Core Insights - Hilton Grand Vacations (HGV) reported Q2 2025 results with strong contract sales but missed Wall Street forecasts for both GAAP revenue and adjusted EPS [1][5][14] - The company emphasized ongoing integration of acquired businesses, particularly Bluegreen Vacations, as a key strategic focus [1][4] Financial Performance - GAAP revenue was $1.266 billion, below the estimated $1.378 billion, while adjusted EPS (non-GAAP) was $0.54 compared to an expected $0.81 [1][2] - Adjusted EBITDA attributable to stockholders was $233 million, down 11.1% from $262 million in Q2 2024 [2] - Adjusted free cash flow dropped 63.5% year-over-year to $135 million, with free cash flow at $28 million, a 70.5% decline from the previous year [2][13] Business Segments - Contract sales increased by 10.2% to $834 million in Q2 2025, indicating solid top-line growth [2][5] - The real estate sales and financing segment generated $760 million in revenue, but profit margins faced pressure due to a $45 million net deferral related to ongoing projects [6] - Resort operations and club management revenue grew to $405 million, but adjusted EBITDA decreased from $152 million to $149 million, with a profit margin drop to 36.8% [7] - The rental and ancillary services segment reported flat revenue of $195 million but moved to a loss of $8 million from a $7 million profit compared to Q2 2024 [8] Strategic Focus - The company is focusing on expansion through acquisitions and brand partnerships, with the Bluegreen Vacations acquisition broadening its product range [4] - Inventory management is crucial, with a pipeline valued at $13.3 billion and owned inventory representing 90.6% of total contract sales pipeline [11] Shareholder Actions - In Q2 2025, the company repurchased 4.1 million shares for $150 million and approved an additional $600 million repurchase authorization [13] - The net leverage ratio remained at approximately 3.9x trailing-twelve-month EBITDA as of June 30, 2025 [13] Outlook - Management maintained its 2025 guidance for full-year adjusted EBITDA in the range of $1.125 billion to $1.165 billion, with no updates on revenue or earnings per share [14] - Key watch points include membership growth, integration pace of Bluegreen, and recovery in profit margins [15]

[PART I - FINANCIAL INFORMATION](index=3&type=section&id=PART%20I%20-%20FINANCIAL%20INFORMATION) This part encompasses the company's unaudited condensed consolidated financial statements and related notes, providing a comprehensive view of its financial performance and position [Item 1. Financial Statements](index=3&type=section&id=Item%201.%20Financial%20Statements) This section presents the unaudited condensed consolidated financial statements of Hilton Grand Vacations Inc. for the periods ended June 30, 2025, and December 31, 2024, including balance sheets, statements of income, comprehensive income, cash flows, and equity, along with detailed notes explaining the company's business, accounting policies, acquisition details, revenue recognition, receivables, debt, equity, and commitments [Condensed Consolidated Balance Sheets](index=3&type=section&id=HILTON%20GRAND%20VACATIONS%20INC.%20CONDENSED%20CONSOLIDATED%20BALANCE%20SHEETS) This section provides a snapshot of the company's financial position, detailing assets, liabilities, and equity as of June 30, 2025, and December 31, 2024 Condensed Consolidated Balance Sheet Highlights (in millions) | Metric | June 30, 2025 | December 31, 2024 | | :-------------------------------- | :------------ | :------------------ | | Cash and cash equivalents | $269 | $328 | | Restricted cash | $323 | $438 | | Timeshare financing receivables, net | $2,979 | $3,006 | | Inventory | $2,406 | $2,244 | | Goodwill | $1,985 | $1,985 | | Intangible assets, net | $1,760 | $1,787 | | TOTAL ASSETS | $11,738 | $11,442 | | Debt, net | $4,574 | $4,601 | | Non-recourse debt, net | $2,499 | $2,318 | | Total liabilities | $10,098 | $9,547 | | Total equity | $1,640 | $1,895 | [Condensed Consolidated Statements of Income (Unaudited)](index=4&type=section&id=HILTON%20GRAND%20VACATIONS%20INC.%20CONDENSED%20CONSOLIDATED%20STATEMENTS%20OF%20INCOME%20(UNAUDITED)) This section presents the company's financial performance over specific periods, detailing revenues, expenses, and net income Condensed Consolidated Statements of Income Highlights (in millions, except per share data) | Metric | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--------------------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Total revenues | $1,266 | $1,235 | $2,414 | $2,391 | | Total operating expenses | $1,154 | $1,141 | $2,242 | $2,231 | | Net income | $28 | $4 | $16 | $2 | | Net income (loss) attributable to stockholders | $25 | $2 | $8 | $(2) | | Basic EPS | $0.26 | $0.02 | $0.09 | $(0.02) | | Diluted EPS | $0.25 | $0.02 | $0.08 | $(0.02) | [Condensed Consolidated Statements of Comprehensive Income (Loss) (Unaudited)](index=5&type=section&id=HILTON%20GRAND%20VACATIONS%20INC.%20CONDENSED%20CONSOLIDATED%20STATEMENTS%20OF%20COMPREHENSIVE%20INCOME%20(LOSS)%20(UNAUDITED)) This section outlines the changes in equity from non-owner sources, including net income and other comprehensive income or loss Condensed Consolidated Statements of Comprehensive Income (Loss) Highlights (in millions) | Metric | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :------------------------------------------------ | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Net income | $28 | $4 | $16 | $2 | | Other comprehensive income (loss), net of tax | $2 | $(10) | $(5) | $(12) | | Comprehensive income (loss) attributable to stockholders | $27 | $(8) | $3 | $(14) | [Condensed Consolidated Statements of Cash Flows (Unaudited)](index=6&type=section&id=HILTON%20GRAND%20VACATIONS%20INC.%20CONDENSED%20CONSOLIDATED%20STATEMENTS%20OF%20CASH%20FLOWS%20(UNAUDITED)) This section details the cash inflows and outflows from operating, investing, and financing activities over specific periods Condensed Consolidated Statements of Cash Flows Highlights (in millions) | Metric | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--------------------------------------- | :----------------------------- | :----------------------------- | | Net cash provided by operating activities | $99 | $113 | | Net cash used in investing activities | $(66) | $(1,482) | | Net cash (used in) provided by financing activities | $(213) | $1,101 | | Net decrease in cash, cash equivalents and restricted cash | $(174) | $(284) | | Cash and cash equivalents, end of period | $269 | $328 | [Condensed Consolidated Statements of Equity (Unaudited)](index=7&type=section&id=HILTON%20GRAND%20VACATIONS%20INC.%20CONDENSED%20CONSOLIDATED%20STATEMENTS%20OF%20EQUITY%20(UNAUDITED)) This section presents the changes in the company's equity accounts, including common stock and total stockholders' equity, over specific periods Condensed Consolidated Statements of Equity Highlights (in millions) | Metric | June 30, 2025 | December 31, 2024 | | :-------------------------------- | :------------ | :------------------ | | Common Stock (shares) | 89 | 97 | | Total Stockholders' Equity | $1,489 | $1,752 | | Total Equity | $1,640 | $1,895 | - Repurchase and retirement of common stock for the six months ended June 30, 2025, totaled **$303 million** (8 million shares)[13](index=13&type=chunk) [NOTE 1: Organization and Basis of Presentation](index=9&type=section&id=NOTE%201:%20ORGANIZATION%20AND%20BASIS%20OF%20PRESENTATION) This note describes the company's business, its global operations, and the significant acquisition of Bluegreen Vacations Holding Corporation - Hilton Grand Vacations Inc. is a global timeshare company engaged in developing, marketing, selling, managing, and operating timeshare resorts and plans, primarily under the Hilton Grand Vacations brand[17](index=17&type=chunk) - The company completed the acquisition of Bluegreen Vacations Holding Corporation on **January 17, 2024**[17](index=17&type=chunk) - As of June 30, 2025, the company had over **200 properties** across the U.S., Europe, Canada, the Caribbean, Mexico, and Asia, with significant concentrations in key tourist destinations[19](index=19&type=chunk) [NOTE 2: Summary of Significant Accounting Policies](index=9&type=section&id=NOTE%202:%20SUMMARY%20OF%20SIGNIFICANT%20ACCOUNTING%20POLICIES) This note outlines the key accounting principles and standards applied in preparing the financial statements, including recent accounting pronouncements - ASU 2023-09 (Income Taxes) is effective for fiscal years beginning after **December 15, 2024**, and is expected to impact disclosures only[24](index=24&type=chunk)[25](index=25&type=chunk) - ASU 2024-03 (Expense Disaggregation Disclosures) is effective for fiscal years beginning after **December 15, 2026**, and is expected to impact disclosures only[26](index=26&type=chunk) [NOTE 3: Bluegreen Acquisition](index=10&type=section&id=NOTE%203:%20BLUEGREEN%20ACQUISITION) This note provides details on the acquisition of Bluegreen Vacations Holding Corporation, including the transaction value and pro forma financial impacts - The Bluegreen Acquisition was completed on **January 17, 2024**, for approximately **$1.6 billion** in an all-cash transaction[27](index=27&type=chunk) Unaudited Pro Forma Results of Operations (Six Months Ended June 30, 2024) | Metric | 2024 (in millions) | | :------- | :----------------- | | Revenue | $2,438 | | Net loss | $(1) | [NOTE 4: Revenue from Contracts with Customers](index=11&type=section&id=NOTE%204:%20REVENUE%20FROM%20CONTRACTS%20WITH%20CUSTOMERS) This note disaggregates revenue by segment and details receivables and contract liabilities arising from customer contracts Disaggregated Revenues by Segment (in millions) | Segment | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :------------------------------------ | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Real Estate Sales and Financing | $760 | $740 | $1,405 | $1,427 | | Resort Operations and Club Management | $378 | $366 | $748 | $713 | Receivables from Contracts with Customers (in millions) | Metric | June 30, 2025 | December 31, 2024 | | :-------------------------- | :------------ | :------------------ | | Accounts receivable, net | $265 | $219 | | Timeshare financing receivables, net | $2,979 | $3,006 | | Total | $3,244 | $3,225 | Contract Liabilities Composition (in millions) | Contract Liability | June 30, 2025 | December 31, 2024 | | :--------------------------------------- | :------------ | :------------------ | | Advanced deposits | $235 | $226 | | Deferred sales of VOIs of projects under construction | $300 | $92 | | Club activation fees and annual dues | $147 | $79 | | Bonus point incentive liability | $94 | $86 | [NOTE 5: Accounts Receivable](index=13&type=section&id=NOTE%205:%20ACCOUNTS%20RECEIVABLE) This note provides a detailed breakdown of accounts receivable by category and the changes in the allowance for credit losses Accounts Receivable, Net (in millions) | Category | June 30, 2025 | December 31, 2024 | | :------------------------ | :------------ | :------------------ | | Fee-for-service commissions | $40 | $48 | | Real estate and financing | $41 | $34 | | Resort and club operations | $184 | $137 | | Tax receivables | $171 | $89 | | Other receivables | $8 | $7 | | Total | $444 | $315 | Changes in Allowance for Credit Losses (Six Months Ended June 30, 2025, in millions) | Category | Fee-for-service commissions | Real estate and financing | Resort and club operations | Total | | :------------------------------------ | :-------------------------- | :------------------------ | :------------------------- | :---- | | Balance as of December 31, 2024 | $24 | $49 | $1 | $74 | | Current period provision for expected credit losses | $4 | $23 | $13 | $40 | | Write-offs charged against the allowance | $(5) | $(10) | — | $(15) | | Balance as of June 30, 2025 | $23 | $62 | $14 | $99 | [NOTE 6: Timeshare Financing Receivables](index=13&type=section&id=NOTE%206:%20TIMESHARE%20FINANCING%20RECEIVABLES) This note details the composition of timeshare financing receivables, including originated and acquired portfolios, and the allowance for losses Timeshare Financing Receivables, Net (in millions) | Portfolio | June 30, 2025 | December 31, 2024 | | :---------- | :------------ | :------------------ | | Originated | $2,307 | $2,128 | | Acquired | $672 | $878 | | Total | $2,979 | $3,006 | - In June 2025, the company completed a securitization of approximately **$300 million** of gross timeshare financing receivables, issuing **$166 million 4.88% notes**, **$87 million 5.18% notes**, and **$47 million 5.52% notes** due May 2042, accounted for as a secured borrowing[42](index=42&type=chunk) Allowance for Financing Receivables Losses (in millions) | Portfolio | Balance as of Dec 31, 2024 | Provision for losses | Write-offs | Inventory recoveries | Upgrades | Balance as of Jun 30, 2025 | | :---------- | :------------------------- | :------------------- | :--------- | :------------------- | :------- | :------------------------- | | Originated | $804 | $167 | $(84) | — | $17 | $904 | | Acquired | $268 | $13 | $(132) | $57 | $(17) | $189 | - As of June 30, 2025, originated timeshare financing receivables had a **weighted-average interest rate of 15.0%** and a **weighted-average remaining term of 8.7 years**; acquired timeshare financing receivables had a **weighted-average interest rate of 15.0%** and a **weighted-average remaining term of 6.4 years**[45](index=45&type=chunk) [NOTE 7: Inventory](index=20&type=section&id=NOTE%207:%20INVENTORY) This note outlines the composition of the company's inventory, including unsold VOIs and construction in process, and details cost of sales true-up adjustments Inventory Composition (in millions) | Category | June 30, 2025 | December 31, 2024 | | :------------------------ | :------------ | :------------------ | | Completed unsold VOIs | $2,012 | $1,898 | | Construction in process | $393 | $345 | | Land, infrastructure and other | $1 | $1 | | Total | $2,406 | $2,244 | Cost of Sales True-up (in millions) | Period | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :-------------------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Cost of sales true-up | $9 | $(4) | $26 | $11 | [NOTE 8: Consolidated Variable Interest Entities](index=20&type=section&id=NOTE%208:%20CONSOLIDATED%20VARIABLE%20INTEREST%20ENTITIES) This note describes the company's consolidated Variable Interest Entities (VIEs) and their associated assets and liabilities - As of June 30, 2025, the company consolidated **17 Variable Interest Entities (VIEs)**, primarily for purchasing timeshare financing receivables and issuing debt[61](index=61&type=chunk) Assets and Liabilities of Consolidated VIEs (in millions) | Category | June 30, 2025 | December 31, 2024 | | :-------------------------- | :------------ | :------------------ | | Restricted cash | $84 | $193 | | Timeshare financing receivables, net | $2,302 | $1,975 | | Non-recourse debt, net | $2,475 | $2,285 | [NOTE 9: Investments in Unconsolidated Affiliates](index=20&type=section&id=NOTE%209:%20INVESTMENTS%20IN%20UNCONSOLIDATED%20AFFILIATES) This note details the company's investments in unconsolidated affiliates, including exposure to loss and distributions received - The company holds ownership interests in BRE Ace LLC and 1776 Holding LLC, which are unconsolidated VIEs[64](index=64&type=chunk) - Maximum exposure to loss from these investments is primarily limited to the carrying amount of investments (**$74 million** as of June 30, 2025) and receivables for commissions[64](index=64&type=chunk) - During the six months ended June 30, 2025, a cash distribution of **$5 million** was received from BRE Ace LLC[65](index=65&type=chunk) [NOTE 10: Intangible Assets](index=21&type=section&id=NOTE%2010:%20INTANGIBLE%20ASSETS) This note provides a breakdown of the company's intangible assets, including trade names, management contracts, and capitalized software, along with amortization expense Intangible Assets, Net Carrying Amount (in millions) | Category | June 30, 2025 | December 31, 2024 | | :-------------------------- | :------------ | :------------------ | | Trade name | $23 | $26 | | Management contracts | $1,324 | $1,340 | | Club member relationships | $89 | $98 | | Capitalized software | $143 | $135 | | Marketing agreements | $138 | $143 | | Other contract-related intangible assets | $43 | $45 | | Total | $1,760 | $1,787 | - Amortization expense on intangible assets was **$52 million** and **$102 million** for the three and six months ended June 30, 2025, respectively[67](index=67&type=chunk) [NOTE 11: Debt and Non-Recourse Debt](index=22&type=section&id=NOTE%2011:%20DEBT%20AND%20NON-RECOURSE%20DEBT) This note details the company's outstanding debt and non-recourse debt, including interest rates, recent amendments, and contractual maturities Outstanding Debt, Net (in millions) | Category | June 30, 2025 | December 31, 2024 | | :--------------------------------------- | :------------ | :------------------ | | Total debt, gross | $4,640 | $4,672 | | Less: unamortized deferred financing costs and discounts | $(66) | $(71) | | Total debt, net | $4,574 | $4,601 | | Weighted-average interest rate (Debt) | 5.991% | 6.140% | - On **January 31, 2025**, the company amended its Revolver Credit Facility and Term Loan B facilities, reducing pricing spreads and extending the Revolver maturity to **January 2030**[70](index=70&type=chunk) Outstanding Non-Recourse Debt, Net (in millions) | Category | June 30, 2025 | December 31, 2024 | | :--------------------------------------- | :------------ | :------------------ | | Total non-recourse debt, gross | $2,529 | $2,350 | | Less: unamortized deferred financing costs and discount | $(30) | $(32) | | Total non-recourse debt, net | $2,499 | $2,318 | | Weighted-average interest rate (Non-recourse Debt) | 5.258% | 5.235% | - In June 2025, the company completed a securitization of approximately **$300 million** of gross timeshare financing receivables, issuing notes due May 2042, with proceeds used to pay down existing debt and for general corporate purposes[77](index=77&type=chunk) Contractual Maturities of Debt and Non-Recourse Debt as of June 30, 2025 (in millions) | Year | Debt | Non-recourse Debt | Total | | :------------------------ | :--- | :---------------- | :---- | | 2025 (remaining six months) | $16 | $239 | $255 | | 2026 | $27 | $393 | $420 | | 2027 | $26 | $1,049 | $1,075| | 2028 | $1,243 | $251 | $1,494| | 2029 | $870 | $200 | $1,070| | Thereafter | $2,458 | $397 | $2,855| | Total | $4,640 | $2,529 | $7,169| [NOTE 12: Fair Value Measurements](index=24&type=section&id=NOTE%2012:%20FAIR%20VALUE%20MEASUREMENTS) This note provides fair value measurements for financial assets and liabilities, explaining the methodologies used for their determination Fair Values of Financial Assets and Liabilities (in millions) | Category | Carrying Amount (June 30, 2025) | Fair Value (June 30, 2025) | | :-------------------------------- | :------------------------------ | :------------------------- | | Timeshare financing receivables, net | $2,979 | $3,271 | | Debt, net | $4,574 | $4,594 | | Non-recourse debt, net | $2,499 | $2,528 | - Fair values for timeshare financing receivables are determined using a discounted cash flow model incorporating default rates, coupon rates, credit quality, and loan terms[83](index=83&type=chunk) [NOTE 13: Income Taxes](index=25&type=section&id=NOTE%2013:%20INCOME%20TAXES) This note presents the company's effective tax rates and discusses factors influencing changes, including recent legislative impacts Effective Tax Rate | Period | 2025 | 2024 | | :-------------------------- | :--- | :--- | | Three Months Ended June 30, | 38% | 60% | | Six Months Ended June 30, | 72% | 80% | - The effective tax rate decrease quarter-over-quarter is primarily due to overall change in earnings, while the year-over-year decrease is due to discrete items partially offset by jurisdictional mix and overall change in earnings[85](index=85&type=chunk) - The company is evaluating the impact of the recently enacted 'One Big Beautiful Bill Act' (July 4, 2025), which includes provisions for accelerated tax deductions[86](index=86&type=chunk) [NOTE 14: Share-Based Compensation](index=25&type=section&id=NOTE%2014:%20SHARE-BASED%20COMPENSATION) This note details the share-based compensation expense recognized and the unrecognized compensation cost for unvested awards Share-Based Compensation Expense (in millions) | Period | 2025 | 2024 | | :-------------------------- | :--- | :--- | | Three Months Ended June 30, | $22 | $17 | | Six Months Ended June 30, | $34 | $26 | - As of June 30, 2025, unrecognized compensation cost for unvested awards was approximately **$75 million**, expected to be recognized over a weighted average period of **1.9 years**[89](index=89&type=chunk) - During the six months ended June 30, 2025, **969,592 Service RSUs** and **449,308 Performance RSUs** were issued[90](index=90&type=chunk)[92](index=92&type=chunk) [NOTE 15: Earnings Per Share](index=27&type=section&id=NOTE%2015:%20EARNINGS%20PER%20SHARE) This note provides basic and diluted earnings per share figures, along with weighted-average shares outstanding and share repurchase activity Earnings Per Share Attributable to Stockholders | Metric | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--------------------------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Basic EPS | $0.26 | $0.02 | $0.09 | $(0.02) | | Diluted EPS | $0.25 | $0.02 | $0.08 | $(0.02) | | Weighted average shares outstanding (Basic) | 91.2 million | 103.4 million | 93.3 million | 104.3 million | Share Repurchase Activity (in millions) | Period | Shares Repurchased | Cost | | :-------------------- | :----------------- | :--- | | As of December 31, 2024 | 41 | $1,549 | | Repurchases (6M 2025) | 8 | $300 | | As of June 30, 2025 | 49 | $1,849 | - As of July 24, 2025, **$98 million** remained available under the 2024 Repurchase Plan[96](index=96&type=chunk) [NOTE 16: Related Party Transactions](index=28&type=section&id=NOTE%2016:%20RELATED%20PARTY%20TRANSACTIONS) This note discloses transactions with related parties, including equity in earnings from unconsolidated affiliates and commissions Related Party Transactions (in millions) | Metric | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :-------------------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Equity in earnings from unconsolidated affiliates | $6 | $3 | $11 | $8 | | Commissions and other fees | $39 | $44 | $78 | $80 | [NOTE 17: Business Segments](index=28&type=section&id=NOTE%2017:%20BUSINESS%20SEGMENTS) This note provides financial information by reportable segment, including revenues, Adjusted EBITDA, and total assets, for performance evaluation - The company operates in two reportable segments: Real estate sales and financing, and Resort operations and club management, with performance evaluated based on Adjusted EBITDA[99](index=99&type=chunk)[101](index=101&type=chunk) Segment Revenues (in millions) | Segment | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :------------------------------------ | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Real estate sales and financing | $760 | $740 | $1,405 | $1,427 | | Resort operations and club management | $405 | $386 | $796 | $746 | | Total segment revenues | $1,165 | $1,126 | $2,201 | $2,173 | Segment Adjusted EBITDA (in millions) | Segment | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :------------------------------------ | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Real estate sales and financing | $176 | $193 | $309 | $399 | | Resort operations and club management | $149 | $152 | $282 | $286 | | Segment Adjusted EBITDA | $325 | $345 | $591 | $685 | Total Segment Assets (in millions) | Segment | June 30, 2025 | December 31, 2024 | | :------------------------------------ | :------------ | :------------------ | | Real estate sales and financing | $7,497 | $7,349 | | Resort operations and club management | $3,387 | $3,163 | | Total segment assets | $10,884 | $10,512 | [NOTE 18: Commitments and Contingencies](index=32&type=section&id=NOTE%2018:%20COMMITMENTS%20AND%20CONTINGENCIES) This note outlines the company's contractual obligations, including marketing agreements, inventory purchase obligations, and legal matters - The company has a **10-year exclusive marketing agreement** with Bass Pro Shops, effective January 17, 2024, to market and sell vacation packages at **140 Bass Pro Shops and Cabela's Stores**[106](index=106&type=chunk)[107](index=107&type=chunk)[108](index=108&type=chunk) Remaining Contractual Obligations as of June 30, 2025 (in millions) | Category | 2025 (remaining) | 2026 | 2027 | 2028 | 2029 | Thereafter | Total | | :-------------------------- | :--------------- | :--- | :--- | :--- | :--- | :--------- | :---- | | Marketing and license fee agreements | $26 | $37 | $38 | $38 | $38 | $134 | $311 | | Inventory purchase obligations | $15 | $37 | $8 | $53 | $44 | $99 | $256 | | Other commitments | $8 | $7 | $1 | $2 | $2 | — | $20 | | Total | $49 | $81 | $47 | $93 | $84 | $233 | $587 | - Accrued liabilities for legal matters were approximately **$10 million** as of June 30, 2025, up from **$7 million** at December 31, 2024[111](index=111&type=chunk) - The company has commitments from surety providers totaling **$538 million** as of June 30, 2025[116](index=116&type=chunk) [NOTE 19: Subsequent Events](index=34&type=section&id=NOTE%2019:%20SUBSEQUENT%20EVENTS) This note discloses significant events occurring after the reporting period, including a securitization and a new share repurchase program - On **July 11, 2025**, the company completed a term securitization of approximately **¥9.5 billion** of timeshare loans through Hilton Grand Vacations Japan Trust 2025-1[117](index=117&type=chunk) - On **July 29, 2025**, the Board approved a new share repurchase program authorizing up to an additional **$600 million** of common stock repurchases over two years[118](index=118&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=35&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) This