TZOO - Earnings call transcript Q1 2022

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Operator

Hello, everyone, and welcome to the Travelzoo First Quarter 2022 Financial Results Conference Call. At this time, 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, are 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. 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 Form 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 archived Relations Travelzoo recording on of made An Investor call at be conference travelzoo.com/ir. website available this

Now, Travelzoo’s financial it’s with start and Arveena its results. Officer, pleasure over my Membership, to turn XXXX will Su; Global Chief an floor the overview Lisa its to Premium Lisa Bartel; Global of Director CEO, the Holger Ahluwalia. quarter Accounting first

Lisa Su

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

X. recover Let’s slide continue positive from earnings and begin turned number the pandemic again. with Revenues to

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

compared the substantial Our operating XX% year-over-year of $X.X expected recovery. increased operating the compared to operating Compared of an turned operating who business North in of we to the QX XX% to Both turned QX. compared With in and total positive resulted the quarter, competitor’s quarter America subscriber grew compared segments, path provide On million, income to we to revenue previous segments quarter, North slide income QX income with Europe $XXX,XXX the a QX to XX% X, million net On an calculation of Europe. of in QX on and year. decided go previous operating in European details significant positive Slide compared the revenue pandemic. America revenue to it Travelzoo previous profit. and during $X.XX. XXXX. $X.X information non-GAAP Europe, more members North The number reflects items slide of base the decided year-over-year which of and X, our in to we operating America XXXX. two to performance. million, income Please revenues as by growth X. more income, was that earnings the grew per level operating explains of turn $X.X slide believe the the X the million X.X in the had income year-over-year how in mainly into to non-GAAP on details profit shows which is non-GAAP about evaluates and highest provides and the due better these income QX two are of QX at which to years. in was QX, million XX.X share slide in a which market acquisition in the of This operating leave excluded XX%

vouchers. their and In redeemed balance As XX, $XX.X more cash expected of level. cash, cash were XXXX, The million. quarter, traveled members equivalents restricted reached the March cash consolidated the and

As to payments our we do so cash but the payables. make hotels, decreases, balance

$X.X our saw by this X million the increased X refund changes, of North and a the FX that When purchased year-over-year. are year-over-year now vouchers neutralizing year, April business business of Difficulty] As Europe and segment increase X million majority nonrefundable. the we policy of [Technical and the and vouchers, are detail America $X.X segment. by segment changed Slides business revenues

Operator

may resume. you And

Lisa Su

we travel segment $X.X business the prior $X.X increased year-over-year now. Compared but segment the FX Slides disconnected, million I’ll year-over-year. by increase segment a the is Europe X our as forward. up expected lower to revenue the higher and the by We fixed continue coming foreseeable future, phone this to apologize. has our We partners grow. and X revenues of and cost in fixed profitability started to while believe detail changes, believe neutralizing in business should America million relatively the advertisers segment. On during I keep My When picked XX, result pandemic. year North have saw slide significantly able been can back. period, business have costs we low going

QX. and ahead, Looking higher revenue currently expect we in profitability

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

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

to turn Holger. it over I Now,

Holger Bartel

Thanks, Lisa.

That’s expect performance companies from the because entertainment the travel as significantly members. Travelzoo We with recovers. interest we we So, more financial improve to us industry see and want XXXX. Company’s in know work to

in our local Travelzoo you global right grow you Flight and gives in irresistible to for XX, X slide members XX experiences. XX XX% latest enthusiasts demand our We to offers we on. to members took the management social offers with to want continue pandemic opportunity returns. for growth. over to XX a providing offers, the seize travel to is an survey are by or media who U.S. in profitability to population. XXXX, loved the and members they now are million the X focused million that subscription The more with and active travel app they’re turn members Travelzoo want to significantly XX% Travelzoo profitable We and users Slide revenue have you open for we travel of We can experiences. new three Club show are vacations U.S. and million that and of want passport in we entertainment results see revenue, and accelerate and the affluent, overview in that increase compares and XXXX, and U.S., If have mobile increase million spite XX% as team followers, the exceptional valid more to of what want want exclusive Jack’s

us Director, turn Arveena, META, overseas will Global is update. and to membership, Travelzoo Now, over I’m an executive is who to she she launch the going Travelzoo’s of the and Premium provide

Arveena Ahluwalia

Travelzoo Travelzoo will take travel see to about slide speak the META paid service. to happy Travelzoo’s our am META, new It’s a it I logo. towards and the entertainment Holger. you, On Metaverse. and initiative XX, subscribers experiences of Thank called please subscription-based

identified six For questions our be today’s most we will interested update, we believe in. investors, you, that have

question shared what highly Travelzoo and first first XD computer-generated We lucrative the opportunities are the that The world willing is connection of the is Metaverse disruptive to perceive innovative virtual as immersive slide be is abundant a mover. in why network the and for entering Metaverse companies a focused on XX is interaction Metaverse? with on and social environment. Metaverse

market travel is, unique market Travelzoo diversify to exclusive size the is related being Metaverse on is XX, and these with not $XXX question question will Please cutting-edge On These is members be access we META billon billion be we experiences, The in entertainment the from globally. experiences demographic. is Travelzoo The of is In the META? but them note, be Travelzoo a XXXX. Travelzoo’s non-gaming what services. its part slide creators by opportunity? creating $XXX will sourced be to provides META experiences. subscription-based Metaverse paid market that current and will size estimated for it creators. is service next from licensing what can slide the believes addition, Metaverse, anticipated Approximately XX

