HGV Q3 2024 Earnings

Call Details

• Call Title: Hilton Grand Vacations Q3 2024 Earnings Call
• Date: November 7, 2024 at 4:00 PM UTC
• Management Team:
  • Mark Melnyk (Senior Vice President of Investor Relations)
  • Mark Wang (Chief Executive Officer)
  • Dan Mathewes (President and Chief Financial Officer)

Call Summary

Financial Performance

• Contract sales for the quarter were $777 million with blue-green contributing $195 million to those sales.
• Adjusted EBITDA excluding net deferrals was $276 million for the quarter after adjusting reported recognitions, and adjusted EBITDA including reported deferrals would be $27 million higher before that adjustment.
• Total revenue excluding cost reimbursements in the quarter was $1.13 billion.
• Real estate profit for the quarter was $140 million with margins of 24%.
• Real estate sales and marketing expense was $384 million, representing 49% of contract sales.
• Combined gross receivables were $3.9 billion, or $3.01 billion net of allowance, with a total allowance for bad debt of $1.1 billion or 26% of the portfolio.

Guidance

• The company stated it is comfortable at the low end of its existing guidance range of $1.075 to $1.135 billion for the year.
• The company estimated approximately a $3 million EBITDA impact from hurricanes in Q3 and warned of a larger hurricane-related impact in Q4 driven by cancellations and physical damage.
• The company expects adjusted EBITDA to adjusted free cash flow conversion for the full year in the low 50% range.
• The company expects proceeds from a $500 million ABF securitization to hit in the fourth quarter.
• Post-quarter, the company closed a $400 million Term Loan A that prepaid a Term Loan B and reduced interest expense by approximately $3 million per year.
• Guidance positioning reflects hurricane impacts, the Hawaii hotel worker strike impact, and a later-than-expected HEV MAX launch for Blue-Green.