TripAdvisor, Inc.

Good day and thank you for standing by. Welcome to the TripAdvisor first quarter 2024 conference call. At this time, all participants are in a listen only mode. After the speaker's presentation, there will be a question and answer session. To ask a question during the session, you will need to press star one one on your telephone. You will then hear an automated message advising your hand is raised. To withdraw your question, please press star 11 again. Please be advised that today's conference is being recorded. I would now like to hand the conference over to your first speaker for today, Angela White, VP of IR. Angela, please go ahead.

Thank you, Felicia. Good morning, everyone, and welcome to TripAdvisor's first quarter 2024 financial results call. Joining me today are Matt Goldberg, President and CEO, and Mike Noonan, CFO. This morning before the market opened, we filed and made available our earnings release. In that release, you'll find reconciliations of non-GAAP financial measures to the most comparable GAAP financial measure discussed on this call. Before we begin, I'd like to remind you that this call may contain estimates and other forward-looking statements that represent management's view as of today, May 8, 2024. TripAdvisor disclaims any obligation to update these statements to reflect future events or circumstances. Please refer to our earnings release as well as our filings with the SEC for information concerning factors that could cause actual results to differ materially from these forward-looking statements. With that, I'll turn the call over to Matt.

Thanks, Angela, and good morning to everyone joining us today. We were pleased with our first quarter results, which represented a solid start to the year across the board. Revenue was $395 million, reflecting year-over-year growth of 6%, and adjusted EBITDA was $47 million, or 12% of revenues. Our results are a testament to our aligned strategy and the disciplined financial and operational execution of our teams. Later in the call, Mike will provide more financial details, but first, I'll cover the progress we've made operationally. As a reminder, we're operating unique but complementary strategies across our segments. At Brand Trip Advisor, we're focusing on engagement and delivering world-class guidance products to diversify and fuel our monetization paths. At Viator, we're reinforcing our leadership position and experiences by investing in our brand, enhanced products, and repeat bookings to drive LTV and improving unit economics. At The Fork, we're driving revenue growth with margin improvement by delivering value to both diners and restaurants as the leader in the European dining market. Starting with Brand Trip Advisor, we delivered revenue of 240 million, a decline of 2%, and adjusted EBITDA of 78 million, or 33% of revenue. Our results reflect the mix of growth and profit profiles within our segment portfolio, as well as the initiatives we're prioritizing to return to sustainable growth. The foundation we built so far and the work we're pursuing in 2024 are expected to deliver clear strategic outcomes, drive continued scale in our global audience, generate additional members who are more loyal and come back to us more frequently through direct channels like the app, and deliver sustainable growth across our diverse monetization paths. These are the core elements to drive engagement-led opportunities across all our categories and key to reducing our overall dependence on fly-by traffic and addressing the well-understood pressure on our legacy meta business. We're measuring these outcomes across key metrics, including our overall audience, active members and app users, and average revenue per user. For all of these, our year-over-year trends improved between Q4 2023 and Q1 of 2024, and we've seen positive trends emerge in monthly sequential changes over the last six months. While we still have work to do continuing to transform this business, we're well positioned to accelerate our progress and exit 2024 with more momentum than we've had at any point in the past few years. As I mentioned on the last call, Our three top priorities for Brand Trip Advisor this year are, one, differentiating the mobile app, two, shifting our marketing to reinforce our engagement-led strategy, and three, leveraging the investments we've made in data and AI to deliver a more personalized experience for our users. Let me share a few of our accomplishments from Q1 across these three priorities and the proof points we continue to see that underscore how we can create more engagement and convert it into increased monetization. First, we scaled our trips itinerary tool from web to app, where we incorporated learnings from the web-only launch last year. We continue to test and roll out new features, including the ability to book experiences through our trips tool and other commerce testing as part of trip planning. One critical area we've been exploring is how to best layer in bookable experiences at every stage in the trip planning journey. For example, in our AI-powered trip planning flow, When we ask users to select overall interests for their trip, like hidden gems or historical landmarks, we now dynamically add destination-specific themes tied to the most relevant bookable experiences. So if you're using our AI feature to build an itinerary for Rome, you might see Vatican skip-the-line tours or pasta-making classes listed alongside the more general interests that apply across destinations. We're seeing that users who select one of these commerce-focused interests generate 50% higher average revenue than users who don't, which provides a fantastic signal of our ability to generate incremental demand and monetize it as users move through the journey. Second, to reinforce our engagement strategy and lean into one of our core differentiators, we've been evaluating how free membership impacts a traveler's content contributions. In Q1, we began testing a new recognition program for members called Achievements, which is based on our research that tells us that users are motivated to contribute reviews, photos, trips, and other guidance specifically to help other travelers. Achievements recognizes travelers for their contributions to the community with badges that showcase the things they're passionate about, along with a new dashboard to track their progress. Although it's early in testing, it has already delivered an increase of nearly 3x in content contributions per user. Importantly, this follows the strong growth we delivered last year, including approximately 20% growth across UGC contributors, review submissions, and photos. We believe we can continue to build on this momentum as we further expand achievements and enhance our membership with additional incentives to reward engagement. Finally, on our last call, I talked about the introduction of Gen AI driven hotel review summaries and the