Company Overview - DiamondRock Hospitality Company is a self-advised real estate investment trust (REIT) that owns a portfolio of geographically diversified hotels concentrated in leisure destinations and top gateway markets [4] - The Company currently owns 36 premium quality hotels and resorts with approximately 9,600 rooms [4] - The portfolio includes properties operated under leading global brand families as well as independent boutique hotels in the lifestyle segment [4] Upcoming Financial Results - The Company will report financial results for the third quarter of 2025 after the market closes on Thursday, November 6, 2025 [1] - A conference call to discuss the third quarter financial results and business outlook is scheduled for Friday, November 7, 2025, at 9:00 a.m. Eastern Time (ET) [1] Conference Call Details - The conference call will be accessible by telephone and through the internet, with registration required for participation [2] - A replay of the call will be available two hours after the live call for a limited time on the Company's website [3]

Group 1 - The article discusses the preferred shares of DiamondRock Hospitality (NYSE: DRH.PR.A) and highlights a significant drawdown during market turmoil earlier in the year [1] - Binary Tree Analytics (BTA) aims to provide transparency and analytics in capital markets, focusing on closed-end funds (CEFs), exchange-traded funds (ETFs), and special situations to achieve high annualized returns with low volatility [1] Group 2 - The article does not provide any specific financial metrics or performance data related to DiamondRock Hospitality or its preferred shares [2][3]

Core Viewpoint - DiamondRock Hospitality (DRH) has received an upgrade to a Zacks Rank 2 (Buy), indicating a positive outlook based on rising earnings estimates, which significantly influence stock prices [1][3]. Earnings Estimates and Stock Price Impact - The Zacks rating system is based on changes in earnings estimates, which are strongly correlated with near-term stock price movements [4][6]. - An increase in earnings estimates typically leads to higher fair value calculations by institutional investors, resulting in buying or selling actions that affect stock prices [4]. Company Performance and Outlook - The upgrade reflects an improvement in DiamondRock Hospitality's underlying business, suggesting that investors may respond positively by driving the stock price higher [5]. - For the fiscal year ending December 2025, the company is expected to earn $1.00 per share, with a 0.2% increase in the Zacks Consensus Estimate over the past three months [8]. Zacks Rank System - The Zacks Rank system classifies stocks into five groups based on earnings estimates, with a strong historical performance, particularly for Zacks Rank 1 stocks, which have averaged a +25% annual return since 1988 [7]. - The upgrade to Zacks Rank 2 places DiamondRock Hospitality in the top 20% of Zacks-covered stocks, indicating a strong potential for market-beating returns in the near term [10].

[PART I. FINANCIAL INFORMATION](index=5&type=section&id=PART%20I.%20FINANCIAL%20INFORMATION) [Item 1. Financial Statements](index=5&type=section&id=Item%201.%20Financial%20Statements) This section presents the unaudited consolidated financial statements for DiamondRock Hospitality Company as of June 30, 2025, including balance sheets, statements of operations, equity, and cash flows, with detailed notes on accounting policies and activities [Consolidated Balance Sheets](index=5&type=section&id=Consolidated%20Balance%20Sheets) As of June 30, 2025, total assets decreased to **$3.06 billion** from **$3.17 billion**, primarily due to a hotel sale, while total liabilities decreased to **$1.48 billion** from **$1.57 billion**, mainly from debt repayments, with total equity remaining stable at **$1.58 billion** Consolidated Balance Sheet Highlights (in thousands) | Account | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | **Total Assets** | **$3,061,315** | **$3,172,251** | | Cash and cash equivalents | $52,402 | $81,381 | | Property and equipment, net | $2,615,010 | $2,631,221 | | Assets held for sale | $0 | $93,400 | | **Total Liabilities** | **$1,476,817** | **$1,573,319** | | Debt, net | $1,020,320 | $1,095,294 | | **Total Equity** | **$1,584,498** | **$1,598,932** | [Consolidated Statements of Operations and Comprehensive Income](index=6&type=section&id=Consolidated%20Statements%20of%20Operations%20and%20Comprehensive%20Income) For Q2 2025, total revenues slightly decreased to **$305.7 million**, but net income attributable to common stockholders significantly increased to **$38.4 million** (**$0.18** per diluted share) from **$22.1 million** (**$0.10** per diluted share) in Q2 2024, driven by reduced corporate expenses Statement of Operations Summary (in thousands, except per share data) | Metric | Q2 2025 | Q2 2024 | Six Months 2025 | Six Months 2024 | | :--- | :--- | :--- | :--- | :--- | | Total Revenues | $305,720 | $309,280 | $560,573 | $565,703 | | Total Operating Expenses | $249,586 | $268,274 | $479,672 | $502,252 | | Net Income | $41,039 | $24,631 | $52,954 | $32,989 | | Net Income Attributable to Common Stockholders | $38,381 | $22,076 | $47,784 | $27,950 | | Diluted EPS | $0.18 | $0.10 | $0.23 | $0.13 | [Consolidated Statements of Cash Flows](index=11&type=section&id=Consolidated%20Statements%20of%20Cash%20Flows) For the six months ended June 30, 2025, operating activities provided **$101.2 million**, investing activities provided **$47.8 million** from a hotel sale, and financing activities used **$174.2 million** for debt repayments and dividends, resulting in a total cash decrease to **$103.6 million** Cash Flow Summary for Six Months Ended June 30 (in thousands) | Cash Flow Category | 2025 | 2024 | | :--- | :--- | :--- | | Net cash provided by operating activities | $101,174 | $86,953 | | Net cash provided by (used in) investing activities | $47,753 | $(35,778) | | Net cash used in financing activities | $(174,159) | $(47,922) | | **Net (decrease) increase in cash** | **$(25,232)** | **$3,253** | [Notes to the Consolidated Financial Statements](index=14&type=section&id=Notes%20to%20the%20Consolidated%20Financial%20Statements) The notes detail the sale of the Westin Washington, D.C. City Center for **$92.0 million**, a reduction in total debt to **$1.02 billion**, significant share repurchase activity, and the company's operation as a single 'hotel ownership' segment - As of June 30, 2025, the company owned a portfolio of **36 premium hotels** with **9,595 guest rooms**[24](index=24&type=chunk) - On February 19, 2025, the company sold the Westin Washington, D.C. City Center for **$92.0 million**, receiving net proceeds of approximately **$89.0 million**[32](index=32&type=chunk) - Subsequent to the quarter end, on July 22, 2025, the company amended its credit facility, increasing its size from **$1.2 billion to $1.5 billion** and extending its maturity schedule[39](index=39&type=chunk) - During the first six months of 2025, the company repurchased **3.1 million shares** of common stock for **$23.7 million** under its share repurchase program[55](index=55&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=27&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses the company's financial performance, strategic direction, and liquidity, highlighting a slight revenue decrease, flat RevPAR, improved net income due to lower corporate expenses, a conservative capital structure, and recent credit facility amendment and share repurchase activities [Results of Operations](index=30&type=section&id=Results%20of%20Operations) For Q2 2025, total revenues decreased by **1.2%** to **$305.7 million** due to a **2.6%** decline in rooms revenue, while RevPAR was nearly flat with a **0.1%** increase, primarily driven by a significant **$19.1 million** reduction in corporate