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 prior year period; for the nine months ended September 30, 2026, net income was $155.249 million, a 6.5% increase from $145.749 million.
• Net income per share was $0.26 for the quarter (up 23.8% YoY) and $0.66 for the nine months (up 8.2% YoY).
• Operating income was $82.198 million for the quarter (up 13.4% YoY) and $218.365 million for the nine months (up 4.9% YoY).
• Operating margin was 20.6% for the quarter, an improvement of 120 basis points from 19.4% in the prior year; margin remained flat at 19.2% for the nine-month period.
• Adjusted EBITDAre was $139.684 million for the quarter (up 13.3% YoY) and $384.789 million for the nine months (up 8.0% YoY).
• Comparable Hotels Adjusted Hotel EBITDA was $145.857 million for the quarter (up 14.7% YoY) and $405.388 million for the nine months (up 9.9% YoY).
• Comparable Hotels Adjusted Hotel EBITDA Margin was 37.1% for the quarter (up 210 bps YoY) and 36.1% for the nine months (up 120 bps YoY).
• Modified Funds from Operations (MFFO) was $117.950 million for the quarter (up 16.0% YoY) and $321.603 million for the nine months (up 9.5% YoY).
• MFFO per share was $0.50 for the quarter (up 16.3% YoY) and $1.36 for the nine months (up 10.6% YoY).
• Total revenue for the quarter was $398.332 million (up 6.5% YoY) and $1.138 billion for the nine months (up 4.9% YoY).
• Total debt outstanding was $1.490 billion as of September 30, 2026; net total debt outstanding (net of cash) was $1.448 billion.
• Total debt to total capitalization, net of cash, was 27.5% as of September 30, 2026.
• Cash and cash equivalents were $42.674 million as of September 30, 2026.
• Distributions paid per share were $0.24 for the quarter, unchanged from the prior year; distributions paid for the nine months were $169.843 million, a 7.4% decrease from $183.477 million in the prior year period.

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 Adjusted EBITDAre guidance range is $482 million to $493 million, an increase of $23 million from the previous midpoint.
• Updated 2026 Comparable Hotels RevPAR Change guidance 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 is 35.0% to 35.5%, an increase of 105 basis points from the previous midpoint.
• Updated 2026 Capital expenditures guidance 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.
• Comparable Hotels (212 hotels) ADR was $170.53 for the quarter (up 4.3% YoY); Occupancy was 78.3% (up 2.8% YoY); RevPAR was $133.60 (up 7.3% YoY).
• Actual portfolio ADR was $170.25 for the quarter (up 4.6% YoY); Occupancy was 78.5% (up 3.0% YoY); RevPAR was $133.58 (up 7.7% YoY).
• Capital improvements invested approximately $58 million during the nine months ended September 30, 2026.
• The Company anticipates comprehensive renovation projects for approximately 18 hotels in 2026.
• Four hotels with 387 guest rooms are classified as held for sale, expected to be sold in Q4 2026.
• A fixed-price forward-purchase contract was entered for an AC Hotel by Marriott in Anchorage, Alaska, for $65.5 million, with expected acquisition in Q4 2027.
• A fixed-price forward-purchase contract was entered for a dual-branded property (AC Hotel and Residence Inn) in Las Vegas, Nevada, for approximately $143.7 million, with expected completion in Q3 2028; $16.9 million has been capitalized as of September 30, 2026.
• In April 2026, the Company sold a 124-room Hampton Inn & Suites in Rochester, Minnesota, for approximately $8.7 million, realizing a gain of $0.2 million.

Market and Competitive Landscape:

• Comparable Hotels ADR, Occupancy, and RevPAR exceeded industry averages reported by STR for the third quarter of 2026.
• Top 30 markets contributed 76.5% of Adjusted Hotel EBITDA in Q3 2026.
• Portland, ME, reported the highest ADR at $355.49 with a 9.0% increase YoY.
• Alaska reported the highest RevPAR growth at 23.0% YoY, driven by a 15.6% ADR increase.
• Washington, DC, saw a 9.8% increase in occupancy and a 16.5% increase in RevPAR YoY.
• Suburban hotels (107 properties) contributed 43.0% of Adjusted Hotel EBITDA, while Urban hotels (63 properties) contributed 40.6%.
• Airport hotels (20 properties) achieved 86.4% occupancy and $131.04 RevPAR in Q3 2026.

Risks and Challenges:

• Five hotels under contract for sale for a combined $71.8 million have conditions to closing that have not yet been satisfied.
• An impairment loss of approximately $4.3 million was recognized in Q3 2026 regarding one hotel under contract for sale.
• Future capital expenditure estimates are subject to change due to inflationary pressures, supply chain disruptions, tariffs, or other factors.
• The forward-looking statements regarding the Anchorage and Las Vegas acquisitions are subject to conditions that may not be satisfied.
• Risks include changes in political, economic, and competitive conditions; travel disruptions due to geopolitical uncertainty, health concerns, or weather; and financing risks.

Management Commentary and Tone:

• CEO Justin Knight stated that momentum continued to build in Q3 2026, driven by broad-based demand from business and leisure travelers.
• Management highlighted the effectiveness of their asset management and property teams in converting top-line gains into margin expansion.
• The Company is actively 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.
• The tone indicates optimism regarding the remainder of 2026 and the outlook for 2027, citing favorable comparisons to prior periods impacted by government shutdowns.

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.
• The Company also amended and restated its $130 million term loan, increasing it to $160 million and extending the maturity by seven years to July 2033.
• Following refinancing, the Company has no significant debt maturities until 2029, with a weighted-average debt maturity of approximately 4.5 years.
• The Company repaid in full a mortgage loan secured by three properties for approximately $49.6 million subsequent to the quarter end, bringing the number of unencumbered hotels to 210 as of October 31, 2026.
• The Company has $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 issued under the respective programs during the three and nine months ended September 30, 2026.
• The current annualized regular monthly cash distribution of $0.96 per 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.
• The Company owns 114 Hilton-branded, 96 Marriott-branded, five Hyatt-branded, and one independent hotel.