With a combined revenue of $21 trillion and $2.1 trillion in profits, the 2026 Fortune 500 is the definitive list of America's largest companies.

Fortune 500

Almost $20 trillion in revenue—and a record-breaking $1.87 trillion in profits. Introducing the 2025 Fortune 500, the definitive list of the biggest companies in America.

F500 2025-Avis Budget Group

<p>Avis Budget Group is a provider of vehicle rental and mobility solutions operating under several brands. The company offers short- and long-term rentals, as well as car-sharing and fleet management services. Its customer base includes leisure travelers, business clients, and corporate accounts. Avis Budget Group maintains operations at airports and urban centers around the world.</p>

The 300 companies on this year’s list brought in over $12.6 trillion in revenue for the latest 12 months, with the median revenue figure at $22 billion.

America's Most Innovative Companies

Industries included in the sector are automotive retail, general merchandisers, internet retail, and specialty retail.

Fortune Sector Leaders: Retailing

The Fortune 500, in its 70th year in 2024, ranks the biggest U.S. companies by revenue.

The Fortune 500, in its 69th year in 2023, ranks the biggest U.S. companies by revenue.

This year’s Fortune 500 marks the 68th running of the list.

This year’s Fortune 500 marks the 67th running of the list.

F500-2021-498-Avis Budget Group

The parent group of multiple car rental companies and Zipcar operates in 180 countries around the world.

This year's Fortune 500 marks the 66th running of the list.

F500-2020-345-Avis

The New Jersey-based rental car company that operates the Avis and Budget brands also owns car-sharing service Zipcar.

This year's Fortune 500 marks the 65th running of the list.

This year's Fortune 500 marks the 64th running of the list.

This year's Fortune 500 marks the 63rd running of the list.

This year's Fortune 500 marks the 62nd running of the list.

This year's Fortune 500 marks the 61st running of the list. Wal-Mart claims the top spot again. See who made the list.

Wal-Mart stayed on top as its sales crept closer to half-a-trillion dollars. Apple moved into the top five. And UnitedHealth Group continued its steady climb. 

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Avis Budget Group is a provider of vehicle rental and mobility solutions operating under several brands. The company offers short- and long-term rentals, as well as car-sharing and fleet management services. Its customer base includes leisure travelers, business clients, and corporate accounts. Avis Budget Group maintains operations at airports and urban centers around the world.

Q2 2026

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Avis Budget Group (CAR): Company Profile, Stock Price, News, Rankings

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Avis Budget Group

avis budget group

Greetings, and welcome to Avis Budget Group Second Quarter twenty twenty five Earnings Call. At this time, all participants are in a listen only mode. A question and answer session will follow the formal presentation. As a reminder, this conference is being recorded. I would now like to turn the call over to your host, Mr. David Calabria, Senior Vice President, Corporate Finance and Treasurer for Avis Budget Group. Thank you. You may begin.

Good morning, everyone, and thank you for joining us. On the call with me are Brian Choi, our Chief Executive Officer and Daniel Puna, our Chief Financial Officer. Before we begin, I would like to remind everyone that we will be discussing forward looking information, including potential future financial performance, which is subject to risks, uncertainties and assumptions that could cause actual results to differ materially from such forward looking statements and information. Such risks and assumptions, uncertainties and other factors are identified in our earnings release and our periodic filings with the SEC as well as the Investor Relations section on our website. Accordingly, forward looking statements should not be relied upon as a prediction of actual results, and any or all of our forward looking statements may prove to be inaccurate, and we make no guarantee about our future performance.

We undertake no obligation to update or revise our forward looking statements. On this call, we will discuss certain non GAAP financial measures. Please refer to our earnings press release, which is available on our website for how we define these measures and reconciliations to the closest comparable GAAP measures. With that, I'd like to turn the call over to Brian.

