Earnings release
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CHOICE HOTELS INTERNATIONAL REPORTS THIRD QUARTER 2026 RESULTS U.S. Net Rooms Growth Rate Improves for Third Consecutive Quarter Owned Hotel Sales Advance Asset-Light Strategy Full-Year 2026 RevPAR Outlook Raised NORTH BETHESDA, Md., Nov. 2, 2026 – Choice Hotels International, Inc. (“Choice” or “the Company”) (NYSE: CHH), aleading global lodging franchisor with an asset-light model, today reported results for the third quarter ended September 30, 2026. Highlights include: • Net income was $58 million, or $1.28 per diluted share, for the third quarter. • Adjusted EBITDA totaled $193 million and adjusted diluted EPS was $2.33 for the third quarter. • The U.S. year-over-year net rooms growth rate continued to improve, with U.S. rooms approximately flat compared toSeptember 30, 2025, as third-quarter room exits declined 23% compared to the same period of 2025. • Global net rooms grew 1.7% compared to September 30, 2025, led by 2.5% growth across the higher-revenue extended stay, midscale, and upscale brands. • U.S. RevPAR increased 3.8% in the third quarter compared to the same period of 2025, reflecting improvements in both occupancy and rate. • U.S. franchise agreements awarded increased 24% in the third quarter compared to the same period of 2025,representing 6,900 new rooms for development. • The U.S. conversion pipeline grew to 25,500 rooms, an increase of 6% from June 30, 2026, and 29% from September30, 2025, driving sequential growth in the total U.S. pipeline. • The U.S. average royalty rate expanded 8 basis points to 5.23% in the third quarter compared to the same period of2025. • Subsequent to quarter-end, the Company completed the sale of two owned hotels for estimated net cash proceeds of approximately $34 million, while retaining franchise agreements for both properties. • The Company returned $211 million to shareholders through dividends and share repurchases during the first nine months of 2026.
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• The Company raised its full-year U.S. and global RevPAR outlooks, revised its net income guidance, and raised its adjusted EBITDA guidance range. “Our third-quarter results reflect continued progress against our key priorities: the U.S. net rooms growth rate improved for the third consecutive quarter, U.S. RevPAR growth strengthened, and capital recycling is underway,” said Dom Dragisich,President and Chief Executive Officer. “Our focus is on returning to the fundamentals that have driven our success fordecades, while continuing to invest in commercial and technology capabilities that help franchisees capture more demand. We expect U.S. net rooms growth to accelerate to approximately 1% by year-end, and stronger demand trends support ourincreased full-year RevPAR outlook. These improvements position us to deliver more consistent financial performance and stronger long-term free cash flow for shareholders.” Financial Performance ($ in millions, except per-share amounts) Three Months EndedSeptember 30, Nine Months EndedSeptember 30, 2026 2025 2026 2025 Total revenues $458 $447 $1,240 $1,207 Revenue excl. revenue for reimbursable costs from franchised andmanaged properties $285 $278 $780 $746 Net income $58 $180 $143 $306 Diluted EPS $1.28 $3.86 $3.12 $6.52 Adjusted net income $105 $98 $247 $252 Adjusted diluted EPS $2.33 $2.10 $5.41 $5.36 Adjusted EBITDA $193 $190 $494 $485 • Net income was $58 million for the third quarter, a 68% decline compared to the same period of 2025. The declineprimarily reflected a $100 million gain from the acquisition of a joint venture recognized in the prior-year quarter.Current-year results included a $24 million charge related to the termination of an arrangement involving an option to acquire a European hospitality business operating primarily under a lease-based model and a $6 million non-cashimpairment charge related to two owned hotels. These impacts were partially offset by higher franchise and management fees. The prior-year gain and both current-year charges are excluded from adjusted results. • Adjusted EBITDA increased 1% to $193 million for the third quarter compared to the same period of 2025, primarilydriven by higher U.S. royalties, partially offset by lower liquidated damages revenue and higher adjusted SG&Aexpenses. Excluding liquidated damages revenue of $3.3 million and $9.5 million in the third quarters of 2026 and2025, respectively, adjusted EBITDA increased 5% compared to the same period of 2025. • Adjusted diluted EPS increased 11% for the third quarter compared to the same period of 2025, benefiting from higherfranchise and management fees and share repurchases. • Franchise and management fees increased 5% to $204 million for the third quarter compared to the same period of2025, primarily reflecting higher U.S. royalties driven by RevPAR growth Calculated as total revenues excluding reimbursable revenues. Reimbursable revenues totaled $173 million and $169 million for third quarter 2026 and 2025, respectively, and $460 million and $460 million for each of the nine-month periods ended September 30, 2026 and 2025. Excluding liquidated damages revenue of $3.3 million and $9.5 million in the third quarters of 2026 and 2025, respectively, revenues excluding reimbursable revenues increased 5% in the third quarter compared to the same period of 2025. 1 1
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and royalty rate expansion, increased franchisee programs and services revenue, and higher international royalties. RevPAR (% change on a currency-neutral basis) Change vs. Prior Year Period Three months endedSeptember 30, 2026 U.S. 3.8% International 3.7% Global 3.9% • U.S. RevPAR increased 3.8% in the third quarter compared to the same period of 2025, driven by a 1.0% increase in rate and a 160-basis-point increase in occupancy, with strength in the West South Central and Midwest regions. • International RevPAR increased 3.7% on a currency-neutral basis in the third quarter compared to the same period of 2025, reflecting growth across all regions, led by strength in the Caribbean and Latin America. System Size and Development (Rooms) September 30,2026 September 30,2025 Change U.S. 498,215 498,307 —% U.S. upscale, extended stay, and midscale 442,154 438,865 0.7% International 162,399 151,370 7.3% Global 660,614 649,677 1.7% Global upscale, extended stay, and midscale 599,303 584,914 2.5% • Global room openings totaled 6,000 in the third quarter, compared to 12,800 in the same period of 2025, whichincluded a 7,400-room international portfolio conversion. • U.S. room openings totaled 4,400 in the third quarter, compared to 4,800 in the same period of 2025. For the ninemonths ended September 30, 2026, U.S. room openings increased 17% compared to the same period of 2025. • Global extended stay net rooms grew 10.7% compared to September 30, 2025, marking the 13th consecutive quarterof double-digit growth. During the quarter, the Company also opened its 600th extended stay hotel. • International net rooms grew 7.3% compared to September 30, 2025, led by growth in EMEA, Asia-Pacific, and Canada. • Global franchise agreements awarded represented 9,000 new rooms for development in the third quarter, compared to 11,800 rooms in the same period of 2025, which included a 4,900-room international portfolio signing. In the U.S.,franchise agreements awarded represented 6,900 rooms, compared with 5,500 rooms in the same period of 2025.
