Choice Hotels International reports $57.91 million net income for Q3 2026

Cover page 2 changes

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FOR THE QUARTERLY PERIOD ENDED June September 30, 2026

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As of July 29, October 26, 2026, the number of shares outstanding of Choice Hotels International, Inc.'s common st ock was 45,008,622 44,508,546 .

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Financial Statements (Unaudited) 5 changes

Consolidated Statements of Income - For the three and six nine months ended June September 30, 2026 and 2025

Consolidated Statements of Comprehensive Income - For the three and six nine months ended June September 30, 2026 and 2025

Consolidated Balance Sheets - As of June September 30, 2026 and December 31, 2025

Consolidated Statements of Cash Flows - For the six nine months ended June September 30, 2026 and 2025

Consolidated Statements of Shareholders' Equity (Deficit) - For the three and six nine months ended June September 30, 2026 and 2025

Financial statements 164 changes

3 unchanged paragraphs

Franchise and management fees $ 187,536 $ 177,086 $ 337,167 $ 322,154

Partnership services and fees 28,674 27,064 53,408 52,445

Owned hotels 34,896 30,228 65,329 58,088

Other 26,332 24,716 38,205 35,843

Total revenues 440,762 426,443 781,337 759,303

Selling, general and administrative 96,153 89,298 174,199 163,508

Business combination, diligence and transition costs 536 347 772 446

Depreciation and amortization 16,813 13,424 33,634 27,172

Owned hotels 25,457 22,419 49,108 43,479

Reimbursable expenses from franchised and managed properties 197,665 176,358 359,452 320,169

Total operating expenses 336,624 301,846 617,165 554,774

Operating income 104,138 124,597 164,172 204,529

Three Months Ended Six Nine Months Ended

September 30, September 30,

Franchise and management fees $ 203,667 $ 193,777 $ 540,834 $ 515,931

Partnership services and fees 28,341 28,868 81,749 81,313

Owned hotels 38,064 33,167 103,393 91,255

Other 15,320 22,094 53,525 57,937

Revenue for reimbursable costs from franchised and managed properties 163,324 167,349 287,228 290,773 172,936 169,434 460,164 460,207

Total revenues 458,328 447,340 1,239,665 1,206,643

Selling, general and administrative 81,275 79,610 255,474 243,118

Contract termination costs 24,268 — 24,268 —

Business combination, diligence and transition costs 3,214 1,494 3,986 1,940

Depreciation and amortization 16,933 15,760 50,567 42,932

Owned hotels 27,312 23,792 76,420 67,271

Reimbursable expenses from franchised and managed properties 192,812 184,268 552,264 504,437

Total operating expenses 345,814 304,924 962,979 859,698

Impairment of long-lived assets ( 6,035 ) — ( 6,035 ) —

Operating income 106,479 142,416 270,651 346,945

1 unchanged paragraph

Interest expense 24,259 22,736 48,221 43,978

Interest income ( 1,095 ) ( 1,456 ) ( 2,306 ) ( 3,015 )

Other gains, net ( 6,124 ) ( 5,374 ) ( 5,403 ) ( 4,938 )

Equity in net loss of affiliates 1,216 80 7,468 131

Total other expenses and (income), net 18,256 15,986 47,980 36,156

Income before income taxes 85,882 108,611 116,192 168,373

Income tax expense 21,544 26,877 31,550 42,105

Net income $ 64,338 $ 81,734 $ 84,642 $ 126,268

Basic earnings per share $ 1.42 $ 1.76 $ 1.85 $ 2.71

Diluted earnings per share $ 1.41 $ 1.75 $ 1.84 $ 2.68

Interest expense 25,575 23,490 73,796 67,468

Interest income ( 998 ) ( 1,435 ) ( 3,304 ) ( 4,450 )

Gain from an acquisition of a joint venture — ( 100,025 ) — ( 100,025 )

Gain on sale of assets — ( 713 ) — ( 713 )

Other gains, net ( 7 ) ( 721 ) ( 5,410 ) ( 5,659 )

Equity in net loss of affiliates 6,866 10,904 14,334 11,035

Total other expenses and (income), net 31,436 ( 68,500 ) 79,416 ( 32,344 )

Income before income taxes 75,043 210,916 191,235 379,289

Income tax expense 17,131 30,920 48,681 73,025

Net income $ 57,912 $ 179,996 $ 142,554 $ 306,264

Basic earnings per share $ 1.29 $ 3.89 $ 3.14 $ 6.59

Diluted earnings per share $ 1.28 $ 3.86 $ 3.12 $ 6.52

Cash dividends declared per share $ 0.2875 $ 0.2875 $ 0.5750 0.8625 $ 0.5750 0.8625

3 unchanged paragraphs

Net income $ 64,338 $ 81,734 $ 84,642 $ 126,268

Foreign currency translation adjustment ( 1,728 ) 2,079 ( 4,597 ) 2,142

Other comprehensive (loss) income, net of tax ( 1,728 ) 2,079 ( 4,597 ) 2,142

Comprehensive income $ 62,610 $ 83,813 $ 80,045 $ 128,410

Three Months Ended Six Nine Months Ended

September 30, September 30,

Net income $ 57,912 $ 179,996 $ 142,554 $ 306,264

Other comprehensive (loss) income (loss), net of tax:

Foreign currency translation adjustment 833 ( 1,557 ) ( 3,764 ) 585

Other comprehensive income (loss), net of tax 833 ( 1,557 ) ( 3,764 ) 585

Comprehensive income $ 58,745 $ 178,439 $ 138,790 $ 306,849

4 unchanged paragraphs

June September 30, 2026 December 31, 2025

Cash and cash equivalents $ 42,826 170,594 $ 44,997

Accounts receivable (net of allowance for credit losses of $ 71,067 82,649 and $ 51,189 , respectively)

Income taxes receivable 9,576 8,681 13,456

Notes receivable (net of allowance for credit losses of $ 5,007 5,066 and $ 7,462 , respectively)

Prepaid expenses and other current assets 44,841 55,243 45,368

Total current assets 431,936 576,390 405,998

Property and equipment (net of accumulated depreciation and amortization of $ 191,937 207,299 and $ 162,113 , respectively)

Operating lease right-of-use assets 75,004 72,528 77,670

Goodwill 302,877 302,668 305,758

Intangible assets (net of accumulated amortization of $ 292,052 312,243 and $ 256,575 , respectively)

1 unchanged paragraph

Other assets 122,718 123,937

Total assets $ 2,988,816 $ 2,918,203

Investments for employee benefit plans, at fair value 54,794 47,549 50,227

Investments in affiliates 137,251 139,667 134,975

Deferred income taxes 76,362 84,022 75,371

Other assets 123,213 123,937

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and 84 more changes in the filing

Note 1: Basis of Presentation and Significant Accounting Policies 1 change

8 unchanged paragraphs

In September 2025, the FASB issued ASU 2025-06, Targeted Improvements to the Accounting for Internal-Use Software ("ASU 2025-06"). ASU 2025-06 eliminates all references to the software development project stages and revises the criteria that must be met to begin capitalizing internal-use software costs. ASU 2025-06 is effective for the annual reporting period beginning after December 15, 2027, including the interim periods within that annual reporting period. Early adoption is permitted. The Company is currently evaluating the potential impact that ASU 2025-06 will have on the Company's consolidated financial statements.

