Hilton has successfully expanded its gross margin to 40.2% in 2026Q1, reflecting a strategic shift toward high-margin management and franchise fee revenue streams.
| Metric | TTM | Dec'25 | Dec'24 | Dec'23 | Dec'22 | Dec'21 | Dec'20 | Dec'19 | Dec'18 | Dec'17 | Dec'16 | Dec'15 | Dec'14 | Dec'13 | Dec'12 | Dec'11 |
|---|
| Sales/Revenue | 12.28B | 12.04B | 11.17B | 10.23B | 8.77B | 5.79B | 4.31B | 9.45B | 8.91B | 3.4B | 6.58B | 3.12B | 10.5B | 9.73B | 9.28B | 8.78B |
| Revenue Growth % | 8.72% | 7.74% | 9.17% | 16.66% | 51.57% | 34.39% | -54.43% | 6.13% | 161.63% | -48.24% | 110.63% | -70.27% | 7.88% | 4.95% | 5.61% | - |
| Cost of Goods Sold | 6.84B | 7.08B | 8.11B | 7.3B | 6.08B | 4.13B | 3.72B | 7.02B | 6.66B | 6.17B | 4.89B | 1.41B | 7.71B | 7.28B | 7.11B | 6.81B |
| COGS % of Revenue | - | 58.85% | 72.59% | 71.37% | 69.25% | 71.41% | 86.46% | 74.24% | 74.72% | 181.2% | 74.33% | 45.29% | 73.41% | 74.8% | 76.67% | 77.51% |
| Gross Profit | 5.44B | 4.95B | 3.06B | 2.93B | 2.7B | 1.66B | 583M | 2.44B | 2.25B | 1.96B | 1.69B | 1.71B | 2.79B | 2.45B | 2.16B | 1.98B |
| Gross Margin % | 44.29% | 41.15% | 27.41% | 28.63% | 30.75% | 28.59% | 13.54% | 25.76% | 25.28% | 57.67% | 25.67% | 54.71% | 26.59% | 25.2% | 23.33% | 22.49% |
| Gross Profit Growth % | - | 61.74% | 4.54% | 8.6% | 63.02% | 183.88% | -76.06% | 8.17% | 14.67% | 16.29% | -1.17% | -38.83% | 13.82% | 13.35% | 9.57% | - |
| Operating Expenses | 2.6B | 2.26B | 693M | 705M | 604M | 645M | 1B | 778M | 819M | 831M | 820M | 808M | 1.12B | 1.35B | 1.06B | 1B |
| OpEx % of Revenue | - | 18.78% | 6.2% | 6.89% | 6.88% | 11.14% | 23.24% | 8.23% | 9.2% | 24.41% | 12.47% | 25.88% | 10.66% | 13.88% | 11.47% | 11.39% |
| Selling, General & Admin | 402M | 393M | 415M | 408M | 382M | 405M | 311M | 441M | 443M | 449M | 401M | 537M | 491M | 748M | 460M | 416M |
| SG&A % of Revenue | - | 3.26% | 3.71% | 3.99% | 4.35% | 7% | 7.22% | 4.67% | 4.97% | 13.19% | 6.1% | 17.2% | 4.68% | 7.68% | 4.96% | 4.74% |
| Research & Development | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| R&D % of Revenue | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - |
| Other Operating Expenses | 4M | 1.87B | 278M | 297M | 222M | 240M | 690M | 337M | 376M | 382M | 419M | 271M | 628M | 603M | 604M | 584M |
| Operating Income | 2.83B | 2.69B | 2.37B | 2.23B | 2.09B | 1.01B | -418M | 1.66B | 1.43B | 1.13B | 868M | 900M | 1.67B | 1.1B | 1.1B | 975M |
| Operating Margin % | 23.08% | 22.37% | 21.21% | 21.74% | 23.87% | 17.45% | -9.71% | 17.53% | 16.08% | 33.26% | 13.2% | 28.83% | 15.93% | 11.32% | 11.86% | 11.1% |
| Operating Income Growth % | - | 13.63% | 6.52% | 6.26% | 107.33% | 341.63% | -125.23% | 15.71% | 26.5% | 30.41% | -3.56% | -46.2% | 51.81% | 0.18% | 12.82% | - |
| EBITDA | 3.02B | 2.87B | 2.52B | 2.37B | 2.26B | 1.2B | -87M | 2B | 1.76B | 1.47B | 1.54B | 1.59B | 2.3B | 1.71B | 1.65B | 1.54B |
| EBITDA Margin % | 24.6% | 23.84% | 22.52% | 23.18% | 25.72% | 20.7% | -2.02% | 21.19% | 19.73% | 43.13% | 23.43% | 50.99% | 21.91% | 17.51% | 17.79% | 17.52% |
| EBITDA Growth % | 19.69% | 14.07% | 6.07% | 5.14% | 88.31% | 1477.01% | -104.34% | 14% | 19.69% | -4.74% | -3.2% | -30.81% | 34.96% | 3.33% | 7.21% | - |
| D&A (Non-Cash Add-back) | 186M | 177M | 146M | 147M | 162M | 188M | 331M | 346M | 325M | 336M | 673M | 692M | 628M | 603M | 550M | 564M |
