InnSuites Hospitality (IHT) Q1 2025 Earnings Report

InnSuites Hospitality Trust (IHT) reported QQ1 2025 revenue of $2.2939 million, a 32.4% QoQ increase from the prior quarter and a 3.99% YoY growth, highlighting a rebound in quarterly top-line activity. The company posted gross profit of $907k and EBITDA of $351k, with a healthy gross margin of 39.6% and an operating margin of 7.78%. Despite these positives at the operating level, net income remained negative at $(148.6) thousand, producing an EPS of $(0.017) for the quarter. The negative bottom line is driven by elevated tax expense and non-operating items, as well as structural costs that continue to weigh on after-tax results. Balance sheet and cash flow metrics depict a leveraged, cash-bleeding profile: cash from operations was negative at $(459) thousand, and free cash flow stood at $(610) thousand for QQ1 2025. The balance sheet shows total debt of $11.90 million with a long-term debt burden of $11.18 million and a net debt position of $(11.47) million. Liquidity remains modest, with cash and cash equivalents of $0.44 million and a current ratio of 1.67. Interest coverage sits around 1.52x, signaling sizable debt service risk if occupancy or rate trends deteriorate. From a competitive and industry context, IHT operates a small, single-asset or tightly clustered hotel portfolio in a capital-intensive sector. The stock trades at a price-to-book of ~2.0 and a price-to-sales of ~5.2, with a negative trailing P/E given the near-term losses. While gross margins are relatively healthy, the company’s sensitivity to debt service and working capital needs remains a key overhang. Absent material improvements in occupancy and ADR (average daily rate) and/or a successful refinancing/ capital strategy, the investment case remains cautious with a focus on liquidity, debt maturity risk, and potential asset monetization opportunities.