Choice Hotels International posted record third‑quarter 2025 results, with total revenue of $447.3 million, up 10.5% from $406.5 million in Q3 2024. Net income rose to $180 million, a 70% increase from $105.7 million a year earlier, while adjusted EBITDA climbed to $190.1 million, up 7.5% from $177.6 million. GAAP diluted earnings per share were $3.86, beating the consensus estimate of $2.19 by $1.67, whereas adjusted diluted EPS of $2.10 fell short of the $2.20 consensus by $0.10.
The revenue beat was driven by a 12% increase in franchise and management fees, reflecting a higher mix of higher‑value brands such as Comfort Inn and Clarion, and a 8.3% rise in international net rooms to 151,370. Strong demand in the upscale and extended‑stay segments offset a modest decline in U.S. RevPAR, which fell 2% year‑over‑year.
Adjusted EPS missed expectations because the Choice Hotels Canada acquisition added $0.15 billion in amortization and tax expense, and the company recorded a one‑time restructuring charge of $0.05 billion. These items reduced the adjusted earnings base, while operating costs rose 3% due to higher labor and commodity expenses.
Operating margin contracted to 31.8% from 35.5% in Q3 2024, reflecting higher cost inflation and the impact of the Canadian acquisition. Nevertheless, the margin remains above the industry average, and the company’s asset‑light model continues to deliver predictable cash flow.
Full‑year 2025 guidance was raised to net income of $353–$371 million, adjusted EBITDA of $620–$632 million, and diluted EPS of $7.52–$7.89, up from the prior guidance of $340–$360 million, $600–$610 million, and $7.20–$7.50 respectively. Management highlighted continued momentum in international growth and a focus on higher‑value brand expansion, while noting that U.S. RevPAR is expected to decline modestly by 2% to 3%.
Investors reacted positively to the results, with the market citing the revenue beat, the record adjusted EBITDA, and the upward revision of full‑year guidance as key drivers, while remaining cautious about the modest U.S. RevPAR decline.
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