Choice Hotels International Reports Third Quarter 2025 Results

Core Insights - Choice Hotels International reported a record profitability for the third quarter of 2025, driven by a strategic shift towards higher-value brand segments and international growth [3][4] - The company aims to double its profitability in the international market by 2027, supported by a robust pipeline of high-quality projects [3][4] Financial Performance - Total revenues increased by 5% to $447.3 million in Q3 2025 compared to Q3 2024 [5] - Net income grew to $180 million in Q3 2025 from $106 million in Q3 2024, resulting in diluted EPS of $3.86, up from $2.22 [7] - Adjusted EBITDA for Q3 2025 reached a record $190.1 million, a 7% increase from $177.6 million in Q3 2024 [7] System Size and Development - Global net rooms grew by 2.3%, with a notable 3.3% increase in higher revenue segments [7] - International net rooms increased by 8.3%, with a 66% rise in openings compared to the previous year [7] - The global franchise agreements awarded surged by 54% in Q3 2025 compared to Q3 2024 [7] Revenue and Fees - Franchise and management fees rose by 3% to $193.8 million in Q3 2025 [8] - Partnership services and fees increased by 19% to $28.9 million in Q3 2025 [8] RevPAR and Market Performance - Global RevPAR increased by 0.2% in Q3 2025, with international RevPAR growth of 9.5% offset by a 3.2% decline in U.S. RevPAR [8] - U.S. extended stay portfolio outperformed the U.S. lodging industry by 20 basis points [8] Balance Sheet and Liquidity - As of September 30, 2025, the company had total available liquidity of $564.2 million [10] - The net debt-to-adjusted EBITDA ratio was 3.0x for the trailing twelve months [10] Shareholder Returns - The company returned $150.4 million to shareholders through dividends and share repurchases during the nine months ended September 30, 2025 [11] Outlook - The net income guidance for full-year 2025 has been revised to a range of $353 million to $371 million, up from previous estimates [13] - Adjusted diluted EPS is projected to be between $6.82 and $7.05 for full-year 2025 [13]