of operations or financial condition of the manufacturers of our vehicles, which could impact their ability to perform their payment obligations under our agreements with them, including repurchase and/or guaranteed depreciation arrangements, and/or their willingness or ability to make vehicles available to us or the mobility industry as a whole on commercially reasonable terms or at all;
•levels of and volatility in travel demand, including volatility in airline passenger traffic;
•a deterioration or fluctuation in economic conditions, resulting in a recession, decreased levels of discretionary consumer spending for travel, or otherwise, particularly during our peak season or in key market segments;
•an occurrence or threat of terrorism, pandemics, severe weather events or natural disasters, military conflicts, including the ongoing military conflicts in the Middle East and Eastern Europe, or civil unrest in the locations in which we operate, trade disputes and tariffs, and the potential effects of sanctions on the world economy and markets and/or international trade;
•any substantial changes in the cost or supply of fuel, vehicle parts, energy, labor or other resources on which we depend to operate our business, including as a result of pandemics, inflation, tariffs, government shutdowns, the ongoing military conflicts in the Middle East and Eastern Europe, and any embargoes on oil sales imposed on or by the Russian government;
•our ability to successfully implement or achieve our business plans and strategies, achieve and maintain cost savings and adapt our business to changes in mobility, and successfully implement digital transformation initiatives;
•political, economic, or commercial instability and/or political, regulatory, or legal changes in the countries in which we operate, and our ability to conform to multiple and conflicting laws or regulations in those countries;
•the performance of the used vehicle market from time to time, including our ability to dispose of vehicles in the used vehicle market on attractive terms;
•our dependence on third-party distribution channels, third-party suppliers of other services and co-marketing arrangements with third parties;
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•risks related to completed or future acquisitions or investments that we may pursue, including the incurrence of incremental indebtedness to help fund such transactions and our ability to promptly and effectively integrate any acquired businesses or capitalize on joint ventures, partnerships and other investments;
•our ability to utilize derivative instruments, and the impact of derivative instruments we utilize, which can be affected by fluctuations in interest rates, fuel prices and exchange rates, changes in government regulations and other factors;
•our exposure to uninsured or unpaid claims in excess of historical levels or changes in the number of incidents or cost per incident, and our ability to obtain insurance at desired levels and the cost of that insurance;
•risks associated with litigation or governmental or regulatory inquiries, or any failure or inability to comply with laws, regulations or contractual obligations or any changes in laws, regulations or contractual obligations, including with respect to personally identifiable information and consumer privacy, labor and employment, and tax;
•risks related to protecting the integrity of, and preventing unauthorized access to, our information technology systems or those of our third-party vendors, licensees, dealers, independent operators and independent contractors, and protecting the confidential information of our employees and customers against security breaches, including physical or cybersecurity breaches, attacks, or other disruptions, compliance with privacy and data protection regulation, and the effects of any potential increase in cyberattacks on the world economy and markets and/or international trade;
•any impact on us from the actions of our third-party vendors, licensees, dealers, independent operators and independent contractors and/or disputes that may arise out of our agreements with such parties;
•any major disruptions in our communication networks or information systems;
•risks related to tax obligations and the effect of future changes in tax laws, including the expiration of tax credits, and accounting standards;
•risks related to our indebtedness, including our substantial outstanding debt obligations, recent and future interest rate increases, which increase our financing costs, downgrades by rating agencies and our ability to incur substantially more debt;
•our ability to obtain financing for our global operations, including the funding of our vehicle fleet through the issuance of asset-backed securities and use of the global lending markets;
•our ability to meet the financial and other covenants contained in the agreements governing our indebtedness, or to obtain a waiver or amendment of such covenants should we be unable to meet such covenants;
•significant changes in the timing of our fleet rotation, carrying value of goodwill, or long-lived assets, including when there are events or changes in circumstances that indicate the carrying value may exceed the current fair value, which have in the past resulted in and in the future could result in a significant impairment charge; and
•other business, economic, competitive, governmental, regulatory, political or technological factors affecting our operations, pricing or services.
We operate in a continuously changing business environment and new risk factors emerge from time to time. New risk factors, factors beyond our control, or changes in the impact of identified risk factors may cause actual results to differ materially from those set forth in any forward-looking statements. Accordingly, forward-looking statements should not be relied upon as a prediction of actual results. Moreover, we do not assume responsibility if future results are materially different from those forecasted or anticipated. Other factors and assumptions not identified
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above, including those discussed in “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” in Item 2 and “Risk Factors” in Item 1A in this quarterly report and in similarly-titled sections set forth in Item 7 and in Item 1A and in other portions of our 2025 Annual Report on Form 10-K filed with the Securities and Exchange Commission (the “SEC”) on February 19, 2026 (the “2025 Form 10-K”), may contain forward-looking statements and involve uncertainties that could cause actual results to differ materially from those projected in any forward-looking statements.
Although we believe that our assumptions are reasonable, any or all of our forward-looking statements may prove to be inaccurate and we can make no guarantees about our future performance. Should unknown risks or uncertainties materialize or underlying assumptions prove inaccurate, actual results could differ materially from past results and/or those anticipated, estimated or projected. We undertake no obligation to release any revisions to any forward-looking statements, to report events or to report the occurrence of unanticipated events. For any forward-looking statements contained in any document, we claim the protection of the safe harbor for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995.
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PART I — FINANCIAL INFORMATION
Item 1. Financial Statements
Avis Budget Group, Inc.
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(In millions, except per share data)
(Unaudited)
| Three Months Ended March 31, | |||||||||||||||||||||||
| 2026 | 2025 | ||||||||||||||||||||||
| Revenues | $ | $ | |||||||||||||||||||||
| Expenses | |||||||||||||||||||||||
| Operating | |||||||||||||||||||||||
| Vehicle depreciation and lease charges, net | |||||||||||||||||||||||
| Selling, general and administrative | |||||||||||||||||||||||
| Vehicle interest, net | |||||||||||||||||||||||
| Non-vehicle related depreciation and amortization | |||||||||||||||||||||||
| Interest expense related to corporate debt, net: | |||||||||||||||||||||||
| Interest expense | |||||||||||||||||||||||
| Restructuring and other related charges | |||||||||||||||||||||||
| Transaction-related costs, net | |||||||||||||||||||||||
| Other (income) expense, net | |||||||||||||||||||||||
| Total expenses | |||||||||||||||||||||||
| Loss before income taxes | ( | ( | |||||||||||||||||||||
| Benefit from income taxes | ( | ( | |||||||||||||||||||||
| Net loss | ( | ( | |||||||||||||||||||||
| Less: Net income attributable to non-controlling interests | |||||||||||||||||||||||
| Net loss attributable to Avis Budget Group, Inc. | $ | ( | $ | ( | |||||||||||||||||||
Comprehensive loss attributable to Avis Budget Group, Inc. | $ | ( | $ | ( | |||||||||||||||||||
| Loss per share | |||||||||||||||||||||||
| Basic | $ | ( | $ | ( | |||||||||||||||||||
| Diluted | $ | ( | $ | ( | |||||||||||||||||||
See Notes to Condensed Consolidated Financial Statements (Unaudited).
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Avis Budget Group, Inc.
CONDENSED CONSOLIDATED BALANCE SHEETS
(In millions, except par value)
(Unaudited)
| March 31, 2026 | December 31, 2025 | ||||||||||
| Assets | |||||||||||
| Current assets: | |||||||||||
| Cash and cash equivalents | $ | $ | |||||||||
| Receivables, net | |||||||||||
| Other current assets | |||||||||||
| Total current assets | |||||||||||
| Property and equipment, net | |||||||||||
| Operating lease right-of-use assets | |||||||||||
| Deferred income taxes | |||||||||||
| Goodwill | |||||||||||
| Other intangibles, net | |||||||||||
| Other non-current assets | |||||||||||
| Total assets exclusive of assets under vehicle programs | |||||||||||
| Assets under vehicle programs: | |||||||||||
| Program cash | |||||||||||
| Vehicles, net | |||||||||||
| Receivables from vehicle manufacturers and other | |||||||||||
| Investment in Avis Budget Rental Car Funding (AESOP) LLC—related party | |||||||||||
| Total assets | $ | $ | |||||||||
| Liabilities, redeemable non-controlling interests and stockholders’ equity | |||||||||||
| Current liabilities: | |||||||||||
| Accounts payable and other current liabilities | $ | $ | |||||||||
| Short-term debt and current portion of long-term debt | |||||||||||
| Total current liabilities | |||||||||||
| Long-term debt | |||||||||||
| Long-term operating lease liabilities | |||||||||||
| Other non-current liabilities | |||||||||||
| Total liabilities exclusive of liabilities under vehicle programs | |||||||||||
| Liabilities under vehicle programs: | |||||||||||
| Debt | |||||||||||
| Debt due to Avis Budget Rental Car Funding (AESOP) LLC—related party | |||||||||||
| Deferred income taxes | |||||||||||
| Other | |||||||||||
Commitments and contingencies (Note 13) | |||||||||||
| Redeemable non-controlling interests | |||||||||||
| Stockholders’ equity: | |||||||||||
Preferred stock, $ | |||||||||||
Common stock, $ | |||||||||||
| Additional paid-in capital | |||||||||||
| Retained earnings | |||||||||||
| Accumulated other comprehensive loss | ( | ( | |||||||||
Treasury stock, at cost— | ( | ( | |||||||||
Stockholders’ equity attributable to Avis Budget Group, Inc. | ( | ( | |||||||||
| Non-controlling interests | |||||||||||
| Total stockholders’ equity | ( | ( | |||||||||
| Total liabilities, redeemable non-controlling interests and stockholders’ equity | $ | $ | |||||||||
See Notes to Condensed Consolidated Financial Statements (Unaudited).
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Avis Budget Group, Inc.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In millions)
(Unaudited)
| Three Months Ended March 31, | |||||||||||
| 2026 | 2025 | ||||||||||
| Operating activities | |||||||||||
| Net loss | $ | ( | $ | ( | |||||||
| Adjustments to reconcile net loss to net cash provided by operating activities: | |||||||||||
| Vehicle depreciation | |||||||||||
| Amortization of right-of-use assets | |||||||||||
| (Gain) loss on sale of vehicles, net | ( | ||||||||||
| Vehicle related reserves | |||||||||||
| Non-vehicle related depreciation and amortization | |||||||||||
| Amortization of debt financing fees | |||||||||||
| Stock-based compensation | |||||||||||
| Net change in assets and liabilities: | |||||||||||
| Receivables | |||||||||||
| Income taxes and deferred income taxes | ( | ( | |||||||||
| Accounts payable and other current liabilities | ( | ||||||||||
| Operating lease liabilities | ( | ( | |||||||||
| Other, net | ( | ( | |||||||||
| Net cash provided by operating activities | |||||||||||
| Investing activities | |||||||||||
| Property and equipment additions | ( | ( | |||||||||
| Proceeds received on asset sales | |||||||||||
| Net assets acquired (net of cash acquired) | ( | ||||||||||
| Other, net | |||||||||||
| Net cash used in investing activities exclusive of vehicle programs | ( | ( | |||||||||
| Vehicle programs: | |||||||||||
| Investment in vehicles | ( | ( | |||||||||
| Proceeds received on disposition of vehicles | |||||||||||
| Investment in debt securities of Avis Budget Rental Car Funding (AESOP) LLC—related party | ( | ( | |||||||||
| Proceeds from debt securities of Avis Budget Rental Car Funding (AESOP) LLC—related party | |||||||||||
| ( | |||||||||||
| Net cash provided by (used in) investing activities | ( | ||||||||||
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Avis Budget Group, Inc.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Continued)
(In millions)
(Unaudited)
| Three Months Ended March 31, | |||||||||||
| 2026 | 2025 | ||||||||||
| Financing activities | |||||||||||
| Proceeds from borrowings (original maturities greater than three months) | $ | $ | |||||||||
| Payments on borrowings (original maturities greater than three months) | ( | ( | |||||||||
| Repurchases of common stock | ( | ( | |||||||||
| Debt financing fees | ( | ||||||||||
| Net cash provided by (used in) financing activities exclusive of vehicle programs | ( | ||||||||||
| Vehicle programs: | |||||||||||
| Proceeds from borrowings | |||||||||||
| Payments on borrowings | ( | ( | |||||||||
| Debt financing fees | ( | ( | |||||||||
| ( | ( | ||||||||||
| Net cash provided by (used in) financing activities | ( | ||||||||||
| Effect of changes in exchange rates on cash and cash equivalents, program and restricted cash | ( | ||||||||||
| Net increase in cash and cash equivalents, program and restricted cash | |||||||||||
| Cash and cash equivalents, program and restricted cash, beginning of period | |||||||||||
| Cash and cash equivalents, program and restricted cash, end of period | $ | $ | |||||||||
See Notes to Condensed Consolidated Financial Statements (Unaudited).
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Avis Budget Group, Inc.
CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY
(In millions)
(Unaudited)
| Common Stock | Additional Paid-in Capital | Retained Earnings (Accumulated Deficit) | Accumulated Other Comprehensive Income (Loss) | Treasury Stock | Stockholders’ Equity Attributable to Avis Budget Group, Inc. | Non-controlling Interests | Total Stockholders’ Equity | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Shares | Amount | Shares | Amount | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Balance as of December 31, 2025 | $ | $ | $ | $ | ( | ( | $ | ( | $ | ( | $ | $ | ( | ||||||||||||||||||||||||||||||||||||||||||||||
| Comprehensive income (loss): | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Net income (loss) | — | — | — | ( | — | — | — | ( | ( | ||||||||||||||||||||||||||||||||||||||||||||||||||
| Other comprehensive income (loss) | — | — | — | — | — | — | ( | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Total comprehensive income (loss) | ( | ( | — | ( | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Net activity related to restricted stock units | — | — | ( | — | — | ( | — | ( | |||||||||||||||||||||||||||||||||||||||||||||||||||
| Balance as of March 31, 2026 | $ | $ | $ | $ | ( | ( | $ | ( | $ | ( | $ | $ | ( | ||||||||||||||||||||||||||||||||||||||||||||||
| Balance as of December 31, 2024 | $ | $ | $ | $ | ( | ( | $ | ( | $ | ( | $ | $ | ( | ||||||||||||||||||||||||||||||||||||||||||||||
| Comprehensive income (loss): | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Net income (loss) | — | — | — | ( | — | — | — | ( | ( | ||||||||||||||||||||||||||||||||||||||||||||||||||
| Other comprehensive income (loss) | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Total comprehensive income (loss) | ( | ( | ( | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Net activity related to restricted stock units | — | — | ( | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||||||||||
| Balance as of March 31, 2025 | $ | $ | $ | $ | ( | ( | $ | ( | $ | ( | $ | $ | ( | ||||||||||||||||||||||||||||||||||||||||||||||
See Notes to Condensed Consolidated Financial Statements (Unaudited).
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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
| Page | ||||||||
Note 1 | Basis of Presentation | 10 | ||||||
Note 2 | Leases | 13 | ||||||
Note 3 | Restructuring and Other Related Charges | 15 | ||||||
Note 4 | Earnings Per Share | 16 | ||||||
Note 5 | Other Current Assets | 16 | ||||||
Note 6 | Acquisitions | 16 | ||||||
Note 7 | Intangible Assets | 17 | ||||||
Note 8 | Vehicle Rental Activities | 17 | ||||||
Note 9 | Income Taxes | 18 | ||||||
Note 10 | Accounts Payable and Other Current Liabilities | 18 | ||||||
Note 11 | Long-term Corporate Debt and Borrowing Arrangements | 19 | ||||||
Note 12 | Debt Under Vehicle Programs and Borrowing Arrangements | 20 | ||||||
Note 13 | Commitments and Contingencies | 22 | ||||||
Note 14 | Stockholders' Equity | 23 | ||||||
Note 15 | Related Party Transactions | 25 | ||||||
Note 16 | Stock-Based Compensation | 25 | ||||||
Note 17 | Financial Instruments | 26 | ||||||
Note 18 | Segment Information | 28 | ||||||
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Avis Budget Group, Inc.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)
(Unless otherwise noted, all dollar amounts are in millions, except per share amounts)
1. Basis of Presentation
Avis Budget Group, Inc. provides mobility solutions to businesses and consumers worldwide. The accompanying unaudited Condensed Consolidated Financial Statements include the accounts and transactions of Avis Budget Group, Inc. and its subsidiaries, as well as entities in which Avis Budget Group, Inc. directly or indirectly has a controlling financial interest (collectively, “we,” “our,” “us,” or the “Company”), and have been prepared pursuant to the rules and regulations of the U.S. Securities and Exchange Commission for interim financial reporting.
We operate the following reportable business segments:
•Americas - consisting primarily of (i) vehicle rental operations in North America, South America, Central America and the Caribbean, (ii) car sharing operations in certain of these markets, and (iii) licensees in the areas in which we do not operate directly.
•International - consisting primarily of (i) vehicle rental operations in Europe, the Middle East, Africa, Asia and Australasia, (ii) car sharing operations in certain of these markets, and (iii) licensees in the areas in which we do not operate directly.
The operating results of acquired businesses are included in the accompanying Condensed Consolidated Financial Statements from the dates of acquisition. We consolidate joint venture activities when we have a controlling interest and record non-controlling interests within stockholders’ equity, temporary equity and the statement of comprehensive income equal to the percentage of ownership interest retained in such entities by the respective non-controlling party. Intercompany transactions have been eliminated in consolidation.
Summary of Significant Accounting Policies
Our significant accounting policies are fully described in Note 2 – Summary of Significant Accounting Policies in our 2025 Form 10-K.
Cash and cash equivalents, Program cash and Restricted cash. The following table provides a detail of cash and cash equivalents, program and restricted cash reported within the Condensed Consolidated Balance Sheets to the amounts shown in the Condensed Consolidated Statements of Cash Flows.
| As of March 31, | |||||||||||
| 2026 | 2025 | ||||||||||
| Cash and cash equivalents | $ | $ | |||||||||
| Program cash | |||||||||||
Restricted cash (a) | |||||||||||
| Total cash and cash equivalents, program and restricted cash | $ | $ | |||||||||
__________
(a)Included within other current assets.
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Vehicle Programs. We present separately the financial data of our vehicle programs. These programs are distinct from our other activities as the assets under vehicle programs are generally funded through the issuance of debt that is collateralized by such assets. The income generated by these assets is used, in part, to repay the principal and interest associated with the debt. Cash inflows and outflows relating to the generation or acquisition of such assets and the principal debt repayment or financing of such assets are classified as activities of our vehicle programs. We believe it is appropriate to segregate the financial data of our vehicle programs because, ultimately, the source of repayment of such debt is the realization of such assets.
Transaction-related costs, net. Transaction-related costs, net are classified separately in the Condensed Consolidated Statements of Comprehensive Income. These costs are comprised of expenses primarily related to acquisition-related activities such as due-diligence and other advisory costs, expenses related to the integration of the acquiree’s operations with our own operations, including the implementation of best practices and process improvements, non-cash gains and losses related to re-acquired rights, expenses related to pre-acquisition contingencies and contingent consideration related to acquisitions.
Currency Transactions. Currency gains and losses resulting from foreign currency transactions are generally included in operating expenses within the Condensed Consolidated Statements of Comprehensive Income; however, the net gain or loss of currency transactions on intercompany loans and the unrealized gain or loss on intercompany loan hedges are included within interest expense related to corporate debt, net.
Variable Interest Entities (“VIE”) and Non-Controlling Interests. We review our investments to determine if they are VIEs. A VIE is an entity in which either (i) the equity investors as a group lack the power through voting or similar rights to direct the activities of such entity that most significantly impact such entity’s economic performance or (ii) the equity investment at risk is insufficient to finance that entity’s activities without additional subordinated financial support. Entities that are determined to be VIEs are consolidated if we are the primary beneficiary of the entity. The primary beneficiary possesses the power to direct the activities of the VIE that most significantly impact its economic performance and has the obligation to absorb losses or the right to receive benefits from the VIE that are significant to it. We will reconsider our original assessment of a VIE upon the occurrence of certain events such as contributions and redemptions, either by us, or third parties, or amendments to an entity’s governing documents. On an ongoing basis, we reconsider whether we are deemed to be a VIE’s primary beneficiary. We account for VIEs where we are not the primary beneficiary under the equity method.
Interpace Ventures Transaction
On September 30, 2025, we received a contribution of $12 million from a non-controlling interest party (Class A Member) in exchange for approximately 17 % in a new joint venture establishing Interpace Ventures LLC (“Interpace Ventures”). On December 30, 2025, we completed the joint venture transaction and Interpace Ventures subsequently funded its wholly-owned subsidiary, Interpace Funding LLC (“Interpace Funding”), with the total contribution from both its Class A members, the third-party investors in the amount of $183 million, and the Company, as the Class B member. Interpace Funding was established to acquire, own, operate, manage, lease, and sell vehicles. This transaction was undertaken as part of our efforts to monetize a portion of our available tax credits. Additionally, in conjunction with this transaction, we reviewed our fleet strategy, specific to certain United States EV rental car vehicles, and as a result shortened the useful life associated with such vehicles.
We consolidate joint venture activities when we have a controlling financial interest. We determined that Interpace Ventures and its related subsidiaries are VIEs and that we are the primary beneficiary. In accordance with Accounting Standards Codification Topic 810-10, all entities created as a result of the Interpace Ventures transaction have been consolidated. Based on the substance of the transaction, the non-controlling interests are presented as temporary equity.
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The Company has determined the allocation of economics between the controlling party and third-party investors should follow the hypothetical liquidation at book value (“HLBV”) method of accounting, based on governing provisions in each respective limited liability company agreement, instead of respective ownership percentages. Under the HLBV method, the amounts of income and loss attributable to the non-controlling interest reflects changes in the amount the owners would hypothetically receive at each balance sheet date under the respective liquidation provisions, assuming the net assets of these entities were liquidated at the recorded amounts, after taking into account any capital transactions, such as contributions and distributions, between the entities and the owners.
As specified in the respective limited liability company agreements, the Class A members’ interests are redeemable based upon events that are not solely within our control. As such, the non-controlling interests were classified as redeemable non-controlling interests of $120 million and $74 million and presented outside of permanent equity on the Condensed Consolidated Balance Sheets as of March 31, 2026 and December 31, 2025, respectively. See Note 14 – Stockholders' Equity for the components of redeemable non-controlling interests.
The following table presents our revenues disaggregated by geography:
| Three Months Ended March 31, | |||||||||||||||||||||||
| 2026 | 2025 | ||||||||||||||||||||||
| Americas | $ | $ | |||||||||||||||||||||
| Europe, Middle East and Africa | |||||||||||||||||||||||
| Asia and Australasia | |||||||||||||||||||||||
| Total revenues | $ | $ | |||||||||||||||||||||
The following table presents our revenues disaggregated by brand:
| Three Months Ended March 31, | |||||||||||||||||||||||
| 2026 | 2025 | ||||||||||||||||||||||
| Avis | $ | $ | |||||||||||||||||||||
| Budget | |||||||||||||||||||||||
Other (a) | |||||||||||||||||||||||
| Total revenues | $ | $ | |||||||||||||||||||||
__________
(a)Other includes Zipcar and other operating brands.
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Recently Issued Accounting Pronouncements
Disaggregation of Income Statement Expenses
In November 2024, the FASB issued ASU 2024-03, “Disaggregation of Income Statement Expenses,” which amends Topic 220 primarily through requiring disclosures, in the notes to financial statements, about certain costs and expenses. The amendments are effective for annual periods beginning after December 15, 2026 and interim periods beginning after December 15, 2027, with early adoption permitted on a prospective or retrospective basis. ASU 2024-03 becomes effective for us on January 1, 2027. We are currently evaluating the impact of the adoption of this accounting pronouncement.
Targeted Improvements to the Accounting for Internal-Use Software
In September 2025, the FASB issued ASU 2025-06, “Targeted Improvements to the Accounting for Internal-Use Software,” which amends Topic 350 primarily to modernize the accounting for software costs. The amendments are effective for annual periods beginning after December 15, 2027, and interim periods within those annual periods. Early adoption is permitted as of the beginning of an annual period. A prospective, modified or retrospective transition approach is permitted. ASU 2025-06 becomes effective for us on an interim basis beginning on January 1, 2028. We are currently evaluating the impact of the adoption of this accounting pronouncement.
Hedge Accounting Improvements
In November 2025, the FASB issued ASU 2025-09, “Hedge Accounting Improvements,” which clarifies certain aspects of the guidance on hedge accounting and addresses several incremental hedge accounting issues arising from the global reference rate reform initiative. The amendments are effective for annual reporting periods beginning after December 15, 2026, and interim periods within those annual reporting periods, with early adoption permitted on a prospective basis. ASU 2025-09 becomes effective for us on an interim basis beginning on January 1, 2027. We are currently evaluating the impact of the adoption of this accounting pronouncement.
Narrow-Scope Improvements
In December 2025, the FASB issued ASU 2025-11, “Narrow-Scope Improvements,” which clarifies interim disclosure requirements and the applicability of Topic 270. The amendments are effective for interim reporting periods within annual reporting periods beginning after December 15, 2027, with early adoption permitted on a prospective or retrospective basis. ASU 2025-11 becomes effective for us on an interim basis beginning on January 1, 2028. We are currently evaluating the impact of the adoption of this accounting pronouncement.
2. Leases
Lessor
The following table presents our lease revenues disaggregated by geography:
| Three Months Ended March 31, | |||||||||||||||||||||||
| 2026 | 2025 | ||||||||||||||||||||||
| Americas | $ | $ | |||||||||||||||||||||
| Europe, Middle East and Africa | |||||||||||||||||||||||
| Asia and Australasia | |||||||||||||||||||||||
| Total lease revenues | $ | $ | |||||||||||||||||||||
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The following table presents our lease revenues disaggregated by brand:
| Three Months Ended March 31, | |||||||||||||||||||||||
| 2026 | 2025 | ||||||||||||||||||||||
| Avis | $ | $ | |||||||||||||||||||||
| Budget | |||||||||||||||||||||||
Other (a) | |||||||||||||||||||||||
| Total lease revenues | $ | $ | |||||||||||||||||||||
__________
(a)Other includes Zipcar and other operating brands.
