TZOO - Earnings call transcript Q3 2021

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Operator

Hello, everyone. Welcome to the Travelzoo Third 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 this 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 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 Form 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 archived An conference at be Relations Investor

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

Lisa Su

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

Slide with begin #X. Let's

million XX% can was $XX.X revenue see that from QX Here, you our million, year-over-year. $XX.X up

X, lifted members million Our America days and by XX.X at for press travel was operating a as from go had has positive end segments, more North Europe in more June and impacted North the short-term September. variant significant Delta into our down to this be X the Slide North slight XX.X On being the about being decline America. recent around we a become $XXX,XXX America. our Europe. details We business of of in revenue million news will about loss in effect at end due believe coverage worldwide, negatively that to especially the in We restrictions more QX

segments for of QX, a revenue income. operating decline on revenue the positive had income the but segment last impact from have these X showing In QX. years significant for grew Europe This recovered. XXXX in are faster. Europe revenue now and Both had operating We

income the the is XX% levels, business close Our XXXX at operating breakeven. North segment is and of America to

This closed on business of was operating to explains gap information performance. Slide operating at is turn on it XXXX which as $X.X the slightly evaluates details slide QX to that shows Travelzoo Slide provide believe income, and which X for compared to calculation at is provides X, we equal profit. XXXX. but non-GAAP slower are for segment XXX,XXX profit, Europe $X.X better recover non-GAAP is profit the the of we Please million how operating million Slide almost XX% On the operating XXXX. with Our has XXXX revenues lower on non-GAAP in now to the excluded items QX X.

As use resulted fixed lower of our XXXX see structure has cost prior in reach. vouchers more Europe a partners and the increase of revenues XXXX, in ongoing The business an switch payment the in and cash payables costs efficient When as cash of both started the On and neutralizing XX, segment the an improved Slides revenue segment. were the to Compared increase million. types, back business Year-over-year cash X recorded restricted related $XX.X North efficiency. the to reached have deposits factor additional revenue X adjustment by the An changes, business to segment of processor. an coming and up and America X%. advertisers more detail of in our decreased. equivalents FX was have the year in can recorded Travelzoo expected September at balance to merchant Slide used year-over-year. picked were and level XX, XX% by our local, revenue pandemic you quick cash, beginning travel right consolidated make organization's members that as period, the of

to we as variant in increase. expect operating Slide Delta anticipated of our you consists the see XX, to Europe's revenues QX North can fixed costs, while than lower continue In had due expense to revenues summary, if America, mostly As revenue profits on positively. increase trended

operating company due lower loss. However, recorded small costs, a to fixed the only

ahead, profitability expect to achieve QX. in currently we Looking

see revenue. of our trend recovery We continue to of a

short could be fluctuations there However, unexpected in term. the

Now, Holger information additional will provide and insights.

Holger Bartel

Lisa. you, Thank

So let's XX. turn to Slide

have users million members, than X.X media We followers. more X million XX social million app mobile and

So are are new and they enthusiasts. Travelzoo travel open is to active, even our loved more, experiences. And are they by members, they affluent,

entertainment because and for U.S., really irresistible as and aimed revenue. of element the We focused And accelerate providing we members want of are for and travel, seize XX want XX% our demand to that travel trust Flight year an our offers their the the local member to us. they in Jack's overview in that in XXXX subscription destinations exclusive of to We Club's experiences. Slide offers want the growth see and of over Travelzoo, the influences say Travelzoo base we returns. area grow gives what profitable You grow profitability next of on. to to million and with you travel is opportunity trust also XX exceptional members

operator. to the back Now,

Operator

[Operator Instructions].

question first Michael from Kupinski Our comes with NOBLE Capital.

