Hilton Grand Vacations (HGV) Q2 2024 earnings summary

Executive summary

• Q2 2024 revenue rose to $1.24 billion, up 22.6% year-over-year, driven by the Bluegreen acquisition, but net income attributable to stockholders dropped to $2 million due to higher acquisition and integration costs.

• Adjusted EBITDA increased to $270 million, with margins around 22%, but both contract sales and EBITDA were below expectations due to consumer pullback and execution challenges.

• Integration of Bluegreen led to a major restructuring of sales and marketing, expansion of regional sales centers, and new leadership appointments; rebranding and synergy realization are ongoing.

• Owner segment showed resilience with low single-digit growth and sales 15% above 2019, but new buyer tours and VPG declined year-over-year.

• Announced a new $500 million share repurchase program in August 2024, with 2.3 million shares repurchased for $100 million in Q2.

Financial highlights

• Q2 2024 revenue was $1.24 billion, up 22.6% year-over-year; contract sales were $757 million, up $145 million, with tours up 39.4% but VPG down 10.9%.

• Adjusted EBITDA was $270 million (margin 21.5%), up from $248 million, but below expectations; net income was $2 million, down from $80 million.

• Bluegreen contributed $189 million in contract sales and 66,000 tours.

• Cash and cash equivalents at June 30, 2024, were $328 million; total debt (corporate and non-recourse) was $6.61 billion.

• Adjusted free cash flow was $370 million, with a cash flow conversion rate exceeding 130% for the quarter.

Outlook and guidance

• Full-year 2024 adjusted EBITDA guidance was lowered to $1.075–$1.135 billion, a reduction of $125 million, mainly due to VPG and tour trends and bad debt normalization.

• Rebranding of Bluegreen properties to Hilton Grand Vacations brands expected to begin in Q4 2024.

• Macro pressures on consumer spending and continued softness in new buyer close rates are expected to persist in the back half of the year.

• Maintenance fee growth for next year is expected to remain in the mid-single digits.