Core Insights - Travelers are currently in a "wait-and-see mode" due to softened American travel demand, leading to a cautious approach in booking [1][2] - Hilton's revenue per available room (RevPAR) grew by 2.5% year-over-year, but the company expects flat RevPAR for the second quarter compared to the same period last year [1][3] - Broader macroeconomic uncertainty has negatively impacted leisure travel demand, with short-term bookings remaining roughly flat year-over-year [2][4] Company Performance - Hilton downgraded its annual guidance for RevPAR growth to a range of 0% to 2%, down from a previous forecast of 2% to 3% [3] - The company reported solid performance in January and February, but this was overshadowed by weaker trends observed in March and continuing into the second quarter [1][2] Industry Trends - The travel industry is experiencing a slowdown after a post-pandemic boom, with Americans pulling back on travel amid economic uncertainty [4] - Airlines have also reported weaker demand, leading to cuts in summer flight schedules and adjustments in annual forecasts [4] - Experts indicate that consumers are now more focused on value and are booking trips last-minute, reflecting a shift in behavior due to financial pressures [6][7]

Financial Data and Key Metrics Changes - System-wide RevPAR grew by 2.5% year over year, driven by strong momentum from the end of the previous year [6][15] - Adjusted EBITDA for the first quarter was $795 million, up 6% year over year, exceeding the high end of guidance [15][21] - Diluted earnings per share adjusted for special items was $1.72 [16] Business Line Data and Key Metrics Changes - Group RevPAR increased by more than 6% year over year, supported by growth in urban markets and company meetings [6] - Business transient RevPAR increased by 2%, primarily from small and medium-sized businesses [6] - Leisure transient RevPAR increased by 1%, with robust performance in January followed by softening demand [6] Market Data and Key Metrics Changes - U.S. RevPAR increased by 2.1%, driven by strong group performance [16] - In the Americas outside the U.S., RevPAR increased by 7% year over year, driven by key events in Mexico and Brazil [17] - In Europe, RevPAR grew by 2.6% year over year, with strong rate and occupancy growth in Continental Europe [18] - In the Middle East and Africa, RevPAR increased by 8.5% year over year, driven by strong performance in Saudi Arabia [18] - In the Asia Pacific region, RevPAR was flat year over year, with a decline of 3.1% in China [19] Company Strategy and Development Direction - The company continues to expand its development pipeline, with over 503,000 rooms, representing a 7% year-over-year increase [10][19] - The company aims for net unit growth of 6% to 7% in 2025, with nearly half of the pipeline under construction [12] - The luxury and lifestyle categories accounted for 30% of all hotel openings in the quarter, with significant growth in these portfolios [9] Management's Comments on Operating Environment and Future Outlook - Management noted that broader macro uncertainty intensified in March, impacting demand, particularly in leisure [6] - The company expects second quarter RevPAR to be approximately flat versus the prior year quarter, with full-year expectations of flat to up 2% [7][21] - Management expressed optimism about long-term opportunities despite current macroeconomic uncertainties, citing a resilient business model [13][36] Other Important Information - The company was named the number one best company to work for in the U.S. by Great Place to Work and Fortune for the second consecutive year [13] - A cash dividend of $0.15 per share was paid during the first quarter, with a total expected return of approximately $3.3 billion to shareholders for the year [21] Q&A Session Summary Question: Perception of the recessionary environment - Management acknowledged the uncertainty in the market but expressed a belief that risks are more equally weighted than perceived, with potential for upside in the long term [30][36] Question: Development environment amidst uncertainty - Management indicated that while developers are cautious, there has not been a significant impact on current projects, and they remain optimistic about development momentum [44][50] Question: Impact of economic downturn on business - Management emphasized the resilience of the business model, with low leverage and strong liquidity, preparing for any potential downturn [56][58] Question: Economic intensity of deals in APAC and China - Management highlighted that the business in China is growing through joint ventures, with no capital investment required, and emphasized the strong demand for their brands in the region [63][66] Question: Strength in group bookings - Management noted that group bookings are expected to lead RevPAR growth, despite some short-term uncertainty affecting booking patterns [72][76] Question: Clarification on non RevPAR driven fees - Management clarified that a significant portion of the first quarter's performance was due to timing, but non RevPAR driven fees are expected to outperform throughout the year [86]

