Hilton’s second quarter results came in above Wall Street’s revenue and profit expectations, yet the market response was negative as investors weighed softer demand trends in key segments. CEO Christopher Nassetta attributed the quarter’s performance to continued strength in Hilton’s international markets, particularly the Middle East, Africa, and Asia Pacific (excluding China), while domestic U.S. and Chinese markets faced headwinds. Nassetta explained, “Performance was driven by continued strength in the Middle East, Africa region and Asia Pacific ex China but offset by softer trends in the U.S. and China.” Business travel and group bookings remained under pressure, but leisure demand held up, helped by an elongated spring break window.
Is now the time to buy HLT? Find out in our full research report (it’s free).
Hilton (HLT) Q2 CY2025 Highlights:
- Revenue: $3.14 billion vs analyst estimates of $3.09 billion (6.3% year-on-year growth, 1.4% beat)
- Adjusted EPS: $2.20 vs analyst estimates of $2.04 (7.8% beat)
- Adjusted EBITDA: $1.01 billion vs analyst estimates of $960.5 million (32.1% margin, 4.9% beat)
- Management slightly raised its full-year Adjusted EPS guidance to $7.92 at the midpoint
- EBITDA guidance for the full year is $3.68 billion at the midpoint, in line with analyst expectations
- Operating Margin: 24.8%, in line with the same quarter last year
- RevPAR: $121.79 at quarter end, down 1.2% year on year
- Market Capitalization: $64.22 billion
While we enjoy listening to the management's commentary, our favorite part of earnings calls are the analyst questions. Those are unscripted and can often highlight topics that management teams would rather avoid or topics where the answer is complicated. Here is what has caught our attention.
Our Top 5 Analyst Questions Hilton’s Q2 Earnings Call
- Shaun Kelley (Bank of America) asked about the outlook for recovery across leisure, business, and group segments. CEO Christopher Nassetta responded that while some early signs of improvement are visible, it is still “early days” and recovery is expected to gradually unfold.
- Stephen Grambling (Morgan Stanley) inquired about development trends and demand in China. Nassetta acknowledged ongoing headwinds but expressed confidence in long-term growth due to undersupplied hotel capacity and continued signings.
- Daniel Politzer (JPMorgan) questioned the drivers behind Hilton’s confidence in achieving 6%-7% net unit growth. Nassetta attributed this to both elevated conversions and increased construction starts across multiple brands.
- Brandt Montour (Barclays) raised concerns about the sustainability of Spark’s rapid expansion. Nassetta argued that Spark is now Hilton’s highest market share brand and expects momentum to continue as the brand scales internationally.
- Robin Farley (UBS) requested clarity on the impact of non-RevPAR items on quarterly profits. CFO Kevin Jacobs explained that the outperformance was largely due to timing of termination fees and ancillary revenues, not broad-based demand improvement.
Catalysts in Upcoming Quarters
In the coming quarters, the StockStory team will be watching (1) whether U.S. business and group travel bookings continue their early recovery, (2) how Hilton’s growing pipeline of conversion and lifestyle brands contributes to net unit growth, and (3) the pace of expansion in international markets, especially in regions like India and Africa. Execution on new brand launches and conversion strategies will be key indicators of Hilton’s ability to offset regional demand softness.
Hilton currently trades at $273.12, in line with $274.01 just before the earnings. In the wake of this quarter, is it a buy or sell? Find out in our full research report (it’s free).
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