Hyatt Q4 Earnings Beat, Revenues Lag Estimates, Stock Down

Core Insights - Hyatt Hotels Corporation reported fourth-quarter 2025 results with earnings exceeding estimates but revenues falling short, leading to a 1.5% decline in shares during pre-market trading [1] Financial Performance - Adjusted earnings per share (EPS) for Q4 were $1.33, significantly above the Zacks Consensus Estimate of 29 cents, compared to 42 cents in the same quarter last year [2] - Revenues reached $1,789 million, slightly below the consensus estimate of $1,793 million, but represented an 11.7% year-over-year increase [2] Revenue Breakdown - Owned and Leased revenues were $423 million, up from $264 million year-over-year [3] - Distribution revenues decreased by 13.7% year-over-year to $177 million, while other revenues fell to $4 million from $11 million in the prior-year quarter [3] Fee Structure - Gross fees increased by 4.5% year-over-year to $307 million, with base management fees rising 8.1%, incentive management fees up 13%, and franchise fees advancing 3.8% [4] - Net fees for the quarter were $290 million, compared to $281 million in the prior-year quarter [5] Operating Metrics - Adjusted EBITDA for the quarter was $292 million, a 14.6% increase year-over-year, but below the model prediction of $324.4 million [6] - Adjusted EBITDA in Management and Franchising was $240 million, up from $219 million year-over-year, but also below the model prediction of $266.4 million [6] Segment Performance - The Owned and Leased segment's adjusted EBITDA was $85 million, compared to $57 million in the prior-year quarter, exceeding the model prediction of $66.4 million [7] - The Distribution segment's adjusted EBITDA fell to $7 million from $20 million year-over-year, missing the model prediction of $38.3 million [7] Balance Sheet and Liquidity - As of December 31, 2025, Hyatt reported cash and cash equivalents of $813 million, up from $749 million in the previous quarter, with total liquidity at $2.3 billion [10] - Total debt decreased to $4.3 billion from $6 billion in the previous quarter [10] Growth Outlook - Hyatt added 8,253 rooms to its system in Q4, with a pipeline of approximately 148,000 rooms, reflecting a 7% year-over-year increase [11] - For 2026, gross fees are projected to be between $1.295 billion and $1.335 billion, with adjusted EBITDA expected in the range of $1.155 billion to $1.205 billion [12][13]