Financial Data and Key Metrics Changes - The company reported a net revenue of RMB9.2 billion for Q1 2023, representing a 124% increase year-over-year and an 83% increase quarter-over-quarter, primarily due to strong recovery in the travel market [18] - Adjusted EBITDA reached RMB2.8 billion, with an adjusted EBITDA margin of 31%, the highest in the past decade, compared to 2% in the same period last year [21][22] - Diluted earnings per ordinary share were RMB5.02 or $0.73, while non-GAAP diluted earnings per ordinary share were RMB3.07 or $0.45 [22] Business Line Data and Key Metrics Changes - Accommodation reservation revenue was RMB3.5 billion, a 140% increase year-over-year and a 106% increase quarter-over-quarter, which is 15% higher than the 2019 level [18] - Transportation ticketing revenue reached RMB4.2 billion, a 150% increase year-over-year and 89% increase quarter-over-quarter, which is 24% higher than the 2019 level [19] - Packaged tour revenue was RMB386 million, representing a 211% increase year-over-year and a 135% increase quarter-over-quarter, recovering to 37% of the 2019 level [19] Market Data and Key Metrics Changes - Domestic hotel reservations in China grew by more than 100% year-over-year, with long-haul hotel bookings seeing a 176% increase and same-city staycation hotel bookings growing by 150% over the 2019 level [8][9] - Outbound hotel and air reservations recovered to over 40% of the pre-pandemic level, significantly outperforming the market average of 15% [9][10] - In the global market, air ticket bookings increased by over 200% year-over-year and were 100% higher than the 2019 level [11] Company Strategy and Development Direction - The company aims to augment its supply chain, content offering, and service quality to capture pent-up travel demands and lay a solid foundation for long-term growth [6][7] - Continued investment in technology, including generative AI, is expected to enhance customer experience and operational efficiency [16][55] - The company is focused on expanding its market presence in lower-tier cities and enhancing its product offerings to meet evolving customer demands [14][42] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the long-term outlook of the travel industry, citing strong pent-up demand and recovery in both domestic and outbound travel [5][7] - The company anticipates a slight decrease in margins in the short term due to increased marketing and promotions but expects to maintain a full-year margin in the 20% to 30% range [30] - The recovery in outbound travel is expected to continue as airlines increase capacity, with management optimistic about sustaining growth in various travel segments [39][46] Other Important Information - The company has established a strong user base in both long-haul and short-haul travel, allowing for a balanced portfolio of services [13] - The TripPLUS program connects over 240,000 hotels to high-quality loyal customers, with over 50% of reservations coming from high-end hotels [14] - The company has seen a significant increase in user-generated content and KOL engagement, enhancing its content generation capabilities [15] Q&A Session Summary Question: Plans for adopting generative AI technology - Management highlighted the use of generative AI to improve productivity in marketing and engineering, as well as enhancing customer service through automation [26][27] Question: Sustainability of EBITDA margins - Management noted that while margins may decrease slightly in the short term due to increased marketing expenses, they expect to maintain a full-year margin in the 20% to 30% range [29][30] Question: Performance of different business segments - Management reported that domestic travel has fully recovered, with outbound flight capacity steadily increasing, and expects continued growth in both domestic and outbound markets [33][34] Question: Drivers behind outbound travel recovery - Management attributed the strong recovery in outbound travel to significant investments in customer trust and partnerships during the pandemic, which have resulted in increased demand [37][39] Question: Long-term growth outlook for travel consumption in China - Management expressed confidence in the long-term growth of travel consumption, particularly among mid to high-income populations, and noted the acceleration of online penetration in the travel industry [40][42]

Financial Performance - In Q1 2023, Trip.com Group's net revenue reached RMB 9.2 billion (USD 1.3 billion), representing a year-over-year increase of 124% and a quarter-over-quarter increase of 83%[3]. - The company's net profit for Q1 2023 was RMB 3.4 billion (USD 491 million), a significant recovery from a net loss of RMB 1 billion in the same period of 2022[5]. - Adjusted EBITDA for Q1 2023 was RMB 2.8 billion (USD 410 million), with an EBITDA margin of 31%, compared to 2% in Q1 2022[5]. - Total revenue for Q1 2023 reached RMB 9,211 million, a significant increase of 83% compared to RMB 5,031 million in Q4 2022[13]. - Net income for Q1 2023 was RMB 3,375 million, compared to a net loss of RMB 989 million in Q1 2022, reflecting a strong recovery[14]. - Adjusted EBITDA for Q1 2023 was RMB 2,820 million, with an adjusted EBITDA margin of 31%[15]. - The gross profit for Q1 2023 was RMB 7,561 million, representing a gross margin of approximately 82%[13]. Revenue Breakdown - Revenue from accommodation bookings was RMB 3.5 billion (USD 570 million), up 140% year-over-year, while transportation ticketing revenue reached RMB 4.2 billion (USD 650 million), up 150% year-over-year[4]. - The travel ticketing segment generated RMB 4,156 million in revenue for Q1 2023, compared to RMB 1,663 million in Q1 2022, indicating strong growth[13]. - The company reported a significant increase in accommodation booking revenue, which reached RMB 3,480 million in Q1 2023, up from RMB 1,450 million in Q1 2022[13]. Operating Costs and Expenses - The company incurred operating costs of RMB 1.6 billion (USD 238 million), which accounted for 18% of net revenue[4]. - Operating expenses totaled RMB 5,320 million in Q1 2023, up from RMB 3,401 million in Q1 2022, driven by increased investments in marketing and administration[13]. - Research and development expenses for Q1 2023 were RMB 2.7 billion (USD 389 million), representing 29% of net revenue, reflecting a 35% year-over-year increase[4]. - Research and development expenses for Q1 2023 amounted to RMB 179 million, an increase from RMB 107 million in Q1 2022[14]. Assets and Liabilities - As of March 31, 2023, the company had cash and cash equivalents totaling RMB 68 billion (USD 9.9 billion)[5]. - As of March 31, 2023, the total assets of Trip.com Group amounted to RMB 209,133 million, an increase from RMB 191,691 million as of December 31, 2022, representing a growth of approximately 9.5%[11]. - The total liabilities increased to RMB 92,246 million as of March 31, 2023, compared to RMB 78,672 million as of December 31, 2022, indicating a rise of about 17.3%[12]. - The total equity attributable to shareholders of Trip.com Group was RMB 116,150 million as of March 31, 2023, up from RMB 112,283 million as of December 31, 2022, reflecting an increase of approximately 3.4%[12]. - Cash and cash equivalents, including restricted cash, rose significantly to RMB 30,576 million as of March 31, 2023, compared to RMB 18,487 million as of December 31, 2022, marking an increase of about 65.5%[11]. - The net accounts receivable increased to RMB 9,257 million as of March 31, 2023, from RMB 5,486 million as of December 31, 2022, which