TripAdvisor (TRIP) Q1 2025 Earnings Call May 07, 2025 08:30 AM ET Company Participants Angela White - VP of IRMatt Goldberg - President and Chief Executive OfficerMike Noonan - Chief Financial OfficerRichard Clarke - Managing DirectorBenjamin Miller - VP - Global Investment ResearchNaved Khan - Managing Director - Equity ResearchJed Kelly - Managing Director - Equity ResearchKevin Kopelman - Managing Director - Equity ResearchChristopher Suchecki - Equity Research Senior Associate Conference Call Participan ...

Financial Data and Key Metrics Changes - Consolidated revenue for Q1 2025 was $398 million, representing a 1% growth or approximately 3% growth in constant currency, driven by marketplace businesses [6][20] - Consolidated adjusted EBITDA was $44 million, or 11% of revenue, exceeding expectations due to revenue outperformance and lower fixed costs [20][28] - Gross booking value (GBV) grew 10% or 12% in constant currency to approximately $1.1 billion [23] Business Line Data and Key Metrics Changes - Viator's revenue grew 10% to $156 million, with bookings growth of 15% [23][24] - Brand TripAdvisor's revenue was $219 million, a decline of 8%, but adjusted EBITDA was $65 million, representing 30% of revenue [10][24] - The Fork's revenue grew 12% or 16% in constant currency to $46 million, with a significant increase in B2B software subscriptions [15][27] Market Data and Key Metrics Changes - North America remained the largest source market for Viator, with stable booking windows year over year [22] - The US share of international travel from certain source markets, particularly Canada, is down, while domestic travel share is up [18] Company Strategy and Development Direction - The company aims to be the most trusted source for travel and experiences, focusing on diversifying its portfolio and optimizing legacy offerings [5][6] - There is a strong emphasis on leveraging AI to enhance user experience and operational efficiency across all segments [16][17] - The merger with Liberty TripAdvisor Holdings has simplified the capital structure and is expected to unlock new opportunities for growth and shareholder engagement [5][42] Management's Comments on Operating Environment and Future Outlook - Management acknowledges macroeconomic uncertainties but remains confident in the long-term growth potential of travel and experiences [19][20] - Travel sentiment remains positive, with consumers planning leisure travel and prioritizing experiences in their budgets [19][68] - The company is closely monitoring early signs of pressure in average booking value and cancellation rates [18][20] Other Important Information - The company raised $350 million in an add-on to its existing Term Loan B and expects to use the proceeds to pay down convertible notes due in 2026 [29][30] - The company plans to restart its share repurchase program with approximately $200 million remaining under its existing authorization [31] Q&A Session Summary Question: Guidance and macro uncertainty - Management is comfortable with the current guidance framework but acknowledges macro uncertainty as a reason for not adjusting guidance upward [39][41] Question: Impact of Liberty buyout - The completion of the Liberty buyout simplifies the capital structure and allows for a clearer focus on value drivers [42][43] Question: Viator margins and marketing - Management believes Viator can achieve OTA-like margins through product-led growth and improved marketing efficiency [48][49] Question: Cross-border exposure and marketing adjustments - Viator is predominantly a North American booker base, making it less susceptible to international trade route pressures [52] Question: Google auction changes - Management is actively involved in optimizing ad placements and formats on Google, viewing it as an opportunity for incremental traffic [58] Question: Average booking value decline - The decline in average booking value is primarily due to a higher mix of third-party bookings, which generally have lower price points [59][60] Question: Travel spending in a slower consumer environment - Historically, consumers defend travel spending, particularly on experiences, even during economic slowdowns [66][68] Question: Hotel Meta pricing improvement - Improvements in user experience and content have driven pricing uplifts in Hotel Meta, contributing to better monetization [70][72] Question: Viator marketing strategy - The marketing strategy for Viator remains focused on utilizing paid channels effectively to convert demand [90][92]