Lessee
We have operating and finance leases for rental locations, corporate offices, vehicle rental fleet and equipment. Many of our operating leases for rental locations contain concession agreements with various airport authorities that allow us to conduct our vehicle rental operations on site. In general, concession fees for airport locations are based on a percentage of total commissionable revenue as defined by each airport authority, some of which are subject to minimum annual guaranteed amounts. Concession fees other than minimum annual guaranteed amounts are not included in the measurement of operating lease right-of-use assets and operating lease liabilities and are recorded as variable lease expense as incurred. Our operating leases for rental locations often also require us to pay or reimburse operating expenses.
The components of lease expense are as follows:
| Three Months Ended March 31, | |||||||||||||||||||||||
| 2026 | 2025 | ||||||||||||||||||||||
| Property leases | |||||||||||||||||||||||
| Operating lease expense | $ | $ | |||||||||||||||||||||
| Variable lease expense | |||||||||||||||||||||||
Total property lease expense (a) | $ | $ | |||||||||||||||||||||
__________
(a)Primarily included within operating expenses.
Supplemental balance sheet information related to leases is as follows:
| As of | As of | ||||||||||
| March 31, | December 31, | ||||||||||
| 2026 | 2025 | ||||||||||
| Property leases | |||||||||||
| Operating lease right-of-use assets | $ | $ | |||||||||
Short-term operating lease liabilities (a) | $ | $ | |||||||||
| Long-term operating lease liabilities | |||||||||||
| Operating lease liabilities | $ | $ | |||||||||
| Weighted average remaining lease term | |||||||||||
| Weighted average discount rate | % | % | |||||||||
__________
(a)Included within accounts payable and other current liabilities.
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Supplemental cash flow information related to leases is as follows:
| Three Months Ended March 31, | |||||||||||
| 2026 | 2025 | ||||||||||
| Cash payments for lease liabilities within operating activities: | |||||||||||
| Property operating leases | $ | $ | |||||||||
| Non-cash activities - increase in right-of-use assets in exchange for lease liabilities: | |||||||||||
| Property operating leases | $ | $ | |||||||||
3. Restructuring and Other Related Charges
In 2024, we initiated a global restructuring plan to further right size our operations (“Global Rightsizing”). The costs associated with this initiative are primarily related to the operational scaling of processes, locations, and lines of business. We expect further restructuring expense of approximately $24 million related to this initiative to be incurred this year.
The following tables summarize the changes to our restructuring-related liabilities and identify the amounts recorded within our reportable segments for restructuring charges and corresponding payments and utilizations:
| Personnel Related | Facility Related | Other | Total | |||||||||||||||||||||||
| Balance as of January 1, 2026 | $ | $ | $ | $ | ||||||||||||||||||||||
| Restructuring expense: | ||||||||||||||||||||||||||
Global Rightsizing (a) | ||||||||||||||||||||||||||
| Restructuring payment/utilization: | ||||||||||||||||||||||||||
Global Rightsizing (a) | ( | ( | ( | ( | ||||||||||||||||||||||
| Balance as of March 31, 2026 | $ | $ | $ | $ | ||||||||||||||||||||||
__________
(a)Other includes the disposition of vehicles.
| Americas | International | Total | ||||||||||||||||||
| Balance as of January 1, 2026 | $ | $ | $ | |||||||||||||||||
| Restructuring expense: | ||||||||||||||||||||
Global Rightsizing | ||||||||||||||||||||
| Restructuring payment/utilization: | ||||||||||||||||||||
Global Rightsizing | ( | ( | ( | |||||||||||||||||
| Balance as of March 31, 2026 | $ | $ | $ | |||||||||||||||||
Other Related Charges
Officer Separation Costs
In February 2025, we announced that Joseph A. Ferraro, President and Chief Executive Officer, would transition to a Board Advisor role effective June 30, 2025. In connection with Mr. Ferraro’s departure, we recorded minimal other related charges for the three months ended March 31, 2026, and expect further expense of less than $1 million to be incurred this year.
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Limited Voluntary Opportunity Plans (“LVOP”)
During the first quarter of 2026, our Americas segment offered a voluntary termination program to certain employees in field operations and general and administrative functions for a limited time. These employees, if qualified, elected resignation from employment in return for enhanced severance benefits to be settled in cash. For the three months ended March 31, 2026, we recorded other related charges of approximately $7 million in connection with the LVOP. As of March 31, 2026, approximately 200 employees elected to participate in the plan and the participants have been terminated.
4. Earnings Per Share
The following table sets forth the computation of basic and diluted loss per share (“EPS”) (shares in millions):
| Three Months Ended March 31, | ||||||||||||||||||||||||||
| 2026 | 2025 | |||||||||||||||||||||||||
Net loss attributable to Avis Budget Group, Inc. for basic and diluted EPS | $ | ( | $ | ( | ||||||||||||||||||||||
| Basic weighted average shares outstanding | ||||||||||||||||||||||||||
Diluted weighted average shares outstanding (a) | ||||||||||||||||||||||||||
| Loss per share | ||||||||||||||||||||||||||
| Basic | $ | ( | $ | ( | ||||||||||||||||||||||
Diluted (b) | $ | ( | $ | ( | ||||||||||||||||||||||
__________
(a)For the three months ended March 31, 2026 and 2025, our number of diluted weighted average shares outstanding excludes the effect of non-vested stock as the effect would have been anti-dilutive. This occurs when a net loss is reported and the effect of using dilutive shares would be anti-dilutive. For the three months ended March 31, 2026 and 2025, 0.4 million and 0.5 million non-vested stock awards have an anti-dilutive effect and therefore have been excluded from the computation of diluted weighted average shares outstanding.
(b)Diluted loss per share was computed using the treasury stock method for non-vested stock.
5. Other Current Assets
Other current assets consisted of:
| As of | As of | ||||||||||
| March 31, | December 31, | ||||||||||
| 2026 | 2025 | ||||||||||
| Sales and use taxes | $ | $ | |||||||||
Prepaid expenses (a) | |||||||||||
Prepaid vehicle license and registration (a) | |||||||||||
| Other | |||||||||||
| Other current assets | $ | $ | |||||||||
__________
(a)For the year ended December 31, 2025 balance, we reclassified $85 million of prepaid vehicle license and registration to conform to the current year presentation. This reclassification had no impact to other current assets.
6. Acquisitions
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7. Intangible Assets
Intangible assets consisted of:
| As of March 31, 2026 | As of December 31, 2025 | ||||||||||||||||||||||||||||||||||
| Gross Carrying Amount | Accumulated Amortization | Net Carrying Amount | Gross Carrying Amount | Accumulated Amortization | Net Carrying Amount | ||||||||||||||||||||||||||||||
| Amortized Intangible Assets | |||||||||||||||||||||||||||||||||||
| License agreements | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||
| Customer relationships | |||||||||||||||||||||||||||||||||||
| Other | |||||||||||||||||||||||||||||||||||
| Total | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||
| Unamortized Intangible Assets | |||||||||||||||||||||||||||||||||||
| Goodwill | $ | $ | |||||||||||||||||||||||||||||||||
| Trademarks | $ | $ | |||||||||||||||||||||||||||||||||
For the three months ended March 31, 2026 and 2025, amortization expense related to amortizable intangible assets was approximately $7 million and $6 million, respectively.
Based on our amortizable intangible assets as of March 31, 2026, we expect amortization expense of approximately $23 million for the remainder of 2026, $24 million for 2027, $19 million for 2028, $16 million for 2029, $16 million for 2030 and $7 million for 2031, excluding effects of currency exchange rates.
8. Vehicle Rental Activities
The components of vehicles, net within assets under vehicle programs are as follows:
| As of | As of | ||||||||||
| March 31, | December 31, | ||||||||||
| 2026 | 2025 | ||||||||||
Rental vehicles (a) | $ | $ | |||||||||
| Less: Accumulated depreciation | ( | ( | |||||||||
| Vehicles held for sale | |||||||||||
Vehicles, net investment in lease (b) | |||||||||||
| Vehicles, net | $ | $ | |||||||||
__________
(a)For the year ended December 31, 2025, reflects long-lived asset impairment and other related charges, which reduced the carrying value of our rental vehicles to fair value.
(b)See Note 15 – Related Party Transactions.
The components of vehicle depreciation and lease charges, net are summarized below:
| Three Months Ended March 31, | |||||||||||||||||||||||
| 2026 | 2025 | ||||||||||||||||||||||
| Depreciation expense | $ | $ | |||||||||||||||||||||
| Lease charges | |||||||||||||||||||||||
(Gain) loss on sale of vehicles, net (a) | ( | ||||||||||||||||||||||
| Vehicle depreciation and lease charges, net | $ | $ | |||||||||||||||||||||
__________
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As of March 31, 2026 and 2025, we had payables related to vehicle purchases included in liabilities under vehicle programs - other of $649 million and $449 million, respectively, and receivables related to vehicle sales included in assets under vehicle programs - receivables from vehicle manufacturers and other of $417 million and $231 million, respectively.
9. Income Taxes
Our effective tax rate for the three months ended March 31, 2026 was a benefit of 31.2 %. Such rate differed from the Federal Statutory rate of 21.0% primarily due to foreign income inclusions and foreign taxes associated with our International operations, as well as state taxes.
Our effective tax rate for the three months ended March 31, 2025 was a benefit of 25.6 %. Such rate differed from the Federal Statutory rate of 21.0% primarily due to foreign taxes on our International operations and state taxes.
In July 2025, the One Big Beautiful Bill Act (“OBBBA”) was enacted, making permanent key provisions of the Tax Cuts and Jobs Act, including full expensing on qualified property, and modifications to the business interest expense limitation, as well as introducing phased-in modifications to certain foreign income inclusion provisions effective in 2026 and future periods. As a result of the enactment of OBBBA, our deferred tax balances as of March 31, 2026 reflect the new law. In addition, these phased-in provisions impacted our income tax expense and effective tax rate for the three months ended March 31, 2026; however, the overall impact on our condensed consolidated results of operations was not significant.
We continue to monitor the implementation of the Organisation for Economic Cooperation and Development (“OECD”) Pillar Two global minimum tax framework, including recent administrative guidance; however, it did not have a material impact on our condensed consolidated financial statements for the three months ended March 31, 2026.
10. Accounts Payable and Other Current Liabilities
Accounts payable and other current liabilities consisted of:
| As of | As of | ||||||||||
| March 31, | December 31, | ||||||||||
| 2026 | 2025 | ||||||||||
| Short-term operating lease liabilities | $ | $ | |||||||||
| Accounts payable | |||||||||||
| Accrued sales and use taxes | |||||||||||
| Accrued advertising and marketing | |||||||||||
| Public liability and property damage insurance liabilities – current | |||||||||||
| Accrued interest | |||||||||||
| Deferred lease revenues - current | |||||||||||
| Accrued payroll and related | |||||||||||
| Other | |||||||||||
| Accounts payable and other current liabilities | $ | $ | |||||||||
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11. Long-term Corporate Debt and Borrowing Arrangements
Long-term debt and other borrowing arrangements consisted of:
| As of | As of | ||||||||||||||||
| Maturity | March 31, | December 31, | |||||||||||||||
| Date | 2026 | 2025 | |||||||||||||||
| July 2027 | $ | $ | |||||||||||||||
| April 2028 | |||||||||||||||||
| February 2029 | |||||||||||||||||
| March 2029 | |||||||||||||||||
| January 2030 | |||||||||||||||||
| July 2030 | |||||||||||||||||
| February 2031 | |||||||||||||||||
| June 2032 | |||||||||||||||||
Floating Rate Term Loan (a) | July 2032 | ||||||||||||||||
Other (b) | |||||||||||||||||
| Deferred financing fees | ( | ( | |||||||||||||||
| Total | |||||||||||||||||
| Less: Short-term debt and current portion of long-term debt | |||||||||||||||||
| Long-term debt | $ | $ | |||||||||||||||
__________
(a)The floating rate term loan is part of our senior revolving credit facility, which is secured by pledges of capital stock of certain of our subsidiaries, and liens on substantially all of our intellectual property and certain other real and personal property. As of March 31, 2026, the floating rate term loan due 2032 bears interest at one-month Secured Overnight Financing Rate (“SOFR”) plus 2.50 %, for an aggregate rate of 6.17 %. We have entered into a swap to hedge $750 million of interest rate exposure related to the floating rate term loan at an aggregate rate of 4.01 %.
(b)Primarily includes finance leases, which are secured by liens on the related assets.
Committed Credit Facilities And Available Funding Arrangements
As of March 31, 2026, the committed corporate credit facilities available to us and/or our subsidiaries were as follows:
| Total Capacity | Outstanding Borrowings | Letters of Credit Issued | Available Capacity | ||||||||||||||||||||
Senior revolving credit facility maturing 2028 (a) | $ | $ | $ | $ | |||||||||||||||||||
__________
(a)The senior revolving credit facility bears interest at one-month SOFR plus 2.00 % and is part of our senior credit facilities, which include the floating rate term loan and the senior revolving credit facility, and which are secured by pledges of capital stock of certain of our subsidiaries, and liens on substantially all of our intellectual property and certain other real and personal property.
