Avis Budget Group ($CAR) Stock Hub 2026: $0.98 A Share, And A $3.4 Billion Equity Deficit

01 A Quarter That Earned $0.98 On 35 Million Shares

Avis Budget Group earned 98 cents a diluted share in the second quarter of 2026. The same company lost $7.01 a share in the first half. Both numbers are correct, and the distance between them is the single most important thing to understand about this stock: with 35.3 million shares outstanding, every dollar of profit or loss lands on a share count roughly a tenth the size of the one Hertz carries.

Start with the operating result, because it is unremarkable in the best sense. Revenue of $2.998 billion was slightly below the $3.039 billion of a year earlier. Adjusted EBITDA of $286 million came from $237 million in the Americas and $73 million internationally, less $24 million of corporate cost. Net income was $63 million, of which $35 million was attributable to Avis Budget Group shareholders. This is a business that rented 43.9 million car days at $68.29 a day and made a modest margin doing it.

Now the balance sheet, because it is not unremarkable at all. Stockholders’ equity attributable to the group is negative $3.388 billion. Vehicle programme debt is $19.850 billion, corporate debt a further $6.022 billion. Total assets are $32.328 billion. A company can carry a deficit that large only because the fleet financing is secured against the fleet and the equity has been deliberately shrunk over a decade of buybacks.

That is the frame for everything below: a fleet business operating normally, on a capital structure engineered to concentrate the outcome into a very small number of shares.

02 Executive Summary

This page is the second quarter of 2026 read from the Form 10-Q filed on July 29, 2026 and the results release filed the day before.

The quarter. Revenue of $2.998 billion against $3.039 billion. Pre-tax income of $73 million against $15 million. Net income of $63 million, $35 million attributable to the group, and diluted earnings per share of $0.98 against $0.10 a year earlier. Adjusted EBITDA of $286 million.

The half. Revenue of $5.528 billion against $5.469 billion, and a pre-tax loss of $267 million against $662 million. The loss attributable to the group was $248 million, or $7.01 per diluted share. The first quarter is structurally the weakest of the year in vehicle rental, and in 2026 it also carried the fleet actions taken at the end of 2025.

The fleet. An average of 664,638 vehicles, 43.9 million rental days, revenue per day of $68.29 and utilisation of 72.6 per cent. Per-unit fleet cost of $292 a month, or $290 excluding currency effects, down 4 per cent year over year. The Americas ran 489,192 vehicles at 73.2 per cent utilisation and $70.20 a day.

The balance sheet. Cash of $558 million. Corporate debt of $6.022 billion and vehicle programme debt of $19.850 billion. Equity attributable to the group of negative $3.388 billion, from negative $3.129 billion at the end of 2025. Total assets of $32.328 billion.

The capital actions. In May 2026 the company added $300 million to its 8.000 per cent senior notes due February 2031. In June 2026 it redeemed $300 million of the 5.750 per cent notes due July 2027, leaving $348 million outstanding, and refinanced its $2 billion revolving facility to June 2031 while adding a $200 million facility to June 2028. No shares were repurchased in the first half; $757 million of authorisation remains.

What is not in the release. There is no numerical guidance. The company did not publish a revenue, EBITDA or earnings range for the rest of 2026, and the only forward-looking language from chief executive Brian Choi is qualitative. Anyone modelling the second half is modelling without a company number to anchor to.

03 The Share Count Is The Story

Avis Budget has 35,325,754 shares outstanding, measured at July 22, 2026 on the cover of the Form 10-Q. That figure is the result of one of the most aggressive buyback programmes run by any large American company over the last decade, and it changes how every other number on the page behaves.

The mechanics are simple and worth stating plainly. Buying back stock with debt converts equity into leverage. Book equity falls, and if the buybacks exceed cumulative retained earnings, it goes negative. Earnings per share rise mechanically because the denominator shrinks. Volatility per share rises for exactly the same reason: the same dollar of operating swing is divided among fewer holders.

The second quarter is a clean illustration. Net income attributable to the group of $35 million produced $0.98 of diluted earnings per share. Had that same $35 million landed on the share count Hertz carries, it would have produced about eight cents. In the first half, an attributable loss of $248 million produced $7.01 of loss per share. The business did not become ten times more volatile. The share count did.

