TZOO - Earnings call transcript Q2 2018

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Operator

Hello, everyone. Welcome to the Travelzoo Second Quarter 2018 Financial Results Conference Call. All participants have been placed in a listen-only mode and the floor will be open for questions following the presentation. Today's conference is being recorded. The company would like to remind you that all statements made during this conference call and presented in the slides that are not statements of historical fact constitute forward-looking statements and are made pursuant to the Safe Harbor provision of the Private Securities Litigation Reform Act of 1995. materially contained vary statements. the could results from in those forward-looking Actual company's XX-Q that to the statements the the results cause SEC. are XX-K materially in Factors actual in differ could filings other and periodic from those described Forms with and forward-looking Unless law. by required as or undertakes company otherwise. rather to of new any forward-looking update The result publicly information, obligation statements no a future events archived company's the earlier Investor to www.travelzoo.com/ir. the on Web of an company's this press refer important available including site call Please information Relations conference issued earnings release morning, made at will recording this for Web be site Travelzoo's the CFO Travelzoo's will results. overview an analysis with of Glen second financial Ceremony the quarter start

Glen Ceremony

to of today. and joining Michel, welcome you, Thank those you us

second you and Holger For the format update of an today's initiatives. our financial will then quarter call, provide our review I business on results will

our open Please along our prepared for Thereafter, remarks. presentation, we our call follow question-and-answer will management with session. the open

To our for Our turn the on highlights presentation X, is quarter. financial to available Web Investor begin provides key Slide let's which the site. Relations

year-over-year the Our X% million up up nominal constant terms to and $XX.X for quarter X% grew in revenue in currencies.

earnings per was continuing operations share for $X.XX. the quarter from diluted Our

currency are increase for Europe is basis. which a of X% of year-over-year currency on our number X representing in continue in that representing increase and a increased XX.X Pacific in in global X% close financial up runs was our America for a tax not North or social increasing million high the $XX.X by tax $X.X Pacific X% a increase North currently first illustrates America growth nominal performance app currencies. is Keep or constant was in constant in that explains Revenue two terms XX%. our to mind Our segment. or Asia Slide mobile our year-over-year the media Asia constant $X.X mode. net a revenue Asia our X% at and million on to was purposes, X% while million representing which to members is and details and followers Pacific Slide X of Europe investment year-over-year years. downloads income business grow. year-over-year Revenue Revenue in basis, X% losses effective deductible that still in in Europe of rate million for

from profitability increased decline significantly. next of few in shows tax revenue of of year-over-year will cover products three revenue X Revenues advertisers America Slide As slides to our further partners. improves, core the Asia increasing members, due each for North rate our effective our of activity detail segments. million. $XX.X The and our

America of $X.X Turning profits million. $X.X the core was by Income profit and operating breakdown FX million as to improvements products in million, which Australia X, revenue servicing on local of FX Slide revenue as spite of expenses percent revenue margin by impact was $X.X X, of $XXX,XXX. income last our cost positive Kong growth America expenses On the second Asia Slide our revenue was revenue Hong percent well revenue from flat a Slide with XX as approximately Pacific focus Europe in consecutive of operating quarter to our increased revenue as operating was and lower XX this voucher revenue the flat. was and year-over-year marketing flat productivity and grew, that improved of essentially Europe is North year-over-year relatively Slide Slide and XX Slide million presents in profit were operating of points our a at of $X.X year offset members headcount. to The our decreased income as $XXX,XXX combined of shows Asia. Pacific flat efficiently This Europe Asia a The and operating a result North a and XX.X% with positive due X $XXX,XXX. and generated of million X.X segment total loss percentage decreased of margin. of increased income. provides syndication operating North our operating generated $X.X operating America and taxes million operating segment. for our shows relatively was by payments. advertising were of impact. cost $X.X driven quarter.

weekend flow XX, Slide technology. app and operating to us position investment cash on in Moving cash an helped positive solid a and oriented equity fund our travel

Turning in our our to driven further core in summary, profit improve products travel generate continues investment and performance marketing. XX, to by the help and Slide products financial to

revenue in revenue overall and growth increased Our continued all regions.

profit generate and maintained and our cash up with we position our operating our cash solid products. investments We continue Asia And operating stepped further marketing to positive despite in flow.

revenue products expect travel experienced of changes on forward, we the performance for in the the year-over-year revenue third we Pacific. have over Asia we XXXX, from Looking in offerings several as expanded and our positive following: quarter our in quarters with focus expect increasing better a last

We to increased investments maintain spend Asia maintain as Pacific. in well our marketing are planning the as

and as will we purchases that such drive as business the to positive the quarter by maintain as addition, results expect to investment. given to we Asia will these summary, second equity of on we audience aim in up we to year-over-year half In growth and our initiatives income expect well trends growth. you plan areas update our portion products underway in our operating of our and going bookings reinvest pick future further our of to while In forward XXXX. in starting in of support members various continue investments third selectively statement the We our Holger year. Pacific income

control increase continuously take our to steps area to continue productivity. cost also to non-investment We

on Holger will Travelzoo's an business you update provide Now, initiatives.

