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Pebblebrook Hotel Trust (PEB)·Q3 2025 Earnings Summary

Executive Summary

  • Q3 2025 results were broadly in line with company outlook: Same-Property Hotel EBITDA was $105.4M; Adjusted EBITDA re was $99.2M (roughly $2.2M above midpoint); Adjusted FFO per diluted share was $0.51 (about $0.03 above midpoint) .
  • Revenue modestly beat Wall Street consensus, while GAAP EPS missed: Revenue $398.7M vs $396.7M estimate*; GAAP diluted EPS to common was -$0.37 vs -$0.02 estimate* ; S&P Global values*.
  • Guidance narrowed/trimmed due to a prolonged federal government shutdown impacting demand in D.C. and San Diego: FY25 Adjusted EBITDA re high-end lowered by $6.0M; Same-Property Total RevPAR high-end lowered by 60 bps; Adjusted FFO/share range narrowed with midpoint unchanged .
  • Balance sheet actions are a positive catalyst: Completed $400M 1.625% converts due 2030 and retired $400M 2026 notes at a 2% discount; instituted a new $150M common share repurchase program; ended Q3 with $232M cash and net debt/TTM EBITDA of 6.1x .

What Went Well and What Went Wrong

What Went Well

  • Strong market recovery in San Francisco (+8.3% RevPAR), with occupancy up sharply; Chicago also grew RevPAR (+2.3%) .
  • Cost discipline remained exceptional: Same-Property hotel expenses before fixed costs rose just 0.4% YoY; per-occupied-room costs fell ~2% .
  • Redeveloped resorts delivered: Newport Harbor Island Resort EBITDA rose strongly (Q3 leadership within portfolio), and Estancia La Jolla and Jekyll Island Club posted RevPAR gains, fueled by comprehensive transformations .

Management quotes:

  • “Our third-quarter results were in line with our outlook, reflecting strong operating execution and continued outperformance in driving portfolio-wide operating efficiencies…” — Jon E. Bortz, CEO .
  • “San Francisco once again led the portfolio…” .
  • “Total expenses before fixed costs increased just 0.4% year-over-year…” .

What Went Wrong

  • ADR pressure and mixed urban performance: Occupancy rose ~190 bps, but ADR declined 5.4%, driving -3.1% RevPAR and -1.5% Total RevPAR vs Q3 2024 .
  • Los Angeles (-10.4% RevPAR) and Washington D.C. (-16.4%) were headwinds, with demand disruptions and a prolonged federal shutdown dampening travel .
  • Group attendance softness and shorter booking windows pressured near-term rates; group occupancy down ~2% and attrition ticked up modestly .

Financial Results

Core P&L and Operating Metrics

MetricQ3 2024Q2 2025Q3 2025
Revenue ($USD Millions)$404.5 $407.5 $398.7
GAAP Diluted EPS to Common ($)$0.24 $0.06 $(0.37)
Adjusted FFO per Diluted Share ($)$0.59 $0.65 $0.51
Adjusted EBITDA re ($USD Millions)$112.2 $117.0 $99.2
Same-Property Hotel EBITDA ($USD Millions)$113.3 $115.8 $105.4
Same-Property EBITDA Margin (%)28.1% 29.4% 26.5%

KPI Trends

KPIQ3 2024Q3 2025
Same-Property Occupancy (%)78.0% 79.9%
Same-Property ADR ($)$306.78 $290.25
Same-Property RevPAR ($)$239.34 $231.84
Same-Property Total RevPAR ($)$367.47 $362.12

Segment/Market Breakdown (Q3 2025 vs 2024 Same-Property RevPAR variance)

Market/SegmentYoY RevPAR Variance
San Francisco+8.3%
Chicago+2.3%
Los Angeles-10.4%
Washington DC-16.4%
Resorts (aggregate)-0.7%
Urban (aggregate)-4.1%

Performance vs Wall Street Estimates (S&P Global)

MetricEstimate (Q3 2025)Actual (Q3 2025)
Revenue ($USD Millions)396.7*398.7
Primary EPS ($)-0.023*-0.37
EBITDA ($USD Millions)99.2*90.0*

Values retrieved from S&P Global.*

Guidance Changes

MetricPeriodPrevious Guidance (7/29/25)Current Guidance (11/05/25)Change
Net loss ($MM)FY 2025($26.5) to ($12.0) ($67.5) to ($58.5) Lowered (wider loss)
Adjusted EBITDA re ($MM)FY 2025$332.5 to $347.5 $332.5 to $341.5 High lowered by $6.0; midpoint -$3.0
Adjusted FFO ($MM)FY 2025$176.5 to $191.0 $177.5 to $186.5 Low +$1.0; High -$4.5
Adjusted FFO per diluted share ($)FY 2025$1.47 to $1.59 $1.50 to $1.57 Low +$0.03; High -$0.02; midpoint unchanged
Same-Property Total RevPAR variance vs 2024 (%)FY 2025(0.1%) to 1.7% (0.1%) to 1.1% High -60 bps; midpoint -30 bps
Same-Property Hotel EBITDA ($MM)FY 2025$343.0 to $358.0 $343.0 to $352.0 High -$6.0
Adjusted FFO per diluted share ($)Q4 2025N/A$0.18 to $0.26 New
Common Dividend ($/share)Q3 2025N/A$0.01 declared Maintained