Two more consequences follow. First, the equity is a thin slice of a large enterprise: with $25.9 billion of combined corporate and vehicle debt against a negative book equity, the market value of the shares is a residual claim on a heavily financed asset base. Second, the remaining buyback authorisation of $757 million is large relative to the current share count, and the company chose not to use any of it in the first half. That choice is itself information about where management believes cash is better deployed.

04 Second Quarter 2026 In Numbers

The reported income statement, second quarter and first half, as filed.

The gap between net income of $63 million and the $35 million attributable to the group is the share of results belonging to non-controlling interests. It is a permanent feature of the reporting and it means the earnings per share line is computed on the smaller number, not the headline one.

Revenue fell 1.3 per cent year over year while adjusted EBITDA rose sharply, which tells you the improvement came from cost rather than from demand. The per-unit fleet cost line is where it sits: $292 a month against a figure 4 per cent higher a year earlier. On 664,638 vehicles, four per cent of monthly fleet cost is roughly $35 million a quarter, which is most of the attributable profit.

05 Americas: Higher Rate, Lower Utilisation

The Americas is roughly three quarters of revenue and the majority of the fleet.

Adjusted EBITDA of $237 million on $2.288 billion of revenue is a 10.4 per cent margin, and it is the number that carries the group. For the first half the Americas produced $157 million, which means the first quarter was negative and the second quarter more than repaired it.

The operating combination here is different from the one Hertz reports. Avis rents at a higher daily rate, $70.20 against $62.11, and runs its fleet less intensively, 73.2 per cent utilisation against 83 per cent. Neither approach is automatically better. A higher rate with lower utilisation earns more per rented day and wastes more depreciation on idle cars; a lower rate with higher utilisation does the reverse. What matters is the product of the two, and on the disclosed figures the two companies end up within a few percentage points of each other on revenue per available vehicle.

06 International: Same Margin, Cheaper Fleet

International is the smaller book, and in this quarter the higher-margin one.

Adjusted EBITDA of $73 million on $710 million is a 10.3 per cent margin, effectively identical to the Americas figure, achieved with a lower daily rate and a materially lower fleet cost. Excluding currency effects the international fleet cost was $260 a month against $301 in the Americas, a $41 monthly gap that reflects a cheaper vehicle mix, different purchase and buy-back arrangements with manufacturers, and a used car market with different dynamics.

For the first half, international adjusted EBITDA was $60 million against $157 million in the Americas, so the seasonal shape is similar in both. European leisure demand concentrates in the third quarter, which means the segment’s most important quarter has not yet been reported.

07 Per-Unit Fleet Cost, And What Four Per Cent Is Worth

Per-unit fleet cost is the number Avis manages most visibly, and in the second quarter of 2026 it fell to $292 a month across the group, $290 excluding currency, down 4 per cent year over year.

This is the same economic quantity Hertz calls depreciation per unit, presented on a slightly different basis, and it moves for the same reasons: what the company paid for the vehicle, what the manufacturer agreed to take it back for, how long it is held, and what the used market pays when it is sold. A four per cent reduction across 664,638 vehicles is worth roughly $12 a vehicle a month, or about $24 million a quarter. Against attributable net income of $35 million, that is most of the result.

The other half of the equation is utilisation at 72.6 per cent. Ten points of utilisation on this fleet is worth roughly 4.4 million rental days a quarter, and at $68.29 a day that is $300 million of revenue. Avis has chosen a lower-utilisation, higher-rate operating point than Hertz, and the honest way to read that choice is as a bet on pricing discipline: it works while daily rates hold and it is expensive when they do not.

Watch the two lines together. Revenue per day fell slightly year over year while fleet cost per unit fell 4 per cent. That combination is what produced a higher adjusted EBITDA on lower revenue, and it is the only combination that produces a durable improvement in this industry.

08 The Balance Sheet And The $3.4 Billion Deficit

The balance sheet at June 30, 2026, as filed.

Vehicle programme debt of $19.850 billion is the largest single number on the balance sheet, and it is also the least alarming one in isolation: it is secured against roughly 665,000 vehicles, sized to their value, and repaid as they are sold. It includes related-party debt through AESOP, the financing vehicle that owns the fleet.

Corporate debt of $6.022 billion is the number that measures the company’s own leverage. Against first-half adjusted EBITDA of $173 million and a seasonally stronger second half still to come, that is a substantial obligation, which is why the June refinancing matters more than its headline suggests.