is an increase of approximately 68.5%[11]. - The company reported a total current asset increase to RMB 72,386 million as of March 31, 2023, compared to RMB 61,435 million as of December 31, 2022, representing a growth of about 17.8%[11]. - The goodwill remained stable at RMB 59,340 million as of March 31, 2023, compared to RMB 59,337 million as of December 31, 2022[11]. Market Outlook and Strategy - The company remains optimistic about the future of the global travel industry and the opportunities ahead, driven by the recovery of travel demand[2]. - Trip.com Group's strategic focus includes enhancing partnerships with suppliers and expanding its market presence, particularly in the travel sector[7]. - The company is actively monitoring economic conditions and potential risks that could impact future growth, including competition and regulatory changes in China[7]. - The company expects continued growth in user engagement and revenue, driven by new product launches and market expansion strategies[15]. Booking Trends - Hotel bookings in China increased by over 100% year-over-year, while local hotel bookings surged by 150% compared to pre-pandemic levels in 2019[2]. - International flight bookings on the company's OTA platform grew by over 200% year-over-year, exceeding 100% compared to 2019[2]. - The number of outstanding shares increased to 672,743,729 for Q1 2023, up from 647,812,835 in Q1 2022[15]. Non-GAAP Measures - The company emphasized the importance of non-GAAP financial measures to provide a clearer picture of operational performance, which includes adjusted EBITDA and diluted earnings per share[8].

Corporate Structure and Share Information - Trip.com Group has 646,066,830 issued Class A ordinary shares with a par value of $0.00125 per share as of December 31, 2022[5] - The company's Class A ordinary shares are listed on the Hong Kong Stock Exchange under the ticker symbol 9961[4] - Trip.com Group's American Depositary Shares (ADS) are traded on the NASDAQ Global Select Market under the ticker symbol TCOM[4] - The company completed a 1:8 stock split on March 18, 2021, adjusting the ratio of American Depositary Shares (ADS) to ordinary shares from 8:1 to 1:1[11] Regulatory Compliance and Filings - The company is registered as a large accelerated filer under the Securities Exchange Act[5] - Trip.com Group follows U.S. Generally Accepted Accounting Principles (GAAP) for its financial statements[6] - The company has submitted all required reports under Sections 13 or 15(d) of the Securities Exchange Act in the past 12 months[5] - The company's annual report is filed under Section 13 or 15(d) of the Securities Exchange Act for the fiscal year ended December 31, 2022[2] - The company has filed a report on the effectiveness of internal control over financial reporting as required by Section 404(b) of the Sarbanes-Oxley Act[6] - The company is not a shell company as defined in the Securities Exchange Act[6] Financial Performance and Metrics - Net revenue for 2022 was RMB 20,039 million (USD 2,907 million), showing a slight increase from RMB 20,023 million in 2021[32] - Gross profit for 2022 was RMB 15,526 million (USD 2,253 million), up from RMB 15,425 million in 2021[32] - Operating profit for 2022 was RMB 88 million (USD 15 million), a significant improvement from an operating loss of RMB 1,411 million in 2021[32] - Net profit for 2022 was RMB 1,367 million (USD 201 million), compared to a net loss of RMB 645 million in 2021[32] - Total assets as of December 31, 2022, were RMB 191,691 million (USD 27,793 million), slightly down from RMB 191,859 million in 2021[33] - Total liabilities as of December 31, 2022, were RMB 78,672 million (USD 11,407 million), a decrease from RMB 81,403 million in 2021[33] - Cash and cash equivalents as of December 31, 2022, were RMB 17,000 million (USD 2,465 million), down from RMB 19,818 million in 2021[33] - Short-term investments as of December 31, 2022, were RMB 25,545 million (USD 3,703 million), down from RMB 29,566 million in 2021[33] - Total equity attributable to Trip.com Group Limited as of December 31, 2022, was RMB 112,283 million (USD 16,279 million), up from RMB 109,677 million in 2021[33] Variable Interest Entities (VIEs) and Contractual Arrangements - The company operates through Variable Interest Entities (VIEs) in China, including entities such as Ctrip Business, Shanghai Huacheng, Chengdu Ctrip, and Qunar Beijing, which hold critical licenses and assets[9] - The company's business in China is conducted through Chinese subsidiaries and VIEs, with contractual arrangements managing the operations of these VIEs[16] - The company's Chinese subsidiaries and variable interest entities (VIEs) are governed by a series of contractual arrangements, including authorization agreements, technical consulting and service agreements, equity pledge contracts, exclusive purchase agreements, and loan contracts, which are deemed valid and enforceable under current Chinese laws[17] - The contractual arrangements grant the company effective control over the VIEs, allowing it to consolidate their operations, financial status, and cash flows into its consolidated financial statements under US GAAP[17] - Net income from VIEs accounted for 36%, 30%, and 22% of the company's total net income for the years ended December 31, 2020, 2021, and 2022, respectively[16] Risks and Challenges - The company anticipates challenges from a slowdown in China's economic growth and global recession, which could significantly impact its growth and profitability[12] - Public health crises, such as COVID-19, may have a substantial adverse effect on the company's business and operating results[12] - The company's quarterly performance may fluctuate due to seasonal factors in the Greater China travel industry[12] - The company's infrastructure or technology could be damaged, fail, or become outdated, potentially harming its business[12] - The company's business heavily relies on the continued efforts of its senior management, and losing their services could severely disrupt operations[12] - Inflation in China could disrupt the company's business and adversely affect its financial condition and operating performance[12] - The company's ownership structure through Variable Interest Entities (VIEs) and contractual arrangements may face penalties if deemed to violate Chinese laws, adversely affecting its business and operating results[13] - The VIE structure poses unique risks to investors, as the enforceability of the contractual arrangements has not been tested in Chinese courts, and potential breaches could disrupt operations and harm the company's reputation[18] - The company faces regulatory risks in China, including potential changes in laws or interpretations that could invalidate the VIE structure, leading to severe penalties or forced divestment of interests in certain businesses[19] - The company's operations in China are subject to complex and evolving legal and regulatory environments, including recent statements and regulatory measures on VIE usage, overseas listings, foreign investment approvals, antitrust regulations, and cybersecurity and data privacy oversight[19] Legal and Regulatory Environment - The company faces risks related to new regulatory measures in Hong Kong or Macau, which could impact its ability to operate, accept foreign investment, or maintain its listing status on US or Hong Kong stock exchanges[20] - The company was identified as a Commission-Identified Issuer under the HFCAA in May 2022, but PCAOB revoked this designation in December 