Thanks, David, thank you to everyone joining us today for our second quarter earnings call. It's great to be back and to have the opportunity to regularly connect with our investor community. Let me start by introducing Daniel Cunha, our new Chief Financial Officer, who joined us on July 1. Daniel started his career as a management consultant, became an investment professional in private equity, and finally settled in on the operational side as a CFO for two companies prior to joining Avis. He's a strategic thinker with real operating chops, and we're thrilled to have him on the team.

Daniel is less than a month in, so to the analysts on this call, please don't scare him off during Q and A. We have high hopes for him here. We're taking a slightly different approach with these calls going forward. You may have noticed we issued a financial supplement alongside our usual earnings release yesterday. That document includes the key highlights and financial details we would typically cover during this call.

You all know the format we followed in the past. This segment grew this much for an X percent increase. That line item moved slightly from here to there. But let's be honest, you can do the math. You don't need me to go through a roll call of data points.

There's a better way for us to use this hour. So today, I'd like to elevate the conversation. Let's move beyond the myopic month to month trends and instead focus on where we're taking EGA's budget group. What opportunities are we prioritizing? Where are we investing resources?

How does this all fit into our broader strategic vision? These are the questions that truly determine whether a company is expanding its moat or simply treading water. To be clear, we fully recognize the importance of consistent financial execution. Delivering on quarterly results is foundational. The sound of the cash register ringing consistently is what buys you the right to take a long term vision.

But meeting our financial expectations should be table stakes. The results of our operational performance should largely speak for itself with minimal interpretation or story to spin. I believe that's the case this quarter. So let's spend this time instead getting into how we're thinking about growth and opportunities at Avis. Let's clarify something though.

Cyclical growth and opportunity comes and goes as the macroeconomic winds blow. Structural growth and opportunity though, that comes from value creating innovation. Avis Budget Group has been around for seventy five years. If we want to be an enduring franchise for the next seventy five years, we must take on value creating innovation as a core responsibility today. A responsibility to our customers who deserve better services that aren't just reliable, but exceptional.

A responsibility to our teams who need new tools and technology that empower their visibility and productivity and a responsibility to our industry overall to grow the size of the pie instead of jostling year to year for a slightly bigger slice. These aren't abstract fortune cookie phrases to us. We're putting this commitment to practice and we're doing it now. Let me provide a tangible example of this by introducing you to Avis First. Avis First is our new premium product offering that defines what first class is for car rental.

What does that mean? Well, picture this. You arrive at the airport, grab your bag, walk out the door, and find an Avis First Concierge is already there waiting for you. He comes over to take your bag, hand you a bottle of water, and walk you all of eight steps to get to the car at the curb. It's exactly what you asked for, latest model year and low mileage with that new car smell.

It's 90 degrees and humid outside, but it's a crisp 68 degrees in your car because it's been preconditioned with the air on and the seat coolers running. The concierge makes sure that your phone's Bluetooth connects seamlessly, and the CarPlay screen pops up on the dash with your map and playlist ready to go. Before you leave, he reminds you to save yourself the hassle of filling up the tank. We only charge for the gas you use at pump rates, so just drop the car off curbside with your concierge and walk into the terminal when your trip is over. You chuckle a bit, remembering the last time you were at this airport and went with the ride hailing option.

Having to meander through a maze of walkways, elevators and parking garages, eventually going halfway back that odyssey to meet your driver with whom you've been furiously texting. You realize now there's a better answer. First class doesn't have to end at the gate if you rent Avis first. This isn't just a new business line. It's a category defining product for the rental car industry.

Historically, our sector has leaned solely on brand segmentation. Avis, Hertz and National is premium, Budget, Enterprise and Alamo is mid tier, Dollar and Thrifty is value, Payless, Fox and others is low cost. But within those brands, the actual product experience is highly variable. That's no longer acceptable. Today's traveler is more discerning.