early but strong positive indicators we've observed. We've continued to improve and expand this feature, measuring performance by the year over year change in revenue and engagement for hotels that have this feature versus those that don't. For hotels with AI driven summaries, the year over year change in click based revenue is three percentage points better than those without. The underlying engagement is also healthier. Review submissions, are three percentage points better, photo submissions are four percentage points better, and saves are eight percentage points better. We're continuing to expand the number of hotels with this feature, prioritizing recency and quality over quantity. We're also excited about our plans to scale this feature to our experiences and restaurant categories over time. I want to thank our teams for their relentless effort to transform Brand Trip Advisor. We're aligned on our strategy and focused on execution. We have a robust roadmap for 2024, and we have confidence we'll continue to provide travelers with indispensable products, increase customer lifetime value, and create even more opportunities for our partners. Turning now to Viator. As we noted on the last call, this year we're focused on continuing to scale while balancing growth, profitability, and market share. Investments to date have driven scale in our customer base and value to our supplier base, reinforcing our leading position in experiences. Viator has the advantage of the demand from hundreds of millions of visitors to the TripAdvisor site each month, including more than 100 million TripAdvisor users actively shopping for an experience. We continue to test and learn how best to capitalize on this relationship, given the cross-team talent, deep industry knowledge, and opportunities we have in our geographic and supply reach. In Q1, Viator revenue grew 23% year-over-year, while gross booking value, or GBV, grew approximately 15%. In addition to the top line results, we were very pleased with the year-over-year improvement in adjusted EBITDA margin, a function of our operating leverage in sales and marketing and our commitment to operational efficiency. Mike will hit more on the details shortly, but this quarter was an example of the levers we manage in order to strike the right balance between growth and profitability, both near and long term. On the traveler side, we continue to work on building an experience that encourages repeat engagement and drives loyalty and lifetime value. This includes ongoing focus on every part of the journey. On acquisition, we're very pleased with our growth in brand health, with meaningful increases in aided and unaided awareness, as well as consideration. As we grow our customer base, we're making it easier for them to book more things more often. We're matching travelers to products, expanding our rewards program, and making significant improvements to checkout pages. These changes are designed to provide more confidence in booking for our users, and they're driving incremental lift in conversion and in revenue per visitor. Further, as we grow our audience and improve the experience, we're increasingly serving our customers through our most efficient channel, the app. In Q1, we saw record-high app downloads, year-over-year growth and conversion, and a record high for app bookings, our most loyal and highest repeat surface. On the supply side, the value we're driving is clear as we continue to see low supplier churn and growth in supplier GBV retention in each subsequent year on our platforms. Viator has generated nearly $4 billion in sales for its tour operators over the last year, and we're proud to be helping our operator partners access global demand to grow their businesses. We also see the value we're driving for our tour operators reflected in our take rate, which reached an all-time high in March driven by incremental benefit coming from our Accelerate program enhancements. With the largest supply base and set of products in the market, both of which continue to grow, we will remain focused on enhancing the value we add for our partners and expanding high-quality supply offerings. Finally, at the fork, in 2024, we're prioritizing our efforts to drive value to our diners and restaurant owners as we transition to annual profitable growth. As the clear leader in European dining reservations, our hybrid model, revenue based on seated diners as well as ERB revenue, positions us to capture even more opportunities. Our Q1 results underscore that our past investment in technology and product with complete solutions to restaurants is paying off. Revenue at the fork grew 17%, driven by a combination of bookings and pricing growth, with meaningful margin improvement year over year. We also saw an opportunity during the quarter to balance the mix between brand and incentive marketing and performance marketing, given favorable returns in performance marketing channels. We were pleased with the growth we delivered and plan to continue to refine our marketing mix. On the B2B side, in Q1, growth in our net restaurant count was over 4%, excluding Australia where we've exited the market, driven by healthy growth across markets with promising growth in new restaurant signatures. We believe that our updated sales approach and technology solutions are gaining more traction thanks to the changes in our go-to-market strategy, including a more segmented approach and proactive outreach triggered by restaurant profile data. The investments we've made in technology and product are enabling more opportunities, such as ERB-driven pricing solutions, promotions, and yield management, which we believe can drive higher restaurant ARPU. Revenue we derive from ERB solutions is still a small portion of the total revenue of the FORC, However, given our leading position in the marketplace, we're confident that the right balance between a strategic sales approach, onboarding, and management for these small businesses and their owners will help us capture more B2B share ahead. Before I pass the call to Mike, I want to reiterate the conviction we have about the long-term opportunity in travel and the role we can play there. One thing we've learned over the past few years is that travel and experiences remain a high priority to consumers around the world. To date, we haven't identified notable changes in our behavioral data to suggest otherwise. Length of stay and share of hotels across star ratings have remained consistent despite ongoing inflationary pressures and geopolitical tensions. Our traveler surveys indicate that consumers still have a tremendous appetite for travel. 80% of travelers expect to travel this summer, an increase from 76% last summer, and international travel interest remains high. We head into the high travel season pleased with the work we've done to strengthen our positioning in this dynamic industry. With that, I'll turn the call over to Mike.