Executive Summary

Q3 topline and EPS modestly better than consensus but with margin compression: Revenue $330.0M vs $324.5M consensus*; EPS -$0.07 vs -$0.08 consensus*; EBITDA (EBITDAre) modest miss at $68.9M vs $69.6M consensus* .
Operating softness driven by tough comps, softer citywide calendars, Austin Convention Center closure, and renovation displacement (~200 bps RevPAR headwind), partly offset by 1.3% non-room revenue growth and tight cost control .
Full-year 2025 outlook cut: AFFO/share to $1.31–$1.37 (from $1.38–$1.58), Adjusted EBITDA to $324–$332M (from $332.5–$362.5M), with higher net interest expense and lower G&A; capex unchanged .
Balance sheet/liquidity remain solid ($1.0B liquidity, $2.2B debt), 74% of debt fixed/hedged and 86 of 94 hotels unencumbered, supporting buybacks (3.3M YTD) and dividend continuity ($0.15/qtr) .
Stock reaction catalysts: near-term—clarity on government shutdown/air travel impacts and Q4 demand; medium-term—2026 events (World Cup, U.S. Semiquincentennial), Northern California AI-driven recovery, and ramping conversions/renovations .

What Went Well and What Went Wrong

What Went Well
- Urban outperformance led by San Francisco CBD (+19.4% RevPAR), with Atlanta (+12.1%) and NYC (+4.7%) also strong; RevPAR index share gained .
- Out-of-room revenues grew 1.3% despite lower occupancy, reflecting ROI in F&B, reprogrammed space, and ancillary revenue; total revenue outperformed RevPAR by ~110 bps .
- Cost discipline: operating expenses up just ~90 bps YoY (ex prior-year tax benefits); YTD expenses +1.7% despite credits; balance sheet flexibility highlighted (liquidity ~$1B; swaps increased) .
What Went Wrong
- RevPAR -5.1% YoY (ADR -2.1%, occupancy -3.1%), with ~200 bps drag from major renovations and Austin Convention Center closure; margins compressed 480 bps YoY to 24.5% .
- October RevPAR down ~2% vs expectations given government shutdown; FY25 guide cut across RevPAR, EBITDA, and AFFO/share .
- Earnings leverage muted: Adjusted EBITDA $72.6M (-21% YoY), AFFO/share $0.27 (-32.5% YoY) amid softer citywide calendars and displacement .

Financial Results

Overall performance by quarter

Metric	Q1 2025	Q2 2025	Q3 2025
Total Revenues ($M)	$328.1	$363.1	$330.0
Net Income per Share (EPS)	-$0.02	$0.15	-$0.07
Comparable RevPAR ($)	$141.23	$155.08	$138.51
Comparable ADR ($)	$204.31	$205.27	$189.74
Comparable Occupancy (%)	69.1%	75.5%	73.0%
Comparable Hotel EBITDA ($M)	$85.3	$113.0	$80.8
Comparable Hotel EBITDA Margin (%)	26.1%	31.1%	24.5%
Adjusted EBITDA ($M)	$77.6	$104.0	$72.6
Adjusted FFO per diluted share & unit	$0.31	$0.48	$0.27

Q3 2025: actuals vs S&P Global consensus

Metric	Actual	Consensus	Delta	Outcome
Revenue ($M)	$330.0	$324.5*	+$5.3*	Beat
EPS (GAAP)	-$0.07	-$0.08*	+$0.01*	Beat
EBITDA (EBITDAre, $M)	$68.9	$69.6*	-$0.8*	Slight miss

Values retrieved from S&P Global.*

Revenue mix (Q3 YoY)

Revenue Category ($M)	Q3 2024	Q3 2025
Room revenue	$283.6	$267.4
Food & beverage revenue	$37.0	$36.9
Other revenue	$25.1	$25.8
Total revenues	$345.7	$330.0

KPIs cadence

KPI	Q1 2025	Q2 2025	Q3 2025
Occupancy (%)	69.1%	75.5%	73.0%
ADR ($)	$204.31	$205.27	$189.74
RevPAR ($)	$141.23	$155.08	$138.51

Balance sheet and capital returns

Liquidity ~$1.0B (cash ~$375M, undrawn revolver $600M); debt ~$2.2B; revolver capacity $600M .
74% of debt fixed/hedged; added $200M of swaps in Q3; 86 of 94 hotels unencumbered .
Share repurchases: 0.2M in Q3 ($1.3M) and 3.3M YTD ($28.6M) .
Dividend: $0.15 per common share declared for Q3; $0.4875 for Series A Preferred .

Guidance Changes

Metric	Period	Previous Guidance	Current Guidance	Change
Comparable RevPAR Growth	FY 2025	-1.0% to +1.0%	-2.6% to -1.9%	Lowered
Comparable Hotel EBITDA ($M)	FY 2025	$365.5 to $395.5	$357.5 to $365.5	Lowered
Adjusted EBITDA ($M)	FY 2025	$332.5 to $362.5	$324.0 to $332.0	Lowered
Adjusted FFO/share (diluted)	FY 2025	$1.38 to $1.58	$1.31 to $1.37	Lowered
Net Interest Expense ($M)	FY 2025	$94.0 to $96.0	$98.5 to $99.5	Higher
Cash corporate G&A ($M)	FY 2025	$34.0 to $35.0	$32.5 to $33.5	Lower
Capex ($M)	FY 2025	$80 to $100	$80 to $100	Maintained
Diluted Wtd Avg Shares & Units (M)	FY 2025	151.5	150.9	Lower
Common Dividend/Share	Q3 2025	$0.15 (Q2 precedent)	$0.15	Maintained

Drivers of change: updated year-to-date performance and the October-start government shutdown reducing compression and travel propensity; delayed ramp from major renovations; lingering macro uncertainty .

