Morning, ladies and gentlemen, and thank you for standing by. Welcome to the Marriott Vacations Worldwide Q3 2025 earnings call. At this time, all participants are in a listen-only mode. Question-and-answer session will follow the formal presentation. Should you require operator assistance during the conference, please press star zero to signal an operator. Please note this conference is being recorded. I will now turn the conference over to your host, Neal Goldner, Vice President, Investor Relations for Marriott Vacations Worldwide. Thank you. You may begin. Thank you, and welcome to the Marriott Vacations Worldwide Q3 earnings call. I am joined today by John Geller, our President and Chief Executive Officer, and Jason Marino, our Executive President and Chief Financial Officer. I need to remind everyone that many of our comments today are not historical facts and are considered forward-looking statements under federal securities laws. These statements are subject to numerous risks and uncertainties, which could cause future results to differ materially from those expressed in or implied by our comments. Forward-looking statements and the press release, as well as comments on this call, are effective only when made and will not be updated as actual events unfold. Throughout the call, we will make references to non-GAAP financial information. You can find a reconciliation of non-GAAP financial measures in the schedules attached to our press release and on our website. With that, it's now my pleasure to turn the call over to John Geller. Thanks, Neal. Good morning, everyone, and thank you for joining our Q3 earnings call. As you saw in our release last night, Q3 contract sales declined 4% year-over-year, a couple of points below our expectations. The shortfall relative to our expectations was driven by weakness in Orlando and Maui, two of our largest markets. Excluding those two markets, system-wide contract sales were approximately flat year-over-year. We're not satisfied with these results and have recently implemented meaningful changes that we believe will drive return to growth. First, we've adjusted our sales and marketing incentive plans to better align with our long-term objectives. Second, we're working to curb third-party commercial rental activity by a small subset of owners, which has depressed owner arrivals at some of our most attractive destinations in recent years. By curbing this practice, we expect to make more inventory available for occupancy by our owners, which should drive higher owner satisfaction and incremental arrivals at our most productive sales centers, benefiting tours and VPG. Third, we have implemented FICO scoring data for marketing purposes, which should result in higher VPGs and improved credit metrics. With respect to our modernization program, we continue to make strong progress towards the $150 million-$200 million in run rate EBITDA benefit by the end of 2026. One of the most impactful steps we've taken thus far occurred in August when we reorganized a portion of our HR and finance and accounting functions and transitioned work to third-party providers. This change will save us $20 million in annual costs that will fall to the bottom line going forward. In addition to these three operational changes I've already outlined, we're rolling out additional initiatives we expect to improve VPG as part of the modernization program. For example, we implemented initiatives to drive owner arrivals, offering owners Bonvoy points to arrive at select resorts within a two-month window. This will help us drive incremental owner tours at and above average VPG. Our new owner experience initiative, which helps reduce rescissions and boost our tour pipeline, is creating excitement at the sales table by giving buyers a pre-planned vacation to look forward to after their presentation. With over 270,000 packages in our pipeline at the end of Q3, the impacts of these changes will be realized over the course of the coming year. In the quarter, we also expanded our presence in Asia Pacific with the opening of a new Marriott Vacation Club resort in Khao Lak, Thailand. We have other resorts and sales centers in development that we expect to contribute more than $80 million of annual contract sales within a few years after opening. We have updated our full-year expectations based on our Q3 results. October VPGs were down less than they were in Q3, and we expect occupancy to remain strong. Keys on the books for the balance of the year are consistent with the same time a year ago, and we expect to drive tour capture rates for owners as we continue to roll out initiatives to drive future owner arrivals. We also have 270,000 packages in our pipeline, which is a good forward indicator, and loan delinquencies are down meaningfully year-over-year. In conclusion, despite our disappointing results this year, I still believe in the long-term growth potential of this business. With the recent operational changes we've made and our continued modernization work, we have tremendous confidence in the future profitability growth. We will be hosting an Investor Day the morning of December 17th at the New York Stock Exchange, and I hope to see many of you there. It will also be webcast for those who won't be able to