Company Overview - Comfort Hotels has been a trusted travel companion for over 40 years, operating more than 2,100 hotels worldwide, providing reliable stays with amenities such as free hot breakfast and Wi-Fi [7][12] - The brand has undergone a multiyear transformation, updating guest rooms and public spaces, and now features a new modern logo [12] Industry Insights - A recent survey indicates that 74% of U.S. travelers consider a relaxing breakfast essential for a great vacation, with 66% ranking breakfast among their favorite family travel memories [1] - The survey also reveals that 78% of respondents enjoy sharing food as a way to connect with others, and 57% associate waffles with cozy, relaxing mornings [2] Consumer Preferences - When it comes to waffles, 41% of respondents prefer crispy waffles, while the remaining 59% favor a softer, fluffier texture [4] - Despite the trend of mini-sized products, 67% of consumers prefer full-size waffles, indicating a strong preference for traditional offerings [5] Marketing and Promotions - Comfort Hotels is celebrating National Waffle Day on August 24, inviting guests to participate in festivities and highlighting the emotional connection breakfast, particularly waffles, has with hotel stays [6] - The company is running a national sweepstakes from August 21 to August 25, where guests can win a one-night stay at participating hotels by engaging on social media [10] Brand Positioning - Comfort Hotels emphasizes the importance of breakfast in creating memorable travel experiences, with over 30 million waffles made annually at its properties [3] - The brand aims to deliver a perfect start to the day for all guests, regardless of their waffle preferences, reinforcing its commitment to customer satisfaction [6]

Core Insights - Cambria Hotels is experiencing growth in both high-demand and emerging markets, with nearly 60 hotels in the pipeline, including new openings in Times Square, NY, and Fort Worth, Texas, as well as its first Canadian property in Thunder Bay, Ontario [1][12] - The upscale portfolio of Choice Hotels now exceeds 110,000 rooms globally, reflecting a 15% year-over-year increase, with nearly 29,000 more rooms in development [1][12] - Cambria Hotels is positioned to attract travelers in aspirational destinations, supported by a commitment to brand success and resources for developers [2] Company Overview - Cambria Hotels offers a distinct experience for modern travelers, featuring contemporary design, spacious rooms, flexible meeting spaces, and locally inspired food and beverages [13] - The brand has over 70 hotels open in major U.S. cities, including Chicago, New York, and Los Angeles, and was ranked 1 in the upscale segment in the J.D. Power 2023 North America Hotel Guest Satisfaction Index Study [13] Specific Properties - Cambria Hotel Templeton in California features 132 rooms, powered by solar energy, and offers curated experiences like ziplining and wine tastings [3][4] - Cambria Hotel Tampa, with 104 rooms, serves as a launchpad for cruise adventures and city exploration, offering a Snooze & Cruise Package [5][6] - Cambria Hotel Plymouth, with 107 rooms, reflects coastal Massachusetts' beauty and is located near historical landmarks [7][8] - Cambria Hotel Portland, the first property in Oregon, features 178 rooms and nearly 1,400 sq ft of meeting space in the Pearl District [9] Rewards Program - Cambria Hotels participates in the Choice Privileges rewards program, allowing members to earn and redeem points for reward nights at over 7,000 Choice-branded hotels [10]

Core Viewpoint - Choice Hotels International reported its Q2 FY2025 results amidst significant market volatility, resulting in a decline in stock price by the closing bell [1]. Financial Performance - The company is recognized as one of the leading asset-light hotel chains, indicating a focus on maximizing returns with minimal capital investment [1]. Market Reaction - Despite the earnings report, the stock experienced a downturn, reflecting investor sentiment and market conditions on the day of the announcement [1].

Core Insights - Choice Hotels International reported Q2 2025 adjusted EPS of $1.92, exceeding estimates of $1.90, while adjusted EBITDA reached a quarterly record of $165 million [1][2][5] - Revenue (GAAP) was $426 million, falling short of the consensus estimate of $429.84 million, leading to a downward revision of full-year 2025 guidance for net income and diluted EPS [1][12] Financial Performance - Adjusted EPS increased by 4.3% year-over-year from $1.84 in Q2 2024 [2] - Revenue (GAAP) decreased by 2.1% year-over-year from $435 million in Q2 2024 [2] - Adjusted EBITDA rose by 1.9% year-over-year from $162 million in Q2 2024 [2] - Effective royalty rate improved to 5.12%, up by 0.08 percentage points from the previous year [2][8] Company Overview - Choice Hotels operates over 7,400 hotels with more than 644,000 rooms globally, focusing on various market segments including economy, midscale, upscale, and extended stay [3] - The company generates most of its revenue from hotel franchising, supplemented by partnerships and hotel ownership [3] Strategic Focus - The company aims to expand its franchise system, enhance brand awareness, and optimize digital reservations while managing costs [4] - Key growth drivers include revenue per available room (RevPAR) growth, expansion of higher-revenue segments, and international growth [4] Market Trends - Domestic RevPAR declined by 2.9% compared to Q2 2024, attributed to macroeconomic uncertainty and challenging comparisons due to calendar events [6] - The extended stay segment showed strong performance, with a 10.5% year-over-year expansion in the domestic extended stay portfolio [7] Future Outlook - Management revised FY2025 net income guidance to $261–$276 million, down from $275–$290 million, and diluted EPS guidance to $5.54–$5.86, down from $5.86–$6.18 [12] - The company expects a decline of 3% or flat performance in domestic RevPAR for FY2025, compared to previous expectations of flat to slight growth [12][13]

Core Viewpoint - Choice Hotels International, Inc. is conducting its Q2 2025 earnings conference call to discuss financial results and future outlook [1][2]. Group 1: Company Overview - The conference call is led by Allie Summers, the Director of Investor Relations, and features key executives including Patrick S. Pacious, the President and CEO, and Scott E. Oaksmith, the Chief Financial Officer [1][2]. - The call includes participation from various research analysts from notable financial institutions such as JPMorgan Chase, BofA Securities, and UBS Investment Bank [1]. Group 2: Financial Reporting - The company will provide a reconciliation of non-GAAP financial measures as part of its second quarter 2025 earnings press release, which is available on its website [4].

PART I. FINANCIAL INFORMATION This section presents the unaudited consolidated financial statements, management's discussion and analysis, market risk disclosures, and controls and procedures for Choice Hotels International, Inc [ITEM 1. FINANCIAL STATEMENTS (UNAUDITED)](index=3&type=section&id=ITEM%201.%20FINANCIAL%20STATEMENTS%20%28UNAUDITED%29) This section presents the unaudited consolidated financial statements, including income, comprehensive income, balance sheets, cash flows, and shareholders' equity, along with detailed explanatory notes [Consolidated Statements of Income](index=3&type=section&id=Consolidated%20Statements%20of%20Income) This section provides the unaudited consolidated statements of income for the three and six months ended June 30, 2025 and 2024 Consolidated Statements of Income (in thousands, except per share amounts) | Metric | Three Months Ended June 30, 2025 (in thousands) | Three Months Ended June 30, 2024 (in thousands) | Six Months Ended June 30, 2025 (in thousands) | Six Months Ended June 30, 2024 (in thousands) | | :---------------------------------- | :---------------------------------------------- | :---------------------------------------------- | :-------------------------------------------- | :-------------------------------------------- | | Total Revenues | $426,443 | $435,156 | $759,303 | $767,105 | | Operating Income | $124,597 | $132,622 | $204,529 | $192,771 | | Income Before Income Taxes | $108,611 | $116,581 | $168,373 | $156,789 | | Net Income | $81,734 | $87,136 | $126,268 | $118,145 | | Basic Earnings Per Share | $1.76 | $1.82 | $2.71 | $2.42 | | Diluted Earnings Per Share | $1.75 | $1.80 | $2.68 | $2.41 | | Cash Dividends Declared Per Share | $0.2875 | $0.2875 | $0.5750 | $0.5750 | [Consolidated Statements of Comprehensive Income](index=4&type=section&id=Consolidated%20Statements%20of%20Comprehensive%20Income) This section presents the unaudited consolidated statements of comprehensive income for the three and six months ended June 30, 2025 and 2024 Consolidated Statements of Comprehensive Income (in thousands) | Metric | Three Months Ended June 30, 2025 (in thousands) | Three Months Ended June 30, 2024 (in thousands) | Six Months Ended June 30, 2025 (in thousands) | Six Months Ended June 30, 2024 (in thousands) | | :---------------------------------- | :---------------------------------------------- | :---------------------------------------------- | :-------------------------------------------- | :-------------------------------------------- | | Net Income | $81,734 | $87,136 | $126,268 | $118,145 | | Foreign Currency Translation Adjustment | $2,079 | $(694) | $2,142 | $(240) | | Comprehensive Income | $83,813 | $86,442 | $128,410 | $117,905 | [Consolidated Balance Sheets](index=5&type=section&id=Consolidated%20Balance%20Sheets) This section provides the unaudited consolidated balance sheets as of June 30, 2025, and December 31, 2024 Consolidated Balance Sheets (in thousands) | Metric | June 30, 2025 (in thousands) | December 31, 2024 (in thousands) | | :---------------------------------- | :--------------------------- | :------------------------------- | | Total Current Assets | $400,679 | $339,086 | | Total Assets | $2,664,762 | $2,530,527 | | Total Current Liabilities | $451,929 | $462,721 | | Long-Term Debt | $1,900,116 | $1,768,526 | | Total Liabilities | $2,691,000 | $2,575,798 | | Total Shareholders' Deficit | $(26,238) | $(45,271) | [Consolidated Statements