Marriott Vacations Worldwide (VAC) investor relations material

Executive summary

• Leadership changes and restructuring, including new CEO and key hires, are underway to drive growth, operational excellence, and profitability, with a focus on cost discipline and monetizing non-core assets.

• Q1 2026 contract sales declined 2% year-over-year to $411 million, and net income attributable to common stockholders dropped to $22 million from $56 million a year ago, reflecting higher expenses and a higher effective tax rate.

• Adjusted EBITDA fell 16% year-over-year to $161 million, with margin declining to 19.5% from 23.2%, due to increased marketing, sales, and modernization costs.

• Workforce reductions and asset sales, including the Westin Cancun, have been completed, with further asset dispositions planned to generate $125M+ in 2026 and $200M–$250M by end of 2027.

• The company operates a resilient, diversified vacation ownership and exchange business with iconic brands, serving ~700,000 owner families and 1.5M exchange members as of 2025.

Financial highlights

• Q1 2026 revenue increased 5% year-over-year to $1.26 billion, driven by growth in the Vacation Ownership segment, while Exchange & Third-Party Management revenue declined 2%.

• Contract sales in Vacation Ownership decreased 2% to $411 million, with a 3% drop in tours but a 1% increase in volume per guest (VPG).

• Adjusted EBITDA margin declined to 19.5% from 23.2% year-over-year.

• Adjusted free cash flow rose to $114 million from $40 million in the prior year, aided by lower inventory/capex and $50 million from the Westin Cancun sale.

• Development profit margin dropped to 16.1% from 22.2% year-over-year.

Outlook and guidance

• Full-year 2026 contract sales guidance is $1,815–$1,885 million, with Adjusted EBITDA guidance of $755–$780 million and Adjusted free cash flow guidance of $375–$425 million.

• Q2 2026 contract sales expected to increase 4–8% sequentially, with Adjusted EBITDA of $187–$202 million.

• Management expects marketing and sales expenses to remain elevated in the near term to support new initiatives, with financial benefits anticipated in the second half of 2026 and into 2027.

• Plans to generate $200–$250 million in gross cash proceeds from non-core asset dispositions by end of 2027, with over $125 million expected in the remainder of 2026.

• Guidance assumes interest expense of $184 million, depreciation/amortization of $150 million, and a tax rate of 31%.