trivago N.V.'s Second Quarter 2024 Earnings Release Scheduled for July 30, 2024; Webcast Scheduled for July 31, 2024 About trivago N.V. Investor Contact: DÜSSELDORF, GERMANY – July 18, 2024 - trivago N.V. (NASDAQ: TRVG) announced today that it will release its financial results for the second quarter for the period ended June 30, 2024 on Tuesday, July 30, 2024 after market close. On Wednesday, July 31, 2024, trivago N.V.'s management will conduct a webcast beginning at 2:15 PM CEST / 8:15 AM EDT. These item ...

DÜSSELDORF, Germany, May 23, 2024 – trivago N.V. (NASDAQ:TRVG) announced today that its annual general meeting of shareholders will be held on June 28, 2024, at the offices of NautaDutilh N.V., Beethovenstraat 400, 1082 PR Amsterdam, the Netherlands. The meeting will start at 3:00 p.m. CEST. The convening notice and explanatory notes for the general meeting are available free of charge in the Investor Relations section of trivago N.V.'s corporate website at ir.trivago.com. About trivago N.V. trivago is a gl ...

Question-and-Answer Session Operator [Operator Instructions]. Your first question comes from the line of Naved Khan of B. Riley Securities. Your line is open. Naved Khan Hi. Thank you for the question, Naved. This is Johannes. I think on the first quarter in terms of performance marketing, there was weakness starting second half of the year already where Google gradually did changes to their search results and tested new ad formats, and that has gradually increased over time. In Q1, from what we observed, t ...

PART I [Item 3: Key information](index=9&type=section&id=Item%203%3A%20Key%20information) This section details trivago's significant business, operational, and financial risks, including reliance on Google and major advertisers, and the impact of its new brand marketing strategy [Risk Factors](index=9&type=section&id=D.%20Risk%20factors) The company highlights risks from its new brand marketing strategy, heavy reliance on Google and key advertisers, potential asset impairment, and its relationship with Expedia Group - A new strategy to increase brand marketing investments is expected to negatively impact profitability in the short-to-medium term, with no guarantee of long-term revenue growth[30](index=30&type=chunk)[32](index=32&type=chunk) - The company relies heavily on search engines, particularly Google, which promotes its own competing products (Google Hotel Ads) at the expense of traditional search results, negatively impacting trivago's traffic acquisition[35](index=35&type=chunk)[37](index=37&type=chunk)[38](index=38&type=chunk) - A very large portion of revenue is derived from a small number of advertisers, primarily brands affiliated with Booking Holdings and Expedia Group, where reduced spending or changes in bidding strategies could significantly harm business[39](index=39&type=chunk)[41](index=41&type=chunk) - The company recorded a cumulative impairment charge of **€196.1 million** in 2023 on intangible assets and goodwill, driven by a revised profitability outlook, a decline in share price, and economic uncertainty[47](index=47&type=chunk) - Expedia Group holds **60.0% of issued shares** and **84.1% of voting power**, giving it control over corporate actions, which may create conflicts of interest with other shareholders[109](index=109&type=chunk)[111](index=111&type=chunk) [Item 4: Information on the company](index=37&type=section&id=Item%204%3A%20Information%20on%20the%20company) This section describes trivago's history, global accommodation search platform business model, organizational structure, and headquarters [History and development of the company](index=37&type=section&id=A.%20History%20and%20development%20of%20the%20company) Founded in 2005 in Düsseldorf, Germany, trivago grew into a leading global hotel search platform, with Expedia Group acquiring a majority stake in 2013, followed by its Nasdaq IPO in December 2016 - Expedia Group acquired a **63.0% equity ownership** in trivago in 2013 for **€477 million**[164](index=164&type=chunk) - The company completed its Initial Public Offering (IPO) on the Nasdaq Stock Exchange on December 16, 2016, and is incorporated as trivago N.V. under Dutch law[165](index=165&type=chunk) [Business overview](index=38&type=section&id=B.%20Business%20overview) trivago operates a global accommodation search platform, generating CPC revenue from over 5.0 million properties, with significant revenue concentration from key advertisers and seasonal patterns - The platform provides access to over **5.0 million hotels** and other accommodations, including **3.8 million alternative accommodations** like vacation rentals[171](index=171&type=chunk)[175](index=175&type=chunk) - The company's four strategic priorities are: reigniting the brand, enhancing the hotel search experience, delivering the best deal discovery, and empowering advertising partners[194](index=194&type=chunk)[195](index=195&type=chunk)[196](index=196&type=chunk) FY2023 Revenue Concentration | Advertiser Group | % of Referral Revenue | | :--- | :--- | | Expedia Group and affiliates | 36% | | Booking Holdings and affiliates | 43% | - The business is seasonal, with revenues generally highest in the first three quarters due to holiday travel planning, and typically decreasing in the fourth quarter[204](index=204&type=chunk) [Organizational structure](index=47&type=section&id=C.