Brand alone isn't enough. Customers expect clear, differentiated offerings within a brand, just like they do when they're flying. Everyone knows Delta is more premium than EasyJet, but Delta customers also understand the difference between Main Cabin, Comfort Plus, First Class, and now Delta One. The airline industry figured out that the post COVID traveler is happy to pay more for certainty, for quality, and for experience. It's not just about the lowest price.

It's about the value received. Avis First addresses that expectation head on. And while a first class flight from New York to LA can cost thousands of dollars more than an economy flight, an Avis First upgrade per day costs as much as a couple of Starbucks lattes. That's why I firmly believe that you can fly any class, but always drive First Class with Avis First. Our customers are the same customers as the Uniteds and Hiltons of the world.

It's already been proven that if you build a premium product, they will come. Airlines have done it. Hotels have done it. Why haven't we? And I don't mean we as an Avis Budget.

I mean why has nobody in the rental car industry tried to offer this first class experience in terms of both vehicle and service? The short answer is because it's hard. Your fleet has to be connected, and you need to coordinate between work groups spread out across acres of an airport. The only way to operationalize this is to enable the field with best in class technology that's purpose built for newly structured processes that are tailored airport by airport. And that's exactly what we did.

New work groups, new technology, new processes. If the consumer is paying for a seamless experience, we can't afford to deliver anything less. The behind the scenes lift to pull this off is substantial, but we've thoughtfully put in the work to bring this to life. I believe this is the single most innovative product our industry has seen in twenty years. And while we're creating and defining this category, I do expect others to follow.

And honestly, we welcome it. Our aim is to set a new standard that elevates the entire industry and increases its overall revenue and profit pools. Car rental is a mission critical piece of the travel ecosystem, and we need alongside the airline and hotel participants in the industry to service our shared customer. It's the only way to escape the vicious cycle of solely competing on price. It's also a way to win back some of the share that has been lost to BrideHale.

How many of you decide to just call a car because you don't want to deal with the busing or the air tram? With Avis First, you get all that convenience and more with none of the awkward chitchat from your Lyft driver. By further segmenting our customer base beyond the binary Avis or budget, we can service a demand that we know exists. We can provide a higher value product and we can grow the overall size of the industry. That's what we're delivering.

The price is slightly higher, but you receive so much more in return that it becomes a no brainer that Avis First is the best value proposition in the rental car industry. You don't need to take my word for it. Avis First is live in over a dozen locations today, and we're planning on over 50 markets being operational by the end of the year. If you find yourself going to airports like Denver or Palm Beach, or if you want to get out of Manhattan in the summer and prefer to have your rental car meet you at your apartment, why not give Avis First a try? Now to the members of our team who are listening to this, I just want to say game on.

It's out there in the open now, so let's show the world what excellence in our industry means with Avis First. Let's shift gears now and talk about another example of innovation that we're excited about. I wanted to provide more context around our recently announced partnership with Waymo in Dallas. I've been following the mobility ecosystem closely for nearly two decades, both as an investor and an operator. And while autonomous ride hailing may seem a world apart from traditional car rental, I've always believed that Avis had the potential to be a central player in this space.

Now I'll admit, this isn't immediately obvious to everyone. When you break down the value chain of autonomous vehicles, it's software and hardware that comes to mind. Clearly, Avis is not developing the code base to create a driverless system. And we're also not manufacturing the vehicles to power that technology. But in a world where that software can be licensed and that hardware can be purchased, the asset management aspect of the value chain gains much more importance.

AV ride hailing isn't just dealing with the zeros and ones of digital logic. These are heavy assets that need to be professionally deployed and managed at scale. AVs are electric, so they need to be charged daily with a network of L3 stations. AVs require maintenance of cameras, sensors, and fluids, which need to be performed regularly by expert technicians. In order to minimize rider wait time, AVs need to be positioned at travel optimized nodes, either in city center or at the airport.

