Core Insights - Hilton Worldwide Holdings Inc. is a leading global hospitality company with a diverse portfolio of hotels and resorts, competing with major chains like Marriott and Hyatt [1] Financial Performance - Hilton reported earnings of $2.11 per share for the quarter, exceeding analysts' consensus estimates of $2.05 by $0.06 [3][6] - The company's revenue for the quarter was $3.12 billion, surpassing the consensus estimate of $3.01 billion, representing an 8.8% increase compared to the same quarter last year [3][6] - Hilton has set its Q4 2025 guidance at an EPS range of 1.94 to 2.03 and FY 2025 guidance at 7.97 to 8.06 EPS [4] Stock Performance - Despite a negative return on equity of 46.13% and a net margin of 13.84%, Hilton's stock reached a high of $279.51 and last traded at $278.19 [4] - The stock's trading volume was 510,532 shares, marking a significant 74% decline from the average session volume of nearly 1.94 million shares [4] - Currently, Hilton's stock price is $271.34, having decreased by 1.35% today, with fluctuations between a low of $269.81 and a high of $275.86 during the trading day [5] Market Analysis - Truist Financial set a price target of $253 for Hilton, indicating a price difference of approximately -6.67% from the current trading price of $271.09 [2] - Hilton's stock surged by 4.6% during mid-day trading, driven by a stronger-than-expected earnings report [2]

Core Insights - Hilton reported an increase in profit and revenue for Q3 2025, with net income of $420 million and diluted EPS of $1.78, compared to $344 million and $1.38 per share in Q3 2024 [1][2] - Revenue for the quarter rose by 8.8% to $3.12 billion, while adjusted EBITDA was $976 million [2] - System-wide comparable RevPAR decreased by 1.1% on a currency neutral basis compared to Q3 2024, attributed to modest occupancy and average daily rate declines [2][4] Financial Performance - For the nine months ending September 30, 2025, system-wide comparable RevPAR increased by 0.3%, with net income at $1.16 billion and adjusted EBITDA at $2.78 billion, resulting in diluted EPS of $4.84 [3] - Hilton forecasts full year 2025 net income between $1.604 billion and $1.625 billion, with adjusted EBITDA expected to be in the range of $3.685 billion to $3.715 billion [4] Development and Growth - Hilton approved 33,000 rooms for development in Q3 2025, increasing its global pipeline to 515,400 rooms, a 5% increase from the previous year [3] - The company added 24,800 rooms to its system, resulting in a net addition of 23,200 rooms and a 6.5% rise in net unit growth from the same point last year [4] - Hilton projects net unit growth between 6.5% and 7.0% in 2025, supported by a strong development pipeline and new brand introductions [6][7] Strategic Initiatives - Hilton opened its 9,000th property with the launch of Signia by Hilton La Cantera Resort and Spa, marking nearly three hotel openings per day since August 2024 [6][7] - The introduction of a new lifestyle brand, Outset Collection by Hilton, is part of the strategy to grow its portfolio and increase market share in hotel conversions in the US [7]

Core Insights - The opening of the Waldorf Astoria Hotel in Qiantan marks a significant addition to Shanghai's cultural and tourism market, making it the third city globally to host two Waldorf Astoria hotels, following Doha and Dubai [1] - The hotel is developed by Lujiazui Group and managed by Hilton Group, located in the core area of the emerging Qiantan International Business District, which offers a diverse range of shopping, business, tourism, events, and performances [1] - Hilton Group expresses strong confidence in the high-end tourism market in China, highlighting the hotel's opening as a milestone in their expansion in the Asia-Pacific region [1] Company and Industry Summary - The Waldorf Astoria brand first entered the Asia-Pacific region in 2010 with the opening of the Bund Waldorf Astoria in Shanghai, initiating a global expansion strategy [1] - Over the past 15 years, the Waldorf brand has established five hotels in China, including locations in Shanghai (Bund and Qiantan), Beijing, Chengdu, and Xiamen [1] - Hilton Group's Asia-Pacific President, Alan Watts, emphasizes Shanghai's status as a vibrant international metropolis and the brand's commitment to providing timeless elegance and unique experiences in the new Qiantan area [1]

