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Choice Hotels (NYSE: CHH) cuts 2026 profit view as EBITDA rises

Filing Impact
(High)
Filing Sentiment
(Neutral)
Form Type
8-K

Rhea-AI Filing Summary

Choice Hotels International reported second-quarter 2026 total revenues of $440.8 million and net income of $64 million, or $1.41 per diluted share. Net income declined 21% from a year earlier, largely due to higher reimbursable deficits, SG&A timing, and higher depreciation and amortization.

Adjusted results were stronger: adjusted EBITDA rose to $175 million and adjusted diluted EPS to $2.02, up 6% and 5% year over year. U.S. RevPAR increased 1.3% and global net rooms grew 2.6%, led by 3.6% growth in extended stay, midscale, and upscale brands. The global pipeline reached about 77,300 rooms, with 96% in these higher-revenue segments.

Choice had $475 million of available liquidity and a net debt-to-adjusted EBITDA ratio of 3.1x as of June 30, 2026. Net capital outlays for hotel development and lending fell 80% to $15 million in the first half, while $139 million was returned to shareholders. For 2026, the company cut net income and EPS guidance but raised adjusted EBITDA guidance to $635–$650 million, citing stronger RevPAR, net rooms growth, and higher U.S. royalty rates alongside higher reimbursable marketing spend, interest expense, and a higher tax rate.

Positive

  • Net capital outlays fell 80% to $15 million for hotel development and lending in the first half of 2026, reducing capital intensity as the company prepares to recycle owned hotel assets.
  • 2026 adjusted EBITDA guidance was raised to $635–$650 million, supported by improved U.S. RevPAR, global net rooms growth, and higher U.S. royalty rates.
  • Global net rooms grew 2.6% year over year to 661,089, with 3.6% growth in higher-revenue extended stay, midscale, and upscale brands and a pipeline of about 77,300 rooms.

Negative

  • Q2 2026 net income declined 21% to $64 million, and diluted EPS fell to $1.41, pressured by higher reimbursable deficits, SG&A timing, and increased depreciation and amortization.
  • Full-year 2026 net income and EPS guidance were cut, with net income now projected at $230–$241 million and diluted EPS at $5.07–$5.31, reflecting higher marketing system expenses, interest costs, and a higher effective tax rate.
  • Operating cash flow decreased to $67 million for the first half of 2026 from $116 million a year earlier, primarily due to higher franchise agreement acquisition costs and reimbursable marketing and reservation system expenses.

Filing Explained

Hotel-portfolio sales are planned for the first half of 2027, while 1.8 million shares remain available for authorized repurchases.

The filing says Choice expects its first asset sales from its owned hotel portfolio in the first half of 2027, subject to market conditions; this is a plan, not a completed sale.

Choice describes the mechanism as recycling capital from its 19 operating hotels, so that structural change would occur only if the sales proceed. As of June 30, 2026, 1.8 million common shares remained available under the current repurchase authorization; that is authorization capacity, not a repurchase already made.

Item 2.02 Results of Operations and Financial Condition Financial
Disclosure of earnings results, typically an earnings press release or preliminary financials.
Item 9.01 Financial Statements and Exhibits Exhibits
Financial statements, pro forma financial information, and exhibit attachments filed with this report.
Total revenues Q2 2026 $440,762 (in thousands) Three months ended June 30, 2026
Net income Q2 2026 $64,338 (in thousands) Three months ended June 30, 2026; 21% decline vs same period of 2025
Adjusted EBITDA Q2 2026 $175,383 (in thousands) Three months ended June 30, 2026; increased 6% vs Q2 2025
Available liquidity $475 million Cash and cash equivalents plus available borrowing capacity as of June 30, 2026
Net debt-to-adjusted EBITDA 3.1x Trailing twelve months ended June 30, 2026; within 3.0x–4.0x target range
Global rooms 661,089 Total system room count as of June 30, 2026; 2.6% higher than June 30, 2025
Net capital outlays 1H 2026 $15 million Net capital outlays for hotel development and lending; declined 80% from $76 million in prior-year period
2026 adjusted EBITDA guidance $635,000–$650,000 (in thousands) Full-year 2026 guidance range; raised from prior outlook of $632,000–$647,000
Adjusted EBITDA financial
"Adjusted EBITDA guidance has been raised from the Company’s prior outlook"
Adjusted EBITDA is a way companies measure how much money they make from their core operations, like running a business, by removing certain costs or income that aren’t part of regular business activities. It helps investors see how well a company is doing without distractions from unusual expenses or gains, making it easier to compare companies or track performance over time.
RevPAR financial
"U.S. RevPAR increased 1.3% in the second quarter"
RevPAR, or revenue per available room, is a measure used in the hotel industry to show how much money a hotel earns from each of its rooms over a certain period. It helps investors understand how well a hotel is performing financially, similar to how a store's sales per square foot reveal its profitability. Higher RevPAR indicates better use of resources and stronger financial health.
asset-light strategy financial
"enter the next phase of its asset-light strategy by recycling capital"
An asset-light strategy is a business approach where a company minimizes owning expensive physical assets — like factories, stores, or heavy equipment — and instead outsources production, leases facilities, or uses partners and technology. For investors this matters because it can lead to faster growth, lower upfront costs and potentially higher returns when demand rises, but it can also increase dependence on suppliers and variable costs, similar to renting a home instead of owning one.
pipeline financial
"The Company’s global pipeline totaled approximately 77,300 rooms"
A pipeline is the organized list of products, drugs or projects a company is developing but has not yet fully launched or commercialized. For investors it acts like a forecasted inventory of future revenue sources — showing what could become earnings, how far along each item is, and the risk and time before they might pay off; think of it as a company’s product roadmap that helps gauge growth potential and uncertainty.
currency-neutral financial
"results are presented on a currency-neutral basis and exclude currency movements"
Currency-neutral means measuring a company’s sales, profits or growth as if exchange rates between currencies had not changed, so movements in foreign money don’t distort the result. It matters to investors because it isolates the company’s underlying business performance from swings in foreign exchange—like comparing two measurements using the same ruler—making trends and comparisons across periods or companies clearer.
Net income $64 million down 21% vs Q2 2025
Adjusted EBITDA $175 million up 6% vs Q2 2025
Adjusted diluted EPS $2.02 up 5% vs Q2 2025
Total revenues $440.8 million
U.S. RevPAR growth 1.3% vs Q2 2025 on a currency-neutral basis
Guidance

For full-year 2026, the company forecasts net income of $230–$241 million, adjusted net income of $312–$323 million, adjusted EBITDA of $635–$650 million, diluted EPS of $5.07–$5.31, and adjusted diluted EPS of $6.86–$7.10.

