Apple Hospitality REIT — Third Quarter 2026 Earnings Summary

Financial Performance

• Net income for the three months ended September 30, 2026, was $60.473 million, an 18.9% increase from $50.880 million in the same period in 2025; for the nine months ended September 30, 2026, net income was $155.249 million, a 6.5% increase from $145.749 million in 2025.
• Net income per share was $0.26 for the quarter (up 23.8% from $0.21) and $0.66 for the nine months (up 8.2% from $0.61).
• Operating income was $82.198 million for the quarter (up 13.4% from $72.497 million) and $218.365 million for the nine months (up 4.9% from $208.207 million).
• Operating margin was 20.6% for the quarter (up 120 basis points from 19.4%) and 19.2% for the nine months (unchanged from 19.2%).
• Adjusted EBITDAre was $139.684 million for the quarter (up 13.3% from $123.338 million) and $384.789 million for the nine months (up 8.0% from $356.194 million).
• Comparable Hotels Adjusted Hotel EBITDA was $145.857 million for the quarter (up 14.7% from $127.160 million) and $405.388 million for the nine months (up 9.9% from $368.802 million).
• Comparable Hotels Adjusted Hotel EBITDA Margin was 37.1% for the quarter (up 210 basis points from 35.0%) and 36.1% for the nine months (up 120 basis points from 34.9%).
• Modified Funds From Operations (MFFO) was $117.950 million for the quarter (up 16.0% from $101.721 million) and $321.603 million for the nine months (up 9.5% from $293.735 million).
• MFFO per share was $0.50 for the quarter (up 16.3% from $0.43) and $1.36 for the nine months (up 10.6% from $1.23).
• Total revenue was $398.332 million for the quarter (up from $373.878 million) and $1,138.626 million for the nine months (up from $1,085.950 million).
• Cash and cash equivalents were $42.674 million as of September 30, 2026.
• Total debt outstanding was $1,490.262 million as of September 30, 2026.
• Total debt outstanding, net of cash and cash equivalents, was $1,447.588 million, representing 27.5% of total capitalization.
• Distributions paid were $56.618 million for the quarter ($0.24 per share) and $169.843 million for the nine months ($0.72 per share).

Guidance and Future Outlook

• Updated 2026 Net income guidance range is $177 million to $192 million, an increase of $19 million from the previous midpoint.
• Updated 2026 Comparable Hotels RevPAR Change guidance range is 5.1% to 6.1%, an increase of 235 basis points from the previous midpoint.
• Updated 2026 Comparable Hotels Adjusted Hotel EBITDA Margin % guidance range is 35.0% to 35.5%, an increase of 105 basis points from the previous midpoint.
• Updated 2026 Adjusted EBITDAre guidance range is $482 million to $493 million, an increase of $23 million from the previous midpoint.
• Updated 2026 Capital expenditures guidance range is $85 million to $95 million.
• Preliminary results for October 2026 indicate Comparable Hotels RevPAR growth of approximately 10% compared to October 2025.
• Management expects sustained demand momentum and muted new supply to create a tailwind for the portfolio in 2027.

Business Segments and Product Lines

• The portfolio consists of 216 hotels with 29,459 guest rooms across 83 markets in 37 states and the District of Columbia as of September 30, 2026.
• Four hotels with 387 guest rooms are classified as held for sale, expected to be sold in the fourth quarter 2026.
• Comparable Hotels (212 hotels) achieved an Actual ADR of $170.25 (up 4.6%), Actual Occupancy of 78.5% (up 3.0%), and Actual RevPAR of $133.58 (up 7.7%) for the quarter.
• Comparable Hotels ADR was $170.53 (up 4.3%), Occupancy was 78.3% (up 2.8%), and RevPAR was $133.60 (up 7.3%) for the quarter.
• Capital expenditures for the nine months ended September 30, 2026, were approximately $58 million.
• The Company anticipates investing $85 million to $95 million in capital improvements during 2026, including comprehensive renovations for approximately 18 hotels.
• A forward-purchase contract was signed for an AC Hotel by Marriott in Anchorage, Alaska, with an anticipated purchase price of $65.5 million and 160 rooms, expected to close in the fourth quarter 2027.
• A forward-purchase contract was signed for a dual-branded property (AC Hotel and Residence Inn by Marriott) in Las Vegas, Nevada, with an anticipated purchase price of approximately $143.7 million, expected to open in the third quarter 2028.
• In April 2026, the Company sold the Hampton Inn & Suites by Hilton Rochester-North for approximately $8.7 million, resulting in a gain of approximately $0.2 million.

