Core Insights - The hotel industry is experiencing a positive trend in pipeline growth, with notable year-over-year increases in room signings and net unit growth across major players [1][6][10] - Wyndham Hotels (WH) reported strong financial performance in 2Q24, with EBITDA growth of 13% year-over-year and revenue growth of 3.7%, indicating robust operational health [6][10] - The long-term outlook for the hotel industry remains favorable, driven by demographic trends and increasing travel demand, which supports revenue per available room (RevPAR) growth [7][10] Pipeline and Growth - WH's development pipeline grew to 245,000 rooms, marking a 7.5% year-over-year increase and the 16th consecutive year of growth [6] - The company signed 180 new development contracts in 2Q24, a 33% increase compared to 2Q23, reflecting strong demand in the market [6] - Other hotel chains, such as Marriott and InterContinental Hotels Group, also reported increases in their pipelines, with Marriott adding nearly 18,000 rooms, a 7% increase year-over-year [1][6] Financial Performance - WH's EBITDA for 2Q24 was $178 million, exceeding street estimates by $8 million, with a margin expansion from 43.6% in 2Q23 to 48.5% in 2Q24 [6] - The company expects to achieve a net unit growth of 6% to 6.5% for the full year, excluding planned additions [1][6] - WH's strong balance sheet, with total liquidity of $820 million and a manageable leverage ratio of 3.5x, supports ongoing capital return initiatives, including a $400 million share buyback program [2][6] RevPAR and Occupancy Trends - RevPAR growth for WH was 2% on a constant currency basis, with international RevPAR increasing by 7%, while domestic RevPAR remained flat [6][7] - The occupancy rates improved by approximately 100 basis points in 2Q24, indicating a recovery in demand [6] - Historical trends suggest RevPAR typically grows at 2-3%, and current dynamics indicate that demand may outpace supply, further supporting occupancy rate increases [7] Valuation and Investment Outlook - The target price for WH is set at $98, based on a projected 7% annual EBITDA growth and a $400 million annual buyback [3][9][10] - The total return, including dividend yield, is estimated to be close to 30% [9][10] - The overall sentiment remains positive for WH, with expectations of continued operational performance despite near-term macroeconomic uncertainties [10][13]

Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 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, 2024 or ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Commission File Number: 001-38432 Wyndham Hotels & Resorts, Inc. (Exact name of registrant as specified in its charter) (State or other jurisdiction ...

Financial Data and Key Metrics Changes - The company reported a 6% growth in comparable adjusted EBITDA and a 12% increase in adjusted diluted EPS for Q2 2024 [8][33] - Adjusted free cash flow was $69 million for the quarter and $171 million year-to-date, with a conversion rate from adjusted EBITDA of 54% [34] - The company returned over $250 million to shareholders year-to-date, including $131 million in share repurchases during Q2 [9][36] Business Line Data and Key Metrics Changes - The company opened over 18,000 rooms in Q2, a 16% increase in domestic openings compared to last year [10] - Domestic net room growth was driven by a 3% increase in midscale and above brands [11] - Internationally, net rooms grew by 8% year-over-year, with significant growth in EMEA and Latin America [13][21] Market Data and Key Metrics Changes - US RevPAR grew by 30 basis points year-over-year, with domestic occupancy finishing a point ahead of the prior year [18] - International RevPAR increased by 7% year-over-year in constant currency, with EMEA and Latin America showing strong growth of 15% and 37% respectively [21] - The company noted that occupancy in the US improved by 1% compared to the previous year, indicating a recovery trend [18][108] Company Strategy and Development Direction - The company is focused on expanding its development pipeline, which grew to a record 245,000 rooms, with a 33% increase in development deals signed in Q2 [10][56] - The introduction of the Wyndham Connect guest engagement platform aims to enhance guest experiences and drive ancillary revenue [23][26] - The company is committed to maintaining a strong balance sheet while pursuing growth opportunities, with a target leverage ratio of 3.5 times [39][85] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the recovery of the select service segments, projecting a 2.7% US RevPAR growth in 2025 [20] - The company anticipates flat year-over-year RevPAR growth for 2024, with adjusted EBITDA guidance remaining unchanged [40][41] - Management highlighted the resilience of the business model, emphasizing the ability to generate cash flow even in a softer RevPAR environment [47] Other Important Information - The company successfully repriced its Term Loan B, generating annual interest savings of approximately $6 million [39] - The marketing fund is expected to generate revenues that will outpace expenses in the second half of the year, offsetting first-half overspending [46] - The company reaffirmed its multi-year outlook through 2026, projecting an adjusted EBITDA CAGR of 7% to 10% [48] Q&A Session Summary Question: What is the outlook for rooms growth? - Management indicated that the current 4% growth is not the floor, with optimism for future growth driven by a strong pipeline and increased receptiveness from developers [50][56] Question: Can you elaborate on the updated RevPAR outlook? - The company expects similar trends in the US, with modest improvements in China and overall efficiency gains contributing to maintaining EBITDA guidance despite RevPAR reductions [59][62] Question: What is driving the increase in royalty rates? - The improvement in royalty rates is attributed to the signing of higher fee deals and the successful efforts of franchise sales and development teams [78][80] Question: How is the company addressing operating expenses in light of RevPAR trends? - Management has been disciplined with costs, reprioritizing investments based on expected RevPAR growth, and is flexible in adjusting spending as needed [125] Question: What is the strategy for the ECHO Suites brand? - The company is seeing significant interest and positive feedback from developers regarding the ECHO Suites, indicating a strong growth trajectory for this brand [99][102]

