TZOO - Earnings call transcript Q2 2021

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Operator

Hello and welcome to the Travelzoo Second 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. Actual results could vary materially from those contained in the forward-looking statements. periodic actual statements differ company's are and and cause in from Forms could SEC. XX-Q forward-looking the the described other that results materially to those XX-K Factors with filings in the Unless required no update future result any publicly events a company or statements, as new obligation whether to forward-looking of law, by the undertakes information, otherwise. earlier for company's earnings Please the this refer including morning. to important the information, company's release issued website press the will archive Relations Travelzoo recording on of made An Investor call at be conference travelzoo.com/ir. website available this

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

Lisa Su

us with open follow travelzoo.com/ir. is website Thank presentation to prepared management our available today. Relations Please in you, welcome on you operator and PDF along the at The to remarks. presentation those Investor format our joining of

slide with begin number Let's three.

million. our Here continued you that our see improvement can was QX We in see business. $XX.X revenue

We to XXXX. of for upward expect the continue revenue rest trending

also down the On segments; QX four, at operating America two end million. we March, to North business of $X.X more XX.X million XX.X slight with had June. and members the in return a to profit We million decline significant into go details of an end in We of Europe. at more to profitability from our wanted slide about

losses equal last levels. business are for now XX% had We operating has due XXXX at years But are of pandemic, significant XXXX XXXX showing America in segment income. of the almost QX. ready some three decline to Both recovered North at the income operating the we these the those revenue to and for is of segments revenue Our but

is of our XX% as on million. We loss the operating with provide has in continued voucher six improved performance. of the of million that gap non-GAAP believe provides expectations. operating at we slide Europe better line segment XXXX which the explains slide and on profit income. non-GAAP the items performance to pushing but slide positive the is has evaluates and Slide a to the non-GAAP our the operating company that in are how in from seven, operating income operating details income an information Travelzoo cash $X.X Please shows decided financial has of been of to on the calculation balance. income. success narrowed revenues, Travelzoo only business On year-over-year recover Our slower sales keeps excluded turn five, believe development $X.X to This

overhead expenses has As recorded neutralizing FX Europe which segment. of cash, headcount the organization continued were resulted $XX.X segment and at our started $XX.X coming detail fixed in business business cash have to as our and throughout and Non-GAAP costs. equivalents, you entire picked recorded XX, On revenues cost mostly of to back million, reach. the of pandemic When million increase from advertisers costs. June the $XX by North adjustment that of segment the slide revenue business is at an in lower prior in structure our Slides cash XX, XXX% were XXX% changes, year-over-year. an the up from see revenue quarters nine of use of Advertising increase million compared revenue beginning make restricted operating and has quick America adjustments and March as our XX. year-over-year increase significantly from of of coming of reduced eight consolidated an can reduction

revenue exceeded current continue as will QX from forward. how our in you see slide QX. that In to We percentage quickly be revenue the on expenses summary, going XX, increased around of QX has expectations expect our with operating XXXX

Looking forward, to expect approximately and revenue million of and range operating expenses $XX.X in to revenues, the million cost for expect $XX we $XX for we million. QX of

We also expect for QX to remain profitable.

Now, Holger information provide insights. will additional and

Holger Bartel

that let's million to social we XX have users, So, let's app and remind X million million go mobile XX X.X media members, slide and followers.

as a travel. the brand countries open when whopping vacation. comes affluent, We of tell among we where new us And is a twice as say influencers, Vaccination are that the beloved by members in I we are all And XX% U.S. country go who experiences. ready are and Travelzoo active, rates members enthusiasts they operate they roughly on average. are travel to they are it they also are are to high are to leaders would

And great. influences gives they U.S., slide team trust of because us. their in travel say that's an our management our Travelzoo next destinations, of XX% overview members what is and the The on. So, global focused the

local right we having we're working the Of continue offers and subscription format That's for we're to for we We course, most returns. it's grow EPS to experiences. the travel, will for Travelzoo flexible looking well. deals revenue now them profits irresistible right exclusive and members and future travel. travel industry grow Flight as important Jack's seize to and looking now that's and We're and Travelzoo opportunities and members exceptional demand for a and offer entertainment, our worry-free see with providing Club's profitable

the to operator. back Now,

Operator

first Capital. question is NOBLE now of Our Instructions] Michael comes [Operator Kupinski from floor for The open questions.