XX VR technologists to on using building our these Many environment. skilled and require approach phased the to is, The our We not slide Metaverse be what browser-enabled are of strategy? will are of hardware. to experiences with members. enable next a judiciously changing the will We to high-quality META Travelzoo question partnering is specific provide us experiences use navigate strategically rapidly

progress finally, Travelzoo’s and to built a a Phase of separately We cost-efficient licenses monitor of upfront launch for On in of the investment and from thereafter. will slide to with finalizing phase the and is industry, pursue time status on be spending META few measure is Travelzoo subscriptions Contingent we business. managed being accordingly. a out of preregistrations initially core status required? deploy the Given requirements, planning manner and X are assess by are important cost continuous XX, process technicalities. will the now slide on no and in technical will question performance is May. investment. significant we what are improvement of timing? what paid the our The for the annual the next additional newness steps XX, META And experiences each the Travelzoo be

that, We over handing provide the Holger, for updates, Lisa questions appropriate. for I am and operator to will as you. With Thank me.

Operator

[Operator first comes The Our Barrington open question questions. for Instructions] Jim Goss of floor Research. is now from

Jim Goss

Okay. Thanks and good morning. Good afternoon, I guess.

I the question gave First, a about make a or the might just comment Metaverse. you presentation about

not in types engage are going about a you could the couple impact for your Why You say rates of the I with of elsewhere? of if be willingness finally, of for and teasers you what’s imagine wondering Do Club. was flight of might think I that interest And post-COVID other trips from you. aspects, might And managed might use offerings about travelers and to business. of things. because levels the your to talk separately beach trips say, deals And, any it Flight of a opportunity better Jack’s versus the offered previously rising much in nature educational? any would this year trips, versus you actually being one, variances other included prices? the of have economy giving and to deals. I it or you coming it’s maybe ask provide the would. thank other length have, you was inflation core expense going And terms on that one

Holger Bartel

Arveena, questions. Jim. question? start And the to I then, three you Metaverse off want about the Hi with other speak

Arveena Ahluwalia

you. believe your Metaverse time, we And updates and teasers. The do please unable we this we we Thank you. opportunities disclose. will there not the course Holger. there necessary. answer Metaverse on at bring. due question in Jim, Hi understand, the is, as the of are time But are provide unique Yes, considering to of the are aspects Thank are certain will business, why

Holger Bartel

in would spend U.S. first we households inflation, most is month So, a say, question that on saw quite until, some and discretionary. to maybe resources particularly I the of had the up ago, what

up And was actually so, to hotels and still opportunity end. are consumers bit. cost see morning, is about rising a heard this period go conscious travel they are to saying in that how booking feel We of be out expensive this out prices for and about that was And lot this came consumers a recently pent-up us it’s more to of an are consumers and they consumer is More wanted that coming good inflation. seems becoming were XX X because plans because you’ve interesting because a and what that study asking for prices. adjusting where out study forth question, all so the reacting going just travel this their quite demand. year things hotels are airfare, and now specifically morning, of a There around to

good provide that start we interest value. there so, And seeing offers is that increased in

said that hotels, with airlines. great airfare, some going brings looking and does, on up, question, had So being deals for good which of Jack’s best our pricing we Flight Club. what summer travels in and airfare at airlines me vacations heard they that’s great same great quarter quite the about the your Consumers members and great Exactly are sales to fourth prices, and Jim, booked here, up on travel flights. ever fares the

has us heard Lisa So, earlier help the to then, terms members U.S., is we shifting comments switched deals, the our and really think of been Club. nonrefundable that in And vouchers, Flight you very in of the we earlier advertising that towards most of by will back the the more again. reception markets good. you growth the Jack’s in And heard -- made, particularly business the in with

received We they that confident can complaints. now any People are haven’t travel.

refundable have future, obviously, for keep for this don’t we good sold be vouchers going these in us very for past, the ones. for So, all reserves but the for not the we new ones to because to is the

Operator

Kupinski comes Noble Your next Markets. question of Capital from Michael

Michael Kupinski

you you I if get didn’t also in quarter. that, can closed just lot there. of I And Congratulations bit the give a little remember really just if how kind that actually background? talk of that, when Secret did some could background contribute you you. your if strong your you quarter? on then can’t Escapes. of you some I a about provide Thank on acquisition much was can on wondering detail

Holger Bartel

question? the I Sorry. was acquisition, hear could What Michael? not you well. very What

