TZOO - Earnings call transcript Q4 2024

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Operator

Good morning, and welcome to the Travelzoo Fourth Quarter 2024 Earnings Call. Today's conference is being recorded. [Operator Instructions] 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 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.

SEC actual statements differ company's are and and cause in from Forms could XX-Q forward-looking the described other that results materially to those XX-K Factors filings. in the company Unless required any statements, future as whether no information, to result new or update forward-looking of undertakes a events by publicly obligation the law, otherwise.

the to company's recording issued on release An archived Investor earnings of made the conference company's earlier website be important for at company's refer website press Please information, the will this travelzoo.com/ir. including Relations today. available

Now over Christina it and Holger Chair, the Financial is my Club, pleasure America, Counsel and Ciocca; to Bartel; to turn floor North CEO General Flight Hoffman. Controller, CEO, Travelzoo's Jack's its of Global Jeff its

Jeff will start with an overview.

Jeff Hoffman

welcome Today is PDF joining and with follow Lijun site at of Thank our refer travelzoo.com/ir. Officer. for in to remarks. you, I'll in our stepping our the The to us. format Chief Qi, Accounting along available relations prepared to on Please operator, you investor those presentation be management Great. presentation

Let's consolidated was X% million, down year. QX the Travelzoo's begin prior Slide $XX.X from revenue with X.

$X.X X% In QX we management year. increased income, constant operating $XX.X which from revenue operating of profit profit in currencies, Operating call revenue, XX% the prior was million. million was up million or year-over-year. $X.X

discontinued year, from effects, income earnings increased income negative EPS the at added led like we'd year, and to from opinion, last be and EPS. slightly end was quarterly ago, favorable dollar other explain other negatively. to the extraordinary of income strength. and operating positive in would to This reflects management's While A to trends income $X.XX EPS compared and better impacted outstanding the EPS Without relatively shares these lower strong XXXX FX why. a year high decreased, operations

fluctuations in both was Club X in North both in Germany, a our revenues Operating Jack's as in Jack's by America not our America do lower. caused Europe Club This were segments, increase we segment. a revenue and and North view Slide decreased Europe segments, primarily shows trend. our increased but in Flight while profit which Flight

we was other. for Revenue On million. increased million down to of QX fees revenue from Advertising X, break revenue: our and $XX.X membership membership XXXX. advertising, Slide fees categories $X.X

are We this we members XXXX. grow Legacy fee club club generally XX% to In members members a to new who and Travelzoo. of were members to than benefits more expect joined exempt available XXXX, offers offers, Travelzoo's legacy legacy only XXXX members.. before continue to revenue fee club substantially the XXXX, members. but being in reach. certain We become for in excited XXXX. introduced The receive travel represent during membership legacy see

is from XX% fees recognized recognized shows full recognition. GAAP membership over an acquisition XXXX. subscription. fee period the you at revenue of X Revenue of operating membership in time of Slide ratably our see X, expense. can On hand, Member in are the QX Slide the on margin the was costs, example other

operating GAAP better performance. margin to management Travelzoo's how providing XXXX. non-GAAP explains Slide as we're shows On increased financial XX, profit in the it on believe that for XX operating America, we evaluates XX% Slide North QX information

XX. period. $X.X the that $X.X to was of non-GAAP excluded million. about the items to information XX Slide QX profit operating in of of calculation operating million profit. XXXX Slide operating profit Please in compared are the year XX% revenue non-GAAP turn provides non-GAAP That's prior

after position grew repurchasing XXX,XXX outstanding stock. shares company's cash even of common the solid Our

million. As cash equivalents of December restricted cash XX, XXXX, and consolidated $XX.X cash, was

in keep company's operating short to can future. fixed relatively the for to midterm. believe Higher how margin. in expenses. shows increase would operating operating low Most except the We thus XX the relatively we revenues foreseeable of expenses, marketing the fixed Slide compared costs revenues are

rata we membership ahead, higher XXXX, in increase expect have at pro The pace. looking a quarter. growth QX fee to of X% revenue incremental portion revenue this Now will already

increase revenue subscription period. expected subsequent members is quarters to This members over club more percentage the ratably fee membership as recognized new and become members. over The is legacy acquired

revenue year, revenue the expect recognized. increase whole For recurring we Over time, expect membership further higher as profitability substantially we growth. to be fee will

turn discussion Holger. I'll to the now over

Holger Bartel

Thank you, Jeff.

suppliers Travelzoo to to for We members. are our active trusted affluent, club strong offers top with brand global Travelzoo's reach, will club negotiate Travelzoo open leverage continue members and relationships more and travel to for new much must-take could. they who imagined we places experiences. We as to never they travel to love do. as membership travel those the to is enthusiast inspire travel

provides they XX destinations that members. new about open Travelzoo and say XX% are ideas. to travel information more Slide

club focus. other Slide of of XX The provides an travel overview enthusiast. management's

XX discipline. more the We are our grow top add paid utilize of to and valuable, profitable benefits legacy members increase members, paying business Flight Grow new new develop members product, to and to convert we even margins META grow profitable popular Travelzoo operating advertising working to with and make revenues the EPS. from number retain Club as Jack's continue add membership higher club subscription

Now will provide META Christina and quick Flight a Jack's Travelzoo on update Club.