1 unchanged paragraph

Note 2: Revenue 7 changes

3 unchanged paragraphs

The following table summarizes the significant changes in the contract liabilities balances during the period from December 31, 2025 to June September 30, 2026:

1 unchanged paragraph

Balance as of June 30, 2026 $ 229,857

Increases to the contract liability balance due to cash received 69,558 108,974

Revenue recognized in the period ( 60,041 92,808 )

Balance as of September 30, 2026 $ 236,506

1 unchanged paragraph

The aggregate amount of the transaction price that is allocated to unsatisfied, or partially unsatisfied, performance obligations was $ 229.9 236.5 million as of June September 30, 2026. This amount represents the fixed transaction price that will be recognized as revenue in future periods, which is presented as current and non-current deferred revenue in the consolidated balance sheets.

1 unchanged paragraph

The loyalty points represent a performance obligation attributable to the usage of the points, and thus the revenues are recognized at the point in time when the loyalty points are redeemed by the members for benefits (with both franchisees and third-party partners), net of the cost of redemptions. The loyalty net revenues, inclusive of adjustments to the estimated redemption rates, were $ 30.1 28.7 million and $ 37.2 31.8 million for the three months ended June September 30, 2026 and 2025, respectively, and $ 53.0 81.6 million and $ 56.7 88.5 million for the six nine months ended June September 30, 2026 and 2025, respectively.

Note 3: Receivables and Allowance for Credit Losses 35 changes

2 unchanged paragraphs

Senior $ 56,705 $ 98,257

Subordinated 31,933 13,356

(in thousands) June September 30, 2026 December 31, 2025

Senior $ 58,276 $ 98,257

Subordinated 32,028 13,356

Unsecured 3,478 3,027 4,044

Total notes receivable $ 92,116 93,331 $ 115,657

Less: allowance for credit losses 8,678 8,737 8,481

Total notes receivable, net of allowance for credit losses $ 83,438 84,594 $ 107,176

Current portion, net of allowance for credit losses $ 54,880 55,906 $ 94,686

Long-term portion, net of allowance for credit losses $ 28,558 28,688 $ 12,490

2 unchanged paragraphs

Senior $ — $ — $ 41,505 $ — $ — $ 15,200 $ 56,705

Subordinated — 3,136 — 3,504 — 25,293 31,933

Unsecured — 445 130 — — 2,903 3,478

Total notes receivable $ — $ 3,581 $ 41,635 $ 3,504 $ — $ 43,396 $ 92,116

Senior $ — $ — $ 43,076 $ — $ — $ 15,200 $ 58,276

Subordinated — 3,136 — 3,506 — 25,386 32,028

Unsecured — 359 130 — — 2,538 3,027

Total notes receivable $ — $ 3,495 $ 43,206 $ 3,506 $ — $ 43,124 $ 93,331

1 unchanged paragraph

(in thousands) June September 30, 2026 December 31, 2025

1 unchanged paragraph

Provision for credit losses 197 256 1,150

Ending balance $ 8,678 8,737 $ 8,481

As of June September 30, 2026 and December 31, 2025, three note receivable loans with senior credit quality indicators met the definition of collateral-dependent and are collateralized by the membership interests in the borrowing entities, the associated land parcel, or the operating hotel. The Company used both a market approach that uses quoted market prices and an income approach that uses discounted cash flows to value the underlying collateral. The Company reviewed the borrower's financial statements, economic trends, industry projections for the market, and comparable sales capitalization rates, which represent significant inputs to the cash flow projections. These nonrecurring fair value measurements are classified as Level 3 in the fair value measurement hierarchy because they are unobservable inputs which are significant to the overall fair value. Based on the Company's analysis, the fair value of the collateral secures substantially all of the carrying value of the respective note receivable loans. The allowance for credit losses attributable to the collateral-dependent note receivable loans was $ 4.6 million as of both June September 30, 2026 and December 31, 2025.

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Senior $ 5,245 $ — $ 42,900 $ 48,145 $ 8,560 $ 56,705

Subordinated — — — — 31,933 31,933

Unsecured — — 204 204 3,274 3,478

As of September 30, 2026

Senior $ — $ — $ 48,229 $ 48,229 $ 10,047 $ 58,276

Subordinated — — — — 32,028 32,028

Unsecured — — 204 204 2,823 3,027

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The amortized cost basis of the notes receivable in a non-accrual status was $ 42.9 million as of both June September 30, 2026 and December 31, 2025.

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The Company has issued notes receivable loans to certain entities that have created variable interests in the associated borrowers totaling $ 80.0 81.7 million and $ 103.2 million as of June September 30, 2026 and December 31, 2025, respectively. The Company has determined that it is not the primary beneficiary of these variable interest entities ("VIEs"). For collateral-dependent loans, the Company has no exposure to the borrowing VIE beyond the respective note receivable and the limited commitments which are addressed in Note 11.

1 unchanged paragraph

The Company has extended loans to various unconsolidated affiliates or members of our unconsolidated affiliates. The Company had a total principal balance on these loans of $ 42.5 million and $ 65.3 million as of June September 30, 2026 and December 31, 2025, respectively.

1 unchanged paragraph

During the six months ended June 30, 2026, the Company recorded write-offs, net of recoveries, through the accounts receivable allowance for credit losses of $ 12.3 million. During the year ended December 31, 2025, the Company recorded write-offs, net of recoveries, through the accounts receivable allowance for credit losses of $ 29.6 million.

During the six nine months ended June September 30, 2026, the Company recognized provisions for credit losses on accounts receivable of $ 18.1 26.0 million in selling, general and administrative expenses, and $ 14.1 20.4 million in reimbursable expenses from franchised and managed properties, in the consolidated statements of income. During the year ended December 31, 2025, the Company recognized provisions for credit losses on accounts receivable of $ 20.2 million in selling, general and administrative expenses, and $ 15.0 million in reimbursable expenses from franchised and managed properties, in the consolidated statements of income. During the nine months ended September 30, 2026, the Company recorded write-offs, net of recoveries, through the accounts receivable allowance for credit losses of $ 14.9 million. During the year ended December 31, 2025, the Company recorded write-offs, net of recoveries, through the accounts receivable allowance for credit losses of $ 29.6 million.

Note 4: Investments in Affiliates 8 changes

1 unchanged paragraph

As of June September 30, 2026 and December 31, 2025, the Company had total investments in affiliates in the consolidated balance sheets of $ 137.3 139.7 million and $ 135.0 million, respectively, which included investments in affiliates that represent VIEs of $ 136.8 139.2 million and $ 134.4 million, respectively. The Company has determined that it is not the primary beneficiary of any of these VIEs, however the Company does exercise significant influence through its equity ownership and as a result, the investments in these affiliates are accounted for under the equity method of accounting. During the three months ended June September 30, 2026 and 2025, the Company recognized losses totaling $ 1.2 6.9 million and $ 1.0 10.9 million, respectively, from these investments that represent VIEs. During the six nine months ended June September 30, 2026 and 2025, the Company recognized losses totaling $ 7.5 14.3 million and $ 1.9 12.8 million, respectively, from these investments that represent VIEs. The Company's maximum exposure to losses related to its investments in the VIEs is limited to the total of its respective equity investment as well as certain limited payment guaranties, which are described in Note 11 to these consolidated financial statements.

