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]

Financial Data and Key Metrics Changes - Adjusted EBITDA was $976 million in Q3 2025, up 8% year over year, exceeding the high end of guidance [20] - System-wide RevPAR decreased approximately 1% year over year, with U.S. RevPAR down 2.3% [5][20] - Diluted earnings per share adjusted for special items was $2.11 [20] Business Line Data and Key Metrics Changes - Leisure transient RevPAR was roughly flat, while business transient RevPAR decreased approximately 1% [6][7] - Group RevPAR decreased approximately 4%, but group demand showed signs of strengthening for Q4 and 2026 [7] - Management franchise fees grew 5.3% year over year [20] Market Data and Key Metrics Changes - In the Americas outside the U.S., third quarter RevPAR increased 4.3% year over year [22] - Europe saw a 1% increase in RevPAR, while the Middle East and Africa experienced a 9.9% increase [23] - Asia Pacific RevPAR was up 3.8% excluding China, but declined 3.1% in China due to government travel policies [24] Company Strategy and Development Direction - The company opened 199 hotels totaling over 24,000 rooms in Q3, achieving net unit growth of 6.5% [9] - The launch of the Outset Collection by Hilton aims to capture the conversion opportunity in the upper mid-scale to upscale segment [12] - The development pipeline now exceeds 515,000 rooms, with nearly half under construction [14] Management's Comments on Operating Environment and Future Outlook - Management remains optimistic about economic growth in the U.S. due to lower interest rates and favorable regulatory conditions [8] - Expectations for RevPAR growth in 2025 are flat to up 1%, with a projected increase in group demand and easier year-over-year comparisons [7][25] - The company is focused on driving efficiencies through technology and AI to enhance profitability for owners [18][41] Other Important Information - The company expects to return approximately $3.3 billion to shareholders through buybacks and dividends for the full year [5][26] - A cash dividend of $0.15 per share was paid during Q3, totaling $108 million for the year to date [26] Q&A Session Summary Question: Thoughts on the timeline for improvement in the operating environment - Management believes the setup for 2026 looks better, with expectations for economic growth and easier comparisons [29][32] Question: Opportunities in AI and partnerships - The company is exploring AI use cases to improve efficiencies and enhance customer experience [48][49] Question: Net unit growth expectations - The acceleration in net unit growth is attributed to a recovery in the development cycle post-COVID, with nearly 40% expected from conversions [58][60] Question: Balancing luxury investments - Luxury remains important for the brand's halo effect, but the company will continue to invest sensibly [66][72] Question: System-wide fee reductions for owners - The initiative aims to support owners during challenging times and incentivize product quality improvements [80][84]

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Core Insights - Hilton Hotels reported a third-quarter revenue increase of 8.7% to $3.12 billion, surpassing analyst expectations of $2.99 billion [1] - Adjusted earnings per share (EPS) were $2.11, exceeding the analyst forecast of $2.05 [1] - Revenue per available room (RevPAR) decreased by 1.1%, while analysts had anticipated a decline of 0.8% [1] Financial Performance - Total revenue for the third quarter reached $3.12 billion, reflecting an 8.7% year-over-year growth [1] - Adjusted EPS was reported at $2.11, higher than the expected $2.05 [1] - RevPAR saw a slight decline of 1.1%, contrasting with the expected decrease of 0.8% [1] Future Outlook - Hilton anticipates that RevPAR will remain flat or grow by 1% for the full year, compared to the analyst expectation of a 0.4% increase [1] - The company projects adjusted EPS to be between $7.97 and $8.06, which is above the previous forecast of $6.82 to $6.99 and higher than the analyst expectation of $7.99 [1]

Core Insights - The travel economy is experiencing a significant boom, particularly benefiting companies like Hilton and Delta, driven by upper-income consumers willing to spend more on travel experiences [1] Hilton - Hilton reported a net income of $421 million and adjusted EBITDA of $976 million for Q3 2025, with a slight decline of about 1% in system-wide revenue per available room [2] - The company added nearly 25,000 rooms and approved a record 33,000 for development, increasing its global pipeline to over 500,000 rooms, a 5% increase from the previous year [2] - Hilton is focusing on the luxury market, adding three high-end hotels weekly and reopening iconic properties like the New York Waldorf-Astoria, capitalizing on affluent travelers' spending [3] - The company views the AI boom as a long-term tailwind that will increase demand for hotel stays, as the growth in tech infrastructure requires accommodations for a large workforce [4] Delta Air Lines - Delta reported record revenue of $15.2 billion and earnings of $1.71 per share, maintaining steady costs and reducing debt [5] - Approximately 60% of Delta's revenue now comes from premium cabins, business travelers, and its partnership with American Express, up from less than half before 2020 [5] Consumer Trends - There is a notable divide in the consumer economy, with high earners, who account for about half of U.S. spending, continuing to book luxury travel options, while lower-income consumers are pulling back [6] - Luxury and upper-middle brands in travel and leisure are thriving, contrasting with struggles in other consumer discretionary sectors [6] - Hilton returned over $3 billion in cash to shareholders this year, while Delta raised its full-year forecast, indicating strong performance in the high-end travel market [7]

Hotel giant beats its earnings target and raises its profit outlook as its predicts less sluggish revenue per room figures ahead ...

Core Insights - Hilton Worldwide Holdings Inc. reported quarterly earnings of $2.11 per share, exceeding the Zacks Consensus Estimate of $2.03 per share, and showing an increase from $1.92 per share a year ago, resulting in an earnings surprise of +3.94% [1] - The company generated revenues of $3.12 billion for the quarter ended September 2025, surpassing the Zacks Consensus Estimate by 3.46%, and up from $2.87 billion year-over-year [2] - Hilton Worldwide has outperformed consensus EPS estimates in all four of the last quarters and has topped revenue estimates three times in the same period [2] Earnings Outlook - The future performance of Hilton Worldwide's stock will largely depend on management's commentary during the earnings call and the trends in earnings estimate revisions [3][4] - The current consensus EPS estimate for the upcoming quarter is $2.01 on revenues of $3.04 billion, while for the current fiscal year, the estimate is $7.93 on revenues of $11.9 billion [7] Industry Context - The Hotels and Motels industry, to which Hilton belongs, is currently ranked in the bottom 35% of over 250 Zacks industries, indicating potential challenges ahead [8] - Empirical research suggests a strong correlation between near-term stock movements and trends in earnings estimate revisions, which could impact Hilton's stock performance [5][6] Competitor Insights - Marriott International, a competitor in the same industry, is expected to report quarterly earnings of $2.38 per share, reflecting a year-over-year increase of +5.3%, with revenues anticipated to be $6.47 billion, up 3.5% from the previous year [9][10]