HGV Q4 2025 Earnings

Call Details

• Call Title: Hilton Grand Vacations Q4 2025 Earnings Call
• Date: February 26, 2026 at 2:00 PM UTC
• Management Team:
  • Mark Melnyk (Senior Vice President of Investor Relations)
  • Mark Wang (Chief Executive Officer)
  • Dan Levy (Chief Financial Officer)

Call Summary

Financial Performance

• Adjusted EBITDA to shareholders in Q4 was $324M, which grew 12% year-over-year.
• Total revenue before cost reimbursements in Q4 grew 1% year-over-year to $1.3B.
• Contract sales in Q4 were $852M, which represented a 2% increase year-over-year, while full-year contract sales grew 10%.
• Tours in Q4 were 225,000, up 9% year-over-year, and the company surpassed pro forma 2019 tour flow levels.
• VPG in Q4 was nearly $3,800 and declined versus the prior year, consistent with a difficult comp from prior launch activity.
• Real estate profit in Q4 was $177M with margins of 28%, up 150 basis points year-over-year.
• Financing segment revenue in Q4 was $134M with financing profit of $81M and margins of 60%, or 63% excluding amortization tied to acquired receivables.
• Gross receivables were $4.3B with an allowance of $1.2B (28.6% of the portfolio) and an annualized default rate of 9.86% with sequential improvement of 24 basis points.

Guidance

• 2026 adjusted EBITDA before deferrals is guided to a range of $1.185B to $1.225B.
• Guidance embeds low single-digit contract sales growth for the full year 2026.
• The company expects first-quarter contract sales and EBITDA to be flat to slightly down versus prior-year Q1 due to tough comps and near-term expense headwinds.
• Management expects EBITDA to improve sequentially each quarter in 2026 driven by sales growth and efficiency initiatives.
• The company quantified two expense headwinds for 2026: license fee step-ups of approximately $15M to $20M and finance optimization annualization of approximately $10M to $15M.
• The provision rate is expected to decrease sequentially in Q1 and to be in the mid-teens as a percent of contract sales for full-year 2026.
• Adjusted free cash flow conversion for 2026 is expected to fall within the long-term 55% to 65% range and specifically in the lower half of that range due to Kahaku project spend.
• The company expects to maintain adjusted EBITDA margins consistent with year-end 2025 despite a higher mix of tours in the sales mix.