Travel & Leisure Co. Q1 FY2025 earnings call

• Delivered $202 million of adjusted EBITDA, at the high end of guidance range. Vacation ownership VPGs well above $3,000. Consolidated adjusted EBITDA margins grew to 22% from 21% prior year. • Consumer KPIs strong: Owners show continued demand, VPG was $3,212, up from 2024. Resort bookings accelerated. • Technology investments yielding higher owner satisfaction: Club Wyndham app downloaded by nearly 100,000 owners, search-to-book conversion rate 71%. Deploying similar app to WorldMark owners. Resort operations texting capabilities increased on-site satisfaction. • Exchange transactions down but travel club business showing growth. Brand strategy updates including Margaritaville Resort in Orlando opening in 2027.

Vacation ownership segment: Reported segment revenue of $755 million, an increase of 4%, and adjusted EBITDA increased 18% to $159 million. Travel and membership segment: Revenue was $180 million, down 7%, and adjusted EBITDA was $68 million, down 9%, driven by a 13% decline in exchange transactions.

• Full-year adjusted EBITDA guidance reiterated at $955 to $985 million. • Second-quarter adjusted EBITDA expected in range of $245 million to $255 million. • Vacation Ownership second-quarter gross realized sales expected $620 million to $640 million, VPGs $3,050 to $3,150. • Travel Membership segment guidance flat to down 2%. • Expect adjusted EBITDA to free cash flow conversion to be in excess of 50% this year.

• Incremental macro uncertainty affecting consumer sentiment, though company-specific KPIs not meaningfully changed. • Loan portfolio delinquencies saw an uptick at end of March, though April showed improvement. • Exchange transactions down due to industry consolidation, though had strongest year-over-year transaction performance toward end of quarter.

Q: Can you talk about what you've seen in April and then talk about T and M?

A: Vacation ownership business performing well in April, no signs of uncertainty affecting KPIs. Travel and membership business sees migration from external to internal exchanges, anticipating continuation, with shortfall covered in Q1 and expecting slight down year on year.

Q: Great. Good morning. Thank you. Mike, congratulations. Wishing you well on your retirement and future travels and endeavors. Let's move on to some questions here. You know, it sounds like your core legacy owners are especially resilient, something we've seen in past economic downturns. Curious if you have any visibility or anything you can share with how your summer rental business for nonowners is looking?

A: Summer demand through rental program consistent with expectations, forward bookings in April solid for summertime, summer shaping up as hoped for, giving confidence in Q2 outlook.

Q: As far as your it implies in your one Q results, you had better closing rates than I guess The Street expected. What was the mix or trends in the mix of closing to existing owners versus new buyers? It might imply that you're selling more upgrades. And is that your expectation going forward to sell more upgrades, which typically have higher margins than to new owners?

A: New owner mix in Q1 returned to historical levels. Owner close rates stronger year on year as owners see value of ownership, new owner close rate slightly down. Expect new owner mix to grow into summertime, long-term outlook to be 35% to 40% new owner tour mix over time.