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Choice Hotels International CHH Initial franchise fees — Contract with customer, liability

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Other financials

Income statement

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Revenue$440.8M+3.4%
Operating income$104.1M-16.4%
Net income$64.3M-21.3%
EPS (diluted)$1.41-19.4%

Balance sheet

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Cash & equivalents$42.8M-26.9%
Total debt$2.1B+4.7%
Total equity$142.2M+642%
Total assets$3.0B+12.2%

Cash flow

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Operating cash flow$90.5M-5.3%
CapEx$10.5M-65.3%
Free cash flow$80.1M+22.4%

Valuation

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Market cap$4.8B-16.0%
Enterprise value$6.86B-10.4%
P/E14.6×-4.0×
P/S-0.7×

Profitability

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Operating margin25.2%-4.9pp
Net margin20.3%+0.8pp
FCF margin9.5%-3.2pp

Returns & leverage

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Return on equity881%+705pp
Debt / equity14.8×
Current ratio0.9×0.0×

Where this comes from

Reported directly by Choice Hotels International in its filing.

Tagged under the XBRL concept us-gaap:ContractWithCustomerLiability.

The source filing: Choice Hotels International’s 10-K, filed February 19, 2026.

Filed
Feb 19, 2026, 12:55 PM EST
Fiscal year
FY2025
Accession
0001046311-26-000008

Deferred revenues from initial franchise fees are typically recognized over a ten-year period, unless the franchise agreement is terminated and the hotel exits the franchise system whereby the remaining deferred revenue amounts are recognized to revenue in the period of termination. As of December 31, 2025 and 2024, deferred revenues from initial franchise fees were $103.0 million and $111.2 million, respectively. Loyalty points are typically redeemed within three years of issuance. As of December 31, 2025 and 2024, deferred revenues from the loyalty program were $114.9 million and $110.4 million, respectively.

Item 8.Financial Statements and Supplementary Data

FAQ

What is Choice Hotels International's initial franchise fees — contract with customer, liability?
Choice Hotels International (CHH) reported initial franchise fees — contract with customer, liability of $103M in Q4 2025.
How has Choice Hotels International's initial franchise fees — contract with customer, liability changed year-over-year?
Choice Hotels International's initial franchise fees — contract with customer, liability decreased by 7.4% year-over-year, from $111.2M to $103M.
What does initial franchise fees — contract with customer, liability mean?
This metric represents the deferred revenue liability associated with initial franchise and relicensing fees that have been collected but not yet recognized as income. It reflects the portion of upfront payments that will be amortized over the term of the franchise agreement as performance obligations are satisfied. Monitoring this balance provides insight into the pipeline of future revenue recognition and the company's long-term contractual obligations to its franchisees.

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