Michael Kupinski

Escapes. Secret

Holger Bartel

Yes.

decided decreasing. market; that Spain that they’re they exiting acquired competition competitors many markets focusing, exit base that member the are see to year, decided exit So, U.S. we the they actually in and is certain We to last because,

Spain. subscribers in And so, acquired in in they or that. QX, to competitor QX. we acquire whenever members did we base a are closed we these see Yes, attractive an our member that’s added has terms quality former at competitor a And for and we opportunity that to and will from what were us, do that

Michael Kupinski

Could in as that a you Europe much of how tell result revenues contributed acquisition? me

Holger Bartel

much to out early And too It’s numbers we break don’t that tell. our detail. in also,

Michael Kupinski

revenue you just earlier that guidance, QX? QX. to guidance your stated in higher you in fiscal In referring that profits you or are and Is revenues and anticipated referring higher to your QX profitability

Holger Bartel

Higher pointed our last in and revenues are as we QX expenses. stand both quarters, the And last have year. managing QX and today out we few

have cost We much lower the had built is a that pandemic. we than basis what before

So, as increase, we revenues profitability. higher will see

Michael Kupinski

you and was And versus about I coverage your talk ratio declined Can cash talk merchant comfortability just position? cash your merchant cash your from your liabilities think liabilities? could now previous percentage quarter, have to of you your about the of The the XX%. liabilities merchant it’s XX%,

Holger Bartel

sheet, the went the receivables, that. large as processors, cash. payables want I it’s for the keep several I in can maybe credit XX you kept merchant more not same with if accounts card you that So, months amounts provide the quite But details, probably days, least. a balance few months, mind about at in down in are see that think

Lisa Su

It’s actually XX days.

Holger Bartel

days. XX

few have to as receivables some next So, these to of months. you cash that in coming you -- have is really see the

Michael Kupinski

to What think Got million question. need think? subscribers, said you to? believe see grow that your mean to? need to number subscriptions you do I you. you What XX.X What your number think do at And then grow subscribers. you do of I total member final you you’re now. your number you

Holger Bartel

This this into we where a we UK. the in of Germany, what based we week growth U.S., know, strong And the in on there’s shifting in in lot -- are back really the mode. still year, opportunity markets are

So, our any the of member we right count. really don’t to see growth limitation now

Michael Kupinski

think achieve? Okay. target you that that to But there’s need specific you no

Holger Bartel

target. Yes. No specific

Operator

Capital. of next question Your Ascendiant Ed Woo comes from

Ed Woo

shortages Yes. some could is, to put quarter. there supply could the travel or back, that the able hotel issues more comes that Congratulations so occupancy question be they labor on chain travel the My been or sky? planes as with any either the they has providers, -- easing in of in demand expand,

Holger Bartel

operating we not the to us airlines. because for Difficult or answer, are hotels

you We are XXX%. in hearing are have that general the that media reading and probably airlines same staffing things hotels the to trouble in up

changing hearing this economic overall the anecdotally slightly that But is things. as broadly are changing same toward So, year. we we this also the hear picture is

Ed Woo

at Ukraine, is on Europe. Great. Russia on Ukraine. Obviously, from And seen question Europe? what’s still much then, in in my you is last Have all of in an going impact

Holger Bartel

really We U.S. interest are travel or will Europe. strong but travel. still or our have impact pick any just in of on our different the not business to They we seen -- to destination consumers of to members on a interest the seeing

Operator

Steve from Research. comes with question next Your Silver Argus

Steven Silver

learned the on and everybody. two growth pandemic, now exciting everything back years of hopefully, afternoon, is, side Company as of a the Good progress. question on guess, my has main really result given we’re into Congratulations that the company the squarely the over moving other It’s it. mode. the to hear past I

get maybe lessons long in flexibility your industry in building to change, to your conditions making adjust thoughts terms in trying the Company resilient on thoughts as travel the Just for more learned on to potential the term. changes just of

Holger Bartel

Yes.

all we learned think, two valuable last years. the lessons over I

models. some benefit that We we found have the

to to. still do generate are expenses. again, were be to less We need were over revenue. our to when able able We the should so reduce traveling, people we pandemic were we would able We

the also experience growth And It’s was our essentially smarter. of it made business. learning a it what it yes, back surely is in brought us So us made driving to our members and for us, more-focused. great us

Operator

Holger now I turn it Mr. And will Okay. back to Bartel.

Holger Bartel

quarter. ladies Thanks, your day. gentlemen. and forward speaking support. next with Have you for Thank Yes. you a to and we look great time And again

Operator

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

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

Holger Bartel	Global CEO
Lisa Su	Chief Accounting Officer
Arveena Ahluwalia	Global Director Premium Membership
Jim Goss	Barrington Research
Michael Kupinski	Noble Capital Markets
Ed Woo	Ascendiant Capital
Steve Silver	Argus Research

Travelzoo (TZOO) 26 Apr 222022 Q1 Earnings call transcript