Financial Highlights
- Total revenue decreased to €250.3 million in the third quarter
of 2019, compared to €253.7 million in the same period in 2018,
representing a decline of 1% period-over-period.
- In the third quarter of 2019 Referral Revenue in Americas
increased by 19% compared to the same period in 2018.
- Referral Revenue declined by 9% and 16%, respectively, in
Developed Europe and the Rest of the World.
- Net income in the third quarter of 2019 was €0.3 million,
compared to €10.1 million in the third quarter of 2018.
- Consolidated Return on Advertising Spend declined to 122.8% in
the third quarter of 2019, compared to 135.9% in the same period in
2018.
- Consolidated Revenue per Qualified Referral improved
significantly in the third quarter of 2019, reaching €1.53, up 16%
compared to the same period in 2018.
- The number of Qualified Referrals decreased to 162.0 million in
the third quarter of 2019, or by 14%, compared to 189.1 million in
the third quarter of 2018.
- Adjusted EBITDA(1) was €10.9 million in the third quarter of
2019, compared to an Adjusted EBITDA of €26.6 million in the third
quarter of 2018.
- Reflecting our performance through the third quarter of 2019,
we continue to expect our Adjusted EBITDA for 2019 to be between
€60 million and €80 million.
Operational Highlights
- We continued to increase our coverage in alternative
accommodations, offering access to more than 2.3 million units on
our platform as of September 30, 2019
- We continued to optimize our algorithm to promote a seamless
user experience across platforms, as we continued to roll out more
granular bidding on our marketplace and started to phase out the
relevance assessment.
Rolf Schrömgens, CEO and Founder,
said: "We are pleased that we reaccelerated growth in the
Americas in the quarter, which we believe is a positive sign of the
strength of our value proposition. We also saw continued progress
in our alternative accommodations as a result of both better
integration with our search capabilities and expansion of our
offerings. We are excited about the momentum we are generating in
these and other key areas, giving us reason to be optimistic for
the rest of the year and beyond.”
Axel Hefer, CFO, said: “We are
encouraged by our fifth consecutive quarter of profitability and
our twelve-month Adjusted EBITDA is €77.9 million. This momentum
has helped us establish a solid base from which to accelerate
strategic investments in the business. Our investments in the
Americas are already showing positive results. We remain confident
in our long-term strategy and our ability to deliver value for our
advertisers, accommodation providers and users.”
Financial Summary & Operating Metrics (€ millions,
unless otherwise stated)
|
Three months endedSeptember
30, |
Nine months ended September
30, |
|
2019 |
2018 |
Δ Y/Y |
2019 |
2018 |
Δ Y/Y |
Total revenue |
250.3 |
253.7 |
(1)% |
682.5 |
748.0 |
(9)% |
Qualified Referrals (in millions) |
162.0 |
189.1 |
(14)% |
422.6 |
555.6 |
(24)% |
Revenue per Qualified Referral (in €) |
1.53 |
1.32 |
16% |
1.59 |
1.33 |
20% |
Operating income/(loss) |
2.4 |
17.9 |
(87)% |
25.9 |
(38.0) |
n.m. |
Net income/(loss) |
0.3 |
10.1 |
(97)% |
14.0 |
(32.5) |
n.m. |
Return on Advertising Spend |
122.8% |
135.9% |
(13.1) ppts |
129.0% |
116.8% |
12.2 ppts |
Adjusted EBITDA(1) |
10.9 |
26.6 |
(59)% |
50.3 |
(13.0) |
n.m. |
n.m. not meaningful
(1) “Adjusted EBITDA” (Adjusted Earnings Before
Interest, Taxes, Depreciation, Amortization, and Share Based
Compensation) is a non-GAAP measure. Please see “Definitions of
Non-GAAP Measures” and “Tabular Reconciliations for Non-GAAP
Measures” for explanations and reconciliations of non-GAAP measures
used throughout this release.
About trivago trivago is a leading
global hotel search platform focused on reshaping the way travelers
search for and compare hotels and alternative accommodations.
Incorporated in 2005 in Düsseldorf, Germany, the platform allows
travelers to make informed decisions by personalizing their hotel
search and providing them access to a deep supply of hotel
information and prices. trivago enables its advertisers to grow
their businesses by providing access to a broad audience of
travelers via its websites and apps. As of September 30,
2019, trivago has established 55 localized platforms connected to
over 3.5 million hotels and alternative accommodations, in over 190
countries.
