SVC · Service Properties Trust

Service Properties Trust reported a Q1 2026 GAAP net loss of $151.2 million, or $0.91 per share, wider than the prior year's $116.4 million loss, driven by $28.1 million loss on asset impairment, $51.9 million loss on early debt extinguishment, and lower hotel revenues of $264.6 million versus $335.0 million last year amid softer RevPAR of $103.90. Normalized FFO was $7.4 million or $0.04 per share, reflecting adjusted operational performance with Adjusted EBITDAre of $107.5 million and hotel EBITDA of $17.9 million. Net lease portfolio delivered $92.4 million NOI at 96.6% occupancy and 2.01x rent coverage. Management highlighted strategic progress including a $745 million asset-backed securitization at 5.96% to refinance higher-cost debt, enabling redemption of $1.55 billion in notes (including $300M 4.95% and $700M 8.375%), followed by a $575 million equity raise in April issuing 479.2 million shares at $1.20, redeeming remaining 2027 notes. These moves lowered leverage, addressed maturities, and boosted free cash flow. Portfolio activity included selling one hotel for $7.1 million, acquiring three net lease properties for $7.4 million, with ongoing sales of 15 Sonesta hotels and further net lease dispositions post-quarter. Full year 2026 guidance was raised at midpoint for Normalized FFO to $124-144 million ($0.24-0.27 per share, pro forma adjusting for equity dilution), Adjusted EBITDAre $500-520 million, assuming $40 million G&A, $360 million interest, no hotel buys/sells, and $25 million net lease activity each way. A $0.01 per share dividend was declared, yielding 2.9% annualized. Balance sheet shows total assets down to $6.1 billion, equity $494 million, debt $5.2 billion principal, with $669 million liquidity and no revolver draws.