Hyatt(H) - 2025 Q2 - Quarterly Results

Second Quarter 2025 Performance and Outlook Performance Highlights The company reported solid Q2 2025 results with increased RevPAR and gross fees, despite a net loss and a slight decrease in Adjusted EBITDA Q2 2025 Key Financial & Operational Metrics | Metric | Q2 2025 Result | vs. Q2 2024 | | :--- | :--- | :--- | | Comparable System-wide RevPAR | +1.6% | - | | Net Rooms Growth | 11.8% | - | | Net Income (attributable to Hyatt) | $(3) million | - | | Diluted EPS | $(0.03) | - | | Adjusted Net Income | $66 million | - | | Adjusted Diluted EPS | $0.68 | - | | Gross Fees | $301 million | +9.5% | | Adjusted EBITDA | $303 million | -1.1% | | Pipeline (executed contracts) | ~140,000 rooms | +8% | - Management emphasized solid performance with strong fee contribution despite a lower RevPAR growth environment and is optimistic about improving performance in Q4 and beyond[2] - The acquisition and planned sale of the Playa real estate portfolio reinforces Hyatt's commitment to an asset-light business model[2] Operational Commentary The company advanced its asset-light strategy by completing the Playa Hotels acquisition and agreeing to sell the associated real estate portfolio - Key operational highlights include 10% gross fee growth, strong luxury segment RevPAR, and the launch of the new "Unscripted by Hyatt" brand[6] - The company completed the $2.6 billion Playa Hotels acquisition and subsequently entered an agreement to sell the real estate portfolio for $2.0 billion[6] - As of June 30, 2025, total debt stood at $6.0 billion with $2.4 billion in liquidity, and a quarterly dividend of $0.15 per share was declared[6] 2025 Full Year Outlook Hyatt projects full-year RevPAR growth of 1-3% and Adjusted EBITDA of $1,155M-$1,215M, including the impact of the Playa acquisition 2025 Full Year Outlook (Excluding Playa Impact) | Metric | 2025 Outlook | Growth vs 2024 | | :--- | :--- | :--- | | System-Wide Hotels RevPAR Growth | 1% to 3% | - | | Net Rooms Growth | 6% to 7% | - | | Net Income | $135M - $165M | (90)% to (87)% | | Adjusted EBITDA | $1,085M - $1,130M | 7% to 11% (adjusted) | | Adjusted Free Cash Flow | $450M - $500M | (17)% to (7)% | | Capital Returns to Shareholders | Approx. $300M | - | 2025 Full Year Outlook (Consolidated, Including Playa Impact) | Metric | Consolidated Outlook | | :--- | :--- | | Net Rooms Growth | 6.7% to 7.7% | | Net Income | $22M - $53M | | Adjusted EBITDA | $1,155M - $1,215M | | Adjusted Free Cash Flow | $435M - $485M | - The projected decline in Net Income is primarily due to significant gains on real estate sales recognized in 2024[10] - Adjusted EBITDA growth is expected to be strong after adjusting for the impact of hotels sold in 2024[10] - The company reinstated its outlook for capital returns, targeting approximately $300 million via dividends and share repurchases[10] Financial Information (Schedules) Condensed Consolidated Statements of Income (Loss) The company reported a Q2 2025 net loss of $3 million, a significant decrease from a $359 million net income in Q2 2024 due to prior-year asset sale gains Q2 2025 Income Statement Highlights (in millions) | Line Item | Q2 2025 | Q2 2024 | | :--- | :--- | :--- | | Total Revenues | $1,808 | $1,703 | | Gross Fees | $301 | $275 | | Transaction and integration costs | $82 | $10 | | Gains (losses) on sales of real estate | $(2) | $350 | | Net income (loss) attributable to Hyatt | $(3) | $359 | | Diluted EPS | $(0.03) | $3.46 | Operating Statistics System-wide RevPAR grew 1.6%, driven by strong performance in luxury brands and international markets, particularly the Middle East & Africa By Geography Q2 2025 RevPAR Growth vs. 2024 (Constant $) | Region | RevPAR Growth | | :--- | :--- | | System-wide hotels | 1.6% | | United States | (0.1)% | | Americas (ex-US) | 0.5% | | Greater China | 2.1% | | Asia Pacific (ex-China) | 7.4% | | Europe | 2.5% | | Middle East & Africa | 14.0% | Q2 2025 All-Inclusive Net Package RevPAR Growth vs. 2024 (Reported $) | Region | Net Package RevPAR Growth | | :--- | :--- | | System-wide all-inclusive | 8.6% | | Americas (ex-US) | 6.0% | | Europe | 22.5% | By Brand Q2 2025 RevPAR Growth vs. 2024 by Chain Scale (Constant $) | Chain Scale | RevPAR Growth | | :--- | :--- | | Composite Luxury | 5.1% | | Composite Upper Upscale | 0.6% | | Composite Upscale & Upper Midscale | (1.2)% | - Within the luxury segment, Park Hyatt was a standout performer with 9.0% RevPAR growth[26] - In the all-inclusive category, Alua Hotels & Resorts saw significant Net Package RevPAR growth of 20.0%[26] Properties and Rooms As of June 30, 2025, Hyatt's portfolio comprised 1,487 properties and 363,790 rooms, with the largest concentration in the United States By Geography Total Properties and Rooms by Geography (as of June 30, 2025) | Geography | Properties | Rooms | | :--- | :--- | :--- | | United States | 729 | 167,446 | | Americas (ex-US) | 86 | 18,376 | | Greater China | 195 | 46,834 | | Asia Pacific (ex-China) | 142 | 35,033 | | Europe | 129 | 25,153 | | Middle East & Africa | 48 | 11,304 | | System-wide Hotels Total | 1,329 | 304,146 | | System-wide All-Inclusive | 158 | 59,644 | | System-wide Total | 1,487 | 363,790 | By Brand Top 5 Brands by Room Count (as of June 30, 2025) | Brand | Properties | Rooms | | :--- | :--- | :--- | | Hyatt Regency | 237 | 96,610 | | Hyatt Place | 442 | 65,114 | | Grand Hyatt | 67 | 34,731 | | Hyatt House | 141 | 19,849 | | Dreams Resorts & Spas | 34 | 14,641 | Reconciliations of Non-GAAP Financial Measures This section details adjustments from GAAP to non-GAAP metrics like Adjusted EBITDA and Adjusted Net Income to clarify underlying performance Net Income to Adjusted EBITDA Q2 2025 Reconciliation of Net Income to Adjusted EBITDA (in millions) | Description | Amount | | :--- | :--- | | Net income (loss) attributable to Hyatt | $ (3) | | Depreciation and amortization | $ 82 | | Transaction and integration costs | $ 82 | | Interest expense | $ 74 | | Provision for income taxes | $ 42 | | Other adjustments | $ 26 | | Adjusted EBITDA | $ 303 | - For Q2 2025, the Management and franchising segment was the largest contributor to Adjusted EBITDA with $238 million[36] - The Playa Hotels Acquisition contributed $14 million to the consolidated Adjusted EBITDA in Q2 2025 for the period of Hyatt's ownership[37] G&A to Adjusted G&A Expenses Q2 2025 Reconciliation of G&A to Adjusted G&A (in millions) | Description | Amount | | :--- | :--- | | G&A expenses (GAAP) | $ 152 | | Less: Rabbi trust impact | $ (30) | | Less: Stock-based compensation expense | $ (12) | | Adjusted G&A Expenses | $ 110 | Net Income and EPS to Adjusted Net Income and Adjusted Diluted EPS Q2 2025 Reconciliation of Net Income & EPS to Adjusted Figures | Metric | GAAP | After-Tax Special Items | Adjusted (Non-GAAP) | | :--- | :--- | :--- | :--- | | Net Income (in millions) | $ (3) | $ 69 | $ 66 | | Diluted EPS | $ (0.03) | $ 0.71 | $ 0.68 | - The largest pre-tax special item in Q2 2025 was $82 million in transaction and integration costs, primarily related to the Playa Hotels Acquisition[43] Adjustments from Sold Assets This schedule quantifies the financial impact of assets sold in 2024, which contributed $80 million in Adjusted EBITDA for that year Full Year 2024 Impact of Sold Assets (in millions) | Description | Full Year 2024 | | :--- | :--- | | Adjustment to segment revenues | $ (259) | | Adjustment to segment Adjusted EBITDA | $ (80) | Outlook Reconciliations This section provides reconciliations for the 2025 outlook, bridging forecasted GAAP Net Income to non-GAAP metrics like Adjusted EBITDA Non-GAAP Financial Measures Outlook FY 2025 Outlook Reconciliation: Net Income to Adjusted EBITDA (Consolidated, in millions) | Description | Low End | High End | | :--- | :--- | :--- | | Net income (loss) attributable to Hyatt | $ 22 | $ 53 | | Key Adjustments (Depreciation, Interest, etc.) | $ 901 | $ 910 | | Pro rata share of unconsolidated ventures' Adj. EBITDA | $ 52 | $ 62 | | Adjusted EBITDA | $ 1,155 | $ 1,215 | FY 2025 Outlook Reconciliation: Operating Cash Flow to Adjusted Free Cash Flow (Consolidated, in millions) | Description | Low End | High End | | :--- | :--- | :--- | | Net cash provided by operating activities | $ 223 | $ 293 | | Capital expenditures | $ (215) | $ (215) | | Cash taxes on asset sales | $ 117 | $ 117 | | Costs associated with Playa Hotels Acquisition | $ 310 | $ 290 | | Adjusted Free Cash Flow | $ 435 | $ 485 | Playa Outlook by Quarter 2025 Playa Contribution to Adjusted EBITDA Outlook (in millions) | Quarter | Low End | High End | | :--- | :--- | :--- | | Q2 2025 (Actual) | $ 14 | $ 14 | | Q3 2025 | $ 17 | $ 21 | | Q4 2025 | $ 39 | $ 50 | | Full Year 2025 | $ 70 | $ 85 | Other Information Conference Call Information Hyatt will host an investor conference call on August 7, 2025, at 9:00 a.m. CT to discuss the Q2 results - An investor conference call to discuss Q2 2025 results is scheduled for the morning of August 7, 2025, at 9:00 a.m. CT[12] Forward-Looking Statements This section outlines potential risks and uncertainties that could cause actual results to differ from the forward-looking statements in the report - The report contains forward-looking statements concerning the company's plans, outlook, and financial performance, which are subject to various risks and uncertainties[15] - Key risks highlighted include the successful completion of the Playa Real Estate Transaction, general economic uncertainty, and supply chain constraints[15] Definitions This section defines key non-GAAP financial measures and operating metrics used throughout the report, such as Adjusted EBITDA and RevPAR - Adjusted EBITDA is a key non-GAAP measure used to reflect core operational performance by excluding items like interest, taxes, and transaction costs[67][73] - Adjusted Net Income and Adjusted Diluted EPS are non-GAAP measures that exclude special items to allow for better period-over-period comparisons[78] - Key operating metrics are defined, including RevPAR (Revenue Per Available Room) and Net Package RevPAR for all-inclusive resorts[88][92]