Core Insights - Hilton Worldwide Holdings Inc. shares increased over 4% following the company's raised full-year earnings guidance and better-than-expected third-quarter results, reflecting optimism for a sustained rebound in U.S. travel demand [1] Financial Performance - The company raised its full-year adjusted EBITDA forecast to between $3.69 billion and $3.72 billion, an increase from the previous estimate of $3.65 billion to $3.71 billion, surpassing analysts' expectations of $3.68 billion [2] - For the third quarter, Hilton reported adjusted earnings per share of $2.11, exceeding forecasts of $2.05, while revenue rose to $2.11 billion from $1.92 billion year-over-year, also above expectations [3] - Revenue per available room (RevPAR) decreased by 1.1% year-over-year to $119.33, slightly missing projections, but management noted strong pricing and occupancy trends heading into the fourth quarter [3] Industry Context - Industry sentiment has improved recently, supported by positive outlooks from airlines like United Airlines and Delta Air Lines, indicating steady travel activity following earlier slowdowns due to uncertainties from tariff policies [2]

Market Overview - The U.S. stock market opened with slight declines across major indices, including S&P 500 (-0.04%), Russell 2000 (-0.11%), Dow (-0.14%), and Nasdaq (-0.18%) [2] Earnings Reports - Intuitive Surgical reported strong earnings, leading to a significant increase in its stock price by 17.76%. Other notable gainers include Vertiv (+7.1%) and Hilton (+3.1%) [3] - Pegasystems saw a rise of 12.5%, while Capital One and Haliburton increased by 4.12% and 2.77%, respectively, benefiting from positive earnings sentiment from the previous day [3] - Conversely, Texas Instruments experienced a sharp decline of 7.9% following weaker after-hours results, alongside other laggards like Manhattan Associates (-7.9%), Netflix (-7.4%), and Newmont (-4.77%) [4] - Mattel's stock fell by 5.5% after missing earnings expectations and reporting a decline in North American sales [4] Upcoming Earnings - Major earnings reports expected later today include Tesla, SAP, and IBM, which will be released after the market closes [8] Economic Indicators - The 10-Year Treasury yield decreased by 1.9 points to 3.944%, while the Continuous Gold Contract fell by 1.76% to $4,036.80 [6]

Core Insights - Affluent travelers are driving demand for high-end hotel brands, helping Hilton offset weaker demand in other segments [2][4] - Hilton Worldwide Holdings reported better-than-expected third-quarter results, with stock prices rising significantly [2][6] Financial Performance - Hilton posted adjusted earnings of $2.11 per share, with revenue increasing nearly 9% year-over-year to $3.12 billion, surpassing analyst expectations [3] - The company raised its adjusted EPS guidance to a range of $7.97 to $8.06 from a previous range of $7.83 to $8.00 [5] Market Trends - Revenue per available room (RevPAR) for luxury brands such as LXR, Conrad, and Waldorf Astoria increased by 6.4%, 2.6%, and 1.7% respectively, indicating strong interest in luxury travel [4] - Overall system-wide RevPAR decreased by 1.1%, with a notable decline of 2.3% in the U.S., but a significant increase of 9.9% in Africa and the Middle East [5] Future Outlook - The company remains optimistic about future growth in the U.S. due to lower interest rates and a favorable regulatory environment, which are expected to boost travel demand [6]