expenses compared to Q2 2024 Q2 2025 vs Q2 2024 Revenue Breakdown (in thousands) | Revenue Type | Q2 2025 | Q2 2024 | Change ($) | Change (%) | | :--- | :--- | :--- | :--- | :--- | | Rooms | $198,237 | $203,487 | $(5,250) | (2.6)% | | Food and beverage | $78,828 | $78,111 | $717 | 0.9% | | Other | $28,655 | $27,682 | $973 | 3.5% | | **Total revenues** | **$305,720** | **$309,280** | **$(3,560)** | **(1.2)%** | Key Hotel Operating Statistics (Q2 2025 vs Q2 2024) | Metric | Q2 2025 | Q2 2024 | % Change | | :--- | :--- | :--- | :--- | | Occupancy % | 76.7% | 77.5% | (0.8)% | | ADR | $295.78 | $292.59 | 1.1% | | RevPAR | $226.95 | $226.83 | 0.1% | - Corporate expenses decreased by **$19.1 million** in Q2 2025 compared to Q2 2024, primarily due to severance expenses recognized in the 2024 period related to leadership changes[110](index=110&type=chunk) [Liquidity and Capital Resources](index=34&type=section&id=Liquidity%20and%20Capital%20Resources) The company maintains a conservative capital structure with **$400.0 million** borrowing capacity as of June 30, 2025, and subsequently upsized its credit facility to **$1.5 billion** to extend maturities and repay remaining 2025 mortgage debt, aiming for a fully unencumbered portfolio while actively repurchasing shares - The company amended its credit facility on July 22, 2025, increasing its size to **$1.5 billion** and extending maturities, with proceeds used to repay remaining 2025 mortgage loans, resulting in a fully unencumbered portfolio[130](index=130&type=chunk)[137](index=137&type=chunk) - Under its **$200 million** share repurchase program, the company bought back **3.1 million shares** for **$23.7 million** in the first six months of 2025, with **$146.8 million** of capacity remaining as of August 7, 2025[133](index=133&type=chunk) [Non-GAAP Financial Measures](index=38&type=section&id=Non-GAAP%20Financial%20Measures) The company uses non-GAAP measures like EBITDA and FFO, reporting Adjusted EBITDA of **$90.5 million** for Q2 2025 (down from $95.0 million) and Adjusted FFO of **$72.3 million** (down from $75.0 million), noting a restatement of prior periods for comparability after excluding share-based compensation from January 1, 2025 Reconciliation to Adjusted EBITDA (in thousands) | Metric | Q2 2025 | Q2 2024 (As Adjusted) | | :--- | :--- | :--- | | Net income | $41,039 | $24,631 | | EBITDA/EBITDAre | $85,054 | $70,074 | | **Adjusted EBITDA** | **$90,457** | **$95,038** | Reconciliation to Adjusted FFO (in thousands) | Metric | Q2 2025 | Q2 2024 (As Adjusted) | | :--- | :--- | :--- | | Net income | $41,039 | $24,631 | | FFO | $69,195 | $52,504 | | **Adjusted FFO available to common stock and unit holders** | **$72,330** | **$75,014** | [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=46&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) The company's primary market risk is interest rate fluctuations, with **$0.8 billion** of its **$1.0 billion** total debt being variable-rate, mitigated by interest rate swaps on **$325 million**, where a **100 basis point** change on unhedged debt would impact annual interest expense by **$4.8 million** - The company's primary market risk is interest rate risk, with **$0.8 billion** of its **$1.0 billion** total debt being variable-rate as of June 30, 2025[175](index=175&type=chunk) - The company uses interest rate swaps to effectively fix the rate on **$325 million** of its variable-rate debt[175](index=175&type=chunk) - A **100 basis point** fluctuation in interest rates on unhedged variable rate debt would impact annual interest expense by **$4.8 million**[175](index=175&type=chunk) [Item 4. Controls and Procedures](index=46&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded that disclosure controls and procedures were effective as of June 30, 2025, with no material changes to internal control over financial reporting identified during the quarter - Management concluded that disclosure controls and procedures were effective as of the end of the period covered by the report[176](index=176&type=chunk) - No changes in internal control over financial reporting that materially affected, or are reasonably likely to materially affect, the company's internal controls were identified during the most recent fiscal quarter[177](index=177&type=chunk) [PART II. OTHER INFORMATION](index=47&type=section&id=PART%20II.