Core Insights - TripAdvisor (TRIP) reported quarterly earnings of $0.14 per share, exceeding the Zacks Consensus Estimate of $0.05 per share, and showing an increase from $0.12 per share a year ago, resulting in an earnings surprise of 180% [1] - The company generated revenues of $398 million for the quarter ended March 2025, surpassing the Zacks Consensus Estimate by 2.31% and reflecting a slight increase from $395 million year-over-year [2] - TripAdvisor has consistently outperformed consensus EPS estimates over the last four quarters, achieving this four times [2] Earnings Outlook - The immediate price movement of TripAdvisor's stock will largely depend on management's commentary during the earnings call and future earnings expectations [3][4] - The current consensus EPS estimate for the upcoming quarter is $0.43 on revenues of $513.15 million, while the estimate for the current fiscal year is $1.37 on revenues of $1.89 billion [7] Industry Context - The Internet - Commerce industry, to which TripAdvisor belongs, is currently ranked in the top 31% of over 250 Zacks industries, indicating a favorable outlook compared to the bottom 50% [8] - Empirical research suggests a strong correlation between near-term stock movements and trends in earnings estimate revisions, which can be tracked by investors [5]

Business Segments - Tripadvisor Group operates across three business segments: Brand Tripadvisor, Viator, and TheFork, aiming to connect users with travel experiences [131]. - Brand Tripadvisor has over 1 billion user-generated reviews and opinions on more than 9 million experiences, accommodations, restaurants, airlines, and cruises [133]. - Viator offers nearly 400,000 bookable experiences from over 65,000 operators, focusing on enhancing traveler engagement and improving unit economics [134][139]. - TheFork has a network of approximately 55,000 partner restaurants across 11 countries, with nearly 40 million app downloads and over 20 million reviews [135]. Financial Performance - Revenue for the three months ended March 31, 2025, was $398.2 million, a 1% increase compared to $395.1 million in the same period of 2024 [160]. - Total costs and expenses for the same period were $413.7 million, reflecting a 1% increase from $409.8 million in 2024 [160]. - Net loss for the first quarter of 2025 was $11.0 million, a significant improvement of 81% compared to a net loss of $59.3 million in the same quarter of 2024 [160]. - Brand Tripadvisor segment revenue decreased by approximately $20 million to $219.4 million, an 8% decline compared to $239.5 million in 2024 [161][162]. - Adjusted EBITDA for the Brand Tripadvisor segment decreased by approximately $13 million to $64.9 million, with an adjusted EBITDA margin of 29.6%, down from 32.4% in 2024 [163][161]. - Viator segment revenue increased by approximately $15 million to $155.8 million, a 10% increase compared to $141.1 million in the same period of 2024 [172][179]. - TheFork revenue increased by approximately $5 million during Q1 2025, driven by booking volume growth and increased adoption of premium reservation software, despite a 4% negative impact from foreign currency fluctuations [185]. - Adjusted EBITDA for the three months ended March 31, 2025, was $43.8 million, down from $46.7 million in the same period in 2024 [216]. Restructuring and Costs - The company incurred estimated pre-tax restructuring costs of $10 million in Q1 2025 to improve operational efficiencies [150]. - Restructuring and other related reorganization costs increased significantly by 910% to $10.1 million, compared to $1.0 million in the same period of 2024 [160]. - Personnel costs decreased by approximately $5 million in Q1 2025, primarily due to a reduction in headcount related to cost-reduction measures [194]. - General and administrative costs decreased by approximately $12 million in Q1 2025, primarily due to a $10 million accrual for a potential regulatory settlement in Q1 2024 [198]. Cash Flow and Liquidity - The company had approximately $1.2 billion in cash and cash equivalents as of March 31, 2025, compared to $1.1 billion as of December 31, 2024 [220]. - The company anticipates that available cash and cash equivalents will be sufficient to meet working capital requirements and financial commitments for at least the next twelve months [232]. - Net cash provided by operating activities for the three months ended March 31, 2025, was $101.7 million, a decrease of approximately $37 million compared to $138.5 million in the same period in 2024 [234][236]. - Cash used in investing activities increased to $19 million for the three months ended March 31, 2025, compared to $15.7 million in 2024, primarily due to increased capital expenditures [234][236]. - Cash used in financing activities decreased by approximately $9 million to $2.5 million for the three months ended March 31, 2025, compared to $12.2 million in 2024, mainly due to proceeds from a $341 million loan issuance [234][237]. Mergers and Acquisitions - The aggregate transaction price for the merger with Liberty TripAdvisor was approximately $430 million, completed on April 29, 2025 [147]. - The merger with LTRIP was completed on April 29, 2025, with a total transaction price including $327 million under the Loan Agreement and additional cash payments of approximately $85 million [230]. Market Trends and Expectations - The company expects to benefit from ongoing market tailwinds as consumers increasingly book experiences online, shifting discretionary spending towards travel [146]. - The company is focused on executing initiatives through organic investments in data, products, marketing, and technology, while also considering strategic acquisitions for growth [142]. Tax and Regulatory Matters - The company is currently under audit by HMRC for tax years 2012 through 2016, with potential tax liabilities estimated between $25 million and $35 million [231]. - The company recorded an income tax benefit of approximately $9 million for the three months ended March 31, 2025, compared to an income tax expense of $46 million in the first quarter of 2024 [211]. - The company maintained a deferred income tax liability for U.S. federal and state income tax and foreign withholding tax liabilities on cumulative undistributed foreign earnings, which amounted to $586 million as of March 31, 2025 [221]. Employee and Operational Metrics - As of March 31, 2025, the company had approximately 2,770 employees, with 62% based in Europe [152]. - The company experienced a seasonal fluctuation in cash flows, with higher cash flow related to working capital typically occurring in the first half of the year [228]. Marketing and Growth Strategies - The company incurred increased marketing costs to drive revenue growth and market share in its experiences and dining offerings during the three months ended March 31, 2025 [212]. - Total marketing expenses increased by approximately $9 million in Q1 2025, driven by higher marketing costs in Viator and TheFork segments [191].