On August 31, 2026, the Company sold its 50 % equity interest in CS Hotel West Orange, LLC to the remaining member. For the three and nine months ended September 30, 2026, the Company recognized a loss on sale of $ 3.8 million in equity in net loss of affiliates in the consolidated statements of income.

On July 10, 2025, the Company entered into a joint venture agreement to develop and operate Everhome Suites in certain strategic markets (the "Joint Venture"). The Company contributed $ 71.6 million in cash to the Joint Venture in exchange for an equity ownership interest. The Company concluded that the Joint Venture represents a VIE. The Company determined that it is not the primary beneficiary of the VIE, however the Company does exercise significant influence through its equity ownership and as a result, the Company's investment in the Joint Venture is accounted for under the equity method of accounting and reported within investments in affiliates in the consolidated balance sheets.

In 2025, subsequent to the formation of the Joint Venture, the following transactions were completed:

• The Joint Venture entered into a loan facility for up to $ 500 million. In connection with the loan facility, the Company has provided a limited payment guarantee, which applies to all hotel projects funded by the loan facility, with the applicable guaranteed amount being determined on a hotel project by hotel project basis. The Company's obligation under the limited payment guarantee with respect to any hotel project is effective upon the earlier of (a) the hotel's opening date or (b) 18 months after the date on which construction first started for the hotel. The maximum exposure to losses related to this limited payment guarantee is described in Note 11 to these consolidated financial statements.

• The Company sold four wholly-owned Everhome Suites hotels under construction to the Joint Venture for an aggregate sale price of $ 52.0 million, resulting in a gain of $ 0.7 million which is reported within gain on sale of assets in the consolidated statements of income. Prior to the sale, the four wholly-owned Everhome Suites hotels were reported within property and equipment in the consolidated balance sheets.

• Seven of the Company's unconsolidated affiliates, which the Company previously accounted for under the equity method of accounting, contributed their underlying assets to the Joint Venture. Prior to the transaction, the seven unconsolidated affiliates had an aggregate investment balance of $ 42.1 million, which was reported within investments in affiliates in the consolidated balance sheets.

During the three and six nine months ended June September 30, 2026 and 2025, the Company recognized no impairment charges related to its equity method investments.

Note 5: Debt 11 changes

1 unchanged paragraph

June September 30, 2026 December 31, 2025

$ 400 500 million senior unsecured notes term loan due 2029 ("2019 Senior Notes") ("2026 Term Loan") with an effective interest rate of 3.88 4.95 %, less a discount and deferred issuance costs of $ 2.1 million and $ 2.4 0.9 million at June September 30, 2026 and December 31, 2025, respectively

$ 450 400 million senior unsecured notes due 2031 ("2020 2029 ("2019 Senior Notes") with an effective interest rate of 3.86 3.88 %, less a discount and deferred issuance costs of $ 2.8 1.9 million and $ 3.1 2.4 million at June September 30, 2026 and December 31, 2025, respectively

$ 600 450 million senior unsecured notes due 2034 ("2024 2031 ("2020 Senior Notes") with an effective interest rate of 6.11 3.86 %, less a discount and deferred issuance costs of $ 9.5 2.6 million and $ 10.1 3.1 million at June September 30, 2026 and December 31, 2025, respectively

$ 600 million senior unsecured notes due 2034 ("2024 Senior Notes") with an effective interest rate of 6.11 %, less a discount and deferred issuance costs of $ 9.2 million and $ 10.1 million at September 30, 2026 and December 31, 2025, respectively

$ 1 billion senior unsecured revolving credit facility due 2029 with an effective interest rate of 4.92 5.01 %, less deferred issuance costs of $ 2.4 2.2 million and $ 2.8 million at June September 30, 2026 and December 31, 2025, respectively

Economic development loans with an effective interest rate of 3.00 % at June September 30, 2026 and December 31, 2025

1 unchanged paragraph

On August 28, 2026, the Company entered into a $ 500.0 million senior unsecured term loan with a maturity date of August 28, 2029 (the "2026 Term Loan"), which has an optional one-year extension that can be requested by the Company prior to the initial maturity date. The extension option is subject to the consent of the lenders and certain customary conditions. The 2026 Term Loan and all accrued but unpaid interest must be repaid in full on the maturity date.

The Company may elect to have the 2026 Term Loan bear interest at a rate equal to (i) the secured overnight financing rate (subject to a 0.00 % floor) plus a margin of 125 basis points, or (ii) a base rate plus a margin of 25 basis points.

The credit agreement governing the 2026 Term Loan (the "Term Loan Credit Agreement") requires that the Company comply with various covenants, including restrictions on liens, incurring indebtedness, making dividends, stock repurchases, investments, and completing mergers and/or asset sales. The Term Loan Credit Agreement has financial covenants which require the Company to maintain a consolidated fixed charge coverage ratio of at least 2.5 to 1.0, and a consolidated leverage ratio of not more than 4.5 to 1.0, which may be increased to 5.5 to 1.0 on up to two nonconsecutive occasions for up to four consecutive fiscal quarters commencing with the fiscal quarter in which certain material acquisitions are consummated. As long as the Company maintains an Investment Grade Rating, as defined in the Term Loan Credit Agreement, then the Company will not need to comply with the consolidated fixed charge coverage ratio covenant.

The Term Loan Credit Agreement includes customary events of default, the occurrence of which, following any applicable cure period, would permit the lenders to, among other things, declare the principal, accrued interest, and other obligations of the Company under the Term Loan Credit Agreement to be immediately due and payable.

Note 6: Fair Value Measurements 10 changes

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Level 3 - Unobservable inputs, supported by little or no market data available, where the reporting entity is required to develop its own assumptions to determine the fair value of the instrument. The Company does not currently have any assets recorded at fair value on a recurring basis whose fair value was determined using Level 3 inputs and there were no transfers of Level 3 assets during the six nine months ended June September 30, 2026 and during the year ended December 31, 2025.

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As of September 30, 2026

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Total $ 56,928 $ 53,236 $ 3,692 $ —

Total $ 57,118 $ 53,696 $ 3,422 $ —

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The Company believes that the fair values of its current assets and current liabilities approximate their reported carrying amounts due to the short-term nature of these items. In addition, the interest rate rates on the senior unsecured revolving credit facility adjusts and the 2026 Term Loan adjust frequently based on current market interest rates; therefore, the Company believes the carrying amount approximates the fair value.

