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    HGV
    Earnings call· Mar 2026(Q1 FY26)

    Hilton Grand Vacations Q1 FY26 earnings call HGV

    Apr 30, 2026 Source

    Executive summary

    Hilton Grand Vacations Q1 FY26 — Strong Start, Raised EBITDA Guidance, and Strategic Portfolio Optimization

    Hilton Grand Vacations delivered a strong first quarter, exceeding adjusted EBITDA expectations and raising full-year guidance, driven by disciplined execution and strategic initiatives. The company successfully integrated new buyers and optimized its portfolio through the Elara JV acquisition and inventory dispositions, while navigating expected VPG declines and external market uncertainties. Management remains focused on operational excellence and capital returns.

    Highlights

    5

    • Adjusted EBITDA grew 8% year-over-year to $267 million, exceeding expectations.

    • Adjusted EBITDA margin expanded by 130 basis points over the prior year.

    • New buyer transactions increased 8% year-over-year, driving new buyer contract sales to over 26% of total.

    • Acquisition of the Elara JV tail is expected to contribute $20 million to FY26 EBITDA.

    • Repurchased $150 million of stock in Q1, with $237 million remaining authorization.

    Concerns

    3

    • Contract sales were down slightly due to tough comparisons for the Bluegreen business.

    • VPG declined 8% to nearly $3,800, in line with expectations, due to Bluegreen normalization and higher new buyer mix.

    • Adjusted free cash flow was a use of $37 million in Q1, including $71 million in inventory spending.

    Guidance & targets

    10
    CategoryTargetConfidence
    Adjusted EBITDA (before deferrals)
    $1.225 billion to $1.265 billion
    high materiality
    High
    Contract Sales Growth
    Low single-digit growth
    medium materiality
    High
    Tour Growth
    Low to mid-single-digit growth
    medium materiality
    High
    VPG (per guest)
    Down slightly
    medium materiality
    High
    VPG Growth
    Low to mid-single-digit declines
    medium materiality
    High
    VPG Growth
    Returning to solid growth
    medium materiality
    High
    Provision
    Mid-teens
    medium materiality
    High
    Adjusted Free Cash Flow Conversion Rate
    Lower half of 55% to 65% range
    medium materiality
    High
    Share Repurchases
    Approximately $150 million per quarter
    high materiality
    High
    Adjusted EBITDA Growth
    Low to mid-single-digit range versus prior year
    medium materiality
    High

    Segment performance

    4
    SegmentRevenueYoYQoQMargin
    Real Estate Business
    Contract sales were slightly down due to tough comparisons for the Bluegreen business. Strong margin performance was driven by efficiency initiatives, offsetting lower VPG and higher new buyer mix.
    Contract sales: $719 millionNew buyer contract sales: >26% of totalNew buyer contract sales growth: +160 bps YoYTours: >189,000Tours growth: +8.5%VPG: ~$3,800VPG decline: -8%Cost of products: 10%Sales and marketing expense: $352 millionSales and marketing expense as % of contract sales: 49%Sales and marketing expense reduction: -260 bps YoY
    		———$152 million profit, 28% margin
    Financing Business
    Strong performance with margins up significantly. The portfolio remains in great shape with stable delinquencies and a declining provision rate.
    Financing margin growth: +510 bps YoYWeighted average interest rate for originated loans: 14.5%Combined gross receivables: $4.4 billionTotal allowance for bad debt: $1.3 billionAllowance for bad debt as % of portfolio: 29%Annualized default rate: 10.1%31-60 day delinquencies: 1.48%Provision: 14.9%
    		$138 million——$87 million profit, 65% margin
    Resort and Club Business
    Revenue grew modestly, reflecting strong new buyer additions offset by recaptured activity. Expenses were slightly elevated due to program-related headcount additions, impacting Q1 margins.
    Consolidated member count: >720,000
    		$185 million1%—$126 million profit, 68% margin
    Rental and Ancillary Business
    Revenue growth was driven by higher available room nights and a slight increase in overall portfolio RevPAR. Developer maintenance fees were the largest driver of the $19 million loss in the period.
    Developer maintenance fee loss: $19 million
    		$197 million5%—$19 million loss

    Operational metrics

    34
    Adjusted EBITDA to shareholders
    $267 million8% growth YoY
    Q1 FY26

    Exceeded expectations.

    Net contract sales deferrals (ASC 606)
    $25 million
    Q1 FY26

    Reduced reported GAAP revenue, related to presales of Ka Haku project, partially offset by Kyoto project recognition.

    Net direct expenses deferrals (ASC 606)
    $7 million
    Q1 FY26

    Associated with deferred revenues.

