Travel + Leisure (TNL) Q2 2024 earnings summary

Executive summary

• Net revenue for Q2 2024 was $985 million, up 4% year-over-year, with adjusted EBITDA of $244 million at the high end of guidance.

• Net income rose to $129 million, aided by a $32 million gain from expired guarantees on the European vacation rentals business.

• Adjusted diluted EPS increased 14% year-over-year to $1.52.

• Tours increased 13%, with new owner tours up 22% and a 37% new owner mix.

• The Accor Vacation Club acquisition expanded the international portfolio and brand affiliations.

Financial highlights

• Adjusted EBITDA margin was 24.8%, with net income margin improving to 13.1%.

• Gross VOI sales were $607 million, up 9% year-over-year, at the high end of guidance.

• Adjusted Net Income reached $108 million, or $1.52 per share, with Adjusted EPS up 14% year-over-year.

• Adjusted Free Cash Flow was $90 million for the quarter, with net cash from operations at $221 million for the first half.

• VPG was $3,051, above expectations, though down 3% year-over-year due to a higher new owner mix.

Outlook and guidance

• Full-year adjusted EBITDA guidance was raised to $915–$935 million, with Q3 forecasted at $235–$245 million.

• Full-year gross VOI sales expected at $2.25–$2.35 billion; Q3 gross VOI sales forecasted at $620–$650 million.

• VPG guidance for 2024 increased to $2,950–$3,050, with expectations for double-digit tour growth.

• Management expects continued pressure on the loan portfolio from increased delinquencies in sub-700 FICO loans.

• Sufficient liquidity is expected, with $166 million in cash and $694 million in available revolving credit as of June 30, 2024.