Travelzoo

Hello everyone. Welcome to the TravelZoo 4th Quarter 2022 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 provisions of the Private Securities Litigation Reform Act of 1995. Actual results could vary materially from those contained in the forward-looking statements. Factors that could cause actual results to differ materially from those in the forward-looking statements are described in the company's forms 10-K and 10-Q and other periodic filings with the SEC. Unless required by law, the company undertakes no obligation to update publicly, Any forward-looking statements, whether as a result of new information, future events, or otherwise. Please refer to the company's website for important information, including the company's earnings press release issued earlier this morning. An archived recording of this conference call will be made available on the Travel Zoo Investor Relations website at TravelZoo.com slash IR. Now it's my pleasure to turn the floor over to Travel Zoo's Global CEO, Olga Bartel, its Chief Financial Officer, Wayne Lee, and its General Manager, Travel Zoo Meta, Arvina Alawalia. Wayne will start with an overview of the fourth quarter 2022 financial results.

Thank you, Regina, and welcome to those of you joining us today. Please open or refer to the management presentation to follow along with our prepared remarks. The presentation in PDF format is available on our investor relations website at TravelZoo.com slash IR. Let's begin with slide number three. Revenue growth accelerated in Q4, leading to much stronger earnings. Our consolidated Q4 revenue was $18.6 million, up 36% from $13.7 million in the previous year And in constant currencies, it was 19.4 million, which is an increase of 42% year over year. Operating income, which we as management call operating profit, was 3.6 million, which is approximately 19% of revenues, compared to an operating loss of 3.8 million in the prior year. As of December 31st, we had 30.4 million unduplicated members. compared to $30.3 million as of December 31st, 2021. On slide four, we go into more details about the revenue and operating profit of our two more significant business segments, North America and Europe. North America segment revenue increased 53% year-over-year from $8.6 million to $13.1 million. The operating profit in North America was 3.7 million in Q4, compared to an operating loss of 2.1 million a year ago. Europe's segment revenue increased from 4.3 million to 4.7 million, or 9% year-over-year. At constant currencies, Europe revenue increased 23% year-over-year. Europe had an operating profit of 42,000 in Q4, compared to an operating loss of 1.7 million in the prior year. On slide five, you can see that our operating margin for all of 2022 reached 11%, which is at a level higher than our operating margins before the pandemic in 2020. Before the pandemic, TravelZoo's reported operating margin was much lower because of operating losses from our Asia Pacific segment. In March 2020, TravelZoo decided to exit its Asia Pacific business and operate it as a licensing business going forward. Now the operating margin shows the true profitability of TravelZoo in North America and in Europe. Slide six shows that our operating margin in North America reached 29% for Q4. On slide seven, We provide information on non-GAAP operating profit, as we believe it better explains how TravelZoo evaluates performance. This slide shows the non-GAAP operating profit, which was 4.8 million in Q4, compared to a loss of 2.4 million in the prior year. Slide eight provides more information about the items that are excluded in the calculation of non-GAAP operating profit. Please turn to slide nine. As of December 31st, 2022, consolidated cash, cash equivalents, and restricted cash was 19.4 million. The cash balance reached the expected level as the number of vouchers outstanding has decreased greatly at the end of 2022. Slides 10 and 11 detail our revenue by business segment. the North America business segment saw a year-over-year revenue increase of $4.5 million. Turning to slide 11, the Europe business segment, which we report in U.S. dollars, was and continues to be impacted by the strong dollar. We saw revenue in Q4 increase by $384,000. But in constant currencies, revenue increased $1 million year over year. Slide 12 shows that the pandemic led to a significant reduction of fixed costs. We believe we can keep our fixed costs relatively low in the foreseeable future while revenues are expected to grow. For Q1 2023, we currently expect higher revenue and profitability. During the pandemic, we have been able to lower our fixed costs. We believe we can keep our fixed costs relatively low in the foreseeable future. Now, I turn over to Holger.

Thank you, Wayne. Revenue growth accelerated in both North America and in Europe, leading to much stronger earnings. As the recovery from the pandemic continues, we will leverage TravelZoo's global reach and trusted brand to further improve earnings in future periods. With more than 30 million members, 7 million mobile app users, and 4 million social media followers, TravelZoo is loved by travel enthusiasts who are affluent, active, and open to new experiences. Slide 13 provides more information about our members. 87% say they are open to new destinations and travel ideas. So travel zoo members are travel enthusiasts. Slide 15 provides an overview of what management and our global team are focused on. We want to reach and surpass pre-pandemic number of members and accelerate revenue growth. We want to utilize higher operating margins to significantly increase EPS. grow ChexFlightClub's profitable subscription revenue, and launch TravelZoo Meta. At this point, I'd like to turn over to Arvina.