Financial Data and Key Metrics Changes - The company reported a consolidated revenue growth of 65% year-over-year, reaching nearly 96% of 2019 revenue for the full year and exiting Q4 2022 at 106% of 2019 levels [5][24] - Q4 consolidated revenue was $354 million, reflecting a year-over-year growth of 47% and reaching 106% of 2019 levels [24][30] - Adjusted EBITDA for 2022 was $295 million, or 20% of revenue, reflecting a significant improvement from 11% in 2021 but down from 28% in 2019 [33] Business Line Data and Key Metrics Changes - Viator achieved record revenue with gross bookings value of approximately $2.7 billion, or 186% of 2019 levels, driven by strong demand [6][27] - TheFork's revenue reached $126 million in 2022, growing 48% year-over-year and reaching 99% of 2019 levels on a constant currency basis [8] - Tripadvisor Core segment revenue was $966 million, growing 45% year-over-year and reaching 79% of 2019 levels [10] Market Data and Key Metrics Changes - Recovery rates for reportable segments in Q4 were 85% for Tripadvisor Core, 208% for Viator, and 94% for TheFork compared to 2019 levels [24] - The U.S. market showed stronger recovery compared to EMEA and the Rest of the World, with hotel meta revenue recovering to 93% of 2019 levels [25][76] Company Strategy and Development Direction - The company aims to innovate around world-class guidance products and enhance mobile experiences to deepen traveler engagement [16][17] - Strategic priorities for 2023 include investing in growth for Viator, improving margins for TheFork, and establishing a clear long-term strategy for Tripadvisor Core [13][14][39] - The company plans to leverage first-party data to enhance monetization opportunities across its segments [20][21] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the ongoing recovery in travel demand, with strong signals of intent from travelers [55] - The company anticipates a flat year-over-year adjusted EBITDA margin for 2023, with expectations for steady growth in Tripadvisor Core and significant margin improvement in TheFork [38][57] Other Important Information - Free cash flow for 2022 was $344 million, significantly up from $54 million in 2021, supported by higher operating cash flow [34] - The company ended the year with over $1 billion in cash and $1.5 billion in total liquidity, providing a solid cushion against potential macro headwinds [35] Q&A Session Summary Question: What is the revenue guidance for 2023? - Management indicated that the growth rate for the travel market is expected to be mid-teens, with Viator anticipated to grow faster than the consolidated rate [42][43] Question: How does the company plan to utilize Generative AI? - Management sees Generative AI as a long-term opportunity to enhance personalized experiences and leverage the vast content asset of over 1 billion reviews [44][47] Question: What are the margin expectations for Viator in 2023? - Management expects Viator's margins to remain consistent year-over-year, with improvements anticipated in TheFork due to prior investments [56][57] Question: What is the expected performance of Tripadvisor Core? - Management aims for steady growth and margin expansion in Tripadvisor Core over the midterm, with a focus on enhancing engagement and product offerings [60][64]

Tripadvisor, Inc. (NASDAQ:TRIP) Q3 2022 Earnings Conference Call November 8, 2022 8:30 AM ET Company Participants Angela White – Vice President-Investor Relations Matt Goldberg – President and Chief Executive Officer Mike Noonan – Incoming Chief Financial Officer Ernst Teunissen – Outgoing Chief Financial Officer Conference Call Participants Richard Clarke – Sanford C. Bernstein Naved Khan – Truist Securities Lloyd Walmsley – UBS Jed Kelly – Oppenheimer & Company James Lee – Mizuho Mario Lu – Barclays Brian ...

