Wyndham’s first quarter results met Wall Street’s revenue expectations, while adjusted earnings per share surpassed estimates. Management attributed the steady quarter to continued growth in its hotel system and development pipeline, as well as resilient pricing in most markets. CEO Geoff Ballotti noted that U.S. and international royalty rates increased, and the company saw healthy ancillary fee growth from partnerships and co-branded credit cards. However, leisure demand in the U.S. softened during the quarter, and China faced ongoing pricing pressures, which management linked to broader macroeconomic uncertainty.
Is now the time to buy WH? Find out in our full research report (it’s free).
Wyndham (WH) Q1 CY2025 Highlights:
- Revenue: $316 million vs analyst estimates of $316 million (3.6% year-on-year growth, in line)
- Adjusted EPS: $0.86 vs analyst estimates of $0.81 (5.6% beat)
- Adjusted EBITDA: $145 million vs analyst estimates of $148.1 million (45.9% margin, 2.1% miss)
- Management lowered its full-year Adjusted EPS guidance to $4.66 at the midpoint, a 1.4% decrease
- EBITDA guidance for the full year is $737.5 million at the midpoint, in line with analyst expectations
- Operating Margin: 35.4%, up from 16.4% in the same quarter last year
- RevPAR: $36.13 at quarter end, in line with the same quarter last year
- Market Capitalization: $6.12 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 Wyndham’s Q1 Earnings Call
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Lizzie Dove (Goldman Sachs) asked about changing U.S. demand drivers and their impact on RevPAR. CEO Geoff Ballotti noted softer leisure trends but emphasized stable pricing and optimism for summer travel.
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Michael Bellisario (Baird) inquired about the long-term growth algorithm and whether the revised outlook alters future targets. CFO Michele Allen stated that long-term growth targets remain intact, with near-term caution but no change to strategic focus.
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Brandt Montour (Barclays) questioned development momentum and conversion trends amid cost pressures and tariffs. Ballotti described resilient conversion activity, especially in the U.S. and Southeast Asia, and noted efforts to shift sourcing and manage costs.
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David Katz (Jefferies) sought details on geographic pipeline progress and strategic use of development capital. Allen explained a selective approach to key money advances, prioritizing high FeePAR markets like Germany and focusing on direct franchising.
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Patrick Scholes (Truist) asked if ancillary revenue growth expectations remain unchanged despite weaker consumer confidence. Allen confirmed the outlook for low-teens growth, citing contract-based revenue and expanded credit card partnerships as stabilizers.
Catalysts in Upcoming Quarters
In coming quarters, the StockStory team will be monitoring (1) whether U.S. leisure and infrastructure-related demand improves during the key summer months, (2) the pace of international pipeline conversions and new construction in higher FeePAR markets, and (3) continued expansion of ancillary revenue streams from credit card and partnership initiatives. Progress on these fronts will be central to assessing Wyndham’s ability to navigate ongoing macroeconomic challenges.
Wyndham currently trades at $79.50, down from $85.05 just before the earnings. Is there an opportunity in the stock?The answer lies in our full research report (it’s free).
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