Financial Performance - Total revenue for Q1 2025 was $398 million, a 1% increase year-over-year[7] - GAAP net loss for Q1 2025 was $11 million, or ($0.08) diluted EPS, an improvement of 81% compared to a loss of $59 million in Q1 2024[7] - Non-GAAP net income for Q1 2025 was $21 million, or $0.14 diluted EPS, a 26% increase from $17 million in Q1 2024[7] - Adjusted EBITDA for Q1 2025 was $44 million, representing 11.0% of revenue, down 6% from $47 million in Q1 2024[7] - Total costs and expenses for Q1 2025 were $413 million, a 1% increase year-over-year[8] - Net income for the three months ended March 31, 2025, was a loss of $11 million, an improvement from a loss of $59 million in the same period last year[24] - Net cash provided by operating activities was $102 million for the three months ended March 31, 2025, compared to $139 million in the prior year, reflecting a decrease of 26.6%[24] - The total stockholders' equity decreased to $643 million from $943 million, indicating a decline of 31.9%[22] - GAAP net income for FY 2024 was $4.9 million, down 50% year-over-year[44] - Total revenue for FY 2024 was $1,834.6 million, reflecting a year-over-year growth of 3%[44] - Adjusted EBITDA for FY 2024 was $338.5 million, with a margin of 18.5%, while Q4 adjusted EBITDA was $72.8 million, down 13% year-over-year[50] Revenue Growth - Viator revenue grew by 10% year-over-year to $156 million, with gross bookings value reaching $1.1 billion[12] - TheFork revenue increased by 12% year-over-year to $46 million, with total bookings growing approximately 5%[12] - Total revenue for FY 2024 was $1,834.6 million, with Q4 revenue at $411.1 million, reflecting a year-over-year growth of 1%[50] - GAAP Total Viator Segment Revenue increased by 23% in Q1 2024, with a Non-GAAP growth of 23% on a constant currency basis[42] - GAAP Total TheFork Segment Revenue grew by 17% in Q1 2024, with a Non-GAAP growth of 16% on a constant currency basis[42] - Viator's revenue increased to $840.1 million in FY 2024, achieving a year-over-year growth of 14%[44] - TheFork's revenue reached $180.8 million in FY 2024, reflecting an 18% year-over-year growth[44] Costs and Expenses - Restructuring costs incurred in 2025 were estimated at $10 million, primarily in the Brand Tripadvisor segment[15] - Long-term debt increased significantly to $1,167 million, up from $831 million, marking a rise of 40.5%[22] - Marketing expenses for FY 2024 totaled $728.6 million, accounting for 39.8% of total revenue[50] - Personnel costs for FY 2024 were $475.2 million, representing 26% of total revenue[50] Cash and Liquidity - Cash and cash equivalents as of March 31, 2025, were approximately $1.2 billion, an increase of $90 million from December 31, 2024[8] - Cash and cash equivalents at the end of the period were $1,154 million, down from $1,171 million a year earlier[24] - The company reported a net increase in cash of $90 million during the quarter, compared to a decrease of $104 million in the same period last year[24] Strategic Initiatives - The merger with Liberty TripAdvisor Holdings, Inc. was completed on April 29, 2025, with an aggregate transaction price of approximately $430 million[13] - The company plans to focus on expanding its market presence and enhancing user engagement through new product offerings and technology advancements[52] - Tripadvisor aims to be the world's most trusted source for travel and experiences, leveraging its brands and technology to connect a global audience with partners[59] - The company connects people to experiences worth sharing, aiming to enhance user engagement through rich content and travel guidance[59] Operational Metrics - Gross Booking Value (GBV) for the Viator platform is used as an operational measure to assess engagement and economic activity, although it is not an indicator of revenue[53] - The company regularly reviews its operational metrics to improve accuracy and transparency for investors[55] Forward-Looking Statements - Tripadvisor's future financial performance may include both GAAP and non-GAAP measures, with expectations subject to risks and uncertainties[58] - The company does not assume any obligations to update forward-looking statements, which may differ from actual results due to various risks[58] - Tripadvisor's financial results may vary significantly from expectations due to known and unknown factors[58]

