Travelzoo

Hello, everyone. Welcome to the Travel Zoo Fourth Quarter 2023 Financial Resource 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 SEC filings. Unless required by the 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 today. An archived recording of this conference call will be made available on the company's investor relations website at travelzoo.com forward slash IR. Now, it is my pleasure to turn the floor over to TravelZoo's Global CEO, Olga Bartel. its chair, general counsel, head of global functions, CEO of Jux Flight Club, Christina Choka, and its finance director, Li Jun Qi. Li Jun will start us with an overview.

Thank you, operator, and welcome to those of you joining us today. Please refer to the management presentation to follow along with our prepared remarks. The presentation in PDF format is available on our investor relation website at travelzoo.com slash IR. Let's begin with slide number four. TravelZoo's revenue, operating profit, and member count all increased year over year. Our consolidated Q4 revenue was 21.1 million, up 14% from 18.6 million in the prior year period. In constant currencies, revenue was 20.8 million, an increase of 12% year over year. Operating income, which weigh as management called operating profit, increased 25% year-over-year. Due for operating profit was 4.5 million, or 21% of revenue, up from 3.6 million in the prior year. As of December 31, 2023, we had 31.1 million unduplicated members, compared to 30.4 million as of December 31, 2022. Slide 5 shows that strong revenue growth continued in our Europe segment and at Jack's Flight Club. On slide 6, we go into more detail about the revenues and operating profit of our two largest business segments, North America and Europe. North America Q4 segment revenue increased 5% year-over-year to $13.8 million from the prior year period. Operating profit in North America was $4.0 million in Q4 compared to an operating profit of $4.2 million a year ago. Europe Q4 segment revenue increased 34% year-over-year to $6.3 million from $4.7 million in the prior year period. Europe had an operating profit of $832,000 in Q4 compared to an operating profit of $42,000 in the prior year period. On slide 7, you can see that our gap operating margin was 21% in Q4, up from 19% year-over-year. Slide 8 shows that in North America, the gap operating margin remained high at 29%. On slide 9, we provide information on non-gap operating profit, as we believe it better explains how TravelZoo's management evaluates financial performance. Before 2023, non-GAAP operating profit was $5.2 million. That's 25% of revenue compared to non-GAAP operating profit of $4.8 million in the prior year period. Slide 10 provides more information about the items that are excluded in the calculation of non-GAAP operating profit. Please turn to slide 11. we maintained a solid cash position even after repurchasing 600,000 Treble Zoo shares during the quarter. As of December 31, 2023, consolidated cash, cash equivalents, and restricted cash was $16.4 million, a decrease of $3.0 million from December 31, 2022. Comparably, merchant payables, which are future payments that we have to make to partners when vouchers are redeemed decreased by 10.7 million over the same period. Slide 12 and 13 detail our revenues by business segment. The North America business segment saw a year-over-year revenue increase of 5% to 13.8 million. This was driven by revenue from travel. Revenues from local consisting of local entertainment experiences are still expected to recover from the pandemic. Turn to slide 13. The Euro business segment saw a year-over-year revenue increase of 34% to $6.3 million. This was driven by particular strengths in trouble. Slide 14 shows how revenues compare to operating expenses. Most of the company's operating expenses, except for marketing, are relatively fixed in the short to mid-term. We believe we can keep fixed costs contained in the foreseeable future, while revenues are expected to grow. Higher revenues will just increase operating margins. For Q1 2024, we expect continued growth in revenue, albeit at a reduced pace from 2023. We expect a high cash flow from operating activities and a high profitability. We plan to continue our outstanding share repurchase program In December 2023, we announced the introduction of a membership fee for TravelZoo beginning January 1st, 2024. Existing members as of December 31st, 2023 are exempt from the fee during 2024. Therefore, we do not anticipate generating membership fee revenue from existing members before 2025. Now I turn the discussion over to Holger.

Thank you Lijun. Q4 concluded a strong year for Travelzoo, with each quarter achieving year-over-year revenue growth, profitability, and positive cash flow from operations. We will continue to leverage Travelzoo's global reach, our trusted brand, and strong relationships with top travel suppliers to negotiate more exclusive offers for our members. It is in times of large increases in travel prices that TravelZoo is most valuable for consumers. TravelZoo members enjoy high quality travel experiences that represent outstanding value. With more than 30 million members, 8 million mobile app users, and 5 million social media followers, TravelZoo is loved by travel enthusiasts who are affluent, active, and open to new experiences. Slide 15 provides more information about Travel Zoo members. 91% say they are open to new destinations and travel ideas. We are indeed the club of travel enthusiasts. Slide 17 provides an overview of what management and our global team are focused on. We want to grow the number of Travel Zoo members leverage our strong existing relationships with top travel suppliers, and add new relationships to negotiate more exclusive offers, utilize higher operating margins to increase EPS, grow ChexFlightClub's revenue, and develop travel zoo meta with discipline. At this point, I'd like to turn over to Pristina for a quick update on JEX Flight Club and TravelZoom Meta.