of Cash Flows](index=6&type=section&id=Consolidated%20Statements%20of%20Cash%20Flows) This section presents the unaudited consolidated statements of cash flows for the six months ended June 30, 2025 and 2024 Consolidated Statements of Cash Flows (in thousands) for Six Months Ended June 30 | Metric | 2025 (in thousands) | 2024 (in thousands) | | :---------------------------------- | :------------------ | :------------------ | | Net Cash Provided by Operating Activities | $116,070 | $113,595 | | Net Cash Used in Investing Activities | $(95,148) | $(62,032) | | Net Cash Used in Financing Activities | $(3,239) | $(18,564) | | Net Change in Cash and Cash Equivalents | $17,683 | $32,999 | | Cash and Cash Equivalents, End of Period | $58,610 | $60,409 | [Consolidated Statements of Shareholders' Equity (Deficit)](index=7&type=section&id=Consolidated%20Statements%20of%20Shareholders%27%20Equity%20%28Deficit%29) This section details the unaudited consolidated statements of shareholders' equity (deficit) for the six months ended June 30, 2025 and 2024 Shareholders' Equity (Deficit) Changes (in thousands) | Metric | Balance as of Dec 31, 2024 (in thousands) | Net Income (in thousands) | Other Comprehensive Income (in thousands) | Share-based Payment Activity (in thousands) | Dividends Declared (in thousands) | Treasury Purchases (in thousands) | Balance as of Jun 30, 2025 (in thousands) | | :---------------------------------- | :---------------------------------------- | :------------------------ | :---------------------------------------- | :------------------------------------------ | :-------------------------------- | :-------------------------------- | :---------------------------------------- | | Total Shareholders' Deficit | $(45,271) | $81,734 | $2,079 | $12,328 | $(13,304) | $(45,141) | $(26,238) | [Notes to Consolidated Financial Statements](index=8&type=section&id=Notes%20to%20Consolidated%20Financial%20Statements) This section provides detailed notes explaining the basis of presentation, significant accounting policies, and specific financial statement line items [Note 1. Basis of Presentation and Significant Accounting Policies](index=8&type=section&id=Note%201.%20Basis%20of%20Presentation%20and%20Significant%20Accounting%20Policies) This note outlines the basis for preparing the unaudited consolidated financial statements, reclassifications, and the impact of new accounting standards - The Company reclassified certain prior year amounts in the consolidated statements of income and cash flows to maintain comparability with the current year presentation, with **no effect on total revenues, total operating expenses, operating income, or net income**[27](index=27&type=chunk)[28](index=28&type=chunk)[30](index=30&type=chunk) - ASU 2023-09 (Improvements to Income Tax Disclosures) is effective for annual reporting periods beginning after December 15, 2024, and is not expected to impact financial statements but will require enhanced disclosures[32](index=32&type=chunk) - ASU 2024-03 (Disaggregation of Income Statement Expenses) is effective for annual reporting periods beginning after December 15, 2026, and the Company is currently evaluating its potential impact[33](index=33&type=chunk) [Note 2. Revenue](index=10&type=section&id=Note%202.%20Revenue) This note details the Company's contract liabilities, revenue recognition, and remaining performance obligations Contract Liabilities Summary (in thousands) | Metric | Amount (in thousands) | | :---------------------------------- | :-------------------- | | Balance as of December 31, 2024 | $216,697 | | Increases due to cash received | $57,859 | | Revenue recognized in the period | $(56,620) | | Balance as of June 30, 2025 | $217,936 | - The aggregate amount of transaction price allocated to unsatisfied performance obligations was **$217.9 million** as of June 30, 2025, representing fixed transaction price to be recognized as future revenue[37](index=37&type=chunk) Loyalty Net Revenues (in millions) | Period | 2025 (in millions) | 2024 (in millions) | | :---------------------------------- | :----------------- | :----------------- | | Three Months Ended June 30 | $37.2 | $36.3 | | Six Months Ended June 30 | $56.7 | $55.8 | [Note 3. Receivables and Allowance for Credit Losses](index=10&type=section&id=Note%203.%20Receivables%20and%20Allowance%20for%20Credit%20Losses) This note provides a detailed breakdown of notes receivable, credit quality, and provisions for credit losses Notes Receivable, Net of Allowance for Credit Losses (in thousands) | Metric | June 30, 2025 (in thousands) | December 31, 2024 (in thousands) | | :---------------------------------- | :--------------------------- | :------------------------------- | | Total Notes Receivable | $116,095 | $115,514 | | Less: Allowance for Credit Losses | $7,204 | $7,331 | | Total Notes Receivable, Net | $108,891 | $108,183 | Notes Receivable Past Due Balances (in thousands) | Category | June 30, 2025 Total Past Due (in thousands) | December 31, 2024 Total Past Due (in thousands) | | :---------------------------------- | :------------------------------------------ | :---------------------------------------------- | | Senior | $42,900 | $15,200 | | Subordinated | $2,264 | $2,264 | | Unsecured | $384 | $784 | | **Total Past Due** | **$45,548** | **$18,248** | - The amortized cost basis of notes receivable in non-accrual status significantly increased to **$45.2 million** as of June 30, 2025, from **$17.5 million** as of December 31, 2024[45](index=45&type=chunk) - During the six months ended June 30, 2025, the Company recognized **$9.2 million** in provisions for credit losses on accounts receivable in selling, general and administrative expenses, and **$6.9 million** in reimbursable expenses from franchised and managed properties[49](index=49&type=chunk) [Note 4. Investments in Affiliates](index=12&type=section&id=Note%204.%20Investments%20in%20Affiliates) This note details the Company's equity method investments in affiliates, including those in Variable Interest Entities (VIEs) Investments in Affiliates (in thousands) | Metric | June 30, 2025 (in thousands) | December 31, 2024 (in thousands) | | :---------------------------------- | :--------------------------- | :------------------------------- | | Total Investments in Affiliates | $125,480 | $117,016 | | Investments in Affiliates (VIEs) | $110,500 | $104,200 | Equity in Net Loss (Gain) of Affiliates (in millions) | Period | Three Months Ended June 30, 2025 (in millions) | Three Months Ended June 30, 2024 (in millions) | Six Months Ended June 30, 2025 (in millions) | Six Months Ended June 30, 2024 (in millions) | | :---------------------------------- | :--------------------------------------------- | :--------------------------------------------- | :------------------------------------------- | :------------------------------------------- | | Losses (Gains) from VIEs | $(1.0) | $6.8 | $(1.9) | $5.6 | - The Company recognized a **$7.2 million gain** in Q2 2024 from a distribution by an unconsolidated affiliate that sold its underlying assets[52](index=52&type=chunk) [Note 5. Debt](index=13&type=section&id=Note%205.%20Debt) This note summarizes the Company's long-term debt, including senior unsecured notes and the revolving credit facility Long-Term Debt (in thousands) | Debt Instrument | June 30, 2025 (in thousands) | December 31, 2024 (in thousands) | | :---------------------------------- | :--------------------------- | :------------------------------- | | 2019 Senior Unsecured Notes due 2029 | $397,343 | $397,042 | | 2020 Senior Unsecured Notes due 2031 | $446,605 | $446,300 | | 2024 Senior Unsecured Notes due 2034 | $589,350 | $588,764 | | $1 Billion Senior Unsecured Revolving Credit Facility | $466,818 | $336,420 | | **Total Long-Term Debt** | **$1,900,116** | **$1,768,526** | [Note 6. Accumulated Other Comprehensive Loss](index=13&type=section&id=Note%206.%20Accumulated%20Other%20Comprehensive%20Loss) This note outlines changes in accumulated other comprehensive loss, primarily due to foreign currency items Changes in Accumulated Other Comprehensive Loss (in thousands) | Metric | Six Months Ended June 30, 2025 (in thousands) | Six Months Ended June 30, 2024 (in thousands) | | :---------------------------------- | :-------------------------------------------- | :-------------------------------------------- | | Balance as of December 31 | $(6,193) | $(5,671) | | Other Comprehensive Income (Loss) before Reclassification | $2,142 | $(240) | | Balance as of June 30 | $(4,051) | $(5,911) | - All changes in accumulated other comprehensive loss for both periods were entirely due to foreign currency items, with no reclassifications[54](index=54&type=chunk) [Note 7. Fair Value Measurements](index=14&type=section&id=Note%207.%20Fair%20Value%20Measurements) This note describes the Company's fair value hierarchy for financial instruments and disclosures for senior unsecured notes Assets at Fair Value on a Recurring Basis (in thousands) | Asset Type | June 30, 2025 Total (in thousands) | June 30, 2025 Level 1 (in thousands) | June 30, 2025 Level 2 (in thousands) | December 31, 2024 Total (in thousands) | December 31, 2024 Level 1 (in thousands) | December 31, 2024 Level 2 (in thousands) | | :---------------------------------- | :--------------------------------- | :--------------------------------- | :--------------------------------- | :------------------------------------- | :------------------------------------- | :------------------------------------- | | Mutual Funds | $45,289 | $45,289 | $— | $43,887 | $43,887 | $— | | Money Market Funds | $7,272 | $— | $7,272 | $5,439 | $— | $5,439 | | **Total** | **$52,561** | **$45,289** | **$7,272** | **$49,326** | **$43,887** | **$5,439** | Fair Value of Senior Unsecured Notes (in thousands) | Debt Instrument | June 30, 2025 Carrying Amount (in thousands) | June 30, 2025 Fair Value (in thousands) | December 31, 2024 Carrying Amount (in thousands) | December 31, 2024 Fair Value (in thousands) | | :---------------------------------- | :------------------------------------------- | :-------------------------------------- | :----------------------------------------------- | :-------------------------------------------- | | 2019 Senior Notes due 2029 | $397,343 | $380,540 | $397,042 | $371,600 | | 2020 Senior Notes due 2031 | $446,605 | $417,816 | $446,300 | $405,351 | | 2024 Senior Notes due 2034 | $589,350 | $606,804 | $588,764 | $601,836 | [Note 8. Income Taxes](index=14&type=section&id=Note%208.