Core Insights - Travelzoo® has launched Club Offers for its members, providing exclusive travel deals that are rigorously vetted and negotiated for travel enthusiasts in the UK [1] Company Overview - Travelzoo® is a club for travel enthusiasts, reaching 30 million travelers globally. Club Members receive offers personally reviewed by deal experts [1] - The company partners with thousands of top travel suppliers, leveraging long-standing relationships to access attractive deals [1] Featured Offers - £399 per person for a two-night stay at the iconic Burgh Island Hotel, including two black-tie dinners, saving up to £750 [2] - £49 per person for an exclusive member event aboard Virgin Voyages' new ship, Brilliant Lady, featuring a cocktail hour and a four-course dinner [2] - £4,999 per person for a Galápagos expedition cruise, including flights and excursions, saving £2,387 [2] - £399 per person for a seven-night stay at the new 5-star Hotel Unda in Corfu, saving up to 61% [2] - Some offers have limited inventory and are subject to availability [2]

Company Overview - Travelzoo is a club for travel enthusiasts, reaching 30 million travelers globally [1] - The company offers Club Members exclusive deals that are personally reviewed by deal experts [1] Club Offers - Travelzoo has released new Club Offers for its members, which are rigorously vetted and negotiated [1] - Some offers have limited inventory and are subject to availability [1] Featured Offers - A 6-night all-inclusive Cancun vacation with flights starting at $999, allowing Club Members to save up to $400 [2] - PEI Harbourview Inn with breakfast priced between $109 and $189, available for summer, fall, or winter stays [2] - A Singapore and Bali combo trip for 13 nights with flights starting at $1999, offering a savings of $310 for Club Members [2] - Toronto summer stays with breakfast at $229, providing a 46% discount [2] - Croatia yacht cruises this summer or fall for $1399, offering a 57% discount [2]

Company Overview - Travelzoo is a club for travel enthusiasts, reaching 30 million travelers and offering Club Offers that are personally reviewed by deal experts globally [1] - The company partners with thousands of top travel suppliers, leveraging long-standing relationships to provide exclusive deals [1] Club Offers - Travelzoo has released Club Offers for its members, which are rigorously vetted and negotiated [1] - Offers include a $499 all-inclusive getaway to Mexico, a $2,999 5-star Maldives villa with a 74% savings, and a $125 summer stay in Chicago with a 71% discount [2] - Other notable offers include a $599 stay at Maui's No. 1 resort, saving $300 per night, and a luxurious Serengeti safari for two priced at $7,999, down from $13,592 [2]

Company Overview - Travelzoo is a club for travel enthusiasts, reaching 30 million travelers globally [1] - The company offers Club Members exclusive deals that are rigorously vetted and negotiated by deal experts [1] Club Offers - A 3-night stay in Akureyri, Northern Iceland, is available for £299 per person, ideal for viewing the Northern Lights [2] - A summer stay in Paris for £299 includes 2 nights at Hotel Saint-Paul Rive Gauche, saving 42-55% [2] - A 9-night tour of Sri Lanka is offered at £1099, saving £1500 on the regular price, including return flights [2] - An elegant Victorian mansion stay in Berkshire is available for £149 for two, set in 80 acres of beautiful estate [2] - A 51-night half-world cruise on Queen Mary 2 is priced at £4499 per person, saving £3340 compared to other offers [2]

Group 1 - Travelzoo is set to join the Russell 3000 Index effective June 27, 2025, following the annual reconstitution [1][2] - The Russell 3000 Index includes the 3,000 largest US stocks ranked by total market capitalization, providing automatic inclusion in either the large-cap Russell 1000 or small-cap Russell 2000 Index [2] - Approximately $10.6 trillion in assets are benchmarked against Russell's US indexes, highlighting the significance of this inclusion for Travelzoo [3][8] Group 2 - Travelzoo is a global Internet media company founded in 1998, focusing on travel, local, and entertainment offers from over 2,000 companies [4] - The company reaches 30 million travelers through its publications, including the popular Top 20 email newsletter [4] - In 2024, Travelzoo introduced an annual membership fee for its services, providing exclusive offers and benefits to Club Members [5]

