--- title: "Service Properties Trust | 10-Q: FY2026 Q1 Revenue: USD 364.45 M" type: "News" locale: "en" url: "https://longbridge.com/en/news/285435689.md" datetime: "2026-05-06T20:43:11.000Z" locales: - [zh-CN](https://longbridge.com/zh-CN/news/285435689.md) - [en](https://longbridge.com/en/news/285435689.md) - [zh-HK](https://longbridge.com/zh-HK/news/285435689.md) --- # Service Properties Trust | 10-Q: FY2026 Q1 Revenue: USD 364.45 M 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. ### Segmented Financial Metrics #### Net Lease Segment - **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). - **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). - **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. - **Interest Expense**: Interest expense for the net lease segment was $15,792 thousand in Q1 2026, compared to $12,126 thousand in Q1 2025. - **Segment Profit**: The net lease segment reported a profit of $34,719 thousand in Q1 2026, down from $47,595 thousand in Q1 2025. - **Capital Expenditures**: Capital expenditures for net lease properties were $580 thousand in Q1 2026, a decrease from $748 thousand in Q1 2025. - **Occupancy**: The net lease properties were 96.6% occupied as of March 31, 2026, with 26 properties available for lease. - **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. - **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. - **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. #### Hotel Investments Segment - **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). - **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). - **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. - **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. - **Capital Expenditures**: Capital expenditures for hotels were $20,350 thousand in Q1 2026, a significant decrease from $45,121 thousand in Q1 2025. - **Hotel Performance (Comparable Hotels)**: - **Occupancy**: Increased by 3.6 percentage points to 60.9% in Q1 2026 from 57.3% in Q1 2025. - **ADR**: Increased by 0.3% to $170.50 in Q1 2026 from $169.92 in Q1 2025. - **RevPAR**: Increased by 6.7% to $103.90 in Q1 2026 from $97.35 in Q1 2025. - **FF&E Reserves**: $786 thousand was deposited into FF&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. #### Overall Financial Metrics - **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%. - **FFO**: FFO was -$47,327 thousand for Q1 2026, compared to $10,186 thousand for Q1 2025. - **Normalized FFO**: Normalized FFO was $7,445 thousand for Q1 2026, compared to $10,836 thousand for Q1 2025. - **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. - **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. - **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. - **Loss on Asset Impairment**: A loss of -$28,095 thousand was recorded in Q1 2026, down from -$37,067 thousand in Q1 2025. - **Loss on Early Extinguishment of Debt**: A loss of -$51,871 thousand was recorded in Q1 2026, with no comparable loss in Q1 2025. - **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. - **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. ### Future Outlook and Strategy 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. ### Related Stocks - [SVC.US](https://longbridge.com/en/quote/SVC.US.md) ## Related News & Research - [Service Properties Trust presents at Nareit REITweek 2026 investor conference](https://longbridge.com/en/news/287215692.md) - [Service Properties Trust (NASDAQ:SVC) Releases Earnings Results, Misses Estimates By $0.55 EPS](https://longbridge.com/en/news/285437381.md) - [Service Properties Trust prices $500M stock at $1.20 per share](https://longbridge.com/en/news/281313477.md) - [ZAWYA: Service My Car highlights growing shift towards tech-driven car maintenance solutions in the UAE](https://longbridge.com/en/news/287186546.md) - [Trøndelag Sparebank sets 5.83% coupon for NO0012998576 FRN bond](https://longbridge.com/en/news/287213014.md)