Hilton’s fourth quarter results reflected a combination of robust international demand, steady group bookings, and continued cost discipline, helping the company surpass Wall Street’s revenue and profit expectations. Management credited strength in Europe, the Middle East, and Africa (EMEA) markets as well as growth in leisure and group segments for offsetting softer performance in the U.S. CEO Christopher Nassetta highlighted, “System-wide RevPAR increased 50 basis points year over year. As strong international performance and solid group demand were offset by softer U.S. government demand and weaker international inbound into the U.S.”
Is now the time to buy HLT? Find out in our full research report (it’s free for active Edge members).
Hilton (HLT) Q4 CY2025 Highlights:
- Revenue: $3.09 billion vs analyst estimates of $2.99 billion (10.9% year-on-year growth, 3.3% beat)
- Adjusted EPS: $2.08 vs analyst estimates of $2.02 (3.2% beat)
- Adjusted EBITDA: $946 million vs analyst estimates of $925.1 million (30.6% margin, 2.3% beat)
- Adjusted EPS guidance for the upcoming financial year 2026 is $8.71 at the midpoint, missing analyst estimates by 4.8%
- EBITDA guidance for the upcoming financial year 2026 is $4.02 billion at the midpoint, in line with analyst expectations
- Operating Margin: 19.5%, up from 17.6% in the same quarter last year
- RevPAR: $110.89 at quarter end, in line with the same quarter last year
- Market Capitalization: $72.87 billion
While we enjoy listening to the management's commentary, our favorite part of earnings calls are the analyst questions. Those are unscripted and can often highlight topics that management teams would rather avoid or topics where the answer is complicated. Here is what has caught our attention.
Our Top 5 Analyst Questions From Hilton’s Q4 Earnings Call
- Shaun Clisby Kelley (Bank of America) asked about the business transient recovery, particularly for small and medium-sized companies. CEO Christopher Nassetta responded that recent data showed encouraging improvement in midscale and business travel, but emphasized the need for more sustained evidence before declaring a full recovery.
- Daniel Brian Politzer (JPMorgan) inquired about Hilton’s approach to AI partnerships and the impact on operations and distribution. Nassetta explained the company’s modern tech stack provides flexibility, and that Hilton is working with all major AI players to drive efficiency and improve customer experience.
- David Katz (Jefferies) questioned the economic intensity and growth trajectory of lifestyle and luxury brands. Nassetta noted that as these brands gain scale, network effects should accelerate growth, but the largest opportunities will remain in the upper midscale segments.
- Stephen Grambling (Morgan Stanley) asked about the use of key money incentives and the mix between new development and conversions. Nassetta and CFO Kevin Jacobs stressed disciplined use of key money, with conversions expected to remain a significant contributor to growth.
- Elizabeth Dove (Goldman Sachs) sought clarity on the outlook for non-RevPAR fees, such as those from Hilton’s credit card partnerships. Jacobs indicated that these fees continue to grow above the company’s algorithm and remain a long-term growth lever.
Catalysts in Upcoming Quarters
In the coming quarters, our team will focus on (1) tracking the pace of new hotel openings and conversion-driven pipeline execution, (2) monitoring international RevPAR trends—particularly in EMEA and Asia-Pacific as major events unfold, and (3) watching for signs of a sustained rebound in U.S. business and leisure travel. Additionally, updates on Hilton’s AI initiatives and digital platform enhancements will be important indicators of operational efficiency and guest engagement.
Hilton currently trades at $317.91, down from $323.70 just before the earnings. In the wake of this quarter, is it a buy or sell? The answer lies in our full research report (it’s free).
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