Tripadvisor ((TRIP)) has held its Q4 earnings call. Read on for the main highlights of the call.
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Tripadvisor’s recent earnings call highlighted a balanced sentiment, reflecting on its robust growth in experiences and dining segments, while facing challenges in the hotel meta business and declining Brand Tripadvisor revenue. The sentiment was cautiously optimistic, with the company showing promising strategic initiatives and solid financial performance countered by existing revenue challenges.
Strong Q4 and FY 2024 Financial Performance
Tripadvisor concluded 2024 with solid financial results, boasting a 5% increase in consolidated revenue for the fourth quarter, reaching $411 million. For the entire year, the revenue grew by 3% to $1.8 billion. The adjusted EBITDA for the full year stood at $339 million, underscoring a robust financial position that places Tripadvisor in a strong footing as it moves forward.
Viator Growth and Market Leadership
Viator, a key segment of Tripadvisor, demonstrated remarkable growth in 2024. The gross bookings value hit $4.2 billion, with a 14% revenue increase for the year that accelerated to 16% in the fourth quarter. Direct booking volume witnessed a significant growth of nearly 30% for the whole year. Notably, Viator’s mobile app emerged as the fastest-growing channel, with booking volume surging by more than 80%.
TheFork Achieves Profitability
TheFork segment marked a significant achievement by reaching full-year profitability for the first time. The segment’s revenue grew by 18% to $181 million, with an adjusted EBITDA improvement of $19 million over the previous year. This milestone underscores TheFork’s potential as a profitable segment within Tripadvisor’s portfolio.
Strategic Focus on Experiences Category
Tripadvisor is strategically focusing on the experiences category, with Viator and TheFork contributing 56% of the group revenue. This focus is expected to further strengthen as experiences revenue is projected to become the largest contributor for the first time in 2025, highlighting the company’s strategic pivot towards this lucrative market segment.
Membership Growth and Engagement
Membership on Tripadvisor witnessed mid-single-digit growth in 2024, with each quarter showing an acceleration in numbers. Particularly in the U.S., monthly active members grew at twice the global rate, indicating a significant improvement in member engagement and retention.
Brand Tripadvisor Revenue Decline
Despite the successes in other segments, Brand Tripadvisor experienced an 8% revenue decline over 2024. Branded hotels revenue fell by 7% in the fourth quarter, while experiences and dining revenue also saw an 8% decrease, highlighting challenges in maintaining growth within this segment.
Q1 2025 Expected Revenue Decline
Looking forward to the first quarter of 2025, Tripadvisor anticipates a flat to low single-digit revenue decline, primarily due to currency and holiday timing headwinds. This cautious outlook reflects the external challenges the company is facing in the near term.
Challenges in Hotel Meta Business
The hotel meta business faced structural challenges leading to variability and a decline in branded hotels revenue. This has significantly impacted the overall performance of Brand Tripadvisor, indicating areas that require strategic intervention to stabilize and grow.
Negative Free Cash Flow
In the fourth quarter, Tripadvisor reported a negative operating cash flow of $2 million and a negative free cash flow of $25 million. Despite this, there was a $10 million improvement from previous periods, suggesting that the company is making efforts to manage cash flow better.
Forward-Looking Guidance
Looking ahead, Tripadvisor forecasts a 5% to 7% increase in consolidated revenue for 2025, with an adjusted EBITDA margin projected between 16% and 18%. The company aims to enhance customer experiences and expand its market share, particularly focusing on the growth of Viator and TheFork segments as critical components of its strategy.
In conclusion, Tripadvisor’s earnings call paints a picture of a company with strong growth prospects in certain segments, juxtaposed with challenges in others. The strategic initiatives, particularly in the experiences category, signal a promising future, even as the company navigates revenue declines and structural challenges in its hotel meta business.