section provides management's perspective on the company's financial condition and results of operations, including an overview of its business, key operational and non-GAAP financial metrics, a detailed analysis of segment performance, and a discussion of liquidity and capital resources. It highlights the impact of the Bluegreen acquisition and strategic initiatives [Cautionary Note Regarding Forward-Looking Statements](index=35&type=section&id=Cautionary%20Note%20Regarding%20Forward-Looking%20Statements) This note advises that the report contains forward-looking statements subject to risks and uncertainties that could cause actual results to differ materially - The report contains forward-looking statements that involve known and unknown risks, uncertainties, and other factors beyond the company's control, which may cause actual results to differ materially[122](index=122&type=chunk) [Terms Used in this Quarterly Report on Form 10-Q](index=35&type=section&id=Terms%20Used%20in%20this%20Quarterly%20Report%20on%20Form%2010-Q) This note defines key terminology used throughout the quarterly report to ensure clarity and consistent understanding - Key terms defined include 'Developed' (VOI inventory from HGV projects), 'Fee for service' (VOI inventory sold and managed for third parties), 'Just-in-time' (VOI inventory acquired to correlate with sales), 'Points-based' (VOI sales backed by real estate in a trust), 'VOI' (vacation ownership intervals and interests), and 'Collections' (acquired resort properties in Diamond's trusts)[125](index=125&type=chunk)[126](index=126&type=chunk) [Non-GAAP Financial Measures](index=35&type=section&id=Non-GAAP%20Financial%20Measures) This note identifies and explains the non-GAAP financial measures used by management to evaluate performance and provide additional insights - The report discusses non-GAAP financial measures such as EBITDA, Adjusted EBITDA, Adjusted EBITDA Attributable to Stockholders, fee-for-service commissions, sales and marketing expense, net, sales revenue, real estate expense, and profits and profit margins for real estate, financing, resort and club management, and rental and ancillary services[127](index=127&type=chunk)[128](index=128&type=chunk) [Operational Metrics](index=36&type=section&id=Operational%20Metrics) This note highlights the key operational metrics used to assess the company's business performance - Key business operational metrics include contract sales, tour flow, and volume per guest (VPG)[129](index=129&type=chunk) [Overview of Business](index=36&type=section&id=Overview) This section provides a general description of Hilton Grand Vacations' business model, global presence, and operational segments - Hilton Grand Vacations is a global timeshare company, which completed the acquisition of Bluegreen Vacations Holding Corporation on **January 17, 2024**[130](index=130&type=chunk) - As of June 30, 2025, the company manages over **200 properties** globally and serves approximately **725,000 members** across its Club offerings[132](index=132&type=chunk)[133](index=133&type=chunk) - The business operates in two segments: Real estate sales and financing, and Resort operations and club management[134](index=134&type=chunk) [Real Estate Sales and Financing](index=36&type=section&id=Real%20Estate%20Sales%20and%20Financing_2) This subsection details the company's strategies for sourcing vacation ownership intervals (VOIs) and its marketing and sales activities - The company sources VOIs through developed properties and fee-for-service and just-in-time agreements, with capital efficient arrangements representing approximately **28% of the $13.3 billion** estimated contract sales value of available inventory[138](index=138&type=chunk)[139](index=139&type=chunk) - Marketing and sales activities include targeted direct marketing and strategic relationships with brands like Bass Pro Shops and Choice Hotels, with **140 Bass Pro Shops and Cabela's Stores** having HGV sales and marketing operations as of June 30, 2025[140](index=140&type=chunk)[141](index=141&type=chunk) - Financing propensity was **65%** for both the six months ended June 30, 2025 and 2024, with the weighted-average FICO score for loans to U.S. and Canadian borrowers at origination being **737 in 2025** and **738 in 2024**[143](index=143&type=chunk)[144](index=144&type=chunk) [Resort Operations and Club Management](index=38&type=section&id=Resort%20Operations%20and%20Club%20Management_2) This subsection describes the company's resort management services, club programs, and rental and ancillary revenue streams - The company manages timeshare resorts under cost-plus management fee agreements (**10% to 15% of operating costs**) and operates Club and exchange programs, generating predictable fee streams[147](index=147&type=chunk)[148](index=148&type=chunk) - Rental revenue is generated from unsold VOI inventory, third-party inventory, and inventory from ownership exchanges, alongside ancillary offerings like food and beverage, retail, and spa services[149](index=149&type=chunk) [Key Business and Financial Metrics](index=38&type=section&id=Key%20Business%20and%20Financial%20Metrics) This section defines and explains the critical operational and non-GAAP financial metrics used to measure the company's performance [Real Estate Sales Operating Metrics](index=38&type=section&id=Real%20Estate%20Sales%20Operating%20Metrics) This subsection defines key metrics for real estate sales, including contract sales, tour flow, and volume per guest (VPG) - Key operating metrics include Contract sales (total VOI products under purchase agreements with at least **10% down payment**), Tour flow (number of sales presentations), and VPG (sales attributable to tours, excluding telesales, divided by tour flow)[150](index=150&type=chunk) [EBITDA, Adjusted EBITDA and Adjusted EBITDA Attributable to Stockholders](index=39&type=section&id=EBITDA,%20Adjusted%20EBITDA%20and%20Adjusted%20EBITDA%20Attributable%20to%20Stockholders) This subsection clarifies the definitions and utility of non-GAAP measures like EBITDA, Adjusted EBITDA, and Adjusted EBITDA Attributable to Stockholders - EBITDA, Adjusted EBITDA, and Adjusted EBITDA Attributable to Stockholders are non-GAAP measures used by management and investors to evaluate operating performance and compare results across the industry, despite inherent limitations[151](index=151&type=chunk)[152](index=152&type=chunk)[153](index=153&type=chunk)[155](index=155&type=chunk)[156](index=156&type=chunk) [Non-GAAP Measures within Our Segments](index=40&type=section&id=Non-GAAP%20Measures%20within%20Our%20Segments) This subsection defines segment-specific non-GAAP profit measures and their corresponding margins - Segment-specific non-GAAP profit measures include Real estate profit (sales revenue less real estate expense), Financing profit (financing revenue net of financing expense), Resort and club management profit (revenue net of expense), and Rental and ancillary services profit (revenues net of expenses), each with corresponding margins[161](index=161&type=chunk) [Results of Operations](index=41&type=section&id=Results%20of%20Operations) This section provides a detailed analysis of the company's financial performance, breaking down revenues, expenses, and profits by segment [Segment Results](index=41&type=section&id=Segment%20Results) This subsection presents the financial performance of the company's operating segments, including total revenues and Adjusted EBITDA Total Segment Revenues (in millions) | Metric | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :------------------------------------ | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Real estate sales and financing | $760 | $740 | $1,405 | $1,427 | | Resort operations and club management | $405 | $386 | $796 | $746 | | Total segment revenues | $1,165 | $1,126 | $2,201 | $2,173 | Adjusted EBITDA and Attributable to Stockholders (in millions) | Metric | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--------------------------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Adjusted EBITDA | $238 | $266 | $423 | $542 | | Adjusted EBITDA attributable to stockholders | $233 | $262 | $413 | $535 | - Real estate sales and financing Adjusted EBITDA decreased by **$17 million** (3M) and **$90 million** (6M) primarily due to increased sales and marketing expense and decreased Sales of VOI, net, partially offset by increased financing profit[164](index=164&type=chunk)[165](index=165&type=chunk) - Resort operations and club management segment Adjusted EBITDA remained consistent for both the three and six months ended June 30, 2025, compared to the same periods in 2024[166](index=166&type=chunk) [Reconciliation of Non-GAAP Profit Measures to GAAP Measure](index=43&type=section&id=Reconciliation%20of%20Non-GAAP%20Profit%20Measures%20to%20GAAP%20Measure) This subsection provides a reconciliation of various non-GAAP profit measures to their most directly comparable GAAP equivalents Non-GAAP Profit Measures (in millions) | Metric | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :------------------------------------ | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Real estate profit | $117 | $120 | $187 | $254 | | Financing profit | $72 | $58 | $142 | $123 | | Resort and club management profit | $127 | $123 | $256 | $235 | | Rental and ancillary services profit | $(8) | $7 | $(27) | $15 | | Total Profit | $308 | $308 | $558 | $627 | [Reconciliation of Non-GAAP Real Estate Measures to GAAP Measures](index=44&type=section&id=Reconciliation%20of%20Non-GAAP%20Real%20Estate%20Measures%20to%20GAAP%20Measures) This subsection reconciles non-GAAP real estate measures, such as fee-for-service commissions and net sales and marketing expense, to GAAP Non-GAAP Real Estate Measures (in millions) | Metric | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--------------------------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Fee-for-service commissions | $84 | $88 | $152 | $152 | | Sales and marketing expense, net | $398 | $374 | $749 | $694 | [Real Estate Sales and Financing Segment](index=44&type=section&id=Real%20Estate%20Sales%20and%20Financing%20Segment_3) This subsection analyzes the performance of the Real Estate Sales and Financing segment, including net sales of VOIs, operating metrics, and profit margins Net Sales of VOIs (Deferrals) Recognitions (in millions) | Metric | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--------------------------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Net Sales of VOIs (deferrals) recognitions | $(82) | $(13) | $(208) | $(11) | Real Estate Sales Operating Metrics | Metric | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--------------------------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Contract sales | $834 million | $757 million | $1,555 million | $1,388 million | | Tour flow | 225,222 | 226,388 | 399,747 | 400,526 | | VPG | $3,690 | $3,320 | $3,874 | $3,441 | - Contract sales increased by **$77 million (10.2%)** for the three months and **$167 million (12.0%)** for the six months ended June 30, 2025, primarily due to an increase in VPG and new inventory[175](index=175&type=chunk)[176](index=176&type=chunk) Real Estate and Financing Profit (in millions) | Metric | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--------------------------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Sales of VOIs, net | $469 | $471 | $847 | $909 | | Real estate profit | $117 | $120 | $187 | $254 | | Real estate profit margin | 21.2% | 21.5% | 18.7% | 23.9% | | Financing profit | $72 | $58 | $142 | $123 | | Financing profit margin | 57.1% | 56.9% | 56.6% | 59.7% | [Resort Operations and Club Management Segment](index=47&type=section&id=Resort%20Operations%20and%20Club%20Management%20Segment_3) This subsection analyzes the performance of the Resort Operations and Club Management segment, including profit and profit margins for resort and club management, and rental and ancillary services Resort and Club Management Profit (in millions) | Metric | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--------------------------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Resort and club management profit | $127 | $123 | $256 | $235 | | Resort and club management profit margin | 69.4% | 71.9% | 69.9% | 69.7% | Rental and Ancillary Services Profit (in millions) | Metric | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--------------------------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Rental and ancillary services profit | $(8) | $7 | $(27) | $15 | | Rental and ancillary services profit margin | (4.1)% | 3.6% | (7.1)% | 4.0% | - Rental and ancillary services profit decreased by **$15 million** (3M) and **$42 million** (6M) primarily due to an increase in expenses, particularly maintenance fees[191](index=191&type=chunk)[192](index=192&type=chunk) [Other Operating Expenses](index=48&type=section&id=Other%20Operating%20Expenses) This subsection details changes in various operating expenses, including general and