Wyndham Posts 18 Percent EPS Gain in Q2

Core Insights - Wyndham Hotels & Resorts reported strong Q2 2025 results, with adjusted diluted EPS of $1.33, exceeding analyst expectations of $1.16, and revenue of $397 million, surpassing the estimate of $386.64 million, reflecting growth in global system size and an expanding development pipeline [1][2][5] Financial Performance - Adjusted diluted EPS increased by 18% year-over-year from $1.13 in Q2 2024 [2] - Fee-related and other revenue reached $397 million, an 8.5% increase from $366 million in Q2 2024 [2] - Adjusted EBITDA grew 10% to $195 million compared to $178 million in Q2 2024 [2] - Adjusted net income rose 13.2% to $103 million from $91 million in Q2 2024 [2] - Adjusted free cash flow increased by 27.5% to $88 million from $69 million in Q2 2024 [2] Business Model and Strategy - Wyndham operates as a hotel franchisor, minimizing capital investment through an asset-light model that emphasizes predictable cash flows from franchise fees [3] - The company has a diversified portfolio with 25 hotel brands, targeting higher-value segments and expanding its international footprint [4] Market Trends and Performance Metrics - Global system size expanded by 4% year-over-year to 846,700 rooms, with a record pipeline of 255,000 rooms, 58% of which are outside the U.S. [6] - Global RevPAR fell 3% year-over-year to $47.55, with U.S. RevPAR dropping 4% to $53.32, while international markets saw a 1% increase in RevPAR [7] - Ancillary revenue sources grew by 19% compared to Q2 2024, indicating a shift towards more stable revenue streams [8] Future Outlook - Management raised the full-year 2025 net room growth outlook to 4.0–4.6% and expects adjusted diluted EPS for FY2025 to be between $4.60 and $4.78 [14] - Guidance for global RevPAR remains unchanged, reflecting caution regarding U.S. demand weakness and softness in the Chinese market [14] - The company anticipates "low teens" growth in ancillary fees for 2025, supported by stable contract structures [14]