Hilton Grand Vacations — Third Quarter 2026 Earnings Summary

Financial Performance:

• Total contract sales were $807 million, a decrease of 11.0% compared to the third quarter of 2025.
• Total revenues were $1.961 billion, compared to $1.300 billion in the third quarter of 2025.
• Net income attributable to stockholders was $291 million, compared to $25 million in the third quarter of 2025.
• Diluted EPS was $3.70, compared to $0.28 in the third quarter of 2025.
• Adjusted net income attributable to stockholders was $317 million, compared to $54 million in the third quarter of 2025.
• Adjusted diluted EPS was $4.03, compared to $0.60 in the third quarter of 2025.
• Adjusted EBITDA attributable to stockholders was $609 million, compared to $245 million in the third quarter of 2025.
• Net income and Adjusted EBITDA included a net construction recognition of $296 million (or $3.76 per share) related to a project in Hawaii.
• The provision for financing receivable losses was 12.5% of owned contract sales.
• Free cash flow was $52 million, compared to $(4) million in the prior year period.
• Adjusted free cash flow was $63 million, compared to $23 million in the prior year period.
• Total net leverage on a trailing 12-month basis was approximately 3.9x.

Guidance and Future Outlook:

• The Company reduced its full year 2026 Adjusted EBITDA guidance (excluding deferrals and recognitions) to a range of $1.165 billion to $1.180 billion, down from the prior range of $1.225 billion to $1.265 billion.
• Management indicated that sales initiatives implemented over the summer are taking longer to ramp than anticipated.
• Near-term priorities include enhancing sales execution by increasing conversion rates and returning the business to consistent and profitable growth.
• Management remains confident in the business model, brand quality, service, and product inventory position.

Business Segments and Product Lines:

• Real Estate Sales and Financing:
  • Segment revenues were $1.418 billion, an increase of $629 million compared to the prior year quarter.
  • Segment Adjusted EBITDA was $557 million with a profit margin of 39.3%, compared to $184 million and 23.3% in the prior year.
  • Revenue increase was driven by a $651 million increase in Sales of VOIs, net, and a $21 million increase in financing revenue, partially offset by a $43 million decrease in fee-for-service commissions.
  • Contract sales decreased $100 million to $807 million.
  • Volume per guest (VPG) decreased 12.5% to $3,406, while tour flow increased 1.7%.
  • Fee-for-service contract sales represented 11.5% of total contract sales, down from 17.2% in the prior year.
• Resort Operations and Club Management:
  • Segment revenues were $416 million, an increase of $10 million compared to the prior year.
  • Segment Adjusted EBITDA was $158 million with a profit margin of 38.0%, compared to $159 million and 39.2% in the prior year.
  • Revenue growth was driven by a $6 million increase in rental revenue and a $3 million increase in resort and club management revenue.
• New Product:
  • The Company recently opened Ka Haku, a Hilton Club in Waikiki.

Market and Competitive Landscape:

• The Company reported a decrease in tour flow growth relative to contract sales volume, indicating a challenging conversion environment.
• The provision for financing receivables losses decreased $37 million compared to the prior year, primarily due to changes in the allowance methodology.

Risks and Challenges:

• Sales results fell short of expectations as execution initiatives took longer to ramp than anticipated.
• The provision for financing receivable losses methodology changes resulted in a 12.5% loss rate on owned contract sales.
• Forward-looking statements involve risks and uncertainties that could cause actual results to differ materially from expectations.

Management Commentary and Tone:

• Mark Wang, CEO, stated that while the underlying business model and cash flow generation remained resilient, sales results were below expectations.
• Management expressed encouragement regarding initial signs of progress as the quarter exited and noted the acceleration of implementation efforts.
• The tone acknowledged dissatisfaction with the quarter's results but maintained confidence in the long-term business model and inventory position.

Other Key Points:

• The Company repurchased 2.4 million shares of common stock for $110 million during the third quarter.
• As of October 22, 2026, $617 million remained available under the share repurchase plans.
• Mike Riley was promoted to Executive Vice President, Chief Sales & Marketing Officer.
• The Company implemented changes to its allowance for financing receivables losses methodology, combining historical performance into a single static pool model stratified by FICO score and equity percentage, resulting in a $55 million decrease in the allowance.
• Balance sheet as of September 30, 2026, included $227 million in unrestricted cash and $457 million in remaining borrowing capacity under the revolving facility.
• Corporate debt, net, was $4.9 billion with a weighted average interest rate of 5.751%, and non-recourse debt, net, was $2.9 billion with a weighted average interest rate of 5.054%.