Travelzoo · NASDAQ:TZOO
Travelzoo — Q3 2024 Earnings Presentation
19 slides from Travelzoo's earnings presentation, Oct 23, 2024
Slide 1: Third Quarter 2024 Performance
Third Quarter 2024 Performance October 23, 2024
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 third quarter 2024 financial results and in conjunction with the Company’s recent Annual Report and Quarterly Reports as filed with the Secur
Slide 3: Part 1: Third Quarter 2024 Performance
Part 1: Third Quarter 2024 Performance Part 2: Management Focus Part 3: Travelzoo META 3 | Third Quarter 2024 Performance
Slide 4: Revenue was lower than we expected, but operating profit increased by 30%
Revenue was lower than we expected, but operating profit increased by 30%. Revenue Operating Profit $ millions $ millions 20.6 20.1 4.0 3.1 Q3 2023 Q3 2024 Q3 2023 Q3 2024 4 | Third Quarter 2024 Performance
Slide 5: Higher profits came particularly from our Europe segment
Higher profits came particularly from our Europe segment. North America Business Segment Europe Business Segment Revenue $ millions Q3 2023 13.4 6.0 Q3 2024 12.8 6.1 Operating Profit $ millions Q3 2023 3.0 0.3 Q3 2024 3.2 1.0 5 | Third Quarter 2024 Performance
Slide 6: Membership fee revenue is still small
Membership fee revenue is still small. We expect it to substantially drive revenue and profit growth in 2025, when the free membership for legacy members* phases out. Global Revenues $ millions Advertising Membership Fees Other Q3 2023 19.4 1.2 0.0 Q1 2024 20.9 1.1 0.0 Q2 2024 20.0 1.2 0.0 Q3 2024 1
Slide 7: We recognize revenue from membership fees ratably over the subscription period
We recognize revenue from membership fees ratably over the subscription period. Member acquisition costs, however, are fully recorded as expenses immediately. Revenue Recognition $ Example: New member joined on March 1, 2024, paying a membership fee of $40 per annum Q1 2024 Q2 2024 Q3 2024 Q4 2024 Q
Slide 8: Our GAAP operating margin remained high at 20%
Our GAAP operating margin remained high at 20% in what is typically our slowest quarter of the year. Operating Margin 2017 2018 2019 2020 2021 2022 2023 Q1 2024 Q2 2024 Q3 2024 25% 19% 20% 18% 11% 9% 7% 4% (2%) (26%) 8 | Third Quarter 2024 Performance
Slide 9: In North America, the GAAP operating margin remained high
In North America, the GAAP operating margin remained high. In Europe, the margin increased to 17%. North America Operating Margin Europe Operating Margin Q1 2023 31% 8% Q2 2023 27% -4% Q3 2023 22% 4% Q4 2023 29% 13% Q1 2024 31% 21% Q2 2024 26% 8% Q3 2024 25% 17% 9 | Third Quarter 2024 Performance
Slide 10: Total non-GAAP operating profit was $4.9 million or 25% of revenue
Total non-GAAP operating profit was $4.9 million or 25% of revenue. Non-GAAP Operating Profit* GAAP Operating Profit $ millions Adjustments Non-GAAP Operating Profit* 0.9 4.9 0.8 3.9 4.0 3.1 Q3 2023 Q3 2024 * GAAP operating profit + amortization of intangibles + stock option expenses + severance-rel
Slide 11: Items excluded in the calculation of non-GAAP operating profit
Items excluded in the calculation of non-GAAP operating profit: $ millions Q2 2024 Q3 2024 Adjustments 0.8 0.9 Impairment of intangibles and goodwill — — Amortization of intangibles 0.1 0.1 Stock option expense 0.7 0.5 Severance-related expenses — 0.3 11 | Third Quarter 2024 Performance
Slide 12: Operating cash flow of $5.3 million and solid cash position
With operating cash flow of $5.3 million, we maintained a solid cash position—even after repurchasing 552,679 shares during the quarter. Going forward, we expect the cash balance to increase again. Cash Balance at End of Quarter* $ millions 16.6 13.2 12.1 Q3 2023 Q2 2024 Q3 2024 * Includes cash, cas
Slide 13: We believe we can keep our fixed costs relatively low
We believe we can keep our fixed costs relatively low in the foreseeable future. Higher revenues would thus increase margins. Non-GAAP adjustments OPEX and cost of revenues Revenue Operating Expenses and Cost of Revenues $ millions $ millions 21.1 17.5 17.1 20.6 20.1 16.1 0.8 0.8 0.9 16.7 16.3 15.2
Slide 14: Travelzoo is loved by travel enthusiasts who are affluent, active and open
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 • 30 million members* Travelzoo U.S. Member Survey** October 2023 • 8 million mobile app users • 4 million social media followers 53%
Slide 15: Part 2: Management Focus
Part 1: Third Quarter 2024 Performance Part 2: Management Focus Part 3: Travelzoo META 15 | Third Quarter 2024 Performance
Slide 16: Management focus
Management focus • Convert a large number of legacy members*, which represent more than 95% of members, into (paying) members from January 1, 2025 on • Add new benefits to the paid membership • Retain, and grow, our profitable advertising business from the popular Top 20® product • Utilize higher op
Slide 17: Part 3: Travelzoo META
Part 1: Third Quarter 2024 Performance Part 2: Management Focus Part 3: Travelzoo META 17 | Third Quarter 2024 Performance
Slide 18: 18 | Third Quarter 2024 Performance
18 | Third Quarter 2024 Performance
Slide 19: Have a good day!
NASDAQ: TZOO HAVE A GOOD DAY! For questions, please contact Travelzoo Investor Relations: ir@travelzoo.com