Core Viewpoint - Service Properties Trust is conducting its Q2 2025 earnings conference call to discuss business performance and future outlook [2][3]. Group 1: Company Overview - The conference call features key company executives including Chris Bilotto (President and CEO), Jesse Abair (Vice President), and Brian Donley (CFO) [3]. - The call is being recorded and is intended for investors and analysts to gain insights into the company's performance [2]. Group 2: Forward-Looking Statements - The conference call includes forward-looking statements as defined by the Private Securities Litigation Reform Act of 1995, indicating that actual results may differ from projections [4]. - The company does not commit to revising or publicly releasing updates to the forward-looking statements made during the call [5].

Financial Data and Key Metrics Changes - For Q2 2025, normalized funds from operations (FFO) were $57.6 million or $0.35 per share, down from $0.45 per share in the prior year quarter [20] - Adjusted EBITDAre decreased by $7.7 million year over year to $163.8 million, primarily impacted by an $8.8 million increase in interest expense and lower hotel returns [20] - The gross operating profit margin percentage declined by 300 basis points to 30.2% [20] Business Line Data and Key Metrics Changes - Hotel level EBITDA declined during the quarter due to elevated labor costs and inflationary pressures, with a notable $2.4 million of negative EBITDA attributed to renovation disruptions [11][20] - The 84 hotels expected to be retained generated RevPAR of $121, an increase of 1.5% year over year, but adjusted hotel EBITDA decreased by $7 million or 11.7% year over year [21] - The net lease portfolio consists of 742 service-oriented retail net lease properties with annual minimum rents of $387 million, over 97% leased with a weighted average lease term of 7.6 years [16] Market Data and Key Metrics Changes - RevPAR increased by 40 basis points year over year, outperforming the broader industry by 90 basis points [10] - The company is on track to complete 122 hotel sales totaling nearly 16,000 keys for gross proceeds of $966 million, implying a valuation of 18.4 times hotel EBITDA of $53 million over the trailing twelve months [9][20] Company Strategy and Development Direction - The company is transforming towards becoming a predominantly net lease REIT, focusing on divesting select hotels while retaining full-service, urban, and leisure-oriented properties [7][13] - The strategic shift aims to create a portfolio with minimal capital expenditure needs and stable cash flows, enhancing tenant and geographic diversity [14][18] - The company plans to maintain its capital recycling and deleveraging strategy into 2026, pursuing further hotel dispositions as market conditions improve [13] Management's Comments on Operating Environment and Future Outlook - Management noted softness in Q3, particularly in August, with expectations for a seasonal drop in leisure travel activity [28][29] - The company anticipates a sequential decline in Q3 due to seasonality and recent headwinds in the travel and lodging industries, projecting RevPAR of $98 to $101 [22] - Management expressed confidence in the pricing achieved for hotel sales, indicating strong participation in those assets [55] Other Important Information - The company fully drew down its $650 million credit facility as a precautionary measure to preserve liquidity [24] - The expected proceeds from the sale of 114 hotels will be used to repay $450 million of senior unsecured notes maturing in October 2026 [24] - Capital expenditures for 2025 are expected to be approximately $250 million, with a significant reduction to $150 million in 2026 [26] Q&A Session Summary Question: Can you expand on the renovation disruption in Q3 and headwinds in travel and lodging? - Management noted softness in Q3, particularly in August, with a seasonal drop in leisure travel expected [28][29] Question: Is the $150 million CapEx for 2026 elevated compared to normal? - Management indicated that the $150 million represents a significant reduction from previous years, aiming for a long-term CapEx run rate closer to 10% to 12% of total revenues [30][31] Question: What is the status of the $900 million hotel sales? - Management confirmed that due diligence is complete, and deposits are hard, with incremental closings expected between Q3 and Q4 [48][49] Question: What is the outlook for net lease investments? - Management indicated that net lease acquisitions could ramp up post-closing of hotel dispositions, with a steady state expected based on current run rates [45][46] Question: How does the company plan to address debt maturities? - Management plans to use proceeds from asset sales and operational improvements to address upcoming debt maturities [61][62]

Core Insights - Service Properties (SVC) reported revenue of $503.44 million for the quarter ended June 2025, reflecting a year-over-year decline of 1.9% [1] - The earnings per share (EPS) for the same period was $0.35, a significant improvement from -$0.45 a year ago [1] - The reported revenue exceeded the Zacks Consensus Estimate of $497.77 million by 1.14%, while the EPS surprise was 2.94% compared to the consensus estimate of $0.34 [1] Revenue Breakdown - Hotel operating revenues were $404.41 million, slightly above the average estimate of $397.67 million, but represented a year-over-year decline of 2% [4] - Rental income was reported at $99.03 million, which was below the average estimate of $100.12 million, showing a year-over-year decrease of 1.4% [4] Stock Performance - Over the past month, shares of Service Properties have returned +3.5%, outperforming the Zacks S&P 500 composite's +1% 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]

