Q2 FY2026
Filed Aug 17, 2026H World reported second-quarter revenue growth of 10.8%, expanded operating margin to 31.1%, raised full-year revenue growth guidance, and approved a US$2.5 billion three-year shareholder return plan.
Revenue, operating income, adjusted EBITDA and operating cash inflow increased, supported by HWC network expansion and higher M&F revenue contribution. HWI revenue and RevPAR declined year-over-year, while same-hotel HWC RevPAR also declined.
Key metrics
as reported| Metric | Value | q/q | y/y |
|---|---|---|---|
| Total revenueGAAP | RMB7.1 billion (US$1.1 billion) | 18.8% | 10.8% |
| Leased and owned hotels revenueGAAP | RMB3.2 billion (US$477 million) | 17.6% | -4.9% |
| Manachised and franchised hotels revenueGAAP | RMB3.6 billion (US$529 million) | 19.3% | 25.2% |
| Other revenueGAAP | RMB302 million (US$44 million) | – | – |
| Hotel operating costsGAAP | RMB4.0 billion (US$594 million) | – | 7.4% |
| Other operating costsGAAP | RMB24 million | – | – |
| Selling and marketing expensesGAAP | RMB337 million | – | – |
| General and administrative expensesGAAP | RMB691 million | – | – |
| Selling, General and Administrative expensesGAAP | RMB1.0 billion (US$152 million) | – | 6.1% |
| Pre-opening expensesGAAP | RMB18 million | – | – |
| Total operating costs and expensesGAAP | RMB5,100 million | – | – |
| Other operating income, netGAAP | RMB197 million (US$29 million) | – | – |
| Income from operationsGAAP | RMB2.2 billion (US$326 million) | – | 24.1% |
| Operating marginGAAP | 31.1% | – | – |
| Income tax expenseGAAP | RMB687 million (US$101 million) | – | – |
| Net incomeGAAP | RMB1,581 million (US$233 million) | – | – |
| Net income attributable to H World Group LimitedGAAP | RMB1.6 billion (US$232 million) | – | 2.1% |
| Diluted earnings per ADSGAAP | 5.00 | – | – |
| Basic earnings per ADSGAAP | 5.00 | – | – |
| Diluted earnings per shareGAAP | 0.49 | – | – |
| Basic earnings per shareGAAP | 0.50 | – | – |
| Adjusted net income attributable to H World Group Limitednon-GAAP | RMB1,712 million (US$252 million) | – | – |
| Adjusted diluted earnings per ADSnon-GAAP | 5.29 | – | – |
| Adjusted basic earnings per ADSnon-GAAP | 5.43 | – | – |
| EBITDAnon-GAAP | RMB2.6 billion (US$381 million) | – | – |
| Adjusted EBITDAnon-GAAP | RMB2.7 billion (US$401 million) | – | – |
| First-half total revenueGAAP | RMB13.1 billion (US$1.9 billion) | – | 11.0% |
| First-half income from operationsGAAP | RMB3.7 billion (US$547 million) | – | – |
| First-half operating marginGAAP | 28.3% | – | – |
| First-half net income attributable to H World Group LimitedGAAP | RMB2.4 billion (US$353 million) | – | – |
| First-half adjusted EBITDAnon-GAAP | RMB4.6 billion (US$676 million) | – | – |
Segments
| Segment | Revenue | q/q | y/y |
|---|---|---|---|
| H World China (HWC)The year-over-year increase was mainly driven by continued hotel network expansion and improved RevPAR performance. | RMB5.9 billion | 16.8% | 14.9% |
| H World International (HWI)Revenue declined year-over-year as the Company exited several leased hotels over the past year. Operational performance was negatively impacted by the Middle East conflict and expansion into developing South Eastern Asia countries with lower ADRs and hotels still in ramp-up. | RMB1.3 billion | 28.9% | -5.8% |
| HWC adjusted EBITDAAdjusted EBITDA was RMB2.6 billion, compared with RMB2.1 billion in the second quarter of 2025 and RMB1.9 billion in the previous quarter. | RMB2.6 billion | – | – |
| HWI adjusted EBITDAAdjusted EBITDA was RMB131 million, compared with RMB164 million in the second quarter of 2025 and a loss of RMB56 million in the previous quarter. | RMB131 million | – | – |
full year of 2026 outlook
- RevenueGroup revenue growth in the range of 4%-8% compared to the full year of 2025
- NoteHWC revenue growth in the range of 7%-11% compared to the full year of 2025, excluding DH.