Your open. is line

Michael Kupinski

couple point? North Thank you reflecting North wondering can might than was If questions. Europe you it's on us some Obviously, as faster just can I seeing give kind you us highlighted fast like and your give recovering congratulations America the about this you Do America? you're thoughts how your looks if Europe, on that what in you Europe the fact at see you recovery? quarter. of start thoughts it that as recovery of and A think

Holger Bartel

international right just on looking I business in lot What's like interest equally members they our as is they when travel. better, Michael, And trips. in and plan will political go, actually we've gets as Europe them vaccinated, can seen Europe they North will strong to America, the back as to So, are the then are a restrictions where is of in among America. as in our holding stops ready think well recover they that are soon travel or the members leader now and

Michael Kupinski

Or of restrictions up? you restrictions seeing of do being implemented? you you overall? opening you're Are being just still lifted? I flavor seeing from see Or have kind any reversing what

Holger Bartel

that have And particularly that better. it's months. of will few U.K. European It Union the happen strategy. Generally, and seems I getting Europe, the a difficulties coordinating common next in just the think

are as well, things as But less happened just better. happens, then get in as in speedily in not So, if that will Europe U.S. that general, the restrictions becoming

Michael Kupinski

the Got margins u. thoughts were talk in your than I gross quarter and significantly of going expected, the terms in And the you what margins forward? margins drove can about on gross gross higher

Holger Bartel

make revenues sales Part of voucher portion as in go down. well sales quarter margins a what to smaller think of voucher and previous continue influences than quarter, we this gross as that will

So, the margins. that's boosting what gross

Michael Kupinski

Flight Jack's of know you. looks Europe, service I flight just like offerings the then other affected Got about that Jack's give how by Can Club, your that expanding markets. adversely it's you travel, outside Jack's about thinking Club expanding thoughts and Flight to would recover? you services other were us in been travel-related Flight Club And offering I assume. flights and And particularly in

give at Flight you point, So, you some wondering Jack's there? and this us recovering see was can thoughts Club I on how revenues

Holger Bartel

of in but is flight absolutely that U.K. the holding looking service We restrictions you're -- change the The part service to we of in quarters. U.S., And And time subscription is introduce back. increasing hope the in increasing actually U.S. of also the maybe subscribers some right, thinking U.S., most the the paid membership their the the now, -- in right the of are at some in subscriptional U.K. are are in the will it couple that we're of next that including point of

Michael Kupinski

And out vouchers next the well. over Just several the your position your talk million and cash color your you some about thoughts kind position $X.X year? to look a of for about cash quarters million, for about on cash have second as your in can your ability the us payables provide you give you $XX.X over then pay merchants but your as the just already thoughts merchant position cash, let's next the

Holger Bartel

Yes, because last point why cash merchants. some to out seeing it we of of we some we pay are the increased that at holding the the are their sold to vouchers time, that's year. in of we And have redemptions have

a will So, members depends the couple of should position It cash the I that quickly for our and quarters reflect really vouchers. how are increase on still redeeming now. think likely

Michael Kupinski

a lower But in than your merchant of position cash payables, concern? being the was that terms

Lisa Su

will vouchers able breakage the bit little can also I payable, Look, of we to a Europe. get actually not to merchant all those at speak are redeemed, recognize in this. actually

right to pay now merchant that don't those all going payable, of all you and with they of we're can't XXXX. XXXX with expire of the vouchers, out. all expect And until so And that really

over So, of we pay next to payable not would the to merchant expect out the year. have all

Michael Kupinski

forward, free fairly do of as you're Lisa your -- with at you cash you. definitely so Got balance go And this looking the at kind think should improving. that you comfortable be flow feeling you're cash point. it's

assume? you that higher as would into subsequent expect payables position the cash that standpoint, you go So, would would from I than merchant the be quarters

Lisa Su

what that's Yes, we would expect.