The fair values of the Company's senior unsecured notes are classified as Level 2 because the significant inputs are observable in an active market. Refer to Note 5 for additional information on debt. As of June September 30, 2026 and December 31, 2025, the carrying amounts and the fair values were as follows:

June September 30, 2026 December 31, 2025

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2019 Senior Notes due 2029 $ 397,944 398,095 $ 383,684 374,888 $ 397,643 $ 389,612

2020 Senior Notes due 2031 $ 447,215 447,367 $ 424,643 409,838 $ 446,910 $ 428,963

2024 Senior Notes due 2034 $ 590,523 590,816 $ 608,898 575,586 $ 589,936 $ 612,612

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Note 7: Income Taxes 1 change

The Company's effective income tax rates were 25.1 22.8 % and 24.7 14.7 % for the three months ended June September 30, 2026 and 2025, respectively. The Company's effective income tax rates were 27.2 25.5 % and 25.0 19.3 % for the six nine months ended June September 30, 2026 and 2025, respectively. The effective income tax rates for the three and six nine months ended June September 30, 2026 were higher than the U.S. federal income tax rate of 21.0% primarily due to the impact of state income taxes and tax expense related to compensation, which were partially offset by the impact of federal income tax credits. The effective income tax rates for the three and six nine months ended June September 30, 2025 were higher lower than the U.S. federal income tax rate of 21.0% primarily due to the impact of a $ 100.0 million non-taxable gain from an acquisition of a joint venture and federal income tax credits, which were partially offset by the impact of state income taxes.

Note 8: Share-Based Compensation 22 changes

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Six Months Ended June 30,

Three Months Ended June September 30,

Nine Months Ended September 30,

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Stock options $ 195 $ 795 $ 752 $ 2,314

Restricted stock 2,744 3,003 6,166 6,330

Performance vested restricted stock units 1,305 7,155 5,618 12,724

Total share-based compensation expense $ 4,244 $ 10,953 $ 12,536 $ 21,368

Stock options $ 128 $ 814 $ 880 $ 3,128

Restricted stock 1,582 3,318 7,748 9,648

Performance vested restricted stock units 1,125 7,076 6,743 19,800

Total share-based compensation expense $ 2,835 $ 11,208 $ 15,371 $ 32,576

A summary of the share-based award activity during the six nine months ended June September 30, 2026 is presented below:

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Granted — — 153,792 107.78 135,539 151.07

Granted — — 172,769 107.76 135,539 151.07

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Exercised/vested ( 93,133 ) 83.95 ( 91,506 ) 137.57 ( 115,378 ) 128.93

Exercised/vested ( 93,822 ) 84.10 ( 198,245 ) 141.92 ( 139,241 ) 145.87

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Forfeited ( 884 ) 134.29 ( 13,533 ) 121.45 ( 27,643 ) 154.57

Outstanding as of June 30, 2026 597,474 $ 115.10 5.4 years 391,918 $ 127.13 423,439 $ 144.80

Forfeited ( 3,080 ) 134.51 ( 42,501 ) 130.18 ( 45,809 ) 142.83

Outstanding as of September 30, 2026 594,589 $ 115.04 5.13 years 275,188 $ 117.85 392,104 $ 139.87

Options exercisable as of June September 30, 2026 534,965 537,008 $ 115.00 5.2 114.97 4.92 years (1) Any Revisions to the outstanding performance vested restricted stock units ("PVRSUs") during the six nine months ended June September 30, 2026 is are based on the Company's performance relative to the targeted performance conditions in the respective PVRSUs.

The fair value of the restricted stock and the PVRSUs with performance conditions that were granted during the six nine months ended June September 30, 2026 was equal to the market price of the Company's common stock on the date of the grant. The fair value of the PVRSUs with market conditions that are based on the Company's total shareholder return relative to a predetermined peer group was estimated using a Monte Carlo simulation method as of the date of the grant. The requisite service periods for the restricted stock and the PVRSUs was were between 9 months and 48 months.

Note 9: Earnings Per Share 25 changes

The Company's shares of restricted stock contain rights to receive nonforfeitable dividends and thus are participating securities that require the computation of basic earnings per share using the two-class method. The shares of restricted stock are both potential shares of common stock and participating securities so the Company calculates diluted earnings per share by using the more dilutive of the treasury stock method or the two-class method. The calculation of earnings per share for the net income available to common shareholders excludes the distribution of dividends and the undistributed earnings attributable to the participating securities from the numerator. The diluted earnings per share includes stock options, PVRSUs, and restricted stock units ("RSUs") in the calculation of the weighted average shares of common stock outstanding.

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Three Months Ended Six Nine Months Ended

September 30, September 30,

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Net income $ 64,338 $ 81,734 $ 84,642 $ 126,268

Net income available to common shareholders $ 64,083 $ 81,342 $ 84,308 $ 125,653

Basic earnings per share $ 1.42 $ 1.76 $ 1.85 $ 2.71

Net income $ 64,338 $ 81,734 $ 84,642 $ 126,268

Net income available to common shareholders $ 64,083 $ 81,342 $ 84,308 $ 125,653

Diluted earnings per share $ 1.41 $ 1.75 $ 1.84 $ 2.68

Net income $ 57,912 $ 179,996 $ 142,554 $ 306,264

Income allocated to participating securities ( 255 163 ) ( 392 857 ) ( 334 524 ) ( 615 1,478 )

Net income available to common shareholders $ 57,749 $ 179,139 $ 142,030 $ 304,786

Weighted average shares of common stock outstanding – basic 45,192 46,141 45,454 46,316 44,748 46,050 45,216 46,226

Basic earnings per share $ 1.29 $ 3.89 $ 3.14 $ 6.59

Net income $ 57,912 $ 179,996 $ 142,554 $ 306,264

Income allocated to participating securities ( 255 163 ) ( 392 857 ) ( 334 524 ) ( 615 1,478 )

Net income available to common shareholders $ 57,749 $ 179,139 $ 142,030 $ 304,786

Weighted average shares of common stock outstanding – basic 45,192 46,141 45,454 46,316 44,748 46,050 45,216 46,226

Dilutive effect of stock options, PVRSUs, and RSUs 201 447 258 538 328 411 281 496

Weighted average shares of common stock outstanding – diluted 45,393 46,588 45,712 46,854 45,076 46,461 45,497 46,722

Diluted earnings per share $ 1.28 $ 3.86 $ 3.12 $ 6.52

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Three Months Ended Six Nine Months Ended

September 30, September 30,

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Stock options 292 128 292 128

Stock options 290 202 290 128

Note 10: Reportable Segments 40 changes

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Our Interim Chief Executive Officer, who is our chief operating decision maker ("CODM"), utilizes budgeted and forecasted financial information as well as industry metrics, such as revenue per available room ("RevPAR"), occupancy, and average daily room rate, ("ADR"), to assess the performance and to make resource allocation decisions. The CODM does not use assets by operating segment when assessing the performance or when making operating segment resource allocation decisions and therefore, assets by segment are not disclosed below.

