Hilton Worldwide Holdings Inc. (NYSE: HLT)

For the three months ended March 31, 2025, Hilton's system-wide comparable RevPAR increased 2.5% compared to the same period in 2024, driven by increases in both occupancy and ADR. Management and franchise fee revenues increased 5.1% compared to the same period in 2024.

Diluted EPS was $1.23 for Q1 2025, up from $1.04 in Q1 2024, representing an 18.3% increase. Diluted EPS, adjusted for special items, was $1.72 compared to $1.53 in the same period last year, a 12.4% increase.

Net income for Q1 2025 was $300 million, up from $268 million in Q1 2024, representing an 11.9% increase. Adjusted EBITDA was $795 million for Q1 2025, compared to $750 million for Q1 2024, a 6.0% increase, reflecting strong underlying business performance despite somewhat weaker macroeconomic conditions.

The company's adjusted EBITDA margin expanded to 73.7% in Q1 2025 from 70.4% in Q1 2024, demonstrating Hilton's ability to maintain operational efficiency and strong pricing power in its franchise and management business segments.

Hilton continued to demonstrate strong development activity in Q1 2025, opening 186 hotels totaling 20,100 rooms. This resulted in 14,000 net room additions for the quarter, contributing to a net unit growth of 7.2% from March 31, 2024.

The company approved 32,600 new rooms for development during the first quarter, bringing its development pipeline to 503,400 rooms as of March 31, 2025, representing 7% growth from March 31, 2024. This robust pipeline spans 3,600 hotels throughout 123 countries and territories, including 27 countries and territories where Hilton had no existing hotels.

Of the rooms in the development pipeline, nearly half were under construction and more than half were located outside of the U.S., highlighting Hilton's balanced approach to global expansion.

During the quarter, Hilton continued to grow its portfolio of lifestyle properties, adding the Tempo by Hilton brand in the U.K. (marking the brand's first hotel outside of the U.S.), the first Tapestry Collection by Hilton and Curio Collection by Hilton hotels in Athens, Greece, and Canopy by Hilton in Utah (representing the brand's first ski destination).

In April 2025, Hilton continued expanding its luxury brands, opening the Waldorf Astoria Osaka and the Waldorf Astoria Costa Rica Punta Cacique, further strengthening its position in the high-end hospitality market.

Hilton's system-wide comparable RevPAR increased 2.5% on a currency neutral basis for Q1 2025 compared to the same period in 2024. This growth was driven by a 0.4 percentage point increase in occupancy to 66.8% and a 1.8% increase in ADR to $155.07.

The Middle East & Africa region was the strongest performer, with RevPAR growth of 8.5%, driven by a 2.1 percentage point increase in occupancy to 70.8% and a 5.3% increase in ADR. This region continued to benefit from strong leisure and business travel demand.

The Americas (excluding U.S.) region also performed well, with RevPAR growth of 7.7%, primarily driven by a substantial 7.1% increase in ADR, reflecting strong pricing power in these markets.

The U.S., Hilton's largest market, saw RevPAR growth of 2.1%, with a modest 0.2 percentage point increase in occupancy and a 1.7% increase in ADR, demonstrating resilience despite slowing economic conditions.

The Asia Pacific region saw flat RevPAR performance, as a 0.8 percentage point increase in occupancy was offset by a 1.2% decrease in ADR, reflecting ongoing recovery challenges in certain markets.

Among the brands, Spark by Hilton showed the strongest RevPAR growth at 26.1%, followed by Waldorf Astoria at 10.7% and Motto by Hilton at 9.4%, highlighting the success of Hilton's newest brand and continued strength in the luxury segment.

During Q1 2025, Hilton continued its strong capital return program, repurchasing 3.7 million shares of common stock at an average price of $242.92 per share, for a total of $890 million. Including dividends of $37 million, the company returned a total of $927 million to shareholders during the quarter.

Year to date through April, including dividends, Hilton's total capital return was $1,157 million. For the full year 2025, the company projects capital return of approximately $3.3 billion.

As of March 31, 2025, Hilton had $11.2 billion of debt outstanding, excluding deferred financing costs and discount, with a weighted average interest rate of 4.77%. Excluding finance lease liabilities, the company had no scheduled maturities until April 2027, other than $500 million of Senior Notes due May 2025.

In April 2025, Hilton issued notice to borrow $500 million under its Revolving Credit Facility and plans to use the proceeds, together with available cash, to repay the $500 million Senior Notes due May 2025.

Total cash and cash equivalents were $807 million as of March 31, 2025, including $76 million of restricted cash and cash equivalents.

The company's net debt to Adjusted EBITDA ratio was 3.0x on a trailing twelve-month basis, indicating a strong balance sheet and financial flexibility to support continued growth and shareholder returns.

Hilton's guidance for 2025 reflects a cautious outlook amid somewhat weaker macroeconomic conditions. For the full year, the company projects system-wide comparable RevPAR growth of 0% to 2.0% on a currency neutral basis compared to 2024, indicating expectations for a challenging demand environment.

Despite the tempered RevPAR outlook, Hilton expects to deliver solid financial results, with full-year net income projected between $1,707 million and $1,749 million and Adjusted EBITDA between $3,650 million and $3,710 million.

The second quarter guidance is particularly conservative, with system-wide comparable RevPAR projected to be roughly flat compared to Q2 2024. However, the company still expects to deliver Q2 Adjusted EBITDA between $940 million and $960 million.

Hilton's projected net unit growth of 6.0% to 7.0% for 2025 highlights the company's continued focus on expanding its footprint globally. This growth, combined with the company's fee-based business model, is expected to drive meaningful earnings growth even in a more challenging RevPAR environment.

The company's projected capital return of approximately $3.3 billion for the full year 2025 underscores management's commitment to returning substantial value to shareholders through share repurchases and dividends, supported by strong free cash flow generation.