SVC Cuts Losses 99% but Post-Earnings Strategy Fails Investors

Service Properties (SVC), ranked by market capitalization, reported fiscal 2025 Q4 earnings on Feb 25, 2026. The company exceeded expectations with FFO of $0.17 (beating estimates by $0.11) and revenue of $397.45M (beating by $3.13M). While Q4 2026 guidance remains undisclosed, the CEO highlighted 2026 strategic priorities during the Feb 26 conference call, signaling cautious optimism amid improved profitability.

Revenue

The total revenue of Service PropertiesSVC+1.84% decreased by 12.9% to $397.45 million in 2025 Q4, down from $456.56 million in 2024 Q4.

Earnings/Net Income

Service Properties narrowed losses to $0.00 per share in 2025 Q4 from a loss of $0.46 per share in 2024 Q4 (99.0% improvement). Meanwhile, the company successfully narrowed its net loss to $-782,000 in 2025 Q4, reducing losses by 99.0% compared to the $-76.39 million net loss reported in 2024 Q4. The 99% reduction in both EPS and net loss demonstrates significant progress in curbing operational losses.

Price Action

The stock price of Service Properties has edged up 1.38% during the latest trading day, has edged up 1.84% during the most recent full trading week, and has jumped 8.33% month-to-date.

Post-Earnings Price Action Review

The strategy of buying Service Properties (SVC) shares 30 days after its quarterly earnings release date over the past three years delivered poor performance. The strategy’s CAGR was -28.07%, with a total return of -71.28% compared to a benchmark return of 60.55%. The strategy had a maximum drawdown of 80.39% and a Sharpe ratio of -0.78, indicating significant risk and losses.

CEO Commentary

The CEO of Service Properties TrustSVC+1.84% (SVC) highlighted the announcement of Q4 2025 results and full-year 2026 financial guidance, emphasizing the company’s position as a $10 billion real estate investment trust with 760 service-focused retail net lease properties and 94 hotels. Strategic priorities include leveraging The RMR Group’s management expertise to optimize asset performance and expand the portfolio. Despite a Q4 2025 net loss of $782,000 and an EPS of -$0.0047, the CEO expressed cautious optimism, underscoring the importance of the February 26 conference call to detail strategic initiatives and 2026 expectations. The tone reflects a focus on stability and long-term growth through disciplined asset management.

Guidance

SVC provided full-year 2026 financial guidance, accessible via its investor relations website and the February 26 conference call. While specific quantitative metrics are not disclosed in the filing, the guidance is framed as a forward-looking outlook to outline expected performance metrics. The company emphasized transparency through its official channels, aligning with prior disclosures of Q4 2025 results. No explicit “expect” or “guide to” statements are included in the provided text, but the guidance is positioned as a key component of SVC’s 2026 strategic roadmap.

Additional News

Service Properties Trust announced a quarterly dividend of $0.01 per share, paid on Feb 19, 2026, representing an annualized yield of 1.8%. Institutional investors, including BNP Paribas Financial Markets and Renaissance Technologies LLC, increased holdings in Q4 2025 and Q3 2025, with ownership stakes rising by 10.9% to 98.9%. The company also disclosed plans for a second securitization of net lease assets, signaling efforts to optimize capital structure. These developments underscore investor confidence in SVC’s long-term strategy despite recent operational challenges.