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Three Months Ended June September 30, 2026 Three Months Ended June September 30, 2025 (in thousands) Hotel Franchising & Management Corporate &

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Revenues $ 407,664 $ 36,735 $ ( 3,637 ) $ 440,762 $ 396,841 $ 32,724 $ ( 3,122 ) $ 426,443

Revenues $ 417,583 $ 44,922 $ ( 4,177 ) $ 458,328 $ 413,237 $ 37,611 $ ( 3,508 ) $ 447,340

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Depreciation and amortization 9,467 7,346 — 16,813 7,327 6,097 — 13,424

Operating income (loss) 142,801 ( 38,663 ) — 104,138 157,866 ( 33,269 ) — 124,597

Depreciation and amortization 9,283 7,650 — 16,933 8,723 7,037 — 15,760

Contract termination costs — 24,268 — 24,268 — — — —

Impairment of long-lived assets — 6,035 — 6,035 — — — —

Operating income (loss) 186,443 ( 79,964 ) — 106,479 193,207 ( 50,791 ) — 142,416

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Interest expense 24,259 22,736

Interest income ( 1,095 ) ( 1,456 )

Other gains, net ( 6,124 ) ( 5,374 )

Income before income taxes $ 85,882 $ 108,611

Interest expense 25,575 23,490

Interest income ( 998 ) ( 1,435 )

Gain from an acquisition of a joint venture — ( 100,025 )

Gain on sale of assets — ( 713 )

Other gains, net ( 7 ) ( 721 )

Equity in net loss of affiliates 1,216 80 6,866 10,904

Income before income taxes $ 75,043 $ 210,916

Six Nine Months Ended June September 30, 2026 Six Nine Months Ended June September 30, 2025 (in thousands) Hotel Franchising & Management Corporate &

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Revenues $ 717,208 $ 71,276 $ ( 7,147 ) $ 781,337 $ 700,025 $ 65,628 $ ( 6,350 ) $ 759,303

Revenues $ 1,134,791 $ 116,198 $ ( 11,324 ) $ 1,239,665 $ 1,113,262 $ 103,239 $ ( 9,858 ) $ 1,206,643

1 unchanged paragraph

Depreciation and amortization 19,107 14,527 — 33,634 14,701 12,471 — 27,172

Operating income (loss) 229,616 ( 65,444 ) — 164,172 261,251 ( 56,722 ) — 204,529

Depreciation and amortization 28,390 22,177 — 50,567 23,424 19,508 — 42,932

Contract termination costs — 24,268 — 24,268 — — — —

Impairment of long-lived assets — 6,035 — 6,035 — — — —

Operating income (loss) 416,059 ( 145,408 ) — 270,651 454,458 ( 107,513 ) — 346,945

1 unchanged paragraph

Interest expense 48,221 43,978

Interest income ( 2,306 ) ( 3,015 )

Income before income taxes $ 116,192 $ 168,373

Interest expense 73,796 67,468

Interest income ( 3,304 ) ( 4,450 )

Gain from an acquisition of a joint venture — ( 100,025 )

Gain on sale of assets — ( 713 )

Other gains, net ( 5,403 5,410 ) ( 4,938 5,659 )

Equity in net loss of affiliates 7,468 131 14,334 11,035

Income before income taxes $ 191,235 $ 379,289

1 unchanged paragraph

Note 11: Commitments and Contingencies 10 changes

The Company is not a party to any material litigation other than litigation in the ordinary course of business. The Company's management and legal counsel do not expect that the ultimate outcome of any of its current legal proceedings, individually or in the aggregate, will have a material adverse effect on the Company's financial position, results of operations, or cash flows.

The Company entered into various limited payment guaranties with regards to the Company's VIEs in order to support its efforts to develop and own hotels that are franchised under the Company's brands. Under these limited payment guaranties, the Company has agreed to guarantee a portion of the outstanding debt until certain conditions are met, such as (a) the loan matures, (b) certain debt covenants are achieved, (c) the maximum amount guaranteed by the Company is paid in full, or (d) the Company, through its affiliates, ceases to be a member of the VIE. As of June September 30, 2026, the maximum unrecorded exposure of the principal associated with these limited payment guaranties was $ 40.4 40.8 million, plus unpaid expenses and accrued but unpaid interest. The Company believes the likelihood of having to perform under these guaranties is remote. In the event of performance, the Company has recourse for certain of the guaranties in the form of partial guaranties from third parties.

The Company had the following outstanding commitments as of June September 30, 2026:

• As part of the acquisition of Radisson Hotels Americas in August 2022, the Company entered into a long-term management arrangement, with an expiration date of July 31, 2031, to manage hotels owned by a third-party. As of June September 30, 2026, the Company managed seven hotels pursuant to the long-term management arrangement. In conjunction with the management arrangement, the Company entered into a guarantee with the third-party to fund any shortfalls in the payment of the third-party owner's priority that is stipulated in the management agreement. As of June September 30, 2026, no liability was recognized in the consolidated balance sheets. For the six nine months ended June September 30, 2026, the Company recognized no guarantee payments in selling, general and administrative expenses in the consolidated statements of income. As of June September 30, 2026, the maximum unrecorded exposure of the guarantee was $ 18.2 million.

1 unchanged paragraph

• The Company has committed to provide financing in the form of loans or credit facilities to franchisees for brand development efforts. As of June 30, 2026, the Company had remaining commitments of up to $ 1.5 million, if certain conditions are met.

1 unchanged paragraph

• The Company has committed to purchase transferable production tax credits generated by qualified solar energy facilities. As of June September 30, 2026, the Company has a remaining commitment of approximately $ 179 million through 2036. The Company's commitments are contingent upon the satisfaction of certain legal and contractual conditions from the sellers, and the continued availability of the credits under federal tax laws. The Company expects to utilize these credits in the same quarter in which they are purchased, offsetting federal income tax estimated payments and reducing income tax expense each year.

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The Company previously announced a leadership transition whereby Patrick Pacious stepped down as the Company's President & Chief Executive Officer, effective May 20, 2026, and transitioned to serving as an advisor to the Company through August 31, 2026. (the "Transition Period"). In connection with the leadership transition, the Company and Mr. Pacious entered into a transition and separation agreement, (the "Separation Agreement"), pursuant to which Mr. Pacious is was entitled to post-employment benefits, including cash severance, continued equity award vesting, and other benefits. The Company expects to recognize a total of $ 2.7 million of post-employment benefits, which will be recognized over the Transition Period. For the three and nine months ended June September 30, 2026, the Company recognized $ 0.2 million of post-employment benefits in selling, general and administrative expenses in the consolidated statements of income.

$ 2.5 million and $ 2.7 million, respectively, of post-employment benefits in selling, general and administrative expenses in the consolidated statements of income.

Contract Termination Costs

The Company entered into an agreement, effective September 16, 2026, to terminate an arrangement whereby the Company had, amongst other rights, an option to acquire 100 % of the outstanding shares of a European hospitality business. During the three and nine months ended September 30, 2026, the Company recognized a contract termination cost of $ 24.3 million in contract termination costs in the consolidated statements of income. The contract termination cost is included in the Corporate & Other segment in Note 10.

Note 12: Acquisitions 8 changes

9 unchanged paragraphs

During the three and six nine months ended June September 30, 2026, the Company recognized transaction and transition costs of $ 0.4 0.6 million in business combination, diligence and transition costs in the consolidated statements of income. The Company did no t recognize any transaction and transition costs during the three months ended September 30, 2026. During both the three and nine months ended September 30, 2025, the Company recognized transaction and transition costs of $ 0.6 1.5 million in business combination, diligence and transition costs in the consolidated statements of income.

