Hilton Grand Vacations Inc

Good morning and welcome to the Hilton Grand Vacations third quarter 2026 earnings conference call. At this time, all participants have been placed in a listen only mode and the floor will be open for your questions following the presentation. If you would like to ask a question, please press star one on your telephone to enter the queue. If at any point your question has been answered, you may remove yourself from the queue by pressing star two. If you should require operator assistance, please press star zero. If using a speakerphone, please lift your handset to allow the signal to reach our equipment. Please limit yourself to one question and one follow-up to allow the opportunity for everyone to ask questions. You may then re-enter the queue to ask additional questions. I would now like to turn the call over to Mark Melnyk, Senior Vice President of Investor Relations. Please go ahead, sir.

Thank you, operator, and welcome to the Hilton Grand Vacations third quarter 2026 earnings call. Our discussions this morning will include forward-looking statements. Actual results could differ materially from those indicated by these forward-looking statements, and these statements are effective only as of today. We undertake no obligation to publicly update or revise these statements. For discussion of some of the factors that could cause actual results to differ, please see the risk factors section of our SEC filings. Our reported results for all periods reflect accounting rules under ASC 606, which we adopted in 2018. Under ASC 606, we're required to defer certain revenues and expenses related to sales made in the period when a project is under construction and then hold off on recognizing those revenues and expenses until the period when construction is completed. The aggregate of these potentially overlapping deferrals and recognitions from various projects in any given period are known as net deferrals and recognitions. Please note that in our prepared remarks today, we'll only be referring to metrics that remove the impact of net deferrals and recognitions, which more accurately reflects the cash flow dynamics of our financial performance during the period. To simplify our discussion today, we've uploaded slides to our investor relations site showing these metrics, which we'll be referring to on today's call. I'd urge you to view these slides on our website at investors.hgv.com. During the third quarter of 2026, we obtained a certificate of occupancy for our Kahaku project. The receipt of that certificate triggered the recognition of previously deferred revenues and direct expenses associated with prior sales of the project's inventory, resulting in a net recognition for the period. On slide two of these materials, you can see the recognition adjusted metrics that we'll be referring to on today's call. Reported results for this quarter reflect $536 million of net contract sales recognitions under AFC 606, which had the effect of increasing reported gap revenue. Also shown on slide two, we recognize a net $240 million of direct expenses associated with these revenues. Adjusting for both of these items would decrease the adjusted EBITDA to shareholders reported in our press release by a net of $296 million, to $313 million. With that, let me turn the call over to our CEO, Mark Wang. Mark?