Michael Kupinski

a picking you if of that difference as trended quarter the of of kind subsided restrictions give grew in how towards us can sense a in -- of forth. and it countries North Delta Did the the see America had in sense or end kind flight of were give so of companies us there throughout business since travel lot variant some because wondering a then And was still Europe, you was up there? kind no quarter. the what started like faster, markets I the

I'm rate a growth than kind So better saw America? Europe North of curious the just why

Holger Bartel

Michael. hi, Yes,

the and fact, was in it an Europe we a the of bit Europe. in they In QX, thought also America Delta was travel situation different. U.S., to inability and little really and by the the So of affected coverage were North in associated what to coverage variant

is anticipated. why QX, are than revenues So that in we what which America affected really us ways in in North lower X

talking of The Europe. North advertising promoting first solid in of the is a at beginning the are coverage declined the quarter and advertisers then at about might advertising media get relatively their our was difficult to came Delta Europe, actually that of be lot the time. But and third of And the canceled when a some that agreements we America. decreased, inclusions response offers and book have advertisers into to it

the was that first So thing.

this that variant The purchases vouchers third decided revenues saw come that purchases And when Delta effect We we also, future we reserve is in previously to thing decrease. second and we September news. increase saw be cautious, QX and for members, these voucher more the August what the primarily potential were the could and on -- in was in was sold that the order in in. refunds have for that to we was

had bad, earlier impact on as see. September, the quarter, even and a quite ability North In combined occurred of all So again. August was travel you actually of was actually revenues to lot on Delta towards the Europe, not coverage confidence, America, in particularly there press an in in the the that and other that UK more hand, In the QX. about

America. the of little QX So Canada, was North of in U.S. North this I ahead Europe, while and America, Europe would time bit were ahead a say, normally,

in October, most see normalizing. Now things importantly, we

But had all pent-up more travel And that there's effects in term. had in over are short and As is recovers, we a of particularly expect an that travel, what lot are we because we are clearly for our press demand, We as release, run, increase a quarter We they see the travel. to these the travel. QX. disappointing will we good and in better a said in They revenue. long of QX. members, international see quarter to ready eager

Michael Kupinski

pressures I some how here as you. all inflationary general just are maybe of to you I in especially was how well trends, obviously, course, seeing interest and inflationary America. pricing assume shortages advertisers so of in as that the to tend terms Got general affect population And in this, of -- and in traveling? then in seeing would just labor and we're wondering terms significant North forth pressures. just then, does

Holger Bartel

But on high the made members one domestically, hand, QX. That, deals. hand, in for for bit it the look offers. were in also more it made Prices the source our hotels on a for difficult more us to U.S. very other certainly,

So thing. prices then, Since really come good have a of down. bad sort thing and it's

hotels whole that saw also at travel, staff we of particularly in Many gone return are not We planning little to but rather bit. running down but it they saw U.S., right the think in domestically, it full surge The the of I only in now we are a is bigger saw yet that inflationary issue That than Germany. has in shortages not to occupancy, UK. that. pressure. the

of I us regards the we it as in media that is as term. that looking in is means the where labor said bit. members and will that's So it is and biggest more The trend imbalances airlines. that short way provide for But travel to travel affects also clearly in in market a the with people expect we XXXX, hotels the that offers them. will And company, all for that industry that dissipate all little earlier, relatively a us more are effect this a

Michael Kupinski

And that then give disappointing quarter? North UK. timeline Jack's have into Is those maybe a for you you and contributor Flight about -- Jack's your still that to to if Europe even UK doing driven general -- maybe just America the indicated also didn't And terms how expand you better Club of in perform Jack's largely is plan that of Club. might still in better, and plan what by the little kind bit it it be? been big thoughts a the might -- Flight North

Holger Bartel

Europe beginning the all, in of QX. the First continue of at trends positive

very see. to that's good So

in that members, this the are it that seems in Flight wasn't travel lot. where was is the looking international for and Club next a XXXX But are Club, time, their travel lot will change a now probably rebounds consumers hesitating to on Flight year. in that at Second, That's offers, regarding And acquire new Jack's year much Jack's just something so to focused travel. be international of why particularly the but our international XXXX. UK members

Michael Kupinski

there? what United still of -- thoughts expanding the States? do timeline your are Jack's thoughts the And to are on what you Or have

Holger Bartel

Yes, doing we this. are

feel U.S. right than timing to now Jack's doing Flight Club. an just we it months X the We is now, We better and are or made was actually the the join this members ago. in to X offer

Operator

question next Argus comes from with Steve Our Silver Research.