%20OTHER%20INFORMATION) [Item 1. Legal Proceedings](index=47&type=section&id=Item%201.%20Legal%20Proceedings) The company is involved in routine legal proceedings but does not anticipate any material adverse impact on its financial condition or results of operations - The company is subject to routine litigation but does not expect any material adverse impact on its financial condition[179](index=179&type=chunk) [Item 1A. Risk Factors](index=47&type=section&id=Item%201A.%20Risk%20Factors) No material changes to the risk factors previously disclosed in the company's Annual Report on Form 10-K for the year ended December 31, 2024, or the Q1 2025 Form 10-Q were reported - No material changes to risk factors were reported for the period[180](index=180&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=47&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) This section details the company's repurchase of **1,684,299 shares** of common stock during Q2 2025 as part of its **$200 million** share repurchase program Issuer Purchases of Equity Securities (Q2 2025) | Period | Total Shares Purchased | Average Price Paid per Share | | :--- | :--- | :--- | | April 2025 | 639,949 | $7.26 | | May 2025 | 86,960 | $7.48 | | June 2025 | 957,390 | $7.60 | - The share repurchase program was approved on May 1, 2024, for up to **$200.0 million** and expires on May 1, 2026[181](index=181&type=chunk) [Item 5. Other Information](index=47&type=section&id=Item%205.%20Other%20Information) No directors or officers adopted, terminated, or modified Rule 10b5-1 trading arrangements during Q2 2025, and the company changed its transfer agent to Broadridge Financial Solutions, Inc. on July 25, 2025 - On July 25, 2025, the company changed its transfer agent to Broadridge Financial Solutions, Inc.[184](index=184&type=chunk) [Item 6. Exhibits](index=48&type=section&id=Item%206.%20Exhibits) This section lists the exhibits filed with the Form 10-Q, including the Seventh Amended and Restated Credit Agreement, CEO and CFO certifications, and XBRL data files

Financial Data and Key Metrics Changes - Comparable RevPAR growth in Q2 2025 was 0.1%, driven by a 1.1% increase in rate and an 80 basis point decline in occupancy [4] - Total RevPAR growth was 1.1%, attributed to a 4.2% increase in out of room revenues per occupied room, reaching a new quarterly high of $160 per occupied room [4] - Corporate adjusted EBITDA was $90.5 million, and adjusted FFO per share was $0.35, with free cash flow per share increasing approximately 4.5% to $0.63 [7] Business Line Data and Key Metrics Changes - Group room revenue increased by 0.8%, business transient revenue rose by 4.2%, while leisure transient revenue declined by 1.6% [5] - Food and beverage revenues increased by 3.1%, with F&B profit rising over 6%, leading to a margin increase of 105 basis points [5][6] - Urban portfolio achieved 3% RevPAR growth, with April being the strongest month at 4.6% growth [7][8] - Resort portfolio saw comparable RevPAR decline of 6.3%, impacted by the delayed opening of The Cliffs at La Verge [9] Market Data and Key Metrics Changes - Urban hotels experienced total RevPAR growth that was 100 basis points stronger than RevPAR growth, with food and beverage revenues up over 5% [8] - Resort RevPAR performance varied, with Florida resorts experiencing a 4.1% decline, but out of room spend per occupied room increased by 6.7% [11] - Group room revenues across the portfolio increased by 0.8%, with rates up 3.3% and room nights down 