10-Q · May 11, 2026
The InterGroup Corporation's Q2 2026 results show a significant recovery with a net income of $595,000 compared to a net loss of $750,000 in Q2 2025. Revenue improved to $20,372,000 driven by strong hotel performance,…
Earnings analysis · 10-K
INTG earnings analysis
Filed September 28, 2026 · Our reading of the company's report
The latest report
InterGroup delivered a substantial fiscal 2026 recovery, with revenue up 14.9%, operating income up 55.3%, and diluted EPS of $0.71 versus a fiscal 2025 loss. The improvement was led by the Hilton San Francisco…
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InterGroup delivered a substantial fiscal 2026 recovery, with revenue up 14.9%, operating income up 55.3%, and diluted EPS of $0.71 versus a fiscal 2025 loss. The improvement was led by the Hilton San Francisco Financial District, where higher occupancy, room rates, RevPAR and expanded inventory lifted Hotel segment income to $12.524 million; real estate earnings were also modestly higher. However, the investment case remains highly leveraged and concentrated: $104.859 million of contractual debt matures in fiscal 2027, Hotel cash remains lender-controlled, and post-bridge entrance improvements have no reliable cost estimate.
Gross and operating margin
How much of each revenue dollar the business keeps.
One point per quarterly or annual filing. Both margins are shares of that report's revenue.
Where revenue came from
The business segments reported by the company.
Shares of the segments disclosed in this filing, largest first.
How we read each report
Our analysis across the last few reports.
Our model's reading of each filing, not the share price or the market's reaction. Annual and quarterly reports each occupy one position.
Reported figures
- Earnings per share
- $0.71
- Operating margin
- 16.0%
What stood out
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Material Earnings Recovery
Fiscal 2026 revenue increased 14.9% to $73.951 million from $64.378 million, while income from operations rose 55.3% to $11.866 million from $7.643 million. Net income attributable to InterGroup improved to $1.643 million, or $0.71 diluted EPS, from a $5.348 million loss in fiscal 2025.
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Hotel Recovery Drives Growth
Hotel Operations was the primary growth driver: revenue increased approximately 20% to $55.797 million, occupancy rose to 95% from 92%, average daily rate increased to $253 from $218, and RevPAR increased to $239 from $200.
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Expanded Hotel Inventory and Hilton Brand
The Hotel’s available inventory expanded from 544 to 558 rooms effective September 30, 2025 after 14 former administrative offices were converted to guestrooms. The property operates under a Hilton franchise agreement through January 31, 2030.
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Stable Diversified Real Estate Base
Real Estate Operations remained stable, with revenue increasing to $18.154 million from $18.015 million and segment income increasing to $8.853 million from $8.465 million. The portfolio comprises 19 operating properties concentrated in Texas and Southern California, plus approximately two acres of Maui land.
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Positive Post-Capex Cash Flow
Cash flow remained positive after capital spending: fiscal 2026 operating cash flow was $3.450 million, while Hotel and non-Hotel capital expenditures were $2.198 million and $968,000, respectively, implying approximately $284,000 of derived free cash flow.
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Debt Reduction and Liquidity Maintained
Capital allocation reduced obligations while retaining liquidity: the Company made $1.201 million of mortgage payments, repaid the $1.834 million mortgage on a sold property, and held $6.356 million of unrestricted cash plus $10.943 million of restricted cash at June 30, 2026.
What to watch
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Large Near-Term Hotel Debt Maturity
The Hotel’s $67.0 million senior mortgage and $36.3 million mezzanine loan mature on April 9, 2027; contractual debt maturities total $104.859 million in fiscal 2027. The first extension requires a DSCR of at least 1.10:1.00; management calculated 1.45:1.00, but lender determination is controlling and refinancing remains necessary if the extension is unavailable.
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Single-Property San Francisco Concentration
Hotel operations are concentrated in one San Francisco property with 558 rooms, and the filing states that the Hotel represents a significant component of consolidated revenues and operating results. A weaker local economy, travel demand or convention market could therefore materially affect consolidated results.
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Unquantified Post-Bridge Capital Requirement
The Hotel was closed from July 31 through August 9, 2026 for pedestrian-bridge removal and resumed operations on August 10, 2026. Portsmouth remains responsible for permanent Kearny Street entrance improvements and had not established a reliable cost estimate because final design, approvals and construction conditions remain unresolved.
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Restricted Hotel Cash Availability
The Hotel cash-management arrangement remained in effect because the lender had not confirmed release conditions, restricting use of Hotel cash for broader corporate purposes. Although management calculated trailing-twelve-month DSCR of 1.45:1.00 and Debt Yield of 13.9% versus thresholds of 1.10:1.00 and 11%, lender approval is still required.
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Concentrated Investment Portfolio
Marketable securities increased to $4.394 million at June 30, 2026, and two equity securities represented approximately 43% of portfolio fair value. Marketable-securities operations still produced a $213,000 loss despite a $953,000 net securities gain, exposing earnings to valuation volatility.
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Rising Hotel Costs and Labor Exposure
Hotel operating expenses rose to $43.273 million from $37.631 million, reflecting higher salaries, Hilton marketing and loyalty fees, credit-card costs, and commissions. Approximately 90% of the Hotel’s 187 employees were represented by unions, increasing exposure to labor-cost and collective-bargaining changes.
Management's outlook
The 10-K provides no numeric revenue or EPS guidance. Management states that existing liquidity sources and financing arrangements are sufficient to meet obligations for at least 12 months following issuance, and expects to exercise the first Hotel debt extension through April 9, 2028.
Earlier filings 4
10-Q · February 12, 2026
InterGroup reported Q2 revenue of $17,301,000 (up from $14,441,000 a year ago) and income from operations of $2,015,000 (vs $853,000 a year ago). Diluted EPS turned positive at $0.71 vs $(1.26) in the prior-year…
10-Q · November 12, 2025
InterGroup reported revenue of $17,913,000 for the three months ended September 30, 2025, up $1,007,000 versus the prior year quarter, driven by higher Hotel and real estate revenue. Operating income declined to…
10-K · September 30, 2025
InterGroup (INTG) emphasizes a hybrid strategy of operating a full-service Hilton hotel in San Francisco while owning and managing a portfolio of 16 apartment complexes and other real estate, plus a marketable…
This is our reading of a public filing, not the filing itself. Analysis can contain errors; check the source document for full context.