MAR Marriott International 10-Q 2026-09-30 section summaries

Marriott International (MAR) — Q3 and first nine months of 2026

Dollars in millions except per-share data. Q3 is the quarter ended September 30; 9M is the first nine months ended September 30.

Consolidated results

Q3 revenue and operating income each grew 8.0%; 9M revenue grew 6.3% and operating income 6.0%. Q3’s 25.1% effective tax rate was down from 26.8%, mainly due to release of a non-U.S. valuation allowance after legislation. The 9M rate rose to 25.5% from 23.3%, primarily because the prior-year period included a tax-reserve release.

Revenue categories

Reimbursed expenses were $5,067 versus $4,739 in Q3 and $15,103 versus $14,335 in 9M, largely offsetting cost reimbursement revenue. Operating expenses included owned, leased and other expense of $395 versus $350 in Q3 and $1,189 versus $1,045 in 9M; depreciation, amortization and other of $55 versus $50 and $224 versus $154; and G&A of $214 versus $210 and $653 versus $629. The 9M depreciation line included a $68 impairment on a hotel sold in May and a $6 impairment on another hotel classified as held for sale in September. Restructuring and merger-related recoveries were nil versus $40 in Q3 and $6 versus $31 in 9M.

Segment performance

EMEA’s Q3 growth contrasted with 9M revenue of $1,779 versus $1,782 and profit of $382 versus $389. Greater China’s 9M profit was $150 versus $142, while APEC’s was $206 versus $219, despite their Q3 profit increases.

Unallocated revenue includes loyalty-program results, credit-card and timeshare-licensing fees, CALA and corporate items. Segment profit excludes corporate expenses, taxes, indirect G&A and certain restructuring and other items.

Cash flow and shareholder returns

The loyalty-program liability contributed $495 to operating cash flow, versus $301, while working-capital changes used $229 versus $345. Common shares outstanding declined from 265.9 million at December 31, 2025, to 258.4 million at September 30, 2026. Weighted-average basic shares were 260.6 million versus 271.8 million in Q3 and 263.5 million versus 274.3 million in 9M; diluted shares were 261.2 million versus 272.5 million and 264.2 million versus 275.0 million, respectively. Marriott repurchased $3,079 of treasury stock in 9M in the statement of equity and declared $559 of dividends; quarterly dividends per share were $0.67 in Q1 and $0.73 in each of Q2 and Q3. Ending cash, cash equivalents and restricted cash was $463 versus $694 a year earlier.

Balance sheet and financing

Identifiable intangible assets excluding goodwill totaled $10,554; goodwill plus identifiable intangibles totaled $19,437. Tangible equity, calculated as equity less goodwill and identifiable intangibles, was $(24,521). Total debt was $16,843, compared with $16,204. Q3 interest expense was $227 versus $206; 9M was $662 versus $601, and 9M cash interest paid was $455 versus $403. Senior notes’ fair value was $15,192 versus a carrying amount of $15,784 at September 30; at December 31, 2025, fair value was $13,836 versus carrying amount of $13,686.

Marriott issued $2,659 of long-term debt and repaid $1,208 in 9M. Issuances included $600 of 4.50% notes due 2033, $850 of 5.10% notes due 2038, $250 of 4.875% notes due 2029 and $1,000 of 5.65% notes due 2036. A September credit-facility amendment extended maturity to September 2031 and increased commitments to $5.0 billion, with an option to $5.5 billion, supporting commercial paper and general corporate needs.

Other developments and risks

Marriott sold a U.S. & Canada hotel in May after recording a $68 impairment and retained a long-term management agreement. A second hotel was classified as held for sale after a $6 impairment; at September 30, held-for-sale assets were $212 and related liabilities were $26, with sale and a long-term management agreement expected in Q4. Maximum potential guarantee fundings were $212, against a recorded liability of $97; $70 of operating-profit guarantees depended on properties opening or other events.

