CAR Q3 Adjusted EBITDA Falls 8% as Rental Days Decline

CAR reported lower third-quarter 2026 revenue and adjusted EBITDA as rental volumes declined in both the Americas and International businesses. Improved fleet efficiency lifted companywide vehicle utilization, while year-to-date adjusted free cash flow turned positive and management projected about $850 million of adjusted EBITDA for the full year.

Revenue for the quarter fell 2% year over year to $3.44 billion as rental days declined 3% to 48.1 million. Revenue per day was broadly flat excluding exchange-rate effects at $71.54. The average rental fleet decreased 5% to 706,717 vehicles, outpacing the decline in rental days and helping utilization rise 2 percentage points to 74.0%.

Adjusted EBITDA declined 8% to $513 million. GAAP net income fell 45% to $199 million from $360 million a year earlier. Per-unit fleet costs increased 4% to $316 per month excluding exchange-rate effects.

For the first nine months of 2026, revenue was nearly unchanged at $8.96 billion. Rental days fell 2%, while revenue per day increased 1% excluding currency effects. Adjusted EBITDA declined 8% to $686 million, but GAAP net income improved to $28 million from a $139 million loss in the prior-year period.

Americas volumes weigh on profitability

Americas revenue decreased 3% to $2.55 billion, reflecting a 3% decline in rental days in what the company described as a softer-than-expected demand environment. Management said it remained selective about the business it pursued. Revenue per day was slightly higher excluding currency effects, although an early-quarter emphasis on longer rentals weighed on the metric. The presentation indicated that pricing momentum improved during the quarter, with September revenue per day up by a mid-single-digit percentage year over year.

The region’s average fleet declined 6%, more than twice the drop in rental days, helping utilization increase 2.8 percentage points to 74.1%. That marked the fourth consecutive quarter of year-over-year utilization improvement despite disruption from vehicle recalls.

Americas adjusted EBITDA fell 8% to $365 million. The company attributed the decline to fewer rental days and the resulting negative operating leverage. Per-unit fleet costs rose 7% to $330 per month, reflecting seasonally lower residual values. Total selling, general and administrative expenses and operating expenses decreased 2%, though the combined cost per rental day increased 1% because of lower volume.

International results reflect restructuring and mix changes

International revenue declined 1% excluding exchange-rate effects to $887 million. Excluding the closure of Zipcar UK, quarterly revenue was $7 million higher than a year earlier.

Rental days decreased 2%, primarily because of network restructuring and mix-shift measures undertaken in 2025, as well as the Zipcar UK closure. Revenue per day rose 1% excluding currency effects but fell short of management’s sequential and internal expectations.

The average International fleet contracted 2%, in line with rental days, while utilization was broadly stable at 73.7%. Per-unit fleet costs declined 2% to $279 per month as the company continued replacing older, higher-cost vehicles acquired in previous years.

Adjusted EBITDA for the segment fell 5% to $180 million. Excluding exchange-rate effects, the decline was $8 million, driven by lower rental days and higher commissions associated with a shift toward leisure demand. SG&A and operating expenses per rental day increased 2% on the same commission pressure.

Cash flow improves as debt repayment remains a priority

Adjusted free cash flow was $198 million for the nine months ended September 30, compared with negative $517 million in the prior-year period, an improvement of $715 million. CAR ended the quarter with $866 million of total liquidity, down from $993 million a year earlier, and had $2.54 billion of available capacity under its asset-backed securities facilities.

On November 2, the company delivered a redemption notice covering the remaining $350 million principal amount of its 5.750% senior notes due in 2027, with repayment planned before year-end. Management said its capital-allocation priorities include further debt repayment and capital expenditures intended to improve operating efficiency, reduce costs and support margin expansion, alongside opportunistic shareholder returns.

For full-year 2026, management expects approximately $850 million of adjusted EBITDA. It projects per-unit fleet costs of about $310 to $320 per month in the fourth quarter and $315 to $325 for the full year, with the annual range unchanged.

The outlook excludes future currency movements and is presented on a non-GAAP basis. The company cautioned that demand conditions, residual values, vehicle recalls, foreign-exchange fluctuations and other risks described in its regulatory filings could cause actual results to differ materially from its expectations.