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• The Company's global pipeline totaled 78,200 rooms as of September 30, 2026, with 96% concentrated in extendedstay, midscale, and upscale brands. The pipeline included: ◦ 71,700 U.S. rooms and 6,500 international rooms.◦ 30,300 extended stay rooms, representing 39% of the total pipeline.◦ 28,100 conversion rooms and 50,100 new-construction rooms. Balance Sheet and Liquidity As of September 30, 2026, the Company had total available liquidity of $928 million, consisting of cash and cash equivalents and available borrowing capacity. The Company's net debt-to-adjusted EBITDA ratio was 3.2x for the trailing twelve monthsended September 30, 2026, within its target range of 3.0x to 4.0x. The quarter-end cash balance included borrowings made in advance of the October 1, 2026, acquisition of Harvest Hosts. Following the acquisition, net leverage remained within theCompany's target range. In August 2026, the Company completed a $500 million unsecured term loan financing, reducing the borrowing spread on the refinanced debt by 15 basis points and increasing available capacity under its $1 billion revolving credit facility. The term loanmatures in August 2029. During the nine months ended September 30, 2026, the Company generated $122 million in cash flows from operatingactivities, compared to $185 million in the prior-year period. The decrease primarily reflected the contract terminationpayment, higher franchise agreement acquisition costs associated with a 17% increase in U.S. room openings, and highermarketing and reservation system reimbursable expenses, partially offset by deferred tax and working capital timing effects. Asset Recycling During the nine months ended September 30, 2026, net capital outlays for hotel development and lending activities declined56% to $36.3 million, compared to $82.0 million in the prior-year period. The Company advanced its return to an asset-light franchising model through sales from its owned hotel portfolio.Subsequent to quarter-end, the Company sold two owned hotels, generating estimated net cash proceeds of approximately$34 million while retaining franchise agreements for both properties. As of November 2, 2026, the Company owned 17operating hotels, with one additional hotel under construction. Acquisition On October 1, 2026, the Company acquired Harvest Hosts, an asset-light RV travel subscription platform with recurringrevenue, expanding Choice Hotels’ offerings for value-minded travelers into the outdoor travel market. The approximately$130 million transaction was funded with available cash and borrowings under the Company’s revolving credit facility. Shareholder Returns During the nine months ended September 30, 2026, the Company returned $39 million to shareholders through dividends and$172 million in share repurchases. Net capital outlays include investments in owned hotel properties, investments in affiliates, notes receivable issued, net of collections, proceeds from asset sales, and distributions from sales of affiliates. Share repurchases include repurchases under the Company's stock repurchase program and repurchases from employees in connection with tax withholding and option exercises relating to awards under the Company's equity incentive plans. 2 3 2 3
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As of September 30, 2026, 1.3 million shares of common stock remained available for repurchase under the Company’scurrent share repurchase authorization. Outlook The Company is updating certain aspects of its full-year 2026 outlook. The outlook includes forward-looking non-GAAPmeasures used by management to assess expected performance. Adjusted metrics exclude the net surplus or deficit from reimbursable activities related to franchised and managed properties, due diligence and transition costs, and other items. Theoutlook includes Harvest Hosts’ operating results from the October 1, 2026, acquisition date and reflects the impact of the Company’s two recent hotel dispositions, except as otherwise noted. Full-Year 2026 Prior Outlook Net income $178 to $185 million $230 to $241 million Diluted EPS $3.92 to $4.07 $5.07 to $5.31 Adjusted net income $315 to $322 million $312 to $323 million Adjusted EBITDA $641 to $651 million $635 to $650 million Adjusted SG&A growth, excluding Harvest Hosts Approximately 9% Mid-single digits Adjusted diluted EPS $6.92 to $7.07 $6.86 to $7.10 Effective tax rate 26% 26% Full-Year 2026 vs. 2025 Prior Outlook Global RevPAR growth 1.5% to 2.5% 0% to 1% U.S. RevPAR growth 1.5% to 2.5% 0% to 1.25% U.S. royalty rate growth Approximately 9 bps 7 bps to 9 bps Global net system rooms growth Approximately 1.5% Approximately 1.5% The net income guidance range has been lowered from the Company's prior outlook primarily to reflect higher expectedmarketing and reservation system reimbursable expenses, driven by increased investment in franchisee-facing tools andguest delivery capabilities. The revision also reflects a $24 million charge related to the termination of an arrangement thatincluded an option to acquire a European hospitality business, $6 million in non-cash impairment charges related to ownedhotels, lower expected equity in earnings of affiliates, and higher interest expense. The adjusted net income guidance range has been narrowed from the Company's prior outlook to reflect higher expectedadjusted EBITDA, higher interest expense, and lower expected equity in earnings of affiliates. The Company raised the midpoint of its adjusted EBITDA guidance range, primarily reflecting stronger global RevPAR, higherU.S. royalty rate expansion, and an estimated $1 million net benefit from the Harvest Host acquisition and two recent hoteldispositions, partially offset by higher adjusted SG&A expenses. The revised adjusted SG&A outlook, excluding Harvest Host,reflects primarily non-recurring spending on certain strategic initiatives and artificial intelligence-enabled capabilities, as wellas higher accounts receivable reserves. Net capital outlays for hotel development-related activities are expected to decline from $103.4 million in 2025 toapproximately $20 million in 2026, assuming no additional hotel sales.2