Earnings Call Themes & Trends

TopicPrevious Mentions (Q1 & Q2)Current Period (Q3 2025)Trend
AI/technology initiativesInitiated pilots to improve hiring, retention, service; brands slower than independents “Working closely with Curator… AI and robotics” accelerating; deploying energy/water tech Expanding adoption
Energy efficiency & cost controlEnergy costs down; water/energy optimization; per-occupied-room expenses down Per-occupied-room expenses down ~2%; continued efficiency program Improving
Tariffs/macro & government shutdownCaution on tariff/policy uncertainty; weaker group in Q2 Shutdown impact hurting travel (esp. D.C.); cautious Q4 outlook Worsened near term
Regional trendsSF recovery strong; Portland/Chicago improving SF standout (+8.3%); Chicago +2.3%; LA/DC pressured Divergent; SF improving
Regulatory/legal (labor policy)Film tax credits and policy tailwinds for LA discussed Ballot initiatives in LA/San Diego on wage policies; industry activism Active engagement
Group vs. leisureGroup nights up; shorter booking windows; leisure resilient but rate sensitive Group attendance softer; leisure prices sensitive; wholesale/consortia used to backfill Group softer; leisure resilient

Management Commentary

  • “San Francisco… fueled by robust citywide conventions and healthy business and leisure transient demand growth. Chicago also exceeded expectations…” — Jon E. Bortz .
  • “We achieved a key strategic milestone with the successful completion of our $400 million convertible notes offering at a very attractive 1.625% rate…” — Jon E. Bortz .
  • “Same property hotel expenses before fixed costs rose just 0.4% year-over-year… per-occupied-room basis, expenses declined about 2%.” — Management remarks .
  • “We are working closely with Curator to identify and implement the most impactful [AI/robotics] solutions. We expect the hotel operating model to look quite different in a few years...” — Management .

Q&A Highlights

  • San Francisco rate confidence: Compression outside citywide dates enabling rate push; AI/tech events and corporate-led conventions (e.g., Microsoft Ignite) bolster demand .
  • LA outlook: Expect improvement in 2026 due to easier comps and ramping film/TV production credits; short-term stabilization underway .
  • Expense trajectory: Expect moderating wage increases and continued offset from efficiency initiatives; targeting every expense line, aided by AI/automation .
  • Government shutdown impacts: Material travel drag nationwide, especially in D.C.; expected tailwind in 2026 as travel normalizes .
  • Dispositions/transactions: One hotel under contract held-for-sale ($72M); broader transaction market showing pent-up demand awaiting macro clarity .

Estimates Context

  • Revenue: Beat by ~$2.1M versus S&P consensus* ($398.7M actual vs $396.7M estimate), consistent with modest top-line resilience .
  • EPS: Miss on GAAP diluted EPS (actual -$0.37 vs -$0.02 estimate*), reflecting ADR pressure, DC/LA demand headwinds, and impairment charges .
  • EBITDA: S&P Global “EBITDA” actual came in below consensus (90.0M* vs 99.2M*), while company’s Adjusted EBITDA re was $99.2M (above midpoint) .
    Values retrieved from S&P Global.*

Where estimates may adjust:

  • Street models likely reduce FY25 top-line/EBITDA assumptions for DC/LA and adjust Q4 run-rate for shutdown-related softness; increase 2026 ramp assumptions for SF and LA given events and film credits .

Key Takeaways for Investors

  • Cost discipline is a durable differentiator; continued efficiency gains and AI-enabled tools should protect margins into 2026 despite wage pressures .
  • Market mix matters: SF’s recovery and redeveloped resorts are offsetting DC/LA headwinds; portfolio positioning should drive outperformance as comps ease and event calendars strengthen in 2026 .
  • Capital allocation is supportive: New $150M buyback and convert refinancing at 1.625% extend maturities and enhance FFO/NAV per share at discounts to NAV .
  • Near-term caution: Q4 guidance reflects shutdown-related risk and continued leisure rate sensitivity; however, cost control and diversified demand channels provide downside buffers .
  • 2026 setup looks favorable: World Cup, Super Bowl (SF), America 250 events, and easier LA/DC comps align with improving convention calendars and potential macro clarity .
  • Watch for asset sales and redeployment into buybacks/debt reduction as the transaction market thaws; one property is already classified as held-for-sale .
  • Track ADR recovery in SF and LA production ramp; pricing power on high-occupancy nights and policy tailwinds could accelerate RevPAR normalization .

Additional Relevant Press Releases (Q3 2025 window)

  • Dividend declaration: $0.01 per common share and preferred dividends per series for Q3 2025 .
  • Earnings call scheduled and webcast details .

Cross-References and Non-GAAP Notes

  • Non-GAAP reconciliations for Adjusted FFO, EBITDA re, and Same-Property metrics are provided in exhibits; LaPlaya BI insurance income affects Adjusted EBITDA re/FFO but is excluded from Same-Property EBITDA .
  • Balance sheet snapshot: Cash and restricted cash $232M; weighted-average interest rate 4.1%; 96% effectively fixed; net debt/TTM corporate EBITDA 6.1x .

Values retrieved from S&P Global.*