Chatham Lodging Trust (CLDT) Financials

Chatham Lodging Trust’s second-quarter 2026 results showed a meaningful rebound from the first quarter and improvement from the year-earlier period. Revenue increased to $80.9 million from $73.9 million in Q2 2025, while pretax income rose 55% to $8.5 million. Net income attributable to common shareholders reached $6.2 million, compared with $3.4 million a year earlier, and diluted earnings per share increased to $0.13 from $0.07.

Operating cash flow also remained a strength. Cash generated from operations rose to $25.6 million in Q2 2026 from $22.1 million in Q2 2025 and nearly doubled from $13.3 million in Q1 2026. The company’s cash flow benefited from depreciation and amortization adjustments, but the improvement in operating cash generation provides support for capital spending, debt service and shareholder distributions.

The balance sheet is more mixed. Total assets were $1.23 billion at June 30, 2026, down modestly from $1.24 billion at the end of the first quarter but up from $1.19 billion a year earlier. Total debt declined sequentially by approximately $9.8 million to $414.3 million, although it remained well above the $351.2 million reported at the end of Q2 2025. Cash and restricted cash totaled $17.7 million, down from $24.2 million a year earlier. Total equity, including noncontrolling interests, was relatively stable sequentially at $761.9 million but declined from $789.0 million in Q2 2025.

• Improving quarterly profitability: Q2 2026 revenue, pretax income, common net income and EPS all increased from Q2 2025, with common EPS rising to $0.13 from $0.07.
• Strong operating cash flow: Cash flow from operations reached $25.6 million in Q2 2026, up 16% year over year and substantially higher than the first-quarter figure.
• Sequential debt reduction: Total short- and long-term debt fell from approximately $424.1 million in Q1 2026 to $414.3 million in Q2, helped by $15.0 million of debt repayments.
• Longer-term debt reduction: Long-term debt has declined from approximately $472.1 million in Q3 2022 to $339.3 million in Q2 2026, despite the company’s use of short-term borrowings.
• Continued shareholder returns: The common dividend was $0.10 per share in Q2 2026, above the $0.09 paid during 2025 and the $0.07 rate reported during 2023 and 2024. The company also repurchased $2.8 million of common equity during the quarter.
• Seasonal improvement: Q2 results were much stronger than Q1 2026, but lodging performance is seasonal, so investors should evaluate whether the improvement continues through the typically softer quarters.
• Capital allocation remains active: The company purchased $7.4 million of investment securities in Q2 and made shareholder distributions, while also repaying debt. These actions may support liquidity and returns but reduce available cash in the near term.
• Interest costs continue to pressure earnings: Interest expense increased to $6.9 million in Q2 2026 from $6.4 million a year earlier, leaving net interest expense at $6.9 million despite only $23,000 of interest income.
• Leverage remains elevated year over year: Total debt increased approximately 18% from Q2 2025, and total liabilities rose to $472.3 million from $405.4 million, even though debt declined sequentially.
• Lower liquidity and accumulated deficits: Cash and restricted cash fell about 27% year over year, while retained earnings remained negative at approximately $308.9 million. The $7.0 million common dividend declared in Q2 also exceeded net income attributable to common shareholders for the quarter.