| EBIT | 2.82B | 2.69B | 2.35B | 2.16B | 2.15B | 957M | -495M | 1.66B | 1.45B | 1.1B | 874M | 910M | 1.76B | 1.32B | 1.14B | 839M |
| Net Interest Income | -637M | -620M | -569M | -464M | -415M | -397M | -429M | -414M | -371M | -351M | -330M | -377M | -608M | -611M | -554M | -632M |
| Interest Income | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 12M | 19M | 10M | 9M | 15M | 11M |
| Interest Expense | 637M | 620M | 569M | 464M | 415M | 397M | 429M | 414M | 371M | 351M | 334M | 377M | 618M | 620M | 569M | 643M |
| Other Income/Expense | -655M | -621M | -587M | -533M | -360M | -450M | -506M | -413M | -354M | -379M | -328M | -367M | -526M | -404M | -527M | -779M |
| Pretax Income | 2.18B | 2.07B | 1.78B | 1.69B | 1.73B | 560M | -924M | 1.24B | 1.08B | 753M | 540M | 533M | 1.15B | 698M | 573M | 196M |
| Pretax Margin % | 17.75% | 17.21% | 15.96% | 16.53% | 19.77% | 9.68% | -21.45% | 13.16% | 12.1% | 22.12% | 8.21% | 17.07% | 10.92% | 7.17% | 6.18% | 2.23% |
| Income Tax | 640M | 615M | 244M | 541M | 477M | 153M | -204M | 358M | 309M | -336M | 557M | -348M | 465M | 238M | 214M | -59M |
| Effective Tax Rate % | 29.36% | 29.68% | 13.68% | 31.97% | 27.51% | 27.32% | 22.08% | 28.78% | 28.66% | -44.62% | 103.15% | -65.29% | 40.54% | 34.1% | 37.35% | -30.1% |
| Net Income | 1.54B | 1.46B | 1.53B | 1.14B | 1.25B | 410M | -715M | 881M | 764M | 1.08B | 338M | 1.4B | 673M | 415M | 352M | 253M |
| Net Margin % | 12.56% | 12.1% | 13.74% | 11.15% | 14.31% | 7.08% | -16.6% | 9.32% | 8.58% | 31.84% | 5.14% | 44.97% | 6.41% | 4.26% | 3.79% | 2.88% |
| Net Income Growth % | -1.78% | -5.08% | 34.53% | -9.08% | 206.1% | 157.34% | -181.16% | 15.31% | -29.52% | 220.71% | -75.93% | 108.62% | 62.17% | 17.9% | 39.13% | - |
| Net Income (Continuing) | 1.54B | 1.46B | 1.54B | 1.15B | 1.26B | 407M | -720M | 886M | 769M | 1.09B | -17M | 881M | 682M | 460M | 359M | 255M |
| Discontinued Operations | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 371M | 535M | 0 | 0 | 0 | 0 |
| Minority Interest | 38M | 42M | 38M | 13M | 4M | 2M | 4M | 10M | 7M | 3M | -50M | -34M | -38M | -87M | -146M | -166M |
| EPS (Diluted) | 6.65 | 6.12 | 6.14 | 4.32 | 4.53 | 1.46 | -2.58 | 3.04 | 2.50 | 3.32 | 1.05 | 4.26 | 2.04 | 1.35 | 1.14 | 0.81 |
| EPS Growth % | 3.48% | -0.33% | 42.13% | -4.64% | 210.27% | 156.59% | -184.87% | 21.6% | -24.7% | 216.19% | -75.35% | 108.82% | 51.11% | 18.42% | 40.74% | - |
| EPS (Basic) | - | 6.18 | 6.20 | 4.35 | 4.56 | 1.47 | -2.60 | 3.07 | 2.53 | 3.34 | 1.06 | 4.26 | 2.04 | 1.35 | 1.14 | 0.81 |
| Diluted Shares Outstanding | 232M | 238M | 247.5M | 264M | 277M | 281M | 279M | 290M | 305M | 327M | 330.03M | 329.67M | 328.67M | 307.41M | 307M | 307M |
| Basic Shares Outstanding | 229M | 236M | 247.5M | 262M | 275M | 279M | 277M | 287M | 302M | 324M | 329.03M | 328.67M | 328.33M | 307.41M | 307M | 307M |
| Dividend Payout Ratio | - | 9.81% | 9.77% | 13.85% | 9.8% | - | - | 19.52% | 23.69% | 17.99% | 81.95% | 9.83% | - | - | - | - |
Pipeline conversion and labor inflation
As reported in recent financial statements, Hilton's top-line growth has remained resilient, posting a 9.0% year-over-year revenue increase in 2026Q1, which suggests that the company's asset-light model continues to capture demand despite broader macroeconomic headwinds impacting the global travel and lodging industry.
