On July 25, 2024, Travelzoo (TZOO, Financial) released its 8-K filing for the second quarter of 2024. Travelzoo, a publisher of travel and entertainment offers, operates in four segments: Travelzoo North America, Travelzoo Europe, Jack's Flight Club, and New Initiatives. The company derives most of its revenue from advertising fees paid by travel, entertainment, and local businesses to advertise their offers on Travelzoo's media properties.
Performance Overview
Travelzoo reported consolidated revenue of $21.1 million for Q2 2024, consistent with the same period last year but slightly below the analyst estimate of $21.72 million. In constant currencies, revenue was $21.2 million. The company achieved an earnings per share (EPS) of $0.23, surpassing the analyst estimate of $0.22 and showing an improvement from $0.17 in the prior-year period.
Segment Performance
Travelzoo North America, the company's largest segment, reported revenue of $14.1 million, consistent year-over-year. The segment's operating profit was $3.7 million, or 26% of revenue, compared to $3.8 million in the prior-year period.
Travelzoo Europe saw a slight increase in revenue to $6.0 million, up 1% year-over-year. The segment reported an operating profit of $512,000, a significant improvement from an operating loss of $239,000 in the prior-year period.
Jack's Flight Club, a membership subscription service, reported a 9% increase in revenue to $1.1 million. The number of premium subscribers increased by 19% year-over-year. The segment achieved a non-GAAP operating profit of $25,000.
New Initiatives, which includes licensing activities in Asia Pacific territories, reported revenue of $23,000 and an operating loss of $184,000.
Financial Achievements
Travelzoo's consolidated operating profit for Q2 2024 was $4.0 million, with a non-GAAP consolidated operating profit of $4.8 million. The company generated $3.1 million in cash flow from operations and had a cash position of $13.2 million as of June 30, 2024.
“We will continue to leverage Travelzoo's global reach, trusted brand, and strong relationships with top travel suppliers to negotiate more exclusive offers for members,” said Holger Bartel, Travelzoo's Global CEO.
Income Statement Highlights
| Metric | Q2 2024 | Q2 2023 |
|---|---|---|
| Revenue | $21.1 million | $21.1 million |
| Gross Profit | $18.6 million | $18.2 million |
| Operating Income | $4.0 million | $3.3 million |
| Net Income | $2.9 million | $2.6 million |
| EPS | $0.23 | $0.17 |
Balance Sheet and Cash Flow
As of June 30, 2024, Travelzoo reported total assets of $51.5 million, down from $55.4 million at the end of 2023. The company's cash and cash equivalents stood at $12.6 million, a decrease from $15.7 million at the end of 2023. Net cash provided by operating activities was $3.1 million for Q2 2024.
Analysis and Outlook
Travelzoo's performance in Q2 2024 demonstrates stability in its revenue streams and an improvement in profitability. The company's ability to exceed EPS estimates is a positive indicator for investors. However, the slight miss on revenue estimates and the decline in cash position are areas to monitor. The company's focus on leveraging its global reach and strong relationships with travel suppliers is expected to drive future growth.
For Q3 2024, Travelzoo anticipates growth in revenue year-over-year, albeit at a smaller pace than in 2023, and higher profitability. The introduction of a membership fee in 2024 is expected to contribute to substantial revenue growth in 2025.
Explore the complete 8-K earnings release (here) from Travelzoo for further details.