As of March 31, 2026, we have other uncommitted standby letter of credit facilities (“SBLC facilities”) with an additional letter of credit capacity of up to $457 million. As of March 31, 2026, letters of credit totaling $457 million have been issued on our SBLC facilities, which results in no remaining available capacity.
Debt Covenants
The agreements governing our indebtedness contain restrictive covenants, including restrictions on dividends paid to us by certain of our subsidiaries, the incurrence of additional indebtedness and/or liens by us and certain of our subsidiaries, acquisitions, mergers, liquidations, and sale and leaseback transactions. Our senior credit facility also contains a maximum leverage ratio requirement. As of March 31, 2026, we were in compliance with the financial covenants governing our indebtedness.
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12. Debt Under Vehicle Programs and Borrowing Arrangements
Debt under vehicle programs, including related party debt due to Avis Budget Rental Car Funding (AESOP) LLC (“Avis Budget Rental Car Funding”), consisted of:
| As of | As of | ||||||||||
| March 31, | December 31, | ||||||||||
| 2026 | 2025 | ||||||||||
Americas - Debt due to Avis Budget Rental Car Funding (a) | $ | $ | |||||||||
Americas - Debt borrowings (b) | |||||||||||
International - Debt borrowings (c) | |||||||||||
| International - Finance leases | |||||||||||
| Other | |||||||||||
Deferred financing fees (d) | ( | ( | |||||||||
| Total | $ | $ | |||||||||
__________
(a)Includes approximately $736 million and $826 million of Class R notes as of March 31, 2026 and December 31, 2025, respectively, which are held by us.
(b)Includes our Repurchase Facilities and $783 million and $965 million associated with the Interpace Ventures transaction as of March 31, 2026 and December 31, 2025, respectively. See Note 1 – Basis of Presentation.
(c)In February 2026, we amended our European rental fleet securitization program to increase its capacity to approximately €2.1 billion and £250 million and extended the maturity of the program to February 2029.
(d)Deferred financing fees related to Debt due to Avis Budget Rental Car Funding as of March 31, 2026 and December 31, 2025 were $50 million and $51 million, respectively.
The following table provides a summary of debt issued by Avis Budget Rental Car Funding during the three months ended March 31, 2026:
| Issuance Date | Maturity Date | Weighted Average Interest Rate | Amount Issued | |||||||||||||||||||||||
| March 2026 | (a) | August 2027 | % | $ | ||||||||||||||||||||||
| March 2026 | (a) | June 2029 | % | |||||||||||||||||||||||
| March 2026 | August 2029 | % | ||||||||||||||||||||||||
| March 2026 | August 2031 | % | ||||||||||||||||||||||||
| % | $ | |||||||||||||||||||||||||
__________
(a)In March 2026, Avis Budget Rental Car Funding issued additional notes under several previously outstanding series of debt.
We entered into several repurchase agreements (the “Repurchase Facilities”) pursuant to which we may sell certain of our Class D notes issued by our wholly-owned subsidiary, Avis Budget Rental Car Funding (AESOP) LLC, to the Repurchase Facility’s respective counterparty and repurchase such notes at a later date and subject to certain conditions set forth in the applicable Repurchase Facility. Transactions under the Repurchase Facilities may be extended at our sole discretion and the interest rate for such Repurchase Facility is simultaneously repriced in connection with such extensions.
The following table provides a summary of the Repurchase Facilities as of March 31, 2026:
| Maturity Date | Interest Rate | Tenor | Amount Outstanding | |||||||||||||||||
| May 2026 | % | $ | ||||||||||||||||||
| June 2026 | % | |||||||||||||||||||
| June 2026 | % | |||||||||||||||||||
| June 2026 | % | |||||||||||||||||||
| June 2026 | % | |||||||||||||||||||
| June 2026 | % | |||||||||||||||||||
| $ | ||||||||||||||||||||
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As of March 31, 2026, we had $326 million of securities pledged as collateral for the Repurchase Facilities, included within investment in Avis Budget Rental Car Funding (AESOP) LLC—related party on our Condensed Consolidated Balance Sheets.
Debt Maturities
The following table provides the contractual maturities of our debt under vehicle programs, including related party debt due to Avis Budget Rental Car Funding, as of March 31, 2026:
Debt under Vehicle Programs (a) | |||||
Within 1 year (b) | $ | ||||
Between 1 and 2 years (c) | |||||
Between 2 and 3 years (d) | |||||
Between 3 and 4 years | |||||
Between 4 and 5 years | |||||
| Thereafter | |||||
| Total | $ | ||||
__________
(a) Vehicle-backed debt primarily represents asset-backed securities.
(b) Includes $0.7 billion of bank and bank-sponsored facilities. These short-term borrowings have a weighted average interest rate of 4.56 % as of March 31, 2026.
(c) Includes $1.9 billion of bank and bank-sponsored facilities.
(d) Includes $2 billion of bank and bank-sponsored facilities.
Committed Credit Facilities And Available Funding Arrangements
The following table presents available funding under our debt arrangements related to our vehicle programs, including related party debt due to Avis Budget Rental Car Funding, as of March 31, 2026:
Total Capacity (a) | Outstanding Borrowings (b) | Available Capacity | |||||||||||||||
| Americas - Debt due to Avis Budget Rental Car Funding | $ | $ | $ | ||||||||||||||
| Americas - Debt borrowings | |||||||||||||||||
| International - Debt borrowings | |||||||||||||||||
| International - Finance leases | |||||||||||||||||
| Total | $ | $ | $ | ||||||||||||||
__________
(a)Capacity is subject to maintaining sufficient assets to collateralize debt. The total capacity for Americas - Debt due to Avis Budget Rental Car Funding includes increases from our asset-backed variable funding financing facilities. These facilities were most recently amended and extended in December 2025.
(b)The outstanding debt is collateralized by vehicles and related assets of $13.9 billion for Americas - Debt due to Avis Budget Rental Car Funding; $2.5 billion for Americas - Debt borrowings; $3.1 billion for International - Debt borrowings; and $0.1 billion for International - Finance leases.
Debt Covenants
The agreements under our vehicle-backed funding programs contain restrictive covenants, including restrictions on dividends paid to us by certain of our subsidiaries and restrictions on indebtedness, mergers, liens, liquidations and sale and leaseback transactions, and in some cases also require compliance with certain financial requirements. As of March 31, 2026, we are not aware of any instances of non-compliance with any of the financial or restrictive covenants contained in the debt agreements under our vehicle-backed funding programs.
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13. Commitments and Contingencies
Contingencies
In 2006, we completed the spin-offs of our Realogy and Wyndham subsidiaries (now known as Anywhere Real Estate, Inc., and Wyndham Hotels and Resorts, Inc. and Travel + Leisure Co., respectively). We do not believe that the impact of any resolution of pre-existing contingent liabilities in connection with the spin-offs should result in a material liability to us in relation to our consolidated financial position or liquidity, as Anywhere Real Estate, Inc., Wyndham Hotels and Resorts, Inc. and Travel + Leisure Co. have agreed to assume responsibility for these liabilities.
We are also involved in litigation that is primarily related to the businesses of our former subsidiaries, including Realogy and Wyndham. We are entitled to indemnification from such entities for any liability resulting from such litigation.
In September 2014, Dawn Valli et al. v. Avis Budget Group Inc., et al. was filed in U.S. District Court for the District of New Jersey. The plaintiffs seek to represent a purported nationwide class of certain renters of vehicles from our Avis and Budget subsidiaries from September 30, 2008 through the present. The plaintiffs seek damages in connection with claims relating to alleged misrepresentations and omissions concerning charging customers for traffic infractions and related administrative fees. In October 2023, plaintiffs’ motion for class certification was denied as to their proposed nationwide class and granted as to a subclass, created at the Court’s discretion, of Avis Preferred and Budget Fastbreak members. In February 2026, plaintiffs agreed to limit the class to the period from September 30, 2008 through April 2016. We have been named as a defendant in other purported consumer class action lawsuits, including a class action filed against us in New Jersey seeking damages in connection with a breach of contract claim, which the Company intends to vigorously defend.
In 2025, two shareholders filed derivative suits in the United States District Court for the District of New Jersey alleging that the Company’s directors and officers breached their fiduciary duties in connection with the Company’s fleet strategy in 2024. The Company was named as a nominal defendant. The court approved the voluntary dismissal of these two suits on April 21, 2026. These cases are now closed.
We are currently involved, and in the future may be involved, in claims and/or legal proceedings, including class actions, and governmental inquiries that are incidental to our vehicle rental and car sharing operations, including, among others, contract and licensee disputes, competition matters, employment and wage-and-hour claims, insurance and liability claims, intellectual property claims, business practice disputes and other regulatory, environmental, commercial and tax matters. In addition, we are a defendant in a number of legal proceedings for personal injury arising from the operation of our vehicles.
Litigation is inherently unpredictable and, although we believe that our accruals are adequate and/or that we have valid defenses in these matters, unfavorable resolutions could occur. We estimate that the potential exposure resulting from adverse outcomes of current legal proceedings in which it is reasonably possible that a loss may be incurred could, in the aggregate, be up to approximately $45 million in excess of amounts accrued as of March 31, 2026. We do not believe that the impact should result in a material liability to us in relation to our consolidated financial condition, results of operations or cash flows.
Commitments to Purchase Vehicles
We maintain agreements with vehicle manufacturers under which we have agreed to purchase approximately $5.1 billion of vehicles from manufacturers over the next 12 months, a $1.7 billion decrease compared to December 31, 2025, financed primarily through the issuance of vehicle-backed debt and cash received upon the disposition of vehicles. Certain of these commitments are subject to the vehicle manufacturers satisfying their obligations under their respective repurchase and guaranteed depreciation agreements.
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Concentrations
Concentrations of credit risk as of March 31, 2026 include risks related to our repurchase and guaranteed depreciation agreements with domestic and foreign automobile manufacturers, and primarily with respect to receivables for program cars that have been disposed of, but for which we have not yet received payment from the manufacturers.
14. Stockholders' Equity
Share Repurchases
Our Board of Directors has authorized the repurchase of up to approximately $8.1 billion of our common stock under a plan originally approved in 2013 and subsequently expanded, most recently in February 2023 (the “Stock Repurchase Program”). During the three months ended March 31, 2026 and 2025, we did not 757 million of authorization remained available to repurchase common stock under the Stock Repurchase Program.
Common stock repurchases under the Stock Repurchase Program do not include shares withheld to satisfy employees’ income tax liabilities attributable to the vesting of restricted stock unit awards.
Total Comprehensive Income (Loss)
Comprehensive income (loss) consists of net income (loss) and other gains and losses affecting stockholders’ equity that, under GAAP, are excluded from net income (loss).
The components of other comprehensive loss were as follows:
Three Months Ended March 31, | |||||||||||||||||||||||
| 2026 | 2025 | ||||||||||||||||||||||
| Net loss | $ | ( | $ | ( | |||||||||||||||||||
| Less: Net income attributable to non-controlling interests | |||||||||||||||||||||||
| Net loss attributable to Avis Budget Group, Inc. | ( | ( | |||||||||||||||||||||
| Other comprehensive income (loss), net of tax | |||||||||||||||||||||||
Currency translation adjustments, net of tax of $( | |||||||||||||||||||||||
Net unrealized gain (loss) on cash flow hedges, net of tax of $ | ( | ( | |||||||||||||||||||||
Minimum pension liability adjustment, net of tax of $ | ( | ||||||||||||||||||||||
Total comprehensive loss attributable to Avis Budget Group, Inc. | $ | ( | $ | ( | |||||||||||||||||||
__________
(a)Currency translation adjustments exclude income taxes related to indefinite investments in foreign subsidiaries.
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Accumulated Other Comprehensive Income (Loss)
The components of accumulated other comprehensive income (loss) were as follows:
| Currency Translation Adjustments | Net Unrealized Gains (Losses) on Cash Flow Hedges (a) | Minimum Pension Liability Adjustment (b) | Accumulated Other Comprehensive Income (Loss) | ||||||||||||||||||||
| Balance as of January 1, 2026 | $ | ( | $ | $ | ( | $ | ( | ||||||||||||||||
| Other comprehensive income (loss) before reclassifications | ( | ||||||||||||||||||||||
| Gross (gains) losses reclassified | ( | ( | |||||||||||||||||||||
| Tax on (gains) losses reclassified | |||||||||||||||||||||||
| (Gains) losses reclassified from accumulated other comprehensive income (loss), net of tax | ( | ( | |||||||||||||||||||||
| Net current-period other comprehensive income (loss) | ( | ( | |||||||||||||||||||||
| Balance as of March 31, 2026 | $ | ( | $ | $ | ( | $ | ( | ||||||||||||||||
| Balance as of January 1, 2025 | $ | ( | $ | $ | ( | $ | ( | ||||||||||||||||
| Other comprehensive income (loss) before reclassifications | ( | ||||||||||||||||||||||
| Gross (gains) losses reclassified | ( | ( | |||||||||||||||||||||
| Tax on (gains) losses reclassified | |||||||||||||||||||||||
| (Gains) losses reclassified from accumulated other comprehensive income (loss), net of tax | ( | ( | |||||||||||||||||||||
| Net current-period other comprehensive income (loss) | ( | ||||||||||||||||||||||
| Balance as of March 31, 2025 | $ | ( | $ | $ | ( | $ | ( | ||||||||||||||||
__________
All components of accumulated other comprehensive income (loss) are net of tax, except currency translation adjustments, which exclude income taxes related to indefinite investments in foreign subsidiaries and include $42 million gain, net of tax, as of March 31, 2026 related to our hedge of our investment in euro-denominated foreign operations (See Note 17 – Financial Instruments).
