The Intergroup Corporation (INTG) FY2026 Earnings: Revenue $74M (+14.9%)
INTG — FY2026 Annual Financial Report Analysis
Full Year · Fiscal year 2026 · Published by Pham Hop
InterGroup's Hilton San Francisco hotel lifted RevPAR 20% to $239, taking FY2026 revenue up 14.9% to $73.95M and producing a $1.64M profit to shareholders — though a $3.51M property-sale gain, not operations, covered the interest bill.
Revenue
$74M
+14.9% YoY
Net income
$1.6M
Diluted EPS
$0.71
Operating margin
16.0%
This period vs a year ago
Same period last year
This period
Revenue▲+14.9%
≈$64M
$74M
Year-ago figures (≈) are worked out from the growth rate the company reported. Each row has its own scale.
A better hotel year turns InterGroup profitable, but the debt load still eats almost all of it
The InterGroup Corporation owns about 75.9% of Portsmouth Square, Inc., whose main asset is the 558-room Hilton San Francisco Financial District hotel, plus a portfolio of fifteen apartment complexes (mostly in Texas and Southern California), one commercial property and three single-family houses. For the fiscal year ended June 30, 2026, total revenue rose 14.9% to $73.95 million and net income attributable to InterGroup shareholders was $1.64 million ($0.71 per diluted share), against a $5.35 million loss a year earlier. Nearly all of the revenue growth came from the hotel, where rooms sold for more and filled more often as business travel and conventions returned to San Francisco.
At a glance
Hotel RevPAR up 20% to $239. RevPAR (revenue per available room — room revenue divided by every room the hotel could have sold, occupied or not) rose because the average nightly rate climbed 16% to $253 and occupancy rose three points to 95%.
Operating income up 55% to $11.87 million, but mortgage interest was $12.67 million. The business still does not earn enough from running its properties to cover the interest on its debt; the year's profit depended on one-off gains.
A $3.51 million gain on selling a 12-unit Los Angeles County apartment building. Without it, InterGroup would have reported a pre-tax loss of about $0.9 million instead of a $2.6 million pre-tax profit.
Results table
Metric
FY2026 (year to Jun 30, 2026)
FY2025
YoY Change
Total revenue
$73.95M
$64.38M
+14.9%
Hotel revenue
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$55.80M
$46.36M
+20.3%
Real estate revenue
$18.15M
$18.02M
+0.8%
Income from operations
$11.87M
$7.64M
+55.3%
Operating margin
16.0%
11.9%
+4.1 pts
Mortgage and mezzanine interest expense
$12.67M
$13.56M
-6.6%
Net income (loss), consolidated
$0.34M
$(7.55)M
n/m (loss to profit)
Net income (loss) attributable to InterGroup
$1.64M
$(5.35)M
n/m (loss to profit)
Diluted EPS attributable to InterGroup
$0.71
$(2.47) basic; diluted not reported
n/m (loss to profit)
Hotel average daily rate
$253
$218
+16%
Hotel average occupancy
95%
92%
+3 pts
Hotel RevPAR
$239
$200
+20%
n/m = not meaningful: a percentage change from a loss to a profit doesn't describe anything useful. The filing shows no diluted EPS for FY2025 because the company lost money that year.
The hotel did the work
Hotel revenue rose $9.43 million to $55.80 million. Room revenue alone went from $39.65 million to $48.40 million (+22%), with smaller gains in food and beverage ($3.16 million vs $2.86 million), the garage ($3.31 million vs $3.21 million) and other departments. Management attributes the increase to "improved business travel and convention demand," the completed guestroom renovation, and 14 extra rooms: from September 30, 2025, former administrative offices were converted into guestrooms, taking the hotel from 544 to 558 rooms (about 2.6% more rooms to sell).
The monthly occupancy table shows where the gain came from. The weak winter months improved most: November 2025 ran at 92% versus 83% a year earlier, and February 2026 at 96% versus 86%. The summer months, already in the mid-90s, were flat or slightly lower (July 2025 was 93% vs 96%). December (88%) and January (91%) remain the soft spots.
Hotel costs rose too, by $5.64 million (+15%) to $43.27 million, driven by higher wages and employee costs, Hilton marketing and loyalty-program fees, credit card processing costs and travel-agent and group commissions — mostly costs that scale with revenue. Because revenue rose faster than costs, the hotel's segment income (revenue minus its direct operating costs, before depreciation and interest) rose from $8.73 million to $12.52 million, and its margin on that basis from 18.8% to 22.4%.
Apartments: steady, small
Real estate revenue barely moved (+0.8% to $18.15 million); the company credits "stronger multifamily occupancy and rental rate trends across the portfolio." Operating costs fell to $9.30 million from $9.55 million on lower insurance and property tax, so the segment's income rose to $8.85 million from $8.47 million. The company notes that rent-stabilization and tenant-protection laws limit how much it can raise rents at some properties.
