Hilton's Q1 Earnings Surpass Estimates, Revenues Rise Y/Y

Core Viewpoint - Hilton Worldwide Holdings Inc. reported strong earnings for Q1 2025, exceeding estimates for the sixth consecutive quarter, although revenues fell short of expectations [1][3]. Financial Performance - Adjusted earnings per share (EPS) for Q1 2025 were $1.72, surpassing the Zacks Consensus Estimate of $1.61 and up from $1.53 in the same quarter last year [3]. - Total revenues reached $2,695 million, missing the consensus mark of $2,707 million but reflecting a year-over-year growth of 4.7% [3]. - Franchise and licensing fees improved to $625 million from $571 million year-over-year, while base and other management fees declined to $88 million from $106 million [4]. - Ownership revenues were reported at $234 million, down from $255 million in the previous year [5]. - System-wide comparable RevPAR grew by 2.5% year-over-year, driven by increased occupancy and average daily rate (ADR) [6]. - Adjusted EBITDA for the quarter was $795 million, a 6% increase year-over-year, exceeding the estimate of $789.2 million [6]. Balance Sheet and Shareholder Returns - As of March 31, 2025, total cash and cash equivalents were $807 million, down from $1.376 billion at the end of 2024, with long-term debt remaining stable at $11.15 billion [7]. - The company repurchased 3.7 million shares at an average price of $242.92 per share and paid dividends totaling $37 million during the quarter [7][8]. - A quarterly cash dividend of 15 cents per share was declared, payable on June 27, 2025 [8]. Business Expansion - In Q1 2025, Hilton added 186 hotels, totaling 20,100 rooms, achieving a net room growth of 14,000 [9]. - The company introduced new lifestyle brands and expanded its luxury offerings, including openings in the UK and Greece [9][10]. - As of March 31, 2025, Hilton's development pipeline included 3,600 hotels representing 503,400 rooms across 123 countries, with an expected net unit growth of 6-7% for 2025 [10]. Future Outlook - For Q2 2025, Hilton anticipates net income between $455 million and $469 million, with adjusted EBITDA expected to be between $940 million and $960 million [11]. - System-wide RevPAR is projected to increase by 2.5-3.5% year-over-year for Q2 2025 [12]. - Full-year adjusted EPS is forecasted to be in the range of $7.76-$7.94, with a capital return of approximately $3.3 billion [13].