TZOO - Earnings call transcript Q1 2021

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Operator

Hello, everyone. Welcome to the Travelzoo First Quarter 2021 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 call is being recorded. The company would like to remind you that all statements made during the conference call and presented in the slides that are not statements of historical facts constitute forward-looking statements and are made pursuant to the Safe Harbor provisions 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 forward-looking information, Unless any future otherwise. the events update law, a as by undertakes no or whether required to result obligation company publicly statements, of new important information, issued Please including Company's refer website to release morning. the earnings earlier for this Company's press the this will call of available made website Travelzoo travelzoo.com/ir. the recording on archive An conference at be Relations Investor

Now to of Lisa overview it is my will its pleasure Bartel; Su. to an turn with the the first Travelzoo's call CEO, Chief over start Lisa quarter Global Accounting XXXX Officer, and results. Holger financial

Lisa Su

welcome Please #X.Here with those us Investor on in follow improvement revenue was to joining Relations presentation $XX.X remarks. to presentation available at and open begin see our management with PDF ttravelzoo.com/ir. you today. We Slide our continued along prepared see our you million. business. QX website in can The of you, our Thank is the format operator, We

loss We has XXXX trend see the small growth from revenue XXXX. continued stabilizing XXXX. to trend shows to a of QX, The QX, also expect in same that

turn profit are the believe on Slide #X financial X. our we of decided subscribers has our operating income, a the it to as XXXX is better expectations. to details provide Please the of loss Slide of non-GAAP as on Slide from XX.X believe to We operating calculation performance which increased items X also in-line Travelzoo million the company evaluates $X.X of performance. information We operating an from million Slide explains On March that million income. non-GAAP XX.X December as in changed operating income X, with shows to XX, of excluded how XX, year-over-year of management non-GAAP XXXX. provides the $XXX,XXX.

the pushing balance. voucher sales Our success positive keeps cash development continued in and

As and XX, North consolidated segment recorded decrease decrease cash in XXXX, XX% year-over-year. business a and FX business equivalents Europe in Slide cash America cash, detail X and revenues X neutralizing March by segment of restricted year-over-year, million. the a XX% the recorded When of our changes, revenue business were of $XX revenue segment.

mostly While you local have of has reduced Non-GAAP the operating overhead revenues fixed advertisers resulted summary, reduction started adjustments of In stagnated Advertising was and still our compared were in our costs. with the reach. QX. make by in-line Travelzoo's can picked at of previous headcount QX pandemic to throughout expenses beginning quick expectations. on see entire Slide the use from back up see costs. adjustment the as Slide cost XX, you in X of coming lower On XX% coming to quarters revenue the structure as from organization

Looking for ahead, in million. the range QX to $XX revenue million $XX we to be expect of

operating expenses, million. approximately we For $XX expect

that we profit report QX. We expect in a

insights. Now will information additional and provide Holger

Holger Bartel

of are advantage. members Travelzoo enthusiasts XX. December we on. influences Thank you, Travelzoo it teams and survey this us Slide trust look a affluent. most global Travelzoo are their competitive our turn loved are management quality an from importantly destinations. is believe by XXXX, are offers. Members becoming they travel new important gives Lisa. what for said open experiences. is focused XX members Travelzoo tell and trust overview travel and of Please Slide that an XX% They to for who In they active

and profits future revenue and offer Grow very format deals Club's Flight well. EPS returns. Travelzoo industry subscription Back members worry-free seize sourcing demand Operator? and operator. to working expand Continue for will travel, entertainment travel, quality the opportunities as for high for Travelzoo members. profitable We for and that deals Jack's flexible a exceptional local is travel and grow the to

Operator

please [Operator compile roster. while stand-by Q&A the we Instructions]

line Michael question the of first a comes Kupinski. from Your

open. Your now line is

Michael Kupinski

Thank the terms few the seeing where the tell you, the growing I have just in coming Europe a are could numbers growth you are growth them. where questions. that seeing in of America curious I'm are at? you ask and I be if growth, might in or opportunity me appreciate from? to is growth, North you Where just growth

Holger Bartel

the So growth U.S. every again. because consumers the more where being come members in forward, we in the came primarily we in market, we to to more growth QX, see added going travel really and interested expect

Michael Kupinski

see outlook really QX, being in your And to you. up U.S. you're or where driven for this anticipating terms to now, a component improvement it starting are the open by of point? we Got at Europe is revenue of see that is

Holger Bartel

a QX. We to see trends well the for particular confidence the positive taking-off. U.S. and see where as in QX where confidence also we more increasing definitely are in little very still It's advertisers. Canada different. And is confident is consumers U.K., comparable is as Germany, France, Spain more situation in and travel by

Canada the the right lockdowns from EU now. U.S., where there from on comes U.K., less going it so still countries So are

Michael Kupinski

know believe. plans. can an influenced Adobe Holger, wondering if talk you're at little And could margins a about I that bit about gross a of you the bit gross obviously I are by I well, looking some talk doing your that product you prospect was as software update, of And margins, little development just in

as of years? to if forward, the maybe about talk that. next give a you can But over couple where little So think idea of bit year a general just then look looking to margins this maybe us could kind gross you and maybe you improve especially