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Webcast and Conference Call Choice will host a conference call to discuss third quarter 2026 results on November 2, 2026, at 10:00 a.m. ET. A live webcastwill be available on the Company’s Investor Relations website at www.investor.choicehotels.com/events-and-presentations.Participants may also dial (833) 461-5787 (U.S.) or (585) 542-9983 (international) and reference conference ID 723141180. Areplay and transcript will be available within 24 hours on the Company’s Investor Relations website. About Choice Hotels Choice Hotels International, Inc. (NYSE: CHH) is one of the largest lodging franchisors in the world, with over 7,500 hotels,representing more than 650,000 rooms, in 50 countries and territories. A wide-ranging portfolio of 22 brands that includes full- service upper upscale, midscale, extended stay, and economy properties enables Choice® to meet travelers’ needs in moreplaces and for more occasions while driving more value for franchise owners and shareholders. The award-winning Choice Privileges® rewards program and co-brand credit card options provide members with a fast and easy way to earn rewardnights and personalized perks. For more information, visit www.choicehotels.com. Forward-Looking Statements Information set forth herein includes “forward-looking statements.” Certain, but not necessarily all, of such forward-lookingstatements can be identified by the use of forward-looking terminology, such as “expect,” “estimate,” “believe,” “anticipate,”“should,” “will,” “forecast,” “plan,” “project,” “assume,” or similar words of futurity. All statements other than historical facts are forward-looking statements. These forward-looking statements are based on management’s current beliefs, assumptions, andexpectations regarding future events, which in turn are based on information currently available to management. Such statements may relate to projections of Choice’s revenue, expenses, adjusted EBITDA, earnings, debt levels, ability to repayoutstanding indebtedness, payment of dividends, net surplus or deficit, repurchases of common stock and other financial and operational measures, including occupancy, room openings and growth, open hotels, RevPAR, royalty rate, strategicinvestment and acquisition performance, asset recycling, international expansion performance, macroeconomic backdrop,commercial and technological capabilities, and Choice’s liquidity, among other matters. We caution you not to place undue reliance on any such forward-looking statements. Forward-looking statements do not guarantee future performance andinvolve known and unknown risks, uncertainties, and other factors. Several factors could cause our actual results, performance or achievements to differ materially from those expressed in orcontemplated by the forward-looking statements. Such risks include, but are not limited to, changes to general, U.S. andforeign economic conditions, including access to liquidity and capital; changes in consumer demand and confidence, including consumer discretionary spending and the demand for travel, transient and group business; the timing and amount offuture dividends and share repurchases; future U.S. or global outbreaks of epidemics, pandemics or contagious diseases or fear of such outbreaks, and the related impact on the global hospitality industry, particularly but not exclusively the U.S. travelmarket; changes in law and regulation applicable to the travel, lodging or franchising industries, including with respect to thestatus of our relationship with employees of our franchisees; the potential impact of changes in laws and regulations generally, or the interpretation thereof, including, without limitation, those relating to taxes, wages, labor and immigration;foreign currency fluctuations; changes in global interest rates and rate differentials; variability and unpredictability in trade relations, sanctions, tariffs or other trade controls; governmental action or inaction relating to the federal budget, includingfunding lapses and ®
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government shutdowns; impairments or declines in the value of our assets; our assumptions underlying our critical accountingestimates; operating risks common in the travel, lodging or franchising industries; changes to the desirability of our brands as viewed by hotel operators and customers; changes to the terms or termination of our contracts with franchisees and ourrelationships with our franchisees; our ability to keep pace with improvements in technology utilized for our marketing andreservation systems and other operating systems; our ability to grow our franchise system; exposure to risks related to our hotel development, financing, franchise agreement acquisition costs and ownership activities; exposures to risks associatedwith our investments in new businesses; fluctuations in the supply and demand for hotel rooms; our ability to realize anticipated benefits from acquired businesses; impairments or losses relating to acquired businesses; the level of acceptanceof alternative growth strategies we may implement; the impact of inflation; information technology, cyber security and databreach risks; introduction and integration of artificial intelligence technologies; climate change; our sustainability strategy; ownership and financing activities; hotel closures or financial difficulties of our franchisees; operating risks associated with ourinternational operations; political instability, geopolitical conflicts and terrorism; labor shortages; the outcome of litigation; our ability to effectively manage our indebtedness and secure our indebtedness; and the integration and performance of HarvestHosts following our acquisition. These and other risk factors are discussed in detail in the Company’s filings with the U.S. Securities and Exchange Commission, including our Annual Report on Form 10-K. We undertake no obligation to publicly update or revise any forward-looking