Release Date: August 06, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Tripadvisor Inc (TRIP, Financial) reported a year-over-year revenue growth of 1% to $497 million and adjusted EBITDA growth of 7% to $97 million.
- Viator delivered strong performance with a 13% year-over-year revenue growth to $244 million and a $12 million year-over-year improvement in adjusted EBITDA.
- TheFork achieved its most profitable quarter ever with an 11% year-over-year revenue growth to $42 million and a $7 million improvement in adjusted EBITDA.
- Tripadvisor Inc (TRIP) saw solid growth in membership and direct engagement, with monthly active members returning to growth and direct channel share increasing by approximately 450 basis points year-over-year.
- The company successfully launched and scaled AI-powered review summaries and expanded its Trips feature to 20 new languages across more than 30 locales.
Negative Points
- Brand Tripadvisor experienced a 10% decline in revenue to $250 million, primarily due to weaker demand trends in hotel meta and experiences.
- Hotel meta revenue declined by 14% to $150 million, driven by weaker demand and increased competition in paid channels.
- Experiences and dining revenue declined by 4%, with a more than 20% decline in the restaurant B2B offering.
- The company faced cost pressures, including higher cloud costs, transaction fees, and media production costs, leading to increased cost of revenue and G&A expenses.
- Tripadvisor Inc (TRIP) provided a cautious outlook for Q3, expecting consolidated revenue growth to be flat to a few points down year-over-year and adjusted EBITDA margins to be down by approximately 350 to 450 basis points.
Q & A Highlights
Q: Given the importance of driving more app-based and logged-in members, how are you optimizing your marketing efforts around targeting those users?
A: Michael Noonan (CFO): We employ various marketing strategies, including stimulating behaviors to download the app and interacting within it. We also use targeted marketing campaigns to incentivize specific behaviors. Matthew Goldberg (CEO): Traditionally, our marketing has been about same-session engagement. We are shifting to LTV-based bidding and leveraging data to drive membership and app engagement, which is showing positive early results.
Q: With the increase in app users, when can this be more meaningful in terms of stabilizing or growing the core business?
A: Matthew Goldberg (CEO): Our strategy focuses on moving away from flyby traffic to more engaged users. The direct traffic, membership, and app engagement are currently a subset of our business but show significant potential for scaling. We expect this to become a more meaningful part of our financial performance as marketing and product efforts align.
Q: Are you still aiming for margin improvement at Viator this year?
A: Michael Noonan (CFO): Yes, we are expecting meaningful margin improvement at Viator for the year.
Q: How much more room is there for optimization in Viator, and what areas are you excited about?
A: Matthew Goldberg (CEO): We are continuously optimizing the funnel at Viator, including reducing cancellation rates, personalizing product sorts, and improving the app experience. We are also focusing on post-booking logistics, loyalty programs, and supplier experience to drive better metrics.
Q: Are you expecting any P&L impact from hotel booking and rewards, and will this be rolled out to experiences as well?
A: Michael Noonan (CFO): Rewards and incentives are powerful tools for customer acquisition and engagement. We will balance this with other marketing investments. Matthew Goldberg (CEO): Rewards are already rolled out in experiences, and we see meaningful opportunities in integrating trip planning with booking in the app for logged-in members.
Q: Can you update us on the impact of Google's search policy changes?
A: Michael Noonan (CFO): The algorithm change in April impacted our free traffic but our teams have clawed back most of the rankings. The financial performance in hotel meta was also influenced by demand trends in both free and paid channels. Matthew Goldberg (CEO): This underscores the importance of our strategy to focus on direct relationships with members and app engagement.
Q: Do you have a target for restaurant count at TheFork by year-end?
A: Matthew Goldberg (CEO): We are pleased with TheFork's progress and expect growth and profitability this year. We are seeing stability in active restaurants and growth in count, along with better restaurant ARPU at lower CAC. This, combined with marketing efficiency and product improvements, will drive profitability and growth.
Q: How are you balancing share buybacks with other opportunities given the current stock price?
A: Michael Noonan (CFO): We have a programmatic approach to share buybacks and will evaluate opportunities based on stock price and liquidity profile. We are also focused on setting our capital structure and understanding true liquidity with the recent refinance of high-yield notes.
Q: What is the outlook for the third quarter and the remainder of the year?
A: Michael Noonan (CFO): We expect consolidated revenue growth to be flat to a few points down year-over-year for Q3, with consolidated adjusted EBITDA margins down by approximately 350 to 450 basis points. For the full year, we expect low single-digit revenue growth and adjusted EBITDA margins deleverage of approximately 100 to 200 basis points.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