AI-generated analysis. How Rhea-AI works. Not financial advice.

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FAQ

How did Choice Hotels (CHH) perform financially in Q2 2026?
Choice Hotels reported Q2 2026 net income of $64 million, or $1.41 diluted EPS, versus $81.7 million a year earlier. Adjusted EBITDA was $175 million and adjusted diluted EPS $2.02, up 6% and 5% year over year as core franchising metrics improved.

How is Choice Hotels (CHH) system size and pipeline evolving?
As of June 30, 2026, Choice operated 661,089 global rooms, up 2.6% year over year, including 12.5% international net room growth. The global pipeline totaled about 77,300 rooms, with 96% in extended stay, midscale, and upscale brands and 29,900 extended stay rooms.

What 2026 outlook did Choice Hotels (CHH) provide?
For 2026, Choice guided to net income of $230–$241 million and adjusted net income of $312–$323 million. Adjusted EBITDA is forecast at $635–$650 million, with adjusted diluted EPS of $6.86–$7.10 and global RevPAR growth of 0% to 1% versus 2025.

What is Choice Hotels (CHH) liquidity and leverage position?
As of June 30, 2026, Choice had $475 million of available liquidity, including cash and revolver capacity. The net debt-to-adjusted EBITDA ratio was 3.1x for the trailing twelve months, within the company’s stated 3.0x to 4.0x target range.

How much capital did Choice Hotels (CHH) return to shareholders in 1H 2026?
During the six months ended June 30, 2026, Choice returned $139 million to shareholders, comprising $26 million of dividends and $113 million of share repurchases. 1.8 million shares remained available under the company’s current repurchase authorization at period-end.
CHOICE HOTELS INTERNATIONAL INC / DE0001046311FALSE00010463112026-08-052026-08-05

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
  _____________________________________________________ 
FORM 8-K
 _____________________________________________________ 
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15 (d)
OF THE SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported): August 5, 2026
  _____________________________________________________ 
 CHOICE HOTELS INTERNATIONAL, INC.
(Exact name of registrant as specified in its charter)
 _____________________________________________________ 
Delaware001-1339352-1209792
(State or other jurisdiction
of incorporation)		(Commission
File Number)		(IRS Employer
Identification Number)
915 Meeting Street20852
Suite 600
North Bethesda,Maryland
(Address of principal executive offices)(Zip Code)
Registrant’s telephone number, including area code (301) 592-5000
  _____________________________________________________  
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below): 
☐Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
☐Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
☐Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
☐Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
Securities registered pursuant to Section 12(b) of the Act:
Title of Each ClassTicker Symbol(s)Name of Each Exchange on Which Registered
Common Stock, Par Value $0.01 per shareCHHNew York Stock Exchange
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐


Item 2.02.Results of Operations and Financial Condition.
On August 5, 2026, Choice Hotels International, Inc. issued a press release announcing earnings for the quarter ended June 30, 2026. A copy of the release is furnished herewith as Exhibit 99.1.
Item 9.01.Financial Statements and Exhibits.
(d) Exhibits
Exhibit 99.1—Press Release issued by Choice Hotels International, Inc., dated August 5, 2026
Exhibit 104—Cover Page Interactive Data File (embedded within the Inline XBRL document)


SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
 
Date:August 5, 2026/s/ Scott E. Oaksmith
Scott E. Oaksmith
Chief Financial Officer




choice.jpg
CHOICE HOTELS INTERNATIONAL REPORTS SECOND QUARTER 2026 RESULTS

U.S. Net Rooms Growth Improved for the Second Consecutive Quarter, Supporting 2.6% Global Net Rooms Growth

NORTH BETHESDA, Md., August 5, 2026 – Choice Hotels International, Inc. (“Choice” or “the Company”) (NYSE: CHH), a leading global lodging franchisor with an asset-light model, today reported results for the second quarter ended June 30, 2026.

Highlights include:

•Net income was $64 million, or $1.41 per diluted share, for the second quarter.

•Adjusted EBITDA totaled $175 million, and adjusted diluted EPS reached $2.02 for the second quarter.

•U.S. room openings increased 27% in the second quarter compared to the same period of 2025, as the Company opened approximately 6,400 U.S. rooms—the highest second-quarter level since 2019, while exits declined to their lowest second-quarter level since 2020, supporting continued improvement in U.S. net rooms growth.

•Global net rooms grew 2.6% compared to June 30, 2025, driven by 3.6% growth in the higher revenue extended stay, midscale, and upscale brands.

•U.S. RevPAR increased 1.3% in the second quarter, compared to the same period of 2025, reflecting improvements in both occupancy and rate.

•U.S. franchise agreements awarded increased 30% in the second quarter compared to the same period of 2025, representing approximately 9,400 new U.S. rooms for development.

•The Company's U.S. conversion rooms pipeline grew 24% to 24,100 rooms, compared to June 30, 2025, and 6% sequentially from March 31, 2026.

•The U.S. royalty rate expanded 11 basis points to 5.2% in the second quarter, compared to the same period of 2025.

•The Company returned $139 million to shareholders through dividends and share repurchases year-to-date through June 30, 2026.

•The Company raised several full-year 2026 guidance ranges.

