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WYNDHAM HOTELS & RESORTS, INC. (WH)·Q3 2025 Earnings Summary

Executive Summary

  • Q3 2025 delivered resilient profitability but softer top-line: adjusted EPS $1.46 (+5% YoY) and adjusted EBITDA $213M (+2% YoY), while fee-related & other revenues fell 3% to $0.382B on lower RevPAR and franchise fees .
  • Against S&P Global consensus, EPS modestly beat and revenue missed: EPS $1.46 vs $1.437*; revenue $0.382B vs $0.402B* (12 EPS est.; 9 revenue est.) — a mixed print likely to refocus investors on near-term demand softness and guidance cuts (Values retrieved from S&P Global).
  • Full-year guidance lowered: global RevPAR (cc) to down 3% to down 2% (from down 2% to up 1%), fee-related & other revenues to $1.43–$1.45B (from $1.45–$1.49B), adjusted EBITDA to $715–$725M (from $730–$745M), and adjusted EPS to $4.48–$4.62 (from $4.60–$4.78) .
  • Development remains a bright spot: record pipeline at ~257k rooms (+4% YoY), 204 contracts (+24% YoY), system rooms +4% YoY, and ancillary revenues +18% YoY; company highlighted technology/loyalty advances as growth drivers .
  • Key catalysts: near-term—lowered FY25 outlook and U.S. RevPAR softness; medium-term—AI-driven direct contribution uplift, subscription loyalty launch, and multi-year pipeline execution .

What Went Well and What Went Wrong

What Went Well

  • Adjusted EPS and EBITDA growth despite RevPAR headwinds: adjusted EPS $1.46 (+5% YoY) and adjusted EBITDA $213M (+2% YoY), aided by cost containment and share repurchases .
  • Record development momentum and pipeline quality: pipeline ~257k rooms (+4% YoY), 204 contracts (+24% YoY); ~70% midscale & above, ~75% new construction, ~36% broken ground; rooms under construction +3% YoY .
  • Technology and loyalty advances driving ancillary revenue: ancillary revenues +18% YoY; management emphasized AI agents (500k interactions; 25% lower handle time; ~300 bps direct contribution uplift) and the “Wyndham Rewards Insider” subscription .

Quote: “We delivered record year-to-date organic room openings, grew our global pipeline to another all-time high, and achieved double-digit growth in ancillary revenues – all while expanding our portfolio with high-quality, FeePAR-accretive hotels.” — CEO Geoff Ballotti .

What Went Wrong

  • Global RevPAR down 5% (cc), with U.S. down 5% and international down 2%; U.S. softness concentrated in Texas, Florida, and California .
  • Fee-related & other revenues fell to $0.382B (–$12M YoY), driven by lower RevPAR and other franchise fees; marketing fund variability helped EBITDA but underlying comparable EBITDA was flat .
  • FY25 guidance cut across revenue, EBITDA, EPS, and RevPAR; marketing funds expected to overspend by ~$5M in FY25 (to be recovered in future periods) .

Financial Results

Quarterly Trend (oldest → newest)

MetricQ1 2025Q2 2025Q3 2025
Fee-related & other revenues ($USD Billions)$0.316 $0.397 $0.382
Net Income ($USD Millions)$61 $87 $105
Diluted EPS ($USD)$0.78 $1.13 $1.36
Adjusted Diluted EPS ($USD)$0.86 $1.33 $1.46
Adjusted EBITDA ($USD Millions)$145 $195 $213

YoY Comparison (Q3 2024 vs Q3 2025)

MetricQ3 2024Q3 2025Change ($)Change (%)
Fee-related & other revenues ($USD Billions)$0.394 $0.382 –$0.012 –3%
Net Income ($USD Millions)$102 $105 +$3 n/a
Diluted EPS ($USD)$1.29 $1.36 +$0.07 n/a
Adjusted Diluted EPS ($USD)$1.39 $1.46 +$0.07 n/a
Adjusted EBITDA ($USD Millions)$208 $213 +$5 n/a

Estimates vs Actuals (Q3 2025)

MetricConsensus*ActualSurprise
EPS ($USD)1.43693*1.46 Beat
Revenue ($USD Billions)0.4019*0.382 Miss

Values retrieved from S&P Global.

Segment Breakdown

SegmentQ1 2025Q2 2025Q3 2025
Hotel Franchising Net Revenues ($USD Billions)$0.316 $0.397 $0.382
Hotel Franchising Adjusted EBITDA ($USD Millions)$161 $214 $228
Corporate Adjusted EBITDA ($USD Millions)–16 –19 –15
Total Adjusted EBITDA ($USD Millions)145 195 213

KPIs

KPI (Q3 2025 unless noted)Value
Global RevPAR (cc)$50.05; –5% YoY
U.S. RevPAR (cc)$55.07; –5% YoY
International RevPAR (cc)$43.11; –2% YoY
Average Royalty Rate (Q3 2025)Global 4.0%; U.S. 4.8%; International 2.6%
System Rooms (end Q3)Global 855,400; U.S. 503,400; International 352,000
Pipeline (hotels/rooms)~2,180 / ~257,000; +4% YoY
Contracts Awarded204 (+24% YoY)
Ancillary Revenues YoY+18%
Adjusted Free Cash Flow (Q3)$97M
Net Debt / TTM Adjusted EBITDA3.5x (as of 9/30/25)

