10-QPeriod: Q2 FY2024

Hilton Worldwide Holdings Inc. Quarterly Report for Q2 Ended Jun 30, 2024

Filed August 7, 2024For Securities:HLT

Summary

Hilton Worldwide Holdings Inc. (HLT) reported its second-quarter 2024 results, demonstrating continued growth and resilience in its global hospitality operations. Total revenues increased by 10.9% to $2.95 billion, driven by robust performance in franchise and licensing fees, which grew 11.5%, and solid contributions from owned and leased hotels. Net income attributable to Hilton stockholders rose to $421 million, or $1.67 per diluted share, up from $411 million, or $1.55 per diluted share, in the prior year's quarter. This performance reflects the company's successful expansion strategy, particularly in its fee-based management and franchise segments. The company also made strategic acquisitions, including the Graduate brand and a controlling interest in the NoMad brand, which are expected to enhance its brand portfolio and future growth. Despite macroeconomic headwinds such as inflation and rising interest rates, Hilton maintained a strong development pipeline and reported positive RevPAR (Revenue per Available Room) growth across most regions, indicating sustained demand for its brands. The company also continued its commitment to returning capital to shareholders through share repurchases and dividends, underscoring its confidence in its financial position and future prospects.

Financial Highlights

50 data points
Beta

Revenue

$2.95B

Net Income

$421.00M

14.3% Net Margin

EPS (Diluted)

$1.67

Total Assets

$15.74B

Cash & Equivalents

$731.00M

Free Cash Flow

$406.00M

Financial Statements
Beta
Revenue$2.95B
Operating Expenses$2.23B
Operating Income$725.00M
Interest Expense$141.00M
Net Income$421.00M
EPS (Basic)$1.69
EPS (Diluted)$1.67
Shares Outstanding (Basic)249.00M
Shares Outstanding (Diluted)252.00M

Key Highlights

  • 1Total revenues increased by 10.9% year-over-year to $2.95 billion for the second quarter of 2024.
  • 2Net income attributable to Hilton stockholders increased to $421 million, or $1.67 per diluted share, compared to $411 million, or $1.55 per diluted share, in the prior year's quarter.
  • 3The company completed strategic acquisitions of the Graduate brand and a controlling interest in the NoMad brand, adding to its brand portfolio.
  • 4System-wide RevPAR increased by 3.5% for the second quarter, driven by a 1.7% increase in ADR and a 1.3 percentage point increase in occupancy.
  • 5Franchise and licensing fees grew by 11.5%, demonstrating strong performance in the company's core fee-based business.
  • 6Hilton repurchased approximately $1.4 billion of its common stock during the six months ended June 30, 2024, and maintained approximately $2.4 billion available for future repurchases.
  • 7The development pipeline remained strong, with 3,870 hotels and 508,300 rooms as of June 30, 2024.

Frequently Asked Questions

Revenue growth was primarily driven by increases in franchise and licensing fees, up 11.5%, and strong performance from owned and leased hotels. This was supported by an 11.9% increase in franchise and licensing fees year-over-year for the six months ended June 30, 2024, and a 0.5% increase in owned and leased hotels revenues for the same period. System-wide RevPAR also increased by 3.5% for the quarter, reflecting higher occupancy and Average Daily Rates (ADR).

In May 2024, Hilton acquired the Graduate brand for $210 million, accounted for as an asset acquisition, adding 32 properties to its franchise portfolio. In April 2024, it acquired a controlling interest in Sydell Group, owner of the NoMad brand, accounted for as a business combination. While the immediate financial impact of these acquisitions on the three and six months ended June 30, 2024, was not material, they are expected to contribute to future growth and brand portfolio enhancement.

As of June 30, 2024, Hilton's total indebtedness was approximately $10.3 billion. The company recently issued $1.0 billion in new Senior Notes and amended its Term Loan facility. Despite the debt load, the company has significant liquidity with $802 million in cash and cash equivalents and $1.9 billion in available borrowing capacity under its revolving credit facility. Hilton believes its liquidity and access to debt financing are sufficient to meet its obligations.

Hilton demonstrated a commitment to returning capital to shareholders. During the six months ended June 30, 2024, the company repurchased approximately $1.4 billion of its common stock and maintained approximately $2.4 billion available under its stock repurchase program. Dividends paid during the six months amounted to $76 million.