Hilton Grand Vacations Reports 28.3% Revenue Growth, Challenges in Profitability Amid Integration of Bluegreen Vacations

Hilton Grand Vacations Inc. (HGV) reported significant financial developments in its latest 10-Q filing for the quarter ending September 30, 2024. The company experienced a notable increase in total revenues, which reached $1,306 million for the three months ended September 30, 2024, up from $1,018 million in the same period of 2023, marking a 28.3% increase. For the nine months ended September 30, 2024, total revenues were $3,697 million, compared to $2,959 million in the prior year, reflecting a 24.9% increase.

The growth in revenue was primarily driven by a substantial rise in sales of Vacation Ownership Interests (VOIs), which totaled $550 million for the third quarter of 2024, up from $367 million in 2023. For the nine-month period, net sales of VOIs reached $1,459 million, compared to $1,040 million in the same period of 2023. The real estate sales and financing segment contributed significantly, with revenues of $814 million for the third quarter, an increase from $612 million in the previous year.

Despite the revenue growth, HGV's profitability faced challenges. Net income for the three months ended September 30, 2024, was $32 million, a decrease from $92 million in the same quarter of 2023. For the nine months, net income dropped to $34 million from $245 million in the prior year. This decline in net income was attributed to increased operating expenses, which rose to $1,142 million for the third quarter, compared to $838 million in 2023, and to acquisition-related costs stemming from the Bluegreen Vacations acquisition.

The company completed the acquisition of Bluegreen Vacations Holding Corporation on January 17, 2024, for approximately $1.6 billion. This acquisition has expanded HGV's property portfolio to around 200 properties globally. The integration of Bluegreen is expected to enhance HGV's operational capabilities, with rebranding plans for Bluegreen properties anticipated to begin in 2025.

Financially, HGV's total assets increased to $11,154 million as of September 30, 2024, up from $8,685 million at the end of 2023. However, total liabilities also rose significantly to $9,167 million, compared to $6,570 million at the end of 2023, largely due to increased debt, which reached $5,039 million. The company reported a decrease in total stockholders' equity to $1,845 million from $2,115 million at the end of 2023.

In terms of cash flow, net cash provided by operating activities for the nine months ended September 30, 2024, was $204 million, down from $312 million in the same period of 2023. Conversely, net cash provided by financing activities increased to $971 million, compared to a net cash outflow of $270 million in the prior year, reflecting the company's strategic financing maneuvers post-acquisition.

Overall, while Hilton Grand Vacations Inc. demonstrated strong revenue growth, the impact of increased expenses and the integration of Bluegreen Vacations has influenced its profitability and financial position.