Choice Hotels International, Inc., also known as Choice Hotels, operates as a prominent global hotel franchisor, conducting its extensive business through its ...
Choice Hotels International, Inc. (NYSE: CHH) is one of the largest lodging franchisors globally, headquartered in North Bethesda, Maryland. Founded in 1939, the company has grown to encompass nearly 7,500 hotels and over 650,000 rooms across 47 countries and territories. Its primary business is hotel franchising, licensing brands such as ...Choice Hotels International, Inc. (NYSE: CHH) is one of the largest lodging franchisors globally, headquartered in North Bethesda, Maryland. Founded in 1939, the company has grown to encompass nearly 7,500 hotels and over 650,000 rooms across 47 countries and territories. Its primary business is hotel franchising, licensing brands such as Comfort Inn, Comfort Suites, Quality, Clarion, Sleep Inn, Econo Lodge, Rodeway Inn, MainStay Suites, WoodSpring Suites, Everhome Suites, Cambria Hotels, and the Ascend Hotel Collection. Beyond franchising, Choice Hotels develops cloud-based property management software for independent hoteliers. The company operates through two segments: Hotel Franchising and Corporate & Other. Financially, Choice Hotels has shown robust performance with a market capitalization of approximately $4.85 billion, a beta of 0.678, and a trailing twelve-month revenue per share of $35.82. The company maintains a strong profitability profile with a net profit margin of 20.3% and an EBITDA margin of 37.3%. Its enterprise value stands at $6.92 billion with a debt-to-equity ratio of 14.8, indicating significant leverage but also a high return on equity of 214.9%. The company generated substantial free cash flow of $419.8 million, and its dividend yield is 1.1%. Leadership is under CEO Dominic Dragisich, with Pat Pacious serving as President and CEO according to other sources, and Stewart W. Bainum Jr. as Chairman. The company employs approximately 1,700 people globally. With a strong brand portfolio, innovative technology solutions, and a focus on the midscale and extended-stay segments, Choice Hotels continues to be a prominent player in the hospitality industry, committed to welcoming every guest and enabling the success of its franchise partners.
YoYYoY means Year-over-Year. It compares the latest annual value with the previous annual value to show long-term trend strength.
QoQQoQ means Quarter-over-Quarter. It compares the latest quarter with the immediately previous quarter to show short-term momentum changes.
RevenueThe total money that came through the front door from selling things, before paying a single bill. Think of it as the grand total of every credit card swipe from customers. (YoY compares this year to last year's performance, while QoQ compares the current three months to the previous three).
$1.6B
+0.8%
+29.4%
Net IncomeThe absolute bottom line. If the company paid every single supplier, employee, banker, and tax collector, this is the actual money left in their pocket at the end of the day.
$369.9M
+23.5%
+215.6%
Gross MarginThe basic markup. If they sell a $100 pair of sneakers, this percentage tells you how much of that price tag is profit right after paying for the rubber and shoelaces, but before paying for things like store rent or TV commercials.
+40.9%
-12.8%
+38.4%
Operating MarginThe 'day job' efficiency score. Out of every dollar a customer spends, this shows how many cents the company keeps after making the product AND paying for all the everyday corporate overhead (like salaries, marketing, and keeping the lights on).
+28.4%
-3.0%
+34.0%
Net MarginThe final take-home percentage. When you strip away every conceivable cost, tax, and interest payment, this is the exact number of cents the company truly gets to keep from every dollar in sales.
+23.2%
+22.5%
+143.9%
Free Cash FlowThe holy grail of corporate cash. It's the spendable, physical money left over after the business pays for its daily operations AND buys the big, expensive upgrades (like new factories or servers) it needs to survive. This is the 'free' money they can use to pay dividends or buy back stock.
$124.7M
-28.2%
+334.6%
FCF MarginThe ultimate cash conversion rate. It shows how good the company is at turning regular sales directly into cold, hard, spendable cash. A high percentage means the business is an absolute cash-printing machine.
+7.8%
-28.7%
+281.2%
Debt / EquityThe financial risk gauge. It compares how much of the company's empire was built using borrowed money (loans) versus the owners' own money (shareholders). A high number means they are heavily leveraged and playing a riskier game; a low number means they are playing it safe.
1175.5%
+128.2%
-3.5%
Current RatioThe 12-month survival check. It simply compares the cash they have right now (plus things they can quickly turn into cash) against the immediate bills they absolutely must pay this year. A score above 1 means they have enough in the wallet to cover the upcoming bills without panicking.
0.87x
+18.6%
-2.2%
Total AssetsThe absolute size of the company's empire. It bundles together absolutely everything of value they own—from the cash in the register and the inventory in the warehouse, to the software patents in the vault and the factories on the ground.
Operator: Ladies and gentlemen, thank you for standing by. Welcome to Choice Hotels International Second Quarter 2026 Earnings Call. [Operator Instructions] I will now turn the call over to Allie Summers, Senior Director of Investor Relations.
Allie Summers: Good morning, and thank you for joining us. Before we begin, please note that today's discussion includes forward-looking statements as defined under U.S. securities laws. These statements are subject to risks and uncertainties that could cause actual results to differ materially from those expressed or implied. For more information, please refer to our filings with the SEC, including our most recent Forms 10-K and 10-Q. These statements speak only as of today, and we undertake no obligation to update them. A reconciliation of any non-GAAP financial measures used in today's remarks is included in our earnings press release available in the Investor Relations section of choicehotels.com. Joining me this morning are Dom Dragisich, our Interim Chief Executive Officer; and Scott Oaksmith, our Chief Financial Officer. Dom will discuss our business performance and strategic progress, and Scott will review our financial results and outlook. And with that, I'll turn the call over to Dom.
Dominic Dragisich: Thank you, Allie, and good morning, everyone. The second quarter marked encouraging progress across our key priorities, highlighted by a 6% year-over-year increase in adjusted EBITDA. Most importantly, U.S. net rooms growth improved sequentially for the second consecutive quarter and is now nearly flat year-over-year. This reflects our strongest first half performance since 2021. These improving net rooms growth trends in the U.S. and continued international momentum led to global rooms growth of 2.6% in the second quarter. We also continued to drive strong franchise agreement results during the quarter, reinforcing our confidence in future global and U.S. rooms growth. U.S. RevPAR increased 1.3% year-over-year, reflecting strengthening demand trends and benefiting in part from the FIFA World Cup. The RevPAR improvement we saw during the second quarter, together with the trends since quarter end, show we are moving in the right direction. I am confident this business can perform at an even higher level as we continue to realize greater value from the investments we've made in our commercial engine and technology platform while maintaining a renewed focus on execution. Disciplined capital allocation also remains a key priority for Choice. In the first half of the year, capital outlays for hotel development declined 80% year-over-year as we continued our transition back to a pure-play asset-light franchising model while maintaining flexibility to make targeted investments in attractive franchise growth opportunities. There is still more work to do, but the progress we have made this quarter and the underlying operating trends we're seeing give us greater confidence in the outlook for the balance of …