2.5% [12] Company Strategy and Development Direction - The company aims to drive outsized free cash flow per share growth and is focused on recycling low free cash flow yield hotels into higher yielding investments [18][19] - The company plans to continue share repurchases as a key use of capital, especially when trading at a favorable cap rate [15][23] - Future value creation opportunities include potential developments at Chico Hot Springs and residential opportunities in Destin and Fort Lauderdale [26] Management's Comments on Operating Environment and Future Outlook - Management noted that the operating environment is expected to stabilize, with improving group lead volumes and out of room spending trends [30] - The company maintains a full-year outlook for RevPAR growth of negative 1% to positive 1%, with total RevPAR growth expected to outperform RevPAR growth by 50 basis points in 2025 [31] - Management expressed optimism about the potential for RevPAR acceleration in the coming year, contingent on reduced political turmoil and increased domestic investment [70] Other Important Information - The company successfully refinanced its senior unsecured credit facility, increasing its size to $1.5 billion, providing operational and transactional flexibility [14][71] - The company has declared or paid a quarterly common dividend of $0.08 per share and may declare an additional sub-dividend for Q4 based on taxable income [15] Q&A Session Summary Question: Can you elaborate on the stabilization at the higher end of the portfolio? - Management clarified that the comment referred to overall portfolio demand improving from a previously softer point [34] Question: What is driving the low single-digit RevPAR declines in Q3? - Management indicated that the decline is primarily due to difficult comparisons from last year's exceptional performance, particularly related to the DNC in Chicago [36][38] Question: How do you view share buybacks in relation to addressing preferred shares? - Management stated that share buybacks remain an attractive use of capital, but they will weigh options regarding preferred shares as the year progresses [41][42] Question: What segments are driving the improvement in group booking pace? - Management noted that the urban side is seeing significant improvement, with short-term group bookings contributing positively [48] Question: How does the company plan to pursue asset sales? - Management acknowledged that recent market volatility and property tax increases have impacted their disposition plans, but they remain focused on accretive recycling opportunities [80][100]

Financial Performance - For the quarter ended June 2025, DiamondRock Hospitality (DRH) reported revenue of $305.72 million, down 1.2% year-over-year [1] - EPS for the quarter was $0.35, compared to $0.10 in the same quarter last year, indicating significant improvement [1] - The reported revenue was below the Zacks Consensus Estimate of $308.63 million, resulting in a surprise of -0.94% [1] - The company delivered an EPS surprise of +6.06%, with the consensus EPS estimate being $0.33 [1] Key Metrics - Revenues from Other sources were $28.66 million, exceeding the estimated $27.87 million, representing a +3.5% change year-over-year [4] - Food and beverage revenues were reported at $78.83 million, slightly above the estimated $78.58 million, with a +0.9% change compared to the previous year [4] - Room revenues were $198.24 million, below the estimated $205.01 million, reflecting a year-over-year decline of -2.6% [4] - Net Earnings Per Share (Diluted) was $0.18, slightly below the estimated $0.19 [4] Stock Performance - Shares of DiamondRock Hospitality have returned -4.9% over the past month, contrasting with the Zacks S&P 500 composite's +1.2% change [3] - The stock currently holds a Zacks Rank 2 (Buy), suggesting potential for outperformance in the near term [3]