Christina Ciocca

Holger. you, Thank

previous travel a in They META and of conscious We browser-enabled work calls, the continue on stated in are production metaverse way. will to the disciplined of earning we Travelzoo experiences. financially developing first be

in team time. additional the will increased Jack's spend. due and We Flight in Club update expanded marketing provide XXXX

members. premium increased We

grew XX% also revenue year-over-year. We

to operating generate continue We profit.

a XXXX continue both for to positioned focus markets. Canadian well the further are with this on and U.S. of penetration trajectory growth We

and me. for I'm now handing over Jeff, operator questions to the Holger for

Operator

[Operator Instructions]

first our with And from Markets. we'll Capital Noble Michael Kupinski take question

Michael Kupinski

color are and wondering how viewing legacy that is for your your the color related balanced, offering was that the added you've advertisers to that you value guess, your pricing the far And partners. around subscriptions? subscription, experience with you're advertising on can some that anticipate if how convert on subscriptions. subscriptions, you being had question I give the other I about offerings the really do the members us so you us give and subscription many with My legacy how any can to is additional maybe

Holger Bartel

a of bunch questions. that's yes, Michael,

Travelzoo off start let So In the XX-month around the USD really that it's a ] offers U.S. in the we particular, only membership in same markets, And It's is [ for all those local in the to. producing have what are the receive It's that the and offers we other XX. me for access currency. membership. which have offers, who started pay club membership

we off We And those last exclusive offers, we our club couple first days, days TripAdvisor. Xx quite say [ Latin very have were ] a year, I had, of for for our centrally with days, would [indiscernible] members. a it's special member unheard hotel, example, of where for hotels just well member event is very, a amazing. X-star located, came $XX, really the offers it,

had according We the Then I'll end breakfast number to and line converted number, ]. a already our hotel so U.K. we to last both specific with plans, XX members for the release Escape of before far? what convert. expectations. that's good what's mean, don't How's it Well, it's had but a to the paying members new just examples with Europe members I it's and in members in of because legacy give all legacy year. going who as [ going trip GBP dinner quite with We Countryside $XXX -- you attracting flights for and That's unbelievable. well,

these conversion are we to club as this exclusive motivates and member legacy and which the And future. member the current offers are additional the quarter introducing members, benefits, over over

results see new better also acquisition. in member We

that model us cost robust a allows members built highly have We a at acquire for new works us. to that

for QX, to in year. pace scaling acquire for started we marketing example, have entire we last than already new now members more So on did

the you business. I And then we about So more advertising seeing asked are growth. lastly, think

continue advertisers reach to travelers used the past. to reach Our the in they that

much people are there's a certainly, a when our going one the the and lot learning to glued are in for advantage. for and about that reached you is we're and things, but they than And much to people bit on, So actually [indiscernible]. more like, sure, almost model the questions those -- to active past. sudden more what's a also also take switch want membership thing It's even pay same of little more receiving you emails for paid

activity, So that who purchases we are from saw before. members terms of of have both to click the those become Travelzoo we levels, are seeing paying in quite what responding impressive compared

Michael Kupinski

follow-up. a Just

seeing indicated in that subscription of be think, $X.X will America I there first the and talk between are North and travelers on from about incremental Outside updates You you for or an trends million, subscription. you Europe? the revenue growth that Can X% the current differences quarter. of

Holger Bartel

it what budget more from I not for the particularly are well. the member U.S., travelers mean a There a very, political and to perspective very I say are U.S. the but the people economy But our quite consumers. doing is hesitant now really base. seeing, -- in bit from uncertainty is would look, we conscious what that's means

base member affluent. more Our is

we the As chart, well. doing and Canada higher-end and luxury from in earlier quite U.S. travel the saw is still in

London wouldn't would that's the side, always were because certainly little hotel a Travelzoo in century they say, offer as hesitation I we if Europe, but at do say, our X-star for They full, hotels that's, members. see more In highly-valued night $XX that. consumer bit room wouldn't all a on good I us located for

it what was and we a saw this revenge a for travel. that -- travel [indiscernible] that were And I'm mean that's news our craziness after companies happy So good so almost I certainly has it busy us. all COVID, of was

Operator

we take our And Sholl Patrick Barrington from question next Research. with will

Patrick Sholl

share engagement to been like what, of sort maybe if have what about wondering kind of just since them continued a that guess, of talking many I I And how of what who talk join? if has guess to maybe numbers of tends -- club. also like was year-end? of could joined start ahead talk you the little the has year. the just levels encourage bit I about about of like you the numbers could And haven't those joined joined

