Travel + Leisure (TNL) Q1 2025 earnings summary

Executive summary

• Net revenues for Q1 2025 were $934 million, up $18 million year-over-year, driven by higher Vacation Ownership sales and property management fees, partially offset by lower Travel and Membership revenues.

• Net income attributable to shareholders increased to $73 million from $66 million in Q1 2024, with adjusted EBITDA rising to $202 million, at the high end of guidance.

• Adjusted EBITDA margin increased to 22% from 21% year-over-year; adjusted EPS rose 14% to $1.11.

• Returned $111 million to shareholders through $41 million in dividends and $70 million in share repurchases.

• Management transition underway as long-serving CFO Mike Hug retires, with a successor announcement imminent.

Financial highlights

• Vacation Ownership segment revenue grew 4% to $755 million; adjusted EBITDA up 18% to $159 million, driven by higher VPG and owner upgrades.

• Travel and Membership segment revenue declined 7% to $180 million; adjusted EBITDA down 9% to $68 million, impacted by lower exchange transactions and member mix shift.

• Operating cash flow was $121 million; adjusted free cash flow reached $152 million in Q1, up from $22 million in Q1 2024.

• Leverage ratio stood at 3.3x; $350 million ABS transaction completed with favorable terms.

• Net debt was $3.5 billion, excluding $2.2 billion of non-recourse debt.

Outlook and guidance

• Q2 adjusted EBITDA projected at $245–$255 million; full-year adjusted EBITDA guidance reiterated at $955–$985 million.

• Vacation Ownership Q2 gross VOI sales expected at $620–$640 million, with VPGs of $3,050–$3,150.

• Travel and Membership segment guidance revised to flat to down 2% for the year.

• Adjusted EBITDA to free cash flow conversion expected to exceed 50% for the year.

• Full-year capital expenditures anticipated between $120 million and $130 million; vacation ownership development spending expected at $150–$180 million.