The guest loyalty liability rose $492 to $8,484 from $7,992 at December 31, primarily as points were earned; the increase was partly offset by $2,580 of 9M revenue recognized from amounts deferred at year-end. The credit-loss allowance increased to $217 from $212. Marriott considers losses from Starwood data-incident consumer litigation probable and has recorded an accrual it describes as not material; additional losses are reasonably possible but not estimable, and Canadian cases remain pending.

9M other comprehensive loss was $51, versus income of $390 in 2025, including foreign-currency translation adjustments of $(60) versus income of $414. Stock-based compensation expense was $53 versus $50 in Q3 and $154 versus $142 in 9M; unvested RSU/PSU deferred compensation costs were $227. 9M grants included 0.5 million RSUs and 0.1 million PSUs at a $345 weighted-average grant-date fair value; PSU awards depend on 2028 adjusted EBITDA and 2026–2028 relative shareholder return targets.

Business performance and demand

Marriott operates an asset-light global lodging franchise, management, licensing and operating business, with most revenue generated from fees rather than hotel ownership. Worldwide systemwide RevPAR increased 6.5% year over year (Y/Y) in Q3 2026, as average daily rate (ADR) rose 4.8% and occupancy increased 1.1 percentage points to 72.5%. For the first nine months (9M), RevPAR grew 4.8%, ADR increased 3.8%, and occupancy rose 0.6 points to 70.0%.

Middle East & Africa remained the main regional weakness: occupancy declined 5.0 points in Q3 and 8.3 points in 9M amid ongoing conflict and travel disruption. Marriott said the impact depends on the duration and extent of disruption to travel and economic activity.

System growth and pipeline

At September 30, 2026, Marriott had 10,241 properties and 1,833,801 rooms, increases of 520 properties (5%) and 80,079 rooms (5%) Y/Y; net room additions were approximately 53,900 in 9M. The system comprised 8,092 franchised/licensed/other properties (1,241,202 rooms), 1,952 managed (562,461 rooms), 50 owned/leased (13,340 rooms) and 147 residential properties (16,798 rooms).

The development pipeline exceeded 4,200 properties and 634,000 rooms; 44% (over 278,000 rooms) were under construction, and more than half of pipeline rooms were outside U.S. & Canada. Marriott expects 2026 net room growth toward the low end of its 4.5%–5.0% range.

Fees and segment results

Fee revenue, $ millions

For 9M, net fee revenue was $4,434 million, versus $3,927 million. Franchise-fee growth benefited from higher co-branded card fees (+$68 million in Q3; +$200 million in 9M) and higher revenue at franchised properties from RevPAR and room growth (+$36 million; +$88 million); 9M also included $26 million more residential branding fees. Management-fee growth reflected stronger RevPAR and profits at managed U.S. & Canada hotels.

Segment results, $ millions (Q3)

U.S. & Canada results reflected RevPAR, room growth and incentive fees; higher net fee revenue was partly offset by lower net cost-reimbursement revenue ($24 million lower in Q3; $133 million lower in 9M) and 9M impairment charges. Despite higher 9M net fee revenue, segment profit declined in EMEA ($382 million from $389 million) and APEC ($206 million from $219 million).

Costs, financing and taxes

Owned/leased/other revenue was $436 million in Q3, versus $420 million, while related expense rose to $395 million from $350 million, reducing net contribution to $41 million from $70 million. For 9M, the net contribution was $125 million, versus $177 million; higher costs included renovation-related spending and a $35 million increase under a third-party agreement.

Cost-reimbursement revenue was $5,080 million in Q3, versus $4,760 million, with reimbursed expenses of $5,067 million, versus $4,739 million. The net contribution was $13 million, versus $21 million. For 9M, reimbursement revenue of $14,982 million and expenses of $15,103 million produced a $121 million net cost, compared with $12 million net revenue a year earlier, mainly reflecting timing and higher centralized-program costs. Depreciation, amortization and other expense was $55 million in Q3, versus $50 million; its 9M increase to $224 million from $154 million was primarily due to impairment charges. G&A was $214 million, versus $210 million, reflecting higher compensation partly offset by lower litigation expense. Prior-year insurance recoveries related to the Starwood data incident affected the comparison of restructuring, merger-related recoveries and other.