- NoteM&F revenue growth in the range of 16%-20% compared to the full year of 2025.
- NoteThe Company remains firmly on track to hit full-year gross opening guidance of 2,200 -2,300 hotels.
Capital returns
- The Board approved a three-year shareholder return plan with an aggregate amount of distributions that may be made to shareholders of US$2,500,000,000 effective from August 17, 2026.
- The Board approved an ordinary cash dividend in the aggregate amount of approximately US$275 million, of US$0.087 per ordinary share, or US$0.87 per ADS.
- Holders of ordinary shares or ADSs as of the close of business on September 8, 2026 will be entitled to receive the cash dividend.
- Payment of share repurchase in the second quarter of 2026 was RMB1,857 million (US$274 million).
- Dividend paid in the second quarter of 2026 was RMB2,844 million (US$419 million).
What drove it
- Hotel turnover increased 13.2% year-over-year to RMB30.5 billion.
- HWC hotel turnover increased 15.3% year-over-year, while HWI hotel turnover decreased 9.4% year-over-year.
- HWC opened 498 hotels and closed 176 hotels during the second quarter, for 322 net additions.
- The worldwide hotel network totaled 13,539 hotels and 1,335,445 rooms in operation as of June 30, 2026.
- The pipeline totaled 3,089 unopened hotels, including 3,054 hotels from HWC and 35 hotels from HWI.
- Blended HWC ADR increased 2.6% year-over-year to RMB298 and blended HWC RevPAR increased 1.1% year-over-year to RMB238.
- M&F revenue increased 25.2% year-over-year to RMB3.6 billion (US$529 million), and the Company cited hotel network expansion as the primary driver.
- Operating margin improved because of a higher revenue contribution from M&F businesses, consistent with the asset-light expansion strategy.
Concerns
- Same-hotel HWC RevPAR was RMB233, representing a 3.0% decrease from RMB240 in the second quarter of 2025.
- HWC blended occupancy declined to 79.8% from 81.0%, while same-hotel occupancy declined by 2.4 percentage points.
- HWI revenue declined 5.8% year-over-year to RMB1.3 billion.
- HWI blended RevPAR declined 3.8% year-over-year to US$98, reflecting a 3.5 percentage-point decline in occupancy rate.
- The Company said HWI operational performance was negatively impacted by the Middle East conflict and expansion into developing South Eastern Asia countries with lower ADRs and hotels still in ramp-up.
- Leased and owned hotels revenue declined 4.9% year-over-year as the Company continued exiting L&O hotels.
What to watch
- Delivery against raised full-year Group revenue growth guidance of 4%-8%.
- Delivery against HWC revenue growth guidance of 7%-11%, excluding DH, and M&F revenue growth guidance of 16%-20%.
- Progress toward full-year gross opening guidance of 2,200 -2,300 hotels.
- Whether HWC same-hotel RevPAR and occupancy stabilize following the reported 3.0% same-hotel RevPAR decline.
- HWI occupancy, RevPAR and profitability amid persistent Middle East tensions and expansion in developing South Eastern Asia countries.
- Execution of the US$2,500,000,000 three-year shareholder return plan.
Balance sheet and cash flow
- Operating cash inflow was RMB3.4 billion (US$503 million) in the second quarter of 2026.
- Investing cash inflow was RMB1.8 billion (US$270 million) in the second quarter of 2026.
- Financing cash outflow was RMB3.2 billion (US$475 million) in the second quarter of 2026.
- Capital expenditures were RMB167 million (US$25 million) in the second quarter of 2026.
- Cash and cash equivalents were RMB14.2 billion (US$2.1 billion) as of June 30, 2026.
- Restricted cash was RMB142 million (US$21 million) as of June 30, 2026.
- Total debt was RMB4.2 billion (US$623 million) as of June 30, 2026.
- Net cash balances were RMB10.2 billion (US$1.5 billion) as of June 30, 2026.
- Operating cash inflow in the first half of 2026 was RMB3.6 billion (US$536 million), compared to RMB3.2 billion in the first half of 2025.
