TripAdvisor, Inc.

Welcome to the TripAdvisor first quarter 2025 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 1 1 on your telephone. You will then hear an automated message advising your hand is raised. To withdraw your question, please press star 1 1 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, Vice President of Investor Relations. Angela, please go ahead.

Great. Thank you, Felicia. Good morning, everyone, and welcome to TripAdvisor's first quarter 2025 financial results call. Joining me today are Matt Goldberg, President and CEO, and Mike Noonan, CFO. Earlier this morning, 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 forward estimates and other forward-looking statements that represent management's views as of today, May 7th, 2025. 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, everyone. I wanted to kick off by acknowledging that last week we closed our merger transaction with Liberty Trip Advisor Holdings, in which we effectively purchased all of our shares held by L-Trip and no longer have a controlling shareholder. We also finalized our conversion to Nevada, a proposal that was approved by shareholders in 2023. As we passed this milestone, we couldn't be more energized about where we're heading. and how we'll continue to build on the progress of our transformation path. This means not only delivering near-term financial results, but also focusing on the biggest opportunities to differentiate and drive long-term growth, margin improvements, and shareholder return. Across the group, our vision is to be the most trusted source for travel and experiences, and we've been steadily executing a strategy to diversify our portfolio, optimize our legacy offerings, and shift our mix to our growth marketplaces. We see a number of opportunities ahead where we believe we're uniquely positioned to drive meaningful value, including scaling our marketplaces, starting with experiences, where we'll accelerate our momentum as a holistic global platform, delivering on our travel guidance strategy by leaning into our trusted brand, authentic content, high-intent audiences, and data to stabilize our hotel category. extending our leadership position in the dynamic European dining market, leveraging our unique assets to establish ourselves as the premier AI-driven personalized recommendation platform across all categories for any destination, and a capital return framework that delivers ongoing value for our shareholders. And now, turning to our performance for the first quarter. Our financial results exceeded our expectations with consolidated revenue of $398 million representing 1% growth or approximately 3% growth in constant currency, driven by our marketplace businesses. Viator and the Fork continued to deliver underlying growth rates in the mid-teens, with steady improvements in profitability, a direct result of our ongoing execution strategy of balancing growth, profitability, and market share. Consolidated adjusted EBITDA was 44 million, or 11% of revenue, which also exceeded our expectations. Since our last update, we've continued to make meaningful progress against our strategic priorities in the experiences category, as evidenced by the results in our Viator segment. Our bookings growth, revenue scale, and profitability progression reflects our disciplined approach to optimize our marketing channels as we grow our active customer base and gain market share in key geographies. Our market position is strong. Booked experiences grew 15%, and revenue grew 10% or approximately 12% in constant currency to 156 million. The adjusted EBITDA loss of 18 million represented an eight-point improvement in margin. These financial results were driven by strong operational execution that drove higher conversion, increased marketing efficiencies, and a larger, more relevant supply base for travelers. On the customer side, We continue to prioritize making the traveler experience in Viator the most easy to use, highest converting, and best in class experience in the market. We're accelerating our velocity of experimentation and rolling out product improvements that are driving higher customer engagement, more relevant recommendations, and a more seamless booking flow, resulting in an uplift in conversion. And our ongoing focus on the mobile app is driving faster bookings growth than other surfaces and continued progression of our unit economics, the result of an increasingly loyal user base and a growing portion of our bookings mix returning to our platform through direct channels. On the operator side, we're streamlining the onboarding process by providing new Gen AI tools that reduce friction and improve the quality of listings for new operators signing up on the platform. We're also expanding our supply catalog to secondary and tertiary markets, to enhance the breadth and depth of choice to meet the needs of consumers as their travel destination preferences evolve. Finally, our third-party partnerships continue to drive healthy above-market growth and allow us to serve incremental, difficult-to-reach travelers and geographies profitably. We continue to work across the group to leverage all of our assets and capabilities to accelerate our global position in the experiences category. our teams are finding new ways to take advantage of the complementary relationship between Viator and brand TripAdvisor with its broad geographic reach, depth of content, proprietary traveler clickstream data, and trusted brand. Given the strength of TripAdvisor's presence globally, we're also testing how and where to lean into marketing our brands optimally across geographies. Each brand serves different audiences in unique ways, but together we're identifying incremental growth opportunities as these teams collaborate across marketing, product, and supply to leverage expertise and drive our ambitions for the category. Turning now to travel planning and guidance in Brand Trip Advisor, where our first quarter results reflected the work we're doing across the platform to drive a better experience for travelers. Revenue was $219 million, a decline of 8%, and adjusted EBITDA was 65 million or 30% of revenue, both exceeding our expectations driven by more favorable pricing and hotel meta and prudent fixed cost management. In Q1, we continued to scale product improvements that yielded deeper engagement and drove financial outcomes. This is a direct result of our ongoing transformation work that puts the traveler at the center of an engagement focused experience rather than optimizing for click arbitrage. In the most notable example this quarter, we made enhancements to the hotel shopping journey that prioritize the needs of the traveler, including surfacing more relevant information and better context for