Holger Bartel

generate remain cost the last to margins few are relatively been constant since sales voucher higher they've next voucher the strong a at percentage couple sales revenue. where quarters Gross for of of of will quarters and our still

we important expect go than up as advertising become Going margins to increasing. is vouchers forward, revenue gross less

Michael Kupinski

that do to can and forth. product can are probably range But gross that, ability have generally? a margins margins, talk about thoughts terms be they'll you I you go in where about an guess your go? little there what think XX% because as your to high think bit Can you or little manage the XX% In as so of they XX% developments bit you a gross of of or those

Holger Bartel

Well, the expenses product etcetera, are referring to expenses you development, operating IT us. for are these

significantly before affect those our years the they So to come maintain they stable. pandemic. And the couple revenue up other see costs margin. of the margins, already same the on the to the and next relatively as affect were back as as go of we where we don't were in gross the you net they margin, quite in Gross probably hand grows QX, levels that expect

Michael Kupinski

maybe And confused. am I

update. looking I mean, I'm curious about how Does of not at gross the margins? an I Adobe that doing prospect think that works? we're software go I does that not affect into the that guess, product, or

Holger Bartel

this? you do answer to want Lisa,

Lisa Su

would that in that capitalized any regular a Yes line, under expenses. be amortization is go product project And of development would PD our project. which our

Michael Kupinski

you. Got

there any margin of from impact gross from type be wouldn't any So that of rollout?

Lisa Su

Yes.

Michael Kupinski

PPP how expected in us you your numbers? loan give Is can terms how little the that might quarter? on a third expenses? of And fall in terms In And just your that affect that update might now the forgiveness.

Holger Bartel

Lisa?

Lisa Su

it. to forgiveness applied happen, can’t government XX time our on come could further XX comment they PPP from receive anything what that really that. related take And back the anywhere obviously loan, of and and delay they days could we forgiveness for We've that predict can that's I days Yes, between ask could questions process.

we're but very time, say. hard to it's this at QX, anticipating So,

Michael Kupinski

you Thank much. got. I so all That's you. Got

Holger Bartel

Sure, you're welcome, Michael.

Operator

Your next question of from the Goss. Jim comes line

line Your is now open.

Jim Goss

well. as you. a Thank got couple I've

was you or talked in is the as notice I to demographics was like timeframe it always And there wondering do. the specific course over you been to changes compress pandemic if that? anything the wondering, First, I demographics about of have the any

Holger Bartel

our In general, high are older. bit a little income members

shift slight the and who actually because pandemic, younger our they look comfortable towards more more members we travelling. to purchased During probably to more saw offers, at were a

Now a confidence older now the larger are back little a share that regaining we're again. shifting members to that accelerating are bit vaccinations gaining and everywhere,

Jim Goss

some in since demographics you your ways samplings gotten some broadened So appeal have have wouldn't it you've might share otherwise? had been and

Holger Bartel

younger we sharing that on in saw, active much Indeed media. friends. are They true. in the more active social more general, with is Because that deals what population is great we see

pandemic So good should broadened we that acquired the and younger of are brand good our that saw a because be segments segment, believe into indeed, quite high Travelzoo demographic during we we we in amount is for is more that reach what for us actually members a a everyone. bit quality which

Jim Goss

Holger. Thanks

that much place and Another timeframes vouchers, any or the of partners from thing What's in or as which the else more of the in some terms anything travel better restrictions of of of back prominent, you use terms can in eased do taken have shorten sort and either happened terms regards? about has the and of some standpoint, get offering? have you're deals talk to travel shift been have can capital come your those timeframes

Holger Bartel

that's this a No we changes, least rates for in QX. decrease happening vouchers rates seeing And one in strong U.K., continue we particularly The demand are from expect quarters. the we to of really, refund for next I is quite see and at decreasing. the the continued are couple see refund where that thing

the which that think vouchers general travel demand to are But more and strong. consumers is ready that in I again, members just So for to be continues shows good.

Jim Goss

get Can thing. in about of shifted? away? get that get if talk services the and you by you is advertisers? noticed to the participating other? terms How need any last patterns trying Are even to Do versus you've users the set relationship Maybe response of before the one your game they of trends the don't advertisers right of ahead one

Holger Bartel

activity, and what's I money right bit of see their and advertisers that's they good would is happening probably now. the then because ahead member exactly response first to a advertisements activity advertiser to want copied that say more

well. about recall last of month, seeing lot way we the I in as was members, up now over money give But the the showing makes us number We seen across back a actually that's that's QX from they not the that companies earnings the bookings. but to-date might you that our on You spoke all why that ago. important difference increased very you where really to of to members had our that of a read a customers of year their before know, have the are our they treat general, traveler is month, what not just you, is within any they earlier in us even reviews was increased trends a trust very driving have everyone some didn't activity powerful on didn't companies members purchased web were customer past we owed. quantity are to only Travelzoo refunding pandemic, XX have from And and it very our of look trust might couple what of to And last And you are and separate probably the service, large pandemic. were respond any If In call passionate, are other days Travelzoo. interest now business other you anyone we slow advertisers. member you very in in some quality companies. you meeting, million I can in our seen more and it's we from