Interest expense rose 10% Y/Y, to $227 million from $206 million in Q3 and $662 million from $601 million in 9M, primarily due to higher debt balances following Senior Notes issuance. At quarter-end, long-term debt carried a 4.7% weighted-average interest rate, a 5.9-year weighted-average maturity and an 80% fixed-rate share. In September, Marriott extended and increased its revolving credit facility to $5.0 billion, maturing September 23, 2031, with an option to increase commitments to $5.5 billion. Its maximum leverage covenant is 4.5x; Marriott reported compliance.

The tax provision was $266 million in Q3, unchanged Y/Y, and $754 million in 9M, versus $656 million. The 9M increase chiefly reflected prior-year reserve releases and higher pretax income, partly offset by current-year tax benefits. New multi-year JPMorgan Chase and American Express co-branded card agreements are expected to support future revenue, primarily cost-reimbursement revenue and then franchise fees. Marriott said it cannot reasonably estimate potential Data Security Incident costs beyond amounts recorded, but does not expect a long-term effect on its financial health.

Cash flow, capital allocation and liquidity

Cash, cash equivalents and restricted cash totaled $463 million at September 30, up $92 million from December 31, 2025. Major 9M cash sources included $1,451 million of net long-term debt issuance, $121 million of loan collections, $108 million from employee stock-plan share issuance and $96 million of dispositions, primarily the Q2 sale of a U.S. & Canada hotel. Uses included $3,081 million of share repurchases, $646 million of net commercial paper repayments, $559 million of dividends and $127 million of employee stock-based compensation withholding taxes.

Marriott repurchased 3.5 million shares for $1.3 billion in Q3; through October 28, repurchases totaled 9.6 million shares for $3.4 billion. Dividends declared in February, May and August were $0.67, $0.73 and $0.73 per share, respectively, and were paid in March, June and September. The company expects to continue returning cash through repurchases and dividends.

Full-year 2026 capital expenditures and other investments are expected to be approximately $1.250 billion–$1.350 billion, including contract acquisition costs, hotel renovations, loan advances and other investing activities, but excluding potentially significant property or brand acquisitions. Planned spending includes higher-than-usual technology transformation costs, most of which Marriott expects to be reimbursed over time.

The current assets/current liabilities ratio was 0.5:1.0 at quarter-end. Marriott cited significant borrowing capacity under its facility, capital-market access and operating cash generation as sufficient for liquidity needs over the next 12 months and the foreseeable future. Commercial paper issuance depends on market demand, but the company expects facility capacity and capital-market access to mitigate fluctuations; it reported that covenants should not constrain anticipated borrowing or liquidity needs. Public debt has no corresponding financial-ratio covenant. Borrowings under the facility and commercial paper are classified as long-term based on Marriott’s ability and intent to refinance them long-term. Marriott reported no material changes to the cash requirements disclosed in its 2025 Form 10-K or to critical accounting policies, methodologies or assumptions.

Market-risk exposure had not materially changed since December 31, 2025. For a detailed discussion, the filing refers readers to Part II, Item 7A of the company’s 2025 Form 10-K.

Disclosure Controls and Internal Control

For Q3 2026, Marriott’s CEO and CFO concluded that disclosure controls and procedures were effective, providing reasonable assurance that information required in SEC reports is recorded, processed, summarized, and reported on time and communicated to management.

No changes during the quarter materially affected, or were reasonably likely to materially affect, internal control over financial reporting. As Marriott continues its worldwide technology systems transformation, it is updating controls for affected systems and processes and will continue assessing their design and implementation.

Risk factors: The company reported no material changes to the risk factors disclosed in Part I, Item 1A of its 2025 Form 10-K.

During Q3 2026, no director or Section 16 officer adopted or terminated a Rule 10b5-1 trading plan or a non-Rule 10b5-1 trading arrangement. This section reports no financial metrics or other material business developments.