Sign in

You're signed outSign in or to get full access.

T&

Travel & Leisure Co. (TNL)·Q2 2025 Earnings Summary

Executive Summary

  • Q2 2025 delivered steady top-line and margin performance: Net revenue $1.02B, Adjusted EBITDA $250M (24.6% margin), and Adjusted EPS $1.65; VOI momentum (tours +3%, VPG +7% YoY) offset weakness in Travel & Membership .
  • Versus S&P Global consensus, revenue modestly beat and EPS was in line; management raised full-year VPG guidance to $3,200–$3,250 while maintaining FY Adjusted EBITDA at $955–$985M, and guided Q3 Adjusted EBITDA to $250–$260M .
  • Balance sheet/liquidity improved: revolver refinanced to 2030 (-25 bps spread), leverage 3.4x; closed $300M ABS at 5.10% (tightest since 2022), underscoring strong capital markets access .
  • Capital return remained active: $107M returned in Q2 ($70M buybacks at ~$46.75; $37M dividend), with $303M remaining buyback authorization .
  • Stock narrative: resilience in core Vacation Ownership (VOI) and a raised VPG outlook are positives; sustained Travel & Membership headwinds and affiliate M&A disruptions temper the setup near-term .

What Went Well and What Went Wrong

  • What Went Well

    • VOI outperformed: revenue +6% YoY to $853M; VPG $3,251 (+7% YoY) exceeded the high end of guidance, tours +3% .
    • Execution and capital markets access: revolver maturity extended to 2030 (-25 bps spreads); $300M ABS priced at 5.10% with 98% advance rate (tightest since early 2022) .
    • Management tone on demand/owner health constructive: “Our VPG performance remains strong as we ended the quarter above the high end of our guidance range.” — CEO Michael Brown . CFO noted adjusted free cash flow and resilient recurring revenue mix .

  • What Went Wrong

    • Travel & Membership softness: revenue -6% YoY to $166M; Adjusted EBITDA -11% to $55M, driven by lower exchange transactions and mix shift to lower-margin travel club .
    • Unanticipated affiliate M&A disruptions pressured T&M volumes beyond original guidance assumptions .
    • GAAP EPS contracted YoY on a tougher compare (prior-year discontinued ops gain), despite continuing ops EPS up YoY; Adjusted EBITDA margin slipped 20 bps YoY to 24.6% .

Financial Results

Consolidated results

MetricQ2 2024Q1 2025Q2 2025
Net Revenue ($USD Millions)$985 $934 $1,018
GAAP Diluted EPS – Continuing Ops ($)$1.36 $1.07 $1.62
Adjusted Diluted EPS ($)$1.52 $1.11 $1.65
Adjusted EBITDA ($USD Millions)$244 $202 $250
Adjusted EBITDA Margin (%)24.8% 21.6% 24.6%

Q2 2025 actual vs S&P Global consensus

MetricActualConsensusDelta
Revenue ($USD Millions)$1,018 $1,008.9*+$9.1
Adjusted EBITDA ($USD Millions)$250 $249.7*+$0.3
Adjusted Diluted EPS ($)$1.65 $1.656*(~in line)

Values marked with * retrieved from S&P Global.

Segment performance

MetricQ2 2024Q1 2025Q2 2025
Vacation Ownership Revenue ($M)$807 $755 $853
Vacation Ownership Adjusted EBITDA ($M)$206 $159 $218
Travel & Membership Revenue ($M)$177 $180 $166
Travel & Membership Adjusted EBITDA ($M)$62 $68 $55

Operational KPIs

KPIQ2 2024Q1 2025Q2 2025
Gross VOI Sales ($M)$607 $512 $654
Net VOI Sales ($M)$441 $384 $474
Tours (000s)192 153 197
VPG ($)$3,051 $3,212 $3,251
Avg. Exchange Members (000s)3,450 3,362 3,329
Exchange Transactions (000s)220 240 197
Travel Club Transactions (000s)179 175 191
Exchange Rev/Transaction ($)$366 $353 $370
Travel Club Rev/Transaction ($)$251 $257 $229

Balance sheet and cash flow (select items)

  • Corporate debt $3.6B; non-recourse VOI debt $2.0B; leverage ratio 3.4x; cash & cash equivalents $212M (6/30/25) .
  • YTD operating cash flow $353M; Adjusted Free Cash Flow $123M (six months) .

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Adjusted EBITDA ($M)Q3 2025n/a250–260 New
Gross VOI Sales ($M)Q3 2025n/a650–680 New
VPG ($)Q3 2025n/a3,200–3,250 New
Adjusted EBITDA ($M)FY 2025955–985 955–985 Maintained
Gross VOI Sales ($B)FY 20252.4–2.5 2.4–2.5 Maintained
VPG ($)FY 20253,050–3,150 3,200–3,250 Raised
Dividend/ShareFY 2025$0.56 recommended (Q2) $0.56 recommended (Q3) Maintained