What the headline numbers hide
The profit came from a sale, not from operations. Income from operations was $11.87 million, but interest on mortgages and the hotel's mezzanine loan (a second, higher-cost layer of debt that sits behind the main mortgage) was $12.67 million, plus $1.20 million of trading and margin interest on the securities account. The $3.51 million gain on the December 2025 sale of the 12-unit property (sold for $4.85 million) turned a pre-tax loss of roughly $0.9 million into a $2.62 million pre-tax profit. A $0.95 million gain on marketable securities and a $0.12 million insurance gain also helped. The prior year had its own swing items: a $1.42 million gain on extinguishing debt and a $1.35 million loss on securities. Stripping the property sale, debt gain, insurance gain and securities gains/losses out of both years, the pre-tax result improved from about -$7.1 million to about -$2.0 million — a real improvement of roughly $5 million, but still short of break-even.
Tax took almost all of the pre-tax profit. Income tax expense was $2.28 million on $2.62 million of pre-tax income, leaving consolidated net income of just $0.34 million. Of that, $1.67 million was deferred tax (an accounting charge, not cash paid this year); cash taxes paid were $0.39 million. The company keeps a $41.0 million valuation allowance against its tax assets, meaning it doesn't count on using most of its past losses to reduce future tax.
Why InterGroup's own profit ($1.64 million) is bigger than the consolidated profit ($0.34 million). Outside shareholders own about 24% of Portsmouth, and their share of Portsmouth's result was a $1.31 million loss. That means the hotel company itself still lost money at the bottom line, and InterGroup's reported per-share profit depends on that loss being partly shared with the minority.
Cash conversion looks weak but is distorted by the securities account. Operating cash flow was $3.45 million, down from $5.89 million, but that figure includes $2.64 million the company put into marketable securities (in FY2025 it pulled $5.47 million out). Stripping that swing, operating cash flow was about $6.1 million, against capital spending of $3.17 million ($2.20 million on the hotel, $0.97 million on the apartments). The securities portfolio grew from $0.97 million to $4.39 million and is now concentrated: American Realty Investors (29.2%) and Snowflake (13.9%).
Buybacks played no role in EPS. Only $73,000 of stock was repurchased; weighted shares outstanding went from 2.16 million to 2.15 million.
The balance sheet is still upside down. Total liabilities were $218.6 million against total assets of $104.6 million (assets are carried at historical cost less depreciation, so this does not mean the properties are worth less than the debt, but it does mean there is no accounting equity cushion). The InterGroup shareholders' deficit narrowed only slightly, from $86.1 million to $84.5 million.
Housekeeping items: the company changed auditors in March 2026 (Withum to Whitley Penn), and management says a previously reported material weakness in accounting for stock compensation was fixed by June 30, 2026.
Takeaway: The San Francisco recovery is showing up clearly at this hotel — RevPAR up 20% with occupancy at 95% — and it lifted operating income by $4.2 million. But InterGroup still spends more on interest than its properties earn from operations, so this year's profit rested on a property sale. The real test is whether hotel earnings keep rising fast enough to cover the debt without selling assets.
What to watch next
The hotel debt maturity in April 2027. Portsmouth's $67.0 million senior mortgage and $36.3 million mezzanine loan mature on April 9, 2027, with three one-year extension options. The first extension requires a debt service coverage ratio (operating cash flow divided by debt payments) of at least 1.10; management calculates 1.45 as of June 30, 2026 and "currently expects" to extend to April 2028. The better hotel year is what makes that extension look achievable — a drop in hotel earnings is the main risk to it.
A known hit to the September 2026 quarter. The hotel suspended guest operations from July 31 to August 9, 2026 while the city removed the pedestrian bridge connecting it to Portsmouth Square park. That is about ten days without guests in the next quarter's results. Portsmouth also has to pay for a permanent new Kearny Street entrance, and has not yet estimated the cost. Under a July 2026 term sheet, the city agreed to make certain payments toward frontage costs, subject to repayment starting in 2029; the settlement is not yet final.
Room for further growth is mostly in price now. At 95% average occupancy the hotel is close to full most months, so further RevPAR gains will have to come mainly from higher nightly rates and the full-year effect of the 14 added rooms, not from filling more rooms.
Management gives no numerical revenue or earnings guidance. Our read: if San Francisco demand holds, another year of hotel growth should push operating income above mortgage interest cost, but the bridge-related closure and upcoming entrance works mean FY2027's first quarter will look weaker, and the thin margin over interest leaves little room for a softer travel market.