10-QPeriod: Q2 FY2023

Hilton Worldwide Holdings Inc. Quarterly Report for Q2 Ended Jun 30, 2023

Filed July 26, 2023For Securities:HLT

Summary

Hilton Worldwide Holdings Inc. (HLT) reported solid financial results for the second quarter and first half of 2023, demonstrating a robust recovery and growth trajectory. Total revenues for the second quarter increased by 18.8% year-over-year to $2.66 billion, driven by strong performance across all segments, particularly in Owned and Leased Hotels and Management and Franchise fees. The company saw significant growth in Revenue Per Available Room (RevPAR), up 12.1% system-wide for the quarter, with Asia Pacific leading the charge with a remarkable 79.0% increase, reflecting the easing of travel restrictions. Net income attributable to Hilton stockholders rose to $411 million ($1.55 diluted EPS) for the quarter, compared to $368 million ($1.32 diluted EPS) in the prior year. For the six months ended June 30, 2023, net income was $617 million ($2.31 diluted EPS), up from $580 million ($2.07 diluted EPS) in the same period last year. The company's strong operational performance is supported by a growing loyalty program membership and an expanding development pipeline, with nearly 3,000 hotels and over 440,000 rooms in the pipeline as of June 30, 2023. Hilton continues to prioritize returning capital to shareholders, repurchasing approximately $916 million of common stock in the first half of the year while maintaining a strong liquidity position.

Financial Highlights

50 data points
Beta

Revenue

$2.66B

Net Income

$411.00M

15.5% Net Margin

EPS (Diluted)

$1.55

Total Assets

$15.30B

Cash & Equivalents

$806.00M

Free Cash Flow

$434.00M

Financial Statements
Beta
Revenue$2.66B
Operating Expenses$1.99B
Operating Income$674.00M
Interest Expense$111.00M
Net Income$411.00M
EPS (Basic)$1.56
EPS (Diluted)$1.55
Shares Outstanding (Basic)264.00M
Shares Outstanding (Diluted)266.00M

Key Highlights

  • 1Total revenues grew 18.8% year-over-year to $2.66 billion in Q2 2023.
  • 2System-wide RevPAR increased by 12.1% in Q2 2023, with Asia Pacific showing a significant 79.0% jump.
  • 3Net income attributable to Hilton stockholders was $411 million for Q2 2023, up from $368 million in Q2 2022.
  • 4Diluted EPS reached $1.55 for Q2 2023, an increase from $1.32 in the prior year.
  • 5Hilton Honors loyalty program membership grew to 166 million members, a 19% increase year-over-year.
  • 6The development pipeline remains strong with 3,064 hotels (440,900 rooms) as of June 30, 2023.
  • 7The company repurchased approximately $916 million of common stock in the first six months of 2023.

Frequently Asked Questions

Hilton reported strong revenue growth of 18.8% to $2.66 billion for the second quarter of 2023, driven by improved RevPAR and growth in both management and franchise fees, as well as owned and leased hotel revenues. Net income attributable to stockholders increased to $411 million, resulting in diluted EPS of $1.55.

Globally, Hilton's system-wide RevPAR increased by 12.1% in the second quarter. The Asia Pacific region showed the most significant growth with a 79.0% increase in RevPAR, largely due to the easing of travel restrictions. The Americas (excluding the U.S.) and Europe also demonstrated strong RevPAR growth of 22.4% and 26.2%, respectively.

Hilton continued to return capital to shareholders. In the first six months of 2023, the company repurchased approximately $916 million of its common stock, and as of June 30, 2023, approximately $2.2 billion remained available under its stock repurchase program. The company also declared cash dividends of $0.15 per share for the quarter.

Revenue growth in the management and franchise segment is primarily driven by increases in RevPAR at comparable franchised and managed hotels, resulting from higher occupancy and ADR. Additionally, the addition of new hotels to the system and increased fees from strategic partnerships, including co-branded credit cards and Hilton Grand Vacations (HGV), contributed to the growth.