%20Income%20Taxes) This note provides the Company's effective income tax rates and the primary factors influencing them Effective Income Tax Rates (%) | Period | June 30, 2025 (%) | June 30, 2024 (%) | | :---------------------------------- | :---------------- | :---------------- | | Three Months Ended | 24.7% | 25.3% | | Six Months Ended | 25.0% | 24.6% | - Effective income tax rates were higher than the U.S. federal income tax rate of **21%** primarily due to the impact of state income taxes[62](index=62&type=chunk) [Note 9. Share-Based Compensation](index=15&type=section&id=Note%209.%20Share-Based%20Compensation) This note details the components of share-based compensation expense and activity of share-based awards Share-Based Compensation Expense (in thousands) | Component | Three Months Ended June 30, 2025 (in thousands) | Three Months Ended June 30, 2024 (in thousands) | Six Months Ended June 30, 2025 (in thousands) | Six Months Ended June 30, 2024 (in thousands) | | :---------------------------------- | :---------------------------------------------- | :---------------------------------------------- | :-------------------------------------------- | :-------------------------------------------- | | Stock Options | $795 | $1,292 | $2,314 | $2,638 | | Restricted Stock | $3,003 | $3,236 | $6,330 | $6,713 | | Performance Vested Restricted Stock Units | $7,155 | $4,749 | $12,724 | $9,020 | | **Total** | **$10,953** | **$9,277** | **$21,368** | **$18,371** | Share-Based Award Activity (Six Months Ended June 30, 2025) | Metric | Stock Options Outstanding (shares) | Restricted Stock Shares (shares) | PVRSUs Shares (shares) | | :---------------------------------- | :------------------------------- | :----------------------------- | :--------------------- | | Outstanding as of January 1, 2025 | 771,641 | 355,405 | 467,521 | | Granted | — | 49,363 | 147,586 | | Exercised/Vested | (57,025) | (57,916) | (116,107) | | Outstanding as of June 30, 2025 | 701,153 | 340,621 | 504,817 | [Note 10. Earnings Per Share](index=16&type=section&id=Note%2010.%20Earnings%20Per%20Share) This note explains the computation of basic and diluted earnings per share using the two-class method Earnings Per Share (in thousands, except per share amounts) | Metric | Three Months Ended June 30, 2025 (in thousands) | Three Months Ended June 30, 2024 (in thousands) | Six Months Ended June 30, 2025 (in thousands) | Six Months Ended June 30, 2024 (in thousands) | | :---------------------------------- | :---------------------------------------------- | :---------------------------------------------- | :-------------------------------------------- | :-------------------------------------------- | | Net Income Available to Common Shareholders | $81,342 | $86,699 | $125,653 | $117,548 | | Weighted Average Shares Outstanding – Basic | 46,141 | 47,741 | 46,316 | 48,522 | | Basic Earnings Per Share | $1.76 | $1.82 | $2.71 | $2.42 | | Weighted Average Shares Outstanding – Diluted | 46,588 | 48,038 | 46,854 | 48,839 | | Diluted Earnings Per Share | $1.75 | $1.80 | $2.68 | $2.41 | Anti-Dilutive Securities Excluded (in thousands) | Security Type | Three Months Ended June 30, 2025 (in thousands) | Three Months Ended June 30, 2024 (in thousands) | Six Months Ended June 30, 2025 (in thousands) | Six Months Ended June 30, 2024 (in thousands) | | :---------------------------------- | :---------------------------------------------- | :---------------------------------------------- | :-------------------------------------------- | :-------------------------------------------- | | Stock Options | 128 | 248 | 128 | 231 | | PVRSUs | — | 49 | — | 49 | [Note 11. Reportable Segments](index=16&type=section&id=Note%2011.%20Reportable%20Segments) This note describes the Company's two reportable segments and provides their financial performance - The Hotel Franchising & Management segment includes hotel franchising operations (22 brands) and management of **13 hotels** (including 4 owned)[67](index=67&type=chunk) - The Corporate & Other segment includes the operations of the Company's owned hotels[68](index=68&type=chunk) Segment Operating Income (in thousands) | Segment | Three Months Ended June 30, 2025 (in thousands) | Three Months Ended June 30, 2024 (in thousands) | Six Months Ended June 30, 2025 (in thousands) | Six Months Ended June 30, 2024 (in thousands) | | :---------------------------------- | :---------------------------------------------- | :---------------------------------------------- | :-------------------------------------------- | :-------------------------------------------- | | Hotel Franchising & Management | $157,866 | $165,243 | $261,251 | $260,091 | | Corporate & Other | $(33,269) | $(32,621) | $(56,722) | $(67,320) | | **Consolidated Operating Income** | **$124,597** | **$132,622** | **$204,529** | **$192,771** | [Note 12. Commitments and Contingencies](index=18&type=section&id=Note%2012.%20Commitments%20and%20Contingencies) This note outlines the Company's various commitments and contingencies, including limited payment guaranties and financing commitments - As of June 30, 2025, the maximum unrecorded exposure for limited payment guaranties related to VIEs was **$47.4 million**, plus unpaid expenses and accrued interest[74](index=74&type=chunk) - The Company has a guarantee for a long-term management arrangement (acquired with Radisson Hotels Americas) to fund shortfalls in owner's priority, with a maximum unrecorded exposure of **$20.0 million** as of June 30, 2025[76](index=76&type=chunk) - The Company had remaining commitments of up to **$4.3 million** to provide financing to franchisees for brand development efforts as of June 30, 2025[76](index=76&type=chunk) [Note 13. Subsequent Events](index=20&type=section&id=Note%2013.%20Subsequent%20Events) This note discloses significant events occurring after the reporting period, including acquisitions and joint ventures - On July 2, 2025, the Company acquired the remaining **50% of Choice Hotels Canada** for approximately **$112.0 million**, funded by available cash and borrowings, expanding its brand offerings in Canada[77](index=77&type=chunk) - On July 10, 2025, the Company entered into a joint venture to develop Everhome Suites, contributing **$71.6 million** in cash for an equity ownership interest[78](index=78&type=chunk) - In connection with the Everhome Suites joint venture, the Company provided a limited payment guarantee for a loan facility, with a maximum unrecorded exposure of **$11.5 million** as of the loan facility date[79](index=79&type=chunk) - The Company sold four wholly-owned Everhome Suites hotels under construction to the Joint Venture for an aggregate sale price of **$52.0 million**[79](index=79&type=chunk) [ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS](index=21&type=section&id=ITEM%202.%20MANAGEMENT%27S%20DISCUSSION%20AND%20ANALYSIS%20OF%20FINANCIAL%20CONDITION%20AND%20RESULTS%20OF%20OPERATIONS) This section provides management's perspective on the Company's financial condition, operational results, liquidity, and capital resources, along with critical accounting estimates and forward-looking statements [Overview](index=21&type=section&id=Overview) This section provides an overview of the Company's business as a hotel franchisor and its strategic priorities for growth and shareholder value - Choice Hotels International is primarily a hotel franchisor with **7,481 hotels** and **644,400 rooms** open globally as of June 30, 2025[81](index=81&type=chunk) - The Company's strategic priorities include profitable growth (improving hotel performance, increasing system size, enhancing royalty rates, expanding vendor platforms, and disciplined cost structure) and maximizing financial returns for shareholders (acquisitions, share repurchases, and dividends)[88](index=88&type=chunk)[89](index=89&type=chunk) - The Company strategically develops and owns hotels, particularly Cambria Hotels and Everhome Suites, to increase brand presence and drive growth, with an intent to dispose of them to franchisees in the future[90](index=90&type=chunk) - Reimbursable expenses from franchised and managed properties exceeded revenue for reimbursable costs by **$9.0 million** for the three months and **$29.4 million** for the six months ended June 30, 2025[96](index=96&type=chunk) [Operations Review](index=24&type=section&id=Operations%20Review) This section reviews the Company's operating results for the three and six months ended June 30, 2025 and 2024 [Comparison of the Operating Results for the Three Months Ended June 30, 2025 and 2024](index=24&type=section&id=Comparison%20of%20the%20Operating%20Results%20for%20the%20Three%20Months%20Ended%20June%2030%2C%202025%20and%202024) This section compares the Company's operating results for the three months ended June 30, 2025, and 2024, highlighting key financial changes - Income before income taxes decreased by **$8.0 million** to **$108.6 million** for the three months ended June 30, 2025, compared to **$116.6 million** in the prior year[102](index=102&type=chunk) - Operating income decreased by **$8.0 million**, mainly due to a **$5.9 million** increase in net reimbursable deficit and a **$2.7 million** decrease in franchise and management fees[103](index=103&type=chunk) Domestic System-Wide RevPAR Performance (Three Months Ended June 30) | Metric | 2025 ($) | 2024 ($) | Change | | :---------------------------------- | :------- | :------- | :----- | | Average Daily Rate | $97.65 | $99.40 | (1.8)% | | Occupancy | 59.6% | 60.3% | (70) bps | | RevPAR | $58.22 | $59.95 | (2.9)% | | Effective Royalty Rate | 5.12% | 5.04% | 8 bps | - Equity in net loss (gain) of affiliates decreased **$8.0 million**, primarily due to a **$7.2 million gain** recognized in Q2 2024 from an unconsolidated affiliate's asset sale[108](index=108&type=chunk) [Comparison of the Operating Results for the Six Months Ended June 30, 2025 and 2024](index=26&type=section&id=Comparison%20of%20the%20Operating%20Results%20for%20the%20Six%20Months%20Ended%20June%2030%2C%202025%20and%202024) This section compares the Company's operating results