administrative, depreciation, amortization, and license fees Selected Other Operating Expenses (in millions) | Metric | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :-------------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | General and administrative | $58 | $58 | $104 | $103 | | Depreciation and amortization | $59 | $68 | $126 | $130 | | License fee expense | $52 | $40 | $101 | $75 | | Impairment expense | $1 | — | $1 | $2 | - License fee expense increased by **$12 million** (3M) and **$26 million** (6M) primarily due to licensing fees paid to Hilton[193](index=193&type=chunk) [Acquisition and Integration-Related Expense](index=48&type=section&id=Acquisition%20and%20Integration-Related%20Expense) This subsection reports on the costs associated with acquisitions and integration activities, highlighting changes over time Acquisition and Integration-Related Expense (in millions) | Metric | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--------------------------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Acquisition and integration-related expense | $26 | $48 | $54 | $157 | - Acquisition and integration-related costs decreased by **$22 million** (3M) and **$103 million** (6M) primarily due to the Bluegreen Acquisition occurring in the first quarter of 2024[194](index=194&type=chunk) [Non-Operating Expenses](index=48&type=section&id=Non-Operating%20Expenses) This subsection details non-operating expenses, including interest expense and income tax expense, and explains their fluctuations Selected Non-Operating Expenses (in millions) | Metric | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :-------------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Interest expense | $79 | $87 | $156 | $166 | | Income tax expense (benefit) | $15 | $3 | $21 | $(8) | - Interest expense decreased due to a lower overall debt balance and weighted average interest rate, while income tax expense increased primarily due to the overall change in pretax earnings[195](index=195&type=chunk) [Net income attributable to noncontrolling interest](index=49&type=section&id=Net%20income%20attributable%20to%20noncontrolling%20interest) This subsection reports the portion of net income attributable to noncontrolling interests Net Income Attributable to Noncontrolling Interest (in millions) | Metric | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--------------------------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Net income attributable to noncontrolling interest | $3 | $2 | $8 | $4 | - The increase in net income attributable to noncontrolling interest reflects the portion of Big Cedar's results attributable to Big Cedar Vacations, LLC[196](index=196&type=chunk) [Liquidity and Capital Resources](index=49&type=section&id=Liquidity%20and%20Capital%20Resources) This section discusses the company's ability to generate and manage cash, outlining its objectives, needs, and funding sources [Overview](index=49&type=section&id=Overview_2) This subsection provides a general overview of the company's cash management objectives, short-term and long-term liquidity needs, and primary funding sources - Cash management objectives include maintaining liquidity, minimizing operational costs, making debt payments, and funding future acquisitions and development projects[197](index=197&type=chunk) - Short-term liquidity needs cover operating expenses, legal costs, resort/sales center costs, interest/principal payments, inventory commitments, and capital expenditures[197](index=197&type=chunk) - Long-term liquidity needs include scheduled debt maturities, inventory purchase commitments, and costs for potential acquisitions and development projects[197](index=197&type=chunk) - Funding sources primarily include cash, operating cash flow, draws on the revolver credit facility, non-recourse revolving timeshare credit facility, and timeshare financing receivable securitizations[198](index=198&type=chunk) [Sources and Uses of Our Cash](index=49&type=section&id=Sources%20and%20Uses%20of%20Our%20Cash) This subsection summarizes the net cash flows from operating, investing, and financing activities, along with available liquidity Net Cash Flows (Six Months Ended June 30, in millions) | Activity | 2025 | 2024 | Variance | | :------------------------ | :--- | :--- | :------- | | Operating activities | $99 | $113 | $(14) | | Investing activities | $(66) | $(1,482) | $1,416 | | Financing activities | $(213) | $1,101 | $(1,314) | - As of June 30, 2025, the company had **$269 million** in cash and cash equivalents, **$323 million** in restricted cash, **$794 million** remaining borrowing capacity under the revolver facility, and **$120 million** under the Timeshare Facility[201](index=201&type=chunk) - During the six months ended June 30, 2025, the company repurchased **8 million shares** for **$300 million** and completed a **$300 million** timeshare financing receivable securitization[201](index=201&type=chunk) [Operating Activities](index=50&type=section&id=Operating%20Activities_2) This subsection analyzes the net cash provided by operating activities and the factors influencing its changes - Net cash provided by operating activities decreased by **$14 million** for the six months ended June 30, 2025, primarily due to decreased depreciation and amortization and increased inventory purchases, partially offset by increased provision for financing receivable losses and share-based compensation[203](index=203&type=chunk) VOI Inventory Spending (Six Months Ended June 30, in millions) | Category | 2025 | 2024 | | :---------------------------------------------------- | :--- | :--- | | VOI spending - owned properties | $128 | $141 | | Purchases and development of real estate for future conversion to inventory | $61 | $50 | | Total VOI inventory spending | $189 | $191 | [Investing Activities](index=50&type=section&id=Investing%20Activities_2) This subsection details the net cash used in investing activities and the primary drivers of its changes - Net cash used in investing activities decreased significantly to **$66 million** for the six months ended June 30, 2025, from **$1,482 million** in the prior year, primarily due to the Bluegreen Acquisition in 2024[206](index=206&type=chunk) [Financing Activities](index=50&type=section&id=Financing%20Activities_2) This subsection analyzes the net cash flows from financing activities, including debt proceeds and share repurchases - Net cash used in financing activities was **$213 million** for the six months ended June 30, 2025, a change from **$1,101 million** provided in 2024, primarily due to lower net proceeds from debt and non-recourse debt and increased share repurchases[207](index=207&type=chunk) [Contractual Obligations](index=50&type=section&id=Contractual%20Obligations) This subsection summarizes the company's total contractual obligations and surety bond commitments - As of June 30, 2025, total contractual obligations were approximately **$9,415 million** over 16 years, with **$496 million** due in the remainder of 2025[208](index=208&type=chunk) - The company has **$538 million** in surety bond commitments as of June 30, 2025[209](index=209&type=chunk) [Subsequent Events](index=51&type=section&id=Subsequent%20Events_2) This subsection reports on significant events that occurred after the reporting period, impacting the company's financial position or operations - On **July 11, 2025**, the company completed a term securitization of approximately **¥9.5 billion** of timeshare loans through Hilton Grand Vacations Japan Trust 2025-1[210](index=210&type=chunk) - On **July 29, 2025**, the Board approved a new share repurchase program authorizing up to an additional **$600 million** of common stock repurchases over two years[211](index=211&type=chunk) [Critical Accounting Policies and Estimates](index=51&type=section&id=Critical%20Accounting%20Policies%20and%20Estimates) This note refers to the annual report for a discussion of the company's critical accounting policies and estimates - Critical accounting policies and estimates are discussed in the Annual Report on Form 10-K for the year ended December 31, 2024[212](index=212&type=chunk) [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=51&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) This section addresses the company's exposure to market risks, specifically from changes in interest rates and currency exchange rates, and confirms that there have been no material changes to these risks since the last annual report - The company is exposed to market risk from changes in interest rates and currency exchange rates[213](index=213&type=chunk) - There have been no material changes to the company's market risk exposure from what was previously disclosed in the Annual Report on Form 10-K for the year ended December 31, 2024[213](index=213&type=chunk) [Item 4. Controls and Procedures](index=52&type=section&id=Item%204.%20Controls%20and%20Procedures) This section details management's evaluation of the effectiveness of the company's disclosure controls and procedures, concluding they were effective as of June 30, 2025. It also notes changes in internal control related to the Bluegreen acquisition integration - Management, including the CEO and CFO, concluded that the company's disclosure controls and procedures were effective as of **June 30, 2025**, providing reasonable assurance that required information is recorded, processed, summarized, and reported timely[215](index=215&type=chunk) - Changes in internal controls over financial reporting were made to integrate the Bluegreen acquisition, with no other material changes during the period[216](index=216&type=chunk) [PART II - OTHER INFORMATION](index=53&type=section&id=PART%20II%20-%20OTHER%20INFORMATION) This part contains additional disclosures beyond the financial statements, covering legal proceedings, risk factors, equity sales, and other pertinent information [Item 1. Legal Proceedings](index=53&type=section&id=Item%201.%20Legal%20Proceedings) This section refers to Note 18 of the condensed consolidated financial statements for detailed information regarding legal proceedings and related contingencies - Information regarding legal proceedings is found in Note 18: Commitments and Contingencies[217](index=217&type=chunk) [Item 1A. Risk Factors](index=53&type=section&id=Item%201A.%20Risk%20Factors) This section states that there have been no material changes to the risk factors previously disclosed in the company's Annual Report on Form 10-K, emphasizing the importance of reviewing these factors for understanding potential impacts on the company's future performance - As of June 30, 2025, there have been no material changes from the risk factors previously disclosed in Item 1A of Part I of the Annual Report on Form 10-K for the year ended December 31, 2024[218](index=218&type=chunk) - Investors should read these risk factors in conjunction with the condensed consolidated financial statements and management's discussion and analysis[218](index=218&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=53&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) This section details the company's share repurchase activity under the 2024 Repurchase Plan, including the number of shares purchased, the average price paid, and the remaining authorization - On **August 7, 2024**, the Board of Directors approved a share repurchase program authorizing up to **$500 million** of common stock repurchases over a two-year period (the '2024 Repurchase Plan')[220](index=220&type=chunk) Issuer Purchases of Equity Securities (Three Months Ended June 30, 2025) | Period | Total Number of Shares Purchased | Average Price Paid Per Share | | :------------------------ | :------------------------------- | :--------------------------- | | April 1 - April 30, 2025 | 1,786,389 | $33.59 | | May 1 - May 31, 2025 | 1,329,448 | $39.39 | | June 1 - June 30, 2025 | 955,270 | $39.46 | | Total | 4,071,107 | $36.86 | - From July 1, 2025, through July 24, 2025, approximately **0.6 million shares** were repurchased for **$29 million**, leaving **$98 million** of remaining availability under the 2024 Repurchase Plan[221](index=221&type=chunk) [Item 3. Defaults Upon Senior Securities](index=53&type=section&id=Item%203.%20Defaults%20Upon%20Senior%20Securities) This section states that there were no defaults upon senior securities during the reporting period - There were no defaults upon senior securities[222](index=222&type=chunk) [Item 4. Mine Safety Disclosures](index=53&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) This section indicates that mine safety disclosures are not applicable to the company - Mine Safety Disclosures are not applicable[223](index=223&type=chunk) [Item 5. Other Information](index=53&type=section&id=Item%205.%20Other%20Information) This section states that there is no other information to report - No other information to report[224](index=224&type=chunk) [Item 6. Exhibits](index=54&type=section&id=Item%206.%20Exhibits) This section lists all exhibits filed as part of the Quarterly Report on Form 10-Q, including corporate documents, credit agreements, and certifications - Exhibits include Amended and Restated Certificate of Incorporation, Amended and Restated Bylaws, Certificate of Designation of Series A Junior Participating Pr