AVs aren't cheap. Being able to finance billions of dollars of fleet with the best advance rates and the best interest rates, that becomes a competitive advantage. And lastly, AVs may be everywhere in the coming years, but I can guarantee you that into the future, no matter how advanced the technology gets, it is a mathematical certainty that someone will always leave a half eaten granola bar in the cup holder. That's why service infrastructure and the human touch still matter. AVs will need to be constantly cleaned by a team of service agents in order to provide an optimal user experience.

At Avis, we do all of those things daily. It is our core competency. In the city of Dallas alone, we manage a fleet of over 15,000 vehicles spread across 50 plus sites, maintained by dozens of technicians and serviced by a field team of over 500 individuals. We've been doing this day in and day out for over seventy five years. The universe of mega fleet managers is small, but Waymo did have a few choices.

Why did they go with us? Well, I can tell you how I positioned what we at Avis uniquely bring to the table. First, we are a truly global network. You can rent an Avis in 180 of the 193 countries around the world. If you're an AV player with global ambitions, we're the only mega fleet manager with that kind of footprint.

Second, instead of buying electric vehicles over the past few years, we've been investing in our EV infrastructure. We've been building out charging capabilities across our real estate portfolio. We've already gone through the brain damage of dealing with the long lead times from municipal authorities, both on the airport and utility side. Third, we have alignment with Waymo on how massive and attractive an opportunity this is. This partnership didn't materialize haphazardly to get a pilot up and running.

No, we dedicated some of our best talent on this partnership across transformation, operations, finance, real estate and legal as a reflection of our commitment to this business line. Fourth, and I think most importantly, is the tech forward way we intend to manage these AV assets, which builds on the newly designed operating system that's foundational to Avis First. Let me close by telling you why we're so excited about this opportunity. Avis plays in a very specific niche of the mobility ecosystem today. We are a leader in a $65,000,000,000 ish TAM industry that is dependent on travel.

That's people taking business trips or going on vacations. Now that's a good place to be. And as I mentioned with Avis First, I think there are substantial opportunities to grow that TAM and capture value. But in an autonomous world, Avis can participate in the meatiest part of the mobility ecosystem where the foremost macro factor isn't passenger deployments, it's vehicle miles driven. This is an addressable market that is hundreds of billions of dollars.

Avis has honed its superpower of mega fleet management by grinding pennies in the rental car industry. But like I said earlier, that core competency of maintaining vehicles, servicing vehicles, repositioning vehicles, purchasing, financing and disposing of vehicles, all of that is fundamental to fleet management, whether the vehicles are ICE, EV, or now AV. We have the opportunity today to apply the skill set we've earned over decades to a much larger market with much higher growth potential. We intend to use Dallas to learn together with Waymo and to see how we can succeed in this market and future markets to come. Initial testing is already underway, and we'll update you as milestone developments take place.

But here's what it all comes down to. We're building for what's coming next by launching category defining products like Avis First and actively shaping the future of the AV landscape with our Waymo partnership. These aren't just headlines. They're proof points to show that Avis Budget Group is not content with playing defense in a legacy category. We're here to win through innovation, carve out our place in the future mobility ecosystem, and by doing so, create durable shareholder value.

We're on that journey. We're excited for what lies ahead, and we're going to keep driving forward. Thanks for listening. With that, operator, let's open it up for questions.

Thank Our first question comes from the line of Adam Jonas with Morgan Stanley. Please proceed with your question.

Thanks. Good morning, everybody. First, Brian, I love the new format. Great job. I wish more companies did it.

I really hope they're listening. Please, please, please do that. Also, I thought the half eaten granola bar was like a free gift, so I'm gonna miss it if you clean it up too much. Two questions, Brian. First, the Dallas Waymo agreement, Can you confirm whether this was the result of a competitive process whereby Waymo considered other fleet and fulfillment partners?

And I'm curious who came to who first? And I got a follow-up.

Hey, Adam. Thanks for the kind words. Really appreciate it. With the Waymo partnership in Dallas, I can't speak for Waymo. We at Avis have been in discussions with multiple AV parties.