Company Insights - Wyndham Hotels & Resorts is investing in artificial intelligence (AI) to enhance guest experiences and improve operational efficiency [1][3] - The company reported a 7% year-over-year growth in its development pipeline, reaching a record 245,000 rooms [7][8] - Revenue per available room (RevPAR) increased by 2%, with flat growth in the U.S. and a 7% increase internationally [7] Financial Performance - The CEO highlighted the resilience and cash-generative nature of the business model, showcasing strong adjusted EBITDA driven by net room and ancillary fee growth [2][8] - The company awarded 33% more hotel contracts domestically, contributing to the growth of its development pipeline [8] Technological Advancements - Wyndham has implemented AI-generated messaging to facilitate communication between franchisees and guests via text [4] - The introduction of smart mobile check-in is aimed at speeding up the check-in process and reducing labor needs [9] Industry Trends - The Global Business Travel Association (GBTA) anticipates a significant increase in global business travel spending, projecting an 11.1% rise in 2024 to $1.48 trillion [6][11] - The travel sector is increasingly adopting AI tools, as evidenced by new platforms introduced by companies like AMGiNE and Altour [5][10]

Core Insights - Wyndham Hotels reported revenue of $367 million for the quarter ended June 2024, reflecting a year-over-year increase of 1.4% [1] - The company's EPS was $1.13, up from $0.93 in the same quarter last year, indicating a positive earnings performance [1] Financial Performance Metrics - The reported revenue of $367 million was below the Zacks Consensus Estimate of $371 million, resulting in a revenue surprise of -1.08% [3] - Wyndham delivered an EPS surprise of +8.65%, with the consensus EPS estimate being $1.04 [3] - Total Rooms stood at 884,900, slightly above the average estimate of 884,014 [4] - Total RevPAR was reported at $45.99, lower than the estimated $47.02 [4] - Fee-related and other revenues from royalties and franchise fees were $144 million, compared to the average estimate of $150.37 million, marking a year-over-year change of +1.4% [4] - Marketing, reservation, and loyalty revenues were $150 million, exceeding the average estimate of $148.96 million, with a year-over-year increase of +3.5% [4] - License and other fees generated $31 million, slightly above the estimated $30.80 million, representing a +6.9% change year-over-year [4] - Other fee-related revenues totaled $39 million, compared to the average estimate of $38.37 million, reflecting a +5.4% year-over-year change [4] - Management and other fees were reported at $2 million, below the average estimate of $2.58 million, indicating a significant year-over-year decline of -60% [4] Stock Performance - Shares of Wyndham have returned +1.4% over the past month, compared to the Zacks S&P 500 composite's +1.8% change [6] - The stock currently holds a Zacks Rank 3 (Hold), suggesting it may perform in line with the broader market in the near term [6]