make it in person. With that, I'll turn the call over to Jason to discuss our results in more detail. Thanks, John. Today, I'm going to review our Q3 results, our balance sheet and liquidity position, and our outlook for the year. Contract sales were down 4% year-over-year in the quarter, driven by 5% lower VPG and a 1% decline in tours. First-time buyer sales decreased 2%, while owner sales declined 5%. Delinquencies declined 100 basis points year-over-year and are now slightly below 2023 levels. Financing propensity increased 90 basis points from last year, which is good for the long-term growth given the strong margins we get from our lending business. Due to the higher-than-expected financing propensity in the quarter, our sales reserve was 13% of contract sales, and we expect it to be 12.5%-13% in Q4. Development profit declined $33 million compared to the prior year, reflecting lower contract sales and higher marketing and sales expense. Total company rental profit declined $17 million to $21 million, primarily driven by higher unsold maintenance fees and getaways at Interval International. Our recurring revenue businesses performed well. Management and exchange profit increased 12% to $96 million, and financing profit increased 5% to $52 million. Finally, corporate G&A decreased $8 million. As a result, adjusted EBITDA decreased 15% year-over-year to $170 million. Moving to the balance sheet, during the quarter, we issued $575 million of 6.5% senior notes, which we'll use to repay our 0% convertible debt when it matures in January. We ended the quarter with leverage of 4.1 times and $1.4 billion in liquidity in anticipation of repaying those notes. We also terminated our delayed draw term loan. After January, our next corporate debt maturity is not until December 2027, so our balance sheet is in good shape from a maturity perspective. Looking forward, we are updating our full-year guidance to reflect our results year-to-date and our expectations for the Q4. We now expect contract sales to decline 2%-3% this year, with tours flat to up slightly and VPG down. We still expect product cost as a percent of contract sales to be in line with last year. We now expect rental profit to decline around $30 million this year, which is slightly lower than our previous guidance due to lower VEDPAR expectations. We expect management and exchange profit to be in the $380 million range and for financing profit to be around $210 million, and corporate G&A to be flat to down slightly this year. We continue to make good progress in our modernization program and still expect to deliver $150 million-$200 million in run rate benefit by the end of next year. For modeling purposes, we still expect to generate an incremental $60 million-$80 million of benefit to flow to the bottom line in 2026, with a full run rate in 2027. As a result, we now expect adjusted EBITDA to be in the $740 million-$755 million range this year. Moving to cash flow, we expect our adjusted free cash flow to be $235 million-$270 million this year. This lower guidance is driven by lower adjusted EBITDA, higher 2026 unsold maintenance fees due in Q4, and the timing of tax refunds, which we now expect to receive next year. Our guidance also excludes roughly $100 million of one-time cash costs related to our modernization initiatives, which is consistent with our previous thinking. We are making good progress on our non-core asset and excess inventory dispositions and hope to dispose of one asset this year and a couple next year. While we don't include proceeds from non-core asset sales in our adjusted free cash flow, any dispositions will provide cash we can use to either reduce debt or buy back shares. We ended the quarter with $1 billion of inventory on the balance sheet. As we discussed last quarter, we plan to restrict our new inventory spending to capital efficient arrangements where our cash outlay coincides with the start of sales, as well as low-cost reacquired inventory. Our long-term goal remains to get closer to one and a half to two years of inventory on the balance sheet over the next few years, which will free up cash over time. With that, we'll be happy to answer your questions. Operator. Thank you. At this time, we will be conducting a question-and-answer session. If you'd like to ask a question, please press star one on your telephone keypad. A confirmation tone will indicate your line is in the question queue. If at any time you wish to remove your question from the queue, please press star two. For participants using speaker equipment, it may be necessary to pick up your—excuse me—it may be necessary to pick up your handset before pressing the star keys. One moment, please, while we poll for questions. Our first question is from Ben Chaiken with Mizuho Securities. Hey, thanks. Good morning. Either John or whoever wants to take this, you kind of threw a lot at us right off the bat in the beginning of the call. Maybe you could talk to us about the strategy to reinvigorate the top line, whether that's on VPG or on tours, and then what levers are at your disposal? Or is this just kind of like a broader deceleration in the business? Thanks. Yeah. No. We're obviously focused on growth. I think it's like hit on two of our larger markets, Orlando