"Our second quarter results reflect encouraging progress across our key priorities, with U.S. net rooms growth improving for the second consecutive quarter to its strongest first-half performance since 2021 and U.S. RevPAR trends strengthening," said Dom Dragisich, Interim Chief Executive


Officer. "Over the past several years, we've built a stronger commercial engine and technology platform, and we continue to invest in both. Our biggest opportunity now is sharpening execution—leveraging those capabilities to further enhance franchisee economics by increasing the number and quality of the guests we deliver while lowering operating costs. While we still have work to do, this business has significantly more potential, and I'm confident we can realize it. The progress we delivered this quarter reinforces that confidence."

Financial Performance

($ in millions, except per-share amounts)
Three Months Ended
June 30,		Six Months Ended
June 30,
2026
2025
2026
2025
Total revenues
$441$426$781$759
Revenue excl. revenue for reimbursable costs from franchised and managed properties1
$277$259$494$469
Net income
$64$82$85$126
Adjusted net income
$92$90$142$153
Diluted EPS
$1.41$1.75$1.84$2.68
Adjusted diluted EPS
$2.02$1.92$3.09$3.25
Adjusted EBITDA
$175$165$301$295

•Net income was $64 million for the second quarter, a 21% decline compared to the same period of 2025. The year-over-year decrease primarily reflected a higher net reimbursable deficit from franchised and managed properties related to investments in franchisee-related tools and guest delivery capabilities, timing of SG&A expenses, and increased depreciation and amortization associated with owned hotels and the prior year acquisition of Choice Hotels Canada. These items were partially offset by higher franchise and management fees.2
•Adjusted EBITDA increased 6%, and adjusted diluted EPS increased 5% compared to the same period of 2025.
•Franchise and management fees increased 6% to $188 million for the second quarter, compared to the same period of 2025, reflecting higher international royalty fees, higher franchisee programs and services revenue, along with U.S. RevPAR and U.S. royalty rate improvement.
•Partnership services and fees increased 6% to $29 million for the second quarter, compared to the same period of 2025, primarily reflecting growth in procurement services revenue.

RevPAR
(% change on a currency-neutral basis)
Change vs. Prior Year Period
Three months ended
June 30, 2026
U.S.
1.3%
International
2.1%
Global
1.7%

1 Calculated as total revenues excluding reimbursable revenues. Reimbursable revenues totaled $163 million and $167 million for second quarter 2026 and 2025, respectively, and $287 million and $291 million year-to-date through June 30, 2026 and June 30, 2025, respectively.
2 Selling, general and administrative expenses for the three months ended June 30, 2026 included $0.2 million of expense related to the post-employment benefits announced on May 20, 2026. The Company expects to recognize approximately $2.7 million of total post-employment benefits through August 31, 2026.


•U.S. RevPAR increased 1.3% in the second quarter, compared to the same period of 2025, driven by a 0.7% increase in rate and a 40-basis-point increase in occupancy, primarily reflecting strength in the East North Central, Middle Atlantic, and West South Central regions.

•International RevPAR increased 2.1% on a currency-neutral basis in the second quarter, compared to the same period of 2025, led by the Caribbean and Latin America and further supported by continued strength in Canada and Asia Pacific.


System Size and Development
(Rooms)
June 30, 2026June 30, 2025Change
U.S.499,226500,562-0.3%
    U.S. upscale, extended stay, and midscale442,676439,7440.7%
International161,863143,83812.5%
Global661,089644,4002.6%
    Global upscale, extended stay, and midscale599,207578,2263.6%


•Global room openings increased 16% in the second quarter of 2026 compared to the same period of 2025, as the Company opened approximately 8,300 global rooms.

•Extended stay remained a core growth engine, supported by strong unit economics and continued developer demand, with U.S. extended stay net rooms growing 13.0% compared to June 30, 2025, marking the 12th consecutive quarter of double-digit growth.

•International net rooms grew 12.5% compared to June 30, 2025, led by double-digit growth in Asia Pacific and EMEA, with continued growth in Canada.

•Global franchise agreements awarded increased 20% in the second quarter compared to the same period of 2025, representing 11,200 new global rooms for development and reflecting continued demand for conversion-led brands.

•The Company's global pipeline totaled approximately 77,300 rooms as of June 30, 2026, with 96% concentrated in extended stay, midscale, and upscale brands. The pipeline included:
◦71,100 U.S. rooms and 6,200 international rooms.
◦29,900 extended stay rooms, representing 39% of the total pipeline.
◦26,400 conversion rooms and 50,900 new-construction rooms.

Balance Sheet and Liquidity
As of June 30, 2026, Choice had total available liquidity of $475 million, comprised of cash and cash equivalents and available borrowing capacity. The Company’s net debt-to-adjusted EBITDA ratio was 3.1x for the trailing twelve months ended June 30, 2026, within the Company's target range of 3.0x to 4.0x.

During the six months ended June 30, 2026, the Company generated $67 million in cash flows from operating activities, compared to $116 million in the prior-year period, primarily reflecting higher franchise agreement acquisition costs associated with a 27% increase in U.S. room openings and higher marketing and reservation system reimbursable expenses.



During the six months ended June 30, 2026, net capital outlays for hotel development and lending activities declined 80% to $15 million, from $76 million in the prior-year period.3

The Company expects to enter the next phase of its asset-light strategy by recycling capital from its owned hotel portfolio. As of August 5, 2026, the Company owned 19 operating hotels, with one additional hotel under construction. The Company expects the first asset sales to occur during the first half of 2027, subject to market conditions.

Shareholder Returns

During the six months ended June 30, 2026, the Company returned $26 million to shareholders through dividends and $113 million in share repurchases.4

As of June 30, 2026, 1.8 million shares of common stock remained available under the Company’s current share repurchase authorization.

Outlook

The Company is updating certain aspects of its full-year 2026 outlook. The following outlook includes forward-looking non-GAAP measures used by management to assess expected performance. Adjusted metrics exclude the net surplus or deficit from reimbursable revenue from franchised and managed properties, due diligence and transition costs, and other items.