    Adjusted EBITDA impact from deferrals
    $18 million
    Q1 FY26

    Increased adjusted EBITDA to shareholders by this amount.

    HGV Max member base
    277,00029% growth YoY
    Q1 FY26

    Supported by new buyer additions.

    Share repurchases
    $150 million
    Q1 FY26

    Part of commitment to returning capital to shareholders.

    Additional share repurchases
    $41 million
    April 1-23

    Executed after quarter end.

    Remaining share repurchase authorization
    $237 million
    As of April 23

    Under current share repurchase plan.

    Total capital returned since standalone
    ~$2.3 billion
    Since becoming standalone public company

    Includes share repurchases.

    Elara JV acquisition initial outflow
    $130 million
    Q2 FY26

    For the remaining 75% of the entity.

    Elara JV acquisition net cash use
    $45 million
    Q2 FY26

    After monetizing $85 million from unpledged ABS collateral and working capital.

    Elara consumer note portfolio acquired
    >$400 million
    Q2 FY26

    Net of impaired loans, acquired as part of Elara JV transaction.

    Fee-for-service percentage
    Below 10%From mid-teens
    Post-Elara closing

    Result of Elara JV acquisition.

    Inventory optimization annual EBITDA benefit
    $10 million to $12 million
    Annual run-rate

    Expected from disposition of 8 properties, once completed in Q3 FY26.

    Inventory spending
    $71 million
    Q1 FY26

    Reflecting timing of ABS deal activity.

    Liquidity position
    $852 million
    As of March 31

    Strong liquidity position.

    Corporate debt
    $4.8 billion
    Quarter end

    Part of total debt balance.

    Nonrecourse debt
    $2.6 billion
    Quarter end

    Part of total debt balance.

    Warehouse facility remaining capacity
    $150 million
    Quarter end

    Available capacity.

    Unsecuritized notes (current on payments)
    $929 million
    Quarter end

    Notes available for monetization.

    Monetizable unsecuritized notes
    ~$370 million
    Quarter end

    Through warehouse borrowings and securitization.

    Notes becoming available after milestones
    ~$367 million
    Future

    Following customary milestones like first payments, dating, and recording.

    Total net leverage
    3.9x
    TTM

    At the end of the quarter.

    Securitization deal size
    $500 millionUpsized from $400 million
    Post Q1

    Oversubscribed deal completed after quarter end.

    Securitization advance rate
    98%
    Post Q1

    For the $500 million deal.

    Securitization average coupon rate
    5.13%
    Post Q1

    For the $500 million deal, including a D tranche.

    Weather impact on revenue
    $5 million
    Q1 FY26

    Majority was contract sales, balance in rentals, from ice storms, cold temperatures, and Hawaii 'Kona Low'.

    Bluegreen equity at the table
    Up 50%
    Compared to 2024 levels

    Due to changes in underwriting process mid-year last year.

    Bluegreen 0-30 day delinquencies
    At 4-year lowImproved 11%
    Post quarter end

    Reflects strong portfolio performance.

    JV EBITDA
    $5 million
    Q1 FY26

    Bridging item between segment and total adjusted EBITDA.

    License Fees
    $53 million
    Q1 FY26

    Bridging item between segment and total adjusted EBITDA.

    EBITDA attributable to noncontrolling interest
    $2 million
    Q1 FY26

    Bridging item between segment and total adjusted EBITDA.

    Corporate G&A
    $40 million
    Q1 FY26

    In line with run rate over the past year.

    Elara JV contribution to FY26 Adjusted EBITDA
    $20 million
    Remainder of FY26

    Not included in prior 2026 guidance.

    Deals & partnerships

    2
    Elara JV partnerAgreement to purchase the remaining 75% development rights of Elara, a flagship resort in Las Vegas, transitioning it from a fee-for-service JV to an owned property.$130 million initial outflow

    The acquisition is effective as of today (call date). It provides full economics, inventory flexibility, and unlocks upgrade potential for Elara owners and other members.

    a third partyAgreement for the disposition of interest in 8 properties that no longer fit with the portfolio, to proactively manage aging and noncore inventory.

    The properties are on average 38 years old, with 4 of the 8 located in Orlando. The agreement is subject to customary closing conditions. This initiative aims to upgrade the portfolio and recycle capital into higher-performing opportunities.

    Risks & headwinds

    4
    Middle East conflict

    Potential broader effects on the leisure travel landscape

    Mitigation: Business model advantages: members have prepaid vacations, new buyers attracted by value propositions, ongoing efficiency initiatives, and variable cost structure.

    VPG declineQ1 FY26, expected to continue Q2 and Q3 FY26

    8% decline in Q1 to ~$3,800

    Mitigation: Offset by strong tour growth and new buyer transactions; cost efficiencies driving margin expansion. Expected to return to solid growth in Q4 FY26.