for the six months ended June 30, 2025, and 2024, focusing on key financial drivers - Income before income taxes increased by **$11.6 million** to **$168.4 million** for the six months ended June 30, 2025, compared to **$156.8 million** in the prior year[111](index=111&type=chunk) - Operating income increased by **$11.8 million**, primarily due to a **$5.2 million** increase in partnership services and fees and a **$16.3 million** decrease in business combination, diligence and transition costs (due to the termination of the Wyndham acquisition pursuit)[112](index=112&type=chunk)[120](index=120&type=chunk) Domestic System-Wide RevPAR Performance (Six Months Ended June 30) | Metric | 2025 ($) | 2024 ($) | Change | | :---------------------------------- | :------- | :------- | :----- | | Average Daily Rate | $94.48 | $94.79 | (0.3)% | | Occupancy | 55.3% | 55.5% | (20) bps | | RevPAR | $52.25 | $52.61 | (0.7)% | | Effective Royalty Rate | 5.11% | 5.04% | 7 bps | - Other (gain) loss increased **$8.8 million**, primarily due to an **$8.4 million** unrealized loss on equity securities recognized in the prior year[121](index=121&type=chunk) [Liquidity and Capital Resources](index=28&type=section&id=Liquidity%20and%20Capital%20Resources) This section discusses the Company's liquidity sources, capital allocation strategies, and cash flow activities - As of June 30, 2025, primary liquidity sources included **$587.5 million** in cash and cash equivalents and available borrowing capacity under the senior unsecured revolving credit facility[125](index=125&type=chunk) - The Company had approximately **$667.5 million** in financial support for Cambria Hotels and Everhome Suites brands reflected on the balance sheet as of June 30, 2025, with outstanding investments not expected to exceed **$1.2 billion**[126](index=126&type=chunk) - The projected 2025 annual dividend rate is **$1.15 per share**, totaling approximately **$53.5 million** in aggregate dividend payments[128](index=128&type=chunk) [Cash Flows from Operating Activities](index=29&type=section&id=Cash%20Flows%20from%20Operating%20Activities) This section analyzes net cash provided by operating activities and its primary drivers for the six months ended June 30, 2025 Net Cash Provided by Operating Activities (in millions) | Period | Six Months Ended June 30, 2025 (in millions) | Six Months Ended June 30, 2024 (in millions) | | :---------------------------------- | :------------------------------------------- | :------------------------------------------- | | Net Cash Provided by Operating Activities | $116.1 | $113.6 | - Operating cash flows increased by **$2.5 million**, primarily due to a decrease in business combination, diligence and transition costs and lower franchise agreement acquisition cost payments[129](index=129&type=chunk) Net Franchise Agreement Acquisition Costs (in millions) | Period | Six Months Ended June 30, 2025 (in millions) | Six Months Ended June 30, 2024 (in millions) | | :---------------------------------- | :------------------------------------------- | :------------------------------------------- | | Net Franchise Agreement Acquisition Costs | $41.5 | $52.0 | [Cash Flows from Investing Activities](index=29&type=section&id=Cash%20Flows%20from%20Investing%20Activities) This section details net cash used in investing activities, including investments in hotel properties and affiliates Net Cash Used in Investing Activities (in millions) | Period | Six Months Ended June 30, 2025 (in millions) | Six Months Ended June 30, 2024 (in millions) | | :---------------------------------- | :------------------------------------------- | :------------------------------------------- | | Net Cash Used in Investing Activities | $(95.1) | $(62.0) | Key Investing Activities (in millions) | Activity | Six Months Ended June 30, 2025 (in millions) | Six Months Ended June 30, 2024 (in millions) | | :---------------------------------- | :------------------------------------------- | :------------------------------------------- | | Investments in Owned Hotel Properties | $65.7 | $50.9 | | Investments in Other Property and Equipment | $18.3 | $22.7 | | Contributions to Investments in Affiliates | $9.4 | $19.5 | | Issuances of Notes Receivable | $3.4 | $1.5 | | Collections of Notes Receivable | $2.8 | $1.7 | [Cash Flows from Financing Activities](index=29&type=section&id=Cash%20Flows%20from%20Financing%20Activities) This section outlines cash flows from financing activities, primarily related to debt, treasury stock, and dividends Net Cash Used in Financing Activities (in millions) | Period | Six Months Ended June 30, 2025 (in millions) | Six Months Ended June 30, 2024 (in millions) | | :---------------------------------- | :------------------------------------------- | :------------------------------------------- | | Net Cash Used in Financing Activities | $(3.2) | $(18.6) | [Debt](index=30&type=section&id=Debt) This section provides details on the Company's debt instruments, including revolving credit facilities and senior unsecured notes - The Senior Unsecured Revolving Credit Facility was increased to **$1 billion** and extended to June 28, 2029, with an effective interest rate of **5.72%** as of June 30, 2025[137](index=137&type=chunk)[140](index=140&type=chunk)[143](index=143&type=chunk) - The Company issued **$600 million** in 2024 Senior Unsecured Notes due 2034 with a **5.85% coupon** and **6.11% effective rate**, using proceeds to repay the 2023 Term Loan[147](index=147&type=chunk)[150](index=150&type=chunk) - As of June 30, 2025, the Company maintained a total leverage ratio of **2.91x** and was in compliance with all financial covenants under its credit agreements[143](index=143&type=chunk) [Dividends](index=32&type=section&id=Dividends) This section reports on cash dividends paid and the projected annual dividend rate - Cash dividends paid during the six months ended June 30, 2025, totaled **$26.9 million**[154](index=154&type=chunk) - The projected 2025 annual dividend rate is **$1.15 per share**, amounting to approximately **$53.5 million** in aggregate payments[154](index=154&type=chunk) [Share Repurchases & Redemptions](index=32&type=section&id=Share%20Repurchases%20%26%20Redemptions) This section details common stock repurchases under the program and redemptions from employees - The Company repurchased **0.7 million shares** of common stock for **$100.4 million** under its share repurchase program during the six months ended June 30, 2025[156](index=156&type=chunk) - As of June 30, 2025, **3.0 million shares** remained under the current share repurchase authorization[156](index=156&type=chunk) - The Company redeemed **0.1 million shares** of common stock from employees for **$9.6 million** to satisfy option exercise prices and tax-withholding requirements, outside the share repurchase program[157](index=157&type=chunk) [Critical Accounting Estimates](index=32&type=section&id=Critical%20Accounting%20Estimates) This section confirms no material changes to critical accounting estimates previously disclosed - There were no material changes to the critical accounting estimates previously disclosed in the Annual Report on Form 10-K for the fiscal year ended December 31, 2024, during the six months ended June 30, 2025[158](index=158&type=chunk) [New Accounting Standards](index=32&type=section&id=New%20Accounting%20Standards) This section refers to Note 1 for information regarding the evaluation of new accounting standards - Refer to Note 1 for information related to the evaluation of new accounting standards (ASU 2023-09 and ASU 2024-03)[159](index=159&type=chunk) [FORWARD-LOOKING STATEMENTS](index=33&type=section&id=FORWARD-LOOKING%20STATEMENTS) This section highlights the presence of forward-looking statements and associated risks and uncertainties - The report contains forward-looking statements regarding future events, financial and operational measures, and liquidity, which are subject to known and unknown risks and uncertainties[160](index=160&type=chunk) - Key risk factors include changes in economic conditions, consumer demand, regulatory environment, foreign currency fluctuations, asset impairments, operating risks, technology advancements, and the ability to manage indebtedness[161](index=161&type=chunk) [ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK](index=33&type=section&id=ITEM%203.%20QUANTITATIVE%20AND%20QUALITATIVE%20DISCLOSURES%20ABOUT%20MARKET%20RISK) This section discusses the Company's exposure to market risks from interest rate and foreign currency fluctuations - The Company is exposed to market risk from changes in interest rates and foreign currency fluctuations[162](index=162&type=chunk) - As of June 30, 2025, the Company had **$470.0 million** of variable interest rate debt outstanding at an effective interest rate of **5.72%** A **10%** hypothetical change in this rate would impact annual interest expense by **$2.7 million**[163](index=163&type=chunk) - The Company does not currently have any material derivative financial instruments[164](index=164&type=chunk) [ITEM 4. CONTROLS AND PROCEDURES](index=34&type=section&id=ITEM%204.%20CONTROLS%20AND%20PROCEDURES) This section confirms the effectiveness of disclosure controls and procedures and the absence of material changes in internal control over financial reporting - The Company's disclosure controls and procedures were evaluated and deemed effective as of June 30, 2025[167](index=167&type=chunk) - No material changes occurred in the Company's internal control over financial reporting during the period ended June 30, 2025[168](index=168&type=chunk) PART II. OTHER INFORMATION This section provides disclosures on legal proceedings, risk factors, equity security transactions, and other miscellaneous information [ITEM 1. LEGAL PROCEEDINGS](index=35&type=section&id=ITEM%201.%20LEGAL%20PROCEEDINGS) This section states that the Company is not involved in any material litigation outside the ordinary course of business - The Company is not a party to any material litigation other than in the ordinary course of business[170](index=170&type=chunk) - Management does not expect current legal proceedings to have a material adverse effect on financial position, results of operations, or cash flows[170](index=170&type=chunk) [ITEM 1A. RISK FACTORS](index=35&type=section&id=ITEM%201A.