Financial Data and Key Metrics Changes - Reported contract sales increased by 10% to $834 million, with adjusted EBITDA at $278 million and margins excluding reimbursements at 23% [10][26] - Total revenue excluding cost reimbursement grew by 9% to $1.2 billion, with adjusted EBITDA margins at 23% [26][34] - Adjusted free cash flow for the quarter was $135 million, with inventory spending of $77 million [32] Business Line Data and Key Metrics Changes - The owner business outperformed, contributing to double-digit contract sales growth driven by strong volume per guest (VPG) expansion [8][10] - The member count reached nearly 725,000, with over 233,000 HEV Max members, including nearly 21,000 legacy Bluegreen members [12][31] - Financing business revenue was $126 million with segment profit at $72 million, resulting in margins of 57% [29] Market Data and Key Metrics Changes - Occupancy remained stable at 83%, with consolidated arrivals in the third quarter matching the prior year [11] - Demand indicators showed strength in marketing and rental arrivals, indicating favorable travel demand [11] - Las Vegas market experienced softness due to lower international and convention business, leading to increased promotional activity [14][62] Company Strategy and Development Direction - The company is focused on enhancing the value proposition of the HEV Max membership and expanding its lead flow [8][21] - Strategic inventory recapture is expected to support long-term cash flow growth and improve the embedded value of the owner base [13] - The integration of Bluegreen is on track, with nearly achieved cost-saving targets and the rollout of new sales technology [20][27] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the business performance and reiterated guidance for the year, citing stable consumer environment and strong demand indicators [9][22] - The company anticipates high single-digit contract sales growth for the year, with flat tour growth expected [28] - Management noted that while the policy landscape remains volatile, they are focused on executing initiatives to mitigate macroeconomic noise [9] Other Important Information - The company successfully closed a JPY 9.5 billion timeshare securitization in Japan, marking a significant milestone [15][16] - The company returned $300 million to shareholders this year, with a goal of $600 million in total for the year [18][34] - The company has $98 million remaining under its share repurchase plan and received authorization for an additional $600 million [33] Q&A Session Summary Question: Impact of higher fee-for-service mix on EBITDA - Management acknowledged that the fee-for-service mix was higher in Q2 compared to Q1, which could have a drag on EBITDA [39][41] Question: Demand side for Bluegreen upgrade sales to MAX - Management reported strong performance in upgrade sales, with a 20% increase since the launch of MAX, and noted stable consumer demand [45][47] Question: Performance of loan book and delinquency rates - Management indicated that the loan book is in good shape, with stable to improving delinquency rates across brands [68][69] Question: VPG growth expectations for the back half of the year - Management expects strong VPG growth in Q3 but anticipates a decline in Q4 due to tough comparisons from the previous year [70][71] Question: Flow-through rates on VPG versus tour flow - Management stated that flow-through for every dollar of VPG is anticipated to be in the 50% range, while core flow is materially less [76][78]

Financial Data and Key Metrics Changes - Reported contract sales increased by 10% to $834 million, with adjusted EBITDA at $278 million and margins excluding reimbursements at 23% [10][25] - Total revenue excluding cost reimbursement grew by 9% to $1.2 billion [25] - Adjusted free cash flow for the quarter was $135 million, with expectations to convert 65% to 70% of adjusted EBITDA into cash flow for the year [16][32] Business Line Data and Key Metrics Changes - The owner business outperformed, contributing to double-digit contract sales growth driven by strong volume per guest (VPG) expansion [7][10] - The member count reached nearly 725,000, with over 233,000 HGV Max members, including nearly 21,000 legacy Bluegreen members [12][30] - Rental business demand remained stable, with revenue flat at $195 million, although Las Vegas experienced softness due to lower international and convention business [14][30] Market Data and Key Metrics Changes - Occupancy remained stable at 83%, with consolidated arrivals in the third quarter equal to the prior year [11] - The company added over 20,000 packages to its pipeline, more than doubling the additions from the first quarter [11] - The annualized default rate for the consolidated portfolio stood at 10.2%, consistent with the first quarter [29] Company Strategy and Development Direction - The company is focused on enhancing the value proposition of HGV Max and driving growth in membership [12][20] - Strategic inventory recapture is expected to support long-term cash flow growth and improve the embedded value of the owner base [13] - The company is committed to returning excess cash to shareholders, with a goal of returning $600 million this year [17][32] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the business outlook, citing stable consumer demand and positive performance indicators [8][47] - The company anticipates high single-digit contract sales growth for the year, with flat tour growth expected [27] - Management noted that while the policy landscape remains volatile, the consumer environment has been relatively stable [8][48] Other Important Information - The company successfully closed a JPY 9.5 billion timeshare securitization in Japan, marking a significant milestone [15][23] - The integration of Bluegreen is on track, with nearly achieved cost-saving targets [19][26] - The company repurchased 4.1 million shares for $150 million during the quarter, with an additional $29 million spent on share repurchases in July [31][32] Q&A Session Summary Question: Impact of higher fee-for-service mix on EBITDA - The fee-for-service mix was higher in Q2 compared to Q1, which may have a slight drag on EBITDA as it retains only a commission for those sales [36][40] Question: Demand side from Bluegreen upgrade sales to MAX - The upgrade curve for MAX has improved by 20% since its launch, with strong performance from Bluegreen members [45][46] Question: Performance of new owner sales - New owner sales have stabilized, with a 10% increase in the new buyer pipeline and 30% of transactional sales coming from new buyers [54][55] Question: Las Vegas market outlook - Visitations in Las Vegas are down, but the company can strategically allocate room nights to mitigate softness in the market [60][62] Question: Loan book performance - The loan book remains in good shape, with stable to improving delinquency rates across brands [66][68] Question: VPG growth expectations - VPG growth is expected to remain strong in Q3 but may decline in Q4 due to tough comparisons from the previous year [69][70]

Core Insights - Hilton Grand Vacations (HGV) reported $1.27 billion in revenue for Q2 2025, a year-over-year increase of 2.5% but a surprise of -7.39% compared to the Zacks Consensus Estimate of $1.37 billion [1] - The EPS for the quarter was $0.54, down from $0.62 a year ago, representing a -30.77% surprise against the consensus estimate of $0.78 [1] Revenue Breakdown - Resort and club management revenues were $183 million, exceeding the average estimate of $177.99 million [4] - Cost reimbursements generated $128 million, slightly below the estimated $130.33 million, reflecting a -0.8% change year-over-year [4] - Rental and ancillary services revenues were $195 million, matching the year-ago figure but below the estimated $197.81 million [4] - Fee-for-service commissions, package sales, and other fees totaled $165 million, slightly below the estimated $166.2 million, with a -1.2% change year-over-year [4] - Financing revenues increased by 23.5% year-over-year to $126 million, compared to the estimated $134.1 million [4] - Sales of VOIs, net, were $469 million, significantly lower than the estimated $563.5 million, with a -0.4% change year-over-year [4] Stock Performance - Shares of Hilton Grand Vacations have returned +14.2% over the past month, outperforming the Zacks S&P 500 composite's +2.7% change [3] - The stock currently holds a Zacks Rank 2 (Buy), indicating potential for outperformance in the near term [3]

[Executive Summary & Q2 2025 Highlights](index=1&type=section&id=Executive%20Summary%20%26%20Q2%202025%20Highlights) This section highlights strong Q2 2025 performance with double-digit contract sales growth, robust operations, and strong adjusted free cash flow [CEO Commentary](index=1&type=section&id=CEO%20Commentary) CEO Mark Wang expresses satisfaction with Q2 2025 results, highlighting double-digit contract sales growth, solid operational performance, and strong adjusted free cash flow driven by financing optimization - CEO Mark Wang expressed satisfaction with Q2 performance, emphasizing **double-digit contract sales growth**, robust operational results, and strong adjusted free cash flow due to financing business optimization[3](index=3&type=chunk) - The HGV Max member value proposition continues to resonate, with the company reaffirming full-year guidance and confidence in business prospects and future value creation opportunities[3](index=3&type=chunk)[4](index=4&type=chunk) [Key Financial & Operational Highlights](index=1&type=section&id=Key%20Financial%20%26%20Operational%20Highlights) Q2 2025 saw 10.2% YoY contract sales growth to $834 million, total revenue of $1.266 billion, with net income of $25 million and adjusted diluted EPS of $0.54 Q2 2025 Key Financial Data | Indicator | Amount/Ratio | | :--------------------------------- | :---------- | | Total Contract Sales | $834 Million (+10.2% YoY) | | Total Revenue | $1.266 Billion | | Net Income Attributable to Stockholders | $25 Million | | Adjusted Net Income Attributable to Stockholders | $50 Million | | Diluted EPS | $0.25 | | Adjusted Diluted EPS | $0.54 | | Adjusted EBITDA Attributable to Stockholders | $233 Million | | Share Repurchases (Current Quarter) | 4.1 Million shares / $150 Million | | New Share Repurchase Program (2025) | $600 Million (two-year) | | FY 2025 Adjusted EBITDA Guidance (Excluding Deferrals) | $1.125 - $1.165 Billion | - Total revenue was impacted by an **$82 million net deferral**, net income and adjusted net income attributable to stockholders by a **$45 million ($0.49 per share) net deferral**, and adjusted EBITDA attributable to stockholders by a **$45 million net deferral**[4](index=4&type=chunk) - The company repurchased approximately **626,000 shares** worth **$29 million** between July 1 and July 24, 2025, with **$98 million** remaining under the 2024 repurchase program[4](index=4&type=chunk) [Company Overview](index=2&type=section&id=Company%20Overview) This section provides an overview of recent acquisitions, consolidated financial performance, and accounting changes [Recent Acquisitions](index=2&type=section&id=Recent%20Acquisitions) Hilton Grand Vacations (HGV) completed the acquisition of Bluegreen Vacations Holding Corporation on January 17, 2024 - HGV completed the acquisition of Bluegreen Vacations Holding Corporation on **January 17, 2024**[5](index=5&type=chunk) [Consolidated Financial Performance (Q2 2025 vs Q2 2024)](index=2&type=section&id=Consolidated%20Financial%20Performance%20%28Q2%202025%20vs%20Q2%202024%29) Q2 2025 diluted EPS significantly increased to $0.25, with total revenue slightly up to $1.266 billion, despite a decrease in net income and adjusted EBITDA attributable to stockholders Q2 2025 Consolidated Financial Performance Comparison | Indicator | Q2 2025 | Q2 2024 | Change (YoY) | | :----------------------------- | :------------- | :------------- | :---------- | | Diluted EPS | $0.25 | $0.02 | +$0.23 | | Net Income Attributable to Stockholders | $25 Million | $2 Million | +$23 Million | | Adjusted EBITDA Attributable to Stockholders | $233 Million | $262 Million | -$29 Million | | Total Revenue | $1.266 Billion | $1.235 Billion | +$31 Million | - Net income attributable to stockholders and adjusted EBITDA attributable to stockholders in Q2 2025 both included a **$45 million net deferral**, primarily related to projects under construction in Hawaii and Japan[7](index=7&type=chunk) [Accounting Changes](index=2&type=section&id=Accounting%20Changes) In Q1 2025, the company renamed "Sales, marketing, brand and other fees" to "Fee-for-service commissions, package sales and other" without reclassifying revenue or impacting consolidated results - In Q1 2025, the company renamed "Sales, marketing, brand and other fees" to "Fee-for-service commissions, package