Financial Data and Key Metrics Changes - Tripadvisor achieved 99% of its 2019 revenue in Q2 2022, a significant increase from 70% in Q1 2022 [14] - Adjusted EBITDA was $109 million, representing 26% of revenue, exceeding expectations [14] - Free cash flow for the quarter was $282 million, with over $1 billion in cash on the balance sheet at the end of the quarter [14] Business Line Data and Key Metrics Changes - Viator's revenue reached 160% of 2019 levels, with a 240% year-over-year growth [6][17] - TheFork achieved 103% of 2019 revenue levels [6] - Tripadvisor's core hotel offering improved to 89% of 2019 levels, up from 63% in the previous quarter [6] Market Data and Key Metrics Changes - U.S. travel strength continued, with Europe showing a strong recovery [14] - The new Tripadvisor Core segment reached 84% of 2019 revenue in Q2 [15] - Hotel auction revenue was about 100% of 2019 levels in both the U.S. and Europe [16] Company Strategy and Development Direction - The company aims to evolve and serve travelers, diners, and experience seekers for decades to come, focusing on innovation and growth in the travel sector [8][12] - Tripadvisor is managing its segments (Tripadvisor Core, Viator, and TheFork) for high growth rather than current margin, reflecting a strategic shift [20] - The company is looking to leverage its data assets to drive consumer insights and engagement [11][78] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the ongoing recovery of travel demand despite macroeconomic concerns such as inflation and recession fears [14] - There is an expectation for further improvement in Q3, although currency headwinds are anticipated [15] - Management emphasized the importance of execution and aligning strategy with operational models to enhance performance [35] Other Important Information - Tripadvisor's culture and team are seen as significant assets, with a focus on attracting talent passionate about purpose [11] - The company is evaluating its cash reserves for potential acquisitions or shareholder returns [74] Q&A Session Summary Question: Insights on Viator's repeat booking behavior and branded ad campaign - Management noted strong repeat booking behavior and plans for a diversified branded demand push, focusing on online channels [22][23] Question: Thoughts on Tripadvisor Plus and its potential - Management acknowledged challenges in scaling Tripadvisor Plus but sees it as a priority area for future focus [28][30] Question: Need for dramatic changes in strategy - Management believes the company has a strong foundation but will focus on sharpening strategy and execution [34][36] Question: Health of the meta search auctions - Management reported healthy dynamics in the auction with strong bidding levels and CPCs, although APAC remains underperforming [50] Question: Core segment margins improvement - The improvement in margins is attributed to fixed cost reductions during the pandemic, with variable costs still elevated [58] Question: Viator's operational take rate - The operational take rate is in the mid-20s, with strategies in place to improve it over time [60] Question: Consumer behavior changes amid macro uncertainty - Management has not observed any significant changes in consumer behavior, with strong demand for travel continuing [69]

Financial Data and Key Metrics Changes - Revenue for Q1 2022 was reported at 70% of 2019 levels, improving to over 80% by the end of March and further in April [8][9] - The Hotels, Media & Platform (HM&P) segment recovered to 63% in Q1, with March at 76% and over 80% in April [21] - Experiences & Dining (E&D) revenue exceeded 130% of 2019 levels in April, with Experiences alone surpassing 140% [23][24] Business Line Data and Key Metrics Changes - The HM&P segment's hotel subscription business and display advertising lagged in recovery compared to other areas, attributed to rebuilding the salesforce and slower up-funnel advertising [21] - Auction revenue recovered quickly after January, reaching 76% of 2019 levels in March and improving significantly in April [21] - E&D showed phenomenal growth, particularly in Experiences, which is growing rapidly and exceeding expectations [24] Market Data and Key Metrics Changes - The recovery in the U.S. market has been robust, with U.S. travelers to Europe exceeding 2019 levels in April [23][57] - Europe as a destination for Experiences has regained strength, matching or exceeding the U.S. as a destination in April [57] Company Strategy and Development Direction - The company is focused on leveraging its unique position in the travel ecosystem and enhancing its offerings through strategic investments [5][61] - The appointment of a new CEO is expected to bring fresh perspectives and strategies to drive growth and address competitive challenges [6][61] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the transition of leisure travel back to full recovery and the potential benefits for the company [9] - The company is optimistic about its growth trajectory, particularly in the Experiences & Dining segment, which is outperforming expectations [24] Other Important Information - The company is investing significantly in marketing and product development for both Viator and TheFork, despite current losses, with a long-term view of achieving profitability [35][36] - The Trip Plus initiative remains a focus, with ongoing testing and iteration to find the right product-market fit [38] Q&A Session Summary Question: Thoughts on the new CEO's expertise and its benefits - Management highlighted the new CEO's broad experience across various roles and industries, emphasizing the importance of his ability to see the whole picture and drive growth [12][14][16] Question: Impact of the Digital Markets Act in Europe - Management acknowledged potential benefits from the regulatory changes but emphasized a cautious approach to strategy formulation around it [17] Question: Performance of HM&P and E&D segments - Management noted that the HM&P segment is recovering slower than OTAs, particularly in hotel subscriptions and display advertising, while E&D is seeing strong growth driven by both conversions and increased traffic [20][23] Question: Viator's potential IPO and revenue recognition - Management clarified that revenue from Tripadvisor's point-of-sale would be recognized under Viator if separated, and they are exploring options for a sub-IPO for Viator [27][29] Question: Marketing spend relative to 2019 levels - Management indicated that marketing expenditures for HM&P have remained consistent with 2019, while E&D has seen increased spending to drive growth [31][32] Question: Recovery of the B2B business - Management expects the B2B business to recover steadily, with a focus on rebuilding the salesforce and improving subscription offerings [48][49]

Part I—Financial Information [Unaudited Condensed Financial Statements](index=3&type=section&id=Item%201.%20Unaudited%20Condensed%20Financial%20Statements) Unaudited Q1 2022 financial statements reveal **$262 million** revenue, a **$34 million** net loss, and **$86 million** positive operating cash flow Condensed Consolidated Statements of Operations (Q1 2022 vs Q1 2021) | Metric | Three months ended March 31, 2022 ($ million) | Three months ended March 31, 2021 ($ million) | | :--- | :--- | :--- | | **Revenue** | 262 | 123 | | **Operating Loss** | (20) | (84) | | **Net Loss** | (34) | (80) | | **Diluted Loss Per Share** | (0.24) | (0.59) | Condensed Consolidated Balance Sheets (As of March 31, 2022) | Account | March 31, 2022 ($ million) | December 31, 2021 ($ million) | | :--- | :--- | :--- | | **Cash and cash equivalents** | 781 | 723 | | **Total Current Assets** | 1,043 | 940 | | **Total Assets** | 2,372 | 2,289 | | **Long-term debt** | 834 | 833 | | **Total Liabilities** | 1,605 | 1,500 | | **Total Stockholders' Equity** | 767 | 789 | Condensed Consolidated Statements of Cash Flows (Q1 2022 vs Q1 2021) | Cash Flow Activity | Three months ended March 31, 2022 ($ million) | Three months ended March 31, 2021 ($ million) | | :--- | :--- | :--- | | **Net cash provided by (used in) operating activities** | 86 | (19) | | **Net cash used in investing activities** | (14) | (10) | | **Net cash provided by (used in) financing activities** | (10) | 287 | [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=25&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses Q1 2022 financial results, emphasizing strong revenue growth, COVID-19 recovery, strategic marketing, and robust liquidity - The company's long-term growth strategy focuses on enhancing user experience, driving loyalty, expanding bookable offerings, and deepening travel partner engagement[143](index=143&type=chunk) - Consolidated revenue for Q1 2022 increased **113% YoY** to **$262 million**, reaching approximately **70% of 2019 levels**, indicating strong recovery[148](index=148&type=chunk) Revenue and Adjusted EBITDA by Segment (Q1 2022 vs Q1 2021) | Segment | Q1 2022 Revenue ($ million) | Q1 2021 Revenue ($ million) | YoY Change | Q1 2022 Adj. EBITDA ($ million) | Q1 2021 Adj. EBITDA ($ million) | | :--- | :--- | :--- | :--- | :--- | :--- | | Hotels, Media & Platform | 160 | 88 | +82% | 46 | (3) | | Experiences & Dining | 92 | 28 | +229% | (22) | (24) | | Other | 10 | 7 | +43% | 3 | 1 | - The company believes its cash and cash equivalents of **$781 million**, along with available credit, are sufficient to fund operations and commitments for at least the next twelve months[216](index=216&type=chunk) [Business Trends and COVID-19 Impact](index=27&type=section&id=Business%20Trends%20and%20COVID-19%20Impact) The