%20Organizational%20structure) trivago N.V. is a holding company for its subsidiaries, with Expedia Group holding 84.1% of the voting power as of December 31, 2023, establishing it as the controlling shareholder - As of December 31, 2023, Expedia Group holds Class B shares representing **60.0% of issued shares** and **84.1% of the voting power** in trivago N.V[109](index=109&type=chunk)[221](index=221&type=chunk)[222](index=222&type=chunk) [Operating and financial review and prospects](index=49&type=section&id=Item%205%3A%20Operating%20and%20financial%20review%20and%20prospects) In FY2023, trivago's revenue decreased by 9% to €485.0 million, resulting in a net loss of €164.5 million due to lower revenue, increased competition, and a €196.1 million impairment charge [Operating results](index=49&type=section&id=A.%20Operating%20results) FY2023 total revenue decreased 9% to €485.0 million, leading to a €164.5 million net loss, driven by lower Referral Revenue in Americas and Developed Europe, and a significant impairment charge Consolidated Statement of Operations Highlights (FY2023 vs. FY2022) | Metric | 2023 (€ millions) | 2022 (€ millions) | % Change | | :--- | :--- | :--- | :--- | | Total Revenue | 485.0 | 535.0 | (9)% | | Operating Loss | (156.6) | (120.3) | 30% | | Net Loss | (164.5) | (127.2) | 29% | | Adjusted EBITDA | 54.1 | 107.5 | (50)% | Referral Revenue by Segment (FY2023 vs. FY2022) | Segment | 2023 (€ millions) | 2022 (€ millions) | % Change | | :--- | :--- | :--- | :--- | | Americas | 176.4 | 216.4 | (19)% | | Developed Europe | 215.7 | 237.7 | (9)% | | Rest of World | 84.7 | 67.7 | 25% | | **Total** | **476.8** | **521.8** | **(9)%** | Return on Advertising Spend (ROAS) by Segment | Segment | 2023 | 2022 | | :--- | :--- | :--- | | Americas | 148.3% | 164.4% | | Developed Europe | 146.0% | 158.6% | | Rest of World | 150.1% | 188.8% | | **Consolidated** | **147.6%** | **164.4%** | - The company recorded cumulative impairment charges of **€196.1 million** in 2023, compared to **€184.6 million** in 2022, related to intangible assets and goodwill[287](index=287&type=chunk) [Liquidity and capital resources](index=60&type=section&id=B.%20Liquidity%20and%20capital%20resources) As of December 31, 2023, trivago's total cash, cash equivalents, and restricted cash decreased by €146.7 million to €102.2 million, primarily driven by a €190.4 million cash outflow from financing activities, including a €184.4 million extraordinary dividend payment Cash Flow Summary (FY2023 vs. FY2022) | Cash Flow Activity | 2023 (€ millions) | 2022 (€ millions) | | :--- | :--- | :--- | | Cash from Operating Activities | 27.8 | 66.3 | | Cash from/(used in) Investing Activities | 16.3 | (54.9) | | Cash used in Financing Activities | (190.4) | (19.6) | - Cash used in financing activities was **€190.4 million**, primarily driven by a one-time extraordinary dividend payment of **€184.4 million** to shareholders in the fourth quarter of 2023[308](index=308&type=chunk) [Critical Accounting Policies and Estimates](index=62&type=section&id=E.%20Critical%20Accounting%20Policies%20and%20Estimates) The company's critical accounting policies and estimates involve significant judgment, particularly concerning leases, the recoverability of goodwill and indefinite-lived intangible assets, income taxes, and share-based compensation, leading to a €196.1 million impairment charge in 2023 - Key critical accounting estimates include leases, recoverability of goodwill and indefinite-lived intangible assets, income taxes, and share-based compensation[310](index=310&type=chunk)[311](index=311&type=chunk) - The annual impairment test for goodwill and indefinite-lived assets as of September 30, 2023, resulted in a quantitative assessment and an impairment charge of **€196.1 million**[315](index=315&type=chunk) - The impairment test for goodwill used a blended analysis of discounted cash flows and a market valuation approach, while the test for indefinite-lived assets used the relief-from-royalty method[317](index=317&type=chunk)[320](index=320&type=chunk) [Item 6: Directors, senior management and employees](index=67&type=section&id=Item%206%3A%20Directors%2C%20senior%20management%20and%20employees) This section details trivago's management and supervisory boards, including compensation and employee headcount, which decreased to 651 in 2023 [Directors and senior management](index=67&type=section&id=A.%20Directors%20and%20senior%20management) As of the report date, trivago's management board consists of Johannes Thomas (CEO), Jasmine Ezz (CMO), and Andrej Lehnert (CPO), with Kevin Hu serving as interim CFO, and the supervisory board comprises eight members, chaired by Eric M. Hart - Significant changes occurred in the Management Board in 2023: Axel Hefer resigned as CEO and was replaced by Johannes Thomas, while Matthias Tillmann resigned as CFO at year-end, with Kevin Hu appointed as interim CFO[346](index=346&type=chunk) - The Supervisory Board consists of eight members, chaired by Eric M. Hart, and co-founder Rolf Schrömgens was re-appointed to the supervisory board in June 2023[347](index=347&type=chunk)[358](index=358&type=chunk) [Compensation](index=70&type=section&id=B.%20Compensation) Management board compensation for 2023 consisted of base salaries, signing bonuses for new members, and benefits in kind, with no cash bonus component, while significant equity awards were granted to new management members with vesting tied to service and performance conditions - Management board cash compensation for 2023 did not include a bonus portion but did include signing bonuses for new members Johannes Thomas (**€250k**), Jasmine Ezz (**€100k**), and Andrej Lehnert (**€250k**)[361](index=361&type=chunk)[363](index=363&type=chunk) - New management members received substantial stock option grants in May 2023, with vesting periods extending to 2027 and performance conditions tied to the company's adjusted share price[364](index=364&type=chunk)[366](index=366&type=chunk) - The trivago N.V. 2016 Omnibus Incentive Plan is the primary vehicle for equity awards, with a maximum of **59,635,698 Class A shares** available for issuance[381](index=381&type=chunk) [Employees](index=81&type=section&id=D.