Full-Year 2026
Prior Outlook
Net income$230 to $241 million$265 to $275 million
Adjusted net income$312 to $323 million$320 to $330 million
Adjusted EBITDA$635 to $650 million$632 to $647 million
    Adjusted SG&AMid-single digitsMid-single digits
Diluted EPS$5.07 to $5.31$5.72 to $5.94
Adjusted diluted EPS$6.86 to $7.10$6.92 to $7.14
Effective tax rate26%25%
Full-Year 2026 vs. 2025Full-Year 2026 vs. 2025
Global RevPAR growth0% to 1%-2% to 1%
    U.S. RevPAR growth0% to 1.25%-2% to 1%
U.S. royalty rate growth7 bps to 9 bpsMid-single digits
Global net system rooms growthApproximately 1.5%Approximately 1%

The net income guidance range has been revised from the Company's prior outlook primarily to reflect higher expected marketing and reservation system reimbursable expenses, driven by increased investment in franchisee-facing tools and guest delivery capabilities, as well as higher interest expense and a higher effective tax rate.

The adjusted net income guidance range has been revised from the Company's prior outlook primarily to reflect higher expected interest expense and a higher effective tax rate.

3 Net capital outlays include investments in owned hotel properties, investments in affiliates, notes receivable issued, net of collections, proceeds from asset sales, and distributions from sales of affiliates.
4 Share repurchases include repurchases under the Company's stock repurchase program and repurchases from employees in connection with tax withholding and option exercises relating to awards under the Company's equity incentive plans.


Adjusted EBITDA guidance has been raised from the Company's prior outlook, primarily reflecting improvement in U.S. RevPAR, global net rooms growth, and U.S. royalty rate.

Net capital outlays for hotel development-related activities are expected to decline from $103.4 million in 2025 to a range of $20 million to $45 million in 2026.3

Webcast and Conference Call

Choice will host a conference call to discuss second quarter 2026 results on August 5, 2026, at 10:00 a.m. ET. A live webcast will be available on the Company’s Investor Relations website at www.investor.choicehotels.com/events-and-presentations. Participants may also dial (833) 461-5787 (U.S.) or (585) 542-9983 (international) and reference conference ID 558894687. A replay and transcript will be available within 24 hours on the Company’s Investor Relations website.

About Choice Hotels®

Choice Hotels International, Inc. (NYSE: CHH) is one of the largest lodging franchisors in the world, with over 7,500 hotels, representing more than 650,000 rooms, in 49 countries and territories. A wide-ranging portfolio of 22 brands that includes full-service upper upscale, midscale, extended stay, and economy properties enables Choice® to meet travelers’ needs in more places and for more occasions while driving more value for franchise owners and shareholders. The award-winning Choice Privileges® rewards program and co-brand credit card options provide members with a fast and easy way to earn reward nights and personalized perks. For more information, visit www.choicehotels.com.

Forward-Looking Statements

Information set forth herein includes “forward-looking statements.” Certain, but not necessarily all, of such forward-looking statements can be identified by the use of forward-looking terminology, such as “expect,” “estimate,” “believe,” “anticipate,” “should,” “will,” “forecast,” “plan,” “project,” “assume,” or similar words of futurity. All statements other than historical facts are forward-looking statements. These forward-looking statements are based on management’s current beliefs, assumptions, and expectations regarding future events, which in turn are based on information currently available to management. Such statements may relate to projections of Choice’s revenue, expenses, adjusted EBITDA, earnings, debt levels, ability to repay outstanding indebtedness, payment of dividends, net surplus or deficit, repurchases of common stock and other financial and operational measures, including occupancy, room openings and open hotels, RevPAR, royalty rate, strategic investment and acquisition performance, international expansion performance, macroeconomic backdrop and Choice’s liquidity, among other matters. We caution you not to place undue reliance on any such forward-looking statements. Forward-looking statements do not guarantee future performance and involve known and unknown risks, uncertainties, and other factors.

Several factors could cause our actual results, performance or achievements to differ materially from those expressed in or contemplated by the forward-looking statements. Such risks include, but are not limited to, changes to general, U.S. and foreign economic conditions, including access to liquidity and capital; changes in consumer demand and confidence, including consumer discretionary spending and the demand for travel, transient and group business; the timing and amount of future dividends and share repurchases; future U.S. or global outbreaks of epidemics, pandemics or contagious diseases or fear of such outbreaks, and the related impact on the global hospitality industry, particularly but not exclusively the U.S. travel market; changes in law and regulation applicable to the travel, lodging or franchising industries, including with respect to the status of our


relationship with employees of our franchisees; the potential impact of changes in laws and regulations generally, or the interpretation thereof, including, without limitation, those relating to taxes, wages, labor and immigration; foreign currency fluctuations; changes in global interest rates and rate differentials; variability and unpredictability in trade relations, sanctions, tariffs or other trade controls; governmental action or inaction relating to the federal budget, including funding lapses and government shutdowns; impairments or declines in the value of our assets; our assumptions underlying our critical accounting estimates; operating risks common in the travel, lodging or franchising industries; changes to the desirability of our brands as viewed by hotel operators and customers; changes to the terms or termination of our contracts with franchisees and our relationships with our franchisees; our ability to keep pace with improvements in technology utilized for our marketing and reservation systems and other operating systems; our ability to grow our franchise system; exposure to risks related to our hotel development, financing, franchise agreement acquisition costs and ownership activities; exposures to risks associated with our investments in new businesses; fluctuations in the supply and demand for hotel rooms; our ability to realize anticipated benefits from acquired businesses; impairments or losses relating to acquired businesses; the level of acceptance of alternative growth strategies we may implement; the impact of inflation; information technology, cyber security and data breach risks; introduction and integration of artificial intelligence technologies; climate change; our sustainability strategy; ownership and financing activities; hotel closures or financial difficulties of our franchisees; operating risks associated with our international operations; political instability, geopolitical conflicts and terrorism; labor shortages; the outcome of litigation; and our ability to effectively manage our indebtedness and secure our indebtedness.

