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MARRIOTT INTERNATIONAL INC /MD/ (MAR)·Q2 2025 Earnings Summary

Executive Summary

  • Q2 results were resilient: adjusted EPS $2.65 and adjusted EBITDA $1.415B, with worldwide RevPAR +1.5% YoY; International RevPAR +5.3% and U.S. & Canada flat . Consensus EPS was modestly exceeded; pipeline reached a record ~3,900 properties and >590k rooms; net rooms +4.7% YoY .
  • Gross fee revenues rose ~4% YoY to $1.4B; owned/leased net contribution was $113M, up from $99M; adjusted operating income margin held at 65% .
  • Guidance narrowed: full-year RevPAR growth trimmed to 1.5%–2.5% from 1.5%–3.5% previously; FY adjusted EPS range revised to $9.85–$10.08 from $9.82–$10.19; Q3 RevPAR guided flat to +1% . Bold risks cited: weaker select-service demand, softer near-term group pace, government travel down .
  • Capital returns: ~$2.1B YTD through July 30, plus a dividend of $0.67/share and a 25M-share buyback authorization increase post-quarter; FY capital return plan remains ≈$4B .

What Went Well and What Went Wrong

What Went Well

  • International strength: “International RevPAR rose over 5 percent, with strong growth in APEC and EMEA” (APAC +9% RevPAR; Middle East +10%+) .
  • Development momentum: “Pipeline stood at a record of more than 590,000 rooms… conversions ~30% of room signings and openings” .
  • Loyalty and platform expansion: Bonvoy reached ~248M members; launch of Series by Marriott and completion of citizenM acquisition broadens the offering and drives owner interest .

What Went Wrong

  • U.S. & Canada softness: RevPAR flat; select-service and extended-stay RevPAR down ~1.5% YoY; government room nights down 16% YoY; business transient RevPAR down ~2% globally .
  • Near-term group pace decelerated: fewer in-quarter bookings and elevated attrition vs expectations, with 3Q pacing down 2% and 4Q up 6% (calendar shifts noted) .
  • Higher interest expense: net interest expense rose vs prior-year driven by higher debt balances; total debt ended quarter at $15.7B, up from $14.4B YE24 .

Financial Results

P&L and Margins (As Reported and Adjusted)

MetricQ4 2024Q1 2025Q2 2025
Total Revenues ($USD Billions)$6.429 $6.263 $6.744
Adjusted Total Revenues ($USD Billions)$1.725 $1.608 $1.812
Operating Income ($USD Billions)$0.752 $0.948 $1.236
Net Income ($USD Billions)$0.455 $0.665 $0.763
Diluted EPS (Reported)$1.63 $2.39 $2.78
Adjusted Diluted EPS$2.45 $2.32 $2.65
Adjusted EBITDA ($USD Billions)$1.286 $1.217 $1.415
Operating Income Margin12% 15% 18%
Adjusted Operating Income Margin62% 63% 65%

Fee and Owned/Leased Detail

Metric ($USD Millions)Q4 2024Q1 2025Q2 2025
Base Management Fees$333 $325 $340
Franchise Fees$795 $746 $818
Incentive Management Fees$206 $204 $200
Gross Fee Revenues$1,334 $1,275 $1,400
Owned/Leased & Other Revenue$418 $361 $441
Owned/Leased Direct Expenses$318 $296 $328
Owned/Leased Net (Revenue – Direct)$100 $65 $113

RevPAR Summary (Constant Currency YoY)

KPIQ4 2024Q1 2025Q2 2025
Worldwide RevPAR YoY+5.0% +4.1% +1.5%
U.S. & Canada RevPAR YoY+4.1% +3.3% ~0%
International RevPAR YoY+7.2% +5.9% +5.3%

Consensus vs Actual (S&P Global)

MetricQ4 2024Q1 2025Q2 2025
Primary EPS Consensus Mean$2.3846*$2.2532*$2.6222*
Adjusted EPS (Actual)$2.45 $2.32 $2.65
EBITDA Consensus Mean ($MM)$1,259.6*$1,182.3*$1,381.4*
Adjusted EBITDA (Actual, $MM)$1,286 $1,217 $1,415

Values retrieved from S&P Global.*

Guidance Changes

MetricPeriodPrevious Guidance (as of Q1 release)Current Guidance (as of Q2 release)Change
Comparable Systemwide RevPAR Growth (Worldwide)FY 2025 vs FY 20241.5% to 3.5% 1.5% to 2.5% Lowered
Gross Fee Revenues ($MM)FY 2025$5,365 to $5,475 $5,365 to $5,420 Lowered upper end
Owned, Leased & Other (Net, $MM)FY 2025$345 to $355 $360 to $370 Raised
G&A ($MM)FY 2025$985 to $965 $985 to $965 Maintained
Adjusted EBITDA ($MM)FY 2025$5,285 to $5,425 $5,310 to $5,395 Narrowed, modestly shifted
Adjusted EPS – DilutedFY 2025$9.82 to $10.19 $9.85 to $10.08 Narrowed; lower upper end
Net Rooms GrowthYE 2025 vs YE 2024Approaching 5% Approaching 5% Maintained
Comparable Systemwide RevPAR Growth (Worldwide)Q3 2025 vs Q3 2024N/AFlat to +1.0% New quarterly guide
Adjusted EBITDA ($MM)Q3 2025N/A$1,288 to $1,318 New quarterly guide
Adjusted EPS – DilutedQ3 2025N/A$2.31 to $2.39 New quarterly guide
Capital Return to Shareholders ($MM)FY 2025Approx. $4,000 Approx. $4,000 Maintained

Additional capital actions post-quarter: dividend $0.67/share and buyback authorization increased by 25M shares .