2022, reducing the risk of delisting for the fiscal year ending December 31, 2022[21] - The company's operations in China require various permits, including for accommodation booking, transportation ticketing, and travel services, with most permits already obtained except for a minor portion of transportation ticketing services[23] - The company's subsidiaries in Hong Kong and Macau have obtained necessary permits for travel agency and insurance agency businesses[23] - The company acknowledges uncertainties in the interpretation and enforcement of Chinese laws and regulations, which may require additional permits in the future[23] - The company's ability to issue securities to investors may be severely restricted or completely hindered due to Chinese government oversight and regulatory control[20] - The company's operations and the value of its American Depositary Shares (ADS) could be adversely affected by uncertainties in the Chinese legal system and rapid regulatory developments[20] - The company's use of a China-based auditor could lead to future HFCAA designations if PCAOB is unable to inspect the auditor, potentially resulting in a trading ban on its ADS[22] - The company has not received written rejection notices for any permit applications, but there is no guarantee that necessary permits will be obtained or maintained in the future[23] - The company's ADS and ordinary shares could significantly decline in value if industry-specific regulations, such as data security or antitrust laws, are implemented[20] Tax and Financial Regulations - The company is subject to new regulations under the "Trial Measures for the Administration of Overseas Securities Offering and Listing by Domestic Companies" effective from March 31, 2023, requiring domestic companies to file with the China Securities Regulatory Commission (CSRC) for overseas securities offerings and listings[24] - The company, as an "existing issuer," is not required to file for historical securities offerings but must file within three business days for any future securities offerings or listings under the new regulations[24] - The company is not currently classified as a Critical Information Infrastructure Operator (CIIO) and has not undergone any cybersecurity reviews by the Cyberspace Administration of China (CAC)[26] - The company has completed all required foreign debt issuance registrations with the National Development and Reform Commission (NDRC) as of the report date[26] - The company's ability to pay dividends and repay debts depends on dividends from its Chinese subsidiaries and service fees from its Variable Interest Entities (VIEs)[27] - Chinese subsidiaries are restricted in paying dividends or other payments to the company due to Chinese accounting standards and regulations, including mandatory reserve funds[27] - The company's future overseas securities offerings may require approval or filing with the CSRC or other Chinese government agencies, with uncertainty around the interpretation and implementation of new regulations[26] - Non-compliance with Chinese laws and regulations, including licensing requirements, could severely impact the company's operations, financial condition, and stock value[24] - The company's subsidiaries and VIEs may face limitations in transferring funds to the parent company due to debt management tools and legal restrictions[27] - The company's operations and securities offerings are subject to significant regulatory oversight and discretion by Chinese government agencies, which could lead to adverse changes in operations and stock value[26] Cash Flow and Financial Transactions - The total restrictions on cash transfers for the company's Chinese subsidiaries and variable interest entities were RMB 7.8 billion, RMB 6.5 billion, and RMB 6.2 billion (USD 900 million) as of December 31, 2020, 2021, and 2022, respectively[28] - The company provided capital contributions to its subsidiaries of RMB 903 million, zero, and RMB 580 million as of December 31, 2020, 2021, and 2022, respectively[29] - Net cash outflows from loans provided by the company to its subsidiaries were RMB 358 million, net cash inflows of RMB 1.1 billion, and net cash outflows of RMB 758 million as of December 31, 2020, 2021, and 2022, respectively[30] - Net cash inflows from loans provided by variable interest entities to subsidiaries were RMB 817 million, net cash outflows of RMB 434 million, and net cash inflows of RMB 4 billion as of December 31, 2020, 2021, and 2022, respectively[30] - Net cash outflows from loans received by variable interest entities from subsidiaries were RMB 2.2 billion, RMB 3.8 billion, and RMB 7.8 billion as of December 31, 2020, 2021, and 2022, respectively[30] - The company did not declare or pay any cash dividends as of December 31, 2020, 2021, and 2022, and has no plans to pay cash dividends for its ordinary shares in the foreseeable future[30] Investments and Acquisitions - The company consolidated the financial statements of Qunar starting from December 31, 2015, excluding Qunar's comparable operating data in certain metrics[10] - The company's expected growth strategies include future business development, operating performance, and financial conditions[12] - The company has recorded significant goodwill and indefinite-lived intangible assets from strategic acquisitions and investments, and a substantial reduction in the recoverability of these assets could result in significant impairment charges[55] - The company's strategic acquisitions and investments in complementary businesses and assets involve significant risks and uncertainties, which could adversely affect its business, reputation, financial condition, and operating results[54] - The company's inability to compete effectively with new and existing competitors could result in a loss of market share and have a material adverse effect on its business[56] - Strategic acquisitions in the Greater China region and overseas tourism industry may dilute equity securities and impact financial performance[73] - Integration of newly acquired businesses may require significant management effort and resources, potentially affecting existing operations[73] - Strategic investments in complementary businesses and assets involve risks such as high acquisition and financing costs, and potential failure to achieve expected goals[74] - Investments in competitive businesses may be adversely affected by uncertainties in the implementation and enforcement of China's Anti-Monopoly Law[74] - Fair value changes in equity investments may negatively impact the company's financial performance if stock prices fall below purchase prices[74] - The company may face liabilities, third-party claims, or litigation related to invested or acquired businesses[74] Market and Competitive Risks - The company faces increasing competition from new and existing competitors, including domestic and international travel agencies, hotels, airlines, and content platforms[80] - The company's competitive position may be affected by the growing importance of international travelers and the lack of exclusive arrangements with ecosystem partners[80] - Increased marketing and R&D investments have negatively impacted the company's operating profit margin due to intense competition[81] - The company has launched promotional plans offering selected transportation tickets, hotel rooms, travel destination activities, and e-coupons to respond to competitors' campaigns[81] - Significant resources have been allocated to enhance AI and cloud technologies to attract and retain