(a)Amounts reclassified to interest expense.
(b)Amounts reclassified to selling, general and administrative expenses.
Redeemable Non-controlling Interests
The following table presents changes in our redeemable non-controlling interests:
| 2026 | |||||||||||||||||||||||
| Balance as of January 1 | $ | ||||||||||||||||||||||
Net income (loss) (a) | |||||||||||||||||||||||
| Distributions | ( | ||||||||||||||||||||||
| Balance as of March 31 | $ | ||||||||||||||||||||||
________
(a) Represents the allocation of net income (loss) to the redeemable non-controlling interest holders under the HLBV method. See Note 1 – Basis of Presentation - Variable Interest Entities (“VIE”) and Non-Controlling Interests.
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15. Related Party Transactions
Avis Mobility Ventures LLC
Avis Mobility Ventures LLC (“AMV”) is our former subsidiary. We ceased to have a controlling interest in AMV in 2022, and as a result we deconsolidated AMV from our financial statements. Our proportional share of AMV’s income or loss is included within other (income) expense, net in our Condensed Consolidated Statements of Comprehensive Income. In November 2025, we made a capital contribution of approximately $9 million to AMV. As of March 31, 2026, we own approximately 35 % of AMV. We continue to provide vehicles, related fleet services, and certain administrative services to AMV to support their operations. The following tables provide amounts reported within our financial statements related to our equity method investment in AMV and these services.
The components of other (income) expense, net are summarized below:
Three Months Ended March 31, | |||||||||||||||||||||||
| 2026 | 2025 | ||||||||||||||||||||||
| (Income) expense for services to AMV, net | $ | $ | |||||||||||||||||||||
| (Income) loss on equity method investment in AMV, net | |||||||||||||||||||||||
| Other (income) expense, net | $ | $ | |||||||||||||||||||||
The following table provides amounts reported within our Condensed Consolidated Balance Sheets related to AMV:
| As of | As of | ||||||||||
| March 31, | December 31, | ||||||||||
| 2026 | 2025 | ||||||||||
Receivables from AMV (a) | $ | $ | |||||||||
Equity method investment in AMV (b) | |||||||||||
Vehicles, net investment in lease with AMV (c) | |||||||||||
__________
(a)Included within other current assets.
(b)Included within other non-current assets.
(c)Included within vehicles, net. See Note 8 – Vehicle Rental Activities.
SRS Mobility Ventures, LLC
SRS Mobility Ventures, LLC is an affiliate of our largest shareholder, SRS Investment Management, LLC. SRS Mobility Ventures, LLC obtained a controlling interest in AMV in 2022. In November 2025, SRS Mobility Ventures, LLC made a capital contribution of approximately $16 million to AMV. As of March 31, 2026, they own approximately 65 % of AMV.
16. Stock-Based Compensation
We recorded stock-based compensation expense of $1 million ($1 million, net of tax) and $6 million ($4 million, net of tax) during the three months ended March 31, 2026 and 2025, respectively.
As part of our declaration and payment of a special cash dividend in December 2023, we granted additional restricted stock units (“RSUs”) to our award holders with unvested shares as a dividend equivalent, which has been deferred until, and will not be paid unless, the shares of stock underlying the award vest.
In March 2026, the Company granted market-based RSUs that vest based on the level of total shareholder return. The grant date fair value of the market-based RSUs incorporates the total shareholder return metric, which is estimated using a Monte Carlo simulation model to estimate the Company’s ranking relative to an applicable stock index. The weighted average assumptions used in the Monte Carlo simulation model to calculate the fair value of the Company’s stock unit awards are outlined in the table below.
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| Three Months Ended March 31, 2026 | |||||
| Expected volatility of stock price | % | ||||
| Risk-free interest rate | % | ||||
| Valuation period | |||||
| Dividend yield | % | ||||
The activity related to stock units consisted of (in thousands of shares):
| Number of Shares | Weighted Average Grant Date Fair Value | Weighted Average Remaining Contractual Term (years) | Aggregate Intrinsic Value (in millions) | ||||||||||||||||||||
| Time-based RSUs | |||||||||||||||||||||||
Outstanding as of January 1, 2026 | $ | ||||||||||||||||||||||
Granted (a) | |||||||||||||||||||||||
Vested (b) | ( | ||||||||||||||||||||||
| Forfeited | ( | ||||||||||||||||||||||
Outstanding and expected to vest as of March 31, 2026 (c) | $ | $ | |||||||||||||||||||||
| Performance-based and market-based RSUs | |||||||||||||||||||||||
| Outstanding as of January 1, 2026 | $ | ||||||||||||||||||||||
Granted (a) | |||||||||||||||||||||||
| Vested | |||||||||||||||||||||||
| Forfeited | ( | ||||||||||||||||||||||
Outstanding as of March 31, 2026 | $ | $ | |||||||||||||||||||||
Outstanding and expected to vest as of March 31, 2026 (c) | $ | $ | |||||||||||||||||||||
__________
(a)Reflects the maximum number of stock units assuming achievement of all time-, performance- and market-vesting criteria and does not include those for non-employee directors. The weighted-average fair value of time- and performance-based RSUs granted during the three months ended March 31, 2025 was $62.64 .
(b)The total fair value of time-based RSUs vested during the three months ended March 31, 2026 was $15 million and the total fair value of time- and performance-based RSUs vested during the three months ended March 31, 2025 was $23 million.
(c)Aggregate unrecognized compensation expense related to time-, performance- and market-based RSUs amounted to $46 million and will be recognized over a weighted average vesting period of 1.7 years.
17. Financial Instruments
Derivative Instruments and Hedging Activities
Currency Risk. We use currency exchange contracts to manage our exposure to changes in currency exchange rates associated with certain of our non-U.S.-dollar denominated receivables and forecasted royalties, forecasted earnings of non-U.S. subsidiaries and forecasted non-U.S. dollar denominated acquisitions. We primarily hedge a portion of our current-year currency exposure to the Australian, Canadian and New Zealand dollars, the euro and the British pound sterling. The majority of forward contracts do not qualify for hedge accounting treatment. The fluctuations in the value of these forward contracts do, however, largely offset the impact of changes in the value of the underlying risk they economically hedge. We have designated our euro-denominated notes as a hedge of our investment in euro-denominated foreign operations.
The estimated net amount of existing gains or losses we expect to reclassify from accumulated other comprehensive income (loss) to earnings for cash flow and net investment hedges over the next 12 months is not material.
Interest Rate Risk. We use various hedging strategies including interest rate swaps and interest rate caps to create what we deem an appropriate mix of fixed and floating rate assets and liabilities. We use interest rate swaps and interest rate caps to manage the risk related to our floating rate corporate debt and our floating rate vehicle-backed debt. We record the changes in the fair value of our cash flow hedges to other
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comprehensive income (loss), net of tax, and subsequently reclassify these amounts into earnings in the period during which the hedged transaction affects earnings and is presented in the same income statement line item as the earnings effect of the hedged item. We record the gains or losses related to freestanding derivatives, which are not designated as a hedge for accounting purposes, currently in earnings and are presented in the same line of the income statement expected for the hedged item. We estimate that approximately $16 million of gain currently recorded in accumulated other comprehensive income (loss) will be recognized in earnings over the next 12 months.
Commodity Risk. We periodically enter into derivative commodity contracts to manage our exposure to changes in the price of fuel. These instruments were designated as freestanding derivatives and the changes in fair value are recorded in earnings and are presented in the same line of the income statement expected for the hedged item.
We held derivative instruments with absolute notional values as follows:
| As of March 31, 2026 | |||||
| Foreign exchange contracts | $ | ||||
Interest rate caps (a) | |||||
| Interest rate swaps | |||||
__________
(a)Represents $6.7 billion of interest rate caps sold and approximately $6.7 billion of interest rate caps purchased. These amounts exclude $0.2 billion of interest rate caps purchased by our Avis Budget Rental Car Funding subsidiary as it is not consolidated by us.
Estimated fair values (Level 2) of derivative instruments are as follows:
| As of March 31, 2026 | As of December 31, 2025 | ||||||||||||||||||||||
| Fair Value, Asset Derivatives | Fair Value, Liability Derivatives | Fair Value, Asset Derivatives | Fair Value, Liability Derivatives | ||||||||||||||||||||
| Derivatives designated as hedging instruments | |||||||||||||||||||||||
Interest rate swaps (a) | $ | $ | $ | $ | |||||||||||||||||||
| Derivatives not designated as hedging instruments | |||||||||||||||||||||||
Foreign exchange contracts (b) | |||||||||||||||||||||||
Interest rate caps (c) | |||||||||||||||||||||||
| Total | $ | $ | $ | $ | |||||||||||||||||||
__________
Amounts in this table exclude derivatives issued by Avis Budget Rental Car Funding, as it is not consolidated by us; however, certain amounts related to the derivatives held by Avis Budget Rental Car Funding are included within accumulated other comprehensive income (loss), as discussed in Note 14 – Stockholders' Equity.
(a)Included within other non-current assets or other non-current liabilities.
(b)Included within other current assets or other current liabilities.
(c)Included within assets under vehicle programs or liabilities under vehicle programs.
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The effects of financial instruments recognized in our Condensed Consolidated Financial Statements are as follows:
| Three Months Ended March 31, | |||||||||||||||||||||||
| 2026 | 2025 | ||||||||||||||||||||||
Financial instruments designated as hedging instruments (a) | |||||||||||||||||||||||
Interest rate swaps (b) | $ | ( | $ | ( | |||||||||||||||||||
Euro-denominated notes (c) | ( | ||||||||||||||||||||||
Financial instruments not designated as hedging instruments (d) | |||||||||||||||||||||||
Foreign exchange contracts (e) | ( | ||||||||||||||||||||||
Interest rate caps (f) | ( | ||||||||||||||||||||||
| Total | $ | $ | ( | ||||||||||||||||||||
__________
(a)Recognized, net of tax, as a component of accumulated other comprehensive income (loss) within stockholders’ equity.
(b)Classified as a net unrealized gain (loss) on cash flow hedges in accumulated other comprehensive income (loss). Refer to Note 14 – Stockholders' Equity for amounts reclassified from accumulated other comprehensive income (loss) into earnings.
(c)Classified as a net investment hedge within currency translation adjustments in accumulated other comprehensive income (loss).
(d)Gains (losses) related to derivative instruments are expected to be largely offset by (losses) gains on the underlying exposures being hedged.
(e)Primarily included within interest expense.
(f)Primarily included within vehicle interest, net.
Debt Instruments
The carrying amounts and estimated fair values (Level 2) of debt instruments are as follows:
| As of March 31, 2026 | As of December 31, 2025 | ||||||||||||||||||||||
| Carrying Amount | Estimated Fair Value | Carrying Amount | Estimated Fair Value | ||||||||||||||||||||
| Corporate debt | |||||||||||||||||||||||
| Short-term debt and current portion of long-term debt | $ | $ | $ | $ | |||||||||||||||||||
| Long-term debt | |||||||||||||||||||||||
| Debt under vehicle programs | |||||||||||||||||||||||
| Vehicle-backed debt due to Avis Budget Rental Car Funding | $ | $ | $ | $ | |||||||||||||||||||
| Vehicle-backed debt | |||||||||||||||||||||||
Interest rate swaps and interest rate caps (a) | |||||||||||||||||||||||
__________
(a)Derivatives in a liability position.
18. Segment Information
Our chief executive officer, who also serves as our chief operating decision-maker (“CODM”), assesses performance and allocates resources based upon the separate financial information of our operating segments. We aggregate certain of our operating segments into our reportable segments. In identifying our reportable segments, we also consider the management structure of the organization, the nature of services provided by our operating segments, the geographical areas and economic characteristics in which the segments operate, and other relevant factors.
Our CODM evaluates the operating results of each of our reportable segments based upon revenues and Adjusted EBITDA, which we define as income (loss) from continuing operations before non-vehicle related depreciation and amortization; long-lived asset impairment and other related charges; other fleet charges; restructuring and other related charges; early extinguishment of debt costs; non-vehicle related interest;
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transaction-related costs, net; legal matters, net, which primarily includes amounts recorded in excess of $5 million, related to unprecedented self-insurance reserves for allocated loss adjustment expense, class action lawsuits and personal injury matters; non-operational charges related to shareholder activist activity, which includes third-party advisory, legal and other professional fees; COVID-19 charges, net; cloud computing costs; other (income) expense, net; severe weather-related damages in excess of $5 million, net of insurance proceeds; and income taxes.
