Xenia Hotels & Resorts(XHR) - 2025 Q2 - Quarterly Results

Overall Financial & Operational Highlights Second Quarter 2025 Performance The company achieved strong Q2 2025 results with significant growth in Net Income, Adjusted EBITDAre, and FFO per share, alongside a 4.0% increase in Same-Property RevPAR Q2 2025 Key Financial & Operating Metrics (vs. Q2 2024) | Metric | Q2 2025 | Change vs. Q2 2024 | | :--- | :--- | :--- | | Net Income | $55.2 million | +259.6% | | Adjusted EBITDAre | $79.5 million | +16.3% | | Adjusted FFO per Diluted Share | $0.57 | +9.6% | | Same-Property Occupancy | 72.3% | +140 bps | | Same-Property ADR | $270.42 | +2.0% | | Same-Property RevPAR | $195.51 | +4.0% | | Same-Property Hotel EBITDA Margin | 29.4% | +269 bps | - Sold the 545-room Fairmont Dallas for $111.0 million in April[5] - Repurchased 2,948,912 shares of common stock for approximately $35.7 million at a weighted-average price of $12.10 per share[5] - Declared a second-quarter dividend of $0.14 per share[5] Year-to-Date 2025 Performance Year-to-date 2025, the company achieved robust growth with a 14.1% increase in Adjusted EBITDAre and a 13.7% rise in Adjusted FFO per share, alongside a 5.4% Same-Property RevPAR increase YTD 2025 Key Financial & Operating Metrics (vs. YTD 2024) | Metric | YTD 2025 | Change vs. YTD 2024 | | :--- | :--- | :--- | | Net Income | $70.7 million | +196.3% | | Adjusted EBITDAre | $152.5 million | +14.1% | | Adjusted FFO per Diluted Share | $1.08 | +13.7% | | Same-Property Occupancy | 71.0% | +180 bps | | Same-Property ADR | $272.88 | +2.7% | | Same-Property RevPAR | $193.66 | +5.4% | | Same-Property Hotel EBITDA Margin | 28.2% | +157 bps | - Year-to-date, the company repurchased 5,682,061 shares of common stock for approximately $71.5 million at a weighted-average price of $12.58 per share[8] CEO Commentary CEO Marcel Verbaas noted Q2 results exceeded expectations due to the Grand Hyatt Scottsdale renovation and strong group business, leading to an 11% Same-Property Total RevPAR increase, prompting raised full-year guidance - Q2 results were driven by the recently renovated Grand Hyatt Scottsdale Resort and strong group business, leading to an 11% increase in Same-Property Total RevPAR[7] - Outperformance was largely due to higher-than-expected, highly-profitable catering revenues and lower-than-expected expense growth[7] - The outlook for the second half of 2025 is consistent with prior expectations, with strong group business expected in Q4, slow corporate transient recovery, and normalizing leisure demand[7] - Full-year guidance for Adjusted EBITDAre and Adjusted FFO has been increased to reflect Q2 outperformance[7] Financial Performance Operating Results Operating results for Q2 and YTD 2025 showed substantial profitability growth, with Q2 Net Income surging 259.6% to $55.2 million, driven by improved Same-Property performance and a 22.2% increase in Hotel EBITDA Q2 2025 vs Q2 2024 Operating Results | Metric | Q2 2025 | Q2 2024 | % Change | | :--- | :--- | :--- | :--- | | Net Income (in thousands) | $55,157 | $15,338 | 259.6% | | Net Income per Share | $0.56 | $0.15 | 273.3% | | Same-Property RevPAR | $195.51 | $187.95 | 4.0% | | Same-Property Total RevPAR | $354.50 | $319.44 | 11.0% | | Same-Property Hotel EBITDA (in thousands) | $84,027 | $68,747 | 22.2% | YTD 2025 vs YTD 2024 Operating Results | Metric | YTD 2025 | YTD 2024 | % Change | | :--- | :--- | :--- | :--- | | Net Income (in thousands) | $70,742 | $23,872 | 196.3% | | Net Income per Share | $0.71 | $0.23 | 208.7% | | Same-Property RevPAR | $193.66 | $183.82 | 5.4% | | Same-Property Total RevPAR | $349.85 | $316.07 | 10.7% | | Same-Property Hotel EBITDA (in thousands) | $158,477 | $135,874 | 16.6% | Liquidity and Balance Sheet As of June 30, 2025, the company maintained strong liquidity of approximately $673 million, with total outstanding debt at $1.4 billion and total assets increasing to $2.88 billion - Total liquidity as of June 30, 2025, was approximately $673 million, comprising $173 million in cash and full availability on the revolving line of credit[11] - Total outstanding debt stood at approximately $1.4 billion with a weighted-average interest rate of 5.67%[11] Balance Sheet Summary (in thousands) | Account | June 30, 2025 | Dec 31, 2024 | | :--- | :--- | :--- | | Total Assets | $2,875,087 | $2,831,616 | | Total Liabilities | $1,613,138 | $1,551,283 | | Total Equity | $1,261,949 | $1,280,333 | Statements of Operations Q2 2025 total revenues increased to $287.6 million, with operating income rising to $40.2 million, further enhanced by a $40.0 million gain on property sales, resulting in a net income of $58.6 million Q2 2025 vs Q2 2024 Statement of Operations (in thousands) | Account | Q2 2025 | Q2 2024 | | :--- | :--- | :--- | | Total Revenues | $287,579 | $272,904 | | Total Hotel Operating Expenses | $190,950 | $185,819 | | Operating Income | $40,218 | $30,267 | | Gain on sale of investment properties | $39,953 | $0 | | Net Income | $58,561 | $16,113 | YTD 2025 vs YTD 2024 