%20RISK%20FACTORS) This section confirms no material changes to previously disclosed risk factors - No material changes to risk factors were disclosed in this quarterly report compared to the Annual Report on Form 10-K for the fiscal year ended December 31, 2024[171](index=171&type=chunk) [ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS](index=35&type=section&id=ITEM%202.%20UNREGISTERED%20SALES%20OF%20EQUITY%20SECURITIES%20AND%20USE%20OF%20PROCEEDS) This section details the Company's purchases and redemptions of common stock during the period Issuer Purchases of Equity Securities (Six Months Ended June 30, 2025) | Period | Total Shares Purchased or Redeemed (shares) | Average Price Paid per Share ($/share) | Total Shares Purchased as Part of Publicly Announced Plans or Programs (shares) | Maximum Shares Remaining Under Plans or Programs (shares) | | :---------------------------------- | :------------------------------------------ | :------------------------------------- | :-------------------------------------------------------------- | :-------------------------------------------------------- | | January 1, 2025 through June 30, 2025 | 811,418 | $135.49 | 742,607 | 3,034,520 | - During the six months ended June 30, 2025, **68,811 shares** were redeemed from employees to satisfy option prices and minimum tax-withholding requirements, which were not part of the share repurchase program[173](index=173&type=chunk) [ITEM 3. DEFAULTS UPON SENIOR SECURITIES](index=35&type=section&id=ITEM%203.%20DEFAULTS%20UPON%20SENIOR%20SECURITIES) This section reports no defaults upon senior securities during the period - There were no defaults upon senior securities[174](index=174&type=chunk) [ITEM 4. MINE SAFETY DISCLOSURES](index=35&type=section&id=ITEM%204.%20MINE%20SAFETY%20DISCLOSURES) This section states that the Company has no mine safety disclosures to report - There are no mine safety disclosures[175](index=175&type=chunk) [ITEM 5. OTHER INFORMATION](index=35&type=section&id=ITEM%205.%20OTHER%20INFORMATION) This section confirms no directors or officers adopted or terminated Rule 10b5-1 trading arrangements - No directors or officers adopted or terminated Rule 10b5-1 or non-Rule 10b5-1 trading arrangements during the quarterly period[176](index=176&type=chunk) [ITEM 6. EXHIBITS](index=36&type=section&id=ITEM%206.%20EXHIBITS) This section lists all exhibits filed with the Form 10-Q - Exhibits include the Restated Certificate of Incorporation, Amendments, Second Amended and Restated Bylaws, 2025 Long-Term Incentive Plan, CEO/CFO Certifications, and Inline XBRL documents[177](index=177&type=chunk) SIGNATURES This section contains the signatures of the Company's principal executive and financial officers - The report was signed by Patrick S. Pacious, President & Chief Executive Officer, and Scott E. Oaksmith, Chief Financial Officer, on August 6, 2025[180](index=180&type=chunk)[181](index=181&type=chunk)

Financial Data and Key Metrics Changes - Adjusted EBITDA for the second quarter reached $165 million, a 2% year-over-year increase [24] - Adjusted earnings per share also hit a record of $1.92, marking a 4% year-over-year increase [25] - Global rooms increased by 3% year-over-year, with total worldwide rooms growing by 2.1% [25][28] - Domestic RevPAR declined approximately 1.6% year-over-year, while overall RevPAR decreased by 2.9% [28] Business Line Data and Key Metrics Changes - Domestic extended stay room system size grew by 10% year-over-year, with a 7% increase in domestic openings [25] - The Comfort brand saw a 50% increase in global openings and a 23% year-over-year increase in domestic franchise agreements [26] - The upscale portfolio, including the Send Hotel Collection, reached over 65,000 rooms worldwide, with a 29% year-over-year increase in domestic franchise agreements awarded [27] Market Data and Key Metrics Changes - International business achieved a 10% growth in adjusted EBITDA, with a 5% expansion in the rooms portfolio year-over-year [5] - The EMEA region saw a 7% increase in room count, reaching over 63,000 rooms [9] - In Canada, the lodging market is projected to grow at an average annual rate of over 5% over the next five years, reaching over $50 billion in total revenues by 2030 [8] Company Strategy and Development Direction - The company is focusing on expanding its global footprint through acquisitions and partnerships, including the acquisition of the remaining 50% interest in Choice Hotels Canada [6][32] - The strategy includes transitioning to a fully direct franchising model in Canada, allowing for a broader product offering across 22 brands [7] - The company aims to enhance its portfolio by exiting underperforming hotels and focusing on more revenue-intensive segments [13][15] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the ongoing growth in international markets and the potential for increased market share [6] - The company anticipates continued growth in the extended stay segment, which has shown resilience during uncertain economic times [11] - Despite macroeconomic challenges, management remains confident in the long-term outlook, driven by strategic investments and a focus on higher revenue-generating hotels [23][34] Other Important Information - The company achieved a record second quarter adjusted EBITDA despite a weaker RevPAR environment [24] - The effective royalty rate increased by eight basis points year-over-year, contributing to revenue growth [30] - The company returned $137 million to shareholders year-to-date, including $27 million in cash dividends and $110 million in share repurchases [32] Q&A Session Summary Question: How does the company decide on direct versus master franchise in different markets? - The decision is based on market fundamentals, including the ability of small business owners to aggregate capital and the regulatory environment [37][40] Question: What is the growth outlook for Canada? - The dynamics around development and hotel openings in Canada are similar to the U.S., with a healthy growth rate of 5% expected [44][46] Question: What is the long-term expectation for international EBITDA? - International EBITDA is currently about 6% of total EBITDA, with significant growth opportunities anticipated [50][53] Question: What current trends are impacting RevPAR expectations? - The company is experiencing softness in international inbound and government travel, affecting RevPAR guidance [60][61] Question: Are there any significant loans to be aware of? - The company clarified that loans made were not to competitive brands and are primarily for launching new brands [67][70] Question: What is the current status of the global net system rooms? - The guidance for global net system rooms is for 1% growth this year, with strategic terminations of underperforming properties factored in [73][75] Question: How is the company managing the balance between occupancy and rate? - The company is focused on maintaining occupancy share gains, which is crucial for future rate increases [84][86]

Financial Data and Key Metrics Changes - Adjusted EBITDA reached $165 million, a 2% year-over-year increase, while adjusted earnings per share rose 4% year-over-year to $1.92 [4][24] - Global rooms increased by 2% year-over-year, with a 3% net increase in more revenue-intensive rooms [4][24] - Domestic RevPAR declined approximately 1.6% year-over-year, while overall RevPAR decreased by 2.9% due to reduced government and international travel [27][32] Business Line Data and Key Metrics Changes - The domestic extended stay room system size grew by 10% year-over-year, with a 7% increase in domestic openings [24][25] - The Comfort brand saw a 50% increase in global openings and a 23% year-over-year rise in domestic franchise agreements awarded [25] - The upscale segment expanded by 15% year-over-year, with nearly 29,000 upscale global rooms in the pipeline, a 7% increase over the prior quarter [13][25] Market Data and Key Metrics Changes - International business achieved a 10% growth in adjusted EBITDA, with a 5% year-over-year expansion in the rooms portfolio [4][6] - The Canadian lodging market is projected to grow at an average annual rate of over 5% over the next five years, reaching over $50 billion in total revenues by 2030 [6] - The EMEA region saw a 7% increase in room count year-over-year, with approximately 4,000 rooms onboarded under direct franchise agreements [7] Company Strategy and Development Direction - The company is transitioning to a fully direct franchising model in Canada, expanding its product offering from eight hotel brands to a full portfolio of 22 [6] - Strategic acquisitions and partnerships are being pursued to enhance international market share, including a recent acquisition of the remaining 50% interest in Choice Hotels Canada [5][30] - The focus on revenue-intensive segments is expected to drive long-term growth, with 98% of the rooms in the pipeline belonging to these segments [14][22] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the domestic consumer's resilience, citing increased disposable income and a favorable travel environment [17][56] - The company anticipates continued growth in the extended stay segment, which has shown resilience during uncertain economic times [10][18] - Adjusted domestic RevPAR expectations have been revised to a range of -3% to flat for the remainder of the year, reflecting a more cautious outlook [32] Other Important Information - The rewards program expanded to nearly 72 million members, an 8% year-over-year increase, and was recognized as the top hotel rewards program by U.S. News and World Report [19][20] - The company returned $137 million to shareholders year-to-date, including $27 million in cash dividends and $110 million in share repurchases [30] Q&A Session Summary Question: How does the company decide on direct versus master franchise in different markets? - The decision is based on market fundamentals, including the ability of small business owners to aggregate capital and the regulatory environment [35][36] Question: What is the growth outlook for Canada? - The company expects healthy growth in Canada, with a strong existing base of franchisees and a focus on both new construction and conversions [41][44] Question: What are the long-term expectations for international EBITDA? - International EBITDA is currently about 6% of total EBITDA, with significant growth opportunities anticipated in the coming years [47][50] Question: What are the current trends affecting RevPAR guidance? - The company noted softness in international inbound and government travel as key headwinds impacting RevPAR expectations [55][56] Question: Can you clarify the operating profit guarantee and its impact on EBITDA? - The operating profit guarantee is evaluated annually, with a total potential payment of $20 million over the life of the agreement [70][71] Question: How is the company managing occupancy and rate in the current environment? - The company is focused on maintaining occupancy while managing costs, particularly in the extended stay segment, which has lower costs per occupied room [76][78]