The revenue trajectory appears supported by steady unit growth, though investors should monitor whether the pace of expansion can be maintained if developer financing remains constrained. The consistency in quarterly revenue figures suggests that the core franchise and management fee streams provide a structural buffer against the volatility typically seen in the ownership segment.
Based on the provided income statement data, Hilton's gross margin reached 40.2% in 2026Q1, reflecting a significant improvement from the 23.5% reported in 2023Q4, which indicates that the company is successfully shifting its business mix toward higher-margin, asset-light franchise and management fee revenue streams.
This margin expansion appears to be a direct result of the company's strategic focus on reducing its ownership footprint in favor of recurring fee-based income. While the 2025Q4 anomaly in gross margin warrants further investigation, the underlying trend suggests that Hilton is effectively leveraging its brand scale to improve profitability without proportional increases in operational overhead.
According to the latest quarterly figures, Hilton's operating income of $678 million in 2026Q1 demonstrates strong operating leverage, as the company maintains tight control over SG&A expenses, which have remained relatively flat despite the continued expansion of the global room supply and brand portfolio.
The ability to scale operating income faster than revenue suggests that the corporate infrastructure is highly efficient and capable of absorbing additional units with minimal incremental cost. Investors should monitor whether this efficiency persists as the company integrates new, lower-price-point brands that may require different support structures.
As indicated by the income statement, Hilton's net income remains subject to fluctuations in stock-based compensation, which reached $45 million in 2026Q1, a factor that analysts must carefully adjust for when evaluating the true cash-generative capacity of the company's core management and franchise operations.
While EPS growth has shown volatility, the underlying earnings quality appears solid when stripping out non-operating items and accounting noise. However, the reliance on share repurchases to drive EPS growth warrants further investigation into whether management is prioritizing capital returns over long-term reinvestment in the loyalty ecosystem.
Based on an analysis of the income statement, short-term margin compression remains a risk if property-level labor and utility costs continue to rise, potentially forcing Hilton to offer fee concessions to third-party owners to maintain its development pipeline and prevent brand standard degradation.
The market's current valuation may be underestimating the sensitivity of the franchise model to owner-level profitability, particularly in the mid-scale segment. If the cost of capital remains elevated, the conversion of the pipeline into fee-generating assets may decelerate, challenging the growth narrative that currently supports the company's premium valuation.
Quick answers to the most common questions about buying HLT stock.
For fiscal year 2025, Hilton Worldwide Holdings Inc. (HLT) reported total revenue of $12.04B. This represents a 37.1% increase compared to $8.78B in 2011.
Hilton Worldwide Holdings Inc. (HLT) is profitable, generating $1.46B in net income for the fiscal year ending 2025 with a net profit margin of 12.1%.
Hilton Worldwide Holdings Inc. (HLT) reported an operating income of $2.69B, resulting in an operating profit margin of 22.4%. This margin reflects the operational efficiency of the business before interest and taxes.
Hilton Worldwide Holdings Inc. (HLT) generated $4.95B in gross profit for the year, representing a gross profit margin of 41.1%. This demonstrates the company's core pricing power and production efficiency.