Core Insights - Hilton Worldwide Holdings Inc. reported first-quarter adjusted earnings per share of $1.72, exceeding the street view of $1.61 [1] - Quarterly sales reached $2.69 billion, which fell short of the analyst consensus estimate of $2.72 billion [1] - Adjusted EBITDA for the first quarter was $795 million, an increase from $750 million a year ago, with an expanded adjusted EBITDA margin of 73.7% compared to 70.4% in the previous year [1] Financial Performance - System-wide comparable RevPAR increased by 2.5% on a currency-neutral basis for the first quarter compared to the same period in 2024 [2] - Quarterly net income margin improved to 11.1% from 10.4% [2] - The company opened 186 hotels, adding a total of 20,100 rooms, resulting in 14,000 net room additions during the first quarter of 2025 [2] Strategic Developments - The company expanded its pipeline of lifestyle properties, introducing the Tempo by Hilton brand in the U.K., marking its first hotel outside the U.S., along with new hotels in Greece and Utah [3] - As of March 31, the company had $11.2 billion in outstanding debt, excluding deferred financing costs and discounts [3] Cash Management - Total cash and equivalents amounted to $807 million as of March 31, 2025, which included $76 million of restricted cash [4] - The firm repurchased 3.7 million shares of common stock during the first quarter, leading to a total capital return of $927 million for the quarter and $1,157 million year-to-date through April [4] - The board of directors authorized a regular quarterly cash dividend of $0.15 per share to be paid on June 27 [4] Future Outlook - Hilton raised its full-year 2025 adjusted EPS guidance to a range of $7.76–$7.94, up from the previous range of $7.71–$7.82, which compares favorably to the $7.93 analyst estimate [5] - For the second quarter, the company expects adjusted EPS between $1.97 and $2.02, which is below the $2.11 estimate [5] - HLT shares were trading lower by 1.30% to $224.27 at the last check on Tuesday [5]

Core Viewpoint - Hilton Worldwide Holdings Inc. reported strong earnings for Q1 2025, exceeding estimates for the sixth consecutive quarter, although revenues fell short of expectations [1][3]. Financial Performance - Adjusted earnings per share (EPS) for Q1 2025 were $1.72, surpassing the Zacks Consensus Estimate of $1.61 and up from $1.53 in the same quarter last year [3]. - Total revenues reached $2,695 million, missing the consensus mark of $2,707 million but reflecting a year-over-year growth of 4.7% [3]. - Franchise and licensing fees improved to $625 million from $571 million year-over-year, while base and other management fees declined to $88 million from $106 million [4]. - Ownership revenues were reported at $234 million, down from $255 million in the previous year [5]. - System-wide comparable RevPAR grew by 2.5% year-over-year, driven by increased occupancy and average daily rate (ADR) [6]. - Adjusted EBITDA for the quarter was $795 million, a 6% increase year-over-year, exceeding the estimate of $789.2 million [6]. Balance Sheet and Shareholder Returns - As of March 31, 2025, total cash and cash equivalents were $807 million, down from $1.376 billion at the end of 2024, with long-term debt remaining stable at $11.15 billion [7]. - The company repurchased 3.7 million shares at an average price of $242.92 per share and paid dividends totaling $37 million during the quarter [7][8]. - A quarterly cash dividend of 15 cents per share was declared, payable on June 27, 2025 [8]. Business Expansion - In Q1 2025, Hilton added 186 hotels, totaling 20,100 rooms, achieving a net room growth of 14,000 [9]. - The company introduced new lifestyle brands and expanded its luxury offerings, including openings in the UK and Greece [9][10]. - As of March 31, 2025, Hilton's development pipeline included 3,600 hotels representing 503,400 rooms across 123 countries, with an expected net unit growth of 6-7% for 2025 [10]. Future Outlook - For Q2 2025, Hilton anticipates net income between $455 million and $469 million, with adjusted EBITDA expected to be between $940 million and $960 million [11]. - System-wide RevPAR is projected to increase by 2.5-3.5% year-over-year for Q2 2025 [12]. - Full-year adjusted EPS is forecasted to be in the range of $7.76-$7.94, with a capital return of approximately $3.3 billion [13].

