Choice Hotels (CHH) Q4 2025 Earnings Transcript

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Thu, February 19, 2026 astatine 9:54 AM CST 43 min read

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Thursday, Feb. 19, 2026 astatine 9:00 a.m. ET

• President and Chief Executive Officer — Patrick S. Pacious

• Chief Financial Officer — Scott E. Oaksmith

Patrick S. Pacious: Thank you, Allie, and bully morning, everyone. We admit you joining america today. In 2025, we delivered adjusted EBITDA of $626,000,000, up 4% twelvemonth implicit year, and grew adjusted net per share, some successful enactment with our expectations. These results bespeak the continued spot of our higher-revenue marque mix, accelerating net publication from our planetary portfolio, robust radical demand, concern question growth, and sustained momentum crossed our concern gross streams. 2025 was besides a twelvemonth of meaningful advancement successful advancing our semipermanent maturation strategy. We delivered 14% year-over-year maturation successful planetary edifice openings, expanded our planetary footprint astatine a double-digit pace, and further strengthened our enactment presumption successful the charismatic extended enactment segment, achieving grounds U.S. openings.

When we look astatine our existing hotels, the occurrence of our wide strategy to amended merchandise prime and fortify franchisee economics tin champion beryllium seen successful the higher mean royalty complaint we were capable to execute crossed the U.S. portfolio, which accrued 8 ground points successful 2025 and 10 ground points successful the 4th quarter. On the user front, we are peculiarly excited by the caller motorboat of the adjacent improvement of our Choice Privileges loyalty platform, and the motorboat adjacent 4th of a dedicated integer level for tiny and midsized businesses.

Our edifice improvement pipeline remains a almighty motor for aboriginal net maturation supported by beardown developer interest, with planetary franchise agreements awarded up 22% twelvemonth implicit twelvemonth successful 2025. Today, 97% of rooms successful our planetary pipeline are successful higher-revenue brands, and these projects are expected to beryllium astir 1.7 times much accretive than our existent portfolio, driven by RevPAR premiums, higher mean royalty rates, and larger mean country counts. Importantly, our vantage is not lone pipeline quality, but execution speed. Our conversion-led exemplary accelerates openings and gross realization with definite hotels opening without ever appearing successful quarter-end pipeline metrics. That execution spot is particularly evident successful the U.S., wherever pipeline conversion rooms accrued 12% sequentially from 09/30/2025.

Our conversion motor remains a cardinal differentiator for Choice Hotels International, Inc., enabling those hotels to unfastened astir 5 times faster than caller operation hotels. In the 4th quarter, U.S. conversion franchise agreements accrued 12% twelvemonth implicit year, and we expect conversion enactment to beryllium a halfway operator of improving U.S. nett country maturation successful 2026. As we indicated connected our past call, we person been actively optimizing our U.S. portfolio passim the year. With developer request remaining constructive, including full-year U.S. midscale and system franchise agreements up 5% twelvemonth implicit year, we accelerated the selective exit of underperforming hotels successful the 4th quarter.