Choice Hotels International (CHH) Q1 2025 earnings summary

Executive summary

• Adjusted EBITDA reached a record $129.6 million, up 4% year-over-year, with adjusted EPS up 5% and net income up 44% to $44.5 million, driven by strategic investments, higher operating income, and lower business combination costs.

• Business travel segment grew 10% year-over-year, now 40% of the mix, with group travel revenue up over 50% year-over-year.

• Rewards program membership expanded 8% to over 70 million, with a 28% increase in global reward night redemptions.

• Extended-stay portfolio grew 19% over five years to about 53,000 rooms, with the segment representing half of the domestic pipeline and a 10.8% year-over-year increase in domestic net rooms.

• Global net rooms system size increased 2.8%, with 3.9% growth in revenue-intense portfolio and 16.2% growth in upscale segment.

Financial highlights

• Total revenues were $333 million, nearly flat year-over-year, with franchise and management fees and partnership services driving growth.

• Adjusted EPS set a Q1 record at $1.34, up 5% year-over-year; diluted EPS was $0.94, up from $0.62.

• Cash provided by operating activities was $20.5 million, up from $1.7 million year-over-year; adjusted free cash flow was $36 million, up 30%.

• Domestic RevPAR rose 2.3% year-over-year, outperforming chain scales by 60 bps; extended stay RevPAR up 6.8%, economy segment up 7.1%.

• Partnership services and fees revenue increased 28% year-over-year in Q1.

Outlook and guidance

• Full-year 2025 adjusted EBITDA expected at $615–$635 million; adjusted diluted EPS at $6.90–$7.22; net income guidance $275–$290 million.

• Domestic RevPAR guidance revised to -1% to +1% for 2025, reflecting macroeconomic softness.

• SG&A for 2025 expected at the lower end of low to mid-single digit growth from $276 million base.

• Projected 2025 annual dividend rate is $1.15 per share, or about $53.6 million in total.

• Guidance excludes additional M&A or share repurchases after April 30.