and Maui. We're down significantly year-over-year, about $20 million of contract sales in total. In the case of Orlando, you had owner arrivals down, which we've talked about this year more broadly has been a bit of a headwind, but we've offset a lot of that with higher capture rates on the tour side to kind of offset what we're seeing there. I think that when you think about Orlando, in that market, we've got two Sheraton sales centers. Those sales centers, average relative to our broader Marriott, tend to have a lower income consumer. We saw some softer VPGs in Orlando. A lot of the changes that I talked about making, as we've looked at, especially in markets like Orlando, what the. Compensation for sales and marketing execs and bringing those and making sure we are competitive to drive not only retaining our top folks, but also recruiting and getting high performers as well. We are focused on that. We did see some higher turnover in Orlando on the sales exec side. When you bring in a new sales exec, off the bat, they typically have a lower VPG, and it takes a while to ramp that up. Retaining the best and bringing in new good talent is going to be key there. We talked about the commercial rental activity, as I talked about, and we talked about this earlier in the year. As we have continued to focus on lower owner arrivals, a lot of that. Or some of it, I should say, as we've dug into a lot of the details, we've seen kind of an uptick in commercial rental activity. It's a small subset of the ownership base, but it does impact owners trying to get to where they want to go. We want to get their satisfaction higher. We've got good owner satisfaction, so it can only help there. The flow through is more owners at the sites, better VPGs, better tours. That's another big initiative. We've ramped up sales training across the board at all our sites. We're starting to see some benefits there. In fact, in October, our VPGs were flattish. That's a good trend to start the Q4. We still got to do more to continue to drive growth going forward. Okay. Okay. And then stepping back, I guess, just going back to the beginning of the call when you fired off a number of kind of new initiatives, looking at the 2026. Because I do not know if we have all digested kind of the moving parts that you guys are laying out here. Are there any curveballs we need to be aware of in any of the segments that stick out to you? I guess rentals comes to mind just because that is a little bit more of a black box for us typically. Again, I do not know if you have any visibility there or any other areas that some of these initiatives might impact. Thanks. Yeah. Are you talking rentals next year or just in the Q4? I'm talking next year. I'm saying that there seems like there's a number of changes you're implementing today to drive top line. I'm just trying to get ahead and see, are there any implications to the P&L in 2026 from those changes? The one that jumps out to me, because it's somewhat of a black box for us, is rentals. Thanks. Yeah. Yeah. Obviously, we're still working on our budget and long-range plan, which will provide more detail. In December, I think. Specific to rentals. Jason hit on, we do have some higher unsold maintenance fees. We have more inventory we expect on our books going into 2026 than we had this year. And that's inventory that we've taken back, as well as YKK and some of the purchases we've made. We will have higher unsold maintenance costs. The key is how do we offset that on the rental side and drive VEDPAR? Those are the details we're still working through. At a baseline, we expect to have some higher costs. The goal is to try and mitigate that as much as possible on the revenue side. Okay. Thanks. Our next question is from Patrick Scholes with Truist Securities. Good morning. Thank you. I have three questions to start with, and I have some more I will jump back in the queue later on. First, very high-level question. When do you consider all strategic alternatives for the company, given the consistent underperformance, arguably mis-execution, and certainly share price underperformance? Any reason it shouldn't be now? Sure. Yeah. No. We're constantly looking at all things and work with the board on that. We're going to do everything we can to increase shareholder value. Okay. Number two, let's just talk about expectations for Q4. We saw that guidance was really only reduced by the amount of the Q3 miss. What gives you confidence that the issues in Q3 won't persist into Q4? Yeah. As I mentioned, at least early trends in October, our VPGs, which were the big headwind in the Q3, are trending more positive. Still early days, but some of the initiatives I've talked about, things to drive owner arrivals in the near term. As we look out and what packages and owner keys on the books and things like that, we still got to drive tour flow as well as VPG. What we've given you in the guidance is kind of based on what we're seeing, based on what we achieved in October and what we see on the books and the trends for November and December. Okay. And then third question. Is about. The The comment that was included in the earnings release around curbing third-party commercial rental activity to drive higher owner arrivals and satisfaction. Was