company notes substantial improvement in Q1 2022 traffic and revenue, with unique users reaching **71% of 2019 levels**, driven by recovering travel demand - Average monthly unique users reached approximately **71% of 2019 levels** in Q1 2022, up from approximately **55%** in Q1 2021[147](index=147&type=chunk) - Consolidated revenue for Q1 2022 reached approximately **70% of 2019 levels**, a significant improvement from **33%** in Q1 2021[148](index=148&type=chunk) [Segment Performance Analysis](index=27&type=section&id=Segment%20Performance%20Analysis) Segment analysis shows Hotels, Media & Platform revenue grew **82% YoY** to **$160 million**, and Experiences & Dining surged **229% YoY** to **$92 million** - Hotels, Media & Platform revenue increased **82% YoY**, reaching approximately **63% of 2019 levels**, with U.S. hotel auction CPC rates nearing or exceeding 2019 levels[153](index=153&type=chunk) - Experiences & Dining segment revenue increased **229% YoY**, reaching approximately **115% of 2019 levels**, with Experiences revenue growing over **350%** compared to Q1 2021[159](index=159&type=chunk)[160](index=160&type=chunk) - Dining revenue increased approximately **125% YoY**, nearly reaching parity with 2019 levels, as European restaurants reopened[160](index=160&type=chunk) [Consolidated Expense Analysis](index=33&type=section&id=Consolidated%20Expense%20Analysis) Consolidated expenses show a **93% increase** in Selling and Marketing costs to **$141 million**, driven by direct SEM spend, while Technology and Content costs decreased **2%** Selling and Marketing Expenses (Q1 2022 vs Q1 2021) | Expense Category | Q1 2022 ($ million) | Q1 2021 ($ million) | YoY Change | | :--- | :--- | :--- | :--- | | Direct costs | 94 | 29 | +224% | | Personnel and overhead | 47 | 44 | +7% | | **Total** | **141** | **73** | **+93%** | - Technology and content costs decreased by **$1 million (2%) YoY** to **$54 million**, primarily due to lower stock-based compensation expense[187](index=187&type=chunk) [Liquidity and Capital Resources](index=37&type=section&id=Liquidity%20and%20Capital%20Resources) The company maintains a strong liquidity position with **$781 million** in cash and **$497 million** available credit, achieving **$86 million** positive operating cash flow - As of March 31, 2022, the company had **$781 million** in cash and cash equivalents and **$497 million** available borrowing capacity under its Credit Facility[204](index=204&type=chunk) Cash Flow Summary (Q1 2022 vs Q1 2021) | Cash Flow Activity | Q1 2022 ($ million) | Q1 2021 ($ million) | | :--- | :--- | :--- | | Operating Activities | 86 | (19) | | Investing Activities | (14) | (10) | | Financing Activities | (10) | 287 | - The company received a **$48 million** U.S. federal tax refund in April 2022 related to the carryback of net operating losses under the CARES Act[215](index=215&type=chunk) [Quantitative and Qualitative Disclosures About Market Risk](index=41&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20about%20Market%20Risk) No material changes to the company's market risk profile occurred in Q1 2022, though exposure to foreign currency fluctuations and geopolitical tensions persists - The company reports no material change in its market risk profile during Q1 2022[231](index=231&type=chunk) - Key market risks include adverse changes in stock prices, interest rates, and foreign currency exchange rates, heightened by international operations, the COVID-19 pandemic, Brexit, and geopolitical tensions[232](index=232&type=chunk)[233](index=233&type=chunk) [Controls and Procedures](index=41&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded that disclosure controls and procedures were effective as of March 31, 2022, with no material changes to internal control over financial reporting - Management concluded that as of March 31, 2022, the company's disclosure controls and procedures were effective[234](index=234&type=chunk) - There were no material changes to the company's internal control over financial reporting during Q1 2022[235](index=235&type=chunk) Part II—Other Information [Legal Proceedings](index=42&type=section&id=Item%201.%20Legal%20Proceedings) The company is involved in various ordinary course legal matters, with management not expecting a material adverse effect on the business - The company is involved in various typical legal matters, including intellectual property, tax, and regulatory compliance[236](index=236&type=chunk) - Management does not believe the final disposition of these matters will have a material adverse effect on the business[236](index=236&type=chunk) [Risk Factors](index=42&type=section&id=Item%201A.