Hilton Grand Vacations Q4 Earnings Call Highlights

Core Insights - Hilton Grand Vacations (HGV) reported a 35% growth in HGV Max memberships, driven by the introduction of Max to Bluegreen members and upgrades from the legacy member base [1] - The company achieved a 10% growth in contract sales and an adjusted EBITDA of $1.15 billion for 2025, reflecting a 4% year-over-year increase [2][7] - HGV returned over $600 million to shareholders in 2025, with plans for continued capital returns as a primary use of free cash flow [1][17] Financial Performance - For the fourth quarter, total revenue reached $1.3 billion, up 1%, with adjusted EBITDA to shareholders of $324 million, marking a 12% increase [12] - The real estate segment saw contract sales grow by 2% to $852 million, with tours increasing by 9% year-over-year to 225,000 [13] - The financing segment reported revenue of $134 million and profit of $81 million, with a 60% margin [14] 2026 Outlook - HGV's guidance for 2026 targets adjusted EBITDA between $1.185 billion and $1.225 billion, with low single-digit contract sales growth anticipated [6][18] - The company expects expense headwinds of approximately $15 million to $20 million from license fee step-ups and $10 million to $15 million from financing optimization [6][18] - HGV plans to maintain a disciplined approach to leverage, with an ending net leverage of approximately 3.78x and over $1 billion in liquidity [20] Operational Highlights - The company achieved a $100 million cost synergy target ahead of schedule and expanded its marketing efforts by opening 41 new sites with partners [9][2] - HGV Max adoption has increased the lifetime value for Max members by over 20% compared to non-Max members [9] - The company is evaluating its inventory strategy, particularly regarding acquired properties that may not align with its long-term vision [21] Shareholder Returns - In 2025, HGV returned $600 million to shareholders through share repurchases, reducing the float by over 20% [17] - The company has repurchased an additional 1.9 million shares for $89 million in early 2026, with plans to continue repurchasing approximately $150 million per quarter [18] Member Dynamics - HGV has over 720,000 members, with 266,000 being Max members, of which 175,000 are new buyers from the last four years [21] - The company noted that the Max membership skew is relatively newer, contributing to a higher lifetime value [21]