Hilton Grand Vacations (NYSE:HGV) used its fourth-quarter 2025 earnings call to highlight a year of improving execution, stronger tour flow, and continued capital returns, while also outlining a 2026 outlook that assumes modest contract sales growth and continued margin discipline amid several planned expense headwinds.
Accounting deferrals and key call framing
Investor Relations SVP Mark Melnyk said management’s prepared remarks would focus on metrics that remove the impact of ASC 606 “net deferrals,” which the company described as deferrals and later recognitions of certain revenues and expenses tied to projects under construction.
Management’s 2025 recap: sales growth, integration progress, and member initiatives
CEO Mark Wang said 2025 marked “meaningful progress,” citing 10% growth in contract sales, EBITDA that finished above the midpoint of guidance, and improvements in package sales and execution. He also pointed to investments in lead generation, including 41 new marketing sites opened with partners such as Hilton, Bass Pro, and Great Wolf.
Wang said HGV Max memberships grew 35%, helped by the introduction of Max to Bluegreen members and continued upgrades from the legacy member base. He also said the company optimized its financing business, including opening what he described as a new low-cost financing market in Japan, and returned $600 million of capital to shareholders during 2025. Wang added that over the past two years, HGV returned more than $1 billion to investors through share repurchases and intends for capital returns to remain the primary use of free cash flow.
Wang characterized the consumer environment as stable, with travel remaining a priority within discretionary spending. He said the company’s 2026 guidance reflects low single-digit contract sales growth and mid-single digit EBITDA growth.
On strategic priorities, Wang emphasized:
- Cost-efficient new customer growth: consolidated tours rose nearly 9% in the fourth quarter, and HGV surpassed its pro forma 2019 tour flow levels.
- Growing member lifetime value: Wang said Max adoption has driven a greater than 20% increase in lifetime value for Max members versus non-Max members, with continued upgrades from both Bluegreen and legacy club members.
- Product innovation: he highlighted HGV Ultimate Access, saying 2025 was the biggest year to date with over 137,000 attendees, up more than 15% year-over-year, and teased new event categories, booking options, and pricing tiers in 2026.
- Operational excellence and integration: Wang said the company reached its $100 million cost synergy target in the fourth quarter, ahead of schedule. He also said the company rebranded targeted Bass Pro locations (including more than 125 during the year) and completed rebranding at 8 Bluegreen resorts in 2025, with roughly 10 more planned in 2026 and the remaining 10 in 2027.
Fourth-quarter results: tours rise, margins expand, and credit metrics improve
CFO Dan said 2025 adjusted EBITDA was $1.15 billion, up 4% year-over-year, and that the real estate business expanded margin by 140 basis points over the year, driven by a mix of VPG and tour flow growth.
For the fourth quarter, Dan reported total revenue (before cost reimbursements) of $1.3 billion, up 1%, and adjusted EBITDA to shareholders of $324 million, up 12%, with margins (excluding reimbursements) of 26%, up 250 basis points.
In the real estate segment, contract sales grew 2% to $852 million. Tours rose 9% year-over-year to 225,000, and the company again noted it surpassed pro forma 2019 tour flow levels. New buyers represented 24% of contract sales mix. Dan said VPG of nearly $3,800 declined versus the prior year due to difficult comparisons tied to the HGV Max launch to Bluegreen owners and strong Ka Haku performance during its initial introduction. Real estate profit was $177 million with margins of 28%, up 150 basis points and the highest level since 2023.
In the financing segment, Dan reported revenue of $134 million and profit of $81 million, with a 60% margin (63% excluding amortization items tied to acquired receivables). He cited a weighted average interest rate for originated loans of 14.6%, gross receivables of $4.3 billion, and an allowance for bad debt of $1.2 billion, or 28.6% of the portfolio. The annualized default rate was 9.86%, improving 24 basis points sequentially for the third straight quarter. Dan said underwriting changes made in late summer increased equity and cash at the point of sale, which he expects to further improve performance into 2026.
