Service Properties Trust (SVC) Q2 2026 earnings summary

Executive summary

• Second quarter 2026 results reflect continued momentum in advancing strategic priorities, with steady NOI growth in the net lease portfolio and hotel RevPAR outperforming industry benchmarks for the seventh consecutive quarter.

• Achieved Normalized FFO of $55.0 million ($0.43/share) and Adjusted EBITDAre of $145.8 million, with a net loss of $223.8 million due to $189.1 million asset impairment on hotels held for sale.

• As of June 30, 2026, owned 838 properties (745 net lease, 93 hotels), focusing on debt reduction, service-focused retail net lease, and improved retained hotel performance.

• Raised $541.8 million in equity, redeemed $550 million in unsecured debt, and completed a 1-for-5 reverse share split in July 2026.

• Managed by The RMR Group, overseeing over $37 billion in assets as of June 30, 2026.

Financial highlights

• Q2 2026 total revenues were $420.97 million, down 16.4% year-over-year, mainly due to hotel asset sales.

• Normalized FFO was $55.0 million ($0.43/share), down 4.5% year-over-year, and Adjusted EBITDAre was $145.8 million.

• Net lease NOI increased $1.3 million year-over-year to $94.9 million, with 96.6% occupancy and rent coverage of 2.09x.

• Hotel RevPAR for retained hotels rose 6.6% to $134.53, with adjusted hotel EBITDA up 4.2% year-over-year.

• Cash flow available for distribution was $42.5 million for the quarter.

Outlook and guidance

• Full-year Normalized FFO guidance reaffirmed at $124–$144 million ($1.20–$1.35/share), with Adjusted EBITDAre guidance at $500–$520 million.

• CapEx for 2026 expected to be $120–$140 million; continued focus on asset sales, debt reduction, and capital improvements.

• Pending sales of 12–15 hotels for $77.4–$98.4 million and additional net lease acquisitions expected.

• Positive momentum in hotel RevPAR carried into Q3, with preliminary July RevPAR up 7.1% year-over-year for retained hotels.