Service Properties Trust Q2 Earnings Call Highlights

Service Properties Trust (NASDAQ:SVC) reported Q2 normalized FFO of $55 million, or $0.43 per share, matching consensus and reinforcing its 2026 guidance of $1.20 to $1.35 per share. The quarter showed improving hotel fundamentals, with retained hotel RevPAR up 6.6% year over year and preliminary July RevPAR up 7.1%, while the net lease portfolio posted 2.2% sequential cash NOI growth and 96.6% occupancy. SVC is continuing its capital-recycling strategy by selling 15 underperforming hotels, expecting about $15 million of annualized EBITDA drag to be removed over time. The company also strengthened its balance sheet by raising $542 million in equity and using proceeds plus asset sales to redeem $550 million of 2027 notes, which should cut annual interest expense by $30 million. Overall, the report was constructive for execution and deleveraging, though renovation-related disruptions and higher insurance costs remain near-term drags.