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Core Points - Tripadvisor, Inc. has completed its merger with Liberty TripAdvisor Holdings, Inc., acquiring Liberty TripAdvisor and its shares [1] - The total transaction value of the merger is approximately $430 million, based on Tripadvisor's closing share price of $12.82 on April 28, 2025 [2] - The merger resulted in a simplification of Tripadvisor's capital structure, eliminating controlling stockholders and reducing the outstanding share count by approximately 23.8 million shares [3] - Tripadvisor has also finalized its redomestication from Delaware to Nevada, a move approved by stockholders in June 2023 [4] Financial Details - Liberty TripAdvisor's Series A and Series B Common Stock were converted into cash payments totaling approximately $20 million [2] - The 8% Series A Cumulative Redeemable Preferred Stock was converted into approximately $42.5 million in cash and 3,037,959 shares of Tripadvisor common stock [2] - Liberty TripAdvisor's Exchangeable Senior Debentures, amounting to approximately $326 million, were repaid, with an additional $4 million to be redeemed within 30 days post-close [2]

Investors might want to bet on TripAdvisor (TRIP) , as it has been recently upgraded to a Zacks Rank #2 (Buy). This rating change essentially reflects an upward trend in earnings estimates -- one of the most powerful forces impacting stock prices.The Zacks rating relies solely on a company's changing earnings picture. It tracks EPS estimates for the current and following years from the sell-side analysts covering the stock through a consensus measure -- the Zacks Consensus Estimate.The power of a changing e ...

NEEDHAM, Mass., April 16, 2025 /PRNewswire/ -- Tripadvisor, Inc. (NASDAQ: TRIP) announced today that at 7:05 a.m. ET on Wednesday, May 7, 2025, the company will post its first quarter 2025 financial results on its investor relations website at ir.tripadvisor.com. The same day, at 8:30 a.m. ET, the company will host a conference call to answer questions regarding its financial results.  The event will be webcast live and can be accessed at ir.tripadvisor.com.  A replay will be available on the website for th ...

TripAdvisor (TRIP) closed the last trading session at $14.03, gaining 1.7% over the past four weeks, but there could be plenty of upside left in the stock if short-term price targets set by Wall Street analysts are any guide. The mean price target of $17.82 indicates a 27% upside potential.The mean estimate comprises 17 short-term price targets with a standard deviation of $3.38. While the lowest estimate of $12 indicates a 14.5% decline from the current price level, the most optimistic analyst expects the ...