sales and other"[8](index=8&type=chunk) - This accounting change did not result in revenue reclassification or impact the company's consolidated results for any presented period[8](index=8&type=chunk) [Segment Performance](index=2&type=section&id=Segment%20Performance) This section details the financial performance of Real Estate Sales and Financing, and Resort Operations and Club Management segments [Real Estate Sales and Financing](index=2&type=section&id=Real%20Estate%20Sales%20and%20Financing) Segment revenue increased by $20 million to $760 million, driven by financing income, but adjusted EBITDA and margin declined due to construction deferrals Real Estate Sales and Financing Segment Performance Comparison | Indicator | Q2 2025 | Q2 2024 | Change (YoY) | | :------------------------- | :------------- | :------------- | :---------- | | Segment Revenue | $760 Million | $740 Million | +$20 Million | | Adjusted EBITDA | $176 Million | $193 Million | -$17 Million | | Adjusted EBITDA Margin | 23.2% | 26.1% | -2.9 pp | | Contract Sales | $834 Million | $757 Million | +$77 Million | | Tours | -0.5% (YoY) | N/A | N/A | | Sales per Guest (VPG) | +11.1% (YoY) | N/A | N/A | | Fee-for-service Contract Sales Mix | 17.0% | 19.5% | -2.5 pp | - Financing revenue increased by **$24 million**, driven by a **10 basis point increase** in the weighted average interest rate of the outstanding portfolio and reduced amortization of premiums on acquired timeshare financing receivables[9](index=9&type=chunk)[12](index=12&type=chunk) - Segment adjusted EBITDA was impacted by a **$45 million net deferral** in the current quarter, compared to an **$8 million net deferral** in the prior-year quarter, both reducing reported adjusted EBITDA attributable to stockholders[10](index=10&type=chunk) [Resort Operations and Club Management](index=2&type=section&id=Resort%20Operations%20and%20Club%20Management) Segment revenue increased by $19 million to $405 million, but adjusted EBITDA and margin both decreased Resort Operations and Club Management Segment Performance Comparison | Indicator | Q2 2025 | Q2 2024 | Change (YoY) | | :------------------------- | :------------- | :------------- | :---------- | | Segment Revenue | $405 Million | $386 Million | +$19 Million | | Adjusted EBITDA | $149 Million | $152 Million | -$3 Million | | Adjusted EBITDA Margin | 36.8% | 39.4% | -2.6 pp | [Inventory & Pipeline](index=2&type=section&id=Inventory%20%26%20Pipeline) This section outlines the total contract sales pipeline and the composition of inventory by owned versus fee-for-service models [Total Contract Sales Pipeline](index=2&type=section&id=Total%20Contract%20Sales%20Pipeline) The total contract sales pipeline is estimated at $13.3 billion, with $10.7 billion from currently available inventory and $2.6 billion from future inventory - The company's total contract sales pipeline is estimated at **$13.3 billion**[14](index=14&type=chunk) - Of this, **$10.7 billion** in sales is from currently available inventory in open or soon-to-open projects, and **$2.6 billion** is from future inventory in new or existing projects[14](index=14&type=chunk) [Inventory Mix (Owned vs. Fee-for-service)](index=2&type=section&id=Inventory%20Mix%20%28Owned%20vs.%20Fee-for-service%29) Owned inventory constitutes 90.6% of the total sales pipeline, with 81.3% currently available, while fee-for-service inventory is 9.4%, with 68.2% available Inventory Composition | Inventory Type | % of Total Sales Pipeline | % Currently Available | | :------------- | :--------------- | :----------- | | Owned Inventory | 90.6% | 81.3% | | Fee-for-service Inventory | 9.4% | 68.2% | [Financial Position & Liquidity](index=3&type=section&id=Financial%20Position%20%26%20Liquidity) This section details the company's balance sheet, cash flow, leverage, and financing optimization strategies [Balance Sheet Overview](index=3&type=section&id=Balance%20Sheet%20Overview) As of June 30, 2025, the company held $269 million in cash and $323 million in restricted cash, with $4.6 billion in corporate net debt and $2.5 billion in non-recourse net debt Key Balance Sheet Data as of June 30, 2025 | Indicator | Amount | | :------------------- | :----------- | | Cash and Cash Equivalents | $269 Million | | Restricted Cash | $323 Million | | Corporate Net Debt | $4.6 Billion | | Corporate Debt Weighted Average Interest Rate | 5.991% | | Non-Recourse Net Debt | $2.5 Billion | | Non-Recourse Debt Weighted Average Interest Rate | 5.258% | [Cash Flow Analysis](index=3&type=section&id=Cash%20Flow%20Analysis) Q2 2025 free cash flow was $28 million and adjusted free cash flow was $135 million, both decreasing year-over-year, with $269 million in unrestricted cash and $794 million available on the revolving credit facility Q2 2025 Cash Flow Comparison | Indicator | Q2 2025 | Q2 2024 | Change (YoY) | | :------------- | :------------- | :------------- | :---------- | | Free Cash Flow | $28 Million | $95 Million | -$67 Million | | Adjusted Free Cash Flow | $135 Million | $370 Million | -$235 Million | - As of June 30, 2025, the company's liquidity included **$269 million** in unrestricted cash and **$794 million** in remaining borrowing capacity under its revolving credit facility[17](index=17&type=chunk) - The company has **$937 million** in notes in good standing but not yet securitized, of which approximately **$429 million** is available for warehouse borrowings or securitization, and **$260 million** in pledged notes are expected to become eligible upon meeting specific milestones[18](index=18&type=chunk) [Leverage](index=3&type=section&id=Leverage) As of June 30, 2025, the company's total net leverage ratio for the trailing twelve months, including all anticipated cost synergies, was approximately 3.9x - As of June 30, 2025, the company's total net leverage ratio for the trailing twelve months, including all anticipated cost synergies, was approximately **3.9x**[20](index=20&type=chunk) [Financing Business Optimization](index=3&type=section&id=Financing%20Business%20Optimization) HGV plans to optimize its securitization strategy by increasing non-recourse credit market usage to generate incremental cash flow for capital returns and business reinvestment - The company plans to optimize its securitization strategy by increasing the use of non-recourse credit markets, leveraging excess liquidity to generate incremental cash flow[21](index=21&type=chunk) - The generated cash flow will be used for additional capital returns and business reinvestment[21](index=21&type=chunk) [Subsequent Events](index=3&type=section&id=Subsequent%20Events) This section covers the approval of a new share repurchase program and a recent term securitization [Share Repurchase Program](index=3&type=section&id=Share%20Repurchase%20Program) On July 29, 2025, HGV's board approved a new two-year share repurchase program for up to $600 million of common stock, supplementing the existing 2024 program - On July 29, 2025, HGV's Board of Directors approved a new share repurchase program authorizing the company to repurchase up to **$600 million** of common stock over a two-year period[23](index=23&type=chunk) - This new program supplements the remaining amount under the existing 2024 repurchase program[23](index=23&type=chunk) [Term Securitization](index=3&type=section&id=Term%20Securitization) On July 11, 2025, the company completed a term securitization of approximately JPY 9.5 billion in timeshare loans through Hilton Grand Vacations Japan Trust 2025-1 at a 1.41% coupon rate - On July 11, 2025, the company completed a term securitization of approximately **JPY 9.5 billion** in timeshare loans through Hilton Grand Vacations Japan Trust 2025-1[22](index=22&type=chunk) - The securitization had a coupon rate of **1.41%**, with proceeds primarily used for general corporate purposes[22](index=22&type=chunk) [Construction Deferrals and Recognitions (ASC 606)](index=4&type=section&id=Construction%20Deferrals%20and%20Recognitions%20%28ASC%20606%29) This section explains the deferral of revenue and related expenses for projects under construction as per ASC 606, with Q2 2025 net construction deferral of $45 million [Net Construction Deferral Activity (Table T-1)](index=4&type=section&id=Net%20Construction%20Deferral%20Activity%20%28Table%20T-1%29) Under ASC 606, revenue and related expenses from sales of projects under construction are deferred until completion, with Q2 2025 net deferral at $45 million - Under ASC 606, revenue and related expenses from sales of projects under construction are deferred until project completion[24](index=24&type=chunk) Q2 2025 Net Construction Deferral Activity | Indicator | Q2 2025 (Million USD) | | :--------------------------------- | :------------------------ | | VOI Sales (Deferred) Recognized | (82) | | Cost of VOI Sales (Deferred) Recognized | (23) | | Selling and Marketing Expenses (Deferred) Recognized | (14) | | Net Construction (Deferred) Recognized | (45) | Q2 2024 Net Construction Deferral Activity | Indicator | Q2 2024 (Million USD) | | :--------------------------------- | :------------------------ | | VOI Sales Recognized (Deferred) | (13) | | Cost of VOI Sales (Deferred) Recognized | (4) | | Selling and Marketing Expenses (Deferred) Recognized | (1) | | Net Construction Recognized (Deferred) | (8) | [Additional Information](index=6&type=section&id=Additional%20Information) This section provides details on the upcoming conference call, forward-looking statements, and definitions of non-GAAP financial measures [Conference Call Details](index=6&type=section&id=Conference%20Call%20Details) Hilton Grand Vacations will host a conference call on July 31, 2025, at 11 AM ET to discuss Q2 results, with dial-in and webcast details provided - HGV will host a conference call on **July 31, 2025, at 11 AM ET** to discuss Q2 results[29](index=29&type=chunk) - Investors can participate by dialing **1-877-407-0784** (US/Canada) or **+1-201-689-8560** (International), or via webcast at https://investors.hgv.com[29](index=29&type=chunk) - A replay will be available within 24 hours until **August 14, 2025**, by dialing **1-844-512-2921** (US) or **+1-412-317-6671** (International), ID **13751067**[31](index=31&type=chunk) [Forward-Looking Statements](index=6&type=section&id=Forward-Looking%20Statements) This press release contains forward-looking statements reflecting management's expectations for HGV's future, based on current beliefs, assumptions, and plans, subject to risks and uncertainties - This press release contains forward-looking statements reflecting management's expectations for HGV's future, based on current beliefs, assumptions, and plans[32](index=32&type=chunk) - Forward-looking statements involve HGV's revenue, earnings, taxes, cash flow, and related financial and operational metrics, as well as expectations for future operational, financial, and business performance[32](index=32&type=chunk) - HGV cautions that forward-looking statements involve known and unknown risks, uncertainties, and other factors beyond the company's control that could cause actual results to differ materially from expectations, and the company undertakes no obligation to update any forward-looking statements[33](index=33&type=chunk)[35](index=35&type=chunk) [Non-GAAP Financial Measures Definitions](index=6&type=section&id=Non-GAAP%20Financial%20Measures%20Definitions) This section defines non-GAAP financial measures used by the company, including adjusted net income, adjusted diluted EPS, EBITDA, adjusted EBITDA, free cash flow, and adjusted free cash flow, emphasizing their utility and limitations - The company references several non-GAAP financial measures in the press release, including adjusted net income, adjusted diluted EPS, EBITDA, adjusted EBITDA, free cash flow, and adjusted free cash flow[36](index=36&type=chunk) - The company believes these additional measures are essential for investors to understand its performance and efficiency, and are widely used by securities analysts, investors, and other interested parties as common metrics for comparing performance or valuation among companies in the industry[37](index=37&type=chunk) - Non-GAAP financial measures should not be considered substitutes for GAAP net income (loss) or other measures of financial performance or liquidity, and their definitions may not be comparable to similar measures used by other companies[44](index=44&type=chunk)[49](index=49&type=chunk) [EBITDA, Adjusted EBITDA, and Attributable to Stockholders](index=7&type=section&id=EBITDA%2C%20Adjusted%20EBITDA%2C%20and%20Attributable%20to%20Stockholders) EBITDA is net income before interest, taxes, depreciation, and amortization; Adjusted EBITDA further excludes specific non-recurring and non-cash items; Attributable to Stockholders excludes non-controlling interests - EBITDA is net income (loss) before interest expense (excluding non-recourse debt), income taxes, and depreciation and amortization[41](index=41&type=chunk) - Adjusted EBITDA further adjusts EBITDA by excluding other gains, debt restructuring/extinguishment, non-cash