Wyndham’s second quarter was met with a positive market response, driven by ongoing system growth, a significant increase in ancillary fee streams, and resilience in both domestic and international royalty rates. Management pointed to a 4% expansion in its global hotel system and nearly 20% growth in ancillary fees as central to performance. CEO Geoffrey Ballotti highlighted new technology-driven initiatives and partnerships, such as the launch of Wyndham Connect PLUS and new food and beverage integrations, as contributors to operational improvement and franchisee engagement.
Is now the time to buy WH? Find out in our full research report (it’s free).
Wyndham (WH) Q2 CY2025 Highlights:
- Revenue: $397 million vs analyst estimates of $387.3 million (8.2% year-on-year growth, 2.5% beat)
- Adjusted EPS: $1.33 vs analyst estimates of $1.16 (14.2% beat)
- Adjusted EBITDA: $195 million vs analyst estimates of $184.8 million (49.1% margin, 5.5% beat)
- Management slightly raised its full-year Adjusted EPS guidance to $4.69 at the midpoint
- EBITDA guidance for the full year is $737.5 million at the midpoint, in line with analyst expectations
- Operating Margin: 37.8%, down from 39.5% in the same quarter last year
- RevPAR: $47.55 at quarter end, down 3.1% year on year
- Market Capitalization: $6.85 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 Q2 Earnings Call
- David Katz (Jefferies) asked about granular RevPAR trends and timing of a return to growth; CEO Geoffrey Ballotti explained that softness is concentrated in Sunbelt states, but noted strength in Midwest and industrial markets and stable pricing trends systemwide.
- Brandt Montour (Barclays) inquired about net unit growth composition between new construction and conversions; Ballotti and CFO Michele Allen responded that both have improved in quality and visibility, with record contract signings and strong execution across regions.
- Dany Asad (Bank of America) questioned how the China Super 8 license issue affects international strategy; Ballotti stated Wyndham is accelerating direct franchising in China, which has doubled since the spin-off and offers higher royalty rates.
- Steve Pizzella (Deutsche Bank) requested insights on the acceleration of ancillary revenues; Allen confirmed that growth is on track with expectations, driven by credit card engagement and strategic partnerships, with similar momentum anticipated for the remainder of the year.
- Alex Brignall (Redburn) asked about retention rates and pipeline project dropouts; Ballotti reported retention rates near 96%, no significant pipeline fallouts, and emphasized high franchisee satisfaction and improved Net Promoter Scores.
Catalysts in Upcoming Quarters
Going forward, the StockStory team will be monitoring (1) the pace of new hotel openings and signings, particularly in higher FeePAR segments and direct franchising regions, (2) sustained growth in ancillary revenues from credit card and partnership programs, and (3) continued improvement in franchisee retention and satisfaction metrics. The resolution of the China Super 8 license situation and the impact of macroeconomic trends on RevPAR will also be key factors.
Wyndham currently trades at $89.76, up from $86.14 just before the earnings. At this price, is it a buy or sell? The answer lies in our full research report (it’s free).
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