there an issue with rental bookings that hurt owner arrivals and VPG in Q3? Yeah. I mean, it's a great question. I'm not sure you can quantify it other than we know we've seen some higher owner rentals. Let's be clear, our owners can rent the product. That is an option for the typical owner. What we're seeing is a small group of owners that appear to be running commercial businesses, right? They're obviously going after the better inventory, the better weeks, and a lot of the higher-end markets to try and rent those and make money. That's the commercial rental activity. Anything we can do to make sure they're adhering to the rules, our points programs don't allow commercial rental activity. We've employed some technology to track that, and we're working on how we're going to enforce those rules here going forward. That'll take a little bit of time to ramp up here, but we're focused on that. If we can get more owners there, the read-through, right, is that should help owner satisfaction. They're getting on more vacations to their top choices. When owners are happy and they're there, that should help us drive tours and better VPGs. Okay. Thank you. I'm going to hop back in the queue. Okay. Our next question is from Brent Montour with Barclays. Thanks. On that point, John, I'm sorry. Can you just go over that one more time, the commercial third parties? This is something we haven't really heard about, at least on these calls. What sort of percentage of your inventory is being used by that? How long has this been a problem? Is it a bigger problem than the past? Maybe give us a little more context. Sure. Yeah. No. Like I said, Brent, owners can, in the normal course, rent their time. That's not prohibited. What you can't do for our documents with the points trust and all that is run commercial businesses, run a rental. You see, if you go to Red Week, for example, you see a disproportionate amount of our weeks on there. I'm not saying those are all commercial businesses, but as we've really dug into the data over the last year or so, we have seen an increase in what we call our guest of owners. As we delve deeper into that with technology, we're able to kind of see where we've got, and once again, it's a pretty small subset of the overall ownership group, but the reservations they're booking are disproportionate, right, to what you would normally see. We're going to put all the procedures in place. If we can reduce that, that makes more inventory available, more generally for our owners to use to go on vacation. Okay. All right. Taking maybe a bigger step back, but on a similar topic, when we look at some of your peers' reports, it was not any sort of surprise that new owner sales have been a bit weaker and repeat has been stronger, which is something that I think kind of happens when you have a bit of a softer leisure macro backdrop. I think we are under the impression that the levers that you can pull to sell to owners are sort of there for you. Is it, are you trying to tell us essentially that you did not have the inventory available to make that pivot throughout this sort of maybe tougher-than-expected year? When you talk about what you can do to change, and you said a few things, how much of those are super short-term? How much of those take longer time? I mean, you mentioned retaining talent and things like that, where you do not actually get the flexibility and maneuverability until 2026. Yeah. Locked in there. I'm not sure I got all the questions you're looking for. Let me try here. Yeah. As you know, we run a 90% year-round occupancy at our system-wide resort. So we run a high occupancy. We talked about the commercial rental activity. That's just a swap out of getting more owners versus renters and getting owners happier there. The near-term levers, which we started to do more in the second quarter, and we really ramped it up in the third quarter, are incentives. The Marriott Bonvoy program p oints to incent owners for short-term bookings, where I think places like Orlando or other bigger markets, where we do have some near-term availability to get owners to arrive within two months. Those end up being above-average VPGs for the owners that were able to tour there. That's one of the near-term initiatives that we've been focused on here to improve. I think when you talk about the commercial rental activity, that'll help more over time. That's going to take some time to ramp up here over the next couple of quarters. Okay. Our next question is from David Katz with Jefferies. Good morning, everyone. Pardon the background noise. It is what it is. What I want us to get at is, I think our understanding is that this is a Salesforce-driven business, right? That's at the heart of it. Can you just talk about sort of how the Salesforce is sort of being run today? Where was it 6 months to 12 months ago? And how should we think about it 6 months to 12 months from now? Unless I'm wrong, and I invite you to correct me, that seems to be kind of a critical piece of all of this and where the performance ultimately lands. Thanks. Yeah. Yeah. In terms of managing our on-site Salesforce, I think the bigger changes and some of the things we've talked about is we've leaned in on training more recently to train, especially our