impairment losses, share-based compensation and other compensation expenses, and acquisition, restructuring, and purchase accounting premium amortization costs[42](index=42&type=chunk) - Adjusted EBITDA attributable to stockholders is Adjusted EBITDA less the amount attributable to Big Cedar non-controlling interests[43](index=43&type=chunk) [Adjusted Net Income and Adjusted Diluted EPS](index=8&type=section&id=Adjusted%20Net%20Income%20and%20Adjusted%20Diluted%20EPS) Adjusted net income excludes acquisition, restructuring, and non-cash/one-time items; attributable to stockholders excludes non-controlling interests; adjusted diluted EPS divides adjusted net income by diluted weighted average shares - Adjusted net income is net income (loss) further adjusted by excluding acquisition, restructuring, purchase accounting premium amortization, and other non-cash and one-time expenses[48](index=48&type=chunk) - Adjusted net income attributable to stockholders excludes the amount attributable to Big Cedar non-controlling interests[48](index=48&type=chunk) - Adjusted diluted EPS is adjusted net income attributable to stockholders divided by diluted weighted average shares outstanding[48](index=48&type=chunk) [Free Cash Flow and Adjusted Free Cash Flow](index=8&type=section&id=Free%20Cash%20Flow%20and%20Adjusted%20Free%20Cash%20Flow) Free cash flow is operating cash flow minus non-inventory capital expenditures; adjusted free cash flow further adjusts for non-recourse debt activities and other one-time items, serving as liquidity indicators - Free cash flow represents cash flow from operating activities less non-inventory capital expenditures[51](index=51&type=chunk) - Adjusted free cash flow further adjusts free cash flow for net non-recourse debt activities and other one-time adjustments, including acquisition-related costs[51](index=51&type=chunk) - The company considers free cash flow and adjusted free cash flow as liquidity indicators measuring cash generated from operating activities available for investing and financing activities[52](index=52&type=chunk) [Non-GAAP Measures within Segments](index=8&type=section&id=Non-GAAP%20Measures%20within%20Segments) This section defines segment-specific non-GAAP metrics like sales revenue, real estate profit, financing profit, and resort/club management profit, used to measure efficiency and profitability of business activities - Sales revenue includes net VOI sales and commissions earned from fee-for-service VOI sales[53](index=53&type=chunk) - Real estate profit margin measures the efficiency of sales and marketing expenditures, inventory cost management, and initiatives to enhance profitability[54](index=54&type=chunk) - Financing profit margin measures the efficiency and profitability of the company's financing business related to VOI sales[55](index=55&type=chunk) - Resort and club management profit margin measures the efficiency and profitability of the resort and club management business supporting VOI sales operations[57](index=57&type=chunk) - Rental and ancillary services profit margin measures the company's ability to convert available inventory and vacant rooms into revenue and profit, as well as the profitability of other services[58](index=58&type=chunk) [Real Estate Metrics](index=9&type=section&id=Real%20Estate%20Metrics) This section defines key real estate operational metrics such as contract sales, owned/fee-for-service inventory, tours, and sales per guest (VPG), used to measure sales activity and efficiency - Contract sales represent the total amount of VOI products for which purchase agreements have been signed and at least **10%** of the contract price has been received as a down payment during the reporting period[59](index=59&type=chunk) - Sales per guest (VPG) measures the effectiveness of HGV's sales process by combining average transaction price with closing rates[62](index=62&type=chunk) - Net Owner Growth (NOG) represents the year-over-year change in the number of members[61](index=61&type=chunk) [Financial Tables](index=10&type=section&id=Financial%20Tables) This section presents the company's condensed consolidated financial statements, including balance sheets, income statements, cash flow statements, and various reconciliation tables [T-2 CONDENSED CONSOLIDATED BALANCE SHEETS](index=11&type=section&id=T-2%20CONDENSED%20CONSOLIDATED%20BALANCE%20SHEETS) As of June 30, 2025, total assets were $11.738 billion, total liabilities $10.098 billion, and total stockholders' equity $1.489 billion, with changes in cash, receivables, and inventory from year-end 2024 Condensed Consolidated Balance Sheets Key Data | Indicator | 2025年6月30日 (Million USD) | 2024年12月31日 (Million USD) | | :----------------------- | :----------------------- | :------------------------ | | Cash and Cash Equivalents | 269 | 328 | | Restricted Cash | 323 | 438 | | Accounts Receivable, Net | 444 | 315 | | Timeshare Financing Receivables, Net | 2,979 | 3,006 | | Inventory | 2,406 | 2,244 | | Total Assets | 11,738 | 11,442 | | Debt, Net | 4,574 | 4,601 | | Non-Recourse Debt, Net | 2,499 | 2,318 | | Deferred Revenue | 551 | 252 | | Total Liabilities | 10,098 | 9,547 | | Total Stockholders' Equity | 1,489 | 1,752 | [T-3 CONDENSED CONSOLIDATED STATEMENTS OF INCOME](index=12&type=section&id=T-3%20CONDENSED%20CONSOLIDATED%20STATEMENTS%20OF%20INCOME) Q2 2025 total revenue was $1.266 billion, with net income attributable to stockholders at $25 million and diluted EPS at $0.25, showing significant improvement year-over-year Condensed Consolidated Statements of Income (Q2 2025) | Indicator | Q2 2025 (Million USD) | Q2 2024 (Million USD) | | :--------------------------------- | :------------------------ | :------------------------ | | Sales of VOIs, Net | 469 | 471 | | Fee-for-service Commissions, Package Sales and Other | 165 | 167 | | Financing Revenue | 126 | 102 | | Resort and Club Management Revenue | 183 | 171 | | Rental and Ancillary Services Revenue | 195 | 195 | | Total Revenue | 1,266 | 1,235 | | Cost of VOI Sales | 38 | 65 | | Selling and Marketing Expenses | 479 | 453 | | Financing Expense | 54 | 44 | | Total Operating Expenses | 1,154 | 1,141 | | Interest Expense | (79) | (87) | | Net Income Attributable to Stockholders | 25 | 2 | | Diluted EPS | 0.25 | 0.02 | [T-4 CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS](index=13&type=section&id=T-4%20CONDENSED%20CONSOLIDATED%20STATEMENTS%20OF%20CASH%20FLOWS) Q2 2025 net cash from operating activities was $62 million, net cash used in investing activities was $34 million, and net cash used in financing activities was $12 million, with operating cash flow decreasing year-over-year Condensed Consolidated Statements of Cash Flows (Q2 2025) | Indicator | Q2 2025 (Million USD) | Q2 2024 (Million USD) | | :----------------------- | :------------------------ | :------------------------ | | Net Cash Provided by Operating Activities | 62 | 113 | | Net Cash Used in Investing Activities | (34) | (9) | | Net Cash (Used in) Provided by Financing Activities | (12) | (171) | | Cash, Cash Equivalents, and Restricted Cash, End of Period | 592 | 601 | | Cash and Cash Equivalents, End of Period | 269 | 328 | [T-5 FREE CASH FLOW RECONCILIATION](index=14&type=section&id=T-5%20FREE%20CASH%20FLOW%20RECONCILIATION) Q2 2025 free cash flow was $28 million and adjusted free cash flow was $135 million, both significantly lower than the prior year Free Cash Flow Reconciliation (Q2 2025) | Indicator | Q2 2025 (Million USD) | Q2 2024 (Million USD) | | :----------------------- | :------------------------ | :------------------------ | | Net Cash Provided by Operating Activities | 62 | 113 | | Capital Expenditures (Property and Equipment) | (15) | (7) | | Capitalized Software Costs | (19) | (11) | | Free Cash Flow | 28 | 95 | | Non-Recourse Debt Activities, Net | 54 | 200 | | Acquisition and Integration Related Costs | 26 | 48 | | Litigation Settlement Payments | — | 13 | | Other Adjustments | 27 | 14 | | Adjusted Free Cash Flow | 135 | 370 | [T-6 SEGMENT REVENUE RECONCILIATION](index=14&type=section&id=T-6%20SEGMENT%20REVENUE%20RECONCILIATION) Q2 2025 Real Estate Sales and Financing segment revenue was $760 million, Resort Operations and Club Management segment revenue was $405 million, contributing to a total revenue of $1.266 billion Segment Revenue Reconciliation (Q2 2025) | Indicator | Q2 2025 (Million USD) | Q2 2024 (Million USD) | | :------------------------- | :------------------------ | :------------------------ | | Real Estate Sales and Financing | 760 | 740 | | Resort Operations and Club Management | 405 | 386 | | Total Segment Revenue | 1,165 | 1,126 | | Cost Reimbursements | 128 | 129 | | Intersegment Eliminations | (27) | (20) | | Total Revenue | 1,266 | 1,235 | [T-7 SEGMENT ADJUSTED EBITDA AND ADJUSTED EBITDA ATTRIBUTABLE TO STOCKHOLDERS TO NET INCOME ATTRIBUTABLE TO STOCKHOLDERS](index=15&type=section&id=T-7%20SEGMENT%20ADJUSTED%20EBITDA%20AND%20ADJUSTED%20EBITDA%20ATTRIBUTABLE%20TO%20STOCKHOLDERS%20TO%20NET%20INCOME%20ATTRIBUTABLE%20TO%20STOCKHOLDERS) Q2 2025 adjusted EBITDA was $238 million, with adjusted EBITDA attributable to stockholders at $233 million, and segment-specific adjusted EBITDA for Real Estate Sales and Financing at $176 million and Resort Operations at $149 million Segment Adjusted EBITDA Reconciliation (Q2 2025) | Indicator | Q2 2025 (Million USD) | Q2 2024 (Million USD) | | :--------------------------------- | :------------------------ | :------------------------ | | Net Income Attributable to Stockholders | 25 | 2 | | EBITDA | 182 | 164 | | Adjusted EBITDA | 238 | 266 | | Adjusted EBITDA Attributable to Stockholders | 233 | 262 | | Real Estate Sales and Financing Segment Adjusted EBITDA | 176 | 193 | | Resort Operations and Club Management Segment Adjusted EBITDA | 149 | 152 | | Adjusted EBITDA Margin | 18.8% | 21.5% | | EBITDA Margin | 14.4% | 13.3% | [T-8 REAL ESTATE SALES PROFIT DETAIL SCHEDULE](index=16&type=section&id=T-8%20REAL%20ESTATE%20SALES%20PROFIT%20DETAIL%20SCHEDULE) Q2 2025 tours slightly decreased, but sales per guest (VPG) grew 11.1% to $3,690, with contract sales increasing to $834 million, though real estate profit and margin declined Real Estate Sales Profit Detail (Q2 2025) | Indicator | Q2 2025 | Q2 2024 | | :----------------------- | :------------- | :------------- | | Tours | 225,222 | 226,388 | | VPG | $3,690 | $3,320 | | Owned Contract Sales Mix | 83.0% | 80.5% | | Fee-for-service Contract Sales Mix | 17.0% | 19.5% | | Contract Sales | $834 Million | $757 Million | | Sales Revenue | $553 Million | $559 Million | | Real Estate Profit | $117 Million | $120 Million | | Real Estate Profit Margin | 21.2% | 21.5% | [T-9 CONTRACT SALES MIX BY TYPE SCHEDULE](index=17&type=section&id=T-9%20CONTRACT%20SALES%20MIX%20BY%20TYPE%20SCHEDULE) Q2 2025 immediate contract sales mix was 11.1%, fee-for-service contract sales mix was 17.0%, with total capital-efficient contract sales mix decreasing to 28.1% from 40.4% year-over-year Contract Sales Mix by Type (Q2 2025) | Contract Sales Type | Q2 2025 | Q2 2024 | | :----------------------- | :------------- | :------------- | | Immediate Contract Sales Mix | 11.1% | 20.9% | | Fee-for-service Contract Sales Mix | 17.0% | 19.5% | | Total Capital-Efficient Contract Sales Mix | 28.1% | 40.4% | [T-10 FINANCING PROFIT DETAIL SCHEDULE](index=17&type=section&id=T-10%20FINANCING%20PROFIT%20DETAIL%20SCHEDULE) Q2 2025 financing revenue grew to $126 million, with financing profit increasing to $72 million, maintaining a financing profit margin of 57.1% Financing Profit Detail (Q2 2025) | Indicator | Q2 2025 (Million USD) | Q2 2024 (Million USD) | | :----------------------- | :------------------------ | :------------------------ | | Interest Income | 122 | 116 | | Other Financing Revenue | 12 | 14 | | Amortization of Premiums on Acquired Timeshare Financing Receivables | (8) | (28) | | Financing Revenue | 126 | 102 | | Financing Expense | 54 | 44 | | Financing Profit | 72 | 58 | | Financing Profit Margin | 57.1% | 56.9% | [T-11 RESORT AND CLUB PROFIT DETAIL SCHEDULE](index=18&type=section&id=T-11%20RESORT%20AND%20CLUB%20PROFIT%20DETAIL%20SCHEDULE) As of June 30, 2025, total members reached 724,306, with net owner growth at 0.6%; Q2 2025 resort and club management revenue grew to $183 million, with profit at $127 million, but margin slightly decreased Resort and Club Profit Detail (Q2 2025) | Indicator | 2025年6月30日 (12 Months) | 2024年6月30日 (12 Months) | | :----------------------- | :----------------------- | :----------------------- | | Total Members | 724,306 | 720,069 | | Net Owner Growth (NOG) | 4,237 | 8,776 | | Net Owner Growth Rate (NOG %) | 0.6% | 1.7% | | Indicator | Q2 2025 (Million USD) | Q2 2024 (Million USD) | | :----------------------- | :------------------------ | :------------------------ | | Club Management Revenue | 70 | 67 | | Resort Management Revenue | 113 | 104 | | Resort and Club Management Revenue | 183 | 171 | | Resort and Club Management Expense | 56 | 48 | | Resort and Club Management Profit | 127 | 123 | | Resort and Club Management Profit Margin | 