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(in thousands) June September 30, 2025

Revenues $ 1,222,972

2 unchanged paragraphs

The Company's consolidated statements of income include Choice Hotels Canada's results of operations since the July 2, 2025 acquisition date. Choice Hotels Canada contributed $ 11.8 16.0 million and $ 3.9 7.7 million in total revenues and net income, respectively, for the three months ended June September 30, 2026. Choice Hotels Canada contributed $ 20.8 36.8 million and $ 7.1 14.9 million in total revenues and net income, respectively, for the six nine months ended June September 30, 2026. Choice Hotels Canada contributed $ 13.2 million and $ 5.9 million in total revenues and net income, respectively, for both the three and nine months ended September 30, 2025.

1 unchanged paragraph

The following table summarizes the carrying amount of the Company's goodwill, including the goodwill arising from the acquisition of Choice Hotels Canada, as of June September 30, 2026.

2 unchanged paragraphs

Effect of foreign currency translation ( 3,504 3,713 )

Total goodwill, gross carrying amount 310,455 310,246

1 unchanged paragraph

Goodwill, net carrying amount $ 302,877 302,668

MD&A 192 changes

1 unchanged paragraph

We are primarily a hotel franchisor operating in 49 states, the District of Columbia, and 49 50 countries and territories. As of June September 30, 2026, we had 7,608 7,604 hotels with 661,089 660,614 rooms open and operating, and 841 847 hotels with 77,275 78,229 rooms under construction, awaiting conversion or approved for development, or committed to future franchise development on outstanding master development agreements (collectively, "pipeline") in our global system. Our brand names include Clarion®, Clarion Pointe®, Comfort®, Country Inn & Suites® by Radisson, Sleep Inn®, Quality®, Park Inn® by Radisson®, Everhome Suites®, WoodSpring Suites®, MainStay Suites®, Suburban Studios®, Radisson Blu®, Park Plaza®, Cambria® Hotels, Ascend Collection®, Radisson RED®, Radisson Individuals®, Radisson®, Radisson Collection®, Radisson Inn & Suites™, Econo Lodge®, and Rodeway Inn®.

The hotel franchising business represents the Company's primary operations. The Company's U.S. operations are conducted through direct franchising relationships, the ownership of 18 19 open and operating hotels, and the management of 13 hotels (inclusive of four owned hotels), while its international franchise operations are conducted through a combination of direct franchising and master franchising relationships. Master franchising relationships are governed by master franchising agreements which generally provide the master franchisee with the right to use our brands and sub-license the use of our brands in a specific geographic region, usually for a fee. As a result of our master franchise relationships and international market conditions, our revenues are primarily concentrated in the U.S. Therefore, our description of our business is primarily focused on the U.S. operations.

2 unchanged paragraphs

Company's management agreements include cost reimbursements, which is primarily related to payroll costs at the managed hotels where the Company is the employer.

The primary factors that affect the Company's results are: the number and relative mix of hotel rooms in the various hotel lodging price categories, growth in the number of hotel rooms owned and under franchise, occupancy and room rates achieved by the hotels in our system, the average royalty rates achieved in our franchise agreements, the level of franchise sales and relicensing activity, the number of qualified vendor arrangements and partnerships and the level of engagement with these partners by our franchisees and guests, and our ability to manage costs. The number of rooms in our hotel system and the occupancy and room rates at those hotel properties significantly affect the Company's results because our fees are based upon room revenues or the number of rooms at owned and franchised hotels. The key industry standard for measuring hotel-operating performance is revenue per available room ("RevPAR"), which is calculated by multiplying the percentage of occupied rooms by the average daily room rate ("ADR") realized. Our variable overhead costs associated with the franchise system growth of our established brands have historically been less than the incremental royalty fees generated from new franchises. Accordingly, over the long-term, the continued growth of our franchise business should enable us to realize the benefits from the operating leverage in place and improve our operating results.

We are required by our franchise agreements to use the marketing and reservation fees we collect for system-wide marketing and reservation activities. These expenditures, which include advertising costs and the costs to maintain our central reservations systems, enhance awareness and consumer preference for our brands and deliver guests to our franchisees. Greater awareness and preference promote long-term growth in business delivery to our franchisees and increases the desirability of our brands to hotel owners and developers, which ultimately increases the franchise fees earned by the Company. Additionally, the Company's management agreements include cost reimbursements, which is primarily related to payroll costs at the managed hotels where the Company is the employer.

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In addition to our hotel franchising business, we have also developed or acquired 18 19 open and operating hotels. We have strategically developed hotels to increase the presence of our newly introduced brands in the U.S., drive greater guest satisfaction and brand preference, and ultimately increase the number of franchise agreements awarded. When developing hotels, we seek key markets with strong growth potential that will deliver strong operating performance and improve the recognition of our brands. Our hotel development and ownership efforts currently focus on the Cambria Hotels and Everhome Suites brands. We believe our owned hotels provide us the opportunity to support and accelerate the growth of these brands. We do not anticipate owning hotels on a permanent basis and we expect to target dispositions to a franchisee encumbered with a long-term Choice franchise agreement in the future.

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Due to the seasonal nature of the Company's hotel franchising and management business and the multi-year investments required to support the franchise operations, quarterly and/or annual surpluses or deficits may be generated. During the three months ended June September 30, 2026 and 2025, reimbursable expenses from franchised and managed properties exceeded revenue for reimbursable costs from franchised and managed properties by $34.3 $19.9 million and $9.0 $14.8 million, respectively. During the six nine months ended June September 30, 2026 and 2025, reimbursable expenses from franchised and managed properties exceeded revenue for reimbursable costs from franchised and managed properties by $72.2 $92.1 million and $29.4 $44.2 million, respectively.

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Franchise and management fees $ 187,536 $ 177,086

Owned hotels 34,896 30,228

Total revenues 440,762 426,443

Selling, general and administrative 96,153 89,298

Owned hotels 25,457 22,419

Total operating expenses 336,624 301,846

Operating income 104,138 124,597

Comparison of the Operating Results for the Three Months Ended June September 30, 2026 and 2025 (in thousands) 2026 2025

Franchise and management fees $ 203,667 $ 193,777

Partnership services and fees 28,674 27,064 28,341 28,868

Owned hotels 38,064 33,167

Revenue for reimbursable costs from franchised and managed properties 163,324 167,349 172,936 169,434

Total revenues 458,328 447,340

Selling, general and administrative 81,275 79,610

Contract termination costs 24,268 —

Business combination, diligence and transition costs 536 347 3,214 1,494

Depreciation and amortization 16,813 13,424 16,933 15,760

Owned hotels 27,312 23,792

Reimbursable expenses from franchised and managed properties 197,665 176,358 192,812 184,268

Total operating expenses 345,814 304,924

Impairment of long-lived assets (6,035) —

Operating income 106,479 142,416

1 unchanged paragraph

Interest expense 24,259 22,736

Interest income (1,095) (1,456)

Other gains, net (6,124) (5,374)

Income before income taxes 85,882 108,611

Income tax expense 21,544 26,877

Net income $ 64,338 $ 81,734

Interest expense 25,575 23,490

Interest income (998) (1,435)

Gain from an acquisition of a joint venture — (100,025)

Gain on sale of assets — (713)

Other gains, net (7) (721)

Equity in net loss of affiliates 1,216 80 6,866 10,904

Total other expenses and (income), net 18,256 15,986 31,436 (68,500)

Income before income taxes 75,043 210,916

Income tax expense 17,131 30,920

Net income $ 57,912 $ 179,996

1 unchanged paragraph

For the three months ended June September 30, 2026, the Company recognized income before income taxes of $85.9 $75.0 million, which is a $22.7 $135.9 million decrease from the same period in the prior year. The decrease in income before income taxes was primarily due to a $20.5 $35.9 million decrease in operating income and a $100.0 million decrease in gain from an acquisition of a joint venture, both of which were partially offset by a $4.0 million decrease in equity in net loss of affiliates.