statement, whether as a result of new information, future events or otherwise, except as required by law. Non-GAAP Financial Measurements and Other Definitions The company evaluates its operations utilizing the performance metrics of adjusted EBITDA, adjusted selling, general andadministrative (SG&A) expenses, adjusted net income, and adjusted diluted EPS, which are all non-GAAP financialmeasurements. These measures, which are reconciled to the comparable GAAP measures in Exhibits 6 and 7, should not beconsidered as an alternative to any measure of performance or liquidity as promulgated under or authorized by GAAP, suchas SG&A, net income and EPS. The company’s calculation of these measurements may be different from the calculationsused by other companies and comparability may therefore be limited. Management believes these non-GAAP financialmeasures provide investors with additional meaningful financial information that should be considered when assessing ourunderlying business performance and trends. We further discuss management’s reasons for reporting these non-GAAPmeasures and how each non-GAAP measure is calculated below. In addition to the specific adjustments noted below with respect to each measure, the non-GAAP measures presented hereinalso exclude restructuring of the company’s operations including employee severance benefit, contract termination costs,legal costs, acquisition related to business combination, due diligence and transition (recoveries) costs, and global ERPsystem implementation and related costs to allow for period-over-period comparison of ongoing core operations before theimpact of these discrete and infrequent charges. The non-GAAP measures presented herein also include certain information regarding projected non-GAAP adjusted EBITDAcontributions from the estimated benefit from the Harvest Host acquisition, which we are unable to reconcile to similarprojections of net income without unreasonable efforts as the adjustments cannot reasonably be predicted. The impact of theunavailable information could be significant relative to our expectations. Adjusted Earnings Before Interest, Taxes, Depreciation, and Amortization: Adjusted EBITDA, presented herein, iscalculated as net income excluding the impact of interest expense, interest income, provision for income taxes, depreciationand amortization, amortization of cloud computing
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arrangements, impairments and gains on sale of business, joint ventures and assets, other (gains) and losses, equity in netincome (loss) of unconsolidated affiliates and (gain) loss on extinguishment of debt, further adjusted to exclude certain items,including, franchisee agreement acquisition cost amortization and charges, mark-to-market adjustments on non-qualifiedretirement plan investments, share based compensation expense (benefit) and surplus or deficits generated by reimbursablerevenue from franchised and managed properties. We consider adjusted EBITDA to be an indicator of operating performancebecause it measures our ability to service debt, fund capital expenditures, and expand our business. We also use thesemeasures, as do analysts, lenders, investors, and others, to evaluate companies because they exclude certain items that canvary widely across industries or among companies within the same industry. For example, interest expense can be dependenton a company’s capital structure, debt levels, and credit ratings, and share based compensation expense (benefit) isdependent on the design of compensation plans in place and the usage of them. Accordingly, the impact of interest expenseand share based compensation expense (benefit) on earnings can vary significantly among companies. The tax positions ofcompanies can also vary because of their differing abilities to take advantage of tax benefits and because of the tax policiesof the jurisdictions in which they operate. As a result, effective tax rates and provision for income taxes can vary considerablyamong companies. These measures also exclude depreciation and amortization because companies utilize productive assetsof different ages and use different methods of both acquiring and depreciating productive assets or amortizing franchise-agreement acquisition costs. These differences can result in considerable variability in the relative asset costs and estimatedlives and, therefore, the depreciation and amortization expense among companies. Mark-to-market adjustments on non-qualified retirement-plan investments recorded in SG&A expenses are excluded from adjusted EBITDA, as the companyaccounts for these investments in accordance with accounting for deferred-compensation arrangements when investmentsare held in a rabbi trust and invested. Changes in the fair value of the investments are recognized as both compensationexpense in SG&A and other gains and losses. As a result, the changes in the fair value of the investments do not have amaterial impact on the company’s net income. Surpluses and deficits generated from reimbursable revenues from franchisedand managed properties are excluded, as the company does not operate these programs to generate a profit and has thecontractual rights to adjust future collections or assess additional fees to recover prior period expenditures. The company’sfranchise and management agreements require these revenues to be used exclusively for expenses associated withproviding franchise and management services, such as central reservation systems, hotel employee and operating costs,reservation delivery and national marketing and media advertising. Franchised and managed property owners are required toreimburse the company for any deficits generated from these activities and the company is required to spend any surplusesgenerated in future periods. The reimbursement for franchise and management services is typically billed and collectedmonthly, based on the underlying hotel’s sales or usage, while the associated costs are recognized as incurred by thecompany, creating timing differences with the net effect impacting net income in the reporting