Hilton(HLT) - 2024 Q1 - Quarterly Results

Financial Performance - Diluted EPS for Q1 2024 was $1.04, and adjusted diluted EPS was $1.53[2] - Net income for Q1 2024 was $268 million, and Adjusted EBITDA was $750 million[2] - Total revenues increased to $2.573 billion in Q1 2024, up 12.2% from $2.293 billion in Q1 2023[23] - Net income attributable to Hilton stockholders rose to $265 million in Q1 2024, compared to $206 million in Q1 2023, a 28.6% increase[23] - Net income attributable to Hilton stockholders increased to $265 million in Q1 2024 from $206 million in Q1 2023[35] - Diluted EPS increased to $1.04 in Q1 2024 from $0.77 in Q1 2023[35] - Adjusted EBITDA increased to $750 million in Q1 2024 from $641 million in Q1 2023[38] - Adjusted EBITDA margin improved to 70.4% in Q1 2024 from 67.8% in Q1 2023[39] - Net income for Q1 2024 increased to $268 million, up from $209 million in Q1 2023, representing a 28.2% year-over-year growth[43] - Adjusted EBITDA for Q1 2024 reached $750 million, compared to $641 million in Q1 2023, a 17% increase[43] - Share-based compensation expense for Q1 2024 was $41 million, up from $33 million in Q1 2023, a 24.2% increase[43] - Depreciation and amortization expenses for Q1 2024 were $36 million, slightly down from $37 million in Q1 2023[43] Development and Expansion - Hilton approved 29,800 new rooms for development in Q1 2024, bringing the total development pipeline to a record 472,300 rooms, a 10% increase from March 31, 2023[2] - Hilton added 16,800 rooms to its system in Q1 2024, resulting in 14,200 net additional rooms and a net unit growth of 5.6%[2] - Hilton announced the planned acquisition of the Graduate Hotels brand, expected to add approximately 35 franchised hotels in Q2 2024[2] - Hilton acquired a controlling financial interest in the Sydell Group, owner of the NoMad brand, marking its entry into the luxury lifestyle space[2] - Total system-wide properties reached 7,626, with 1,197,329 rooms as of March 31, 2024[28] - Total system includes 7,626 properties and 1,197,329 rooms, with the U.S. contributing 5,642 properties and 793,826 rooms[29] RevPAR and ADR Performance - System-wide comparable RevPAR increased 2.0% in Q1 2024 compared to Q1 2023[2] - System-wide RevPAR grew by 2.0% to $104.16 in Q1 2024, driven by a 1.7% increase in ADR to $154.91[26] - Middle East & Africa region showed the strongest RevPAR growth at 14.8%, with ADR increasing by 11.0% to $193.22[26] - Conrad Hotels & Resorts achieved a 14.6% increase in RevPAR to $204.67, supported by a 6.9% rise in ADR to $286.62[26] - Hampton by Hilton experienced a 1.7% decline in RevPAR to $81.93, despite a 0.7% increase in ADR to $123.94[26] - Management and franchise segment RevPAR increased by 1.8% to $103.78, with ADR up 1.6% to $154.36[26] - Ownership segment RevPAR surged by 14.0% to $133.64, driven by a 7.7% increase in ADR to $198.05[26] - Full-year 2024 system-wide RevPAR is projected to increase between 2.0% and 4.0% compared to 2023[2] Capital and Shareholder Returns - Hilton repurchased 3.4 million shares of common stock in Q1 2024, returning $701 million in capital to shareholders[2] - Capital expenditures decreased by 46.0% to $34 million in Q1 2024 compared to $63 million in Q1 2023[32] - Contract acquisition costs decreased by 64.8% to $37 million in Q1 2024 compared to $105 million in Q1 2023[32] Debt and Financial Leverage - Long-term debt increased to $10,173 million as of March 31, 2024, from $9,196 million as of December 31, 2023[42] - Net debt increased to $8,836 million as of March 31, 2024, from $8,392 million as of December 31, 2023[42] - Long-term debt as of March 31, 2024, stood at $10.173 billion, with a net debt to Adjusted EBITDA ratio of 2.8[43] - The company's net debt as of March 31, 2024, was $8.836 billion[43] - Net debt is calculated as long-term debt (including current maturities) minus cash, cash equivalents, and restricted cash, used to evaluate financial leverage[60] - Net debt to Adjusted EBITDA ratio is a non-GAAP measure used to assess indebtedness, frequently compared by analysts and investors[61] - Long-term debt to net income ratio is calculated as long-term debt (including current maturities) divided by net income, providing insights into financial leverage[60] Full-Year Projections - Full-year 2024 net income is projected to be between $1,586 million and $1,621 million, and Adjusted EBITDA is projected to be between $3,375 million and $3,425 million[2] - For the full year 2024, the company forecasts net income between $1.577 billion (low case) and $1.612 billion (high case)[48] - Adjusted EBITDA for 2024 is projected to be between $3.375 billion (low case) and $3.425 billion (high case)[53] - Diluted EPS for Q2 2024 is expected to range from $1.74 (low case) to $1.80 (high case)[47] - The company plans to exclude the effect of the planned acquisition of Graduate Hotels from its 2024 outlook[48] Operational Metrics and Definitions - Occupancy measures the utilization of available capacity, calculated as room nights sold divided by room nights available, used to gauge demand and determine achievable ADR pricing levels[63] - ADR (Average Daily Rate) represents average room price attained, calculated as hotel room revenue divided by room nights sold, providing insights into pricing environment and customer base[64] - RevPAR (Revenue per Available Room) is a key performance indicator, calculated as hotel room revenue divided by room nights available, reflecting occupancy and ADR trends[65] - Occupancy, ADR, and RevPAR metrics are presented on a comparable basis for the three months ended March 31, 2024, using currency-neutral exchange rates[66] - Comparable hotels as of March 31, 2024, totaled 6,347 out of 7,532 hotels in the system, with 1,185 non-comparable hotels including 421 removed due to large-scale capital projects, property damage, or business interruption[62] Non-GAAP Measures and Limitations - Adjusted EBITDA and Adjusted EBITDA margin are non-GAAP measures with limitations and should not be considered substitutes for GAAP financial performance metrics[60] - The company emphasizes that non-GAAP measures like net debt and Adjusted EBITDA ratios may not be comparable to similarly titled measures of other companies[61]