Dan said fourth-quarter provision was 18.1% of contract sales, above the mid-teens long-term target, attributing the result largely to seasonally strong owner upgrades—particularly within the Bluegreen portfolio, where upgrades were 76% of sales. In Q&A, he said a factor in the provision “optic” relates to purchase accounting as owners move from acquired loans into originated loans: the legacy reserve release is recognized in financing, while the new loan is fully reserved in real estate despite only incremental contract sales being recognized.
In the resort and club business, revenue rose 6% to $219 million, segment profit was $160 million, and margins were 73%. Rental and ancillary revenue increased 2% to $178 million, but the business posted a loss of $8 million driven by developer maintenance fees. Dan said inventory management is a priority, with efforts to reduce the burden of those fees by working down inventory through organic and inorganic means.
Cash flow, buybacks, balance sheet, and 2026 guidance
Dan said 2025 adjusted free cash flow was $756 million, or more than $8.25 per share. The company returned $600 million (79% of that cash flow) by repurchasing nearly 15 million shares, reducing float by over 20%. In the fourth quarter alone, adjusted free cash flow was $414 million, including $103 million of inventory spending, representing a 128% adjusted EBITDA conversion rate.
For early 2026, Dan said HGV repurchased an additional 1.9 million shares for $89 million from Jan. 1 through Feb. 9. As of Feb. 19, the company had $339 million remaining under its share repurchase plan. In Q&A, management reiterated an expectation to repurchase about $150 million per quarter in 2026, with a goal of not increasing leverage to fund buybacks.
For 2026, HGV guided adjusted EBITDA (before deferrals) to $1.185 billion to $1.225 billion. Dan flagged two expense headwinds embedded in guidance:
- License fees: an estimated $15 million to $20 million headwind due to rate step-ups (Diamond and Bluegreen), with most pressure in the first three quarters.
- Financing optimization annualization: an estimated $10 million to $15 million headwind, primarily in the first half.
The company expects low single-digit contract sales growth, driven by tour flow, with VPG down slightly as it laps elevated 2025 growth. Dan said first-quarter contract sales and EBITDA are expected to be flat to slightly down due to difficult VPG comparisons and the noted expense headwinds, with EBITDA improving sequentially in each quarter thereafter as comparisons ease and headwinds subside.
On liquidity, Dan said the company ended 2025 with over $1 billion of liquidity, including $239 million of unrestricted cash and $809 million available under its revolver. Corporate debt was $4.5 billion and non-recourse debt was $2.7 billion. Total net leverage on a trailing twelve-month basis was 3.78x, inclusive of anticipated cost synergies.
Additional investor topics: inventory actions and member dynamics
In Q&A, Wang confirmed the company is evaluating whether certain acquired properties align with its long-term portfolio strategy, saying some inventory obtained through acquisitions “doesn’t align” with the company’s vision. He said the company would provide more detail once plans are finalized and emphasized the topic was “nothing related to legacy HGV.”
Another question focused on owner growth trends. Wang said the business has matured following acquisitions and now includes owners with longer tenure. He highlighted that HGV has over 720,000 members and 266,000 Max members, adding that 175,000 Max members are new buyers from the last four years, and that Max membership skew is relatively newer, which he tied to higher lifetime value.
About Hilton Grand Vacations (NYSE:HGV)
Hilton Grand Vacations Inc is a leading developer and marketer of premium vacation ownership resorts. The company specializes in selling timeshare interests in vacation properties under the Hilton Grand Vacations brand, enabling members to purchase deeded real estate interests and utilize a points-based system for booking stays. Alongside new sales, the company provides ongoing management services for its portfolio of resorts, ensuring high standards of guest services, resort maintenance, and member engagement through its proprietary technology platform.
In addition to vacation ownership sales, Hilton Grand Vacations offers a comprehensive suite of membership benefits.