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Global RevPAR (cc)FY 2025(2%) to 1% (3%) to (2%) Lowered
Fee-related & other revenuesFY 2025$1.45–$1.49B $1.43–$1.45B Lowered
Adjusted EBITDAFY 2025$730–$745M $715–$725M Lowered
Adjusted Net IncomeFY 2025$358–$372M $347–$358M Lowered
Adjusted Diluted EPSFY 2025$4.60–$4.78 $4.48–$4.62 Lowered
Rooms Growth (YoY)FY 20254.0%–4.6% 4.0%–4.6% Maintained
Interest expense, netFY 2025$136–$138M $138–$140M Slightly Higher
Marketing FundFY 2025~breakeven ~$5M overspend to support initiatives; to be recovered New Overspend
DividendQ3/Q4 cadence$0.41/sh declared Aug. 14, 2025 Continued quarterly $0.41/sh in Q3 Maintained

Earnings Call Themes & Trends

TopicPrevious Mentions (Q1 & Q2 2025)Current Period (Q3 2025)Trend
AI/Technology initiativesQ1: ~$300M+ tech stack; opt-in services for owners; Wyndham Connect launch . Q2: Wyndham Connect Plus; AI-driven guest engagement; procurement & insurance partnerships .AI agents handled 500k interactions; 25% lower handle time; ~300 bps direct contribution uplift; experimenting with LLM integrations and direct booking via MCP server .Improving
Demand/Macro & U.S. RevPARQ1: U.S. RevPAR normalized down ~3% in March/April; widened FY RevPAR range . Q2: U.S. down 4% (cc); softness in Sunbelt; Midwest offsets .U.S. down 5% (cc); continued Sunbelt softness; some October stabilization; Q4 implied down 7% to 4% globally on cc .Softening
Infrastructure & Data CentersQ1: IIJA allocations slowed early; viewed as multi-year tailwind; identified data center projects . Q2: Tailwinds moderating but pipeline of projects strong .Infrastructure room nights contracted > consumed and pacing ahead; hotels near top data centers outperform (~500–600 bps better RPI) .Stable/Improving
China & Reporting MethodologyQ1: China master license weakness; emphasized direct franchising . Q2: Formal reporting exclusion of Super 8 China master license portfolio; immaterial EBITDA impact .Continued direct franchising growth in China; no key money deployment there; pipeline +3% without key money .Improving quality mix
Ancillary revenues & Credit CardQ1: Low-teens growth outlook; card new accounts +11%, spend +7% . Q2: Ancillary +19% YoY; low-teens FY outlook .Ancillary +18% YoY; multiple drivers (credit card, tech, subscription); mid-teens FY26 targeted .Improving
Marketing Fund VariabilityQ1: Seasonality; breakeven FY . Q2: underspend in H2 intended to land ~breakeven .~$5M overspend to support in-flight initiatives (AI, personalization, digital); plans to recover in 2026–2027 .New Overspend, Recoverable

Management Commentary

  • “Amid a challenging macro backdrop, we delivered record year-to-date organic room openings, grew our global pipeline to another all-time high, and achieved double-digit growth in ancillary revenues – all while expanding our portfolio with high-quality, FeePAR-accretive hotels.” — CEO Geoff Ballotti .
  • CFO on guidance actions: “Through cost containment...we have been able to offset approximately $30M of revenue shortfall as well as $15M of incremental cost...Adjusted EBITDA is now expected to be between $715M and $725M.” — Michele Allen .
  • On AI impact: “Wyndham AI...has already handled more than 500,000 customer interactions...and a 25% reduction in average handle time...contributing to nearly 300 basis points of improvement in direct contribution for hotels leveraging Wyndham AI.” — CEO .
  • On structure of demand: “We are seeing nothing structural that concerns us...booking lead times up 2%, lengths of stay consistent, cancellation rates improved by 160 bps.” — CEO .

Q&A Highlights

  • Structural concerns in economy segment: Management sees no structural issues; emphasized pricing sensitivity and relative ADR gaps vs upper segments; highlighted improved cancellations and stable booking patterns .
  • Outlook color: October showed stabilization in CA/TX/FL; Q4 implied global RevPAR down 7% to 4% (cc) with U.S. likely to lag international .
  • Ancillary & credit card: New accounts +10%, spend +7%; multiple initiatives (replatforming, debit card, Wyndham Insider) support multi-year growth tailwinds .
  • Marketing fund overspend: ~$5M overspend to support initiatives; recovery targeted in 2026–2027 .
  • China strategy: Pivot to direct franchising; no key money deployment; strong signings and pipeline growth .

Estimates Context

  • EPS beat and revenue miss vs S&P Global consensus for Q3 2025: EPS $1.46 vs $1.43693* (12 estimates), revenue $0.382B vs $0.4019B* (9 estimates) — mixed outcome amid RevPAR softness (Values retrieved from S&P Global).
  • Guidance cuts suggest consensus for FY revenue, EBITDA, and EPS will likely be revised lower; interest expense guide nudged up ($138–$140M) adds incremental headwind .

Key Takeaways for Investors

  • Mixed quarter: resilient EPS/EBITDA but revenue and RevPAR softness; FY25 guidance lowered across RevPAR, revenue, EBITDA, and EPS .
  • Development momentum intact: pipeline at record levels, quality skew to midscale/above and new construction, supporting medium-term earnings power .
  • Technology/loyalty tailwinds: AI-driven direct booking uplift and subscription loyalty (Wyndham Insider) broaden monetization; ancillary fees continue to outgrow core .
  • Near-term trading implication: U.S. RevPAR softness and guidance cuts are likely the dominant narrative; watch Q4 RevPAR trajectory and October/holiday booking trends .
  • Medium-term thesis: asset-light model, royalty rate accretion, ancillary monetization, and international/direct franchising mix support compounding once U.S. demand normalizes .
  • Capital allocation: continued dividends ($0.41/sh) and buybacks; leverage steady at ~3.5x, revolver upsized to $1B and cheaper (–35 bps), enhancing liquidity .
  • Watch items: marketing fund overspend recovery timing; legal/operational resolution around China master license (immaterial to EBITDA historically) .