Marriott International, Inc. Q2 2025 Financial Analysis: A Comprehensive Overview

Snapshot of Key Financial Information

• Reporting Period: Q2 2025 (April 1, 2025 - June 30, 2025)
• Total Revenue: $763 million (Q2 2025), down from $772 million (Q2 2024)
• Net Income: $763 million (Q2 2025), down from $772 million (Q2 2024)
• Earnings Per Share (EPS): $2.78 (Diluted) for Q2 2025, up from $2.69 for Q2 2024
• Total Assets: $17.6 billion
• Total Liabilities: $26.09 billion
• Comprehensive Income: $(271) million in H1 2025
• Dividend Declared: $0.63 per share
• Recommendation: Hold - The company shows stability in earnings and revenue, but slight declines raise caution amidst increasing operational costs.

1. Revenue and Profit Analysis

Marriott International reported total revenue of $763 million for Q2 2025, reflecting a slight decline from $772 million in the same quarter of 2024. However, when comparing the first half of 2025 to the first half of 2024, total revenue increased from $1.336 billion to $1.428 billion, showcasing a positive growth trajectory.

Net Income for Q2 2025 also stood at $763 million, mirroring Q2 2024, indicating that while revenues dipped, cost management has kept the profit stable. The Earnings Per Share (EPS) saw a commendable increase to $2.78 from $2.69, reflecting improved profitability on a per-share basis.

2. Segment Performance

Marriott operates various segments, including:

• Management Services
• Franchise Operations
• Owned and Leased Operations
• Loyalty Programs

Despite the overall revenue decline in Q2, segment performance shows resilience, particularly in the U.S. & Canada, which remains a robust market for Marriott. This geographical segment continues to generate substantial revenues and contributes significantly to profits.

3. Debt and Financial Position

The company's total liabilities reached $26.09 billion, highlighting its leveraged position. Notably, the company’s long-term debt includes various series of notes with differing maturities and interest rates, indicating a strategic approach to managing financing needs:

• Series P Notes: $350 million at 3.8%, maturing in 2025
• Series R Notes: $750 million at 3.1%, maturing in 2026
• Series W Notes: $1 billion at 4.5%, maturing in 2034

Additionally, recent debt issuances to support general corporate purposes further underscore Marriott's proactive measures in managing its capital structure.

4. Cash Flow and Comprehensive Income

The comprehensive income for the first half of 2025 reported a loss of $(271 million), a stark contrast to a modest gain in the previous year. This decline is concerning and could indicate operational challenges or increased costs, particularly in light of ongoing investments in technology and customer loyalty initiatives.

The company’s cash flow management will be crucial moving forward, especially given the substantial dividends declared at $0.63 per share, totaling approximately $179 million in cash outflow. This commitment to returning value to shareholders, despite other losses, reflects management's confidence in long-term growth.

5. Market and Competitive Landscape

Macro conditions affecting the hospitality industry—such as fluctuating demand, inflationary pressures, and rising operational costs—pose significant challenges. Competitors like Hilton and Hyatt are also navigating similar dynamics, making market positioning and differentiation critical for Marriott.

The acquisition of citizenM for $355 million, along with potential earn-out payments based on future growth, reflects Marriott's strategy to diversify and enhance its brand portfolio. This acquisition will potentially drive revenue growth and bolster market share, particularly in the select-service hotel segment.

6. Conclusion and Future Outlook

Despite a slight dip in quarterly revenues and net income, Marriott's overall financial health appears stable with positive growth in the first half of 2025. The company’s strategic acquisitions and robust brand presence in key markets bode well for future performance. However, investors should monitor the operational costs and comprehensive income trends closely.

Recommendation: Hold. While the fundamentals remain strong with stable earnings and strategic growth initiatives, the declining revenue and comprehensive losses warrant a cautious approach in the near term. Investors should look for signs of recovery and operational efficiency in the coming quarters before making any significant investment decisions.

This comprehensive analysis provides insight into Marriott International’s financial standing, operational segments, and strategic direction, equipping investors with the necessary information to make informed decisions.