Marriott Intl Inc New — Income Statement, Cash Flows & Balance Sheet
Is Marriott profitable?
Marriott's core fee business grew meaningfully, pushing net income to a new high for the period — though a much lower tax rate inflated 2023's reported profit.
| Metric | 2023 | 2024 | 2025 | Change (2024→2025) |
|---|---|---|---|---|
| Net fee revenues ($M) | $4,736 | $5,067 | $5,303 | +$236 / +4.7% |
| Operating income ($M) | $3,864 | $3,767 | $4,141 | +$374 / +9.9% |
| Net income ($M) | $3,083 | $2,375 | $2,601 | +$226 / +9.5% |
| Diluted EPS | $10.18 | $8.33 | $9.51 | +$1.18 / +14.2% |
| Effective tax rate | 8.7% | 24.6% | 23.4% | — |
Net fees — the revenue Marriott keeps from franchise royalties and hotel management contracts, before pass-through cost reimbursements — grew steadily and operating income bounced back strongly after a soft 2024. The sharp drop from 2023 to 2024 in net income was almost entirely a tax story: a large intellectual-property restructuring benefit made 2023's tax rate unusually low at just 8.7%, so the underlying business trajectory is better read from 2024 to 2025.
Interest expense is rising quickly as Marriott has borrowed heavily to fund buybacks and growth.
| Metric | 2023 | 2024 | 2025 | Change (2024→2025) |
|---|---|---|---|---|
| Interest expense ($M) | $565 | $695 | $809 | +$114 / +16.4% |
Marriott issued several billion dollars of new senior notes in 2025, and the higher debt load is flowing through to the income statement. This is worth watching: if borrowing costs keep rising, they will increasingly offset fee revenue gains.
Where does Marriott's revenue come from?
Franchise fees are the biggest and fastest-growing piece of Marriott's fee income, reflecting the company's asset-light model.
| Segment / Fee Type | 2024 Gross Fees ($M) | 2025 Gross Fees ($M) | Change |
|---|---|---|---|
| Franchise fees | $3,113 | $3,325 | +$212 / +6.8% |
| Base management fees | $1,288 | $1,322 | +$34 / +2.6% |
| Incentive management fees | $769 | $791 | +$22 / +2.9% |
| Total gross fee revenues | $5,170 | $5,438 | +$268 / +5.2% |
Franchise fees — earned when hotel owners pay royalties to operate under Marriott's brands without Marriott managing the property — account for roughly six out of every ten dollars of gross fees and are growing fastest. Incentive management fees, which are tied to hotel profitability rather than just revenue, grew modestly, suggesting owner-level profitability improved but at a measured pace.
U.S. & Canada dominates segment profit, while EMEA and APEC are the clearest growth stories internationally.
| Segment | 2024 Profit ($M) | 2025 Profit ($M) | Change |
|---|---|---|---|
| U.S. & Canada | $2,640 | $2,679 | +$39 / +1.5% |
| EMEA | $512 | $525 | +$13 / +2.5% |
| Greater China | $186 | $185 | −$1 / −0.5% |
| APEC | $280 | $301 | +$21 / +7.5% |
The U.S. & Canada segment generates the lion's share of profit, but growth there was modest in 2025. Asia Pacific (excluding China) posted the strongest percentage gain, while Greater China was essentially flat — a notable softness given how much that market had been expected to recover.
Does Marriott generate cash?
Marriott is a strong cash generator, and free cash flow (operating cash minus capital spending) improved year-over-year.
| Metric | 2024 ($M) | 2025 ($M) | Change |
|---|---|---|---|
| Operating cash flow | $2,749 | $3,212 | +$463 / +16.8% |
| Capital & technology expenditures | $(750) | $(604) | −$146 |
| Free cash flow (GAAP approx.) | ~$1,999 | ~$2,608 | +$609 / +30.5% |
Because Marriott operates mostly as a franchisor and manager rather than a hotel owner, it does not need to spend heavily on physical assets — capital spending actually declined in 2025. The resulting free cash flow is substantial relative to the size of the business.
Marriott returns most of its cash to shareholders, primarily through buybacks.
| Use of Cash | 2024 ($M) | 2025 ($M) | Change |
|---|---|---|---|
| Share repurchases | $(3,762) | $(3,300) | −$462 |
| Dividends paid | $(682) | $(718) | +$36 / +5.3% |
| Total returned to shareholders | $(4,444) | $(4,018) | −$426 |
Marriott returned more cash to shareholders than it generated from operations in both years, funding the gap with new debt issuance. The dividend per share rose modestly, and the share count has fallen from about 302 million in 2023 to 274 million by the end of 2025 — meaning each remaining share represents a larger slice of the business.
How strong is Marriott's balance sheet?
Marriott carries substantial debt and runs a negative stockholders' equity (a "stockholders' deficit"), which is intentional but worth understanding.
| Metric | Dec 2024 ($M) | Dec 2025 ($M) | Change |
|---|---|---|---|
| Total long-term debt (incl. current portion) | $14,447 | $16,204 | +$1,757 |
| Stockholders' deficit | $(2,992) | $(3,771) | −$779 |
| Cash and equivalents | $396 | $358 | −$38 |
Negative stockholders' equity simply means the cumulative amount spent on buybacks and dividends exceeds retained earnings on paper — a common and deliberate outcome for asset-light businesses that return capital aggressively. That said, total debt grew by nearly $1.8 billion in one year, and interest payments are climbing accordingly.
The loyalty program represents a large and growing liability that is funded by hotel owners, not Marriott's own cash.
| Metric | Dec 2024 ($M) | Dec 2025 ($M) | Change |
|---|---|---|---|
| Liability for guest loyalty program (total) | $7,519 | $7,992 | +$473 / +6.3% |
| Deferred revenue (current + noncurrent) | $1,299 | $1,409 | +$110 / +8.5% |
The Marriott Bonvoy loyalty liability — essentially points earned by members but not yet redeemed — is the single largest liability after debt. Importantly, the costs of running the program are reimbursed by hotel owners, so this liability does not represent a direct drain on Marriott's own cash flow, but it is large and growing as the program expands.