I can only imagine that Waymo having had previous partnerships before had been in discussions. So I do think that both parties went into this eyes wide open considering the playing field.

Okay. And just, Brian, if you put on your really long term hat, I'm thinking out ten to twenty years from now, what's your vision for Avis Budget's business model? How would your revenue and operational model have evolved? And just kind of along those lines, where you see the surface area evolving and expanding with autonomous machines and your ability to service them and maintain them? Thanks.

Yes, sure. I mean, is something that we obviously give a lot of thought to. Today, tomorrow, going forward, I really do think that the beating heart of the business is what we do today. It is actually providing a mega fleet management, which is providing the highest utilization, keeping the lowest number of unrentalable cars in our fleet and providing a high quality service to our customers. That's what we do.

We do it today in the rental car space. We're going to continue doing it in the rental car space going forward. But in the future, in this autonomous world, as we kind of utilize the core skill set that we've built across seventy five years, over seventy five years of history, we think that we can expand our footprint and our sphere of influence in this mobility ecosystem. So it starts here with kind of autonomous ride hail. Like I said in my prepared remarks, a lot of the core competencies that we do on a day in day out basis, very transferable to autonomous ride hail.

And as we said in our press release, Dallas, you said, is the start. We expect to expand this to other cities and we see a good long runway in that. Over time, like I said, autonomous vehicles is touching, like I said, the meatiest part of the mobility ecosystem, which is vehicle miles driven. That opens up a lot of other areas that we can play in as well in terms of expanding our horizon. So right now, like I said, core of the business is the rental car business.

But as the years progress, think we can expand our footprint.

Thank you. Our next question comes from the line of Chris Woronka with Deutsche Bank. Please proceed with your question.

Hey, good morning, guys. Brian, welcome to the seat and also welcome to Daniel. It's a slight follow-up on Adam's question, maybe asking in a slightly different way, which is, if you think about this first partnership with Weibo and Brian, I just heard your comments about what you longer term, how it might evolve. Kind of shorter term, I'll say next three to five years, How do we think about the bandwidth you have to do more partnerships like the one you announced with Weibo, but also potentially other things? And how do you kind of fit your existing infrastructure into that?

And what kind of incremental investments are you willing to make? And how do you internally kind of measure the ROI on these businesses? And then I'll have a follow-up. Thanks.

Yes, sure. Chris, I think we have a lot of bandwidth to take on future partnerships. Like I said, with Waymo, this is the first of what I hope is many cities. And in order to do that, are going to have to put our balance sheet to work. That's something that we're not shy about doing.

What I do want to be careful of is that we are not going to take our eye off the core part of our business, which is rental car. We want to make sure that the partnerships that we do are thoughtful, that they're deeply integrated and that they're long term. We're not here to just put out a bunch of press releases and partner with a bunch of people. We are in discussions with many people. But who we choose to partner with, we're going make sure that we do it in a thoughtful way, in a true partnership where a one plus one equals three. So that's kind of how we're looking at it.

Okay. Thanks, Brian. And then going back to the Avis First initiative, which I think is really differentiated for now at least. Is there any change to how you think about fleet on that? I mean I know that one of the tenants of it is you're going to have the newest cars in here. Does that in terms of your fleet plan for, next year, does that make you do more larger premium vehicles? Or is this just kind of reallocating within what you had planned anyway?

Hey, Chris. So with regards to Avis First and the fleet, one thing that I do want to point out that with the difference between Avis First and I think other offerings that have been out there is that it's not just about the car. Yes, the car is an important aspect of it and we're going make sure that the right car, a premium car is there for our Avis First customers. But when you think about first class for an airline, it's not all just about the seat, it's about the whole experience. And I think that's what we're building from soup to nuts, just reimagining the whole customer journey through that lens.

