• Revenue: $532 million, flat year-over-year.
• Adjusted EBITDA: $122 million, 23% of revenue.
• Viator Revenue: $270 million, 10% growth year-over-year.
• Viator Gross Booking Value (GBV): $1.1 billion, 9% growth.
• Viator Adjusted EBITDA: $30 million, 11% of revenue.
• Brand Tripadvisor Revenue: $255 million, 12% decline year-over-year.
• Brand Tripadvisor Adjusted EBITDA: $87 million, 34% of revenue.
• TheFork Revenue: $49 million, 17% growth year-over-year.
• TheFork Adjusted EBITDA: $5 million, 10% of revenue.
• Operating Cash Flow: Negative $44 million.
• Free Cash Flow: Negative $64 million.
• Cash and Cash Equivalents: Nearly $1.1 billion.

• Warning! GuruFocus has detected 2 Warning Sign with HUBS.

Release Date: November 06, 2024

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• Tripadvisor Inc (NASDAQ:TRIP) reported consolidated revenue of $532 million for Q3 2024, which was in line with expectations despite headwinds in the legacy hotel meta offering.
• Viator segment revenue grew by 10% year-over-year to $270 million, with gross booking value reaching approximately $1.1 billion.
• TheFork segment achieved its best financial performance on record with revenue of $49 million, marking a 17% year-over-year growth.
• Tripadvisor Inc (NASDAQ:TRIP) is leveraging generative AI to enhance customer service and product recommendations, which is expected to drive higher conversion rates.
• The company is seeing strong growth in app bookings, with app bookings in Q3 growing faster than any other surface and the mix of app bookings nearly doubling since 2022.

Negative Points

• Brand Tripadvisor's Q3 revenue declined by 12% year-over-year to $255 million, primarily due to a 17% decline in branded hotels revenue.
• The company reported negative operating cash flow of $44 million and negative free cash flow of $64 million for the quarter, reflecting typical seasonality and other factors.
• Tripadvisor Inc (NASDAQ:TRIP) is facing ongoing headwinds in its legacy hotel meta offering, which continues to pressure revenue.
• The company has not engaged in share repurchase activity due to ongoing consideration of potential strategic alternatives, limiting its ability to buy back shares.
• Despite progress, Tripadvisor Inc (NASDAQ:TRIP) acknowledges that it is still in the early stages of its multiyear strategy to transition from legacy offerings to new growth drivers.

Q & A Highlights

Q: Can you expand on the drivers of Brand Tripadvisor's margin performance in Q3 and the outlook for next year? A: Michael Noonan, CFO, explained that Q3 outperformance was due to three factors: operational outperformance across assets, normal quarterly accrual adjustments, and delayed marketing investments. These investments, initially planned for Q3, were postponed to ensure high conviction before rollout, impacting Q4 revenue and adjusted EBITDA. It's too early to predict 2025 margins, but the company is working on it.

Q: What are the early learnings from launching bookable hotel inventory in the app? A: Matthew Goldberg, CEO, noted that members prefer hotel booking over the Meta product, resulting in higher click-through rates and revenue per booker. There's a strong propensity for repeat bookings, with conversion rates five times higher for repeat users. Hotel bookers also drive incremental experiences revenue and engage more with other categories.

Q: How is Viator balancing growth versus profitability, given the market's growth expectations? A: Michael Noonan, CFO, stated that Viator's growth rate is in line with expectations, considering last year's price increases and different growth strategies across channels. The company is pleased with Q4 reacceleration and believes it can capture share next year through ongoing development, funnel optimization, and supply extension.

Q: Are there any restrictions on Tripadvisor's ability to buy back shares? A: Matthew Goldberg, CEO, mentioned that there are various reasons, including ongoing consideration of potential strategic alternatives, that may limit share repurchase ability. The company will look for opportunities to repurchase shares, considering capital needs and market conditions, but cannot provide further details.

Q: How is Tripadvisor planning to balance growth and profitability for Viator in 2025? A: Matthew Goldberg, CEO, emphasized the category's solid double-digit growth potential and Viator's ability to contribute a higher mix of revenue and profit. The company is identifying opportunities across product, data, conversion, supply acquisition, and international growth, leveraging Tripadvisor's demand in various territories.

For the complete transcript of the earnings call, please refer to the full earnings call transcript.