users[81] - The company faces risks from competitors with larger active user bases, financial resources, and technological capabilities[81] - Failure to maintain or enhance brand awareness could hinder the ability to retain existing users and acquire new ones[82] - Negative publicity, whether justified or not, could harm the company's reputation and business performance[83] - The company relies on performance and brand marketing channels to generate significant traffic and business growth[83] - The company employs brand ambassadors to promote its brands and services, but their effectiveness and popularity cannot be guaranteed[83] - Negative publicity could lead to increased costs and divert management's focus from core business operations[84] Operational and Technological Risks - The company's infrastructure, including mobile platforms, websites, and systems, is critical to its success, and any system interruptions could reduce business volume and user satisfaction[85] - The company experienced a network shutdown in May 2015 and a hotel booking failure in October 2019, both of which temporarily disrupted services but did not result in data breaches[85] - The company relies on internally developed booking software systems, and failure to upgrade these systems to handle future traffic could lead to system interruptions, slower response times, and loss of users and ecosystem partners[86] - The company's future success depends on its ability to adapt products and services to changes in technology and internet user behavior, particularly with the increasing use of mobile devices and the adoption of 5G technology[87] - The company's services must be compatible with various mobile operating systems and devices, and failure to develop widely recognized and used products could hinder its penetration into the mobile internet market[87] - The company's business heavily relies on the continued efforts of its senior management, and the loss of key executives could severely disrupt operations[88] - The company may face challenges in attracting, training, and retaining key personnel and skilled employees, which could negatively impact user experience and business performance[89] International Operations and Risks - The company faces international operational risks including compliance, reputational, and operational risks, which could increase costs and impact business growth[90] - International trade tensions, particularly between the US and China, may adversely affect the company's business, financial condition, and operating results[91] - The company may struggle to protect its intellectual property globally, potentially leading to legal disputes and increased costs[92] - Reliance on third-party services for product delivery and operations could disrupt service quality and harm user retention[93] - Potential violations of foreign laws and regulations could result in fines, sanctions, and reputational damage, impacting the company's ability to operate internationally[90] - Political tensions between the US and China, including trade disputes and sanctions, may negatively impact global economic conditions and the company's performance[91] - The company's international expansion efforts may be hindered by challenges in enforcing intellectual property rights in certain foreign jurisdictions[92] - Third-party service disruptions or quality issues could lead to user dissatisfaction, reputational damage, and loss of market share[93] - Compliance with foreign laws and regulations requires significant management effort and resources, potentially diverting focus from business growth[90] - The company's reliance on third-party providers for critical services exposes it to risks of service interruptions and negative publicity[93] Payment Processing and Financial Risks - The company faces risks related to payment processing, including potential increases in fees, regulatory changes, and security vulnerabilities, which could negatively impact revenue and operational performance[96] - The company relies on hotel partners and users to provide accurate information for calculating commissions, and any false data could lead to revenue loss and inaccurate business forecasts[96] - During peak holiday seasons in China, the company faces inventory risks due to purchasing hotel rooms and transportation tickets in advance, which could result in financial losses if demand is mispredicted[97] - The company's subsidiaries in China benefit from a preferential corporate income tax rate of 15% under the "High-Tech Enterprise" status, but this status is subject to periodic review and potential revocation[98] - Several of the company's subsidiaries, including Ctrip Computer Technology and Qunar Beijing, have their High-Tech Enterprise status expiring in 2023, requiring reapplication to maintain the 15% tax rate[98] - The company's subsidiaries, such as Ctrip Business Travel Information Services and Shanghai Ctrip Information, were newly recognized as High-Tech Enterprises in 2021, enjoying the 15% tax rate until 2023[98] - The company may face reputational damage and financial losses due to third-party actions, such as anonymous complaints or regulatory investigations, which could impact market share and stock price[94] - The company is exposed to risks from fraudulent activities and regulatory non-compliance in payment processing, which could lead to fines, higher transaction fees, and loss of payment capabilities[96] - The company's ability to maintain its High-Tech Enterprise status for subsidiaries is uncertain, as it depends on periodic government reviews and potential policy changes[98] - The company's financial performance could be adversely affected if tax incentives for its Chinese subsidiaries are reduced or revoked[98] Cybersecurity and Data Protection - Trip.com Group is subject to China's Cybersecurity Law, which mandates strict data protection measures and imposes penalties for non-compliance, including fines, license revocation, or criminal liability[101] - A past security incident in 2014 exposed credit card information of 93 users, highlighting vulnerabilities in the company's data protection systems[102] - The company invests significant resources in complying with data protection laws and addressing potential security breaches to maintain user trust and avoid legal liabilities[102] - The company's business may be adversely affected if it fails to obtain or maintain necessary licenses and approvals, particularly in industries such as airline ticketing, travel agencies, and internet-related activities[104] - The company's ticketing revenue could be negatively impacted by restrictive policies adopted by regulatory bodies such as the Civil Aviation Administration of China and the National Development and Reform Commission[104] - The company must comply with the "E-Commerce Law of the People's Republic of China," which imposes joint liability on e-commerce platform operators for violations by merchants on their platforms[105] - The company is subject to the "Interim Provisions on the Administration of Online Tourism Business Services," which requires accurate information disclosure, verification of merchant credentials,

UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, DC 20549 FORM 20-F (Mark One) ☐ REGISTRATION STATEMENT PURSUANT TO SECTION 12(b) OR 12(g) OF THE SECURITIES EXCHANGE ACT OF 1934 OR ☒ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended December 31, 2022 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from __________ to __________ OR ☐ SHELL COMPANY REPORT PURSUANT TO ...