These and other risk factors are discussed in detail in the Company’s filings with the U.S. Securities and Exchange Commission, including our Annual Report on Form 10-K. We undertake no obligation to publicly update or revise any forward-looking statement, whether as a result of new information, future events or otherwise, except as required by law.

Non-GAAP Financial Measurements and Other Definitions

The company evaluates its operations utilizing the performance metrics of adjusted EBITDA, adjusted selling, general and administrative (SG&A) expenses, adjusted net income, and adjusted diluted EPS, which are all non-GAAP financial measurements. These measures, which are reconciled to the comparable GAAP measures in Exhibits 6 and 7, should not be considered as an alternative to any measure of performance or liquidity as promulgated under or authorized by GAAP, such as SG&A, net income and EPS. The company’s calculation of these measurements may be different from the calculations used by other companies and comparability may therefore be limited. Management believes these non-GAAP financial measures provide investors with additional meaningful financial information that should be considered when assessing our underlying business performance and trends. We further discuss management’s reasons for reporting these non-GAAP measures and how each non-GAAP measure is calculated below.

In addition to the specific adjustments noted below with respect to each measure, the non-GAAP measures presented herein also exclude restructuring of the company’s operations including employee severance benefit, income taxes and legal costs, acquisition related to business combination, due diligence and transition (recoveries) costs, and global ERP system implementation and related costs to allow for period-over-period comparison of ongoing core operations before the impact of these discrete and infrequent charges.

Adjusted Earnings Before Interest, Taxes, Depreciation, and Amortization: Adjusted EBITDA, presented herein, is calculated as net income excluding the impact of interest expense, interest income, provision for income taxes, depreciation and amortization, amortization of cloud computing arrangements, impairments and gains on sale of business, joint ventures and assets, other (gains)


and losses, equity in net income (loss) of unconsolidated affiliates and (gain) loss on extinguishment of debt, further adjusted to exclude certain items, including, franchisee agreement acquisition cost amortization and charges, mark-to-market adjustments on non-qualified retirement plan investments, share based compensation expense (benefit) and surplus or deficits generated by reimbursable revenue from franchised and managed properties. We consider adjusted EBITDA to be an indicator of operating performance because it measures our ability to service debt, fund capital expenditures, and expand our business. We also use these measures, as do analysts, lenders, investors, and others, to evaluate companies because they exclude certain items that can vary widely across industries or among companies within the same industry. For example, interest expense can be dependent on a company’s capital structure, debt levels, and credit ratings, and share based compensation expense (benefit) is dependent on the design of compensation plans in place and the usage of them. Accordingly, the impact of interest expense and share based compensation expense (benefit) on earnings can vary significantly among companies. The tax positions of companies can also vary because of their differing abilities to take advantage of tax benefits and because of the tax policies of the jurisdictions in which they operate. As a result, effective tax rates and provision for income taxes can vary considerably among companies. These measures also exclude depreciation and amortization because companies utilize productive assets of different ages and use different methods of both acquiring and depreciating productive assets or amortizing franchise-agreement acquisition costs. These differences can result in considerable variability in the relative asset costs and estimated lives and, therefore, the depreciation and amortization expense among companies. Mark-to-market adjustments on non-qualified retirement-plan investments recorded in SG&A expenses are excluded from adjusted EBITDA, as the company accounts for these investments in accordance with accounting for deferred-compensation arrangements when investments are held in a rabbi trust and invested. Changes in the fair value of the investments are recognized as both compensation expense in SG&A and other gains and losses. As a result, the changes in the fair value of the investments do not have a material impact on the company’s net income. Surpluses and deficits generated from reimbursable revenues from franchised and managed properties are excluded, as the company does not operate these programs to generate a profit and has the contractual rights to adjust future collections or assess additional fees to recover prior period expenditures. The company’s franchise and management agreements require these revenues to be used exclusively for expenses associated with providing franchise and management services, such as central reservation systems, hotel employee and operating costs, reservation delivery and national marketing and media advertising. Franchised and managed property owners are required to reimburse the company for any deficits generated from these activities and the company is required to spend any surpluses generated in future periods. The reimbursement for franchise and management services is typically billed and collected monthly, based on the underlying hotel’s sales or usage, while the associated costs are recognized as incurred by the company, creating timing differences with the net effect impacting net income in the reporting period. These timing differences are due to our discretion to spend in excess of the revenues earned or less than the revenues earned in a single period to ensure that the programs are operated in the best long-term interests of our franchised and managed properties. Since these activities will be managed to break-even over time, quarterly or annual surpluses and deficits have been excluded from the measurements utilized to assess the company’s operating performance.

Adjusted Net Income and Adjusted Diluted Earnings Per Share: Adjusted net income and adjusted diluted EPS exclude the impact of surpluses or deficits generated from reimbursable revenue from franchised and managed properties, impairments, formation costs and gains on sale of business, joint ventures and assets and gains on extinguishment of debt. Surpluses and deficits generated from reimbursable revenue from franchised and managed properties are excluded, as the company does not operate these programs to generate a profit and has the contractual rights to adjust future collections or assess additional fees to recover prior period expenditures. The company’s franchise agreements require these revenues to be used exclusively for expenses associated with providing franchised and managed services, such as central reservation systems, hotel employee and operating costs, reservation delivery and national marketing and media


advertising. Franchised and managed property owners are required to reimburse the company for any deficits generated from activities and the company is required to spend any surpluses generated in future periods. The reimbursement for franchise and management services is typically billed and collected monthly, based on the underlying hotel’s sales or usage, while the associated costs are recognized as incurred by the company, creating timing differences with the net effect impacting net income in the reporting period. These timing differences are due to our discretion to spend in excess of the revenues earned or less than the revenues earned in a single period to ensure that the programs are operated in the best long-term interests of our franchised and managed properties. Since these activities will be managed to break-even over time, quarterly or annual surpluses and deficits have been excluded from the measurements utilized to assess the company’s operating performance. We consider adjusted net income and adjusted diluted EPS to be indicators of operating performance because excluding these items allows for period-over-period comparisons of our ongoing operations.