period. These timing differencesare due to our discretion to spend in excess of the revenues earned or less than the revenues earned in a single period toensure that the programs are operated in the best long-term interests of our franchised and managed properties. Since theseactivities will be managed to break-even over time, quarterly or annual surpluses and deficits have been excluded from themeasurements utilized to assess the company’s operating performance. Adjusted Net Income and Adjusted Diluted Earnings Per Share: Adjusted net income and adjusted diluted EPS excludethe impact of surpluses or deficits generated from reimbursable revenue from franchised and managed properties,impairments, formation costs and gains on sale of business, joint ventures and assets and gains on extinguishment of debt.Surpluses and deficits generated from reimbursable revenue from franchised and managed properties are excluded, as thecompany does not operate these programs to generate a profit and has the contractual rights to adjust future collections orassess additional fees to recover prior period expenditures. The company’s franchise agreements require these revenues tobe used exclusively for expenses associated with providing franchised and managed services, such as central reservationsystems,
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hotel employee and operating costs, reservation delivery and national marketing and media advertising. Franchised andmanaged property owners are required to reimburse the company for any deficits generated from activities and the companyis required to spend any surpluses generated in future periods. The reimbursement for franchise and management services istypically billed and collected monthly, based on the underlying hotel’s sales or usage, while the associated costs arerecognized as incurred by the company, creating timing differences with the net effect impacting net income in the reportingperiod. These timing differences are due to our discretion to spend in excess of the revenues earned or less than therevenues earned in a single period to ensure that the programs are operated in the best long-term interests of our franchisedand managed properties. Since these activities will be managed to break-even over time, quarterly or annual surpluses anddeficits have been excluded from the measurements utilized to assess the company’s operating performance. We consideradjusted net income and adjusted diluted EPS to be indicators of operating performance because excluding these itemsallows for period-over-period comparisons of our ongoing operations. Adjusted SG&A: Adjusted SG&A reflects SG&A excluding the impact of mark-to-market adjustments on non-qualifiedretirement plan investments, amortization of cloud computing arrangements and share based compensation expense. We usethis measure, as do analysts, lenders, investors, and others, to evaluate companies because it excludes certain items thatcan vary widely across industries or among companies within the same industry. For example, share based compensationexpense (benefit) is dependent on the design of compensation plans in place and the usage of them. Accordingly, the impactof share-based compensation expense (benefit) on earnings can vary significantly among companies. Mark-to-marketadjustments on non-qualified retirement-plan investments recorded in SG&A expenses are also excluded as the companyaccounts for these investments in accordance with accounting for deferred-compensation arrangements when investmentsare held in a rabbi trust and invested. Changes in the fair value of the investments are recognized as both compensationexpense in SG&A and other gains and losses. As a result, the changes in the fair value of the investments do not have amaterial impact on the company’s net income. Occupancy: Occupancy represents the total number of room nights sold divided by the total number of room nights availableat a hotel for a given period. Occupancy measures the utilization of the hotels’ available capacity. Management usesoccupancy to gauge demand at a specific hotel or group of hotels in a given period. The company calculates occupancybased on information as reported by its franchisees. To accurately reflect occupancy, the company may revise its prior years’operating statistics for the most current information provided. Average Daily Rate (ADR): ADR represents hotel room revenue divided by the total number of room nights sold for a givenperiod. ADR measures the average room price attained by a hotel and ADR trends provide useful information concerning thepricing environment and the nature of the customer base of a hotel or group of hotels. ADR is a commonly used performancemeasure in the industry, and management uses ADR to assess pricing levels that the company is able to generate. Thecompany calculates ADR based on information as reported by its franchisees. To accurately reflect ADR, the company mayrevise its prior years’ operating statistics for the most current information provided. Revenue Per Available Room (RevPAR): RevPAR is calculated by dividing hotel room revenue by the total number of roomnights available to guests for a given period. Management considers RevPAR to be a meaningful indicator of hotelperformance and therefore company royalty and system revenues as it provides a metric correlated to the two key drivers ofoperations at a hotel: occupancy and ADR. The company calculates RevPAR based on information as reported by itsfranchisees. To accurately reflect RevPAR, the company may revise its prior years’ operating statistics for the most currentinformation provided. RevPAR is also a useful indicator in measuring performance over comparable periods.
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Pipeline: Pipeline is defined as hotels awaiting conversion, under construction or approved for development, and masterdevelopment agreements committing owners to future franchise development. Contacts Allie Summers, Senior Director, Investor RelationsIR@choicehotels.com © 2026 Choice Hotels International, Inc. All rights reserved.