Core Viewpoint - DiamondRock Hospitality (DRH) reported quarterly funds from operations (FFO) of $0.35 per share, exceeding the Zacks Consensus Estimate of $0.33 per share, and showing a slight increase from $0.34 per share a year ago [1] Group 1: Financial Performance - The quarterly FFO surprise was +6.06%, and the company had a previous quarter surprise of +11.76% with an actual FFO of $0.19 compared to an expected $0.17 [2] - Revenues for the quarter ended June 2025 were $305.72 million, which missed the Zacks Consensus Estimate by 0.94%, and decreased from $309.28 million year-over-year [3] - Over the last four quarters, the company has surpassed consensus FFO estimates three times but has only topped revenue estimates once [3] Group 2: Stock Performance and Outlook - DiamondRock Hospitality shares have declined approximately 16.1% since the beginning of the year, contrasting with the S&P 500's gain of 7.9% [4] - The company's FFO outlook is crucial for investors, with current consensus FFO estimates at $0.26 for the coming quarter and $1.00 for the current fiscal year [5][8] - The Zacks Rank for DiamondRock Hospitality is currently 2 (Buy), indicating expectations for the stock to outperform the market in the near future [7] Group 3: Industry Context - The REIT and Equity Trust - Other industry is currently in the top 40% of over 250 Zacks industries, suggesting a favorable outlook for stocks within this sector [9]

[Financial Highlights & Operating Results](index=1&type=section&id=Financial%20Highlights%20%26%20Operating%20Results) DiamondRock reported a **73.8%** net income increase to **$38.4 million** in Q2 2025, with flat Adjusted FFO per share and a **1.1%** rise in Comparable Total RevPAR Q2 2025 Key Performance Indicators (vs. Q2 2024) | Metric | Q2 2025 | Change vs. Q2 2024 | | :--- | :--- | :--- | | Net Income | $38.4 million | +73.8% | | Comparable RevPAR | $226.95 | +0.1% | | Comparable Total RevPAR | $350.00 | +1.1% | | Comparable Hotel Adjusted EBITDA | $95.4 million | -1.9% | | Adjusted EBITDA | $90.5 million | -4.7% | | Adjusted FFO per Share | $0.35 | Flat | - Out-of-room spend accelerated from Q1 levels and is expected to remain a strong point in the second half of the year[3](index=3&type=chunk)[5](index=5&type=chunk) - Expense growth was limited to **0.7%**, excluding a larger-than-anticipated property tax increase in Chicago; excluding this tax impact, Comparable Hotel Adjusted EBITDA margins would have expanded by **30 basis points** instead of contracting by **97 basis points**[3](index=3&type=chunk) Comparable Operating Results Summary | Metric | Three Months Ended June 30, 2025 | Change (YoY) | Six Months Ended June 30, 2025 | Change (YoY) | | :--- | :--- | :--- | :--- | :--- | | RevPAR | $226.95 | 0.1% | $206.69 | 1.0% | | Total RevPAR | $350.00 | 1.1% | $320.95 | 1.3% | | Total Revenues | $305.7M | 1.2% | $557.5M | 0.9% | | Hotel Adjusted EBITDA | $95.4M | (1.9)% | $156.7M | (0.4)% | | Hotel Adjusted EBITDA Margin | 31.19% | (97) bps | 28.11% | (34) bps | [Capital Management & Shareholder Returns](index=3&type=section&id=Capital%20Management%20%26%20Shareholder%20Returns) The company completed a **$1.5 billion** refinancing, extending debt maturities to 2028, and continued share repurchases - Completed a **$1.5 billion** refinancing of its senior unsecured credit facility, increasing its size from **$1.2 billion**, addressing all near-term maturities and leaving no debt maturities until **2028**[1](index=1&type=chunk)[9](index=9&type=chunk) - Following the planned prepayment of the Westin Boston Seaport District mortgage in September 2025, the company's entire portfolio will be unencumbered by secured debt[10](index=10&type=chunk) - The company invested **$41.3 million** in capital improvements in the first half of 2025 and expects to invest a total of **$85.0 to $95.0 million** for the full year[11](index=11&type=chunk) - Year-to-date, the company repurchased **3.6 million** common shares for