What is Service Properties's gross profit margin?

What guidance did Service Properties's management provide for the next earnings period?

What were the key takeaways from Service Properties’s earnings call?

What factors drove the changes in Service Properties's revenue and profit?

What does Service Properties do and what are its main business segments?

Did Service Properties beat or miss consensus estimates last quarter?

What is the revenue and EPS growth rate for Service Properties year over year?

What were the key takeaways from Service Properties's earnings call?

- **Capital Recycling Success**: SVC executed $850 million in asset sales and debt repayments, retiring all 2026 senior notes and issuing zero-coupon bonds to extend maturity. 
- **Hotel Portfolio Resilience**: RevPAR grew 20 bps YoY, with retained hotels showing 60 bps RevPAR improvement despite industry challenges. 
- **Net Lease Growth**: $24.8 million in Q3 acquisitions focused on necessity-based retail, with 2.6x rent coverage and 7.4% cap rate. 
- **Cost Management**: 2025 CapEx reduced to $200 million, with $20-30 million deferred to 2026 due to delayed renovations.

**【Management Opening Remarks】**
- SVC reported third-quarter 2025 results, highlighting strategic initiatives including $850 million in capital recycling through asset sales and debt repayments. The company emphasized financial flexibility and balance sheet strength, with all 2026 senior notes retired and $580 million zero-coupon bonds issued to support debt maturity extension.

**【CEO Commentary】**
- CEO Chris Bilotto detailed progress on 121 hotel sales ($959 million gross proceeds), with 69 remaining transactions expected to close by year-end. These sales aim to reduce leverage and support transition to a net lease-focused business. Hotel performance showed RevPAR growth of 20 basis points YoY, driven by occupancy gains, despite cost pressures. The net lease portfolio expanded with $24.8 million in Q3 acquisitions, targeting necessity-based retail and QSRs.

**【CFO Financial Commentary】**
- CFO Brian Donley reported normalized FFO of $33.9 million ($0.20 per share) and adjusted EBITDAre of $145 million, down 10% YoY due to higher expenses and softer demand. Hotel EBITDA declined 19% YoY, impacted by elevated labor costs and insurance claims. The company repaid $700 million in senior notes and fully drew down its $650 million revolver, now repaid with asset sales proceeds. 2025 CapEx guidance was revised to $200 million from $250 million, with $20-30 million deferred to 2026 due to delayed hotel renovations.

**【Q&A Highlights】**
- **Hotel Sales Execution**: Management confident in closing 69 remaining hotels by year-end, with 40-50% expected in November. Impairments ($27 million) were due to purchase price allocations, not indicative of portfolio health. 
- **Net Lease Portfolio**: Rent coverage stable at 2x, with QSR and convenience retail assets driving resilience. TA TravelCenters' credit strength supports coverage despite industry headwinds.
- **EBITDA Outlook**: Q4 EBITDA guidance ($20-25 million) reflects seasonal trends and cost pressures, with 2026 plans to sell negative EBITDA hotels to improve margins.
- **Debt Strategy**: Zero-coupon bonds provide covenant relief, with next maturity in 2027. Management aims to reduce leverage by $50 million through 2026 hotel sales.

Service Properties Trust (SVC) Q3 2025 Earnings Call Transcript

Revenue

Sales and Services Revenue

Financing Services Revenue

Other Revenue

Cost of Revenue

Cost of Goods and Services

Cost of Financing Services

Other Cost

Gross Profit

Other Operating Income

Operating Expenses

Selling, General and Administrative Expenses

Selling and Marketing Expenses

General and Administrative Expenses

Research and Development Expenses

Loss on Bad Debts

Loss on Impairment of Other Assets

Loss on Disposal of Assets

Other Operating Expenses

Operating Income

Non-Operating Income (Loss)

Income (Loss) from Affiliates

Income (Loss) from Associates

Income (Loss) from Joint ventures

Gain (Loss) on Other Investment

Gain (Loss) on Change in Fair Value

Gain (Loss) on Foreign Currency Exchange

Other Non-Operating Income (Loss)

Net Interest Expense

Interest Expense

Interest Income

Pretax Income From Continuing Operations

Income Tax Expense

Current Income Tax

Deferred Income Tax

Income Tax Adjustments

Net Income from Continuing Operations

Income from Discontinued Operations

Other Items Before Net Income

Net Income

Net Income Attributable to Minority Interests

Net Income Attributable to Owners of the Company

Preferred Stock Dividends

Other Adjustments

Net Income Attributable to Common Stockholders

Other Comprehensive Income

Total Comprehensive Income

Total Comprehensive Income Attributable to Minority Interests

Total Comprehensive Income Attributable to Owners of the Company

Basic EPS

Basic EPS from Continuing Operations

Basic EPS from Discontinued Operations

Diluted EPS

Diluted EPS from Continuing Operations

Diluted EPS from Discontinued Operations

SVC

SVC fundamentals

You can ask Aime