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Choice Hotels International, Inc. Earnings Release Schedules Table of Contents Page No. Condensed Consolidated Statements of Income 12 Condensed Consolidated Balance Sheets 13 Condensed Consolidated Statements of Cash Flows 14 Currency-Neutral System-Wide Hotel Operating Statistics 14 System Hotel and Room Supply 16 Non-GAAP Financial Information 17 Outlook 19
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Choice Hotels International, Inc. Exhibit 1 Condensed Consolidated Statements of Income (Unaudited) (In thousands, except per share amounts) For the Three Months Ended For the Nine Months Ended September 30, September 30, 2026 2025 2026 2025 REVENUES Franchise and management fees $ 203,667 $ 193,777 $ 540,834 $ 515,931 Partnership services and fees 28,341 28,868 81,749 81,313 Owned hotels 38,064 33,167 103,393 91,255 Other 15,320 22,094 53,525 57,937 Revenue for reimbursable costs from franchised and managed properties 172,936 169,434 460,164 460,207 Total revenues 458,328 447,340 1,239,665 1,206,643 OPERATING EXPENSES Selling, general and administrative 81,275 79,610 255,474 243,118 Contract termination costs 24,268 — 24,268 — Business combination, diligence and transition costs 3,214 1,494 3,986 1,940 Depreciation and amortization 16,933 15,760 50,567 42,932 Owned hotels 27,312 23,792 76,420 67,271 Reimbursable expenses from franchised and managed properties 192,812 184,268 552,264 504,437 Total operating expenses 345,814 304,924 962,979 859,698 Impairment of long-lived assets (6,035) — (6,035) — Operating income 106,479 142,416 270,651 346,945 OTHER EXPENSES AND (INCOME), NET Interest expense 25,575 23,490 73,796 67,468 Interest income (998) (1,435) (3,304) (4,450) Gain from an acquisition of a joint venture — (100,025) — (100,025) Gain on sale of assets — (713) — (713) Other gains, net (7) (721) (5,410) (5,659) Equity in net loss of affiliates 6,866 10,904 14,334 11,035 Total other expenses and (income), net 31,436 (68,500) 79,416 (32,344) Income before income taxes 75,043 210,916 191,235 379,289 Income tax expense 17,131 30,920 48,681 73,025 Net income $ 57,912 $ 179,996 $ 142,554 $ 306,264 Basic earnings per share $ 1.29 $ 3.89 $ 3.14 $ 6.59 Diluted earnings per share $ 1.28 $ 3.86 $ 3.12 $ 6.52
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Choice Hotels International, Inc. Exhibit 2 Condensed Consolidated Balance Sheets (Unaudited) (In thousands) September 30, December 31, 2026 2025 ASSETS Cash and cash equivalents $ 170,594 $ 44,997 Accounts receivable, net 285,966 207,491 Other current assets 119,830 153,510 Total current assets 576,390 405,998 Property and equipment, net 645,102 649,291 Operating lease right-of-use assets 72,528 77,670 Goodwill 302,668 305,758 Intangible assets, net 1,119,107 1,082,486 Notes receivable, net of allowances 28,688 12,490 Investments for employee benefit plans, at fair value 47,549 50,227 Investments in affiliates 139,667 134,975 Other assets 207,235 199,308 Total assets $ 3,138,934 $ 2,918,203 LIABILITIES AND SHAREHOLDERS' EQUITY Accounts payable $ 148,045 $ 156,276 Accrued expenses and other current liabilities 117,443 125,282 Deferred revenue 107,680 100,698 Liability for guest loyalty program 84,863 85,035 Total current liabilities 458,031 467,291 Long-term debt 2,177,105 1,906,122 Long-term deferred revenue 135,975 130,505 Deferred compensation and retirement plan obligations 54,076 56,532 Deferred income taxes 32,416 25,303 Operating lease liabilities 102,315 107,963 Liability for guest loyalty program 42,731 39,771 Other liabilities 4,527 3,487 Total liabilities 3,007,176 2,736,974 Total shareholders' equity 131,758 181,229 Total liabilities and shareholders' equity $ 3,138,934 $ 2,918,203
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Choice Hotels International, Inc. Exhibit 3 Condensed Consolidated Statements of Cash Flows (Unaudited) (In thousands) Nine Months Ended September 30, 2026 2025 CASH FLOWS FROM OPERATING ACTIVITIES Net income $ 142,554 $ 306,264 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization 50,567 42,932 Depreciation and amortization – reimbursable expenses from franchised and managed properties 17,076 14,295 Franchise agreement acquisition cost amortization 30,051 25,020 Impairment of long-lived assets 6,035 — Gain from an acquisition of a joint venture — (100,025) Gain on sale of assets — (713) Non-cash share-based compensation and other charges 16,841 27,439 Non-cash interest, investments, and affiliate loss (income), net 1,000 (6,131) Deferred income taxes (581) (17,713) Equity in net loss of affiliates, less distributions received 10,529 16,424 Franchise agreement acquisition costs, net of reimbursements (103,993) (62,359) Change in working capital and other (48,165) (60,676) Net cash provided by operating activities 121,914 184,757 CASH FLOWS FROM INVESTING ACTIVITIES Investments in other property and equipment (25,612) (26,927) Investments in owned hotel properties (37,533) (85,307) Contributions to investments in affiliates (20,038) (90,005) Issuances