%20Risk%20Factors) No material changes to the company's risk factors have occurred since the December 31, 2021 Annual Report on Form 10-K - There have been no material changes in the company's risk factors from those disclosed in the Annual Report on Form 10-K for the fiscal year ended December 31, 2021[237](index=237&type=chunk) [Unregistered Sales of Equity Securities and Use of Proceeds](index=42&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) No unregistered equity securities were sold, and no shares were repurchased in Q1 2022, with **$75 million** remaining available under the repurchase program - No unregistered equity securities were issued or sold during the quarter ended March 31, 2022[238](index=238&type=chunk) - No shares of common stock were repurchased in Q1 2022; **$75 million** remains available under the program, but repurchases are restricted by covenants[239](index=239&type=chunk) [Other Information and Exhibits](index=42&type=section&id=Other%20Information%20and%20Exhibits) This section confirms no defaults on senior securities or mine safety disclosures, concluding with a list of filed exhibits including management certifications - The company reports no defaults upon senior securities[240](index=240&type=chunk) - The report includes standard exhibits such as CEO/CFO certifications, Inline XBRL documents, and certain management compensation agreements[243](index=243&type=chunk)

Financial Data and Key Metrics Changes - In 2021, revenue started at one-third of pre-pandemic levels and exited the year at 72% of pre-pandemic levels, with Q4 results slightly ahead of expectations [8][9] - The company managed costs effectively, maintaining fixed cost savings while balancing future revenue opportunities with investments [9][65] Business Line Data and Key Metrics Changes - The Experiences segment showed strong growth, with expectations for revenue in 2022 to exceed 2019 levels [9][19] - The Dining segment is focusing on increasing penetration in Europe, where restaurant reservations are under-penetrated compared to the U.S. [18][72] Market Data and Key Metrics Changes - The company observed a strong recovery in February 2022, following a challenging January impacted by Omicron, with significant improvements in both the hotel auction and Dining business [25][82] Company Strategy and Development Direction - The company is exploring a potential sub-IPO for Viator, which is expected to crystallize value and provide growth opportunities [9][21] - There is a focus on enhancing the user experience and product offerings across all segments, particularly in Experiences and Dining [19][60] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the recovery of consumer travel in 2022, particularly in international travel, which is a strength for the company [9][10] - The company is cautious about making forward-looking statements based on short-term data but is encouraged by recent trends [24][25] Other Important Information - The company achieved a milestone of 1 billion reviews and opinions, highlighting the strength of its brand and user engagement [6][56] - Management is actively searching for a new CEO, with updates to be provided as the process continues [7] Q&A Session Summary Question: Opportunities for investment in Viator and long-term growth in Dining - Management highlighted strong growth in the Experiences business, particularly in U.S. domestic consumption, and emphasized the importance of improving product quality and marketing strategies [13][18] Question: Trends in Experiences & Dining and impact of Omicron - Management noted that January was significantly impacted by Omicron, but February showed strong recovery trends in both Dining and Experiences [25][26] Question: Regional performance of Experiences and Plus subscription management - Management indicated strong performance in the U.S. market for Experiences, with ongoing improvements in Europe and APAC, and discussed the challenges in consumer uptake for the Plus subscription [31][33] Question: Long-term margin targets for Experiences & Dining - Management reaffirmed long-term margin targets in the mid to high 20s for Experiences & Dining, emphasizing healthy economics and growth potential [39][52] Question: Cost savings and reinvestment strategies - Management outlined plans to retain most fixed cost savings in HM&P while reinvesting a significant portion of E&D savings into growth initiatives [64][65] Question: Recovery of travel spend and revenue expectations - Management expects a progressive return to pre-pandemic levels of leisure travel spending throughout 2022, with revenue recovery following a similar pattern [67] Question: Viator's growth and operational synergies - Management discussed the importance of Viator's core platform for long-term growth and the operational synergies with TripAdvisor, emphasizing a strong supply base and quality standards [50][80]