Holger Bartel

Europe, operating goal much is off. build larger Revenue And are We are grow we to we're making has in member the Pacific. margins XXXX, profitable in countries are growth organization franchise half Slide all will From solid and markets and With would accelerated to in way, start in resumed with membership are which in XXXX. revenues then global invest our a continue in XX, paying highlight in Asia and and to America initiatives operating travel we that two even pleased focused the progress investments growth. into just believe in and Travelzoo second that product faster and increase looking into our of I North and China we other almost our under activity like in technology that or highly and to community. will I revenue

hundreds yes, that month we launching the book around complete also who trips. members negotiate exclusive We to the are offers global world that of as close hotels, our every we've ability live to on the been working technology the

hotel when in a have example are in We she found rate, a for only not London that more local member offer air and but for fare times tested is includes several likely offer he the book just or a hotels, special Rome, a package a hotel to if that receives activities. trip, a and

that hotels to found rates a also better them are airlines us if into bundle have give willing package we and We offering.

with experienced mean this Germany we and Europe to technology ourselves. couple industry. tour We and looking are this in in rolling weeks the in Instead of select this a partners not operate become travel markets in we established are that quarter starting are working various out does in markets

for in global for way to to our are create technology a advantage more better We a merely offering and partnerships members deal. and fantastic the a leveraging take convenient them simple these of

teams On the we marketing world. marketing to started up beef side, have our around the

consumers as Many beyond Our many current we existing further grow still to members either have but or do about need what our us do. that of build Travelzoo research shows member are our don't we loyal, a skill. we and base highly know opportunity not large to visibility know

cost way a members build in our size brands to available the to of out demand. Technology in are is that further for growth double goal seasoned the We of XX, my executive team on want reach exclusive partnerships and again aiming increase are and as still effective quality these to reach. initiatives accelerate To to the support Brand number our are maintain are we with both a of top-line Officer. leadership, We company our offers new and Chief require past a by smart few we while efficient do finding we strengthened in Global and have Slide Head recently maintaining on of profit To summarize margins. years. that some strong we bringing will the we even this but way as the will done have increasing and investments in This audiences next

to the Now back operator.

Operator

first line Our The is Capital. now from the Woo with of questions. open question Instructions] for you. comes Thank Ascendiant [Operator floor Ed

is ahead. line open. go Your Please

Ed Woo

you stronger I seeing have What my taking for on dollar? any out industry. you travel Thank from question. seeing a the the general guess are there? Are you question impact I

Holger Bartel

countries. the of people many is to now In not general there's to travel in travel the less industry because certain reason for improving regions

for after a trend in the to people really years saw in lot last normalizing. where travel of of Europe that's and certain of example, to terrorist fear So attacks countries we a couple the

a so very -- strong they last that or not open travel China seeing simply but a tourists just And North destinations travel to into So of the way the for and familiar but like places now and are think think continues maybe dollar I Asia deals were at didn't they is explanation from so America Travel offers us a is much don't Rome with. to Europe interestingly which into Europe least, that's our strong the make opportunity and from good because think the and particularly for is quite to good. Chinese about are that Paris, increase I before, that. travel destinations to U.S. they maybe members that good to not Chinese we

good a trend us. that's for So

Ed Woo

offers done to of have I -- is on you versus what personalization tour sending and that mentioned [indiscernible]? you Then a some part can email previously were on personal different you question want in than was the -- travel to How how operators. some just much add Great.

Holger Bartel

an to point our about the make an more of main make the offer are -- that for is offer we that launch of step technology really more first relative to to packaging So is member. relevant

let's right might you up member and Ohio, Cincinnati, from hotel they to you, to-date say need are a we to have hotel hey seek air go we New yourself but would received the so So us York, how tell have out you book in now fare. might great in

here dates we look you easy trip, are it that. what you Previously you you; tell add depart New you get tell can will asking. relevant on the and member to offer Cincinnati, York San And offers from or know going and might no you have you the you really for also in Chicago it We price Francisco. very you one the entire flight, best a wouldn't great or is that deal can do make an receive on a to were book what your even to and if without

So that's more I much convenient. think

we the Now and are members. personalize our able to that further target messages to

have particularly a are personalize really further to members good offerings situation that them messages We in the we information to send helping outbound. the we to these our and leverage