Market and Competitive Landscape

• Comparable Hotels ADR, Occupancy, and RevPAR exceeded industry averages reported by STR for the third quarter 2026.
• Top performing markets in Q3 2026 included Portland, ME (RevPAR up 7.2%), San Diego, CA (RevPAR up 12.4%), and Chicago, IL (RevPAR up 15.9%).
• The portfolio is concentrated with industry-leading brands: 114 Hilton-branded, 96 Marriott-branded, five Hyatt-branded, and one independent hotel.
• Suburban and Urban locations contributed 43.0% and 40.6% respectively of Comparable Hotels Adjusted Hotel EBITDA in Q3 2026.

Risks and Challenges

• Forward-looking statements involve risks including changes in political, economic, and competitive conditions; inflationary pressures; supply chain disruptions; and tariffs.
• Risks include reduced business and leisure travel due to geopolitical uncertainty, terrorism, acts of war, or health concerns.
• Potential risks include inclement weather, natural disasters, government shutdowns, airline strikes, and adverse changes in real estate capital markets.
• Financing risks include changes in interest rates and the ability to fund capital obligations or successfully integrate pending transactions.
• Conditions to closing on sale contracts for five hotels under contract for sale ($71.8 million) have not yet been satisfied.
• Conditions to closing on the Anchorage and Las Vegas acquisition contracts have not yet been satisfied.
• The Company recognized an impairment loss of approximately $4.3 million in the third quarter 2026 regarding one hotel under contract for sale.

Management Commentary and Tone

• CEO Justin Knight stated momentum continued to build with broad-based demand from business and leisure travelers driving Comparable Hotels RevPAR growth of more than 7%.
• Management noted that asset management and property teams converted top-line gains into approximately 210 basis points of Comparable Hotels Adjusted Hotel EBITDA Margin expansion.
• Management highlighted the strategy of recycling capital out of older assets with limited upside into investments with stronger long-term return potential.
• Management expressed confidence in the balance sheet strength and liquidity to support acquisition opportunities and fund capital requirements.
• Management indicated that the performance reflects the effectiveness of their strategy and the strength of their corporate and on-site management teams.

Other Key Points

• In July 2026, the Company amended and restated its unsecured $1.2 billion credit facility, increasing capacity to approximately $1.3 billion and extending maturities with improved pricing terms.
• The Company also amended its $130 million term loan, increasing it to $160 million and extending the maturity date by seven years to July 24, 2033.
• Following refinancing transactions, the Company has no significant debt maturities until 2029, with a weighted-average debt maturity of approximately 4.5 years.
• The Company has approximately $700 million available under its revolving credit facility and no outstanding borrowings under it as of September 30, 2026.
• Subsequent to the quarter end, the Company repaid in full one mortgage loan of approximately $49.6 million, bringing the number of unencumbered hotels to 210 as of October 31, 2026.
• Five hotels are under contract for sale for a combined gross sales price of approximately $71.8 million, expected to close in the fourth quarter 2026.
• The Company has approximately $242.5 million remaining under its Share Repurchase Program and $500 million remaining under its ATM Program as of September 30, 2026.
• No shares were repurchased or sold under the ATM Program during the three or nine months ended September 30, 2026.
• The current annualized regular monthly cash distribution of $0.96 per common share represents an annual yield of approximately 5.1% based on a closing price of $18.65 on November 3, 2026.
• Effective January 1, 2026, the Company began excluding share-based compensation expense from the calculation of Adjusted EBITDAre and MFFO.