Adjusted SG&A: Adjusted SG&A reflects SG&A excluding the impact of mark-to-market adjustments on non-qualified retirement plan investments, amortization of cloud computing arrangements and share based compensation expense. We use this measure, as do analysts, lenders, investors, and others, to evaluate companies because it excludes certain items that can vary widely across industries or among companies within the same industry. For example, share based compensation expense (benefit) is dependent on the design of compensation plans in place and the usage of them. Accordingly, the impact of share-based compensation expense (benefit) on earnings can vary significantly among companies. Mark-to-market adjustments on non-qualified retirement-plan investments recorded in SG&A expenses are also excluded as the company accounts for these investments in accordance with accounting for deferred-compensation arrangements when investments are held in a rabbi trust and invested. Changes in the fair value of the investments are recognized as both compensation expense in SG&A and other gains and losses. As a result, the changes in the fair value of the investments do not have a material impact on the company’s net income.

Occupancy: Occupancy represents the total number of room nights sold divided by the total number of room nights available at a hotel for a given period. Occupancy measures the utilization of the hotels’ available capacity. Management uses occupancy to gauge demand at a specific hotel or group of hotels in a given period. The company calculates occupancy based on information as reported by its franchisees. To accurately reflect occupancy, the company may revise its prior years’ operating statistics for the most current information provided.

Average Daily Rate (ADR): ADR represents hotel room revenue divided by the total number of room nights sold for a given period. ADR measures the average room price attained by a hotel and ADR trends provide useful information concerning the pricing environment and the nature of the customer base of a hotel or group of hotels. ADR is a commonly used performance measure in the industry, and management uses ADR to assess pricing levels that the company is able to generate. The company calculates ADR based on information as reported by its franchisees. To accurately reflect ADR, the company may revise its prior years’ operating statistics for the most current information provided.

Revenue Per Available Room (RevPAR): RevPAR is calculated by dividing hotel room revenue by the total number of room nights available to guests for a given period. Management considers RevPAR to be a meaningful indicator of hotel performance and therefore company royalty and system revenues as it provides a metric correlated to the two key drivers of operations at a hotel: occupancy and ADR. The company calculates RevPAR based on information as reported by its franchisees. To accurately reflect RevPAR, the company may revise its prior years’ operating statistics for the most current information provided. RevPAR is also a useful indicator in measuring performance over comparable periods.



Pipeline: Pipeline is defined as hotels awaiting conversion, under construction or approved for development, and master development agreements committing owners to future franchise development.

Contacts
Allie Summers, Senior Director, Investor Relations
IR@choicehotels.com
© 2026 Choice Hotels International, Inc. All rights reserved.


Choice Hotels International, Inc.
Earnings Release Schedules
Table of Contents

Page No.
Condensed Consolidated Statements of Income
11
Condensed Consolidated Balance Sheets
12
Condensed Consolidated Statements of Cash Flows
13
Currency-Neutral System-Wide Hotel Operating Statistics
13
System Hotel and Room Supply
15
Non-GAAP Financial Information
16
Outlook
17


Choice Hotels International, Inc.Exhibit 1
Condensed Consolidated Statements of Income
(Unaudited)
(In thousands, except per share amounts)For the Three Months EndedFor the Six Months Ended
June 30,June 30,
2026202520262025
REVENUES
Franchise and management fees$187,536 $177,086 $337,167 $322,154 
Partnership services and fees28,674 27,064 53,408 52,445 
Owned hotels34,896 30,228 65,329 58,088 
Other26,332 24,716 38,205 35,843 
Revenue for reimbursable costs from franchised and managed properties163,324 167,349 287,228 290,773 
Total revenues440,762 426,443 781,337 759,303 
OPERATING EXPENSES
Selling, general and administrative96,153 89,298 174,199 163,508 
Business combination, diligence and transition costs536 347 772 446 
Depreciation and amortization16,813 13,424 33,634 27,172 
Owned hotels25,457 22,419 49,108 43,479 
Reimbursable expenses from franchised and managed properties197,665 176,358 359,452 320,169 
Total operating expenses336,624 301,846 617,165 554,774 
Operating income104,138 124,597 164,172 204,529 
OTHER EXPENSES AND (INCOME), NET
Interest expense24,259 22,736 48,221 43,978 
Interest income(1,095)(1,456)(2,306)(3,015)
Other gains, net(6,124)(5,374)(5,403)(4,938)
Equity in net loss of affiliates1,216 80 7,468 131 
Total other expenses and (income), net18,256 15,986 47,980 36,156 
Income before income taxes85,882 108,611 116,192 168,373 
Income tax expense21,544 26,877 31,550 42,105 
Net income$64,338 $81,734 $84,642 $126,268 
Basic earnings per share$1.42 $1.76 $1.85 $2.71 
Diluted earnings per share$1.41 $1.75 $1.84 $2.68 




Choice Hotels International, Inc.Exhibit 2
Condensed Consolidated Balance Sheets
(Unaudited)
(In thousands)June 30,December 31,
20262025
ASSETS
Cash and cash equivalents$42,826 $44,997 
Accounts receivable, net279,813 207,491 
Other current assets109,297 153,510 
Total current assets431,936 405,998 
Property and equipment, net653,503 649,291 
Operating lease right-of-use assets75,004 77,670 
Goodwill302,877 305,758 
Intangible assets, net1,105,813 1,082,486 
Notes receivable, net of allowances28,558 12,490 
Investments for employee benefit plans, at fair value54,794 50,227 
Investments in affiliates137,251 134,975 
Other assets199,080 199,308 
Total assets$2,988,816 $2,918,203 
LIABILITIES AND SHAREHOLDERS' EQUITY
Accounts payable$165,441 $156,276 
Accrued expenses and other current liabilities110,873 125,282 
Deferred revenue104,256 100,698 
Liability for guest loyalty program85,898 85,035 
 Total current liabilities466,468 467,291 
Long-term debt2,002,339 1,906,122 
Long-term deferred revenue133,998 130,505 
Deferred compensation and retirement plan obligations61,090 56,532 
Deferred income taxes32,890 25,303 
Operating lease liabilities104,349 107,963 
Liability for guest loyalty program41,139 39,771 
Other liabilities4,365 3,487 
Total liabilities2,846,638 2,736,974 
Total shareholders' equity142,178 181,229 
Total liabilities and shareholders' equity$2,988,816 $2,918,203 