Core Insights - Hilton Worldwide Holdings Inc. reported strong third-quarter 2025 results, with earnings and revenues exceeding expectations, leading to a 2.5% increase in shares during pre-market trading [1][2]. Financial Performance - Adjusted earnings per share (EPS) for Q3 2025 were $2.11, surpassing the Zacks Consensus Estimate of $2.03, and up from $1.92 in the same quarter last year [3]. - Total revenues reached $3.12 billion, exceeding the consensus estimate of $3.02 billion, and reflecting an 8.8% year-over-year increase [3]. - Franchise and licensing fees improved to $739 million from $698 million year-over-year, although below the estimate of $758.4 million [3]. - Base and other management fees rose to $93 million from $88 million, while incentive management fees decreased by 1.5% to $65 million [4]. - Ownership revenues were $322 million, down from $330 million year-over-year, and below the expected $349.8 million [4]. - System-wide comparable RevPAR declined by 1.1% year-over-year on a currency-neutral basis [5]. - Adjusted EBITDA was $976 million, an 8% increase year-over-year, exceeding the estimate of $953.5 million [5]. Balance Sheet and Capital Management - As of September 30, 2025, Hilton had total cash and cash equivalents of $1,126 million, up from $448 million in the previous quarter [6]. - Total debt stood at $11.7 billion with a weighted average interest rate of approximately 4.8%, and no significant maturities before April 2027 [6]. - The company repurchased 2.8 million shares at $270.31 each during the third quarter [7]. Business Development - Hilton added 199 hotels, totaling 24,800 rooms, achieving a net room growth of 23,200 [8]. - The development pipeline expanded to 3,648 properties across 128 countries, with nearly half of the rooms under construction and more than half located outside the U.S. [10]. - Notable brand expansions included the Conrad brand entering Germany and the first Curio Collection property opening in Thailand [9]. Future Outlook - For Q4 2025, Hilton anticipates net income between $441 million and $462 million, with adjusted EBITDA expected to be between $906 million and $936 million [11]. - Full-year 2025 net income is projected to be in the range of $1.64-$1.62 billion, with adjusted EBITDA between $3.69 billion and $3.72 billion [12]. - System-wide RevPAR for 2025 is expected to be flat to up 1% year-over-year [13].

PART I. FINANCIAL INFORMATION [Item 1. Financial Statements](index=3&type=section&id=Item%201.%20Financial%20Statements) Hilton's unaudited condensed consolidated financial statements and notes for Q3 2025 and FY 2024 are presented here [Condensed Consolidated Balance Sheets](index=3&type=section&id=CONDENSED%20CONSOLIDATED%20BALANCE%20SHEETS) Hilton's balance sheet, detailing assets, liabilities, and equity, is presented for Q3 2025 and FY 2024 | Metric | September 30, 2025 (in millions) | December 31, 2024 (in millions) | Change (2025 vs 2024) | | :--------------------------------- | :------------------------------- | :------------------------------- | :-------------------- | | **Assets** | | | | | Cash and cash equivalents | $1,057 | $1,301 | -$244 | | Total current assets | $3,119 | $3,272 | -$153 | | Goodwill | $5,079 | $5,035 | +$44 | | Brands | $5,022 | $4,990 | +$32 | | Management and franchise contracts, net | $1,366 | $1,235 | +$131 | | Total assets | $16,641 | $16,522 | +$119 | | **Liabilities & Equity (Deficit)** | | | | | Accounts payable, accrued expenses and other | $2,597 | $2,124 | +$473 | | Current maturities of long-term debt | $35 | $535 | -$500 | | Total current liabilities | $4,698 | $4,700 | -$2 | | Long-term debt | $11,603 | $10,616 | +$987 | | Total liabilities | $21,532 | $20,211 | +$1,321 | | Total Hilton stockholders' deficit | ($4,932) | ($3,727) | -$1,205 | | Total deficit | ($4,905) | ($3,706) | -$1,199 | - Total assets increased by **$119 million** to **$16,641 million** as of September 30, 2025, primarily driven by increases in goodwill, brands, and management/franchise contracts[8](index=8&type=chunk) - Total liabilities increased by **$1,321 million** to **$21,532 million**, mainly due to a significant increase in long-term debt and accounts payable, accrued expenses and other, while current maturities of long-term debt decreased substantially[8](index=8&type=chunk) - Hilton's stockholders' deficit widened by **$1,205 million** to **($4,932) million**, primarily influenced by an increase in treasury stock[8](index=8&type=chunk) [Condensed Consolidated Statements of Operations](index=5&type=section&id=CONDENSED%20CONSOLIDATED%20STATEMENTS%20OF%20OPERATIONS) Hilton's