It falls into three distinct areas. Owner growth, first-time buyer growth, and operational growth. First, owner growth. VPG increase. We are continuing to see VPG growth. We believe we have strong tailwinds and a healthy upside embedded in our recently launched strategy. Premier vacations. is building a large pipeline of very predictable owner tour flow. When owners travel on this bonus vacation, we expect that they will convert at a very strong VPG level. Connection rate. We will continue to improve owner arrival to tour rates with our owners when they travel to our resorts in the future. Inner circles. will be scaled in a significant way over the course of 2027 and beyond, allowing us to realize the increased connection rate associated with producing one of our experiential events, as well as the outsized VPGs associated with them. First-time buyer growth, package sale pipelines, We will continue to grow through previews sold to guests who will tour our beautiful resorts in the future and attend a sales presentation while doing so. This preview package sales growth will continue to be fueled by the robust Marriott Bonvoy and World of Hyatt databases. Hotel Linkage Program This is being aggressively expanded. whereby we will have marketing desks in the lobby of select branded hotels across North America and we will invite hotel guests to purchase a preview package to tour one of our resorts in North America. Partnership marketing. This is a significant incremental growth channel for us. We are building a team that will sell packages face-to-face in the marketplaces. They will identify companies and events with high guest flow of leisure-minded guests who will provide us the opportunity to sell a preview package to their guests as well as make offers electronically to their database. Operational growth. Recruiting. We have recently invested in enhancing our sales and marketing recruiting team Thank you for joining us. We increase prices on July 1 and our performance continues to be strong. We have confidence that there is still incremental price increase opportunity ahead. Cost reductions. We will continue to address these within the business while effectively supporting the necessary growth strategy that we have in place. We are confident in the sustainability of our performance. As we have said, the second half of this year will continue our revenue growth story and we also expect nice margin improvement driven by both leveraging our fixed costs and the impact of the cost saving measures that have been implemented. We are also focused on 2027 and beyond and are strategically ramping a predictable pipeline of both owner and first-time buyer tour flow growth. In closing, during my discussions to join Marriott Vacations, it was clear there was a meaningful opportunity in the company. Having now spent six months immersed in the organization, I would tell you that the opportunity is even greater than I could have forecasted. We have outlined a very powerful near-term transformation strategy that is already showing excellent results. In addition, we have laid out a very sustainable long-term plan that will provide predictable and profitable growth for the company out into the future. These plans, coupled with our world-class brands, Access to two great loyalty programs with highly engaged and qualified owner bases and an extremely talented team give us tremendous confidence in the future of the company. What excites me most is that the results we delivered in the second quarter show what is possible when we execute with focus, discipline, and speed. The quarter reinforced my confidence in both the near-term and long-range value creation opportunity and our team's ability to execute it. With that, I'll turn it over to Jason.

Thank you, Mike. Good morning, everyone. Our second quarter results reflect the tremendous success of the work of our teams, new programs, and operating discipline, and I'm pleased to report that our transformation is well underway. Our contract sales increased 22% year-over-year to $545 million, driven by an increase in VPG. As a result of our new programs and sales operating excellence, our sales to existing owners increased 41%. North American tours increased 3% due to our increased connection rate with owners, and North America contract sales increased 27%, principally influenced by our average transaction size. Development profit increased $14 million year-over-year to $106 million due to the strong contract sales growth we delivered this quarter, combined with our cost of vacation ownership sales declining 130 basis points year-over-year as a percent of development revenue. It is important to remember that in periods of significant growth, There is an adverse impact to our reported revenue related to our contract sales, which we call reportability. Simply put, we don't recognize revenue from contracts sold in the last 10 days of the quarter as they are still in the rescission period. However, we do recognize most of the sales and marketing costs. This negatively impacted development profit by $15 million in the quarter. Marketing and sales expense as a percent of contract sales decreased 150 basis points year over year. This is a substantial 700 basis points sequential improvement from Q1. As Mike mentioned, we are focused on improving development margins and expect them to improve in the second half of the year. Sales reserve was 13.4% of contract sales in the quarter. Given a significant 22% increase in contract sales, we determined it was prudent to increase our sales reserve measured as a percentage of our contract sales this quarter and expect a similar rate in the second half of the year. Our sales reserve is the lowest in the industry, reflecting the quality of our brands and property portfolio, the strong financial profile of our owners, and their affinity to our products. Management and exchange profit increased $6 million year-over-year, and financing profit was unchanged, excluding the change in the presentation of interest expense in our warehouse credit facility, which we've discussed previously. Finally, adjusted EBITDA increased 6% year-over-year to $215 million. Turning to the balance sheet, we finished the quarter with $3.1 billion of net corporate debt and leverage of approximately four times Thank you. Thank you. Thank you. We are making good progress on our non-core asset dispositions, actively marketing multiple assets for sale with key brokers. We anticipate adding our New York City property to our inventory trust to support our higher contract sales this year and into the future. This asset was previously included on our targeted non-core asset disposition list. and as a result we now expect total proceeds from our non-core asset sales to be 200 million dollars by the end of 2027. We expect to sell 50 million dollars of non-core assets in the second half of this year which are included in the overall disposition numbers I mentioned though excluded from our adjusted free cash flow guidance. Turning to guidance, Given our Q2 contract sales and the strong momentum that continued into July, we now expect contract sales to increase 18 to 20% for the year, implying 25 to 29% growth in the second half. As a result of our contract sales growth and continued focus on cost, we will drive better margins in the second half. We are raising our adjusted EBITDA guidance to be $805 to $830 million this year. This reflects a $50 million higher range than our previous guidance. From a cash flow perspective, we are raising our adjusted free cash flow estimate for the full year to be between $410 and $460 million this year, a $35 million increase at the midpoint. We expect our free cash flow conversion this year to be in the mid 50% range. As we continue to grow our free cash flow, we will evaluate opportunities to deploy capital with an emphasis on repayment of debt, dividends, and opportunistic share repurchases. In closing, we had a great quarter. Our new initiatives are resonating with our owners, highlighted by 22% contract sales increase and 23% VPG growth in the quarter. Our team is reinvigorated and I couldn't be more optimistic about the direction we're headed and the opportunities ahead of us. With that, we will be happy to answer your questions. Operator.

