Service Properties Trust (SVC) Q4 2025 earnings summary

Executive summary

• Completed sale of 66 hotels in Q4 2025 for $534 million, bringing full-year dispositions to 112 hotels and $860 million, with proceeds used to redeem $800 million of 2026 debt and $300 million of 2027 notes, reducing leverage and strengthening the balance sheet.

• Priced $745 million of new five-year mortgage financing secured by a net lease master trust, with 158 retail properties appraised at $1.1 billion.

• Net lease portfolio maintained high occupancy and stable rent coverage, with 760 properties and 97% leased.

• Hotel portfolio outperformed industry RevPAR trends for the fifth consecutive quarter, with renovated assets driving gains.

• Focus remains on further hotel dispositions and deleveraging in 2026.

Financial highlights

• Q4 2025 normalized FFO was $27.5 million or $0.17 per share, with adjusted EBITDAre at $125.6 million.

• Hotel RevPAR was $99.24, with adjusted hotel EBITDA of $27.9 million.

• Comparable hotel RevPAR increased 70 basis points; gross operating profit margin declined 370 basis points to 20.5%.

• Q4 net loss was $0.8 million ($0.00/share); Q4 CapEx was $106.4 million.

• Q4 gain on sale of real estate was $58.4 million; full-year gain was $84.2 million.

Outlook and guidance

• 2026 guidance: RevPAR for 94 hotels expected at $108–$113; hotel EBITDA projected at $124–$144 million.

• Net lease NOI expected at $380–$386 million; adjusted EBITDA projected at $500–$520 million; normalized FFO per share at $0.65–$0.77.

• CapEx for 2026 expected at $120–$140 million, a step down from prior years.

• Free cash flow after CapEx projected for 2026, marking a milestone after three years of elevated investment.

• Assumes no hotel acquisitions, limited dispositions, and $25 million net lease acquisitions/dispositions.