We believe Adjusted EBITDA is useful as a supplemental measure in evaluating the performance of our operating businesses and in comparing our results from period to period. We also believe that Adjusted EBITDA is useful to investors because it allows them to assess our results of operations and financial condition on the same basis that management uses internally. Adjusted EBITDA is a non-GAAP measure and should not be considered in isolation or as a substitute for net income or other income statement data prepared in accordance with U.S. GAAP.
Provided below is information about our revenues, significant segment expenses, and reportable segment Adjusted EBITDA, together with a reconciliation of reportable segment Adjusted EBITDA to loss before income taxes.
| Three Months Ended March 31, | |||||||||||||||||||||||||||||||||||
| 2026 | 2025 | ||||||||||||||||||||||||||||||||||
| Americas | International | Total | Americas | International | Total | ||||||||||||||||||||||||||||||
| Revenues | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||
| Significant segment expenses: | |||||||||||||||||||||||||||||||||||
Operating (a) | |||||||||||||||||||||||||||||||||||
Vehicle depreciation and lease charges, net (b) | |||||||||||||||||||||||||||||||||||
| Selling, general and administrative | |||||||||||||||||||||||||||||||||||
| Vehicle interest, net | |||||||||||||||||||||||||||||||||||
| Reportable segment Adjusted EBITDA | $ | ( | $ | ( | $ | ( | $ | ( | $ | ( | $ | ( | |||||||||||||||||||||||
| Reconciliation of reportable segment Adjusted EBITDA to loss before income taxes: | |||||||||||||||||||||||||||||||||||
| 2026 | 2025 | ||||||||||||||||||||||||||||||||||
| Reportable segment Adjusted EBITDA | $ | ( | $ | ( | |||||||||||||||||||||||||||||||
| Non-vehicle related depreciation and amortization | |||||||||||||||||||||||||||||||||||
| Interest expense related to corporate debt, net: | |||||||||||||||||||||||||||||||||||
| Interest expense | |||||||||||||||||||||||||||||||||||
| Other fleet charges | |||||||||||||||||||||||||||||||||||
| Restructuring and other related charges | |||||||||||||||||||||||||||||||||||
| Transaction-related costs, net | |||||||||||||||||||||||||||||||||||
| Other (income) expense, net | |||||||||||||||||||||||||||||||||||
Other segment expenses (c) | |||||||||||||||||||||||||||||||||||
Corporate and other (d) | |||||||||||||||||||||||||||||||||||
| Loss before income taxes | $ | ( | $ | ( | |||||||||||||||||||||||||||||||
__________
(a)Excludes other segment expenses.
(b)For the three months ended March 31, 2025, excludes other fleet charges related to the disposal of certain fleet within our Americas reportable segment.
(c)Cloud computing costs for the three months ended March 31, 2026 and March 31, 2025, respectively.
(d)Consists of unallocated corporate expenses which are not attributable to a particular reportable segment. For the three months ended March 31, 2026 and 2025, includes $104 million and $95 million of interest expense, respectively.
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Provided below is information about our segment assets.
| Americas | International | Unallocated Assets (a) | Total | ||||||||||||||||||||
Three Months Ended March 31, 2026 | |||||||||||||||||||||||
| Property and equipment additions | $ | $ | $ | $ | |||||||||||||||||||
As of March 31, 2026 | |||||||||||||||||||||||
| Assets exclusive of assets under vehicle programs | |||||||||||||||||||||||
| Assets under vehicle programs | |||||||||||||||||||||||
| Net long-lived assets | |||||||||||||||||||||||
| Year Ended December 31, 2025 | |||||||||||||||||||||||
| Property and equipment additions | $ | $ | $ | $ | |||||||||||||||||||
| As of December 31, 2025 | |||||||||||||||||||||||
| Assets exclusive of assets under vehicle programs | |||||||||||||||||||||||
| Assets under vehicle programs | |||||||||||||||||||||||
| Net long-lived assets | |||||||||||||||||||||||
__________
(a)Includes unallocated corporate assets which are not attributable to a particular reportable segment.
* * * *
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Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations
The following discussion should be read in conjunction with our Condensed Consolidated Financial Statements and accompanying Notes included in this Quarterly Report on Form 10-Q and with our 2025 Form 10-K. Our actual results of operations may differ materially from those discussed in forward-looking statements as a result of various factors, including those discussed in “Forward-Looking Statements.” See “Forward-Looking Statements” and “Risk Factors” for additional information. Unless otherwise noted, all dollar amounts in tables are in millions.
| OVERVIEW | ||
Our Company
We operate three of the most globally recognized brands in mobility solutions, Avis, Budget and Zipcar together with several other brands well recognized in their respective markets. We are a leading vehicle rental operator in North America, Europe, Australasia and certain other regions we serve, with an average rental fleet of approximately 620,000 vehicles in first quarter 2026. We also license the use of our trademarks to licensees in the areas in which we do not operate directly. We and our licensees operate our brands in approximately 180 countries throughout the world.
Our Segments
We categorize our operations into two reportable business segments: Americas, consisting primarily of (i) vehicle rental operations in North America, South America, Central America and the Caribbean, (ii) car sharing operations in certain of these markets, and (iii) licensees in the areas in which we do not operate directly; and International, consisting primarily of (i) vehicle rental operations in Europe, the Middle East, Africa, Asia and Australasia, (ii) car sharing operations in certain of these markets, and (iii) licensees in the areas in which we do not operate directly.
Business and Trends
Our strategy remains centered on driving sustainable growth through operational efficiency, analytics, customer experience and innovation. Additionally, during the fourth quarter of the fiscal year ended December 31, 2025, in conjunction with the Interpace Ventures transaction, we reviewed our fleet strategy, specific to certain United States EV rental car vehicles, and as a result shortened the useful life associated with such vehicles. We believe our strategies will continue to reinforce our competitive position, support long-term profitability, and deliver value to our stakeholders. During the three months ended March 31, 2026, we generated revenues of $2.5 billion, net loss of $234 million and Adjusted EBITDA loss of $113 million. These results were primarily driven by increased revenue per day, partially offset by decreased volume and higher per-unit fleet costs, excluding other fleet charges related to the disposal of certain fleet in our Americas reportable segment recorded in 2025.
We continue to be susceptible to a number of industry-specific and global macroeconomic factors that may cause our actual results of operations to differ from our historical results of operations or current expectations. The factors and trends that we currently believe are or will be most impactful to our results of operations and financial condition include the following: interest rates, inflationary impact on items such as commodity prices and wages, cost of new vehicles, used car values, increases in the number of personal injury claims and cost per incident, government shutdowns, manufacturer recalls, and an economic downturn that may impact travel demand, all of which may be exacerbated by ongoing military conflicts, including in the Middle East and Eastern Europe. Additionally, uncertainty remains with respect to tariffs and tax regulations, and this uncertainty has had and may continue to have impacts on our operations. We continue to monitor the potential favorable or unfavorable impacts of these and other factors on our business, operations, financial condition, and future results of operations and cash flows.
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RESULTS OF OPERATIONS
We measure performance principally using the following key metrics: (i) rental days, which represent the total number of days (or portion thereof) a vehicle was rented, (ii) revenue per day, which represents revenues divided by rental days, (iii) vehicle utilization, which represents rental days divided by available rental days, with available rental days being defined as average rental fleet times the number of days in the period, and (iv) per-unit fleet costs, which represent vehicle depreciation, lease charges and gain or loss on vehicle sales, divided by average rental fleet. Our rental days, revenue per day and vehicle utilization metrics are all calculated based on the actual rental of the vehicle during a 24-hour period. We believe that this methodology provides management with the most relevant metrics in order to effectively manage the performance of the business. Our calculation may not be comparable to the calculation of similarly-titled metrics by other companies. We present currency exchange rate effects to provide a method of assessing how our business performed excluding the effects of foreign currency rate fluctuations. Currency exchange rate effects are calculated by translating the current period results at the prior period average exchange rate plus any related gains and losses on currency hedges.
We assess performance and allocate resources based upon the separate financial information of our operating segments. We aggregate certain of our operating segments into our reportable segments. In identifying our reportable segments, we also consider the management structure of the organization, the nature of services provided by our operating segments, the geographical areas and economic characteristics in which the segments operate, and other relevant factors. Management evaluates the operating results of each of our reportable segments based upon revenues and Adjusted EBITDA, which we define as income (loss) from continuing operations before non-vehicle related depreciation and amortization; long-lived asset impairment and other related charges; other fleet charges; restructuring and other related charges; early extinguishment of debt costs; non-vehicle related interest; transaction-related costs, net; legal matters, net, which primarily includes amounts recorded in excess of $5 million, related to unprecedented self-insurance reserves for allocated loss adjustment expense, class action lawsuits and personal injury matters; non-operational charges related to shareholder activist activity, which includes third-party advisory, legal and other professional fees; COVID-19 charges, net; cloud computing costs; other (income) expense, net; severe weather-related damages in excess of $5 million, net of insurance proceeds; and income taxes.
We believe Adjusted EBITDA is useful as a supplemental measure in evaluating the performance of our operating businesses and in comparing our results from period to period. We also believe that Adjusted EBITDA is useful to investors because it allows them to assess our results of operations and financial condition on the same basis that management uses internally. Adjusted EBITDA is a non-GAAP measure and should not be considered in isolation or as a substitute for net income or other income statement data prepared in accordance with U.S. GAAP. Our presentation of Adjusted EBITDA may not be comparable to similarly-titled measures used by other companies.
During the three months ended March 31, 2026:
•Our revenues totaled $2.5 billion, an increase of $100 million year-over-year, primarily due to increased revenue per day.
•Our net loss attributable to Avis Budget Group, Inc. was $283 million, representing a decreased loss of $222 million year-over-year, primarily due to increased revenue per day and decreased fleet charges.
•Our Adjusted EBITDA loss was $113 million, representing an increased loss of $20 million year-over-year.
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Three Months Ended March 31, 2026 vs. Three Months Ended March 31, 2025
Our condensed consolidated results of operations comprised of the following:
| Three Months Ended March 31, | |||||||||||||||||||||||
| 2026 | 2025 | $ Change | % Change | ||||||||||||||||||||
| Revenues | $ | 2,530 | $ | 2,430 | $ | 100 | 4 | % | |||||||||||||||
| Expenses | |||||||||||||||||||||||
| Operating | 1,422 | 1,353 | 69 | 5 | % | ||||||||||||||||||
| Vehicle depreciation and lease charges, net | 664 | 1,055 | (391) | (37 | %) | ||||||||||||||||||
| Selling, general and administrative | 341 | 308 | 33 | 11 | % | ||||||||||||||||||
| Vehicle interest, net | 229 | 210 | 19 | 9 | % | ||||||||||||||||||
| Non-vehicle related depreciation and amortization | 58 | 56 | 2 | 4 | % | ||||||||||||||||||
| Interest expense related to corporate debt, net: | |||||||||||||||||||||||
| Interest expense | 109 | 97 | 12 | 12 | % | ||||||||||||||||||
| Restructuring and other related charges | 35 | 22 | 13 | 59 | % | ||||||||||||||||||
| Transaction-related costs, net | 6 | — | 6 | n/m | |||||||||||||||||||
| Other (income) expense, net | 6 | 6 | — | — | % | ||||||||||||||||||
| Total expenses | 2,870 | 3,107 | (237) | (8 | %) | ||||||||||||||||||
| Loss before income taxes | (340) | (677) | 337 | 50 | % | ||||||||||||||||||
| Benefit from income taxes | (106) | (173) | 67 | (39 | %) | ||||||||||||||||||
| Net loss | (234) | (504) | 270 | 54 | % | ||||||||||||||||||
| Less: Net income attributable to non-controlling interests | 49 | 1 | 48 | n/m | |||||||||||||||||||
| Net loss attributable to Avis Budget Group, Inc. | $ | (283) | $ | (505) | $ | 222 | 44 | % | |||||||||||||||
__________
n/m - Not Meaningful
Revenues increased $100 million during the three months ended March 31, 2026 compared to the similar period in 2025, primarily due to a 3% increase in revenue per day, excluding exchange rate effects and a $51 million positive impact from currency exchange rate movements, partially offset by a 1% decrease in volume. Total expenses decreased 8% during the three months ended March 31, 2026 compared to the similar period in 2025, primarily due to other fleet charges related to the disposal of certain fleet in our Americas reportable segment recorded in 2025. Our effective tax rates were a benefit of 31.2% and 25.6% for the three months ended March 31, 2026 and 2025, respectively. As a result of these items, our net loss attributable to Avis Budget Group, Inc. resulted in a decrease of $222 million compared to the similar period in 2025. For the three months ended March 31, 2026 and 2025, we reported diluted loss per share of $8.01 and $14.35, respectively.
Operating expenses increased to 56.2% of revenue during the three months ended March 31, 2026 compared to 55.7% during the similar period in 2025, primarily due to increased facilities costs. Vehicle depreciation and lease charges decreased to 26.3% of revenue during the three months ended March 31, 2026 compared to 43.4% during the similar period in 2025, primarily due to other fleet charges related to the accelerated disposal of certain fleet in our Americas reportable segment recorded in 2025. Selling, general and administrative costs increased to 13.5% of revenue during the three months ended March 31, 2026 compared to 12.7% during the similar period in 2025, primarily due to increased commissions, marketing and other general and administrative costs. Vehicle interest costs increased to 9.0% of revenue during the three months ended March 31, 2026 compared to 8.6% during the similar period in 2025, primarily due increased interest rates, partially offset by decreased fleet levels.
