Marriott International(MAR) - 2025 Q4 - Annual Results

Financial Performance - Fourth quarter 2025 RevPAR increased 1.9% worldwide, with a 6.1% growth in international markets and a 0.1% decline in U.S. & Canada[3] - Reported diluted EPS for the fourth quarter totaled $1.65, while adjusted diluted EPS was $2.58; for the full year, reported diluted EPS was $9.51 and adjusted diluted EPS was $10.02[3] - Fourth quarter reported net income was $445 million, and adjusted net income was $695 million; for the full year, reported net income totaled $2,601 million and adjusted net income was $2,742 million[3] - Adjusted EBITDA for the fourth quarter was $1,402 million, a 9% increase from the previous year, and for the full year, adjusted EBITDA totaled $5,383 million[3] - For full year 2026, the company expects worldwide RevPAR to rise by 1.5% to 2.5%, net rooms growth of 4.5% to 5%, and adjusted EBITDA growth of 8% to 10%[3] - The company returned over $4.0 billion to shareholders through dividends and share repurchases in 2025[3] - For Q4 2025, Marriott reported total revenues of $6,690 million, a 4% increase from $6,429 million in Q4 2024[37] - Net income for Q4 2025 was $445 million, a decrease of 2% from $455 million in Q4 2024[37] - For the full year 2025, Marriott's total revenues reached $26,186 million, up 4% from $25,100 million in 2024[40] - The company reported a 10% increase in operating income for the full year 2025, totaling $4,141 million compared to $3,767 million in 2024[40] - Reported net income for Fiscal Year 2025 was $2,601 million, an increase from $2,375 million in Fiscal Year 2024, representing a growth of 9.5%[76] - Adjusted EBITDA for Fiscal Year 2025 was $5,383 million, reflecting an 8% increase compared to $4,981 million in Fiscal Year 2024[76] Revenue and Fees - Franchise fees increased by 6% to $843 million in Q4 2025, compared to $795 million in Q4 2024[37] - Franchise fees for the full year 2025 totaled $3,325 million, an increase from $3,113 million in 2024, representing a growth of 6.8%[45] - The outlook for 2026 includes a projected 35% increase in co-branded credit card fees recognized in franchise fees, reflecting expected strong growth in spending[24] - Cost reimbursement revenue for Q4 2025 was $4,857 million, up from $4,704 million in Q4 2024, reflecting a growth of 3.2%[45] - Cost reimbursement revenue for Fiscal Year 2025 totaled $(19,204) million, compared to $(18,482) million in Fiscal Year 2024, showing a 3.9% increase[76] Development and Growth - The company added nearly 100,000 gross rooms globally in 2025, resulting in a net rooms growth of over 4.3% from year-end 2024[3] - At year-end 2025, Marriott's worldwide development pipeline reached approximately 4,100 properties and nearly 610,000 rooms, with 43% of pipeline rooms under construction[3] - As of December 31, 2025, Marriott operates a total of 9,805 properties worldwide, comprising 1,779,936 rooms[51] - The company has 6,433 properties in the US & Canada, totaling 1,084,057 rooms, and 3,372 properties internationally, totaling 695,879 rooms[51] - Future growth strategies include market expansion and potential acquisitions to enhance the company's global footprint[51] Membership and Customer Engagement - In 2025, Marriott Bonvoy membership grew by approximately 43 million, bringing total membership to nearly 271 million, with member stays accounting for 75% of room nights in the U.S. & Canada[9] Operational Metrics - The operating income margin for Q4 2025 remained stable at 12%, while the adjusted operating income margin improved to 63% from 62% in Q4 2024[43] - Adjusted operating income for Q4 2025 was $1,155 million, an 8% increase compared to $1,072 million in Q4 2024[43] - The company experienced a 3% increase in incentive management fees, totaling $239 million in Q4 2025 compared to $206 million in Q4 2024[37] Market Performance - The average daily rate for Marriott Hotels reached $255.18, up 3.1% from the previous year[59] - The total systemwide occupancy rate for US & Canada properties was 65.8%, a decrease of 0.9 percentage points compared to 2024[61] - The overall RevPAR for Composite US & Canada Luxury properties rose by 4.9% to $317.38, with occupancy at 69.3%, a 0.6 percentage point increase[64] - For the twelve months ended December 31, 2025, RevPAR for JW Marriott increased by 3.1% to $242.57, while occupancy decreased by 0.2 percentage points to 70.9%[64] Expenses and Costs - General and administrative expenses totaled $870 million, with quarterly expenses of $209 million, $210 million, $210 million, and $241 million[47] - Interest expense for Fiscal Year 2025 was $809 million, up from $695 million in Fiscal Year 2024, marking a 16.4% increase[76] - Provision for income taxes in Fiscal Year 2025 was $793 million, compared to $776 million in Fiscal Year 2024, reflecting a 2.2% increase[76] - Stock-based compensation for Fiscal Year 2025 amounted to $236 million, slightly down from $237 million in Fiscal Year 2024[76] Accounting and Reporting - The company plans to exclude cost reimbursement revenue and reimbursed expenses from its guidance due to the inability to forecast these items accurately[80] - Adjusted EBITDA is considered a meaningful indicator of operating performance, allowing for period-over-period comparisons and excluding items that can vary widely across different industries[86] - Revenue per Available Room (RevPAR) is calculated by dividing property level room revenue by total rooms available, serving as a key performance measure[88] - Occupancy is calculated by dividing total rooms sold by total rooms available, indicating the utilization of a property's available capacity[88] - Average Daily Rate (ADR) is calculated by dividing property level room revenue by total rooms sold, useful for assessing pricing levels[88]