Earnings Call Themes & Trends

TopicPrevious Mentions (Q4’24 and Q1’25)Current Period (Q2’25)Trend
AI/Tech & DigitalQ1: Club Wyndham app bookings rising; focus on multi-brand digital engagement 162k app downloads; 19% of bookings; investing in AI on web/app channels for personalized experiences and frictionless booking Improving
Macro/Consumer HealthQ4: Consumers prioritized vacations; strong core demand Booking pace steady; owner base resilient; VPG above guidance high-end Stable/Positive
Credit Quality/ProvisionFY’24 provision elevated; disciplined underwriting Provision outlook 21% FY; delinquencies moderated; new origination FICOs >740 Improving
Travel & Membership StrategyFY’24: flat EBITDA; Travel Clubs growth offset subscription softness Revenue -6%, EBITDA -11%; affiliate M&A and exchange mix headwinds; cost actions underway Deteriorating
Multi-Brand ExpansionFY’24: Accor Vacation Club acquisition New SI Resorts Nashville (spring 2026); Margaritaville Orlando, Accor Asia club expansion Expanding
Capital Markets/LiquidityQ1: $350M ABS at 5.2%; conduit extended to Aug 2027 Revolver extended to 2030 (-25 bps); $300M ABS at 5.10% (tightest since 2022) Strengthening

Management Commentary

  • “We saw healthy year-over-year growth in VOI sales, with gains in both tour flow and volume per guest… VPG performance remains strong as we ended the quarter above the high end of our guidance range.” — Michael D. Brown, CEO .
  • “Revenue for the quarter was $1.02 billion… Adjusted EBITDA was $250 million… Adjusted EPS grew 9%… driven by strong performance in Vacation Ownership and the benefit from ongoing share repurchases.” — Erik Hoag, CFO .
  • “The exchange business continues to face industry consolidation headwinds… recent M&A activity disrupted transaction volumes from certain affiliates and was not anticipated in our original guidance.” — Erik Hoag, CFO .
  • “We are progressing with investments in AI on our web and app channels, driving recommendations for personalized experiences and a seamless booking process.” — Michael D. Brown, CEO .
  • “We ended the quarter at 3.4 times levered… completed our second ABS… a 98% advance rate and a 5.1% coupon, the lowest we've seen since 2022.” — Erik Hoag, CFO .

Q&A Highlights

  • Travel & Membership pressure and visibility: Affiliate M&A and exchange consolidation drove a meaningful, unforecasted volume impact; management is pursuing cost actions, innovative inventory deployment, and Travel Club growth to mitigate .
  • VPG guidance raised while gross VOI unchanged: Strength came from measured price increases and higher owner engagement; management expects VOI to skew to high end of range with summer seasonality, tours up 3% in Q2 and sequential acceleration expected .
  • Credit/delinquencies: Early-year uptick moderated through Q2 and into July; full-year provision 21% reiterated; robust inventory recovery process supports economics (recovery cost <10%) .
  • New owner mix: Long-term target 35%; Q2 was 30% given outsized owner demand; expect improvement in back half as new partnerships (e.g., Hornblower) scale; close rates materially above pre-COVID .
  • Sports Illustrated Resorts: Nashville conversion to open spring 2026; sales to start late 2025; Tuscaloosa delivery early 2027 after permitting; third SI Resorts announcement expected this year .

Estimates Context

  • Q2 2025: Revenue $1,018M vs $1,008.9M consensus (beat); Adjusted EBITDA $250M vs $249.7M consensus (in line); Adjusted EPS $1.65 vs $1.656 consensus (in line) . Consensus values from S&P Global*.
  • Q3 2025: Company guides Adjusted EBITDA $250–$260M; Street est. EBITDA ~$254.8M, EPS ~$1.73, revenue ~$1.033B — broadly aligned with company’s guide . S&P Global values*.
  • FY 2025: Company maintained Adjusted EBITDA $955–$985M; raised VPG guidance to $3,200–$3,250 from $3,050–$3,150, implying higher sales efficiency even if tour growth remains measured .

Values marked with * retrieved from S&P Global.

Key Takeaways for Investors

  • VOI fundamentals remain resilient: sustained high VPG and improving tours underpin 2H sales momentum, supporting management’s maintained FY Adjusted EBITDA outlook .
  • Mix shift creates a two-speed story: VOI strength offsets T&M structural challenges and affiliate M&A disruptions; watch for cost actions and potential strategic moves in T&M .
  • Raised VPG guidance is a quiet positive: pricing and engagement are driving higher per-tour monetization; execution on new-owner partnerships is the next lever for upside .
  • Capital allocation remains shareholder-friendly: $107M returned in Q2 with $303M buyback capacity remaining; dividend held at $0.56 .
  • Funding conditions supportive: lower ABS coupons and extended revolver maturity reduce risk to financing engine and support capital efficiency .
  • Near-term trading setup: Expect the stock to react to raised VPG and in-line-to-better execution in VOI; any incremental deterioration in T&M or macro wobble could cap multiple expansion until clearer stabilization emerges .

Additional Relevant Press Releases (Q2 2025)

  • $300M term securitization at 5.10% all-in coupon; 98% advance rate (Sierra Timeshare 2025-2) .
  • Sports Illustrated Resorts Nashville announced; opening spring 2026, sales begin late 2025 .

Notes:

  • Returned $107M to shareholders in Q2 ($70M buybacks; $37M dividends)
  • Leverage ratio 3.4x; refinance of $1B revolver to 2030 with 25 bps spread reduction