Apple Hospitality REIT(APLE) - 2025 Q1 - Quarterly Results

Financial Performance - For Q1 2025, Apple Hospitality reported a net income of $31.2 million, down 42.2% from $54.1 million in Q1 2024[2] - Adjusted EBITDAre for Q1 2025 was approximately $95.4 million, a decrease of 5.4% compared to $100.8 million in Q1 2024[12] - Comparable Hotels Adjusted Hotel EBITDA was approximately $104.9 million for Q1 2025, down 5.4% from $110.9 million in Q1 2024[12] - Total revenue for Q1 2025 was $327.7 million, a decrease of 0.5% from $329.5 million in Q1 2024[35] - Operating income decreased by 29.0% to $50.9 million in Q1 2025 from $71.6 million in Q1 2024[38] - Comparable Hotels total revenue was $324.3 million, down 0.4% from $325.4 million in the same period last year[38] - Funds from operations (FFO) for Q1 2025 were $74,845, compared to $82,343 in Q1 2024, indicating a decrease of approximately 9%[61] - Comprehensive income for Q1 2025 was $24.2 million, down from $57.8 million in Q1 2024[35] Operational Metrics - The average daily rate (ADR) for Comparable Hotels increased by 1.0% to $156.56 in Q1 2025, while occupancy decreased by 1.5% to 71.1%[9] - The operating margin for Q1 2025 was 15.5%, down 620 basis points from 21.7% in Q1 2024[38] - Average Daily Rate (ADR) for Comparable Hotels increased by 1.0% to $156.56 in Q1 2025 from $155.05 in Q1 2024[38] - Occupancy rate for Comparable Hotels was 71.1%, a decrease of 1.5% from 72.2% in Q1 2024[38] - Revenue per Available Room (RevPAR) decreased slightly by 0.5% to $111.36 in Q1 2025 from $111.97 in Q1 2024[73] - In the top 30 markets, occupancy was 76.2% in Q1 2025, a decrease of 1.2% from 77.1% in Q1 2024[73] - The suburban location category had the highest occupancy at 71.7%, with a 0.4% increase from the previous year[76] Debt and Capital Management - The company maintained a total debt to total capitalization ratio of approximately 33% as of March 31, 2025[12] - As of March 31, 2025, the Company had approximately $1.5 billion of total outstanding debt with a weighted-average interest rate of approximately 4.8%[19] - The Company repaid a secured mortgage loan of approximately $7 million in April 2025, increasing the number of unencumbered hotels to 207[19] - Total debt as of March 31, 2025, is $1,540.26 million, with maturities of $293.001 million in 2025 and $352.649 million in 2026[67] - Average interest rates for total debt are 4.8% for 2025, 4.9% for 2026, and decreasing to 3.6% by 2029[67] Investments and Acquisitions - The company sold two hotels for a combined gross sales price of approximately $21 million during Q1 2025, with a gain of approximately $3.6 million[12] - Apple Hospitality has two hotels under contract for purchase with a total anticipated purchase price of approximately $117 million[13] - The Company anticipates acquiring the 126-room Homewood Suites by Hilton Tampa Brandon for approximately $18.8 million in June 2025[17] - The Company expects to acquire a Motto by Hilton in downtown Nashville, Tennessee, for approximately $98.2 million, with an expected 260 rooms, in late 2025[17] - The company invested approximately $20 million in capital expenditures during Q1 2025 and anticipates investing $80 million to $90 million in capital improvements throughout 2025[16] Shareholder Returns - Monthly distributions paid were $0.29 per common share, including a special cash distribution of $0.05 per share[12] - The Company paid distributions totaling $0.29 per common share during the three months ended March 31, 2025, representing an annual yield of approximately 8.1%[22] - The Company purchased approximately 1.9 million common shares at a weighted-average price of approximately $13.61 per share for a total of approximately $26.3 million during the three months ended March 31, 2025[20] Future Outlook - The Company updated its 2025 outlook, decreasing Net Income by $6.5 million and Adjusted EBITDAre by $14 million compared to previous guidance[23] - The anticipated range for 2025 Net Income is between $167 million and $195 million, with Comparable Hotels RevPAR Change guidance of -1.0% to 1.0%[23] - The Adjusted Hotel EBITDA guidance for 2025 is projected to be between $471,301 and $496,001[63] - For the year ending December 31, 2025, the net income guidance ranges from $166,534 to $194,834, with an EBITDA forecast between $440,742 and $464,442[63] Strategic Focus - The company emphasizes the importance of Adjusted Hotel EBITDA as a key performance measure for evaluating hotel operations and management effectiveness[55] - The company plans to focus on market and location metrics for more effective portfolio performance analysis moving forward[71] - The company operates a total of 218 hotels, with 123 in the top 30 markets contributing 79.4% of Adjusted Hotel EBITDA[73] - Los Angeles, CA, showed a significant occupancy increase of 7.8% to 86.1% in Q1 2025 compared to 79.9% in Q1 2024[73]