Choice Hotels International, Inc.Exhibit 3
Condensed Consolidated Statements of Cash Flows
(Unaudited)
(In thousands)Six Months Ended June 30,
20262025
CASH FLOWS FROM OPERATING ACTIVITIES
Net income$84,642 $126,268 
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization33,634 27,172 
Depreciation and amortization – reimbursable expenses from franchised and managed properties11,228 9,426 
Franchise agreement acquisition cost amortization20,201 17,261 
Non-cash share-based compensation and other charges13,098 19,438 
Non-cash interest, investments, and affiliate loss (income), net(3,391)(1,668)
Deferred income taxes7,493 850 
Equity in net loss of affiliates, less distributions received7,468 692 
Franchise agreement acquisition costs, net of reimbursements(72,169)(41,474)
Change in working capital and other(34,842)(41,895)
Net cash provided by operating activities67,362 116,070 
CASH FLOWS FROM INVESTING ACTIVITIES
Investments in other property and equipment(17,900)(18,333)
Investments in owned hotel properties(27,292)(65,676)
Contributions to investments in affiliates(10,588)(9,358)
Issuances of notes receivable(1,859)(3,353)
Collections of notes receivable24,610 2,773 
Other items, net(995)(1,201)
Net cash used in investing activities(34,024)(95,148)
CASH FLOWS FROM FINANCING ACTIVITIES
Net borrowings pursuant to revolving credit facilities96,275 130,000 
Purchases of treasury stock(107,464)(112,756)
Dividends paid(26,333)(26,868)
Proceeds from the exercise of stock options2,339 6,385 
Net cash used in financing activities(35,183)(3,239)
Net change in cash and cash equivalents(1,845)17,683 
Effect of foreign exchange rate changes on cash and cash equivalents(326)750 
Cash and cash equivalents, beginning of period44,997 40,177 
Cash and cash equivalents, end of period$42,826 $58,610 



Exhibit 4
CHOICE HOTELS INTERNATIONAL, INC.
CURRENCY-NEUTRAL SYSTEM-WIDE HOTEL OPERATING STATISTICS
(UNAUDITED)
For the Three Months Ended June 30, 2026
ADROccupancyRevPAR
2026vs. 20252026vs. 20252026vs. 2025
Total U.S.$98.28 0.7 %60.0 %40bps$58.92 1.3 %
     Upscale & Above (1)
155.49 2.0 %60.0 %(50)bps93.33 1.3 %
     Midscale & Upper Midscale (2)
102.76 0.7 %59.6 %20bps61.24 1.1 %
     Extended Stay (3)
69.24 3.5 %71.3 %10bps49.37 3.7 %
     Economy (4)
71.16 (0.2)%49.9 %(20)bps35.51 (0.7)%
International (5)
111.14 2.0 %64.8 %10bps71.96 2.1 %
Total System (5)
$101.45 1.2 %61.1 %40bps$61.95 1.7 %
For the Six Months Ended June 30, 2026
ADROccupancyRevPAR
2026vs. 20252026vs. 20252026vs. 2025
Total U.S.$93.92 (0.5)%55.5 %20bps$52.08 (0.2)%
     Upscale & Above (1)
148.67 1.4 %55.1 %(10)bps81.97 1.4 %
     Midscale & Upper Midscale (2)
98.02 (0.5)%54.7 %10bps53.62 (0.2)%
     Extended Stay (3)
67.87 1.9 %68.7 %(80)bps46.65 0.7 %
     Economy (4)
68.80 (2.6)%46.1 %(80)bps31.71 (4.4)%
International (5)
105.01 2.7 %60.9 %(20)bps63.90 2.2 %
Total System (5)
$96.68 0.4 %56.7 %10bps$54.83 0.6 %
For the Three Months EndedFor the Six Months Ended
June 30, 2026June 30, 2025June 30, 2026June 30, 2025
U.S. Average Royalty Rate
Total U.S.5.23 %5.12 %5.22 %5.11 %
(1) Includes Ascend Hotel Collection, Cambria, Park Plaza, Radisson, Radisson Blu, Radisson Individuals, and Radisson RED brands.
(2) Includes Clarion, Comfort Inn, Comfort Suites, Country Inn & Suites, Park Inn, Quality Inn, and Sleep Inn brands.
(3) Includes Everhome Suites, Mainstay Suites, Suburban Studios, and WoodSpring Suites brands.
(4) Includes Econo Lodge and Rodeway brands.
(5) International and Total System results are presented on a currency-neutral basis and exclude the impact of foreign currency exchange movements.


Exhibit 5
CHOICE HOTELS INTERNATIONAL, INC.
SYSTEM HOTEL AND ROOM SUPPLY
(UNAUDITED)
Global System by BrandJune 30, 2026
HotelsRooms
Ascend Hotel Collection528 71,347 
Cambria Hotels77 10,278 
Radisson(1)
129 22,600 
Comfort(2)
2,135 178,818 
Quality1,881 148,452 
Country404 32,618 
Sleep427 30,610 
Clarion(3)
274 37,020 
Park Inn31 2,573 
WoodSpring298 35,869 
MainStay157 11,486 
Suburban121 9,995 
Everhome30 3,451 
Econo Lodge631 35,947 
Rodeway427 23,479 
Other (4)
58 6,546 
(1) Includes Radisson, Radisson Blu, Radisson Individuals, Radisson RED and Park Plaza brands.
(2) Includes Comfort family of brand extensions including Comfort Inn and Comfort Suites.
(3) Includes Clarion family of brand extensions including Clarion and Clarion Pointe.
(4) Includes other brands under Master Franchise Agreements.
U.S. System by Chain ScaleJune 30, 2026
HotelsRooms
Upscale & Above374 60,259 
Midscale & Upper Midscale4,223 322,296 
Extended Stay598 60,121 
Economy1,000 56,550 
Global System by RegionJune 30, 2026
HotelsRooms
U.S.6,195 499,226 
Total International1,413 161,863 
     Americas (excluding U.S.)545 56,036 
     Europe & Middle East484 70,998 
     Asia-Pacific384 34,829 
Total System7,608 661,089 