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Following is a more detailed discussion of the results of each of our reportable segments and corporate and other, together with a reconciliation of net loss to Adjusted EBITDA:
| Three Months Ended March 31, | |||||||||||||||||||||||
| 2026 | 2025 | ||||||||||||||||||||||
| Revenues | Adjusted EBITDA | Revenues | Adjusted EBITDA | ||||||||||||||||||||
| Americas | $ | 1,962 | $ | (80) | $ | 1,907 | $ | (67) | |||||||||||||||
| International | 568 | (13) | 523 | (3) | |||||||||||||||||||
Corporate and other (a) | — | (20) | — | (23) | |||||||||||||||||||
| Total Company | $ | 2,530 | $ | (113) | $ | 2,430 | $ | (93) | |||||||||||||||
| Reconciliation of net loss to Adjusted EBITDA: | |||||||||||||||||||||||
| 2026 | 2025 | ||||||||||||||||||||||
| Net loss | $ | (234) | $ | (504) | |||||||||||||||||||
| Benefit from income taxes | (106) | (173) | |||||||||||||||||||||
| Loss before income taxes | (340) | (677) | |||||||||||||||||||||
| Non-vehicle related depreciation and amortization | 58 | 56 | |||||||||||||||||||||
| Interest expense related to corporate debt, net: | |||||||||||||||||||||||
| Interest expense | 109 | 97 | |||||||||||||||||||||
Other fleet charges (b) | — | 390 | |||||||||||||||||||||
| Restructuring and other related charges | 35 | 22 | |||||||||||||||||||||
| Transaction-related costs, net | 6 | — | |||||||||||||||||||||
Other (income) expense, net (c) | 6 | 6 | |||||||||||||||||||||
Legal matters, net (d) | 1 | 1 | |||||||||||||||||||||
Cloud computing costs (e) | 12 | 12 | |||||||||||||||||||||
| Adjusted EBITDA | $ | (113) | $ | (93) | |||||||||||||||||||
__________
(a)Includes unallocated corporate expenses which are not attributable to a particular segment.
(b)Costs reported within vehicle depreciation and lease charges, net related to the disposal of certain fleet in our Americas reportable segment.
(c)Primarily consists of gains or losses related to our equity method investment in a former subsidiary, offset by fleet related and certain administrative services provided to the same former subsidiary.
(d)Consists of $1 million reported within selling, general and administrative expenses for the three months ended March 31, 2026 and 2025, in each period.
(e)Reported within operating expenses.
Americas
| Three Months Ended March 31, | ||||||||||||||||||||
| 2026 | 2025 | % Change | ||||||||||||||||||
| Revenues | $ | 1,962 | $ | 1,907 | 3 | % | ||||||||||||||
| Adjusted EBITDA | (80) | (67) | (19 | %) | ||||||||||||||||
Revenues increased during the three months ended March 31, 2026 compared to the similar period in 2025, primarily due to a 3% increase in revenue per day, excluding exchange rate effects and a $3 million positive impact from currency exchange rate movements.
Operating expenses were 55.6% of revenue during the three months ended March 31, 2026 compared to 55.8% during the similar period in 2025. Vehicle depreciation and lease charges decreased to 27.1% of revenue during the three months ended March 31, 2026 compared to 48.4% during the similar period in 2025, primarily due to other fleet charges related to the accelerated disposal of certain fleet recorded in 2025. Selling, general and administrative costs increased to 11.4% of revenue during the three months ended March 31, 2026 compared to 10.5% during the similar period in 2025, primarily due to increased commissions, marketing and other general and administrative costs. Vehicle interest costs increased to 10.0% of revenue during the three months ended March
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31, 2026 compared to 9.3% during the similar period in 2025, primarily due to increased interest rates, partially offset by decreased fleet levels.
Adjusted EBITDA loss increased during the three months ended March 31, 2026 compared to the similar period in 2025, primarily due to increased operating expenses, selling, general and administrative costs and vehicle interest costs, partially offset by increased revenue per day, excluding exchange rate effects.
International
| Three Months Ended March 31, | ||||||||||||||||||||
| 2026 | 2025 | % Change | ||||||||||||||||||
| Revenues | $ | 568 | $ | 523 | 9 | % | ||||||||||||||
| Adjusted EBITDA | (13) | (3) | n/m | |||||||||||||||||
__________
n/m - Not Meaningful
Revenues increased during the three months ended March 31, 2026 compared to the similar period in 2025, primarily due to a $48 million positive impact from currency exchange rate movements and a 3% increase in revenue per day, excluding exchange rate effects, partially offset by a 4% decrease in volume.
Operating expenses increased to 55.5% of revenue during the three months ended March 31, 2026 compared to 52.5% during the similar period in 2025, primarily due to increased fleet operating and facilities costs. Vehicle depreciation and lease charges decreased to 23.2% of revenue during the three months ended March 31, 2026 compared to 25.3% during the similar period in 2025, primarily due to decreased per-unit fleet costs, excluding exchange rate effects, driven by decreased fleet levels, partially offset by increased revenue. Selling, general and administrative costs increased to 17.9% of revenue during the three months ended March 31, 2026 compared to 16.7% during the similar period in 2025, primarily due to increased commissions, marketing and other general and administrative costs. Vehicle interest costs decreased to 5.7% of revenue during the three months ended March 31, 2026 compared to 6.3% during the similar period in 2025, primarily due to decreased fleet levels and sustained interest rates.
Adjusted EBITDA loss increased during the three months ended March 31, 2026 compared to the similar period in 2025, primarily due to increased operating expenses and selling, general and administrative costs and approximately a $5 million negative impact from currency exchange rate movements, partially offset by increased revenue per day, excluding exchange rate effects.
FINANCIAL CONDITION, LIQUIDITY AND CAPITAL RESOURCES
We present separately the financial data of our vehicle programs. These programs are distinct from our other activities as the assets under vehicle programs are generally funded through the issuance of debt that is collateralized by such assets. The income generated by these assets is used, in part, to repay the principal and interest associated with the debt. Cash inflows and outflows relating to the generation or acquisition of such assets and the principal debt repayment or financing of such assets are classified as activities of our vehicle programs. We believe it is appropriate to segregate the financial data of our vehicle programs because, ultimately, the source of repayment of such debt is the realization of such assets.
FINANCIAL CONDITION
| March 31, 2026 | December 31, 2025 | $ Change | |||||||||||||||
| Total assets exclusive of assets under vehicle programs | $ | 10,464 | $ | 10,306 | $ | 158 | |||||||||||
| Total liabilities exclusive of liabilities under vehicle programs | 12,050 | 12,047 | 3 | ||||||||||||||
| Assets under vehicle programs | 20,139 | 20,951 | (812) | ||||||||||||||
| Liabilities under vehicle programs | 21,835 | 22,252 | (417) | ||||||||||||||
| Redeemable non-controlling interests | 120 | 74 | 46 | ||||||||||||||
| Total stockholders’ equity | (3,402) | (3,116) | (286) | ||||||||||||||
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The decreases in both assets under vehicle programs and liabilities under vehicle programs are primarily due to the decrease in the size of our rental fleet and related debt.
The increase in redeemable non-controlling interests is due to net income allocated to the interest holders of the Interpace Ventures transaction. See Note 14 – Stockholders' Equity for the components of redeemable non-controlling interests. The decrease in total stockholders’ equity is primarily due to our net loss.
LIQUIDITY AND CAPITAL RESOURCES
Overview
Our principal sources of liquidity are cash on hand and our ability to generate cash through operations and financing activities, as well as available funding arrangements and committed credit facilities, each of which is discussed below.
During 2026, our Avis Budget Rental Car Funding (AESOP) LLC subsidiary issued approximately $922 million of asset-backed notes with expected final payment dates ranging from August 2027 to August 2031 and a weighted average interest rate of 5.36%. Avis Budget Rental Car Funding (AESOP) LLC has also amended and extended its asset-backed variable funding financing facilities, most recently in December 2025. The proceeds from these borrowings were used to fund the repayment of maturing vehicle-backed debt and the acquisition of rental cars in the United States.
In February 2026, we amended our European rental fleet securitization program to increase its capacity to approximately €2.1 billion and £250 million and extended the maturity of the program to February 2029.
In March 2026, we entered into an Equity Distribution Agreement with certain sales agents, in which we may sell, from time to time through or to the sales agents, as our agents or as principals, up to 5 million shares of our common stock (the “ATM Program”). The sales, if any, of the shares of our common stock made under the Equity Distribution Agreement may be made in sales deemed to be “at-the-market offerings.” As of March 31, 2026, we have not sold any shares of our common stock under the ATM Program.
Our Board of Directors has authorized the repurchase of up to approximately $8.1 billion of our common stock under a plan originally approved in 2013 and subsequently expanded, most recently in February 2023 (the “Stock Repurchase Program”). Our stock repurchases may occur through open market purchases, privately negotiated transactions or trading plans pursuant to Rule 10b5-1 of the Securities Exchange Act of 1934, as amended. The amount and timing of specific repurchases are subject to market conditions, applicable legal requirements, restricted payment capacity under our debt instruments and other factors. The Stock Repurchase Program may be suspended, modified or discontinued at any time without prior notice. The Stock Repurchase Program has no set expiration or termination date. During the three months ended March 31, 2026, we did not repurchase shares of common stock under the Stock Repurchase Program. As of March 31, 2026, approximately $757 million of authorization remained available to repurchase common stock under the Stock Repurchase Program.
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CASH FLOWS
The following table summarizes our cash flows:
| Three Months Ended March 31, | |||||||||||||||||
| 2026 | 2025 | $ Change | |||||||||||||||
| Cash provided by (used in): | |||||||||||||||||
| Operating activities | $ | 434 | $ | 619 | $ | (185) | |||||||||||
| Investing activities | 428 | (715) | 1,143 | ||||||||||||||
| Financing activities | (822) | 98 | (920) | ||||||||||||||
| Effect of changes in exchange rates on cash and cash equivalents, program and restricted cash | (7) | 8 | (15) | ||||||||||||||
| Net change in cash and cash equivalents, program and restricted cash | 33 | 10 | 23 | ||||||||||||||
| Cash and cash equivalents, program and restricted cash, beginning of period | 618 | 597 | 21 | ||||||||||||||
| Cash and cash equivalents, program and restricted cash, end of period | $ | 651 | $ | 607 | $ | 44 | |||||||||||
Cash provided by operating activities during the three months ended March 31, 2026 decreased when compared with the similar period in 2025, primarily due to changes in the components of working capital.
Cash provided by investing activities during the three months ended March 31, 2026 increased when compared with the similar period in 2025, primarily due to the increase in our proceeds received on vehicle sales and the decrease in our investment in vehicles.
Cash used in financing activities during the three months ended March 31, 2026 increased when compared with the similar period in 2025, primarily due to the decrease in both our corporate borrowings and borrowings under vehicle programs.
DEBT AND FINANCING ARRANGEMENTS
As of March 31, 2026, we had approximately $24.4 billion of indebtedness, including corporate indebtedness of approximately $6.0 billion and debt under vehicle programs of approximately $18.4 billion. For information regarding our debt and borrowing arrangements, see Note 1 – Basis of Presentation, Note 11 – Long-term Corporate Debt and Borrowing Arrangements and Note 12 – Debt Under Vehicle Programs and Borrowing Arrangements to our Condensed Consolidated Financial Statements.
LIQUIDITY RISK
Our primary liquidity needs include the procurement of rental vehicles to be used in our operations, servicing of corporate and vehicle-related debt and the payment of operating expenses. The present intention of management is to reinvest the undistributed earnings of our foreign subsidiaries indefinitely into our foreign operations. Our primary sources of funding are operating revenue, cash received upon the sale of vehicles, borrowings under our vehicle-backed borrowing arrangements and our senior revolving credit facility, and other financing activities.
Our liquidity has in the past been, and could in the future be, negatively affected by any financial market disruptions, a worsening of the United States and worldwide economies or by increases in interest rates, which may result in unfavorable conditions in the mobility industry, in the asset-backed financing market and in the credit markets generally. We believe these factors have affected and could further affect the debt ratings assigned to us by credit rating agencies and the cost of our borrowings. Additionally, a worsening or prolonged downturn in the worldwide economy or a disruption in the credit markets could further impact our liquidity due to (i) decreased demand and pricing for vehicles in the used vehicle market, (ii) increased costs associated with, and/or reduced capacity or increased collateral needs, including due to a decrease in the fair value of our fleet, under, our financings, (iii) the adverse impact of vehicle manufacturers being unable or unwilling to honor their obligations to repurchase or guarantee the depreciation on the related program vehicles and (iv) disruption in our ability to obtain financing due to negative credit events specific to us or affecting the overall debt market.