Company Performance - Wyndham reported quarterly earnings of $1.13 per share, exceeding the Zacks Consensus Estimate of $1.04 per share, and showing an increase from $0.93 per share a year ago [7] - The company posted revenues of $367 million for the quarter ended June 2024, which was 1.08% below the Zacks Consensus Estimate, but an increase from $362 million in the same quarter last year [2] - Over the last four quarters, Wyndham has surpassed consensus EPS estimates four times [8] Stock Performance - Wyndham shares have declined approximately 7.9% since the beginning of the year, while the S&P 500 has gained 16.5% [3] - The current consensus EPS estimate for the upcoming quarter is $2.49, reflecting a year-over-year change of +10.2% [6] - The current consensus EPS estimate for the current fiscal year is $4.25 on revenues of $1.45 billion [5] Earnings Outlook - The estimate revisions trend for Wyndham is mixed, resulting in a Zacks Rank 3 (Hold) for the stock, indicating expected performance in line with the market [11] - Future stock price movements will largely depend on management's commentary during the earnings call [9] - The Hotels and Motels industry is currently ranked in the top 42% of Zacks industries, suggesting a favorable outlook compared to the bottom 50% [13]

Financial Performance - Adjusted EBITDA rose by 13% year-over-year to $178 million, with adjusted diluted EPS increasing by 22% to $1.13[2][10] - Net income for the second quarter was $86 million, a 23% increase compared to the prior-year quarter[2][10] - Net revenues for Q2 2024 were $367 million, a slight increase from $362 million in Q2 2023, while net revenues for the first half of 2024 totaled $671 million, down from $674 million in the same period last year[29] - Operating income for Q2 2024 was $145 million, compared to $123 million in Q2 2023, indicating a year-over-year increase of approximately 17.9%[29] - Net income for Q2 2024 was $86 million, up from $70 million in Q2 2023, representing a growth of 22.9%[29] - Adjusted EBITDA for the first half of 2024 was $141 million, compared to $147 million in the first half of 2023, reflecting a decrease of 4.1%[32] - The company reported a basic earnings per share of $1.07 for Q2 2024, up from $0.82 in Q2 2023, reflecting a growth of 30.5%[29] - Net income for the six months ended June 30, 2024, was $102 million, compared to $137 million for the same period in 2023, reflecting a decrease of 25.6%[51] - Adjusted net income for the three months ended June 30, 2024, was $91 million, an increase from $80 million in 2023, marking a growth of 13.8%[51] Development and Growth - System-wide rooms grew by 4% year-over-year, with over 18,000 rooms opened globally, including a 16% increase in the U.S.[2] - The development pipeline reached a record 245,000 rooms, reflecting a 7% year-over-year increase and a 33% rise in awarded contracts[2][4] - Approximately 70% of the development pipeline is in the midscale and above segments, which grew 4% year-over-year[4] - The global room count increased by 33,400 rooms, reaching 884,900 as of June 30, 2024, representing a 4% growth year-over-year[41] - The company added 31,200 rooms globally in the first half of 2024, a 11% increase from the previous year[41] - The total international room count increased by 29,100 rooms, reaching 385,500 as of June 30, 2024, an 8% growth year-over-year[41] - The number of rooms is expected to grow by 3% to 4% year-over-year[53] Cash Flow and Shareholder Returns - The company generated adjusted free cash flow of $69 million in the second quarter, ending with a cash balance of $70 million[12] - Free cash flow for Q2 2024 was $27 million, down from $92 million in Q2 2023, indicating a decline of 70.7%[35] - The company returned $162 million to shareholders through share repurchases and dividends, with $131 million allocated for share buybacks[2][15] - The adjusted free cash flow conversion rate is anticipated to be approximately 60%[53] Debt and Financial Outlook - Total debt increased to $2.427 billion as of June 30, 2024, from $2.201 billion at the end of 2023, marking an increase of approximately 10.3%[36] - The net debt leverage ratio increased to 3.5x as of June 30, 2024, compared to 3.2x at the end of 2023[38] - The company successfully repriced its Term Loan B Facility, reducing the interest rate by 60 basis points to SOFR plus 1.75%[2][14] - As of June 30, 2024, total outstanding debt amounts to $2.427 billion, with $1.445 billion maturing thereafter[39] - Full-year 2024 adjusted diluted EPS outlook is refined to $4.20 - $4.32, with adjusted net income expected between $338 million and $348 million[16] - The company projects adjusted net income for 2024 to be between $338 million and $348 million, with adjusted diluted EPS expected to range from $4.20 to $4.32[53] - Adjusted EBITDA for 2024 is forecasted to be between $690 million and $700 million[53] - The outlook for fee-related and other revenues in 2024 is estimated to be between $1,410 million and $1,430 million[53] - The company’s capital expenditures for 2024 are projected to be approximately $40 million[53] Revenue Per Available Room (RevPAR) - Global RevPAR increased by 2% in constant currency, with U.S. RevPAR remaining flat and international RevPAR growing by 7%[4] - For the three months ended June 30, 2024, the total RevPAR for the United States was $55.44, showing no percentage change compared to the previous year[43] - International RevPAR for the three months ended June 30, 2024, was $34.11, reflecting a 7% increase year-over-year[43] - The company experienced a 39% increase in RevPAR in Latin America for the six months ended June 30, 2024, reaching $50.41[43] - The average royalty rate for the United States increased by 9 basis points to 4.7%, while the global average rose by 4 basis points to 4.0%[43] Other Expenses - The company incurred payments related to hostile takeover defense amounting to $46 million in the first half of 2024[34] - Total adjustments before tax for the six months ended June 30, 2024, amounted to $72 million, significantly higher than $24 million in the same period of 2023[51]