For more information, trivago’s earnings
releases and other financial information are available at
ir.trivago.com or visit company.trivago.com/press for all corporate
news.
ENDS
For more details, refer to our 2019 Q3 report,
which is available on the Securities and Exchange Commission's
website (http://www.sec.gov).
Conference Call
trivago N.V. will webcast a conference call to
discuss third quarter 2019 financial results and certain
forward-looking information on Tuesday, November 5, 2019 at 8:00
a.m. Eastern Time (EST). The webcast will be open to the public and
available via http://ir.trivago.com. trivago N.V. expects to
provide access to the webcast on the IR website for at least three
months subsequent to the initial broadcast.
Notes & Definitions: Current
Ratio: The current ratio is used to measure the company´s ability
to pay off its short-term liabilities with its current assets and
is an important measure of liquidity. The current ratio is
calculated by dividing the company´s total current assets by the
company´s total current liabilities.
Referral Revenue: We use the term “referral” to
describe each time a visitor to one of our websites or apps clicks
on a hotel offer or advertisement in our search results and is
referred to one of our advertisers. We charge our advertisers for
each referral on a cost-per-click (CPC) basis.
ROAS: The ratio of our Referral Revenue to our
Advertising Spend in a given period, or return on
Advertising Spend. We invest in multiple marketing
channels, such as: TV; out-of-home advertising; search engine
marketing; display advertising campaigns on advertising networks,
affiliate websites, social networking sites and email marketing;
online video; mobile app marketing and content marketing.RPQR: We
use average revenue per Qualified Referral, to
measure how effectively we convert Qualified Referrals to revenue.
RPQR is calculated as Referral Revenue divided by the total number
of Qualified Referrals in a given period.
Qualified Referral: We define a
Qualified Referral as a unique visitor per day
that generates at least one referral. For example, if a single
visitor clicks on multiple hotel offers in our search results in a
given day, they count as multiple referrals, but as only one
Qualified Referral.
Definitions of Non-GAAP Measures Adjusted
EBITDA: We define adjusted EBITDA as net income
(loss):
1. Less: income/(loss)
from equity method investment 2. Plus:
expense/(benefit) for income taxes, 3.
Plus: total other (income)/expense, net, 4.
Plus: depreciation of property and equipment, including
amortization of internal use software and website development
5. Plus: amortization of intangible assets
and 6. Plus: share-based compensation
Adjusted EBITDA is a non-GAAP financial measure.
A “non-GAAP financial measure” refers to a numerical measure of a
company’s historical or future financial performance, financial
position, or cash flows that excludes (or includes) amounts that
are included in (or excluded from) the most directly comparable
measure calculated and presented in accordance with U.S. GAAP in
such company’s financial statements. We present this non-GAAP
financial measure because it is used by management to evaluate our
operating performance, formulate business plans, and make strategic
decisions on capital allocation. We also believe that this non-GAAP
financial measure provides useful information to investors and
others in understanding and evaluating our operating performance
and consolidated results of operations in the same manner as our
management and in comparing financial results across accounting
periods.
Our use of adjusted EBITDA has limitations as an
analytical tool, and you should not consider it in isolation or as
a substitute for analysis of our results reported in accordance
with U.S. GAAP, including net loss. Some of these limitations
are:
- Adjusted EBITDA does not reflect our cash expenditures or
future requirements for capital expenditures or contractual
commitments;
- Adjusted EBITDA does not reflect changes in, or cash
requirements for, our working capital needs;
- Although depreciation and amortization are non-cash charges,
the assets being depreciated and amortized may have to be replaced
in the future, and adjusted EBITDA does not reflect cash capital
expenditure requirements for such replacements or for new capital
expenditure requirements; and
- Other companies, including companies in our own industry, may
calculate adjusted EBITDA differently than we do, limiting its
usefulness as a comparative measure.
We are not able to provide a reconciliation of our
adjusted EBITDA guidance to net income/(loss), the comparable GAAP
measure, because certain items that are excluded from adjusted
EBITDA cannot be reasonably predicted or are not in our control. In
particular, we are unable to forecast the timing or magnitude of
share-based compensation, interest, taxes, depreciation and
amortization without unreasonable efforts, and these items could
significantly impact, either individually or in the aggregate, net
income/(loss) in the future.