Jim Goss

was thing, Maybe encouraging. guidance the one last as

that of sort and in Mike you restore that relative more you and is opportunity getting like revenue you growth talking should all revenue terms gross fact more ways to be such more beyond confident those the company working growth? about envisioned you the plans be more have was just in might expenses profitability of able confident well? the as margin that just you controlling to out and that of to other achieve something achieve more the Are you profitable an of As the are way profitability, the

Holger Bartel

Yes, right our is see changing. past going the in don't according and everything plan and to that expectations we and now,

even expect, as than we bit originally are QX just expected. we a is stronger So we executing going exactly it’s And maybe along what little yes, plan. our

So that's very encouraging.

Jim Goss

much. Alright, thanks very

Holger Bartel

Sure.

Jim. welcome, You're

Operator

Your Silver, Steve now from line is is question Next open.

Steve Silver

thanks million it to exit member XX.X million relates for the numbers in about the one question. expanded for I it’s you And In it as year, And base. to showed much. mentioned due had X last U.S. this that competitor. got remarks, last question very taking the I you a Thank base know I’ve guys the the XX.X. user the think by of quarter members the year prepared

the left of So to the a might a market, growth, an the given might net user to that expect time the that over deal that of just have and and subscriptions, would information that being you members just to or from left in people offset recovery terms had that time? would there of over and period travel just a but sense whether I'm have, took during was get whether insights services as the you members any having members break pandemic, these trying of services coming pandemic, some subscriptions the more over out lot return

Holger Bartel

decrease exactly you XX last of say, because a certainly just as in seen Yes, unsubscribes. Steve, months, the we've members

interested are temporary. travel, why the them if you of I also come offers. these travel people And of would in members back. expect that are mean, good will Some less number cannot I

them added noticed, members you So in future, million the X quarters that acquisition organic year-over-year from we marketing. QX can travel come the And the saw because sign-ups and in in new and three come U.S. as we we growth now more previous the to back members, And we we you hope again from also added hope added to member we in than members back.

Steve Silver

you And Great. on your insights. the progress. Thank congratulations for

Operator

is question from Next Ed Woo.

Your now line is open.

Ed Woo

were be the that congratulations think My how But a Yes, a are it's coming I you you be on going that to question industry lot faster bit maybe little ago? multi-year people changed than end. saying going you back on things given your see has better know recovery. your thought view, a it's it quarter is, a Do of to recovery.

Holger Bartel

following in is in trips in and said Yes, probably But recovery earlier the would right for think. the for countries they now for coming We Iceland, it's Europe back by open U.S. over interest I in I to and some example, week the last and the Croatia, top an and members people of Ed. possible it's namely now stronger see and U.K. faster offer fastest in see domestic primarily had vacations. last and the Europe. than response XX travel to weeks U.S., U.S., Demand Hi, oh, couple incredible U.S. the just which as of what we Greece, tourists, just because now in in just say the Croatia the

them But is the gives that see, faster. that are will confidence. we recovery hopeful we So

other industries, that in demand. is of You see lot a there pent up

benefit they And are month last from comment to before longer of promoting is this the the willing that also of before had X the mentioned a the money because the Dimon vacations, significantly more means JP be bigger from also in upscale vouchers of course, purchasing offers. will more in saw that seeing You higher. Jamie today on that the vacations, versus average trillion something with are a on towards it are Morgan of these they that we pandemic. see value pandemic U.S. sitting consumers of I the more spend we vacations we kinds is generally advertisers And voucher call shift and than already,

Ed Woo

to where Will is very you more rapidly grow to ratchet back marketing you stance aggressive to up good. sounds it business subscriber or growth? as grow was a a increase, your recovers That it will still more, Then the controlled take list?

Holger Bartel

of of more us. are confident Club we be to in will a opportunity that a members there struggling. competitors will was of from all our that It significantly future for very we we combination also the this members the And attractive year. we still of Flight these few hope still quarter And Jack competitor. could transactions of that had for be grow This add last a are kinds great a sure, some

Ed Woo

luck. good Great. Well, thank and you

Holger Bartel

Thanks, Ed. a day. Have good

Operator

call Holger no more to the will Bartel. back over now I Mr. questions. We have turn

Holger Bartel

again with you and look we for day. forward thank nice a gentlemen, and speaking support quarter. Have you your to and ladies next time Yes,

Operator

and Thank you today's gentlemen, call. concludes conference ladies this

may a You lines time. at your disconnect Have day. this nice

Lisa Su	CAO
Holger Bartel	CEO
Michael Kupinski	NOBLE Capital Markets
Jim Goss	Barrington Research
Steve Silver	Argus Research
Ed Woo	Ascendiant Capital

Travelzoo (TZOO) 22 Apr 212021 Q1 Earnings call transcript