But to answer your question, yes, obviously, the car is a big part of that. And how we're in fleeting cars or how we're participating within our fleet negotiations this year takes that into mind. We are going to consider kind of more premium vehicles, but we already have a lot of these premium vehicles in our fleet. This isn't about just like luxury where it has to be some German engineered Porsche or something like that. For us, I think premium in at Avis First can be a Jeep Cherokee.

But we want to make sure that it's the newest model year, that it is very, very low mileage. Right now, it's kind of been a random distribution at times of who gets that like brand new car. Right now, we're just trying to segment our business a little better to offer that product to the customers that are willing to pay a little bit more for that premium service.

Thank you. Our next question comes from the line of Dan Levy with Barclays. Please proceed with your question.

Hi, good morning. Thanks for taking the questions. And Brian, congrats on starting the new seat. Dale, welcome. If we could just, sorry, go back to perhaps the more myopic part of the results for a second, just the guidance and maybe we could just attack some of the different trends.

Perhaps, team, if you could just talk to the implied second half, the puts and takes between DPU and RPD, where it seems like DPU is significantly better, but it seems like there's some offsetting effect in the guidance for the second half, whether it's from RPD or whether it's from cost. So maybe you can just talk about the puts and takes there in the implied second half guidance of 900,000,000 to 1,000,000,000

Sure. Dan, let's start I'll answer your myopic question with the high level. Let's start with the macro overview here. So, kind of what we're seeing in terms of RPD isn't all that different from what other participants in the travel industry are seeing. I think demand is firming up post the passage of the big beautiful bill.

For us leisure is stronger than commercial right now and pricing is more challenged than volume. And this is true in PRASM for airlines. It's true for RevPAR for hotels and RPD for us. But we do think that there are signs that things are firming up for the summer and I think summer is off to a good start. I think one of the reasons for that and kind of why you're seeing some of these issues on the DPU side where I think you may have expected slightly stronger DPU maybe this quarter in guidance is that we're dealing and having to navigate with two big issues here.

That's tariffs and recalls. So let's just start with tariffs. The uncertainty around auto tariffs, of course, that's lifted the used car market. That's been a clear benefit. And when you look at the asset base, the vehicle asset base that we have on our balance sheet, like it is meaningful.

But I want to note, we're not changing how we account for gross depreciation at this time. We just took a write down at the beginning of the year. So Dan, you better believe we're going to stay conservative on this front. So if you keep that gross depreciation constant, the only way to harvest used car gains is by selling the older model year vehicles. And to do that, you actually have to inflate the new model year vehicles.

And that's where we're getting hung up. The tariff uncertainty is causing OEMs to delay production and delivery. So our in fleet schedule is getting pushed. So we're having to hold on to the older model year cars for longer. Certain cars that were programmed that we were going to return that are a little higher priced we're going to turn back as we're getting in new model year cars, we've been having to hold on to.

So we're dealing with a fleet rotation dynamic right now. So that's a negative headwind there. And then again, on top of that with TPU, have an issue with recalls. And listen, I don't want to make excuses here for recalls on a normal basis because recalls are a part of doing business in the rental car industry. We deal with it every single day.

But this one's different. It's massive. It affects 4% of our America's fleet. And you know that if cars are on recall, we're not allowed to sell them. So we're holding these on our book.

And by the way, it's not just any vehicles, it's some of our highest RPD segments. These are transit vans and minivans. So they're actually more expensive to hold as well. There's also no visibility on when this gets resolved because it's a parts defect and we've been given no visibility on delivery time for these parts from the OEMs. And lastly, the cherry on top of this garbage sundae is that it's hitting us in the heart of summer right now.

It's a gut punch. There's no other way to describe it. So to put this all together, listen, the only silver lining with this recall and the tariffs, it's not unique to Avis. The entire industry is affected. And I think we're seeing that right now lead to some pricing recalibration. So yes, hope that answers your question, Dan.