Core Insights - Hilton Worldwide Holdings Inc. reported $2.7 billion in revenue for Q1 2025, a year-over-year increase of 4.7% and an EPS of $1.72 compared to $1.53 a year ago, with a slight revenue miss against the Zacks Consensus Estimate of $2.71 billion [1] - The company delivered an EPS surprise of +6.83%, exceeding the consensus EPS estimate of $1.61 [1] Financial Performance Metrics - Total owned/leased rooms stood at 15,606, below the average estimate of 17,109 based on two analysts [4] - Revenue per available room (RevPAR) system-wide was $103.59, slightly below the average estimate of $106.21 [4] - Total systemwide rooms were reported at 1,282,192, exceeding the average estimate of 1,273,692 [4] - System-wide RevPAR growth was 2.5%, matching the two-analyst average estimate [4] Revenue Breakdown - Revenues from owned and leased hotels were $234 million, below the five-analyst average estimate of $258.21 million, representing a year-over-year decline of -8.2% [4] - Other revenues totaled $46 million, compared to the estimated $55.03 million, reflecting an -8% change year-over-year [4] - Franchise and licensing fees generated $625 million, slightly below the average estimate of $629 million, but showing a +9.5% year-over-year increase [4] - Base and other management fees were $88 million, in line with the four-analyst average estimate of $88.41 million, indicating a -17% year-over-year change [4] - Incentive management fees reached $72 million, surpassing the average estimate of $67.81 million, with a +2.9% year-over-year increase [4] Stock Performance - Hilton Worldwide shares have returned -2.6% over the past month, compared to the Zacks S&P 500 composite's -0.8% change [3] - The stock currently holds a Zacks Rank 3 (Hold), suggesting it may perform in line with the broader market in the near term [3]

Company Overview - As of March 31, 2025, Hilton operates 8,602 properties with a total of 1,282,192 rooms across 139 countries, and has 218 million members in its Hilton Honors loyalty program, reflecting a 16% increase from the previous year[65]. - The Americas region accounted for 65% of Hilton's system-wide hotel rooms as of March 31, 2025[67]. Growth and Development - The company reported 186 hotel openings and 155 net additions during the three months ended March 31, 2025, resulting in a net unit growth of 7.2%[70]. - The development pipeline includes 270 additions expected to add 32,600 rooms, with a total of 3,600 hotels and 503,400 rooms projected in the pipeline[70]. - The company faces challenges in executing its growth strategy due to elevated inflation and interest rates, which may lead to delays in openings and new developments[69]. Financial Performance - Adjusted EBITDA for the three months ended March 31, 2025, was $795 million, up from $750 million in the prior year[87]. - Ownership revenues decreased by 8.2% to $234 million, impacted by unfavorable foreign currency fluctuations[88]. - Net cash provided by operating activities increased by 30.6% to $452 million for the three months ended March 31, 2025, compared to $346 million in the same period of 2024[111]. - Net cash used in investing activities rose by 85.2% to $50 million for the three months ended March 31, 2025, compared to $27 million in the same period of 2024[111]. - The decrease in net cash provided by financing activities was primarily due to a $1.0 billion cash inflow from the March 2024 Senior Notes issuance, along with a $209 million increase in cash outflows for share repurchases[114]. Revenue Metrics - Revenue per Available Room (RevPAR) is a significant performance indicator, calculated by dividing hotel room revenue by total available room nights[75]. - System-wide RevPAR increased by 2.5% to $103.59, supported by improvements in ADR and occupancy across all regions[82]. - Franchise and licensing fees rose by 9.5% to $625 million, driven by a 1.5% increase in RevPAR at comparable franchised hotels[84]. - The company experienced a 5.2% increase in RevPAR at comparable managed hotels, contributing to a currency neutral increase in management fees[86]. Cash Management - Total cash and cash equivalents as of March 31, 2025, were $807 million, including $76 million of restricted cash[102]. - The company plans to issue $500 million under the Revolving Credit Facility in April 2025 to repay the May 2025 Senior Notes at maturity[116]. - Cash management policy objectives include maintaining liquidity availability and minimizing operational costs[109]. - The company may pre-sell Hilton Honors points through strategic partnerships as a source of liquidity[108]. Segment Performance - Hilton's management and franchise segment generates revenue from management and franchise fees, while the ownership segment derives revenue from hotel room sales and services[66]. - Management and franchise segment included 833 managed and 7,722 franchised properties, totaling 1,266,586 rooms as of March 31, 2025[100]. Operational Metrics - The occupancy rate is a key metric for Hilton, measuring the total number of room nights sold against available room nights, which helps determine pricing levels[73]. - The increase in interest expense was primarily due to $30 million from the issuance of $1.0 billion Senior Notes[96]. - General and administrative expenses decreased by 9.6% to $94 million, mainly due to reduced payroll costs[93]. Market Risks - The company has exposure to market risks from changes in one-month SOFR and foreign currency exchange rates, which may affect future income and cash flows[119]. - The company emphasizes the importance of evaluating the economic viability of new hotels based on geographic location and credit quality of third-party owners[69]. Accounting and Estimates - There were no material changes to critical accounting estimates during the three months ended March 31, 2025, compared to previous disclosures[118].

