InnSuites Hospitality (IHT) Q2 2025 Earnings Report

InnSuites Hospitality Trust (IHT) reported QQ2 2025 results with modest year-over-year revenue growth but sizable deterioration in profitability and cash flow metrics, underscoring a high-leverage balance sheet and ongoing earnings volatility for this small hotel REIT. Revenue for the quarter was $1.84 million, up 6.93% from the prior-year period but down 19.77% versus the immediately preceding quarter, as occupancy and rate dynamics likely shifted through the backdrop of a slower near-term hotel cycle. Gross margin remained robust at about 41.3%, yet the company posted an operating loss of $285.96k and a net loss of $370.88k, translating to an EPS of -$0.0402. Negative EBITDA of $112.92k and an EBITDARatio of -0.0614 highlight ongoing cost and revenue discipline challenges despite a relatively healthy gross margin.

Liquidity and liquidity-adjusted cash flow pressures persisted. Net cash provided by operating activities was negative $44.60k, and free cash flow was similarly negative, driven in part by working capital changes and sizable fixed costs. Cash balance stood at $418.0k at quarter-end, with total debt of $12.21 million and net debt of $11.79 million, yielding a debt ratio of 0.81 and a debt-to-equity ratio of 2.22. Interest coverage remained negative, signaling near-term vulnerability to rising rates absent operational improvements or refinancing.

Management commentary is not captured in the provided transcript data, so quotes and call-specific guidance are not included here. Given the limited free cash flow, dividend payout activity, and high leverage, the near-term investment thesis remains cautious. The key questions for investors center on debt maturities and refinancing flexibility, occupancy/RERP recovery potential, operating efficiency improvements, and the ability to fund maintenance capex and potential growth initiatives without exacerbating leverage.