Thank you. We will now begin the question and answer session. If you would like to ask a question, you may press store one on your telephone keypad. should you wish to cancel your request, you may press star two. As a reminder, you may ask one question and one follow up. If you would like to ask more questions, you may press star one again to go back to the queue. And your first question is from Ben Chaiken from Mizuho. Your line is now open.

Hey, good morning, and thanks for taking my questions. Maybe just to dive in on 2Q, You know, it sounds like the tour logistics was the major driver of contract sales in 2Q. Is that fair? And I ask because I think Premier Vacations and Inner Circle only recently launched, if I'm not mistaken, and I'm assuming those didn't contribute much in the quarter. So I guess the question is, A, have I framed the first part of that correctly? And B, how did you think about the ramp of those two aspects, Inner Circle and Premier Vacations, in the context of the guide? Thanks. And then one quick follow-up.

Hey Ben, it's Mike here. Yes, you are correct. Tour logistics and our owner benefit levels. So it wasn't exactly just tour logistics. Tour logistics, as we have discussed, has had a tremendous impact. And the algorithm is designed to make sure we're using propensity to match up every tour wave, the right salesperson with the right tour to give us the highest propensity for conversion. And then when you couple that with the owner benefit levels that were completely refreshed, including adding the reserve and the pinnacle levels, We have created an aspiration for our owners to want to buy more of the product while making sure that the matchups through tour logistics are putting the right salespeople in front of the right customers. As we moved into the later part of Q2, you are correct in we rolled out our inner circle presented by AFLAC event series and our premier vacations. And the early indicators that we got in the second half of June were excellent, above our expectations.

So, hey, Ben, it's Matt. Thanks for joining us. And so to your point, as we considered our guidance for the balance of the year, certainly sort of the runway that we see for those programs introduced late in the quarter are certainly a catalyst for the second half of the year.

Okay, that's very helpful. And then maybe a question on recruitment. It sounds, if I was maybe reading between the lines, it sounds like you were able to attract some new talent. Where does that stand? Have the bulk of these hires been made already? And while, you know, obviously a long-term or a medium-term, long-term positive, it sounds like that's weighing on flow through in the near term slightly. I guess is the expectation that there's some sequential improvement there and then obviously totally understand that there's also the reportability dynamic as well unrelated but thanks.

So I'll handle two of the three and Jason can talk about the reportability. We don't have anything as it relates to recruitment that is impacting flow through. In fact, we've been incredibly blessed As they say in professional baseball, the players know. And the top talent in the industry has choices. And they've been voting our way. And it's driven by our innovation. It's driven by our brands. It's driven by the demographic of our customer. And frankly, our sales and marketing leadership and the culture that they create. So we've been really blessed on that front. And we continue to see top talent coming our way.

Yeah, Ben, I don't think you had a question on reportability. I think you understand it.

Yep, yep. Appreciate it. Thank you very much.

Thank you. And your next question is from Lazy Dove from Goldman Sachs. Your line is now open.

Hey, good morning. Thanks for taking the question. Don't want to kind of, you know, front run anything on the Invest Today, of course, but I guess high level, you know, how do you think about some building blocks of just and many more.