Core Viewpoint - Choice Hotels reported quarterly earnings of $1.92 per share, exceeding the Zacks Consensus Estimate of $1.90 per share, and showing an increase from $1.84 per share a year ago, representing an earnings surprise of +1.05% [1] Financial Performance - The company posted revenues of $426.44 million for the quarter ended June 2025, which was slightly below the Zacks Consensus Estimate by 0.15%, and a decrease from $435.16 million in the same quarter last year [2] - Over the last four quarters, Choice Hotels has surpassed consensus EPS estimates three times, but has only topped consensus revenue estimates once [2] Stock Performance - Choice Hotels shares have declined approximately 11.9% since the beginning of the year, contrasting with the S&P 500's gain of 7.1% [3] - The current Zacks Rank for Choice Hotels is 4 (Sell), indicating expectations of underperformance in the near future [6] Future Outlook - The consensus EPS estimate for the upcoming quarter is $2.17 on revenues of $426.24 million, and for the current fiscal year, it is $6.99 on revenues of $1.56 billion [7] - The outlook for the Hotels and Motels industry is currently in the bottom 10% of over 250 Zacks industries, which may negatively impact the stock's performance [8]

[Executive Summary & Q2 2025 Highlights](index=1&type=section&id=Item%201.%20Executive%20Summary%20%26%20Q2%202025%20Highlights) Choice Hotels International achieved record adjusted EBITDA and diluted EPS in Q2 2025, driven by strategic international expansion and robust operational growth, despite a slight decline in net income [Key Financial Highlights](index=1&type=section&id=Item%201.1.%20Key%20Financial%20Highlights) Choice Hotels International achieved record growth in adjusted EBITDA and adjusted diluted EPS in Q2 2025, despite a slight decrease in net income Q2 2025 Key Financial Metrics | Metric | Q2 2025 | Q2 2024 | Change | | :--- | :--- | :--- | :--- | | Net Income | $81.7 Million | $87.1 Million | -6.2% | | Diluted EPS | $1.75 | $1.80 | -2.8% | | Adjusted EBITDA | $165.0 Million | $162.0 Million | +1.9% | | Adjusted Diluted EPS | $1.92 | $1.84 | +4.3% | [Key Operational & Strategic Highlights](index=1&type=section&id=Item%201.2.%20Key%20Operational%20%26%20Strategic%20Highlights) The company achieved significant growth in global and international room system size through strategic international expansion and the acquisition of the remaining stake in Choice Hotels Canada - Global net room system size grew by **2.1%**, with the upscale, extended stay, and midscale room portfolio increasing by **3.0%**[1](index=1&type=chunk) - International net room system size increased by **5.0%**, with new openings growing by **15%**[1](index=1&type=chunk) - Accelerated international expansion, including strategic agreements in Brazil, France, and China, and the acquisition of the remaining **50%** stake in Choice Hotels Canada, expected to contribute approximately **$18 million** in EBITDA in 2025[1](index=1&type=chunk)[2](index=2&type=chunk) - Global hotel pipeline exceeded **93,000 rooms** as of June 30, 2025, with nearly **77,000** domestic rooms[5](index=5&type=chunk) - Domestic extended stay segment net room portfolio grew by **10.5%**, with the segment's pipeline reaching nearly **43,000 rooms**[5](index=5&type=chunk) [CEO Commentary](index=2&type=section&id=Item%201.3.%20CEO%20Commentary) CEO Patrick Pacious highlighted record financial results despite a soft domestic RevPAR environment, attributing success to diversified growth, strong international performance, and leadership in the cyclically resilient extended stay segment, delivering long-term stakeholder returns - Choice Hotels achieved another quarter of record financial results despite a soft domestic RevPAR environment, underscoring the successful execution and diversification of our growth strategy[2](index=2&type=chunk) - We are particularly pleased with our strong international performance, achieving significant growth and accelerating global expansion through recent strategic acquisitions, key partnership signings, and new market entries[2](index=2&type=chunk) - With more diversified growth avenues, enhanced product quality and value propositions driving stronger customer engagement, and a leading position in the cyclically resilient extended stay segment, we remain well-positioned to deliver long-term returns for all stakeholders[2](index=2&type=chunk) [Financial Performance](index=2&type=section&id=Item%202.%20Financial%20Performance) The company reported a slight decrease in total revenues for Q2 2025, but demonstrated strong underlying profitability with growth in adjusted EBITDA and adjusted diluted EPS, while maintaining solid liquidity and positive operating cash flow [Consolidated Financial Results](index=2&type=section&id=Item%202.1.%20Consolidated%20Financial%20Results) Total revenues slightly decreased to $426 million in Q2 2025 from $435 million in Q2 2024, with year-to-date revenues also showing a minor decline, while net income and diluted EPS decreased quarterly but increased year-to-date Total Revenues | Period | 2025 (Million USD) | 2024 (Million USD) | Change (%) | | :--- | :--- | :--- | :--- | | Three Months Ended June 30 | $426 | $435 | -2.1% | | Six Months Ended June 30 | $759 | $767 | -1.0% | Net Income | Period | 2025 (Million USD) | 2024 (Million USD) | Change (%) | | :--- | :--- | :--- | :--- | | Three Months Ended June 30 | $82 | $87 | -5.7% | | Six Months Ended June 30 | $126 | $118 | +6.8% | Diluted Earnings Per Share | Period | 2025 | 2024 | Change (%) | | :--- | :--- | :--- | :--- | | Three Months Ended June 30 | $1.75 | $1.80 | -2.8% | | Six Months Ended June 30 | $2.68 | $2.41 | +11.2% | [Key Profitability Metrics](index=1&type=section&id=Item%202.2.%20Key%20Profitability%20Metrics) Adjusted EBITDA and adjusted diluted EPS showed positive growth both quarterly and year-to-date, reflecting strong underlying operational performance despite a decrease in GAAP net income, with adjusted SG&A also declining Adjusted EBITDA | Period | 2025 (Million USD) | 2024 (Million USD) | Change (%) | | :--- | :--- | :--- | :--- | | Three Months Ended June 30 | $165 | $162 | +1.9% | | Six Months Ended June 30 | $295 | $286 | +3.1% | Adjusted Diluted Earnings Per Share | Period | 2025 | 2024 | Change (%) | | :--- | :--- | :--- | :--- | | Three Months Ended June 30 | $1.92 | $1.84 | +4.3% | | Six Months Ended June 30 | $3.25 | $3.11 | +4.5% | - Partner services and fees increased by **7%** to **$27.1 million** in Q2 2025 and by **16%** to **$52.4 million** in the first half of 2025[6](index=6&type=chunk) - Adjusted selling, general and administrative expenses (SG&A) decreased by **4%** to **$77.6 million** in Q2 2025 (or **6%** excluding **$2 million** in operating guarantee payments)[6](index=6&type=chunk)[7](index=7&type=chunk)[50](index=50&type=chunk) [Balance Sheet and Liquidity](index=4&type=section&id=Item%202.3.%20Balance%20Sheet%20and%20Liquidity) As of June 30, 2025, the company maintained strong liquidity with $587.5 million in available liquidity and a net debt leverage ratio of 3.0x, while total assets and liabilities both increased - Total available liquidity was **$587.5 million** as of June 30, 2025[11](index=11&type=chunk) - Net debt leverage ratio was **3.0x** as of June 30, 2025[11](index=11&type=chunk) Key Balance Sheet Metrics | Metric | June 30, 2025 (Thousand USD) | December 31, 2024 (Thousand USD) | | :--- | :--- | :--- | | Cash and Cash Equivalents | $58,610 | $40,177 | | Total Assets | $2,664,762 | $2,530,527 | | Total Liabilities | $2,691,000 | $2,575,798 | | Shareholders' Deficit | $(26,238) | $(45,271) | [Cash Flow Activities](index=4&type=section&id=Item%202.4.%20Cash%20Flow%20Activities) Cash flow from operating activities increased by 2% to $116.1 million in the first half of 2025, while net cash used in investing activities significantly increased and net cash used in financing activities decreased Key Cash Flow Metrics (Six Months Ended June 30, Thousand USD) | Metric | 2025 (Thousand USD) | 2024 (Thousand USD) | | :--- | :--- | :--- | | Net Cash Provided by Operating Activities | $116,070 | $113,595 | | Net Cash Used in Investing Activities | $(95,148) | $(62,032) | | Net Cash Used in Financing Activities | $(3,239) | $(18,564) | | Net Change in Cash and Cash Equivalents | $17,683 | $32,999 | [Operational Performance & System Growth](index=1&type=section&id=Item%203.%20Operational%20Performance%20%26%20System%20Growth) Choice Hotels achieved significant global and international room system growth, with strong performance in extended stay and upscale segments, alongside strategic international expansion and key brand highlights [Global System Size and Development](index=1&type=section&id=Item%203.1.%20Global%20System%20Size%20and%20Development) Choice Hotels' global net room system grew by 2.1% year-over-year, driven by strong international growth and significant expansion in upscale, extended stay, and midscale segments, with the global hotel pipeline exceeding 93,000 rooms Global Room System Size (As of June 30) | Category | 2025 | 2024 | Change (%) | | :--- | :--- | :--- | :--- | | Domestic Rooms | 500,562 | 494,083 | 1.3% | | International Rooms | 143,838 | 136,980 | 5.0% | | Global Rooms | 644,400 | 631,063 | 2.1% | - Domestic upscale, extended stay, and midscale net room portfolio grew by **2.3%** year-over-year[10](index=10&type=chunk) - Global hotel pipeline exceeded **93,000 rooms** as of June 30, 2025, with nearly **77,000** domestic rooms[5](index=5&type=chunk) [Domestic Operating Metrics (RevPAR, ADR, Occupancy)](index=3&type=section&id=Item%203.2.