%20Employees) The company's total number of employees decreased from 709 at the end of 2022 to 651 at the end of 2023, with the majority based in Germany and the largest group working in Technology and content Employee Headcount by Function | Function | 2023 | 2022 | 2021 | | :--- | :--- | :--- | :--- | | Cost of revenue | 54 | 58 | 57 | | Selling and marketing | 119 | 111 | 133 | | Technology and content | 338 | 380 | 444 | | General and administrative | 140 | 160 | 175 | | **Total** | **651** | **709** | **809** | [Item 7: Major shareholders and related party transactions](index=82&type=section&id=Item%207%3A%20Major%20shareholders%20and%20related%20party%20transactions) This section outlines trivago's ownership structure, with Expedia Group as the controlling shareholder, and details significant related party transactions, including 36% of 2023 revenue from Expedia [Major Shareholders](index=82&type=section&id=A.%20Major%20Shareholders) As of February 26, 2024, Expedia Group, Inc. is the largest shareholder with 84.1% of the total voting power, while co-founder Rolf Schrömgens holds 12.8% of the voting power Beneficial Ownership (as of Feb 26, 2024) | Name of Beneficial Owner | Class A Shares % | Class B Shares % | % Voting Power | | :--- | :--- | :--- | :--- | | Expedia Group, Inc. | — | 88.0% | 84.1% | | Rolf Schrömgens | 31.1% | 12.0% | 12.8% | | PAR Investment Partners, L.P. | 5.4% | — | <1% | [Related party transactions](index=84&type=section&id=B.%20Related%20party%20transactions) trivago has extensive related party transactions, primarily with Expedia Group, which accounted for 36% of total revenue in 2023, and received €110.6 million of a €184.4 million extraordinary dividend paid in 2023 - Revenue from related party Expedia Group and its brands was **€172.5 million** in 2023, accounting for **36% of total revenue**[453](index=453&type=chunk) - A one-time extraordinary dividend of **€184.4 million** was paid in 2023, with **€110.6 million** going to Expedia Group and **€15.1 million** to founder Rolf Schrömgens[452](index=452&type=chunk)[456](index=456&type=chunk) - The Amended and Restated Shareholders' Agreement with Expedia and the Founders governs board composition, registration rights, and share transfer restrictions, with the Founders' right to designate board members terminating in November 2022 when their collective shareholding fell below a 15% threshold[438](index=438&type=chunk)[440](index=440&type=chunk) [Item 8: Financial information](index=89&type=section&id=Item%208%3A%20Financial%20information) This section references the main financial statements and provides details on legal proceedings, including purported class action lawsuits in Israel and Canada following a 2022 Australian judgment where the company paid a penalty of AUD 44.7 million - Following a judgment by the Australian Federal Court, the company paid a penalty of **AUD 44.7 million** in 2022 for breaches of the Australian Consumer Law[467](index=467&type=chunk) - The company is facing two purported class action lawsuits in Israel and Ontario, Canada, with similar allegations regarding advertising and display practices, where the Ontario action's class certification was denied but is under appeal[468](index=468&type=chunk) [Item 10: Additional information](index=90&type=section&id=Item%2010%3A%20Additional%20information) This section details material contracts, exchange controls, and complex taxation implications for ADS holders, noting the company's German tax residency and potential PFIC status for U.S. tax purposes [Taxation](index=91&type=section&id=E.%20Taxation) The company is a tax resident of Germany, despite being incorporated in the Netherlands, with dividends subject to German withholding tax of 26.375%, and a risk of Passive Foreign Investment Company (PFIC) classification for U.S. Holders - The company is considered a tax resident of Germany due to its effective place of management being in Germany, despite its incorporation in the Netherlands[487](index=487&type=chunk)[570](index=570&type=chunk) - Dividends are subject to a German withholding tax of **26.375%** (25% plus solidarity surcharge), which may be reduced for non-German residents under applicable double taxation treaties[502](index=502&type=chunk) - For U.S. federal income tax purposes, the company does not believe it was a Passive Foreign Investment Company (PFIC) for the 2023 taxable year, but this is a factual determination made annually and no assurance can be given for future years[150](index=150&type=chunk)[607](index=607&type=chunk) [Item 12: Description of securities other than equity securities](index=118&type=section&id=Item%2012%3A%20Description%20of%20securities%20other%20than%20equity%20securities) This section describes the American Depositary Shares (ADSs), where each ADS represents five Class A shares and is registered by Deutsche Bank Trust Company Americas, outlining the deposit agreement and various service fees payable by ADS holders - Each American Depositary Share (ADS) represents **five Class A shares** of the company[628](index=628&type=chunk) - ADS holders are required to pay fees for services such as issuance (up to **$0.05 per ADS**), cancellation (up to **$0.05 per ADS**), and cash dividend distributions (up to **$0.02 per ADS**)[630](index=630&type=chunk) PART II [Item 15: Control and procedures](index=120&type=section&id=Item%2015%3A%20Control%20and%20procedures) This section confirms the effectiveness of trivago's disclosure controls and internal control over financial reporting as of December 31, 2023, as concluded by management and affirmed by the independent auditor - Management concluded that as of December 31, 2023, the company's disclosure controls and procedures were effective[635](index=635&type=chunk) - Management concluded that as of December 31, 2023, the company's internal control over financial reporting was effective, based on the COSO 2013 framework[638](index=638&type=chunk) - The independent auditor, EY GmbH & Co. KG, provided an unqualified opinion on the effectiveness of the company's internal control over financial reporting as of December 31, 2023[642](index=642&type=chunk) [Item 16: Other Information](index=122&type=section&id=Item%2016%3A%20Other%20Information) This section covers governance, principal accountant fees, and cybersecurity, detailing deviations from Nasdaq rules and the Dutch Corporate Governance Code, and outlining the company's cybersecurity risk management program [Principal accountant fees and services](index=122&type=section&id=C.%20Principal%20accountant%20fees%20and%20services) For fiscal year 2023, trivago's independent auditor, EY GmbH & Co. KG, billed a total of €2.46 million, with 99.1% attributed to audit fees Accountant Fees (FY2023 vs. FY2022) | Fee Category | 2023 (€ thousands) | 2022 (€ thousands) | | :--- | :--- | :--- | | Audit Fees | 2,437 | 2,347 | | Tax Fees | 12 | 8 | | All Other Fees | 10 | 6 | | **Total** | **2,459** | **2,361** | [Corporate governance](index=124&type=section&id=G.%20Corporate%20governance) As a foreign private issuer and controlled company, trivago follows home country practices, leading to deviations from certain Nasdaq rules and non-compliance with some Dutch Corporate Governance Code provisions - The company follows home country (Dutch) corporate governance practices in lieu of certain Nasdaq rules, permitted as a foreign private issuer[661](index=661&type=chunk) - Deviations from Nasdaq rules include not having a board comprised of a majority of independent directors and not having a compensation committee composed solely of independent directors, due to its status as a 'controlled company'[140](index=140&type=chunk)[665](index=665&type=chunk) - The company does not comply with all provisions of the Dutch Corporate Governance Code (DCGC), citing conflicts with U.S. securities laws and practices of global companies[664](index=664&type=chunk) [Cybersecurity](index=126&type=section&id=K.%20Cybersecurity) trivago maintains a cybersecurity risk management program, overseen by the Management and Supervisory Boards, based on industry frameworks, with no material incidents reported in the past year - The company's cybersecurity program is overseen by the Management Board and Supervisory Board, with processes based on frameworks like NIST and ISO/IEC 27001[679](index=679&type=chunk) - The Chief Product Officer also serves as the Chief Information Security Officer (CISO), with extensive experience in technology and risk management[684](index=684&type=chunk) - The company states that cybersecurity threats or incidents have not materially affected its business, operations, or financial condition over the past financial year[685](index=685&type=chunk) PART III [Item 18: Financial statements](index=129&type=section&id=Item%2018%3A%20Financial%20statements) This section presents trivago's audited consolidated financial statements for the three years ended December 31, 2023, prepared under U.S. GAAP, detailing key accounting policies, significant impairments, and related-party transactions [Consolidated statements of operations](index=138&type=section&id=Consolidated%20statements%20of%20operations) The consolidated statement of operations shows a 9% decrease in total revenue to €485.0 million in 2023, with the net loss widening to €164.5 million, heavily impacted by a €196.1 million impairment charge Key Financial Results (in € thousands) | | 2023 | 2022 | 2021 | | :--- | :--- | :--- | :--- | | Total revenue | 485,031 | 535,004 | 361,465 | | Operating income/(loss) | (156,587) | (120,262) | 10,051 | | Net income/(loss) | (164,476) | (127,218) | 10,704 | | Basic EPS (€) | (0.48) | (0.36) | 0.03 | | Diluted EPS (€) | (0.48) | (0.36) | 0.03 | [Consolidated balance sheets](index=141&type=section&id=Consolidated%20balance%20sheets) The consolidated balance sheet as of December 31, 2023, shows total assets decreased to €325.1 million, primarily due to reduced cash and the complete impairment of goodwill Key Balance Sheet Items (in € thousands) | | Dec 31, 2023 | Dec 31, 2022 | | :--- | :--- | :--- | | Cash and cash equivalents | 101,847 | 248,584 | | Goodwill | — | 181,927 | | Total Assets | 325,069 | 691,592 | | Total Liabilities | 110,045 | 129,856 | | Total stockholders' equity | 215,024 | 561,736 | [Consolidated statements of cash flows](index=143&type=section&id=Consolidated%20statements%20of%20cash%20flows) Net cash provided by operating activities decreased to €27.8 million in 2023, while net cash used in financing activities significantly increased to €190.4 million due to a €184.4 million extraordinary dividend Cash Flow Summary (in € thousands) | | 2023 | 2022 | 2021 | | :--- | :--- | :--- | :--- | | Net cash provided by operating activities | 27,801 | 66,268 | 32,536 | | Net cash provided by/(used in) investing activities | 16,289 | (54,910) | 10,018 | | Net cash provided by/(used in) financing activities | (190,442) | (19,621) | 1,053 | | Net increase/(decrease) in cash | (146,737) | (7,793) | 45,948 | [Note 8. Goodwill and intangible assets, net](index=159&type=section&id=Note%208.