Company Overview - Travelzoo is a club for travel enthusiasts, reaching 30 million travelers globally [1] - Club Members receive exclusive offers that are personally reviewed by deal experts [1] Club Offers - Offers include a luxury hotel in Davos for 199 €, providing a 47–54% discount compared to the hotel website [2] - A Tuscany package for 379 € includes 6 days with wine tasting and cooking courses, featuring apartments of at least 92 square meters [2] - A 2-night stay in a 4-star hotel in Paris is available for 119 €, including a Seine cruise and breakfast, with a regular price of 472 € [2] - A new luxury hotel in Budapest is offered at 99 €, representing a 72% discount, noted for its bold design [2] - A 3-day Black Forest stay with half board is priced at 139 €, with savings of 39–66% compared to the original price [2] - A Switzerland trip featuring the Glacier Express and hotels starts from 599 €, including a 4-day first-class train journey [2]

Group 1 - Travelzoo announces new Club Offers for its members, featuring exclusive travel deals across various destinations [1][2] - Offers include significant discounts, such as a 51% reduction for a luxury coastal resort in Cornwall and a 64% discount for a 5-star hotel in Budapest [1][3] - The company emphasizes its partnerships with top travel suppliers, allowing access to unique and irresistible deals for its 30 million members [2] Group 2 - Specific offers highlighted include a two-night stay in Paris for £125 per person, a summer spa retreat in the Lake District at £249, and a deluxe week in Cyprus for £295 per person [3] - Additional offers feature a Sunday lunch at a 5-star Kensington hotel for £22.50 per person, showcasing the variety of experiences available to Club Members [3] - The company notes that some offers have limited inventory and are subject to availability, indicating a competitive market for travel deals [1]

Revenue and Membership - Travelzoo reached 30 million travelers through its platforms, including Travelzoo and Jack's Flight Club[117]. - Travelzoo introduced an annual membership fee of $40 for new members starting January 1, 2024, while waiving the fee for existing members in 2024[133]. - Total revenues for the three months ended March 31, 2025, were $23.14 million, an increase from $21.985 million in the same period of 2024, representing a growth of approximately 5.3%[161]. - Membership fees increased by $1.3 million to $2.443 million for the three months ended March 31, 2025, driven by higher subscription fees from Travelzoo and Jack's Flight Club members[164]. - Jack's Flight Club revenues increased by $220,000 to $1.283 million for the three months ended March 31, 2025, with operating loss improving from $(99,000) to $(48,000)[184]. Advertising and Revenue Influences - Travelzoo's advertising revenues are influenced by audience reach, engagement, and advertising rates, particularly as it transitions to a paid membership model[138]. - Advertising revenue decreased by $170,000 to $20.68 million for the three months ended March 31, 2025, primarily due to a $603,000 decrease in revenues from the Travelzoo website[162]. Costs and Expenses - The company expects fluctuations in cost of revenues as a percentage of revenues from quarter to quarter, which may significantly impact results[147]. - Cost of revenues increased by $1.5 million to $4.1 million for the three months ended March 31, 2025, primarily due to increased costs associated with the sale of pre-purchased vouchers[167]. - Sales and marketing expenses rose by $1.6 million to $10.2 million for the three months ended March 31, 2025, largely due to increased member acquisition costs[169]. Operating Performance - Operating income decreased to $3.594 million for North America, down from $4.438 million in the same period of 2024, with operating profit margin dropping from 31.2% to 23.8%[180]. - Travelzoo Europe reported revenues of $6.712 million, a slight increase from $6.662 million in 2024, but operating profit fell significantly from $1.382 million to $228,000[181]. Cash Flow and Financial Position - As of March 31, 2025, the company had $11.5 million in cash and cash equivalents, with $8.3 million held outside the U.S.[186]. - Cash, cash equivalents, and restricted cash decreased by $5.5 million from $17.7 million as of December 31, 2024, primarily due to $8.9 million used for common stock repurchase[187]. - Net cash provided by operating activities for the three months ended March 31, 2025, was $3.3 million, down from $4.6 million in the same period of 2024[190]. - The company reported a negative net working capital of $10.3 million as of March 31, 2025, due to $14.8 million in merchant payables related to unredeemed vouchers[188]. - Net cash used in financing activities for the three months ended March 31, 2025, was $8.9 million, primarily for common stock repurchase[192]. - The company anticipates that cash on hand will be sufficient to cover operating costs for at least the next twelve months[193]. Tax and Contingencies - The effective tax rate remained stable at 26% for both periods, with income tax expense decreasing to $1.2 million from $1.5 million[177]. - As of March 31, 2025, the company had contingencies related to net unrecognized tax benefits of approximately $23.9 million[198]. Future Outlook and Investments - The company anticipates increased costs for acquiring new paying members compared to non-paying members prior to 2024[148]. - The company may need to raise additional capital through equity or debt securities if business developments are less favorable than expected[194]. - The company plans to continue evaluating investments in businesses, products, and technologies, which may increase capital requirements[193]. - Travelzoo launched Travelzoo META in May 2023 to provide metaverse travel experiences, following the acquisition of Metaverse Travel Experiences, Inc.[121].