%20Domestic%20Operating%20Metrics%20%28RevPAR%2C%20ADR%2C%20Occupancy%29) [Overall Domestic Performance](index=3&type=section&id=Item%203.2.1.%20Overall%20Domestic%20Performance) Domestic RevPAR decreased by 2.9% in Q2 2025, primarily due to macroeconomic uncertainties and a high comparison base from last year's Easter and eclipse-related travel, though the domestic effective royalty rate increased - Domestic RevPAR decreased by **2.9%** year-over-year in Q2 2025 (approximately **1.6%** excluding the impact of Easter and the eclipse)[9](index=9&type=chunk)[45](index=45&type=chunk) - Domestic effective royalty rate increased by **8 basis points** to **5.12%** in Q2 2025[9](index=9&type=chunk)[46](index=46&type=chunk) Domestic Hotel System Key Metrics (Three Months Ended June 30) | Metric | 2025 | 2024 | Change | | :--- | :--- | :--- | :--- | | Average Daily Rate (ADR) | $97.65 | $99.40 | (1.8)% | | Occupancy | 59.6% | 60.3% | (70) bps | | Revenue Per Available Room (RevPAR) | $58.22 | $59.95 | (2.9)% | [Performance by Segment](index=3&type=section&id=Item%203.2.2.%20Performance%20by%20Segment) The domestic extended stay portfolio outperformed the overall hotel industry in RevPAR, as did the economy temporary lodging portfolio within its segment, with WoodSpring Suites showing strong growth and high customer satisfaction - Domestic extended stay RevPAR outperformed the overall hotel industry by **40 basis points** in Q2 2025[9](index=9&type=chunk) - Economy temporary lodging portfolio RevPAR outperformed economy chain hotels by **320 basis points** in Q2 2025[9](index=9&type=chunk) - WoodSpring Suites brand grew by **9.7%** to nearly **33,000 rooms** and ranked 1 in the economy extended stay segment for the third consecutive year in the J.D. Power 2025 North America Hotel Guest Satisfaction Index Study[10](index=10&type=chunk) - Upscale brands' global net rooms grew by **14.7%** year-over-year, with global pipeline increasing by **7%**[10](index=10&type=chunk) [International Expansion & Acquisitions](index=1&type=section&id=Item%203.3.%20International%20Expansion%20%26%20Acquisitions) Choice Hotels accelerated international expansion through strategic agreements and acquisitions, significantly increasing its presence in key markets like Brazil, France, and China, and fully acquiring Choice Hotels Canada - In Brazil, the master franchise agreement with Atlantica Hospitality International was extended for **20 years**, adding over **10,000 rooms**[1](index=1&type=chunk) - In France, the number of rooms nearly quadrupled through a direct franchise agreement with Zenitude Hotel-Residences[1](index=1&type=chunk) - In China, a strategic agreement with SSAW Hotels & Resorts is expected to add over **9,500 rooms** in 2025 and approximately **10,000 rooms** over the next five years[1](index=1&type=chunk) - Acquired the remaining **50%** stake in Choice Hotels Canada for approximately **$112 million** in July, expanding the product line from **8** to **22 brands**[1](index=1&type=chunk)[2](index=2&type=chunk) [Brand Performance Highlights](index=3&type=section&id=Item%203.4.%20Brand%20Performance%20Highlights) While some brands like Radisson, Comfort, and Quality saw slight decreases in hotels or rooms, brands such as Ascend Hotel Collection, Cambria, Park Inn, WoodSpring, MainStay, Suburban, and Everhome Suites achieved growth in rooms or hotels, with Everhome Suites showing exceptional growth Key Brand Room Count Changes (As of June 30) | Brand | 2025 Rooms | 2024 Rooms | Change (%) | | :--- | :--- | :--- | :--- | | Ascend Hotel Collection | 38,537 | 23,109 | +66.8% | | Everhome Suites | 1,952 | 449 | +334.7% | | WoodSpring | 32,521 | 29,639 | +9.7% | | MainStay | 10,098 | 9,202 | +9.7% | | Radisson | 9,928 | 14,177 | -30.0% | | Econo Lodge | 36,149 | 38,602 | -6.4% | | Rodeway | 24,669 | 25,756 | -4.2% | [Shareholder Returns](index=4&type=section&id=Item%204.%20Shareholder%20Returns) In the first half of 2025, Choice Hotels returned capital to shareholders through cash dividends and significant share repurchases, retaining substantial authorization for future buybacks - Total cash dividends of **$26.9 million** paid in the first half of 2025[12](index=12&type=chunk) - **811,000 shares** of common stock repurchased for **$110 million** in the first half of 2025[12](index=12&type=chunk) - **3 million shares** of common stock remained under existing share repurchase authorization as of June 30, 2025[12](index=12&type=chunk) [Outlook](index=4&type=section&id=Item%205.%20Outlook) The company adjusted its RevPAR outlook to reflect more modest domestic market expectations but maintained its adjusted net income and adjusted EBITDA guidance, incorporating incremental contributions from recent acquisitions [Full-Year 2025 Financial Guidance](index=4&type=section&id=Item%205.1.%20Full-Year%202025%20Financial%20Guidance) The company adjusted its RevPAR outlook to reflect a more modest domestic market expectation but maintained its adjusted net income and adjusted EBITDA outlook, with the Choice Hotels Canada acquisition expected to provide incremental EBITDA contribution Full-Year 2025 Outlook | Metric | 2025 Full-Year (New Outlook) | Previous Outlook | | :--- | :--- | :--- | | Net Income | $261 – $276 Million | $275 – $290 Million | | Adjusted Net Income | $324 – $339 Million | $324 – $339 Million | | Adjusted EBITDA | $615 – $635 Million | $615 – $635 Million | | Diluted EPS | $5.54 – $5.86 | $5.86 – $6.18 | | Adjusted Diluted EPS | $6.88 – $7.20 | $6.90 – $7.22 | | Effective Income Tax Rate | 25% | 25% | - Domestic RevPAR growth (vs. FY2024): **-3% to 0%** (adjusted from -1% to 1%)[13](index=13&type=chunk) - Global net system room growth (vs. FY2024): approximately **1%** (unchanged)[13](index=13&type=chunk) [Key Outlook Adjustments](index=4&type=section&id=Item%205.2.%20Key%20Outlook%20Adjustments) The company's outlook reflects a more modest domestic RevPAR expectation due to macroeconomic changes and includes approximately $6 million in incremental EBITDA contribution from the Choice Hotels Canada acquisition for the remainder of 2025 - RevPAR outlook adjusted to reflect more modest domestic expectations amid changing macroeconomic conditions[13](index=13&type=chunk) - Adjusted EBITDA outlook includes approximately **$6 million** in incremental contribution from the Choice Hotels Canada acquisition for the remainder of 2025[13](index=13&type=chunk) - Adjusted data exclusions include net surplus or deficit from reimbursable revenue from franchised and managed properties, due diligence and transition costs, additional company stock repurchases, and other items[13](index=13&type=chunk) [Company Information](index=5&type=section&id=Item%206.%20Company%20Information) Choice Hotels International is a leading global hotel franchisor with a diverse brand portfolio, providing value to stakeholders, and the report includes forward-looking statements subject to various risks and uncertainties [About Choice Hotels](index=5&type=section&id=Item%206.1.%20About%20Choice%20Hotels) Choice Hotels International is a leading global hotel franchisor with nearly 7,500 hotels and over 640,000 rooms across 46 countries and territories, offering 22 brands to meet diverse traveler needs and create value for franchisees and shareholders - One of the largest hotel franchisors globally, with nearly **7,500 hotels** and over **640,000 rooms** across **46 countries and territories**[16](index=16&type=chunk) - Features a broad portfolio of **22 brands**, ranging from full-service upscale to midscale, extended stay, and economy hotels[16](index=16&type=chunk) - Offers the award-winning Choice Privileges® rewards program and co-branded credit card options[16](index=16&type=chunk) [Forward-Looking Statements](index=5&type=section&id=Item%206.2.%20Forward-Looking%20Statements) The report contains forward-looking statements based on management's current beliefs and expectations, which involve known and unknown risks and uncertainties that could cause actual results to differ materially from projections - Forward-looking statements are identified by words such as “expect,” “estimate,” “believe,” and “forecast”[17](index=17&type=chunk) - Based on management's current beliefs, assumptions, and expectations about future events[17](index=17&type=chunk) - Do not guarantee future performance and involve known and unknown risks, uncertainties, and other factors, including economic conditions, consumer demand, regulatory changes, and operational risks[17](index=17&type=chunk)[18](index=18&type=chunk)[19](index=19&type=chunk) - The company undertakes no obligation to publicly update or revise any forward-looking statements, except as required by law[19](index=19&type=chunk) [Non-GAAP Financial Measures & Other Definitions](index=6&type=section&id=Item%207.%20Non-GAAP%20Financial%20Measures%20%26%20Other%20Definitions) The company uses non-GAAP financial measures like Adjusted EBITDA and Adjusted EPS to provide insight into core operational performance by excluding specific variable or infrequent items, alongside definitions of key operational metrics [Non-GAAP Measures Overview](index=6&type=section&id=Item%207.1.%20Non-GAAP%20Measures%20Overview) The company utilizes non-GAAP financial measures such as EBITDA, Adjusted EBITDA, Adjusted SG&A, Adjusted Net Income, and Adjusted EPS to assess operations, providing insight into core performance by excluding certain variable or infrequent items - Non-GAAP measures used include EBITDA, Adjusted EBITDA, Adjusted Selling, General and Administrative Expenses (SG&A), Adjusted Net Income, and Adjusted EPS[20](index=20&type=chunk) - These metrics are used to evaluate operations and should not be considered substitutes for GAAP measures[20](index=20&type=chunk) - Exclusions include restructuring costs, acquisition costs related to business combinations, legal claim expenses, gains or losses on the sale of equity securities, global ERP system implementation costs, and other discrete and infrequent expenses[21](index=21&type=chunk) [Specific Non-GAAP Definitions](index=6&type=section&id=Item%207.2.