financial performance, including revenues, expenses, and net income, is presented for Q3 and nine months ended September 30, 2025 and 2024 | Metric (in millions, except per share data) | Three Months Ended Sep 30, 2025 | Three Months Ended Sep 30, 2024 | Nine Months Ended Sep 30, 2025 | Nine Months Ended Sep 30, 2024 | | :---------------------------------------- | :------------------------------ | :------------------------------ | :----------------------------- | :----------------------------- | | Franchise and licensing fees | $739 | $698 | $2,109 | $1,958 | | Total revenues | $3,120 | $2,867 | $8,952 | $8,391 | | Total expenses | $2,343 | $2,242 | $6,861 | $6,515 | | Operating income | $777 | $623 | $2,091 | $1,881 | | Net income attributable to Hilton stockholders | $420 | $344 | $1,160 | $1,030 | | Basic EPS | $1.79 | $1.40 | $4.89 | $4.13 | | Diluted EPS | $1.78 | $1.38 | $4.84 | $4.09 | | Cash dividends declared per share | $0.15 | $0.15 | $0.45 | $0.45 | - Total revenues increased by **8.8%** to **$3,120 million** for the three months and by **6.7%** to **$8,952 million** for the nine months ended September 30, 2025[11](index=11&type=chunk) - Operating income saw a significant increase of **24.7%** to **$777 million** for the three months and **11.2%** to **$2,091 million** for the nine months ended September 30, 2025[11](index=11&type=chunk) - Net income attributable to Hilton stockholders grew by **22.1%** to **$420 million** for the three months and **12.6%** to **$1,160 million** for the nine months ended September 30, 2025[11](index=11&type=chunk) - Diluted EPS increased by **29.0%** to **$1.78** for the three months and **18.3%** to **$4.84** for the nine months ended September 30, 2025[11](index=11&type=chunk) [Condensed Consolidated Statements of Comprehensive Income](index=6&type=section&id=CONDENSED%20CONSOLIDATED%20STATEMENTS%20OF%20COMPREHENSIVE%20INCOME) This section details Hilton's comprehensive income, including net income and other comprehensive income (loss) components, for Q3 and nine months ended September 30, 2025 and 2024 | Metric (in millions) | Three Months Ended Sep 30, 2025 | Three Months Ended Sep 30, 2024 | Nine Months Ended Sep 30, 2025 | Nine Months Ended Sep 30, 2024 | | :------------------- | :------------------------------ | :------------------------------ | :----------------------------- | :----------------------------- | | Net income | $421 | $344 | $1,163 | $1,034 | | Total other comprehensive income (loss) | ($9) | $24 | $69 | ($9) | | Comprehensive income | $412 | $368 | $1,232 | $1,025 | | Comprehensive income attributable to Hilton stockholders | $412 | $366 | $1,229 | $1,020 | - Total other comprehensive income (loss) shifted from a gain of **$24 million** in Q3 2024 to a loss of **$9 million** in Q3 2025, primarily due to currency translation adjustments and cash flow hedge adjustments[12](index=12&type=chunk) - For the nine months ended September 30, 2025, total other comprehensive income was **$69 million**, a significant improvement from a loss of **$9 million** in the prior year, mainly driven by a positive currency translation adjustment[12](index=12&type=chunk) [Condensed Consolidated Statements of Cash Flows](index=7&type=section&id=CONDENSED%20CONSOLIDATED%20STATEMENTS%20OF%20CASH%20FLOWS) This section summarizes Hilton's cash flows from operating, investing, and financing activities for the nine months ended September 30, 2025 and 2024 | Metric (in millions) | Nine Months Ended Sep 30, 2025 | Nine Months Ended Sep 30, 2024 | | :------------------- | :----------------------------- | :----------------------------- | | Net cash provided by operating activities | $1,926 | $1,431 | | Net cash used in investing activities | ($130) | ($367) | | Net cash used in financing activities | ($2,052) | ($274) | | Net increase (decrease) in cash, restricted cash and cash equivalents | ($250) | $780 | | Cash, restricted cash and cash equivalents, end of period | $1,126 | $1,655 | - Net cash provided by operating activities increased by **34.6%** to **$1,926 million** for the nine months ended September 30, 2025, driven by