newer sales folks. Some of the things I mentioned earlier, in certain highly competitive timeshare markets, you do see that seem to have more turnover, people moving around. That's where, as we talked about, adjusting our comp programs to focus on not only retaining but also getting really good new talent. That's been a focus here. I think I talked about earlier, when you do have turnover and you bring in maybe a non-experienced timeshare exec, there's a bit of a ramp-up on getting their VPGs up. Everything we can do to retain the best talent and recruit in the best talent, that's the focus. There's no w holesale change overall other than really focusing on the talent. You are right. The Salesforce, you got somebody who can do a $6,000 or $7,000 VPG on average versus a $4,000. That is a big difference. Those higher VPGs flow through the bottom line. As we really focus in on this, this should help drive higher VPGs going forward. If I may follow that up, and if it was in there and I missed it, I apologize, but have there been some sort of departures in leadership or management within the Salesforce of the recent past? Are any changes worth noting? There is always normal turnover, David. I think in certain markets, when you get down to the frontline sales execs. The highly competitive markets, like I said, think Orlando, maybe to some extent Vegas, those types of things. There is a lot of people looking for talent on the sales side. That is where in a few of the markets, we have seen some higher turnover more recently of our better sales folks. David, when you think about the comments that John made in the script about Maui, some of this is sales-related. We are still recovering from the wildfires. As you think about sales execs that had to move an hour and a half or two hours away because they lost their home and there was no housing, they did the commute for a while. Then, more recently, over the last six months or so, have found other opportunities closer to home. It is a tough commute to make that drive every day. That did impact us a little bit in Maui. That is not necessarily fixable overnight. That is something that is related, but specific to Maui. Understood. Thank you. Our next question is from Sean Kelly with Bank of America. Hi, good afternoon. Thanks for taking my question. A lot of ground's been covered, but I did want to go back to the commercial piece that you've been talking about throughout. I just want to make sure I understand what's happening here, but just to be clear, are people basically arbitraging the point system to some degree and either kind of rent or re-renting that on third-party websites? Is that what's really going on? What's your ability today, as we sit here, to kind of track and control that? What systems do you use or how familiar are you with this? It would seem like you should be pretty aware of this. I think for many of us, this is either the first or maybe second time we've ever heard of this. Thanks. Yeah. No. I think the way you described it, yes. At a lot of our resorts, given the markets they're in. You can rent those weeks for more than, call it, your annual maintenance fees, right? If that's what you're talking about, arbitrage. Yes, you can make money, if you will, just on your annual fees. As I mentioned, owners in the normal course are allowed to do rental activity. It's really where—this is where, yes, we're tracking in the systems, we're identifying unusual high bookings by a smaller number, and then doing the work to make sure that this is commercial and shutting those down. It's a constant. Just because you shut one down, there could be others. We're going to continue to look at it and do the best we can to make people adhere to the rules and stop the commercial rental activity. Got it. Thanks. Just sort of one super high-level question would be, going back to the core business, just on the VOI sales. Just big picture, obviously, the trend line's a little different than what we're hearing from other operators in this space. In your own estimation, how much of this is macro and how much of this is idiosyncratic to your portfolio, be it some of the just continued headwinds in Maui or the Salesforce thing? I think we're all still struggling a little bit with trying to kind of balance what's been a bifurcated consumer environment and that underlying trend line with what's kind of happening in VAC's business. Yeah. Yeah. I think if you want to start at the macro level, like I mentioned a little bit earlier, I do think in Orlando and in some of our resorts where the mix of income trends towards the lower end versus our higher-end resorts, things like that, we've probably seen some impact at that lower end of our household income. We do see a little bit of that, but I think some of the bigger things that we've talked about, which we talked about earlier in the year, which is owner arrivals and some of the commercial rental activity, is probably a little bit with us. We'll solve that and move that forward. Owner arrivals this year versus last year, and we talked about this earlier, last year benefited from more plus points and things that were burning off. The goal was to continue to drive owner arrivals and to offset that this year, like we talked about, notwithstanding