Executive Summary

Q3 2025 results were seasonally soft but operationally resilient: comparable RevPAR rose 1.4% to $257, driven by ADR +4.7% to $401 while occupancy fell 3.2% to 64.3% . Comparable Hotel EBITDA increased 15.1% to $21.4M as managers delivered strong flow-through .
Revenue modestly beat consensus and EPS beat decisively: revenue $143.6M vs $142.6M consensus (+0.7%); EPS −$0.12 vs −$0.66 consensus, a significant beat. Adjusted EBITDAre was $16.4M, below EBITDA consensus $19.2M* .
Portfolio actions advanced deleveraging and sale positioning: sale of Marriott Seattle Waterfront ($145M; $88.4M debt repaid; ~$50.8M net proceeds) and post-quarter closing of The Clancy ($115M; $64.7M debt repaid; ~$43.7M net proceeds) refine the portfolio for a potential company sale .
Balance sheet/liquidity: cash and restricted cash totaled ~$164.0M; net debt/gross assets at 43.2%; debt is ~87% floating (caps in place), blended rate ~6.9% .
Strategic catalyst: formal sale process initiated in August; management will not provide interim updates, but expects the portfolio’s luxury positioning to attract private buyers .

What Went Well and What Went Wrong

What Went Well
- Resort portfolio strength and flow-through: comparable resort RevPAR +5.5%; resort comparable Hotel EBITDA up ~58% YoY; management highlighted strong flow-through to margins .
- Property standouts: Four Seasons Scottsdale comparable RevPAR up ~25%; Ritz-Carlton Lake Tahoe total revenue +32% YoY; Dorado Beach RevPAR +~20% YoY, supported by buyouts and residential rental program expansion .
- Portfolio optimization: closed Seattle sale; definitive agreement then closed Clancy sale post-quarter; successfully refinanced Four Seasons Scottsdale at SOFR+3.00% to enhance liquidity and lower cost of debt .
- Quote: “Our property managers were able to generate strong flow-through… resulting in approximately 15% growth in comparable Hotel EBITDA” — Richard Stockton, CEO .
What Went Wrong
- Seasonality and renovations: Q3 is the weakest seasonal quarter; renovations at Cameo Beverly Hills, Park Hyatt Beaver Creek, and Hotel Yountville created displacement and urban softness (e.g., The Notary impacted by citywide occupancy declines) .
- Occupancy pressure: portfolio comparable occupancy fell to 64.3% (−3.2% YoY), partially offset by ADR gains .
- EBITDA below consensus: Adjusted EBITDAre of $16.4M was below the $19.2M EBITDA consensus*, reflecting seasonality, renovation disruptions, and urban headwinds .
- Analyst concerns: government segment softness in D.C. (Capital Hilton) and potential near-term impacts from federal dynamics; management cited group revals/cancellations in D.C., though broader corporate strength mitigated elsewhere .

Financial Results

Metric	Q1 2025	Q2 2025	Q3 2025
Total Hotel Revenue ($USD Millions)	$218.4	$179.9	$143.6
Net Income (Loss) Attributable to Common EPS ($USD)	$(0.04)	$(0.24)	$(0.12)
Adjusted EBITDAre ($USD Millions)	$63.0	$38.9	$16.4
Comparable RevPAR ($USD)	$404.0	$318.1	$257.5
Comparable Occupancy (%)	64.6%	71.9%	64.3%
Comparable ADR ($USD)	$625.6	$442.8	$400.7
Comparable Hotel EBITDA Margin (%)	32.42%	26.57%	15.47%

Segment breakdown (Resort vs Urban; Comparable metrics YoY):

Segment Metric	Q3 2024	Q3 2025
Resorts – Comparable RevPAR ($USD)	$341.73	$360.55
Resorts – Comparable Occupancy (%)	54.25%	55.34%
Resorts – Comparable ADR ($USD)	$629.96	$651.46
Resorts – Comparable Hotel EBITDA ($USD Millions)	$8.28	$13.05
Urban – Comparable RevPAR ($USD)	$191.87	$184.42
Urban – Comparable Occupancy (%)	74.91%	70.55%
Urban – Comparable ADR ($USD)	$256.13	$261.40
Urban – Comparable Hotel EBITDA ($USD Millions)	$10.33	$8.37

Selected KPIs and balance sheet:

KPI	Q3 2025
Cash & Cash Equivalents ($USD Millions)	$116.3
Restricted Cash ($USD Millions)	$47.7
Due from Third-Party Hotel Managers ($USD Millions)	$23.1
Net Debt / Gross Assets (%)	43.2%
Debt Mix (Effectively Fixed / Floating)	~13% / ~87%
Blended Average Interest Rate	~6.9%
Capex Invested (Quarter) ($USD Millions)	$21.5
Dividend Declared (Q4 per share) ($USD)	$0.05

Guidance Changes

Metric	Period	Previous Guidance	Current Guidance	Change
Capex (Total $USD)	FY 2025	$75–$95M (Q2 call)	$75–$85M (Q3 call)	Narrowed lower end
Common Dividend	Q4 2025	$0.05 (Q3 declared)	$0.05 (Q4 declared)	Maintained
Debt Maturities	CY 2025	“No remaining maturities in 2025” (Q2 PR)	“No remaining maturities in 2025” (Q3 PR)	Maintained
Strategic Alternatives	N/A	Evaluating, then initiated sale process (Aug 26)	Sale process ongoing; no interim updates	Announced/ongoing