The equity deficit deepened by $259 million in six months, which is what a $248 million attributable loss does to a balance sheet that has no cushion. Negative equity does not trigger anything by itself. What it removes is the option to solve a problem by issuing shares at a comfortable price, and it makes every covenant test a cash-flow test rather than a net-worth test.

09 The June Refinancing: Four Years For 225 Basis Points

Three capital actions in two months tell you how Avis is managing its corporate stack.

May 2026: a $300 million add-on to the 8.000 per cent senior notes due February 2031. An eight per cent coupon on unsecured corporate paper is the price of the balance sheet described above.

June 2026: redemption of $300 million of the 5.750 per cent notes due July 2027. The remaining balance fell from $645 million at the end of 2025 to $348 million. The company effectively swapped a 2027 maturity at 5.75 per cent for a 2031 maturity at 8.00 per cent. That is four extra years of runway bought with 225 basis points of additional coupon, which on $300 million is $6.75 million a year.

June 2026: the $2 billion revolving credit facility refinanced to June 2031, plus a new $200 million facility to June 2028. Revolver capacity is what keeps a fleet business liquid between the seasonal trough and the peak.

What remains is the $348 million residual of the 2027 notes, which is the only corporate maturity inside the next twenty-four months. The next tranche after that is the 4.750 per cent notes due April 2028. On the letter-of-credit side, $464 million has been issued under the standby facilities and there is no remaining capacity on that line, which is a constraint worth noting for a business that posts collateral in the ordinary course.

10 Waymo In Dallas: What It Is And What It Is Not

On June 1, 2026 Avis went live with Waymo in Dallas, Texas, under a partnership disclosed in the second quarter release. Avis manages the fleet operations for autonomous vehicles that Waymo operates.

Read it for what it is, and not for what a headline can make of it. The immediate financial contribution is not disclosed and is, on any plausible basis, immaterial to a company with $12 billion of annual revenue. What the arrangement does is place Avis on the operating side of a technology that could eventually remove the driver from the vehicle rental equation altogether.

The strategic logic is that autonomous fleets still need what rental companies already own: depots, cleaning, maintenance, damage repair, tyre and fluid management, licensing, insurance handling and the ability to move thousands of vehicles between cities. If robotaxi networks scale, someone has to run that layer, and the companies that already run it at scale are Avis, Hertz and the truck rental operators.

The counter-argument is equally straightforward. A rental company that becomes a service contractor for a technology owner has swapped a business where it sets the price for one where it does not. The margin on fleet operations for a third party is a negotiated fee, not a daily rate that rises with demand.

Neither case is settled by a single city and one summer. Dallas is a pilot, and the correct way to track it is by counting additional cities and disclosed economics, not by pricing a transformation that has not yet earned a line in the segment tables.

11 Ownership, Covenants And Legal Exposure

The largest disclosed holder is SRS Investment Management, which reported 17,430,882 shares in a Schedule 13D amendment filed on August 25, 2023, equal to 45.0 per cent of the class at that time. No later amendment appears on EDGAR through August 21, 2026, so the current percentage is not confirmed by a recent primary filing, and the share count has changed since.

Concentration of that order matters for three practical reasons. It reduces the effective free float, which raises volatility per unit of trading volume. It gives one holder a decisive voice in any strategic decision that requires shareholder approval. And it interacts with the buyback history: repurchases shrink the denominator, so a holder who does not sell rises as a percentage without buying a share.

Governance and litigation sit in the same section for a reason: they describe claims on the company that are not debt. The Form 10-Q states that the company was in compliance with the financial covenants governing its indebtedness at June 30, 2026, and that it is not aware of any instances of non-compliance in the vehicle-backed funding programmes. It discloses potential additional exposure of up to approximately $40 million beyond amounts already accrued across a set of legal matters, including proceedings connected to former subsidiaries and a class action pending since 2014.

12 Avis Against Hertz And U-Haul

The three United States listed vehicle rental companies, on their most recently reported quarters.

Avis and Hertz are the same trade run with opposite settings. Avis prices higher and utilises less; Hertz prices lower and utilises more. Avis has ten times fewer shares and five times the equity deficit. On the most recent quarter both earned roughly the same absolute profit, and the per-share outcomes differ by a factor of twenty because of the capital structures, not because of the rental businesses.

U-Haul is the outside case that keeps both honest: positive equity of $7.66 billion, self-storage revenue growing alongside vehicle rental, and no fleet utilisation metric at all, because a one-way truck rental network does not work the way an airport counter does.