Trip.com Group Limited (NASDAQ:TCOM) Q4 2022 Earnings Conference Call March 6, 2023 7:00 PM ET Company Participants Michelle Qi - Investor Relations James Liang - Executive Chairman Jane Sun - Chief Executive Officer Cindy Wang - Chief Financial Officer Conference Call Participants Brian Gong - Citi Alex Poon - Morgan Stanley Jiong Shao - Barclays Alex Yao - JPMorgan James Lee - Mizuho Group Thomas Chong - Jefferies Simon Cheung - Goldman Sachs Wei Xiong - UBS Joyce Ju - Bank of America Tian Hou - T.H. Capi ...

Financial Data and Key Metrics Changes - Trip.com Group reported net revenue of RMB6.9 billion for Q3 2022, a 29% increase year-over-year and a 72% increase quarter-over-quarter, primarily due to recovery in the China domestic market and strong performance in overseas markets [17] - Adjusted EBITDA was RMB1.4 billion for Q3 2022, compared to RMB537 million in the same period last year and RMB355 million in the previous quarter, with an adjusted EBITDA margin of 21% [21][22] - Diluted income per ordinary share was RMB0.41 or $0.06, while non-GAAP diluted income per ordinary share was RMB1.58 or $0.22 for Q3 2022 [22] Business Line Data and Key Metrics Changes - Accommodation reservation revenue for Q3 2022 was RMB2.9 billion, a 32% increase year-over-year and a 114% increase quarter-over-quarter, recovering to 71% of the 2019 level [17] - Transportation ticketing revenue for Q3 2022 was RMB2.6 billion, representing a 44% increase year-over-year and a 49% increase quarter-over-quarter, recovering to 70% of the 2019 level [18] - Packaged tour revenue for Q3 2022 was RMB387 million, stable year-over-year and a 217% increase quarter-over-quarter, recovering to 24% of the 2019 level [19] Market Data and Key Metrics Changes - Domestic hotel bookings in China increased by 25% year-over-year, with long-haul hotel bookings up over 130% sequentially from the previous quarter [8][10] - Overall air ticket bookings on the global platform achieved over 100% year-over-year growth, with Asia-Pacific showing over 400% growth compared to the same period in 2021 [9][10] - International business maintained growth momentum, with total revenue contribution from international platforms growing more than 140% year-over-year, contributing about 15% to 20% of total revenues in Q3 [36] Company Strategy and Development Direction - The company aims to strengthen its globalization strategy and enhance cooperation with global partners to provide a one-stop service model [6][10] - Focus on creating value and providing a frictionless customer experience to capture post-pandemic travelers [6] - Continued investment in local market penetration and user engagement to drive growth in both domestic and international travel segments [11][12] Management Comments on Operating Environment and Future Outlook - Management expressed confidence in the long-term growth potential of the travel industry despite near-term uncertainties due to COVID-19 [6][16] - Recent adjustments in COVID policies in China are expected to support the recovery of domestic travel and cross-border travel [16] - The company remains cautiously optimistic about the travel environment and is prepared to seize opportunities as they arise [25] Other Important Information - The company is committed to corporate responsibility initiatives, including rural revitalization projects in China and promoting sustainable travel practices [13][15] - The number of content creators increased by 20% year-over-year, with user-generated content growing significantly, indicating a focus on enhancing user engagement [57] Q&A Session Summary Question: Changes in user behavior and company response to new normalcy - Management noted a resilient global travel demand and evolving travel preferences, with a focus on leisure and short-haul travel [28] Question: Domestic business recovery in Q4 - Domestic travel momentum was muted due to COVID spread, but local hotel reservations maintained positive growth [32] Question: Breakdown of international performance - International air ticket bookings increased over 100% year-over-year, with significant growth in the APAC region [35] Question: Outlook for Chinese New Year travel - Search interest for travel increased significantly following new COVID policy announcements, but current reservations are low due to short booking windows [40] Question: Future growth outlook drivers post-pandemic - Strong pent-up demand is expected for both domestic and international travel, with a focus on high-end and comprehensive product offerings [44] Question: Long-term margin targets - Management expects healthy operating margins to return to at least 20% to 30% once business normalizes [48] Question: Competitive landscape in domestic travel - The company focuses on customer and partner satisfaction to maintain market share amidst increasing competition [51] Question: Recovery of international brands - Despite macro challenges, the international platform is expected to continue healthy growth due to strong product offerings [54] Question: Content strategy updates - The company aims to enhance user engagement through credible and relatable content, with significant growth in user-generated content [57]