69.4% | 71.9% | [T-12 RENTAL AND ANCILLARY PROFIT DETAIL SCHEDULE](index=19&type=section&id=T-12%20RENTAL%20AND%20ANCILLARY%20PROFIT%20DETAIL%20SCHEDULE) Q2 2025 rental and ancillary services revenue remained at $195 million, but due to increased expenses, the segment recorded an $8 million loss, with the profit margin turning negative Rental and Ancillary Profit Detail (Q2 2025) | Indicator | Q2 2025 (Million USD) | Q2 2024 (Million USD) | | :----------------------- | :------------------------ | :------------------------ | | Rental Revenue | 180 | 181 | | Ancillary Services Revenue | 15 | 14 | | Rental and Ancillary Services Revenue | 195 | 195 | | Rental and Ancillary Services Expense | 203 | 188 | | Rental and Ancillary Services Profit | (8) | 7 | | Rental and Ancillary Services Profit Margin | (4.1)% | 3.6% | [T-13 REAL ESTATE SALES AND FINANCING SEGMENT ADJUSTED EBITDA](index=20&type=section&id=T-13%20REAL%20ESTATE%20SALES%20AND%20FINANCING%20SEGMENT%20ADJUSTED%20EBITDA) Q2 2025 Real Estate Sales and Financing segment adjusted EBITDA was $176 million, with a margin of 23.2%, both decreasing year-over-year Real Estate Sales and Financing Segment Adjusted EBITDA (Q2 2025) | Indicator | Q2 2025 (Million USD) | Q2 2024 (Million USD) | | :--------------------------------- | :------------------------ | :------------------------ | | Real Estate Sales and Financing Segment Revenue | 760 | 740 | | Real Estate Sales and Financing Segment Adjusted EBITDA | 176 | 193 | | Real Estate Sales and Financing Segment Adjusted EBITDA Margin | 23.2% | 26.1% | [T-14 RESORT AND CLUB MANAGEMENT SEGMENT ADJUSTED EBITDA](index=21&type=section&id=T-14%20RESORT%20AND%20CLUB%20MANAGEMENT%20SEGMENT%20ADJUSTED%20EBITDA) Q2 2025 Resort and Club Management segment adjusted EBITDA was $149 million, with a margin of 36.8%, both decreasing year-over-year Resort and Club Management Segment Adjusted EBITDA (Q2 2025) | Indicator | Q2 2025 (Million USD) | Q2 2024 (Million USD) | | :--------------------------------- | :------------------------ | :------------------------ | | Resort and Club Management Segment Revenue | 405 | 386 | | Resort and Club Management Segment Adjusted EBITDA | 149 | 152 | | Resort and Club Management Segment Adjusted EBITDA Margin | 36.8% | 39.4% | [T-15 ADJUSTED NET INCOME ATTRIBUTABLE TO STOCKHOLDERS AND ADJUSTED DILUTED EARNINGS PER SHARE (Non-GAAP)](index=22&type=section&id=T-15%20ADJUSTED%20NET%20INCOME%20ATTRIBUTABLE%20TO%20STOCKHOLDERS%20AND%20ADJUSTED%20DILUTED%20EARNINGS%20PER%20SHARE%20%28Non-GAAP%29) Q2 2025 adjusted net income attributable to stockholders was $50 million, and adjusted diluted EPS was $0.54, both lower than the prior year Adjusted Net Income Attributable to Stockholders and Adjusted Diluted EPS (Q2 2025) | Indicator | Q2 2025 (Million USD) | Q2 2024 (Million USD) | | :--------------------------------- | :------------------------ | :------------------------ | | Net Income Attributable to Stockholders | 25 | 2 | | Adjusted Net Income Attributable to Stockholders | 50 | 65 | | Diluted Weighted Average Shares | 92.2 | 104.3 | | Diluted EPS | 0.25 | 0.02 | | Adjusted Diluted EPS | 0.54 | 0.62 | [T-16 RECONCILIATION OF NON-GAAP PROFIT MEASURES TO GAAP MEASURE](index=23&type=section&id=T-16%20RECONCILIATION%20OF%20NON-GAAP%20PROFIT%20MEASURES%20TO%20GAAP%20MEASURE) Q2 2025 total profit was $308 million, comprising $117 million from real estate, $72 million from financing, $127 million from resort and club management, and a negative $8 million from rental and ancillary services Reconciliation of Non-GAAP Profit Measures to GAAP Measure (Q2 2025) | Indicator | Q2 2025 (Million USD) | Q2 2024 (Million USD) | | :--------------------------------- | :------------------------ | :------------------------ | | Net Income Attributable to Stockholders | 25 | 2 | | EBITDA | 182 | 164 | | Profit | 308 | 308 | | Real Estate Profit | 117 | 120 | | Financing Profit | 72 | 58 | | Resort and Club Management Profit | 127 | 123 | | Rental and Ancillary Services Profit | (8) | 7 |

Company Overview - Hilton Grand Vacations (HGV) is expected to report quarterly earnings on July 31, 2025, with a consensus estimate of $0.78 per share, reflecting a year-over-year increase of +25.8% [3] - Revenues are anticipated to reach $1.37 billion, which is a 10.7% increase from the same quarter last year [3] Earnings Expectations - The consensus EPS estimate has remained unchanged over the last 30 days, indicating stability in analyst expectations [4] - The Most Accurate Estimate for Hilton Grand Vacations is higher than the Zacks Consensus Estimate, resulting in a positive Earnings ESP of +10.58% [12] Historical Performance - In the last reported quarter, Hilton Grand Vacations was expected to post earnings of $0.49 per share but only achieved $0.09, resulting in a surprise of -81.63% [13] - The company has not beaten consensus EPS estimates in any of the last four quarters [14] Market Sentiment - Despite a positive Earnings ESP, Hilton Grand Vacations currently holds a Zacks Rank of 4, making it challenging to predict an earnings beat conclusively [12] - The overall market sentiment suggests that Hilton Grand Vacations may not be a compelling earnings-beat candidate, and investors should consider other factors before making investment decisions [17] Industry Context - In the broader Zacks Hotels and Motels industry, Civeo (CVEO) is expected to report a loss of $0.03 per share for the same quarter, indicating a year-over-year change of -105.4% [18] - Civeo's revenue is projected to decline by 12.4% to $165.34 million, with a negative Earnings ESP of -933.33% despite a Zacks Rank of 2 (Buy) [19][20]

Core Insights - The logistics sector has seen significant engagement from investors, particularly in the ASEAN and US markets, highlighting its growth potential [1] - The popularity of insurance companies in the Philippines since 2014 indicates a shift in investment strategies among local investors [1] - The diversification of investment portfolios across various industries and market capitalizations is becoming a common practice among investors [1] Investment Trends - There is a notable trend of investing in blue-chip companies initially, which has evolved into a broader investment strategy across different sectors [1] - The entry into the US market has been facilitated by platforms like Seeking Alpha, which provide valuable analyses for comparison with local markets [1] - The focus on specific sectors such as banking, telecommunications, retail, hotels, and logistics reflects targeted investment strategies [1]

Core Viewpoint - Hilton Grand Vacations (NYSE: HGV) has underperformed in the past year, with a loss of approximately 7% in value due to rising credit losses in its timeshare loan portfolio [1] Company Performance - The company has faced increasing credit losses on its timeshare loan portfolio, which has contributed to its poor stock performance [1] Analyst Perspective - The analysis is based on over fifteen years of experience in making contrarian bets and focusing on stock-specific turnaround stories to achieve favorable risk/reward profiles [1]

Sales and Revenue Performance - For the three months ended March 31, 2025, sales from fee-for-service and just-in-time inventory accounted for 15% and 10% of contract sales, respectively [123]. - The estimated contract sales value related to inventory currently available for sale is $13.2 billion, with capital efficient arrangements representing approximately 28% of that supply [123]. - For the three months ended March 31, 2025, 75% of contract sales were to existing owners, slightly down from 76% in the same period of 2024 [126]. - Real estate sales and financing revenues decreased by 6.1% from $687 million in Q1 2024 to $645 million in Q1 2025 [148]. - Resort operations and club management revenues increased by 8.6% from $360 million in Q1 2024 to $391 million in Q1 2025 [148]. - Total revenues for the company decreased by 0.7% from $1,156 million in Q1 2024 to $1,148 million in Q1 2025 [148]. - Sales of VOIs (Vacation Ownership Interests) decreased by $60 million or 13.7%, from $438 million in 2024 to $378 million in 2025 [161]. - Contract sales increased by $90 million or 14.3%, from $631 million in 2024 to $721 million in 2025, primarily due to a 14.4% increase in VPG (Volume Per Guest) [160]. Financial Metrics and Losses - Net loss attributable to stockholders increased from $4 million in Q1 2024 to $17 million in Q1 2025, a change of $13 million [148]. - Adjusted EBITDA attributable to stockholders decreased by 34.1% from $273 million in Q1 2024 to $180 million in Q1 2025 [148]. - The company reported a net loss of $12 million for Q1 2025 compared to a net loss of $2 million in Q1 2024 [148]. - Total segment revenues decreased by 1.1% from $1,047 million in Q1 2024 to $1,036 million in Q1 2025 [148]. - Adjusted EBITDA for the three months ended March 31, 2025, was $185 million, a decrease of $91 million or 33.0% compared to $276 million in 2024 [149]. - Net loss attributable to stockholders was $17 million for the three months ended March 31, 2025, compared to a net loss of $4 million in 2024, representing a $13 million increase in loss [153]. Expenses and Cost Management - Sales and marketing expense increased by $24 million or 6.0%, from $401 million in 2024 to $425 million in 2025 [156]. - Real estate profit decreased by $64 million or 47.8%, from $134 million in 2024 to $70 million in 2025, primarily due to decreased sales of VOIs [161]. - The provision for financing receivables losses increased by $8 million or 12.5%, from $64 million in 2024 to $72 million in 2025 [160]. - Fee-for-service commissions increased by $4 million or 6.3%, from $64 million in 2024 to $68 million in 2025 [161]. - The real estate profit margin decreased from 26.7% in 2024 to 15.7% in 2025, reflecting the impact of decreased sales and increased expenses [161]. - Share-based compensation expense increased by 33.3% from $9 million in Q1 2024 to $12 million in Q1 2025 [148]. - Acquisition and integration-related expenses decreased significantly by 74.3% from $109 million in Q1 2024 to $28 million in Q1 2025 [148]. Financing and Cash Flow - Financing propensity for the three months ended March 31, 2025, was 64%, compared to 65% for the same period in 2024 [127]. - The weighted-average FICO score for loans to U.S. and Canadian borrowers at the time of origination was 736 for 2025, down from 744 in 2024 [128]. - Financing profit increased by $5 million to $70 million for the three months ended March 31, 2025, compared to $65 million in 2024, driven by a $21 million increase in financing revenue [164][165]. - Financing revenue rose by $21 million to $125 million, primarily due to an increase in the weighted average outstanding balance of timeshare financing receivables and a decrease in premium amortization of $8 million [165]. - Financing expenses increased by $16 million to $55 million, mainly due to a $9 million rise in portfolio management expenses and a $6 million increase in consumer financing interest expense [166]. - Net cash provided by operating activities was $38 million for the three months ended March 31, 2025, compared to no cash provided in the same period in 2024 [180]. - Net cash used in investing activities was $32 million, significantly lower than $1,473 million in 2024, mainly due to the prior year's Bluegreen Acquisition [184]. - Net cash used in financing activities was $201 million, a decrease from $1,272 million in 2024, primarily due to reduced net proceeds from debt and increased share repurchases [185]. Company Operations and Market Presence - As of March 31, 2025, the company had approximately 725,000 members across its Club offerings, providing access to around 8,400 properties in the Hilton system [117]. - The company completed the acquisition of Bluegreen Vacations Holding Corporation on January 17, 2024, expanding its market presence [114]. - The company operates approximately 100 sales distribution centers in various domestic and international locations [124]. - The management fees earned from resort operations are highly predictable, typically ranging from 10% to 15% of the costs to operate the applicable resort [132]. - The company has signed a 10-year exclusive marketing agreement with Bass Pro, effective from the Bluegreen Acquisition Date, to market vacation packages [125]. - General and administrative expenses remained stable at $46 million, while depreciation and amortization rose by $5 million to $67 million, attributed to assets acquired in the Bluegreen Acquisition [171][172]. - The company has approximately $9,356 million in contractual obligations over 16 years, with $734 million due in the remainder of 2025 [186]. - The company has commitments from surety providers amounting to $669 million as of March 31, 2025, primarily consisting of escrow, subsidy, and construction-related bonds [187]. - The company is exposed to market risks from changes in interest rates and currency exchange rates, with no material change in exposure reported since the previous year [189].