Marriott Vacations Worldwide — Third Quarter 2026 Earnings Summary

Financial Performance:

• Revenues excluding cost reimbursements increased 15% year-over-year to $857 million in the third quarter of 2026, compared to $748 million in the prior year.
• Contract sales increased 29% year-over-year to $565 million, up from $439 million.
• Volume per guest (VPG) increased 30% year-over-year to $4,822, compared to $3,700.
• Development profit increased 97% year-over-year to $142 million, compared to $72 million.
• Net income attributable to common stockholders was $82 million, a turnaround from a net loss of $2 million in the prior year.
• Diluted earnings per share (EPS) was $2.24, compared to a diluted loss per share of $0.07.
• Adjusted net income attributable to common stockholders increased 47% to $98 million, compared to $66 million.
• Adjusted diluted EPS increased 56% to $2.64, compared to $1.69.
• Adjusted EBITDA increased 27% to $216 million, compared to $170 million.
• Vacation Ownership Segment Adjusted EBITDA increased 30% to $255 million, with a margin of 29.6% (up from 26.1%).
• Exchange & Third-Party Management Segment Adjusted EBITDA remained flat at $21 million, with a margin of 44.7% (up from 42.3%).
• General and administrative costs increased $18 million year-over-year, primarily due to higher incentive compensation.
• The Company recorded a 14.8% sales reserve as a percentage of contract sales in the third quarter, compared to 13.4% in the second quarter.

Guidance and Future Outlook:

• The Company raised the midpoint of its full-year 2026 Contract Sales guidance to $2,130 million (range: $2,120 million to $2,140 million), up from a previous midpoint of $2,097.5 million.
• The Company raised the midpoint of its full-year 2026 Adjusted EBITDA guidance to $820 million (range: $810 million to $830 million), up from a previous midpoint of $817.5 million.
• The updated full-year Adjusted EBITDA guidance includes an estimated $16 million adverse impact from Hurricane Lowell.
• Full-year 2026 Adjusted net income attributable to common stockholders guidance is $315 million to $335 million.
• Full-year 2026 Adjusted diluted EPS guidance is $8.65 to $9.15.
• Full-year 2026 Adjusted free cash flow guidance is $410 million to $430 million.
• Supplemental estimates for full-year 2026 include interest expense, net of $176 million to $174 million, and depreciation and amortization of $135 million to $133 million.

Business Segments and Product Lines:

• Vacation Ownership:
  • Tours decreased 2% year-over-year to 107,687; North America tours increased 4% year-over-year.
  • The 2% decline in total tours was attributed to purposeful actions to prioritize higher profitability and cash flow in the Asia-Pacific region.
  • Segment financial results attributable to common stockholders increased 58% to $220 million.
  • Segment margin increased 710 basis points to 25.7%.
  • Segment Adjusted EBITDA margin increased 350 basis points to 29.6%.
  • Lower rental profit was driven by higher inventory costs and the partial closure of five resorts in Kauai, Hawaii, due to Hurricane Lowell damages.
• Exchange & Third-Party Management:
  • Revenues excluding cost reimbursements declined 5% to $48 million, driven by lower exchange and other transaction revenue at Interval International.
  • Total active Interval International members decreased 1% to 1,480,000.
  • Average revenue per Interval International member decreased 2% to $37.
  • Segment financial results attributable to common stockholders increased 10% to $16 million.
  • Segment margin increased 470 basis points to 34.4%.
• Product Initiatives:
  • The "Inner Circle by Aflac" events platform, featuring curated regional and national entertainment, is cited as fueling sales success.
  • Product and operational enhancements implemented in the second quarter contributed to higher VPG.

Market and Competitive Landscape:

• VPG of $4,822 is described as industry-leading.
• The Company maintains exclusive, long-term relationships with Marriott International, Inc. and an affiliate of Hyatt Hotels Corporation for the development, sales, and marketing of vacation ownership products.
• The Company operates 120 vacation ownership resorts and serves approximately 650,000 owner families.
• The exchange network includes more than 3,200 affiliated resorts in over 90 countries and territories.

Risks and Challenges:

• Hurricane Lowell caused an estimated $16 million adverse impact to Adjusted EBITDA in the second half of 2026 and resulted in the partial closure of five resorts in Kauai, Hawaii.
• Higher inventory costs contributed to lower rental profit.
• The Company notes that the full-year outlook excludes impacts from asset sales, foreign currency changes, restructuring costs, litigation charges, modernization costs, and impairments, which cannot be forecast with sufficient accuracy.
• Forward-looking statements are subject to risks including macroeconomic uncertainty, health crises, demand variations, vendor compliance, workforce challenges, inflation, technology integration risks (including AI), privacy laws, banking system instability, severe weather, supply chain disruptions, geopolitical conflicts, and interest rate volatility.

Management Commentary and Tone:

• CEO Matt Avril expressed pleasure with the third-quarter results, citing substantive momentum and the continued success of strategies implemented in the second quarter.
• Management highlighted operating discipline as a driver for 27% Adjusted EBITDA growth.
• The tone emphasized differentiation of owner experiences and sales execution as key growth drivers.

Other Key Points:

• Capital Markets: The Company generated $66 million in net proceeds from the sale of Asia Pacific vacation ownership notes receivable at 6.70% interest during the quarter. Subsequent to the quarter, it completed a $460 million term securitization with a weighted average coupon of 5.91% and a 98% advance rate.
• Liquidity: The Company ended the quarter with approximately $1.1 billion in liquidity, including $229 million in cash and cash equivalents and $776 million available under its revolving corporate credit facility.
• Debt: Corporate debt was $3.0 billion and non-recourse debt related to securitized vacation ownership notes receivable was $2.4 billion. The net corporate leverage ratio declined to 3.6 times from 4.0 times in the prior quarter.
• Share Repurchase: The Board extended the remaining $322 million share repurchase authorization from December 31, 2026, to December 31, 2027.
• Inventory: Inventory totaled $906 million at quarter-end, including $227 million classified as Property and equipment.
• Interest Expense: Interest expense on warehouse credit facility borrowings was $4 million in the third quarter.