Service Properties Trust reported its fourth‑quarter 2025 results, posting a non‑GAAP earnings per share of $0.17—well above the consensus estimate of a loss ranging from $0.44 to $0.18. Revenue totaled $397.45 million, slightly below the $398.26 million consensus estimate but only marginally short of expectations.
The earnings beat was driven largely by disciplined cost management and a favorable mix shift toward the company’s hotel portfolio. Hotel RevPAR growth outpaced industry benchmarks for the fifth consecutive quarter, while the net‑lease segment maintained stable performance. Asset disposition activity in 2025—selling a significant number of hotel properties—helped reduce debt and improve operating leverage, contributing to the stronger bottom line.
Revenue fell short of estimates by roughly $0.8 million, a miss attributed to higher labor costs and operational challenges that weighed on the hotel segment. Despite these headwinds, the robust RevPAR growth and the stability of the net‑lease portfolio mitigated the impact, keeping revenue close to consensus.
Segment analysis shows the net‑lease portfolio of 760 retail properties continued to generate consistent cash flow, while the hotel segment’s 94 properties delivered higher RevPAR and occupancy rates. The company’s strategic focus on portfolio optimization and deleveraging is evident in the continued asset disposition program, which has reduced leverage and positioned the company for a more net‑lease‑centric model.
For the full year 2026, SVC guided EPS of $0.65 to $0.77, a sharp upside relative to the consensus forecast of a loss of $0.84. Revenue guidance of $1.61 billion reflects confidence in the company’s operational improvements and the continued strength of its hotel and net‑lease segments.
Investors responded positively to the earnings beat and the company’s forward‑looking guidance, underscoring confidence in SVC’s strategic transformation and its ability to generate sustainable profitability.
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