Steve Silver

quarter. in profitability the the on Congratulations

on out plans Just do that that little you focus I in Jack's Flight to of just the on Or focus the trying byproduct the in place a growth more touch get just to there a mentioned presentation, mentioning in to what demand color member just And whether something might you XXXX. roll be maybe as was plans that, to wanted mentioned management pent-up upon the the mostly seeing? see more it's U.S. Club in to the you accelerating you're

of Just your trying to thinking you sense growth member to a accelerate terms get that can the way in in XXXX. as

Holger Bartel

actually you in general, travel. plus But I too last It's Steve, everything you years, so to a that of mentioned all back people the much cannot were few go eager many things. detail. more into X.X above, if look the not

changing. a is us it's think a has year. versus in were that That Now changed lot. member for good we now to where growth we increase environment this And

Steve Silver

the the trying lag once favorable, more little cycle revenue a a converted in into like, you the over put of that that where being and I'm then just might in the Delta becomes translate news wrinkle expect given back the especially that, the pent-up And America fact you that, lifting just booked sense to to as QX, and demand travel back might a guess, terms in I that the variant the get think in of restrictions to North Travelzoo? into plan

Holger Bartel

see clearly getting market we we are improvement see in, Actually We in that October. that already are things every in better.

there see time. COVID less this at is about You coverage that will

one only So that's badly we I'm timeline. hit optimistic. in we're say didn't time. the the at how good, expected exactly Delta hesitant what not the but us, U.S. spoke No we and When QX. the would expect generally in economy X is to ago, months

a we where be on quarters. few So cautious we're quarter each bit just next to little timeline give a more over will the

we optimistic is are However, because trend positive. very the in general

Operator

Barrington with Goss Jim from comes question next Research. Our

James Goss

a seems Holger, agreements. royalty-bearing you you nominal amount, a it about the sold I'd will have you've was is. lag. if ask you booked of wondering with the great. off, was could what revenues the just you out It I talk roll territory that set was some which to revenues -- cover Japan The Australia, in relationships about says how potential like licensing it the and to $X,XXX. up and licensing I you booked value know

could us? just that frame But for it be So may underway. you getting

Holger Bartel

would can like is strongly off you comment restrictions, and much The lockdowns situation Europe North Singapore, that but say with so Thailand, regards start China, let far and me reacted America. Australia Maybe, Bali, now I travel the on behind in that, even right Asia Lisa, countries more forth. to

right So you there generating here? really why add that's why is now do want business very to we small, that's are licensees But anything Lisa, revenues insignificant. the of the the and are

Lisa Su

during quarters future But profit I can because -- And that would on. been now also though. of as obviously, we expect been expected. licensing I add But with will they that made we're -- that and charging actually they why they're not have increase small that's some a something much times getting fairly They the would amounts. profitable, Japan Japan restrictions, probably lockdown. has they've solid, and money that's just making as in we're

James Goss

Okay.

Lisa Su

And what in I be that. developments still soon will it's would of Australia, with terms with say, to too the say,

Holger Bartel

I One add, also that that are these source thing markets would for to very us like Jim, deals. important is to

So Asia and significant. also the which And said, Southeast members is also benefit to for license really quite in fantastic fees, North in America right not Australia with beyond deals now, just our and and us, region. you we small Europe as for example, that where are rather that's licensing the providing

James Goss

queued Well, in actually, my another mind. just thought

local potential travel travel deals If might some, markets? that for you from have in anticipation and some them, U.S. build is help have that what that to speaking those you for in do area, relatively Europe of people book trying -- sourced the do to

Holger Bartel

more still very point Zealand, Singapore, very, Australia, time, China, Yes, ways. much it as this restrictive. goes But are exactly at said, countries been both Thailand, New all of I Japan, they've isolated. of these

James Goss

Okay.

hold wonder base. since or any good bad. the also key I client to the demographics very any always to there nice if pandemic outlined in You for were changes your took demographics those of the