their accommodation search. This drove a shift from a funnel optimized for same-session click revenue to a traveler-centric experience optimized for engagement, cross-selling, booking flow, and longer-term value. The result was a notable increase in traveler engagement along with higher quality traffic and a meaningful conversion uplift for our partners, which in turn yielded pricing strength and gave us the confidence to roll these changes out globally. We also made the largest changes to our mobile app in the last four years with an ambitious vision to deliver the world's best travel planning companion. We started by customizing and simplifying the onboarding flow. improving navigation, search, and destinations, and further integrating maps, trip planning, and a seamless nearby experience, all of which are key elements in planning and booking. We also rolled out an updated in-app hotel shopping experience that presents both booking and price comparison options, and we're seeing monetization improvements driven by better conversion, which isn't surprising given the importance of pricing for travelers as they plan and book their trips. While this is just the beginning, these changes are supported by a plan in the app marketing campaign that's driving early positive trends in app growth, revenue, and trip creations. Finally, we continue to enhance the product experience by further integrating AI across all of our services, focusing on providing contextual and personalized recommendations made possible by our billions of content and user combinations. Our popular AI review summaries that highlight the provenance of real travelers are now available across hotels, restaurants, and attractions. Our AI travel assistant provides conversational, intelligent, and dynamic recommendations based on traveler prompts. And we're leveraging AI to better detect fraud and moderate content, which enhances and protects our brand trust. Looking ahead, our teams at Brand Trip Advisor are laser focused on an execution roadmap to scale product wins across hotels, experiences, and the app. This includes expanding our in-app booking capabilities in hotels, leaning further into our membership proposition, compounding conversion wins and experiences, and scaling our investment in marketing throughout the year to drive deeper engagement and monetization. Turning now to our European dining offering, The Fork. Revenue this quarter grew 12% or 16% in constant currency to $46 million as we continue to diversify our revenue mix and drive monetization of our enhanced B2B software offering for restaurants. The adjusted EBITDA loss of $3 million reflects normal seasonality and a margin improvement of 100 basis points. The progress we've made in enhancing the quality of the product we deliver to our restaurant base is driving significant monetization improvements. with Q1 revenue growth from software subscriptions of over 90%. This growth stems from adoption by our existing restaurant base, as well as new restaurants, a clear signal of the strength of the value proposition we provide, and a testament of how our multi-year investment in product and technology is delivering results. Finally, the Vodafone partnership we signed in the second half of last year drove strong revenue growth in the first quarter, and we expect our partnership with MasterCard to start driving incremental financial impact in the second half of this year as that partnership goes live to consumers this summer. Across the group and in each of our segments, we continue to chart our AI future, leveraging our data investments to reinforce our unique and privileged position in the travel ecosystem. We believe that authenticity and trust will become increasingly precious and highly valued in an AI future and we're well positioned among the travel incumbents along these dimensions. We've established ourselves competitively for the opportunity ahead by leveraging our distinctive assets, our trusted global brands, high quality data and content from authentic travel experiences, scaled global audiences, and deep and diverse partner relationships across all categories and operators. These capabilities allow us to position ourselves as a trusted AI intermediary for travelers and create substantial value through rapid innovation in our own products and services, as well as by experimenting and learning through select partnerships. During the quarter, we added new strategic partnerships with Amazon Alexa and Microsoft Azure with a growing pipeline of other opportunities ahead. We're also harnessing the potential of AI across the company from customer service to engineering, content moderation and business analytics to marketing and supply acquisition. We're moving quickly but thoughtfully to create a culture where every one of our employees is obsessed with addressing evolving consumer preferences in the age of AI and embracing the tools available to serve them most effectively. Finally, I want to turn to an important topic, the backdrop of macro uncertainty. We recognize that travel isn't immune to slowing economic growth. Consumers have important choices to make when their personal balance sheets are pressured. Our business performance has been durable thus far in 2025, and we're closely monitoring our data for leading indicators. For example, experiences volume growth remains healthy, both sequentially and year over year, but we're monitoring early signs of pressure and average booking value and cancellation rates. Our data has reflected some of the anecdotal themes following recent policy actions. For example, the US share of international travel from certain source markets is down, particularly from Canada, and our share of domestic travel across regions is up. Still, we've not seen these translate into material changes to consumer travel intent or business impact to date. Consumers have largely defended discretionary spending in categories like travel, and especially experiences. Travel sentiment remains positive, with travelers continuing to plan leisure summer travel and putting experiences at the heart of their budgets. We believe we can benefit by serving travelers who are increasingly sensitive to price and choice, whether through price comparison or by offering the most diverse set of options in the experiences category across all price points, close to home or abroad. From what we see today, it would be premature to make a call on where things are heading. We'll continue to monitor and adapt to any potential near-term changes in the landscape but we're confident that travel remains a durable, long-term growth opportunity, and we are well-positioned to capture the enduring demand for travel and experiences ahead. With that, I'll turn the call over to Mike.