Lizzie, this is Matt. Thanks for joining us. And to your point, I appreciate you allowing us to beg off just a little bit towards the investor day. But I would reinforce a couple of the points that Mike made. Some of the things we're introducing right now, the premier vacations, by way of example, not only add to the value proposition on day one sell, but they are designed to build a pipeline of guests returning next year on that premier vacation. And the way that we've designed those, they all come back to our existing properties by design. And so that's one way in which we build out additional tour flow opportunities next year. Secondly, as we look at both how far we utilize and penetrate the loyalty programs that exist both at Marriott and Hyatt, we have opportunities to grow our tour flow in that regard. So, simply put, and I won't go too much more specifically, we have very much had our eyes on, right now, it has been about increasing the connections with our owners and bringing value to them, and we're seeing that in our results now, and that'll be an ongoing driving engine of the future. In addition to that, between new partnerships we can establish, better utilization of databases we already have, we see the opportunity to and many more. Thank you.

Seems like, you know, given what you did in the quarter, there's a kind of huge acceleration and very, very strong exit rate. Appreciate you've said the momentum kind of continued into July, but anything you'd be able to share more specifically on just how things have been trending quarter to date?

Yeah, Lizzie, this is Jason. So, yeah, what we said on the last call was 8% contract sales growth in April. So just doing the math, that implies call it, you know, 29% for May and June and I would just say that July was largely consistent with the May and June numbers.

Great. Thanks so much.

Thank you. And your next question is from Patrick Shoals from Truist Securities. Your line is now open.

Great. Thank you. Good morning. Certainly the adjective demonstrable is fitting here. Mike, a question for you. You know, talked about at a high level ramping up on inner circle. I think you said you had done five in QQ. You know, do you have a specific number that you're targeting for the back half of the year and what should we think that there's a come next year, a full year run rate for those types of events? Thank you.

Good morning, Patrick. We have plans to do about 50 in 2026. And as I've said before to you, I believe the proof of concept is not in whether the event platform works. We certainly know that's proven and we know how to execute it. We want to get the Marriott team up to speed on how to execute these headline events. and so we have been incredibly pleased with the rollout of the headline events. But remember, only 20% of the total event platform going forward will be the headline events. 80% of them will be smaller regional in-market events like casino nights, murder mysteries, Things along that line, which also have the outsized VPG performance. So when we get to 2027, our goal is to do a couple of hundred headline events, and I would say target a thousand events for the full year 2027.

Okay, so pretty sizable expected ramp up there. Jason, you had just briefly touched on the loan loss provision. Can you go to a little more granularity on trends within that and changes, et cetera? I did see that it was up modestly year over year. Thank you. And the results.

Yeah, thanks, Patrick. So, yeah, I think for the year, for the quarter, we're up about 20 basis points year over year as measured as a percentage of contract sales. We feel good about where the portfolio sits. The trends from Q1 to Q2 are good. You'll see that our delinquencies in the sub-120-day bucket are down 54 basis points. We did have some higher propensity year over year, too, which drove some of that increase. But we feel good about where it's going, and July actually finished up with good results as well. So we're confident in where we sit today.

Okay. What do you mean by higher propensity? Higher propensity to default or just more buyers and they had higher propensity? Sorry.

Yeah, I'll be more clear on that. Higher propensity to finance their purchases with us, so that drives how we reserve for it. It's just higher dollars financed.

Gotcha. Just wanted clarification. Thank you very much.

Thank you. And your next question is from David Katz from Jefferies. Your line is now open.

Morning, everybody. Thanks for all the detail. Mike, I wanted to just go a little farther on one of the five strategies which and I don't remember which number it was, but there was hotel linkage. And, you know, my sense historically is that that's kind of a normal course channel. Could you provide a little more color on sort of where that was when you got here, where that, you know, where you intended to take that and just give us more of a sense of what you feel like you can do with that? That just always seemed like a part of the process to me.

Yes, David, I think that the answer to the first part of your question, there were very limited hotel partners in the system when Matt and I arrived. We believe that there is significant upside to going out and partnering with the hotel owners that have the brands that are on our brand bar and basically creating a win-win scenario to create an incremental revenue stream for the hotel owners whereby giving us the opportunity to get in front of their leisure-minded travelers and sell one of our four-day, three-night preview packages to come preview one of our resorts in North America. And we see that as a significant opportunity to ramp that up going forward.

Can I, if I may follow up, Just kind of an order of magnitude, you know, where, you know, maybe you were in 100 hotels and you want to go to 1,000, you know, something, whether that's qualitative or otherwise. Thanks.

Yes, sir. I would tell you we're in four or five hotels today, and our goal is to get in as many of them that we think would be accretive to the business and scale it in a fashion that we can staff it up appropriately.

four or five. Go ahead. Sorry. That's great.