%20Goodwill%20and%20intangible%20assets%2C%20net) This note details the €196.1 million cumulative impairment charge recorded in 2023, which fully eliminated goodwill and reduced indefinite-lived intangible assets, driven by a revised profitability outlook and share price decline - A cumulative impairment charge of **€196.1 million** was recorded in 2023 for goodwill and indefinite-lived intangible assets[823](index=823&type=chunk) - Goodwill impairment charges of **€95.5 million** (Developed Europe) and **€86.5 million** (Americas) completely eliminated the company's goodwill balance, which stood at **€181.9 million** at the start of the year[823](index=823&type=chunk)[827](index=827&type=chunk) - The carrying value of indefinite-lived intangible assets decreased from **€89.5 million** at year-end 2022 to **€75.3 million** at year-end 2023 due to a **€14.2 million** impairment charge[822](index=822&type=chunk)[823](index=823&type=chunk)

Financial Data and Key Metrics Changes - The company reported revenues of €91.7 million for Q4 2023, representing a 13% decline compared to the same quarter in the previous year [81] - The net income for Q4 was €2.5 million, while the full year net loss was €164.5 million, primarily due to an impairment analysis conducted in Q3 [82] - Adjusted EBITDA for Q4 was €7.3 million, with a full year adjusted EBITDA of €54.1 million [82] Business Line Data and Key Metrics Changes - Referral revenues declined by 20% in the Americas and by 14% in developed Europe, while increasing by 14% in the Rest of World segment [6] - The company observed a normalization of average booking values across its segments, with a higher length of stay in developed Europe and a slight decrease in average daily rates in the Americas [30][44] Market Data and Key Metrics Changes - The Americas and developed Europe segments are expected to see mid-single-digit revenue declines in Q1 2024, while the Rest of World segment is anticipated to continue its growth [32] - The company noted that competition in performance marketing channels has increased, impacting traffic volumes [81] Company Strategy and Development Direction - The company is focusing on branded growth, enhancing hotel search experiences, and improving deal discovery [4][25][56] - A new brand marketing campaign was launched in mid-December 2023, with expectations of a negative impact on near-term profitability but a positive long-term effect on brand traffic [28] - The company is testing a second-price auction model in key markets to improve user value and search results [50] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the brand investments leading to increased brand traffic over time, despite near-term profitability challenges [28] - The company anticipates that the first half of 2024 will be negative, with a potential turnaround in the second half as brand investments begin to pay off [10][75] - Management acknowledged the impact of Google's changes in performance marketing and the Digital Markets Act on their operations [11][81] Other Important Information - The company paid out a one-time extraordinary dividend of €184.4 million during Q4 2023 and maintained a cash balance of over €125 million [7] - Operating expenses remained stable at €87.3 million in Q4, with higher selling and marketing expenses offset by lower share-based compensation costs [58] Q&A Session Summary Question: Clarification on January trends and top-line modeling - Management indicated that January trends are similar to Q4, with expectations of revenue declines decelerating in the first half of the year [9][32] Question: Growth expectations from branded advertising - Management expects top-line growth to materialize as brand investments compound over time, with a positive outlook for the second half of the year [10][36] Question: Competition in performance marketing channels - Management noted that competition remains high, similar to previous quarters, and is closely monitoring the impact of Google's changes [33][81] Question: Ad spend allocation for new versus existing markets - The company is investing in over 20 markets and will continue to optimize spending based on unit economics and market responses [38] Question: Adjusted EBITDA guidance and outperformance opportunities - Management expects adjusted EBITDA to be negative in the first half of the year but trending positively in the second half due to brand investments [75]

[Operating and Financial Review](index=1&type=section&id=Operating%20and%20Financial%20Review) [Overview](index=1&type=section&id=Overview) trivago's FY2023 revenue fell 9% to **€485.0 million**, Adjusted EBITDA dropped 50% to **€54.1 million**, resulting in a **€164.5 million** net loss - trivago is a global hotel and accommodation search platform, offering access to over **5.0 million** properties in more than **190** countries as of December 31, 2023[4](index=4&type=chunk) Financial Summary & Operating Metrics (€ millions) | Metric | Q4 2023 | Q4 2022 | Δ Y/Y | FY 2023 | FY 2022 | Δ Y/Y | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Total revenue | 91.7 | 104.9 | (13)% | 485.0 | 535.0 | (9)% | | Net income/(loss) | 2.5 | 10.4 | (76)% | (164.5) | (127.2) | 29% | | Adjusted EBITDA | 7.3 | 22.6 | (68)% | 54.1 | 107.5 | (50)% | | Return on Advertising Spend | 155.4% | 180.4% | (25.0) ppts | 147.6% | 164.4% | (16.8) ppts | - Recent trends in Q4 2023 include