Travel + Leisure (TNL) Q2 2024 earnings summary

Executive summary

• Net revenue for Q2 2024 reached $985 million, up 4% year-over-year, driven by higher vacation ownership interest (VOI) sales and increased tours, with adjusted EBITDA at $244 million, at the high end of guidance.

• Net income attributable to shareholders rose to $129 million, aided by a $32 million gain from the expiration of guarantees related to the European vacation rentals business.

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

• Tours increased 13%, with new owner tours up 22% and a 37% new owner mix in Q2.

• The acquisition of Accor Vacation Club for $50 million expanded the international portfolio and brand affiliations.

Financial highlights

• Adjusted EBITDA margin was 24.8%, maintaining mid-twenties levels while growing revenue.

• Gross VOI sales were $607 million, up 8.9% year-over-year, at the high end of guidance, driving a 10% increase in segment Adjusted EBITDA.

• 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, reflecting business momentum and higher provision rates.

• Q3 Adjusted EBITDA is forecasted at $235–$245 million, with Travel and Membership segment at $55–$60 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 the year increased to $2,950–$3,050, with expectations for double-digit tour growth and strong VPG performance in the second half.

• Capital expenditures for 2024 are anticipated at $90–$100 million, with vacation ownership development spending of $105–$130 million.