Michael Kupinski

have. I Thank right. you. All Okay. all That's

Holger Bartel

Thanks Bye. Michael.

Operator

Thank you.

Research. question Our from of Barrington Goss comes next Jim

open. is line Your

Jim Goss

Thanks.

clarification. one First,

questions. One of Michael's

within return what more is on a then terms Union attitudes, it With on basis the travel on does European of from note, you? it -- be consumer to Europe, basis is be regulations? reading and predominate country-by-country uneven? will And in those more -- Or the in related a -- I'm that of related will restrictions, a terms somewhat

Holger Bartel

to looked the restrictions is enthusiasm decision among level not the appetite travel from lies And Europe or the it is a as members that said, Spain these the just authority In at in yesterday the it's travel effect call but survey as coordinate I in county numbers sometimes for European the the you, with they as in the And received see state new they the just even at same we like we travel same to the there. U.S. country easy. Union always with

all are equally longer trips, do they they're trips, travel. to So, more are signs to more so those for they we seeing and XXXX ready are special go want that also spend good willing to

Jim Goss

both Europe, in whether some are they Europe, and in said vaccines U.S. depending well-vaccinated, I available a provide the renewed country of which you each? is and challenge? and And insight know could uneven, that's And terms variant creating in were the also quite Okay. Delta you that the on within

Holger Bartel

now. much find we But everywhere. right is than members haven't I the heard that news can't yourself Yes, from variant, probably will that Delta don't in on impacting really it what's know our more comment their the significantly you decisions

that vaccinated fact the our person they just somewhere. one. comfortable go want members think as a are shows I to a more traveling twice than And that vaccinated just is non-vaccinated

sign the So, it's and again. a traveling of of interest enthusiasm just the

Jim Goss

a couple a Okay. relative pandemic, the Thank as talked of will other importance could we you. more your greater say they I things. becoming into And of important sustain part you forward? them whether that think Vouchers, went mix about going he

Holger Bartel

that still it the travel making over important can somewhere popular. what to vouchers the it booking of are plans, quarters, that's can and down, still later. all interest their something flexibility. tell travel business quarter, overall us The as members if very as probably they go so an five in a for every remain the it's they is is XX%. them change why or going And is and number last the couple the about changes, this the revenues it's down one else, next quarter. that's that these slightly quite to percentage one QX, have of But below strong, changed will think in I it's what they've can go our quarters. seen number same see factor roughly hasn't QX, their four use advertising offering revenue, element ability decisions of members really But in And XX% become the was popular still vouchers because I over on of exactly And maybe probably we --

Jim Goss

And final Thanks. Okay. thing. one

maintaining of of percentage costs And think I seemed QX profitability, not rate seemed you dynamic it leverage about cutting you of because talked revenues those a on right in that bit, going year was and that a costs that would forward. cost of a but mentioned improved. of of get but that fixed the sort depth about either in expense the about the you only little you'd the profitability, a pandemic people you? the in it continuing away levels improvement And that last similar Lisa operating Could operating some benefit the back the would from be I wondering and and get revenue especially. talk that maintaining as

Holger Bartel

absolute meant Lisa will was profits, of In be terms, absolute as probably a what a revenues down think revenue go roughly terms, percentage forward. as bit will is operating the one I that in bit. a our really hasn't more was increase increase that on little could same, to The marketing spend thing add we little our profit that going we're probably changed.