Financial Performance - In Q3 2022, Trip.com Group's net revenue reached RMB 6.9 billion (USD 969 million), representing a year-over-year increase of 29% and a quarter-over-quarter increase of 72%[5] - Adjusted EBITDA for Q3 2022 was RMB 1.4 billion (USD 198 million), a 164% increase compared to RMB 537 million in Q3 2021, with an adjusted EBITDA margin of 21%[8] - The company reported a net profit of RMB 245 million (USD 34 million) in Q3 2022, a significant improvement from a net loss of RMB 868 million in the same quarter of 2021[8] - Total revenue for the three months ended September 30, 2022, was RMB 6,897 million, representing a 29.2% increase from RMB 5,346 million for the same period in 2021[17] - Gross profit for the three months ended September 30, 2022, was RMB 5,621 million, up 36.4% from RMB 4,121 million in the same period of 2021[17] - Operating profit for the three months ended September 30, 2022, was RMB 854 million, compared to an operating loss of RMB 246 million for the same period in 2021[17] - Net profit attributable to Trip.com Group Ltd. for the three months ended September 30, 2022, was RMB 266 million, a significant recovery from a net loss of RMB 849 million in the same period of 2021[18] - EBITDA for the three months ended September 30, 2022, was RMB 1,419 million, with an EBITDA margin of 21%[19] Revenue Breakdown - Domestic hotel booking revenue grew by 25% year-over-year, while international flight bookings increased by over 100% year-over-year[3] - The revenue from accommodation bookings was RMB 2.9 billion (USD 480 million), up 32% year-over-year and 114% quarter-over-quarter[5] - Transportation ticketing revenue reached RMB 2.6 billion (USD 369 million), reflecting a 44% year-over-year increase and a 49% quarter-over-quarter increase[5] - The company reported a significant increase in accommodation bookings, with revenue from accommodation reservations reaching RMB 2,904 million for the three months ended September 30, 2022, up from RMB 2,194 million in the same period of 2021[17] Expenses and Costs - The company’s operating costs increased by 4% year-over-year to RMB 1.3 billion (USD 179 million), accounting for 18% of net revenue[6] - Research and development expenses rose by 8% year-over-year to RMB 2.5 billion (USD 350 million), representing 36% of net revenue[6] - Sales and marketing expenses increased by 13% year-over-year to RMB 1.4 billion (USD 210 million), accounting for 21% of net revenue[7] - The effective tax expense for Q3 2022 was RMB 277 million (USD 39 million), compared to RMB 95 million in Q3 2021[7] Cash and Assets - As of September 30, 2022, the total cash and cash equivalents, restricted cash, short-term investments, and held-to-maturity deposits amounted to RMB 62 billion (USD 8.7 billion)[9] - Total current assets increased from RMB 66.1 billion as of December 31, 2021, to RMB 67.0 billion as of September 30, 2022[15] - The total assets of the company rose from RMB 191.9 billion as of December 31, 2021, to RMB 194.3 billion as of September 30, 2022[15] - Total liabilities increased slightly to RMB 83,355 million as of September 30, 2022, from RMB 81,403 million as of December 31, 2021[16] - Total equity attributable to shareholders of Trip.com Group Ltd. was RMB 110,230 million as of September 30, 2022, compared to RMB 109,677 million as of December 31, 2021[16] Strategic Focus and Risks - The company operates a comprehensive travel platform, serving as a preferred choice for travelers in China and increasingly for global tourists[14] - The company has faced risks including potential economic slowdowns, impacts from the COVID-19 pandemic, and competition from both new and existing rivals[11] - The company is committed to enhancing its operational strategies and expanding its market presence through strategic investments and acquisitions[11] - The company plans to continue expanding its market presence and investing in new technologies to enhance user experience and operational efficiency[19] Non-GAAP Measures - The company reported a net profit attributable to Trip.com Group Ltd. under non-GAAP measures, which provides a more comparable operational data across periods[12] - The management emphasized the importance of non-GAAP financial data for future planning and forecasting capabilities[12] Share Information - The diluted earnings per share for Q3 2022 were RMB 0.41 (USD 0.06) while the loss per share, excluding stock-based compensation, was RMB 1.58 (USD 0.22)[9] - The number of weighted average ordinary shares outstanding for the diluted calculation was 653,485,857 for the three months ended September 30, 2022[20] Share Repurchase - The company repurchased a total of USD 51 million in convertible bonds due in 2022, including USD 25 million from a subsidiary of Booking Holdings Inc.[9]

Financial Performance - In Q2 2022, Trip.com Group reported a net profit of RMB 43 million (USD 6 million), an improvement from a net loss of RMB 1 billion in the previous quarter[3] - Adjusted EBITDA for Q2 2022 was RMB 355 million (USD 53 million), a 290% increase from RMB 91 million in the previous quarter[3] - Total net revenue for Q2 2022 was RMB 4 billion (USD 598 million), a year-over-year decline of 32% and a quarter-over-quarter decline of 2%[4] - The adjusted EBITDA margin for Q2 2022 was 9%, down from 16% in the same period last year[7] - Total revenue for the three months ended June 30, 2022, was RMB 4,016 million, a decrease of 32% compared to RMB 5,892 million for the same period in 2021[17] - Net loss attributable to Trip.com Group Limited for the three months ended June 30, 2022, was RMB 69 million, a significant improvement from a net loss of RMB 647 million in the same period of 2021[18] - Adjusted EBITDA for the three months ended June 30, 2022, was RMB 355 million, with an adjusted EBITDA margin of 9%[19] - The company’s net loss for the six months ended June 30, 2022, was RMB 958 million, compared to a net profit of RMB 1,106 million for the same period in 2021[19] Revenue Breakdown - Hotel booking revenue in Q2 2022 was RMB 1.4 billion (USD 230 million), down 45% year-over-year and down 6% quarter-over-quarter[4] - Air ticketing revenue for Q2 2022 was RMB 1.8 billion (USD 263 million), a 15% year-over-year decline but a 6% increase quarter-over-quarter[4] - The revenue from vacation services in Q2 2022 was RMB 122 million (USD 18 million), a 67% year-over-year decline[5] - Accommodation booking revenue for the six months ended June 30, 2022, was RMB 2,807 million, representing