That's very helpful. Thank you. And the second question, if we could just talk about the AV strategy and specifically we see you're playing for a very large TAM, but I think what's maybe unclear to some folks is perhaps the type of revenue model here. So maybe you could just give us the parameters roughly, not just now, but in the future, of what the revenue type model looks like? Is this on a per vehicle basis?

Are there other services involved? And does this eventually go down the route? One of your core competencies is acquiring and disposing vehicles. Is that eventually something that gets factored in here? I mean, I realize that's way down the line, but just give us a sense of the type of revenue model here on the AV side.

Yes, sure. Dan, I appreciate the question. And it is exactly what I'd be asking if I were in your shoes. I'd love to get into more detail, but given how tightly integrated this partnership is, Waymo and Avis have agreed to maintain pretty tight messaging at this stage. So I'm going give you everything that I can share right now.

So some of this was already in the press release. Initial mapping, the testing, it's already underway. We're going to start offering rides to the public next year. It is a multi year agreement. We fully expect to expand into additional cities in the near future.

And to your question, I think like other markets where Waymo operates, the vehicles that we're going to be starting off with in Dallas is the fully electric Jaguar I PACE. It's powered by their fifth generation Waymo driver. At this point, those vehicles are on Waymo's balance sheet. As the landscape evolves, as different vehicles are put into place, I don't think it's unreasonable to say that how that changes and who holds what on the balance sheet that can change as well. So we're not disclosing the financial details of this arrangement, but I do want to say this.

It's not like we woke up last month and say, hey, like we need to get into this AD game. Like we've been in serious discussions with Waymo and building towards this since January 2024. So we took the time to structure this thoughtfully. We have full alignment on incentives so that the big variables that affect profitability for Waymo, that's the exact same variable. Those are the exact same variables that affect profitability for us.

So we're in it to win together in Dallas, but the framework is built to scale to future cities.

Thank you. Our next question comes from the line of Chris Stathalopoulos with Susquehanna International Group. Please proceed with your question.

taking my questions. Brian, Daniel, welcome. Daniel, so Brian, excuse me, I appreciate the unveiling of the vision here. It's refreshing. Guess a lot to unpack.

In two or three senses, maybe if you could, you know, encapsulate how we should think about Avis of the future. So is this more of a technology enabled cleaning rental company with now kind of more discrete pricing around segments bundling, unbundling? And then also help us think about this move here and the two initiatives announced, we should conceptualize that, I guess, the context of normalized earnings here for EBITDA, which has been a core focus for investors since exiting the pandemic. Has this become more of a mid single, high single digit story? Just want to tie those two pieces together.

And again, what's the sort of the, I guess, the tagline, if you will, as we move forward with this new plan? Thanks.

Yeah, sure. Chris, I think the way that we're viewing Avis' role in the mobility ecosystem is that we're here to empower mega fleet management. I mean, we've been doing it for ourselves in terms of car rental for, like I said, seventy five years. We think that this is a core competency that others in the mobility space can use. When you think about, like I said, the value chain of autonomous mobility, there is the software and hardware component And people are sticking to their core competencies over there.

And I think the thing that people haven't paid a lot of attention to is the fleet management aspect of it. This isn't pure internet anymore. It's Internet of Things. It's not an algorithm that you need to maintain with a few software engineers. These are heavy assets that need to be actively managed.

And kind of what I said in my prepared remarks, all those aspects of it, yes, cleaning is one of them, but it's one of many. Having a nationwide, having a global footprint of real estate, being able to energize and charge these facilities, having just the employee base to be able to service the vehicles, being able to maintain the vehicles, all of that I think goes into mega fleet management and that's the value that we provide to the value chain. In terms of kind of your question about where we like steady state run rate earnings of this is, like we don't have any changes there. I think we put out there post pandemic that $1,000,000,000 is the bare minimum of what we want to do in a normalized year and that's going to continue going forward. I don't think that this is a particularly normal year given what we're having to deal with, with the tariffs and with the recalls.