Financial Data and Key Metrics Changes - The company reported system-wide RevPAR growth of 2.5% year over year, driven by strong momentum from the end of the previous year [6] - Adjusted EBITDA was $795 million in the first quarter, up 6% year over year, exceeding the high end of guidance [15] - Diluted earnings per share adjusted for special items was $1.72 [16] Business Line Data and Key Metrics Changes - Group RevPAR increased more than 6% year over year, supported by growth in urban markets and company meetings [6] - Business transient RevPAR increased 2%, primarily from small and medium-sized businesses, which make up roughly 85% of the business transient mix [6] - Leisure transient RevPAR increased 1%, with robust performance in January followed by softening demand patterns [6] Market Data and Key Metrics Changes - In the Americas outside the U.S., first quarter RevPAR increased 7% year over year, driven by key events in Mexico and Brazil [17] - In Europe, RevPAR grew 2.6% year over year, with strong rate and occupancy growth in Continental Europe [18] - In the Asia Pacific region, first quarter RevPAR was flat year over year, with China experiencing a decline of 3.1% [19] Company Strategy and Development Direction - The company continues to expand its development pipeline, ending the quarter with more than 503,000 rooms, representing a 7% year-over-year increase [10] - The luxury and lifestyle categories accounted for 30% of all hotel openings in the quarter, with these portfolios approaching 1,000 hotels globally [9] - The company aims to deliver net unit growth of 6% to 7% in 2025, with nearly half of its pipeline under construction [12] Management's Comments on Operating Environment and Future Outlook - Management noted that broader macro uncertainty intensified in March, impacting demand, particularly in leisure [6] - The company expects second quarter RevPAR to be approximately flat versus the prior year quarter, with full-year expectations of flat to up 2% [7] - Management expressed optimism about long-term opportunities supported by a capital-light business model and favorable megatrends in travel [13] Other Important Information - The company was named the number one best company to work for in the U.S. by Great Place to Work and Fortune for the second consecutive year [13] - A cash dividend of $0.15 per share was paid during the first quarter, with a total expected return of approximately $3.3 billion to shareholders for the year [21][22] Q&A Session Summary Question: Concerns about recessionary environment - Management acknowledged the uncertainty in the market but expressed confidence in the stability of demand patterns and the potential for positive outcomes in the second half of the year [30][36] Question: Development environment amidst uncertainty - Management indicated that while developers are cautious, there has not been a significant impact on current projects, and they remain optimistic about future growth [44][50] Question: Impact of economic downturn on business - Management highlighted the resilience of the business model, emphasizing low leverage and strong access to liquidity, preparing for any potential downturn [56][58] Question: Economic intensity of deals in APAC and China - Management noted that the business in China continues to grow, with a focus on joint ventures and franchising, which allows for capital-light expansion [63][66] Question: Group performance outlook - Management remains optimistic about group performance leading the pack, despite some short-term booking softness due to uncertainty [72][76]

Core Viewpoint - Hilton Worldwide Holdings Inc. reported quarterly earnings of $1.72 per share, exceeding the Zacks Consensus Estimate of $1.61 per share, and showing an increase from $1.53 per share a year ago, indicating a positive earnings surprise of 6.83% [1] Financial Performance - The company posted revenues of $2.7 billion for the quarter ended March 2025, slightly missing the Zacks Consensus Estimate by 0.45%, but up from $2.57 billion year-over-year [2] - Over the last four quarters, Hilton has surpassed consensus EPS estimates four times and topped revenue estimates twice [2] Stock Performance - Hilton Worldwide shares have declined approximately 10.3% since the beginning of the year, compared to a 6% decline in the S&P 500 [3] - The current Zacks Rank for Hilton is 3 (Hold), indicating expected performance in line with the market in the near future [6] Earnings Outlook - The consensus EPS estimate for the upcoming quarter is $2.13 on revenues of $3.19 billion, and for the current fiscal year, it is $7.86 on revenues of $12.09 billion [7] - The estimate revisions trend for Hilton Worldwide is mixed, which may change following the recent earnings report [6] Industry Context - The Hotels and Motels industry is currently ranked in the top 31% of over 250 Zacks industries, suggesting a favorable outlook compared to the bottom 50% [8] - Empirical research indicates a strong correlation between near-term stock movements and trends in earnings estimate revisions, which can be tracked by investors [5]