a 30% decrease from RMB 4,035 million in the same period of 2021[17] - Transportation ticketing revenue for the three months ended June 30, 2022, was RMB 1,763 million, down from RMB 2,066 million in the same period of 2021, reflecting a decline of 14.7%[17] - The company reported a gross profit of RMB 3,035 million for the three months ended June 30, 2022, compared to RMB 4,667 million for the same period in 2021, indicating a decrease of 35%[17] Cash and Assets - As of June 30, 2022, the company had cash and cash equivalents totaling RMB 65.6 billion (USD 9.8 billion)[9] - As of June 30, 2022, the total assets of Trip.com Group amounted to RMB 194.628 billion (approximately USD 29.057 billion), an increase from RMB 191.859 billion as of December 31, 2021[15] - The total liabilities of Trip.com Group as of June 30, 2022, were RMB 84.350 billion (approximately USD 12.593 billion), compared to RMB 81.403 billion as of December 31, 2021[16] - The cash and cash equivalents, along with restricted cash, increased to RMB 22.959 billion (approximately USD 3.427 billion) as of June 30, 2022, from RMB 21.196 billion as of December 31, 2021[15] - The net accounts receivable rose to RMB 5.445 billion (approximately USD 813 million) as of June 30, 2022, up from RMB 4.649 billion as of December 31, 2021[15] - The total equity attributable to shareholders of Trip.com Group was RMB 109.542 billion (approximately USD 16.354 billion) as of June 30, 2022, slightly down from RMB 109.677 billion as of December 31, 2021[16] Strategic Focus and Future Plans - The company plans to enhance operational efficiency and prudently control costs to maintain flexibility for long-term growth[3] - The company plans to continue investing in product development and marketing to enhance user experience and drive future growth[19] - The management highlighted potential risks including economic slowdowns and competition, which could impact future performance[11] Market Presence - Trip.com Group's mission is to provide a comprehensive travel platform for both Chinese tourists and global travelers, enhancing travel experiences and bookings[14] - The company has been listed on NASDAQ since 2003 and on the Hong Kong Stock Exchange since 2021, indicating its growth and market presence[14] Shareholder Information - The company had a weighted average of 647,866,001 ordinary shares outstanding for the three months ended June 30, 2022[18] - The weighted average shares outstanding (diluted) decreased from 656,483,984 in Q2 2021 to 647,866,001 in Q2 2022[20] - The diluted earnings per share (non-GAAP) for Q2 2022 was 1.13 RMB, compared to a loss of 0.06 RMB in Q2 2021[20] - The diluted earnings per American Depositary Share (non-GAAP) for Q2 2022 was also 1.13 RMB, reflecting a significant improvement from a loss of 0.31 RMB in Q1 2022[20] - The company reported a total revenue of 647 million RMB for the six months ended June 30, 2022, compared to 645 million RMB for the same period in 2021[20] Currency Information - The exchange rate used for conversion was 1 USD to 6.6981 RMB as of June 30, 2022[20]

Financial Data and Key Metrics Changes - For Q1 2022, Trip.com Group reported net revenue of RMB4.1 billion, which was flat year-over-year and decreased by 12% quarter-over-quarter [20] - Accommodation reservation revenue was RMB1.5 billion, representing an 8% decrease year-over-year and a 24% decrease quarter-over-quarter, recovering to 48% of the 2019 level [20] - Transportation ticketing revenue was RMB1.7 billion, reflecting a 10% increase year-over-year and a 10% increase quarter-over-quarter, recovering to 50% of the 2019 level [21] - Adjusted EBITDA was RMB91 million for Q1, compared to negative RMB216 million in the same period last year [24] - As of March 31, 2022, the company had cash and cash equivalents totaling RMB63.3 billion or $10 billion [25] Business Line Data and Key Metrics Changes - Domestic hotel bookings increased by more than 20% year-over-year in January and February, but were impacted by the Omicron outbreak in March [9][10] - Air ticket bookings on global platforms increased over 270% year-over-year, with Trip.com achieving approximately 400% growth [11][31] - Hotel bookings on global platforms increased by more than 25% above 2019 levels in Q1 [12] - Packaged tour revenue was RMB124 million, representing a 27% decrease year-over-year and a 30% decrease quarter-over-quarter, recovering to 12% of the 2019 level [22] Market Data and Key Metrics Changes - The domestic travel market in China faced severe impacts due to pandemic controls, with air passenger volume down by 70% to 90% [26] - In Southern and Western China, hotel bookings have surpassed 2019 levels recently [10][27] - International markets showed robust recovery momentum, particularly in Europe, the U.S., and Asia, benefiting from the relaxation of travel restrictions [27] Company Strategy and Development Direction - The company aims to capture travel demand by enhancing product capabilities and service quality, focusing on both domestic and international markets [6][8] - Trip.com continues to strengthen its value proposition to hotel owners and users through product innovations and loyalty programs [13][14] - The company is adapting its strategies to be flexible and responsive to the fast-changing market environment [8][13] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about long-term travel demand despite short-term challenges due to the pandemic [6][10] - The company anticipates a recovery in the Chinese market once restrictions are eased, similar to trends observed in international markets [6][27] - Management highlighted the importance of maintaining liquidity and effective cost control to navigate ongoing challenges [52] Other Important Information - The company has implemented corporate responsibility initiatives, including support for