Travelzoo Reports Third Quarter 2025 Results

Core Insights - Travelzoo reported a consolidated revenue of $22.2 million for Q3 2025, reflecting a 10% increase from $20.1 million in the same period last year [1][12]. - The company continues to invest heavily in acquiring new Club Members, which has impacted earnings per share (EPS) due to immediate expensing of marketing costs [2][11]. - Net income attributable to Travelzoo was $0.2 million, or $0.01 per share, down from $0.26 per share in the prior-year period [3][12]. Financial Performance - Consolidated revenue increased to $22.2 million, a 10% year-over-year growth, with constant currency revenue at $21.9 million, up 9% [1][12]. - Non-GAAP operating profit was reported at $1.1 million, excluding certain expenses [3][14]. - The North America segment revenue rose 11% year-over-year to $14.2 million, while the Europe segment revenue increased by 9% to $6.6 million [4][5]. Membership and Marketing Strategy - The company is focusing on acquiring more Club Members, expecting a payback and positive ROI within a quarter [2][11]. - Membership fees revenue is recognized ratably over a 12-month subscription period, contributing to fluctuations in reported net income [2][11]. - Travelzoo aims to enhance member benefits, including airport lounge access for delayed flights, to attract affluent and active travelers [4]. Segment Performance - Travelzoo North America reported an operating profit of $1.1 million, which is 8% of revenue, down from 25% in the prior-year period [4]. - The Europe segment experienced an operating loss of $640,000, attributed to the acquisition of more Club Members [5]. - Jack's Flight Club, in which Travelzoo holds a 60% interest, saw a revenue increase of 12% year-over-year to $1.4 million, with an 8% rise in premium subscribers [6]. Cash Flow and Balance Sheet - As of September 30, 2025, cash, cash equivalents, and restricted cash totaled $9.2 million, with cash flow from operations at ($0.4) million [10][20]. - Deferred revenue increased due to the ratable recognition of membership fees [10]. - The company repurchased 148,602 shares of its outstanding common stock during Q3 2025 [10]. Future Outlook - For Q4 2025, Travelzoo expects continued year-over-year revenue growth, with an acceleration in subsequent quarters as more Legacy Members transition to Club Members [11]. - The company anticipates substantial increases in profitability over time as recurring membership fees revenue is recognized [11].