Core Viewpoint - Wyndham Hotels & Resorts, Inc. is expected to report second-quarter 2024 results on July 24, with earnings anticipated to beat the Zacks Consensus Estimate by 4% based on previous performance [1] Q2 Estimates - The Zacks Consensus Estimate for second-quarter 2024 earnings is $1.05, compared to adjusted earnings of 93 cents in the prior-year quarter [2] - Revenue estimates are pegged at $373.9 million, indicating a 3.3% year-over-year increase [2] Factors to Note - The company's results are likely supported by expansion efforts and the integration of AI across operations, enhancing efficiency and service quality [3] - AI is utilized in call centers for real-time coaching and call handling, allowing agents to focus more on guest assistance [3] - Wyndham is focused on expanding its geographic footprint and product offerings through a diversified brand portfolio and disciplined capital allocation strategy [4] Revenue Estimates - The consensus estimate for Marketing, reservation and loyalty revenues is $150 million, reflecting a 6.3% year-over-year increase [5] - Royalties and franchise fees revenues are estimated at $151 million, up 3.4% year over year [5] Earnings Prediction Model - The model predicts an earnings beat for Wyndham, supported by a positive Earnings ESP of +0.11% and a Zacks Rank of 3 (Hold) [6]

Cash flow can come from bond interest, interest from other types of investments, and of course, dividends. A dividend is the distribution of a company's earnings paid out to shareholders; it's often viewed by its dividend yield, a metric that measures a dividend as a percent of the current stock price. Many academic studies show that dividends make up large portions of long-term returns, and in many cases, dividend contributions surpass one-third of total returns. Big, established firms that have more secur ...

Core Viewpoint - The upcoming earnings report for Wyndham Hotels is anticipated to influence its stock price significantly, with expectations of a year-over-year earnings increase and higher revenues, but actual results will determine the stock's movement [1][6]. Earnings Expectations - Wyndham Hotels is expected to report quarterly earnings of $1.05 per share, reflecting a year-over-year increase of +12.9% [2]. - Revenues are projected to be $373.9 million, which is a 3.3% increase from the same quarter last year [14]. Estimate Revisions - The consensus EPS estimate has been revised 0.81% lower in the last 30 days, indicating a reassessment by analysts [3]. - The Most Accurate Estimate for Wyndham is higher than the Zacks Consensus Estimate, resulting in a positive Earnings ESP of +0.11%, suggesting a bullish outlook from analysts [18][19]. Earnings Surprise Prediction - The Zacks Earnings ESP model indicates that a positive Earnings ESP is a strong predictor of an earnings beat, especially when combined with a solid Zacks Rank [17]. - Wyndham has a Zacks Rank of 3, which suggests a neutral outlook, but the positive Earnings ESP indicates a likelihood of beating the consensus EPS estimate [9][19]. Historical Performance - In the last four quarters, Wyndham has consistently beaten consensus EPS estimates, achieving a surprise of +4% in the most recent quarter [10][21].