Good morning, everyone, and thank you for joining our third quarter earnings call. This was a challenging quarter for us, and our results in Q3 fell short of our expectations and outlook provided on our last call. Although the underlying business model, recurring revenue streams, and cash flow generation of the business remained resilient, The 11% reduction in contract sales was below our forecast for a mid-single-digit decline. While we implemented a series of initiatives at the end of Q2 to address sales execution, primarily at our blue-green locations, and we expected those efforts would take time to drive significant improvement, trends at both our legacy and blue-green brands weakened further in August before gaining traction across the business late in the quarter. To be clear, we're not satisfied with this outcome and we're moving with an increased sense of urgency to return to sales growth and deliver long-term shareholder value. The contract sales decline in the quarter was driven by sales execution challenges, particularly our closing rates. We've identified key drivers of that conversion rate softness, namely the need for incentive alignment to drive higher transactions, along with a more dynamic headcount environment in certain markets requiring enhanced recruiting and retention programs. And while they have taken longer to ramp, our initiatives are designed to address those underlying drivers. From a macro perspective, while travel intentions remain resilient, we believe that sustained elevated pressure on the consumer are having marginally more impact on the purchase decisions versus a quarter ago. We also faced final difficult comparisons of 17% from our successful Blue Green Max launch period this quarter, although those were headwinds that we anticipated and not an incremental driver of softness. Importantly, we don't see this as an issue of willingness to travel. Tour flow for the quarter was consistent with our expectations as it's been all year. And our arrivals on the books, occupancy levels, and package pipelines remain favorable. But we didn't convert those tours into transactions at the level we should have. We continue to have the strongest value proposition, product, and inventory that we've ever had, and we need to execute more consistently across the system to take advantage of those strengths. That said, in light of our Q3 results, we're reducing our guidance to reflect a more realistic view on the timing and ramp of the near-term sales and EBITDA growth. Last quarter, we discussed targeted initiatives around incentive alignment, training, and recruiting, along with organizational initiatives with the goal of improving our execution and conversion rates. Here are some of the direct actions we took. In Blue Green Orlando property, we put a new leader in place, rebuilt the team, and returned to growth in September. In Blue Green's Myrtle Beach property, we also made leadership changes that stabilized the business and while it will take time to ramp, we're encouraged by their progress. And we tested updated incentive plans that generated a positive outcome and we're in the process of delivering them to other key markets based on these early results. As I mentioned earlier, the cadence of the quarter demonstrated some early signs of positive traction from those initiatives. August marked a low point for sales and in September we narrowed the gap considerably With several of our key sales centers returning to positive growth for the month, demonstrating a trend of measured improvement that continued into October. And controlling for the effect of those tougher year-over-year comparisons, contract sales growth trends improved materially in each month of the quarter on a two-year stacked basis. So while the monthly trends give us confidence that we're on the right track, our results make it clear that we still have more work to do. As a result, we're expediting our pace of rollout across our brands. We made further incentive changes to enhance alignment across the business, ensuring we're positioned competitively in key markets. We brought additional sales talent into the organization through productive recruiting efforts including a mix of former HEV team members and new employees. And we've seen further improvements in October as a result. And in a separate release this morning, we announced a change to our sales leadership. Mike has a track record of driving growth throughout his career, including 15 years of consistent execution at HEV across multiple markets and brands, and I'm confident He's the right leader to renew our sales momentum and oversee our next phase of growth. In addition, we have an opportunity to dedicate additional energy toward improving conversions in our new buyer channel, which is critical to the long-term value creation in our industry. First, our robust tour flow and diversity of lead channels provides us with the opportunity to further focus our resources on channels with the highest profitability, as well as the customers with the highest propensity to close. By improving our channel efficiencies, we'll generate higher transactions and higher profit contribution from a smaller set of tours. Second, we've identified areas where we have the ability to provide additional value and enhance accessibility to certain segments of our customer base with new products and price tiers further improving our value proposition in driving transactions, which will enable us to continue to adapt our product and our approach to meet the customers where they are and with a product that fits their needs while preserving their future upgrade path as owners. These additional actions are about making every tour count, driving improved conversion rates and increasing the transactions that are critical to growing embedded value as the majority of a member's lifetime value is generated within the first five to 10 years of ownership. That embedded value extends beyond our real estate business, fueling our recurring club and resort and financing business that represents well over half of our segment profit. For the quarter, our financing business revenues grew 16% while expanding margins and our Clever Resort business continues to demonstrate consistent growth while producing our highest margins. That performance has been aided by the 20% growth of our H2B Max member base, which has now surpassed 300,000 members. These are high margin, predictable earning streams anchored by our Max membership base, and they have supported EBITDA and cash flow generation despite the pressure on contract sales. and they demonstrate the resilience of our operating model as a whole, supporting our robust cash flow generation and capital returns. This quarter, we repurchased another 2.4 million shares for 110 million as part of our ongoing commitment to returning excess cash flow to shareholders and we continue to expect to meet our target of returning 600 million for the full year. So in summary, We're taking an honest assessment of our performance and we're determined to improve our execution. While we're optimistic about early signs of progress from our initiatives, today's guidance reset presents a more conservative and achievable view of how quickly these changes will translate into improved results. Our confidence in the business model, products, inventory position, and the quality of our brand and level of service remains unwavering. And our current priorities are clear. Improve our sales execution by increasing our conversion rates and return the business to consistent and profitable growth. With that, I'll turn it to Dan for more details on the numbers. Dan?