of notes receivable (3,338) (6,351) Collections of notes receivable 24,610 3,036 Business acquisition, net of cash acquired — (73,395) Proceeds from the sale of assets — 52,000 Distributions from sales of affiliates — 44,617 Other items, net (1,232) 4,475 Net cash used in investing activities (63,143) (177,857) CASH FLOWS FROM FINANCING ACTIVITIES Net (repayments) borrowings pursuant to revolving credit facilities (228,725) 148,482 Proceeds from the issuance of long-term debt 499,500 — Proceeds from economic development loans — 250 Debt issuance costs (435) — Purchases of treasury stock (166,178) (112,958) Dividends paid (39,325) (40,194) Proceeds from the exercise of stock options 2,411 7,488 Net cash provided by financing activities 67,248 3,068 Net change in cash and cash equivalents 126,019 9,968 Effect of foreign exchange rate changes on cash and cash equivalents (422) 2,438 Cash and cash equivalents, beginning of period 44,997 40,177 Cash and cash equivalents, end of period $ 170,594 $ 52,583
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Exhibit 4 CHOICE HOTELS INTERNATIONAL, INC. CURRENCY-NEUTRAL SYSTEM-WIDE HOTEL OPERATING STATISTICS (UNAUDITED) For the Three Months Ended September 30, 2026 ADR Occupancy RevPAR 2026 vs. 2025 2026 vs. 2025 2026 vs. 2025 Total U.S. $ 100.99 1.0 % 61.9 % 160bps $ 62.56 3.8 % Upscale & Above 159.98 1.4 % 62.7 % (20)bps 100.37 1.1 % Midscale & Upper Midscale 105.47 0.8 % 61.7 % 160bps 65.11 3.6 % Extended Stay 69.56 4.2 % 72.3 % 130bps 50.29 6.2 % Economy 74.12 0.9 % 51.4 % 130bps 38.13 3.5 % International 117.57 3.9 % 71.3 % (10)bps 83.77 3.7 % Total System $ 105.21 1.8 % 64.1 % 130bps $ 67.41 3.9 % For the Nine Months Ended September 30, 2026 ADR Occupancy RevPAR 2026 vs. 2025 2026 vs. 2025 2026 vs. 2025 Total U.S. $ 96.48 0.1 % 57.6 % 60bps $ 55.61 1.3 % Upscale & Above 152.95 1.6 % 57.7 % —bps 88.32 1.6 % Midscale & Upper Midscale 100.73 0.1 % 57.1 % 70bps 57.47 1.2 % Extended Stay 68.47 2.7 % 70.0 % —bps 47.90 2.6 % Economy 70.68 (1.4)% 47.9 % (10)bps 33.84 (1.6)% International 109.28 2.8 % 64.8 % 20bps 70.78 3.0 % Total System $ 99.71 0.9 % 59.3 % 60bps $ 59.11 2.0 % For the Three Months Ended For the Nine Months Ended September 30, 2026 September 30, 2025 September 30, 2026 September 30, 2025 U.S. Average Royalty Rate Total U.S. 5.23 % 5.15 % 5.22 % 5.12 % Includes Ascend Hotel Collection, Cambria, Park Plaza, Radisson, Radisson Blu, Radisson Individuals, and Radisson RED brands. Includes Clarion, Comfort Inn, Comfort Suites, Country Inn & Suites, Park Inn, Quality Inn, and Sleep Inn brands. Includes Everhome Suites, MainStay Suites, Suburban Studios, and WoodSpring Suites brands. Includes Econo Lodge and Rodeway Inn brands. International and Total System results are presented on a currency-neutral basis and exclude the impact of foreign currency exchange movements. (1) (2) (3) (4) (5) (5) (1) (2) (3) (4) (5) (5) (1) (2) (3) (4) (5)
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Exhibit 5 CHOICE HOTELS INTERNATIONAL, INC. SYSTEM HOTEL AND ROOM SUPPLY (UNAUDITED) Global System by Brand September 30, 2026 Hotels Rooms Ascend Hotel Collection 539 72,180 Cambria Hotels 79 10,546 Radisson 130 22,716 Comfort 2,135 178,772 Quality 1,868 146,892 Country 400 32,299 Sleep 429 30,705 Clarion 276 36,951 Park Inn 35 2,881 WoodSpring 300 36,115 MainStay 157 11,485 Suburban 121 9,992 Everhome 32 3,679 Econo Lodge 618 35,255 Rodeway Inn 427 23,600 Other 58 6,546 Includes Radisson, Radisson Blu, Radisson Individuals, Radisson RED and Park Plaza brands. Includes Comfort family of brand extensions including Comfort Inn and Comfort Suites. Includes Clarion family of brand extensions including Clarion and Clarion Pointe. Includes other brands under Master Franchise Agreements. U.S. System by Chain Scale September 30, 2026 Hotels Rooms Upscale & Above 378 60,876 Midscale & Upper Midscale 4,212 320,686 Extended Stay 602 60,592 Economy 989 56,061 Global System by Region September 30, 2026 Hotels Rooms U.S. 6,181 498,215 Total International 1,423 162,399 Americas (excluding U.S.) 549 56,605 Europe & Middle East 488 71,208 Asia-Pacific 386 34,586 Total System 7,604 660,614 (1) (2) (3) (4) (1) (2) (3) (4)
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Exhibit 6 CHOICE HOTELS INTERNATIONAL, INC. SUPPLEMENTAL NON-GAAP FINANCIAL INFORMATION (UNAUDITED) ADJUSTED SELLING, GENERAL AND ADMINISTRATIVE EXPENSES (dollar amounts in thousands) Three Months Ended Nine Months Ended September 30, September 30, 2026 2025 2026 2025 Total selling, general and administrative expenses $ 81,275 $ 79,610 $ 255,474 $ 243,118 Mark to market adjustments on non-qualified retirement plan investments (255) (2,657) (5,227) (5,907) Non-recurring operational restructuring charges and executive severance (5,047) (497) (7,585) (4,799) Share-based compensation (3,879) (6,397) (13,246) (18,523) Amortization of cloud computing arrangements (326) (189) (902) (189) Global ERP system implementation and related costs (86) (1,587) (445) (3,653) Adjusted selling, general and administrative expenses $ 71,682 $ 