Financial Performance - Service Properties (SVC) reported quarterly funds from operations (FFO) of $0.35 per share, exceeding the Zacks Consensus Estimate of $0.34 per share, but down from $0.45 per share a year ago, indicating a FFO surprise of +2.94% [1] - The company posted revenues of $503.44 million for the quarter ended June 2025, surpassing the Zacks Consensus Estimate by 1.14%, although this is a decrease from year-ago revenues of $512.95 million [2] Market Performance - Service Properties shares have increased approximately 3.5% since the beginning of the year, compared to the S&P 500's gain of 7.6% [3] - The current status of estimate revisions for Service Properties is mixed, resulting in a Zacks Rank 3 (Hold), suggesting the stock is expected to perform in line with the market in the near future [6] Future Outlook - The current consensus FFO estimate for the upcoming quarter is $0.30 on revenues of $474.76 million, and for the current fiscal year, it is $0.86 on revenues of $1.86 billion [7] - The outlook for the REIT and Equity Trust - Other industry is currently in the top 40% of over 250 Zacks industries, indicating a favorable environment for performance [8]

Table of Contents FORM 10-Q ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended June 30, 2025 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 Commission File Number 1-11527 SERVICE PROPERTIES TRUST (Exact Name of Registrant as Specified in Its Charter) UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 (State or Other Jurisdiction of Incorporation or Organization) Maryland ...

Exhibit 99.2 Table of Contents | QUARTERLY RESULTS | | | | --- | --- | --- | | | Service Properties Trust Announces Second Quarter 2025 Financial Results. www.management.com works of the consisted on the Second Quarter 2025 Highlights | 415 | | FINANCIALS | | | | | Key Financial Data... | | | | Condensed Consolidated Statements of Income (Loss) | 5 10 100 | | | Condensed Consolidated Balance Sheets | | | | Debt Summary . | 11 | | | Debt Maturity Schedule | 12 | | | Leverage Ratios, Coverage Ratios and Debt ...

Strategic Transformation - SVC is transforming into a majority net lease REIT by selling a significant portion of its hotel portfolio[10, 18] - Anticipated gross proceeds from hotel sales in 2025 are $966 million[21] - Net lease assets will represent 71% of pro forma Adjusted EBITDAre for LTM 2Q25 after the hotel sales[21] - 114 hotels (14,925 keys) are earmarked for sale in 2H25, with $900 million under binding agreement[21] Financial Highlights - SVC's LTM Adjusted EBITDAre is $565.238 million[147] - Pro Forma Net Debt / LTM Adjusted EBITDAre is expected to be 93x after hotel dispositions[40] - SVC has $60 billion of unencumbered assets pro forma for anticipated hotel dispositions[45] Net Lease Portfolio - The net lease portfolio has 742 properties with $3865 million in annualized minimum rent[13] - TravelCenters of America (TA) accounts for 68% of annualized minimum net lease rents as of 2Q25[21] - Approximately 97% of net leases have embedded growth through contractual rent escalators[21] Hotel Portfolio - The pro forma hotel portfolio will consist of 84 hotels with 19,942 keys[23, 29] - The pro forma hotel portfolio is expected to generate $144 million in EBITDA[29] - The ADR for the pro forma hotel portfolio is expected to be $17180 and RevPAR is expected to be $10840[29]

Summary of Service Properties Trust (SVC) Conference Call Company Overview - Service Properties Trust (SVC) primarily operates in the lodging and net lease sectors, with a portfolio of over 200 hotels and more than 700 net lease properties, focusing on travel centers and necessity-based retail [3][4] Key Points Portfolio Strategy - SVC is undergoing a repositioning strategy, divesting certain hotel assets to focus more on a net lease strategy, particularly full-service hotel operations [4] - The company is actively marketing 123 hotels, with 114 focused service hotels being a significant part of the divestment strategy [11][12] - The divestment process has seen considerable interest, with 50 groups initially offering on the portfolio, narrowed down to four potential buyers [12] Financial Performance - RevPAR (Revenue per Available Room) grew modestly by over 2.5%, impacted by renovations and labor cost increases [6][7] - The hotel industry is facing challenges, including a pullback in RevPAR and softness in international travel, particularly affecting government contract revenues [8][9] Use of Proceeds - Proceeds from hotel sales, estimated at $800 million, will primarily be used to repay maturing senior notes and potentially reduce other debts [15][16] - The company aims to improve its balance sheet and leverage, targeting a reduction of leverage by one full turn post-divestment [43] Travel Center Assets - The travel center assets are considered the "crown jewels" of SVC's portfolio, with leases guaranteed by British Petroleum (BP) [22][24] - Despite recent challenges in fuel margins and freight demand, SVC remains confident in the long-term value of these assets [27] Net Lease Strategy - SVC's net lease portfolio includes over 700 properties, primarily consisting of quick-service restaurants (QSRs) and grocery stores [28][29] - The company is looking to expand its net lease acquisitions, with a pipeline of $40 million to $50 million under contract [29][30] Future Outlook - SVC anticipates that the remaining hotel portfolio will consist of 83 hotels, predominantly full-service, which are expected to yield better performance post-renovation [18][20] - The company is focused on maintaining a diversified REIT structure while emphasizing growth in the net lease sector [50][51] Capital Expenditures - Significant capital expenditures are planned, with $300 million spent in 2024 and $250 million projected for the current year, primarily on renovations [47][48] - The company expects capital expenditures to normalize after mid-2026 [49] Dividend Policy - Currently, SVC pays a minimal dividend of one cent per quarter, with future increases contingent on improved EBITDA and successful completion of asset sales [44][45] Transition Narrative - SVC is viewed as a transition story, focusing on deleveraging and enhancing the value of its portfolio, with a goal to narrow the discount to NAV (Net Asset Value) [52][53] Additional Insights - The company is strategically positioned to benefit from a strong buyer pool for its hotel assets, which may lead to favorable pricing [35] - Future growth will be supported by a flexible financing structure through a master trust, enhancing capital deployment opportunities [31][39]