Operating income decreased $20.5 $35.9 million primarily due to a $25.3 $24.3 million increase in contract termination costs, a $6.8 million decrease in other revenues, a $6.0 million increase in impairment of long-lived assets, a $5.0 million increase in the net reimbursable deficit from franchised and managed properties, and a $6.9 $1.7 million increase in selling, general and administrative expenses, and a $3.4 million increase in depreciation and amortization, all of which were partially offset by a $10.5 $9.9 million increase in franchise and management fees.

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Franchise and management fees increased $10.5 $9.9 million primarily due to a $6.4 $5.4 million increase in international U.S. royalty fees, a $2.8 $5.2 million increase in revenues generated from programs, platforms, and services associated with the Company's franchise operations, and a $1.2 $2.7 million increase in U.S. international royalty fees, all of which were partially offset by a $1.4 $2.8 million decrease in initial franchise fees.

U.S. royalty fees increased $1.2 $5.4 million to $122.5 $132.1 million for the three months ended June September 30, 2026 from $121.3 $126.7 million for the three months ended June September 30, 2025. The increase in U.S. royalty fees was primarily due to a 1.3% 3.8% increase in U.S. system-wide RevPAR as a result of a 0.7% 1.0% increase in average daily rates and a 40 160 basis points increase in occupancy during the current period, and a system-wide 11 8 basis points increase in the average royalty rate from 5.12% 5.15% for the three months ended June September 30, 2025 to 5.23% for the three months ended June September 30, 2026. all of which were partially offset by a 0.3% decrease in open and operating U.S. hotel rooms. The U.S. system-wide RevPAR during the three months ended June September 30, 2026 includes a FIFA World Cup-related impact of 60 40 basis points.

2 unchanged paragraphs

June September 30, 2026 June September 30, 2025

3 unchanged paragraphs

$ 155.49 60.0 % $ 93.33 $ 152.42 60.5 % $ 92.14 2.0 % (50) bps 1.3 %

$ 159.98 62.7 % $ 100.37 $ 157.79 62.9 % $ 99.31 1.4 % (20) bps 1.1 %

1 unchanged paragraph

102.76 59.6 % 61.24 102.03 59.4 % 60.58 0.7 % 20 bps 1.1 %

69.24 71.3 % 49.37 66.87 71.2 % 47.60 3.5 % 10 bps 3.7 %

71.16 49.9 % 35.51 71.32 50.1 % 35.77 (0.2) % (20) bps (0.7) %

Total $ 98.28 60.0 % $ 58.92 $ 97.58 59.6 % $ 58.16 0.7 % 40 bps 1.3 % (1) Includes Ascend Hotel Collection, Cambria, Park Plaza, Radisson, Radisson Blu, Radisson Individuals, and Radisson RED brands.

105.47 61.7 % 65.11 104.61 60.1 % 62.86 0.8 % 160 bps 3.6 %

69.56 72.3 % 50.29 66.77 71.0 % 47.37 4.2 % 130 bps 6.2 %

74.12 51.4 % 38.13 73.48 50.1 % 36.83 0.9 % 130 bps 3.5 %

Total $ 100.99 61.9 % $ 62.56 $ 99.99 60.3 % $ 60.28 1.0 % 160 bps 3.8 % (1) Includes Ascend Hotel Collection, Cambria, Park Plaza, Radisson, Radisson Blu, Radisson Individuals, and Radisson RED brands.

2 unchanged paragraphs

(4) Includes Econo Lodge and Rodeway Inn brands.

A summary of the U.S. hotels and rooms by brand in our franchise system as of June September 30, 2026 and 2025 was as follows:

June September 30, 2026 June September 30, 2025 Variance

1 unchanged paragraph

Ascend Hotel Collection 241 38,933 231 38,537 10 4.3 % 396 1.0 %

Cambria Hotels 77 10,278 75 10,222 2 2.7 % 56 0.5 %

Quality Inn 1,574 113,389 1,593 115,638 (19) (1.2) % (2,249) (1.9) %

Country 397 32,023 408 32,704 (11) (2.7) % (681) (2.1) %

Sleep Inn 405 28,121 407 28,483 (2) (0.5) % (362) (1.3) %

Park Inn 19 1,524 13 1,302 6 46.2 % 222 17.1 %

WoodSpring Suites 298 35,869 270 32,521 28 10.4 % 3,348 10.3 %

Suburban Studios 121 9,995 111 9,137 10 9.0 % 858 9.4 %

Everhome Suites 30 3,451 17 1,952 13 76.5 % 1,499 76.8 %

Econo Lodge 583 33,721 620 36,149 (37) (6.0) % (2,428) (6.7) %

Rodeway 417 22,829 441 24,669 (24) (5.4) % (1,840) (7.5) %

Ascend Hotel Collection 244 39,410 232 38,221 12 5.2 % 1,189 3.1 %

Cambria Hotels 79 10,546 77 10,520 2 2.6 % 26 0.2 %

Quality Inn 1,560 111,849 1,584 114,784 (24) (1.5) % (2,935) (2.6) %

Country 393 31,704 404 32,435 (11) (2.7) % (731) (2.3) %

Sleep Inn 407 28,216 409 28,588 (2) (0.5) % (372) (1.3) %

Park Inn 23 1,832 10 1,000 13 130.0 % 832 83.2 %

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and 112 more changes in the filing