lower monetization, foreign exchange headwinds, and increased competition in performance marketing channels, leading to traffic declines in Developed Europe and Americas, partially offset by growth in the Rest of World segment[7](index=7&type=chunk) - For 2024, the company launched new global campaigns and expects higher advertising spend, with Adjusted EBITDA anticipated to be close to breakeven as it reinvests profits into its marketing strategy[8](index=8&type=chunk)[9](index=9&type=chunk) [Revenue Analysis](index=3&type=section&id=Revenue%20Analysis) FY2023 total revenue fell 9% to **€485.0 million**, driven by declines in Americas (-19%) and Developed Europe (-9%), offset by 25% growth in Rest of World [Revenue by Segment and Type](index=3&type=section&id=Revenue%20by%20Segment%20and%20Type) FY2023 Referral Revenue fell 9% to **€476.8 million**, with Americas down 19% and Developed Europe down 9%, while Rest of World grew 25% Referral Revenue by Segment & Other Revenue (€ millions) | Revenue Type | Q4 2023 | Q4 2022 | Δ % | FY 2023 | FY 2022 | Δ % Y/Y | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | **Referral Revenue** | | | | | | | | Americas | 33.3 | 41.8 | (20)% | 176.4 | 216.4 | (19)% | | Developed Europe | 37.6 | 43.9 | (14)% | 215.7 | 237.7 | (9)% | | Rest of World | 17.9 | 15.7 | 14% | 84.7 | 67.7 | 25% | | **Total Referral Revenue** | **88.8** | **101.4** | **(12)%** | **476.8** | **521.8** | **(9)%** | | Other revenue | 2.9 | 3.4 | (15)% | 8.2 | 13.2 | (38)% | | **Total revenue** | **91.7** | **104.9** | **(13)%** | **485.0** | **535.0** | **(9)%** | - Americas FY23 revenue decreased by **19%** due to lower traffic from increased competition, softer bidding dynamics, and a negative foreign exchange impact from the weakening U.S. dollar[18](index=18&type=chunk) - Developed Europe FY23 revenue decreased by **9%**, primarily driven by softer bidding dynamics and lower traffic volumes from increased competition[20](index=20&type=chunk) - Rest of World FY23 revenue increased by **25%**, driven by higher average booking values, better booking conversion, and an increase in traffic volumes, particularly in Japan[22](index=22&type=chunk) - Other Revenue decreased by **38%** in FY23, mainly due to the decision in Q2 2022 to discontinue some B2B products like display ads[23](index=23&type=chunk) [Advertiser Concentration](index=4&type=section&id=Advertiser%20Concentration) Referral Revenue share from major advertisers shifted in FY2023, with Expedia Group increasing to **36%** and Booking Holdings decreasing to **43%** Advertiser Revenue Concentration (% of Referral Revenue) | Advertiser Group | Q4 2023 | Q4 2022 | FY 2023 | FY 2022 | | :--- | :--- | :--- | :--- | :--- | | Expedia Group | 34% | 37% | 36% | 33% | | Booking Holdings | 43% | 46% | 43% | 49% | [Return on Advertising Spend (ROAS)](index=5&type=section&id=Return%20on%20Advertising%20Spend%20%28ROAS%29) Consolidated ROAS declined by **16.8** percentage points to **147.6%** in FY2023, with all segments experiencing decreases, particularly Rest of World ROAS by Segment (%) | Segment | Q4 2023 | Q4 2022 | Δ ppts | FY 2023 | FY 2022 | Δ ppts | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Americas | 173.4% | 191.8% | (18.4) | 148.3% | 164.4% | (16.1) | | Developed Europe | 152.7% | 170.1% | (17.4) | 146.0% | 158.6% | (12.6) | | Rest of World | 134.5% | 182.3% | (47.8) | 150.1% | 188.8% | (38.7) | | **Consolidated ROAS** | **155.4%** | **180.4%** | **(25.0)** | **147.6%** | **164.4%** | **(16.8)** | - In FY 2023, Americas ROAS decreased to **148.3%** as the relative decrease in Referral Revenue was greater than the relative decrease in Advertising Spend[30](index=30&type=chunk) - In FY 2023, Developed Europe ROAS decreased to **146.0%** for the same reason as the Americas segment[32](index=32&type=chunk) - In FY 2023, Rest of World ROAS decreased to **150.1%** as the relative increase in Advertising Spend was greater than the relative increase in Referral Revenue, mainly due to increased marketing in Japan[34](index=34&type=chunk) [Expense Analysis](index=7&type=section&id=Expense%20Analysis) Total costs and expenses decreased 2% to **€641.6 million** in FY2023, despite a **€196.1 million** impairment, primarily due to a 36% reduction in G&A expenses Expenses by Cost Category - Full Year 2023 vs 2022 (€ millions) | Expense Category | FY 2023 | FY 2022 | Δ % Y/Y | | :--- | :--- | :--- | :--- | | Cost of revenue | 12.0 | 12.7 | (6)% | | Selling and marketing | 345.6 | 342.0 | 1% | | Technology and content | 49.0 | 54.9 | (11)% | | General and administrative | 38.7 | 60.9 | (36)% | | Impairment of intangible assets and goodwill | 196.1 | 184.6 | 6% | | **Total costs and expenses** | **655.3** | **641.6** | **(2)%** | - General and administrative expenses decreased by **36%** in FY 2023, mainly due to the non-recurrence of a **€20.7 million** expense in 2022 related to a proceeding by the Australian Competition and Consumer Commission (ACCC)[49](index=49&type=chunk)[51](index=51&type=chunk) - An impairment charge of **€196.1 million** was recorded in Q3 2023, consisting of **€95.5 million** for Developed Europe goodwill, **€86.5 million** for Americas goodwill, and **€14.2 million** for indefinite-lived intangible assets[53](index=53&type=chunk) - Technology and content expenses decreased by **11%** in FY 2023, primarily due to lower personnel costs from a lower headcount following reorganizations and project discontinuations in 2022[45](index=45&type=chunk)[47](index=47&type=chunk) [Profitability Analysis](index=10&type=section&id=Profitability%20Analysis) FY2023 net loss