owner arrivals being down. We've done a much better job of what we call capture rate, getting those owners that do show up, touring them at a higher percentage to really drive that. We got programs to continue doing that going forward. Yes, Maui, pre-fires was 10% of our contract sales. We're the largest, I think, in West Maui by far. It's a big part of our business versus our competitors. The recovery has been choppy over the last couple of years. Jason talked a little bit on the sales exec side, but I think we've talked about this before. We do a lot of packages into Maui. When the fires hit, we stopped selling packages, right? It just did not make sense, and people were not going to buy them. That pipeline started to get depleted. People that had packages started to come back over time, and then we started to sell packages again. We have seen lower package arrivals just because of that, but those are starting to ramp back up. Owners have started to come back to Maui, but they are being respectful as well to the messaging that has come out of Maui over the last couple of years. That one is probably specific to us. Yeah. I I think high level is you look at our competitors too. They are in a different spot, obviously, with acquisitions on the HDV side and how they are upgrading owners and selling into those products, T&L has launched new brands and new resorts. They're at a different life cycle a little bit here in the near term. I think that's offsetting for them any headwinds. They've got some good things that they're selling at the table. Thank you so much. Okay. Our next question is a follow-up from Patrick Scholes with Truist Securities. Thank you for taking my follow-up questions. I have some questions just specifically for Jason. Jason, any costs or expenses for next year that you'd like to point out when we're modeling that we initially should be aware of? Thank you. Yeah. John talked a little bit about unsold maintenance fees in response to one of the earlier questions. I think the other item that we've talked about in the past, and just to make sure everyone's on the same page, is higher product costs as we go forward. You did see an increase, as we expected, from Q2 to Q3 due to the mix of inventory. We think that'll go up again next year. We've talked about that in the past. We have the higher product costs coming from Khao Lak inventory in Asia that we're going to sell through next year, as well as the mix of inventory we expect to sell next year domestically. I would point to really those two. Obviously, we're working hard on the modernization. We did t ake some costs out of the organization in August, which are going to—we are about $20 million in total on an annual run rate basis spread throughout the P&L. Some of it will be in G&A. Some of it will be in other lines as we were—that was done in August. We'll get more guidance out later, but as we work through everything. Those would be the ones that I would call out. Okay. Jason, just specifically on the rental business, certainly we saw the profit down this year. I think earlier in this call, it was noted higher costs for next year. Is it the expectation that profit next year for the rental business will grow? Yeah, Patrick, we're still working through that. As we talked about, we have a good sense of the unsold maintenance fees going up. Generally, and depending on the markets in which that inventory exists, we don't always cover our unsold maintenance fees. As John talked about, some of the markets where we would, but in markets like Orlando in the desert where we do have a significant amount of inventory, the ADRs don't cover that. That's largely due to the reserves. That's common in the timeshare business. There could be some headwinds related to that higher unsold maintenance fees. That's what we're working through here as we kind of finalize the year in the budget. You did see in Q3 a pretty significant decline in the rental business from Q2. A lot of that is seasonality with lower ADRs in that market. Those markets have continued to struggle a little bit. We do expect that to pick up in Q4. That would be what I would highlight. Okay. Thank you. I look forward to the investor day. If you'd be so kind, just at the investor day, talk a little bit more in granularity about that last topic of expectations for rental business. I'm all set. Thank you. Ladies and gentlemen, we have reached the end of the question and answer session. I'd like to turn the call back to John Geller for closing remarks. Thank you, everyone, for joining our call today. As I said at the outset, we acknowledge that this has been a challenging year. We believe recent targeted changes address some of the root causes of our sales softness in recent periods, particularly in Orlando. These changes, combined with continued progress on the $150 million-$200 million in adjusted EBITDA benefit through our modernization program by the end of 2026, will position us to return to consistent profitable growth. On behalf of all of our associates, owners, members, and guests around the world, I want to thank you for your continued interest in our company and hope to see you on vacation soon. Thank you. This concludes today's conference. You may disconnect your lines at this time.