higher net income and favorable working capital changes[15](index=15&type=chunk)[116](index=116&type=chunk) - Net cash used in investing activities decreased by **64.6%** to **$130 million**, primarily due to lower cash paid for acquisitions compared to the prior year which included the Graduate brand and Sydell Group acquisitions[15](index=15&type=chunk)[117](index=117&type=chunk) - Net cash used in financing activities significantly increased to **$2,052 million**, mainly due to higher debt repayments and increased share repurchases, partially offset by new debt issuance[15](index=15&type=chunk)[118](index=118&type=chunk)[119](index=119&type=chunk) [Note 1: Organization and Basis of Presentation](index=8&type=section&id=Note%201%3A%20Organization%20and%20Basis%20of%20Presentation) This note describes Hilton's global hospitality operations and the basis for preparing its unaudited condensed consolidated financial statements in accordance with U.S. GAAP - Hilton Worldwide Holdings

Financial Data and Key Metrics Changes - System-wide RevPAR decreased approximately 1% year-over-year, impacted by unfavorable holidays, softer international inbound travel, and portfolio renovations [6][18] - Adjusted EBITDA was $976 million in Q3, up 8% year-over-year, exceeding guidance expectations [18] - Diluted earnings per share adjusted for special items was $2.11 [18] - Full year 2025 adjusted EBITDA is expected to be between $3.685 billion and $3.715 billion, with diluted EPS adjusted for special items between $7.97 and $8.06 [21][22] Business Line Data and Key Metrics Changes - Leisure transient RevPAR was roughly flat, driven by strong demand in Europe and the Middle East, while business transient RevPAR decreased approximately 1% due to economic uncertainty [6][7] - Group RevPAR decreased approximately 4%, but group demand is expected to strengthen in Q4 and 2026 [7] - Management franchise fees grew 5.3% year-over-year [18] Market Data and Key Metrics Changes - U.S. RevPAR decreased 2.3% in Q3, largely due to declines in government spending and softer international inbound demand [18] - In the Americas outside the U.S., RevPAR increased 4.3% year-over-year [19] - Europe saw a 1% increase in RevPAR, while the Middle East and Africa experienced a 9.9% increase [19] - Asia Pacific RevPAR was up 3.8% excluding China, but declined 3.1% in China due to government travel policies [20] Company Strategy and Development Direction - The company plans to return $3.3 billion to shareholders through buybacks and dividends for the full year [5][22] - A new brand, Outset Collection by Hilton, was launched to capture conversion opportunities in the upper mid-scale to upscale market [10] - The development pipeline has increased to over 515,000 rooms, with nearly half under construction [12][20] - The company expects net unit growth of 6.5% to 7% annually over the next several years [14] Management's Comments on Operating Environment and Future Outlook - Management remains optimistic about the next few years, citing lower interest rates and a favorable regulatory environment as drivers for increased travel demand [8][27] - The company anticipates RevPAR growth to be flat to up 1% for the full year [8] - Management believes that 2026 will be better than 2025, driven by easier comps and upcoming major events [30][32] Other Important Information - The company has implemented a program offering system fee reductions tied to hotel-specific product and service quality scores to support owners [15][62] - The proprietary tech platform has been enhanced, with 90% of enterprise solutions now in the cloud, allowing for greater agility and innovation [16] Q&A Session Summary Question: Thoughts on the timeline for improvement in the operating environment - Management believes there are positive structural factors in the U.S. that will lead to improved RevPAR, including lower inflation and a favorable investment cycle [27][30] Question: Opportunities in AI and partnerships - The company is exploring AI use cases to improve efficiencies and customer experience, with 41 use cases currently being tested [41][42] Question: Expectations for conversions and new brands - Approximately 40% of net unit growth is expected to come from conversions, with new brands contributing as well [50] Question: Balancing luxury investments and returns - Luxury is important for the company, providing a halo effect, and investments will continue to be made sensibly [56][58] Question: Impact of system-wide fee reductions on conversions - The fee reduction program is expected to incentivize more conversions from owners [62]