widened to **€164.5 million**, driven by lower revenues and higher impairment, with Adjusted EBITDA falling 50% to **€54.1 million** Profitability Summary (€ millions) | Metric | Q4 2023 | Q4 2022 | FY 2023 | FY 2022 | | :--- | :--- | :--- | :--- | :--- | | Operating income/(loss) | 4.4 | 17.8 | (156.6) | (120.3) | | Net income/(loss) | 2.5 | 10.4 | (164.5) | (127.2) | | Adjusted EBITDA | 7.3 | 22.6 | 54.1 | 107.5 | - The larger net loss in FY 2023 was driven by lower revenues and a higher impairment charge of **€196.1 million**, compared to **€184.6 million** in 2022, partly offset by the non-recurrence of a **€20.7 million** legal expense from the prior year[62](index=62&type=chunk) - Adjusted EBITDA for FY 2023 decreased by **€53.4 million (50%)** to **€54.1 million**, driven by lower revenues of **€50.0 million** and lower ROAS[63](index=63&type=chunk) - The effective tax rate for FY 2023 was **(8.2%)**, differing from the statutory rate of **31.2%** primarily due to non-deductible goodwill impairment and share-based compensation expenses[58](index=58&type=chunk) [Balance Sheet and Cash Flows](index=12&type=section&id=Balance%20sheet%20and%20cash%20flows) Total cash, cash equivalents, and restricted cash decreased by **€146.7 million** to **€102.2 million** in FY2023, primarily due to a **€184.4 million** extraordinary dividend - Total cash, cash equivalents and restricted cash decreased from **€248.9 million** at year-end 2022 to **€102.2 million** at year-end 2023[66](index=66&type=chunk) - The main driver of the cash decrease was a **€184.4 million** one-time extraordinary dividend paid to shareholders in Q4 2023[67](index=67&type=chunk) - Net cash provided by operating activities for FY 2023 was **€27.8 million**, driven by non-cash adjustments (like the **€196.1 million** impairment) to the net loss[66](index=66&type=chunk)[68](index=68&type=chunk) - The current ratio decreased from **7.1** as of Dec 31, 2022 to **5.2** as of Dec 31, 2023, largely due to the dividend payment reducing current assets[73](index=73&type=chunk) [Financial Statements](index=13&type=section&id=Financial%20Statements) This section presents the unaudited condensed consolidated balance sheets, statements of operations, and cash flows for FY2023 and FY2022 [Condensed Consolidated Balance Sheets](index=13&type=section&id=trivago%20N.V.%20Condensed%20consolidated%20balance%20sheets) [Condensed Consolidated Statements of Operations](index=14&type=section&id=trivago%20N.V.%20Condensed%20consolidated%20statements%20of%20operations) [Condensed Consolidated Statements of Cash Flows](index=16&type=section&id=trivago%20N.V.%20Condensed%20consolidated%20statements%20of%20cash%20flows) [Earnings Per Share (EPS) and Ownership](index=17&type=section&id=Earnings%20Per%20Share%20and%20Ownership%20of%20the%20Company) FY2023 basic and diluted EPS were **(€0.48)**, reflecting the increased net loss, with **348.4 million** shares outstanding (**32%** Class A, **68%** Class B) Earnings Per Share | Period | Basic EPS | Diluted EPS | | :--- | :--- | :--- | | **Q4 2023** | €0.01 | €0.01 | | **Q4 2022** | €0.03 | €0.03 | | **FY 2023** | (€0.48) | (€0.48) | | **FY 2022** | (€0.36) | (€0.36) | Ownership Structure as of Dec 31, 2023 | Share Class | Number of Shares | % of Total | | :--- | :--- | :--- | | Class A | 110,919,270 | 32% | | Class B | 237,476,895 | 68% | | **Total** | **348,396,165** | **100%** | [Non-GAAP Measures and Reconciliations](index=19&type=section&id=Non-GAAP%20Measures%20and%20Reconciliations) This section defines Adjusted EBITDA, a key non-GAAP metric, and provides its reconciliation from net income/(loss), with FY2023 Adjusted EBITDA at **€54.1 million** - Adjusted EBITDA is defined as net income/(loss) adjusted for income taxes, interest, depreciation & amortization, impairments, share-based compensation, and certain other items like restructuring or significant legal settlements[93](index=93&type=chunk)[94](index=94&type=chunk) Reconciliation of Net Income/(Loss) to Adjusted EBITDA (€ millions) | Reconciliation Item | FY 2023 | FY 2022 | | :--- | :--- | :--- | | **Net income/(loss)** | **(164.5)** | **(127.2)** | | Expense for income taxes | 12.4 | 6.6 | | Total other (income)/expense, net | (4.7) | (0.0) | | Depreciation & Amortization | 4.6 | 6.1 | | Impairment of intangible assets and goodwill | 196.1 | 184.6 | | Share-based compensation | 9.5 | 15.3 | | Certain other items | 0.5 | 20.7 | | **Adjusted EBITDA** | **54.1** | **107.5** | [Risk Factors (Safe Harbor Statement)](index=21&type=section&id=Safe%20Harbor%20Statement) The company identifies forward-looking risks, including its new marketing strategy, reliance on Google, advertiser concentration, and increasing competition - Key risks include reliance on the success of its brand marketing strategy, dependence on Google for traffic, and concentration of revenue from a few large OTAs[100](index=100&type=chunk) - Other risks cited are the potential negative impact of a worsening economy, further asset impairments, geopolitical instability, and increasing industry competition[100](index=100&type=chunk)

trivago N.V. (NASDAQ:TRVG) Q3 2023 Earnings Conference Call November 2, 2023 8:15 AM ET Company Participants Johannes Thomas - Chief Executive Officer & Managing Director Matthias Tillmann - Chief Financial Officer & Managing Director Conference Call Participants Naved Khan - B. Riley Securities James Lee - Mizuho Lloyd Walmsley - UBS Operator Good day, ladies and gentlemen. Thank you for standing by and welcome to the trivago Q3 Earnings Call 2023. All lines will be muted during the presentation portion of ...