David, it's Matt. You know, I think simply put, almost as we talked earlier in our calls this year, we were focusing on key markets. There are key markets where we know there's opportunities, as you know, over time, hotel owners change in various branded portfolios. And we are simply refocusing on All of those key relationships, particularly in key markets where we operate, where we generate package tours on our own. We think there is just simply more opportunity. So order of magnitude, I might ask you to give us just a little bit of time between now and our investor day. It's an area that we know simply has more opportunity, and that's what we were highlighting today. You'll see more specificity by the time we're together.

On the list. Thank you.

Thank you. And your next question is from Steven Grambling from Morgan Stanley. Your line is now open.

Hey, thanks. Mike, you gave this stat I think you previously kind of talked about. This average owner has 1.3 weeks versus other networks are more like three to four weeks. Can you remind us where occupancy across the portfolio is both from owners and then in total with rentals? And as you continue down this path of upselling to the existing owners. Is there a need to add inventory to ensure you don't have any kind of degradation in the availability of what you're selling?

Yes, Stephen, I'll cover the first part and I'll ask Jason to talk about the inventory. As it relates to the specific question, we feel like that we're in a good spot. We, as I said, this owner base is significantly underserved. There is tremendous runway left in this owner base, and we're very excited about the initial responses, you know, to what we have rolled out. The inventory piece of it, Jason, you can comment specifically on that.

Yeah, Stephen, so we run, call it 65% owner occupancy across the system. The 90% that we routinely quote is added to with Marketing stage that we use for packages and marketing stage to support the sales and marketing business as well as transient. So we feel like we've got good opportunity there to increase the ownership base without significantly increasing our inventory.

Okay, and then you mentioned the propensity to finance went up. I'm curious, what's the average down payment for existing owners in the quarter and how does that compare to history?

Yeah, it was relatively unchanged for, you know, our average down payment, including equity that they're using from, call it previous ownership. It's in the mid to high 20s for down payments.

But I guess if you exclude that equity, I mean, do you, I think some don't allow, some of your peers don't allow existing owners to use that.

Yeah, I don't know necessarily what all of our peers do, but we have minimum 10% down loans. So for first-time buyers, it would be minimum 10% cash down. But for people that are what we call upgrading from one product to another or same product, we allow them to use their existing equity, and that's the number in the high 20s. Got it. Thank you.

Thank you.

Thank you. And your next question is from Trey Bowers from Wells Fargo. Your line is now open.

Hi, this is Nick on for Trey.

Thanks for the question. I just want to ask about the decision to no longer look to sell the property in New York. Kind of just, you know, what was the rationale behind that? Any color would be great.

Yeah, Trey, I think as you look at our inventory on the balance sheet today, we've got about $900 million at cost. That represents about a year, 1.7 years, given the guidance that we just gave. And as we're looking to really support sales, we thought it prudent to put that inventory in the trust as we go forward.

Yeah, Nick, this is Matt. And I think we felt it important to indicate that at this point, we anticipate that that's one of the options as our sales pace continues over the next two quarters. And in that section, we were updating what the disposition proceeds were likely to be. And knowing that we're evaluating that as one of the changes as our sales pace continues to grow, we thought it was important to Thank you. Thank you. Once again, that is part one, should you wish to ask a question.

and your next question is from Patrick Schultz from True Risk Securities. Your line is now open.

Great. Just a quick follow-up question. I believe this is for Jason. As we think about the EBITDA ramping up, it implies you may be able to get back to mid three times net debt to EBITDA by the end of this year. In that scenario, how are you thinking about getting back and potentially back to share repurchases. Thank you.

Yeah, as I said in our prepared remarks, we're at four times based on the guidance and what we expect for cash flow. We would be in the upper threes by the end of the year. And so the way we're thinking about it right now is we want to remain disciplined, get the debt to a more appropriate level. But as I've said before, as we get below four times, we can be more opportunistic in terms of share repurchases. And we'll evaluate that strategy on a continuous basis as we go forward.

Okay, thank you, Jason.

Thank you. There are no further questions at this time. I would now like to turn the conference call back over to Matt Avril for the closing remarks.

Thank you, everyone, for joining our call today. As we began the year, we committed to reestablishing your confidence in our company. We generated revenue growth by focusing on the fundamentals of the business and strengthening our connections with our owners. The owner experience programs we have introduced are proving to be a meaningful catalyst towards that objective. These initiatives have generated excitement among our owners by creating more personalized interactions, enhancing their vacation experiences, and increasing awareness of the value available across our network of brands and destinations. At the same time, they have reignited energy throughout this organization by giving our teams new tools and new opportunities to engage with customers and greater visibility into the impact of their efforts. The improved owner engagement and stronger organizational alignment we are seeing today gives us confidence that the operational improvements achieved this quarter represent the early stages of a more durable and sustainable growth trajectory. On behalf of all of our associates, owners, and members, I want to thank you for your continued interest in Marriott Vacations Worldwide. Thank you and have a great day.

Thank you, ladies and gentlemen. That concludes the conference call for today. Thank you all for joining. You may now disconnect your lines.