Jamie Rollo

Jamie Rollo, on behalf of Meta Marshall, inquired about the primary areas of traction with Independent Software Vendors (ISVs) and whether the recent price increase had a material impact in the quarter.

Answer

CRO Thomas Wyatt explained that ISV traction is strong across verticals like financial services and healthcare, typically starting with messaging and expanding to other channels like voice and RCS. CFO Aidan Viggiano confirmed that the impact from the price increase was not material in Q2.

Jamie Rollo from Morgan Stanley inquired about current trading trends for Q3 and Q4, the reasons for a 1% decline in Americas fee revenue despite RevPAR and unit growth, and the sustainability of the significant positive swing in the central profit line.

Answer

CEO Elie Maalouf expressed confidence in the full-year outlook, citing subsiding market turbulence and strong fundamentals in the U.S., and downplayed the impact of the election. He noted that the central profit improvement was expected, driven by growth in point sales and credit card revenues. CFO Michael Glover explained the Americas fee revenue dip was due to the exit of high-fee hotels (with replacements pending), increased renovations, and the ramp-up period for a high volume of new openings.

Jamie Rollo of Morgan Stanley inquired about current trading trends for Q3 and the potential for a Q4 RevPAR pickup in the U.S., a reconciliation for the Americas' fee revenue decline despite RevPAR growth, and the significant profit swing in the central cost line.

Answer

CEO Elie Maalouf expressed confidence in the full-year outlook, citing a constructive U.S. economic backdrop and the expected growth from ancillary revenues like point sales and credit cards. CFO Michael Glover attributed the Americas fee revenue gap to temporary factors including high-fee hotel exits, renovations, and the leap year, noting it is not a long-term issue. Mr. Maalouf added that the full fee benefit from a 75% increase in openings has not yet been realized.

Jamie Rollo of Morgan Stanley inquired about current trading trends for Q3 and Q4, the discrepancy in Americas fee revenue versus RevPAR and unit growth, and the significant swing in the central cost line.

Answer

CEO Elie Maalouf expressed confidence in the full-year profit consensus, noting that market turbulence from March and April is subsiding. He stated the outlook is constructive, supported by job growth and corporate investment in the US. CFO Michael Glover addressed the Americas fee revenue, attributing the gap to the exit of high-fee hotels, an increase in hotels under renovation, and the ramp-up period for a 40% increase in new openings. Maalouf and Glover explained the central line's profitability is driven by planned growth in point sales and credit card revenues, alongside disciplined cost management.