Forward-looking statements 1 change

1 unchanged paragraph

Several factors could cause our actual results, performance or achievements to differ materially from those expressed in or contemplated by the forward-looking statements. Such risks include, but are not limited to, changes to general, U.S. and foreign economic conditions, including access to liquidity and capital; changes in consumer demand and confidence, including consumer discretionary spending and the demand for travel, transient and group business; the timing and amount of future dividends and share repurchases; future U.S. or global outbreaks of epidemics, pandemics or contagious diseases or fear of such outbreaks, and the related impact on the global hospitality industry, particularly but not exclusively the U.S. travel market; changes in law and regulation applicable to the travel, lodging or franchising industries, including with respect to the status of our relationship with employees of our franchisees; the potential impact of changes in laws and regulations generally, or the interpretation thereof, including, without limitation, those relating to taxes, wages, labor and immigration; foreign currency fluctuations; changes in global interest rates and rate differentials; variability and unpredictability in trade relations, sanctions, tariffs or other trade controls; governmental action or inaction relating to the federal budget, including funding lapses and government shutdowns; impairments or declines in the value of our assets; our assumptions underlying our critical accounting estimates; operating risks common in the travel, lodging or franchising industries; changes to the desirability of our brands as viewed by hotel operators and customers; changes to the terms or termination of our contracts with franchisees and our relationships with our franchisees; our ability to keep pace with improvements in technology utilized for our marketing and reservation systems and other operating systems; our ability to grow our franchise system; exposure to risks related to our hotel development, financing, franchise agreement acquisition costs and ownership activities; exposures to risks associated with our investments in new businesses; fluctuations in the supply and demand for hotel rooms; our ability to realize anticipated benefits from acquired businesses; impairments or losses relating to acquired businesses; the level of acceptance of alternative growth strategies we may implement; the impact of inflation; information technology, cyber security and data breach risks; introduction and integration of artificial intelligence technologies; climate change; our sustainability strategy; ownership and financing activities; hotel closures or financial difficulties of our franchisees; operating risks associated with our international operations; political instability, geopolitical conflicts and terrorism; labor shortages; the outcome of litigation; and our ability to effectively manage our indebtedness and secure our indebtedness; and the integration and performance of Harvest Hosts following our acquisition. These and other risk factors are discussed in detail in Item 1A. Risk Factors of this Quarterly Report on Form 10-Q and of the Company's Annual Report on Form 10-K for the year ended December 31, 2025, filed with the SEC on February 19, 2026. We undertake no obligation to publicly update or revise any forward-looking statement, whether as a result of new information, future events or otherwise, except as required by law.

Market risk 2 changes

The Company is exposed to market risk from changes in interest rates and the impact of fluctuations in foreign currencies on the Company's foreign investments and operations. The Company manages its exposure to these market risks through the monitoring of its available financing alternatives, including in certain circumstances, the use of derivative financial instruments. We are also subject to risk from changes in debt and equity prices from our non-qualified retirement savings plan investments in debt securities and common stock, which have a carrying value of $56.9 $57.1 million and $52.0 million as of June September 30, 2026 and December 31, 2025, respectively, and are accounted for as trading securities. The Company will continue to monitor the exposure in these areas and make the appropriate adjustments as market conditions dictate.

As of June September 30, 2026, the Company had $567.2 $742.1 million of variable interest rate debt instruments outstanding at an effective interest rate of 4.92%. 4.97%. A hypothetical change of 10% in the Company's effective interest rate from the June September 30, 2026 levels would increase or decrease annual interest expense by $2.8 $3.7 million. The Company generally expects to refinance its fixed and variable long-term debt obligations prior to their scheduled maturities.

1 unchanged paragraph

Controls and procedures 3 changes

1 unchanged paragraph

The Company has a disclosure review committee whose membership includes the Interim Chief Executive Officer ("CEO") and Chief Financial Officer ("CFO"), among others. The disclosure review committee's procedures are considered by the CEO and CFO in performing their evaluations of the Company's disclosure controls and procedures and in assessing the accuracy and completeness of the Company's disclosures.

1 unchanged paragraph

An evaluation was performed under the supervision and with the participation of the Company's CEO and CFO, of the effectiveness of the design and operation of the Company's disclosure controls and procedures. Based on that evaluation, the Company's management, including the CEO and CFO, concluded that the Company's disclosure controls and procedures were effective as of June September 30, 2026.

1 unchanged paragraph

There have been no changes in the Company's internal control over financial reporting during the period ended June September 30, 2026 that materially affected, or is reasonably likely to materially affect, the Company's internal control over financial reporting.

Unregistered sales of stock 7 changes

1 unchanged paragraph

The following table sets forth the purchases and redemptions of Choice Hotels International, Inc. common stock made by the Company during the six nine months ended June September 30, 2026. Refer to the Liquidity and Capital Resources section of "Management's Discussion and Analysis of Financial Condition and Results of Operations" for more information.

14 unchanged paragraphs

Total 1,077,603 $ 104.51 943,333 1,813,430

July 1, 2026 through July 31, 2026 186,485 110.13 186,485 1,626,945

August 1, 2026 through August 31, 2026 266,883 105.95 206,279 1,420,666

September 1, 2026 through September 30, 2026 99,216 103.66 99,216 1,321,450

Total 1,630,187 $ 105.33 1,435,313 1,321,450

(1) In 1998, the Company instituted a share repurchase program. On March 11, 2024, the Company's board of directors approved an increase of 5.0 million shares in the number of shares authorized to be repurchased under its share repurchase program. During the six nine months ended June September 30, 2026, the Company redeemed 134,270 194,874 shares of common stock from employees to satisfy the stock option exercise price and the statutory minimum tax-withholding requirements related to the exercising of stock options and the vesting of performance vested restricted stock units and restricted stock grants. These redemptions were not part of the share repurchase program.

Other information 10 changes

1 unchanged paragraph

None The following table describes, for the third quarter of 2026, each trading arrangement for the sale or purchase of Company securities adopted or terminated by our directors or and officers (as defined in Rule 16a-1(f) under the Exchange Act) adopted that is either (i) a contract, instruction, or terminated written plan intended to satisfy the affirmative defense conditions of Rule 10b5-1(c) (a "Rule 10b5-1 trading arrangement"), or (ii) a "non-Rule 10b5-1 trading arrangement" (as defined in Item 408(c) of Regulation S-K): during the period covered by this quarterly report.

Action Taken (Date of Action)

Type of Trading Arrangement

Nature of Trading Arrangement

Duration of Trading Arrangement

Aggregate Number of Securities Covered

Shames Family Foundation (1)

Adopted ( August 24, 2026 )

Rule 10b5-1 trading arrangement Sale Expires August 21, 2027 (1) Ervin R. Shames , a director of the Company, serves as a trustee of the Shames Family Foundation.

Other than as set forth above, none of our directors or officers (as defined in Rule 16a-1(f) under the Exchange Act) adopted or terminated a Rule 10b5-1 trading arrangement or a non-Rule 10b5-1 trading arrangement during the period covered by this quarterly report.

Exhibits 9 changes

6 unchanged paragraphs

10.1(e)† Separation Agreement, dated May 20, 2026, between Choice Hotels International, Inc. and Patrick S. Pacious

10.1(e) Senior Unsecured Credit Agreement, dated August 28, 2026, among Choice Hotels International, Inc., Wells Fargo Bank, National Association, as administrative agent, the other agents party thereto and a syndicate of lenders

10.2(f)† Amended and Restated Non-Competition, Non-Solicitation & Severance Benefit Agreement, dated August 31, 2026, between Choice Hotels International, Inc. and Dominic E. Dragisich

10.3*† Amendment to the Choice Hotels International, Inc. 2025 Long-Term Incentive Plan

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(e) Incorporated by reference to the identical document filed as an exhibit to Choice Hotels International, Inc.'s Current Report on Form 8-K dated May 20, August 28, 2026, filed May 20, August 28, 2026.

(f) Incorporated by reference to the identical document filed as an exhibit to Choice Hotels International, Inc.'s Current Report on Form 8-K dated August 30, 2026, filed August 31, 2026.

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August 5, November 2, 2026 By: /s/ DOMINIC E. DRAGISICH

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Interim Chief Executive Officer

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August 5, November 2, 2026 By: /s/ SCOTT E. OAKSMITH

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