Group 1 - Hotel REITs experienced significant declines during the Q1 earnings season, with 7 out of 15 U.S. hotel REITs lowering their FFO guidance, indicating a challenging environment for the sector [1] - Forward bookings have softened due to increased uncertainty, particularly affecting group bookings, which have shown notable weakness [1] - The overall performance of hotel REITs suggests a cautious outlook as the market navigates these challenges [1]

Financial Data and Key Metrics Changes - For Q1 2025, normalized FFO was $10.8 million or $0.07 per share, down from $0.13 per share in the prior year quarter [24] - Adjusted EBITDAre increased slightly year over year to $115.8 million [24] - Comparable hotel RevPAR grew by 2.6% year over year, with gross operating profit margin percentage declining by 330 basis points to 21.4% [24] Business Line Data and Key Metrics Changes - Comparable hotel RevPAR growth was supported by occupancy and ADR gains, with a 10.6% increase in RevPAR for the select service portfolio, primarily driven by occupancy growth in Hyatt Place and Sonesta Select hotels [11][10] - Full service hotels reported a 1.9% increase in RevPAR, while extended stay portfolio RevPAR was essentially flat due to renovation impacts [10][11] - Adjusted hotel EBITDA for the hotel portfolio was $23 million, a decline of 20.5% year over year, primarily due to renovations and increased costs [24] Market Data and Key Metrics Changes - The lodging portfolio experienced a softening in RevPAR as the quarter progressed, influenced by reduced government and international travel [8] - Group revenue pace increased by 6.5% year over year, indicating a positive trend despite overall market challenges [35] Company Strategy and Development Direction - The company plans to sell 123 hotels in 2025 with estimated proceeds of $1.1 billion to strengthen the balance sheet and reinvest in growth opportunities [9][14] - A strategic shift towards increasing net lease exposure is anticipated, with a target to adjust the investment composition from 56% lodging assets to 54% net lease properties [16] - The company aims to optimize its portfolio through asset sales and reinvestment in high-potential hotels, while gradually expanding net lease acquisitions [12][16] Management's Comments on Operating Environment and Future Outlook - Management noted ongoing macroeconomic uncertainties but expressed confidence in the resilience of the net lease portfolio and the potential for long-term value creation through portfolio optimization initiatives [16] - The company expects challenges in the travel and lodging industries to impact key segments, but anticipates a seasonal benefit in Q2 [27] Other Important Information - The company is monitoring potential impacts from tariffs on capital improvement costs and supply chain uncertainties [29] - The net lease portfolio was nearly 98% leased with a weighted average lease term of eight years, providing steady cash flow [18] Q&A Session Summary Question: Can you walk us through the RevPAR trends in the quarter? - Management indicated that RevPAR started strong in January but showed deceleration by March, with preliminary April numbers indicating a 1% year-over-year decrease [32][33] Question: What is the impact of international and government business on demand? - Approximately 30% of the portfolio is in top markets affected by international travel, with a modest decrease in government business noted [34][35] Question: How confident is the company in completing hotel sales at the expected price? - Management expressed confidence due to a robust selection process and strong buyer interest, with transactions expected to occur in phases [36][38] Question: Will the company continue to have hotel exposure in the future? - Management confirmed that while there will be a shift towards net lease properties, the company will maintain hotel exposure to drive EBITDA [41][43] Question: What is the outlook for the Sonesta stake? - The company believes the value of its 34% stake in Sonesta will grow as Sonesta transitions to a franchise model, enhancing margins [50][51]