Company Participants Conference Call Participants Operator We are pleased to be joined on the call today by Johannes Thomas, trivagoÂ's CEO and Managing Director; and Matthias Tillmann, trivagoÂ's CFO and Managing Director. The following discussion including responses to your questions reflects managementÂ's views as of today Wednesday, the 2nd of August, 2023, only. trivago does not undertake any obligation to update or revise this information. You will find reconciliations of non-GAAP measures to the most ...

Financial Data and Key Metrics Changes - The company reported a referral revenue growth of 11% year-on-year in Q1 2023, with January seeing growth exceeding 30% due to robust travel demand and elevated average booking values [5][6] - Net income improved to €9.9 million compared to a net loss of €10.7 million in the previous year, primarily due to the nonrecurrence of a €21.1 million expense related to legal proceedings in Q1 2022 [5][6] - Adjusted EBITDA decreased slightly from €21.1 million in Q1 2022 to €18.6 million in Q1 2023, resulting in a strong adjusted EBITDA margin of 16.8% [6][11] Business Line Data and Key Metrics Changes - Referral revenue in the Americas segment declined by 7% year-on-year, attributed to a loss in performance marketing volumes and a focus on profitability [7][8] - Developed Europe experienced a 19% year-on-year growth in referral revenue, driven by recovery from Omicron-related restrictions and successful brand marketing campaigns [7][8] - The Rest of World segment saw a significant 51% growth in referral revenue, largely due to recovery in Asian markets, particularly Japan [8] Market Data and Key Metrics Changes - Average booking values increased globally by around 10% year-on-year, with the highest increase observed in the Rest of World segment [29] - In April, referral revenue showed a slight decline, with Europe remaining roughly flat, Americas declining by a high-teens percentage, and Rest of World still up over 30% [22] Company Strategy and Development Direction - The company is ramping up brand marketing investments to enhance brand traffic and improve competitive positioning, particularly in response to inflation concerns among consumers [3][4] - Product development focuses on improving price comparison capabilities and increasing coverage of directly bookable rates, with expectations for significant enhancements later in the year [4][33] - The company aims to exceed adjusted EBITDA levels from 2019, emphasizing cost discipline and efficient marketing investments [13] Management's Comments on Operating Environment and Future Outlook - Management noted robust demand in the first quarter, particularly in Asia, while the economic outlook in Western markets remains uncertain [3] - The company anticipates a decrease in return on advertising spend in the upcoming quarters due to increased brand marketing investments, but expects seasonal revenue increases to offset this [12][23] - Management expressed optimism about the recovery in Asia, particularly in Japan and other smaller markets, and plans to continue investing in these regions [35] Other Important Information - The company has approximately €297 million in cash and short-term investments, indicating a strong cash position [11] - The decision to stop providing qualified referrals and revenue per qualified referrals was made to better reflect underlying business dynamics [6] Q&A Session Summary Question: Referral revenue growth expectations and customer communication - Management indicated that referral revenue growth was in line with expectations, with adjustments made based on prior year trends and demand dynamics [15][16] Question: Focus on profitability among clients - Management noted a shift in client focus towards profitability due to economic uncertainty, with expectations that this balance may shift back towards growth as conditions stabilize [17][18] Question: Trends in Q3 and revenue seasonality - Management provided insights on referral revenue trends, indicating a deceleration in growth rates but an expectation for improvement as comparisons become easier [22] Question: ADR trends and summer travel demand - Average daily rates (ADRs) were reported to be elevated across all regions, with demand for summer travel in Europe showing early signs of recovery [29][30] Question: Progress on growth initiatives and Asia recovery - Management discussed ongoing marketing and product initiatives aimed at increasing direct hotel bookings and highlighted positive recovery trends in Japan and other Asian markets [33][35] Question: Consumer reaction to brand advertising investments - Management observed a greater response to current brand campaigns compared to previous years, indicating a positive consumer reaction to the sharpened messaging focused on price comparison [38][39]

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington D.C. 20549 Form 20-F ☐ REGISTRATION STATEMENT PURSUANT TO SECTION 12(b) OR (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 OR ☐ SHELL COMPANY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 Commissio ...