Exhibit 6
CHOICE HOTELS INTERNATIONAL, INC.
SUPPLEMENTAL NON-GAAP FINANCIAL INFORMATION
(UNAUDITED)
ADJUSTED SELLING, GENERAL AND ADMINISTRATIVE EXPENSES
(dollar amounts in thousands)Three Months EndedSix Months Ended
June 30,June 30,
2026202520262025
Total selling, general and administrative expenses$96,153$89,298$174,199 $163,508
Mark to market adjustments on non-qualified retirement plan investments(6,023)(3,973)(4,972)(3,250)
Non-recurring operational restructuring charges and executive severance(2,057)(372)(2,538)(4,302)
Share-based compensation(4,555)(6,236)(9,367)(12,126)
Amortization of cloud computing arrangements(297)—(576)—
Global ERP system implementation and related costs(59)(1,076)(359)(2,066)
Adjusted selling, general and administrative expenses$83,162$77,641$156,387 $141,764
ADJUSTED EARNINGS BEFORE INTEREST, TAXES, DEPRECIATION AND AMORTIZATION ("ADJUSTED EBITDA")
(dollar amounts in thousands)Three Months EndedSix Months Ended
June 30,June 30,
2026202520262025
Net income $64,338 $81,734 $84,642 $126,268 
Income tax expense21,544 26,877 31,550 42,105 
Interest expense24,259 22,736 48,221 43,978 
Interest income(1,095)(1,456)(2,306)(3,015)
Amortization of cloud computing arrangements297 — 576 — 
Depreciation and amortization16,813 13,424 33,634 27,172 
Other gains, net(6,124)(5,374)(5,403)(4,938)
Equity in net loss of affiliates1,216 80 7,468 131 
Share-based compensation4,555 6,236 9,367 12,126 
Mark to market adjustments on non-qualified retirement plan investments6,023 3,973 4,972 3,250 
Franchise agreement acquisition costs amortization and charges6,564 5,941 12,489 11,327 
Revenue for reimbursable costs from franchised and managed properties(163,324)(167,349)(287,228)(290,773)
Reimbursable expenses from franchised and managed properties197,665 176,358 359,452 320,169 
Global ERP system implementation and related costs59 1,076 359 2,066 
Business combination, diligence and transition costs536 347 772 446 
Non-recurring operational restructuring charges and executive severance2,057 372 2,538 4,302 
Adjusted EBITDA$175,383 $164,975 $301,103 $294,614 
ADJUSTED NET INCOME AND ADJUSTED DILUTED EARNINGS PER SHARE ("EPS")
(dollar amounts in thousands, except per share amounts)Three Months EndedSix Months Ended
June 30,June 30,
2026202520262025
Net income $64,338 $81,734 $84,642 $126,268 
Revenue for reimbursable costs from franchised and managed properties(163,324)(167,349)(287,228)(290,773)
Reimbursable expenses from franchised and managed properties197,665 176,358 359,452 320,169 
Business combination, diligence and transition costs536 347 772 446 
Non-recurring operational restructuring charges and executive severance2,057 372 2,538 4,302 
Global ERP system implementation and related costs59 1,076 359 2,066 
Income tax expense on adjustments(9,278)(2,756)(18,883)(9,053)
Adjusted Net Income$92,053 $89,782 $141,652 $153,425 
Diluted EPS$1.41$1.75$1.84$2.68
Adjusted Diluted EPS$2.02$1.92$3.09$3.25


Exhibit 7
CHOICE HOTELS INTERNATIONAL, INC.
OUTLOOK
(UNAUDITED)
Guidance represents the company's range of estimated outcomes for the full year ended December 31, 2026
ADJUSTED EBITDA
(in thousands)Full YearFull Year
Lower RangeUpper Range
Net income$230,000 $241,000 
Income tax expense79,900 83,700 
Interest expense96,200 96,400 
Interest income(4,000)(4,000)
Amortization of cloud computing arrangements1,200 1,200 
Depreciation and amortization68,200 68,200 
Other gains, net(5,300)(5,300)
Equity in net loss of affiliates10,600 10,600 
Share-based compensation17,500 17,500 
Mark to market adjustments on non-qualified retirement plan investments5,000 5,000 
Franchise agreement acquisition costs amortization and charges26,600 26,600 
Revenue for reimbursable costs from franchised and managed properties(595,700)(595,700)
Reimbursable expenses from franchised and managed properties695,600 695,600 
Global ERP system implementation and related costs1,700 1,700 
Business combination, diligence and transition costs1,500 1,500 
Non-recurring operational restructuring charges and executive severance6,000 6,000 
Adjusted EBITDA$635,000 $650,000 
ADJUSTED NET INCOME & DILUTED EARNINGS PER SHARE ("EPS")
(in thousands, except per share amounts)Full YearFull Year
Lower RangeUpper Range
Net income$230,000 $241,000 
Revenue for reimbursable costs from franchised and managed properties(595,700)(595,700)
Reimbursable expenses from franchised and managed properties695,600 695,600 
Business combination, diligence and transition costs1,500 1,500 
Non-recurring operational restructuring charges and executive severance6,000 6,000 
Global ERP system implementation and related costs1,700 1,700 
Income tax expense on adjustments(27,100)(27,100)
Adjusted net income$312,000 $323,000 
Diluted EPS$5.07 $5.31 
Adjusted Diluted EPS$6.86 $7.10 

Source: View Original Filing on SEC EDGAR

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