Financial Performance - Revenue increased by 5% year-over-year, reaching $23.1 million in Q1 2025, the highest quarterly revenue since the pandemic[5][6] - Operating profit decreased from $5.6 million in Q1 2024 to $3.7 million in Q1 2025, due to increased investment in member growth[5][6] - Non-GAAP operating profit was $4.3 million, representing 19% of revenue in Q1 2025[28] - Cash flow from operations was $3.3 million, and the company repurchased 590,839 shares, decreasing cash to $12.2 million[33] Segment Performance - North America segment revenue increased from $4.4 million in Q1 2024 to $6.7 million in Q1 2025[9] - Europe segment revenue increased from $3.3 million in Q1 2024 to $6.7 million in Q1 2025[9] - Jack's Flight Club segment revenue increased from $14.2 million in Q1 2024 to $15.1 million in Q1 2025[9] Revenue Streams - Membership fees increased from $1.6 million to $2.4 million, driving significant and incremental revenue growth[15] - Total revenue increased from $20.7 million in Q1 2024 to $23.1 million in Q1 2025[38] Investments and Expenses - Operating expenses and cost of revenues increased from $16.4 million in Q1 2024 to $19.4 million in Q1 2025[40] - The company is investing more in member growth, which is expected to accelerate revenue growth in coming quarters[5][37]

Financial Data and Key Metrics Changes - Travelzoo's consolidated Q1 revenue was $23.1 million, up 5% from the prior year, marking the highest quarterly revenue since the pandemic [5] - Operating income decreased 34% year over year to $3.7 million, representing 16% of revenue, down from $5.6 million in the prior year [5][10] - Non-GAAP operating profit for Q1 was $4.3 million, or 19% of revenue, compared to $6 million in the prior year [12] Business Line Data and Key Metrics Changes - Revenue from advertising was $20.7 million for Q1, while membership fees contributed $2.4 million [6] - Operating profit decreased in both North America and Europe segments, but increased slightly in the Jack's Flight Club segment [6] - Membership fees began to drive significant revenue growth, with a notable increase in new club members [7] Market Data and Key Metrics Changes - Revenue in North America showed stronger growth compared to Europe, with a 1% increase in Europe year over year [5] - Germany experienced double-digit revenue growth year over year, contrasting with a slight decline in the UK [11][26] Company Strategy and Development Direction - The company aims to grow the number of paying members and accelerate revenue growth by converting legacy members and adding new benefits to the paid membership [17] - Investments in member growth are expected to increase total expenses but are anticipated to accelerate revenue growth in the coming quarters [13][14] - The company is also focused on developing Travelzoometa in a financially disciplined manner [19] Management's Comments on Operating Environment and Future Outlook - Management noted that while there is a trend of foreign travelers being hesitant to visit the U.S., Travelzoo members remain flexible and open to new destinations [22] - The company expects year-over-year revenue growth to double in Q2 2025, with profitability anticipated to increase as recurring membership fee revenue is recognized [14] Other Important Information - The company repurchased 590,839 shares of its outstanding common stock [12] - As of March 31, 2025, consolidated cash, cash equivalents, and restricted cash totaled $12.2 million [12] Q&A Session Summary Question: Concerns about foreign travelers not wanting to come to the U.S. - Management indicated that Travelzoo members are flexible and open to new destinations, mitigating the impact of this trend [22] Question: Performance differences between North America and Europe - Management explained that fluctuations are natural and highlighted strong performance in Germany, while the UK saw a slight decline [26][27] Question: Impact of gross margins on subscription business development - Management noted that purchasing distressed travel products at discounted prices helped create strong club offers, impacting gross margins [30] Question: Drivers for member acquisition - The main driver for converting consumers into club members is the attractive club offers, along with additional membership benefits [34] Question: Demand dynamics for international travel - Management observed a decrease in Canadian interest in traveling to the U.S., but noted that Americans still show strong interest in traveling to Europe [40] Question: Share repurchase strategy and balance sheet outlook - Management expressed confidence in the business and indicated plans to continue share repurchases if market conditions remain favorable [42]