    Elevated expenses in Resort and Club businessQ1 FY26

    Reduced margins in Q1

    Mitigation: Expected to diminish as the company moves into seasonally stronger quarters of the year.

    Higher interest ratesOngoing

    ABS deals priced a little bit higher than originally anticipated

    Mitigation: Securitization markets remain open and healthy, demonstrated by oversubscribed $500 million deal.

    What to watch in Q2 FY26

    5

    Inventory Disposition Closing

    Q3 FY26
    CurrentAgreement signed for 8 properties
    TargetClosing of the disposition

    Why it matters

    The closing of the disposition will generate an expected $10M-$12M annual run-rate adjusted EBITDA benefit and optimize the portfolio by reducing developer maintenance fees.

    We're confident that we'll get that achieved in Q3.

    Q&A highlights

    5

    Can you provide additional color on loan loss provision trends and new issuances? Also, compare and contrast tour growth versus VPG expectations for Q2 and the rest of the year.

    The loan portfolio is performing strongly with decreased default rates and stable/improving early-stage delinquencies across all brands, including Bluegreen's 0-30 day delinquencies at a 4-year low. The provision is in the mid-teens as expected. VPG headwinds were anticipated due to Bluegreen Max launch comparisons, but strong tour growth and new buyer transactions offset this, leading to margin expansion. The focus is on balancing healthy tour growth with sustainable VPG growth, with VPG expected to improve towards year-end.

    “our portfolio is performing extremely well. No deterioration. It's solid performance. And I think that is also well received in the ABS markets.”

    asked by Patrick Scholes · answered by Daniel Mathewes

    2 min read6 chapters

    Detailed Narrative

    01

    Strategic Initiatives & Operational Excellence

    Hilton Grand Vacations reported a strong Q1 FY26, with adjusted EBITDA exceeding expectations and margin expansion, reinforcing confidence in achieving long-term growth algorithms. The company's strategic priorities include operational excellence, attracting new customers, product evolution and innovation, and enhancing member lifetime value. Disciplined execution and cost efficiencies were key drivers of performance, allowing the company to manage expected VPG headwinds effectively and improve EBITDA contribution.

    02

    New Buyer Growth & Member Engagement

    The company achieved high single-digit new buyer tour growth in Q1, leading to an 8% increase in new buyer transactions, the highest level since 2023. New buyer contract sales represented over 26% of the total, an increase of 160 basis points year-over-year. The HGV Max member base grew 29% year-over-year to 277,000 members, supported by enhancements to Hilton Honors points conversions and expanded HGV Ultimate Access offerings, including exclusive concerts and sports events.

    03

    Inventory Optimization & Portfolio Upgrade

    HGV announced an agreement to dispose of its interest in 8 non-core properties, primarily older, smaller assets with an average age of 38 years, including four in Orlando. This initiative is expected to generate an annual run-rate adjusted EBITDA benefit of $10 million to $12 million by reducing developer maintenance fees. This strategy aims to proactively manage aging inventory, reduce long-term carry risk, and upgrade the overall portfolio mix and quality without shrinking the business.

    04

    Elara JV Acquisition

    The company reached an agreement to purchase the remaining development rights of Elara, its flagship resort in Las Vegas, for an initial outflow of $130 million, resulting in a net cash use of $45 million. This acquisition allows HGV to take full control of the project, unlocking full economics, providing inventory flexibility, and integrating a consumer note portfolio exceeding $400 million. Elara is expected to contribute $20 million to FY26 adjusted EBITDA for the remainder of the year and will reduce the company's fee-for-service percentage below 10%.

    05

    Financial Business Performance & Loan Portfolio Health

    The financing business reported $138 million in revenue and $87 million in profit, with margins of 65%, up 510 basis points year-over-year. The weighted average interest rate for originated loans was 14.5%. The combined gross receivables stood at $4.4 billion, with an allowance for bad debt of $1.3 billion (29% of the portfolio). The annualized default rate was 10.1%, a slight improvement, and 31-60 day delinquencies remained stable at 1.48%. The provision declined sequentially to 14.9%, in line with expectations.

    06

    Liquidity, Capital Structure & Securitization

    As of March 31, HGV's liquidity position was $852 million, comprising $261 million in unrestricted cash and $591 million in revolving credit facility availability. Total net leverage on a TTM basis was 3.9x. The company successfully completed a $500 million securitization, upsized from $400 million due to strong investor demand, with an advance rate of 98% and an average coupon rate of 5.13%, demonstrating healthy securitization markets despite geopolitical noise.

    AI-generated summary of the company’s earnings call. Not investment advice.