13 What Has To Hold

Four things decide whether the second quarter repeats.

Per-unit fleet cost has to keep falling, or at least stop rising. The 4 per cent reduction is most of the year-over-year improvement in adjusted EBITDA. It depends on vehicle purchase terms and used values.

Revenue per day has to hold near $68. It slipped slightly year over year. Avis has chosen the higher-rate, lower-utilisation operating point, and that only pays while rates hold.

The third quarter has to carry the year. The first half produced a $248 million attributable loss. Everything that turns 2026 into a profitable year has to happen between July and December, and the company has published no numerical guidance to frame it.

The corporate stack has to stay refinanceable. The June actions extended the revolver to 2031 and pushed a 2027 maturity to 2031 at 8.00 per cent. What remains inside two years is the $348 million residual of the 2027 notes.

14 Risks And Red Flags

Negative equity of $3.388 billion. It is the mathematical consequence of a decade of debt-funded buybacks plus recent losses. It removes the cheap equity option and concentrates outcomes.

A 35 million share count amplifies everything. A quarter that earns $35 million attributable prints $0.98; a half that loses $248 million prints $(7.01). The operating swing was ordinary; the per-share swing was not.

No published guidance. The second quarter release contains no revenue, EBITDA or earnings range. Anyone estimating the second half is doing so without a company anchor.

Residual value and fleet cost risk. Per-unit fleet cost is set by purchase terms and used vehicle values, and both are outside the company’s control.

Utilisation at 72.6 per cent. Roughly a quarter of the fleet was not earning at any moment in the quarter, while depreciating on schedule.

Concentration of ownership. The most recent primary filing on SRS Investment Management, from August 2023, showed 45.0 per cent of the class. The absence of a later amendment means the current figure is not confirmed.

Letters of credit are fully drawn. $464 million issued with no remaining capacity on that facility, in a business that posts collateral routinely.

Legal exposure. Up to approximately $40 million beyond accrued amounts, across matters including proceedings tied to former subsidiaries.

15 Scenarios

Three descriptive paths, none of them a forecast and none of them a recommendation.

Cost discipline compounds. Per-unit fleet cost keeps falling through the second half, revenue per day holds, and the third quarter delivers the seasonal peak on a leaner cost base. In that world the full year turns positive at the attributable line, and on 35 million shares the earnings per share figure is large enough to change how the equity is discussed.

Pricing gives way. Industry capacity returns faster than demand, daily rates soften, and the company’s lower-utilisation operating point becomes expensive. Revenue per day falling five per cent on 43.9 million quarterly rental days is roughly $150 million of revenue, which is more than the quarter’s entire adjusted EBITDA margin cushion.

The financing path. The corporate stack is now mostly termed out, with the notable residual being $348 million due in 2027. The cost of the extension was 8.00 per cent money. A further extension at similar or higher rates is manageable in size and unhelpful to interest expense, which is already a material line against a first-half operating result.

16 Bottom Line

Avis Budget in the second quarter of 2026 is a competent fleet operation attached to an unusual capital structure. Revenue of $2.998 billion was slightly lower than a year earlier; adjusted EBITDA of $286 million was materially higher, and the difference came from a per-unit fleet cost of $292 a month, down 4 per cent. That is the operating story, and it is a good one.

The financial story is separate. Equity attributable to the group is negative $3.388 billion. Vehicle programme debt is $19.850 billion and corporate debt $6.022 billion. There are 35.3 million shares. The first half lost $7.01 per share and the second quarter earned $0.98, on a business whose absolute results moved far less than those two numbers suggest.

What to watch, in order. The third quarter, because it is the seasonal peak and the year depends on it. Per-unit fleet cost, because the improvement lives there. Revenue per day, because the operating model assumes it holds. The Waymo arrangement in Dallas, for additional cities and any disclosed economics. And any Schedule 13D amendment from SRS, because the ownership picture on file is three years old.

Related Research On Merlintrader

These pages sit alongside it in the Merlintrader travel section.

• Hertz Global Holdings ($HTZ) Stock Hub — the same trade run at higher utilisation and a lower daily rate, on 356.5 million shares.
• U-Haul Holding ($UHAL) Stock Hub — vehicle rental attached to a self-storage property company, with $7.66 billion of positive equity.
• Merlintrader Travel Pub — the travel index, with every airline, cruise and vehicle rental hub and its own update date.