Analysis
H World reported a solid second quarter, with total revenue of RMB7.1 billion (US$1.1 billion), up 10.8% year-over-year and 18.8% quarter-over-quarter. The growth was concentrated in HWC, where revenue increased 14.9% year-over-year to RMB5.9 billion, and in the M&F model, where revenue grew 25.2% year-over-year to RMB3.6 billion (US$529 million). Leased and owned hotels revenue declined 4.9% year-over-year to RMB3.2 billion (US$477 million), consistent with the stated strategy of exiting L&O hotels.
Margin performance improved materially. Income from operations increased 24.1% year-over-year to RMB2.2 billion (US$326 million), while operating margin reached 31.1%, compared with 27.8% a year earlier and 24.8% in the previous quarter. Management attributed the year-over-year margin expansion to a higher M&F revenue contribution. Adjusted EBITDA rose to RMB2.7 billion (US$401 million) from RMB2.3 billion in the second quarter of 2025 and RMB1.9 billion in the previous quarter. Net income attributable to H World Group Limited increased 2.1% year-over-year to RMB1.6 billion (US$232 million).
Operating indicators show that HWC growth was driven more by network expansion and pricing than occupancy. Blended HWC ADR increased 2.6% year-over-year to RMB298 and blended RevPAR increased 1.1% to RMB238, but occupancy declined to 79.8% from 81.0%. Same-hotel RevPAR decreased 3.0% to RMB233, with a 2.4 percentage-point decline in same-hotel occupancy. The China network added 322 hotels on a net basis during the quarter, and the Company ended the period with 3,054 unopened HWC hotels in its pipeline.
HWI remained the principal operating pressure point. HWI revenue declined 5.8% year-over-year to RMB1.3 billion and blended HWI RevPAR declined 3.8% year-over-year to US$98. Management cited the Middle East conflict and expansion into developing South Eastern Asia countries with lower ADRs and hotels in ramp-up. HWI adjusted EBITDA improved sequentially to RMB131 million from a loss of RMB56 million in the previous quarter, but remained below RMB164 million in the second quarter of 2025.
Capital allocation was active. Second-quarter operating cash inflow was RMB3.4 billion (US$503 million), while the Company reported RMB14.2 billion (US$2.1 billion) of cash and cash equivalents and RMB4.2 billion (US$623 million) of total debt at June 30, 2026. The Board approved a US$2,500,000,000 three-year shareholder return plan and declared an approximately US$275 million ordinary cash dividend. Management raised full-year Group revenue growth guidance to 4%-8% from 2%-6%, raised HWC growth guidance to 7%-11% from 5%-9% excluding DH, and raised M&F revenue growth guidance to 16%-20% from 12%-16%.
Management, verbatim
During the second quarter, we delivered another quarter of RevPAR expansion. Our blended HWC ADR rose 2.6% year-on-year, fueling a 1.1% year-over-year lift in blended RevPAR. This performance was underpinned by ongoing product upgrades and a suite of revenue-management optimization initiatives.
Jin Hui, CEO of H World
We remain firmly on track to hit our full-year gross opening guidance of 2,200 -2,300 hotels. Looking ahead, we will continue to pursue ‘brand-led’ high-quality hotel network expansion, backed by our H Rewards membership program and technology development.
Jin Hui, CEO of H World
In the second quarter of 2026, our HWI segment’s operational performance was negatively impacted by the Middle East conflict as well as our expansion into the developing South Eastern Asia countries which have lower ADRs and are still in the ramp-up period.
Jin Hui, CEO of H World
Not in the filing
stated, not guessed- Gross margin was not reported.
- Free cash flow was not reported.
- Forward guidance for gross margin was not reported.
- Forward guidance for operating expenses was not reported.
- Forward guidance for tax rate was not reported.
- A prior outlook section was not provided, so no actual-versus-prior-guidance comparison is included.
- A specific share repurchase authorization amount was not reported.
AlphAI analysis generated from the company’s SEC earnings filing (Form 8-K Item 2.02, or Form 6-K for a foreign private issuer). Every figure was cross-checked against the filing text; consensus estimates, price targets and share-price reactions are not shown because they are not in the filing. AI-generated research, not investment advice.