Latest quarter
Hilton reported Q2 FY2026 revenue of $3.3 billion, up 6.50% from Q2 FY2025, while the consensus counted revenue of $3.3 billion against a $3.4 billion estimate, a −0.62% difference. The company reported adjusted EPS, as the consensus counts it, of $2.29, matching the $2.29 consensus estimate.
Hilton reported diluted EPS of $2.10, up 14.1% from $1.84 a year earlier. The company reported gross margin of 92.0%, compared with 90.9% in Q2 FY2025, and operating margin of 25.7%, compared with 24.8%. Hilton reported free cash flow of $435.0 million, down −29.3% from $615.0 million a year earlier.
Kevin Jacobs said system-wide RevPAR increased 3.9% from the prior year on a comparable, currency-neutral basis, driven by demand recovery in the U.S. and World Cup-related demand. He said management and franchise fees grew 6.4% from a year earlier, while adjusted EBITDA of $1.5 billion rose 4.6%.
| Q2 FY2026 | Q2 FY2025 | Change | |
|---|---|---|---|
| Revenue | $3.3 billion | $3.1 billion | 6.50% |
| Diluted EPS | $2.10 | $1.84 | 14.1% |
| Gross margin | 92.0% | 90.9% | 1.2 percentage points |
| Operating margin | 25.7% | 24.8% | 0.9 percentage points |
| Free cash flow | $435.0 million | $615.0 million | −29.3% |
| Against the consensus | Reported | Consensus | Result |
|---|---|---|---|
| Adjusted EPS | $2.29 | $2.29 | In line |
| Revenue | $3.3 billion | $3.4 billion | Missed by 0.62% |
Adjusted EPS is the figure the consensus estimates, not the GAAP EPS above.
What management said on the call
Chris Nassetta said second-quarter demand improved across chain scales and segments, with business-transient and group demand in the U.S. exceeding the company’s expectations. He said leisure-transient RevPAR was supported by World Cup demand but was offset by holiday shifts and pressure related to the Middle East conflict. Nassetta said the company expects business-transient demand to lead as its recovery continues into the third quarter.
Kevin Jacobs said U.S. comparable RevPAR rose 5.4% in the quarter, driven by demand across segments, while RevPAR rose 4.6% in the Americas outside the U.S. and 4.3% in Europe. He said Middle East and Africa RevPAR declined about 30% from a year earlier and that uncertainty around the region’s recovery remains. Jacobs also said China RevPAR declined 2.2% because continued government restrictions reduced group travel.
On development, Nassetta said Hilton opened more than 200 hotels totaling more than 24,000 rooms during the quarter and signed approximately 43,000 rooms. Jacobs said net units grew 6.1% in the quarter and that the company had more than 541,000 rooms in its pipeline. Nassetta said conversions represented 36% of quarterly openings and that the company expects conversions to comprise approximately 40% of full-year openings.
Analysts asked about hotel-owner margins and the company’s actions to reduce costs. Nassetta said Hilton had reduced loyalty fees for most hotels globally and created the Hilton Rise program, which provides program-fee discounts when hotels meet guest-experience standards. He said the combination of those efforts represented somewhere between 75 and 100 basis points of margin for owners, while Hilton continued work on costs, brand standards, technology and AI-enabled processes. Nassetta did not quantify the further opportunity from that work.
For the quarter ahead, Jacobs said the company expected approximately 4% system-wide RevPAR growth in Q3, including the impact of the Middle East conflict. Nassetta said the third quarter would benefit from the World Cup and holiday shifts, while calendar shifts and midterm elections would affect the fourth quarter.
Guidance
Hilton’s October results release projected FY2026 adjusted EBITDA of $4.1 billion to $4.1 billion, compared with its prior outlook of $4.0 billion to $4.1 billion. The company projected FY2026 adjusted diluted EPS of $9.07 to $9.13 and GAAP diluted EPS of $8.38 to $8.44. Hilton also projected FY2026 contract acquisition costs and capital expenditures, excluding third-party reimbursements, of $350.0 million to $375.0 million, compared with approximately $300.0 million previously.
| Metric | For | Guide | Previous guide | Change |
|---|---|---|---|---|
| EBITDA, non-GAAP | Q4 FY2026 | $1.0 billion–$1.1 billion | Q3 FY2026: $1.0 billion–$1.1 billion | Raised |
| Net income, GAAP | Q4 FY2026 | $508.0 million–$522.0 million | Q3 FY2026: $502.0 million–$516.0 million | Raised |
| EPS, non-GAAP | Q4 FY2026 | $2.32–$2.38 | Q3 FY2026: $2.28–$2.34 | Raised |
| EPS, GAAP | Q4 FY2026 | $2.25–$2.31 | Q3 FY2026: $2.20–$2.26 | Raised |
| Units growth, Net unit growth | FY2026 | 6.00%–7.00% | — | New |
| Operating expenses, General and administrative | FY2026 | $400.0 million | — | New |
| Capex, Excluding amounts reimbursed by third parties | FY2026 | $350.0 million–$375.0 million | — | New |
| EBITDA, non-GAAP | FY2026 | $4.1 billion–$4.1 billion | $4.0 billion–$4.1 billion | Held |
| Net income, GAAP | FY2026 | $1.9 billion–$1.9 billion | $1.9 billion–$1.9 billion | Raised |
| EPS, non-GAAP | FY2026 | $9.07–$9.13 | $8.89–$9.01 | Raised |
| EPS, GAAP | FY2026 | $8.38–$8.44 | $8.22–$8.35 | Raised |
| EBITDA, non-GAAP | Q3 FY2026 | $1.0 billion–$1.1 billion | — | New |
| Net income, GAAP | Q3 FY2026 | $502.0 million–$516.0 million | — | New |
| EPS, non-GAAP | Q3 FY2026 | $2.28–$2.34 | — | New |
| EPS, GAAP | Q3 FY2026 | $2.20–$2.26 | — | New |
| Units growth, Net Unit Growth | FY2026 | 6.00%–7.00% | 6.00%–7.00% | Held |
| Operating expenses, General and Administrative | FY2026 | $400.0 million | — | New |
| Share repurchases, Capital Return | FY2026 | $3.5 billion | — | New |
| Capex, Contract Acquisition Costs and Capex Excluding Third Party Reimbursements | FY2026 | $300.0 million | — | New |
| Units growth, Conversion Openings | FY2026 | 40.0% | — | New |
| EPS, Adjusted Special Items | Q3 2026 | $2.28–$2.34 | Q2 2026: $2.18–$2.24 | Raised |
| EBITDA, Adjusted | Q3 2026 | $1.0 billion–$1.1 billion | Q2 2026: $1.0 billion–$1.0 billion | Raised |
| Units growth, Net Units | FY2026 | 6.00%–7.00% | — | New |
| EPS, Adjusted Special Items | FY2026 | $8.89–$9.01 | $8.79–$8.91 | Raised |
| EBITDA, Adjusted | FY2026 | $4.0 billion–$4.1 billion | $4.0 billion–$4.1 billion | Held |
| Units growth, Global New Development Construction Starts | FY2026 | 20.0% | — | New |