rural tourism and local accommodations [17][18] - Trip.com has streamlined operations and achieved significant cost savings, with adjusted operating expenses down 11% year-over-year [23][52] Q&A Session Summary Question: What is the global expansion strategy given the current situation? - Management emphasized the integration and upgrade of supply chain and technology for international brands, with strong recovery in air ticket bookings and hotel reservations [31] Question: How does the current economic situation affect recovery expectations? - Management believes demand for domestic and global travel remains solid, with recent recovery in hotel reservations in less restricted areas [34] Question: What is the early booking situation for summer? - Management noted limited visibility due to short booking windows but remains optimistic about long-term growth potential [37] Question: What strategies are in place if travel controls continue? - Management highlighted the importance of adapting to government control measures and noted that recent relaxations have led to increased bookings [39] Question: What are the trends for ADR and take rate in the accommodation segment? - Management reported a decline in ADR due to pandemic impacts, with expectations for recovery as travel restrictions ease [43] Question: How does the company view structural changes in travel preferences? - Management sees opportunities in short-haul travel and has made significant progress in content-driven strategies to enhance user engagement [46] Question: What support is the government providing to the tourism industry? - Management noted ongoing discussions with authorities to improve the business environment and reduce disruptions from COVID-19 [49] Question: How sustainable is the company's cash position? - Management confirmed a strong cash position with RMB33.3 billion on hand and effective cost control measures in place [52]

Financial Performance - In Q1 2022, Trip.com Group reported net revenue of RMB 4.1 billion (USD 649 million), remaining stable year-over-year but down 12% quarter-over-quarter due to the impact of COVID-19 in China[4]. - The company experienced a net loss attributable to shareholders of RMB 989 million (USD 155 million) in Q1 2022, compared to a net profit of RMB 1.8 billion in the same period last year[6]. - Total revenue for Q1 2022 was RMB 4,111 million, a slight increase from RMB 4,109 million in Q1 2021[16]. - Net loss attributable to Ctrip Group for Q1 2022 was RMB 989 million, compared to a net profit of RMB 1,780 million in Q1 2021[17]. - Gross profit for Q1 2022 was RMB 3,042 million, down from RMB 3,074 million in Q1 2021, reflecting a gross margin of approximately 74%[16]. - Operating expenses for Q1 2022 totaled RMB 3,401 million, a decrease from RMB 3,861 million in Q1 2021[16]. - Adjusted EBITDA for Q1 2022 was RMB 91 million (USD 16 million), with an adjusted EBITDA margin of 2%, improving from -5% in Q1 2021[5]. - Adjusted EBITDA for Q1 2022 was RMB 91 million, compared to a negative RMB 216 million in Q1 2021, indicating improved operational efficiency[18]. - The company reported a basic loss per share of RMB 1.52 for Q1 2022, compared to earnings of RMB 2.95 per share in Q1 2021[17]. Revenue Breakdown - Hotel booking revenue in Q1 2022 was RMB 1.5 billion (USD 229 million), a decrease of 8% year-over-year and 24% quarter-over-quarter, primarily affected by the pandemic[4]. - Air ticketing revenue increased by 10% year-over-year and quarter-over-quarter to RMB 1.7 billion (USD 262 million), driven by strong recovery in overseas ticket sales[4]. - Ctrip's accommodation booking revenue for Q1 2022 was RMB 1,450 million, down from RMB 1,580 million in Q1 2021[16]. - Transportation ticketing revenue increased to RMB 1,663 million in Q1 2022, up from RMB 1,506 million in Q1 2021, showing a growth of approximately 10.4%[16]. Cash and Assets - Cash and cash equivalents, restricted cash, and short-term investments totaled RMB 63.3 billion (USD 10 billion) as of March 31, 2022[6]. - Total assets of Trip.com Group as of March 31, 2022, amounted to RMB 187.8 billion (approximately USD 29.6 billion)[14]. - Total liabilities decreased from RMB 81.4 billion to RMB 78.1 billion from December 31, 2021, to March 31, 2022[15]. - Shareholders' equity for Trip.com Group was RMB 108.9 billion (approximately USD 17.2 billion) as of March 31, 2022[15]. - Cash and cash equivalents, along with restricted cash, totaled RMB 20.9 billion (approximately USD 3.3 billion) as of March 31, 2022[12]. - Short-term investments increased from RMB 29.6 billion to RMB 30.4 billion from December 31, 2021, to March 31, 2022[12]. - Net accounts receivable decreased from RMB 4.6 billion to RMB 4.0 billion during the same period[12]. - Total current assets amounted to RMB 64.5 billion (approximately USD 10.2 billion) as of March 31, 2022[13]. - The company reported a total of RMB 59.4 billion in goodwill as of March 31, 2022[14]. - Deferred tax assets increased from RMB 1.7 billion to RMB 1.8 billion from December 31, 2021, to March 31, 2022[14]. - The company’s total liabilities and shareholders' equity amounted to RMB 191.9 billion as of December 31, 2021[15]. Market Trends and Strategies - Local hotel bookings increased by over 20% year-over-year, indicating a strong recovery in domestic travel[3]. - International flight bookings surged by over 270% year-over-year, reflecting a robust recovery in the European and Asia-Pacific markets[3]. - The company plans to adapt its strategies to capture growth opportunities amid ongoing market fluctuations[3]. - R&D expenses in Q1 2022 were RMB 2 billion (USD 311 million), accounting for 48% of net revenue, reflecting a decrease of 11% year-over-year[5]. - Ctrip's weighted average diluted shares outstanding for Q1 2022 were 647,812,835, consistent with the previous quarter[17].