%20Specific%20Non-GAAP%20Definitions) This section provides detailed definitions and adjustments for EBITDA, Adjusted EBITDA, Adjusted Net Income, Adjusted EPS, and Adjusted SG&A, explaining the rationale for excluding specific items to better reflect ongoing operational performance - EBITDA: Net income excluding interest expense, interest income, provision for income taxes, depreciation and amortization, impairment and gains on asset disposals, other (gains) and losses, equity in net income (loss) of unconsolidated affiliates, and (gains) losses on extinguishment of debt[22](index=22&type=chunk) - Adjusted EBITDA: EBITDA further adjusted to exclude mark-to-market adjustments on non-qualified retirement plan investments, stock-based compensation expense (benefit), and the surplus or deficit generated from reimbursable revenue from franchised and managed properties[23](index=23&type=chunk) - Adjusted Net Income and Adjusted EPS: Exclude the surplus or deficit generated from reimbursable revenue from franchised and managed properties and gains on extinguishment of debt[25](index=25&type=chunk) - Adjusted SG&A: Excludes mark-to-market adjustments on non-qualified retirement plan investments and stock-based compensation expense[26](index=26&type=chunk) [Operational Definitions](index=8&type=section&id=Item%207.3.%20Operational%20Definitions) This section defines key operational metrics such as Occupancy, Average Daily Rate (ADR), Revenue Per Available Room (RevPAR), and Hotel Pipeline, explaining their calculation and significance in measuring hotel and company performance - Occupancy: Total room nights sold divided by total room nights available at a hotel during a given period, measuring the utilization of a hotel's available capacity[27](index=27&type=chunk) - ADR (Average Daily Rate): Hotel room revenue divided by total room nights sold during a given period, measuring the average room price achieved by a hotel[28](index=28&type=chunk) - RevPAR (Revenue Per Available Room): Hotel room revenue divided by total room nights available for guests during a given period, a key indicator of hotel performance and the company's royalty and system revenues[29](index=29&type=chunk) - Hotel Pipeline: Refers to hotels awaiting conversion, under construction, or approved for development, as well as master development agreements committing to future franchise development[30](index=30&type=chunk) [Financial Statements Update & Reclassifications](index=8&type=section&id=Item%208.%20Financial%20Statements%20Update%20%26%20Reclassifications) In Q1 2025, the consolidated statements of income were reclassified to categorize revenues and expenses based on the nature of underlying activities, without impacting previously reported total revenues, operating expenses, operating income, or net income, aiming to enhance comparability - Reclassification aims to categorize revenues and expenses based on the nature of underlying activities to enhance the comparability of financial statements[31](index=31&type=chunk) - The reclassification did not impact the company's previously reported total revenues, total operating expenses, operating income, or net income[31](index=31&type=chunk) - Specific reclassifications include: revising “royalties, licensing, and management fees” to “franchise and management fees”; revising “platform and procurement service fees” to “partner services and fees”; revising “other revenues from franchised and managed properties” to “reimbursable revenue from franchised and managed properties”; and reclassifying certain expenses from “other expenses from franchised and managed properties” to “selling, general and administrative expenses” and “depreciation and amortization”[32](index=32&type=chunk)[34](index=34&type=chunk)[35](index=35&type=chunk)[36](index=36&type=chunk)[37](index=37&type=chunk)[38](index=38&type=chunk) [Supplemental Financial Data](index=10&type=section&id=Item%209.%20Supplemental%20Financial%20Data) This section provides comprehensive unaudited condensed financial statements, including income statements, balance sheets, and cash flow statements, along with detailed operating statistics and non-GAAP reconciliations for the periods presented [Condensed Consolidated Statements of Income](index=10&type=section&id=Item%209.1.%20Condensed%20Consolidated%20Statements%20of%20Income) This section presents the unaudited condensed consolidated statements of income for the three and six months ended June 30, 2025, and 2024, detailing revenues, operating expenses, and other income/expenses, culminating in net income Condensed Consolidated Statements of Income Summary (Thousand USD) | Metric | Q2 2025 | Q2 2024 | H1 2025 | H1 2024 | | :--- | :--- | :--- | :--- | :--- | | Total Revenues | $426,443 | $435,156 | $759,303 | $767,105 | | Total Operating Expenses | $301,846 | $302,534 | $554,774 | $574,334 | | Operating Income | $124,597 | $132,622 | $204,529 | $192,771 | | Net Income | $81,734 | $87,136 | $126,268 | $118,145 | [Condensed Consolidated Balance Sheets](index=11&type=section&id=Item%209.2.%20Condensed%20Consolidated%20Balance%20Sheets) This section presents the unaudited condensed consolidated balance sheets as of June 30, 2025, and December 31, 2024, detailing assets, liabilities, and shareholders' deficit Condensed Consolidated Balance Sheets Summary (Thousand USD) | Metric | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Total Assets | $2,664,762 | $2,530,527 | | Total Liabilities | $2,691,000 | $2,575,798 | | Shareholders' Deficit | $(26,238) | $(45,271) | [Condensed Consolidated Statements of Cash Flows](index=12&type=section&id=Item%209.3.%20Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) This section provides the unaudited condensed consolidated statements of cash flows for the six months ended June 30, 2025, and 2024, outlining cash flows from operating, investing, and financing activities Condensed Consolidated Statements of Cash Flows Summary (Six Months Ended June 30, Thousand USD) | Metric | 2025 (Thousand USD) | 2024 (Thousand USD) | | :--- | :--- | :--- | | Net Cash Provided by Operating Activities | $116,070 | $113,595 | | Net Cash Used in Investing Activities | $(95,148) | $(62,032) | | Net Cash Used in Financing Activities | $(3,239) | $(18,564) | | Net Change in Cash and Cash Equivalents | $17,683 | $32,999 | [Supplemental Operating Information - Domestic Hotel System](index=13&type=section&id=Item%209.4.%20Supplemental%20Operating%20Information%20-%20Domestic%20Hotel%20System) This section provides detailed domestic operating statistics, including Average Daily Rate (ADR), Occupancy, and RevPAR by hotel segment (Upscale & Above, Midscale & Upper Midscale, Extended Stay, Economy), and effective royalty rate, comparing Q2 and H1 2025 with 2024 Domestic RevPAR by Segment (Three Months Ended June 30) | Segment | 2025 RevPAR | 2024 RevPAR | Change (%) | | :--- | :--- | :--- | :--- | | Upscale & Above | $92.24 | $96.88 | (4.8)% | | Midscale & Upper Midscale | $60.64 | $62.71 | (3.3)% | | Extended Stay | $47.62 | $47.63 | — % | | Economy | $35.80 | $35.86 | (0.2)% | | Total | $58.22 | $59.95 | (2.9)% | - System-wide effective royalty rate: **5.12%** in Q2 2025, compared to **5.04%** in Q2 2024[46](index=46&type=chunk) [Supplemental Hotel and Room Supply Data](index=14&type=section&id=Item%209.5.%20Supplemental%20Hotel%20and%20Room%20Supply%20Data) This section provides detailed data on domestic and international franchised hotel and room supply by brand as of June 30, 2025, and 2024, highlighting changes in system size Total Franchised Room Count (As of June 30) | Category | 2025 | 2024 | Change (%) | | :--- | :--- | :--- | :--- | | Domestic Franchised Rooms | 500,562 | 494,083 | 1.3% | | International Franchised Rooms | 143,838 | 136,980 | 5.0% | | Total Franchised Rooms | 644,400 | 631,063 | 2.1% | Key Brand Room Count Changes (As of June 30) | Brand | 2025 Rooms | 2024 Rooms | Change (%) | | :--- | :--- | :--- | :--- | | Ascend Hotel Collection | 38,537 | 23,109 | +66.8% | | Everhome Suites | 1,952 | 449 | +334.7% | | Radisson | 9,928 | 14,177 | -30.0% | [Supplemental Non-GAAP Financial Information Reconciliations](index=15&type=section&id=Item%209.6.%20Supplemental%20Non-GAAP%20Financial%20Information%20Reconciliations) This section provides detailed reconciliation tables for GAAP to non-GAAP financial measures, including Adjusted SG&A, EBITDA, Adjusted EBITDA, Adjusted Net Income, and Adjusted Diluted EPS, covering data for the three and six months ended June 30, 2025, and 2024 Adjusted SG&A Reconciliation Summary (Three Months Ended June 30, Thousand USD) | Metric | 2025 | 2024 | | :--- | :--- | :--- | | Total Selling, General and Administrative Expenses | $89,298 | $88,729 | | Total Adjustments | $(11,657) | $(8,229) | | Adjusted Selling, General and Administrative Expenses | $77,641 | $80,500 | Adjusted EBITDA Reconciliation Summary (Three Months Ended June 30, Thousand USD) | Metric | 2025 | 2024 | | :--- | :--- | :--- | | Net Income | $81,734 | $87,136 | | EBITDA | $138,021 | $145,459 | | Adjusted EBITDA | $164,975 | $161,741 | Adjusted Net Income and Adjusted Diluted EPS Reconciliation Summary (Three Months Ended June 30, Thousand USD) | Metric | 2025 | 2024 | | :--- | :--- | :--- | | Net Income | $81,734 | $87,136 | | Adjusted Net Income | $89,782 | $88,783 | | Diluted EPS | $1.75 | $1.80 | | Adjusted Diluted EPS | $1.92 | $1.84 | [Supplemental 2025 Outlook Details](index=16&type=section&id=Item%209.7.%20Supplemental%202025%20Outlook%20Details) This section provides a detailed breakdown of the company's full-year 2025 outlook for EBITDA, Adjusted EBITDA, Adjusted Net Income, and Adjusted Diluted EPS, including specific adjustments made to derive non-GAAP guidance Full-Year 2025 Adjusted EBITDA Outlook (Thousand USD) | Range | Lower | Upper | | :--- | :--- | :--- | | Adjusted EBITDA | $615,000 | $635,000 | Full-Year 2025 Adjusted Net Income and Diluted EPS Outlook | Range | Lower | Upper | | :--- | :--- | :--- | | Adjusted Net Income (Thousand USD) | $323,600 | $338,600 | | Adjusted Diluted EPS | $6.88 | $7.20 | - Guidance does not reflect depreciation and amortization of assets and liabilities related to the Choice Hotels Canada acquisition, as the preliminary accounting for the acquisition is not yet complete[55](index=55&type=chunk)