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T&

Travel & Leisure Co. (TNL)·Q1 2025 Earnings Summary

Executive Summary

  • Q1 2025 net revenue was $934M, GAAP diluted EPS $1.07, and Adjusted EBITDA $202M; Vacation Ownership strength offset continued Travel & Membership softness .
  • Versus S&P Global consensus, revenue modestly beat ($934M vs $930M*), EPS slightly missed ($1.11 adjusted vs $1.12*); EBITDA vs SPGI’s “EBITDA” metric missed (186M* actual vs 200M* est), while company-reported Adjusted EBITDA was $202M, reflecting definitional differences .
  • Management reiterated FY 2025 Adjusted EBITDA guidance ($955M–$985M), introduced Q2 2025 guidance (Adj. EBITDA $245M–$255M; VPG $3,050–$3,150; Gross VOI $620M–$640M), and lowered Travel & Membership FY guidance to flat to down 2% (from flat to up 2%) .
  • Capital returns remained a catalyst: $41M dividend ($0.56/share) and $70M buybacks in Q1; leverage ratio 3.3x; ABS market access reaffirmed with a $350M term securitization at 5.2% and 98% advance rate .

What Went Well and What Went Wrong

  • What Went Well

    • VPG rose to $3,212 (+6% y/y), driving Vacation Ownership revenue (+4%) and Adjusted EBITDA (+18% y/y) .
    • Technology adoption: Club Wyndham app downloads reached ~100k (~20% of base) with 71% search-to-book conversion (+22% vs website), lifting satisfaction and bookings .
    • Capital allocation and liquidity: $111M returned to shareholders (dividends + buybacks); $350M ABS executed at favorable terms; ABS conduit renewed to Aug 2027 .

  • What Went Wrong

    • Travel & Membership faced structural headwinds from industry consolidation; revenue fell 7% y/y and Adjusted EBITDA fell 9% y/y; FY guidance lowered to flat to down 2% .
    • Portfolio performance: delinquency improvements typical from Dec–Mar “did not occur”; provision rate for 2025 raised to 21%, implying ~$15–$16M headwind to EBITDA unless offset by VPG/cost actions .
    • Tours declined 1% y/y; booking window narrowed to 116 days from 130, and new owner close rates softened modestly, though owner close rates improved slightly .

Financial Results

  • Consolidated trend (oldest → newest)
MetricQ3 2024Q4 2024Q1 2025
Net Revenues ($M)$993 $971 $934
Diluted EPS ($)$1.39 $1.72 $1.07
Adjusted EBITDA ($M)$242 $252 $202
Adjusted EBITDA Margin (%)24.4% 26.0% 21.6%
Net Income Margin (%)9.8% 12.3% 7.8%
  • Segment comparison (y/y)
SegmentQ1 2024 Revenue ($M)Q1 2025 Revenue ($M)Q1 2024 Adj. EBITDA ($M)Q1 2025 Adj. EBITDA ($M)
Vacation Ownership$725 $755 $135 $159
Travel & Membership$193 $180 $75 $68
  • KPIs and operating metrics (oldest → newest)
KPIQ1 2024Q4 2024Q1 2025
VPG ($)$3,035 $3,284 $3,212
Tours (000s)155 175 153
Gross VOI Sales ($M)$490 $591 $512
Net VOI Sales ($M)$369 $456 $384
Loan Loss Provision ($M)$78 $117 $91
Exchange Transactions (000s)275 182 240
Travel Club Transactions (000s)170 157 175
Exchange Rev/Transaction ($)$350 $376 $353
Travel Club Rev/Transaction ($)$256 $235 $257
  • Estimates vs Actuals (Q1 2025)
    • EPS: Estimate $1.12* vs Actual $1.11 (Adjusted diluted EPS); slight miss .
    • Revenue: Estimate $929.9M* vs Actual $934.0M; modest beat .
    • EBITDA: Estimate $199.6M* vs SPGI “actual” $186.0M*; company reports Adjusted EBITDA $202.0M (non-GAAP) .
      Values marked with * retrieved from S&P Global.
MetricQ1 2025 Estimate*Q1 2025 Actual
Primary EPS Consensus Mean ($)1.1225*1.11 (Adjusted diluted EPS)
Revenue Consensus Mean ($M)929.9*934.0
EBITDA Consensus Mean ($M)199.6*186.0*; Adj. EBITDA 202.0

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Adjusted EBITDA ($M)FY 2025$955–$985 $955–$985 Maintained
Gross VOI Sales ($B)FY 2025$2.4–$2.5 $2.4–$2.5 Maintained
VPG ($)FY 2025$3,050–$3,150 $3,050–$3,150 Maintained
Travel & Membership Adj. EBITDAFY 2025Flat to up 2% Flat to down 2% Lowered
Adjusted EBITDA ($M)Q2 2025N/A$245–$255 New
Gross VOI Sales ($M)Q2 2025N/A$620–$640 New
VPG ($)Q2 2025N/A$3,050–$3,150 New
Dividend per share ($)Q1 2025Recommend $0.56 Paid $0.56 (Q1); recommend $0.56 for Q2 Increased and maintained

