Shares of Avis Budget Group (CAR) plummeted 5.02% on Tuesday after the car rental company reported a massive net loss of $1.96 billion in the fourth quarter of 2024. The significant loss was primarily driven by a one-time non-cash impairment charge of $2.3 billion related to accelerating the rotation of its vehicle fleet in the Americas segment.

Avis Budget's revenue for the quarter declined 2% year-over-year to $2.71 billion, missing analysts' expectations. Adjusted EBITDA was a loss of $101 million, compared to a profit of $311 million in the prior-year quarter.

The company attributed the decision to accelerate fleet rotation to creating more certainty in its fleet costs and positioning itself for sustainable growth in 2025 and beyond. While acknowledging the financial impact, CEO Joe Ferraro expressed confidence in generating at least $1 billion in Adjusted EBITDA in 2025, citing sustained strong travel demand.

In a separate announcement, Avis Budget revealed a leadership transition, with Ferraro stepping down as CEO on June 30, 2025, after serving in the role since 2020. Brian Choi, the company's current Chief Transformation Officer, will succeed Ferraro as CEO, effective July 1, 2025. Jagdeep Pahwa, who has served as the company's Chairman since May 2024, has been named Executive Chairman.