approximately **$27.3 million**, with **$146.8 million** remaining under its repurchase program[1](index=1&type=chunk)[12](index=12&type=chunk) - Declared a quarterly cash dividend of **$0.08** per common share and **$0.515625** per Series A Preferred Stock share[14](index=14&type=chunk) [Full Year 2025 Guidance](index=4&type=section&id=GUIDANCE) DiamondRock raised its full-year 2025 guidance midpoint for Adjusted EBITDA and FFO per share, anticipating improved Total RevPAR growth Full Year 2025 Guidance Update | Metric | Current Guidance | Previous Guidance | Change at Midpoint | | :--- | :--- | :--- | :--- | | Comparable RevPAR Growth | (1.0)% to 1.0% | (1.0)% to 1.0% | —% | | Comparable Total RevPAR Growth | (0.5%) to 1.5% | (1.0)% to 1.0% | +0.5% | | Adjusted EBITDA | $275M to $295M | $270M to $295M | +$2.5M | | Adjusted FFO per share | $0.96 to $1.06 | $0.94 to $1.06 | +$0.01 | - Key guidance assumptions include: - Corporate expenses of **$24M to $25M** (unchanged) - Cash interest expense of **$63M to $64M** (increased by **$2.5M** due to credit facility upsizing) - Fully diluted weighted average shares of **209.0 million**[20](index=20&type=chunk) [Financial Statements](index=7&type=section&id=Financial%20Statements) Unaudited financial statements show total assets decreased to **$3.06 billion**, with net income attributable to common stockholders surging to **$38.4 million** [Consolidated Balance Sheets](index=7&type=section&id=CONSOLIDATED%20BALANCE%20SHEETS) As of June 30, 2025, total assets were **$3.06 billion**, down from **$3.17 billion** at year-end 2024, while total liabilities decreased Consolidated Balance Sheet Summary (in thousands) | Account | June 30, 2025 (unaudited) | December 31, 2024 | | :--- | :--- | :--- | | **Total Assets** | **$3,061,315** | **$3,172,251** | | Debt, net | $1,020,320 | $1,095,294 | | **Total Liabilities** | **$1,476,817** | **$1,573,319** | | **Total Equity** | **$1,584,498** | **$1,598,932** | [Consolidated Statements of Operations](index=8&type=section&id=CONSOLIDATED%20STATEMENTS%20OF%20OPERATIONS) For Q2 2025, total revenues were **$305.7 million**, with net income attributable to common stockholders surging to **$38.4 million** Consolidated Statements of Operations Summary (in thousands) | Account | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | | :--- | :--- | :--- | | Total Revenues | $305,720 | $309,280 | | Total Operating Expenses | $249,586 | $268,274 | | Net Income | $41,039 | $24,631 | | Net Income Attributable to Common Stockholders | $38,381 | $22,076 | | Earnings per Diluted Share | $0.18 | $0.10 | [Non-GAAP Financial Measures & Reconciliations](index=9&type=section&id=Non-GAAP%20Financial%20Measures%20%26%20Reconciliations) This section details the company's use of non-GAAP measures like EBITDA and FFO, providing comprehensive reconciliations from GAAP net income [Explanation of Non-GAAP Financial Measures](index=9&type=section&id=Explanation%20of%20Non-GAAP%20Financial%20Measures) The company defines and justifies its use of EBITDA, FFO, and their adjusted variants as key performance indicators - Management uses non-GAAP measures like EBITDA and FFO to evaluate hotel performance and facilitate comparisons with other lodging REITs[29](index=29&type=chunk) - Effective **January 1, 2025**, the company excludes share-based compensation from its calculations of Adjusted EBITDA and Adjusted FFO to align with financial covenant calculations and enhance peer comparability[8](index=8&type=chunk)[36](index=36&type=chunk) [Reconciliations of Non-GAAP Measures](index=13&type=section&id=Reconciliations%20of%20Non-GAAP%20Measures) Detailed reconciliations from GAAP net income to non-GAAP metrics show Q2 2025 net income of **$41.0 million** reconciled to Adjusted EBITDA of **$90.5 million** Reconciliation of Net Income to Adjusted EBITDA (in thousands) | Line Item | Three Months Ended June 30, 2025 | | :--- | :--- | | Net income | $41,039 | | Interest expense | $14,868 | | Real estate related depreciation and amortization | $28,156 | | EBITDA/EBITDAre | $85,054 | | Adjustments (Share-based comp, etc.) | $5,403 | | **Adjusted EBITDA** | **$90,457** | Reconciliation of Net Income to Adjusted FFO (in thousands) | Line Item | Three Months Ended June 30, 2025 | | :--- | :--- | | Net income | $41,039 | | Real estate related depreciation and amortization | $28,156 | | FFO | $69,195 | | Adjustments (Share-based comp, etc.) | $5,589 | | Distribution to preferred stockholders | ($2,454) | | **Adjusted FFO available to common stock** | **$72,330** | - Comparable Hotel Adjusted EBITDA for Q2 2025 was **$95.4 million**, compared to **$97.2 million** in Q2 2024; the reconciliation adjusts for the sale of the Westin Washington D.C. City Center and the acquisition of the AC Hotel Minneapolis Downtown[40](index=40&type=chunk) [Supplemental Information](index=15&type=section&id=Supplemental%20Information) This section provides supplemental data, including market capitalization, debt structure, and extensive property-level operating statistics [Market Capitalization and Debt Summary](index=16&type=section&id=Market%20Capitalization%20and%20Debt%20Summary) As of June 30, 2025, total enterprise value was approximately **$2.68 billion**, with total debt outstanding of **$1.27 billion** Enterprise Value as of June 30, 2025 (in thousands) | Component | Value | | :--- | :--- | | Common equity capitalization | $1,592,487 | | Preferred equity capitalization | $119,000 | | Consolidated debt (face amount) | $1,020,876 | | Cash and cash equivalents | ($52,402) | | **Total enterprise value** | **$2,679,961** | - Post-refinancing (as of Aug 7, 2025), the average years to maturity for the company's debt increased from **1.4 years** to **2.8 years**[46](index=46&type=chunk) [Hotel Operating Statistics](index=17&type=section&id=Hotel%20Operating%20Statistics) Detailed operating statistics for 36 comparable hotels show Q2 2025 comparable ADR increased by **1.1%** to **$295.78** Comparable Portfolio Operating Statistics - Q2 2025 vs Q2 2024 | Metric | 2Q 2025 | 2Q 2024 | Change | | :--- | :--- | :--- | :--- | | ADR | $295.78 | $292.59 | 1.1% | | Occupancy | 76.7% | 77.5% | (0.8)% | | RevPAR | $226.95 | $226.83 | 0.1% | | Total RevPAR | $350.00 | $346.27 | 1.1% | [Hotel Adjusted EBITDA Reconciliation](index=22&type=section&id=Hotel%20Adjusted%20EBITDA%20Reconciliation) This section provides granular, hotel-by-hotel reconciliations of total revenues to Hotel Adjusted EBITDA for Q2 2025 and YTD periods - Provides a detailed reconciliation from Total Revenues to Hotel Adjusted EBITDA for each of the company's properties for Q2 2025, Q2 2024, YTD 2025, and YTD 2024[53](index=53&type=chunk)[54](index=54&type=chunk)[55](index=55&type=chunk)[56](index=56&type=chunk)

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Group 1 - The article compares two stocks, DiamondRock Hospitality (DRH) and CubeSmart (CUBE), to determine which offers better value for investors [1] - DRH has a Zacks Rank of 2 (Buy), indicating a stronger earnings outlook compared to CUBE, which has a Zacks Rank of 3 (Hold) [3][7] - Value investors typically consider various traditional metrics to identify undervalued stocks, beyond just earnings outlook [3] Group 2 - The Value category of the Style Scores system evaluates companies based on key metrics such as P/E ratio, P/S ratio, earnings yield, and cash flow per share [4] - DRH has a forward P/E ratio of 8.03, significantly lower than CUBE's forward P/E of 15.85, suggesting DRH may be undervalued [5] - DRH's PEG ratio is 4.61, while CUBE's PEG ratio is 7.51, indicating DRH's expected earnings growth is more favorable [5] - DRH's P/B ratio is 1.07, compared to CUBE's P/B of 3.26, further supporting DRH's valuation as more attractive [6] - Based on these valuation metrics, DRH holds a Value grade of B, while CUBE has a Value grade of D [6]