Travel + Leisure Co. — Third Quarter 2026 Earnings Summary

Financial Performance:

• Net revenue for the three months ended September 30, 2026, was $1.10 billion, up 5% year-over-year compared to $1.04 billion in Q3 2025.
• Net income attributable to shareholders was $108 million for Q3 2026, down 3% from $111 million in Q3 2025.
• Diluted earnings per share (EPS) were $1.73 for Q3 2026, up 4% from $1.67 in Q3 2025.
• Adjusted EBITDA was $283 million for Q3 2026, up 6% year-over-year from $266 million, with an adjusted EBITDA margin of 25.7% compared to 25.5% in the prior year period.
• Adjusted diluted EPS was $2.21 for Q3 2026, up 23% year-over-year from $1.80.
• For the nine months ended September 30, 2026, net revenue was $3.125 billion, up 4% from $2.996 billion in the prior year period.
• Net income for the nine months ended September 30, 2026, was $296 million, up 2% from $291 million in the prior year period.
• Adjusted EBITDA for the nine months ended September 30, 2026, was $777 million, up 8% year-over-year from $718 million.
• Adjusted diluted EPS for the nine months ended September 30, 2026, was $5.51, up 21% year-over-year from $4.55.
• Net cash provided by operating activities was $388 million for the nine months ended September 30, 2026, down from $516 million in the same period of 2025.
• Adjusted free cash flow was $254 million for the nine months ended September 30, 2026, down from $326 million in the prior year period.
• As of September 30, 2026, corporate debt outstanding was $4.0 billion, excluding $2.0 billion of non-recourse debt related to securitized notes receivables.
• The company's leverage ratio for covenant purposes was 3.3x as of September 30, 2026.

Guidance and Future Outlook:

• The company raised the mid-point of its full-year 2026 Adjusted EBITDA guidance to a new range of $1.070 billion to $1.085 billion.
• Full-year 2026 Gross VOI sales guidance is now $2.625 billion to $2.675 billion.
• Full-year 2026 Volume Per Guest (VPG) guidance is now $3,325 to $3,375.
• Management expressed confidence in sustaining momentum with strong visibility into the balance of the year.

Business Segments and Product Lines:

• Vacation Ownership: Revenue increased 9% to $953 million in Q3 2026 from $876 million in Q3 2025. Adjusted EBITDA increased 8% to $250 million from $231 million.
• Net VOI sales increased 10% year-over-year, driven by a 6% increase in Gross VOI sales ($720 million) and a lower provision rate.
• Gross VOI sales growth was driven by a 7% increase in tours (213,000 tours), partially offset by a 1% decrease in VPG ($3,286).
• The decline in VPG reflects a mix impact from recent acquisitions, which more than offset organic growth.
• Travel and Membership: Revenue decreased 11% to $150 million in Q3 2026 from $169 million in Q3 2025. Adjusted EBITDA decreased 12% to $51 million from $58 million.
• The revenue decline was primarily driven by a $17 million decrease in transaction revenue due to an increasing mix of exchange members with club affiliations who have lower transaction propensity.
• The EBITDA decrease was driven by lower exchange transaction volume and a higher mix of Travel Club transactions generating lower margins, partially offset by lower operating costs.

Market and Competitive Landscape:

• Management noted that owners continue to prioritize travel and demand remains healthy.
• The company operates a diverse portfolio including experiential brands (Sports Illustrated Resorts, Eddie Bauer Adventure Club, Margaritaville Vacation Club, Accor Vacation Club) and cornerstone brands (Club Wyndham, WorldMark, RCI).

Risks and Challenges:

• The company incurred $2 million in inventory write-downs and impairments during Q3 2026 and $27 million for the nine months ended September 30, 2026, related to the resort optimization initiative.
• The resort optimization initiative identified 17 resorts requiring significant owner reinvestment or in markets misaligned with demand, which may result in a loss or reduction of VOI sales and property management fees at impacted resorts.
• Forward-looking statements highlight risks including adverse economic conditions, inflation, tariffs, trade restrictions, higher interest rates, recessionary pressures, travel restrictions, geopolitical conflicts, pandemics, and severe weather events.
• Risks also include the ability to compete in the timeshare and leisure travel industries, uncertainties related to acquisitions, and compliance with financial covenants.

Management Commentary and Tone:

• Michael D. Brown, President & CEO, stated the company delivered another strong quarter, building on momentum, with demand translating into growth in earnings and cash flow.
• Management highlighted that year-to-date adjusted revenue is up 4%, EBITDA is up 8%, and EPS is up 21%, validating their strategy of consistent execution, advancing the multi-brand platform, and disciplined capital allocation.

Other Key Points:

• The company returned $364 million to shareholders year-to-date, consisting of $250 million in share repurchases and $114 million in dividends.
• During Q3 2026, the company repurchased approximately 1.1 million shares for $75 million at a weighted average price of $71.45 per share.
• As of September 30, 2026, $671 million remained in the share repurchase authorization.
• The company paid $36 million ($0.60 per share) in cash dividends on September 30, 2026, and management will recommend a fourth-quarter dividend of $0.60 per share for Board approval in November 2026.
• The company invested approximately $350 million in two strategic acquisitions during the year-to-date period: Yes& Vacations and Spinnaker Resorts, which closed during the third quarter.
• Subsequent to the quarter end, the company closed on a $300 million term securitization transaction with a weighted average coupon of 6.18% and a 98% advance rate.