Service Properties Trust announced its financial results for the second quarter ended June 30, 2025, reporting funds from operations (FFO) of $57.6 million, or 35 cents per share. The company's FFO and revenues for the quarter surpassed analyst estimates.
Total revenues for Q2 2025 were $503.4 million, a 2.0% decrease from $512.9 million in the prior year quarter, driven by a 2.0% decline in hotel operating revenues to $404.4 million. Rental income from the net lease segment also saw a modest 1.4% decrease to $99.0 million, while hotel-level EBITDA declined to $73.0 million from $82.3 million in Q2 2024 due to elevated labor costs and renovation impacts.
SVC's consolidated income available for debt service to debt service ratio was 1.49x, just below the 1.50x covenant requirement for incurring additional debt. In response, SVC proactively drew down its entire $650 million revolving credit facility on July 1, 2025, resulting in approximately $670 million of cash on hand. The company also amended its credit facility in February 2025, reducing the minimum fixed charge coverage ratio covenant from 1.50x to 1.30x, demonstrating proactive financial management. For Q3 2025, SVC projects RevPAR of $98 to $101 and adjusted hotel EBITDA of $54 million to $58 million.
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