Earnings Call Themes & Trends

Topic	Previous Mentions (Q1 & Q2)	Current Period (Q3 2025)	Trend
Sale process	Not present in Q1; Q2 focused on refinancing and asset sale	Sale process initiated; no details until a transaction approved	New strategic overhang
Group demand	Q2: group pace +8.6% FY25; strong recovery; catering +100% at Lake Tahoe	Q3: group room revenue pace +9.1% YTD; Lake Tahoe group room revenue +80.2% QoQ; portfolio catering +31%	Strengthening; targeted high-spend events
Resort normalization	Q1/Q2: resorts resuming normalized growth	Resort comparable RevPAR +5.5%; resort EBITDA +~58% YoY	Continued normalization
Renovation impacts	Q2: Yountville, Beaver Creek renovations; Cameo repositioning	Q3: renovation disruption at Cameo, Beaver Creek, Yountville; urban softness (Philadelphia)	Temporary headwind
Capital structure & liquidity	Q1/Q2: refinancing across five hotels; Lake Tahoe extension	Four Seasons Scottsdale refi at SOFR+3.00%; debt ~87% floating; blended ~6.9%	Liquidity enhanced; rate exposure
Government segment/D.C.	Q2: government softness noted	D.C. impact limited (low gov’t transient mix); some group revals/cancellations at Capital Hilton	Manageable risk
Leisure consumer	Q2: strong leisure at resorts	Luxury consumer remains price-insensitive; higher on-property ancillary spend	Resilient

Management Commentary

“I’m pleased with Braemar’s solid third quarter performance… approximately 15% growth in comparable Hotel EBITDA… resorts delivering solid comparable RevPAR growth of 5.5%” — Richard Stockton, CEO .
“For the quarter we reported a net loss attributable to common stockholders of $8.2 million or $0.12 per diluted share and AFFO per diluted share of -$0.19. Adjusted EBITDAre for the quarter was $16.4 million.” — Deric Eubanks, CFO .
“Ritz-Carlton Lake Tahoe… exceptional group room revenue growth of 80.2%… +2,400 room nights; catering revenue increased 80.7%” — Chris Nixon, EVP Asset Management .
“We will not be providing any update on [the sale] process… no deadline or definitive timetable… no assurance that this process will result in the sale of the company.” — Richard Stockton, CEO .

Q&A Highlights

Capex run-rate and maintenance: management targets low-single-digit % of revenue for maintenance; larger ROI projects prioritized through engineering reviews; no significant deferred items .
Operational impact of sale process: management does not see property-level impact; despite headwinds, portfolio grew RevPAR, EBITDA, and margins quarter over quarter .
Internalization: Board evaluated internalization among strategic alternatives, but chose to pursue a company sale instead .
D.C. (government segment): limited direct exposure at Capital Hilton; some group revals/cancellations; broader corporate strength offset impacts .
Leisure trends: luxury consumers show low price sensitivity; higher ancillary spend on property; ADR strength offset slight occupancy declines .

Estimates Context

Metric	Q3 2025 Consensus	Q3 2025 Actual	Surprise
Revenue ($USD Millions)	$142.6*	$143.6	+$1.0 (+0.7%)*
Primary EPS ($USD)	−$0.66*	−$0.12	+$0.54 (beat)*
EBITDA ($USD Millions)	$19.2*	$12.1*	−$7.1 (miss)*

Values marked with an asterisk (*) retrieved from S&P Global.

Implication: Strong EPS and modest revenue beats likely reflect ADR strength and cost control; EBITDA shortfall vs consensus aligns with seasonality and renovation-related displacement.

Key Takeaways for Investors

EPS beat and modest revenue beat despite seasonal trough and renovation drag suggest improved operational leverage; ADR strength and catering/facilities monetization underpin margins .
Resorts are the growth engine; continued normalized trajectory and Lake Tahoe/Dorado Beach outperformance support medium-term margin recovery as renovations complete .
Urban softness is transitory and mixed by market; Philadelphia was pressured, while Chicago and San Francisco improved pre-Clancy sale; expect improvement as renovations and event calendars normalize .
Portfolio optimization and debt actions de-risk: Seattle and Clancy sales lower leverage and sharpen the luxury focus; refinancing at Four Seasons Scottsdale reduced spreads, bolstering liquidity ahead of a potential sale .
Rate sensitivity remains high (~87% floating); interest-rate path is a key macro input to AFFO and valuation; caps mitigate near term, but rate declines would be a tailwind .
Dividend maintained at $0.05 (common), implying high yield; Board reviews quarterly; watch for sustainability and any adjustments tied to sale process milestones .
Sale process is the primary stock narrative; limited interim disclosures likely; private-market valuation discovery and continued deleveraging are catalysts for share price re-rating .

Braemar Hotels & Resorts Inc. (BHR)·Q3 2025 Earnings Summary