Earnings Call Themes & Trends

TopicPrevious Mentions (Q3 2024, Q4 2024)Current Period (Q1 2025)Trend
Technology/app adoptionClub Wyndham app launched; ~40k downloads; +30% conversion vs website ~100k downloads (~20% of owner base); 71% search-to-book (+22% vs website); texting boosts on-site satisfaction Accelerating adoption; improving satisfaction
Consumer/booking windowForward bookings “a tad behind” early 2025; owners resilient; VPG >$3k Booking window modestly shortened to 116 days (from 130); owner demand resilient; strong April and Easter weekend Slightly shorter window; demand steady
Exchange consolidationTravel & Membership structurally pressured; offset by Travel Club growth Exchange transactions down; Travel Club +3% transactions; segment guidance lowered Persistent headwind; managed for cash
Loan loss provision2025 provision expected ~20% Provision outlook raised to 21%; April collections improving Slight deterioration; monitoring
Brand expansion (SI, Margaritaville)SI sales targeted for 2025; pipeline robust; conversions preferred SI trust conversion expected; sales launch in 2025; announced new Margaritaville Kissimmee resort opening 2027 Execution steps underway
Capital allocationRepurchases/dividends consistent; ABS access; refi reduced interest $70M buybacks; $0.56 dividend; $350M ABS at 5.2% & 98% advance; ABS conduit renewed Continued discipline

Management Commentary

  • “Adjusted EBITDA at the high end of our guidance range… strength of our vacation ownership business, which saw volume per guest well above $3,000… bookings increasing via our new Club Wyndham app” — Michael D. Brown, CEO .
  • “For the March quarter, we reported adjusted EBITDA of $202 million… Vacation Ownership segment revenue $755M (+4% y/y), adjusted EBITDA $159M (+18% y/y)… Travel & Membership revenue $180M (-7%), adjusted EBITDA $68M (-9%)” — Michael Hug, CFO .
  • “We are projecting $250 million of adjusted EBITDA [Q2]… reiterating our full year adjusted EBITDA outlook” — Michael D. Brown .
  • “Our leverage ratio in the first quarter was 3.3x… we renewed our $600 million ABS conduit to August 2027” — Michael Hug .

Q&A Highlights

  • April trends and collections: VO KPIs strong through Easter; April collections improving; provision raised to 21% given elevated March delinquencies .
  • Close rates/mix: Owner close rates up slightly; new owner close rates down modestly; new owner mix ~31% in Q1, expected to reach ~35% by year-end .
  • Tour flow cadence: Expect mid-single-digit growth in back half on easier comps and new partnerships; Q1 decline reflects tough comps and channel culling in 2024 .
  • Exchange dynamics: Consolidation continues to pressure external exchanges; Travel Club transactions +3%; aiming to “flatten the curve” while VO drives results .
  • Sports Illustrated Resorts: Plan to convert a property into SI trust, enabling faster sales start in 2025; announcements expected .
  • Macro and exposure: ~90% revenue in U.S.; minimal Europe exposure; Canada shows loyalty to local resorts; Asia-Pacific largely regional travel (Australia/Thailand/NZ) .
  • Interest rate environment: ABS benchmarks modestly higher; 2025 interest expense impact closer to flat/slight headwind vs prior expectation of tailwind .

Estimates Context

  • Revenue beat: $934M actual vs $930M* consensus; reflects robust VOI sales and strong VPG; Travel & Membership declined but was anticipated .
  • EPS near inline/miss: Adjusted diluted EPS $1.11 vs $1.12* consensus; GAAP diluted EPS $1.07; mix shifts toward owners supported margins .
  • EBITDA definitional gap: SPGI “EBITDA” actual 186M* vs 200M* estimate; TNL reports Adjusted EBITDA $202M; investors should anchor on company’s non-GAAP metric and reconciliation .
    Values marked with * retrieved from S&P Global.

Key Takeaways for Investors

  • Q1 showed resilient owner demand and execution; revenue beat vs consensus and adjusted EBITDA at the high end of internal guidance, despite exchange headwinds and higher provision rate .
  • Watch the provision trajectory and April/May collections; management raised provision to 21% and plans to offset via stronger VPG and cost control — a key determinant of H2 margin cadence .
  • Summer is the peak for new owner mix; tour flow expected to ramp mid-single digits on easier comps and new partnerships, implying sequential sales momentum into Q3 .
  • Technology is a tangible catalyst: Club Wyndham app engagement and conversion are improving bookings and satisfaction; WorldMark app launch later this year is a follow-on driver .
  • Segment divergence persists: Vacation Ownership remains the earnings engine; Travel & Membership is being managed for cash as consolidation pressures exchange transactions .
  • Capital returns remain robust: ongoing buybacks and $0.56 dividend; ABS access and conduit renewal support liquidity and FCF conversion >50% for 2025 per plan .
  • Brand strategy could add optionality over 12–24 months (Sports Illustrated sales start in 2025; Margaritaville Kissimmee opening 2027), but contributions in 2025 likely modest .

Appendix: Additional Data

  • Consolidated income statement (Q1 2025 vs Q1 2024)
MetricQ1 2025Q1 2024
Net Revenues ($M)$934 $916
Net Income ($M)$73 $66
Diluted EPS ($)$1.07 $0.92
Operating Income ($M)$156 $150
  • Cash flow and balance sheet highlights (Q1 2025)
MetricQ1 2025
Net cash from operating activities ($M)$121
Adjusted free cash flow ($M)$152
Corporate debt outstanding ($B)$3.5
Non-recourse VOI debt ($B)$2.2
Leverage ratio (covenant)3.3x
  • Capital return (Q1 2025)
MetricQ1 2025
Dividend paid$41M; $0.56/share
Shares repurchased1.3M; $70M @ ~$52.27 avg
Authorization remaining$373M