Financial Data and Key Metrics Changes - System-wide RevPAR decreased approximately 1% year over year, impacted by unfavorable holidays, softer international inbound travel, and portfolio renovations [5][15] - Adjusted EBITDA was $976 million in the third quarter, up 8% year over year, exceeding the high end of guidance [15] - Diluted earnings per share adjusted for special items was $2.11 [15] - For the full year 2025, RevPAR is expected to be flat to up 1% [6][18] Business Line Data and Key Metrics Changes - Leisure transient RevPAR was roughly flat, driven by strong demand in Europe and the Middle East, while business transient RevPAR decreased approximately 1% due to economic uncertainty [5] - Group RevPAR decreased approximately 4%, but group demand showed signs of strengthening for the fourth quarter and 2026 [5] - Management franchise fees grew 5.3% year over year [15] Market Data and Key Metrics Changes - In the Americas outside the U.S., RevPAR increased 4.3% year over year, driven by strong leisure and group demand [16] - In Europe, RevPAR grew 1% year over year, while in the Middle East and Africa, it increased 9.9% year over year [16] - Asia Pacific RevPAR was up 3.8% excluding China, but declined 3.1% in China due to government travel policies [17] Company Strategy and Development Direction - The company opened 199 hotels, totaling over 24,000 rooms, achieving net unit growth of 6.5% [6][10] - The launch of the Outset Collection by Hilton aims to capture the conversion opportunity in the upper mid-scale to upscale collection space [8] - The development pipeline increased to over 515,000 rooms, with nearly half under construction [10][11] Management's Comments on Operating Environment and Future Outlook - Management remains optimistic about the next few years, citing lower interest rates, favorable regulatory environment, and significant investment cycles as drivers for increased travel demand [6][24] - The company expects RevPAR growth to improve in 2026, supported by easier year-over-year comparisons and event-driven benefits [27] - Management emphasized the importance of cost discipline and efficiency improvements through AI and technology [30][31] Other Important Information - The company plans to return approximately $3.3 billion to shareholders through buybacks and dividends for the full year [4][18] - A cash dividend of $0.15 per share was paid during the third quarter, totaling $108 million for the year to date [18] Q&A Session Summary Question: Thoughts on the timeline for improvement in the operating environment - Management believes there are positive structural factors in the U.S. that will support growth, including lower inflation and a favorable investment cycle [24][26] Question: Potential partnerships with AI companies - Management is exploring AI use cases to improve efficiencies and enhance customer experience, with 41 use cases currently being tested [36][38] Question: Expectations for net unit growth and conversions - Management expects nearly 40% of net unit growth to come from conversions, with new brands contributing as well [47] Question: Balancing luxury investments and returns - Management acknowledges the importance of luxury but emphasizes that the majority of key investments will continue to focus on core brands [52][56] Question: Impact of system-wide fee reductions for owners - The fee reduction program aims to support owners during challenging times and incentivize more conversions [60][62] Question: Fee revenue growth despite more economy rooms - Management believes fee per room will continue to grow due to a mix of higher fee-paying brands and ongoing growth in emerging markets [68][70]