Holger Bartel

they because changes are significant the that don't up the I No members show on about don't They in are the actually using I "Look, money. money who an quite like profile as it. because deals trips. opposite. deal good. the have actually want purchase It's go I They want to And really to so markets. they members the excuse Travelzoo to across not to travel have say, to spend. pass talk that on this deals is

go to let's the source. So

Let's go to China.

offers, to fact, is deal offers go our because but advertisers the to show that the it's let's go are France Let's with the offers members. or Mexico and to with that of our also most the is we see so our the promoting we members, In -- time that what both fantastic."

longer but purchase of these the a a trip, we see With the either we room. offers, majority not that normally, do them better members the tell about that that's deal upgraded something

Travelzoo noticed from class, members New exclusive like surprised class than to rather launching what And In much we pretty Madeira. fact, that where we nonstop many how an we're flight, business York to Madeira, actually business had purchased are offer we deal just the economy. flight

that's why the and I So they why actually members. to so They they not and the money, travel Travelzoo. talk that's we to of are much, love why and have lot love people about They that's think who they money, a have don't us. why subscribe that's they

James Goss

Okay. Good point.

comment that any your versus and and I might have Finally, just booked wondering might you might voucher revenues expected, if usage on was is you you have what trending? rates what how in shifts in

Holger Bartel

increase, to thing used we be is continue redemptions a good quarters, by members. want we few because the vouchers will and ultimately, anticipate see generally these our in We which that that, next

Operator

Woo from Capital. have question a with We Ascendiant Ed

Edward Woo

traveling shifts of Have in you travel, traveling going And international particularly, are doing how noticed domestic any whether right farther? terms Are they now? people beyond locations? is

Holger Bartel

where domestic plans. been And in And they survey other of the XXXX, to. that's would interesting we And before to they travel the to. go interested we a we members has the I thoughts are behavior. Previously, Clearly, and international knew is who they travel. our year a their see Yes, primary where now in our to members leave XXXX the members about thing nutshell lot say saw country regularly what see open would percentage where members travel are quite pandemic, much is we the to of higher that a live. want destination can

to audience deals safe, that's Now they offers their with "Look, to wherever quite year. an good, now boards go interesting And because much the it's to probably why good haven't the say, organizations, a to well, with willing wherever good country -- business to wherever to And in XXXX. also destination before. doing coming that been it for tourism the is see us, is particularly more very are us and open. for them allows end And our also And they that destination to are." that's really trend really they open tourism continue actually really that I'm boards and that's market at it's we of

Operator

have with from NOBLE we Michael follow-up Kupinski Capital. a And

Michael Kupinski

of and certainly One cycled you're cost are keys Or lot wondering the still quarter? quarter anticipating if reductions go the a that you was infrastructure now through profitability the cuts that those in further this reductions. of this of there can into into was have to in fact as cost just we if all you had -- XXXX? cuts quarter expense and I you

Holger Bartel

QX upgrade related in saw infrastructure. of IT an a increase expenses bit an Michael, our question. to We from to good QX in

another We did we now party. sending emails all all it third Previously, are from ourselves.

bit impacting expenses temporarily. that's So a

of this better as much as have open And I mean, we they because, because completed our are we but beginning we're more quarter. right this at In I that said delivery rates. greater think roughly back now. increase going the we're they and we down expenses -- Lisa a go seen click we're have But pandemic. very now But levels happy course, we markets emails. there remain are more go will general, transition probably in hiring it seen not -- I this rates, where slight expense phase. be the at the are seen think people, expecting we where we in of all business will to otherwise, the will in were before the change level up Maybe earlier. to with said robust this was go of We've like improves,

Lisa Su

add also but that would the benefit all of I spend we that's in marketing, may more the for company.

Operator

you. Thank I'm the call Bartel And for turn Mr. to time. this like back questions further remarks. at over to showing no I'd Holger closing

Holger Bartel

Great, Katherine.

much and always, So quarter. for a look And your again thank you today speaking great your course, forward of and to support. you ladies gentlemen, day. again as with so next time Have

Operator

This gentlemen. and ladies concludes today's teleconference. you, Thank

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

Travelzoo (TZOO) 29 Oct 212021 Q3 Earnings call transcript