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As of March 31, 2026, we had $528 million of available cash and cash equivalents and access to $387 million of available borrowing capacity under our revolving credit facility, providing us with access to approximately $915 million of total liquidity.
Our liquidity position could also be negatively impacted if we are unable to remain in compliance with the consolidated first lien leverage ratio requirement and other covenants associated with our senior credit facilities and other borrowings. As of March 31, 2026, we were in compliance with the financial covenants governing our indebtedness. For additional information regarding our liquidity risks, see Part I, Item 1A, “Risk Factors” of our 2025 Form 10-K.
CONTRACTUAL OBLIGATIONS
Our future contractual obligations have not changed significantly from the amounts reported within our 2025 Form 10-K with the exception of our commitment to purchase vehicles, which decreased by approximately $1.7 billion from December 31, 2025, to approximately $5.1 billion as of March 31, 2026 due to existing fleet levels. Changes to our obligations related to corporate indebtedness and debt under vehicle programs are presented above within the section titled “Liquidity and Capital Resources—Debt and Financing Arrangements” and also within Note 11 – Long-term Corporate Debt and Borrowing Arrangements and Note 12 – Debt Under Vehicle Programs and Borrowing Arrangements to our Condensed Consolidated Financial Statements.
CRITICAL ACCOUNTING ESTIMATES
Accounting Policies
The results of the majority of our recurring operations are recorded in our financial statements using accounting policies that are not particularly subjective, nor complex. However, in presenting our financial statements in conformity with generally accepted accounting principles (GAAP), we are required to make estimates and assumptions that affect the amounts reported therein. Several of the estimates and assumptions we are required to make relate to matters that are inherently uncertain as they relate to future events and/or events that are outside of our control. If there is a significant unfavorable change to current conditions, it could result in a material adverse impact to our consolidated results of operations, financial position and liquidity. We believe that the estimates and assumptions we used when preparing our financial statements were the most appropriate at that time. Presented within the section titled “Critical Accounting Estimates” of our 2025 Form 10-K are the accounting policies (related to goodwill and other indefinite-lived intangible assets, vehicles, income taxes and public liability, property damage and other insurance liabilities) that we believe require subjective and complex judgments that could potentially affect reported results. There have been no significant changes to those accounting policies or our assessment of which accounting policies we would consider to be critical accounting policies.
New Accounting Standards
For detailed information regarding new accounting standards and their impact on our business, see Note 1 – Basis of Presentation to our Condensed Consolidated Financial Statements.
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Item 3. Quantitative and Qualitative Disclosures About Market Risk
We are exposed to a variety of market risks, including changes in currency exchange rates, interest rates and fuel prices. We assess our market risks based on changes in interest and currency exchange rates utilizing a sensitivity analysis that measures the potential impact on earnings, fair values and cash flows based on a hypothetical 10% change (increase and decrease) in interest and foreign currency exchange rates. We used March 31, 2026 market rates to perform a sensitivity analysis separately for each of these market risk exposures. We have determined, through such analyses, that the impact of a 10% change in interest or currency exchange rates on our results of operations, balance sheet and cash flows would not be material. Additionally, we have commodity price exposure related to fluctuations in the price of unleaded fuel. We anticipate that such commodity risk will remain a market risk exposure for the foreseeable future. We determined that a 10% change in the price of unleaded fuel would not have a material impact on our earnings for the period ended March 31, 2026. For additional information regarding our long-term borrowings and financial instruments, see Note 11 – Long-term Corporate Debt and Borrowing Arrangements, Note 12 – Debt Under Vehicle Programs and Borrowing Arrangements and Note 17 – Financial Instruments to our Condensed Consolidated Financial Statements.
Item 4. Controls and Procedures
(a)Disclosure Controls and Procedures. Under the supervision and with the participation of our Chief Executive Officer and Chief Financial Officer, our management conducted an evaluation of the effectiveness of our disclosure controls and procedures (as such term is defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”)). Based on such evaluation, our Chief Executive Officer and Chief Financial Officer have concluded that our disclosure controls and procedures were effective as of March 31, 2026.
(b)Changes in Internal Control Over Financial Reporting. During the first quarter of 2026, there was no change in our internal control over financial reporting (as such term is defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.
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PART II – OTHER INFORMATION
Item 1. Legal Proceedings
For information regarding our legal proceedings, see Note 13 – Commitments and Contingencies to our Condensed Consolidated Financial Statements and refer to our 2025 Form 10-K.
SEC regulations require us to disclose certain information about proceedings arising under federal, state or local environmental provisions if we reasonably believe that such proceedings may result in monetary sanctions above a stated threshold. In accordance with these regulations, we use a threshold of $1 million for purposes of determining whether disclosure of any such proceedings is required pursuant to this item.
Item 1A. Risk Factors
During the quarter ended March 31, 2026, we had no material developments to report with respect to our risk factors. For additional information regarding our risk factors, please refer to our 2025 Form 10-K.
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
Our Board of Directors has authorized the repurchase of up to approximately $8.1 billion of our common stock under a plan originally approved in 2013 and subsequently expanded, most recently in February 2023 (the “Stock Repurchase Program”). Under our Stock Repurchase Program, we may repurchase shares from time to time in open market transactions, and may also repurchase shares in accelerated share repurchases, tender offers, privately negotiated transactions or by other means. Repurchases may also be made under a plan pursuant to Rule 10b5-1 under the Securities Exchange Act of 1934, as amended (the “Exchange Act”). The timing and amount of repurchase transactions is determined by management based on our evaluation of market conditions, our share price, legal requirements, restricted payment capacity under our debt instruments and other factors. The Stock Repurchase Program may be suspended, modified or discontinued without prior notice. During the first quarter of 2026, no common stock repurchases were made under the Stock Repurchase Program. As of March 31, 2026, approximately $757 million of authorization remained available to repurchase common stock under the Stock Repurchase Program.
Item 5. Other Information
During the quarter ended March 31, 2026, no director or Section 16 officer of the Company adopted terminated
Item 6. Exhibits
See Exhibit Index commencing on page 42 hereof.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
AVIS BUDGET GROUP, INC. | ||||||||||||||
| Date: | April 29, 2026 | /s/ CATHLEEN DEGENOVA | ||||||||||||
Cathleen DeGenova | ||||||||||||||
Senior Vice President and | ||||||||||||||
Chief Accounting Officer | ||||||||||||||
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Exhibit Index
| Exhibit No. | Description | |||||||
| 3.1 | Amended and Restated Certificate of Incorporation of Avis Budget Group, Inc., dated as of July 31, 2025 (incorporated by reference to Exhibit 3.1 to the Company’s Current Report on Form 8-K, dated July 31, 2025). | |||||||
| 3.2 | Amended and Restated Bylaws of Avis Budget Group, Inc., dated August 10, 2020 (incorporated by reference to Exhibit 3.2 to the Company’s Current Report on Form 8-K, dated August 13, 2020). | |||||||
| 10.1 | Series 2026-1 Supplement, dated as of March 11, 2026, between Avis Budget Rental Car Funding (AESOP) LLC and The Bank of New York Mellon Trust Company, N.A., as trustee and as Series 2026-1 Agent. (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K, dated March 13, 2026). | |||||||
| 10.2 | Series 2026-2 Supplement, dated as of March 11, 2026, between Avis Budget Rental Car Funding (AESOP) LLC and The Bank of New York Mellon Trust Company, N.A., as trustee and as Series 2026-2 Agent. (incorporated by reference to Exhibit 10.2 to the Company’s Current Report on Form 8-K, dated March 13, 2026). | |||||||
| 10.3 | Third Amendment, dated as of March 20, 2026, to Sixth Amended and Restated Series 2010-6 Supplement, dated as of March 4, 2024, by and among Avis Budget Rental Car Funding (AESOP) LLC, as Issuer, Avis Budget Car Rental, LLC, as Administrator, JPMorgan Chase Bank, N.A., as Administrative Agent, the Non-Conduit Purchasers, the CP Conduit Purchasers, the Committed Note Purchasers, the APA Banks and the Funding Agents named therein and The Bank of New York Mellon Trust Company, N.A., as Trustee and as Series 2010-6 Agent. | |||||||
| 10.4 | Third Amendment, dated as of March 20, 2026, to Fourth Amended and Restated Series 2015-3 Supplement, dated as of March 4, 2024, by and among Avis Budget Rental Car Funding (AESOP) LLC, as Issuer, Avis Budget Car Rental, LLC, as Administrator, JPMorgan Chase Bank, N.A., as Administrative Agent, the Non-Conduit Purchasers, the CP Conduit Purchasers, the Committed Note Purchasers, the APA Banks and the Funding Agents named therein and The Bank of New York Mellon Trust Company, N.A., as Trustee and as Series 2015-3 Agent. | |||||||
| 10.5 | First Amendment, dated as of March 25, 2026, to the Series 2022-1 Supplement, dated as of April 14, 2022, between Avis Budget Rental Car Funding (AESOP) LLC and The Bank of New York Mellon Trust Company, N.A., as trustee and Series 2022-1 Agent. | |||||||
| 10.6 | First Amendment, dated as of March 25, 2026, to the Amended and Restated Series 2024-1 Supplement, dated as of January 31, 2025, between Avis Budget Rental Car Funding (AESOP) LLC and The Bank of New York Mellon Trust Company, N.A., as trustee and as Series 2024-1 Agent. | |||||||
| 10.7 | Equity Distribution Agreement, dated as of March 27, 2026, by and among Avis Budget Group, Inc. and BofA Securities, Inc., BNP Paribas Securities Corp., Credit Agricole Securities (USA) Inc., J.P. Morgan Securities LLC, Morgan Stanley & Co. LLC, RBC Capital Markets, LLC, Scotia Capital (USA) Inc., SG Americas Securities, LLC, Truist Securities, Inc. and Wells Fargo Securities, LLC (incorporated by reference to Exhibit 1.1 to the Company’s Current Report on Form 8-K, dated March 27, 2026). | |||||||
| 31.1 | Certification of Chief Executive Officer pursuant to Rules 13(a)-14(a) and 15(d)-14(a) promulgated under the Securities Exchange Act of 1934, as amended. | |||||||
| 31.2 | Certification of Chief Financial Officer pursuant to Rules 13(a)-14(a) and 15(d)-14(a) promulgated under the Securities Exchange Act of 1934, as amended. | |||||||
| 32 | Certifications Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. | |||||||
| 101.INS | XBRL Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document. | |||||||
| 101.SCH | XBRL Taxonomy Extension Schema. | |||||||
| 101.CAL | XBRL Taxonomy Extension Calculation Linkbase. | |||||||
| 101.DEF | XBRL Taxonomy Extension Definition Linkbase. | |||||||
| 101.LAB | XBRL Taxonomy Extension Label Linkbase. | |||||||
| 101.PRE | XBRL Taxonomy Extension Presentation Linkbase. | |||||||
| 104 | Cover Page Interactive Data File - (formatted as Inline XBRL and contained in Exhibit 101) | |||||||
42
FAQ
What were Avis Budget Group (CAR) revenues in Q1 2026?
Avis Budget Group generated $2.53 billion of revenue in Q1 2026. This was up from $2.43 billion a year earlier, mainly due to a 3% increase in revenue per day and favorable currency movements, partially offset by a slight decline in rental volume.
What net loss and EPS did Avis Budget Group (CAR) report for Q1 2026?
The company reported a net loss attributable to Avis Budget Group of $283 million in Q1 2026. This compared with a $505 million loss in Q1 2025. Diluted loss per share improved to $8.01 from $14.35 as losses narrowed despite ongoing cost pressures.
How did Americas and International segments perform for Avis Budget Group (CAR) in Q1 2026?
The Americas segment produced $1.96 billion of revenue and a $80 million Adjusted EBITDA loss. International delivered $568 million of revenue and a $13 million Adjusted EBITDA loss. Both regions benefited from higher revenue per day but faced increased operating and administrative expenses.
What was Avis Budget Group (CAR) Adjusted EBITDA in Q1 2026 and why did it change?
Adjusted EBITDA showed a loss of $113 million in Q1 2026. This loss widened from $93 million a year earlier as higher operating, selling, general and administrative, and vehicle interest costs outweighed the benefits of higher revenue per day and reduced fleet-related charges.
How strong was Avis Budget Group (CAR) cash flow in Q1 2026?
Net cash provided by operating activities was $434 million in Q1 2026. This compared with $619 million in the prior-year period. Total cash and cash equivalents, program and restricted cash ended the quarter at $651 million, modestly above $607 million a year earlier.
What is Avis Budget Group (CAR) vehicle-related debt position as of March 31, 2026?
Debt under vehicle programs totaled $18.39 billion at March 31 2026. This included $13.60 billion of vehicle-backed debt due to Avis Budget Rental Car Funding and other vehicle borrowings and finance leases. Contractual maturities within one year were $4.42 billion under these vehicle programs.
Did Avis Budget Group (CAR) repurchase shares or change stockholders’ equity in Q1 2026?
The company did not repurchase shares under its stock repurchase program in Q1 2026. Stockholders’ equity attributable to Avis Budget Group declined to negative $3.42 billion, driven mainly by the $283 million net loss and changes in redeemable non-controlling interests and accumulated other comprehensive income.