Hilton Grand Vacations (HGV)2025-05-01 20:18Sales and Revenue Performance - For the three months ended March 31, 2025, sales from fee-for-service and just-in-time inventory accounted for 15% and 10% of contract sales, respectively [123]. - The estimated contract sales value related to inventory currently available for sale is $13.2 billion, with capital efficient arrangements representing approximately 28% of that supply [123]. - For the three months ended March 31, 2025, 75% of contract sales were to existing owners, slightly down from 76% in the same period of 2024 [126]. - Real estate sales and financing revenues decreased by 6.1% from $687 million in Q1 2024 to $645 million in Q1 2025 [148]. - Resort operations and club management revenues increased by 8.6% from $360 million in Q1 2024 to $391 million in Q1 2025 [148]. - Total revenues for the company decreased by 0.7% from $1,156 million in Q1 2024 to $1,148 million in Q1 2025 [148]. - Sales of VOIs (Vacation Ownership Interests) decreased by $60 million or 13.7%, from $438 million in 2024 to $378 million in 2025 [161]. - Contract sales increased by $90 million or 14.3%, from $631 million in 2024 to $721 million in 2025, primarily due to a 14.4% increase in VPG (Volume Per Guest) [160]. Financial Metrics and Losses - Net loss attributable to stockholders increased from $4 million in Q1 2024 to $17 million in Q1 2025, a change of $13 million [148]. - Adjusted EBITDA attributable to stockholders decreased by 34.1% from $273 million in Q1 2024 to $180 million in Q1 2025 [148]. - The company reported a net loss of $12 million for Q1 2025 compared to a net loss of $2 million in Q1 2024 [148]. - Total segment revenues decreased by 1.1% from $1,047 million in Q1 2024 to $1,036 million in Q1 2025 [148]. - Adjusted EBITDA for the three months ended March 31, 2025, was $185 million, a decrease of $91 million or 33.0% compared to $276 million in 2024 [149]. - Net loss attributable to stockholders was $17 million for the three months ended March 31, 2025, compared to a net loss of $4 million in 2024, representing a $13 million increase in loss [153]. Expenses and Cost Management - Sales and marketing expense increased by $24 million or 6.0%, from $401 million in 2024 to $425 million in 2025 [156]. - Real estate profit decreased by $64 million or 47.8%, from $134 million in 2024 to $70 million in 2025, primarily due to decreased sales of VOIs [161]. - The provision for financing receivables losses increased by $8 million or 12.5%, from $64 million in 2024 to $72 million in 2025 [160]. - Fee-for-service commissions increased by $4 million or 6.3%, from $64 million in 2024 to $68 million in 2025 [161]. - The real estate profit margin decreased from 26.7% in 2024 to 15.7% in 2025, reflecting the impact of decreased sales and increased expenses [161]. - Share-based compensation expense increased by 33.3% from $9 million in Q1 2024 to $12 million in Q1 2025 [148]. - Acquisition and integration-related expenses decreased significantly by 74.3% from $109 million in Q1 2024 to $28 million in Q1 2025 [148]. Financing and Cash Flow - Financing propensity for the three months ended March 31, 2025, was 64%, compared to 65% for the same period in 2024 [127]. - The weighted-average FICO score for loans to U.S. and Canadian borrowers at the time of origination was 736 for 2025, down from 744 in 2024 [128]. - Financing profit increased by $5 million to $70 million for the three months ended March 31, 2025, compared to $65 million in 2024, driven by a $21 million increase in financing revenue [164][165]. - Financing revenue rose by $21 million to $125 million, primarily due to an increase in the weighted average outstanding balance of timeshare financing receivables and a decrease in premium amortization of $8 million [165]. - Financing expenses increased by $16 million to $55 million, mainly due to a $9 million rise in portfolio management expenses and a $6 million increase in consumer financing interest expense [166]. - Net cash provided by operating activities was $38 million for the three months ended March 31, 2025, compared to no cash provided in the same period in 2024 [180]. - Net cash used in investing activities was $32 million, significantly lower than $1,473 million in 2024, mainly due to the prior year's Bluegreen Acquisition [184]. - Net cash used in financing activities was $201 million, a decrease from $1,272 million in 2024, primarily due to reduced net proceeds from debt and increased share repurchases [185]. Company Operations and Market Presence - As of March 31, 2025, the company had approximately 725,000 members across its Club offerings, providing access to around 8,400 properties in the Hilton system [117]. - The company completed the acquisition of Bluegreen Vacations Holding Corporation on January 17, 2024, expanding its market presence [114]. - The company operates approximately 100 sales distribution centers in various domestic and international locations [124]. - The management fees earned from resort operations are highly predictable, typically ranging from 10% to 15% of the costs to operate the applicable resort [132]. - The company has signed a 10-year exclusive marketing agreement with Bass Pro, effective from the Bluegreen Acquisition Date, to market vacation packages [125]. - General and administrative expenses remained stable at $46 million, while depreciation and amortization rose by $5 million to $67 million, attributed to assets acquired in the Bluegreen Acquisition [171][172]. - The company has approximately $9,356 million in contractual obligations over 16 years, with $734 million due in the remainder of 2025 [186]. - The company has commitments from surety providers amounting to $669 million as of March 31, 2025, primarily consisting of escrow, subsidy, and construction-related bonds [187]. - The company is exposed to market risks from changes in interest rates and currency exchange rates, with no material change in exposure reported since the previous year [189].