Holger Bartel

much to pay are the year. information per Pat, that. what have But still behavior want email -- saw So the ones are end what will of makes members to can at focus we had than about you pay of are you of we It's quarter. we end it want speak similar a members a XX% we about on converted. still the fairly don't that for and members the that's Click you happy. to become just that of Christina, they to is than members speak yet. pace have more us, for that us from. a we're that in QX, there's members click see don't -- And year legacy they releasing maybe, members that about last things But we offers, rates change good because the we what minute? talk not We rates bit how last a can range become more have Christina, of specifically on tell motivates currently one little benefit don't I -- not at paying have whole in many do

Christina Ciocca

Sure.

we are offers. addition of service believe which the -- great these and In vetting service really offers membership that of the always and the core researching the identifying to provided offers, the the and we've

that We're select in those We've any In the also also are free. opportunity that win, to members away have members would top quite give we to a from and weekly interested QX, launched take our offers other to randomly response, where be delayed lounge Travelzoo. both added to to like XX good to and from for a benefits. access legacy flights benefit club selected external they adding also who

for excited our we're to services members, out In building additional addition services member the been to and member club benefits progresses. have as we've and potentially that, year add priority

Patrick Sholl

the of had Okay. that that paid And about you expenses in pulling and commentary ad that, marketing around you just service. that to one-off? there of why talk Germany. like additional on market any in order guess, more And you I sort maybe the are Europe a mentioned then there. maybe back And around feel you're market can weakness was then

Holger Bartel

Great.

not disappointed, with But particularly with many of And QX, factors. Europe, fluctuations were the happy clearly. result we So Europe were we very in were Germany. a

some plan, So some as got example, advertising run delayed. just some destination not did revenue

have of advertising lower revenue. annual on than true-up we was on of higher the breakage side, Cruise top accounting the that,

use their true-up We came have we because higher where had then a in in look, than Germany year. versus It's do just a expected elections in the estimates people And to QX government political turmoil weekend. once what resigned, that last more they that vouchers. the

don't as And a travel all we as said and at worry we holding All that consumers Many that we'd things went pattern. as of that into trend together once. a see just time. earlier, either. came us you didn't these companies see help at this But all

Operator

Silver will And Argus we our with next from Steve Research. take question

Steven Silver

cash. on the is merchant And quarter, Looks cash payables outpacing since time congratulations reaching a the pandemic. positive for this first net like the the

So congratulations.

on been XXXX, read-through you expected working ramp The question is, ability expectation ramping of guys like any to have in your whether maintaining for that of been years You have active repurchasing might shares. to several still discipline. with significant course over I the META while this revenues in growth investments the have know guys now.

curious increase as ramp growth investments to the allow Just you whether in as to will revenues well.

Holger Bartel

yes, whether And we our we And for balance planning thanks sheet, actually Steve. also spend marketing asked Pat are. to development first, positive the more. about are now, Well, pointing in out

marketing in are we spend. up We wrap will XXXX,

doing works, model okay? are we QX. that Why? found in that Number one, We a have

we members long that if cost with we The it's rates and paying Then smart acquire are benefit decision are for seeing the can are we we rates that. over do a them. reasonable renewal of business -- renewal a period course, them of because at invest from time. So so far to happy -- we the a

And XX to the and revenues subscription trying incremental of we go will QX, we revenue as seeing X% months. revenues up continue recognized course the growth explain because the to as earlier, second, were at only are year are that in increase the number over throughout

some this difficult and bit but META as with already we in that, seeing QX. little we happy Will why conceptualize in in Flight it's look investment Club. No, we that that's really at are a pointed quite affect also quite are have Jack's develop to we So in what with independently, out, META we discipline. Steve,

of don't see our time. cash experience. and some was as improving you dollars spending quite affected, we this quarter QX more and that highest flow that in sheet balance generating in still or have developing it this of seen is not on millions billions millions do the We're We among metaverse And as we rationally. are we saw particularly cash flow

Operator

take Ascendiant our will from we And with question next Woo Capital. Ed

Edward Woo

membership any separate to Congratulations I quarter. And on and you a Travelzoo are products? both Flight the Jack's have them that the Are combine Club the products? on had membership question membership. there they Club plans so for one

Christina Ciocca

can I take question.

slightly operating for businesses acquired the that memberships. to Flight the and and we're independently sense includes now, are that businesses, membership -- Jack's cross-promotion or beneficial X We a by either and way makes it's the includes For we ways serve synergies brands, for Club. that that the both since content Flight Travelzoo doing Jack's we've and Club, and they both market. in And some a different identified look between we of find and

So that's for independent. now, keep is plan them the to

Operator

turn the would of Bartel remarks. closing This to like for concludes call to I Mr. Holger today's back portion call. Q&A the over

Holger Bartel

to for a for and great with look support. your investors, thank day. quarter. forward next We you again Have speaking time you Dear listening

Operator

Travelzoo webcast. today's concludes and Earnings Quarter This Fourth XXXX Call

your time, You lines have wonderful and may this a day. disconnect at

Travelzoo (TZOO) 25 Feb 252024 Q4 Earnings call transcript