Global Expansion & Unit Economics - International adjusted EBITDA is projected to grow 4x from 2022 to 2025F, driven by direct franchising and stronger unit economics[2] - The percentage of rooms under direct franchising is expected to increase from 19% in 2022 to 41% in 2025F[3] - EBITDA per unit is projected to increase from $9,000 in 2022 to $28,000 in 2025F[3] - Adjusted EBITDA is expected to increase from $10 million in 2022 to $39 million in 2025F, a 3x increase[3] Pipeline Composition & Growth Drivers - A new MFA partnership in China is expected to add 9,500 rooms[4] - 98% of the global pipeline is comprised of higher-revenue hotels with higher room count, RevPAR, and royalty rates[5] - Midscale and Extended Stay segments constitute 34% and 39% respectively of the 3Q 2025 Global Portfolio[6] - Conversions make up 35% of the 3Q 2025 Global Pipeline, while new builds account for 65%[6] - Average rooms per unit in the global pipeline are 96, compared to 86 in the global portfolio[6] - Average RevPAR in the global pipeline is $70, compared to $54 in the global portfolio[6] - Conversions are typically opened within 3-6 months, approximately 80% faster than new construction[6]

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]