68,283 $ 228,069 $ 210,047 ADJUSTED EARNINGS BEFORE INTEREST, TAXES, DEPRECIATION AND AMORTIZATION ("ADJUSTED EBITDA") (dollar amounts in thousands) Three Months Ended Nine Months Ended September 30, September 30, 2026 2025 2026 2025 Net income $ 57,912 $ 179,996 $ 142,554 $ 306,264 Income tax expense 17,131 30,920 48,681 73,025 Interest expense 25,575 23,490 73,796 67,468 Interest income (998) (1,435) (3,304) (4,450) Amortization of cloud computing arrangements 326 189 902 189 Depreciation and amortization 16,933 15,760 50,567 42,932 Impairment of long-lived assets 6,035 — 6,035 — Gain from an acquisition of a joint venture — (100,025) — (100,025) Gain on sale of assets — (713) — (713) Other gains, net (7) (721) (5,410) (5,659) Equity in net loss of affiliates 6,866 10,904 14,334 11,035 Share-based compensation 3,879 6,397 13,246 18,523 Mark to market adjustments on non-qualified retirement plan investments 255 2,657 5,227 5,907 Franchise agreement acquisition costs amortization and charges 6,129 4,257 18,618 15,584 Revenue for reimbursable costs from franchised and managed properties (172,936) (169,434) (460,164) (460,207) Reimbursable expenses from franchised and managed properties 192,812 184,268 552,264 504,437 Global ERP system implementation and related costs 86 1,587 445 3,653 Business combination, diligence and transition costs 3,214 1,494 3,986 1,940 Non-recurring operational restructuring charges and executive severance 5,047 497 7,585 4,799 Contract termination costs 24,268 — 24,268 — Adjusted EBITDA $ 192,527 $ 190,088 $ 493,630 $ 484,702
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Exhibit 6 CHOICE HOTELS INTERNATIONAL, INC. SUPPLEMENTAL NON-GAAP FINANCIAL INFORMATION (UNAUDITED) ADJUSTED NET INCOME AND ADJUSTED DILUTED EARNINGS PER SHARE ("EPS") (dollar amounts in thousands, except per share amounts) Three Months Ended Nine Months Ended September 30, September 30, 2026 2025 2026 2025 Net income $ 57,912 $ 179,996 $ 142,554 $ 306,264 Impairment of long-lived assets 6,035 — 6,035 — Gain on sale of assets — (713) — (713) Gain from an acquisition of a joint venture — (100,025) — (100,025) Revenue for reimbursable costs from franchised and managed properties (172,936) (169,434) (460,164) (460,207) Reimbursable expenses from franchised and managed properties 192,812 184,268 552,264 504,437 Business combination, diligence and transition costs 3,214 1,494 3,986 1,940 Non-recurring operational restructuring charges and executive severance 5,047 497 7,585 4,799 Global ERP system implementation and related costs 86 1,587 445 3,653 Loss on sale of an affiliate 3,805 — 3,805 — Non-recurring joint venture formation transaction costs — 6,498 — 6,498 Contract termination costs 24,268 — 24,268 — Income tax expense on adjustments (14,935) (5,924) (33,818) (14,977) Adjusted Net Income $ 105,308 $ 98,244 $ 246,960 $ 251,669 Diluted EPS $ 1.28 $ 3.86 $ 3.12 $ 6.52 Adjusted Diluted EPS $ 2.33 $ 2.10 $ 5.41 $ 5.36
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Exhibit 7 CHOICE HOTELS INTERNATIONAL, INC. OUTLOOK (UNAUDITED) Guidance represents the company's range of estimated outcomes for the full year ended December 31, 2026 ADJUSTED EBITDA (in thousands) Full Year Full Year Lower Range Upper Range Net income $ 178,000 $ 185,000 Income tax expense 62,000 64,400 Interest expense 97,700 98,300 Interest income (4,100) (4,100) Amortization of cloud computing arrangements 1,200 1,200 Depreciation and amortization 67,900 67,900 Impairment of long-lived assets 6,000 6,000 Other gains, net (5,400) (5,400) Equity in net loss of affiliates 15,800 15,800 Share-based compensation 17,000 17,000 Mark to market adjustments on non-qualified retirement plan investments 5,200 5,200 Franchise agreement acquisition costs amortization and charges 26,300 26,300 Revenue for reimbursable costs from franchised and managed properties (599,200) (599,200) Reimbursable expenses from franchised and managed properties 734,200 734,200 Global ERP system implementation and related costs 1,800 1,800 Business combination, diligence and transition costs 4,400 4,400 Non-recurring operational restructuring charges and executive severance 7,900 7,900 Contract termination costs 24,300 24,300 Adjusted EBITDA $ 641,000 $ 651,000 ADJUSTED NET INCOME & DILUTED EARNINGS PER SHARE ("EPS") (in thousands, except per share amounts) Full Year Full Year Lower Range Upper Range Net income $ 178,000 $ 185,000 Impairment of long-lived assets 6,000 6,000 Revenue for reimbursable costs from franchised and managed properties (599,200) (599,200) Reimbursable expenses from franchised and managed properties 734,200 734,200 Business combination, diligence and transition costs 4,400 4,400 Non-recurring operational restructuring charges and executive severance 7,900 7,900 Global ERP system implementation and related costs 1,800 1,800 Loss on sale of an affiliate 3,800 3,800 Contract termination costs 24,300 24,300 Income tax expense on adjustments (46,200) (46,200) Adjusted net income $ 315,000 $ 322,000 Diluted EPS $ 3.92 $ 4.07 Adjusted Diluted EPS $ 6.92 $ 7.07