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Hilton Worldwide Holdings Inc. (HLT)·Q1 2025 Earnings Summary

Executive Summary

  • Q1 2025 adjusted EPS was $1.72, a beat versus Wall Street consensus of $1.61*, and Adjusted EBITDA was $795 million, modestly ahead of consensus $784 million*; system-wide comparable RevPAR rose 2.5% (currency-neutral) .
  • Guidance was recalibrated: FY 2025 RevPAR now flat to +2% (from +2% to +3% in Feb), diluted EPS cut to $7.04–$7.22 (from $7.45–$7.56), Adjusted EBITDA trimmed to $3.65–$3.71B (from $3.70–$3.74B), while adjusted EPS inched up to $7.76–$7.94 (from $7.71–$7.82) .
  • Mix and macro: Group led (+~6%), Business Transient grew ~2%, Leisure +1% but softened in March; management guided Q2 RevPAR to ~flat on tougher comps (Easter shift) and “wait-and-see” traveler behavior .
  • Development remains a core catalyst: pipeline reached 503,400 rooms (+7% YoY), net unit growth 7.2% YoY; capital return was $927M in Q1 and ~$3.3B projected for FY 2025 .

Note: *Values retrieved from S&P Global.

What Went Well and What Went Wrong

What Went Well

  • EPS and EBITDA beats driven by non-RevPAR fees and timing: “Adjusted EBITDA…exceeding the high end of our guidance…largely driven by better-than-expected growth in non-RevPAR-driven fees and timing items” .
  • Development momentum and brand expansion: “Approved 32,600 new rooms…pipeline…503,400 rooms” and openings in key luxury and lifestyle markets (Waldorf Astoria Osaka, Costa Rica; Tempo in the U.K.) .
  • Group strength: “Group…increased more than 6% year-over-year…continued strength in company meetings” .

What Went Wrong

  • Leisure softness and macro uncertainty: “Broader macro uncertainty intensified in March…pressured demand, particularly across Leisure,” continuing into Q2 .
  • Lowered FY outlook: RevPAR range cut to flat–+2%, diluted EPS and EBITDA reduced, with CFO noting RevPAR as the primary driver of lower EBITDA .
  • China underperformance: APAC ex-China positive, but China RevPAR declined ~3.1% in Q1 amid strong outbound travel and tough comps .

Financial Results

Core P&L and Margins (USD)

MetricQ3 2024Q4 2024Q1 2025
Total Revenues (Reported)$2,867M $2,783M $2,695M
Total Revenues (As Adjusted)$1,252M $1,209M $1,079M
Net Income$344M $505M $300M
Diluted EPS (Reported)$1.38 $2.06 $1.23
Diluted EPS (Adjusted)$1.92 $1.76 $1.72
Adjusted EBITDA$904M $858M $795M
Net Income Margin12.0% 18.2% 11.1%
Adjusted EBITDA Margin72.2% 71.0% 73.7%

Actual vs Wall Street Consensus (Q1 2025)

MetricConsensusActual
Adjusted EPS$1.61*$1.72
Adjusted EBITDA$784M*$795M
Revenue (company “Revenues” ex. reimbursements)$2,714M*$1,065M

Note: *Values retrieved from S&P Global.

Revenue Components (USD)

ComponentQ1 2024Q1 2025
Franchise & Licensing Fees$571M $625M
Base & Other Management Fees$106M $88M
Incentive Management Fees$70M $72M
Ownership$255M $234M
Other Revenues$50M $46M
“Revenues” (sum above)$1,052M $1,065M

Key Operating KPIs (Comparable, Currency-Neutral)

KPIQ1 2025YoY Change
System-wide Occupancy66.8% +0.4 pts
System-wide ADR$155.07 +1.8%
System-wide RevPAR$103.59 +2.5%
U.S. RevPAR$111.39 +2.1%
MEA RevPAR$143.55 +8.5%
Americas ex-U.S. RevPAR$98.92 +7.7%

Guidance Changes

MetricPeriodPrevious Guidance (Feb 6)Current Guidance (Apr 29)Change
System-wide RevPAR (cc)FY 2025+2% to +3% flat to +2% Lowered
Diluted EPSFY 2025$7.45–$7.56 $7.04–$7.22 Lowered
Diluted EPS (Adjusted)FY 2025$7.71–$7.82 $7.76–$7.94 Raised
Net IncomeFY 2025$1,829–$1,858M $1,707–$1,749M Lowered
Adjusted EBITDAFY 2025$3,700–$3,740M $3,650–$3,710M Lowered (midpoint)
G&A ExpenseFY 2025$420–$430M $420–$430M Maintained
CapEx + Contract Acquisition (ex-reimb.)FY 2025$250–$300M $250–$300M Maintained
Capital ReturnFY 2025~$3.3B ~$3.3B Maintained
Net Unit GrowthFY 20256%–7% 6%–7% Maintained
System-wide RevPAR (cc)Q2 2025—~flat YoY New
Diluted EPS (Adj.)Q2 2025—$1.97–$2.02 New
Adjusted EBITDAQ2 2025—$940–$960M New