Statement of Operations (in thousands) | Account | YTD 2025 | YTD 2024 | | :--- | :--- | :--- | | Total Revenues | $576,506 | $540,392 | | Total Hotel Operating Expenses | $386,497 | $368,845 | | Operating Income | $76,082 | $57,893 | | Gain on sale of investment properties | $39,953 | $0 | | Net Income | $75,068 | $25,080 | Strategic & Capital Activities Capital Markets Activities In Q2, the company repurchased $35.7 million of common stock, bringing year-to-date repurchases to $71.5 million, with an additional $100 million authorized for future repurchases - In Q2, repurchased 2,948,912 shares for approximately $35.7 million at an average price of $12.10 per share[12] - Year-to-date, repurchased 5,682,061 shares for approximately $71.5 million at an average price of $12.58 per share[12] - The Board of Directors authorized an additional $100 million for share repurchases in Q2 2025, leaving $146.4 million in remaining capacity[14] Transaction Activity In April, the company sold the 545-room Fairmont Dallas for $111.0 million, achieving an 8.6x Hotel EBITDA multiple and a 10.0% capitalization rate on Net Operating Income - Sold the 545-room Fairmont Dallas for $111.0 million, or approximately $203,670 per key[15] - The sale price represented an 8.6x multiple on Hotel EBITDA and a 10.0% capitalization rate on NOI, excluding an estimated $80 million of near-term capital expenditures[15] Capital Expenditures The company invested $18.5 million in Q2 and $50.8 million year-to-date in portfolio improvements, including the Grand Hyatt Scottsdale renovation and ongoing upgrades across multiple properties - Invested $18.5 million in Q2 and $50.8 million YTD in portfolio improvements[16] - Significant progress was made on guest room upgrades at multiple properties, including Renaissance Atlanta Waverly and Marriott San Francisco Airport Waterfront[17] - The company is performing significant infrastructure upgrades at ten hotels, including façade waterproofing, chiller replacements, and elevator modernizations[18] Outlook & Guidance Full Year 2025 Guidance The company raised its full-year 2025 guidance, projecting Net Income between $58 million and $72 million, Adjusted EBITDAre between $249 million and $263 million, and Adjusted FFO per diluted share between $1.66 and $1.80 Updated Full Year 2025 Guidance | Metric | Low End | High End | | :--- | :--- | :--- | | Net Income | $58 million | $72 million | | Same-Property RevPAR Change | 3.50% | 5.50% | | Adjusted EBITDAre | $249 million | $263 million | | Adjusted FFO per Diluted Share | $1.66 | $1.80 | | Capital Expenditures | $75 million | $85 million | - Key assumptions for the guidance include: G&A expense of approximately $24 million, interest expense of approximately $81 million, and 99.9 million weighted-average diluted shares[24] Supplemental Information Debt Summary As of June 30, 2025, total debt, net of unamortized costs, was $1.42 billion with a 5.67% weighted-average interest rate, comprising diverse debt instruments and a fully available $500 million revolving credit facility Debt Composition (in thousands) | Debt Type | Outstanding Amount | Weighted-Avg Rate | | :--- | :--- | :--- | | Mortgage Loans | $212,124 | 4.88% | | Corporate Credit Facilities | $325,000 | 6.23% | | 2029 Senior Notes | $500,000 | 4.88% | | 2030 Senior Notes | $400,000 | 6.63% | | Total Debt, net | $1,423,681 | 5.67% | Same-Property Portfolio Analysis The 30-hotel Same-Property portfolio showed strong Q2 2025 performance, with Hotel EBITDA increasing 22.2% to $84.0 million and margins expanding to 29.4%, driven by 11.0% total revenue growth and significant RevPAR increases in key markets like Phoenix Q2 2025 Same-Property Performance vs. Q2 2024 | Metric | Q2 2025 | Q2 2024 | % Change | | :--- | :--- | :--- | :--- | | Total Same-Property Revenues | $286.1M | $257.6M | +11.0% | | Same-Property Hotel EBITDA | $84.0M | $68.7M | +22.2% | | Same-Property Hotel EBITDA Margin | 29.4% | 26.7% | +269 bps | - The top two markets by 2024 Hotel EBITDA contribution are Houston (17%) and Orlando (17%)[83] - In Q2 2025, the Phoenix market experienced the highest Same-Property RevPAR growth at 66.9%, followed by Pittsburgh at 27.5%, while the largest declines were in Portland (-13.0%) and Dallas (-12.7%)[88] Non-GAAP Financial Measures & Reconciliations The report details reconciliations for non-GAAP measures, showing Q2 2025 Net Income of $58.6 million reconciled to Adjusted EBITDAre of $79.5 million and Adjusted FFO of $57.4 million, primarily adjusting for non-cash items and property sales Q2 2025 Non-GAAP Reconciliation Summary (in thousands) | Metric | Amount | | :--- | :--- | | Net Income | $58,561 | | EBITDA | $114,497 | | EBITDAre | $74,823 | | Adjusted EBITDAre | $79,543 | | FFO | $51,474 | | Adjusted FFO | $57,406 | YTD 2025 Non-GAAP Reconciliation Summary (in thousands) | Metric | Amount | | :--- | :--- | | Net Income | $75,068 | | EBITDA | $186,117 | | EBITDAre | $146,443 | | Adjusted EBITDAre | $152,485 | | FFO | $101,090 | | Adjusted FFO | $109,466 |