So, profitable to that's same that go about, probably the you're not business are be talks what to up, future. go it as the operating at in more pace, dislike that expenses up shows general, makes which overall also for as expected has but considered, our referring this clearly revenues to

Jim Goss

right. you, All Holger. Thank

Holger Bartel

Yes. Jim. Thanks,

Operator

you. Thank

comes from Steve question Argus of Silver Research. Our next

Your line open. is

Steve Silver

on profitability quick quarter. have but I and in the answered, Most the great of count. you about the questions It's had a congratulations strong my see. been Thank member to question

current noticed a the little bit of quarter, of contraction I a the in member mostly As count, Europe. overall in

to a slower little Just to to rebound, as operations. a Europe even -- get terms in of -- of sense is as just wanted

you rate Given back the as vaccination globe the would progressing last quicker be across of couple last that expect the way hold the bounce globally? members last it the even would expands to the the is or quarter vaccination the that European fact quarters of over program these really is,

Holger Bartel

what a this we not clearly order. it's Steve, That's Yes, trend. saw

they really we newsletters see have coming in also -- XX that and that new have up that planning again now have clicking. are subscribers also have who consumers confidence that see the more to we didn't see traveling six, and to last to read months, in they we are also and sign back we eight the We subscribers are months,

rates are the fact, this started. the the out click now are sending we since highest pandemic that we on seen In that newsletters quarter have

And seeing the up the whole with on planning actually So, we show in that's but of thing. increasing very and increases lot is coming referrals one have trips. that people much using the this And and of showing a strongly are quarter. not the us, amount we're buying revenues other that's that that might booking number, seen thing as it what's

Steve Silver

trying Club a whether million. X.X number remained Okay, of great. steady members And then constant to that mentioned for get your sense to Jack's Flight and press the release at has as I'm the to is to more a catalyst we just beyond or just there conditions just we that whether same discussed terms subject in what of gaining discussed? attention the Jack's the membership it's with just

Holger Bartel

Yes, it's that clear the And trend. that for It's not at management grow base service. projects is you to be subscribing said as a a can Club's same priority heard, here. member

Steve Silver

again. Okay, great. Thanks congratulations and

Operator

you. Thank

of next Ascendiant Our comes Ed question Woo Capital. from

Your is open.

Ed Woo

Yes, again. congratulations quarter on the

And either industry -- full are your that's back the As going business? holding or you do we're getting air back big to back particularly affected much in having of capacity, hearing again? that that be about holding travel destinations you some issues travel travel rental from some to growth cars. How or has of think

Holger Bartel

destinations Look, busy, it's are Yes, empty. quite almost you're destinations simple. quite are some right, other

In fact of a almost reported on come just only to at the employees back person Maldives the trip island. she our one was from the and

Travelzoo, our are we they value. in. trust these and that's we us Travelzoo asset where what we makes come still that and them biggest are strong, XX to and tell they trust tell where the they million that's members not -- have, members So, they consumer can typical Look, us our -- exactly members find and the because really

instead at because about can about Tahiti why of think as Madeira, about or for Croatia the role higher? these are to prices I don't going XX% go to places you the this you important where the to coming. them find industry help are places tell have members, find So, spontaneous, same where but don't to we travel who Why are just Fiji, they like going cheaper the get not Hawaii very very places and in we actually aren't think we deals look, these can to that's help where the and or recovery. enough destinations, members the travel different are deal time if you members want we we tell to willing good heard flexible, of people it. suppliers there them the And destinations they We the without where them play

in So, an think play travel of I important recovery about role the this that's what Travelzoo what industry next. an year will and this essence and is we

Ed Woo

Great. my you Well, wish thank asking I luck. for guys good questions and you

Holger Bartel

Sure. day. Thanks Ed. good a Have

Operator

Bartel. back call Mr. the to return Holger I Okay.

Holger Bartel

time gentlemen, we to next and look your quarter. thank you again with day. and Ladies forward great you for today speaking a support so much and Have

Operator

and this Ladies concludes teleconference. you. gentlemen, today's Thank

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

Travelzoo (TZOO) 21 Jul 212021 Q2 Earnings call transcript