Earnings Call Themes & Trends

TopicPrevious Mentions (Q-2: Q3 2024; Q-1: Q4 2024)Current Period (Q1 2025)Trend
Macro/Leisure softnessQ3: slower top line from modest macro & calendar ; Q4: constructive post-election sentiment March macro uncertainty pressured Leisure; Q2 RevPAR ~flat Weaker near term
Segment mix (Group/BT/Leisure)Q3: Group + strength; Q4: Leisure occupancy strong, BT/Group improving Group +~6%, BT +~2%, Leisure +1% with late-quarter softening Group-leading; Leisure softer
Development & conversionsRecord openings/pipeline in Q3; conversions ~45% in 2024 186 openings; 32.6k approvals; conversions ~40% of 2025 deliveries Strong, share gains
Tariffs/supply chainQ4: diversified supply chain; limited tariff impact Monitoring trade/tariffs; uncertainty impacting developer “wait-and-see” Manageable risk
Regional dynamicsQ3/Q4: EMEA strong; APAC mixed; China soft MEA +8.5%; Americas ex-U.S. +7.7%; China -3.1% MEA strength; China lagging
Technology/AIQ4: direct relationships; AI to mass-customize on-stay Continued focus on commercial engines; no new AI specifics in Q1 call Ongoing investment

Management Commentary

  • CEO: “Adjusted EBITDA and adjusted EPS both exceeding our expectations…we remain optimistic about our growth opportunities and are well positioned…in 2025 and beyond.”
  • CFO: “Adjusted EBITDA was $795 million in the first quarter…largely driven by better-than-expected growth in non-RevPAR-driven fees and timing items.”
  • CEO on outlook: “Weaker trends have continued into the second quarter…we expect second quarter RevPAR to be approximately flat…For the full year, our system-wide RevPAR expectations are flat to up 2%.”
  • CEO on development: “We opened 186 hotels…approved more than 32,000 rooms…pipeline ended the quarter with more than 503,000 rooms, +7% YoY.”

Q&A Highlights

  • Macro/recession risk: Management sees uncertainty but believes risk is more equally weighted than markets imply; committed to keeping guidance ranges and updating as visibility improves .
  • Development landscape: Signings/starts/deliveries remained positive; conversions provide counterbalance in uncertain times; NUG target 6%–7% reaffirmed .
  • Group demand: Bookings flat short term; on-the-books mid-single-digit growth; 2026 position up in the teens; Group expected to lead segments .
  • Non-RevPAR fees/timing: Q1 beat largely timing; non-RevPAR fees expected above algorithm for year; explains upside drivers .
  • Q2 segmentation: Group to lead, BT next, Leisure softer; domestic ~flat; EMEA/MEA/APAC ex-China better; China negative .
  • Canada/Mexico inbound: Recent deterioration high-single-digits, offset by other markets; combined just ~1.5% of revenue .

Estimates Context

  • Q1 2025 adjusted EPS beat: $1.72 vs $1.61 consensus*; Adjusted EBITDA beat: $795M vs $784M consensus* .
  • The company’s “Revenues” (ex cost reimbursement) were $1,065M versus a consensus revenue figure of $2,714M*, indicating potential measure mismatch; investors should compare on a like-for-like basis (reported total vs adjusted) .

Note: *Values retrieved from S&P Global.

Key Takeaways for Investors

  • Near-term topline softness is concentrated in Leisure; expect Q2 RevPAR ~flat, with Group leading and BT resilient (SMB ~85% of BT mix) .
  • Despite macro choppiness, Hilton continues to execute on its asset-light, fee-driven model with high margins (Q1 Adjusted EBITDA margin 73.7%) and robust capital returns (~$3.3B FY target) .
  • Development is a durable growth engine: pipeline +7% YoY to 503k rooms; conversions ~40% of deliveries provide flexibility and share gains in tougher build environments .
  • FY guidance reset lowers RevPAR, diluted EPS, and EBITDA midpoints, but raises adjusted EPS range—signals discipline on costs and share count dynamics; monitor Q2 delivery vs flat RevPAR guide .
  • Regional exposure favorable: MEA and Americas ex-U.S. strong; APAC ex-China positive; China negative but outbound travel benefits rest of APAC footprint .
  • Watch non-RevPAR fee trajectory (credit card, purchasing, HGV, etc.): above algorithm per CFO; can offset softer RevPAR .
  • Balance sheet/liquidity: $11.2B debt, no maturities until Apr 2027 except $500M May 2025 notes (to be repaid via revolver and cash); $807M cash at Q1 end .