Revenue: As of FY2026 Q1, the actual value is USD 364.45 M.EPS: As of FY2026 Q1, the actual value is USD -0.91, missing the estimate of USD -0.365.EBIT: As of FY2026 Q1, the actual value is USD 94.73 M.<h3>Segmented Financial Metrics</h3><h4>Net Lease Segment</h4><ul><li>Revenue: Rental income was $99,876 thousand for the three months ended March 31, 2026, a decrease of -0.3% compared to $100,216 thousand for the same period in 2025. This decrease was primarily due to lower rental income from credit losses (-$2,000 thousand) and property sales (-$248 thousand), partially offset by acquisitions (+$1,908 thousand).</li><li>Operating Expenses: Net lease operating expenses increased by 32.2% to $7,440 thousand for the three months ended March 31, 2026, up from $5,628 thousand in 2025. This was mainly due to acquisition activity (+$1,382 thousand), increased property management fees (+$684 thousand), and other operating expenses (+$148 thousand), partially offset by property sales (-$402 thousand).</li><li>Depreciation and Amortization: Depreciation and amortization for net lease properties decreased by -6.8% to $32,937 thousand in Q1 2026 from $35,357 thousand in Q1 2025, mainly due to fully depreciated assets and property sales, partially offset by capital expenditures.</li><li>Interest Expense: Interest expense for the net lease segment was $15,792 thousand in Q1 2026, compared to $12,126 thousand in Q1 2025.</li><li>Segment Profit: The net lease segment reported a profit of $34,719 thousand in Q1 2026, down from $47,595 thousand in Q1 2025.</li><li>Capital Expenditures: Capital expenditures for net lease properties were $580 thousand in Q1 2026, a decrease from $748 thousand in Q1 2025.</li><li>Occupancy: The net lease properties were 96.6% occupied as of March 31, 2026, with 26 properties available for lease.</li><li>Lease Renewals: During Q1 2026, lease renewals for 194,474 rentable square feet (18 properties) had weighted average rents 35.3% above prior rents, with an average lease term of 5.9 years.</li><li>New Leases: New leases for 24,802 rentable square feet (2 properties) had rents 146.8% above prior rents, with an average lease term of 10.1 years.</li><li>Rent Coverage: Net lease properties generated a rent coverage of 2.01x as of March 31, 2026, compared to 2.07x as of March 31, 2025.</li></ul><h4>Hotel Investments Segment</h4><ul><li>Revenue: Hotel operating revenues decreased by -21.0% to $264,575 thousand for the three months ended March 31, 2026, down from $334,963 thousand in 2025. This was primarily due to hotel sales since January 1, 2025 (-$84,440 thousand), partially offset by increases in occupancy and average rates at certain hotels (+$14,052 thousand).</li><li>Operating Expenses: Hotel operating expenses decreased by -20.7% to $242,644 thousand in Q1 2026 from $305,840 thousand in Q1 2025. This was mainly due to hotel sales since January 1, 2025 (-$82,018 thousand), partially offset by increases in insurance expense (+$4,060 thousand), room expenses (+$2,801 thousand), food and beverage expenses (+$758 thousand), and other operating expenses (+$11,203 thousand).</li><li>Depreciation and Amortization: Depreciation and amortization for hotels decreased by -20.2% to $42,906 thousand in Q1 2026 from $53,743 thousand in Q1 2025, primarily due to hotel sales and fully depreciated assets, partially offset by capital expenditures.</li><li>Segment Loss: The hotel investments segment reported a loss of -$41,171 thousand in Q1 2026, compared to a loss of -$61,318 thousand in Q1 2025.</li><li>Capital Expenditures: Capital expenditures for hotels were $20,350 thousand in Q1 2026, a significant decrease from $45,121 thousand in Q1 2025.</li><li>Hotel Performance (Comparable Hotels):<ul><li>Occupancy: Increased by 3.6 percentage points to 60.9% in Q1 2026 from 57.3% in Q1 2025.</li><li>ADR: Increased by 0.3% to $170.50 in Q1 2026 from $169.92 in Q1 2025.</li><li>RevPAR: Increased by 6.7% to $103.90 in Q1 2026 from $97.35 in Q1 2025.</li></ul></li><li>FF&amp;E Reserves: $786 thousand was deposited into FF&amp;E reserves in Q1 2026, and $1,845 thousand was spent from these accounts. As of March 31, 2026, $5,704 thousand was on deposit as restricted cash.</li></ul><h4>Overall Financial Metrics</h4><ul><li>Net Loss: Service Properties Trust reported a net loss of -$151,178 thousand for the three months ended March 31, 2026, compared to a net loss of -$116,435 thousand for the same period in 2025, an increase of 29.8%.</li><li>FFO: FFO was -$47,327 thousand for Q1 2026, compared to $10,186 thousand for Q1 2025.</li><li>Normalized FFO: Normalized FFO was $7,445 thousand for Q1 2026, compared to $10,836 thousand for Q1 2025.</li><li>Net Cash Provided by Operating Activities: Net cash provided by operating activities was $35,578 thousand in Q1 2026, down from $38,200 thousand in Q1 2025, primarily due to lower returns from the hotel portfolio.</li><li>Net Cash Used in Investing Activities: Net cash used in investing activities increased to -$50,472 thousand in Q1 2026 from -$42,192 thousand in Q1 2025, mainly due to lower net proceeds from real estate sales and higher acquisitions, partially offset by decreased real estate improvements.</li><li>Net Cash Used in Financing Activities: Net cash used in financing activities increased significantly to -$317,836 thousand in Q1 2026 from -$59,300 thousand in Q1 2025, primarily due to higher net debt repayments, partially offset by debt issuances.</li><li>Loss on Asset Impairment: A loss of -$28,095 thousand was recorded in Q1 2026, down from -$37,067 thousand in Q1 2025.</li><li>Loss on Early Extinguishment of Debt: A loss of -$51,871 thousand was recorded in Q1 2026, with no comparable loss in Q1 2025.</li><li>Total Assets: Total assets decreased from $6,491,580 thousand as of December 31, 2025, to $6,081,625 thousand as of March 31, 2026.</li><li>Total Liabilities: Total liabilities decreased from $5,845,456 thousand as of December 31, 2025, to $5,587,889 thousand as of March 31, 2026.</li></ul><h3>Future Outlook and Strategy</h3>Service Properties Trust’s strategy focuses on reducing debt, increasing its service-focused retail net lease property portfolio, and improving performance of retained hotels. The company expects to fund $100,000 thousand to $120,000 thousand for capital improvements during the last nine months of 2026 using cash on hand. Pending property dispositions, including 15 hotels and 7 net lease properties, are expected to generate net sales proceeds for general business purposes and debt repayment.

Service Properties Trust | 10-Q: FY2026 Q1 Revenue: USD 364.45 M