Marriott 2025 Q2 Earnings Mixed Results as Net Income Dips 1.2%

Marriott International (Nasdaq: MAR) reported second quarter 2025 results on August 5, 2025. The company’s Q2 revenue rose 4.7% year-over-year to $6.74 billion, driven by strong performance across multiple segments. However, net income declined slightly to $763 million, representing a 1.2% drop compared to the prior year. The company maintained its asset-light strategy and reaffirmed its commitment to shareholder returns, while offering guidance that remained in-line with market expectations.

Revenue
Marriott’s total revenue increased by 4.7% to $6.74 billion in Q2 2025, driven by robust performance across its management and franchise fee streams. Franchise fees led the way with $860 million, followed by base management fees at $340 million and incentive management fees at $200 million. Cost reimbursement revenue contributed the largest portion at $4.93 billion. Meanwhile, owned, leased, and other revenue totaled $441 million, and contract investment amortization recorded a negative $29 million.

Earnings/Net Income
Marriott’s EPS rose 3.0% to $2.78 in Q2 2025 compared to $2.70 in Q2 2024, reflecting continued earnings growth. However, net income declined to $763 million, a 1.2% decrease from $772 million in the prior-year period. While EPS growth is a positive sign, the slight drop in net income signals mixed financial performance for the quarter.

Price Action
The stock price of Marriott edged up 0.16% during the latest trading day, but dropped 5.03% for the week and 7.25% month-to-date, reflecting mixed investor sentiment.

Post-Earnings Price Action Review
A strategy of buying Marriott shares on the earnings release date and holding for 30 days would have yielded a 22.64% return over the past three years, although this underperformed the 64.74% return of the benchmark. The strategy recorded a maximum drawdown of 0.00%, a Sharpe ratio of 0.47, and a volatility of 16.85%.

CEO Commentary
Anthony Capuano, President and Chief Executive Officer, highlighted the company’s strong second-quarter performance, with global RevPAR growth of 1.5% and net rooms growth of 4.7%. He noted international strength in APEC and EMEA, while U.S. & Canada RevPAR remained flat, with luxury segment strength offsetting weaker demand in select service. Capuano emphasized the company’s asset-light business model and shareholder returns, including $2.1 billion returned through July 30 and plans to return approximately $4 billion in 2025. Strategic priorities included brand expansion, such as the launch of Series by Marriott and the acquisition of citizenM, to strengthen global positioning. Capuano expressed cautious optimism about future growth amid macroeconomic uncertainty but remained confident in the company’s long-term strategy.

Guidance
Marriott provided 2025 guidance, forecasting full-year adjusted EBITDA between $5,310 million and $5,395 million, with adjusted diluted EPS projected at $9.85 to $10.08. For the third quarter, gross fee revenues are expected to range from $1,310 million to $1,325 million, with adjusted EBITDA anticipated between $1,288 million and $1,318 million. The company expects to return approximately $4 billion to shareholders in 2025 and anticipates net rooms growth approaching 5% by year-end.

Additional News
In the three weeks following the Q2 2025 earnings report, Marriott announced key strategic developments, including the acquisition of citizenM, a European lifestyle hotel brand, to expand its presence in the midscale and upscale markets. The company also launched its newest brand, Series by Marriott, targeting the budget-conscious traveler with a modern, stylish offering. Additionally, Marriott reaffirmed its commitment to shareholder returns, having returned $2.1 billion through dividends and buybacks in the first half of 2025, and reiterated its plan to return approximately $4 billion to shareholders in the full year.