Avis Budget Group, Inc. (NASDAQ:CAR) Q2 2019 Earnings Conference Call Transcript

Aug 06, 2019 • 08:30 am ET

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Avis Budget Group, Inc. (NASDAQ:CAR) Q2 2019 Earnings Conference Call Transcript

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Q & A
Operator
Operator

Thank you. We will now be conducting a question-and-answer session. [Operator Instructions] Our first question today is coming from Chris Woronka from Deutsche Bank. Your line is now live.

Analyst
Chris Woronka

Hey. Good morning, guys. Was hoping maybe you'd talk a little bit about the opportunities you see on the delivery front using your fleet, I know you still have the Budget truck fleet and you've done some acquisitions overseas, can you talk about how big of an opportunity that can be for you?

Executive
Larry D. De Shon

Hi, Chris, This is Larry. I think it's actually going to be a pretty significant opportunity for us since we're going forward. As you can see, we're developing a lot of other used cases and new partnerships to take advantage of our fleet, particularly our Connected Car fleet. We have a Fetch pilot going on with Budget Truck, which allows people to rent trucks seamlessly in a self-service mode. We have in a few locations for the pilot test, but it's an indication of how different use cases are developing out there, particularly for this last mile delivery as well. So as we look at some of the partners that we're working with and others that we're discussing opportunities with, I do think that there's a potential for significant amount of business in the future as it relates to this kind of delivery activity both on the car side as well as the truck side.

Analyst
Chris Woronka

Okay. That's helpful. And just as a follow-up. As you look at the different possibilities for capital allocation between -- I guess share repurchase, deleveraging, acquisitions and kind of reinvesting in the business or growth initiatives, how do you look at those different buckets right now and what would make you potentially pivot towards one or the other?

Executive
John F. North

Hey, it's John, good morning. I think our philosophy with capital allocation has been pretty consistent, it's a balanced approach. Over the past four years, we've split our capital allocation between capex or investment in the business. We've bought back a significant amount of stock, I think almost $1.5 billion worth and then we've done a number of acquisitions, especially internationally and then also picking up a number of our licensees in the Americas. So we're capitalists at heart, we're looking for the best return at all times and that's where we're going to direct the capital, so I would say that it continues to be in flux.

I would also point out that this morning we increased our share repurchase authorization by $100 million. We now have over $250 million available to repurchase shares, and we're prepared to come in and buy stock if we think that's the highest return or if there's a compelling acquisition, we'll look at that, but I think first and foremost, we're going to continue to invest in the business and these mobility use cases, we think are just really the tip of the iceberg to get started here.

Operator
Operator

Thank you. Our next question today is coming from Brian Johnson