Tabular Reconciliations for Non-GAAP
Measures
Adjusted EBITDA (Adjusted Earnings Before Interest,
Taxes, Depreciation & Amortization and Share-Based
Compensation) (€ millions)
|
Three months endedSeptember
30, |
|
Nine months endedSeptember
30, |
|
|
2019 |
|
2018 |
|
2019 |
|
2018 |
Net income/(loss) |
€ |
0.3 |
€ |
10.1 |
€ |
14.0 |
€ |
(32.5) |
Income from equity method investment |
|
0.1 |
|
0.1 |
|
0.2 |
|
0.0 |
Income/(loss) before equity method investment |
€ |
0.2 |
€ |
10.0 |
€ |
13.8 |
€ |
(32.5) |
Expense/(benefit) for income taxes |
|
2.4 |
|
7.1 |
|
12.9 |
|
(6.8) |
Income/(loss) before income taxes |
€ |
2.6 |
€ |
17.1 |
€ |
26.7 |
€ |
(39.3) |
Add/(less): |
|
|
|
|
|
|
|
|
Interest expense |
|
0.0 |
|
0.7 |
|
0.0 |
|
1.0 |
Other, net |
|
(0.2) |
|
0.1 |
|
(0.9) |
|
0.4 |
Operating income/(loss) |
€ |
2.4 |
€ |
17.9 |
€ |
25.9 |
€ |
(38.0) |
Depreciation |
|
2.7 |
|
3.0 |
|
7.5 |
|
8.5 |
Amortization of intangible assets |
|
0.4 |
|
0.4 |
|
1.3 |
|
1.3 |
EBITDA |
€ |
5.5 |
€ |
21.2 |
€ |
34.6 |
€ |
(28.2) |
Share-based compensation |
|
5.3 |
|
5.4 |
|
15.7 |
|
15.2 |
Adjusted EBITDA |
€ |
10.9 |
€ |
26.6 |
€ |
50.3 |
€ |
(13.0) |
Note: Some figures may not add due to
rounding.
Safe Harbor Statement Under the Private Securities
Litigation Reform Act of 1995
This release contains “forward-looking
statements” within the meaning of the Private Securities Litigation
Reform Act of 1995. These statements are not guarantees of future
performance. These forward-looking statements are based on
management’s expectations as of the date of this release and
assumptions which are inherently subject to uncertainties, risks
and changes in circumstances that are difficult to predict. The use
of words such as “intend” and “expect,” among others, generally
identify forward-looking statements. However, these words are not
the exclusive means of identifying such statements. In addition,
any statements that refer to expectations, projections or other
characterizations of future events or circumstances are
forward-looking statements and may include statements relating to
future revenue, expenses, margins, profitability, net income /
(loss), earnings per share and other measures of results of
operations and the prospects for future growth of trivago N.V.’s
business.
Actual results and the timing and outcome of
events may differ materially from those expressed or implied in the
forward-looking statements for a variety of reasons, including,
among others:
- our ability to grow our revenue in future periods, or at rates
deemed sufficient by the market without reducing our profits or
incurring losses;
- our dependence on a relatively small number of advertisers for
our revenue and adverse impacts that could result from their
reduced spending or changes in their bidding strategy;
- factors that contribute to our period-over-period volatility in
our financial condition and result of operations, and how they may
negatively impact our ability to meet the financial guidance that
we communicate to the market;
- our dependence on general economic conditions and adverse
impacts that could result from declines in travel or discretionary
spending;
- the effectiveness of our Advertising Spend, including as a
result of increased competition or inadequate or ineffective
innovation in or execution of our advertising;
- the effectiveness of our measures to increase advertiser
diversity on our marketplace;
- increasing competition and consolidation in our industry;
- our focus on hotel and other accommodations if users expect
other services;
- our ability to innovate and provide tools and services that are
useful to our users and advertisers;
- our dependence on relationships with third parties to provide
us consumer reviews;
- our reliance on search engines, which may change their business
models or algorithms;
- any inaccuracies in, or misinterpretation of, the assumptions
and estimates and data we use to make decisions about our
business;
- changes to and our compliance with applicable laws, rules and
regulations;
- the impact of any legal and regulatory proceedings to which we
are or may become subject;
- potential disruptions in the operation of our systems, security
breaches and data protection;
- impacts from our operating globally;
as well as other risks and uncertainties detailed
in our public filings with the SEC, including trivago's Annual
Report on Form 20-F for the fiscal year ended December 31, 2018 as
such risks and uncertainties may be updated from time to time.
Except as required by law, we undertake no obligation to update any
forward-looking or other statements in this release, whether as a
result of new information, future events or otherwise.
Contacts
Investor Relations |
Communications |
ir@trivago.com |
comms@trivago.com |
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