TripAdvisor Cites Profit Growth, New Segment Structure

NEEDHAM, MA—TripAdvisor Inc. has reported its financial results for the first quarter ended March 31, 2019.

“In Q1, we grew profit and while investing in and growing our strategically important Experiences and Restaurants businesses,” said CEO Steve Kaufer. “This year we are focused on product improvements and supply growth to drive an even more engaged customer base and long-term revenue on our platform.”

CFO Ernst Teunissen added, “Q1 results were in line with our expectations and we remain on track to deliver full-year double-digit consolidated adjusted EBITDA growth,” he said. “Our new segment structure reflects our differentiated revenue and profit focus by segment, while leveraging unique assets and investing across a number of areas aimed at long-term, profitable growth.”

First Quarter 2019 Operational and Financial Highlights

  • Total Revenue was $376 million, a 1% decrease year-over-year. TripAdvisor estimates that excluding changes in foreign currency, Total Revenue grew approximately 2%.
  • GAAP Net Income grew 420% to $26 million, while Non-GAAP Net Income grew 21% to $51 million.
  • Total Adjusted EBITDA grew 11% to $89 million, and Total Adjusted EBITDA margin increased by 3% year-over-year to 24%. TripAdvisor estimates that excluding year-over-year changes in foreign currency Total Adjusted EBITDA grew approximately 18%.
  • Hotels, Media & Platform segment revenue was $254 million, which was flat year-over-year. Hotels, Media & Platform segment Adjusted EBITDA grew 36% to $105 million, and Hotels, Media & Platform segment Adjusted EBITDA margin improved to 41%, a 11% increase compared to Q1 2018, primarily due to increased efficiency of direct selling and marketing expenses. TripAdvisor estimates that excluding year-over-year changes in foreign currency Total Hotels, Media & Platform Segment Revenue and Adjusted EBITDA grew approximately 3% and 43%, respectively.
  • Experiences & Dining segment revenue grew 29% to $80 million, while Experiences & Dining segment Adjusted EBITDA reflected increased strategic investments to drive long-term growth initiatives. TripAdvisor estimates that excluding year-over-year changes in foreign currency Total Experiences & Dining Segment Revenue grew approximately 35%.
  • Other revenue decreased 33% to $42 million, primarily driven by the elimination of some marginal and unprofitable revenue within some non-TripAdvisor branded offerings, which reduced revenue and increased profitability.
  • Cash and cash equivalents and short-term marketable securities was $811 million and there was no outstanding debt as of March 31, 2019.
  • Cash flow from operating activities for the three months ended March 31, 2019, was $182 million, an increase of $8 million, or 5%, year-over-year. Free cash flow for the three months ended March 31, 2019, grew 4% to $165 million.

Changes in Segment Information

During the first quarter of 2019, as part of TripAdvisor’s continuous review of the business, it evaluated its operations and realigned the reportable segment information which its chief operating decision maker, or CODM, regularly assesses to evaluate performance for operating decision-making purposes, including evaluation and allocation of resources. The CODM for the company is the Chief Executive Officer. As a result of this realignment, effective for the quarter ended March 31, 2019, the company has the following reportable segments:

  • The Hotels, Media & Platform segment includes TripAdvisor-branded hotel metasearch auction-based revenue, transaction revenue from its hotel instant booking feature, TripAdvisor-branded display-based advertising revenue, subscription-based advertising and media advertising placements revenue; all TripAdvisor-related brand advertising expenses (primarily television advertising), and technical infrastructure and other costs supporting the TripAdvisor platform, all of which were previously included in the legacy Hotel segment. TripAdvisor will disclose Hotels, Media & Platform revenue by source as follows: (1) TripAdvisor-branded hotels; and (2) TripAdvisor-branded display and platform.
  • The Experiences & Dining segment includes its Experiences and Restaurant businesses and will be reported on an aggregate basis.