Travelzoo · NASDAQ:TZOO
Travelzoo — Q2 2022 Earnings Presentation
22 slides from Travelzoo's earnings presentation, Jul 27, 2022
Slide 1: Second Quarter 2022 Performance
NASDAQ: TZOO Second Quarter 2022 Performance July 27, 2022
Slide 2: Important Notice to Investors
Important Notice to Investors Please read this management presentation together with the Company’s press release issued earlier today announcing the Company’s second quarter 2022 financial results and in conjunction with the Company’s recent Annual Report and Quarterly Reports as filed with the Secu
Slide 3: Part 1: Second Quarter 2022 Performance
Part 1: Second Quarter 2022 Performance Part 2: Management Focus Part 3: Travelzoo META 2 | Second Quarter 2022 Performance
Slide 4: Q2 revenues were lower than expected. However, profitability was good.
Q2 revenues were lower than expected. However, profitability was good. Financial Performance Revenue Operating Profit Members $ millions $ millions 31.3 30.7 30.7 30.2 28.2 19.1 18.5 17.7 3.5 2.4 1.9 1.8 Q2 2019* Q2 2021 Q1 2022 Q2 2022 Q2 2019* Q2 2021 Q1 2022 Q2 2022 Q2 2019 Q2 2021 Q1 2022 Q2 202
Slide 5: North America continues to outperform Europe in the recovery from the pandemic
North America continues to outperform Europe in the recovery from the pandemic. North America Business Segment Europe Business Segment Revenue $ millions Q2 2021 14.0 4.2 Q1 2022 11.7 5.9 Q2 2022 12.4 4.4 Operating Profit $ millions Q2 2021 3.5 (0.2) Q1 2022 1.7 0.2 Q2 2022 3.1 (1.5) 4 | Second Quar
Slide 6: Operating margins are higher now than before the pandemic
Operating margins are higher now than before the pandemic. Operating Margin 2015 2016 2017 2018 2019 2020 2021 Q1 2022 Q2 2022 9% 9% 10% 10% 7% 3% 4% 17.7 -2% -26% 5 | Second Quarter 2022 Performance
Slide 7: In North America, the operating margin reached 25%
In North America, the operating margin reached 25%. It is the highest operating margin in 6 years. We think it can go higher. North America Business Segment Revenue Operating Margin $ millions Percent Q3 2021 10.1 -10% Q4 2021 8.3 -26% Q1 2022 11.7 15% Q2 2022 12.4 25%* * North America operating mar
Slide 8: Non-GAAP operating profit was $2.6 million
Non-GAAP operating profit was $2.6 million. Non-GAAP Operating Profit* GAAP Operating Profit $ millions Adjustments Non-GAAP Operating Profit* 1.4 4.9 3.5 0.8 2.7 0.8 2.6 1.9 1.8 Q2 2021 Q1 2022 Q2 2022 * GAAP operating profit + impairment of intangibles and goodwill + amortization of intangibles +
Slide 9: Items excluded in the calculation of non-GAAP operating profit
Items excluded in the calculation of non-GAAP operating profit $ millions Q2 2021 Q1 2022 Q2 2022 Adjustments 1.4 0.8 0.8 Impairment of intangibles and goodwill ⎯ ⎯ ⎯ Amortization of intangibles 0.3 0.2 0.2 Stock option expense 0.9 0.6 0.6 Severance-related expenses 0.2 ⎯ ⎯ 8 | Second Quarter 2022 P
Slide 10: Our cash balance reached the expected level
Our cash balance reached the expected level as the number of vouchers outstanding has become smaller. Payables decreased proportionately. Cash Balance at End of Quarter* $ millions 82.1 36.7 26.7 Q2 2021 Q1 2022 Q2 2022 * Includes cash, cash equivalents and restricted cash 9 | Second Quarter 2022 Pe
Slide 11: North America business segment revenue
North America business segment revenue North America Revenue by Type $ millions 14.0 YOY %* YOY % 0.9 change change 12.4 12.3 (constant F/X) (as reported) 0.9 0.9 3% 3% 13.1 11.5 11.4 -12% -12% Q2 2021 Q2 2022 Q2 2022 at constant F/X* Local Travel * Based on constant F/X rates for CAD 10 | Second Qu
Slide 12: Europe business segment revenue
Europe business segment revenue, which we report in USD, is negatively impacted by the strong dollar. Europe Revenue by Type $ millions +17% YOY %* YOY % 4.9 change change 4.4 (constant F/X) (as reported) 4.2 0.3 0.3 -39% -44% 0.5 4.6 4.1 23% 9% 3.7 Q2 2021 Q2 2022 Q2 2022 at constant F/X* Local Tra
Slide 13: Pandemic led to a significant reduction of fixed costs
The pandemic led to a significant reduction of fixed costs which can be kept relatively low in the foreseeable future—while revenues are expected to grow. Financial Performance Revenue* Operating Expenses and Cost of Revenues* $ millions $ millions 22.5 26.6 0.3 22.2 16.5 15.9 19.1 18.5 15.6 0.8 17.
Slide 14: Travelzoo's Global Reach
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. Travelzoo's Global Reach High-Quality Users, Followers and Subscribers Members* Travelzoo U.S. Member S
Slide 15: Part 2: Management Focus
Part 1: Second Quarter 2022 Performance Part 2: Management Focus Part 3: Travelzoo META 14 | Second Quarter 2022 Performance
Slide 16: Management Focus
Management Focus • Increase number of members and accelerate revenue growth to reach and then exceed pre-pandemic levels. • Grow Jack’s Flight Club’s profitable subscription revenue. • Utilize higher operating margins to significantly increase EPS. • Launch Travelzoo META. 15 | Second Quarter 2022 P
Slide 17: Part 3: Travelzoo META
Part 1: Second Quarter 2022 Performance Part 2: Management Focus Part 3: Travelzoo META 16 | Second Quarter 2022 Performance
Slide 18: 17 | First Quarter 2022 Performance
17 | First Quarter 2022 Performance
Slide 19: What are the status and timing?
What are the status and timing? • Given the newness of this industry, we launched Phase 1 in May in a controlled test environment to a limited set of users. • We are deploying learnings from the test into our next phase which is scheduled to launch in September. • We are continuing with our phased a
Slide 20: Top categories of value-creation in the Metaverse
Top categories of value-creation in the Metaverse According to a large consumer survey by McKinsey & Company published in June 2022*—asking for "Drivers of excitement for consumers who prefer virtual immersive experience over similar activities in the physical world"— virtual immersive travel is the
Slide 21: The McKinsey & Company report validates Travelzoo META strategy
The McKinsey & Company report validates Travelzoo META strategy. • McKinsey & Company found that consumers in the Metaverse are looking to explore and travel digital worlds. Travelzoo META will allow its members to do so and, therefore, give them the experiences they value the most. • Travelzoo META
Slide 22: Have a nice day!
NASDAQ: TZOO HAVE A NICE DAY! For questions, please contact Travelzoo Investor Relations: ir@travelzoo.com