Financial Performance - Diluted EPS for Q1 2025 was $1.23, with adjusted diluted EPS at $1.72, compared to $1.04 and $1.53 for Q1 2024, respectively [5]. - Net income for Q1 2025 was $300 million, an increase from $268 million in Q1 2024 [5]. - Adjusted EBITDA for Q1 2025 was $795 million, up from $750 million in Q1 2024 [5]. - Full year 2025 net income is projected to be between $1,707 million and $1,749 million [17]. - Full year 2025 Adjusted EBITDA is projected to be between $3,650 million and $3,710 million [17]. - Total revenues reported for Q1 2025 were $2,695 million, up from $2,573 million in Q1 2024, marking a growth of 4.7% [40]. - The net income margin improved to 11.1% in Q1 2025 from 10.4% in Q1 2024 [40]. - For the three months ending June 30, 2025, net income is projected to be between $454 million and $468 million, with diluted EPS expected to range from $1.88 to $1.94 [44]. - The company anticipates net income for the year ending December 31, 2025, to be between $1,702 million and $1,744 million, with diluted EPS ranging from $7.04 to $7.22 [44]. Operational Metrics - System-wide comparable RevPAR increased by 2.5% on a currency neutral basis for Q1 2025 compared to Q1 2024 [2]. - System-wide occupancy rate for Q1 2025 was 66.8%, an increase of 0.4 percentage points compared to Q1 2024 [28]. - Average Daily Rate (ADR) for Q1 2025 was $155.07, reflecting a 1.8% increase from Q1 2024 [28]. - Revenue Per Available Room (RevPAR) for Q1 2025 reached $103.59, up 2.5% year-over-year [28]. - The Middle East & Africa region had the highest occupancy rate at 70.8%, an increase of 2.1 percentage points year-over-year [28]. Development and Expansion - The development pipeline reached 503,400 rooms as of March 31, 2025, representing a 7% growth from the previous year [2]. - A total of 32,600 new rooms were approved for development in Q1 2025, with 186 hotels opened, resulting in 14,000 net room additions [6][7]. - The company has a pipeline of rooms under construction, indicating ongoing expansion efforts in its hotel portfolio [66]. Cash and Debt Management - As of March 31, 2025, total cash and cash equivalents were $807 million, including $76 million of restricted cash [8]. - The company’s net debt as of March 31, 2025, was $10,427 million, compared to $9,860 million at the end of 2024 [42]. - The long-term debt to net income ratio stood at 7.1 as of March 31, 2025 [42]. - Net debt is calculated as long-term debt minus cash and cash equivalents, providing insights into the company's indebtedness and financial leverage [59]. Cost Management - The company reported a decrease in contract acquisition costs, net of refunds, to $30 million in Q1 2025 from $37 million in Q1 2024, a decline of 18.9% [34]. - Total capital expenditures for Q1 2025 amounted to $40 million, a 17.6% increase from $34 million in Q1 2024 [34]. - Special items for the year ending December 31, 2025, include cost reimbursement revenues of $(1,630) million and reimbursed expenses of $1,759 million [44]. Performance Evaluation Metrics - Adjusted EBITDA and Adjusted EBITDA margin are key performance measures used by the company to evaluate operating performance and make decisions, excluding items like interest expense and depreciation that can vary widely across companies [56]. - Occupancy is a critical metric for the company, representing the total number of room nights sold divided by available room nights, which helps gauge demand and determine achievable Average Daily Rate (ADR) pricing levels [62]. - ADR, calculated as hotel room revenue divided by total room nights sold, provides insights into pricing levels and customer base, influencing overall revenues and profitability [63]. - Revenue per Available Room (RevPAR) is a significant performance indicator, calculated by dividing hotel room revenue by total available room nights, correlating with occupancy and ADR [64]. - The company excludes reimbursed revenues and expenses from its operating performance evaluation, as they do not impact net income in the reporting period [57]. - The long-term debt to net income (loss) ratio and net debt to Adjusted EBITDA ratio are non-GAAP measures used to assess financial leverage and are not substitutes for GAAP measures [60].

HLT's earnings beat the Zacks Consensus Estimate in the trailing four quarters, the average surprise being 5.1%. (Find the latest earnings estimates and surprises on Zacks Earnings Calendar.) Trend in Estimate Revision of HLT The Zacks Consensus Estimate for first-quarter earnings per share (EPS) is pegged at $1.61, indicating growth of 5.2% from the $1.53 reported in the year-ago quarter. For revenues, the consensus mark is pegged at $2.71 billion, suggesting growth of 5.2% from the prior-year quarter's re ...