Earnings Call Themes & Trends

Topic	Previous Mentions (Q2 2025, Q1 2025)	Current Period (Q3 2025)	Trend
Business Transient (BT) recovery/RTO	“Robust performance in urban; conversions ramp; cost controls” (Q1); Q2: Q3 expected softer due to calendar shifts/renovations	Non-gov’t BT +2.4% revenue; corporate rates +3%; momentum into late Sept before shutdown	Improving pre-shutdown; softer in Oct
Leisure demand & price sensitivity	Q1: rate discipline, stable demand	Leisure room nights up, but more price-sensitive and channel-mix shift; urban leisure supported by events	Stable demand, pricing sensitivity rising
Group/citywide calendars	Q2 flagged tough comps and softer citywides ahead	Softer citywides (holiday shifts); Austin convention center transformation a headwind; group ADR +2%	Weaker in Q3; recovery depends on calendars
Out-of-room revenue & ROI initiatives	Q1/Q2 emphasized conversions/ROI; cost control	Non-room revenue +1.3%; reprogrammed spaces, F&B, parking driving mix/margins	Positive contribution continues
Regional: Northern California	Not highlighted in Q1/Q2 releases	SF CBD +19.4% RevPAR; AI activity, events, improved safety and RTO support outlook	Strengthening
Capital allocation	Q1/Q2: repurchases and balance sheet actions	More attractive buybacks; programmatic, leverage-neutral; 3.3M shares repurchased YTD	Ongoing
Regulatory/macro (shutdown/ATC)	Macro uncertainty cited earlier	Shutdown cut Oct RevPAR ~2% and pressured Q4 outlook; potential ATC headwinds to travel	Negative near term

Management Commentary

“Our third quarter results were…reflect[ive of] the resiliency of our portfolio and lean operating model…[with] continued growth in out-of-room spend… and disciplined cost control… During the quarter, we…advance[d] our conversion pipeline as well as our transformative renovations” — Leslie Hale, CEO .
“Our urban hotels continued to perform better… led by… San Francisco CBD, Atlanta, and New York City… We were especially pleased with our non-room revenues achieving 1.3% growth… total revenues… 110 bps better than our RevPAR” — CFO commentary .
“We…began… Renaissance Pittsburgh [to] Marriott’s Autograph Collection… Wyndham Boston Beacon Hill… to Hilton’s Tapestry Collection… confident… unlock significant EBITDA upside of over 40% on a stabilized basis” — CEO .
“October… declined by approximately 2%… below our expectations in light of the government shutdown” — CFO .
“We believe… 2026 [will] drive a more positive backdrop… World Cup… 72 matches… 250th anniversary… ongoing recovery in Northern California, supported by… AI industry” — CEO .

Q&A Highlights

Revenue management and channel mix: Focused on diversifying mix given weaker group setup; strength via brand.com and GDS; weekend OTA uptick; non-gov’t BT +2.4% (second consecutive quarter) .
Renovations/Capex returns: Major renovations substantially complete; ramp expected but delayed by macro; Boston Beacon Hill conversion to Tapestry seen as high upside given Mass General expansion and Hilton Honors demand .
Government shutdown/ATC impact: Q4 guide cut largely due to shutdown effects on compression and travel propensity; October -~2% RevPAR; midpoint of FY guide most likely assuming current trends; implies Nov/Dec ~-4% .
Out-of-room revenue drivers: Expanded markets, reprogrammed spaces (e.g., added ballroom in Phoenix, Black Door Cafe at Mills House), F&B enhancements; positive flow-through .
Capital allocation: Buybacks viewed as increasingly attractive; intention to be programmatic and leverage-neutral; balance with investment and balance sheet strength .

Estimates Context

Q3 results vs consensus: Revenue beat by ~$5.3M; EPS beat by $0.01; EBITDA (EBITDAre) slight miss by ~$0.8M; Adjusted EBITDA headline ($72.6M) is above EBITDAre actual due to non-GAAP add-backs .
Outlook implications: FY25 guidance cuts (RevPAR, EBITDA, AFFO/share) suggest Street will likely reduce Q4 and FY numbers, with interest expense higher and some renovation ramp timing pushed out .
Values retrieved from S&P Global.*

Key Takeaways for Investors

Near-term setup is choppy: October underperformance and government shutdown create Q4 risk; guide reset lowers the bar but compresses margins in the interim .
Structural levers intact: ROI/ancillary revenue initiatives and conversions/renovations are working and should improve mix and margins as demand normalizes .
Urban and Northern California positioning is a differentiator, with SF CBD strength and AI-driven demand offering 2026 upside alongside major events (World Cup, 250th U.S. anniversary) .
Balance sheet flexibility supports buybacks and dividend continuity; interest expense headwinds partly offset by lower G&A and hedging .
Watch list of catalysts: resolution of the shutdown/ATC constraints, citywide calendars into Q4/Q1, visible ramp at renovated assets (Key West, Waikiki), progress on Boston/Pittsburgh conversions, and additional capital recycling for repurchases .
Relative performance remains solid (market share gains); if macro stabilizes, portfolio is set to recapture margins and benefit from mix/pricing .
Risk monitor: prolonged shutdown or weaker consumer/corporate confidence; renovation ramp delays; elevated wage costs in certain markets; interest rate path .

Appendix: Additional Q3 2025 Press Releases

Dividend declaration: $0.15 per common share; $0.4875 for Series A Preferred; payable in October to Sept 30 record date .

RLJ Lodging Trust (RLJ)·Q3 2025 Earnings Summary