Ed Woo

much would specific or there that. throughout you the air want for more location, that you hotel very it expensive be much a more able the going since to fare it to from you effort to to that I fare and few at country. imagine being air from time costs said deal was the Is cargo much be just location, do on probably very, is able base consuming for send how like but a obviously major versus is events or scattered send personal airports to Cincinnati are

Holger Bartel

on We can It's already the front. today. not that do difficult publishing

done have many for that We years.

an issue not that's for us. So

technology. and with deal real-time hotel York actually the current we the is to and have that automated. New have fares that that that's now technology have new We what's What's new really bundle the air we in is

operations role is really confirm, good this technology simply efficient. makes offer a and So say our them but review more and yes, our is this and to simplifies

Ed Woo

Great.

me Let different a ask question.

at deals more personalized local have they that focused kind have changed than more more changed you What much focused rather it you Your broader? take becoming have recently. Has your at of is all? more much now are rate, much all

Holger Bartel

in there. last really really team But local example very I'm the in rates the happy place. And by to America grew that's changed hasn't few attribute North have for an Take in great differences this deals they XX%, no that big much quarter. years,

off. bring members for good really to who and now offers have pay they're amazing starting We our just team,

So team the there. thanks and shout to out

Ed Woo

model advertising And conversion business you almost rolling to Great. of economic guys the about transmission outlook. kind as overall are model. of part from What

overall But, I the [indiscernible] what or booking doing do see when think deals previously -- kind hotel. booking are like when margin higher the [indiscernible] that transition for conversion that you as in you margins of advertising? you much a a -- your into -- paid conversion impact are

Holger Bartel

sell which entire investment. all now allow we indeed said it was differently us. I with is margins in if The when decided to why doing something CEO, time you are are do built ourselves right. I we infrastructure it as It's hotels with packaging, built we a we big through lower are members want back to You book actually came We hotels, actually partners. yourself, our to it

that some have out negotiated are We these the on revenue. a products and mind great Keep we quite deals margin actually margins partners on and good. is on are with are way on the there the working net terms our in the margin

quite comparable we what report the as actually the on revenue business. actually that media margins and would is is to revenue net the So

and time from comments it's do just the we price. let because million a impacted also few obviously now self-inflicted see to obviously And and disappointing I'm But volatility. $X in because But even EPS too in Ed by to from the in QX, same spend packages. much the me some There's $X.XX that earnings by stock grow So stock about price faster. pace have in at we and areas hotels quarter going continue the business at we the grew swings for and increased differently now learned what And that's now. we the results $X.XX to first not our happy large generic this today. it make really that's

the But obvious run, earlier, to important to that's next need long the said As better double I and at need this do from also Travelzoo's we scale, revenue. our million fast revenue at costs thing have than further the quarters. the This a are company to really grow what to operating and even business, our faster And we to I $XXX you right $XXX business to and the in will back as even but for if I improve. years. million, is is had is improved think think business the in understand in we margins million $XXX earnings look hopefully when as history want operating fixed growth, periods size I mostly few managing I CEO of that one be

to to back margins operating we XX%. at no running should like really were So something historically And XX% get our that level.

achieve where to are losses Well, going APAC, all, losses continue forever. we now, these not deductible. aren't have losses, first are how of So investing, will Right that? tax we we we keep incurring

brings really down quite EPS that significantly. So our

performance Pacific As the the and picture that profit. entire dramatically a relatively up we make as revenue grows happen coming and will the Asia of finally financial quite change are in improves and fast. That can margins company

competitors And again don't which will we quarters bring up last that shown hope and as improve and fourth to we've a this really and even is revenue. we to members other have bit tell about excited to But areas three a come are focusing this want the technology continue we strategic still operating much actually XXXX we if grow continue want Second, rather because I'm are that have overall, in on, don't that publicly tested we we significantly, our do. the think margins, about is And but that promote markets really further few more we still a going our times what too and frequently. packaging quite to it I planning I hotel, just revenue are them packaging because seen have goal revenues than in third I buying we up of to accelerate. in talk several will couple product will the this

Ed Woo

you clarification Very Thank good for and questions well. guys my I Thank for your you. answering and luck. you wish

Holger Bartel

Thanks Sure. Sure. Ed.

Operator

to now closing Thank you. And remarks. Bartel I'll back for Holger turn Mr.

Holger Bartel

quarter you ladies with your again support Okay, to dialing and you thank next to I look okay. and we time speaking for hope forward results. Bye. gentlemen, better and for in

Operator

Ladies today's day. and gentlemen, concludes pleasant lines your this teleconference have may Thank and at this you a you. time disconnect

Travelzoo (TZOO) 25 Jul 182018 Q2 Earnings call transcript