Earnings Call Themes & Trends

TopicPrevious Mentions (Q4 2024, Q1 2025)Current Period (Q2 2025)Trend
AI/Technology transformationMulti-year upgrades to loyalty/reservations/PMS; cloud deployments planned; investments ramping 2024–2026 New cloud-based central reservations/PMS pilots in U.S./Canada select service later this year; AI incubator use cases (concierge, contact centers, HVMB, ambassador planning); tech spend +~$100M vs typical over 2024–2026 Execution progressing
Macro/tariffs/government demandU.S. strength in Q4; softer trends flagged in Q1 outlook Government room nights down 16% YoY; BT RevPAR down ~2%; macro uncertainty weighing on near-term bookings Headwind
Group business cadenceSolid in Q4; Q1 outlook softened in U.S. & Canada Q3 pacing -2% and Q4 +6% (calendar effects); attrition up; 2026 pace up ~8% U.S./Canada Near-term softer; medium-term firmer
Development/pipeline & conversionsRecord signings in Q4; 34k rooms signed in Q1; conversions ~⅓ of signings/openings Pipeline surpasses 590k rooms; conversions remain ~30% of signings/openings; midscale pipeline doubled QoQ Strengthening
Brand portfolio expansionOutdoor lodging, Four Points Flex expansion; citizenM acquisition agreement in Q1 Series by Marriott launch; citizenM acquisition completed; 27 luxury openings planned; RC Yacht third ship launched Broadening
Media/adjacenciesCo-branded cards strong; adjacencies highlighted Marriott Media Network launched; early advertiser interest; returns to be shared with owners New monetization

Management Commentary

  • “Marriott delivered another solid quarter… Global RevPAR increased 1.5 percent… International RevPAR rose over 5 percent… U.S. & Canada RevPAR [was] flat” — Anthony Capuano, CEO .
  • “We signed nearly 32,000 rooms… pipeline stood at a record of more than 590,000 rooms… Conversions continued to be a key driver of growth” — Capuano .
  • “Third quarter adjusted EBITDA is expected to increase 5% to 7%… full year gross fees… $5,370 to $5,420… adjusted EPS $9.85 to $10.08” — Leeny Oberg, CFO .
  • “We expect to start deploying the new cloud-based central reservations, PMS in the U.S. & Canada select service hotels later this year… we have stood up a Marriott AI incubator” — Capuano .

Q&A Highlights

  • Technology and AI: Cloud-based reservations/PMS rollout in select-service U.S./Canada later this year; AI pilots across concierge, contact centers, Homes & Villas, trip planning; tech spend heavier in 2024–2026 (+~$100M vs typical) .
  • Macro and legislation: “Big beautiful bill” passage reduces uncertainty; owners’ development decisions hinge on yields; tariffs uncertainty still a watch point .
  • Group dynamics: Near-term softness driven by attrition and fewer in-quarter bookings; 2026 pace +8% in U.S./Canada; luxury F&B spend strong (+6–10%) .
  • Business transient: Ex-government BT RevPAR down ~1% globally; government transient RevPAR down 17%; overall BT stable with short booking windows .
  • Conversions and China: Conversions ~30% of signings; key money competitive but broadly similar to 2019; Greater China signings +~20% YoY, 70% in select service, rooms growth high-single digits .

Estimates Context

  • MAR delivered modest beats on adjusted EPS and adjusted EBITDA across Q4 2024, Q1 2025, and Q2 2025 versus S&P Global consensus, reflecting resilient fee growth and international RevPAR strength despite U.S. select-service softness (see table above) .
  • Full-year guidance narrowing (lower RevPAR range; adjusted EPS upper end trimmed) suggests Street models should reduce RevPAR and EPS top-end assumptions and reflect lower residential branding fees timing offset by stronger owned/leased net and disciplined G&A .

Values retrieved from S&P Global.*

Key Takeaways for Investors

  • International outperformance and a record pipeline continue to anchor growth; exposure to luxury/full service offsets U.S. select-service headwinds .
  • Near-term demand mix pivot: leisure transient remains firm; BT and group softer short-term but 2026 pace supportive; expect calendar-driven 4Q acceleration .
  • Guidance prudence: FY RevPAR range lowered; EPS range narrowed; still targeting ≈$4B capital returns with leverage maintained at low end of 3.0–3.5x net debt/EBITDA .
  • Strategic expansion: Series by Marriott and citizenM broaden addressable markets; midscale pipeline doubled QoQ—portfolio conversions and soft brands are key levers .
  • Technology execution: Cloud-based reservations/PMS rollout and AI pilots should improve efficiency and merchandising, supporting owner economics and customer experience .
  • Watch U.S. select-service/government demand: sustained weakness could cap near-term RevPAR in the U.S.; international momentum and pricing help mitigate .
  • Capital allocation remains shareholder-friendly: dividend increased post-quarter; buyback authorization expanded; operating cash flow and asset-light model support returns .

Additional Relevant Q2 Press Releases

  • citizenM acquisition completed (July 23, 2025), expanding lifestyle/select-service offerings .
  • Earnings release date announcement (July 8, 2025) .
  • CFO retirement announcement (July 14, 2025) — transition plan disclosed .
  • Dividend declaration ($0.67/share) and buyback authorization increase (Aug 7, 2025) .