But our expectation is that's fundamental. Like we need to whatever investments we make, whatever partnerships we want to do, that's additive, but we need to be a $1,000,000,000 EBITDA business going forward. And like I said in the prepared remarks, I think it's doing that. I think it is by generating substantial free cash flow that we earn the right to go and participate in these other parts of the ecosystem.

Okay. Thank you. And my second question, so if the secondary or used car market continues to move higher in response to tariffs, how are you thinking about the 2026 purchases? Does the I guess the gain or benefit this year around DPU become a headwind next year? Is it the plan at this point just to kind of hold on to these older cars and I guess be more opportunistic around the purchases?

Just wanted to understand the plans or tactics in place around managing fleet and DPU given what is likely to be a volatile six to twelve months secondary. In Thanks.

Yes. Chris, we did this whole situation of holding on to the fleet for longer. It didn't work out for us. We're not going to do that again. I think from a customer service aspect, from a vehicle maintenance aspect, like that's not what that's not our game plan here.

Tariffs are no tariffs. So right now, fleet discussions are ongoing with all of our OEM partners right now. We are in the thick of it. The recent tariff uncertainty, it slowed the pace. But now that we have a little more clarity around tariffs like with Japan and the EU, we do expect things to pick up.

And we've actually already signed a few deals already. But to your point, we're being cautious. Like that write down we took early this year, it is still fresh in my mind and it was driven largely by purchase made for the model year 2023 and model year 2024 cycles when we purchased at elevated levels. So despite tariffs coming and that having an impact on used car prices, we can't repeat that same mistake with the model year 26x. We have to remain disciplined.

So the approach we've taken with the OEMs, like we're being straightforward and like I said, disciplined. What we're trying to do is provide them full transparency to say, this is what the market is right now. This is how we're modeling the residual values on a bin by bin basis. We have a willingness to be flexible. And we need this clear understanding both between us as car rental and the OEMs that these are long term relationships.

The deals have to work for both sides. So I think this position has been appreciated. And while we're not rushing into volume commitments, we're right now, I think we're in a good place heading into this buying cycle.

Thank you. Our next question comes from the line of Lizzie Duff with Goldman Sachs. Please proceed with your question.

Hi there. Thanks for taking the question. I appreciate all the color. And welcome, Brian and Daniel. Just wanted to go back to the RPD side and curious kind of what you're kind of seeing there in recent weeks, sorry to be so myopic, but also what's kind of factored into your guidance for this year for the second half in terms of any possible RPD improvement given some of the factors you called out? Thanks.

Hey, Lizzie. Honestly, like I'm a little surprised by the restraint that it took five questions now to get to the week by week RPD. It is actually it's a fair question though, because the recalls have happened pretty recently or at least the large recalls of scale, the ones with no fix. We are seeing some green shoots here in terms of RPD because of that. It's not like we're making a call that this is structural at this time.

But RPD has been, you see it in the numbers pretty challenged all throughout this year. I do think industry supply overall tightening up is having an impact and that RPD is getting better because of it. But from our perspective, I've said it before, I'll say it again, like we at Avis do not set rental car prices. We respond to them given consumer demand and industry supply. So like I said, industry supply that's shrinking a little bit.

Industry demand, surprisingly, I know there's a lot of uncertainty around there with the economy, but the demand is out there to be got right now. People are still traveling. So we're doing what we can with our philosophy around RPD, which is we're fleeting slightly inside of demand, making sure that we receive an appropriate ROI on the cars that we do put out there. And from our perspective, we're hoping that has a positive influence on RPD.

Got it. That's helpful. Thank you. And just one follow-up. I'm curious what you're seeing out there in the competitive environment, Felt like enterprise was pretty competitive last year, then sixth maybe stepped on the gust this year.

Avis Budget Group (CAR) Q2 2025 Earnings Call Transcript

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